SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 21, 2003
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ONE LIBERTY PROPERTIES, INC.
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(Exact name of Registrant as specified in charter)
Maryland 0-11083 13-3147497
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(State or other (Commission file No.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 516-466-3100
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Item 5. Other Events.
On March 21, 2003, Registrant consummated a $30 million revolving credit
facility with Valley National Bank, Merchants Bank Division and Bank Leumi USA.
The material terms of the transaction are as follows:
Lender: Valley National Bank, Merchants Bank Division and Bank Leumi USA
Guarantors: All subsidiaries of Registrant whose properties are not
encumbered by mortgage debt guaranteed the credit facility.
Subsidiaries of Registrant formed post-closing are required to
become guarantors so long as their properties are not
encumbered by mortgage debt. Subject to certain conditions, a
guarantor may be released from its guaranty when it mortgages
its property.
Amount: $30,000,000. As of the date hereof, the Registrant has drawn
approximately $10,000,000 on the credit facility.
Loan Type: The credit facility is a revolving facility (i.e.funds can be
borrowed, repaid and borrowed again).
Use of
Proceeds: (1) Acquisition or financing of commercial real estate, and
(2) repayment of mortgage debt.
Term: Two (2) years maturing March 21, 2005.
Rate: Prime rate of the Lender.
Fees: There was a .667% ($200,000) commitment fee paid in connection
with the credit facility. Registrant also paid the out of
pocket expenses of the Lender in connection with the
transaction (including by way of example, legal fees).
In addition, there is an "unused fee" payable monthly, equal
to .25% per annum of the difference between the loan balance
and the maximum loan amount of $30,000,000.
Accounts: Borrower and affiliates are to maintain balances with Lender
in qualifying accounts of at least 10% of outstanding balance
due under credit facility.
Financial
Covenants: The Loan Agreement contains various financial and other
covenants and restrictions. The most significant are that
(i) Total Secured Debt (principally mortgage debt) to Total
Secured Value (essentially the value of Registrant's or its
subsidiaries' properties as calculated by formulas set forth
in the new credit facility which are encumbered by mortgage
debt) shall not exceed .70 to 1.00; (ii) Registrant, on a
consolidated basis, may not have more than $25 million of
Investment in Venture Interests (essentially joint ventures);
(iii) Total Debt to Total Value shall not exceed .70 to 1.00;
(iv) Total Adjusted Net Operating Income to Debt Service shall
not exceed 1.65 to 1.00; (v) Registrant and its Subsidiaries
must own at least four (4) properties which are not encumbered
by a mortgage and which have a Total Unsecured Value of at
least $15 million; and (vi) Registrant must maintain a Net
Worth at least equal to $80 million.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements - none.
(b) Pro Forma Financial Information - not applicable.
(c) Exhibits - Loan Agreement dated as of March 21, 2003 between One
Liberty Properties, Inc. and certain subsidiaries and Valley National
Bank, Merchants Bank Division and Bank Leumi USA.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
One Liberty Properties, Inc.
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Registrant
March 26, 2003 By:/s/
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Mark H. Lundy, Vice President
and Secretary
LOAN AGREEMENT
Dated as of March 21, 2003
ONE LIBERTY PROPERTIES, INC., a Maryland corporation, having its
principal place of business at 60 Cutter Mill Road, Suite 303, Great Neck, New
York 11021 (the "Borrower"), OLP CHATTANOOGA, INC., a Tennessee corporation,
having its principal place of business at 60 Cutter Mill Road, Suite 303, Great
Neck, New York 11021 ("Chattanooga" or a "Corporate Guarantor"), OLP PALM BEACH,
INC., a Florida corporation, having its principal place of business at 60 Cutter
Mill Road, Suite 303, Great Neck, New York 11021 ("Palm Beach" or a "Corporate
Guarantor"), OLP TEXAS, INC., a Texas corporation, having its principal place of
business at 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021 ("Texas"
or a "Corporate Guarantor"), OLP HAMILTON, INC., a New York corporation, having
its principal place of business at 60 Cutter Mill Road, Suite 303, Great Neck,
New York 11021 ("Hamilton" or a "Corporate Guarantor"), OLP RABRO DRIVE CORP., a
New York corporation, having its principal place of business at 60 Cutter Mill
Road, Suite 303, Great Neck, New York 11021 ("Rabro Drive" or a "Corporate
Guarantor"), OLP THEATRES LLC, a Delaware limited liability company, having its
principal place of business at 60 Cutter Mill Road, Suite 303, Great Neck, New
York 11021 ("Holdings" or a "Limited Liability Company Guarantor"), OLP LAKE
CHARLES LLC, a Louisiana limited liability company having its principal place of
business at 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021 ("Lake
Charles" or a "Limited Liability Company Guarantor"), OLP MOVIES LLC, a Delaware
limited liability company having its principal place of business at 60 Cutter
Mill Road, Suite 303, Great Neck, New York 11021 ("Movies" or a "Limited
Liability Company Guarantor"), OLP TUCKER LLC, a Georgia limited liability
company having its principal place of business at 60 Cutter Mill Road, Suite
303, Great Neck, New York 11021 ("Tucker" or a "Limited Liability Company
Guarantor"), OLP LAKE WORTH LLC, a Florida limited liability company having its
principal place of business at 60 Cutter Mill Road, Suite 303, Great Neck, New
York 11021 ("Lake Worth" or a "Limited Liability Company Guarantor"), VALLEY
NATIONAL BANK, Merchants Bank Division, with an address at 275 Madison Avenue,
New York, New York 10016 ("Merchants") and BANK LEUMI USA, with an address at
562 Fifth Avenue, New York, New York 10036 ("Leumi", Merchants and Leumi,
collectively, the "Bank") hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Adjusted Net Operating Income" means the base rent of all properties
subject to the covenant being tested less operating expenses and an assumed
three (3%) percent management fee allowance.
"Affiliate" means, as to any Person: (i) a Person which directly or
indirectly controls, or is controlled by, or is under common control with, such
Person; (ii) a Person which directly or indirectly beneficially owns or holds
five (5%) percent or more of any class of voting stock of, or five (5%) percent
or more of the equity interest in, such Person; or (iii) a Person five (5%)
percent or more of the voting stock of which, or five (5%) percent or more of
the equity interest of which, is directly or indirectly beneficially owned or
held by such Person. The term "control" means the possession, directly or
indirectly, of the power to direct, or cause the direction of, the management
and policies of a Person, whether through the ownership of voting securities,
by contract, or otherwise. For the purposes of calculating the Required Balances
required in Section 2.04(b) hereof, executive officers of the Borrower and
Persons controlled by such executive officers shall be considered Affiliates.
"Agreement" means this Loan Agreement, as amended, supplemented or
modified from time to time.
"Bank" means each of, or as the context requires, both Merchants and
Leumi or Merchants and Leumi in proportion to their Pro Rata Share.
"Board of Governors" means the Board of Governors of the Federal
Reserve System of the United States of America.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City.
"Capital Lease" means a lease which has been or should be, in
accordance with GAAP, capitalized on the books of the lessee.
"Collateral" means all property which is subject or is to be subject to
the security interest granted by the Pledge Agreement(s).
"Commitment" means the Banks' obligation to make Revolving Credit Loans
to the Borrower pursuant to the terms and subject to the conditions of this
Agreement.
"Corporate Guarantor" or "Corporate Guarantors" means each of, or all
of, as the context requires, those Corporate Guarantors, if any, named as such
in the preamble to this Agreement.
"Debt" means, as to any Person: (i) all indebtedness or liability of
such Person for borrowed money; (ii) all indebtedness of such Person for the
deferred purchase price of property or services (including trade obligations);
(iii) all obligations of such Person as a lessee under Capital Leases; (iv) all
current liabilities of such Person in respect of unfunded vested benefits under
any Plan; (v) all obligations of such Person under letters of credit issued for
the account of such Person; (vi) all obligations of such Person arising under
acceptance facilities; (vii) all guaranties, endorsements (other than for
collection or deposit in the ordinary course of business) and other contingent
obligations to purchase, to provide funds for payment, to supply funds to invest
in any other Person, or otherwise to assure a creditor against loss; (viii) all
obligations secured by any Lien on property owned by such Person whether or not
the obligations have been assumed; (ix) liabilities of such Person under
interest rate protection and similar agreements; (x) liabilities of such Person
under any preferred stock or other preferred equity instrument which, at the
option of the holder or upon the occurrence of one or more events, is redeemable
by such holder, or which, at the option of such holder is convertible into Debt;
(xi) indebtedness of any partnership of which such Person is a general partner;
and (xii) all other liabilities recorded as such, or which should be recorded as
such, on such Person's financial statements in accordance with GAAP.
"Debt Service" means (i) all scheduled principal payments, and (ii) all
scheduled interest payments due within twelve (12) calendar months from any
calculated period.
"Default" means any of the events specified in Section 6.01 of this
Agreement, whether or not any requirement for notice or lapse of time or any
other condition has been satisfied.
"Dividends" means, with respect to any Person, (i) any dividend
(whether payable in cash, stock, other equity or debt instrument or in assets),
(ii) the purchase, redemption, retirement or other acquisition for value of any
of such Person's capital stock now or hereafter outstanding, (iii) the making of
any distribution of assets to such Person's stockholders as such, whether in
cash, assets, or in obligations of such Person, (iv) the allocation or other
setting apart of any sum for the payment of any dividend or distribution on, or
for the purchase, redemption or retirement of any shares of such Person's
capital stock or (v) the making of any other distribution by reduction of
capital or otherwise in respect of any share of such Person's capital stock.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Encumbered Properties" shall mean a Property or Properties encumbered
by a security interest, mortgage or any other Lien upon or charge against or
interest in the property to secure payment of a debt or performance of an
obligation.
"Equity Interests" means all securities, shares, units, options,
warrants, interests, participations, or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company, or
similar entity, whether voting or nonvoting, certificated or uncertificated,
including general partner partnership interests, limited partner partnership
interests, common stock, preferred stock, or any other "equity security" (as
such term is defined in Rule 3a11-1 of the General Rules and Regulations
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, the regulations promulgated thereunder and the
published interpretations thereof as in effect from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which together with any other Person would be treated, with such
Person, as a single employer under Section 4001 of ERISA.
"Event of Default" means any of the events specified in Section 6.01 of
this Agreement, provided that any requirement for notice or lapse of time or any
other condition has been satisfied.
"GAAP" means Generally Accepted Accounting Principles.
"Generally Accepted Accounting Principles" means those generally
accepted accounting principles and practices which are recognized as such by the
American Institute of Certified Public Accountants acting through the Financial
Accounting Standards Board ("FASB") or through other appropriate boards or
committees thereof and which are consistently applied for all periods so as to
properly reflect the financial condition, operations and cash flows of a Person,
except that any accounting principle or practice required to be changed by the
FASB (or other appropriate board or committee of the FASB) in order to continue
as a generally accepted accounting principle or practice may be so changed. Any
dispute or disagreement between the Borrower and the Bank relating to the
determination of Generally Accepted Accounting Principles shall, in the absence
of manifest error, be conclusively resolved for all purposes hereof by the
written opinion with respect thereto, delivered to the Bank, of the independent
accountants selected by the Borrower and approved by the Bank for the purpose of
auditing the periodic financial statements of the Borrower.
"General Partnership Guarantor" or "General Partnership Guarantors"
means each of, or all of, as the context requires, those General Partnership
Guarantors", if any, named as such in the preamble to this Agreement.
"Guarantor" or "Guarantors" means each of, or all of, as the context
requires, those Corporate Guarantors, Limited Liability Company Guarantors,
General Partnership Guarantors and Limited Partnership Guarantors named in the
preamble to this Agreement, and any other Person which is required to guarantee
the obligations of the Borrower in accordance with Section 5.01(1) of this
Agreement.
"Guaranty" or "Guaranties" means a guaranty or guaranties required to
be executed and delivered by a Guarantor or Guarantors pursuant to Section
3.01(j) and Section 5.01(l) of this Agreement.
"Hazardous Materials" includes, without limit, any flammable
explosives, radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances, or related materials defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. Sections 9601, et seq.), the Hazardous Materials Transportation Act, as
amended (49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery
Act, as amended (42 U.S.C. Sections 6901 et. seq.), and in the regulations
adopted and publications or interpretations promulgated pursuant thereto, or any
other federal, state or local environmental law, ordinance, rule or regulation
and Payment Sharing.
"Institutional Lender" is any bank, savings bank, savings and loan
association, trust company, credit union, insurance company or finance company
nationally recognized such as General Motors Acceptance Corporation and General
Electric Credit Corporation.
"Intercreditor Agreement" means the agreement between Merchants and
Leumi with respect to the Banks' respective rights in the Collateral and
collections from the Borrower and Guarantors.
"Interest Payment Date" means the first Business Day of each month.
"Investment" means any stock, evidence of Debt or other security of any
Person, any loan, advance, contribution of capital, extension of credit or
commitment therefor, including without limitation the guaranty of loans made to
others (except for current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms in the ordinary course of business and except for limited
guaranties executed in connection with non-recourse mortgage financing) and (i)
any purchase of any security of another Person or (ii) any business or
undertaking of any Person or any commitment or option to make any such purchase,
or any other investment.
"Leumi Revolving Credit Note" means a promissory note of the Borrower
payable to the order of Leumi, in substantially the form of Exhibit A(2) annexed
hereto, evidencing the aggregate indebtedness of the Borrower to Leumi resulting
from the Leumi Revolving Credit Loans (as defined herein) made by Leumi to the
Borrower pursuant to this Agreement.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance (other than utility
easements, reciprocal easement agreements, party-wall agreements and similar
items in the ordinary course of business), lien (statutory or other), or
preference, priority, or other security agreement or preferential arrangement,
charge, or encumbrance of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing.
"Limited Liability Company Guarantor" or "Limited Liability Company
Guarantors" means each of, or all of, as the context requires, those Limited
Liability Company Guarantors, if any, named as such in the preamble to this
Agreement.
"Limited Partnership Guarantor" or "Limited Partnership Guarantors"
means each of, or all of, as the context requires, those Limited Partnership
Guarantors, if any, named as such in the preamble to this Agreement.
"Loan" or Loans" means one or more, as the context requires, of the
Revolving Credit Loans.
"Loan Documents" means this Agreement, the Note, the Guaranties, the
Pledge Agreements and any other document executed or delivered pursuant to this
Agreement.
"Material Adverse Change" means, as to any Person, (i) a material
adverse change in the financial condition, business, operations, properties,
prospects or results of operations of such Person or (ii) any event or
occurrence which could have a material adverse effect on the ability of such
Person to perform its obligations under the Loan Documents.
"Maturity Date" shall have the meaning assigned to such term in Section
2.08(a) of this Agreement.
"Merchants Revolving Credit Note" means a promissory note of the
Borrower payable to the order of Merchants, in substantially the form of Exhibit
A(1) annexed hereto, evidencing the aggregate indebtedness of the Borrower to
Merchants resulting from the Merchants Revolving Credit Loans (as defined
herein) made by Merchants to the Borrower pursuant to this Agreement.
"Multiemployer Plan" means a Plan described in Section 4001(a)(3) of
ERISA which covers employees of the Borrower or any ERISA Affiliate.
"Net Worth" shall mean the amount by which all the assets of the
Borrower, as determined in accordance with GAAP, at any given time exceed the
liabilities.
"New Encumbered Properties" means Encumbered Properties acquired by the
Borrower, a Guarantor or a subsidiary of the Borrower or a Guarantor that they
have owned for less than one year.
"New Unencumbered Properties" means unencumbered properties acquired by
the Borrower, a Guarantor or a Subsidiary of the Borrower or a Guarantor that
they have owned for less than one year.
"Note" means the Merchants Revolving Credit Note and the Leumi
Revolving Credit Note.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Investments" means: (i) direct obligations of the United
States of America or any governmental agency thereof, or obligations guaranteed
by the United States of America, provided that such obligations mature within
one year from the date of acquisition thereof; (ii) time certificates of deposit
having a maturity of one year or less issued by any commercial bank organized
and existing under the laws of the United States or any state thereof and having
aggregate capital and surplus in excess of $1,000,000,000.00 other than such
time certificates of deposit at the Bank; (iii) money market mutual funds having
assets in excess of $2,500,000,000; (iv) commercial paper rated not less than
P-1 or A-1 or their equivalent by Moody's Investor Services, Inc. or Standard &
Poor's Corporation, respectively; (v) tax exempt securities rated Prime 2 or
better by Moody's Investor Services, Inc. or A-1 or better by Standard & Poor's
Corporation; (vi) the fee or leasehold interest in (or a mortgage/deed of trust
encumbering) retail, office, industrial, multi-family residential and other
commercial real estate located in the 48 contiguous United States; (vii)
investments by the Borrower in its Subsidiaries, (viii) investments in stock of
real estate investment trusts listed on a nationally recognized stock exchange
in an aggregate amount not exceeding $10,000,000.00, (ix) investments in an
aggregate amount not exceeding $25,000,000.00 in Venture Interests in Persons
owning Properties, and (x) time certificates of deposit issued by the Bank.
"Person" means an individual, partnership, limited liability company,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a federal, state
or local government, or a political subdivision thereof, or any agency of such
government or subdivision.
"Plan" means any employee benefit plan established, maintained, or to
which contributions have been made by, the Borrower or any ERISA Affiliate.
"Pledge Agreement" or "Pledge Agreements" means one or more of the
security agreements to be executed and delivered pursuant to Section 3.01(k) and
Section 5.01(l) of this Agreement.
"Prime Rate" means the rate of interest stated by Merchants to be its
prime rate as in effect from time to time; each change in said rate shall be
effective as of the date of such change.
"Pro Rata Share" shall have the meaning set forth in the Intercreditor
and Payment Sharing Agreement as may be amended from time to time.
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended from
time to time.
"Property" or "Properties" mean commercial real property in which (i)
the Borrower, Guarantor and/or Subsidiary owns a fee or leasehold interest, or
(ii) the Borrower, Guarantor and /or Subsidiary owns a Venture Interest in a
Person that owns a fee or leasehold interest, or (iii) the Borrower, Guarantor
and/or Subsidiary owns a Venture Interest in a Person that owns a fee or
leasehold interest.
"Real Estate Acquisition Information" means copies and abstracts of any
and all information relating to any of the Properties including but not limited
to appraisals, financial information, rent rolls, lease abstracts and any such
other information as requested by the Bank in its sole and absolute discretion
and in the possession of Borrower, Guarantor and/or Subsidiary.
"Regulation D" means Regulation D of the Board of Governors, as the
same may be amended and in effect from time to time.
"Regulation T" means Regulation T of the Board of Governors, as the
same may be amended and in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors, as the
same may be amended and in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors, as the
same may be amended and in effect from time to time.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
"Revolving Credit Loan" or "Revolving Credit Loans" shall be deemed a
reference to both the Merchants Revolving Credit Loans and the Leumi Revolving
Credit Loans as defined in Section 2.01 of this Agreement.
"Revolving Credit Note" or "Revolving Credit Notes" shall be deemed a
reference to both the Merchants Revolving Credit Note and the Leumi Revolving
Credit Note.
"SEC" means The United States Securities and Exchange Commission.
"Subsidiary" means, as to any Person, any corporation, partnership,
limited liability company or joint venture whether now existing or hereafter
organized or acquired (i) in the case of a corporation, of which one hundred
percent (100%) of the securities having ordinary voting power for the election
of directors (other than securities having such power only by reason of the
happening of a contingency) are at the time owned by such Person and/or one or
more Subsidiaries of such Person or (ii) in the case of a partnership, limited
liability company or joint venture, of which one hundred percent (100%) of the
partnership, membership or other ownership interests are at the time owned by
such Person and/or one or more Subsidiaries of such Person.
"Total Debt" means Total Secured Debt plus Total Unsecured Debt.
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"Total Secured Debt" means all Debt of the Borrower, the Guarantors and
their respective Subsidiaries attributable to their Encumbered Properties.
"Total Unsecured Debt" means all Debt of the Borrower, the Guarantors
and their respective Subsidiaries other than Total Secured Debt.
"Total Value" means Total Secured Value plus Total Unsecured Value.
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"Total Secured Value" means the value of the Borrower's, Guarantors'
and their respective Subsidiaries' Encumbered Properties (other than New
Encumbered Properties), calculated by capitalizing the Adjusted Net Operating
Income thereof at a rate of 10.75%, plus the value of the Borrower's,
Guarantors' and their respective Subsidiaries' New Encumbered Properties,
calculated at the higher of (i) the capitalization of the Adjusted Net Operating
Income thereof at a rate of 10.75% or (ii) the purchase price thereof, provided
however that such Encumbered Property must be improved and have a positive cash
flow.
"Total Unsecured Value" means the value of the Borrower's, Guarantors'
and their respective Subsidiaries' Unencumbered Properties (other than New
Unencumbered Properties), calculated by capitalizing the Adjusted Net Operating
Income thereof at a rate of 10.75%, plus the value of the Borrower's,
Guarantors' and their respective Subsidiaries' New Unencumbered Properties,
calculated at the higher of (i) the capitalization of the Adjusted Net Operating
Income thereof at a rate of 10.75% or (ii) the purchase price thereof, provided
however that such Unencumbered Property must be improved and have a positive
cash flow.
"Unencumbered Properties" shall mean a Property or Properties
unencumbered by any security interest, mortgage or any other Lien upon or charge
against or interest in the Property to secure payment of a debt or performance
of an obligation.
"Unused Facility Fee" shall have the meaning set forth in Section 2.06
hereof.
"Venture Interest" means as to any Person, any corporation,
partnership, limited liability company or joint venture whether now existing or
hereafter organized or acquired (i) in the case of a corporation, of which less
than a majority but equal to or more than 25% of the securities having ordinary
voting power for the election of directors (other than securities having such
power only by reason of the happening of a contingency) are at the time owned by
such Person and/or one or more Subsidiaries of such Person or (ii) in the case
of a partnership, limited liability company or joint venture, of which less than
a majority but equal to or more than 25% of the partnership, membership or other
ownership interests are at the time owned by such Persona and/or one or more
Subsidiaries of such Person.
"Written-Off Subsidiary" shall mean a Subsidiary (other than a
Subsidiary which is also a Guarantor) in which the assets of such Subsidiary
have been written down to a net value of $0 on the consolidated books of the
Borrower.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to and including".
SECTION 1.03. Accounting Terms. Except as otherwise herein specifically
provided, each accounting term used herein shall have the meaning given to it
under GAAP.
SECTION 1.04. Construction. (a) All references in this Agreement to
"Sections" or "sub-sections" shall be deemed, unless otherwise noted, to be
references to the Sections or sub-sections of this Agreement.
(b) All references in this Agreement to an "Exhibit" or
"Exhibits" or to a "Schedule" or "Schedules" shall be deemed, unless otherwise
noted, to be references to the Exhibits and Schedules annexed to this Agreement.
(c) All references to a Subsidiary shall be deemed, unless
otherwise noted, to be references to a Subsidiary of the Borrower or a
Subsidiary of a Guarantor.
SECTION 1.05. Calculation of Financial Requirements. All calculations
of Financial Requirements set forth in Section 5.03 of this Agreement when
referable to a Property or Properties of a Venture Interest shall be computed by
applying the percentage interest owned by the Borrower, Guarantor and/or
Subsidiary to the applicable Accounting Term, Financial Requirement or other
term, to be computed.
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
SECTION 2.01. (a) Merchants Revolving Credit Loans. Merchants agrees,
on and after the date of this Agreement, on the terms and conditions of this
Agreement and in reliance upon the representations and warranties set forth in
this Agreement, to lend to the Borrower prior to the Maturity Date such amounts
as the Borrower may request from time to time (individually, a "Merchants
Revolving Credit Loan" or collectively, the "Merchants Revolving Credit Loans"),
which amounts may be borrowed, repaid and reborrowed, provided, however, that
the aggregate amount of such Merchants Revolving Credit Loans outstanding at any
one time shall not exceed Twenty Two Million Five Hundred Thousand
($22,500,000.00) Dollars or such other amount of the Commitment as it may be
reduced pursuant to Section 2.07 hereof.
(b) Leumi Revolving Credit Loans. Leumi agrees, on and after the date
of this Agreement, on the terms and conditions of this Agreement and in reliance
upon the representations and warranties set forth in this Agreement, to lend to
the Borrower prior to the Maturity Date such amounts as the Borrower may request
from time to time (individually, a "Leumi Revolving Credit Loan" or
collectively, the "Leumi Revolving Credit Loans"), which amounts may be
borrowed, repaid and reborrowed, provided, however, that the aggregate amount of
such Leumi Revolving Credit Loans outstanding at any one time shall not exceed
Seven Million Five Hundred Thousand ($7,500,000.00) Dollars or such other amount
of the Commitment as it may be reduced pursuant to Section 2.07 hereof.
SECTION 2.02. (a) Merchants Revolving Credit Note. Each Merchants
Revolving Credit Loan shall be in the minimum principal amount of $100,000.00
and in increased integral multiples of $10,000.00. Each Merchants Revolving
Credit Loan shall be evidenced by the Merchants Revolving Credit Note of the
Borrower. The Merchants Revolving Credit Note shall be dated the date hereof and
be in the principal amount of Twenty Two Million Five Hundred Thousand
($22,500,000.00) Dollars, and shall mature on the Maturity Date, at which time
the entire outstanding principal balance and all interest thereon shall be due
and payable. The Merchants Revolving Credit Note shall be entitled to the
benefits and subject to the provisions of this Agreement.
(b) Leumi Revolving Credit Note. Each Leumi Revolving Credit Loan shall
be in the minimum principal amount of $100,000.00 and in increased integral
multiples of $10,000.00. Each Leumi Revolving Credit Loan shall be evidenced by
the Leumi Revolving Credit Note of the Borrower. The Leumi Revolving Credit Note
shall be dated the date hereof and be in the principal amount of Seven Million
Five Hundred Thousand ($7,500,000.00) Dollars, and shall mature on the Maturity
Date, at which time the entire outstanding principal balance and all interest
thereon shall be due and payable. The Leumi Revolving Credit Note shall be
entitled to the benefits and subject to the provisions of this Agreement.
SECTION 2.03. Notice of Revolving Credit Loans. The Borrower shall give
the Bank irrevocable written, telex, telephonic (immediately confirmed in
writing) or facsimile notice (in each case in the form annexed hereto as Exhibit
B) prior to 11:00 a.m. on the day of each Revolving Credit Loan. Notices
received after 11:00 a.m. on any Business Day shall be deemed to have been given
and received on the next Business Day. Such notice shall specify the date of
such borrowing and the amount thereof.
At the time of the making of each Revolving Credit Loan and at the time
of each payment of principal thereon, the holder of the Revolving Credit Note is
hereby authorized by the Borrower to make a notation on the schedule annexed to
the Revolving Credit Note of the date and amount of the Revolving Credit Loan or
payment, as the case may be. Failure to make a notation with respect to any
Revolving Credit Loan shall not limit or otherwise affect the obligation of the
Borrower hereunder or under the Revolving Credit Note with respect to such
Revolving Credit Loan, and any payment of principal on the Revolving Credit Note
by the Borrower shall not be affected by the failure to make a notation thereof
on said schedule.
SECTION 2.04. Payment of Interest on the Revolving Credit Note;
Required Balances.
(a) Interest shall be payable at a rate per annum (computed on
the basis of the actual number of days elapsed over a year of 360 days) equal at
all times to the Prime Rate. Such interest shall be payable on each Interest
Payment Date, commencing with the first Interest Payment Date after the date of
such Loan and on the Maturity Date. Any change in the rate of interest on the
Revolving Credit Note due to a change in the Prime Rate shall take effect as of
the date of such change in the Prime Rate.
(b) The Borrower and/or Guarantors and/or their respective
Affiliates shall maintain at all times collected deposit balances of at least
ten percent (10%) of the average outstanding annual principal balance of the
Note with the Bank (the "Required Balances"). In the event that the Borrower
and/or Guarantors and/or their respective Affiliates maintain at least
$450,000.00 in collected demand deposit balances with Merchants and $150,000.00
in collected demand deposit balances with Leumi, the remainder of the Required
Balances requirement may be met with money market accounts and certificates of
deposit (balances held in certificates of deposit will be calculated at 50% of
their face value and money market accounts at 100% at their face value). In the
event that the Borrower and/or the Guarantors and/or their respective Affiliates
fail to maintain such Required Balances, as sole remedy for such failure, the
Borrower shall pay to the Bank a deficiency fee equal to four percent (4%) per
annum of the difference between the Required Balances and the actual balances
maintained by the Borrower and/or the Guarantors and/or their respective
Affiliates, payable on each anniversary of the date of this Agreement in
arrears.
SECTION 2.05. Use of Proceeds. The proceeds of the Revolving Credit
Loans shall be used to finance (i) the acquisition or financing of interests
(including joint venture interests) in commercial real estate by the Borrower
and/or the Guarantors, and/or a Subsidiary and (ii) the repayment of existing
mortgage debt on Properties owned by the Borrower and/or the Guarantors. No part
of the proceeds of any Loan may be used for any purpose that directly or
indirectly violates or is inconsistent with, the provisions of Regulations T, U
or X.
SECTION 2.06. Unused Facility Fee. The Borrower agrees to pay to the
Bank from the date of this Agreement and for so long as the Commitment remains
outstanding, on the first Business Day of each month an unused facility fee
equal to one quarter of one percent (0.25%) per annum (computed on the basis of
the actual number of days elapsed over 360 days) on the average daily unused
amount of the Commitment (the "Unused Facility Fee"), such Unused Facility Fee
being payable for the calendar month, or part thereof, preceding the payment
date.
SECTION 2.07. Reduction of Commitment. Upon at least three (3) Business
Days' written notice to the Bank, the Borrower may irrevocably elect to have the
unused Commitment (in proportion to its Pro Rata Share) terminated in whole or
reduced in part without penalty or premium provided, however, that any such
partial reduction shall be in a minimum amount of $250,000.00 or whole multiples
thereof. The Commitment, once terminated or reduced, shall not be reinstated
without the express written approval of the Bank. The Borrower shall, on the
effective date of any such reduction, without any notice or demand from the
Bank, prepay any Revolving Credit Loans which exceed the Commitment, as so
reduced.
SECTION 2.08. Prepayment; Maturity. (a) Mandatory. (i) All Revolving
Credit Loans shall be due and payable, if not required to be paid earlier
pursuant to this Agreement, on March 21, 2005 (the "Maturity Date").
(ii) (a) Upon the sale by the Borrower or any Guarantor of any
Property for which the proceeds of the Revolving Credit Loans were used to
purchase or finance such Property, the Borrower or Guarantor, as the case may
be, shall repay such Revolving Credit Loans with the full net proceeds of such
sale, (b) upon the refinance of any Property acquired by the Borrower or any
Guarantor after the date hereof for which the proceeds of the Revolving Credit
Loans were used, the Borrower shall repay such Revolving Credit Loans the net
proceeds of such refinance, and (c) upon the remortgaging by the Borrower or any
Guarantor of any Property for which the proceeds of the Revolving Credit Loans
were used to repay prior mortgages, the Borrower shall repay the net proceeds of
such remortgaging.
(b) Voluntary. (i) The Borrower shall have the right at any time and
from time to time to prepay any Loan, in whole or in part, without premium or
penalty on one (1) Business Day's prior irrevocable written notice to the Bank
of such prepayment provided, however, that each such prepayment shall be on a
Business Day and shall be in a minimum principal amount of $50,000.00 and in
increased integral multiples of $10,000.00.
(ii) The notice of prepayment under this Section 2.08 shall
set forth the prepayment date and the principal amount of the Loan being prepaid
and shall be irrevocable and shall commit the Borrower to prepay such Loan by
the amount and on the date stated therein. All prepayments shall be accompanied
by accrued interest on the principal amount being prepaid to the date of
prepayment. Each prepayment under this Section 2.08 shall be applied first
towards unpaid interest on the amount being prepaid and then towards the
principal in whole or partial prepayment of Loans by the Borrower.
SECTION 2.09. Intentionally Omitted.
SECTION 2.10. Intentionally Omitted.
SECTION 2.11. Authorization to Debit Borrower's Account. The Bank is
hereby authorized to debit the Borrower's account maintained with the Bank for
(i) all scheduled payments of principal and/or interest under the Note, and (ii)
the Unused Facility Fee, deficiency fee, and all other fees and amounts due
hereunder; all such debits to be made on the days such payments are due in
accordance with the terms hereof.
SECTION 2.12. Late Charges, Default Interest. (a) If the Borrower shall
default in the payment of any principal installment of or interest on any Loan
or any other amount becoming due hereunder, the Borrower shall pay a late
payment charge equal to four (4%) percent of such defaulted payment.
(b) Upon the occurrence and during the continuation of an
Event of Default, the Borrower shall pay interest on all amounts owing under the
Note and this Agreement (after as well as before judgment) at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 360
days) equal to the lower of (i) three (3%) percent in excess of the Prime Rate,
or (ii) the highest interest rate otherwise permitted by law.
SECTION 2.13. Payments. All payments by the Borrower hereunder or under
the Note shall be made in Dollars in immediately available funds by wire
transfer or intra-Bank credit from accounts of the Borrower by 12:00 noon, New
York City time on the date on which such payment shall be due. Interest on the
Notes shall accrue from and including the date of each Loan to but excluding the
date on which such Loan is paid in full.
SECTION 2.14. Interest Adjustments. If the provisions of this Agreement
or the Note would at any time require payment by the Borrower to the Bank of any
amount of interest in excess of the maximum amount then permitted by applicable
law, the interest payments shall be reduced to the extent necessary so that the
Bank shall not receive interest in excess of such maximum amount. To the extent
that, pursuant to the foregoing sentence, the Bank shall receive interest
payments hereunder or under the Note in an amount less than the amount otherwise
provided, such deficit (hereinafter called the "Interest Deficit") will cumulate
and will be carried forward (without interest) until the termination of this
Agreement. Interest otherwise payable to the Bank hereunder or under the Note
for any subsequent period shall be increased by such maximum amount of the
Interest Deficit that may be so added without causing the Bank to receive
interest in excess of the maximum amount then permitted by applicable law.
SECTION 2.15. Participations, Etc. The Bank shall have the right at any
time, with or without notice to the Borrower, to sell, assign, transfer or
negotiate all or any part of the Note or the Commitment or grant participations
therein to one or more banks (foreign or domestic, including an affiliate of the
Bank) having sufficient capital to honor the Commitment, insurance companies or
other regulated financial institutions, pension funds or mutual funds. The
Borrower and each of the Guarantors agrees and consents to the Bank providing
financial and other information regarding its and their business and operations
to prospective purchasers or participants and further agree that to the extent
that the Bank should sell, assign, transfer or negotiate all or any part of the
Note or the Commitment, the Bank shall be forever released and discharged from
its obligations under the Note, the Commitment and this Agreement to the extent
same is sold, assigned, transferred or negotiated to any commercial bank,
insurance company or other regulated financial institution, pension fund or
mutual fund organized and existing under the laws of the United States or any
state thereof and having a net worth in excess of $1,000,000,000.00. Nothing
herein shall be read or construed as prohibiting or otherwise limiting the
ability or right of the Bank to pledge the Note to a Federal Reserve Bank.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to the Making of the Initial
Revolving Credit Loan. The obligation of the Bank to make the initial Revolving
Credit Loan contemplated by this Agreement is subject to the following
conditions precedent, all of which shall be performed or satisfied in a manner
in form and substance reasonably satisfactory to the Bank and its counsel:
(a) The Bank shall have received the Revolving Credit Note,
duly executed by the Borrower and payable to the order of the Bank.
(b) The Bank shall have received certified (as of the date of
this Agreement) copies of the resolutions of the board of directors of the
Borrower authorizing the Loans and authorizing and approving this Agreement and
the other Loan Documents and the execution, delivery and performance thereof and
certified copies of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to this Agreement and such
other Loan Documents.
(c) The Bank shall have received certified (as of the date of
this Agreement) copies of the resolutions of the boards of directors and the
shareholders of each of the Corporate Guarantors, authorizing and approving this
Agreement, their Guaranties and any other Loan Document applicable to the
Corporate Guarantors, and the execution, delivery and performance thereof and
certified copies of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to this Agreement, their
Guaranties and such other Loan Documents.
(d) The Bank shall have received a certificate of the
Secretary (attested to by another officer) of the Borrower certifying: (i) the
names and true signatures of the officer or officers of the Borrower authorized
to sign this Agreement, the Note and the other Loan Documents to be delivered
hereunder on behalf of the Borrower; and (ii) a copy of the Borrower's by-laws
as complete and correct on the date of this Agreement.
(e) The Bank shall have received a certificate of the
Secretary (attested to by another officer) of each of the Corporate Guarantors
certifying (i) the names and true signatures of the officer or officers of the
Corporate Guarantors authorized to sign this Agreement, their Guaranties and any
other Loan Documents to be delivered hereunder on behalf of the Corporate
Guarantors; (ii) a copy of each of the Corporate Guarantors' by-laws as complete
and correct on the date of this Agreement; and (iii) the stock ownership of each
Corporate Guarantor.
(f) The Bank shall have received copies of the certificates of
incorporation and all amendments thereto of the Borrower and each of the
Corporate Guarantors, certified in each case by the Secretary of each such
entity and a certificate of existence and good standing with respect to the
Borrower and each Corporate Guarantor from the Secretary of State (or equivalent
officer) of the state of incorporation of the Borrower and each Corporate
Guarantor and from the Secretary of State (or equivalent officer) of any state
in which the Borrower and each Corporate Guarantor is authorized to do business.
(g) The Bank shall have received copies of the (i) articles of
organization, (ii) operating agreement and all amendments thereto, (iii)
authenticated consents of members authorizing and approving this Agreement and
(iv) the name of the member/manager authorized to execute the Loan Documents of
each of the Limited Liability Company Guarantors.
(h) The Bank shall have received copies of the (i) partnership
agreement and all amendments thereto, (ii) authenticated consents of partners
authorizing and approving this Agreement and (iii) the name of the partner
authorized to execute the Loan Documents of each of the General Partnership
Guarantors and Limited Partnership Guarantors.
(i) The Bank shall have received an opinion of Mark Lundy,
Esq., general counsel for the Borrower and the Guarantors as to certain matters
referred to in Article IV hereof and as to such other matters as the Bank or its
counsel may reasonably request.
(j) The Bank shall have received from each of the Guarantors,
an executed Guaranty.
(k) The Bank shall have received from the Borrower an executed
Pledge Agreement giving to the Bank a first priority security interest in the
Equity Interest of each Subsidiary and Guarantor (the "Collateral"), together
with (i) all outstanding stock certificates for each Subsidiary, Corporate
Guarantor, and (ii) stock power forms executed in blank.
(l) The Bank shall have received confirmation that the UCC-1
filings in the appropriate jurisdictions have been filed to perfect the Bank's
security interests in the Collateral.
(m) The following statements shall be true and the Bank shall
have received a certificate signed by the President, Vice President or Chief
Financial Officer of the Borrower dated the date hereof, stating that:
(a) The representations and warranties contained in
Article IV of this Agreement and in the Loan Documents are true and correct in
all material respects on and as of such date;
(b) No Default or Event of Default has occurred and
is continuing, or would result from the making of the initial Revolving Credit
Loan;
(n) All schedules, documents, certificates and other
information provided to the Bank pursuant to or in connection with this
Agreement shall be satisfactory to the Bank and its counsel in all material
respects;
(o) The Borrower and/or the Guarantors and/or their respective
Affiliates shall have established a banking and depository relationship with the
Bank;
(p) The Bank shall have received the Borrower's 10-Q financial
statement filed with the SEC for the period fiscal quarter ended September 30,
2002;
(q) All legal matters incident to this Agreement and the Loan
transactions contemplated hereby shall be reasonably satisfactory to Zeichner
Ellman & Krause LLP, counsel to Merchants and Warshaw, Burstein, Cohen,
Schlessinger & Kuh, LLP, counsel to Leumi;
(r) The Bank shall have received such other approvals,
opinions or documents as the Bank or its counsel may reasonably request;
(s) The Bank shall have received payment of the reasonable
legal fees and expenses of the Bank's counsel;
(t) Merchants shall have received payment of a commitment fee
in the amount of $150,000.00, which the Borrower and Guarantors acknowledge was
earned by the Merchants in connection with the transactions contemplated hereby;
(u) Leumi shall have received payment of a commitment fee in
the amount of $50,000.00, which the Borrower and Guarantors acknowledge was
earned by the Leumi in connection with the transactions contemplated hereby; and
(v) The Intercreditor and Payment Sharing Agreement shall
have been executed by Merchants and Leumi.
SECTION 3.02. Conditions Precedent to All Revolving Credit Loans. The
obligation of the Bank to make each Revolving Credit Loan (including the initial
Revolving Credit Loan) shall be subject to the further condition precedent that
on the date of such Loan:
(a) The following statements shall be true and each request
for a Revolving Credit Loan shall be deemed a certification by the Borrower
that:
(i) The representations and warranties contained in
Article IV of this Agreement and in the other Loan Documents are true and
correct on and as of such date as though made on and as of such date; and
(ii) No Default or Event of Default has occurred and
is continuing, or would result
from such Loan.
(b) The Bank shall have received a covenant compliance
certificate prepared by management of the Borrower, indicating that, after
giving effect to the requested Loan, the Borrower shall remain in compliance
with all of the financial requirements set forth in Section 5.03 hereof.
(c) The Bank shall have received such other approvals,
opinions or documents as the Bank may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties. On the date hereof and on
each date that the Borrower requests a Revolving Credit Loan, the Borrower and
each Guarantor represents and warrants to the Bank as follows:
(a) Subsidiaries. On the date hereof, the only Subsidiaries of
the Borrower or any Guarantor are set forth on Schedule 4.01(a) annexed hereto.
All of the Equity Interests of such Subsidiaries shown as owned by the Borrower
or any Guarantor on Schedule 4.01(a) are owned by the Borrower or such
Guarantor, free and clear of any mortgage, pledge, lien or encumbrance. Except
as set forth on Schedule 4.01(a), there are not outstanding any warrants,
options, contracts or commitments of any kind entitling any Person to purchase
or otherwise acquire any securities or other Equity Interests of any Subsidiary,
nor are there outstanding any instruments which are convertible into or
exchangeable for any securities or other Equity Interests of any Subsidiary.
(b) Organization. The Borrower and each Guarantor is a
corporation, partnership or limited liability company, as applicable, duly
organized, validly existing and in good standing under the laws of the states of
their respective formation and the Borrower and each Guarantor has the power to
own its assets and to transact the business in which it is presently engaged.
The Borrower and each Guarantor is duly qualified and is in good standing in all
other jurisdictions where the failure to so qualify or be in good standing would
result in a Material Adverse Change in the Borrower or a Guarantor.
(c) Due Execution, etc. The execution, delivery and
performance by the Borrower and each Guarantor of this Agreement and the other
Loan Documents to which it is a party are within the Borrower's and each
Guarantor's corporate, limited liability company or partnership power, as
applicable, and have been duly authorized by all necessary corporate, limited
liability company or partnership action, as applicable, and do not and will not
(i) require any consent or approval of the stockholders, members or partners, as
applicable, of the Borrower or any Guarantor; (ii) contravene the Borrower's or
any Guarantor's certificate of incorporation or by-laws, partnership agreement,
operating agreement or articles of organization, as applicable; (iii) violate
any provision of or any law, rule, regulation, contractual restriction, order,
writ, judgment, injunction, or decree, determination or award binding on or
affecting the Borrower or any Guarantor; (iv) result in a breach of or
constitute a default under any indenture or loan or credit agreement, or any
other agreement, lease or instrument to which the Borrower or any Guarantor is a
party or by which it or its properties may be bound or affected; or (v) result
in, or require, the creation or imposition of any Lien (other than the Lien of
the Loan Documents) upon or with respect to any of the properties now owned or
hereafter acquired by the Borrower or any Guarantor.
(d) No Authorization, etc. No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Borrower or any Guarantor of this Agreement or any other Loan Document to
which it is a party, except authorizations, approvals, actions, notices or
filings which have been obtained, taken or made (or to be made in connection
with UCC financing statements executed in connection herewith), as the case may
be.
(e) Validity of Loan Documents. The Loan Documents when
delivered hereunder will have been duly executed and delivered on behalf of the
Borrower and each Guarantor and will be legal, valid and binding obligations of
the Borrower and each Guarantor, enforceable against the Borrower and each
Guarantor in accordance with their respective terms.
(f) Financial Statements. The management prepared consolidated
financial statements of the Borrower and its Subsidiaries for the nine (9) month
fiscal period ended September 30, 2002, copies of each of which have been
furnished to the Bank, and the consolidated results of operations of the
Borrower and its Subsidiaries for the periods ended on such dates, all in
accordance with GAAP, fairly present in all material respects the consolidated
financial condition of the Borrower and its Subsidiaries as at such dates. Since
such date there has been (i) except as set forth in Schedule 4.01(f) hereto, no
material increase in the liabilities of the Borrower and its Subsidiaries or any
Guarantor and (ii) no Material Adverse Change in the Borrower, any Subsidiary or
any Guarantor.
(g) No Litigation. There is no pending or threatened action,
proceeding or investigation against the Borrower or any Guarantor or any
Subsidiary before any court, governmental agency or arbitrator, which may either
in one case or in the aggregate, result in a Material Adverse Change in the
Borrower, such Guarantor or such Subsidiary.
(h) Tax Returns. The Borrower, each Guarantor and each
Subsidiary has filed all federal, state and local tax returns required to be
filed (subject to extensions granted) and has paid all taxes, assessments and
governmental charges and levies thereon to be due, including interest and
penalties.
(i) Licenses, etc. The Borrower, each Guarantor and each
Subsidiary possesses all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto, to conduct its business
substantially as now conducted and as presently proposed to be conducted, and
neither the Borrower, any Guarantor nor any Subsidiary is in violation of any
similar rights of others.
(j) Intentionally Omitted.
(k) Margin Credit. Neither the Borrower, any Guarantor nor any
Subsidiary is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations T, U or
X), and no proceeds of any Loan will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock or in any other way which will cause the Borrower or any
Guarantor to violate the provisions of Regulations T, U or X.
(l) Compliance with Law. The Borrower, each Guarantor and each
Subsidiary is in all material respects in compliance with all federal and state
laws and regulations in all jurisdictions where the failure to comply with such
laws or regulations could result in a Material Adverse Change in the Borrower,
such Guarantor or such subsidiary.
(m) ERISA. The Borrower, each Guarantor, each Subsidiary and
each ERISA Affiliate of the Borrower, a Guarantor or a Subsidiary are in
compliance in all material respects with all applicable provisions of ERISA.
Neither a Reportable Event nor a Prohibited Transaction has occurred and is
continuing with respect to any Plan of the Borrower, a Guarantor or a
Subsidiary; no notice of intent to terminate a Plan of the Borrower, a Guarantor
or a Subsidiary has been filed nor has any Plan been terminated; no
circumstances exist which constitute grounds under Section 4042 of ERISA
entitling the PBGC to institute proceedings to terminate, or appoint a trustee
to administrate, a Plan of the Borrower, a Guarantor or a Subsidiary, nor has
the PBGC instituted any such proceedings; neither the Borrower, any Guarantor,
any Subsidiary nor any ERISA Affiliate of the Borrower, any Guarantor or any
Subsidiary has completely or partially withdrawn under Sections 4201 or 4204 of
ERISA from a Multiemployer Plan; the Borrower, each Guarantor, each Subsidiary
and each ERISA Affiliate of the Borrower, any Guarantor or any Subsidiary have
met their minimum funding requirements under ERISA with respect to all of their
Plans and the present fair market value of all Plan assets exceeds the present
value of all vested benefits under each Plan, as determined on the most recent
valuation date of the Plan in accordance with the provisions of ERISA for
calculating the potential liability of the Borrower, any Guarantor, any
Subsidiary or any ERISA Affiliate of the Borrower, any Guarantor or any
Subsidiary to PBGC or the Plan under Title IV of ERISA; and neither the
Borrower, any Guarantor, or any Subsidiary nor any ERISA Affiliate of the
Borrower, a Guarantor or any Subsidiary has incurred any liability to the PBGC
under ERISA.
(n) Hazardous Material. The Borrower, each Guarantor and each
Subsidiary is, in all material respects, in compliance with all federal, state
or local laws, ordinances, rules, regulations or policies governing Hazardous
Materials; and neither the Borrower, any Guarantor nor any Subsidiary has used
Hazardous Materials on, from, or affecting any property now owned or occupied or
hereafter owned or occupied by the Borrower, any Guarantor or any Subsidiary in
any manner which violates federal, state or local laws, ordinances, rules,
regulations or policies governing the use, storage, treatment, transportation,
manufacture, refinement, handling, production or disposal of Hazardous
Materials; and to the best of the Borrower's and each Guarantor's knowledge, no
prior owner of any such property or any tenant, subtenant, prior tenant or prior
subtenant of any such property have used Hazardous Materials on, from or
affecting such property in any manner which violates federal, state or local
laws, ordinances, rules, regulations, or policies governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials except as set forth in the Borrower's files
which have been made available to the Bank.
(o) Use of Proceeds. The proceeds of the Revolving Credit
Loans shall be used exclusively for the purposes set forth in Section 2.05.
(p) Title to Assets. The Borrower, each Guarantor and each
Subsidiary has good and marketable title to all of its properties and assets.
The Properties and assets of the Borrower and each Guarantor are not subject to
any mortgage, judgment or similar Lien other than those described in Section
5.02(a) hereof.
(q) Casualty. Neither the business nor the properties of the
Borrower, any Guarantor or any Subsidiary are affected by any fire, explosion,
accident, strike, hail, earthquake, embargo, act of God or of the public enemy,
or other casualty (whether or not covered by insurance), which could result in a
Material Adverse Change in the Borrower, any Guarantor or any Subsidiary.
(r) Lien Priority. Except as disclosed on Schedule 4.01(r) or
as permitted by Section 5.02(a), the Lien(s) on the Collateral created by the
Pledge Agreement(s) constitute(s) valid first priority perfected security
interests in favor of the Bank.
(s) Credit Agreements. Schedule 4.01(s) is a complete and
correct list of all Debt.
(t) Solvency. The liability of each Guarantor as a result of
the execution of its respective Guaranty and the execution of this Agreement
shall not cause the liabilities (including contingent liabilities) of such
Guarantor to exceed the fair saleable value of its assets.
(u) Financial or Other Advantage. Each Guarantor acknowledges
that it has derived or expects to derive a financial or other advantage from the
Loans obtained by the Borrower from the Bank.
ARTICLE V
COVENANTS OF THE BORROWER AND THE GUARANTORS
SECTION 5.01. Affirmative Covenants. So long as any amount
shall remain outstanding under the Revolving Credit Note or so long as the
Commitment shall remain in effect, the Borrower and each Guarantor will, and
will cause each Subsidiary to, unless the Bank shall otherwise consent in
writing:
(a) Compliance with Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders, where the failure to so
comply could result in a Material Adverse Change in the Borrower, any Guarantor
or any Subsidiary;
(b) Reporting Requirements. Furnish to the Bank: (i) Annual
Financial Statements. As soon as available and in any event not later than the
earlier of (x) the date required to be filed with the SEC, or (y) 90 days after
the end of each fiscal year, a copy of the 10-K report of the Borrower and its
Subsidiaries for each fiscal year, including audited consolidated financial
statements with balance sheets with related statements of income and retained
earnings and statements of cash flows, all in reasonable detail and setting
forth in comparative form the figures for the previous fiscal year, together
with an unqualified opinion, prepared by management of the Borrower and
certified by independent certified public accountants selected by the Borrower
and reasonably satisfactory to the Bank, all such financial statements to be
prepared in accordance with GAAP, consistently applied;
(ii) Quarterly Financial Statements. As soon as
available and in any event not later than the earlier of (x) the date required
to be filed with the SEC, or (y) 45 days after the end of each fiscal quarter,
a copy of the 10-Q report of the Borrower and its Subsidiaries for each fiscal
quarter, (or in the case of the fourth fiscal quarter, within 75 days after the
end of the quarter, such financial information as would be provided in a 10-Q
report, management prepared, and certified by the chief financial officer of
the Borrower), including consolidated financial statements for such quarter and
for year to date, including a balance sheet with related statements of income
and retained earnings and a statement of cash flows, all in reasonable detail
and setting forth in comparative form the figures for the comparable quarter
and comparable year to date period for the previous fiscal year, all such
financial statements to be prepared by management of the Borrower in accordance
with GAAP, consistently applied;
(iii) Management Letters. Promptly upon receipt
thereof, copies of any reports submitted to the Borrower, any Guarantor or any
Subsidiary by independent certified public accountants in connection with the
examination of the financial statements of the Borrower, any Guarantor or any
Subsidiary made by such accountants;
(iv) Accountant's Report. Simultaneously with the
delivery of the annual financial statements referred to in Section 5.01(b)(i),
a certificate of the independent certified public accountants who audited such
statements to the effect that, in making the examination necessary for the audit
of such statements, they have obtained no knowledge of any condition or event
which constitutes a Default or Event of Default, or if such accountants shall
have obtained knowledge of any such condition or event, they shall specify in
such certificate each such condition or event of which they have knowledge and
the nature and status thereof;
(v) Quarterly Portfolio of Real Estate Investments.
As soon as available and in any event not later than 45 days after the end of
each fiscal quarter, a portfolio of real estate investments substantially in
the form attached as Exhibit C hereto;
(vi) Certificate of No Default. Simultaneously with
the delivery of the financial statements referred to in Section 5.01(b)(i) and
(ii), a certificate of the President, Vice President or the Chief Financial
Officer of the Borrower, (1) certifying that to the best of their knowledge
after due inquiry no Default or Event of Default has occurred and is continuing,
or if a Default or Event of Default has occurred and is continuing, a statement
as to the nature thereof and the action which is proposed to be taken with
respect thereto; and (2) with computations demonstrating compliance with the
covenants contained in Section 5.03 in form and substance similar to Exhibit D;
(vii) Notice of Litigation. Promptly after the
commencement thereof, notice of all actions, suits and proceedings before any
court or governmental department, commission, board, bureau, agency, or
instrumentality, domestic or foreign, whether or not covered by insurance,
affecting the Borrower, any Guarantor or any Subsidiary which, if determined
adversely to the Borrower such Guarantor, or such Subsidiary could result in a
Material Adverse Change in the Borrower, such Guarantor or such Subsidiary;
(viii) Notice of Defaults and Events of Default. As
soon as possible and in any event within five (5) days after the occurrence of
each Default or Event of Default, a written notice setting forth the details of
such Default or Event of Default and the action which is proposed to be taken
by the Borrower with respect thereto;
(ix) ERISA Reports. Promptly after the filing or
receiving thereof, copies of all reports, including annual reports, and notices
which the Borrower, any Guarantor or any Subsidiary files with or receives under
ERISA from the PBGC, the Internal Revenue Service or the U.S. Department of
Labor; and as soon as possible after the Borrower or any Guarantor knows or has
reason to know that any Reportable Event or Prohibited Transaction has occurred
with respect to any Plan of the Borrower, any Guarantor or any Subsidiary or
that the PBGC or the Borrower, any Guarantor or any Subsidiary has instituted
or will institute proceedings under Title IV of ERISA to terminate any Plan, the
Borrower will deliver to the Bank a certificate of the President, Vice President
or the Chief Financial Officer of the Borrower setting forth details as to such
Reportable Event, Prohibited Transaction or Plan termination and the action the
Borrower proposes to take with respect thereto;
(x) Reports to Other Creditors. Promptly after the
furnishing thereof, copies of any statement or report furnished to any other
party pursuant to the terms of any indenture, loan, credit or similar agreement
and not otherwise required to be furnished to the Bank pursuant to any other
clause of this Section 5.01(b);
(xi) Proxy Statements, Etc. Promptly after the
sending or filing thereof, copies of all proxy statements, financial statements
and reports which the Borrower or any Corporate Guarantor sends to its public
stockholders, if any, and copies of all regular, periodic, and special reports,
all registration statements which the Borrower or any Corporate Guarantor files
with the SEC or any governmental authority which may be substituted therefor,
or with any national securities exchange and any press releases or other notices
or information publicly disseminated;
(xii) Notice of Affiliates. Promptly after any Person
becomes an Affiliate of the Borrower or any Guarantor, notice to the Bank of
such Affiliate other than an Affiliate that is a natural person;
(xiii) Mortgage Financing. As soon as available and
in any event not later than 30 days prior to the closing of any mortgage
financing against any Unencumbered Property, a certificate prepared by
management of the Borrower (i) advising the Bank of the proposed mortgage
financing, (ii) detailing the Property or Properties to be mortgaged, (iii)
setting forth the source and terms of such financing, (iv) providing a copy of
the appraisal, if any, to the Bank if in the possession or control of Borrower,
and (v) evidencing compliance with all of the financial covenants set forth in
Section 5.03 hereof after giving effect to such mortgage financing;
(xiv) Real Estate Acquisition Information. Such Real
Estate Acquisition Information reasonably as requested by the Bank on a
semi-annual basis; and
(xv) General Information. Such other information
respecting the condition or operations, financial or otherwise, of the Borrower,
any Guarantor or any Subsidiary as the Bank may from time to time reasonably
request.
(c) Taxes. Pay and discharge all taxes, assessments and
governmental charges upon the Borrower, any Guarantor, any Subsidiary, its or
their income and its or their properties prior to the dates on which penalties
are attached thereto, unless and only to the extent that (A) (i) such taxes
shall be contested in good faith and by appropriate proceedings by the Borrower,
such Guarantor or such Subsidiary, (ii) there be adequate reserves therefor in
accordance with GAAP entered on the books of the Borrower, such Guarantor or
such Subsidiary and (iii) no enforcement proceedings against the Borrower, such
Guarantor or such Subsidiary have been commenced or (B) the Property is owned by
a Written-Off Subsidiary.
(d) Existence. Preserve and maintain the Borrower's, each
Guarantor's and each Subsidiary's existence and good standing in the
jurisdiction of its formation and the rights, privileges and franchises of the
Borrower, each Guarantor and each Subsidiary in each case where failure to so
preserve or maintain could result in a Material Adverse Change in the Borrower,
the Guarantors and their respective Subsidiaries, taken as a whole.
(e) Maintenance of Properties and Insurance. (i) Keep the
respective properties and assets (tangible or intangible) that are useful and
necessary in the Borrower's, each Guarantor's and each Subsidiary's business, in
good working order and condition, reasonable wear and tear excepted; and (ii)
maintain insurance with financially sound and reputable insurance companies or
associations in such amounts and covering such risks as are usually carried by
companies engaged in similar businesses and owning properties doing business in
the same general areas in which the Borrower, each Guarantor and each Subsidiary
operates.
(f) Books of Record and Account. Keep adequate records and
proper books of record and account in which complete entries will be made in a
manner to enable the preparation of financial statements in accordance with
GAAP, reflecting all financial transactions of the Borrower, each Guarantor and
each Subsidiary.
(g) Visitation. At any reasonable time, and from time to time,
permit the Bank or any agents or representatives thereof, to examine and make
copies of and abstracts from the books and records of, and, subject to the
requirements of all applicable leases, visit the properties of, the Borrower,
each Guarantor and each Subsidiary and to discuss the affairs, finances and
accounts of the Borrower, each Guarantor and each Subsidiary with any of their
respective officers or directors or the Borrower's, such Guarantor's or such
Subsidiary's independent accountants.
(h) Real Estate Acquisition Information. Provide the Real
Estate Acquisition Information to the Bank as soon as practical but in no event
less than forty-eight (48) hours prior to submitting a Drawing Notice attached
as Exhibit B hereto in connection with either a property acquisition or mortgage
refinancing;
(i) Performance and Compliance with Other Agreements. Perform
and comply with each of the provisions of each and every agreement the failure
to perform or comply with which could result in a Material Adverse Change in the
Borrower, any Guarantor or any Subsidiary;
(j) Continued Perfection of Liens and Security Interest.
Record or file or rerecord or refile any of the Loan Documents or a financing
statement or any other filing or recording or refiling or rerecording in each
and every office where and when necessary to preserve, perfect and continue the
security interests of the Loan Documents;
(k) Pension Funding. Comply with the following and cause each
ERISA Affiliate of the Borrower, each Guarantor and each Subsidiary to comply
with the following:
(i) engage solely in transactions which would not
subject any of such entities to either a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the Internal Revenue
Code in either case in an amount in excess of $25,000.00;
(ii) make full payment when due of all amounts which,
under the provisions of any Plan or ERISA, the Borrower, each Guarantor, each
Subsidiary or any ERISA Affiliate of any of same is required to pay as
contributions thereto;
(iii) all applicable provisions of the Internal
Revenue Code and the regulations promulgated thereunder, including but not
limited to Section 412 thereof, and all applicable rules, regulations and
interpretations of the Accounting Principles Board and the Financial Accounting
Standards Board;
(iv) not fail to make any payments in an aggregate
amount greater than $25,000.00 to any Multiemployer Plan that the Borrower, any
Guarantor, any Subsidiary or any ERISA Affiliate of the Borrower, any Guarantor
or any Subsidiary may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto; or
(v) not take any action regarding any Plan which
could result in the occurrence of a Prohibited Transaction.
(l) Licenses. Maintain at all times all licenses or permits
necessary to the conduct of the business of the Borrower, each Guarantor and
each Subsidiary or as may be required by any governmental agency or
instrumentality thereof;
(m) New Subsidiaries. (i) Cause any Subsidiary of the Borrower
formed after the date of this Agreement owning Unencumbered Properties to become
a Guarantor of all obligations of the Borrower to the Bank, whether incurred
under this Agreement or otherwise; and
(ii) Pledge to the Bank all of its Equity Interest on
any new Subsidiary or new Venture Interest pursuant to a Pledge Agreement, and
deliver to the Bank (i) all stock certificates and other certificates evidencing
such Equity Interest, and (ii) stock power forms executed in blank.
(n) Year 2000 Issue. Any reprogramming or other corrective
modifications required to permit, on or after January 1, 2000, the proper
functioning of and receipt, transmission, processing, storage, manipulation or
other utilization of data by (i) the Borrower's and Guarantors' computer
systems, and (ii) equipment containing embedded microchips has been or will be
timely completed such that no material adverse effect will occur with respect to
the Borrower's or Guarantors' business or operations stemming from the failure
of the Borrower's or Guarantors' or their respective subsidiaries' computer
hardware or software to function at least as effectively following December 31,
1999 as it did at all time periods prior thereto;
(o) Maintenance of Real Estate Investment Trust Status. The
Borrower shall maintain at all times its existence as a real estate investment
trust;
(p) Maintenance of Listing on National Stock Exchange. The
Borrower shall maintain at all times its listing on the American Stock Exchange
or another nationally recognized stock exchange; and
(q) Granting of Mortgages to Bank. Upon the occurrence of an
Event of Default, the Borrower and/or the Guarantors shall grant to the Bank
first priority mortgage liens against such Unencumbered Properties of the
Borrower and/or the Guarantors as are satisfactory to the Bank in the maximum
amount of the Note, together with appropriate title insurance policies,
appraisals, environmentals, etc. as may be reasonably requested by the Bank.
(r) Release of Guarantor. In the event that any Guarantor
refinances any Property, Bank shall release such Guarantor from its obligations
under its Guaranty, provided, however (i) neither Borrower nor such Guarantor is
in Default under this Agreement and (ii) Borrower or such Guarantor has prepaid
the proceeds of such refinance pursuant to Section 2.08 (a)(ii).
SECTION 5.02. Negative Covenants. So long as any amount shall
remain outstanding under the Note, or so long as the Commitment shall remain in
effect, neither the Borrower nor any Guarantor will, nor will the Borrower or
any Guarantor permit any Subsidiary to, without the written consent of the Bank:
(a) Liens, Etc. Create, incur, assume or suffer to exist, any
Lien, upon or with respect to any of its properties, now owned or hereafter
acquired, except:
(i) Liens in favor of the Bank;
(ii) Liens for taxes or assessments or other
government charges or levies if not yet due and payable or if due and payable
if they are being contested in good faith by appropriate proceedings and for
which appropriate reserves are maintained in accordance with GAAP or if the
Property is owned by a Written-Off Subsidiary;
(iii) Liens imposed by law, such as mechanics',
materialmen's, landlords', warehousemen's, and carriers' Liens, and other
similar Liens, securing obligations incurred in the ordinary course of business
which are not past due or which are being contested in good faith by appropriate
proceedings and for which appropriate reserves are maintained in accordance
with GAAP;
(iv) Liens under workers' compensation, unemployment
insurance, Social Security, or similar legislation;
(v) Liens, deposits, or pledges to secure the
performance of bids, tenders, contracts (other than contracts for the payment
of money), leases (permitted under the terms of this Agreement), public or
statutory obligations, surety, stay, appeal, indemnity, performance or other
similar bonds, or other similar obligations arising in the ordinary course of
business;
(vi) Liens described in Schedule 5.02(a), provided
that no such Liens or the Debt secured thereby shall be renewed, extended or
refinanced (other than Liens described in (ix) below);
(vii) Judgment and other similar Liens arising in
connection with court proceedings (other than those described in Section
6.01(f)), provided that the execution or other enforcement of such judgment or
Lien is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;
(viii) Easements, rights-of-way, restrictions, and
other similar encumbrances with respect to real property which, either in one
case or in the aggregate, do not materially interfere with the Borrower's or a
Guarantor's or a Subsidiary's occupation, use and enjoyment of the property or
assets encumbered thereby in the normal course of its business or materially
impair the value of the property subject thereto; or
(ix) Liens resulting from direct mortgage debt for
the purchase or refinance of real estate, provided that:
(1) The obligation secured by any Lien so
created, assumed, or existing shall not exceed 75% of the higher of cost or
appraised value of the property subject to such Lien (or in the event an
appraisal is not available, Borrower shall submit to the Bank a copy of the
application and/or commitment letter from an Institutional Lender which makes
it an express condition that the loan amount not exceed 75% of the value of the
property), except upon written consent from both Merchants and Leumi, which may
be withheld for any or no reason whatsoever; and in connection with such request
for consent, Borrower shall submit to the Bank in writing such information,
including but not limited to Real Estate Acquisition Information, as Bank shall
reasonably require, and Bank shall reply in writing to Borrower within fourteen
(14) days after receipt of all of the foregoing information.
(2) Each such Lien shall attach only to the
property (or properties) so acquired or refinanced and the improvements thereon;
and
(3) In the event that such Lien is against a
Guarantor, if required by the lender secured by such Lien and no Event of
Default has occurred, the Guaranty of such Guarantor shall be released by the
Bank.
(b) Debt. Create, incur, assume, or suffer to exist, any Debt,
except:
(i) Debt of the Borrower or a Guarantor under this
Agreement or the Note or any other Debt of the Borrower, a Guarantor or a
Subsidiary owing to the Bank;
(ii) Debt described in Schedule 5.02(b);
(iii) Accounts payable to trade creditors for goods
or services and current operating liabilities (other than for borrowed money)
in each case incurred in the ordinary course of business and paid within the
specified time, unless contested in good faith and by appropriate proceedings;
or
(iv) Debt of the Borrower, a Guarantor or a
Subsidiary secured by Liens permitted by Section 5.02(a)(ix).
(c) Intentionally Omitted.
(d) Merger. Merge into, or consolidate with or into, or have
merged into it, any Person; and, for the purpose of this subsection (d), the
acquisition or sale by the Borrower or a Guarantor by lease, purchase or
otherwise, of all, or substantially all, of the common stock or the assets of
any Person or of it shall be deemed a merger of such Person with the Borrower or
a Guarantor;
(e) Sale of Assets, Etc. Sell, assign, transfer, lease or
otherwise dispose of any of its assets, (including a saleleaseback transaction)
with or without recourse, other than in the ordinary course of its business.
(f) Investments, Etc. Make any Investment other than Permitted
Investments.
(g) Transactions With Affiliates. Except in the ordinary
course of business and pursuant to the reasonable requirements of the
Borrower's, a Guarantor's or Subsidiary's business and upon fair and reasonable
terms no less favorable to the Borrower, such Guarantor or such Subsidiary than
would be obtained in a comparable arm's length transaction with a Person not an
Affiliate, enter into any transaction, including, without limitation, the
purchase, sale, or exchange of property or the rendering of any service, with
any Affiliate.
(h) Intentionally Omitted.
(i) Guarantees. Guaranty, or in any other way become directly
or contingently obligated for any Debt of any other Person (including any
agreements relating to working capital maintenance, take or pay contracts or
similar arrangements) other than (i) the endorsement of negotiable instruments
for deposit in the ordinary course of business; or (ii) guarantees existing on
the date hereof and set forth in Schedule 5.02(i) annexed hereto; or (iii)
hazardous material indemnities; or (iv) indemnities regarding intentional fraud
or misrepresentation, misappropriation of security deposits or insurance
proceeds, waste, abandonment of any property, misapplication of rents post
default and other similar items.
(j) Change of Business. Materially alter the nature of its
business.
(k) Fiscal Year. Change the ending date of its fiscal year
from December 31.
(l) Losses. Incur a consolidated net loss for any fiscal year.
(m) Accounting Policies. Change any accounting policies,
except as permitted by GAAP.
(n) Management. Fail to retain at least three (3) of Fredric
H. Gould, Jeffrey Fishman, Matthew Gould, David Kalish and Israel Rosenzweig in
the management of the Borrower.
(o) Hazardous Material. Cause or permit any property owned or
occupied by the Borrower, a Guarantor or a Subsidiary to be used to generate,
manufacture, refine, transport, treat, store, handle, dispose, transfer, produce
or process Hazardous Materials, except in compliance with all applicable
federal, state and local laws or regulations; nor cause or permit, as a result
of any intentional or unintentional act or omission on the part of the Borrower,
a Guarantor, a Subsidiary or any tenant or subtenant, a release of Hazardous
Materials onto any property owned or occupied by the Borrower, a Guarantor, a
Subsidiary or onto any other property; fail to comply with all applicable
federal, state and local laws, ordinances, rules and regulations, whenever and
by whomever triggered; nor fail to obtain and comply with, any and all
approvals, registrations or permits required thereunder. The Borrower and the
Guarantors shall execute any documentation reasonably required by the Bank in
connection with the representations, warranties and covenants contained in this
sub-section and Section 4.01 of this Agreement.
(p) Dividends, Etc. Upon the occurrence of an Event of Default, the
Borrower shall not make distributions in excess of the sum necessary to permit
the Borrower to maintain its status as a real estate investment trust.
SECTION 5.03. Financial Requirements. So long as any amount
shall remain outstanding under the Note, or so long as the Commitment shall
remain in effect:
(a) Total Secured Debt to Total Secured Value. The Borrower
and the Guarantors will maintain at all times, on a consolidated basis, a ratio
of Total Secured Debt to Total Secured Value of not greater than 0.70 to 1.00,
such ratio to be tested quarterly.
(b) Total Debt to Total Value. The Borrower and the Guarantors
will maintain at all times, on a consolidated basis, a ratio of Total Debt to
Total Value of not greater than 0.70 to 1.00, such ratio to be tested quarterly.
(c) Debt Service Coverage Ratio. The Borrower and the
Guarantors will maintain at all times, on a consolidated basis, a Debt Service
Coverage Ratio, the ratio of (a) total Adjusted Net Operating Income, to (b)
Debt Service, of not less than 1.65 to 1.00, such ratio to be tested quarterly.
(d) Venture Interest Investments. Borrower and the Guarantors
shall not permit, on a consolidated basis, its Investment in Venture Interests
to exceed $25,000,000.00, to be tested quarterly.
(e) Minimum Total Unsecured Value. The Borrower and the
Guarantor shall own at least four Unencumbered Properties with a minimum Total
Unsecured Value in the aggregate amount of Fifteen Million ($15,000,000.)
Dollars at all times.
(f) Minimum Net Worth. Borrower will maintain at all times a
minimum Net Worth of at least Eighty Million ($80,000,000.00) Dollars.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events (each an "Event of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any installment of
principal of, or interest on, the Note when due, or the Borrower shall fail to
pay any fees or other amounts owed in connection with this Agreement when due;
or
(b) Any representation or warranty made by the Borrower or any
Guarantor in this Agreement or in any other Loan Document or which is contained
in any certificate, document, opinion, or financial or other statement furnished
at any time under or in connection with this Agreement or any other Loan
Document shall prove to have been incorrect in any material respect when made;
or
(c) The Borrower, any Guarantor or any Subsidiary shall fail
to perform any covenant contained in Section 5.01 of this Agreement on its part
to be performed or observed within fifteen (15) days of the date required for
such performance; provided however, that for a failure to perform under
Subsections 5.01(a), 5.01(d) and 5.01(e)(i), such longer period as shall be
reasonably necessary to cause compliance provided that Borrower, a Guarantor or
a Subsidiary (as the case may be) shall have commenced the curative process
prior to the expiration of such fifteen (15) day period and shall thereafter
diligently and in good faith complete the curative measure within ninety (90)
days thereafter; or
(d) The Borrower, any Guarantor or any Subsidiary shall fail
to perform any term, covenant or agreement contained in Subsection 5.02(o);
provided, however, that for a failure to perform under Subsection 5.02(o), such
longer period as shall be reasonably necessary to cause compliance provided that
Borrower, a Guarantor or a Subsidiary shall deliver to the Bank within ninety
(90) days thereafter, a written proposal regarding the curative process,
certified by an environmental company acceptable to the Bank, and such plan must
be approved by the Bank's environmental consultants; or
(e) The Borrower or any Guarantor shall fail to perform any
term, covenant or agreement contained in Section 5.03 on its part as is
evidenced by the date quarterly financial statements for each fiscal quarter
pursuant to Subsection 5.02(b)(ii) are due (the "Reporting Date"), provided,
however, to the extent that Borrower or any Guarantor is not in compliance with
any of the Section 5.03 requirements on the Reporting Date, Borrower or such
Guarantor shall have (45) days from the Reporting Date to comply with Section
5.03 and on the fifty-fifth (55th) day after the Reporting Date, shall deliver a
compliance certificate to the Bank along with such management prepared financial
statements which evidence that the Borrower or such Guarantor is in compliance
with Section 5.03.
(f) The Borrower, any Guarantor or any Subsidiary shall fail
to perform or observe any other term, covenant or agreement contained in this
Agreement or in any other Loan Document (other than the Notes) on its part to be
performed or observed; or
(g) The Borrower, any Guarantor or any Subsidiary shall fail
to pay any Debt or Debts of the Borrower, any Guarantor or any Subsidiary in the
singular or aggregate principal amount of $50,000.00 or more (excluding Debt
evidenced by the Notes), or any installment, interest or premium thereon, when
due (whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace period, if
any, specified in the agreements or instruments relating to such Debt or Debts;
or any other default under any agreements or instruments relating to any such
Debt or Debts, or any other event shall occur and shall continue after the
applicable grace period, if any, specified in such agreements or instruments, if
the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Debt or Debts; or any such Debt or Debts
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the stated maturity
thereof and is not then so paid within three (3) business days of the date same
shall have been declared due and payable; provided, however, that it shall not
constitute an Event of Default for a Written-Off Subsidiary not to pay its Debt;
or
(h) The Borrower, any Guarantor or any Subsidiary shall
generally not pay its Debts as such Debts become due, or shall admit in writing
its inability to pay its Debts generally, or shall make a general assignment for
the benefit of creditors; or any proceeding shall be instituted by or against
the Borrower, any Guarantor or any Subsidiary seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its Debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial part
of its property and if instituted against the Borrower, any Guarantor or any
Subsidiary shall remain undismissed for a period of 30 days; or the Borrower,
any Guarantor or any Subsidiary shall take any action to authorize any of the
actions set forth above in this subsection (h); provided, however, that it shall
not constitute an Event of Default for a Written-Off Subsidiary not to pay its
Debt or to have a receiver or similar Person appointed; or
(i) Any judgment or order or combination of judgments or
orders for the payment of money, in the amount of $100,000.00 or more,
singularly or in the aggregate, which sum shall not be subject to full, complete
and effective insurance coverage, shall be rendered against the Borrower, any
Guarantor or any Subsidiary and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; provided, however, that it shall not constitute a Default for a
Written-Off Subsidiary to have a judgment entered against it; or
(j) Any of the following events occur or exist with respect to
the Borrower, any Guarantor, any Subsidiary or any ERISA Affiliate of the
Borrower, any Guarantor or any Subsidiary: (i) any Prohibited Transaction
involving any Plan; (ii) any Reportable Event with respect to any Plan; (iii)
the filing under Section 4041 of ERISA of a notice of intent to terminate any
Plan or the termination of any Plan; (iv) any event or circumstance that might
constitute grounds entitling the PBGC to institute proceedings under Section
4042 of ERISA for the termination of, or for the appointment of a trustee to
administer, any Plan, or the institution of the PBGC of any such proceedings;
(v) complete or partial withdrawal under Section 4201 or 4204 of ERISA from a
Multiemployer Plan or the reorganization insolvency, or termination of any
Multiemployer Plan; and in each case above, such event or condition, together
with all other events or conditions, if any, could in the opinion of the Bank
subject the Borrower, any Guarantor, any Subsidiary or any such ERISA Affiliate
to any tax, penalty, or other liability to a Plan, a Multiemployer Plan, the
PBGC, or otherwise (or any combination thereof) which is either singularly or in
the aggregate $50,000.00 or more; or
(k) Any Guarantor shall fail, beyond any applicable grace or
cure period, to perform or observe any term or provision of its Guaranty or any
representation or warranty made by any Guarantor (or any of its officers or
partners) in connection with such Guarantor's Guaranty shall prove to have been
incorrect in any material respect when made; or
(l) This Agreement or any other Loan Document, at any time
after its execution and delivery and for any reason, ceases to be in full force
and effect or shall be declared to be null and void, or the validity or
enforceability of any document or instrument delivered pursuant to this
Agreement shall be contested by the Borrower, any Guarantor or any other party
to such document or instrument or the Borrower, any Guarantor or any other party
to such document or instrument shall deny that it has any or further liability
or obligation under any such document or instrument; or
(m) An event of default beyond any applicable grace period
specified in any Loan Document other than this Agreement shall have occurred and
be continuing.
SECTION 6.02. Remedies on Default. Upon the occurrence and
continuance of an Event of Default the Bank may by notice to the Borrower, (i)
terminate the Commitment, (ii) declare the Note, all interest thereon and all
other amounts payable under this Agreement to be due and payable, whereupon the
Commitment shall be terminated, the Note, all such interest and all such amounts
shall become and be due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower and the Guarantors and (iv) proceed to enforce its rights whether by
suit in equity or by action at law, whether for specific performance of any
covenant or agreement contained in this Agreement or any other Loan Document, or
in aid of the exercise of any power granted in either this Agreement or any
other Loan Document or proceed to obtain judgment or any other relief whatsoever
appropriate to the enforcement of its rights, or proceed to enforce any other
legal or equitable right which the Bank may have by reason of the occurrence of
any Event of Default hereunder or under any other Loan Document, provided,
however, upon the occurrence of an Event of Default referred to in Section
6.01(h), the Commitment shall be immediately terminated, the Note, all interest
thereon and all other amounts payable under this Agreement shall be immediately
due and payable without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower and the
Guarantors. Any amounts collected pursuant to action taken under this Section
6.02 shall be applied to the payment of, first, any costs incurred by the Bank
in taking such action, including but without limitation reasonable attorneys
fees and expenses, second, to payment of the accrued interest on the Note, and
third, to payment of the unpaid principal of the Note, in the order determined
by the Bank.
SECTION 6.03. Remedies Cumulative. No remedy conferred upon or
reserved to the Bank hereunder or in any other Loan Document is intended to be
exclusive of any other available remedy, but each and every such remedy shall be
cumulative and in addition to every other remedy given under this Agreement or
any other Loan Document or now or hereafter existing at law or in equity. No
delay or omission to exercise any right or power accruing upon any Event of
Default shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time
and as often as may be deemed expedient. In order to entitle the Bank to
exercise any remedy reserved to it in this Article VI, it shall not be necessary
to give any notice, other than such notice as may be herein expressly required
in this Agreement or in any other Loan Document.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Etc. No amendment, modification,
termination or waiver of any provision of any Loan Document to which the
Borrower or any Guarantor is a party, nor consent to any departure by the
Borrower or any Guarantor from any provision of any Loan Document to which it is
a party, shall in any event be effective unless the same shall be in writing and
signed by the Bank, the Borrower and any Guarantor that may be a party, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 7.02. Notices, Etc. All notices and other
communications provided for in this Agreement shall be in writing (including
telegraphic communication) and mailed, sent by nationally recognized overnight
mail delivery service, or delivered, if to the Borrower or any Guarantor, at the
address of the Borrower set forth at the beginning of this Agreement to the
attention of David Kalish (with a courtesy copy to Mark Lundy, Esq.) and if to
the Bank, at the address of the Bank set forth at the beginning of this
Agreement to the attention of Andrew Baron, Vice President, Valley National
Bank, Merchants Bank Division and to the attention of Frederick Wilhelm, Vice
President, Bank Leumi USA or, as to each party, at such other address as shall
be designated by such party in a written notice to the other parties complying
as to delivery with the terms of this Section 7.02. All such notices and
communications shall be effective as to Borrower or any Guarantor (i) three (3)
business days after being mailed by registered or certified mail, postage
prepaid, (ii) upon delivery if by personal messenger or hand delivery service or
(iii) the next business day after depositing with an agent or reputable
overnight carrier service. All such notices and communications shall be
effective as to the Bank when actually received by the Bank.
SECTION 7.03. No Waiver, Remedies. No failure on the part of
the Bank to exercise, and no delay in exercising, any right, power or remedy
under any Loan Document, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law.
SECTION 7.04. Costs, Expenses and Taxes. The Borrower agrees
to pay on demand all reasonable costs and expenses of the Bank in connection
with the preparation, execution, delivery and administration of this Agreement,
the Note and any other Loan Documents, including without limitation, the
reasonable fees and expenses of counsel for the Bank with respect thereto and
with respect to advising the Bank as to its rights and responsibilities under
this Agreement and the other Loan Documents, and all costs and expenses, if any
(including reasonable counsel fees and expenses), in connection with the
enforcement of this Agreement, the Note and any other Loan Documents. Other than
for the default of the Bank hereunder, the Borrower and the Guarantors shall at
all times protect, indemnify, defend and save harmless the Bank from and against
any and all claims, actions, suits and other legal proceedings, and liabilities,
obligations, losses, damages, penalties, judgments, costs, expenses or
disbursements which the Bank may, at any time, sustain or incur by reason of or
in consequence of or arising out of the execution and delivery of this Agreement
and the other Loan Documents and the consummation of the transactions
contemplated hereby. The Borrower and the Guarantors acknowledge that it is the
intention of the parties hereto that this Agreement shall be construed and
applied to protect and indemnify the Bank against any and all risks involved in
the execution and delivery of this Agreement and the other Loan Documents and
the consummation of the transactions contemplated hereby, all of which risks are
hereby assumed by the Borrower and the Guarantors, including, without
limitation, any and all risks of the acts or omissions, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority, provided that the Borrower and the Guarantors shall not
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Bank's gross negligence or willful misconduct. The provisions of this
Section 7.04 shall survive the payment of the Note and the termination of this
Agreement.
SECTION 7.05. Right of Set-off. Upon the occurrence and during
the continuance of any Event of Default, the Bank is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by the Bank
or any affiliate of the Bank to or for the credit or the account of the Borrower
or any Guarantor against any and all of the obligations of the Borrower and the
Guarantors now or hereafter existing under this Agreement, the Note and the
other Loan Documents, irrespective of whether or not the Bank shall have made
any demand under this Agreement, the Note or such other Loan Documents and
although such obligations may be unmatured. The rights of the Bank under this
Section 7.05 are in addition to all other rights and remedies (including,
without limitation, other rights of set-off) which the Bank may have.
SECTION 7.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower, the Guarantors and
the Bank and thereafter it shall be binding upon and inure to the benefit of the
Borrower, the Guarantors and the Bank and their respective successors and
assigns, except that the Borrower and the Guarantors shall not have any right to
assign its or their rights hereunder or any interest herein without the prior
written consent of the Bank.
SECTION 7.07. Further Assurances. The Borrower and each
Guarantor agrees at any time and from time to time at its expense, upon request
of the Bank or its counsel, to promptly execute, deliver, or obtain or cause to
be executed, delivered or obtained any and all further instruments and documents
and to take or cause to be taken all such other action the Bank may reasonably
deem appropriate in obtaining the full benefits of, this Agreement or any other
Loan Document.
SECTION 7.08. Section Headings, Severability, Entire
Agreement. Section and subsection headings have been inserted herein for
convenience only and shall not be construed as part of this Agreement. Every
provision of this Agreement and each other Loan Document is intended to be
severable; if any term or provision of this Agreement, any other Loan Document,
or any other document delivered in connection herewith shall be invalid, illegal
or unenforceable for any reason whatsoever, the validity, legality and
enforceability of the remaining provisions hereof or thereof shall not in any
way be affected or impaired thereby. All exhibits and schedules annexed to this
Agreement shall be deemed to be part of this Agreement. This Agreement, the
other Loan Documents and the exhibits and schedules annexed hereto and thereto
embody the entire agreement and understanding among the Borrower, the Guarantors
and the Bank with respect to the transactions contemplated hereby and supersede
all prior agreements and understandings relating to the subject matter hereof.
SECTION 7.09. Governing Law. This Agreement, the Notes and all
other Loan Documents shall be governed by, and construed in accordance with, the
laws of the State of New York.
SECTION 7.10. Waiver of Jury Trial. The Borrower, each
Guarantor and the Bank waive all rights to trial by jury in any action or
proceeding involving, directly or indirectly any matter (whether sounding in
tort, contract or otherwise) in any way, arising out of, relating to, or
connected with this Agreement, any other Loan Document or the transactions
contemplated hereby.
SECTION 7.11. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
ONE LIBERTY PROPERTIES, INC.
By: \s\ Mark H. Lundy
-------------------------------------------------
Mark H. Lundy, Vice President
OLP CHATTANOOGA, INC.
By: \s\ Mark H. Lundy
-------------------------------------------------
Mark H. Lundy, Vice President
OLP PALM BEACH, INC.
By: \s\ Mark H. Lundy
-------------------------------------------------
Mark H. Lundy, Vice President
OLP TEXAS, INC.
By: \s\ Mark H. Lundy
-------------------------------------------------
Mark H. Lundy, Vice President
OLP HAMILTON, INC.
By: \s\ Mark H. Lundy
-------------------------------------------------
Mark H. Lundy, Vice President
OLP RABRO DRIVE CORP.
By: \s\ Mark H. Lundy
-------------------------------------------------
Mark H. Lundy, Vice President
OLP THEATRES LLC
by: One Liberty Properties, Inc. its sole member
By: \s\ Mark H. Lundy
-------------------------------------------------
Mark H. Lundy, Vice President
OLP LAKE CHARLES LLC
by: One Liberty Properties, Inc. its sole member
By: \s\ Mark H. Lundy
-------------------------------------------------
Mark H. Lundy, Vice President
OLP MOVIES LLC
by: One Liberty Properties, Inc. its sole member
By: \s\ Mark H. Lundy
-------------------------------------------------
Mark H. Lundy, Vice President
OLP TUCKER LLC
by: One Liberty Properties, Inc. its sole member
By: \s\ Mark H. Lundy
-------------------------------------------------
Mark H. Lundy, Vice President
OLP LAKE WORTH LLC
by: One Liberty Properties, Inc. its sole member
By: \s\ Mark H. Lundy
-------------------------------------------------
Mark H. Lundy, Vice President
VALLEY NATIONAL BANK, MERCHANTS BANK DIVISION
By: \s\ Andrew Baron
-------------------------------------------------
Name: Andrew Baron
Title: Vice President
BANK LEUMI USA
By: \s\ Frederic Wilhelm
-------------------------------------------------
Name: Frederic Wilhelm
Title: Vice President
SCHEDULE 4.01(a)
Subsidiaries
Name
OLP BATAVIA, INC.
OLP IOWA, INC.
OLP TEXAS, INC.
OLP - TSA GEORGIA, INC.
OLP DIXIE DRIVE HOUSTON, INC.
OLP GREENWOOD VILLAGE, COLORADO, INC.
OLP FT. MYERS, INC.
OLP RABRO DRIVE CORP.
OLP CHATTANOOGA, INC.
OLP COLUMBUS, INC.
OLP MESQUITE, INC.
OLP SOUTH HIGHWAY HOUSTON, INC.
OLP SELDEN, INC.
OLP PALM BEACH, INC.
OLP NEW HYDE PARK, INC.
OLP CHAMPAIGN, INC.
OLP EL PASO, INC.
OLP HAMILTON, INC.
OLP PLANO, INC.
OLP HANOVER PA, INC.
OLP GRAND RAPIDS, INC.
OLP PLANO I, L.P.
OLP EL PASO I, L.P.
OLP HANOVER I LLC
OLP PLANO LLC
OLP EL PASO I LLC
OLP THEATRES LLC
OLP RONKONKOMA LLC
OLP HAUPPAUGE, LLC
OLP LAKE CHARLES LLC
OLP MOVIES LLC
OLP TUCKER LLC
OLP LAKE WORTH LLC
SCHEDULE 4.01(f)
MATERIAL EVENTS
None.
SCHEDULE 4.01 (s)
Credit Agreements, etc.
See attached.
SCHEDULE 5.02(a)
Liens
See attached.
SCHEDULE 5.02(b)
Debt
See attached.
SCHEDULE 5.02(i)
Guaranties
None.
EXHIBIT A(1)
MERCHANTS REVOLVING CREDIT NOTE
$22,500,000.00 New York, New York
March 21, 2003
FOR VALUE RECEIVED, on the Maturity Date, ONE LIBERTY PROPERTIES, INC.,
a Maryland corporation, having its principal place of business at 60 Cutter Mill
Road, Great Neck, New York 11021 (the "Borrower"), promises to pay to the order
of VALLEY NATIONAL BANK, MERCHANTS BANK DIVISION (the "Bank") at its office
located at 275 Madison Avenue, New York, New York 10016, the principal sum of
the lesser of: (a) Twenty-Two Million Five Hundred Thousand ($22,500,000.00)
Dollars; or (b) the aggregate unpaid principal amount of all Merchants Revolving
Credit Loans made by the Bank to the Borrower pursuant to the Agreement (as
defined below).
The Borrower hereby authorizes the Bank to enter from time to time the
amount of each Loan to the Borrower and the amount of each payment on a Loan on
the schedule annexed hereto and made a part hereof. Failure of the Bank to
record such information on such schedule shall not in any way affect the
obligation of the Borrower to pay any amount due under this Note.
The Borrower shall pay interest on the unpaid balance of this Note from
time to time outstanding at said office, at the rate of interest and at the
times set forth in the Agreement.
All payments including prepayments on this Note shall be made in lawful
money of the United States of America in immediately available funds. Except as
otherwise provided in the Agreement, if a payment becomes due and payable on a
day other than a Business Day, the due date thereof shall be extended to the
next succeeding Business Day, and interest shall be payable thereon at the rate
herein specified during such extension.
This Note is the Merchants Revolving Credit Note referred to in that
certain Loan Agreement among the Borrower, certain Guarantors and the Bank of
even date herewith (the "Agreement"), as such Agreement may be amended from time
to time, and is subject to prepayment and its maturity is subject to
acceleration upon the terms contained in said Agreement. All capitalized terms
used in this Note and not defined herein shall have the meanings given them in
the Agreement.
If any action or proceeding be commenced to collect this Note or
enforce any of its provisions, the Borrower further agrees to pay all costs and
expenses of such action or proceeding and reasonable attorneys' fees and
expenses and further expressly waives any and every right to interpose any
counterclaim in any such action or proceeding. The Borrower hereby submits to
the jurisdiction of the Supreme Court of the State of New York and agrees with
the Bank that personal jurisdiction over the Borrower shall rest with the
Supreme Court of the State of New York for purposes of any action on or related
to this Note, the liabilities hereunder, or the enforcement of either or all of
the same. The Borrower hereby waives personal service by manual delivery and
agrees that service of process may be made by post-paid certified mail directed
to the Borrower at the Borrower's address designated in the Agreement or at such
other address as may be designated in writing by the Borrower to the Bank in
accordance with Section 7.02 of the Agreement, and that upon mailing of such
process such service be effective with the same effect as though personally
served.
THE BORROWER HEREBY EXPRESSLY WAIVES ANY AND EVERY RIGHT TO A TRIAL BY
JURY IN ANY ACTION ON OR RELATED TO THIS NOTE, THE LIABILITIES HEREUNDER OR THE
ENFORCEMENT OF EITHER OR ALL OF THE SAME.
The Bank may transfer this Note (subject to Section 2.15 of the
Agreement) and may deliver the security or any part thereof to the transferee or
transferees, who shall thereupon become vested with all the powers and rights
above given to the Bank in respect thereto, and the Bank shall thereafter be
forever relieved and fully discharged from any liability or responsibility in
the matter. The failure of any holder of this Note to insist upon strict
performance of each and/or all of the terms and conditions hereof shall not be
construed or deemed to be a waiver of any such term or condition.
The Borrower and all endorsers and guarantors hereof waive presentment
and demand for payment, notice of non-payment, protest, and notice of protest.
This Note shall be construed in accordance with and governed by the
laws of the State of New York.
ONE LIBERTY PROPERTIES, INC.
By:
Name:
Title:
SCHEDULE OF REVOLVING CREDIT LOANS
Amount of
Principal Name of Principal
Date Amount of Loan Paid or Prepaid Unpaid Balance Person Making Notation
---- -------------- --------------- -------------- ----------------------
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7
EXHIBIT A(2)
LEUMI REVOLVING CREDIT NOTE
$7,500,000.00 New York, New York
March 21, 2003
FOR VALUE RECEIVED, on the Maturity Date, ONE LIBERTY PROPERTIES, INC.,
a Maryland corporation, having its principal place of business at 60 Cutter Mill
Road, Great Neck, New York 11021 (the "Borrower"), promises to pay to the order
of BANK LEUMI USA (the "Bank") at its office located at 562 Fifth Avenue, New
York, New York 10036, the principal sum of the lesser of: (a) Seven Million Five
Hundred Thousand ($7,500,000.00) Dollars; or (b) the aggregate unpaid principal
amount of all Leumi Revolving Credit Loans made by the Bank to the Borrower
pursuant to the Agreement (as defined below).
The Borrower hereby authorizes the Bank to enter from time to time the
amount of each Loan to the Borrower and the amount of each payment on a Loan on
the schedule annexed hereto and made a part hereof. Failure of the Bank to
record such information on such schedule shall not in any way affect the
obligation of the Borrower to pay any amount due under this Note.
The Borrower shall pay interest on the unpaid balance of this Note from
time to time outstanding at said office, at the rate of interest and at the
times set forth in the Agreement.
All payments including prepayments on this Note shall be made in lawful
money of the United States of America in immediately available funds. Except as
otherwise provided in the Agreement, if a payment becomes due and payable on a
day other than a Business Day, the due date thereof shall be extended to the
next succeeding Business Day, and interest shall be payable thereon at the rate
herein specified during such extension.
This Note is the Leumi Revolving Credit Note referred to in that
certain Loan Agreement among the Borrower, certain Guarantors and the Bank of
even date herewith (the "Agreement"), as such Agreement may be amended from time
to time, and is subject to prepayment and its maturity is subject to
acceleration upon the terms contained in said Agreement. All capitalized terms
used in this Note and not defined herein shall have the meanings given them in
the Agreement.
If any action or proceeding be commenced to collect this Note or
enforce any of its provisions, the Borrower further agrees to pay all costs and
expenses of such action or proceeding and reasonable attorneys' fees and
expenses and further expressly waives any and every right to interpose any
counterclaim in any such action or proceeding. The Borrower hereby submits to
the jurisdiction of the Supreme Court of the State of New York and agrees with
the Bank that personal jurisdiction over the Borrower shall rest with the
Supreme Court of the State of New York for purposes of any action on or related
to this Note, the liabilities hereunder, or the enforcement of either or all of
the same. The Borrower hereby waives personal service by manual delivery and
agrees that service of process may be made by post-paid certified mail directed
to the Borrower at the Borrower's address designated in the Agreement or at such
other address as may be designated in writing by the Borrower to the Bank in
accordance with Section 7.02 of the Agreement, and that upon mailing of such
process such service be effective with the same effect as though personally
served.
THE BORROWER HEREBY EXPRESSLY WAIVES ANY AND EVERY RIGHT TO A TRIAL BY
JURY IN ANY ACTION ON OR RELATED TO THIS NOTE, THE LIABILITIES HEREUNDER OR THE
ENFORCEMENT OF EITHER OR ALL OF THE SAME.
The Bank may transfer this Note (subject to Section 2.15 of the
Agreement) and may deliver the security or any part thereof to the transferee or
transferees, who shall thereupon become vested with all the powers and rights
above given to the Bank in respect thereto, and the Bank shall thereafter be
forever relieved and fully discharged from any liability or responsibility in
the matter. The failure of any holder of this Note to insist upon strict
performance of each and/or all of the terms and conditions hereof shall not be
construed or deemed to be a waiver of any such term or condition.
The Borrower and all endorsers and guarantors hereof waive presentment
and demand for payment, notice of non-payment, protest, and notice of protest.
This Note shall be construed in accordance with and governed by the
laws of the State of New York.
ONE LIBERTY PROPERTIES, INC.
By:
Name:
Title:
SCHEDULE OF REVOLVING CREDIT LOANS
Amount of
Principal Name of Principal
Date Amount of Loan Paid or Prepaid Unpaid Balance Person Making Notation
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EXHIBIT B
DRAWING NOTICE
Date:________________
Valley National Bank, Merchants Bank Division
275 Madison Avenue
New York, New York 10036
Attention: Andrew Baron, Vice President
Bank Leumi USA
562 Fifth Avenue
New York, New York 10016
Attention: Frederic Wilhelm, Vice President
We hereby refer you to the Loan Agreement dated as of March 21, 2003,
between made by One Liberty Properties, Inc. and certain other guarantors to the
order of Valley National Bank, Merchants Bank Division and Bank Leumi USA (the
"Loan Agreement").
We wish to borrow the following amount, seventy-five (75%) thereof from
Merchants and twenty-five (25%) thereof from Leumi, pursuant to such Loan
Agreement and, in connection therewith, I hereby confirm that I accept all the
terms and conditions of such Loan Agreement, including all reporting
requirements and conditions precedent necessary for the Bank to make a revolving
credit loan, and that there is no Event of Default which has occurred and is
continuing as of the date hereof:
We have provided to the Bank at least forty-eight (48) hours prior to
the date hereof, the Real Estate Acquisition Information, as defined in the Loan
Agreement.
Amount of Loan: U.S.$ ______________
Term of Loan:_____________________
Purpose of Loan: (Address of property)
------------------------------------------------------
Expected means of repayment:
------------------------------------------
Very truly yours,
One Liberty Properties, Inc.
By:
----------------------------
Print Name:
Title:
EXHIBIT C
PORTFOLIO OF REAL ESTATE INVESTMENTS
See attached.
EXHIBIT D
FORM OF COMPUTATION OF COVENANT COMPLIANCE
See attached.
FORM OF SECTION 3.01(m) CERTIFICATE
[DATE]
Reference is made to the Loan Agreement, dated as of March 21,
2003, by and among One Liberty Properties, Inc., a Maryland corporation (the
"Borrower"), certain other guarantors as defined therein ("Guarantors") and
Valley National Bank, Merchants Bank Division and Bank Leumi USA (collectively,
the "Lender") (as the same may be amended, modified or supplemented from time to
time, the "Loan Agreement"). Capitalized terms used herein which are defined in
the Loan Agreement shall have the meanings therein defined. This Certificate is
delivered pursuant to Section 3.01(m) of the Loan Agreement.
The undersigned, being the duly elected, qualified and acting
chief financial officer of the Borrower, on behalf of the Borrower, and solely
in his or her capacity as an officer of the Borrower, hereby certifies and
warrants that:
1.
--------------- is the [President] [Vice President] [Chief
Financial Officer] of the Borrower and that, as such, he or she is authorized to
execute this certificate on behalf of the Borrower.
2. The representations and warranties contained in Section 4
of the Loan Agreement and in the Loan Documents are true and correct in all
material respects on and as of the date hereof.
3. No Default or Event of Default has occurred and is
continuing or would result from the making of the initial Revolving Credit Loan.
BORROWER: ONE LIBERTY PROPERTIES, INC.
By:
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
ONE LIBERTY PROPERTIES, INC.
60 CUTTER MILL ROAD
SUITE 303
GREAT NECK, NEW YORK 11021
516.466.3100/FAX 516.466.3132
March 26, 2003
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
We enclose Form 8-KA amending Form 8-K filed on March 25, 2003. The sole
purpose of this filing is to include a signature block. The signature block was
inadvertently omitted from the Edgar filed copy.
Very truly yours,
ONE LIBERTY PROPERTIES, INC.
By: /s/
--------------------------------
Mark H. Lundy, Vice President
And Secretary