U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[ X ]Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
or
[ ]Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from________________to_______________
Commission file no.: 0-21455
DECADE COMPANIES INCOME PROPERTIES - A LIMITED PARTNERSHIP
(Name of small business issuer in its charter)
Wisconsin 39-1518732 (State or
other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
250 Patrick Blvd., Suite 140
Brookfield, Wisconsin 53045-5864 (Address of
principal executive offices) (Zip Code)
Issuer's telephone number: 262-792-9200
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Interests
(Title of Class)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X
. No .
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be
contained to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.[ X ]
State issuer's revenues for its most recent fiscal year. $6,567,032
The aggregate market value of the Limited Partnership Interests ("Interests")
is indeterminable because there is no established or organized market for the
Interests.<PAGE>ANNUAL REPORT ON FORM 10-KSB
INDEX
YEAR ENDED DECEMBER 31, 1999
DECADE COMPANIES INCOME PROPERTIES - A LIMITED PARTNERSHIP
BROOKFIELD, WISCONSIN
Part I Item Page
Description of Business 1 3
Description of Property 2 9
Legal Proceedings 3 22
Submission of Matters to a Vote of Security Holders 4 22
Part II
Market for Limited Partnership
Interests and Related Partner Matters 5 22
Management's Discussion and Analysis or Plan
of Operations 6 24
Financial Statements 7 41
Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 8 41
Part III
Directors, Executive Officers, Promoters and 9 41
Control Persons; Compliance with Section 16(a)
of the Exchange Act
Executive Compensation 10 43
Security Ownership and Certain Beneficial Owners and
Management 11 43
Certain Relationships and Related Transactions 12 44
Exhibits and Reports on Form 8-K 13 45
Signatures 51
Audited Financial Statements 52
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Decade Companies Income Properties
Annual Report on Form 10-KSB
For year ended December 31, 1999
Page 3
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PART I
Item 1. Description of Business
(a) Business Development
Decade Companies Income Properties - A Limited Partnership (the "Partnership")
is a limited partnership formed in 1985 under the Uniform Limited Partnership
Act of the State of Wisconsin. A brief summary of the development of the
Partnership during the last three years follows:
During the last three years the Partnership owned and operated three
residential apartment complexes consisting of 935 rental apartment units
located in Florida and Wisconsin.
In January 1997 two matters were submitted to vote of the Limited Partners:
1)On January 4, 1997 a proxy statement and consent was mailed by the General
Partner to all Limited Partners in connection with a proposed amendment to the
Limited Partnership Agreement to adopt a new Section 8.6 encaptioned the "Fair
Price Provision". The proxy period expired on February 4, 1997. The Fair
Price Provision was adopted by a majority of 7,255 Interests (approximately
54% of the outstanding Interests voted affirmatively).
2)A proxy statement, dated January 27, 1997, and consent was mailed by
Arnold K. Leas (a limited partner of the Partnership) to all Limited Partners
in connection with a proposal to remove Decade Companies as the general
partner of the Partnership and concurrently therewith appoint Wellington
Management Corporation (his affiliate) as the new general partner. The proxy
period expired on March 1, 1997. To the best of the General Partner's
knowledge, approximately 84% of the limited partners did not vote for the Leas
proposal. As a result, the proposal was not adopted.
An offer and Settlement Agreement was executed effective March 13, 1997,
between the parties to resolve the litigation. Pursuant to the settlement
agreement, certain Wellington clients, including Arnold K. Leas, agreed to
sell their Interests in the Partnership. Additionally Arnold K. Leas and the
other Wellington defendants agreed that Jeffrey Keierleber, an individual who
is a general partner in Decade Companies (the General Partner of the
Partnership) would purchase certain Limited Partnership Interests for a net
price to the Limited Partner of $550 per Limited Partner Interest until May 5,
1997, (plus commissions ranging from $42.50 to $55.00 per Interest paid to an
affiliate of the Defendants), provided that the Limited Partnership Interests
are acquired by isolated transactions that do not give rise to general
solicitation or a tender offer.
On March 20, 1997, the Eastern District of Wisconsin federal court dismissed,
pursuant to the stipulation of the parties, Decade Companies Income
Properties--A Limited Partnership and Decade Companies, the general partner,
lawsuit against Arnold Leas, Wellington Management Corporation, and WMC Realty
Inc. (and the Defendants counterclaims against the Partnership and Decade
Companies) pending in the Eastern District of Wisconsin.
Between March 31, 1997 and May 5, 1997, Jeffrey Keierleber purchased 1,411.84
Limited Partner Interests from certain Limited Partners pursuant to the
Settlement Agreement.
Subsequent to May 5, 1997, Jeffrey Keierleber continued to purchase Limited
Partner Interests in isolated transactions. There were 975.70 Limited Partner
Interests purchased from Limited Partners from May 19, 1997 to March 24, 2000,
at an average price to the Limited Partner of appromately $554 per Limited
Partner Interest.
In August 1998 The Meadows II was independently appraised at an estimated
value of $12 million.
In August 1998 the Partnership received and accepted a loan commitment from
Associated Bank Milwaukee to refinance the two outstanding mortgage notes on
The Meadows II with a new loan in the amount of $9.15 million.
In September 1998 the Partnership exercised its option to extend the term of
the Pelican Sound mortgage loan for an additional five years to December 1,
2003. Although the interest rate increased from 7.0% to 7.625% per annum
under the extension, the extension allowed the Partnership to continue to look
for more favorable long-term financing on Pelican Sound.
Effective October 1, 1998, the Partnership refinanced the two outstanding
mortgage loans that encumbered The Meadows II in the total amount of
approximately $6.44 million and replaced the old mortgage notes with a new
mortgage note in the amount of $9.15 million. Approximately $2.56 million of
the new mortgage financing was not disbursed at closing. Such amount may be
disbursed at the discretion of the General Partner. The new mortgage loan
reduced the interest rate from approximately 7.46% to 7.25% per annum. The
new mortgage loan revised the term of the financing to expire on September 30,
2005 (the due dates on the old mortgage notes were set to expire in 2004 and
2021).
In July 1999 the Partnership received and accepted a loan commitment from
Republic Bank located in St. Petersburg, Florida to refinance the existing
mortgage loan on Pelican Sound with a new loan in the amount of $13 million.
In September 1999 Pelican Sound was independently appraised at an estimated
value of $17.9 million.
On October 5, 1999, the Partnership refinanced the outstanding mortgage loan
that encumbered Pelican Sound in the amount of approximately $9.67 million and
replaced the old mortgage note with a new mortgage in the amount of $13.0
million. Approximated $3.11 million of the new mortgage financing was not
disturbed at closing, but was disbursed on December 30, 1999 and added to cash
reserves. The new mortgage loan extended the term of the financing from
December 1, 2003 to October 5, 2006, and reduced the interest rate from 7.625%
to 7.50% per annum.
In its ordinary course of operations, the Partnership has received offers on
the sale of its properties. The Partnership has received numerous oral and
written offers during 1997,1998, and 1999, all containing conditions, with
prices as described below:
Pelican Sound - 1997: The Partnership received and rejected or countered 24
offers for Pelican Sound Apartments (or expressions of interests to such
effect) averaging $14.1 million, and ranging from a low of $12.0 million to a
high of $17.6 million.
Pelican Sound - 1998: The Partnership received and rejected or countered
16 offers for Pelican Sound Apartments (or expressions of interests to such
effect). Four of the offers were made for the purchase of Pelican Sound in
combination with Town Place and another property owned by an affiliate of the
General Partner. The proposed prices have ranged from a low of $14,000,000 to
a high of $17,750,000, with an average price of $15,815,000.
Pelican Sound - 1999: The Partnership received and rejected or countered three
offers for Pelican Sound Apartments (or expressions of interests to such
effect). The proposed prices ranged from a low of $16,500,000 to a high of
$18,002,500, with an average price of $17,418,000.
The Meadows II - 1997: The Partnership received and rejected or countered
eight offers for The Meadows II Apartments (or expressions of interests to
such effect). All of the offers included The Meadows I Apartments which is
owned by an affiliated partnership. The offers for both properties ranged
from a low of $13.0 million to a high of $15.0 million. The average offer was
for $13.99 million for both properties, resulting in a prorated amount of
approximately $10.94 million for The Meadows II.
The Meadows II - 1998: The Partnership did not receive any offers.
The Meadows II - 1999: The Partnership did not receive any offers.
Town Place - 1997: The Partnership received and rejected or countered 12
offers for Town Place Apartments (or expressions of interests to such effect)
averaging $8.92 million, and ranging from a low of $8.0 million to a high of
$10.5 million.
Town Place - 1998: The Partnership received and rejected or countered 10
offers for Town Place Apartments (or expressions of interests to such
effect). Four of the offers were made for the purchase of Town Place in
combination with Pelican Sound and another property owned by an affiliate of
the General Partner. The proposed prices have ranged from a low of $8,555,000
to a high of $9,750,000, with an average price of $9,358,000.
Town Place - 1999: The Partnership received and rejected or countered four
offers for Town Place Apartments (or expressions of interests to such
effect). The proposed prices ranged from a low of $11,100,000 to a high of
$12,000,000, with an average price of $11,475,000.
The General Partner will continue to consider offers for sale of its
properties, but cannot assure Limited Partners that any of the properties will
be sold during 2000. The General Partner is seeking to obtain offers with no
or minimal contingencies that allow the Partnership the time and ability to
conclude a tax deferred exchange for any or all of the properties.
(b) Business of Issuer
The Partnership is engaged solely in the business of owning and operating
residential apartments. In January 1989 the Partnership acquired The Meadows
II Apartments, a 316- unit apartment complex located in Madison, Wisconsin.
In February 1990 the Partnership acquired Town Place Apartments, a 240-unit
apartment complex located in Clearwater, Florida. In November 1993, the
Partnership acquired Pelican Sound Apartments, a 379-unit apartment complex
located in St. Petersburg, Florida. The Apartment complexes owned by the
Partnership are collectively referred to as "the Apartments" throughout this
report.
The real estate investment business is highly competitive. The Apartments are
in competition for residents with numerous other alternative sources of
housing, including, but not limited to, apartment complexes owned by
affiliates of the General Partner. Many of these competitors may have greater
resources than those of the Partnership or may be associated with individuals
with broader experience than that of management of the General Partner.
Additional residential rental projects may be built which may compete directly
with the Partnership's properties.
In addition, demand by purchasers for investment properties of the type owned
by the Partnership may increase or decrease. This competition is primarily
based on property location, condition, and asking rent. These factors may
increase or decrease the price of potential property acquisitions/sales.
The Partnership is not dependent upon any single tenant or small groups of
tenants for its operating success. The loss of any one of or a small group of
tenants would not have a material adverse effect. The Partnership does not
foresee any events or market trends which would have a materially adverse
effect upon the Partnership's revenues, except for increased competition for
residents.
The real estate operation of the Partnership, including the value of its real
estate holdings, may be affected by many factors over which the Partnership
has limited or no control, among them, changes in general and local economic
conditions, interest rate levels, availability and terms of financing, changes
in tax laws and fluctuations in operating costs. The principal factors
affecting rental rates and occupancy levels include location, ease of access,
amenities, and the quality of property management. The Partnership has
diversified its investments geographically and competes in several markets
including Madison, Wisconsin and Clearwater and St. Petersburg, Florida.
See the section "Environmental Matters" in Item 6 herein for information on
environmental matters.
During 1999, the Partnership did not directly employ any individuals. In
order to effectively manage the personnel function of operating the Apartments
and the Partnership and to control the costs of compensation (including wages,
worker's compensation, unemployment, payroll taxes, health care, and 401(k)
profit sharing plans), the employees who work for the Partnership and the
Apartments are employed by the General Partner or its affiliate, Decade
Properties, Inc. The costs of these employee services are reimbursed by the
Partnership based upon the records of such employees in performing such
services multiplied by a rate established to cover overhead and expenses
incurred to perform such duties. The Apartments are managed by Decade
Properties, Inc., an affiliate of the General Partner. Employees of the
General Partner and affiliates perform the on-site management services
required to operate and maintain the Apartments and render partnership
management services to the Partnership including maintaining investor
communications, compliance with tax laws and other governmental regulations,
and cash management.
At the close of business on December 31, 1999, the Partnership's 13,400.27
Interests were held by 1,202 Limited Partners. The General Partner of the
Partnership is Decade Companies - A General Partnership (of which Jeffrey
Keierleber and Decade 80, Inc. are the general partners). The principal
offices of Decade Companies and the Partnership are located at 250 Patrick
Blvd. Suite 140, Brookfield, Wisconsin 53045-5864, Telephone (262) 792-9200.
Item 2. Description of Property
(a) Location
The residential apartment complexes which are owned and operated by the
Partnership are:
Rental
Name Location Units
Pelican Sound St. Petersburg, Florida 379
The Meadows II Madison, Wisconsin 316
Town Place Clearwater, Florida 240
935
Pelican Sound is pledged as collateral against a mortgage encumbrance of
$12.97 million. The Meadows II is pledged as collateral against a mortgage
encumbrance of approximately $6.47 million. Town Place is pledged as
collateral against a mortgage encumbrance of $6.42 million.
(b) Investment policies
(1) Investments in real estate or interests in real estate.
The investment policy of the Partnership is to primarily invest in real estate
located in the state of Florida, although real estate situated anywhere in the
continental United States may be acquired. Although there is no restriction
on the type of real estate in which the Partnership may invest, the
Partnership has concentrated its real estate holdings to residential apartment
complexes located in the States of Florida and Wisconsin.
The method or proposed method of financing properties is set forth as follows:
(1) the aggregate amount of mortgage indebtedness (other than short-term
financing) which may be incurred in connection with the acquisition of
Properties shall not exceed 20% of their fair market value (determined by
appraisals prepared by independent appraisers) on a combined basis; (2) the
aggregate amount of such mortgage indebtedness incurred in connection with
financing or refinancing Properties subsequent to their acquisition shall not
exceed 75% of their aggregate independently appraised value; and (3) further,
a creditor who makes a nonrecourse loan to the Partnership shall not and must
not acquire, at any time, as a result of making the loan, any direct or
indirect interest in the profits, capital or property of the Partnership other
than as a secured creditor.
The Partnership Agreement does not prohibit either unsecured or secured
financing. The General Partner has complete discretion to finance or
refinance the Partnership's properties, on a secured, or unsecured basis, at
any time it determines that such financing or refinancing is advantageous to
the Partnership.
There is no limitation on the number of mortgages which may be placed on any
one piece of property.
There is no limitation on the percentage of assets which may be invested in
any one investment, or type of investment. The selection of investment
properties is solely the discretion of the General Partner; a vote of the
limited partners is not required and under appropriate circumstances the
General Partner would consider the exchange and/or purchase of additional
properties.
It is the Partnership's policy to acquire assets primarily to generate income
and provide the partners with quarterly cash distributions. Capital
appreciation through increases in the value of the Partnership's real property
assets is a secondary objective.
(2) Investments in real estate mortgages
The Limited Partnership Agreement also authorizes the Partnership to invest in
real estate mortgages. The Partnership did make real estate mortgages
totaling approximately $5.5 million from 1986 to 1989 but has not done so
since then. None of the mortgage loan investments remain outstanding. It is
not likely that the Partnership will invest in another real estate mortgage
loan.
(3)Securities of or interests in persons primarily engaged in real estate
activities.
The Partnership has not invested in any securities such as common stocks,
interests in real estate investment trusts, or partnership interests.
The Agreement of Limited Partnership permits the Partnership to enter into
joint ventures or general partnerships and other participations with real
estate developers, owners, and others for the purpose of owning a particular
property or properties in accordance with the Partnership's investment
policies. In some joint ventures, the Partnership may be entitled to a
preferential claim to a specified rate of return on the investment before a
joint venturer is entitled to any share of such return. In connection with
some joint ventures or general partnerships, the seller of a property may
obtain an interest in the joint venture or general partnership holding title
to a property, in exchange for which the seller in some cases may not be
required to make a capital contribution to such partnership or joint venture.
The Agreement of Limited Partnership permits the Partnership to participate in
joint venture investments with non-Affiliates provided that it acquires a
controlling interest therein. The Partnership is permitted to invest in a
joint venture arrangement with another joint venture formed by the General
Partner or Affiliates provided the Affiliate has identical investment
objectives, there are no duplicate property management or other fees, the
sponsor compensation is substantially identical in each real estate program,
the Partnership is granted the right of first refusal to purchase the real
property if the affiliated joint venturer wishes to sell the property, and the
investment of each of the real estate programs is otherwise on substantially
the same terms and conditions.
(c) Description of Real Estate and Operating Data
(1) The general character and location of each of the three apartment
properties owned by the Partnership are separately described below. Each of
the properties is a residential garden-style apartment complex. In the view
of the General Partner the properties are suitable and adequate for such use.
Pelican Sound Apartments
10200 Gandy Boulevard
St. Petersburg, Florida 33702
The apartments were built in 1988 and consist of 379 one and two bedroom air
conditioned living units with individual washers and dryers. The units range
in size from 505 square feet to 910 square feet. The complex consists of 13
two and three-story wooden frame with brick veneer garden apartment buildings
plus a 1,961 square foot clubhouse/leasing office on approximately 21.59
acres. The complex includes a swimming pool with jacuzzi, two tennis courts,
569 parking spaces, and an exercise room available for all residents.
The complex is located in the "Gateway" region of St. Petersburg, on Gandy
Boulevard approximately one mile west of the Gandy Bridge. The location
provides easy access to both Pinellas and Hillsborough business districts and
the location is considered by the General Partner to be a positive growth area
for both commercial and residential developments.
The Meadows II Apartments (Phases II, III, IV)
201-417 N. Thompson Drive
Madison, Wisconsin 53714
The Meadows Apartments consists of 404 apartment units in 32 two-story
buildings covering approximately 24 acres of land. The property was developed
in four phases; construction began in late 1976 and was completed in September
1980. On January 17, 1989 the Partnership acquired three of the four phases
comprising 316 of the 404 rental units. The other 88 rental units were
acquired by an affiliated limited partnership (Decade's Monthly Income &
Appreciation Fund). The apartments in Phases II, III, and IV were completed
between 1977 and 1980 and consist of one, two, and three-bedroom units in
twenty-four buildings. The entire complex has a total of 720 parking spaces
for a 1.78:1 ratio of stalls per unit. In addition to the apartment units,
the three phases owned by the Partnership have one swimming pool, one lighted
tennis court and a play area. Laundry room areas and storage lockers are
located in the basement of each building.
The Meadows is located on the far northeast perimeter of the City of Madison
at the southeast corner of the intersection of I-90/94 and Highway 30. The
property is situated in a growing residential neighborhood five miles
northeast of Madison's Capitol Square. The primary access route is Highway 30
on the north which meets East Washington Avenue. North-south linkages are
provided by I-90/94 and Highway 51. Neighborhood land uses are dominated by
single family homes with some multifamily residences interspersed, primarily
long main roads. The area around The Meadows II has experienced a great deal
of residential and commercial growth in the 1990's. Commercial growth has
been concentrated around the perimeter of East Towne Mall, a regional shopping
center located to the northeast of The Meadows II. Residential growth has
been concentrated in the areas to the east of East Washington Avenue, the west
of Interstate Highways 90 & 94, south of the East Towne Mall area, and north
of Highways 12 & 18, which includes The Meadows II. Overall, the General
Partner believes that vacant and improved real estate prices have been
increasing in such area since the early 1990's.
Town Place Apartments
2545 N.E. Coachman Road
Clearwater, Florida 33575
The apartments were built in 1985 and consist of 240 one and two bedroom
units. The units range in size from 540 square feet to 1,036 square feet.
The complex consists of 24 buildings plus an office on approximately 25.7
acres. The complex includes a swimming pool with jacuzzi, two tennis courts,
volleyball court, a 6.7 acre lake, clubhouse, 365 parking spaces, and a
laundromat for all residents.
The property is located on the south side of N. E. Coachman Road approximately
one mile northwest from the intersection of U.S. Highway 19 and Route 60.
The surrounding neighborhood primarily consists of well established, fully
developed, residential properties with supporting commercial facilities lining
the major thoroughfares. The improvements in the neighborhood contain a
mixture of commercial and residential uses. The main traffic arteries are
typically lined with commercial improvements, including offices, service
stations, convenience stores, restaurants, service shops, auto sales/repair
facilities, banks, and other commercial uses. The balance of the surrounding
areas are primarily developed with a mixture of single family and multiple
family development. Clearwater Beach is seven miles from the property.
(2) The Partnership holds title to each of the properties. The nature and
amount of all material mortgages, liens or encumbrances are separately
described below, including the current principal amount of each material
encumbrance, interest and amortization provisions, prepayment provisions,
maturity date, and the balance due at maturity assuming no prepayments.
Pelican The Town
Sound Meadows II Place
Current principal amount $12,968,049 $6,466,851 $6,422,914
Interest rate 7.50% 7.25% 8.25%
Amortization provisions 25 yrs. 25 yrs. 311 mo.
Prepayment provisions (1) (2) (3)
Maturity date 10/05/06 09/30/05 05/16/03
Balance due at maturity
assuming no prepayments $11,399,550 $5,737,026 $5,999,567
(1)Prepayment of principal is permitted at any time. A prepayment
penalty equal to one percent (1%) calculated on the unpaid principal balance
will apply if the prepayment occurs at any time during the first four years
during the term of the note.
(2)Borrower may prepay the Loan, in whole or in part, provided Borrower
gives 15 days prior written notice to Lender of such prepayment. Unless the
Loan Amount and all accrued interest are paid in full, no such prepayment will
suspend required payments. Borrower may prepay any or all of the Loan without
premium or penalty if prepayment is made (a) contemporaneously with the bona
fide sale of the Property (as such term is defined in the Mortgage) to a buyer
unaffiliated with Borrower; or (b) within one year before the Maturity Date
(the "No Premium Period"). Otherwise, any prepayment must be accompanied by
an additional amount equal to 2.00% of the amount being prepaid (the
"Prepayment Premium") if made within four years after the Loan Date and 1% of
the amount being prepaid if made later. Following the occurrence of any
default by Borrower and acceleration of the maturity of this Note by Lender
other than during the No Premium Period, a tender of payment of the amount
necessary to satisfy the entire balance of principal will be deemed to
constitute an attempt by Borrower to evade paying the Prepayment Premium.
Therefore, such payment will be deemed to be a prepayment and must include the
Prepayment Premium.
(3)Prepayment of principal without penalty is permitted in whole or in
part without penalty.
(3) The Partnership does not lease any properties from others. There are
no options or contracts to purchase or sell any of the properties.
The leases with tenants of the Apartments are generally for periods of one
year. The rent for each apartment unit varies according to its size and
amenities.
The average monthly gross potential rent ("GPR") per unit at the Apartments
for the month of December of each of the last two years and the related
occupancy rate ("OR") for December of each year is set forth below:
Number December December
of Units 1999 1998
GPR OR GPR OR
All Units 935 $633 91% $622 89%
Pelican Sound 379 $643 89% $633 89%
The Meadows II 316 $622 90% $609 87%
Town Place 240 $631 94% $623 89%
The apartment mix and monthly asking rents at Pelican Sound Apartments was:
Number of Square
Asking Rent
Style Units Feet 12/99 12/98
One-bedroom/one bath 128 505 $535-585 $530-585
One bedroom/one bath 156 700 $620-675 $615-675
One-bedroom/one bath/den 27 830 $750-775 $740-765
Two-bedroom/two bath 68 910 $795-835 $785-810
379
The apartment mix and monthly asking rents at The Meadows II Apartments was:
Number
of Square Asking Rent
Style Units Feet 12/99 12/98
One-bedroom 88 625 $545-565 $540-560
One-bedroom/deluxe 12 744 $570-575 $555-575
Two-bedroom/one bath 192 875 $610-690 $610-680
Two-bedroom/1.5 bath/den 12 1,466 $875-900 $850-900
Three-bedroom 12 1,466 $875-900 $850-900
316
The apartment mix and monthly asking rents at Town Place Apartments was:
Number
of Square Asking Rent
Style Units Feet 12/99 12/98
One-bedroom/Suite 36 540 $545 $525-535
One bedroom/Garden 72 720 $575-615 $575-605
Two-bedroom/one bath 36 836 $650-670 $650-670
Two-bedroom/two bath 96 1,036 $720-780 $700-815
240
(4) Any proposed program for the renovation, improvement or development of
the properties, including the estimated cost thereof and the method of
financing to be used, is set forth below.
At Pelican Sound the proposed 2000 budget includes a total of $288,000:
$68,000 for carpentry repairs to the building exteriors; $60,000 for exterior
painting of facia and chimneys; $48,000 for carpet replacement; $48,000 for
appliances; $12,000 for tile and vinyl replacement; $30,000 for wallpaper in
apartment units; and $22,000 for air conditioners, water heaters and drapery.
At The Meadows II the proposed 2000 budget includes $49,000 for carpet
replacement; $30,000 for pool and tennis courts repairs; and $28,000 for
appliances, water heaters, drapery and other items; for a total of $107,000.
At Town Place the proposed 2000 budget includes $128,000 for exterior
painting; $64,000 for wood repair to building exterior; $36,000 for
appliances, drapery, and air conditioning items and $29,000 for carpet
replacement for a total of $257,000.
All renovations are scheduled to be paid for by the Partnership's operating
cash flow and cash reserves.
(5) All three rental properties owned by the Partnership are located in
developed areas that include other multifamily properties. The number of
competitive multifamily properties in a particular area could have a material
effect on the Partnership's ability to lease units at the Properties and on
the rents charged. The Partnership may be competing with other entities that
have greater resources than the Partnership and whose managers have more
experience than that of the management of the General Partner. In addition,
other forms of multifamily properties, including multifamily properties
controlled by the General Partner and affiliates, and single-family housing,
provide housing alternatives to potential residents of multifamily properties.
(6) In the opinion of the General Partner, the properties are adequately
covered by insurance.
(7) With respect to each property the following additional information is
provided:
Average for year
(i) Occupancy rate 1999 1998
All Apartments 90% 92%
Pelican Sound 92% 93%
The Meadows II 86% 90%
Town Place 92% 93%
(ii) Tenant information
No tenant occupies 10% or more of the rentable square footage of each
property. Each tenant occupies the property as a personal residence. The
principal provisions of each of their leases are essentially the same except
for the negotiated amount of monthly rent. All leases require the timely
monthly payment of rent, and require a security deposit for damages. Most
leases are written for the term of one year, although terms of six months, or
month-to-month also exist.
(iii) Principal business use
Each of the properties are used for residential purposes and are not used to
conduct commercial business, occupations or professions.
(iv) Annual rental information
The average effective annual rental per unit is as follows:
Number
of Units 1999 1998
All Apartments 935 $6,617 $6,627
Pelican Sound 379 $6,898 $6,877
The Meadows II 316 $6,329 $6,372
Town Place 240 $6,552 $6,568
(v) Lease expirations
All leases are scheduled to expire in 2000.
(A) The approximate number of tenants whose leases will expire in 2000 are as
follows:
All Apartments 848
Pelican Sound 337
The Meadows II 286
Town Place 225
(B) The approximate total area in square feet covered by such leases that
will expire in 2000 are as follows:
All Apartments 658,000
Pelican Sound 229,000
The Meadows II 241,000
Town Place 188,000
(C) The approximate annual rental represented by such leases that will
expire in 2000 is as follows:
All Apartments $3,214,000
Pelican Sound $1,297,000
The Meadows II $1,065,000
Town Place $ 852,000
(D) The percentage of gross annual rental represented by such leases that
will expire in 2000 is 100% for each property.
(vi) Depreciation information
(A) Federal tax basis
The federal tax basis for each of the properties is set forth below:
Accumulated Tax
Pelican Sound Cost Depreciation Basis
(in thousands)
Land $ 2,513 $ 0 $ 2,513
Land Improvements 762 292 470
Buildings and Improvements 7,972 1,615 6,357
Personal Property 1,266 962 304
Total $12,513 $ 2,869 $ 9,644
Accumulated Tax
The Meadows II Cost Depreciation Basis
(in thousands)
Land $ 1,064 $ 0 $ 1,064
Land Improvements 100 12 88
Buildings and Improvements 8,591 3,305 5,286
Personal Property 942 750 192
Total $10,697 $ 4,067 $ 6,630
Accumulated Tax
Town Place Cost Depreciation Basis
(in thousands)
Land $ 1,190 $ 0 $ 1,190
Land Improvements 2 0 2
Buildings and Improvements 4,234 1,430 2,804
Personal Property 731 596 135
Total $ 6,157 $ 2,026 $ 4,131
(B) Rate
The applicable rate used for computing depreciation for financial statement
purposes is 3.33% per year for buildings and improvements, and 20% per year
for personal property and 6.67% for Land Improvements.
(C) Method
The applicable depreciation method used for computing depreciation for
financial statement purposes is the straight line method.
(D) Life claimed
The life used to depreciate assets for financial statement purposes is 30
years for buildings and improvements and 5 years for personal property and 15
years for land improvements.
(vii) Real estate taxes
Realty Annual
Tax Realty
Rate Taxes
Pelican Sound $25.3978 per $100 $300,490 (1)
The Meadows II $25.9421 per $100 $259,421 (2)
Town Place $22.9775 per $100 $171,345 (1)
(1)A discount of up to 4% (1% per month) is available for early payment of the
tax due on March 31.
(2)Approximately 50% of the tax is due by January 31, with the remaining
balance due by July 31.
Item 3. Legal Proceedings
The Partnership is not subject to any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No items were submitted to a vote of the security holders during the fourth
quarter.
PART II
Item 5. Market for Limited Partnership Interests and Related Partner Matters
a) Market Information
There has not been an organized public trading market and it is not
anticipated that a public market for Limited Partnership Interests in the
Partnership will develop.
The Agreement of Limited Partnership provides that the General Partner may in
its sole discretion utilize up to 2% of the gross proceeds of the offering
($360,000) to repurchase Interests tendered to the Partnership by Limited
Partners who offer for repurchase fewer than 100 Interests in the aggregate.
Accordingly the Partnership repurchased Interests from Limited Partners from
1989 through 1992 until 2% of the gross proceeds of the offering were
expended. This repurchase arrangement was intended only to provide a
potential for liquidity as to a limited number of Interests and was not
intended to provide a market for the Interests in general.
b) Security Holders
As of March 25, 2000, there were 1,193 Interest holders of record on the
Partnership's books and records.
c) Dividends or Similar Distributions
During the last two years, quarterly cash distributions to Limited Partners
were declared at the rate of 5% per annum on the original capital investment.
Cash distributions declared to the Limited Partners for the two year period
ended December 31, 1999 were made as follows:
Period Date Amount Distributed
Ended Paid Total Per $1,000 Interest
03/31/98 04/24/98 $167,504 $12.50
06/30/98 07/25/98 $167,504 $12.50
09/30/98 10/23/98 $167,504 $12.50
12/31/98 01/22/99 $167,504 $12.50
03/31/99 04/19/99 $167,504 $12.50
06/30/99 07/19/99 $167,504 $12.50
09/30/99 10/18/99 $167,504 $12.50
12/31/99 01/24/00 $167,504 $12.50
The Agreement of Limited Partnership provides that the Partnership will make
quarterly distributions to all partners of Cash Available for Distribution
whereby 99% of all distributable cash, as defined in the Agreement of Limited
Partnership, will be distributed to the Limited Partners and 1% to the General
Partner.
The actual amount and frequency of future cash distributions will depend upon
future cash flows generated by operations, capital requirements, debt service
requirements, financial condition, and working capital requirements.
Item 6. Management's Discussion and Analysis or Plan of Operation.
The financial statements included in Item 7 present the balance sheet as of
December 31, 1999 and present the cash flow and results of operations for the
two years ended December 31, 1999.
Financial Condition
During 1999, cash and cash equivalents increased by $2,703,000 from $1,868,000
at December 31, 1998 to $4,571,000 at December 31, 1999. During 1999,
approximately $1,128,000 was generated by operating activities, approximately
$2,005,000 was generated by financing activities, and $430,000 was used in
investing activities as shown herein on the Statements of Cash Flows.
Approximately $430,000 of fixed asset additions were capitalized during 1999
($251,000 at Pelican Sound, $108,000 at Town Place and $71,000 at The Meadows
II).
Approximately $425,000 of financing costs were incurred during 1999 to obtain
the new mortgage financing on Pelican Sound.
Total liabilities were approximately $30.4 million at December 1999 up from
$27. 4 million at December 1998 due to the increase of the Pelican Sound
mortgage.
The outstanding balance of the mortgage loan on Pelican Sound Apartments
averaged $10.81 million during the last two years. The outstanding balance of
the mortgage loans on The Meadows II Apartments averaged $6.51 million during
the last two years. The outstanding balance of the mortgage loans on Town
Place Apartments averaged $6.51 million during the last two years.
The use of leverage through borrowings is intended to assist the Partnership
in meeting its investment objective of achieving capital appreciation for the
Limited Partners. The total leverage on the three properties at year end is
79.9% of the capitalized cost, compared to 71.3% at the end of 1998.
The use of mortgage financing creates unrelated business taxable income
("UBTI") for Qualified Plan investors. The UBTI for 1999 was approximately
$23 per $1,000 Limited Partner Interest.
Partners' Capital decreased by $647,000 during 1999. The decrease was
attributable to $673,000 of distributions declared to the Partners, offset by
the net income of $26,000 for financial reporting purposes (after depreciation
and amortization of $1,073,000).
Results of Operations
The Statements of Operations present a two-year comparison of operations
divided into two separate categories: investment property operations and
other partnership income (expenses).
The comparative presentation of operations reflects the operation of 935
apartment units during each period.
Revenues from 1999 rental operations increased $19,000 from the prior year.
The increase was comprised of increases at Pelican Sound ($18,000) and The
Meadows II ($4,000), offset by a decrease at Town Place ($3,000). A summary
of total operating revenue by apartment site follows:
Increase Increase
(Decrease) (Decrease)
1999 1998 Amount Percent
Pelican Sound $2,761,000 $2,743,000 $ 18,000 0.7%
The Meadows II 2,067,000 2,063,000 4,000 0.2%
Town Place 1,664,000 1,667,000 (3,000) (0.2%)
Total $6,492,000 $6,473,000 $ 19,000 0.3%
The $18,000 increase at Pelican Sound is attributed to a 2% increase in asking
rents, offset by a 1% decrease in average occupancy (from 93% to 92%). The
$4,000 increase at The Meadows II is attributed to a 3% increase in asking
rents, offset by a 4% decrease in average occupancy (from 90% to 86%). The
$3,000 decrease at Town Place is attributed to a 2% increase in asking rents
offset by a 1% decrease in average occupancy (from 93% to 92%).
The average monthly gross potential rent per unit at the Apartments for the
two year period was:
Increase Increase
Number (Decrease)(Decrease)
of Units 1999 1998 Amount Percent
All Apartments 935 $626 $611 $15 2.5%
Pelican Sound 379 $636 $622 $14 2.3%
The Meadows II 316 $614 $597 $17 2.8%
Town Place 240 $624 $609 $15 2.5%
"Gross potential rent" represents the asking rent established by the
Partnership for a vacant apartment plus the rent in effect for occupied
apartments. As a general rule the asking rents are the same as the actual
rents eventually established by the rental agreements and are comparable with
existing market conditions.
The average occupancy level at the Apartments for the two year period was:
Increase
1999 1998 (Decrease)
All Apartments 90% 92% (2%)
Pelican Sound 92% 93% (1%)
The Meadows II 86% 90% (4%)
Town Place 92% 93% (1%)
The range of occupancy levels at the Apartments for the years was:
1999 1998
All Apartments 88.0-92.5% 88.0-95.2%
Pelican Sound 88.5-94.2% 89.4-97.0%
The Meadows II 79.0-90.5% 86.1-94.7%
Town Place 85.6-94.8% 86.0-97.9%
The differences in occupancy levels were primarily related to the
Partnership's asking rents compared to other competitors in the market place.
Rental expenses before depreciation and debt service decreased $19,000. The
decrease was comprised of decreases at Pelican Sound ($66,000), and Town Place
($36,000) offset by an increase of the Meadows II ($83,000). A summary of
operating expenses before depreciation and debt service by apartment site
follows:
Increase Increase
(Decrease) (Decrease)
1999 1998 Amount Percent
Pelican Sound $1,425,000 $1,491,000 $ (66,000) (4.4%)
The Meadows II 1,159,000 1,076,000 83,000 7.7%
Town Place 879,000 915,000 (36,000) (3.9%)
Total $3,463,000 $3,482,000 $ (19,000) (0.5%)
The changes in rental expenses can be explained as follows:
Pelican Sound
The $66,000 decrease in expenses at Pelican Sound consisted of decreases in
various expenses totaling $129,000, offset by increases in other expenses
totaling $63,000.
The primary decreases consisted of the following:
Utilities$ 48,000
Insurance 29,000
Security 10,000
Repairs to Signs & supports 12,000
Other 30,000
Total$129,000
The $48,000 decrease in utilities was the direct result of installing
individual water meters for each apartment unit so that utilities can be
billed directly to each resident.
The $29,000 decrease in insurance was achieved by changing insurance carriers.
The primary increases consisted of the following:
Office expenses$ 9,000
Outside Contractors 6,000
Apartment interior repairs 16,000
Vinyl & tile replacement 6,000
Other 26,000
Total$ 63,000
Town Place
The $36,000 decrease in expenses at Town Place consisted of decreases in
various expenses totaling $71,000, offset by increases in expenses totaling
$35,000.
The primary decreases consisted of the following:
Insurance $20,000
On-site payroll 15,000
Rubbish 8,000
Grounds 7,000
Other 21,000
Total $71,000
The $20,000 decrease in insurance was achieved by changing insurance carriers.
The decrease in on-site payroll resulted from an $8,000 decrease in grounds
personnel and a $6,000 decrease in apartment cleaning personnel.
The increases primarily consisted of the following:
Utilities $ 8,000
Property management fees 7,000
Office expense 7,000
Outside contractors 6,000
Administrative expense 3,000
Other 4,000
Total $35,000
The Meadows II
The $83,000 increase in expenses at The Meadows II consisted of increases in
various expenses totaling $105,000, offset by decreases in expenses totaling
$22,000.
The increases primarily consisted of the following:
Utilities$ 15,000
Exterior painting 34,000
Paving repairs 22,000
Other 34,000
Total$105,000
The exterior painting of $34,000 and paving repairs of $22,000 are
non-recurring.
The decreases primarily consisted of the following:
Property taxes$ 7,000
Grounds 6,000
Other 9,000
Total$ 22,000
The decrease in property taxes was a result of a decrease in the tax rate.
The increase in operating revenue of $19,000, along with the decrease in
operating expenses of $19,000, resulted in an increase of $38,000 in net
operating income from property operations before depreciation and debt
service. The increase was comprised of increases at Pelican Sound ($84,000)
and Town Place ($33,000), offset by a decrease at The Meadows II ($79,000).
A summary of operating income before depreciation and debt service by
apartment site follows:
Increase Increase
(Decrease) (Decrease)
1999 1998 Amount Percent
Pelican Sound $1,336,000 $1,252,000 $ 84,000 6.7%
The Meadows II 908,000 987,000 (79,000) (8.0%)
Town Place 785,000 752,000 33,000 4.4%
Total $3,029,000 $2,991,000 $ 38,000 1.3%
Interest expense decreased $2,000. The decrease was comprised of a decrease
for The Meadows II of $58,000 and a decrease for Town Place of $7,000, offset
by an increase for Pelican Sound $63,000. The decreases for The Meadows II
and Town Place are the result of interest charged on the decreasing principal
balances of the notes. The increase at Pelican Sound is due to a higher
interest rate and the increased loan balance from refinancing.
After considering the effect of interest expense, 1999 calendar year net
operating income before depreciation was $1,204,000. A summary of net
operating income before depreciation by apartment site follows:
Increase Increase
(Decrease) (Decrease)
1999 1998 Amount Percent
Pelican Sound $ 578,000 $ 557,000 $ 21,000 3.8%
The Meadows II 413,000 434,000 (21,000) (4.8%)
Town Place 213,000 172,000 41,000 23.8%
Total $1,204,000 $1,163,000 $ 41,000 3.5%
The net income from real estate activities is partially sheltered by
deductions for depreciation and amortization which did not affect cash flow.
Depreciation and amortization decreased $53,000 from 1998 levels.
As a result of the foregoing, net income from investment properties operations
for 1999 was $199,000, compared to a net income of $103,000 in 1998. During
both years all three properties generated positive cash flow. General Partner
anticipates that all three properties will continue to positively cash flow in
2000.
Other expense, net of other income, decreased approximately $12,000 from 1998
calender year levels. The decrease is attributable to a $73,000 decrease in
interest on payables to affiliates, offset by a $26,000 increase in
administrative expenses and a $35,000 decrease in interest income earned.
As a result of the foregoing, net income for 1999 was $27,000, compared to a
net loss of $82,000 in 1998.
There are certain events that could cause the reported financial information
to not be indicative of future operating results or future financial
condition, as follows:
A review of the calculations of front-end fees allowed to the General Parnter
under the Limited Partnership Agreement resulted in additional interest of
$73,400 calculated on deferred acquisition fees for 1998. This one-time
adjustment will not have an impact on future operations.
In October 1998 the Partnership refinanced the two outstanding mortgage loans
of $6.44 million on The Meadows II with a new mortgage loan of $9.15 million.
Approximately $2.56 million of the new mortgage financing was not disbursed at
closing and remains undisbursed as of December 31, 1999. The debt service
requirements for this loan will change at the time that the remaining funds
are disbursed and will impact future operations.
In October 1999 the Partnership refinanced the $9.67 million loan on Pelican
Sound with a new mortgage loan of $13.0 million. Approximately $3.11 million
of the new mortgage financing was not disbursed at closing, but was disbursed
on December 30, 1999 and placed into cash reserves. The debt service
requirements for this additional amount of debt did not impact historical
operations in the financial statements, but will have an impact on future
operations.
Liquidity
At December 31, 1999 there was approximately $4.57 million of cash and cash
equivalents and $17,000 of escrow deposits resulting in $4.6 million of
liquidity. The Partnership has a credit line established of approximately
$2.56 million from the undisbursed funds from The Meadows II refinancing to
provide additional liquidity. The cash balance averaged $2.46 million during
the year.
Cash increased approximately $2,703,000 during 1999 as shown on the Statements
of Cash Flows. Escrow deposits increased $48,000 from the prior year balance.
Cash flow of $1,128,000 was generated by operating activities during 1999 as
shown on the Statements of Cash Flows in the annual financial statements. The
1999 cash flow was used to make cash distributions to the partners of
$670,000, of which $74,000 (11.0%) was considered to be portfolio income
subject to income taxes. (Investment interest expense of $119,000 was
available in 1999 to offset all of the portfolio income for income tax
purposes.) The balance of the cash flow provided by operations was used to
pay $430,000 of additions to the properties. There was a net addition to cash
reserves from the refinancing of Pelican Sound of $2,679,000 consisting of the
new mortgage loan of $13,000,000 offset by the pay off of the balance of the
prior Pelican Sound mortgage note and other regular mortgage loan payments
which together total $9,896,000 and debt issue costs of $425,000.
The General Partner believes that the Partnership has the ability to generate
adequate amounts of cash to meet the Partnership's needs.
Short-term obligations total $4.05 million, consisting of $633,000 of current
liabilities, $384,000 of mortgage principal liabilities, and $3,040,000
payable to the General Partner and affiliates.
On a short-term basis, rental operations are expected to provide a stream of
cash flow to pay day-to-day operating expenses and to fund quarterly cash
distributions to the partners. Investment property operations generated a
profit in 1999 of $1,272,000 (before depreciation and amortization of
$1,073,000) compared to $1,229,000 in 1998.
The Partnership intends, but is not required, to continue to declare quarterly
cash distributions in 2000 to the Limited Partners at the rate of $12.50 per
Interest (5.0% per annum on the original capital investment of $1,000 per
Interest). This intention will require cash distributions to the limited
partners of approximately $670,000 during 2000. Through December 31, 1999 the
Partnership distributed approximately $13.2 million (73% of original capital)
to the Limited Partners since inception. Cumulative cash distributions range
from $720 (72%) to $867 (87%) per $1,000 Interest of an original holder
depending upon the date of purchasing the Interest.
The long-term mortgage obligations of the Partnership require principal
reductions (excluding balloon payments) of $2.1 million over the next five
years. These obligations should be satisfied by cash generated from
operations. In the year 2003 the Town Place mortgage note requires a balloon
payments that will total $6.0 million. The Meadows II mortgage is due in year
2005 and requires a final payment of $5.7 million. It is anticipated that both
properties will be sold or refinanced prior to the maturity dates in 2003 and
2005.
Approximately $3.8 million of deferred fees and deferred interest related
thereto has been earned by the General Partner and affiliates, of which
approximately $3.0 million is a short term obligation of the Partnership
currently due and payable. To date the Partnership has not paid the $3.0
million of deferred fees and deferred interest in order to preserve the
ability of the Partnership to acquire additional properties, if deemed
advisable. The actual timing of the payment of deferred fees and related
interest will take into account the amount of cash reserves to be set aside
that the General Partner deems necessary or appropriate for the operation and
protection of the Partnership. The General Partner currently intends to make
payment only after it is determined that the liquidity is not required to
purchase additional properties, either directly or by means of an exchange.
The mortgage notes on Town Place and The Meadows II bear interest at 8.25% an
7.25% respectively. Both loans are due in three to five years (in 2003 and
2005). The Partnership is exploring the possibility of refinancing both
mortgage loans during 2000 if lower interest rates are available. Additional
proceeds from the refinancings in excess of the existing mortgage debt would
provide additional liquidity.
Other than the payments described above, there are no long-term material
capital expenditures, obligations, or other demands or commitments that might
impair the liquidity of the Partnership.
Capital Resources
At December 31, 1999 no material commitments existed to acquire additional
property or to make capital expenditures. However, a material short-term
obligation exists of approximately $3.0 million payable to the General Partner
for deferred fees. The anticipated source of funds to pay this obligation is
the proceeds received from refinancing the mortgage loans on Town Place and
The Meadows II.
Pursuant to the terms of the Limited Partnership Agreement no Limited Partner
shall be subject to assessment nor shall any Limited Partner be personally
liable for any debts of the Limited Partnership. The Partnership completed
its $18 million offering of Limited Partner Interests in 1988. There are no
plans to raise additional capital by selling additional Limited Partner
Interests. Such action would require the approval of the Limited Partners.
Prospective Information - Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995
Forward-looking statements in this report, including without limitation,
statements relating to the Partnership's plans, strategies, objectives,
expectations, intentions and adequacy of resources, are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Investors are cautioned that such forwarded-looking statements involve
risks and uncertainties including without limitation the following: (i) the
Partnership's plans, strategies, objectives, expectations and intentions are
subject to change at any time at the discretion of the General Partner; (ii)
the Partnership's plans and results of operations will be affected by the
Partnership's ability to manage its growth (iii) other risks and uncertainties
indicated from time to time in the Partnership's filings with the Securities
and Exchange Commission.
Information contained in this Annual Report on Form 10-KSB contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, which can be identified by the use of
forward-looking terminology such as "may," "will," "expect, "anticipate,"
"estimate" or "continue" or the negative thereof or other variations thereon
or comparable terminology. There are number of important factors with respect
to such forward looking statements, including certain risks and uncertainties,
that could cause actual results to differ materially from those contemplated
in such forward-looking statements. Such factors, which could adversely
effect the Partnership's ability to obtain these results, include, among other
things, (i) the volume of transactions and prices for real estate in the real
estate markets generally, (ii) a general or regional economic downturn which
could create a recession in the real estate markets, (iii) the Partnership's
debt level and its ability to make interest and principal payments, (iv) an
increase in expenses related to new initiatives, investments in people and
technology, and service improvements, (v) the success of the new initiatives
and investments and (vi) other factors described elsewhere in this Annual
Report on Form 10-KSB including Year 2000 issues.
The General Partner believes that continued ownership by the Partnership of
its properties is in the long-term best interests of the Limited Partners. In
order for the Partnership to meet its investment objectives, the General
Partner believes that a sale of any of the properties at this time and a
distribution of the proceeds to the Partners could reduce the opportunity
that the Partnership would be able to fully meet its investment objectives.
While there can be no assurance that the Partnership's properties will
appreciate in value from their present level, the General Partner, based on
its experience in the real estate industry, believes that the current value of
the Partnership's properties is more likely than not to increase in the
future. There can, of course, be no assurance that such appreciation will
occur, or if it does occur, that it will result in any specific level of
return to the Partners.
The Partnership Agreement provides for termination at December 31, 2005.
However, at the time of originating the Partnership, the General Partner
anticipated that the Partnership would dispose of its properties and complete
liquidation within seven to nine years after the Partnership's acquisition of
its investment properties. The three properties owned by the Partnership were
acquired between January 1989 and November 1993.
The General Partner believes that low interest rates and favorable economic
conditions have contributed to a recovery in the real estate industry.
However the low interest rates have made single family homes more affordable
for apartment dwellers resulting in higher vacancies for multi-family
residential properties.
The General Partner believes that the Partnership may be required to retain
the properties for an additional period in order to maximize the potential
profit on sale. Therefore, the Partnership may continue to operate its
existing three Apartments and possibly exchange for another property.
While the General Partner believes the Partnership will be best served by
waiting to liquidate the Partnership's properties until the emerging increase
in rental rates matures, the General Partner's position is that the properties
are always open for offers and that any reasonable offer will be seriously
considered. This is not a change in policy and merely reflects the General
Partner's striving to meet the investment objectives of the Partnership. The
General Partner consistently tests the market to determine if a buyer can be
found at a price that will be sufficient to meet the investment goals of the
Partnership. The General Partner has and will continue to explore liquidation
possibilities and will seriously consider any offer for a property which meets
the investment objectives of the Partnership.
As a result of suggestions recently received from limited partners, however,
the General Partner will further increase efforts during 2000 to attract a
reasonable offer for any or all of the properties subject to the availability
of a suitable exchange and shall report to the Limited Partners on the results
of those exchange efforts.
Environmental Matters
The Partnership is subject to various laws and governmental regulations
concerning environmental matters and employee safety and health in the United
States. U.S. federal environmental legislation having particular impact on
the Partnership includes the Toxic Substances Control Act; the Resources
Conservation and Recovery Act; the Clean Air Act; the Clean Water Act; the
Safe Drinking Water Act; and the Comprehensive Environmental Response,
Compensation and Liability Act (also known as Superfund). The Partnership
also is subject to the Occupational Safety and Health Administration (OSHA)
concerning employee safety and health matters. The United States
Environmental Protection Agency (EPA), OSHA, and other federal agencies have
the authority to promulgate regulations that have an impact on the Partnership's
operations.
In addition to these federal activities, various states have been delegated
certain authority under the aforementioned federal statutes. Many state and
local governments have adopted environmental and employee safety and health
laws and regulations, some of which are similar to federal requirements.
State and federal authorities may seek fines and penalties for violation of
these laws and regulations. As part of its continuing environmental program,
the Partnership has been able to comply with such proceedings and orders
without any materially adverse effect on its business.
The Partnership is committed to a long-term environmental protection program
that reduces emissions of hazardous materials into the environment, as well as
to the remediation of identified existing environmental concerns.
The Partnership did not have any material expenditures in 1999 for
environmental capital projects or for operation and maintenance of
environmental protection facilities. The Partnership estimates that during
2000 and 2001 no material amount will be spent on capital projects for
environmental protection.
The General Partner is not aware of any hidden or unapparent conditions of the
property, subsoil or structural conditions which would render the Apartments
more or less valuable. The General Partner is not aware of the existence of
potentially hazardous materials used in the construction or maintenance of the
buildings, such as the presence of urea-formaldehyde foam insulation, and/or
the existence of toxic waste, which may or may not be present at the
Apartments. The General Partner is not aware of any groundwater
contamination, underground methane gas or radon gas. The General Partner
believes that the Apartments do not produce air emissions or waste water of
environmental concern. The General Partner is not aware of any underground
storage tanks. The General Partner is not aware of any incidents of spills,
dumping or discharges at the property/or the presence of hazardous
substances. A Phase I Environmental Site Assessment has been performed at
Pelican Sound and Town Place but has not been performed at The Meadows II.
In 1996 the Partnership engaged an environmental services firm to inspect and
test The Meadows II Apartments in Madison, Wisconsin for the presence of
lead-based paint. Federal law became effective in 1996 to require that
notification be given to renters, contractors, and purchasers of an interest
in residential real property on which a residential dwelling was built prior
to 1978 (such as The Meadows II Apartments) that such property may present
exposure to lead from lead-based paint that may place young children at risk
of developing lead poisoning. A letter report dated September 30, 1996 was
obtained from the environmental services firm regarding the results of testing
for lead-based paint at The Meadows II along with a Certificate of No
Indication of Lead-Based Paint under EPA Regulations.
Impact of Year 2000 Compliance
In prior years, the Partnership discussed the nature and progress of its plans
to become Year 2000 ready. In late 1999, the General Partner completed its
remediation and testing of systems. As a result of those planning and
implementation efforts, the Partnership experienced no significant disruptions
in mission critical information technology and non-information technology
systems and believes those systems successfully responded to the Year 2000
date change. The Partnership is not aware of any material problems resulting
from Year 2000 issues, either with its internal systems, or the products and
services of third parties. The Partnership will continue to monitor its
mission critical computer applications and those of its suppliers and vendors
throughout the year 2000 to ensure that any latent Year 2000 matters that may
arise are addressed promptly.
Impact of Inflation
Although inflation has slowed in recent years, it is still a factor in the
economy and the Partnership continues to seek ways to mitigate its impact. To
the extent permitted by competition, in general the Partnership passes
increased costs on to its residents by increasing asking rents over time.
Operating revenue associated with rental properties reported in the
Partnership's financial statements have increased in the last year from $6.47
million in 1998 to $6.49 million in 1999 (a 3.1% increase). The increased
revenue is due to an increase in asking rents offset by a decrease in
occupancy. The gross potential rent increased from $6,850,000 in 1998 to
$7,020,000 in 1999, a 2.5% increase. Occupancy decreased from 91.9% in 1998
to 90.0% in 1999. The changes in gross potential rent and in occupancy at
each location follows:
Pelican Sound gross potential rent increased from $2,831,000 in 1998 to
$2,894,000 in 1999 (a 2.2% increase). Occupancy decreased from 93.1% in 1998
to 91.8% in 1999.
The Meadows II gross potential rent increased from $2,265,000 in 1998 to
$2,329,000 in 1999 (a 2.8% increase). Occupancy decreased from 89.6% in 1998
to 86.5% in 1999.
Town Place gross potential rent increased from $1,754,000 in 1998 to
$1,796,000 in 1999 (a 2.4% increase). Occupancy decreased from 92.8% in 1998
to 91.5% in 1999.
The Partnership attempts to pass most cost increases through to the residents
by adjusting the asking rents for apartments. The General Partner believes
that the ability to increase rental rates on apartment units should generally
offset any adverse effects from inflation on the Partnership's cost of
operations. The General Partner anticipates that demand for residential rental
units in the Clearwater and St. Petersburg, Florida areas will remain stable
to high and will hopefully improve in Madison, Wisconsin.
Real estate held for production is accounted for the same way as productive
assets are accounted for in other industries. Such assets are normally
carried at historical cost less accumulated depreciation. However, real
estate is generally considered to be a hedge against inflation by typically
increasing in value rather than depreciating. Appreciation results from both
inflation and supply and demand factors. The charges to operations for
depreciation represent the allocation of historical costs incurred over past
years and are significantly less than if they were based on the current cost
of replacing the property. Three types of depreciation affect the economic
value of the real estate: physical depreciation such as wear and tear,
functional depreciation or obsolescence, such as outmoded or poor design,
layout or fixtures, and economic depreciation or obsolescence, caused by
factors outside the property itself, such as a declining neighborhood.
Depreciation for financial statement purposes is the systematic allocation of
the cost of a property to separate fiscal periods. Such write-off does not
necessarily relate to an actual decline in the value of a property.
The Partnership's investment in the Apartments currently owned was made
between January 1989 and November 1993. The various Apartments were
constructed over a period of time ranging from 1975 to 1987. The Apartments
have an estimated remaining useful life ranging up to 24 years for buildings
and improvements as of December 31, 1999. Carpeting, appliances, and other
furnishings and equipment are depreciated over five years for financial
statement purposes. Capitalized additions acquired in prior years will, of
course, be replaced at higher costs but this will take place over many years.
These new assets will result in higher depreciation charges; but in many
cases, due to technological improvements, there should be operating cost
savings as well. It is not the intention of the Partnership to hold the
investment properties until fully depreciated economically. The Partnership
considers these matters in setting its pricing policies with respect to asking
rents.
The value of the Partnership's Apartments can be affected by inflation in a
number of ways. To the extent that general inflation in the economy has the
effect of increasing the general level of interest rates, the value of the
Partnership's property could be adversely affected, inasmuch as prospective
purchasers of the Apartments may be unable to secure suitable financing for
their purchase. Also, higher interest rates could affect the ability of the
Partnership to secure suitable financing for a replacement property should any
Apartments be exchanged.
Conversely, inflation which results in higher real estate values could serve
to enhance the Partnership's revenues, particularly to the extent that when
the Partnership elects to sell the Apartments it is thereby able to do so at
higher prices.
Inflation had no material effect on the results of operations in 1999 and
1998.
Item 7. Financial Statements
The response to this Item is submitted in a separate section of this report
and is incorporated by reference herein.
Item 8. Changes in and Disagreements on Accounting and Financial Disclosure
There have been no disagreements with Virchow Krause & Co., the Partnership's
independent auditors, on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.
Part III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
(a) Directors and Executive Officers.
Neither the Partnership nor Decade Companies, its General Partner, has a Board
of Directors.
The names, ages and business experience of the general partners of Decade
Companies are as follows:
Mr. Jeffrey Keierleber (age 46), is a licensed real estate broker and
securities agent. He is the sole Director of the Corporate General Partner
for various limited partnerships and serves as a co-General Partner in the
public limited partnerships sponsored by Affiliates of Decade Companies, and
he is a General Partner in all of the non-public limited partnerships
sponsored by Affiliates of Decade Companies. Mr. Keierleber is a shareholder,
officer, and director of a number of privately held and affiliated
corporations.
Decade 80, Inc., a corporation wholly owned by Mr. Keierleber, was admitted as
a general partner of the General Partner in December 1992. Mr. Keierleber is
the sole director and President of Decade 80, Inc. and Mr. Michael G. Sweet is
its Secretary.
(b) Significant employees.
The names, ages and business experience of significant employees of the
General Partner and its affiliates are as follows:
Mr. Steven Cooper (age 55), is a Certified Property Manager and has served as
Vice-President of Decade Properties, Inc. since 1989.
Mr. Michael G. Sweet (age 50), is a Certified Public Accountant and has served
as the Controller of Decade Companies and Partnership Manager of the
Decade-sponsored partnerships since 1982, and as an officer and/or director of
various affiliated entities since 1988.
(c) Family relationships.
There is no family relationship between any of the foregoing individuals.
(d) Involvement in certain legal proceedings. None.
(e) Compliance with Section 16(a) of the Exchange Act
Under the securities laws of the United States, the Partnership's directors,
its executive officers, and any persons holding more than 10% of the
Partnership's Interests are required to report their initial ownership of the
Partnership's Interests and any subsequent changes in that ownership to the
SEC. Specific due dates for these reports have been established, and the
Partnership is required to disclose any failure to file by those dates. The
Partnership believes that all of these filing requirements were satisfied
during the year ended December 31, 1999. In making these disclosures, the
Partnership has relied solely on representations of those persons it knows to
be subject to the reporting requirements and copies of the reports that they
have filed with the SEC.
Item 10. Executive Compensation
(a) Cash compensation
(1)The Partnership does not have a chief executive officer ("CEO"). Jeffrey
Keierleber is the individual general partner of the General Partner and serves
in the capacity of CEO.
(2)Entities controlled by or affiliated with Jeffrey Keierleber receive other
compensation for services as set forth in Item 12 herein.
(b) Summary Compensation Table: No cash or non-cash compensation has been paid
or distributed during the last fiscal year to the general partners of Decade
Companies.
(c) Option/SAR Grants Table: No options or stock appreciation rights have
been granted.
(d) Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value
Table: No options or stock appreciation rights have been granted.
(e) Long-Term Incentive Plan Awards Table: None.
(f) Compensation of Directors: None.
(g) Employment contracts and termination of employment and
change-in-control arrangements: None.
(h) Report on repricing of options/SAR's: None.
Item 11. Security Ownership and Certain Beneficial Owners and Management
(a) Security ownership of certain beneficial owners.
Persons who are the beneficial owners of more than five percent of the voting
securities as of March 30, 2000 are:
(1) (2) (3) (4)
Title of Class Name and Amount and Percent of Class
Address of Nature of
Beneficial Beneficial
Owner Owner
Limited Partner Jeffrey Keierleber 2,588.58 19.317%
Interests 240 Bayside Drive
Clearwater, FL 34630
Relatives and affiliates of the General Partner own 35.69 additional Interests
and Decade Properties, Inc., a corporation wholly owned by Mr. Keierleber,
owns 8.0 Interests (included above).
(b) Security ownership of management: See response to item (a).
(c) Changes in control. None.
Item 12. Certain Relationships and Related Transactions
Decade Companies, the General Partner of the Partnership, was reimbursed for
expenses of $133,470 in 1999 and $118,091 in 1998. Additional interest earned
on deferred acquisition fees of $0 in 1999 and $73,402 in 1998 were recorded.
Decade Properties, Inc., wholly-owned by Jeffrey Keierleber, the Managing
General Partner of Decade Companies, the General Partner of the Partnership,
manages the Apartments. During the last two years Decade Properties, Inc.
earned property management fees of $506,915 in 1999 and $501,962 in 1998,
reimbursed expenses of $879,468 in 1999 and $879,964 in 1998 including the
site property management staff, and interest on real estate sales commissions
of $28,588 in 1999 and $28,588 in 1998 (earned but not paid, and payment is
subordinated as set forth in the Partnership Agreement).
The Partnership is required to pay a distributive share of cash flow to the
General Partner. When and as quarterly cash distributions are made to the
Limited Partners, 99% of all distributable cash, as defined in the Agreement
of Limited Partnership, will be distributed to the Limited Partners and 1% to
the General Partner. Distributions of $3,201 were paid to the General Partner
during 1999 compared to none in 1998. Distributions to the General Partner of
$3,975 were accrued during 1999, compared to $3,201 in 1998.
When the Partnership sells or refinances Partnership property, the net sale
proceeds resulting therefrom after repayment of any General Partner's loan and
payment of deferred fees, will be distributed to Limited Partners until such
time as they have received a return of their capital investment plus any
deficiency in their 6% cumulative priority return. The remaining sale or
refinancing proceeds available for distribution will be distributed 88% to the
Limited Partners and if, after the foregoing distributions of net sale
proceeds, the Limited Partners have not received their capital investment plus
a cumulative preference of 10% per annum on their capital investment, they
will receive an amount equal to the amount of such deficiency in such return
and any balance remaining, not to exceed 12% of the net sale proceeds, will be
distributed to the General Partner. To date, no amounts have been paid.
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits and Index of Exhibits and
(b) Description of Exhibits
Description
Exhibit 3Articles of Incorporation and By-laws
(3.1)Certificate of Limited Partnership Agreement (previously filed with Form
8/A).
(3.2)Adoption of Section 8.6 Fair Price Provision
(previously filed with Schedule 14A proxy statement dated December 13, 1996).
Exhibit 10Forms of Material Contracts
(10.1)Form of Acquisition Agreement (previously filed with
Form S-11 Registration Statement on August 28, 1985).
(10.2)Management Consulting Agreement (previously filed
with Form S-11 Registration Statement on August 28, 1985).
(10.3)Form of Property Management Agreement (previously
filed with Form S-11 Registration Statement on August 28, 1985).
(10.4)Security Agreement between Partnership and Home
Savings of America, F.A. (previously filed with Amendment No. 1 to Form 10-K/A
on December 5, 1996).
(10.5)Mortgage for Adjustable Interest Rate Loan between
Partnership and Home Savings of America, F.A., (previously filed with
Amendment No. 1 to Form 10-K/A dated December 5, 1996).
(10.6)Mortgage Modification Agreement between Pelican
Sound Apartments, Inc., Fengar Investment Corporation, and River Bank America
(previously filed with Amendment No. 1 to Form 10-K/A dated December 5, 1996).
(10.7)Term Loan Agreement between River Bank America,
Pelican Sound Apartments, Inc. and Fengar Investment Corporation (previously
filed with Amendment No. 1 to Form 10-K/A dated December 5, 1996).
(10.8)Loan Agreement between Republic Bank and the
Partnership, (previously filed with Amendment No. 1 to Form 10-K/A dated
December 5, 1996).
(10.9)Mortgage between Republic Bank and the Partnership
(previously filed with Amendment No. 1 to Form 10-K/A dated December 5, 1996).
(10.10)Nonrecourse Agreement between Home Savings of
America and the Partnership (previously filed with Amendment No. 1 to Form
10-K/A dated December 5, 1996).
(10.11)Mortgage Consolidation and Modification Agreement
between Pelican Sound Limited Partnership and River Bank America (previously
filed with Amendment No. 1 to Form 10-K/A dated December 5, 1996).
(10.12)Fee Agreement For Purchase and Sale of Pelican
Sound (previously filed with Amendment No. 1 to Form 10-K/A dated December 5,
1996).
(10.13)Regulatory Agreement Concerning The Meadows loans
(previously filed with Amendment No. 1 to Form 10-K/A dated December 5, 1996).
(10.14)Mortgage Note between Partnership and Associated
Bank Milwaukee (previously filed with Form 8-K dated March 26, 1999).
(10.15)Mortgage, Security Agreement and Fixture Financing
Statement between Partnership and Associated Bank Milwaukee (previously filed
with Form 8-K dated March 26, 1999).
(10.16)Assignment of Leases and Rents between Partnership
and Associated Bank Milwaukee (previously filed with Form 8-K dated March 26,
1999).
(10.17)Collateral Assignment of Property Management
Contract between Partnership and Associated Bank Milwaukee (previously filed
with Form 8-K dated March 26, 1999).
(10.18)Reserve Fund Agreement between Partnership and
Associated Bank Milwaukee (previously filed with Form 8-K dated March 26,
1999).
(10.19)Payment Amount/Frequency Modification between
Partnership and Associated Bank Milwaukee (previously filed with Form 8-K
dated March 26, 1999).
(10.20)Mortgage Note between Partnership and Republic Bank
(filed herewith).
(10.21)Mortgage between Partnership and Republic Bank
(filed herewith).
(10.22)Assignment of Rents, Leases, Contracts, Accounts
Receivable, Accounts and Deposit Accounts between Partnership and Republic
Bank (filed herewith).
(10.23)Loan Agreement between Partnership and Republic
Bank (filed herewith).
(10.24)Security Agreement between Partnership and Republic
Bank (filed herewith).
(10.25)Subordination Agreement between and Partnership and
Republic Bank (filed herewith).
(10.26)Environmental Compliance and Indemnity Agreement
between Partnership and Republic Bank (filed herewith).
(10.27)Agreement to Provide Insurance between Partnership
and Republic Bank (filed herewith).
(10.28)Anti-Coercian Letter executed by Partnership (filed
herewith).
(10.29)Agreement Waiving Right to Jury Trial between
Partnership and Republic Bank (filed herewith).
(10.30)Mortgage Refinancing Services Agreement between
Partnership and Decade Properties, Inc. (filed herewith).
Exhibit 16Letter regarding change in certifying accountant.
Letter of Ernst & Young, LLP to the Securities and
Exchange Commission dated December 18, 1998 (previously filed with Form 8-K
dated December 17, 1998).
Exhibit 27Financial Data Schedule (filed herewith) *
* copy available to Limited Partners upon request.
(c) Financial Data Schedule.
A Financial Data Schedule was submitted in the electronic format prescribed by
the EDGAR Filer Manual setting forth the financial information specified in
the applicable table in the Appendixes to this item.
(d)Reports on Form 8-K filed in the fourth quarter of 1999:
None.
<PAGE>SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Decade Companies Income Properties
(Registrant)
Decade
Companies General Partner
March 30, 2000 By/s/ Jeffrey L. Keierleber
Dated Jeffrey L. Keierleber, General Partner of
Decade Companies
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed in the capacities and on the dates indicated.
March 30, 2000 By/s/ Jeffrey L. Keierleber
Dated Jeffrey L. Keierleber, Principal
Executive Officer and Principal Financial and
Accounting Officer of the Registrant
<PAGE>
ANNUAL REPORT ON FORM 10-KSB
ITEM 7
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999
DECADE COMPANIES INCOME PROPERTIES - A LIMITED PARTNERSHIP
BROOKFIELD, WISCONSIN
DECADE COMPANIES
INCOME PROPERTIES
Brookfield, Wisconsin
FINANCIAL STATEMENTS
Including Independent Auditors' Report
December 31, 1999 and 1998
DECADE COMPANIES INCOME PROPERTIES
TABLE OF CONTENTS
December 31, 1999 and 1998
Independent Auditors' Report 1
Balance Sheet 2
Statements of Operations 3
Statements of Partners' Capital (Deficit) 4
Statements of Cash Flows 5
Notes to Financial Statements 6 - 14
INDEPENDENT AUDITORS' REPORT
The Partners of
Decade Companies Income Properties - A Limited Partnership
Brookfield, Wisconsin
We have audited the accompanying balance sheet of Decade Companies Income
Properties - A Limited Partnership (the Partnership) as of December 31, 1999,
and the related statements of operations, partners' capital (deficit) and cash
flows for the years ended December 31, 1999 and 1998. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test bases, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Decade Companies Income
Properties - A Limited Partnership as of December 31, 1999, and the results of
its operations and its cash flows for the years ended December 31, 1999 and
1998, in conformity with generally accepted accounting principles.
VIRCHOW, KRAUSE & COMPANY, LLP
Milwaukee, Wisconsin
January 26, 2000
DECADE COMPANIES INCOME PROPERTIES -
A LIMITED PARTNERSHIP
BALANCE SHEET
December 31, 1999
ASSETS
Cash and cash equivalents $ 4,570,655
Prepaid expenses and other assets 141,057
Escrow
deposits
16,937
Investment properties, at cost
Land 5,305,536
Buildings and improvements 23,974,211
Equipment 3,066,408
32,346,155
Less: Accumulated depreciation (9,667,549)
22,678,606
Deferred financing costs, net of accumulated amortization of $154,894
638,258
TOTAL ASSETS $ 28,045,513
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
LIABILITIES
Tenant security deposits $ 120,030
Accounts payable 52,064
Accrued real estate taxes 259,421
Accrued interest payable 20,325
Unearned rent 9,670
Distributions payable 171,479
Payables to affiliates 3,886,106
Mortgage notes payable 25,857,814
Total Liabilities 30,376,909
PARTNERS' CAPITAL (DEFICIT)
General Partner (91,792)
Limited Partners (Interest authorized - 18,000;
Interests outstanding - 13,400.27) (2,239,604)
Total Partners' Capital (Deficit) (2,331,396)
TOTAL LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) $ 28,045,513
DECADE COMPANIES INCOME PROPERTIES -
A LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
Years Ended December 31, 1999 and 1998
1999 1998
OPERATING REVENUE ASSOCIATED WITH
INVESTMENT PROPERTIES
Rentals $ 6,186,552 $ 6,196,035
Other 305,946 276,790
Total Operating Revenue Associated with
Investment Properties 6,492,498 6,472,825
OPERATING EXPENSES ASSOCIATED WITH
INVESTMENT PROPERTIES
Operating 2,439,144 2,474,158
Administration 292,480 273,181
Depreciation 1,005,261 1,060,439
Interest, including amortization of financing costs
1,825,304 1,827,231
Real estate taxes 731,257 734,909
Total Operating Expenses Associated with
Investment Properties 6,293,446 6,369,918
Income from Operations of Investment Properties
199,052 102,907
OTHER PARTNERSHIP INCOME (EXPENSES)
Interest income 74,534 109,459
Interest on payables to affiliates (28,588) (101,990)
Administrative expenses (218,189) (191,911)
Net Other Partnership Expenses (172,243) (184,442)
NET INCOME (LOSS) 26,809 (81,535)
Net income (loss) attributable to General Partner (1%)
268 (815)
Net income (loss) attributable to Limited Partners (99%)
26,541 (80,720)
26,809 (81,535)
Weighted average Limited Partnership Interests
outstanding 13,400.27 13,400.27
Net income (loss) per weighted average
Limited Partnership Interest 1.98 (6.02)
DECADE COMPANIES INCOME PROPERTIES -
A LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
Years Ended December 31, 1999 and 1998
General Limited
Limited
Partners' Partners'
Partnership Capital Capital
Interests (Deficit)
(Deficit) Total
BALANCES, December 31, 1997 $13,400.27 $(84,069) $ (845,390)
$(929,459)
Distributions to Partners -0- (3,201)
(670,016) (673,217)
Net loss for the year -0- (815)
(80,720) (81,535)
BALANCES, at December 31, 1998 13,400.27 (88,085)
(1,596,126) (1,684,211)
Distributions to Partners -0- (3,975)
(670,019) (673,994)
Net income for the year -0- 268
26,541 26,809
BALANCES, at December 31, 1999 13,400.27 (91,792) (2,239,604)
(2,331,396)
DECADE COMPANIES INCOME PROPERTIES -
A LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
Years Ended December 31, 1999 and 1998
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 26,809 $ (81,535)
Adjustments to reconcile net loss to net cash provided
by operating activities
Depreciation 1,005,261 1,060,437
Amortization of deferred financing costs 67,777
65,352
Changes in operating assets and liabilities
Prepaid expense and other assets 8,154 (64,342)
Escrow deposits 107,817 59,623
Tenant security deposits 1,027
(28,047)
Accounts payable (83,338) 79,073
Unearned rent 9,670 (38,810)
Accrued real estate taxes (6,684) 18,649
Accrued interest payable (40,273) 23,381
Payables to affiliates 31,703 10,146
Net Cash Flows Provided by Operating Activities 1,127,923
1,103,927
CASH FLOWS FROM INVESTING ACTIVITIES
Net additions to investment properties (430,485)
(534,262)
Net Cash Flows Used in Investing Activities (430,485)
(534,262)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from mortgage note payable 13,000,000 6,589,201
Additions to debt issue costs (424,951) (58,692)
Payments on mortgage notes payable (9,896,428) (6,733,846)
Distributions paid to Limited Partners (670,017)
(670,016)
Distributions paid to General Partner (3,201)
- - -0-
Net Cash Flows Provided by (Used) in Financing
Activities 2,005,403 (873,353)
Increase (Decrease) in Cash and Cash Equivalents 2,702,841
(303,688)
CASH AND CASH EQUIVALENTS - Beginning of Year 1,867,814 2,171,502
CASH AND CASH EQUIVALENTS - END OF YEAR $ 4,570,655 $ 1,867,814
See accompanying notes to financial statements.
DECADE COMPANIES INCOME PROPERTIES -
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
NOTE 1 - ORGANIZATION AND BASIS OF ACCOUNTING
Organization
Decade Companies Income Properties - A Limited Partnership (the Partnership)
was organized as a limited partnership under the laws of the State of
Wisconsin pursuant to a certificate and an Agreement (the Agreement) of
Limited Partnership dated June 6, 1985, for the purpose of investing primarily
in residential and commercial real property. The Agreement terminates on or
before December 31, 2005. The Partnership began operations June 9, 1986. The
Partnership operates three residential apartment complexes located in Madison,
Wisconsin, Clearwater, Florida, and St. Petersburg, Florida.
The Partnership consists of a General Partner, Decade Companies - A General
Partnership (Decade Companies), of which Jeffrey Keierleber and Decade 80,
Inc. are the general partners, and 1,202 Limited Partners at December 31,
1999.
Basis of Accounting
The accompanying financial statements, which have been prepared in accordance
with generally accepted accounting principles (GAAP), will differ from the
income tax returns due to the different treatment of various items as
specified by the Internal Revenue Code. The net effect of these accounting
differences is as follows for 1999:
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash Equivalents
The Partnership considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
Depreciation
Depreciation is computed by the straight-line method using estimated useful
lives of 30 years for the buildings and improvements and 5 years for related
equipment.
Advertising
The Company expenses costs of advertising at the time incurred. Advertising
expenses are immaterial.
Investment Property
The Partnership evaluates investment properties periodically for indication of
impairment, including recurring operating losses and other significant adverse
changes in the business climate that affect the recovery of the recorded asset
value. An impairment in the carrying value of an asset is assessed when the
undiscounted, expected future operating cash flows derived from the asset are
less than its carrying value. Management is not aware of any indicator that
would result in any significant impairment loss.
Deferred Financing Costs
Deferred financing costs are amortized using the straight-line method over the
term of the agreement (see Note 4) and are included as a component of interest
expense in the financial statements.
Fees to Affiliates
Fees related to the offering, organizational and acquisition stages of the
Partnership paid to the General Partner or affiliates, and deferred interest
related thereto, are limited to a maximum amount as defined in the Partnership
Agreement and prospectus. The General Partner has earned the maximum amount
of fees as of December 31, 1999 (see Note 6).
The Partnership Agreement provides for acquisition fees, mortgage placement
and mortgage brokerage fees, property management fees and real estate sales
commissions payable to the General Partner or affiliates of the General
Partner. These fees are capitalized or charged to expense as follows:
Acquisition Fees
Acquisition fees designated for selection, negotiation and purchase of
Partnership properties have been capitalized as investment property and
allocated to land, buildings and improvements and equipment based on appraised
values. The portions allocated to buildings, improvements and equipment are
being depreciated over the respective lives of the buildings, improvements and
equipment.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Mortgage Placement and Brokerage Fees
Fees for services rendered in locating potential borrowers and investigating
their credit-worthiness for placement of mortgage loans are payable by the
Partnership to the extent not paid by the mortgagor. Any fees paid by the
Partnership will be charged to expense over the terms of the mortgage loans.
Property Management Fees
Fees for property management and rental services are being charged to expenses
over the period property management services are being performed. The fee is
defined in the partnership agreement.
Real Estate Sales Commissions
Fees may be earned for services rendered related to the sale of Partnership
property, as defined in the Partnership prospectus. Payment of such fees to
an affiliate of the General Partner shall be subordinated to a return to the
Limited Partners equal to their original capital contribution plus a 6% per
annum cumulative return.
Expenses of Offerings
Sales commissions, underwriting fees and reimbursed syndication costs paid to
the General Partner or affiliates of the General Partner in connection with
the capital offering have been recorded as a charge to Limited Partners'
capital, as well as certain costs associated with tender offer purchases of
Limited Partner Interests.
Reimbursed Expenses
The Partnership reimburses the General Partner and affiliates of the General
Partner for the actual cost of goods and materials used by or for the
Partnership in the course of performing the general functions of the
Partnership. These general functions include accounting, investor
communications, investor documentation, legal services, tax services, computer
services, risk management, and any other related operational and
administrative expenses necessary for the prudent organization and operation
of the Partnership.
Pursuant to the Agreement, net income and losses from operations (exclusive of
those from the sale of disposition of Partnership properties) are to be
allocated 99% to the Limited Partners and 1% to the General Partner. In
computing net income and losses from operations, depreciation expense is
allocated differently to taxable and nontaxable entities.
Any gains from the sale or disposition of Partnership properties will be
allocated: 1) 99% to the Limited Partners and 1% to the General Partner until
the cumulative gains are equal to any losses from the sale or disposition of
Partnership property for all prior periods; 2) to the Limited Partners until
their cumulative gains equal the sum of all sales commissions, underwriting
fees, and reimbursed syndication costs for the current year and all prior
years, any losses from the sale or disposition of Partnership property for the
current year and all prior years, and an amount equal to 6% per annum,
cumulative and noncompounded, on the Limited Partners' capital investment
minus prior distributions of cash available for distribution or the extent
that prior distributions of sales proceeds exceed the Limited Partners'
original capital investment ("priority return") from the inception of the
Partnership to the end of the current year; 3) to the General Partner an
amount equal to the distributions made to the General Partner under (iii)(b)
below; 4) to the General Partner an amount equal to the distributions made to
the General Partner pursuant to (iv) below; 5) to the Limited Partners until
cumulative gains allocated to them are equal to (vi) below; and 7) to the
General Partner until cumulative gains allocated to the General Partner are
equal to (vii) below. Any losses from the sale or disposition of the
Partnership properties will be allocated 99% to the Limited Partners and 1% to
the General Partner.
Cash available for distribution, as defined in the Agreement, will be
distributed 99% to the Limited Partners and 1% to the General Partner.
Proceeds from the sale or disposition of Partnership properties, if any,
remaining after repayment of any General Partner's loan and payment of
deferred fees, will be distributed as follows: (i) to the Limited Partners, an
amount equal to 100% of their original capital contribution minus any prior
distributions; (ii) to the Limited Partners, an amount to provide their
priority return; (iii) to the General Partner an amount equal to the greater
of the excess of (a) its capital contribution over the sum of all prior
distributions of sales proceeds or (b) 1% of such sales proceeds; (iv) in the
case of the sale of any property in which brokerage services are actually
performed by the General Partner or an affiliate, to the General Partner or an
affiliate, an amount equal to its subordinated real estate commission
(generally up to 3% of the aggregated selling price of all properties); (v) of
the remaining proceeds, 88% to the Limited Partners; (vi) then, to the Limited
Partners, the deficiency, if any, in return of capital plus a cumulative
preference of 10% per annum on their capital investment; and (vii) to the
General Partner, the remaining balance (not to exceed 12% of the proceeds
remaining after the distributions in accordance with (i) through (iv) above).
Net Loss Per Limited Partnership Interest
Net loss per Limited Partnership Interest is based on 99% of net loss as
allocated to the Limited Partners divided by the weighted average number of
Interest outstanding during the year.
NOTE 3 - INVESTMENT PROPERTIES
Investment properties owned at December 31, 1999 are as follows:
A reconciliation of the cost and accumulated depreciation of the investment
properties at December 31, 1999 follows:
The aggregate cost of the investment properties for federal income tax
purposes is $29,367,296 because the acquisition fees and sales commission
payable to the General Partner are capitalizable for financial reporting
purposes only. The accumulated depreciation for federal income tax purposes
was $8,963,606 at December 31, 1999.
NOTE 4 - MORTGAGE NOTES PAYABLE
Mortgage notes payable consist of the following at December 31, 1999:
The Meadows II, Town Place and Pelican Sound Apartments investment properties
and all associated operating revenues are pledged as collateral for the
mortgage notes payable. Interest paid with respect to the mortgage notes and
other indebtedness was $1,808,067 and $1,738,496 in 1999 and 1998,
respectively. During 1998, the Meadows II mortgage was refinanced totaling
$9,150,000; as of December 31, 1999, $2,560,799 of the proceeds remains
undrawn and available. During 1999, the Pelican Sound mortgage was refinanced
totaling $13,000,000. Aggregate annual maturities of the mortgage notes
payable for the five years subsequent to December 31, 1999 are as follows:
NOTE 5 - INCOME TAXES
The Partnership pays no income taxes. Partnership losses or income and taxes
attributable thereto will be the responsibility of the various Partners.
Differences between the net income (loss) as reported herein and net income
(loss) reported for federal income tax purposes arise from temporary
differences related to depreciation, disposition of investment property and
accrual-basis adjustments. The following is a reconciliation of reported net
loss and net loss reported for federal income tax purposes.
NOTE 6 - TRANSACTIONS WITH RELATED PARTIES
Decade Companies and its general partner are general partners for other
limited partnerships which have invested in real estate. The Partnership also
shares certain management and accounting employees and other expenses with
entities that are controlled by Decade Companies and its general partner. The
Partnership has executed certain contracts providing for the following fees
payable to the General Partner or to affiliates of the General Partner.
Decade Companies
In accordance with restrictions set forth in the Partnership Agreement and
prospectus, the General Partner reviewed the calculations of front-end fees
allowed under the Limited Partnership Agreement during 1998 and calculated
additional interest on acquisition fees of $73,402 payable to the General
Partner. The additional interest expense representing amounts incurred for
1998 has been included with interest expense in the financial statements. No
additional front-end fees were allowed under the Limited Partnership Agreement
during 1999. Acquisition fees of $2,243,785 are payable to Decade Companies at
December 31, 1999 and 1998. Such fees were capitalized as part of the cost of
the investment properties. Accrued interest on these fees was $667,826 at
December 31, 1999 and 1998.
In addition, mortgage placement fees of $90,246 are payable to Decade
Companies at December 31, 1999 and 1998.
Decade Properties, Inc.
Decade Properties, Inc. (Decade Properties) earned the following amounts from
the Partnership: property management fees ($506,915 - 1999; $501,962 - 1998)
and interest on real estate sales commissions $28,588 - 1999; $28,588 - 1998).
Real estate sales commissions of $440,700 are payable to Decade Properties at
December 31, 1999 and 1998. Accrued interest on these fees was $404,968 and
$376,380 at December 31, 1999 and 1998, respectively. The payment of these
fees is subordinated to the Limited Partners as detailed in the Partnership
Prospectus.
In addition, other miscellaneous amounts are payable including payroll
reimbursement and property management fees totaling, $38,581 and $35,467 at
December 31, 1999 and 1998, respectively.
Deferred fees payable to affiliates bear interest at the minimum rate required
under the Internal Revenue Code (the Code) to avoid imputed interest under the
Code and is payable only from sales proceeds, partnership operations or cash
reserves. However, as described above and in Note 2, interest earned on
certain deferred fees is subject to the limitations of the Limited Partnership
Agreement.
Reimbursed expenses paid to the General Partner or affiliates of the General
Partner on behalf of the Partnership were as follows: Decade Companies
($133,470 - 1999; $118,091 - 1998) and Decade Properties ($879,468 - 1999;
$879,964 - 1998).
NOTE 7 - FAIR VALUES OF FINANCIAL INSTRUMENTS
Cash and Cash Equivalents
The carrying amount reported in the balance sheet for cash and cash
equivalents approximates its fair value.
Long-Term Debt
The carrying amount reported in the balance sheet for mortgage notes payable
approximates its fair value.
NOTE 8 - CONTINGENCIES
Bank Balances in Excess of Insured Limits
The Company had bank deposits in excess of federally insured limits totaling
$4,262,674 as of December 31, 1999.
Exhibit Number 10.20
NOTE
$13,000,000.00
Pinellas County, Florida
October 5, 1999
FOR VALUE RECEIVED, the undersigned, DECADE COMPANIES INCOME
PROPERTIES - A LIMITED PARTNERSHIP, a Wisconsin limited
partnership authorized to do business in the State of Florida
(the "Borrower"), promises to pay to the order of REPUBLIC BANK,
a Florida banking corporation (the "Lender"), the principal sum
of THIRTEEN MILLION AND N0/100 DOLLARS ($13,000,000.00), together
with interest on the principal balance remaining unpaid from time
to time at the rates set forth below.
Term. The term of this Note shall be from the date of this Note
through and including the date exactly seven (7) years from the
date hereof (the "Term"). The last day of the Term will be
sometimes referred to below as the "Maturity Date".
Interest. The principal balance of this Note remaining unpaid
from time to time shall bear interest from the date of this Note
through and including the Maturity Date at the rate of SEVEN AND
50/100 PERCENT (7.50%) per annum.
Payments. Principal and interest shall be due and payable and
shall be paid at 111 Second Avenue Northeast, St. Petersburg,
Florida 33701, ATTN: Commercial Loan Department, or at such other
place as the Lender may designate from time to time as follows:
(i) Monthly Payments. In equal monthly installments of principal
and interest in the amount of NINETY SIX THOUSAND NINE HUNDRED
FIFTY ONE AND 85/100 DOLLARS ($96,951.40) each, commencing on the
date exactly one (1) month following the date of this Note, and
on the same day of each succeeding month thereafter through and
including the same day of the month next preceding the Maturity
Date.
(ii) Maturity Date. On the Maturity Date, all indebtedness
evidenced by this Note (whether unpaid principal, accrued
interest or otherwise) that remains unpaid shall be due and
payable and shall be paid.
Each installment of principal and interest under subparagraph (i)
above shall be credited first on account of the interest then
accrued on said principal remaining unpaid, and then in reduction
of said unpaid principal.
Manner of Calculation. Interest shall be calculated on the basis
of a three hundred sixty (360) day year for actual days elapsed.
Interest will be charged on the principal balance of the Loan
that remains outstanding from time to time.
Interest Limitation. Notwithstanding any other provision of this
Note or of any instrument securing this Note or any other
instrument executed in connection with the loan evidenced hereby
(the "Loan"), it is expressly agreed that the amounts payable
under this Note or under the other aforesaid instruments for the
payment of interest or any other payment in the nature of or
which would be considered as interest or other charge for the use
or loan of money shall not exceed the highest rate allowed by
law, from time to time, to be charged by Lender. In the event the
provisions of this Note or of any instruments referred to in this
paragraph, regarding the payment of interest or other payments in
the nature of or which would be considered as interest or other
charge for the use or loan of money operate to produce a rate
that exceeds such limitation, then the excess over such
limitation will not be payable and the amount otherwise agreed to
have been paid shall be reduced by the excess so that such
limitation will not be exceeded, and if any payment actually made
shall result in such limitation being exceeded, the amount of the
excess shall constitute and be treated as a payment on the
principal hereof and shall operate to reduce such principal by
the amount of such excess, or if in excess of the principal
indebtedness, such excess shall be refunded.
Late Charge. Any installment not received within ten (10) days
when due shall be subject to, and it is agreed that the Lender
shall collect thereon and therewith a "late charge" in the amount
of five percent (5%) of the payment upon each such delinquent
installment. Said "late charge" shall be immediately due and
payable and shall be paid by the Borrower without notice or
demand of the holder hereof.
Prepayment. Except as provided below, which shall control and
prevail, Borrower shall have the option of prepaying all or any
part of the principal of this Note at any time during the term of
this Note, without notice, premium or penalty for the privilege
of such prepayments. The Lender may require that any partial
prepayments be made on the date payments are due. Any partial
prepayments shall not postpone the due date of any subsequent
monthly installments or change the amount of such installments,
unless the Lender shall otherwise agree in writing. In the event
of any full prepayment, all accrued interest and other charges
evidenced by this Note and the instruments of security for this
Note shall be paid at the same time as such full principal
prepayments. Notwithstanding the foregoing, there shall be a
prepayment penalty equal to one percent (1%) calculated on the
unpaid principal balance of this Note, if this Note is prepaid,
in whole or in part, at any time during the first four (4) years
during the term of this Note (the "Prepayment Penalty"). Provided
however, the Prepayment Penalty shall not apply if:
(i) The Borrower sells the Pelican Sound Apartments (the
"Property"), which serves as collateral for this Note, in a bona
fide, arm's length transaction; and
(ii) This Note and all other loan documents evidencing and/or
securing the Loan are fully current with no defaults existing
thereunder at the time of such sale.
There shall be no Prepayment Penalty for prepayment after the
first four years of the term of this Note for any reason.
Further, no Prepayment Penalty shall be due in connection with
any prepayment occurring as a result of the application of
insurance proceeds or condemnation awards.
Consent and Waive. Each Obligor (which term shall mean and
include the Borrower, each guarantor, each endorser, and all
others who may become liable for all or any part of the
obligations evidenced and secured hereby), does hereby, jointly
and severally: (a) consent to any forbearance or extension of the
time or manner of payment hereof and to the release of all or any
part of any security held by the Lender to secure payment of this
Note and to the subordination of the lien of the mortgage and any
other instrument of security securing this Note as to all or any
part of the property encumbered thereby, all without notice or
consent of that party; (b) agree that no course of dealing or
delay or omission or forbearance on the part of the Lender in
exercising or enforcing any of its rights or remedies hereunder
or under any instrument securing this Note shall impair or be
prejudicial to any of the Lender's rights and remedies hereunder
or to the enforcement hereof and that the Lender may extend or
postpone the time and manner of payment and performance of this
Note and any instrument securing this Note, may grant
forbearances and may release, wholly or partially, any security
held by the Lender as security for this Note and release,
partially or wholly, any person or party primarily or secondarily
liable with respect to this Note, all without notice to or
consent by any party primarily or secondarily liable hereunder
and without thereby releasing, discharging or diminishing its
rights and remedies against any other party primarily or
secondarily liable hereunder; and (c) except as otherwise set
forth in this Note and the instruments of security for this Note,
waive notice of acceptance of this Note, notice of the occurrence
of any default hereunder or under any instrument securing this
Note and presentment, demand, protest, notice of dishonor and
notice of protest and notices of any and all action at any time
taken or omitted by the Lender in connection with this Note or
any instrument securing this Note and waives all requirements
necessary to hold that party to the liability of that party.
Events of Default. The happening of any of the following events
shall constitute a default hereunder: (a) failure of any Obligor
to pay any principal, interest or any other sums required
hereunder when due under this Note; or (b) a default shall occur
in any instrument securing this Note or in any other instrument
executed in connection with the Loan evidenced hereby, which is
not cured within the applicable curative period set forth in such
instruments.
Acceleration. If a monetary default shall occur hereunder (the
default specified in (a) next above) which is not cured within
thirty (30) days, or if a nonmonetary default shall occur
hereunder (the default specified in (b) next above) and remains
uncured for thirty (30) days or more following provision of
written notice to Borrower from Lender specifying with
particularity such event of nonmonetary default (or, if such
nonmonetary default cannot be reasonably cured within the thirty
(30) day period, if Borrower does not commence to cure such
nonmonetary default within such thirty (30) day period or
thereafter fails to diligently and continuously proceed to cure
such nonmonetary default), then at the option of the Lender, the
entire principal sum then remaining unpaid and accrued interest
shall immediately become due and payable without notice or
demand, and said principal shall bear interest from such date at
the highest legal rate permitted by law, from time to time, to be
charged by Lender; it being agreed that interest not paid within
ten (10) days of when due shall, at the option of the Lender,
draw interest at the rate provided for in this paragraph. Failure
to exercise the above options shall not constitute a waiver of
the right to exercise the same in the event of any subsequent
default.
Attorneys' Fees. All parties liable for the payment of this Note
agree to pay the Lender reasonable attorneys' fees and costs,
whether or not an action be brought, for the services of counsel
employed after maturity or default to collect this Note or any
principal or interest due hereunder, or to protect the security,
if any, or enforce the performance of any other agreement
contained in this Note or in any instrument of security executed
in connection with this Loan, including costs and attorneys' fees
on any appeal, or in any proceedings under the National
Bankruptcy Code or in any post judgment proceedings.
Notwithstanding anything contained in this Note, the instruments
of security, or any other documents executed in connection
therewith to the contrary, the Borrower hereby expressly waives
its statutory right under Section 57.105(2) of the Florida
Statutes to receive attorneys' fees in any cause of action or
other litigation based in whole or in part, directly or
indirectly, upon the foregoing documents. Such waiver by the
Borrower constitutes a material inducement for the Lender to make
the Loan to the Borrower.
Waiver of Jury Trial. Borrower hereby voluntarily and irrevocably
waives the right to a trial by jury in connection with any
litigation, action or cause of action arising out of or by virtue
of (i) this instrument; or (ii) any other agreement or document
executed or contemplated to be in connection with the Loan
evidenced or secured hereby, or incident hereto; or (iii) any
course of conduct, course of dealing, representation, statement
or other action of any party in connection with the Loan. The
parties to the Loan have discussed this waiver, have agreed that
it is an essential and material part of their agreement
concerning the Loan, and that no officer or representative of
Lender has the authority to modify, orally or in writing, the
terms of this paragraph. This agreement shall be binding on the
borrower, and, if applicable, on all Obligors as defined herein,
and constitutes a material inducement for Lender entering into
the loan transaction.
Set Off. The Obligors shall have no right of set off against
the Lender under this Note or under any instruments securing this
Note or executed in connection with the loan evidenced hereby.
Upon an uncured event of default, the Lender, however, shall have
the right, immediately and without further action by it, to set
off against this Note all money owed by the Lender in my capacity
to each or any Obligor, whether or not due, but only if such
monies are in an account with Lender and were derived from the
operations at the Property.
Florida Law. This Note is executed under seal and constitutes a
contract under the laws of the State of Florida, and shall be
enforceable in a Court of competent jurisdiction in that State,
regardless of in which State this Note is being executed.
Headings. The headings of the paragraphs contained in this Note
are for convenience of reference only and do not form a part
hereof and in no way modify, interpret or construe the meaning of
the parties hereto.
Documentary Stamps. Documentary stamps in the amount required by
Florida law have been purchased and affixed to the mortgage of
even date that secures this Note.
Nonrecourse Note. This Note is a nonrecourse Note, and anything
herein to the contrary notwithstanding, (but except as provided
below), the Lender agrees, for itself, its representatives,
successors, endorsees and assigns, that: (i) neither the
Borrower, nor any general or limited partner, officer, director,
representative, successor, assign or affiliate of the Borrower,
shall be personally liable on this Note; and (ii) in the event of
default hereunder, the Lender (and any such representative,
successor, endorsee or assignee) shall look to the property
encumbered by the Mortgage and/or the other instruments of
security that secure this Note (collectively, with the Mortgage,
the "Instruments of Security") for payment of this Note, and will
not make any claim or institute any action or proceeding against
the Borrower (or any general or limited partners, officers,
directors, representatives, successors, assigns or affiliates of
the Borrower) for any deficiency remaining after collection of
the Instruments of Security. Provided however, and
notwithstanding the foregoing, the Borrower is and will remain
personally liable for any deficiency remaining after collection
of the Instruments of Security to the extent of any loss suffered
by Lender, or its representatives, successors, endorsees or
assigns, if such loss is caused by Borrower based in whole or in
part upon:
(i) Damages arising from any fraud or misrepresentation;
(ii) Misapplication or misappropriation of insurance proceeds,
condemnation proceeds, tenant security deposits, rent or other
funds due Lender under the Instruments of Security;
(iii) Damage to or waste of the Property, or damage to the
Property resulting from gross negligence or intentional acts;
(iv) Failure to pay taxes or other Property-related liens;
and/or
(v) Damages arising from the existence of hazardous or toxic
substances, or the failure to comply with any and all
environmental laws.
Identification. This Note consists of seven (6) pages, all but
the last two (2) of which have been signed only for
identification by Jeffrey Keierleber, the Managing General
Partner of the sole General Partner of the Borrower, on behalf of
the Borrower.
THE UNDERSIGNED ACKNOWLEDGES THAT THE LOAN EVIDENCED HEREBY IS
FOR COMMERCIAL PURPOSES ONLY AND NOT FOR PERSONAL, FAMILY OR
HOUSEHOLD PURPOSES.
Signed, sealed and delivered
in the presence of:
/s/ Nydia I. McLean
/s/ Jennifer Dzieminski
As to Borrower
BORROWER:
DECADE COMPANIES INCOME PROPERTIES -
A LIMITED PARTNERSHIP, a Wisconsin limited
partnership authorized to do business in the
State of Florida, by its sole general partner:
By: DECADE COMPANIES, a Wisconsin general
partnership, by its managing general partner:
By: /s/ Jeffrey Keierleber
JEFFREY KEIERLEBER
STATE OF WISCONSIN
COUNTY OF MILWAUKEE
The foregoing instrument was acknowledged before me this 4th day
of October, 1999, by JEFFREY KEIERLEBER, as Managing General
Partner of DECADE COMPANIES, a Wisconsin general partnership, the
sole partner of DECADE COMPANIES INCOME PROPERTIES - A LIMITED
PARTNERSHIP, a Wisconsin limited partnership authorized to do
business in the State of Florida, on behalf of said limited
partnership.
Personally Known X, OR Produced Identification
Type of Identification Provided
/s/ Mary Neese Fertl
SIGNATURE
Mary Neese Fertl.
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED
(SEAL) NOTARY PUBLIC
My Commission is permanent
THIS INSTRUMENT PREPARED BY:
David R. Punzak, Esq.
CARLTON, FIELDS, WARD, EMMANUEL,
SMITH & CUTLER, P.A.
P. 0. Box 2861
St. Petersburg, Florida 33731
Exhibit Number 10.21
MORTGAGE
THIS MORTGAGE is executed this 5th day of October, 1999, by
DECADE COMPANIES INCOME PROPERTIES - A LIMITED PARTNERSHIP, a
Wisconsin limited partnership authorized to do business in the
State of Florida (the "Borrower"), in favor of REPUBLIC BANK, a
Florida banking corporation (the "Lender"), and is made in
reference to the following facts:
(A) On or about the date hereof, the Lender has made a loan to
the Borrower in the original principal amount of THIRTEEN MILLION
AND N0/100 DOLLARS ($13,000,000.00) (the "Loan"). The Loan is
evidenced by a promissory note, which will sometimes be referred
to herein as the "Note", the terms and provisions of which are
incorporated in and made a part hereof. The Note bears interest
at the rate stated therein, provides for payments of principal
and interest in the manner stated therein, and has a maturity
date of seven (7) years from the date hereof.
(B) Lender is desirous of securing the prompt payment of the
Note, and any additional indebtedness accruing to the Lender on
account of any future payments, advances, or expenditures made by
the Lender or on account of any other indebtedness incurred in
connection with this Mortgage or any other instrument securing
the Note as set forth herein.
NOW, THEREFORE, for and in consideration of Lender making the
aforesaid Loan to Borrower and for other good and valuable
consideration, and to secure the payment of the aforesaid
indebtedness, the Borrower does hereby grant, bargain, sell,
alien, remise, convey and confirm unto the Lender all that
certain land, and all structures, buildings and improvements
thereon, of which Borrower is now seized and in possession,
situate in Pinellas County, Florida, more particularly described
in Exhibit "A" attached hereto and by this reference made a part
hereof.
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances and all structures, buildings and improvements of
every kind and description now or hereafter on said land, and all
heretofore or hereafter vacated alleys and streets abutting the
said land, and all riparian and littoral rights, easements,
rights, rents, royalties, mineral, oil and gas rights and
profits, water, water rights and water stock appurtenant to the
said land, and Borrower's interest in all fixtures, machinery,
equipment, building materials, appliances and goods of every
nature whatsoever now or hereafter located in, or on, or used, or
intended to be used in connection with the said land,
improvements and appurtenances including, but not limited to
those for the purposes of supplying or distributing heating,
cooking, electricity, gas, water, air and light; and all
elevators and related machinery and equipment, plumbing, bath
tubs, water heaters, sinks, and other plumbing fixtures, ranges,
stoves, refrigerators, dishwashers, disposals, washers, dryers,
awnings, storm windows, storm doors, screens, blinds, shades,
curtains, carpet, attached floor covering, furniture, antennae,
trees and plants, all of which including replacements and
additions thereto, shall be deemed to be and remain a part of the
real property covered by the Mortgage.
FURTHER TOGETHER WITH all rents, issues, income, profits and all
accounts receivable generated through the use by Borrower or
others of the real or personal property encumbered by this
Mortgage, including any such rents, issues, income, profits and
all accounts receivable of any business activity conducted by
Borrower on or through the use of such property; and the proceeds
of all of the foregoing.
All of the above described property and interests will sometimes
be referred to herein as the "Property".
TO HAVE AND TO HOLD the Property unto the Lender and its
successors and assigns forever.
The Borrower hereby covenants and agrees with and warrants to the
Lender as follows: (i) that the Borrower is the absolute fee
simple owner of the Property excepting leased items, if any,
disclosed in a Lien Affidavit (the "Affidavit") executed by
Borrower and presented to Lender on even date herewith; (ii) that
the Property is and will remain free and clear of all
encumbrances excepting covenants, restrictions, easements and
reservations disclosed in a Lender title insurance binder as
endorsed, described in the Affidavit, except as permitted by this
Mortgage; (iii) that Borrower has full power and lawful right to
mortgage and convey the Property; (iv) that no delinquency exists
with respect to the payment of any taxes, assessments, water or
sewer charges or other governmental impositions of any kind
levied or assessed on the Property; (v) that it shall be lawful
for the Lender at all times to peacefully enter upon, hold,
occupy and enjoy the Property and every part thereof; (vi) that
Borrower will make such further assurances to protect the fee
simple title to the Property in the Lender as may be reasonably
required; and (vii) that Borrower does hereby fully warrant the
title to the Property and will defend the same against the lawful
claims of all persons whomsoever.
And the Borrower does hereby further covenant and agree with and
promise to the Lender as follows:
1. Payment. Borrower shall strictly and fully comply with all
provisions of this Mortgage and of the Note secured hereby and
with the provisions of any other instrument securing the Note.
Borrower shall promptly pay Lender all sums of money evidenced by
the Note as well as all sums of money required by this Mortgage
and in any other instrument securing the Note, on the days,
respectively, the same severally become due.
2. Escrow for Taxes. Upon an uncured event of default, the Lender
may require at any time that escrow payments as to taxes and
assessments be paid to it by the Borrower, during the term of
this Mortgage. In such event, the Borrower shall pay to Lender,
to the extent requested by the Lender, on dates upon which
interest is payable or as otherwise directed by the Lender such
amounts as Lender from time to time estimates is necessary to
create and maintain a reserve fund from which to pay, before the
same become due, all taxes and governmental assessments relating
to the Property and as additional security for the debt secured
by this Mortgage. Said payments may be, at the discretion of the
Lender, a monthly sum and amount equal to one-twelfth (1/12) of
the estimated annual taxes and assessments upon the Property, as
the amount thereof is reasonably determined from time to time by
Lender. In the event such monthly escrow payments are
insufficient to pay for said taxes and assessments when due,
Lender may demand of Borrower that the amount of such payments be
increased and/or Lender may demand that the difference be paid to
it by the Borrower, and Borrower shall immediately comply with
such demands. Interest shall be due to Borrower on such deposits.
Payments from said reserve fund for said purposes may be made by
the Lender at its discretion even though subsequent owners of the
Property described herein may benefit thereby. In the event of
any default under this Mortgage which is not cured within the
curative period set forth herein Lender at its discretion and
option may apply all or any part of said reserve fund to the
indebtedness hereby secured. In refunding any part of said
reserve fund, the Lender may deal with whomsoever is represented
to be the owner of the Property at that time. Provided however,
at all times during the term of this Mortgage: (i) Borrower shall
provide to Lender documentary evidence that all insurances
required by this Mortgage have been prepaid (within fifteen (15)
days of the prepayment of the same); and (ii) Lender shall permit
Borrower to obtain the maximum possible discount for payment of
the taxes on the Property.
3. Taxes. Borrower shall, during the term of this Mortgage, pay
all taxes, assessments and encumbrances of every nature that may
for any and all purposes be payable, assessed or imposed on the
Property, or any part thereof, or the income therefrom, and upon
this Mortgage and the Note, or the money secured and evidenced
thereby, and shall pay them before the delinquency thereof and
receipts evidencing payment of said taxes, assessments, levies
and encumbrances if requested by Lender, shall be deposited with
the Lender on or before February 28th of each succeeding year
during the term of this Mortgage. Lender shall be the sole judge
of any such tax, assessment, water rent, claim, lien or
encumbrance and of the amount necessary to be paid in
satisfaction thereof. Notwithstanding anything contained in
paragraph 2 hereof or this paragraph 3 to the contrary, Borrower
shall have the right to contest any tax or assessment made on the
Property, provided that: (a) Borrower shall notify Lender in
writing prior to September 30 of the year that the taxes or
assessments are contested (so as to be received by the Lender
prior to such date) of such contest, specifying the factual and
legal basis for such contest; (b) the contest made by the
Borrower is made in good faith and is diligently and continuously
contested so as to resolve the contest in a reasonable period of
time; (c) the amount of taxes or assessments required by Florida
law to be deposited with the appropriate governmental authority
or agency is deposited with such authority or agency within the
period required by law; and (d) at the same time the difference
between the amount of taxes or assessments imposed and the amount
deposited with the governmental authority or agency under
subparagraph (c) next above is deposited in escrow with the
Lender so as to be subject to the terms of this Mortgage,
including the disposition of escrow monies following a default
hereunder which is not cured within the applicable grace period.
In the event that all of the above provisions are not fully and
strictly complied with within the period stated and taxes or
assessments are not otherwise paid as required by this paragraph
3, such shall constitute a default under this Mortgage.
4. Insurance.
(a) Borrower shall keep the buildings and other improvements,
which are now, or which hereafter may be erected on the Property,
including any personal property and fixtures described above,
constantly insured against loss by fire with extended coverage in
a sum not less than full insurable value so as to avoid any claim
on the part of the insurers for co-insurance, and in addition
shall keep in full force and effect policies of insurance
insuring against such other hazards, casualties, and
contingencies as Lender may reasonably require, including, but
not limited to, Flood Insurance on any buildings that have an
elevation that is below the flood zone level, Property Damage
Insurance and Public Liability Insurance. All insurance required
by Lender hereunder shall be on such forms, for such periods, and
in such amounts as Lender may reasonably require with loss
payable to the Lender under a clause acceptable to Lender in its
sole discretion (which shall include a minimum of thirty (30)
days advance notice of cancellation of such insurances). Borrower
shall deliver the policy, or policies, to the Lender, as
additional security, and where renewal policies are necessary in
the performance of this covenant to deliver them at least thirty
(30) days before the expiration of the existing insurance. In the
event such policy or policies are a part of a master policy
insuring properties in addition to the Property, then Borrower
may submit to Lender a certified copy of such policy together
with the original loss payable endorsement in lieu of the
original policy as set forth above. The right to any return
premiums on any insurance policies covered by this Mortgage is
hereby assigned to Lender as further security for the Note
secured hereby.
(b) In the event of loss, the Borrower shall give immediate
notice by mail to the Lender; and in the event Borrower shall
fail to agree with the insurance companies involved as to the
amount and terms of any loss within ninety (90) days of the
happening of such loss, then the Lender may negotiate with and
settle said loss with such insurance companies and neither the
Lender nor the insurance companies involved shall, upon such
settlement being made, be liable in any manner to the Borrower.
(c) If Borrower elects to restore by giving Lender notice of such
election within thirty (30) days following such damage occurring,
the Lender shall permit any funds received from insurance
policies to be used in restoring the Property, provided that such
proceeds, together with any other funds available for such
purposes, including funds to be made available by Borrower, are
sufficient to restore the casualty. The Lender shall make the
insurance proceeds available to Borrower in an amount
corresponding to the progress of the work performed and based
upon amounts certified to Lender by a qualified licensed
architect or engineer who is reasonably acceptable to Lender.
Provided however, Lender may require that all funds necessary
above the insurance proceeds for restoration be first used, and
that any amounts disbursed be solely for in-place and installed
materials and services, that Borrower comply with Chapter 713,
Florida Statutes, and that all contractors, contracts, plans and
specifications and the concept for restoration be first approved
in writing by Lender, which approval shall not be unreasonably
withheld. Provided further however, that if Borrower is in
default under this Mortgage or if Borrower does not elect to
restore the premises within the period provided or if there are
insufficient funds for restoration as aforesaid, then
notwithstanding anything contained in this paragraph to the
contrary, Lender shall have the right to apply the insurance
proceeds to reduce the balance of the Mortgage indebtedness. Any
insurance proceeds payable to Lender hereunder shall be retained
by Lender in an interest bearing money market account pledged by
Borrower to Lender.
5. Condemnation.
(a) In the event the Borrower is served with process or otherwise
notified of a condemnation action or any other action which
involves a taking of the Property or any part thereof, the
Borrower shall notify the Lender in writing of such within five
(5) days from the date of service of process or such other
notification (so as to be received by the Lender within said
period). In the event Borrower fails to promptly, diligently,
continuously and completely pursue the condemnation action to
completion, then Borrower authorizes Lender as attorney-in-fact
for Borrower to, at Lender's option, commence, appear in and
prosecute, in Lender's or Borrower's name, any action or
proceeding relating to such taking of the Property and to settle
or compromise any claim in connection with such condemnation or
taking. The proceeds of any award or claim for damages, direct or
consequential, in connection with any condemnation or other
taking of the Property, or any part thereof, or for conveyance in
lieu of condemnation, are hereby assigned and shall be paid to
Lender. Lender shall not be held responsible for any failure to
collect any award or awards, regardless of the cause of such
failure.
(b) In the event all or a substantial portion of the Property is
condemned (and as to a substantial portion, with the remaining
portion not being capable of being restored to its original
functioning entity), then any such award or awards received by
the Lender may, at its option, be used in restoring the Property
on terms and conditions acceptable to and prescribed by the
Lender (and in which event the funds shall be retained in an
interest bearing money market account pledged by Borrower to
Lender), or be applied as a credit on any portion of the
indebtedness or sums secured hereby, whether then matured or
subsequently to mature (provided that such does not exceed the
amount necessary to pay in full all indebted nesses secured by
this Mortgage and all other instruments securing the Note). Any
excess condemnation award that remains following either
restoration of the Property or payment of the Loan in full under
this subsection (b) or subsection (c) below shall be released to
the Borrower.
(c) In the event only a portion of the Property is condemned with
the remaining portion being capable of being reasonably restored
to its original functioning operating entity, and provided this
Mortgage is not otherwise in default beyond the applicable
curative period set forth herein, then, if Borrower elects to
restore by giving written notice to Lender of such election
within ninety (90) days of the entry of the final judgment of
condemnation in such proceedings, Lender shall permit the
condemnation award to be used in restoring the Property as
aforesaid, provided that such award, together with any other
funds available for such purpose, including funds to be made
available by Borrower, are sufficient to fully restore the
Property. In the event Borrower so elects to restore, the Lender
shall make the condemnation award available to Borrower in an
amount corresponding to the progress of the work performed and
based upon amounts certified to Lender by a qualified licensed
architect or engineer who is reasonably acceptable to Lender.
Provided however, Lender may require that all funds necessary
above the condemnation award for restoration be first used, that
any amount disbursed be solely for in-place and installed
materials and services, that Borrower comply with Chapter 713,
Florida Statutes, and that all contractors, contracts, plans and
specifications as well as the concept for restoration are first
reasonably approved in writing by Lender. Any portion of the
condemnation award not used as set forth in this subparagraph (c)
shall be applied in the manner set forth in subparagraph (b) next
above.
6. Use and Alteration of Property. Borrower shall not allow
changes in the nature of the occupancy for which the Property was
intended at the time this Mortgage was executed. Borrower shall
not initiate or acquiesce in a change in the zoning
classification of the Property set forth above without Lender's
written consent. Borrower shall not make any change in the use of
the Property which will create a fire or other hazard not in
existence on the date hereof, nor shall Borrower in any way
increase any hazard. Without the prior written consent of Lender,
no building or improvement may be erected on the Property, nor
may Borrower structurally remove or demolish any building or,
improvement, nor may Borrower materially structurally alter any
building or improvement that would change the use of the Property
or that would otherwise decrease its value, nor shall any fixture
or personal property covered by this Mortgage be removed at any
time unless simultaneously replaced by an article of equal kind,
quality and value owned by Borrower, and which is unencumbered
except by the lien of this Mortgage and other instruments of
security securing the Note.
7. Surface Alteration and Mineral Rights. Borrower shall not
consent to, permit or indulge in any entry, either by itself or
by any others, upon the surface of the property for the purpose
of exploration, drilling, prospecting, mining, excavation or
removal of any earth, sand, dirt, rock, minerals, oil or any
other substance without the Lender's approval and written
consent.
8. Waste and Mechanic's Lien. Borrower shall keep the Property,
and all equipment, appurtenances and accessories constantly in
good order and repair; shall comply with all laws, ordinances,
and regulations now or hereafter affecting the Property or any
part thereof, and shall not permit, suffer or commit any waste,
impairment or deterioration of said Property, or any part
thereof. Included within the obligations of Borrower contained
in the preceding sentence is that Borrower shall maintain an
effective schedule of maintenance and repair and of replacement
of equipment and personal property situate in or on the Property
so that they are in good order and repair, and so that the
Property, all improvements thereon and all personal property
situated therein is maintained in good order and repair and so
that all of such items present to the guests and patrons of
Borrower in the operation of its business, a first class and
attractive premises. In addition, in the event any mechanics' or
materialmen's liens are filed against the Property, or any part
thereof, Borrower shall cause the same to be discharged,
paid, bonded or otherwise satisfied so that it no longer affects
the Property within thirty (30) days after the filing thereof, or
within ten (10) days after a suit for the foreclosure thereof has
been filed, whichever date is earlier.
9. Protection of Lender's Security. Borrower shall execute and/or
cause to be executed such further assurances of title to the
Property, and to take and cause to be taken, such steps,
including legal proceedings as may at any time appear to the
Lender to be desirable to perfect the title to the Property in
the Lender. Upon a failure or default in or breach of performance
of any of the covenants and agreements contained herein not cured
within applicable cure period, in any particular, the Lender may,
without notice to the Borrower, pay all taxes, assessments, and
public charges, and/or take such steps as may be necessary to
secure or redeem the Property from forfeiture or sale, and/or
effect or renew any insurance, and/or make such repairs as may be
necessary to keep the Property, equipment, appurtenances and
accessories in good order and repair and/or take or cause to be
taken, such steps, including legal proceedings, as may be
desirable to prevent the commission of waste, impairment or
deterioration of the Property, or any part thereof, or to perfect
the title to the Property in the Lender, and/or to perform any
other acts or expend such other sums deemed necessary by Lender
to protect its security for the repayment of the Note, and all
sums expended in the doing of or on account of the same, shall be
a part of the debt secured by this Mortgage, and shall be secured
as fully as the principal debt and interest is secured, and shall
bear interest at the highest legal rate permitted by law to be
charged by Lender from the date of the expenditure thereof and
shall together with the interest thereon, be repaid by the
Borrower before the expiration of a period of thirty (30) days
thereafter. But there is no obligation upon the Lender to make
such payments or take such steps, nor shall any act of the Lender
or any failure to act under the powers granted by this paragraph
9, nor any lapse of time, be construed as the waiver of any
breach of the covenants and agreements contained herein.
10. Civil Proceedings. If any action or proceeding is commenced
(except an action to foreclose this Mortgage or to collect the
debt secured hereby), to which action or proceeding the Lender is
or becomes a party or in which it becomes necessary to defend or
uphold the lien of this Mortgage (including to protect its
interests in any condemnation proceedings), all sums paid by the
Lender for the expense of any litigation (including reasonable
attorneys' fees and appellate counsel fees, if any) to prosecute
or defend the rights and lien created by this Mortgage shall on
notice and demand be paid by the Borrower, together with interest
thereon at the highest legal rate permitted by law to be charged
by Lender, and shall be a lien on the Property, prior to any
right or title to, interest in or claim upon the Property
subordinate to the lien of this Mortgage, and shall be deemed to
be secured by this Mortgage and evidenced by the Note.
11. Payments Received. Any payment made in accordance with the
terms of this Mortgage by any person at any time liable for the
payment of the whole or any part of the sums now or hereafter
secured by this Mortgage, or by any subsequent owner of the
Property, or by any other person whose interest in the Property
might be prejudiced in the event of a failure to make such
payment, or by any stockholder, officer or director of a
corporation or by any partner of a partnership or beneficiary of
a trust which at any time may be liable for such payment or may
own or have such an interest in the Property, shall be deemed, as
between the Lender and all persons who at any time may be liable
as aforesaid or may own the Property, or any part thereof, to
have been made on behalf of all such persons.
12. Inspections and Management. The Borrower agrees that Lender
and any person authorized by the Lender shall have the privilege
of making inspections of the Property at reasonable times upon
reasonable prior notice during the life of this Mortgage.
13. Financial Information. Within ninety (90) days following the
end of the fiscal year of Borrower, the Borrower shall promptly
furnish to the Lender a statement of the financial condition of
Borrower including balance sheets, financial and operating
statements showing, inter alia, gross income, receipts and
revenues and expenses with respect to operation of the Property
during such fiscal period, in comparative form to the preceding
fiscal year, and in form and containing such information as shall
be satisfactory to the Lender and prepared in accordance with
generally accepted accounting principles, and certified to by the
Borrower and, if Lender shall require, by an independent
certified public accountant. Such statement shall show with other
pertinent information all rents, profits and income received from
tenants of the Property including rents, profits and income paid
in excess of minimum rentals or payments called for by the
respective leases or contracts. Lender shall be entitled to
inspect, audit and make extracts from the records and books of
account with respect only to the Property which shall be prepared
and maintained by Borrower, in a manner satisfactory to Lender,
at the Property. At the written request of Lender, the Borrower
shall cause any other person or entity liable for all or any
portion of the indebtedness secured hereby from time to time to
submit to Lender a financial statement as to such person or
entity prepared by such person or entity within the same ninety
(90) day period required above on an annual basis.
14. Uniform Commercial Code. When and if Borrower and Lender
shall respectively become the Debtor and Secured Party in any
Uniform Commercial Code Financing Statement affecting property
either referred to or described herein, or in any way connected
with the use and enjoyment of the Property, this Mortgage shall
be deemed the Security Agreement as defined in said Uniform
Commercial Code and the remedies for and violation of the
covenants, terms and conditions of the agreements herein
contained shall be (i) as prescribed herein, or (ii) by general
law, or (iii) as to such part of the security which is also
reflected in said financing statement by the specific statutory
consequences now or hereafter enacted and specified in the
Uniform Commercial Code, all at Lender's sole election. Borrower
and Lender agree that the filing of such financing statement in
the records normally having to do with personal property shall
never be construed as in anywise derogating from or impairing
this declaration and hereby stated intention of the parties
hereto, that everything used in connection with the production of
income from the Property (furniture only excepted) and/or adapted
for use therein and/or which is described or reflected in this
Mortgage is, and at all times and for all purposes and in all
proceedings both legal or equitable shall be, regarded as part of
the real estate irrespective of whether (i) any such item is
physically attached to the improvements, (ii) serial numbers are
used for the better identification of certain equipment items
capable of being thus identified in a recital contained herein or
in any list filed with the Lender, or (iii) any such item is
referred to or reflected in any such financing statement so filed
at any time. Similarly, the mention in any such financing
statement of (1) the rights in or the proceeds of any fire and/or
hazard insurance policy, or (2) any award in eminent domain
proceedings for a taking or for loss of value, or (3) the
debtor's interest as lessor in any present or future lease or
rights to income growing out of the use and/or occupancy of the
Property mortgaged hereby, whether pursuant to lease or
otherwise, shall never be construed as in anywise altering any of
the rights of Lender as determined by this instrument or
impugning the priority of the Lender's lien granted hereby or by
any other recorded documents, but such mention in the financing
statement is declared to be for the protection of the Lender in
the event any court or judge shall at any time hold with respect
to (1), (2) and (3) that notice of Lender's priority of interest
to be effective against a particular class of persons, including,
but not limited to, the Federal government and any subdivisions
or entity of the Federal government, must be filed in the
Commercial Code Records. Borrower shall pay for all costs of
filing such statements and renewals and releases thereof and
shall pay all reasonable costs and expenses, including reasonable
attorneys' fees and any record searches for financing statements
Lender may reasonably require, incident to the preparation and
filing of such financing statements.
15. Assignment of Rents. Borrower does hereby assign and set over
unto the Lender as additional security for the indebtedness and
other items herein secured, all rents, issues, profits, income
and accounts receivable generated through the use by Borrower or
others of all or any part of the Property, including any such
rents, issues, profits, income and accounts receivable of any
business activity conducted by Borrower on or through the use of
the Property, as well as the proceeds of all of the foregoing.
Borrower does hereby appoint the Lender its attorney-in-fact to
collect said rents, issues, profits, income and accounts
receivable with or without suit and apply the same, less expenses
of collection, to the said indebtedness, other secured items and
repairs, in such manner as the Lender may elect; provided,
however, that until there be a default under the terms of this
Mortgage (which is not cured within the applicable curative
period prescribed herein), Borrower may continue to collect and
enjoy said rents, issues, profits, income and accounts receivable
giving only an annual accounting to the holder of the Note for
the same. The curing of any default within the period permitted
by this Mortgage shall entitle the Borrower to again collect said
rents, issues, profits, income and accounts receivable. This
assignment of rents, issues, profits, income, and accounts
receivable and power of attorney shall be irrevocable and shall
be in addition to the other remedies herein provided for in event
of default and may be put into effect independently of or
concurrently with any of said remedies, but no liability shall
attach to the Lender for failure or inability to collect any
rents, issues, profits, income and accounts receivable herein
assigned. Assignment, lien, and power of attorney shall apply to
all rents, issues, profits, income, accounts receivable chooses
in action and the proceeds of same hereafter accruing from
present contracts for deed, purchase agreements, option
agreements or leases and rentals of the Property and any business
activity conducted from or on the Property and from all contracts
for deed or purchase agreements, option agreements or leases and
rentals and any business activity hereafter made or conducted by
the present or any future owners of the Property, with respect to
the Property; and any persons entering into contracts for
purchase or sale of the Property shall take subject to all the
provisions and conditions hereof.
16. Future Advances. In addition to the Note referred to herein,
this Mortgage shall also secure future advances made by the
Lender to the Borrower, which future advances shall be at the
option of the Lender; however, the maximum principal amount
secured by this Mortgage shall not exceed twice the principal
amount of the Note. All such future advances shall be made within
the time limit authorized by Florida law for making valid future
advances with interest and all indebted nesses created by virtue
of such future advances shall be and are secured hereby. All
provisions of this Mortgage shall apply to any future advances
made pursuant to the provisions of this paragraph 16. Nothing
herein contained shall limit the amount secured by this Mortgage,
if such amount is increased by advances made by the Lender as
herein elsewhere provided and authorized for the protection of
the security of the Lender.
17. Other Document. The Borrower hereby acknowledges that certain
other documents or instruments have been, are being or will be
submitted by or for the Borrower or executed by the Borrower or
by the Borrower and the Lender in connection with the loan
evidenced hereby. Any misrepresentation in or default under any
of said documents or other instrument executed in connection with
the loan secured hereby on even date herewith or hereafter shall
be and constitute a default under this Mortgage and the Note
secured hereby.
The word "Document(s)" shall mean any document or instrument
executed or submitted by or for the Borrower in connection with
the Loan, including, as applicable but not limited to: Note,
Mortgage, Loan Agreement, Construction Loan Agreement, Assignment
of Rents, Leases, Contracts, Accounts Receivable, Accounts and
Deposit Accounts, Security Agreement, Financing Statements,
Environmental Compliance and Indemnity Agreement, Owner's
Affidavit, Certificate of Corporate Resolution and/or Good
Standing, Loan Application, Financial Statement, Title Insurance
Commitment or Policy, Survey, Site Plan, Plans and
Specifications, Construction Breakdown, Insurance Policies,
Opinions of Counsel, Letters of any Governmental Authority,
provider of utilities, architect, engineer or other consultant,
Construction Commitment, Permanent Commitment and Construction
Contract.
18. Release of Liability. Without affecting the liability of any
party (other than any party released pursuant thereto) for
payment of any indebtedness secured hereby, and without affecting
the superiority or validity of the lien hereof upon any Property
not released pursuant thereto, Lender may at any time and from
time to time, without notice, in whole or in part, release or
discharge the obligation of any party liable for payment of any
indebtedness secured hereby, or extend the time for payment for
such indebtedness, or agree to alter any other terms of payment
of such indebtedness or accept additional security of any kind or
release any Property securing such indebtedness or consent to the
making of any map or plat for the creation of any easements
thereon or otherwise.
19. Intervening Liens. Any agreement hereafter made by Borrower
and Lender pursuant to this Mortgage shall be superior to the
rights of the holder of any intervening lien or encumbrance.
20. Waiver. No failure of Lender to exercise any option herein
given to declare the maturity of the debt hereby secured shall be
taken or construed as a waiver of its right to exercise such
option or to declare such maturity by reason of any past,
present, or future default on the part of Borrower; and the
procurement of insurance or the payment of taxes or other liens,
debts, or charges by Lender shall not be taken or construed as a
waiver of its right to declare the maturity of the indebtedness
hereby secured by reason of failure of Borrower to procure such
insurance or to pay such taxes, debts, liens or charges. The lien
of this instrument shall remain in full force and effect during
any postponement or extension of time of payment of any part or
all of the indebtedness secured hereby and during the term of any
future advances made hereunder.
21. Exemptions. The Borrower agrees not to set up or claim the
benefit of curtesy or dower laws, or any exemption or insolvency
laws against any claim of the Lender, for any sum of money which
may become due and payable to it, under the covenants and
agreements of the Note, or of this Mortgage, or any other
instrument securing the Note, or against the securing of
execution of any judgment sought thereon, all of said rights and
exemptions being hereby expressly waived.
22. Default. The happening of any of the following events shall
constitute a default hereunder: (a) a default shall occur under
the Note; (b) failure of Borrower to perform any agreement in
this Mortgage or in any other instrument securing the Note or in
any other instrument executed by Borrower in connection with the
Loan secured hereby not cured within the cure period set forth
therein; (c) the filing of any petition under the Bankruptcy
Code, or any similar federal or state statute, by any Obligor
(which term shall mean and include the Borrower, each borrower,
endorser, surety, guarantor, and all others who may become liable
for all or any part of the obligations secured hereby, as well as
anyone that owns, from time to time, all or any portion of the
Property or any interest therein) or by any Obligor against
another Obligor; (d) the filing by anyone other than an Obligor
of any petition under the Bankruptcy Code, or any similar federal
or state statute, against any Obligor which is not vacated within
sixty (60) days after filing; (e) the filing in any court by any
person or entity of an application for the appointment of a
receiver or trustee to take custody of the Property or any part
thereof which is not vacated within sixty (60) days after filing;
(f) the filing of any application in any court for the
appointment of a receiver for the benefit of one or more
creditors which is not vacated within sixty (60) days after
filing, or the making of a general assignment for the benefit of
creditors as to any Obligor; (g) the dissolution, business
failure, death, merger, consolidation, or reorganization of any
Obligor; (h) any material warranty, representation, certificate
or statement of any Obligor (whether contained in this Mortgage,
the Note, other instruments of security or other instruments
executed in connection with the Loan secured hereby) is not true;
(i) taking of possession of all or any substantial part of the
Property encumbered by this Mortgage or other instruments of
security securing the Note at the instance of any governmental
authority; (j) a default shall occur under or any proceedings are
instituted for the foreclosure or collection of any mortgage,
judgment or lien prior or subordinate to the lien of this
Mortgage affecting the Property (including collateral encumbered
by the other instruments of security for the Note); (k) a
material default by Borrower or other Obligor shall occur under
any contract affecting all or any part of the Property; (l) a
material adverse change in the financial condition of the
Borrower or any Obligor; or (m) should any franchise, license or
permit in existence on the date of this Mortgage or any other
franchise, license or permit necessary for the operation and use
of the Property contemplated herein be revoked or terminated or
should any conditions imposed by any governmental authority not
be complied with by the time requested by such authority as a
condition to non-revocation or non-termination. The enumeration
of events of default under this paragraph 22 shall not exclude
such other events of default under this Mortgage which are set
forth in other paragraphs.
23. Acceleration. If a monetary default shall occur hereunder and
remain uncured for thirty (30) days, or should a nonmonetary
default occur hereunder and remain uncured for thirty (30) days
or more following provision of written notice to Borrower from
Lender specifying with particularity such event of nonmonetary
default (or, if such nonmonetary default cannot be reasonably
cured within the thirty (30) day period, if Borrower does not
commence to cure such nonmonetary default within such thirty (30)
day period or thereafter fails to diligently and continuously
proceed to cure such nonmonetary default), then, without notice,
the full unpaid principal amount of the Note together with all
accrued interest shall become immediately due and payable at the
option of the Lender as fully and completely as if said aggregate
sum were originally stipulated to be paid at such time. Monetary
default shall be deemed to include failure to make payment of
principal, interest or late charges under the Note, as well as
payments of escrow, taxes and governmental assessments or
premiums for insurance under this Mortgage and any security
agreement securing the Note. That is to say, upon the breach of
any of the terms or covenants herein to be performed by the
Borrower and the failure of the Borrower to cure such breach
within the applicable curative period set forth in the preceding
sentence, the Lender or holder shall have the right to accelerate
the maturity of this Mortgage as though it were due and payable
on the day following such curative period and to demand payment
in full of the Mortgage amount or any unpaid balance thereof, and
to exercise all the rights and remedies herein or by law reserved
to the Lender the same as in any event of default hereunder,
anything in the Note secured hereby or herein to the contrary
notwithstanding. Notwithstanding anything contained in this
paragraph 23 to the contrary, except as expressly stated in such
subparagraphs, there shall be no requirement of a curative period
as set forth above in the event of any default specified in
paragraphs 22(c), (d), (h), (i), (j) or (k) hereof. If the Note
secured hereby is a demand note, the terms and provisions of this
paragraph or of any other provision in this Mortgage, shall not
be deemed or interpreted to alter or abrogate the demand nature
of the Note or the rights of Lender under a demand instrument.
24. Receiver. In the event a suit is instituted to foreclose or
reform this Mortgage or to enforce payment of any claims
hereunder, the Lender shall have the right, at any time pending
such suit, to apply to the Court having jurisdiction thereof for
the appointment of a Receiver of all and singular the Property,
and of all rents, profits, income, issues, accounts receivable
and proceeds as assigned hereunder; and upon such application
such court shall forthwith appoint a Receiver of the Property,
all and singular, and of such rents, income, profits, issues and
accounts receivable with the usual powers and duties of Receivers
in like cases, and such appointment shall be made as a matter of
absolute right to the Lender and without reference to the
adequacy or inadequacy of the security, or to the solvency or
insolvency of the Borrower. Such rents, profits, income, issues
and accounts receivable shall be applied, after payment of the
expenses of receivership and management of the Property by the
Receiver aforesaid, according to law and the order and practice
of such Court, and all rents, profits, income, issues and
accounts receivable as hereinabove assigned are hereby
transferred, assigned, set over and pledged as further security
for the payment of the mortgage indebtedness, with the right on
the part of the Lender, but without any duty to do so, at any
time after default hereunder to demand and receive and apply the
same upon the mortgage indebtedness, and such appointment shall
be without notice to any Obligor hereunder.
25. Costs and Attorneys' Fees. In the event the Property or any
part thereof becomes the subject of or involved in any action or
court proceeding (including any bankruptcy case or proceeding),
the Borrower shall pay and reimburse the Lender for all costs,
charges and expenses, including reasonable attorneys' fees, and
further including those on appeal, incurred by the Lender in
connection with or growing out of such action or proceeding and
all such costs, charges, expenses and attorneys' fees shall be
secured by the lien of this Mortgage. The Borrower agrees to pay
all such costs, charges, expenses and attorneys' fees to the
Lender promptly. The Borrower will pay all costs, charges and
expenses including reasonable attorneys' fees, costs of abstracts
of title, title searches and appraisals, incurred or paid at any
time by the Lender because of the failure of the Borrower to
promptly and fully perform the agreements and covenants of the
Note or this Mortgage or of any other instrument securing the
Note or executed by the Borrower in connection with the loan
evidenced by the Note. Said costs, charges and expenses shall be
immediately due and payable and secured by the lien of this
Mortgage. Said reasonable attorneys' fees shall include any such
incurred or expended at any time by the Lender after any default
by the Borrower as specified above even if incurred prior to the
commencement of any action or otherwise, in the foreclosure of
this Mortgage or the collection of the amount secured hereby. The
obligation to pay Lender's costs, expenses and attorneys' fees
shall include those costs, expenses and fees incurred by Lender
in seeking to collect or enforce any judgment entries on the
Note, this Mortgage or any other instrument of security, and such
obligations shall survive the entry of any judgment upon the Note
or this Mortgage and such obligation shall not merge in such
judgment or judgments but shall survive and continue until all
debts and obligations evidenced by the Note, this Mortgage or any
other instruments of security, and any judgment or judgments
entered thereon or foreclosures thereof are enforced, paid and
satisfied in full.
26. Late Charges. Installments, payable under the terms hereof
and the Note secured hereby, not paid within ten (10) days after
due date shall be subject to "late charges" as provided in the
Note, and such "late charges" are secured by the lien hereof.
27. Transfer of Property. If all or any part of the Property or
any interest therein is sold or transferred by Borrower (or any
subsequent owner of the Property) without Lender's prior written
consent, which consent will not be unreasonably withheld, Lender
may, at Lender's option, and without notice to Borrower, declare
all sums secured by this Mortgage to be immediately due and
payable. Lender shall have waived such option to accelerate if,
prior to the sale or transfer, Lender and the person to whom the
Property is to be sold or transferred reach agreement in writing
that the credit and other factors required by Lender (including,
without limitation, experience, principle location of person and
past credit performance) is satisfactory to Lender in its sole
discretion and that the interest payable on the sum secured by
this Mortgage shall be at such rate as Lender shall request in
its reasonable discretion, and at closing such person shall
assume in writing the indebtedness secured hereby and the
obligations set forth herein, and execute such other documents
that Lender may reasonably require.
28. Other Limitation. In addition to the limitation set forth in
paragraph 27 hereof, Borrower agrees that the following events
shall not occur on or after the day and year first above written
without the prior written consent of Lender: (a) a material
change of the General Partner of the Borrower that effectively
changes control of the Borrower; (b) encumbering of all or any
part of the Property except in favor of Lender; (c) conversion of
the Property into a congregate form of ownership; (d) sales or
leases of interval ownership or time sharing of all or any part
of the Property; (e) conversion of the Property into condominium
form of ownership; (f) the Borrower is disqualified to do
business in the State of Wisconsin or Florida; or (g) the use or
operation of the Property in existence on the date of this
Mortgage, or the business engaged in Borrower on the Property on
the date of this Mortgage is changed, discontinued or terminated.
If any of such events do occur, such shall be deemed a default
under this Mortgage, and the Lender or holder shall have the
right to accelerate the maturity of this Mortgage as though it
were due and payable on the day of such default and to demand
payment in full of the Note or any unpaid balance thereof, and to
exercise all rights and remedies herein or by law reserved to the
Lender the same as in any event of default hereunder, anything
contained in the Note secured hereby or herein to the contrary
notwithstanding. There shall be no requirement of any curative
period, and the provisions of paragraph 23 hereof as to curative
periods are inapplicable, for curing such event of default under
this paragraph 28 or under paragraph 27 hereof. The Borrower
acknowledges that the Loan secured hereby is a commercial loan
and that Lender is making the Loan to Borrower not only on the
basis of the collateral secured by this Mortgage but likewise on
the basis of the Borrower owning all of the Property during the
term of the Loan. Accordingly, Borrower agrees that limitations
contained in this paragraph 28, and in paragraph 27 hereof shall
be strictly construed against the Borrower and in favor of
Lender. Any default under any of such limitations shall be non-
rebuttable and conclusively presumed to jeopardize the security
and collateral of Lender for the Loan, as same is defined and
construed under Florida appellate decisions as may exist from
time to time (but without any expressed or implied consent or
waiver that state law rather than federal law shall be applicable
in the construction and application of the foregoing provisions).
At the option and in the sole discretion of Lender, Federal
regulatory or statutory law as affects "due on sale" or "due on
encumbrance" clauses when a federal savings and loan association
is the lender shall apply and control, rather than Florida law,
irrespective of any other provision contained in this Mortgage to
the contrary.
29. Proceeds of Claims, Awards. Rents and Sales. All monies,
other than proceeds of foreclosure sale or other transfer of
title to the Property in extinguishment of the indebtedness
secured by this Mortgage, which are paid to, collected or
received by Lender in connection with or as the proceeds of
insurance loss claims, condemnation awards, rents, leases, or
sales as provided under the terms of this Mortgage, shall be
applied by Lender as follows: first, to payment of Lender's costs
including any advances made by Lender and all expenses, real
estate commissions and reasonable attorneys' fees incurred
therewith; second, to payment to Lender of interest, at the
highest legal rate permitted by law to be charged by Lender, on
said costs from the date of such expenditures; and third, at
option of Lender to (a) restoration or repair of the Property, if
applicable, or (b) to payment of interest due on the principal
indebtedness, and the remainder, if any, to the principal
indebtedness secured by this Mortgage. Unless Borrower and Lender
otherwise agree in writing, any such application of proceeds to
principal shall not extend or postpone the due date of the
installment payments referred to in paragraphs 1 and 2 hereof or
change the amount of such installments. Nothing in this paragraph
shall in any way affect the lien of this Mortgage. The provisions
of this paragraph 29 are subject to the rights of Borrower to
restore the premises as set forth in paragraphs 4 and 5 above.
30. Proceeds of Foreclosure Sale. If this Mortgage is foreclosed
by a proper suit and the Property is sold to satisfy a decree of
foreclosure, the proceeds of such sale shall be applied as
follows: First, to the expenses and costs incurred hereunder,
including reasonable attorneys' fees for such services as may be
necessary in the premises and for the collection of said
indebtedness and the foreclosure of this Mortgage; second, to the
payment of whatever sum or sums the Lender may have paid or
become liable to pay in carrying out the terms and stipulations
of this Mortgage, together with interest thereon; and finally, to
the payment and satisfaction of the Note. The balance, if any,
shall, unless the Court decrees otherwise, be paid into the
registry of the Court having jurisdiction of said foreclosure
suit, to abide the further order of said Court.
31. Hazardous Waste. Borrower warrants and represents to Lender
to Borrower's knowledge after reasonable investigation:
(a) That neither Borrower nor any other person to the Borrower's
knowledge, after reasonable inquiry, has ever used the Property
as a facility for the storage, treatment or disposal of any
"Hazardous Substances," as that term is hereinafter defined;
(b) That to Borrower's knowledge the Property is now and at all
times hereafter will continue to be in full compliance with all
federal, state and local "Environmental Laws" (as that term is
defined hereinafter), including but not limited to, the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA"), 42 USC § 9601, et. seq., the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), Public Law
99-499, 100 Stat. 1613, the Resource Conservation and Recovery
Act ("RCRA"), 42 USC § 6901, et. seq., the Florida Resource
Recovery and Management Act, § 403.701 et. seq., Florida
Statutes, the Pollutant Spill Prevention and Control Act,
§376.011-376.17 and 376.19-376.21, Florida Statutes, as the same
may be amended from time to time and all ordinances, regulations,
codes, plans, orders, and decrees now existing or in the future
enacted, promulgated, adopted, entered or issued, both within and
outside present contemplation of the Borrower and Lender;
(c) That to Borrower's knowledge and except for such hazardous
substances as are kept in small quantities as is customary in
similar apartment projects, (i) as of the date hereof there are
no hazardous or toxic materials, substances, wastes or other
environmentally regulated substances (including solids or gaseous
products and any materials containing asbestos), the presence of
which is limited, regulated or prohibited by any state, federal
or local governmental authority or agency having jurisdiction
over the Property, or which are otherwise known to pose a hazard
to health or safety of occupants of the Property, located on, in
or under the Property or used in connection therewith, or (ii)
Borrower has fully disclosed to Lender in writing the existence,
extent and nature of any such hazardous or toxic material waste
or other environmentally regulated substance, which Borrower is
legally authorized and empowered to maintain on, in or under the
Property or use in connection therewith, and Borrower has
obtained and will maintain all licenses, permits and approvals
required with respect thereto, and is in fully compliance with
all of the terms, conditions and requirements of such licenses,
permits and approvals;
(d) That Borrower shall notify Lender of any change in the nature
or extent of any hazardous or toxic materials, substances or
wastes maintained on, in or under the Property or used in
connection therewith, and will transmit to Lender copies of any
citations, orders, notices or other material governmental or
other communication received with respect to any other hazardous
materials, substances, wastes or other environmentally regulated
substances affecting the Property;
(e) That Borrower is not aware of, nor has the Borrower nor any
of its subsidiary or affiliated entities received notice of, any
past, present or future events, conditions, circumstances,
activities, practices, incidents, actions or plans which may
interfere with or prevent compliance or continued compliance with
Environmental Laws or any ordinance, regulation, code, plan,
order, decree, judgment, injunction, notice or demand letter
issued, entered, promulgated or approved thereunder, or which may
give rise to any common law or legal liability, or otherwise form
the basis of any claim, action, demand, suit, proceeding,
hearing, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge,
release or threatened release into the environment, of any
Hazardous Substance;
(f) That there is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice or demand letter, notice of
violation, investigation, or proceeding pending or to Borrower's
knowledge threatened against Borrower or the Property, relating
in any way to any Environmental Laws or any regulation, code,
plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder; and
(g) Borrower hereby agrees to indemnify, reimburse, defend and
hold harmless Lender, its officers, directors, employees,
successors and assigns from and against all demands, claims,
civil or criminal actions or causes of action, liens,
assessments, civil or criminal penalties or fines, losses,
damages, liabilities, obligations, costs, disbursements, expenses
or fees of any kind or of any nature (including, without
limitation, cleanup costs, attorneys', consultants' or experts'
fees and disbursements and costs of litigation at trial and
appellate levels) which may at any time be imposed upon, incurred
by or asserted or awarded against, Lender directly or indirectly,
resulting from: (i) any acts or activities of Borrower, its
agents, employees or contractors, at, on or about the Property
which contaminate air, soils, surface waters or groundwaters
over, on or under the Property; (ii) arising from or out of any
Hazardous Substance on, in or under the Property; (iii) pursuant
to or in connection with the application of any Environmental Law
to the acts or omissions of Borrower or any other person and any
environmental damage alleged to have been caused, in whole or in
part, by the transportation, treatment, storage, or disposal of
any Hazardous Substance at the Property; or (iv) arising from or
in relation to the presence, whether past, present or future, of
any Hazardous Substances on the Property in violation of
applicable Environmental Laws.
Without limiting the foregoing, this indemnification provision
specifically protects the Lender against any claim or action from
activities described in (i), (ii), (iii) or (iv) above, based in
whole or part upon any environmental statute, rule, regulation or
policy, including but not limited to Chapters 403 and 376,
Florida Statutes, the Florida Administrative Code, the
Comprehensive Environmental Response, Compensation and Liability
Act 1980, ("CERCLA") 42 USC § 9601, et seq., and other laws,
whether now in existence or enacted in the future.
Borrower's indemnification obligation hereunder shall be one of
strict liability and shall be enforceable without regard to any
fault or knowledge of Lender with respect to any act or omission
or condition or event which is the basis of the claim under such
indemnification obligation, except as disclosed in the
environmental report provided to Lender. Borrower's obligation
under this section shall not be limited to any extent by the term
of the Note or other obligations secured hereby, and such
obligation shall continue, survive and remain in full force and
effect notwithstanding payment in full or other satisfaction
or release of said Note (and other obligations secured hereby)
and this Mortgage, or any foreclosure under this Mortgage, or any
delivery of a deed in lieu of foreclosure. The provisions of this
section shall be deemed to survive and continue in full force and
effect after any foreclosure or other proceeding by which the
Lender, and its successors and assigns succeed to ownership of
the Property.
As used herein, "Environmental Law" means any federal, state, or
local statutory or common law relating to pollution or protection
of the environment, including without limitation, any common law
of nuisance or trespass, and any law or regulation relating to
emissions, discharges, releases or threatened releases of
Hazardous Substances into the environment (including without
limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances.
As used herein, "Hazardous Substance" means any substance or
material (i) identified in Section 101(14) of CERCLA, 42 USC
§9601(14), as the same may be amended from time to time, or (ii)
determined to be toxic, a pollutant or contaminant, under
federal, state or local statute, law, ordinance, rule or
regulation or judicial or administrative order or decision, as
the same may be amended from time to time, including but not
limited to petroleum and petroleum products as defined in Sec.
376.301(10), Florida Statutes, as same may be amended from time
to time.
(h) Any breach of any warranty, representation or agreement
contained in this paragraph shall be an Event of Default
hereunder and shall entitle Lender to exercise any and all
remedies provided in this Mortgage and the Loan Documents, or
otherwise permitted by law.
32. Amounts Due. The Borrower, within ten (10) days upon request
in person or within fifteen (15) days upon request by mail, will
furnish a written statement duly acknowledged of the amount due
on this Mortgage and whether any offsets or defenses exist
against the Mortgage debt.
33. Notice. Any written notice, demand or request that is
required to be made hereunder or under the Note or under any
other instrument of security for the Note shall be served in
person or by registered or certified mail, return receipt
requested, addressed to the party to be served at its address set
forth below:
Borrower:
Jeffrey Keierleber
Brookfield Lakes Corporate Center
250 Patrick Boulevard, Suite 140
Brookfield, WI 53045-5864
Lender:
111 Second Avenue Northeast
St. Petersburg, Florida 33701
ATTN: Commercial Real Estate Department
Terry K. Bush
The above addresses may be changed as to the applicable party by
providing the other party with notice of such address change in
the same manner provided above; provided, however, so long as
Borrower is the owner of all or any part of the Property the
address of the Borrower must be located within the continental
United States of America. In the event that written notice,
demand or request is made as provided in this paragraph 33, then
in the event that such notice is returned to the sender by the
U.S. Postal System because of insufficient address or because the
party has moved or otherwise other than for insufficient postage,
such writing shall be deemed to have been received by the party
to whom it was addressed on the date that such writing was
initially placed in the U.S. Postal System by the sender.
34. Severability. Wherever possible, each provision of this
Mortgage shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision hereof shall
be prohibited or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or
invalidity only, without invalidating the remainder of such
provisions or of the remaining provisions of this Mortgage.
35. Nonrecourse. Except as provided below, the Lender agrees, for
itself, its representatives, successors, endorsees and assigns,
that: (i) neither the Borrower, nor any general or limited
partner, officer, director, representative, successor, assign or
affiliate of the Borrower, shall be personally liable on the
Note; and (ii) in the event of default under the Note or
hereunder, the Lender (and any such representative, successor,
endorsee or assignee) shall look to the property encumbered by
this Mortgage and/or the other instruments of security that
secure the Note (collectively, with the Mortgage, the
"Instruments of Security") for payment of the Note, and will not
make any claim or institute any action or proceeding against the
Borrower (or any general or limited partners, officers,
directors, representatives, successors, assigns or affiliates of
the Borrower) for any deficiency remaining after collection of
the Instruments of Security. Provided however, and
notwithstanding the foregoing, the Borrower is and will remain
personally liable for any deficiency remaining after collection
of the Instruments of Security to the extent of any loss suffered
by Lender, or its representatives, successors, endorsees or
assigns, if such loss is caused by Borrower based in whole or in
part upon:
(i) Damages arising from any fraud or misrepresentation;
(ii) Misapplication or misappropriation of insurance proceeds,
condemnation proceeds, tenant security deposits, rent or other
funds due Lender under the Instruments of Security;
(iii) Damage to or waste of the Property, or damage to the
Property resulting from gross negligence or intentional acts;
(iv) Failure to pay taxes or other Property-related liens; and/or
(v) Damages arising from the existence of hazardous or toxic
substances, or the failure to comply with any and all
Environmental Laws.
36. Binding Effect. Whenever the context of this Mortgage so
admits or requires, the terms Borrower and Lender shall include
the heirs, personal representatives, successors and/or assigns of
the respective parties hereto; the use of the singular number
shall include the plural, and the plural the singular; the use of
any gender shall include all genders, and if used, the term Note
or Promissory Note shall include the Note herein described if
more than one.
37. Headings. The headings of the paragraphs contained in this
Mortgage are for convenience of reference only and do not form a
part hereof and in no way modify, interpret or construe the
meaning of the parties hereto.
PROVIDED ALWAYS HOWEVER, that if the Borrower shall pay unto the
said Lender the moneys provided for in and by the Note and this
Mortgage and shall well and truly keep, observe and perform,
comply with and abide by each and every the stipulations,
agreements, conditions and covenants thereof as and when required
thereby then this deed and the estate hereby created shall cease
and be null and void, otherwise the same shall remain of binding
force and effect.
IN WITNESS WHEREOF, the Borrower has executed this Mortgage or
has caused the same to be executed by its duly authorized
representatives on the day and year first above written.
Signed, Sealed and Delivered
in the Presence of:
/s/Nydia I. McLean
SIGNATURE
/s/Jennifer Dzieminski
SIGNATURE
/s/ Nydia I. McLean
NAME LEGIBLY PRINTED, TYPEWRITTEN
OR STAMPED
/s/Jennifer Dzieminski
NAME LEGIBLY PRINTED, TYPEWRITTEN
OR STAMPED
DECADE COMPANIES INCOME PROPERTIES-A LIMITED PARTNERSHIP,
a Wisconsin Limited partnership authorized to do business in the
State of Florida, by its sole general partner:
By: DECADE COMPANIES, a Wisconsin general partnership, by its
managing general partner:
By: /s/ Jeffrey Keierleber
JEFFREY KEIERLEBER
Brookfield Lakes Corporate Center
250 Patrick Boulevard, Suite 140
Brookfield, WI 53045-5864
STATE OF WISCONSIN
COUNTY OF MILWAUKEE
The foregoing instrument was acknowledged before me this 4th day
of October, 1999, by JEFFREY KEIERLEBER, as Managing General
Partner of DECADE COMPANIES, a Wisconsin general partnership, the
sole partner of DECADE COMPANIES INCOME PROPERTIES - A LIMITED
PARTNERSHIP, a Wisconsin limited partnership authorized to do
business in the State of Florida, on behalf of said limited
partnership.
Personally Known X OR Produced Identification
Type of Identification Provided
/s/Mary Neese Fertl
SIGNATURE
Mary Neese Fertl
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED
(SEAL) NOTARY PUBLIC
My Commission is permanent
EXHIBIT "A"
LEGAL DESCRIPTION
Lot 1, Block 1, of that certain subdivision known as PELICAN
SOUND, according to the map or plat thereof on file and recorded
in the office of the Clerk of the Circuit Court of Pinellas
County, Florida, in Plat Book 98, pages 3 and 4, more
particularly described as:
That part of the Southeast 1/4 of Section 18, and that part of
the Northeast 1/4 of Section 19, Township 30 South, Range 17
East, Pinellas County, Florida, more particularly described as
follows:
Beginning at a point on the North line of Section 19, Township 30
South, Range 17 East, Pinellas County, Florida, which point is
North 89 degrees 54' 50" West, 327.22 feet from the Northeast
corner of said Section; thence South 00 degrees 09' 57" West,
372.67 feet; thence North 81 degrees 08' 18" East, 218.93 feet to
an intersection with a line which is 111.00 feet West of and
parallel with the East boundary of said Section; thence South 00
degrees 09' 57" West, along said line 652.38 feet to an
intersection with the South line of the North 3/4 of the North ½
of the Northeast 1/4 of said Section; thence North 89 degrees 55'
46" West, along said line 1472.68 feet; thence North 00 degrees
14' 59" East, 790.91 feet to an intersection with the South
right-of-way line of the new alignment of Gandy Boulevard (S.R.
600, a varying width right-of way); thence along said right-of-
way by the following six (6) courses:
1. North 79 degrees 47' 00" East, 258.09 feet;
2. North 71 degrees 14' 32" East, 102.50 feet;
3. North 65 degrees 57' 53" East, 293.84 feet to a point on a
curve;
4. Along the arc of a curve to the right concave to the
Southeast, Radius 2809.79 feet, Delta 3 degrees 00' 03", Arc
147.16, Chord 147-14, North 70 degrees 10' 36".East;
5. Thence leaving said curve North 71 degrees 40', 31" East
299.68 feet;
6. North 72 degrees 49' 16" East, 225.58 feet;
Thence leaving said right-of-way South 00 degrees 31' 53" West,
210.57 feet to the above-mentioned point of beginning.
THIS INSTRUMENT PREPARED BY:
David R. Punzak
CARLTON, FIELDS, WARD, EMMANUEL,
SMITH & CUTLER, P.A.
P. 0. Box 2861
St. Petersburg, Florida 33731
Exhibit Number 10.22
ASSIGNMENT OF RENTS, LEASES, CONTRACTS, ACCOUNTS RECEIVABLE,
ACCOUNTS AND DEPOSIT ACCOUNTS
THIS ASSIGNMENT OF RENTS, LEASES, CONTRACTS, ACCOUNTS RECEIVABLE,
ACCOUNTS AND DEPOSIT ACCOUNTS (the "Assignment") is executed this
5th day of October, 1999, by DECADE COMPANIES INCOME PROPERTIES -
A LIMITED PARTNERSHIP, a Wisconsin limited partnership authorized
to do business in the State of Florida (the "Borrower"), in favor
of REPUBLIC BANK, a Florida banking corporation (the "Lender"),
and is made in reference to the following facts:
(A) The Borrower is the fee simple owner of that certain parcel
of real property and all improvements thereon situate, lying and
being in Pinellas County, Florida, and being more particularly
described in Exhibit "A" attached hereto and by this reference
made a part hereof (the "Property").
(B) On or about the date hereof, the Lender has made a loan to
the Borrower in the original principal amount of THIRTEEN MILLION
AND N0/100 ($13,000,000.00) (the "Loan"). This Loan is evidenced
by a promissory note, which will be sometimes referred to herein
as the "Note", the terms and provisions of which are incorporated
in and made a part hereof. The Loan is secured by a mortgage (the
"Mortgage"), the terms and provisions of which are incorporated
herein and made a part hereof.
(C) The Loan is further secured by certain other instruments of
security, and all of such instruments of security and the Note
and Mortgage shall be referred to collectively herein as the
"Documents".
(D) The Borrower has agreed to and does execute this Assignment
as a part of the transaction evidencing and securing the Loan.
NOW, THEREFORE, the Borrower covenants and agrees to and with the
Lender as follows:
1. Recitals. The statements contained in the recitals of fact set
forth above (the "Recitals") are true and correct and the
Recitals by this reference are made a part of this Assignment.
2. Lender's Security. As additional collateral and security for
the payment of the indebtedness under the Note and for the
performance of each and every of the covenants and agreements
contained in the Documents and herein, the Borrower sells,
assigns, transfers, sets over and delivers unto the Lender and
agrees to and does hereby grant to the Lender a first security
interest in and to the following: (a) all present and future
rents, issues, profits, income, accounts and accounts receivable
from the Property, and each and every part and parcel thereof,
and also all present and future right, title and interest of the
Borrower under and by virtue of each and every franchise,
license, permit, lease, contract for deed or purchase and sale
agreement ("purchase agreement"), or any other document or
contractual right, written or verbal, covering any part or parcel
of the Property, whether now or hereafter made, and any and all
amendments to or modifications, extensions or renewals thereof
and all proceeds thereof; (b) all present and future rents,
issues, profits, income, accounts, accounts receivable and the
proceeds thereof of any business activity conducted by Borrower
on or through the use of the Property; (c) all bank accounts and
deposit accounts into which any of the proceeds of the foregoing
are deposited; and (d) proceeds of all the foregoing. Borrower
hereby warrants that there are no contracts for deed, purchase
agreements, mortgages or leases affecting the Property as of the
day and year first above written nor shall there be any in
existence on the date of recordation of the Mortgage and other
instruments of security except for tenant leases from time to
time and those set forth in that certain Affidavit executed by
Borrower on even date herewith. Borrower further warrants that it
has not executed nor will it execute at any time during the term
of the Loan any other assignments or instruments encumbering the
items described above.
3. Application of Proceeds. The Lender shall have the right to
and may receive the rents, issues, profits and income from the
Property, including all rents payable under any lease hereby
assigned, for application toward the reduction of the
indebtedness under the Note only if and in the event the Borrower
defaults in, breaches or fails to perform any one or more of the
covenants and agreements contained in either (a) this Assignment,
or (b) the Documents and such is not cured within the applicable
curative period, if any, specified in the Mortgage. In the event
of Borrower's default, breach or failure to perform which is not
cured within the curative period as aforesaid, and the exercise
by the Lender of its right to receive such rents, issues, profits
and income, the amounts so received prior to foreclosure sale,
less all costs, fees and expenses of collection, including
reasonable attorneys' fees, shall be applied toward the reduction
of the indebtedness under the Note. However, the exercise by the
Lender of its right to receive such rents, issues, profits and
income, shall not prevent the Lender from exercising any of its
rights under the Documents, including its right to foreclose the
Mortgage, nor any of its other rights under this Assignment, and
in addition the Lender shall have and may exercise from time to
time any and all rights and remedies of a secured party under the
Uniform Commercial Code of the State of Florida and any and all
other rights and remedies available to it under any other
applicable law, including but not limited to, the right to
foreclose this Assignment, the Mortgage, and any other instrument
of security for the Note in the same proceedings.
4. Future Contracts, Advance Receipts and Deposit. Except in the
ordinary course of business, the Borrower will not in the future
and during the continuance of the lien of the Mortgage and this
Assignment, or while any of the indebtedness under the Note
remains unpaid, (a) enter into any agreement or contract or any
amendment, modification, extension or renewal thereof for
franchise, license, permit, lease, purchase agreement or any
other document or contractual right covering any part or parcel
of the Property, or (b) accept security or guaranty payments or
deposits from lessees or tenants or accept advance payments of
rent from lessees or tenants or accept advance payments of rent
from lessees or tenants without first obtaining the written
consent of the Lender. But the Borrower may accept rental
payments or security deposits in advance for a period of up to
but not more than one month. If any lessee or tenant shall make
security or guaranty payments or deposits or pay rental for more
than one month in advance, either such security or guaranty
payment, deposit or advance rental payment shall be binding upon
the Lender and if the Lender shall elect, as herein provided, to
receive the rents, issues, profits and income, or in the event of
foreclosure of the Mortgage, such lessee or tenant shall have no
right by reason or on account of any such security or guaranty
payment, deposit or advance rental payment to remain on the
Property or any part thereof or to a refund by the Lender of any
such security or guaranty payment, deposit or advance rental
payment.
5. Proceeds of Insurance Claims. Notwithstanding any express or
implied obligation of the Borrower or the Borrower's predecessor
in title under any lease to rebuild or repair any improvement or
structure on any part of the Property in the event of damage or
destruction by fire or other casualty, the Lender shall be
entitled in the event of any such damage or destruction by fire
or other casualty to apply the proceeds of the hazard insurance
payable with respect to such fire or other casualty in accordance
with the terms and provisions of the Mortgage. In no event shall
the Lender have any obligation to the Borrower or to any lessee
or tenant to apply the hazard insurance proceeds to any repair,
restoration or rebuilding of the Property or any part thereof or
improvements thereon. The provisions of this paragraph 4 are
subject to the rights of Borrower to use insurance proceeds in
the event of a casualty loss to restore the premises as set forth
in paragraph 4 of the Mortgage.
6. Taxes. In the event any tax or assessment shall be levied or
assessed against the Lender on account of or incident to this
Assignment, the Borrower will pay said tax as soon as it is due
and payable, and if the Borrower shall fail to pay any such tax
the Lender may pay the same and the amount paid shall be repaid
by the Borrower to the Lender and shall be secured hereby and by
the lien of the Mortgage and shall be immediately due and
payable, together with interest at the highest legal rate
permitted by law from time to time to be charged by Lender, from
and after the date the tax was paid by the Lender.
7. Notice to Tenants. After default by the Borrower beyond any
applicable cure period, the Lender may notify any lessee or
tenant of the Property, or any part thereof, of the terms and
provisions of this Assignment by mailing a copy of this
Assignment to such lessee or tenant, or otherwise. Recordation of
this Assignment in the public records of the county in which the
Property is located shall constitute notice to any lessee or
tenant of the terms and provisions hereof.
8. Indemnification. The Borrower will indemnify and save harmless
the Lender against any and all expenses, costs and fees,
including reasonable attorneys' fees, whether or not an action be
brought, and including such as are incurred on appeal, which the
Lender incurs or pays on account or growing out of any default,
breach or failure, beyond any applicable cure period after
reasonable notice, to perform by the Borrower of any one or more
of the covenants and agreements contained in either (a) this
Assignment, (b) any item assigned hereby now in existence, (c)
any item assigned hereby and hereafter made, or (d) the
Documents, and such amounts incurred shall be secured hereby and
by the lien of the Mortgage.
9. Default. In the event the Borrower defaults in, breaches or
fails to perform any one or more of the covenants and agreements
contained in this Assignment and such breach continues for a
period of thirty (30) days after written notice from Lender
thereof, such shall constitute a default, breach or failure to
perform under the Documents. All of the rights of the Lender
hereunder shall be cumulative and not in limitation of the
Lender's rights under the terms of the Documents.
10. Termination. This Assignment and all of its provisions shall
end if and when the Lender shall execute and record a
satisfaction of the Documents in the public records of the county
in which the Property is located; otherwise the provisions hereof
shall remain in full force and effect.
11. Binding Effect. All of the covenants and agreements herein
shall bind, and the benefits and advantages shall inure to the
benefit of the parties hereto and their respective heirs, legal
representatives, grantees, successors and assigns.
12. Headings. The headings of the paragraphs contained in this
Assignment are for convenience of reference only and do not form
a part hereof and in no way modify, interpret or construe the
meaning of the parties hereto.
13. Nonrecourse. The obligations of the Borrower hereunder are
subject to the Nonrecourse provisions contained in the Mortgage.
IN WITNESS WHEREOF, the Borrower has executed this instrument
under seal the day and year first above written.
Signed, Sealed and Delivered
in the Presence of:
/s/ Nydia I. McLean
SIGNATURE
/s/ Nydia I. McLean
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED
/s/ Jennifer Dzieminski
SIGNATURE
/s/ Jennifer Dzieminski
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED
DECADE COMPANIES INCOME PROPERTIES
A LIMITED PARTNERSHIP, a Wisconsin limited
partnership authorized to do business in the
State of Florida, by its sole general partner:
By: DECADE COMPANIES, a Wisconsin general
partnership, by its managing general partner:
By: /s/ JEFFREY KEIERLEBER
JEFFREY KEIERLEBER
Brookfield Lakes Corporate Center
250 Patrick Boulevard, Suite 140
Brookfield, WI 53045-5864
STATE OF WISCONSIN
COUNTY OF MILWAUKEE
The foregoing instrument was acknowledged before me this 4th day
of October, 1999, by JEFFREY KEIERLEBER, as Managing General
Partner of DECADE COMPANIES, a Wisconsin general partnership, the
sole partner of DECADE COMPANIES INCOME PROPERTIES - A LIMITED
PARTNERSHIP, a Wisconsin limited partnership authorized to do
business in the State of Florida, on behalf of said limited
partnership.
Personally Known X OR Produced Identification
Type of Identification Provided
/s/ Mary Neese Fertl
SIGNATURE
Mary Neese Fertl
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED
(SEAL) NOTARY PUBLIC
My Commission is permanent
EXHIBIT "A"
LEGAL DESCRIPTION
Lot 1, Block 1, of that certain subdivision known as PELICAN
SOUND, according to the map or plat thereof on file and recorded
in the office of the Clerk of the Circuit Court of Pinellas
County, Florida, in Plat Book 98, pages 3 and 4, more
particularly described as:
That part of the Southeast 1/4 of Section 18, and that part of
the Northeast 1/4 of Section 19, Township 30 South, Range 17
East, Pinellas County, Florida, more particularly described as
follows:
Beginning at a point on the North line of Section 19, Township 30
South, Range 17 East, Pinellas County, Florida, which point is
North 89 degrees 54' 50" West, 327.22 feet from the Northeast
corner of said Section; thence South 00 degrees 09' 57" West,
372-67 feet; thence North 81 degrees 08' 18" East, 218.93 feet to
an intersection with a line which is 111.00 feet West of and
parallel with the East boundary of said Section; thence South 00
degrees 09' 57" West, along said line 652.38 feet to an
intersection with the South line of the North 3/4 of the North ½
of the Northeast 1/4 of said Section; thence North 89 degrees 55'
46" West, along said line 1472.68 feet; thence North 00 degrees
14' 59" East, 790.91 feet to an intersection with the South
right-of-way line of the new alignment of Gandy Boulevard (S.R.
600, a varying width right-of-way); thence along said right-of-
way by the following six (6) courses:
1. North 79 degrees 47' 00" East, 258.08 feet;
2. North 7l degrees 14' 32" East, 102.50 feet;
3. North 65 degrees 57' 53" East, 293.84 feet to a point on a
curve;
4. Along the arc of a curve to the right, concave to the
Southeast, Radius 2809.79 feet, Delta 3 degrees 00' 03', Arc
147.16, Chord 147.14, North 70 degrees 10' 36" East;
5. Thence leaving said curve North 71 degrees 40' 31" East 299.68
feet;
6. North 72 degrees 49' 16" East, 225.58 feet;
Thence leaving said right-of-way South 00 degrees 31' 53' West,
210.57 feet to the above-mentioned point of beginning.
Exhibit Number 10.23
LOAN AGREEMENT
THIS LOAN AGREEMENT is made entered into this 5th day of October,
1999, by and between REPUBLIC BANK, a Florida banking corporation
(the "Lender") and DECADE COMPANIES INCOME PROPERTIES - A LIMITED
PARTNERSHIP, a Wisconsin limited partnership authorized to do
business in the State of Florida (the "Borrower"), and is made in
reference to the following facts:
(A) On or about the date hereof, the Lender has made a secured loan to the
Borrower in the original principal amount of THIRTEEN
MILLION AND NO/100 DOLLARS ($13,000,000.00) (the "Loan").
(B) In connection with the Loan, the Borrower has executed and
delivered to Lender, among other things, a note (the "Note"). The
Borrower has also executed and delivered to Lender a Mortgage,
Assignment of Rents, Leases, Contracts, Accounts Receivable,
Accounts and Deposit Accounts, Security Agreement, Environmental
Compliance and Indemnity Agreement, UCC-1 Financing Statements,
and numerous other documents securing the Loan, (collectively the
"Instruments of Security"). The Note and Instruments of
Security collectively comprise the "Loan Documents".
(C) The Lender has required the execution and delivery of this
Agreement by the Borrower as a condition to making the Loan to
Borrower, and Borrower is agreeable to such.
NOW THEREFORE, for and in consideration of the mutual covenants
and conditions contained herein and other valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the
parties covenant and agree as follows:
ARTICLE I - INTRODUCTORY PROVISIONS
1.1 Recital. The statements contained in the recitals of fact set
forth above (the "Recitals") are true and correct, and the
Recitals by this reference are made a part of this Agreement.
1.2 Exhibits. All exhibits attached to this Agreement are by this
reference made a part hereof.
1.3 Abbreviations and Definition. The following abbreviations and
definitions will be used for purposes of this Agreement:
(a) The abbreviations for the parties set forth in the Preamble
will be used for purposes of this Agreement.
(b) The abbreviations and definitions set forth in the Recitals
will be used for purposes of this Agreement.
ARTICLE II - LOAN
2.1 Loan. On or about the date hereof, Borrower has executed the
Note in favor of Lender in the original principal amount of Loan.
The principal that is disbursed by Lender to Borrower shall bear
interest and be repaid in the manner set forth in the Note.
2.2 Purpose. The purpose of the Loan evidenced by the Note is to
provide funds for the refinancing of existing indebtedness
encumbering the real property that will serve as partial security
for the Loan, and to provide Borrower with an "Equity Extraction"
as provided in the Commitment Letter between Lender and Borrower
dated July 28, 1999 ("Commitment Letter"). All terms and
provisions of the Commitment Letter are incorporated in this
Agreement by this reference.
2.3 Funding of Equity Extraction. As indicated above, the
difference between the face amount of the loan and the payoff of
the Borrower's current mortgage with Marine Midland Bank and the
other costs of closing shall be deemed "Equity Extraction".
Borrower has the option of deferring the funding of the Equity
Extraction (or any part thereof) until December 31, 1999. No
further funding shall occur subsequent to December 31, 1999.
In the event Borrower elects to defer the funding of the Equity
Extraction (or any part thereof), the monthly payment under the
Note shall be amended for 3 months to reflect the deferring of
funding, and further amended upon final disbursement of the
Equity Extraction proceeds. These revised payment amounts shall
supersede the Note.
ARTICLE III - FINANCIAL AND OPERATIONAL DISCLOSURES
At all times during the term of the Loan, the Borrower shall
provide to Lender the following:
(a) No later than forty-five (45) days after the end of
Borrower's fiscal quarters, the Borrower shall provide to Lender
its unaudited management-prepared quarterly financial statements,
including, without limitation, a balance sheet, profit and loss
statement, and statement of cash flows, with supporting
schedules, along with a current rent roll.
(b) No later than ninety (90) days after the end of each fiscal
year of Borrower, the Borrower shall provide to Lender its: (i)
annual audited financial statements reflecting its operations and
that of its subsidiaries, including, without limitation, a
balance sheet, profit and loss statement and statement of cash
flows, with supporting schedules; (ii) its contingent liability
listings; (iii) its rent roll on the Property, and a schedule of
all debt payments, with supporting schedules, certified by
Borrower in favor of Lender, all in form and content acceptable
to Lender in its sole discretion. Furthermore, Borrower will
provide to Lender a detailed breakdown of all non-Property
expenses charged by the Decade Companies to Pelican Sound
Apartments.
(c) No later than thirty (30) days following the submission by
Borrower and DECADE COMPANIES, a Wisconsin general partnership
("Decade") of their tax returns and all supporting documentation
therefor to the Internal Revenue Service, Borrower and Decade
shall provide copies of all such documentation to Lender.
All of the foregoing reports and information must be provided by
Borrower and Decade to Lender in form and content acceptable to
Lender in its reasonable discretion and shall be certified to
Lender as to completeness and accuracy by Borrower or Decade, as
the case may be. All financial statements shall be prepared in
accordance with generally accepted accounting principles
consistently applied. Additionally, Borrower and Decade shall
furnish such additional financial information or reports as
Lender shall reasonably request from time to time during the term
of the Loan.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as follows:
4.1 Organization. Standing. Corporate Power. The Borrower is a
limited partnership duly formed, validly existing and in good
standing under the laws of the State of Wisconsin, and is
authorized to do business in the State of Florida. The Borrower
has appropriate power and authority to own its properties and to
carry on its business as now being conducted, and the Borrower
has appropriate power and authority to execute and perform this
Agreement and to deliver the Note and all other documents,
instruments and agreements provided for herein.
4.2 This Agreement. The execution and performance by the Borrower
of this Agreement, the borrowings hereunder, and the execution
and delivery of the Note and all other documents, instruments and
agreements provided for herein: (a) have been duly authorized by
all requisite partnership action; (b) will not violate any
provision of law or of the Borrower's Partnership Agreement as
amended to the date hereof; and (c) will not violate or be in
conflict with, result in a breach of, or constitute a default
under any indenture, agreement and other instrument to which the
Borrower is a party or by which it or any of its properties is
bound, or any order, writ, injunction or decree of any court or
governmental institution.
4.3 Litigation. There are no actions, suits or proceedings
pending, or to the knowledge of the Borrower, threatened against
or adversely affecting the Borrower at law or in equity or before
or by any federal agency or instrumentality, domestic or foreign,
which involve any of the transactions herein contemplated or the
possibility of any judgment or liability which may result in any
material and adverse change in the business, operations, prospects, property
or assets, or in the condition, financial or
otherwise, of the Borrower. The Borrower is not in default with
respect to any judgment, order, writ, injunction, decree, or, to
Borrower's knowledge, rule or regulation of any court, or
federal, state, municipal or other governmental department.
4.4 Financial Statement. The Borrower has heretofore furnished to
the Lender balance sheets, income statements, and other financial
information which are correct and complete and accurately present
the financial condition and the results of the operation of the
Borrower as of the dates thereof. Since the date of the last
furnishing of said financial statements, there has been no
material adverse change in the financial condition of the
Borrower.
4.5 Taxes. The Borrower has filed or caused to be filed all
federal and state tax returns which are required to be filed by
applicable law, and Borrower has paid or caused to be paid all
taxes as shown on said returns or on any assessment received by
it and not being contested in good faith, to the extent that such
taxes have become due.
4.6 Other Instruments. Except as reflected on the financial
statements described in Section 4.4 hereof, the Borrower is not a
party to any agreement or instrument or subject to any charter or
other restrictions adversely affecting its business, properties
or assets, operations or condition, financial or otherwise.
4.7 Property and Assets. The Borrower has good and marketable
title to all the property and assets reflected on the most recent
financial statements furnished to the Lender, except such as have
been disposed of in the ordinary course of business since the
date of said financial statements, and all such property and
assets are free and clear of mortgages, pledges, liens, charges
or other encumbrances, except as are reflected on the financial
statements.
4.8 Regulation U. No part of the proceeds of the Loan will be
used to purchase or carry, or to reduce or retire any loan
incurred to purchase or carry, any margin stocks (within the
meaning of Regulation U of the Board of Governors of the Federal
Reserve System) or to extend credit to others for the purpose of
purchasing or carrying any such margin stocks. The Borrower is
not engaged in the business of extending credit, nor is one of
the Borrower's important activities extending of credit, for the
purpose of purchasing or carrying such margin stocks. If
requested by the Lender, the Borrower shall furnish to the Lender
in connection with any loan hereunder a statement in conformity
with the requirements of Federal Reserve Form U-1 referred to in
said regulation.
4.9 Continuity of Representations and Warranties. All of the
foregoing representations and warranties shall be true and
correct at the time of the making of each advance under the Loan
pursuant to this Agreement.
ARTICLE V - CONDITIONS PRECEDENT
The obligation of the Lender to make the Loan hereunder is
subject to the following conditions precedent:
(a) Representations and Warranties. In order to induce the Lender
to enter into this Agreement and to make the Loan herein provided
for and disbursements thereunder, the Borrower represents and
warrants to the Lender that on the date of each borrowing or
disbursement hereunder, the representations and warranties set
forth in this Agreement shall be true and correct on and as of
the date of such borrowing or disbursement, with the same force
and effect as though such representations and warranties had
been made on and as of such date.
(b) No Default. At the time of each borrowing or disbursement
hereunder, the Borrower has observed and performed all of the
terms, conditions and agreements set forth herein on its part to
be observed or performed and no "Event of Default" (as that term
is defined below), nor any event which, upon notice or lapse of
time or both, would constitute such an Event of Default, shall
have occurred and be continuing.
(c) Liens and Encumbrances. The properties and assets of the Borrower, real,
personal and mixed, are not subject to any liens,
encumbrances or security interests or outstanding financing
statements, whether filed or unfiled, except for liens for taxes
not yet due and liens, encumbrances or security interests on
personal or real property as reflected in the Borrower's
financial statements heretofore delivered to Lender or which shall be paid out
of the proceeds of the Loan.
(d) Litigation. There are no actions, suits, proceedings or
claims pending or threatened against or affecting the Borrower,
the result of which might substantially affect the financial
condition, business or operations of the Borrower.
ARTICLE VI - AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with the Lender that from the
date hereof and so long as the Loan is outstanding, unless the
Lender shall otherwise consent in writing delivered to the
Borrower, it will:
6.1 Partnership Existence. Do or cause to be done all things
necessary to preserve, renew and keep in full force and effect
Borrower's partnership existence, and all Borrower's rights,
licenses, permits and franchises required at the date hereof, or
which may be required in the future conduct of its business, and
comply with all laws and regulations applicable to it that
materially affect the Borrower, and conduct and operate its
business in the same lines and in substantially the same manner
in which presently conducted and operated, and at all times
maintain, preserve and protect all property used and useful in
the conduct of its business with respect to the Property, and
maintain same in good working order and condition.
6.2 Insurance. Keep the Property adequately insured at all times
by financially sound and reputable insurers, and maintain such
insurance to such extent and against such risks, including
liability insurance, fire, windstorm, and other risks insured
against by extended coverage as is acceptable to Lender in its
reasonable discretion. Borrower will furnish Lender with a copy
of such insurance policies containing an endorsement in
favor of Lender as loss payee as its interest may appear.
6.3 Obligations and Taxes. Pay all indebtedness and obligations
promptly and in accordance with normal terms, and pay and
discharge promptly all taxes, assessments and governmental
charges or levies imposed upon it or in respect of its property,
before the same shall become in default, as well as all lawful
claims for labor, materials and supplies or otherwise which, if
unpaid, might become a lien or charge upon such properties or any
part thereof.
6.4 Records. The Borrower will keep and maintain full and
accurate rent rolls and accounts and records of its operations
with respect to the Property, and will permit Lender and its
designated officers, employees, agents and representatives, to
have access thereto and to make examination thereof at all
reasonable times, to make audits, and to inspect and otherwise
check the Property.
6.5 Deposit Accounts. As long as the Borrower reasonably believes
the level of service with Lender is competitive with other
financial institutions in Pinellas County, Florida, at all times
during the term of the Loan, Borrower agrees to establish a
deposit account with Lender with respect to the Property (with no
minimum deposit requirements), and to utilize such account for
revenue derived from the Property.
ARTICLE VII - NEGATIVE COVENANTS
The Borrower covenants and agrees with Lender that from the date
hereof and so long as the Loan is outstanding, unless the Lender
shall otherwise consent in writing delivered to the Borrower
(which consent will not be unreasonably withheld), it will not:
7.1. Indebtedness. With respect to the Property, create or incur
any indebtedness except in the ordinary course of business for
goods and services, and will not incur, create, assume or permit
to exist any indebtedness or liability for borrowed money or any
indebtedness evidenced by notes, bonds, debentures or similar
obligations, except for presently existing indebtedness set forth
in the financial statements heretofore delivered to Lender and
the Note evidencing the Loan described herein.
7.2 Loans. With respect to the Property, guarantee, endorse or
assume any debt, or pledge its credit in any manner, directly or
indirectly, except in favor of Lender or in the ordinary course
of business.
7.3 Liens. Incur, create, assume or permit to exist any mortgage,
pledge, lien, charge, security interest or other encumbrance of
any nature whatsoever on the Property, except to Lender, other
than: (a) liens for taxes or assessments and similar charges
either: (i) not delinquent; or (ii) being contested in good faith
by appropriate proceedings and as to which the Borrower shall
have set aside on its books adequate reserves; and (b) currently
existing indebtedness consented to in writing by Lender.
7.4 Change of Control. Make a material management or ownership
change in the composition of Decade, which effectively changes
the control of the Borrower.
7.5 Compliance with Laws Generally. Be in violation of any law,
ordinance, governmental rules or regulations to which Borrower is
subject, or fail to obtain any licenses, permits, franchises or
other governmental authorizations necessary to the ownership of
the Property, or to the conduct of its business, which violation
or failure to obtain might materially adversely affect the
business, prospects, profits, properties or condition (financial
or otherwise) of Borrower.
ARTICLE VIII - COLLATERAL
As security for the full and timely payment of the Note, including future
advances, together with interest thereon, as
well as any renewals, modifications or extensions thereof, and to
secure performance of all obligations of Borrower to Lender,
however or whenever created, Borrower covenants and agrees that
it has previously granted to Lender a first security interest
subject to no other liens, encumbrances or security interests in
and to all of the items of security as are set forth in the
Instruments of Security (collectively the "Collateral").
ARTICLE IX - DEFAULTS AND REMEDIES
9.1 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason
whatsoever (and whether such occurrences shall be voluntary or
involuntary, or come about or be effected by operation of law or
pursuant to or in compliance with any judgment, decree or order
of any court, or any order, rule or regulation of any
administrative or governmental body), then Lender shall be
entitled to the remedies set forth in Section 9.2 of this
Agreement. The Events of Default shall include, but not be
limited to, the following:
(a) Any representation or warranty made herein or in any report,
certificate, financial statement or other instrument furnished in
connection with this Agreement or the borrowing hereunder shall
prove to be false or misleading in any material respect;
(b) Default beyond the applicable curative period shall occur in
the payment of interest or principal on any indebtedness referred
to herein, including the Note, when and as the same shall become
due and payable, whether at the due date thereof or by acceleration or
otherwise;
(c) Any default beyond the applicable curative period shall occur
in the due observance or performance of any covenant, agreement
or other provision of this Agreement or the Loan Documents other
than for the payment of money, including without limitation the
invalidation or loss of priority of any lien or assignment
contemplated to be given to Lender pursuant to the Loan
Documents;
(d) The Borrower shall: (i) apply for or consent to the appointment of a
receiver, trustee in bankruptcy for benefit of
creditors, or liquidator of it or any of its property; (ii) admit
in writing its inability to pay its debts as they mature; (iii)
make a general assignment for the benefit of creditors; (iv) be
adjudicated a bankrupt or insolvent; (v) file a voluntary
petition in bankruptcy, or a petition or an answer seeking
reorganization or an arrangement with creditors, or seeking to
take advantage of any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation law or statute
or an answer admitting an act of bankruptcy alleged in a petition
filed against it in any proceeding under any such law; or (vi)
take any action for the purposes of effecting any of the
foregoing;
(e) An order, judgment or decree shall be entered against the
Borrower with the application, approval or consent of the
Borrower by any court of competent jurisdiction, approving a
petition seeking its reorganization or appointing a receiver,
trustee or liquidator of the Borrower, or of all or a substantial
part of the assets thereof, and such order, judgement or decree
shall continue unstayed and in effect for any period of sixty
(60) days from the date of entry thereof, or
(f) Borrower's corporate existence shall be dissolved or
terminated, whether voluntarily or involuntarily.
9.2 Remedy. Upon the occurrence of any Event of Default, Lender
may, at its option, declare all indebtedness of principal and
interest due and payable, whereupon the Note (notwithstanding any
provisions hereof or thereof) shall be immediately due and
payable, and Lender shall have and may exercise from time to
time any and all rights and remedies available to it under any
applicable law; and Borrower shall promptly pay all costs of
Lender of collection of any and all liabilities, and enforcement
of rights hereunder, including reasonable attorney's fees, and
legal expenses of any repairs to any of the Collateral, and
expenses of repairs to any realty or other property to which any
of the Collateral may be affixed. Any notice of sale, disposition
or other intended action by Lender sent to Borrower, at the
address of Borrower specified herein or at any other address
shown on the records of the Lender at least ten (10) days prior
to such action, shall constitute reasonable notice to Borrower.
Expenses of retaking, holding, preparing for sale, selling, or
the like shall include Lender's reasonable attorney's fees and
legal expenses. All rights, powers and remedies contained herein
or in any other agreement, instrument or document executed in
connection herewith are cumulative.
ARTICLE X - MISCELLANEOUS
10.1 Notices. All notices, requests or other communications to be
given to the Borrower or the Lender hereunder shall be
sufficiently given and shall be deemed given, when given by hand-
delivery to such person at the street address of such person set
forth below, or when mailed by registered or certified mail,
postage prepaid, addressed as follows:
If to the Borrower:
Brookfield Lakes Corporate Center
250 Patrick Boulevard, Suite 140
Brookfield, WI 53045
If to Lender:
111 Second Avenue Northeast
St. Petersburg, FL 33701
The parties hereto may, by notice given under this Section 10.1
to the others, designate any further or different addresses to
which subsequent notices, requests or other communications shall
be sent.
10.2 Survival of Representations. All covenants, agreements,
representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the making
by Lender of the Loan herein contemplated and the execution and
delivery to Lender of the Note evidencing such Loan and shall
continue in full force and effect so long as any indebtedness
created hereunder is outstanding and unpaid. All covenants and
agreements by or on behalf of either party which are contained or
incorporated in this Agreement shall bind and inure to the
benefit of the successors and assigns of both parties hereto.
10.3 Effect of Delay. Neither any failure nor any delay on the
part of Lender in exercising any right, power or privilege
hereunder or under the Note shall operate as a waiver thereof,
nor shall a single or partial exercise thereof preclude any other
or further exercise or the exercise of any other right, power or
privilege.
10.4 Expenses. Subject to the terms of the Loan Commitment
Letter, the Borrower will pay, and indemnify and hold harmless
the Lender against any liability with respect to, all out-of-
pocket expenses reasonably incurred by Lender in connection with
the preparation of this Agreement or the borrowings hereunder. Additionally,
the Borrower will pay and indemnify and hold
harmless the Lender against any liability with respect to, and
all out-of-pocket expenses reasonably incurred by Lender in
connection with the enforcement of the rights of Lender in
connection with this Agreement, or with the Loan made or the Note
issued hereunder, including but not limited to the fees of and
expenses of counsel for Lender. The provisions of this Section
10.4 shall survive the execution of this Agreement and the
repayment of the Note.
10.5 Modification and Waivers. No modification or waiver of any
provision of this Agreement or of the Note nor consent to any
departure by the Borrower therefrom shall in any event be
effective unless the same shall be in writing, and then such
waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or
demand on the Borrower in any case shall thereby entitle the
Borrower to any other or further notice or demand in the same,
similar or other circumstances.
10.6 Business Day. Should any installment on the Note become due
and payable on other than a business day of the Lender, the
maturity thereof shall be extended to the next succeeding
business day with interest on the principal amount thereof at the
rate set forth therein.
10.7 Remedies Cumulative. Any rights or remedies of the Lender
hereunder or under the Note or any other security agreement or
writing shall be cumulative and in addition to every other right
or remedy contained therein or herein, whether now existing or
hereafter at law or in equity or by statute or otherwise.
10.8 Binding Agreement. This Agreement shall be binding upon
Borrower and its successors and assigns and the terms hereof
shall inure to the benefit of Lender and its successors and
assigns.
10.9 Exhibits. All references to "Exhibits" contained herein are
references to exhibits attached to the Agreement, the terms and
conditions of which are made a part hereof for all purposes, the
same as if set forth herein verbatim.
10.10 Number and Gender of Words. Whenever herein the singular
number is used, the same shall include the plural where
appropriate, and words of any gender shall include each other
gender where appropriate.
10.11 Captions. The captions, headings, and arrangements used in
this Agreement are for convenience only and do not in any way
affect, limit, amplify, or modify the terms and provisions
hereof.
10.12 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or
future laws effective during the term of this Agreement, such
provision shall be fully severable, and this Agreement shall be
construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part.
10.13 All Loans Constitute One Loan. All loans and/or advances
made hereunder shall constitute one loan and the obligations of
such loans and/or advances shall constitute one obligation
secured by the Collateral provided for herein.
10.14 Construction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida,
regardless of the state in which it is executed.
10.15 Nonrecourse. The obligations of the Borrower hereunder are
subject to the Nonrecourse provisions contained in the Mortgage.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
Signed, sealed and delivered
in the presence of:
REPUBLIC BANK, a Florida banking
corporation
By:
Its President
(CORPORATE SEAL)
As to Lender
DECADE COMPANIES INCOME PROPERTIES A LIMITED PARTNERSHIP, a
Wisconsin limited partnership authorized to do business in the
State of Florida, by its sole general partner:
By: DECADE COMPANIES, a Wisconsin
general partnership, by its managing general partner:
By:/s/Jeffrey Keierleber
JEFFREY KEIERLEBER
/s/Nydia I. McLean
Nydia I. McLean
/s/Jennifer Dzieminski
Jennifer Dzieminski
STATE OF FLORIDA
COUNTY OF PINELLAS
The foregoing instrument was acknowledged before me this ___day
of _______________, 1999, by __________________________, the
____________ President of REPUBLIC BANK, a Florida banking
corporation, on behalf of the corporation.
Personally Known X OR Produced Identification
Type of Identification Provided
SIGNATURE
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED
(SEAL) NOTARY PUBLIC
My Commission is permanent
STATE OF WISCONSIN
COUNTY OF MILWAUKEE
The foregoing instrument was acknowledged before me this 4th day
of October, 1999, by JEFFREY KEIERLEBER, as Managing General
Partner of DECADE COMPANIES, a Wisconsin general partnership, the
sole partner of DECADE COMPANIES INCOME PROPERTIES - A LIMITED
PARTNERSHIP, a Wisconsin limited partnership authorized to do
business in the State of Florida, on behalf of said limited
partnership.
Personally Known X OR Produced Identification
Type of Identification Provided
/s/Mary Neese Fertl
SIGNATURE
Mary Neese Fertl
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED
(SEAL) NOTARY PUBLIC
My Commission is permanent
EXHIBIT "A"
LEGAL DESCRIPTION
Lot 1, Block 1, of that certain subdivision known as PELICAN
SOUND, according to the map or plat thereof on file and recorded
in the office of the Clerk of the Circuit Court of Pinellas
County, Florida, in Plat Book 98, pages 3 and 4, more
particularly described as:
That part of the Southeast 1/4 of Section 18, and that part of
the Northeast 1/4 of Section 19, Township 30 South, Range 17
East, Pinellas County, Florida, more particularly described as
follows:
Beginning at a point on the North line of Section 19, Township 30
South, Range 17 East, Pinellas County, Florida, which point is
North 89 degrees 54' 50" West, 327.22 feet from the Northeast
corner of said Section; thence South 00 degrees 09' 57" West,
372.67 feet; thence North 81 degrees 08' 18" East, 218.93 feet to
an intersection with a line which is 111.00 feet West of and
parallel with the East boundary of said Section; thence South 00
degrees 09' 57" West, along said line 652.38 feet to an
intersection with the South line of the North 3/4 of the North ½
of the Northeast 1/4 of said Section; thence North 89 degrees 55'
46" West, along said line 1472.68 feet; thence North 00 degrees
14' 59" East, 790.91 feet to an intersection with the South
right-of-way line of the new alignment of Gandy Boulevard (S.R.
600, a varying width right-of-way); thence along said
right-of-way by the following six (6) courses:
1. North 79 degrees 47' 00" East, 258.08 feet;
2. North 7l degrees 14' 32" East, 102.50 feet;
3. North 65 degrees 57' 53" East, 293.84 feet to a point on a
curve;
4. Along the arc of a curve to the right, concave to the
Southeast, Radius 2809.79 feet, Delta 3 degrees 00' 03', Arc
147.16, Chord 147.14, North 70 degrees 10' 36" East;
5. Thence leaving said curve North 71 degrees 40' 31" East 299.68
feet;
6. North 72 degrees 49' 16" East, 225.58 feet;
Thence leaving said right-of-way South 00 degrees 31' 53' West,
210.57 feet to the above-mentioned point of beginning.
Exhibit Number 10.24
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement") is executed this 5th
day of October, 1999, by DECADE COMPANIES INCOME PROPERTIES - A
LIMITED PARTNERSHIP, a Wisconsin limited partnership authorized
to do business in the State of Florida (the "Borrower"), in favor
of REPUBLIC BANK, a Florida banking corporation (the "Lender"),
and is made in reference to the following facts:
(A) The Borrower is the owner in fee simple to that certain
parcel of real property and all improvements thereon located in
Pinellas County, Florida and more particularly described in
Exhibit "A" attached hereto and by this reference made a part
hereof (the "Property").
(B) On or about the date hereof, the Lender has made a loan to
the Borrower in the original principal amount of THIRTEEN MILLION
AND N0/100 ($13,000,000.00) (the "Loan"). The Loan is evidenced
by a promissory note, which will sometimes be referred to herein
as the "Note", and is secured by a mortgage (the "Mortgage") the
terms and provisions of both of which are incorporated in and
made a part hereof. The Mortgage secures the Note and encumbers
the Property as a first lien thereon.
(C) The Loan is further secured by certain other instruments and
all of such instruments of security and the Note and Mortgage
shall be referred to collectively herein as the "Documents".
(D) Lender has required Borrower to grant Lender a first security
interest and lien in the tangible and intangible personal
property of Borrower located on or incident to the Property,
however arising or created, and whether now existing or hereafter
arising, existing or created, and the proceeds thereof as
described in Exhibit "B" attached hereto and by this reference
made a part hereof (the "Collateral").
NOW THEREFORE, for and in consideration of the premises and other
good and valuable consideration, the Borrower does hereby
covenant, agree, warrant and represent with and to Lender as
follows:
1. Recitals. The statements contained in the recitals of fact set
forth above (the "Recitals") are true and correct and the
Recitals by this reference are made a part of this Agreement.
2. Security Interest. Borrower does hereby grant to Lender a
first security interest and lien in the Collateral as additional
security to secure the payment of principal, interest and other
sums due or to become due under the Note and any and all
extensions, modifications or renewals of the Note, and all
present and future indebtedness, obligations, and liabilities
contained in or referred to or which may hereafter arise in
connection with or as contemplated by the Mortgage and any other
instrument of security for the Note, and any and all
modifications or extensions of the Mortgage and such other
instruments of security, and all obligations and liabilities of
Borrower hereunder, all of which are hereinafter referred to as
the "Obligations."
3. Use and Location of Collateral. The Collateral was and shall
be acquired and is and shall be used primarily for business use.
The Collateral shall be kept at and on the Property, upon which
is or will be constructed certain appurtenant improvements.
4. Payment. To pay and perform, all and singular, the
Obligations, including but not limited to the payment of sums of
principal and interest and other sums payable by virtue of the
Note and the Mortgage promptly when due, to perform all of
Borrower's agreements in the Mortgage and herein and to pay all
taxes and assessments levied or assessed against the Collateral,
against this Security Agreement and against the Obligations
secured hereby, whether such taxes and assessments be against the
Collateral, the Obligations, the Borrower, the Lender, or
another. All such taxes and assessments shall be paid by Borrower
before they become delinquent, and before the date they would
have become delinquent or within ten (10) days after payment of
same, whichever shall be sooner, Borrower shall deliver to Lender
official receipts, or copies thereof, showing payment.
5. Insurance. To keep the Collateral continuously insured against
loss by fire, theft, tornado, windstorm, flood and such other
hazards, as may from time to time be required by Lender, in
companies and in amounts in each company as may be approved by
and acceptable to Lender; all such insurance policies shall be in
form acceptable to Lender with loss payable to Lender as its
interest may appear, and each and every such policy or certified
copies thereof shall be promptly delivered to and held by Lender.
Not less than thirty (30) days in advance of the expiration of
each such policy Borrower shall deliver to Lender a renewal or
certified copy thereof, together with the receipt, or copy
thereof, for the premium for such renewal. In the event of loss
the insurance claim proceeds, or any part thereof, shall be
applied by Lender in the manner set forth in the Mortgage.
6. Protection of Lender's Security. Borrower is and will be the
owner of the Collateral free and clear from any lien, security
interest or encumbrance, except for the lien and the obligations
of this Security Agreement. No financing statement covering any
of the Collateral is on file in any public office. Borrower will
from time to time at the request of Lender execute one or more
financing statements and such other documents (and pay the costs
of filing or recording the same in all public offices deemed
necessary or desirable by Lender) and do such other acts and
things, all as Lender may request to establish and maintain a
valid perfected first security interest in the Collateral to
secure the payment and performance of the Obligations. From time
to time upon the request of the Lender, Borrower will furnish an
inventory of the Collateral to Lender, which inventory shall
specifically describe the Collateral by make, model and serial
number insofar as possible.
7. Replacement of Collateral. To keep the Collateral, all and
singular, on the Property and not to remove or permit same to be
removed therefrom without the prior written consent of the Lender
except that Borrower shall be entitled to dispose of such of the
Collateral as has become unfit for continued use provided
Borrower simultaneously replaces same with property of similar
kind and for like use and provided the purchase price of any such
replacement shall have been paid in full and provided that the
lien of this Security Agreement shall continue upon any such
replacement. To use reasonable care and diligence to preserve and
keep the Collateral in good condition and not to permit or commit
any waste, impairment or deterioration thereof and to use same
only for the purpose for which same is now agreed upon to be used
in connection with said improvements.
8. Sale or Encumbrance. Except as set forth in paragraph 7 above,
not to sell or attempt to sell any of the Collateral and not to
create or permit any other security interest or other lien or
encumbrance upon such Collateral without the prior written
consent of the Lender.
9. Costs and Attorneys' Fees. To pay, all and singular, the
expenditures, costs, charges and expenses, including reasonable
attorneys' fees and costs of title searches and information
requests, incurred or paid at any time by the Lender because of
the failure on the part of the Borrower promptly and fully to
perform and pay the Obligations, and all such costs, charges and
expenses shall be immediately due and payable and shall bear
interest at the highest legal rate permitted by law to be charged
by Lender from time to time, from date of payment by Lender until
repaid by Borrower and, together with such interest, shall be
secured by the lien of this Security Agreement.
10. Default. Borrower shall be in default under this Agreement
upon the happening of any of the following events or conditions:
(a) failure or omission to perform or pay when due any of the
Obligations (including any installment thereof or interest
thereon); (b) any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower proves to have
been false in any material respect when made or furnished; (c)
Borrower makes an assignment for the benefit of creditors; (d) a
Receiver is appointed for Borrower or any part of the Collateral;
(e) Borrower files a Petition in Bankruptcy, is adjudicated a
bankrupt, or files any petition or institutes any proceedings
under the Bankruptcy Code with respect to Borrower's assets and
liabilities; or (f) Borrower defaults in, breaches or fails to
perform any one or more of the covenants and agreements contained
in the Obligations, including without limitation, this Security
Agreement, the Note, the Mortgage, or any other instrument
executed by Borrower in connection with the loan secured hereby
on even date herewith or hereafter.
11. Acceleration. Upon the occurrence of any monetary default
which remains uncured for thirty (30) days, or should a
nonmonetary default remain uncured for thirty (30) days or more
following provision of written notice to Borrower from Lender
specifying with particularity such event of nonmonetary default
(or, if such nonmonetary default cannot be reasonably cured
within the thirty (30) day period, if the Borrower does not
commence to cure such nonmonetary default within the thirty (30)
day period or thereafter fails to diligently and continuously
proceed to cure such nonmonetary default), Lender may, at its
option, declare all Obligations, or any of them (notwithstanding
any provision thereof), immediately due and payable without
demand or notice of any kind and the same thereupon shall
immediately become and be due and payable without demand or
notice, and Lender shall have and may exercise from time to time
any and all rights and remedies of a Lender under the Uniform
Commercial Code of the State of Florida and any and all other
rights and remedies available to it under any other applicable
law, including the right to foreclose this Agreement and the
Mortgage in the same proceedings. Notwithstanding anything
contained in the preceding sentences of this paragraph 11 to the
contrary, there shall be no requirement of a curative period as
set forth above in the event of a default described in
subparagraphs (c), (d) or (e) of paragraph 10 hereof. Upon
request or demand of Lender, Borrower shall, at Borrower's
expense, assemble the Collateral and make it available to the
Lender and Borrower shall promptly pay all costs of Lender of
collection of any and all of the Obligations and enforcements of
rights hereunder, including reasonable attorneys' fees and legal
expenses and expenses of any repairs to any of the Collateral and
expenses of any repairs to any realty or other property to which
any of the Collateral may be affixed or be a part. Expenses of
retaking, holding, preparing for sale, selling or the like, shall
include those incurred on appeal, if any.
12. Waiver. No waiver by Lender of any default shall operate as a
waiver of any other default or of the same default on a future
occasion. No delay or omission on the part of Lender in
exercising any right or remedy shall operate as a waiver thereof
or the exercise of any other right or remedy.
13. Provisions Cumulative. The provisions of this Agreement are
cumulative and in addition to the provisions of the Note secured
by this Agreement and the provisions of the Mortgage and other
instruments securing the Note and Lender shall have all the
benefits, rights and remedies of and under the Note and any other
instrument securing same. All rights of Lender hereunder shall
inure to the benefit of its successors and assigns and all
obligations of Borrower hereunder shall bind the successors and
assigns of Borrower.
14. Florida Contract. This Agreement has been delivered in the
State of Florida and shall be construed in accordance with the
laws of Florida.
15. Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this
agreement shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such
prohibition or invalidity only, without invalidating the
remainder of such provision or of the remaining provisions of
this agreement.
16. Designation of Personal and Real Property. Notwithstanding
any other provisions hereof, Borrower, by the execution and
delivery hereof, and Lender, by the acceptance hereof, recognize
and agree that certain items or portions of the Collateral may be
now or hereafter so attached to the buildings and improvements as
to become fixtures or a part of the realty and as such,
encumbered as a part of the realty by the Mortgage, and nothing
herein shall be considered as an agreement or to imply that any
such item of the Collateral which is or may hereafter be attached
to and a part of the realty is personal property as distinguished
from real estate, and nothing herein shall be construed to limit
or diminish the lien effected by the Mortgage upon the realty,
including any of the Collateral which is or may become a part of
the realty.
17. Nonrecourse. The obligations of the Borrower hereunder are
subject to the Nonrecourse provisions contained in the Mortgage.
18. Headings. The headings of the paragraphs contained in this
Agreement are for convenience of reference only and do not form a
part hereof and in no way modify, interpret or construe the
meaning of the parties hereto.
IN WITNESS WHEREOF, Borrower has executed this instrument under
seal the day and year first above written.
Signed, Sealed and Delivered
in the Presence of:
/s/Nydia I. McLean
SIGNATURE
/s/Nydia I. McLean
NAME LEGIBLY PRINTED, TYPEWRITTEN
OR STAMPED
DECADE COMPANIES INCOME PROPERTIES
A LIMITED PARTNERSHIP, a Wisconsin limited
partnership authorized to do business in the
State of Florida, by its sole general partner:
By: DECADE COMPANIES, a Wisconsin general
partnership by its managing general partner:
By:/s/Jeffrey Keierleber
JEFFREY KEIERLEBER
Brookfield Lakes Corporate Center
250 Patrick Boulevard, Suite 140
Brookfield, WI 53045-5864
/s/Jennifer Dzieminski
SIGNATURE
/s/Jennifer Dzieminski
NAME LEGIBLY PRINTED, TYPEWRITTEN
OR STAMPED
As to Borrower
STATE OF WISCONSIN
COUNTY OF MILWAUKEE
The foregoing instrument was acknowledged before me this 4th day
of October, 1999, by JEFFREY KEIERLEBER, as Managing General
Partner of DECADE COMPANIES, a Wisconsin general partnership, the
sole partner of DECADE COMPANIES INCOME PROPERTIES - A LIMITED
PARTNERSHIP, a Wisconsin limited partnership authorized to do
business in the State of Florida, on behalf of said limited
partnership.
Personally Known X OR Produced Identification
Type of Identification Provided
/s/Mary Neese Fertl
SIGNATURE
/s/Mary Neese Fertl
NAME LEGIBLY PRINTED, TYPEWRITTEN OR STAMPED
(SEAL)
NOTARY PUBLIC
My Commission is permanent
EXHIBIT "A"
LEGAL DESCRIPTION
Lot 1, Block 1, of that certain subdivision known as PELICAN
SOUND, according to the map or plat thereof on file and recorded
in the office of the Clerk of the Circuit Court of Pinellas
County, Florida, in Plat Book 98, pages 3 and 4, more
particularly described as:
That part of the Southeast 1/4 of Section 18, and that part of
the Northeast 1/4 of Section 19, Township 30 South, Range 17
East, Pinellas County, Florida, more particularly described as
follows:
Beginning at a point on the North line of Section 19, Township 30
South, Range 17 East, Pinellas County, Florida, which point is
North 89 degrees 54' 50" West, 327.22 feet from the Northeast
corner of said Section; thence South 00 degrees 09' 57" West,
372.67 feet; thence North 81 degrees 08' 18" East, 218.93 feet to
an intersection with a line which is 111.00 feet West of and
parallel with the East boundary of said Section; thence South 00
degrees 09' 57" West, along said line 652.38 feet to an
intersection with the South line of the North 3/4 of the North ½
of the Northeast 1/4 of said Section; thence North 89 degrees 55'
46" West, along said line 1472.68 feet; thence North 00 degrees
14' 59" East, 790.91 feet to an intersection with the South
right-of-way line of the new alignment of Gandy Boulevard (S.R.
600, a varying width right-of-way); thence along said right-of-
way by the following six (6) courses:
1. North 79 degrees 47' 00" East, 258.08 feet;
2. North 7l degrees 14' 32" East, 102.50 feet;
3. North 65 degrees 57' 53" East, 293.84 feet to a point on a
curve;
4. Along the arc of a curve to the right, concave to the
Southeast, Radius 2809.79 feet, Delta 3 degrees 00' 03', Arc
147.16, Chord 147.14, North 70 degrees 10' 36" East;
5. Thence leaving said curve North 71 degrees 40' 31" East 299.68
feet;
6. North 72 degrees 49' 16" East, 225.58 feet;
Thence leaving said right-of-way South 00 degrees 31' 53' West,
210.57 feet to the above-mentioned point of beginning.
All rights, title and interest of Borrower in and to the
minerals, soil, flowers, shrubs, crops. trees, timber and other
emblements now or hereafter on the Property described in Exhibit
"A" (herein referred to as "Property") or under or above the same
or any part or parcel thereof.
All machinery, apparatus, equipment, fittings, fixtures, whether
actually or constructively attached to the Property and including
all trade, domestic and ornamental fixtures and articles of
personal property of every kind and nature whatsoever now or
hereafter located in, upon or under the Property or any part
thereof and used or usable in connection with any present or
future operation of the Property and now owned or hereafter
acquired by Borrower, including, but without limiting the
generality of the foregoing, all heating, air conditioning,
freezing, lighting, laundry, incinerating and power equipment;
engines; pipes; pumps; tanks; motors; conduits; switchboards,
plumbing, lifting, cleaning, fire prevention, fire extinguishing,
refrigerating, ventilating and communications apparatus; boilers,
ranges, furnaces, oil burners or units thereof; appliances; air-
cooling and air conditioning apparatus; vacuum cleaning systems;
elevators; escalators; shades; awnings; screens; storm doors and
windows; stoves; wall beds; refrigerators; attached cabinets;
partitions; ducts and compressors; rugs and carpets; draperies;
furniture and furnishings; together with all building materials
and equipment now or hereafter delivered to the Property and
intended to be installed therein, including but not limited to
lumber, plaster, cement, shingles, roofing, plumbing, fixtures,
pip, lath, wallboard, cabinets, nails, sinks, toilets, furnaces,
heaters, brick, tile, water heaters, screens, window frames,
glass, doors, flooring, paint, lighting fixtures and unattached
refrigerating, cooking, heating and ventilating appliances and
equipment; together with all additions and accessions thereto and
replacements thereof.
All of the water, sanitary and storm sewer systems now or
hereafter owned by the Borrower which are now or hereafter
located by, over, and upon the Property or any part and parcel
thereof, and which water system includes all water mains, service
laterals, hydrants, valves and appurtenances, and which sewer
system includes all sanitary sewer lines, including main,
laterals, manholes and appurtenances.
All paving for streets, roads, walkways or entrance ways now or
hereafter owned by Borrower and which are now or hereafter
located on the Property or any part or parcel thereof.
All of Borrower's interest as lessor in and to all leases or
rental arrangements of the Property, or any part thereof,
heretofore made and entered into, and in and to all leases or
rental arrangements of the Property hereafter made and entered
into by Borrower during the life of the security agreements or
any extension or renewal thereof, together with all rents and
payments in lieu of rents, together with any and all guarantees
of such leases or rental arrangements and including all present
and future security deposits and advance rentals.
Any and all awards or payments, including interest thereon, and
the right to receive the same, as a result of (a) the exercise of
the right of eminent domain, (b) the alteration of the grade of
any street, or (c) any other injury to, taking of, or decrease in
the value of the Property described in Exhibit "A" or in this
Exhibit.
All of the right, title and interest of the Borrower in and to
all unearned premiums accrued, accruing or to accrue under any
and all insurance policies now or hereafter provided pursuant to
the terms of security agreements, and all proceeds or sums
payable for the loss of or damage to (a) the Property described
in Exhibit "A", or herein, or (b) rents, revenues, income,
profits or proceeds from leases, franchises, concessions or
licenses of or on any part of the Property.
All contracts and contract rights of Borrower arising from
contracts entered into in connection with development,
construction upon or operation of the Property.
All Borrower's rights to any fictitious or other names or
tradenames used in conjunction with the said real and personal
property.
All furniture, furnishings, appliances and equipment and all
other tangible personal property now or hereafter owned or
acquired by the Borrower or now or hereafter located or installed
at or in any other improvement on the Property or elsewhere at or
on the Property, together with all accessories and parts now
attached to or used in connections with any such Property or
which may hereafter at any time be placed in or added thereto and
also any and all replacements and proceeds of any such Property.
EXHIBIT "B"
Exhibit Number 10.25
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (the "Agreement") is executed this
5th day of October , 1999 by DECADE COMPANIES, a Wisconsin
general partnership (the "Partnership") and DECADE PROPERTIES,
INC., a Wisconsin corporation authorized to do business in the
State of Florida (the "Corporation") (the Partnership and
Corporation will be sometimes collectively referred to below as
the "Subordinating, Party") in favor of REPUBLIC BANK, a Florida
banking corporation (the "Lender"), and is made in reference to
the following facts:
(A) On or about the date hereof, the Lender has agreed to make a
secured loan to DECADE COMPANIES INCOME PROPERTIES - A LIMITED
PARTNERSHIP, a Wisconsin limited partnership authorized to do
business in the State of Florida (the "Borrower") in the original
principal amount of THIRTEEN MILLION AND N0/100 DOLLARS
($13,000,000.00) (the "Loan"). The Loan is evidenced by a Note
(the "Note"), which Note is secured by a Mortgage (the
"Mortgage"), and other instruments of security (collectively,
with the Mortgage, the "Instruments of Security"), all as more
particularly described and defined in a Loan Agreement being
executed by the parties hereto on or about the date hereof (the
"Loan Agreement"). The Loan Agreement, together with the Note,
Instruments of Security and the numerous other documents
described in the Loan Agreement, collectively comprise the "Loan
Documents". The Mortgage and other Instruments of Security
encumber the real property and all improvements therein more
particularly described on Exhibit "A" attached hereto (the
"Property").
(B) On or about November 30, 1993, Borrower, as owner, and
Corporation, as manager, entered into a Property Management
Agreement, a copy of which is attached hereto as Exhibit "B" (the
"Management Agreement"). Among other things, the Management
Agreement provides for certain property management fees to be
paid by Borrower to the Corporation as more specifically
described therein (collectively the "Management Payments").
(C) Under the terms of a Charge Back Agreement between Borrower,
as owner of the Property, and the Partnership, as service
provider, which agreement is codified in the Section entitled
Reimbursable Expenses on Page 42 of the Prospectus of Borrower
dated June 3, 1987 (the "Charge Back Agreement"), the Partnership
is entitled to receive certain administrative charge-back
payments more specifically described therein.
(D) As a condition to making the Loan to Borrower, Lender has
required that the Subordinating Party subordinate all of their
right, title and interest to receive any and all payments, monies
or compensation of any kind due and payable under the Management
Agreement and/or Charge Back Agreement, not including amounts
with respect to reimbursements to unaffiliated third parties
(but, with respect to the Charge Back Agreement, only to the
extent such payments, monies or compensation relate to services
or materials provided to or for the benefit of the Property), as
such agreements currently exist, or as they maybe amended from
time to time in the future (collectively, the "Subordinated
Payments"), and this Agreement accomplishes the same.
NOW THEREFORE, in consideration of the premises and other
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agrees as follows:
1. Recitals. The statements contained in the recitals of fact set
forth above are true and correct, and are by this reference are
made a part of this Agreement.
2. Exhibit. The exhibits attached to this Agreement are by this
reference made a part hereof.
3. Warranties and Representations. Each Subordinating Party hereby
warrants and represents to the Lender as follows:
(a) Each Subordinating Party has received good and valuable
consideration for its execution of this Agreement.
(b) All action or authority exists or has occurred so as to duly
authorize the appropriate representative of each Subordinating
Party to execute this Agreement on behalf of the Subordinating
Party so as to fully and legally bind the Subordinating Party to
the terms of this Agreement.
(c) A list of all currently existing Subordinated Payments owed
by Borrower to Subordinated Party is set forth on Exhibit "C"
attached hereto.
4. Subordination. Each Subordinating Party hereby agrees so long
as any indebtedness of the Loan or Loan Documents remain
outstanding that:
(a) To the extent the Subordinated Payments are secured in any
way whatsoever, whether now or at any time in the future, by any
property of the Borrower, including but not limited to the
Property, any lien, mortgage, security interest or other form of
encumbrance whatsoever that the Subordinating Party may have to
secure the Subordinated Payments are and shall be at all times
junior and subordinate to: (i) the Loan and all Loan Documents;
and (ii) any lien, mortgage, security interest or other form of
encumbrance in favor of Lender which secures the Loan, whether or
not such lien, mortgage, security interest or other form of
encumbrance securing the Loan is now in existence or arises at
any time in the future. This provision shall not be construed to
grant the Borrower the authority to create any security interest
in contravention of the Loan Documents.
(b) The Borrower shall not pay, and Subordinating Party shall not
receive, any prepayments, or advance payments whatsoever on the
Subordinated Payments, whether said payment is in the form of
principal, interest or otherwise. Provided, however, all
regularly scheduled payments set forth in the Management
Agreement and Charge Back Agreement (collectively the "Payment
Documents") may continue to be paid by Borrower to the
Subordinated Party strictly in accordance with the terms and
provisions of such documents, but only for so long as no Event of
Default (as defined in the Mortgage) shall have occurred.
Following the occurrence of any Event of Default, all future
payments of any variety on account of the Subordinated Payments
shall cease until the Event of Default is cured.
(c) The terms of this paragraph 4 shall be operative and
indicative of the priority of the security interest of the Lender
and Subordinated Party with respect to the Property, regardless
of the perfection of any such security interests thereby.
(d) The Payment Documents shall not be modified, amended or
supplemented without the prior written consent of Lender.
5. Payment. Should any payment or distribution of proceeds or
security be received by Subordinated Party upon or with respect
to any indebtedness owed by the Borrower to Subordinated Party
subsequent to the date of this Agreement on account of the
Subordinated Payments, Subordinated Party shall immediately
deliver the same to Lender in the form received (except for
endorsement or assignment by Subordinated Party where required by
Lender), for application in accordance with the Loan Documents
between Borrower and Lender, and, until so delivered, the same
shall be held in trust by Subordinated Party as the property of
Lender.
6. Default. In the event of any Event of Default: (i) any payment
or distribution of assets of the Borrower of any kind or
character, whether in cash, securities or other property, which
would otherwise be payable to or deliverable upon or with respect
to the Subordinated Payments, shall be paid or delivered directly
to Lender for application in accordance with the Loan Documents
between the Borrower and Lender until the Event of Default is
cured. Lender shall have the right to enforce, collect and
receive every such payment or distribution and give acquittance
therefor, and Lender is hereby authorized, as attorney-in-fact
for Subordinated Party, to vote and prove the indebtedness of the
Borrower to Subordinated Party in any of the above described
proceedings or in any meeting of creditors of the Borrower.
7. Restrictions of Remedies. In consideration of the agreement of
the Lender to make the Loan, until the Lender's Loan shall be
paid in full, Subordinated Party shall not take any action to
enforce its rights to receive the Subordinated Payments, except
with the Lender's prior written consent.
8. Continuity. This Agreement shall constitute a continuing
agreement of subordination, and Lender may, without notice to
Subordinated Party, lend monies, extend credit and make other
financial accommodations to or for the account of the Borrower on
the faith hereof until written notice of revocation of this
Agreement as to future transactions shall be delivered by Lender
to Subordinated Party. Any such notice of revocation shall not
affect this Agreement in relation to any obligations or
liabilities of the Borrower then existing.
9. Modification. Lender, at any time and from time to time,
either before or after any such notice of revocation, may enter
into such agreement or agreements with Borrower as Lender may
deem proper extending the time of payment or renewing or
otherwise altering the terms of all or any of the indebtedness of
Borrower to Lender or affecting any security underlying any or
all of such indebtedness, or may exchange, sell or surrender or
otherwise deal with any security, or may release any balance of
funds of Borrower with Lender, without notice to Subordinated
Party and without in any way impairing or affecting this
Agreement.
10. Delay. Lender's delay in or failure to exercise any right or
remedy shall not be deemed a waiver of any obligation of
Subordinated Party or right of Lender. This Agreement may be
modified, and any of Lender's rights hereunder waived, only by
agreement in writing signed by Lender and the parties to this
Agreement.
11. Benefit. This Agreement shall inure to the benefit of
Lender, its successors and assigns and bind the successors and
assigns of Subordinated Party and the Borrower.
12. Governing Law. This Agreement shall be construed and
governed by the laws of the State of Florida, and shall be
enforceable in the Circuit Court of Pinellas County, Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement this 5th day of
October, 1999.
Signed, sealed and delivered
in the presence of:
/s/Nydia I. McLean
/s/Jennifer Dzieminski
As to Partnership
PARTNERSHIP:
DECADE COMPANIES, s Wisconsin general partnership, by its
managing general partner:
By: /s/ Jeffrey Keierleber
JEFFREY KEIERLEBER
CORPORATION:
DECADE PROPERTIES, INC., a Wisconsin corporation authorized to do
business in the State of Florida
By: /s/ Jeffrey Keierleber
Its President
(CORPORATE SEAL)
/s/Nydia I. McLean
/s/Jennifer Dzieminski
As to Corporation
LENDER:
REPUBLIC BANK, a Florida banking corporation
By:
Its President
(CORPORATE SEAL)
As to Lender
EXHIBIT "A"
LEGAL DESCRIPTION
Lot 1, Block 1, of that certain subdivision known as PELICAN
SOUND, according to the map or plat thereof on file and recorded
in the office of the Clerk of the Circuit Court of Pinellas
County, Florida, in Plat Book 98, pages 3 and 4, more
particularly described as:
That part of the Southeast 1/4 of Section 18, and that part of
the Northeast 1/4 of Section 19, Township 30 South, Range 17
East, Pinellas County, Florida, more particularly described as
follows:
Beginning at a point on the North line of Section 19, Township 30
South, Range 17 East, Pinellas County, Florida, which point is
North 89 degrees 54' 50" West, 327.22 feet from the Northeast
corner of said Section; thence South 00 degrees 09' 57" West,
372-67 feet; thence North 81 degrees 08' 18" East, 218.93 feet to
an intersection with a line which is 111.00 feet West of and
parallel with the East boundary of said Section; thence South 00
degrees 09' 57" West, along said line 652.38 feet to an
intersection with the South line of the North 3/4 of the North ½
of the Northeast 1/4 of said Section; thence North 89 degrees 55'
46" West, along said line 1472.68 feet; thence North 00 degrees
14' 59" East, 790.91 feet to an intersection with the South
right-of-way line of the new alignment of Gandy Boulevard (S.R.
600, a varying width right-of-way); thence along said right-of-
way by the following six (6) courses:
1. North 79 degrees 47' 00" East, 258.08 feet;
2. North 7l degrees 14' 32" East, 102.50 feet;
3. North 65 degrees 57' 53" East, 293.84 feet to a point on a
curve;
4. Along the arc of a curve to the right, concave to the
Southeast, Radius 2809.79 feet, Delta 3 degrees 00' 03', Arc
147.16, Chord 147.14, North 70 degrees 10' 36" East;
5. Thence leaving said curve North 71 degrees 40' 31" East 299.68 feet;
6. North 72 degrees 49' 16" East, 225.58 feet;
Thence leaving said right-of-way South 00 degrees 31' 53' West,
210.57 feet to the above-mentioned point of beginning.
Exhibit "B"
PROPERTY MANAGEMENT AGREEMENT
THIS AGREEMENT, dated November 30, 1993, is by and between DECADE
COMPANIES INCOME PROPERTIES, a Wisconsin limited partnership
("Owner") and DECADE PROPERTIES, INC., a Wisconsin corporation
("Manager").
BACKGROUND:
Owner has acquired a 379 unit apartment complex located in St.
Petersburg, Florida, known as Pelican Sound Apartments ("The
Property"). In connection with such acquisition, Owner desires to
retain Manager to manage the Property on behalf of Owner on the
terms and for the compensation set forth below.
THE PARTIES THEREFORE AGREE AS FOLLOWS:
1. Appointment and Acceptance. Owner hereby appoints and retains
Manager to perform the services set forth herein, and Manager
hereby accepts such appointment and employment, subject to the
conditions of this Agreement.
2. Efforts and Conflicts. Manager agrees to use commercially
reasonable and continual efforts to fulfill its obligations
hereunder. Owner acknowledges that Manager has been, is and will
be engaged to perform duties for other entities, including
Affiliates of Owner and of Manager that are similar to those
duties to be performed under this Agreement. Owner further
acknowledges that it has no exclusive right to Manager's
services.
3. Term of Agreement. This Agreement shall remain in full force
and effect until terminated as provided below.
4. Compensation. For services rendered hereunder, Owner shall pay
to Manager an amount equal to five percent (5%) of rental income
received from the Property (excluding security deposits), plus
any miscellaneous income received from the operation of the
Property (including rental of parking spaces coin-operated
laundry facilities, and security deposits retained for breach of
leases and resident damage), and an amount equal to one-half
(1/2) of the first month's rent on any newly-leased apartment
unit payable monthly. The parties acknowledge that this
compensation is competitive with that charged in the area for
comparably sized projects and for comparable quality and quantity
of service.
5. Manager's Authority. Duties and Obligations. During the term of this
Agreement, manager shall provide the following services and, in the
performance of such services, shall have the authority indicated to act as
agent on behalf of owner:
(a) To advertise the availability for rental of the Property or
any part thereof and to display "For Rent" signs thereon; to
sign, renew and/or cancel leases for the Property or any part
thereof in Manager's own name without prior approval of owner; to
collect rents due or to become due and give receipts therefore;
to terminate tenancies and to sign and serve in its own name or
in the name of Owner such notices as are appropriate; to
institute and prosecute legal actions; to evict tenants and to
recover possession of the Property; to sue for, in its own name
or in the name of owner and recover rents and other sums due; and
when expedient, to settle, compromise and release such actions or
suits or reinstate such tenancies. Any residential lease executed
for Owner by Manager shall not exceed a period of one (1) year.
(b) To keep the Property in good condition and repair under the
supervision of Owner; to make or cause to be made and to
supervise repairs and alterations on Owner's behalf; to purchase
supplies and pay all bills therefore. Manager agrees to secure
the prior approval of Owner on all expenditures in excess of
$1,000 for any one item, except monthly or recurring operating
charges and/or emergency repairs in excess of ouch maximum if, in
the opinion of manager, such repairs are necessary to protect the
Property from damage, or to maintain service to the tenants as
called for in their lease.
(c) To hire, discharge and supervise all independent contractors
retained in connection with the operation and maintenance of the
Property.
(d) To borrow money in the name of Owner provided such funds are
used exclusively for payment of expenses related to the Property.
(e) To make contracts for electricity, gas, fuel, water,
telephone, window cleaning, ash or rubbish hauling and other
services or such of them as Manager shall deem advisable.
(f) To carry at Owner's expense necessary public liability
insurance with a minimum limit of $1,000,000 in coverage and
workmen's compensation insurance adequate to protect the
interests of the parties hereto; which policies shall, if
possible, be so written as to protect Manager in the same manner
and to the same extent they protect Owner and will name Manager
as an additional insured under the policy; and acquire fire,
liability, steam boiler, pressure vessel, or any other insurance
required.
(g) To pay, on behalf and at the direction of Owner, mortgage and
other indebtedness relating to the Property.
(h) To follow the directions of any consultants retained by Owner
for the establishment of the Property's procedures and controls.
(i) To bond by a fidelity bond all of the Manager's employees
who are responsible for the handling of money.
(j) To pay all taxes and special assessments for public
improvements now or hereafter assessed or levied against and on
the Property as they become due and to deliver to Owner and to
Owner's mortgagee copies of receipts evidencing payment thereof.
Payments may be made in installments as permitted by the
municipality.
(k) To pay all costs of data processing and/or computer
processing charges in connection with the accounting and controls
established by Owner for the Property.
(l) To perform such other services as may be reasonably directed
by owner in the diligent management of the Property.
6. Records and Reports. Manager will have the following
responsibilities with respect to records and reports:
(a) Manager, at the direction and expense of owner, will maintain
a comprehensive system of records, books and accounts relative to
the operation of the Property (as opposed to the Partnership
records and accounts of Owner) in a manner satisfactory to Owner
and according to systems and procedures established for Owner by
Manager under separate agreement. All records, books and accounts
shall be subject to examination at reasonable hours by any
authorized representative of Owner.
(b) Manager shall render monthly statements of receipts and
disbursements and remit the balance due Owner after deduction of
the amounts payable to Manager pursuant to Paragraphs 4 and 7
hereof.
(c) Manager will furnish such information (including occupancy
reports) as may be requested by owner from time to time with
respect to the financial, physical or operational condition of
the Property.
7. Reimbursement of Expenses. In addition to the compensation
payable under Paragraph 4, Owner shall reimburse Manager for the
costs including all goods, materials and services used for or by
Owner, and for all expenses of Manager on behalf of Owner and
directly relating to the prudent operation of the Property,
including site by site bookkeeping services. In the case of
services performed by employees of Manager, the reimbursable
costs shall be based upon the time actually spent by such
employees in performing such services as supported by time
records multiplied by a rate established by Manager to cover the
costs directly related to the employment of such persons; however
such amounts charged to Owner will not exceed those which Owner
generally would be required to pay to independent parties for
comparable services in the area in which the Property is located.
Excluded from the allowable reimbursement herein are rent or
depreciation, utilities, capital equipment, salaries, fringe
benefits, travel expenses and any other administrative items
incurred or allocated to any "Controlling Persons" as such term
is defined in Owner's Amended and Restated Agreement of Limited
Partnership.
8. Termination of Agreement. Either party hereto may terminate
this Agreement upon not less than 30 days nor greater than 60
days notice prior to each calender year end. Owner shall pay to
Manager upon the termination by either party all accrued but
unpaid property management fees plus any amounts payable pursuant
to Paragraphs 7 and 9.
9. Pending Leases. Upon and after the termination of the
Agreement pursuant to Paragraph 8, Owner shall pay to Manager, in
one lump sum, an amount equal to five percent (5%) of the rental
to be paid after the date of termination under leases for
apartment units in force as of such date for the balance of the
terms of such leases. in addition, Owner shall recognize Manager
as the broker in any pending negotiations for the rental of any
apartment units, and in the event of the consummation of such
leases. In addition, Owner shall pay to Manager, in one lump sum
on the date of said consummation, a commission at the rate of
five percent (5%) of the total rents to be paid under such new
leases.
10. Entire Agreement, Amendments. This Agreement constitutes the
entire understanding between the parties hereto with respect to
the subject matter hereof. The rights and obligations specified
herein are intended to be construed as separate and independent
from any other prior, contemporaneous or subsequent agreements
among the parties hereto. No amendment or modification of the
Agreement will be valid unless made by supplemental agreement in
writing.
11. Assignability. The rights under this Agreement may be
assigned and the duties hereunder may be delegated by Manager
without the consent of Owner provided that such delegation shall
not relieve Manager of its obligations to Owner hereunder.
12. Severability. If any of the provisions of this Agreement are
judicially held to be invalid, the remainder of this Agreement
shall not be affected thereby.
13. Choice of Law. This Agreement shall, in all respects, be
governed by and construed in accordance with, the laws of the
State of Wisconsin.
DECADE PROPERTIES, INC.
By: /s/ Jeffrey Keierleber
Jeffrey Keierleber,
President
DECADE COMPANIES INCOME PROPERTIES
By: DECADE COMPANIES
By: /s/ Jeffrey Keierleber
Jeffrey Keierleber,
Managing General, Partner
EXHIBIT "C"
LIST OF EXISTING SUBORDINATED PAYMENTS
None as of the date hereof
Exhibit Number 10.26
ENVIRONMENTAL COMPLIANCE AND INDEMNITY AGREEMENT
THIS ENVIRONMENTAL COMPLIANCE AND INDEMNITY AGREEMENT (the
"Agreement"), is made and entered into this 5th day of October
1999 by DECADE COMPANIES INCOME PROPERTIES - A LIMITED
PARTNERSHIP, a Wisconsin limited partnership authorized to do
business in the State of Florida (the "Borrower") in favor of
REPUBLIC BANK, a Florida banking corporation (the "Lender"), and
is made in reference to the following facts:
(A) On or about the date hereof, Lender has made or will make a
loan to the Borrower in the original principal amount of
$13,000,000.00 (the "Loan"). The Loan is evidenced by a note
(the "Note") and secured by a Mortgage (the "Mortgage"), both of
even date herewith. The Note, Mortgage and all other documents
evidencing, securing or otherwise relating to the Loan are
hereinafter called the "Loan Documents". The mortgaged property
(the "Property") includes the land as more fully described in
Exhibit "A" attached hereto and by reference made a part hereof,
including all buildings and other improvements now or hereafter
located thereon, and any real property hereinafter encumbered by
the lien of the Mortgage.
(B) The Borrower will realize direct and indirect benefits from
the making of the Loan.
(C) The Lender would not be willing to make and to cause to be
made the Loan if Hazardous Substances (as defined below) were
present on, under or about the Property in violation of
applicable Environmental Laws (as defined below) or if the
operations and activities of Borrower were in violation of
applicable Environmental Laws.
(D) As a material inducement to the Lender's making of the Loan,
the Borrower has agreed to make certain warranties,
representations and covenants regarding the presence of Hazardous
Substances on, under or about the Property and the operation and
activities of Borrower, and to indemnify and hold the Lender
harmless from and against any and all liability, damages, losses,
claims, costs and expenses resulting from or arising out of any
claim, demand, cost or judgment made against the Lender by any
party including, without limitation, a governmental authority, in
connection with the presence of Hazardous Substances in or about
the Property or any failure to comply with Environmental Laws
with respect to the Property or any operations and activities of
Borrower.
(E) As a condition to making the Loan, the Lender requires that
the representations, covenants and indemnification herein
contained shall survive the full satisfaction of the Loan, as the
continuing, absolute and unconditional joint and several
liability of the Borrower.
NOW THEREFORE, in consideration of and in order to induce the
Loan by the Lender and for other good and valuable consideration,
the receipt and sufficiency of such consideration being hereby
acknowledged, the Borrower intending to be legally bound, hereby
to Borrower's knowledge, represents, covenants and agrees for
itself and its successors and assigns as follows:
(1) Recitals. The above recitals are true and correct and are
incorporated herein by this reference.
(2) Inquiry. Borrower has made all reasonable inquiry and
investigation into the present condition of the Property and the
previous ownership and uses of the Property consistent with good
commercial or customary practice in an effort to minimize
liability with respect to Hazardous Substances.
(3) Use of Property. Neither Borrower nor any other person or
entity to the Borrower's knowledge, after all reasonable inquiry
and investigation, has ever used the Property as a facility for
the manufacture, processing, distribution, use, transportation,
handling, storage, treatment or disposal of any Hazardous
Substances (except for such Hazardous Substances kept in small
quantities as is customary for similar apartment projects), and
Borrower will not in the future use the Property for any such
purposes.
(4) Compliance. To Borrower's knowledge, the Property is now and
at all times hereafter will continue to be in full compliance
with all federal, state and local Environmental Laws, which
Environmental Laws include but are not limited to, the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA"), 42 U.S.C. § 9601, et.seq., the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), Public Law
99-499, 100 Stat. 1613, the Resource Conservation and Recovery
Act ("RCRA"), 42 U.S.C. § 6901, et seq., the Florida Resource
Recovery and Management Act, Section 403.701, et seq.., Florida
Statutes, the Pollutant Spill Prevention and Control Act, Section
376.011-376.17 and 376.19-376.21 Florida Statutes, and all
federal, state and local environmental statutes, ordinances,
rules and regulations whether now existing or in the future
enacted, promulgated, adopted, entered or issued, both within and
outside present contemplation of Borrower and the Lender.
(5) Property. After reasonable inquiry and investigation, to
Borrower's knowledge, the Property has never contained either
asbestos, PCBs or other toxic materials, whether used in
construction or stored on the Property, except as set forth in
the Environmental Audit provided to Lender.
(6) Storage Tanks. After reasonable inquiry and investigation,
any above-ground or underground storage tanks on the Property
have been properly registered with the Florida Department of
Environmental Regulation and are in full compliance with the
standards for stationery tanks contained in Chapter 17-761 or 17-
762, Florida Administrative Code ("F.A.C."), any local tank
regulation program authorized under Chapter 17-63, F.A.C., and
regulations for underground storage tanks promulgated by the U.S.
Environmental Protection Agency in 40 CFR Part 280. Borrower
further represents that to the best of its knowledge there has
never been a discharge, as that term is defined in Rule 17-
761.200(33)(b), F.A.C., of any pollutants, contaminants or
petroleum products from any of the above-ground or underground
storage tanks and the Property has never been the subject of a
petroleum contamination site cleanup or remediation under Chapter
17-770, F.A.C, or other applicable environmental law.
(7) Disclosure. (i) After reasonable inquiry and investigation,
to Borrower's knowledge, there are no Hazardous Substances, the
presence of which is limited, regulated or prohibited by any
federal, state or local governmental authority or agency having
jurisdiction in the Property, or which are otherwise known to
pose a hazard to health or safety of occupants of the Property,
located on, in or under the Property or used in connection
therewith (except for such Hazardous Substances kept in small
quantities as is customary for similar apartment projects); or
(ii) to Borrower's knowledge, Borrower has fully disclosed to the
Lender in writing the existence, extent and nature of any
Hazardous Substance, which Borrower is legally authorized and
empowered to maintain on, in or under the Property or use in
connection therewith, (except for such Hazardous Substances kept
in small quantities as is customary for similar apartment
projects); and Borrower has obtained and will maintain all
licenses, permits and approvals required with respect thereto,
and is in full compliance with all of the terms, conditions and
requirements of such licenses, permits and approvals.
(8) Change in Use. Borrower shall promptly notify Lender in
writing of any change in the nature or extent of any Hazardous
Substances maintained on, in or under the Property or used
in connection therewith, and will transmit to Lender copies of
any citations, orders, notices or other material governmental or
other communication received with respect to any Hazardous
Substances.
(9) Discharge. Borrower shall not cause or permit to exist, as a
result of an intentional or unintentional act or omission on its
part, a releasing, discharging, spilling, leaking, pumping,
emitting, pouring, emptying or dumping of a "Hazardous Substance"
into waters or unto lands of the State of Florida or the waters
of the United States, or into waters outside the jurisdiction of
the State of Florida where damage may result to the lands,
waters, fish, shellfish, wildlife, biota, air and other resources
owned, managed, held in trust or otherwise controlled by the
State of Florida or the United States, unless said release,
spill, leak, etc. is pursuant to and in compliance with the
conditions of a permit issued by the appropriate federal, state
or local governmental authorities.
(10) Historical Use. Neither Borrower nor any of its subsidiaries
has received notice of any past, present or future events,
conditions, circumstances, activities, practices, incidents,
actions or plans which may interfere with or prevent compliance
or continued compliance with any Environmental Laws or any
regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved
thereunder, or which may give rise to any statutory or common law
legal liability, or otherwise form the basis of any claim,
action, demand, suit, proceeding, hearing, study or
investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or
threatened release into the environment, of any Hazardous
Substance, with respect to the Property (hereinafter an
"Environmental Complaint"). Without limiting the foregoing,
Borrower has not received a summons, citation, notice of
violation, directive, letter or other communication, written or
oral, from any agency or Department of Pinellas County, the State
of Florida or the U.S. Government concerning any intentional or
unintentional action or omission on Borrower's part which had
resulted in the releasing, discharging, spilling leaking,
pumping, pouring, emitting, emptying or dumping of "Hazardous
Substances" into waters or onto lands of the State of Florida, or
waters of the United States, or into waters outside the
jurisdiction of the State of Florida where damage may have
resulted to the lands, waters, fish, shellfish, wildlife, biota,
air and other resources owned, managed, held in trust or
otherwise controlled by the State of Florida or the United
States.
(11) Actions Pending. To Borrower's knowledge, there is no civil,
criminal or administrative action, suit, demand, claim, hearing,
notice or demand letter, notice of violation, investigation, or
proceeding pending or threatened against the Borrower relating in
any way to any Environmental Law or any plan, order, decree,
judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder.
(12) Remedial Actions. Borrower shall immediately notify Lender
should Borrower become aware of (i) any Hazardous Substance or
other environmental problem or liability with respect to the
Property, or (ii) any lien, action, or notice of the nature
described in Paragraph 4 above. Borrower shall, at its own cost
and expense, take all actions as shall be necessary or advisable
for the clean-up of the Property, including all removal,
containment and remedial actions in accordance with all
applicable Environmental Laws, and shall further pay or cause to
be paid at no expense to Lender all clean-up, administrative, and
enforcement costs of applicable governmental agencies which may
be asserted against the Property or the owner thereof.
(13) Indemnification. Borrower hereby indemnifies, reimburses,
defends and holds harmless Lender, its officers, directors,
employees, successors and assigns from and against all demands,
claims, civil or criminal actions or causes of action, liens,
assessments, civil or criminal penalties or fines, losses,
damages, liabilities, obligations, costs, disbursements, expenses
or fees of any kind or of any nature (including, without
limitation, clean-up costs, attorneys', paralegals', consultants'
or experts' fees and disbursements and costs of litigation) which
may at any time be imposed upon, incurred by or asserted or
awarded against, Lender directly or indirectly, related to or
resulting from: (a) any acts or omissions of Borrower at, on or
about the Property which contaminate air, soils, surface waters
or groundwaters over, on or under the Property; (b) the breach of
any representation or warranty under this Agreement; (c) pursuant
to or in connection with the application of any Environmental
Law, to the acts or omissions of Borrower or any other person and
any environmental damage alleged to have been caused, in whole or
in part, by the manufacture, processing, distribution, use,
handling, transportation, treatment, storage, or disposal of any
Hazardous Substance at the Mortgaged Property; or (d) the
presence, whether past, present or future, of any Hazardous
Substances on, in or about the Mortgaged Property in violation of
applicable Environmental Laws.
Without limiting the foregoing, this indemnification provision
specifically protects the Lender against any claim or action from
activities described in (a), (b), (c) or (d) above, based in
whole or in part upon any Environmental Law, whether now in
existence or enacted in the future.
Borrower's indemnification obligation under this section shall
not be limited to any extent by the term of the Loan and shall
continue, survive and remain in full force and effect
notwithstanding payment in full and satisfaction of the Note and
the Mortgage or foreclosure under the Mortgage, or delivery of a
deed in lieu of foreclosure. The provisions of this section shall
be deemed to survive satisfaction of the Note or issuance of a
certificate of title and shall continue in full force and effect
after any foreclosure or other proceeding by which the Lender,
its successors or assigns, succeeds to ownership of the Mortgaged
Property.
Those liabilities, losses, claims, damages and expenses for which
Lender is indemnified under this Section shall be reimbursable to
Lender at Lender's option by making payments with respect
thereto, without any requirement of waiting for the ultimate
outcome of any litigation, claim or other proceeding, and
Borrower shall pay such liability, losses, claims, damages and
expenses to Lender as so incurred within thirty (30) days after
notice from Lender itemizing the amounts incurred to the date of
such notice. In addition to any remedy available for failure to
periodically pay such amounts, such amounts shall thereafter bear
interest at the highest rate permitted by law.
Borrower waives any acceptance of this indemnity by Lender. The
failure of Lender to enforce any right or remedy hereunder, or to
promptly enforce any such right or remedy, shall not constitute a
waiver thereof nor give rise to any estoppel against Lender, nor
excuse Borrower from its obligations hereunder. Any waiver of
such right or remedy must be in writing and signed by Lender.
This indemnity is subject to enforcement at law and/or equity,
including actions for damages and/or specific performance.
(14) Environmental Law. For purposes of this Agreement,
"Environmental Law" shall mean any federal, state, or local
statutory or common law, ordinance, rule or regulation, whether
now in existence or established or enacted in the future,
relating to pollution or protection of the environment, including
without limitation, any common law of nuisance or trespass, and
any law, rule or regulation relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants or
chemicals, or industrial, toxic or hazardous substances or waste
into the environment (including without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants or chemicals or industrial, toxic or
hazardous substances or wastes.
(15) Hazardous Substance. For the purposes of this Agreement, the
term "Hazardous Substance" means any substance or material (i)
identified in Section 101(14) of CERCLA, 42 USC § 9601(14) and as
set forth in Title 40, Code of Federal Regulations, Part 302, as
the same may be amended from time to time, or (ii) determined to
be toxic, a pollutant or contaminant, under federal, state or
local statute, law, ordinance, rule, or regulation or judicial or
administrative order or decision, as same may be amended from
time to time, including but not limited to petroleum and
petroleum products as defined in Sec. 376.301(10), Florida
Statutes, as same may be amended from time to time, (iii)
asbestos, (iv) radon, (v) polychlorinated biphenyls and (vi) such
other materials, substances or waste which are otherwise
dangerous, hazardous, harmful or deleterious to human health or
the environment.
(16) Environmental Audit. Lender shall have the right, in its
reasonable discretion, to require Borrower to periodically
perform which shall only be required if Lender reasonably
believes there has been a release of hazardous substances upon
the Property (at Borrower's expense) an environmental audit and,
if deemed necessary by Lender, an environmental risk assessment
of the Property, each of which must be satisfactory to Lender in
its reasonable discretion, each of which shall include a
description of the Borrower's hazardous waste management
practices and/or hazardous waste disposal sites used by Borrower.
Such audit and/or risk assessment must be by an environmental
consultant satisfactory to Lender. Should Borrower fail to
perform such environmental audit or risk assessment within 30
days of the Lender's written request, Lender shall have the right
but not the obligation to retain an environmental consultant to
perform said environmental audit or risk assessment. All costs
and expenses incurred by Lender in the exercise of such rights
shall bear interest at the default rate set forth in the Note and
shall be secured by the Loan Documents and shall be payable by
Borrower upon demand or charged to Borrower's loan balance at the
discretion of the Lender.
(17) Default. Any breach of any warranty, representation or
agreement contained in this Agreement shall be an Event of
Default as that term is defined in the Loan Documents and shall
entitle Lender to exercise any and all remedies provided in the
Loan Documents, or otherwise permitted by law.
(18) Waiver. Any one or more of either the Borrower, or any other
party liable upon or in respect of this Agreement or the Loan
Documents, may be released without affecting the liability of any
party not so released.
(19) Limitations. Borrower's obligations under this Agreement
shall not be subject to any non-recourse or other limitation of
liability provisions in the Note, Mortgage or any of the other
Loan Documents, and Borrower acknowledges that its obligations
under this Agreement are unconditional, and are not limited by
any such non-recourse or similar limitation of liability
provisions.
(20) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original. Said
counterparts shall constitute one and the same instrument and
shall be binding upon each of the undersigned individually as
fully and completely as if all had signed but one instrument so
that the joint and several liability of each of the undersigned
shall be unaffected by the failure of any of the undersigned to
execute any or all of said counterparts.
(21) Governing Law. It is agreed and understood that this
Agreement shall be governed by the laws of the State of Florida
(excluding the principles thereof governing conflicts of law).
(22) Severability. If any provision of this Agreement shall be
contrary to the laws of the jurisdiction in which the same shall
be sought to be enforced, the illegality or unenforceability of
any such provision shall not affect the other terms, covenants
and conditions hereof, and the same shall be binding upon
Borrower with the same force and effect as though such illegal or
unenforceable provision were not contained herein.
(23) Binding Effect. All of the terms of this Agreement will
apply to and be binding upon, and inure to the benefit of, the
heirs, devisees, personal representatives, successors and assigns
of Borrower and the Lender, respectively, and all persons
claiming under or through them.
IN WITNESS WHEREOF, Borrower has executed this Agreement as of
the date first above written.
Signed, sealed and delivered
in the presence of:
/s/ Nydia I. McLean
/s/ Jennifer Dzieminski
As to Borrower
BORROWER:
DECADE COMPANIES INCOME PROPERTIES - A LIMITED PARTNERSHIP, a
Wisconsin limited partnership authorized to do business in the
State of Florida, its sole general partner:
By: DECADE COMPANIES, a Wisconsin general partnership, its
managing general partner:
By: /s/ Jeffrey Keierleber
JEFFREY KEIERLEBER
EXHIBIT "A"
LEGAL DESCRIPTION
Lot 1, Block 1, of that certain subdivision known as PELICAN
SOUND, according to the map or plat thereof on file and recorded
in the office of the Clerk of the Circuit Court of Pinellas
County, Florida, in Plat Book 98, pages 3 and 4, more
particularly described as:
That part of the Southeast 1/4 of Section 18, and that part of
the Northeast 1/4 of Section 19, Township 30 South, Range 17
East, Pinellas County, Florida, more particularly described as
follows:
Beginning at a point on the North line of Section 19, Township 30
South, Range 17 East, Pinellas County, Florida, which point is
North 89 degrees 54' 50" West, 327.22 feet from the Northeast
corner of said Section; thence South 00 degrees 09' 57" West,
372-67 feet; thence North 81 degrees 08' 18" East, 218.93 feet to
an intersection with a line which is 111.00 feet West of and
parallel with the East boundary of said Section; thence South 00
degrees 09' 57" West, along said line 652.38 feet to an
intersection with the South line of the North 3/4 of the North ½
of the Northeast 1/4 of said Section; thence North 89 degrees 55'
46" West, along said line 1472.68 feet; thence North 00 degrees
14' 59" East, 790.91 feet to an intersection with the South
right-of-way line of the new alignment of Gandy Boulevard (S.R.
600, a varying width right-of-way); thence along said right-of-
way by the following six (6) courses:
1. North 79 degrees 47' 00" East, 258.08 feet;
2. North 7l degrees 14' 32" East, 102.50 feet;
3. North 65 degrees 57' 53" East, 293.84 feet to a point on a
curve;
4. Along the arc of a curve to the right, concave to the
Southeast, Radius 2809.79 feet, Delta 3 degrees 00' 03', Arc
147.16, Chord 147.14, North 70 degrees 10' 36" East;
5. Thence leaving said curve North 71 degrees 40' 31" East 299.68
feet;
6. North 72 degrees 49' 16" East, 225.58 feet;
Thence leaving said right-of-way South 00 degrees 31' 53' West,
210.57 feet to the above-mentioned point of beginning.
Exhibit Number 10.27
AGREEMENT TO PROVIDE INSURANCE
Mortgagor: DECADE COMPANIES INCOME PROPERTIES - A LIMITED
PARTNERSHIP, a Wisconsin limited
partnership authorized to do business in the State of Florida
Lender: Republic Bank
111 2nd Avenue N.E.
St. Petersburg, FL 33701
INSURANCE REQUIREMENTS. Mortgagor (jointly and severally if more
than one) understands that insurance coverage is required in
connection with the extension of a loan and/or the providing of
other financial accommodations to Mortgagor by Lender (the
"Loan"). These requirements are set forth in the security
documents. The following minimum insurance coverage must be
provided on the following described real estate (the "Real
Estate").
Collateral: 10200 Gandy Boulevard, St. Petersburg, FL (See
Exhibit "A" attached hereto).
Type. All risks, including wind damage, fire and extended
coverage*.
Amount. Full insurable value.
Basis. Replacement value.
Endorsements. Standard mortgagee's clause with stipulation that
coverage will not be canceled or diminished without a minimum of
thirty (30) days' prior written notice to Lender, and without
disclaimer of the insurer's liability for failure to give such
notice. Deductible. [$5,000.00]
Mortgagor may obtain insurance from any insurance company
Mortgagor may choose that is reasonably acceptable to Lender.
[*FLOOD INSURANCE. If the Real Estate is determined to be located
in an area designated by the Director of the Federal Emergency
Management Agency as a special flood hazard area, Mortgagor will
obtain and maintain Federal Flood Insurance in the amount of
$250,000 per building, for any building that has an elevation
that is below the flood zone level.]
FAILURE TO PROVIDE INSURANCE. Mortgagor acknowledges and agrees
that if Mortgagor fails to provide any required flood insurance or fails to
continue such insurance in force, Lender may do so at
Mortgagor's expense as provided in the security documents. The
cost of any such insurance, at the option of Lender, shall be (a)
payable on demand, (b) added to the balance of the Loan and be
apportioned among and be payable with any installment payments to
become due during either (i) the term of any applicable insurance
policy, or (ii) the remaining term of the Loan, or (c) be treated
as a balloon payment which will be due and payable at the Loan's
maturity. Any amount expended by Lender will bear interest at the
rate charged under the Loan from the date incurred or paid by
Lender to the date of full repayment by Mortgagor.
MORTGAGOR ACKNOWLEDGES THAT IF LENDER SO PURCHASES ANY SUCH
INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST
PHYSICAL DAMAGE TO THE REAL ESTATE, UP TO THE BALANCE OF THE
LOAN;
HOWEVER, MORTGAGOR'S EQUITY IN THE COLLATERAL MAY NOT BE INSURED.
IN ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC LIABILITY
OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE
REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY LAWS.
AUTHORIZATION. For purposes of insurance coverage on the Real
Estate, Mortgagor authorizes Lender to provide to any person
(including any insurance agent or mortgage company) all
information Lender deems appropriate, whether regarding the Real
Estate or the Loan.
MORTGAGOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
AGREEMENT TO PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS
AGREEMENT IS DATED October 5, 1999.
MORTGAGOR:
DECADE COMPANIES INCOME PROPERTIES - A LIMITED PARTNERSHIP, a
Wisconsin limited partnership authorized to do business in the
State of Florida, by its sole general partner:
By: DECADE COMPANIES, a Wisconsin general partnership, by its
managing general partner
By: /s/ Jeffrey Keierleber
JEFFREY KEIERLEBER
EXHIBIT "A"
LEGAL DESCRIPTION
Lot 1, Block 1, of that certain subdivision known as PELICAN
SOUND, according to the map or plat thereof on file and recorded
in the office of the Clerk of the Circuit Court of Pinellas
County, Florida, in Plat Book 98, pages 3 and 4, more
particularly described as:
That part of the Southeast 1/4 of Section 18, and that part of
the Northeast 1/4 of Section 19, Township 30 South, Range 17
East, Pinellas County, Florida, more particularly described as
follows:
Beginning at a point on the North line of Section 19, Township 30
South, Range 17 East, Pinellas County, Florida, which point is
North 89 degrees 54' 50" West, 327.22 feet from the Northeast
corner of said Section; thence South 00 degrees 09' 57" West,
372-67 feet; thence North 81 degrees 08' 18" East, 218.93 feet to
an intersection with a line which is 111.00 feet West of and
parallel with the East boundary of said Section; thence South 00
degrees 09' 57" West, along said line 652.38 feet to an
intersection with the South line of the North 3/4 of the North ½
of the Northeast 1/4 of said Section; thence North 89 degrees 55'
46" West, along said line 1472.68 feet; thence North 00 degrees
14' 59" East, 790.91 feet to an intersection with the South
right-of-way line of the new alignment of Gandy Boulevard (S.R.
600, a varying width right-of-way); thence along said right-of-
way by the following six (6) courses:
1. North 79 degrees 47' 00" East, 258.08 feet;
2. North 7l degrees 14' 32" East, 102.50 feet;
3. North 65 degrees 57' 53" East, 293.84 feet to a point on a
curve;
4. Along the arc of a curve to the right, concave to the
Southeast, Radius 2809.79 feet, Delta 3 degrees 00' 03', Arc
147.16, Chord 147.14, North 70 degrees 10' 36" East;
5. Thence leaving said curve North 71 degrees 40' 31" East 299.68 feet;
6. North 72 degrees 49' 16" East, 225.58 feet;
Thence leaving said right-of-way South 00 degrees 31' 53' West,
210.57 feet to the above-mentioned point of beginning.
Exhibit Number 10.28
ANTI-COERCION LETTER
THE FOLLOWING STATEMENT IS REQUIRED UNDER RULE 4-3.02 OF THE RULES AND
REGULATIONS PROMULGATED BY THE INSURANCE COMMISSIONER RELATIVE TO
ANTI-COERCION.
The Insurance Laws of this state provide that the lender may not require the
borrower to take insurance through any particular insurance agent or company
to protect the mortgaged property.
The borrower, subject to the rules adopted by the Insurance Commissioner, has
the right to have the insurance placed with an insurance agent or company of
his choice, provided such company and/or agency meets the requirements of the
lender. The lender has the right to designate reasonable financial
requirements as to the company and the adequacy of the coverage.
I have read the foregoing statement, or the rules of the Insurance
Commissioner relative thereto, and understand my rights and privileges and
those of the lender relative to the placing of such insurance.
I have selected the Evanston Insurance Company Insurance Agency whose address
is 311 Park Place Blvd., Suite 400, Clearwater, Florida 34619-3923 to write
the hazard insurance covering property located at:
Pelican Sound Apartments, 10200 Gandy Boulevard, St. Petersburg, Florida.
October 5, 1999
MORTGAGOR:
DECADE COMPANIES INCOME PROPERTIES A LIMITED PARTNERSHIP, a Wisconsin limited
partnership authorized to do business in the State of Florida, by its sole
general partner:
By: DECADE COMPANIES, a Wisconsin general partnership, by its managing general
partner:
By: /s/ Jeffrey Keierleber
JEFFREY KEIERLEBER
EXHIBIT "A"
LEGAL DESCRIPTION
Lot 1, Block 1, of that certain subdivision known as PELICAN SOUND, according
to the map or plat thereof on file and recorded in the office of the Clerk of
the Circuit Court of Pinellas County, Florida, in Plat Book 98, pages 3 and 4,
more particularly described as:
That part of the Southeast 1/4 of Section 18, and that part of the Northeast
1/4 of Section 19, Township 30 South, Range 17 East, Pinellas County, Florida,
more particularly described as follows:
Beginning at a point on the North line of Section 19, Township 30 South, Range
17 East, Pinellas County, Florida, which point is North 89 degrees 54' 50"
West, 327.22 feet from the Northeast corner of said Section; thence South 00
degrees 09' 57" West, 372-67 feet; thence North 81 degrees 08' 18" East,
218.93 feet to an intersection with a line which is 111.00 feet West of and
parallel with the East boundary of said Section; thence South 00 degrees 09'
57" West, along said line 652.38 feet to an intersection with the South line
of the North 3/4 of the North ½ of the Northeast 1/4 of said Section;
thence North 89 degrees 55' 46" West, along said line 1472.68 feet; thence
North 00 degrees 14' 59" East, 790.91 feet to an intersection with the South
right-of-way line of the new alignment of Gandy Boulevard (S.R. 600, a varying
width right-of-way); thence along said right-of-way by the following six (6)
courses:
1. North 79 degrees 47' 00" East, 258.08 feet;
2. North 7l degrees 14' 32" East, 102.50 feet;
3. North 65 degrees 57' 53" East, 293.84 feet to a point on a curve;
4. Along the arc of a curve to the right, concave to the Southeast, Radius
2809.79 feet, Delta 3 degrees 00' 03', Arc 147.16, Chord 147.14, North 70
degrees 10' 36" East;
5. Thence leaving said curve North 71 degrees 40' 31" East 299.68
feet;
6. North 72 degrees 49' 16" East, 225.58 feet;
Thence leaving said right-of-way South 00 degrees 31' 53' West,
210.57 feet to the above-mentioned point of beginning.
Exhibit Number 10.29
AGREEMENT WAIVING RIGHT TO JURY TRIAL
THIS AGREEMENT WAIVING RIGHT TO JURY TRIAL (the "Agreement") is
made this 5th day of October, 1999, by and among REPUBLIC BANK, a
Florida banking corporation (the "Lender") and DECADE COMPANIES
INCOME PROPERTIES - A LIMITED PARTNERSHIP, a Wisconsin limited
partnership authorized to do business in the State of Florida
(the "Borrower") and is made in reference to the following facts:
(A) On or about the date hereof, the Lender has agreed to make a
loan to the Borrower in the original principal amount of THIRTEEN
MILLION AND N0/100 DOLLARS ($13,000,000.00) (the "Loan").
(B) In connection with the Loan, Borrower has executed and
delivered to the Lender that certain Note and Mortgage which,
together with numerous other documents executed by Borrower and
others in favor of Lender, collectively comprise the "Loan
Documents".
(C) The Lender and Borrower acknowledge and agree that: (i) the
Loan is a complex business transaction; (ii) the Loan Documents
are lengthy and technical in nature and may be susceptible to
misinterpretation if isolated provisions of the Loan Documents
are separately reviewed; and (iii) in the event of any dispute as
to the rights and obligations of the parties under the Loan
Documents and otherwise with respect to the Loan, a judge, rather
than a jury, would be the most efficient and best qualified trier
of fact. Accordingly, the Lender and Borrower desire to waive
their respective rights to a jury trial with respect to any
litigation or other legal proceeding based on all or any portion
of the Loan Documents, or arising out of, under or in connection
with any Loan Documents or the Loan transaction.
NOW, THEREFORE, for and in consideration of the sum of TEN AND
NO/100 DOLLARS ($10.00), and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the Lender and Borrower hereby agree as follows:
1. Recital. The foregoing recitals of fact (the "Recitals") are
true and correct and are hereby incorporated into this Agreement.
2. Waive. The Lender and Borrower each knowingly, voluntarily,
and intentionally waive any right it or they may have to a trial
by jury, with respect to any litigation or legal proceedings
based on, or arising out of the Note, Mortgage, or other Loan
Documents, including any course of conduct, course of dealings,
verbal or written statements, or actions or omissions of any
party which in any way relates to the Loan or Loan Documents. The
parties hereto have specifically discussed and negotiated this
waiver, and understand the legal consequences of signing this
Agreement.
3. Inducement. This waiver by Borrower is a material inducement
for the Lender's making of the Loan, and the Lender's waiver is a
material inducement for Borrower's acceptance of the Loan and for
the Borrower to execute and deliver the Note, Mortgage and other
Loan Documents.
4. Joinder. At a party's request, the other parties hereto will
join in asking the court in which suit is pending to try the case
and decide all issues, including issues of fact, without a jury.
5. Applicability. Notwithstanding the narrower definition of the
term "Loan" above, the term "Loan" as used in this Agreement will
include, without limitation, any future advances, modifications,
renewals, extensions, and refinancing of the Loan described in
the Recitals.
6. Admissibility. If for any reason the waivers set forth in
paragraph 2 are declared or found by a court of competent
jurisdiction to be invalid, illegal or unenforceable, and any
litigation or other legal proceeding relating to or arising in
connection with the Loan or Loan Documents is in fact conducted
before an impaneled jury, each party hereto agrees that it or
they will not seek to have this Agreement or the existence
thereof admitted into evidence with respect to such litigation or
other legal proceeding. The parties hereto acknowledge that
damages are an inadequate remedy for any breach of the covenant
set forth in the preceding sentence and, therefore, such covenant
shall be subject to enforcement by injunctive relief without the
need of demonstrating the inadequacy of monetary damages.
7. Invalid Provisions. If any one or more of the provisions
contained in this Agreement is declared or found by a court of
competent jurisdiction to be invalid, illegal or unenforceable,
such provision or portion thereof shall be deemed stricken and
severed and the remaining provisions hereof shall continue in
full force and effect.
8. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
heirs, legal and personal representatives, successors and
assigns.
9. Florida Contract. The validity, meaning and effect of this
Agreement shall be determined as provided by the law of the State
of Florida applicable to agreements made and to be performed in
the State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first written above.
LENDER:
REPUBLIC BANK, a Florida banking corporation
By:
Its President
(CORPORATE SEAL)
BORROWER:
DECADE COMPANIES INCOME PROPERTIES -A LIMITED PARTNERSHIP, a
Wisconsin limited partnership authorized to do business in the
State of Florida, by its sole general partner:
By: DECADE COMPANIES, a Wisconsin general partnership, by its
managing general partner:
By: /s/ Jeffrey Keierleber
JEFFREY KEIERLEBER
Exhibit Number 10.30
MORTGAGE REFINANCING SERVICES AGREEMENT
AGREEMENT made and entered into as of this 27th day of August, 1998, by
and between DECADE COMPANIES INCOME PROPERTIES, A LIMITED PARTNERSHIP
(hereinafter "Owner") and DECADE PROPERTIES, INC., a Wisconsin Corporation
(hereinafter "Decade").
WHEREAS, Owner is the owner of a 379-unit multifamily residential
apartment complex known as Pelican Sound Apartments, located in St.
Petersburg, Pinellas County, Florida legally described in attached Exhibit A
(hereinafter the "Property"); and
WHEREAS, the Property is presently encumbered by a mortgage loan
("Existing Loan") held by Marine Midland Credit Corporation with an
outstanding balance of approximately $9,710,500 bearing interest at 7.0% per
annum, with final payment due December 1, 1998; and
WHEREAS, Owner may elect to extend the term of the Existing Loan for five
years at an interest rate to be determined at the time of renewal; and
WHEREAS, Owner desires to refinance the Existing Loan; and
WHEREAS, Decade is experienced in refinancing multifamily residential
apartment projects, obtaining and evaluating loan proposals and coordinating
the closing, and is qualified to advise Owner on these matters; and
WHEREAS, Decade has agreed to perform certain services relating to said
refinancing upon the terms stated herein for the period contemplated by this
Agreement.
NOW THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereby have to agree as follows:
1. Exclusive Rights Granted. Owner gives Decade the exclusive right, and
Decade hereby agrees, to perform certain services relating to the refinancing
of the Existing Loan encumbering the Property under the terms and conditions
hereinafter set forth.
2. Term. The term of this Agreement shall commence on the 27th day of August
1998, and shall terminate on the 31st day of December, 1999. Said refinancing
must occur on or before December 31, 1999, or this Agreement shall be null and
void and neither party shall have any further rights or obligations hereunder.
3. Compensation. In consideration of said services under this Agreement the
Owner shall pay to Decade a fee equal to 1% of the loan amount ("Refinancing
Services Fee") which is standard and customary in the industry. In addition,
Owner shall pay directly or Owner shall reimburse Decade, as the case may be,
an amount up to an additional 1% of the loan amount for fees paid or due to
the lender or other Brokers (hereinafter defined in paragraph 7) who assist in
obtaining the loan. The Refinancing Services Fee shall be paid in full at
closing. Such Refinancing Services Fee shall be deemed fully earned upon
payment and shall be non-refundable. Should litigation arise between the
parties in connection with this Agreement, the prevailing party shall have the
right to reasonable attorney fees.
4.Duties. Decade is hereby authorized to do on behalf of the Owner all things
which in its sole judgement, are necessary, proper or desirable to carry out
its duties and responsibilities. Such duties include, but are not limited to:
A. request and obtain proposals for first mortgage non-recourse financing from
various lenders, including, but not limited to:
(i) make requests regarding the structure of a new loan with respect to the
loan amount; the rate of interest; the term of the loan; the repayment terms
(including the amount and frequency of periodic payments, the amortization
period, and the maturity date); any prepayment penalty; any guaranties
required; additional fees to be charged, if any; the loan-to-value parameters
required in an appraisal; any escrow deposits required;
(ii) evaluate loan proposals;
(iii) assist the Owner in completing loan applications;
(iv) assist the Owner in the preparation and assembly of all documentation
required by the lender to make a credit and granting decision and to process
and underwrite the new loan;
(v) assist in the selection of a qualified appraiser of the Property to
provide a full narrative appraisal, if necessary, and negotiate a fee
therefor;
(vi) assist in the selection of a qualified individual or firm to perform a
Phase I Environmental Site Assessment, if necessary, and negotiate a fee
therefor;
(vii)assist in the selection of a qualified structural engineer to inspect the
Property and provide a physical needs assessment report, if necessary, and
negotiate a fee therefor;
(viii) assist in the selection of a qualified surveyor to survey the Property,
if necessary, and negotiate a fee therefor;
(ix) assist in obtaining a credit report from a qualified credit reporting
agency and preparing the credit history of the Owner, if necessary, and
negotiate a fee therefor;
(x) obtain a loan commitment for said refinancing acceptable to the Owner;
(xi) assist in the selection of a qualified attorney to prepare the loan
closing statement and review the loan documents, and negotiate a fee therefor,
(xii) determine pay-off amounts for any outstanding mortgage encumbering the
Property;
(xiii) assist in obtaining a title report and UCC search information, as well
as a title policy written by an insurer that is acceptable to the lender;
(xiv) assist in obtaining evidence that the Property will be
continuously insured with acceptable property and liability insurance policies
which meet the requirements of the lender;
(xv) review the terms of the new mortgage note,
(xvi) review the disclosure statement for the new loan,
(xvii) assist in providing information in the preparation of the loan closing
statement,
(xviii) evaluate acceptable escrow and reserve requirements with the lender,
(xix) assist in providing any other documents, records or forms required to
obtain and close the loan, and
(xx) in general assist in the coordination of closing said refinancing as
directed by the Owner.
(B) In addition, if an environmental indemnity agreement is required by the
lender with respect to hazardous material, Decade will attempt to arrange for
the guarantee of any indemnity by the firm selected to perform the Phase I
Environmental Site Assessment, or by a General Partner of the Owner, or by a
key principal under the loan, or by the Owner, and Decade may, if necessary,
pay a portion of its fee earned here under to the guarantor for such guarantee
if necessary.
(C) In addition, if additional security is required by the lender,
Decade is willing to consent to the assignment of its Property Management
Agreement by the Owner to lender upon a default by Owner under the documents
evidencing and securing the new loan, and permit lender to terminate the
Property Management Agreement without liability.
5. Efforts. In consideration for Owner's agreements herein Decade agrees
to use reasonable efforts to find a new loan for the Property. Owner agrees
that Decade may perform similar services for other properties during the term
of this Agreement.
6. Owner Cooperation with Decade's Efforts. Owner agrees to cooperate
with Decade in Decade's refinancing efforts and to provide Decade with all
records, documents and other material in Owner's possession or control which
are required in connection with the refinancing, including but not limited to,
financial statements and tax returns of the Owner and key principals of the
Owner, operating statements and rent rolls for the Property, and other
information as required by the lender. Owner authorizes Decade to do those
acts reasonably necessary to effect a refinancing and Owner agrees to
cooperate fully with these efforts. Owner shall promptly notify Decade in
writing of any potential lenders with whom Owner negotiates during the term of
this Agreement and shall promptly refer all persons making inquiries
concerning the refinancing of the Property to Decade.
7. Other Brokers. The parties agree that Decade may work and cooperate
with other mortgage brokers in refinancing the Property, including brokers
from other firms acting as subagents (agents of Owner retained by Decade) and
brokers representing lenders.
8. Extension of Agreement. This Agreement may be extended by written
agreement of the parties.
9. Assignment. Any of the duties and responsibilities of Decade under
this Agreement may be delegated, assigned, or subcontracted by Decade on
whatever terms and conditions may be acceptable to it at any time, to any
individual, corporation, or other entity including affiliates of Decade which,
in the judgement of Decade, is capable of performing the same. If Decade
assigns, delegates or subcontracts any of its duties and responsibilities
hereunder, Decade shall continue to be primarily responsible for the
fulfillment of all the obligations as set further herein. However, Decade
shall not sell, assign, or otherwise transfer any of its rights and interests
hereunder without the prior written consent of the Owner. Any attempted
assignment hereof without said prior written consent shall be void and of no
force or effect.
10. Notices. All notices or other communications provided for by this
Agreement shall be made in writing and shall be deemed properly delivered when
(i) delivered personally, or (ii) by the mailing of such notice to the parties
entitled thereto, registered or certified mail, postage prepaid to the parties
at the following addresses (or to such address designated in writing by one
party to the other):
Owner:Decade Companies Income Properties,
A Limited Partnership
250 Patrick Blvd., Suite 140
Brookfield, WI 53045-5864
Decade:Decade Properties, Inc.
250 Patrick Blvd., Suite 140
Brookfield, WI 53045
Notices, property mailed shall be deemed received three (3) business days
after the date mailed.
11.Entire Agreement and Waiver. This Agreement contains the entire
agreement between the parties hereto and supersedes all prior and
contemporaneous agreements, arrangements, negotiations and understandings
between the parties hereto, relating to the subject matter hereof. There are
no other understandings, statements, promises or inducements, oral or
otherwise, contrary to the terms of this Agreement. No representations,
warranties, covenants or conditions, express or implied, whether by statute or
otherwise, other than as set forth herein have been made by any party hereto.
No waiver or any term, provision, or conditions of this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or
shall constitute, a waiver of any other provision hereof, whether or not
similar, nor shall such waiver constitute a continuing waiver, and no waiver
shall be binding unless executed in writing by the party making the waiver.
12. Amendments. No supplement, modification or amendment of any term,
provision or condition of this Agreement shall be binding or enforceable
unless executed in writing by the parties hereto.
13. Parties in Interest. Nothing in this Agreement, whether express or
implied, is intended to confer upon any person other than the parties hereto
and their respective heirs, representatives, successors and permitted assigns,
any rights or remedies under or by reason of this Agreement, nor is anything
in this Agreement intended to relieve or discharge the liability of any other
party hereto, nor shall any provision hereof give any entity any right of
subrogation against or action over against any party.
14. Severability. Should any part, term or provision of this Agreement
or any document required herein to be executed be declared invalid, void or
unenforceable, all remaining parts, terms and provisions hereof shall remain
in full force and effect and shall in no way be invalidated, impaired or
affected thereby.
15. Subject Headings. The subject headings of the articles, paragraphs
and subparagraphs of this Agreement are included solely for purposes of
convenience and reference only, and shall not be deemed to explain, modify,
limit, amplify or aid in the meaning, construction or interpretation of any of
the provisions of this Agreement.
16. Applicable Law. This Agreement shall be governed by and construed
and enforced in accordance with and subject to the laws of Florida.
<PAGE> The undersigned have executed this Agreement as of the date first
above written.
Dated the date first above written.
OWNER
DECADE COMPANIES INCOME PROPERTIES,
A LIMITED PARTNERSHIP
By: DECADE COMPANIES - A GENERAL PARTNERSHIP
General Partner
By:/s/ Jeffrey
Keierleber
Jeffrey Keierleber,
General Partner of Decade Companies
By: DECADE 80, INC.,
General Partner of Decade Companies
By: /s/ Jeffrey
Keierleber
Jeffrey Keierleber,
President of Decade 80, Inc.
Attest: /s/ Micheal Sweet
Michael Sweet,
Secretary of Decade 80, Inc.
Decade
DECADE PROPERTIES, INC.
By: /s/ Jeffrey
Keierleber
Jeffrey Keierleber, President
Attest: /s/ Michael Sweet
Michael Sweet, Secretary
EXHIBIT A
ALL OF PELICAN SOUND CONDOMINIUM, according to the Declaration of Condominium
recorded in Official Records Book 7449, Pages 1113 through 1174, according to
the Condominium Plat Book 107, Pages 13 through 29, inclusive, recorded in the
Public Records of Pinellas County, Florida.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 4,570,655
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,728,649
<PP&E> 32,346,155
<DEPRECIATION> (9,667,549)
<TOTAL-ASSETS> 28,045,513
<CURRENT-LIABILITIES> 4,057,427
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (2,331,396)
<TOTAL-LIABILITY-AND-EQUITY> 28,045,513
<SALES> 6,492,498
<TOTAL-REVENUES> 6,567,032
<CGS> 0
<TOTAL-COSTS> 4,468,142
<OTHER-EXPENSES> 218,189
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,853,892
<INCOME-PRETAX> 26,809
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,809
<EPS-BASIC> 1.98
<EPS-DILUTED> 1.98
</TABLE>
