<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO.1
TO THE
SCHEDULE 13E-3
(Final Amendment)
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
McNeil Real Estate Fund XXVII, L.P.
---------------------------------------
(Name of Issuer)
McNeil Real Estate Fund XXVII, L.P.
McNeil Partners, L.P.
McNeil Investors, Inc.
Robert A. McNeil
WXI/McN Realty L.L.C.
WXI/MNL Real Estate, L.L.C.
Whitehall Street Real Estate Limited Partnership XI
---------------------------------------
(Name of Person(s) Filing Statement)
Units of Limited Partnership Interest
---------------------------------------
(Title of Class of Securities)
N/A
---------------------------------------
(CUSIP Number of Class of Securities)
Jonathan Langer
Vice President
WXI/McN Realty L.L.C.
85 Broad Street
New York, New York 10004
(212) 902-1000
---------------------------------------
(Name, Address and Telephone Number of Persons Authorized
to Receive Notices and Communications on Behalf of Person(s) Filing Statement)
with a copy to:
<TABLE>
<S> <C> <C>
Martha E. McGarry, Esq. Gary Israel, Esq. W. Scott Wallace, Esq.
Skadden, Arps, Slate, Sullivan & Cromwell Haynes & Boone, LLP
Meagher & Flom LLP 125 Broad Street 901 Main Street, Suite 3100
Four Times Square New York, New York 10004 Dallas, Texas 75202
New York, New York 10036 (212) 558-4000 (214) 651-5000
(212) 735-3000
</TABLE>
This statement is filed in connection with (check the appropriate box):
(a) [X] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
(b) [ ] The filing of a registration statement under the Securities Act of
1933.
(c) [ ] A tender offer.
(d) [ ] None of the above.
<PAGE>
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [ ]
Calculation of Filing Fee
- -------------------------------------------------------------------------------
Transaction Amount of
valuation* Filing Fee**
- -------------------------------------------------------------------------------
$ 51,009,541 $ 10,201.91
- -------------------------------------------------------------------------------
* For purposes of calculating the filing fee only. This calculation assumes
the exchange of 5,162,989 units of limited partner interest in the Issuer
at $9.88 per unit in cash.
** The amount of the filing fee, calculated in accordance with Rule 0-11(c) of
the Securities Exchange Act of 1934, as amended, equals 1/50th of one
percent of the aggregate value of cash exchanged for such units.
[X] Check box if any part of the fee is offset by Rule 0-11(a)(2) and identify
the filing with which the offsetting fee was previously paid. Identify the
previous filing by registration statement number, or the Form or Schedule
and the date of its filing.
Amount Previously Paid: $ 10,294.84 Filing Party: McNeil Real Estate
Fund XXVII, L.P.
Form or Registration No.: Schedule 14A Date Filed: August 3, 1999
<PAGE>
INTRODUCTION
This Final Amendment to Rule 13e-3 Transaction Statement (this
"Final Amendment") is being jointly filed by each of (1) McNeil Real Estate
Fund XXVII, L.P., a Delaware limited partnership (the "Partnership"),
(2) McNeil Partners, L.P., a Delaware limited partnership (the "General
Partner"), (3) McNeil Investors, Inc., a Delaware corporation and the
general partner of the General Partner ("McNeil Investors"), (4) Robert A.
McNeil, the sole stockholder of McNeil Investors, (v) WXI/McN Realty
L.L.C., a Delaware limited liability company (the "Purchaser"), (6) WXI/MNL
Real Estate, L.L.C., a Delaware limited liability company and the managing
member of the Purchaser ("WXI/MNL Real Estate"), and (7) Whitehall Street
Real Estate Limited Partnership XI, a Delaware limited partnership and the
managing member of WXI/MNL Real Estate ("Whitehall" and, collectively with
the Partnership, the General Partner, McNeil Investors, Robert A. McNeil,
WXI/McN Realty and WXI/MNL Real Estate, the "Filing Persons"), pursuant to
Section 13(e) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and Rule 13e-3 thereunder, to amend and supplement the
definitive Rule 13e-3 Transaction Statement on Schedule 13E-3, jointly
filed by the Filing Persons with the Securities and Exchange Commission
(the "SEC") on December 14, 1999 (the "Transaction Statement"). Unless otherwise
indicated herein, each capitalized term used but not defined herein shall
have the meaning assigned to such term in the Transaction Statement or in
the Definitive Proxy Statement on Schedule 14A of the Partnership filed by
the Partnership with the SEC on December 14, 1999 (the "Proxy Statement").
This Final Amendment is being filed with the SEC pursuant to the
requirements of Rule 13e-3(d)(3) promulgated under the Exchange Act, to
reflect the results of the transactions contemplated by the Master
Agreement with respect to the Partnership. Except as expressly set forth in
this Final Amendment, all information in the Transaction Statement remains
unchanged.
ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.
Item 6 is hereby amended and supplemented by adding the following
information:
On January 31, 2000, a subsidiary of the Purchaser entered
into a loan agreement (the "Commercial Loan Agreement") with
General Electric Capital Corporation ("GECC") pursuant to which
GECC has agreed to lend to such subsidiary up to an aggregate
amount of approximately $109,185,728 to partially finance the
acquisition of the McNeil Partnerships and to provide a working
capital and leasing facility with respect to certain commercial
properties owned by the McNeil Partnerships. The foregoing
description is qualified in its entirety by reference to the
Commercial Loan Agreement, which is attached as Exhibit (a)(1)
hereto and is incorporated herein by reference in its entirety.
On January 31, 2000, subsidiaries of the Purchaser entered
into a loan agreement, made as of January 1, 2000 (the "Multifamily
Loan Agreement") with Amresco Capital, L.P. ("Amresco") pursuant to
which Amresco has agreed to lend to such subsidiaries up to an
aggregate amount of approximately $195,783,261 to partially finance
the acquisition of the McNeil Partnerships. The foregoing
description is qualified in its entirety by reference to the
Multifamily Loan Agreement, which is attached as Exhibit (a)(2)
hereto and is incorporated herein by reference in its entirety.
ITEM 16. ADDITIONAL INFORMATION.
Item 16 is hereby amended and supplemented by adding the following
information.
The transactions contemplated by the Master Agreement,
including the merger of a separate newly formed subsidiary of the
Purchaser with and into the Partnership (the "Merger"), were
approved by the limited partners of the Partnership on January 20,
2000. Such transactions were consummated with respect to the
Partnership on January 31, 2000, and the Merger became effective on
such date upon the filing of a Certificate of Merger with the
Secretary of State of the State of Delaware. As a result of the
Merger, each limited partner unit in the Partnership has been
converted into the right to receive $9.88 in cash. In addition, a
special cash distribution of approximately $1.10 per unit was declared
as of January 31, 2000, payable to limited partners holding limited
partner units immediately prior to the effective time of the Merger. As
a result of and following the Merger, all the issued and outstanding
limited partner units in the Partnership are directly or indirectly
beneficially owned by the Purchaser. Accordingly, the Partnership has
filed a Certification and Notice of Termination of Registration on Form
15 with the SEC.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
Item 17 is hereby amended and supplemented by adding the following
exhibits:
(a)(1) Loan Agreement, dated January 31, 2000, between
WXI/MCN Comercial Real Estate Limited Partnership and
General Electric Capital Corporation
(a)(2) Loan Agreement, made as of January 1, 2000,
among WXI/MCN Multifamily Real Estate Limited
Partnership, Brendon Way Fund XII Associates,
Castle Bluff Fund XII Associates, L.P.,
Embarcadero Associates and Amresco Capital,
L.P.
(d)(4) Press Release issued by McNeil Partners, L.P. dated
January 31, 2000
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this Statement is
true, complete and correct.
Dated: February 11, 2000 McNEIL REAL ESTATE FUND XXVII, L.P.
By: WXI/MCN Commercial Gen-Par, L.L.C.
Its: General Partner
By: WXI/McN Realty L.L.C.
Its: Managing Member
By: /s/ Jonathan Langer
_________________________
Name: Jonathan Langer
Title: Vice President
McNEIL PARTNERS, L.P.
By: McNeil Investors, Inc.
Its: General Partner
By: /s/ Robert A. McNeil
___________________________
Name: Robert A. McNeil
Title: Chaiman of the Board
McNEIL INVESTORS, INC.
By: /s/ Robert A. McNeil
___________________________
Name: Robert A. McNeil
Title: Chaiman of the Board
/s/ Robert A. McNeil
_________________________
ROBERT A. McNEIL
WXI/McN REALTY L.L.C.
By: /s/ Jonathan Langer
_________________________
Name: Jonathan Langer
Title: Vice President
WXI/MNL REAL ESTATE, L.L.C.
By: Whitehall Street Real
Estate Limited Partnership XI
Its: Managing Member
By: WH Advisors, L.L.C. XI
Its: General Partner
By: /s/ Jonathan Langer
_________________________
Name: Jonathan Langer
Title: Vice President
WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP XI
By: WH Advisors, L.L.C. XI
Its: General Partner
By: /s/ Jonathan Langer
_________________________
Name: Jonathan Langer
Title: Vice President
<PAGE>
EXHIBIT INDEX
The Exhibit Index is hereby amended and supplemented by adding the
following exhibits:
(a)(1) Loan Agreement, dated January 31, 2000, between
WXI/MCN Comercial Real Estate Limited Partnership
and General Electric Capital Corporation
(a)(2) Loan Agreement, made as of January 1, 2000,
among WXI/MCN Multifamily Real Estate Limited
Partnership, Brendon Way Fund XII Associates,
Castle Bluff Fund XII Associates, L.P.,
Embarcadero Associates and Amresco Capital,
L.P.
(d)(4) Press Release issued by McNeil Partners, L.P. dated
January 31, 2000
<PAGE>
Loan Agreement
================================================================================
U.S. $109,185,728.00
LOAN AGREEMENT
BETWEEN
WXI/MCN COMMERCIAL REAL ESTATE LIMITED PARTNERSHIP,
AS BORROWER
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS LENDER
JANUARY 31, 2000
(WHITEHALL/MCNEIL PORTFOLIO)
================================================================================
<PAGE>
LOAN AGREEMENT
This Loan Agreement ("AGREEMENT") is entered into as of January 31,
2000 between GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
("LENDER"), and WXI/MCN COMMERCIAL REAL ESTATE LIMITED PARTNERSHIP, a Delaware
limited partnership ("BORROWER"). Capitalized terms used in the Recitals shall
have the meanings ascribed to such terms hereinbelow.
RECITALS
WHEREAS, Borrower desires to obtain the Loan from Lender for the
purposes of (i) financing or refinancing the Properties and (ii) funding Working
Capital Advances;
WHEREAS, Borrower and Lender desire to set forth the terms and
conditions of the Loan and of each Advance made hereunder;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and the payment of $10 and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lender and Borrower
agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
Section 1.1 CERTAIN DEFINITIONS. As used herein, the following terms
have the meanings indicated:
(1) "ACQUISITION ADVANCE" means an Advance made for the purpose of
financing or refinancing an Additional Property, if any.
(2) "ACQUISITION ADVANCE TERMINATION DATE" means June 1, 2000.
(3) "ADDITIONAL PROPERTIES" means, collectively, the properties
designated as "Additional Properties" on Schedule 1.1(B).
(4) "ADJUSTED ANNUAL DEBT SERVICE" means, as of the date of
calculation, subject to the adjustment set forth below in this paragraph,
annual debt service calculated on the outstanding balance of the Loan on
the calculation date (taking into account, in the case of a release of a
Property, the application of the Release Payment to the outstanding balance
<PAGE>
of the Loan), at the greater of the then current interest rate payable
under the Loan and the average interest rate for the prior six month period
(such greater interest rate, as applicable, the "APPLICABLE RATE"),
provided in each case that such annual debt service shall be reduced by
amounts that would be payable (based on such interest rate) to Borrower
under any interest rate swap, cap, collar or similar agreement entered into
by Borrower in connection with the Loan (assuming, for purposes of
determining the amount payable under any such agreement, that the interest
rate applied under the respective agreement is the Applicable Rate)
provided the benefits of such agreement are pledged to Lender as further
security for the Loan. (For example, if the current interest rate payable
under the Loan is 8% and the average interest rate for the six month period
prior to determining Adjusted Annual Debt Service was 7%, then annual debt
service shall be determined using the 8% rate and, for purposes of
determining the amounts payable under any interest rate swap, cap, call or
of similar agreement, the rate used to calculate the counterparty's
obligations shall be deemed to have been 8% for such prior six month
period.)
(5) "ADJUSTED LOAN BASIS" means, with respect to any Property, the
amount set forth opposite the reference to such Property on the attached
Schedule 1.1(B) under the caption "Loan Basis," and as such Loan Basis may
be increased or decreased pursuant to the terms hereof.
(6) "ADJUSTED OPERATING CASH FLOW" shall mean, for any period, the sum
of Operating Cash Flow for such period (but excluding income from or
expenses related to (a) any interest rate swap, cap, collar, or similar
agreement entered into by Borrower in connection with the Loan, and (b) any
Properties previously released or to be released in connection with the
calculation of Adjusted Operating Cash Flow). Notwithstanding the
foregoing, no lump sum nonrecurring Operating Expense or Gross Receipt, as
reasonably determined by Lender, shall be included in determining
annualized Adjusted Operating Cash Flow for purposes of this definition.
Similarly, the determination of annualized Adjusted Operating Cash Flow for
purposes of this paragraph shall be adjusted, as reasonably determined by
Lender, to reflect annualized decreases or increases in Operating Expenses
or Gross Receipts resulting from anticipated major events. The
determination of Adjusted Operating Cash Flow for purposes of this
definition shall be based upon the lesser of market occupancy or the actual
occupancy rate of each Property (but in no event greater than a 95%
occupancy rate) and shall assume as part of Operating Expenses (i) the
greater of the actual property management fees incurred by Borrower or a
fee equal to 3% of gross rental receipts from the Properties, and (ii)
annual replacement reserves of $0.25 per square foot). In addition, based
upon, among other things, the operating statements provided to Lender by
Borrower (if available), Lender shall consider such adjustments to the
annualized Adjusted Operating Cash Flow as it deems reasonably appropriate,
which considerations may take into account nonrecurring periods where one
or more Properties were not generating gross receipts or were generating
significantly lower gross receipts.
(7) "ADVANCE" means each advance of the Loan made by Lender to
Borrower pursuant to and in accordance with the terms and conditions of
this Agreement,
-2-
<PAGE>
including the Initial Advance and each Working Capital Advance and each
Acquisition Advance.
(8) "AFFILIATE" means, with respect to any Person, any Person that
directly or indirectly through one or more intermediaries controls or is
controlled by or is under common control with such Person.
(9) "AGREEMENT" means this Loan Agreement, together with all Exhibits
and Schedules hereto.
(10) "AGREEMENT REGARDING MANAGEMENT AGREEMENT" means the Agreement
Regarding Asset Management Agreement executed by Holding Company and Asset
Manager in favor of Lender, in form and substance satisfactory to Lender.
(11) "ANCILLARY AGREEMENTS" means any supplemental agreement,
undertaking, instrument, document or other writing executed by Borrower as
a condition to Advances under this Agreement or otherwise in connection
herewith, including the Loan Documents.
(12) "APPROVED PLANS" has the meaning set forth in Section 3.2 hereof.
(13) "ARCHITECT" means any architect and/or inspecting engineer,
chosen by Borrower and reasonably satisfactory to Lender, that is retained
in connection with any Work or the construction of any Capital Improvements
or Tenant Improvements.
(14) "ASSET BUSINESS PLAN"means a "Portfolio Business Plan" as such
term is defined in the Asset Management Agreement.
(15) "ASSET MANAGEMENT AGREEMENT" means that certain Portfolio
Advisory Agreement dated as of January 31, 2000, executed by Holding
Company and Asset Manager, regarding the Properties.
(16) "ASSET MANAGEMENT FEE" means the portion of the "Portfolio
Advisory Fee" payable under the Asset Management Agreement which is
allocable to the Properties.
(17) "ASSET MANAGER" means Archon Group, L.P., a Delaware limited
partnership, or its permitted successors or assigns, or any replacement
asset manager reasonably acceptable to Lender.
(18) "ASSIGNMENT OF LEASES" means each first priority assignment of
rents and leases executed by Borrower for the benefit of Lender with
respect to a Property, in form and substance satisfactory to Lender.
-3-
<PAGE>
(19) "BORROWER PARTY" means Whitehall and any general partner of
Borrower.
(20) "BORROWING DATE CERTIFICATE" means a certificate executed by
Borrower in favor of Lender, in form and substance satisfactory to Lender,
in which Borrower shall confirm certain matters regarding Borrower and the
Properties as of the Closing Date.
(21) "BUSINESS DAY" means a day other than a Saturday, a Sunday, or a
day on which national banks located in the State of New York are not open
for general banking business.
(22) "CAPITAL EXPENDITURES" means all commercially reasonable payments
for necessary and customary replacements or substitutions to improvements
to any Property, including remediation of deferred maintenance.
(23) "CAPITAL LEASE" means, with respect to any Person, a lease of any
property (whether real, personal or mixed) by such Person as lessee that,
in accordance with GAAP, either would be required to be classified and
accounted for as a capital lease on a balance sheet of such Person or
otherwise be disclosed as such in a note to such balance sheet.
(24) "CAPITAL LEASE OBLIGATION" means, with respect to any Capital
Lease, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in
respect of such Capital Lease or otherwise be disclosed in a note to such
balance sheet.
(25) "CAPITAL TRANSACTION" means, with respect to any Property (a) a
sale or refinancing of the whole of such Property, (b) an event giving rise
to an insurance recovery or a condemnation award to the extent such
insurance recovery or condemnation award exceeds the actual out-of-pocket
cost of repair or restoration to such Property or the portion thereof
affected by the event which gave rise to such insurance recovery or
condemnation award, (c) a Complete Taking or (d) any financing or
refinancing of, or sale of, a partial interest in such Property, if
permitted under the terms of this Agreement.
(26) "CASH ON CASH LIMIT" means, as of the date of calculation, the
Loan balance resulting in a 12.04% Cash On Cash Return, calculated by
dividing (a) the amount of Adjusted Operating Cash Flow which would be used
as of such date in calculating Cash On Cash Return by (b) .1204; provided,
however, that upon making each Acquisition Advance (if any), the Cash On
Cash Return percentage used above in this definition shall be revised to
equal the Cash On Cash Return for the Properties (including the Additional
Property added in connection with such Acquisition Advance) as of the date
of such Acquisition Advance, which revision shall be confirmed in writing
by the parties, and shall be effective for the balance of the Term (unless
such revised percentage is replaced as the result of a subsequent
Acquisition Advance).
-4-
<PAGE>
(27) "CASH ON CASH RETURN" means, as of the date of calculation, the
quotient, expressed as a percentage, obtained by dividing (a) Adjusted
Operating Cash Flow from all Properties which constitute Collateral on the
calculation date, determined for the twelve (12) month period prior to such
date of calculation, by (b) the outstanding balance of the Loan on the
calculation date (taking into account, in the case of a release of a
Property, the application of the Release Payment to the outstanding Loan
balance). Lender agrees that calculations of Cash On Cash Return after the
Closing Date will be performed in a manner reasonably consistent with the
underwriting practices, procedures and policies which were followed by
Lender in verifying satisfaction of the Cash On Cash Return closing
condition contained in Part A of Schedule 2.1.
(28) "CHARGES" means all federal, state, county, city, municipal,
local, foreign or other governmental (including PBGC) taxes at the time due
and payable, levies, assessments, charges, liens, claims or encumbrances
upon or relating to (i) the Properties, (ii) the Obligations, (iii)
Borrower's employees, payroll, income or gross receipts, (iv) Borrower's
ownership or use of any of the Properties, or (v) any other aspect of
Borrower's business.
(29) "CHARGES ACCOUNT" has the meaning set forth in Section 3.4
hereof.
(30) "CLOSING DATE" means the date on which Lender makes the Initial
Advance.
(31) "CODE" means the Uniform Commercial Code of the jurisdiction with
respect to which such term is used, as in effect from time to time.
(32) "COLLATERAL" means the collateral covered by the Collateral
Documents.
(33) "COLLATERAL ASSIGNMENT OF CONTRACTS" means each Collateral
Assignment of Contracts, Licenses and Permits executed by Borrower in favor
of Lender, in form and substance satisfactory to Lender.
(34) "COLLATERAL ASSIGNMENT OF INTEREST RATE CAP AGREEMENT" means each
Collateral Assignment of Interest Rate Cap Agreement executed by Borrower
in favor of Lender, substantially in the form of Exhibit "C" hereto.
(35) "COLLATERAL DOCUMENTS" means the Collateral Assignments of
Contracts, the Assignments of Leases, the Deeds of Trust, the Collateral
Assignments of Interest Rate Cap Agreement and any other deeds of trust,
mortgages, security agreements, pledge agreements, financing statements or
similar documents now or hereafter executed to secure (or perfect a
security interest granted to secure) any or all of the Obligations.
-5-
<PAGE>
(36) "COMPLETE TAKING" means a taking or condemnation by any competent
Governmental Authority of the whole of any Property or so much thereof that
the part not so taken or condemned cannot feasibly be used or reconverted
for use as a building of the type and character existing immediately prior
to such taking or condemnation.
(37) "CONTRACT RATE" has the meaning set forth in Section 2.2 hereof.
(38) "DEBT SERVICE COVERAGE RATIO" means, as of the date of
calculation, the ratio of (a) Adjusted Operating Cash Flow from all
Properties which constitute Collateral on the calculation date, determined
for the six-month period ending on such date of calculation adjusted to
reflect a one-year period, to (b) Adjusted Annual Debt Service.
(39) "DEBT SERVICE COVERAGE RATIO LIMIT" means, as of the date of
calculation, the Loan balance resulting in a 1.32 to 1.00 Debt Service
Coverage Ratio, calculated by dividing (a) the amount of Adjusted Operating
Cash Flow which would be used as of such date in calculating the Debt
Service Coverage Ratio by (b) the product obtained by multiplying (i) the
Contract Rate (expressed as a decimal) by (ii) 1.32; provided, however,
that upon making each Acquisition Advance, the Debt Service Coverage Ratio
used above in this definition shall be revised to equal the Debt Service
Coverage Ratio for the Properties (including the Additional Property added
in connection with such Acquisition Advance) as of the date of such
Acquisition Advance, which revision shall be confirmed in writing by the
parties and shall be effective for the balance of the Term (unless such
revised ratio is replaced as the result of a subsequent Acquisition
Advance).
(40) "DEED OF TRUST" means each first priority deed of trust, mortgage
and security agreement executed by Borrower in favor of Lender, creating a
first priority lien against a Property, in form and substance satisfactory
to Lender.
(41) "DEFAULT PROPERTY" has the meaning set forth in Section 10.1
hereof.
(42) "DEFAULT RATE" means the lesser of (a) the maximum rate of
interest allowed by applicable Laws, and (b) three percent (3%) per annum
in excess of the Contract Rate.
(43) "EARLY TERMINATION DATE" has the meaning set forth in Section 2.3
hereof.
(44) "ENVIRONMENTAL LAWS" has the meaning set forth in Section 4.1
hereof.
(45) "ENVIRONMENTAL LIABILITIES AND COSTS" has the meaning set forth
in Section 4.1 hereof.
-6-
<PAGE>
(46) "ENVIRONMENTAL SITE ASSESSMENT" means an environmental
engineering report (Phase I and, when necessary or appropriate in Lender's
judgment, Phase II) for each Property prepared by an engineer engaged by
Lender at Borrower's expense, and in a manner satisfactory to Lender, based
upon an investigation relating to and making appropriate inquiries
concerning the existence of Hazardous Materials on or about such Property,
and the past or present discharge, disposal, release or escape of any such
substances, all consistent with good customary and commercial practice.
(47) "ERISA" means the Employee Retirement Income Security Act of 1974
(or any successor legislation thereto), as amended from time to time.
(48) "EVENT OF DEFAULT" has the meaning set forth in Article 10.
(49) "EXTENSION NOTICE" has the meaning set forth in Section 2.3
hereof.
(50) "FEDERAL RESERVE BOARD" has the meaning set forth in Section 6.14
hereof.
(51) "FIDELITY FEDERAL GROUND LEASES" means, collectively, the ground
leases described in Exhibit "E" hereto, as the same may from time-to-time
be modified or amended as permitted under the Loan Documents.
(52) "FIDELITY FEDERAL PROPERTY" means the Property described in
Exhibit "D-8" hereto.
(53) "FISCAL YEAR" means the calendar year. Subsequent changes of the
fiscal year of Borrower shall not change the term "Fiscal Year," unless
Lender shall consent in writing to such changes.
(54) "GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time.
(55) "GECC" means General Electric Capital Corporation, a New York
corporation.
(56) "GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
(57) "GROSS RECEIPTS" means, for any period, all rental and other cash
income (other than any proceeds in respect of a Capital Transaction)
actually received by, on behalf of, or for the account of Borrower from any
source in respect of the Properties, including rental receipts (including
percentage rents and room charges) from Tenants, advance rentals or prepaid
rents (but only to the extent not required to be segregated under
-7-
<PAGE>
any applicable Law), reimbursements from Tenants for their share of
utilities, services and supplies and other operating expenses under Leases,
Security Deposit forfeitures, proceeds from letters of credit or other
credit enhancements (except to the extent applied to the Loan balance or to
the items for which such credit enhancements were originally provided, as
otherwise required in this Agreement), proceeds from rental or business
interruption insurance, parking, concessions and vending fees, food and
beverage income, laundry income, and furniture rentals, but excluding (a)
Security Deposits made by Tenants until such deposits are applied by
Borrower pursuant to the applicable Lease, (b) capital contributions or
loans made to Borrower by any of the partners in Borrower, and (c) Advances
under the Loan.
(58) "GUARANTEED INDEBTEDNESS" means, as to any Person, any obligation
of such Person guaranteeing any indebtedness, lease, dividend, or other
obligation ("primary obligations") of any other Person (the "primary
obligor") in any manner including any obligation or arrangement of such
Person (a) to purchase or repurchase any such primary obligation, (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of
any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) to indemnify the owner of such
primary obligation against loss in respect thereof.
(59) "HAZARDOUS MATERIALS" has the meaning set forth in Section 4.1
hereof.
(60) "HAZARDOUS SUBSTANCES INDEMNITY AGREEMENT" means the hazardous
substances indemnity agreement executed by Borrower and Whitehall in favor
of Lender with respect to the Properties, in form and substance
satisfactory to Lender.
(61) "HOLDING COMPANY" means WXI/McN Realty L.L.C., a Delaware limited
liability company.
(62) "IMPAIRED PROPERTY" has the meaning set forth in Section 8.18.
(63) "INDEBTEDNESS" of any Person shall mean (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (including reimbursement and all other obligations
with respect to surety bonds, letters of credit and bankers' acceptances,
whether or not matured, but not including obligations to trade creditors
incurred in the ordinary course of business), (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments, (c)
all indebtedness created or arising under any conditional sale or other
title retention agreements with respect to property acquired by such
Person, (d) all Capital Lease Obligations, (e) all Guaranteed Indebtedness,
(f) all Indebtedness referred to in clause (a), (b), (c), (d) or (e) above
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or
-8-
<PAGE>
otherwise, to be secured by) any Lien upon or in property (including
accounts and contract rights) owned by such Person, even though such Person
has not assumed or become liable for the payment of such Indebtedness, (g)
as to Borrower and any Borrower Party, the Obligations, and (h) all
liabilities under Title IV of ERISA.
(64) "INITIAL ADVANCE" means the initial Advance made by Lender to
Borrower on the Closing Date in the maximum amount of $99,185,728, less the
sum of the amounts in the "Loan Basis" column on Schedule 1.1(B) for the
properties identified on such Schedule as Additional Properties (if any).
The Initial Advance shall be made for the purpose of financing or
refinancing the Initial Properties and paying certain Loan closing costs.
(65) "INITIAL PROPERTIES" means the properties described in Exhibits
"D-1" through "D-21" attached hereto, excluding any such properties
identified as "Additional Properties" on Schedule 1.1(B).
(66) "INTEREST PAYMENT DATE" has the meaning set forth in Section 2.3
hereof.
(67) "IRC" means the Internal Revenue Code of 1986, as amended, and
any successor thereto.
(68) "IRS" means the Internal Revenue Service, or any successor
thereto.
(69) "LAWS" means all federal, state and local laws, rules,
regulations, ordinances and codes.
(70) "LEASE BUY OUT CONSIDERATION" means all amounts paid to Borrower
by any tenant under a Lease as consideration for terminating such Lease
prior to its stated expiration date.
(71) "LEASES" means all written rights to use any portion of any
Property in which Borrower is the lessor.
(72) "LEASING COSTS" means, with respect to any Property, leasing
commissions payable to brokers who are not Affiliates of Borrower, which
are commercially reasonable and customary for the area where the Property
is located.
(73) "LENDER" means GECC and any future holder of all or any portion
of the Note.
(74) "LIBOR RATE" means the U.S. Dollar rate listed on page 3750
(i.e., the LIBOR page) of the Telerate News Services titled "BRITISH BANKER
ASSOCIATION INTEREST SETTLEMENT RATES" for a designated maturity of one (1)
month determined as of 11:00 a.m. London Time on the second (2nd) full
Eurodollar Business Day next preceding the first day
-9-
<PAGE>
of each month with respect to which interest is payable under the Loan
(unless such date is not a Business Day in which event the next succeeding
Eurodollar Business Day which is also a Business Day will be used). If the
Telerate News Services (1) publishes more than one (1) such LIBOR Rate, the
average of such rates shall apply, or (2) ceases to publish the LIBOR Rate,
then the LIBOR Rate shall be determined from such substitute financial
reporting service as Lender in its discretion shall determine. The term
"EURODOLLAR BUSINESS DAY", shall mean any day on which banks in the City of
London are generally open for interbank or foreign exchange transactions.
(75) "LIEN" means any mortgage or deed of trust (including any Deed of
Trust), pledge, hypothecation, assignment, deposit arrangement, lien,
Charge that becomes a lien on real property, claim, security interest,
easement or encumbrance, or preference, priority or other security
agreement of any kind or nature whatsoever (including any lease or title
retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code
or comparable Law of any jurisdiction).
(76) "LOAN" means the loan to be made by Lender to Borrower under this
Agreement up to the Maximum Loan Amount.
(77) "LOAN DOCUMENTS" means this Agreement, the Note, the Borrowing
Date Certificate, the Collateral Documents, the Hazardous Substances
Indemnity Agreement, the Agreement Regarding Asset Management Agreement,
the Whitehall Indemnity and all other agreements, instruments, documents
and certificates evidencing, securing, governing or otherwise pertaining to
the Loan.
(78) "MAJOR WORK" has the meaning set forth in Section 3.2 hereof.
(79) "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(a) the assets, operations or financial condition of Borrower taken as a
whole, (b) Borrower's ability to pay the Obligations in accordance with the
terms thereof and otherwise comply with the terms of this Agreement, (c)
any Property individually or (d) Lender's Liens (individually or
collectively) on the Collateral or the priority of any such Lien.
(80) "MATERIAL AGREEMENT" shall mean any material written or oral
agreement, contract, commitment or understanding requiring payments,
pledges, or performance executed or assumed by Borrower in connection with
the Properties (other than the Loan Documents) which provides for payments
by Borrower over the term of any such agreement, contract, commitment or
understanding in excess of One Hundred Thousand and No/100 Dollars
($100,000.00) and which is not cancelable by Borrower upon sixty (60) days'
or less notice without liability for further payment other than a nominal
penalty and which is not assignable without consent of the other party
thereto. For purposes of clarification, this term shall not include Leases
currently in effect or entered into in accordance with the terms hereof.
-10-
<PAGE>
(81) "MATERIAL LEASE" has the meaning set forth in Section 5.4 hereof.
(82) "MATURITY DATE" means the earliest of (a) January 31, 2003, as
such date may be extended pursuant to the provisions of Section 2.3(3), (b)
the Early Termination Date, or (c) any other date on which the entire Loan
is required to be paid in full, by acceleration or otherwise, under this
Agreement or any of the other Loan Documents.
(83) "MAXIMUM LIABILITY" has the meaning set forth in Section 12.1
hereof.
(84) "MAXIMUM LOAN AMOUNT" means $109,185,728.00.
(85) "MCNEIL" means McNeil Partners, L.P., a Delaware limited
partnership.
(86) "NET CAPITAL PROCEEDS" shall mean, with respect to a Capital
Transaction, (a) the cash proceeds (including cash equivalents) therefrom
plus (b) the cash proceeds (including cash equivalents) of the disposition
of any non-cash consideration, in each case received by or for the account
of Borrower, less the ordinary and customary direct selling expenses
incurred by Borrower in connection with such Capital Transaction (including
then customary brokerage commissions for assets similar to the affected
Property and a disposition fee to the Asset Manager of up to one percent
(1%) of the Consideration (as defined in the Asset Management Agreement)
received by Borrower).
(87) "NON-STORAGE LEASES" means the Leases, other than the Leases for
any portion of the Storage Properties.
(88) "NOTE" means the Promissory Note of even date herewith, in the
stated principal amount of One Hundred Nine Million One Hundred Eighty-Five
Thousand Seven Hundred Twenty-Eight and No/100 Dollars ($109,185,728.00)
executed by Borrower, and payable to the order of Lender, in evidence of
the Loan.
(89) "NOTICE OF ADDITIONAL ADVANCE" means a notice, substantially in
the form of Exhibit "A" hereto, which Borrower shall deliver to Lender in
connection with each requested Advance and which shall specify the
requested date and amount of such Advance.
(90) "OBLIGATIONS" shall mean all loans, advances, debts, liabilities
and obligations for monetary amounts (whether such amounts are liquidated
or determinable) owing by Borrower to Lender, and all present or future
covenants and duties regarding such amounts, of any kind or nature, whether
evidenced by any note, agreement or other instrument, arising under any of
the Loan Documents. This term includes all interest, charges, expenses,
attorneys' fees and any other sum chargeable to Borrower under any of the
Loan Documents.
-11-
<PAGE>
(91) "OPERATING CASH FLOW" shall mean, for any period, the excess, if
any, of (a) cumulative Gross Receipts from all Properties and from any
other source of Borrower for the period in question (including from any
interest rate cap or other hedging device) over (b) cumulative Operating
Expenses (excluding debt service) for all Properties for such period.
(92) "OPERATING EXPENSES" shall mean, for any period, all ordinary,
normal and necessary cash expenses directly or indirectly incurred by or
for the account of Borrower in respect of any Property as would be incurred
by owners of assets similar to the Properties and which would be considered
operating expenses under GAAP, including payments under the Fidelity
Federal Ground Leases, repair and maintenance costs, Charges in respect of
the Properties, litigation costs, fees paid to property managers and
expenses properly reimbursable to the property managers and which would
otherwise be an operating expense hereunder, including Reserves therefor;
but excluding (a) any completed Capital Transactions and the expenses
(including adjustments and prorations) incurred in any completed Capital
Transaction, (b) any amounts in respect of the Asset Management Fee or any
other fee, compensation or reimbursement payable to Asset Manager under the
Asset Management Agreement, or Asset Manager's or Borrower's general
partner's overhead and operating expenses, (c) any item for which a Reserve
has been previously established and considered an Operating Expense, and
(d) any costs, fees or expenses related to or in connection with the
negotiation or consummation of the transactions contemplated by this
Agreement. Notwithstanding the foregoing, it is understood and agreed that
to the extent that any of the foregoing are funded out of the Loan, such
expenses shall not be deemed to be Operating Expenses.
(93) "OTHER TAXES" has the meaning set forth in Section 8.10 hereof.
(94) "PARTIAL RELEASE NOTICE" has the meaning set forth in Section 2.4
hereof.
(95) "PARTNERSHIP AGREEMENT" means that certain Amended and Restated
Agreement of Limited Partnership of WXI/MCN Commercial Real Estate Limited
Partnership, dated as of January 31, 2000.
(96) "PERMITTED ENCUMBRANCES" means the following encumbrances: (a)
Liens for taxes or assessments or other governmental charges or levies,
either not yet due and payable or to the extent that nonpayment thereof is
permitted by the terms of this Agreement; (b) workers', mechanics', or
other similar liens on the Properties arising after the Closing Date in the
ordinary course of business and securing indebtedness which can be realized
by foreclosure on any Property and which (i) with respect to such Property
shall not exceed $100,000 at any time outstanding, and (ii) with respect to
all of the Properties shall not exceed, in the aggregate, $1,000,000 at any
time outstanding, and which are being contested in good faith to the extent
and in the manner expressly permitted under this Agreement; (c) deposits
securing or in lieu of surety, appeal or customs bonds in proceedings to
which Borrower is a party; (d) any attachment or judgment Lien, provided
that the
-12-
<PAGE>
judgment it secures shall, within 60 days after the entry thereof, have
been discharged or execution thereof stayed pending appeal, or shall have
been discharged within 60 days after the expiration of any such stay; (e)
any additional permitted liens expressly allowed by any provision of the
Loan Documents; (f) mechanics' liens, which are subordinate to the Lien of
the applicable Deed of Trust, arising out of work performed by or materials
furnished to or on behalf of Tenants for which Borrower is not indebted;
(g) with respect to each Property, such exceptions to title as appear on
Schedule B to the Title Policy delivered to and accepted by Lender with
respect to such Property; and (h) easements, rights-of-way, restrictions
(including zoning restrictions), defects or irregularities in title and
other similar title matters not, in any material respect, interfering with
the operation, use or value of the property encumbered or affected
(provided that the foregoing clause (h) shall in no way be deemed a waiver
by Lender of, or otherwise operate to impair, any rights or remedies Lender
may have under the Title Policies with respect to items described in such
clause which are not excluded from coverage under such policies).
(97) "PERSON" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, trustee, estate, limited
liability company, unincorporated organization, real estate investment
trust, government or any agency or political subdivision thereof, or any
other form of entity.
(98) "PLAN" means, with respect to Borrower, at any time, an employee
benefit plan, as defined in Section 3(3) of ERISA, which Borrower
maintains, contributes to, or has an obligation to contribute to on behalf
of participants employed by Borrower.
(99) "POTENTIAL DEFAULT" means the occurrence of any event or
condition which, with the giving of notice, the passage of time, or both,
would constitute an Event of Default.
(100) "PROPERTIES" means, collectively, (a) the Initial Properties,
(b) each Additional Property, if any, which is financed or refinanced with
an Acquisition Advance, and (c) as to each property described in clauses
(a) or (b) above, all other "Property" described in the Deed of Trust
encumbering such property.
(101) "PROPERTY BASIS" means, with respect to a particular Property,
the amount set forth opposite the reference to such Property on the
attached Schedule 1.1(B) under the caption "Property Basis."
(102) "PROPERTY DOCUMENTS" has the meaning set forth in Section 6.23.
(103) "PURCHASE AGREEMENT" means that certain Master Agreement dated
as of June 24, 1999, by and among Holding Company, McNeil, the "McNeil
Partnerships" described therein, McNeil Investors, Inc., McNeil Real Estate
Management, Inc., McNeil Summerhill, Inc. and Robert A. McNeil
(104) "RELEASE" has the meaning set forth in Section 4.1 hereof.
-13-
<PAGE>
(105) "RELEASE PAYMENT" has the meaning set forth in Section 2.4
hereof.
(106) "REMEDIAL ACTION" has the meaning set forth in Section 4.1
hereof.
(107) "RESERVES" means (a) any reserves required by the terms of the
Loan Documents, (b) reserves for ordinary trade payables coming due within
the next 30 day period, and (c) reserves established by Borrower and
approved by Lender, for doubtful accounts, returns, allowances, contingent
liabilities, Operating Expenses and the like, in each case as may be, or as
may otherwise be required in accordance with GAAP.
(108) "SECURITY DEPOSITS" shall have the meaning set forth in Section
5.6 hereof.
(109) "SELLER" means, collectively, the "Participating McNeil
Partnerships" (as defined in the Purchase Agreement) which at any time held
title to one or more Properties.
(110) "SHAREHOLDER LITIGATION" means any litigation (whether a court
proceeding, arbitration, mediation, administrative action or otherwise)
heretofore or hereafter commenced by any limited partners in the Sellers
against the Sellers, the general partner(s) of the Sellers, Borrower,
Borrower's general partner, Holding Company, Whitehall and/or Lender in
connection with, arising from or relating to the Purchase Agreement, any of
the other "Transaction Documents" described therein, any of the "Proxy
Statements" described therein, any of the transactions contemplated by any
of the foregoing, any challenge to the fairness or the bidding process
leading up to such transactions (or any of them), and/or any of the matters
upon which any of the plaintiffs' claims in the class action litigation
described in Section 8.1(d) of the Purchase Agreement were based, in whole
or in part.
(111) "STATE" means the State of New York.
(112) "STORAGE PROPERTIES" means, collectively, those Properties which
have a "Self Storage" property type designation on Schedule 1.1(A).
(113) "TAXES" has the meaning set forth in Section 8.10 hereof.
(114) "TENANT" means the tenant or lessee under any Lease or any other
occupant of any Property pursuant to any legal right.
(115) "TENANT ALLOWANCES" means, with respect to Leases executed after
the Closing Date (a) moving expenses of the Tenant not to exceed three
dollars ($3.00) per square foot of rentable space to be leased by such
Tenant under the Lease and (b) buyout payments to a Tenant to pay or
reimburse such Tenant for amounts required to be paid to the landlord of
the space which was leased and surrendered by such Tenant for terminating
such lease prior to its stated expiration date, provided that such moving
expenses and buyout
-14-
<PAGE>
payments are commercially reasonable and customary for the area in which
the particular Property is located.
(116) "TENANT IMPROVEMENTS" means (a) tenant improvements which are
paid for by Borrower or reimbursed to Tenants in connection with Leases
which are commercially reasonable and customary for the area in which the
particular Property is located and (b) Tenant Allowances.
(117) "TERM" means the period commencing as of the Closing Date and
ending on the close of business on the Maturity Date.
(118) "TITLE COMPANY" means Lawyers Title Insurance Corporation.
(119) "TITLE POLICY" means with respect to each Property, an ALTA
mortgagee's title insurance policy as more particularly described on
Schedule 2.1 attached hereto.
(120) "TO BORROWER'S KNOWLEDGE" means to the knowledge of Whitehall
and any Persons which are Affiliates of Whitehall prior to the Closing
Date, but without any imputed knowledge from (a) any prior owner of any the
Properties, (b) any Persons which, prior to the Closing Date, are
Affiliates of any such prior owner, or (c) any other Persons which, prior
to the Closing Date, were partners, directors, officers, members,
principals, trustees, stockholders, consultants or employees of any such
prior owner or any such Affiliate.
(121) "WHITEHALL" means Whitehall Street Real Estate Limited
Partnership XI, a Delaware limited partnership.
(122) "WHITEHALL XII" means Whitehall Street Real Estate Limited
Partnership XII, a Delaware limited partnership.
(123) "WHITEHALL INDEMNITY" means that certain Indemnification
Agreement executed by Whitehall and Whitehall XII in favor of Lender with
respect to Shareholder Litigation, in form and substance satisfactory to
Lender.
(124) "WHITEHALL NET WORTH" means the "Net Worth" of Whitehall and
Whitehall XII as defined in the Whitehall Indemnity.
(125) "WORK" has the meaning set forth in Section 3.2 hereof.
(126) "WORKING CAPITAL ADVANCE" means an Advance made by Lender to
Borrower for the purpose of reimbursing Borrower for, or paying for,
certain costs in respect of Capital Expenditures, Tenant Improvements
and/or Leasing Costs.
(127) "WORKING CAPITAL ADVANCE ALLOCATION" means $10,000,000.00.
-15-
<PAGE>
(128) "WORKING CAPITAL BUDGET" means, for any Property, the budget
approved by Lender setting forth the amount of Working Capital Advances
allocated to pay Capital Expenditures, Tenant Improvements and Leasing
Costs incurred in connection with such Property.
ARTICLE 2
LOAN TERMS
Section 2.1 THE LOAN ADVANCES.
(1) PURPOSES. Lender agrees to make to Borrower the Loan, to be funded
in one or more Advances and repaid in accordance with this Agreement, for
the following purposes: (a) to finance or refinance the Properties and pay
certain Loan closing costs; and (b) to fund Working Capital Advances.
(2) AMOUNTS. The aggregate amount of all Advances on a cumulative
basis shall not exceed the Maximum Loan Amount. In addition, the aggregate
amount of all Working Capital Advances, on a cumulative basis, shall not
exceed the Working Capital Advance Allocation.
(3) FREQUENCY. Advances shall not be made more frequently than once
per calendar month.
(4) INITIAL ADVANCE. Provided Borrower has satisfied all terms and
conditions described in Part A of Schedule 2.1 hereto, Lender shall
disburse the Initial Advance on the Closing Date as follows:
(a) An amount equal to the commitment fee owing to Lender, plus
all other sums owing to Lender described in Part A of Schedule 2.1
hereto, shall be disbursed to Lender in payment of such sums;
(b) The amount specified in Lender's escrow and recording
instructions shall be disbursed by wire transfer to the Title Company
for credit to the escrow established to consummate the Loan closing,
which shall be disbursed by the Title Company in accordance with
Lender's escrow and recording instructions to finance the acquisition
of the Properties and to pay certain Loan closing costs; and
(c) The balance of the Initial Advance by wire transfer to
Borrower (or as otherwise requested by Borrower).
-16-
<PAGE>
(5) WORKING CAPITAL ADVANCES. During the initial Term, Lender shall
make Working Capital Advances to Borrower subject to and in accordance with
the following terms and conditions:
(a) Working Capital Advances for each Property shall be made in
accordance with the allocations set forth in the Working Capital
Budget for such Property. The Working Capital Budgets for the
Properties are set forth in Schedule 2.1(5) hereof. Unless Lender
otherwise consents in writing, Borrower shall not, on a cumulative,
aggregate basis, reallocate more than five percent (5.0%) of the Loan
funds within a Working Capital Budget. Subject to Lender's prior
written consent in each instance, Borrower may reallocate demonstrated
surplus Loan funds (i) among categories within any Working Capital
Budget (except that such consent is not required to the extent such
reallocation is permitted under the immediately preceding sentence),
or (ii) under any Working Capital Budget to the Working Capital Budget
of one or more other Properties (whether such reallocation is
requested in connection with a sale of a Property, the failure to add
an Additional Property to the Properties, or otherwise).
(b) As to each Working Capital Advance, Borrower shall have
satisfied the terms and conditions set forth in Parts B and C of
Schedule 2.1 hereto.
(c) The amount of each Working Capital Advance shall in no event
exceed the lesser of (i) an amount which, when added to the Loan
balance, results in a sum equal to the Cash On Cash Limit, or (ii)
eighty percent (80%) of the actual costs incurred by Borrower from
third parties in respect of the Tenant Improvements, Leasing Costs or
Capital Expenditures for which such Advance is requested. In no event
shall any Working Capital Advance be used to pay or reimburse Borrower
for any commissions, fees, expenses or costs charged by or to be paid
for services rendered by Borrower or Borrower's Affiliates.
(d) Each Working Capital Advance shall be in an amount not less
than Fifty Thousand Dollars ($50,000).
(6) ACQUISITION ADVANCES. As to each Additional Property (if any),
Lender shall make an Acquisition Advance to Borrower to finance or
refinance such Additional Property and to pay certain Loan funding costs in
connection therewith, subject to and in accordance with the following terms
and conditions:
(a) The amount of the Acquisition Advance shall not exceed the
least of (i) the amount designated as the "Loan Basis" amount for such
Additional Property, as set forth on Schedule 1.1(B), (ii) an amount
which, when added to the then existing Loan balance, results in a
10.75% Cash On Cash Return, (iii) an amount which, when added to the
then current Loan balance, results in a 1.15 to 1.00 Debt Service
Coverage Ratio, and (iv) an amount equal to eighty percent (80%) of
the acquisition costs incurred by Borrower for such Additional
Property, including the
-17-
<PAGE>
costs of any interest rate cap agreement (or amendment thereto) which
Borrower is required to obtain in connection with such Acquisition
Advance under the terms of this Agreement. Lender shall determine
Borrower's satisfaction of the foregoing condition based upon an
updated Operating Cash Flow audit of the Additional Property and each
of the Properties.
(b) As to each Acquisition Advance, Borrower shall have satisfied
the conditions specified in paragraphs 1, 4, 9, 13, 14, 15, 16, 19,
20, 24, 26, 28, 29, 30, 31, 32, 35, 36, 40, 41 and 42 of Part A of
Schedule 2.1.
(c) Borrower shall have satisfied the terms and conditions set
forth in Part B of Schedule 2.1.
(d) No new or additional information shall have become known to
Lender since the Closing Date which Lender, in it sole discretion,
determines would cause any of the environmental or engineering reports
with respect to the Additional Property, which were reviewed by Lender
prior to the Closing Date, to be inaccurate in any material respect.
(e) Borrower shall have paid to Lender, as the balance of the
commitment fee owing with respect to the Additional Property, an
amount equal to .67% of the amount of the Acquisition Advance funded.
(f) Borrower shall have confirmed in writing the revised Cash On
Cash Limit and the revised Debt Service Coverage Ratio Limit as
determined by Lender in connection with the addition of the Additional
Property to the Properties.
(g) Notwithstanding anything to the contrary contained in this
Agreement, Borrower shall not be entitled to any Acquisition Advance
after the Acquisition Advance Termination Date, and all undisbursed
Loan proceeds available for Acquisition Advances but which are not
advanced on or before the Acquisition Advance Termination Date shall
be cancelled.
(7) TIMING OF ADDITIONAL ADVANCES. Each Advance following the Initial
Advance shall be made no later than 5:00 p.m. (New York City time) on the
fifth (5th) Business Day after receipt by Lender of a Notice of Additional
Advance for the requested Advance and satisfaction of all conditions to
making such Advance (as specified in this Section 2.1 and in Schedule 2.1
hereof).
(8) NO REVOLVING ADVANCES. The Loan is not a revolving credit loan,
and Borrower is not entitled to any readvances of any portion of the Loan
which it may (or is otherwise required to) prepay pursuant to the
provisions of this Agreement.
-18-
<PAGE>
Section 2.2 INTEREST RATE; LATE CHARGE.
(1) CONTRACT RATE. The outstanding principal balance of the Loan
(including any amounts added to principal under the Loan Documents) shall
bear interest at a rate of interest equal to three hundred twenty-five
(325) basis points in excess of the LIBOR Rate (the "CONTRACT RATE").
(2) COMPUTATION OF INTEREST. Interest shall be computed on the basis
of a fraction, the denominator of which is three hundred sixty (360) and
the numerator of which is the actual number of days elapsed from the date
of the Initial Advance or the date on which the immediately preceding
payment was due.
(3) LATE CHARGE. If Borrower fails to pay any installment of interest
or principal within five (5) days after the date on which the same is due
(other than the payment due on the Maturity Date), Borrower shall pay to
Lender a late charge on such past-due amount, as liquidated damages and not
as a penalty, equal to two percent (2%) of such amount, notwithstanding the
date on which such payment is actually paid to Lender; provided, however,
that if any court of competent jurisdiction determines that such
delinquency charge under this Section 2.2(3) is not liquidated damages for
such delinquency (as contemplated by Borrower and Lender), and is deemed to
be interest in excess of the maximum amount of interest allowed by
applicable Law, the amount actually collected by Lender in excess of such
lawful amount shall be applied in accordance with the provisions of Section
11.3 hereof. While any Event of Default exists, the Loan shall bear
interest at the Default Rate.
Section 2.3 TERMS OF PAYMENT. The Loan shall be payable as follows:
(1) INTEREST. Commencing on March 1, 2000, Borrower shall pay interest
in arrears on the first Business Day of each month (the "INTEREST PAYMENT
DATE") until the Maturity Date, when all amounts secured by and outstanding
under the Loan Documents shall be paid in full.
(2) PRINCIPAL AMORTIZATION. During the initial Term, the Loan shall be
an interest-only loan and Borrower shall not be required to make any
regularly scheduled principal amortization payments. If the Term is
extended for one or both of the 12-month periods contemplated by Section
2.3(3) below (each, an "EXTENSION PERIOD"), then commencing on March 1,
2003, and continuing on each Interest Payment Date thereafter until all
Obligations are paid in full, Borrower shall make monthly principal
amortization payments in accordance with this Section 2.3(2), which
payments shall be applied to the outstanding principal balance of the Loan.
For each Extension Period, Lender shall calculate the total amount of
principal payments payable for such Extension Period based upon a 25-year
amortization schedule, an amortization period which begins on February 1,
2003, a fixed interest rate equal to the Contract Rate in effect as of
February 1 of such Extension Period, and the outstanding principal balance
of the Loan as of February 1 of such Extension Period. The amount of the
monthly principal amortization payment for a given Extension
-19-
<PAGE>
Period shall be the amount determined by dividing the aggregate amount of
all monthly principal amortization payments payable for such Extension
Period (calculated as set forth above) by twelve (12). The foregoing
notwithstanding, upon application of any Release Payment or any other
permitted or required prepayment of the Loan (other than the amortization
payments required by this Section 2.3(2)) to the Loan balance, Lender shall
recalculate the amount of the monthly principal amortization payments owing
for the remainder of the then current Extension Period, based upon the new
Loan balance and the Contract Rate then in effect, and such revised
principal amortization payment shall be due commencing on the first
Interest Payment Date occurring after the date the Release Payment (or such
other permitted or required prepayment) is made.
(3) MATURITY. On the Maturity Date, Borrower shall pay to Lender all
outstanding principal, accrued and unpaid interest, and any other amounts
due under the Loan Documents. Subject to the provisions of this paragraph,
Borrower, at its option, may extend the Term for two (2) 12-month periods,
by giving written notice (the "EXTENSION NOTICE") to Lender of Borrower's
election to obtain each such extension not less than sixty (60) days prior
to the expiration of the original Term or the first extension period, as
applicable. If Borrower elects to so extend the Term, all of the other
terms and conditions of this Agreement and the other Loan Documents shall
remain in full force and effect and unmodified except that all undisbursed
Loan funds shall be canceled as of the original Maturity Date and Borrower
shall have no further right to extend the Term after the second extension.
Borrower's right to extend the Term is subject to the satisfaction of each
of the following conditions as to each extension:
(a) No Event of Default has occurred and is continuing on the
date on which Borrower gives Lender the Extension Notice and on the
last day of the then existing Term;
(b) The Cash On Cash Return equals or exceeds twelve and one-half
percent (12.50%), and (b) the Debt Service Coverage Ratio equals or
exceeds 1.40 to 1.00;
(c) Borrower shall have paid to Lender an extension fee (for each
such extension) equal to one-quarter of one percent (0.25%) of the
outstanding principal balance of the Loan (it being the parties'
understanding and agreement that any portion of the Maximum Loan
Amount which is undisbursed as of the end of the initial Term shall be
canceled and no longer available for disbursement);
(d) Borrower shall have completed (i) all structural repairs
described in paragraph 2 on Schedule 8.19 which, in accordance with
such paragraph (and any revised work plan agreed to by the parties
pursuant thereto), are required to be completed prior to commencement
of such extension, and (ii) all Remedial Action described in paragraph
3 on Schedule 8.19 hereof (including the delivery of all required
"closure" or "no further action" letters with respect to such Remedial
Action);
-20-
<PAGE>
(e) Borrower shall execute and deliver such other instruments,
certificates, opinions of counsel and documentation as Lender shall
reasonably request in order to preserve, confirm or secure the Liens
and security granted to Lender by the Loan Documents, including any
amendments, modifications or supplements to any of the Loan Documents,
endorsements to Title Policies and, if required by Lender, estoppel
and other certificates; and
(f) Borrower shall pay for any and all reasonable out-of-pocket
costs and expenses, including reasonable attorneys' fees and
disbursements, incurred by Lender in connection with or arising out of
the extension of the Term.
(4) PREPAYMENT. Except as provided below, at any time during the Term,
upon not less than ten (10) days' prior written notice to Lender, Borrower
may prepay the Loan in whole or in part without premium or penalty,
provided that each such prepayment shall be accompanied by the payment of
accrued and unpaid interest on the principal amount being prepaid, through
the date of prepayment, and any other costs or expenses which are payable
to Lender in accordance with the terms hereof or any other Loan Document.
The foregoing notwithstanding, prior to August 1, 2001, the Loan shall be
closed to prepayment in whole, and partial prepayment shall only be
permitted in connection with a sale or other transfer of a Property to a
Person which is not an Affiliate of Borrower or Whitehall. From and after
August 1, 2001, Loan shall be closed to partial prepayment from a refinance
(whether by third party financing, additional capital contributions, or
otherwise) of one or more Properties and from a sale or other transfer or
conveyance of one or more Properties to an Affiliate of Borrower or
Whitehall. A prepayment premium equal to two percent (2.0%) of the
outstanding principal balance of the Loan shall be payable if an Event of
Default occurs and the Loan is accelerated prior to August 1, 2001.
Borrower acknowledges that the prepayment premium required by this Section
2.3(4) constitutes partial compensation to Lender for the costs of
reinvesting the Loan proceeds and for loss of the contracted rate of return
on the Loan. Furthermore, Borrower acknowledges that the loss that may be
sustained by Lender as a result of such prepayment by Borrower is not
susceptible of precise calculation and the prepayment premium represents
the good faith effort of Borrower and Lender to compensate Lender for such
loss. Borrower confirms that Lender's agreement to make the Loan at the
interest rate and on the other terms set forth herein constitutes adequate
and valuable consideration, given individual weight by Borrower, for the
prepayment provision set forth in this Section. Notwithstanding anything to
the contrary contained in this Section 2.3(4), none of the foregoing
restrictions on prepayments of the Loan shall apply to a prepayment
resulting from a sale, transfer or refinance of the Fidelity Federal
Property (provided that the release of such Property shall be subject to
Section 2.4).
(5) EARLY LOAN ACCELERATION. Notwithstanding anything to the contrary
contained in this Agreement, if at any time (a) the outstanding principal
balance of the Loan is less than Fifteen Million Dollars ($15,000,000) and
(b) the Cash On Cash Return is less than twelve percent (12.0%), Lender
shall have the right to accelerate the Loan, whereupon all amounts due
under the Loan Documents shall become due and payable without any
-21-
<PAGE>
penalty or premium on the date which is one hundred twenty (120) days (the
"EARLY TERMINATION DATE") after the date that Lender provides Borrower with
notice of its intent to accelerate the Loan pursuant to the provisions of
this paragraph; provided that Borrower shall have the right to repay the
Loan without penalty or premium (including the premium contemplated in
Section 2.3(4) above, if payable) on any earlier date after Borrower's
receipt of such notice. Borrower shall pay to Lender, in immediately
available funds, all outstanding principal, accrued and unpaid interest,
and any other amounts due under the Loan Documents as of the Early
Termination Date (or as of such earlier date on which Borrower elects to
repay the Loan, as permitted in this paragraph).
(6) APPLICATION OF PAYMENTS. All payments received by Lender under the
Loan Documents shall be applied: first, to any fees and expenses due to
Lender under the Loan Documents; second, to any Default Rate interest or
late charges; third, to accrued and unpaid interest; and fourth, to the
principal sum and other amounts owing under the Loan Documents.
(7) LENDER ADVANCES TO COVER BORROWER'S PAYMENTS. Lender is authorized
to, and at is sole option may, make advances on behalf of Borrower for
payment of all fees, expenses, charges, costs, principal, interest and
other sums incurred or payable by Borrower hereunder when and as Borrower
fails to promptly pay any such amounts (after any applicable grace period).
To the extent permitted by Law, any such advances made by Lender shall be
added to the Obligations, shall bear interest from the date advanced until
paid at the Default Rate and shall be secured by the Collateral.
(8) RECEIPT OF PAYMENTS. Borrower shall make each payment under this
Agreement not later than 2:00 p.m. (New York City time) on the day when due
in lawful money of the United States of America in immediately available
funds to Lender's depository bank in the United States as designated by
Lender from time to time for deposit in Lender's depositary account. For
purposes only of computing interest hereunder, all payments shall be
applied by Lender to the Loan on the date payment has been credited by
Lender's depository bank to Lender's account in immediately available
funds.
Section 2.4 COLLATERAL; RELEASES OF COLLATERAL. The Loan and all other
Obligations (other than Borrower's Obligations under the Hazardous Substances
Indemnity Agreement) shall be secured by the Collateral. Except as expressly set
forth below in this Section, Lender shall have no obligation to release any of
the Collateral until all Obligations have been paid and performed in full and
all obligations of Lender under this Agreement and the other Loan Documents have
terminated. Borrower shall be entitled to obtain the release of a Property from
the Lien of the Loan Documents in connection with a Capital Transaction
(excluding a Capital Transaction consisting of an event giving rise to an
insurance recovery or condemnation award in excess of repair/restoration costs),
provided that all of the following conditions are satisfied:
(1) Borrower provides Lender with reasonable prior written notice (the
"PARTIAL RELEASE NOTICE") of the proposed release together with copies of
any documents which Borrower requests that Lender execute in connection
with such proposed release.
-22-
<PAGE>
(2) Concurrently with Lender's release of the Property, Borrower shall
pay to Lender an amount (the "RELEASE PAYMENT") determined as follows:
(a) if, after giving effect to the proposed release, (i) the Loan
balance does not exceed the least of (A) eighty percent (80%) of the
sum of the Property Basis amounts for all the then remaining
Properties, (B) the Cash On Cash Limit, and (C) the Debt Service
Coverage Ratio Limit, and (ii) the Discounted Release Amount (defined
below) is less than the Discounted Funding Amount (defined below),
then the Release Payment shall be equal to one-hundred ten percent
(110%) of the Adjusted Loan Basis of the Property to be released; or
(b) if either or both of the conditions specified in subparagraph
(a) immediately above are not satisfied, then the Release Payment
shall be equal to one-hundred twenty percent (120%) of the Adjusted
Loan Basis of the Property to be released;
provided, however, if the release involves an Impaired Property or a
Default Property (pursuant to Borrower's rights to obtain a release of such
Property set forth elsewhere in this Agreement), then the Release Payment
shall be equal to the Adjusted Loan Basis of such Property. Notwithstanding
the foregoing, in no event shall the Release Payment for any Property
exceed the then outstanding Obligations. As used above, "DISCOUNTED RELEASE
AMOUNT" means, as of any date, the aggregate difference between the Release
Payments paid by Borrower that were calculated pursuant to subparagraph (a)
immediately above (including, for purposes of such calculation, the Release
Payment to be paid in connection with the proposed release assuming it is
calculated pursuant to subparagraph (a) above) and the amount of such
Release Payments which would have been paid by Borrower if such Release
Payments had been calculated in accordance with subparagraph (b)
immediately above. As used above, "DISCOUNTED FUNDING AMOUNT" means the
lesser of (x) $4,300,000, and (y) the positive difference, if any, obtained
by subtracting the amount of the Initial Advance from an amount equal to
eighty percent (80%) of the aggregate acquisition costs for all Properties.
(3) Except as provided in this paragraph, no Event of Default has
occurred and is continuing on the date on which Borrower gives Lender the
Partial Release Notice and on the date of delivery of the release;
provided, however, if the Property to be released is a Default Property and
the only Event of Default which exists is the Event of Default which caused
such Property to be designated as a Default Property (and which arises from
the occurrence of a breach, default, failure of condition or other event
for which no cure period is provided), then this condition shall be waived
so long as the Default Property is released within 10 days of notice from
Lender, as required in the last paragraph of Section 10.1. In addition,
Lender shall release a Property which is the subject of a Complete Taking
notwithstanding the existence of an Event of Default, if and only if (a)
Borrower has otherwise satisfied the conditions set forth in this Section
2.4 to the release of such Property, and (b) Borrower pays to Lender, as
the Release Payment for such Property, an amount equal
-23-
<PAGE>
to 100% of the Net Capital Proceeds from the Complete Taking (it being
understood by the parties that if no Event of Default exists, the amount to
be paid by Borrower shall be the Release Payment as determined in
accordance with the paragraph (2) above).
(4) Borrower shall execute and deliver such other instruments,
certificates, opinions of counsel and documentation as Lender shall
reasonably request in order to preserve, confirm or secure the Liens and
security granted to Lender by the Loan Documents, including any amendments,
modifications or supplements to any of the Loan Documents and partial
release endorsements to the existing Title Policies.
(5) Borrower shall pay for any and all reasonable out-of-pocket costs
and expenses incurred in connection with any proposed release, including
reasonable attorneys' fees and disbursements and all title insurance
premiums for any endorsements to any existing Title Policies reasonably
required by Lender in connection with such proposed release.
(6) Borrower shall deliver to Lender evidence reasonably satisfactory
to Lender that all amounts owing to any parties in connection with the
transaction relating to the proposed release have been paid in full, or are
simultaneously paid in full at closing, or adequate Reserves therefor are
established by Borrower in cash with respect to contingent or other
liabilities that may arise out of such transaction.
(7) Unless the proposed release will repay the Loan in full (and
terminate all of Lender's obligations hereunder), or the proposed release
involves the Fidelity Federal Property or an Impaired Property or a Default
Property, the release shall be in connection with a sale or other transfer
of the Property to a Person which is not an Affiliate of Borrower or
Whitehall. If the proposed release involves the Fidelity Federal Property
or an Impaired Property or a Default Property, then concurrently with the
release Borrower shall transfer the Property to an entity which may be
related to Borrower, so long as Borrower is not directly or indirectly
liable on a recourse basis for any of such entity's indebtedness or
obligations to any Person.
(8) If the Release Payment to be paid in connection with the proposed
release would reduce the Loan Balance to an amount less than $30,000,000,
then in addition to the foregoing conditions, such release shall be subject
to the additional condition that either (a) the Fidelity Federal Property
has been previously released, or is being concurrently released, in
accordance with this Section 2.4, or (b) Borrower shall have delivered to
Lender a consent to encumbrance and estoppel, substantially in the form
previously provided by Lender to Borrower, executed by each of the lessors
under the Fidelity Federal Ground Leases (and by any Person owning a fee
interest in any portion of the Fidelity Federal Property).
Section 2.5 ADJUSTMENTS TO ADJUSTED LOAN BASIS. The Adjusted Loan Basis
for each Property shall be increased dollar for dollar for Working Capital
Advances and other Advances which relate directly to such Property. The Adjusted
Loan Basis for each Property shall be decreased dollar for dollar for
prepayments of principal which relate directly to such Property (e.g.,
-24-
<PAGE>
casualty or condemnation proceeds, or a Release Payment) and any prepayment
proceeds in excess of the Adjusted Loan Basis (e.g., the excess portion of the
Release Payment for any specific Property) and any other prepayment of principal
not directly related to a specific Property shall be allocated by Lender among
the Properties, on a pro rata basis, in accordance with each Property's Adjusted
Loan Basis.
Section 2.6 CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY.
(1) If Lender shall determine that any new applicable Law adopted
after the Closing Date regarding capital adequacy, or any change after the
Closing Date in any existing Law, or any change after the Closing Date in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof or compliance by Lender (or its lending office) with
any request or directive regarding capital adequacy (whether or not having
the force of law) of any such Governmental Authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on Lender's capital as a consequence of its obligations hereunder or
credit extended by it hereunder to a level below that which Lender could
have achieved but for such adoption, change or compliance by an amount
deemed by Lender to be material, then from time to time as promptly
specified by Lender in writing, Borrower shall pay such additional amount
or amounts as will compensate Lender for such reduction; provided that
Borrower shall not be required to pay any amounts pursuant to this
paragraph (1) to a subsequent holder of the Note to the extent that such
amounts would not have been payable had GECC continued to hold the Note.
(2) Upon the occurrence of any of the events set forth in paragraph
(1) above, Lender shall promptly notify Borrower in writing of the
occurrence of such event. If requested by Borrower, in connection with any
demand for payment pursuant to this Section, Lender shall provide to
Borrower a summary setting forth in reasonable detail the basis for such
demand, the amount required to be paid by Borrower to Lender and the
computations made by Lender to determine such amount (which computations
shall be deemed conclusive absent manifest error).
ARTICLE 3
INSURANCE, CONDEMNATION, DEPOSITS AND RESERVES
Section 3.1 INSURANCE. Borrower shall maintain insurance with respect
to the Properties as follows:
(1) PROPERTY; BUSINESS INTERRUPTION. Borrower shall keep the buildings
and the improvements located on each Property insured (a) against loss or
damage by fire, lightning, windstorm, tornado, hail and such other further
and additional hazards of whatever kind or nature as are now or hereafter
may be covered by standard extended coverage "all risk" endorsements
(including vandalism, malicious mischief and damage by water (other
-25-
<PAGE>
than flood)) of whatsoever kind, in an amount not less than one hundred
percent (100%) of the full replacement cost of such improvements including
the cost of debris removal, but excluding the value of foundations and
excavation and surface parking, (b) against loss or damage by earthquake,
including subsidence, as reasonably required by Lender, and (c) against
loss of rentals and business interruption due to any of the foregoing
causes, in an amount not less than twelve (12) months anticipated gross
rental income or gross business earnings, as applicable.
(2) LIABILITY. Borrower shall maintain commercial general liability
insurance with respect to each Property and the operations related thereto,
whether conducted on or off such Property, against liability for personal
injury, including bodily injury and death, and property damage in an amount
not less than $1,000,000 per Property and per occurrence, with a $4,000,000
per Property umbrella policy. Such liability insurance shall be on an
occurrence basis, shall provide (but need not specifically describe)
coverage for sprinkler leakage liability and water damage legal liability,
and shall specifically include premises operations, products liability, and
broad form contractual coverage. Borrower also shall maintain motor vehicle
liability for all owned and non-owned vehicles, including rented and leased
vehicles.
(3) WORKERS' COMPENSATION. Workers' compensation for employees of
Borrower as required by applicable Law.
(4) FORM AND QUALITY. All casualty and business interruption or rental
income insurance provided hereunder shall name Lender under a standard
"non-contributory mortgagee" endorsement or its equivalent, which shall be
acceptable to Lender, and liability insurance shall be evidenced by
certificates of insurance issued to Lender and naming Lender as additional
insured. All property insurance shall provide for loss payable to Lender as
provided in this Agreement, shall be provided by insurance companies which
have a Best's rating of at least "A-IX" or otherwise shall be acceptable to
Lender in its reasonable discretion. Every policy of insurance shall
contain an agreement by the insurer that it will not cancel such policy
except after thirty (30) days prior written notice to Lender, if obtainable
(but in no event less than ten (10) days) and that any loss payable
thereunder shall be payable notwithstanding any act or negligence of Lender
and Borrower which might, absent such agreement, result in a forfeiture of
all or a part of such insurance payment and notwithstanding (a) occupancy
or use of the Property for purposes more hazardous than permitted by the
terms of such policy, (b) any foreclosure or other action or proceeding
taken by Lender pursuant to the Deed of Trust encumbering the Property or
(c) any change in title to or ownership of the Property. All deductible
amounts under the insurance policies required to be carried pursuant to
this Section 3.1 shall be subject to Lender's reasonable approval. At
Lender's request, Borrower shall deliver to Lender copies of, or (at
Borrower's option) certificates of insurance for, all such policies of
insurance. If any insurance required to be provided hereunder shall expire,
be withdrawn, become void by breach of any condition thereof by Borrower
with respect to any Property, or become void or questionable by reason of
the failure or impairment of the capital of any insurer, Borrower
immediately shall obtain new or additional insurance which shall conform to
the requirements hereof.
-26-
<PAGE>
Borrower shall not take out any separate or additional insurance which is
contributing in the event of loss unless it is properly endorsed and
otherwise satisfactory to Lender in all respects. Lender shall have the
right to conduct a periodic audit of Borrower's procedures in respect of
insurance matters and Borrower shall cooperate with Lender therein.
(5) EVIDENCE OF INSURANCE. Borrower shall (a) pay as they become due
all premiums for the insurance required hereunder, and (b) not later than
thirty (30) days if available (but in no event less than ten (10) days)
prior to the expiration of each such policy, deliver a certificate of
insurance evidencing the insurance required to be provided hereunder for a
period of not less than one year, marked "premium paid," or accompanied by
such other evidence of payment as shall be reasonably satisfactory to
Lender.
(6) LENDER'S RIGHT TO PLACE INSURANCE. If Borrower shall be in default
of its obligation to insure any Property in accordance with the provisions
hereof, Lender, at its option and without notice, may (but shall have no
obligation to) obtain such insurance from year to year, and pay the premium
or premiums therefor, and, in such event, the amount of all such premiums
paid by Lender (a) shall be deemed to be Obligations, (b) shall be secured
by the Collateral prior to any right or title to, or interest in, or claim
upon, the Collateral subordinate to the Lien of Lender on the Collateral,
and (c) shall be immediately due and payable, on demand, together with
interest thereon at the Default Rate, from the date of any such payment by
Lender to the date of repayment to Lender.
(7) INCREASES IN INSURANCE AMOUNTS. Borrower shall increase the amount
of all-risk casualty insurance required to be provided pursuant to the
provisions of Section 3.1 hereof at the time that each such policy of
insurance is renewed (but, in any event, not less frequently than once
during each twelve (12) month period) by using the F.W. Dodge Building
Index (or, if such index is no longer available, such other similar
available index acceptable to Lender) to determine whether there shall have
been an increase in the replacement cost of the improvement since the most
recent adjustment to any such policy and, if there shall have been any such
increase, the amount of insurance required to be provided hereunder shall
be adjusted accordingly.
(8) COMPLIANCE WITH POLICY REQUIREMENTS. Borrower promptly shall
comply with (a) all of the provisions of each such insurance policy
affecting the Properties, and (b) all of the requirements of the insurers
thereunder applicable to Borrower or to any improvements located on the
Properties or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or restoration of any of the improvements
located on the Properties, even if such compliance would necessitate
structural changes or improvements or would result in interference with the
use or enjoyment of the Properties or any portion thereof.
(9) ADDITIONAL INSURANCE. Lender shall have the right from time to
time to require Borrower to procure such other and additional insurance,
and increased amounts, relating to the Properties in such amounts and
against such insurable events or occurrences as Lender may reasonably
require and which are consistent with industry practice for assets
-27-
<PAGE>
similar to the Properties, including (a) if the Property is located in a
federally designated "special flood hazard zone", flood, including surface
water; and (b) contingent liability from the operation of any building Laws
pertaining to non-conforming property.
Section 3.2 CASUALTY; USE AND APPLICATION OF INSURANCE PROCEEDS. In the
event of damage or destruction to any Property, or any portion thereof, whether
insured or uninsured, Borrower and Lender shall proceed as follows:
(1) Borrower promptly shall give written notice of such damage or
destruction to Lender (and upon such notification, Schedule 6.5 hereof
shall be deemed to have been automatically amended to reflect the matters
contained in such notification) and promptly shall cause the Property to be
secured in a safe manner and thereafter to prepare and submit a budget, and
after approval thereof, shall commence and diligently continue to perform
repair, restoration and rebuilding of the portion of the Property so
damaged or destroyed (the "WORK") to restore the Property in full
compliance with all legal requirements so that the Property shall be at
least equal in value and quality and general utility as it was prior to the
damage or destruction and, if the cost of the Work as estimated by Lender
shall exceed the sum of $100,000 ("MAJOR WORK"), then Borrower, prior to
the commencement of the Work, shall furnish to Lender (a) complete plans
and specifications for the Work (approved by all Governmental Authorities
whose approval is required at such time), for Lender's approval, which
approval shall not be unreasonably withheld or delayed, which plans and
specifications (as approved by Lender, the "APPROVED PLANS") shall bear the
signed approval thereof by the Architect and shall be accompanied by the
Architect's signed estimate, bearing the Architect's seal, of the entire
cost of completing the Work; (b) certified or photostatic copies of all
permits and approvals required by Law in connection with the commencement
and conduct of the Work; and (c) a payment and performance bond for and/or
guaranty of the payment for and completion of, the Work, which bond or
guaranty shall be in form reasonably satisfactory to Lender, shall be
signed by a surety or sureties, or guarantor or guarantors, as the case may
be, who are reasonably acceptable to Lender, and shall be in an amount of
not less than one hundred ten percent (110%) of the Architect's estimate of
the entire cost of completing the Work.
(2) Borrower shall not commence any Work until Borrower shall have
complied with the requirements referred to in paragraph (1) above, and
after commencing the Work, Borrower shall perform the Work diligently in a
good and workmanlike manner and in good faith in accordance with the
Approved Plans, if applicable, and in compliance with all applicable Laws.
(3) The casualty insurance policies required to be maintained in
accordance with this Agreement shall provide that the proceeds shall be
paid in accordance with the provisions of this paragraph. If the proceeds
exceed One Hundred Thousand Dollars ($100,000), Borrower promptly shall
deliver to Lender any proceeds which are paid directly to Borrower by the
casualty insurance carrier. All proceeds delivered to Lender as aforesaid,
together with all proceeds paid directly to Lender on account of damage or
destruction to the Property, less the cost, if any, to Lender of such
recovery and of paying out such proceeds
-28-
<PAGE>
(including reasonable attorneys' fees and other third party out-of-pocket
costs allocable to inspecting the Work and reviewing the plans and
specifications therefor), upon written request of Borrower, shall be
applied by Lender to the payment of the cost of the Work and shall be paid
out from time to time as the Work progresses to Borrower and/or, at
Lender's option exercisable from time to time, directly to the contractor,
subcontractors, materialmen, laborers, engineers, architects and other
persons rendering services or materials in connection with the Work, except
as otherwise hereinafter provided, but subject to the following conditions,
any of which Lender may waive:
(a) If the Work to be done is Major Work, as reasonably
determined by Lender, the Architect shall administer the Work.
(b) Each request for payment shall be made at least ten (10) days
prior to the requested date of disbursement and shall be accompanied
by a certificate of an officer of the general partner of Borrower
stating that (i) all of the Work completed has been done in a good and
workmanlike manner and in material compliance with the Approved Plans
(if applicable), and in accordance with all applicable provisions of
Law; (ii) the sum requested is justly required to reimburse Borrower
for payments by Borrower to, or is justly due to, the contractor,
subcontractors, materialmen, laborers, engineers, architects or other
persons rendering services or supplying materials in connection with
the Work (giving a brief description of such services and materials),
and that when added to all sums previously paid out by Lender, if any,
the resulting sum does not exceed the value of the Work done to the
date of such certificate; and (iii) the amount of proceeds remaining
in the hands of Lender, together with other funds otherwise available
to Borrower, will be sufficient on completion of the Work to pay for
the same in full (giving in such reasonable detail as Lender may
require an estimate of the cost of such completion and, if such other
funds are required, as to the sources of such funds). If the Work is
structural or Major Work, as reasonably determined by Lender, then
each request for payment therefor also shall be accompanied by a
certificate of the Architect confirming, in Architect's professional
opinion, the matters listed in clauses (i) and (ii) of the preceding
sentence.
(c) Each request shall be accompanied by waivers or releases of
liens, reasonably satisfactory to Lender, covering that part of the
Work previously paid for, if any, and by a search prepared by a title
company or other evidence satisfactory to Lender showing that any
mechanic's lien or other lien or instrument for the retention of title
relative to the Work which has been filed with respect to the Property
or any part thereof, other than Permitted Encumbrances and those which
may have been approved by Lender, have been discharged of record by
bonding or otherwise.
(d) None of the Material Leases in effect immediately prior to
the damage or destruction shall have been canceled, nor contain any
still exercisable right to cancel, due to such damage or destruction.
-29-
<PAGE>
(e) There shall be no Event of Default on the part of Borrower
under this Agreement or any other Loan Documents.
(f) With respect to the final advance only (which shall include
any retainage previously held back by Lender) the request for any
payment after the Work has been completed shall be accompanied by a
copy of any certificate or certificates required by Law to render
occupancy and operation of the Property legal.
(4) Upon completion of the Work and payment in full therefor, or upon
failure on the part of Borrower promptly to commence or diligently to
continue the Work, or at any time upon request by Borrower, the amount of
any proceeds then or thereafter in the hands of Lender shall be applied by
Lender to the Loan balance.
(5) In the event the Work to be done is not Major Work, the proceeds
shall be paid to Borrower to be applied toward the cost of the Work,
subject to the provisions of the foregoing paragraphs (1), (2), (3) and (4)
above, other than those applicable to Major Work.
(6) If: (a) within sixty (60) days after the occurrence of any damage
or destruction to a Property or any portion thereof requiring Major Work in
order to restore the Property, Borrower fails to submit to Lender for
Lender's approval plans and specifications for the repair, restoration and
rebuilding of the Property so damaged or destroyed (approved by the
Architect and by all Governmental Authorities whose approval is required at
such time); or (b) within ninety (90) days after such plans and
specifications are approved by all such Governmental Authorities, other
parties and Lender, Borrower fails to promptly commence such repair,
restoration and rebuilding; or (c) thereafter Borrower fails to diligently
continue such repair, restoration and rebuilding or is more than 30 days
delinquent in the payment to mechanics, materialmen or others of the costs
incurred in connection with such Work (other than as a result of Lender's
improper failure to release the insurance proceeds for such Work and other
than payment delays associated with amounts which Borrower is contesting in
good faith to the extent and in the manner expressly permitted under this
Agreement); or (d) in the case of any damage or destruction to the Property
or any part thereof not requiring Major Work in order to restore the
Property, as determined by Lender, if Borrower fails to promptly repair,
restore and rebuild the Property so damaged or destroyed, or if Borrower in
any other respect fails to comply with its restoration obligations under
this Section 3.2, then, in addition to all other rights herein set forth,
and after giving Borrower ten (10) days' written notice of the
nonfulfillment of one or more of the foregoing conditions, Lender may, at
its option, perform or cause to be performed such repair, restoration and
rebuilding, and may take such other steps as it deems advisable to perform
such Work; provided, however, that Lender shall be permitted to give such
shorter notice (and in such manner) as is reasonably practical in case of
emergency circumstances. Lender may apply all or a portion of the proceeds
(without the need to fulfill any other requirements of this Section 3.2) to
reimburse Lender for all amounts expended or incurred by it in
-30-
<PAGE>
connection with the performance of such work, and any excess costs shall be
paid by Borrower to Lender upon demand.
Section 3.3 CONDEMNATION.
(1) Borrower, immediately upon obtaining actual knowledge of the
institution of any proceedings for the condemnation of any Property or any
portion thereof, shall notify Lender of the pendency of such proceedings
(and upon such notification, Schedule 6.4 hereof shall be deemed to have
automatically been modified to reflect the matters contained in such
notification). Lender, at its election and in its discretion, may
participate in any such proceedings and Borrower, from time to time, shall
deliver to Lender all instruments requested by Lender to permit such
participation. All awards which are payable to Borrower from a condemnation
or other taking, or purchase in lieu thereof, of any Property or any
portion thereof, shall be paid and applied in accordance with the
provisions of this Section 3.3. All such awards are hereby assigned to and
shall be paid to Lender. Borrower, upon request by Lender, shall make,
execute and deliver any and all instruments requested for the purposes of
confirming the assignment of the aforesaid awards and compensation to
Lender free and clear of any Liens. Borrower hereby authorizes Lender to
collect and receive such awards, to give proper receipts and acquittances
therefor and, to apply the same in the manner set forth in this Agreement.
(2) In the event that a portion of any Property is taken or condemned
so that there is less than a Complete Taking, then Borrower promptly shall
commence and diligently continue to repair, restore, replace or rebuild the
Property in accordance with the provisions of Section 3.2 hereof, as if
such taking or condemnation had resulted in a casualty to the Property, and
the proceeds of any award paid to Lender in connection therewith, shall be
made available to Borrower for such purposes; provided, however, that in
such event Borrower shall comply with, and such proceeds shall be disbursed
to Borrower in accordance with, the provisions of Section 3.2 hereof. In
the event of a Complete Taking, all Net Capital Proceeds therefrom shall be
applied in accordance with the release provisions in Section 2.4.
(3) Notwithstanding any taking by eminent domain, alteration of the
grade of any street or other injury to or decrease in value of any Property
by any Governmental Authority, Borrower shall continue to make all payments
due hereunder and under the other Loan Documents.
Section 3.4 DEPOSITS.
(1) CHARGES. Borrower shall segregate in a separate account held by
Borrower in a depository acceptable to Lender (the "CHARGES ACCOUNT") and
deposit therein on or before the twenty-fifth (25th) day of each month from
and after the Closing Date until the Obligations have been paid in full, an
amount equal to one-twelfth (1/12th) of the annual Charges in respect of
all Properties. Such deposits shall be used by Borrower to pay such Charges
prior to delinquency or any earlier date that any interest or penalty can
be imposed thereon. On the Closing Date, Borrower shall deposit into the
Charges Account an amount
-31-
<PAGE>
which when added to the monthly deposits required to be made thereafter
pursuant to this Section is sufficient to pay the next installment of such
Charges. From time to time, on demand by Lender, Borrower shall pay into
the Charges Account additional sums sufficient to permit payment of the
next due installments of such Charges, if, and to the extent that, the
required monthly deposits thereafter falling due before the respective
payment dates would otherwise be insufficient to permit the full payment
thereof.
(2) GENERAL REQUIREMENTS FOR FUNDS IN SEGREGATED ACCOUNTS. Borrower
shall irrevocably instruct and shall cause all depositories maintaining any
segregated accounts required under the terms of this Agreement (including
the Charges Account, the Security Deposits and Lease Buy Out Consideration
accounts and accounts in respect of any Impaired Properties) to, within
five (5) days after demand from Lender, deposit all funds deposited in such
segregated accounts maintained by Borrower into segregated accounts
maintained by Lender. Thereafter, Borrower shall cause all deposits which
Borrower otherwise would have been required to make into Borrower's
segregated accounts to be deposited in such accounts maintained by Lender.
Borrower shall contemporaneously with the delivery of such deposits to
Lender, deliver to Lender any security deposit in the form of a letter of
credit, certificate of deposit or similar non-cash form of credit
enhancement which exceeds $50,000. Upon any Event of Default, Lender may
apply any funds deposited in the accounts maintained by Lender or Borrower
to the payment of or to the performance of any Obligation, except for any
Security Deposit which, under the terms of the Lease to which it relates,
must be maintained in a segregated account. Borrower hereby designates
Lender as its attorney-in-fact, which designation is irrevocable and
coupled with an interest, to draw upon the accounts of Borrower in the name
of Borrower and to apply the funds therein as provided in the immediately
preceding sentence. As additional security for the Obligations, Borrower
hereby pledges to Lender, and grants to Lender a security interest in, all
Charges Accounts and all other segregated accounts required under this
Agreement (including the accounts maintained by Lender to the extent
Borrower has any interest therein), and all funds at any time on deposit
therein. Prior to the Closing Date, Borrower and Lender shall have executed
and delivered a notice to the depository at which any such account is held
(if such account is located in any state in which Lender determines such
notice is necessary or appropriate in connection with the pledge of, and
grant of security interest in, such account), which notice shall be
substantially in the form of Exhibit "B" hereto. Borrower shall deliver to
Lender monthly reports of all balances and activity with respect to each of
the segregated accounts required by the terms of this Agreement and any
other information reasonably requested by Lender.
-32-
<PAGE>
ARTICLE 4
ENVIRONMENTAL MATTERS
Section 4.1 CERTAIN DEFINITIONS. As used herein, the following terms
have the meanings indicated:
(1) "ENVIRONMENTAL LAWS" means all Laws, now or hereafter in effect,
and in each case as amended or supplemented from time to time, and any
judicial or administrative interpretation thereof, including any applicable
judicial or administrative order, consent decree or judgment, relative to
the applicable Property, relating to the regulation and protection of the
environment and natural resources (including ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
species and vegetation). "Environmental Laws" shall include Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
(42 U.S.C. ss. 9601 et seq.) ("CERCLA"); the Hazardous Material
Transportation Act, as amended (49 U.S.C. ss. 1801 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. ss. 136
et seq.); the Resource Conservation and Recovery Act, as amended (42 U.S.C.
ss. 6901 et seq.) ("RCRA"); the Toxic Substance Control Act, as amended (15
U.S.C. ss. 2601 et seq.); the Clean Air Act, as amended (42 U.S.C. ss. 740
et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C.
ss. 1251 et seq.); those portions of the Occupational Safety and Health
Act, as amended (29 U.S.C. ss. 651 et seq.) ("OSHA") concerning Hazardous
Materials; and the Safe Drinking Water Act, as amended (42 U.S.C. ss. 300f
et seq.), and any and all regulations promulgated thereunder, and all
analogous state and local counterparts or equivalents and any environmental
transfer of ownership notification or approval statutes such as the New
Jersey Industrial Site Recovery Act (N.J. Stat. Ann. ss. 13:1K-6 et seq.)
("ISRA").
(2) "ENVIRONMENTAL LIABILITIES AND COSTS" means, as to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses,
damages, punitive damages, consequential damages, treble damages, costs and
expenses (including all fees, disbursements and expenses of counsel,
experts and consultants and costs of investigation and feasibility
studies), fines, penalties, sanctions and interest incurred as a result of
any claim or demand pending or threatened by any other Person, whether
based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute or common law (including any thereof arising
under any Environmental Law, permit, order or agreement with any
Governmental Authority or other Person) and which relate to any
environmental condition regulated under any Environmental Law or in
connection with any other environmental matter or a Release or threatened
Release in connection with any Property.
(3) "HAZARDOUS MATERIALS" means (a) petroleum or chemical products,
whether in liquid, solid, or gaseous form, or any fraction or by-product
thereof, (b) asbestos or asbestos-containing materials, (c) polychlorinated
biphenyls (pcbs), (d) radon gas, (e) underground storage tanks, (f) any
explosive or radioactive substances, (g) lead or lead-based paint, or (h)
any other substance, material, waste or mixture which is or shall be
-33-
<PAGE>
listed, defined, or otherwise determined by any Governmental Authority to
be hazardous, toxic, dangerous or otherwise regulated, controlled or giving
rise to liability under any Environmental Laws.
(4) "RELEASE" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration of any Hazardous Materials in violation of
Environmental Law into the indoor or outdoor environment or into or out of
any property owned by such Person, including the movement of Hazardous
Materials in violation of Environmental Law through or in the air, soil,
surface water, ground water or property, any disposal, any discharge,
spillage, uncontrolled loss, seepage or filtration of any Hazardous
Materials in violation of Environmental Law.
(5) "REMEDIAL ACTION" means all actions required by Environmental Law
to (a) clean up, remove, treat or in any other way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent the Release or
threat of Release or minimize the further Release of Hazardous Materials so
they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment, or (c) perform pre-remedial
studies and investigations and post-remedial monitoring and care.
Section 4.2 REPRESENTATIONS AND WARRANTIES ON ENVIRONMENTAL MATTERS. As
of the Closing Date, except as disclosed in the reports listed on Schedule 4.2
hereof, to Borrower's knowledge, (1) no Hazardous Material is now or was
formerly used, stored, generated, manufactured, installed, disposed of or
otherwise present at or about any Property or any property adjacent to such
Property (except for cleaning and other products currently used in connection
with the routine maintenance or repair of any Property in full compliance with
Environmental Laws), (2) all permits, licenses, approvals and filings required
by Environmental Laws have been obtained, and the use, operation and condition
of the Property does not, and did not previously, violate any Environmental
Laws, and (3) no civil, criminal or administrative action, suit, claim, hearing,
investigation or proceeding has been brought or been threatened, nor have any
settlements been reached by or with any parties or any liens imposed in
connection with any Property concerning Hazardous Materials or Environmental
Laws, nor have any written notices concerning Hazardous Materials or
Environmental Laws been received from any Person in connection with any assets
or activities of Borrower or any Property. Borrower further represents and
warrants that (a) to its knowledge (i) neither Borrower nor any other party is
or has been involved in operations at or near any of the Properties which
operations could lead to (A) the imposition of liability on Borrower, or on any
subsequent or former owner of any of the Properties or (B) the creation of a
lien on any of the Properties under the Environmental Laws or under any similar
laws or regulations, and (ii) Borrower has not permitted any tenant or occupant
of any of the Properties to engage in any activity that could impose liability
under the Environmental Laws on Borrower or any other owner of any of the
Properties, (b) neither Borrower any other party will be involved in operations
at or near any of the Properties which operations could lead to (i) the
imposition of liability on Borrower, or on any subsequent or former owner of any
of the Properties or (ii) the creation of a lien on any of the Properties under
the Environmental Laws or under any similar laws or regulations, and (c)
Borrower will not permit any tenant or occupant of any of the Properties to
engage in any activity
-34-
<PAGE>
that could impose liability under the Environmental Laws on Borrower or any
other owner of any of the Properties.
Section 4.3 COVENANTS ON ENVIRONMENTAL MATTERS.
(1) Borrower shall (a) comply strictly and in all respects with the
requirements of the Environmental Laws and shall notify Lender within 10
days of Borrower's obtaining knowledge in the event of (i) any Release at,
upon, under or within any of the Properties or (ii) discovery of any
Hazardous Materials at, upon, under or within any of the Properties where
such discovered Hazardous Materials may result in Environmental Liabilities
and Costs and (b) forward promptly to Lender copies of all orders, notices,
permits, applications and other communications and reports Borrower
receives in connection with any Release or the presence of any Hazardous
Materials or any other matters relating to the Environmental Laws as all of
the above may affect any of the Properties or any other properties owned by
Borrower. Without limiting the foregoing, Borrower specifically covenants
and agrees to complete the Remedial Action described in paragraph 3 of
Schedule 8.19 hereof, for the Properties identified therein, within the
time frame(s) set forth therein for the completion of such work.
(2) To the extent that Lender reasonably believes that circumstances
exist that require additional environmental testing to be performed on the
Properties, promptly upon the written request of Lender from time to time,
Borrower shall provide Lender, at Borrower's expense, with an environmental
site assessment or environmental audit report prepared by an environmental
engineering firm mutually acceptable to Lender and Borrower, to assess with
a reasonable degree of certainty the presence or absence of any Hazardous
Materials and the potential costs in connection with Remedial Action of any
Hazardous Materials found on, under, at or within any of the Properties.
(3) Subject to the provisions of Section 12.1 hereof, Borrower and its
partners shall at all times indemnify and hold harmless Lender against and
from any and all Environmental Liabilities and Costs, including reasonable
attorneys' fees, litigation costs and any costs of settlement, suffered or
incurred by Lender, including those with respect to:
(a) any Release, the threat of a Release, or the presence of any
Hazardous Materials affecting any of the Properties, whether or not
the same originates or emanates from any of the Properties or any
contiguous real property, including any loss of value of any of the
Properties as a result of any of the foregoing;
(b) any costs of Remedial Action incurred by the United States
Government or any costs incurred by any other Person or damages from
injury to, destruction of, or loss of natural resources, including
reasonable costs of assessing such injury, destruction or loss
incurred pursuant to any Environmental Laws; and/or
-35-
<PAGE>
(c) liability for personal injury or property damage arising
under any statutory or common law tort theory, including damages
assessed for the maintenance of a public or private nuisance or for
the carrying on of an abnormally dangerous activity at or near any of
the Properties.
The provisions of this Section 4.3 shall apply whether or not the
Environmental Protection Agency, any other federal agency or any state or
local environmental agency has taken or threatened any action in connection
with the presence of any Hazardous Materials. Notwithstanding the foregoing
or anything else to the contrary in the Loan Documents, in no event shall
Borrower or its partners indemnify Lender for any Environmental Liabilities
and Costs caused by (i) actions taken solely and negligently by Lender, its
successors and assigns (including any purchaser at a foreclosure sale), or
(ii) the presence of Hazardous Materials on any Property which is brought
on a Property during the time that Lender or its successors or assigns
(including a purchaser at a foreclosure sale) takes actual physical
possession and control of such Property (except to the extent caused by
Borrower).
(4) In the event of any Release, the threat of a Release, or the
presence of any Hazardous Materials, where such may result in Environmental
Liabilities and Costs, affecting any Property, whether or not the same
originates or emanates from any Property or any contiguous real property,
or if Borrower shall fail to comply with any of the requirements of the
Environmental Laws, Lender may at its election, but without the obligation
so to do, give such notices and/or cause such work to be performed and/or
take any and all other actions as Lender shall reasonably deem necessary in
order to abate such Release, remove the Hazardous Materials to the extent
required by the Environmental Laws, cure Borrower's noncompliance with
Environmental Laws or take such steps as it deems necessary to remove any
lien imposed by federal or state authorities under Environmental Laws.
(5) If prior to the Maturity Date Lender reasonably determines after
consultation with Borrower (a) that Borrower faces a material risk of
sustaining an Environmental Liability and Cost (other than the cost of any
Remedial Action in respect of any Property that will continue to be owned
by Borrower) and (b) that, taking into account Borrower's then existing
assets and other liabilities, the outstanding Obligations, available
insurance coverage, the availability of indemnification or contribution
from other parties (such as prior owners or owners of nearby properties)
and other relevant factors, such as an orderly (not forced) disposition of
the Properties, there is a material risk that Borrower may be unable to
satisfy such contingent Environmental Liability and Cost if and when it
becomes due and to pay and perform all of the Obligations when due in full,
such that the partners in Borrower might become obligated in respect of the
Loan on a recourse basis as provided in Section 12.1 hereof, then by notice
to Borrower, Lender may require Borrower to establish and fund to the
extent of monies otherwise available to Borrower for distribution to its
partners, a Reserve in a reasonable amount to satisfy such material risk
and to maintain such funded Reserve in such amount and until such time as
Lender can reasonably determine that such Reserve is no longer needed to
satisfy the requirements of clauses (a) and (b) of this sentence. In such
event, Borrower, notwithstanding the foregoing provisions of this
-36-
<PAGE>
Section 4.3, shall be required, after making payments otherwise required on
the Loan, to apply any additional Operating Cash Flow or Net Capital
Proceeds to fund such Reserve before making any distributions to the
partners in Borrower. Borrower may, not more often than once each quarter,
require Lender to confirm that it requires continuation of such Reserve and
Lender shall set forth its reasons for so requiring. Borrower will
cooperate with Lender and make available to it such information as Lender
may reasonably request for purposes of making any such determination
regarding a Reserve, and Lender shall in good faith consider any relevant
information in respect of such matter provided to it by Borrower or any of
its partners.
(6) In the event of a dispute between Lender and Borrower or any
partners in Borrower as to whether Borrower faces a material risk of
sustaining an Environmental Liability and Cost as set forth in clause (a)
of paragraph (5) above or the estimated dollar amount of such material
risk, then Borrower shall pick an appropriate consultant and Lender shall
pick an appropriate consultant, and the two consultants shall confer and
jointly determine whether or not Borrower faces a material risk and the
estimated dollar amount of such material risk as more fully set forth in
clause (a) of paragraph (5) above. If the two consultants cannot agree
within thirty (30) days after being appointed as consultants as to whether
such a material risk exists or the estimated dollar amount of such material
risk, the two consultants will, within seven (7) days after the expiration
or such thirty (30) day period, jointly select a third consultant and
within thirty (30) days of its selection, the third consultant shall issue
its written determination as to whether such a material risk exists and the
estimated dollar amount of such material risk, which determination shall be
final and binding on all parties. In the event that the two consultants
shall be unable to timely agree on the selection of a third consultant, the
third consultant shall be selected by the President of the American
Arbitration Association. In the event of a dispute between Lender and
Borrower or any partners in Borrower in respect of the establishment or
continuation of any such Reserve, such Reserve shall be established or
continued in the interim while such dispute is resolved. No such resolution
shall constitute a limitation on or waiver of Lender's right to seek
recourse (subject to the provisions of Section 12.1 hereof) from the
partners in Borrower to the extent of distributions made to them by
Borrower in the event Lender becomes liable in respect of any Environmental
Liability and Cost of Borrower against which it is entitled to indemnity
from Borrower or in the event the Loan is not repaid in full by reason of
Borrower sustaining any such Environmental Liability and Cost.
Section 4.4 NO WAIVER. Notwithstanding any provision in this Article 4
or elsewhere in the Loan Documents, or any rights or remedies granted by the
Loan Documents, Lender does not waive and expressly reserves all rights and
benefits now or hereafter accruing to Lender under any "security interest" or
"secured creditor" exceptions under applicable Environmental Laws, as the same
may be amended. No action taken by Lender pursuant to the Loan Documents shall
be deemed or construed to be a waiver or relinquishment of any such rights or
benefits under the "security interest exception."
-37-
<PAGE>
ARTICLE 5
LEASING MATTERS
Section 5.1 REPRESENTATIONS AND WARRANTIES ON LEASES. Borrower
represents and warrants to Lender with respect to all Leases that: (1) the rent
roll delivered to Lender for each Property is true and correct as of the date of
such rent roll (provided that if Whitehall has owned a direct or indirect
interest in Borrower for less than two (2) months prior to the Closing Date, the
foregoing representation and warranty is made to Borrower's knowledge), and the
Leases are valid and in and full force and effect; (2) the Leases are in
writing, and there are no oral agreements with respect thereto; (3) the copies
of the Leases delivered to Lender are true and complete; (4) to Borrower's
knowledge, except as set forth in Schedule 5.1(A), neither the landlord nor any
Tenant is in material default under any of the Leases; (5) except as set forth
in Schedule 5.1(B), (a) Borrower has no knowledge, after due inquiry, of any
notice of termination or default with respect to any Non-Storage Lease and (b)
to Borrower's knowledge, after due inquiry, not more than 5% of the Leases at
any Storage Property are the subject of any notices of termination or default;
(6) Borrower has not assigned or pledged any of the Leases, the rents or any
interests therein except to Lender; (7) except as set forth in the rent roll
delivered to Lender, and except as set forth in Schedule 5.1(C), no Tenant or
other party has an option to purchase all or any portion of any Property; (8)
except as set forth in Schedule 5.1(D), no Tenant has the right to terminate its
Lease prior to expiration of the stated term of such lease; (9) except as set
forth in Schedule 5.1(E), there are no leasing commissions that are owing in
connection with any Leases or tenancies in effect as of the Closing Date; and
(10) except as set forth in Schedule 5.1(F), no tenant has prepaid more than one
month's rent in advance (except for bona fide security deposits not in excess of
an amount equal to two month's rent).
Section 5.2 GENERAL LEASE REQUIREMENTS. Each Lease hereafter entered
into by Borrower shall (1) not permit the Tenant thereunder to terminate or
invalidate the terms of the Lease as a result of any action taken by Lender to
enforce any right or remedy under the Loan Documents, including any sale of the
Property or any portion thereof pursuant to the power of sale or otherwise, (2)
include a subordination clause providing that the Lease and the interest of the
Tenant thereunder in the Property are in all respects subject and subordinate to
the Loan Documents, (3) provide that, at the option of Lender or the purchaser
at a foreclosure sale or the grantee in a voluntary conveyance in lieu of such
sale, the Tenant thereunder shall attorn to Lender or to such purchaser or
grantee under all of the terms of the Lease and recognize such entity as the
lessor under the Lease for the balance of the term of the Lease, and (4) provide
that, in the event of the enforcement by Lender of the rights and remedies
provided by law or in equity or by the Loan Documents, any Person succeeding to
the interest of Borrower as a result of such enforcement shall not be bound by
any prepayment of installments of rent for more than thirty (30) days in advance
of the time when the same shall become due or any amendment, modification,
extension, cancellation or renewal of the Lease made without the prior written
consent of Lender. Any Lease which is in a form approved by Lender after the
Closing Date shall be deemed to comply with this Section.
-38-
<PAGE>
Section 5.3 COVENANTS. Borrower shall deliver to Lender, promptly after
demand by Lender, a rent roll for each Property in form and substance
satisfactory to Lender. Borrower shall promptly deliver to Lender a fully
executed copy of any new Non-Storage Lease upon execution of the same, and shall
promptly deliver to Lender upon Lender's request a fully executed copy of all
other Leases not previously delivered to Lender. Borrower shall not (1) assign,
mortgage or otherwise encumber any of the Leases or any of the rents due or to
become due thereunder or to which Lender may now or hereafter become entitled,
or (2) accept prepayments of installments of rent for more than thirty (30) days
in advance of the time when the same shall become due or to anticipate the rents
thereunder, except for Security Deposits, provided that Borrower may accept
prepayments of rent installments up to six months in advance for Leases covering
not more than ten percent (10%) of the leasable space within each Storage
Property.
Section 5.4 ADDITIONAL COVENANTS REGARDING MATERIAL LEASES. All Leases
covering at least 10,000 rentable square feet, and any combination of Leases
which collectively cover at least 10,000 rentable square feet of any Property
and which are entered into with a single Tenant or with Tenants who are
Affiliates of each other, shall be referred to herein as "MATERIAL LEASES". As
to any Material Leases, Borrower shall (1) promptly perform all of the material
provisions of the Material Leases on the part of the lessor thereunder to be
performed; (2) promptly enforce all of the material provisions of the Material
Leases on the part of the Tenants thereunder to be performed; (3) not cancel,
terminate or accept a surrender of any Material Lease, or refrain from taking
any action which would result in the termination of a Material Lease by any
Tenant thereunder, unless the Tenant thereunder is in default or such action is
otherwise commercially prudent and all Lease Buy Out Consideration, if any, is
deposited and used in the manner set forth below in this Article 5; (4) appear
in and prosecute or defend any action or proceeding arising under, growing out
of, or in any manner connected with, the Material Leases or the obligations of
the lessor or the lessees thereunder, as the case may be; (5) provide Lender
with a copy of each notice of default received by Borrower from the Tenant under
any Material Lease immediately upon receipt thereof and deliver to Lender a copy
of each notice of default sent by Borrower to a Tenant under any Material Lease
simultaneously with its delivery of such notice under such Material Lease; and
(6) promptly notify Lender of all material disputes and claims in respect of any
Material Leases and not settle or adjust any such material claims or disputes
without Lender's consent. In addition, Borrower shall not (a) consent to any
assignment or subletting of any Material Lease if the assignor or sublessor
thereof would be relieved from liability thereafter accruing under such Material
Lease; (b) discount any rents under any Material Lease or otherwise refrain from
taking any action with respect to a Material Lease which would result in the
diminution of the rents thereunder; and (c) without Lender's prior consent,
enter into, modify, amend, extend, renew, or otherwise change in any material
manner, any of the terms covenants or conditions of, any Material Lease. Without
limiting the foregoing, Borrower shall not enter into, extend or modify any new
or existing Material Lease affecting a Property for base rentals which are less
than the lesser of (i) the average aggregate base rentals for all Leases
affecting such Property, and (ii) the fair market rental for similar space in
other buildings similarly situated.
-39-
<PAGE>
Section 5.5 LENDER'S CONSENT TO DEVIATIONS. Borrower shall obtain
Lender's prior, written consent to any deviations from the leasing covenants set
forth in this Article 5. Lender shall not unreasonably withhold its consent to
any such request, except with respect to requests to deviate from the minimum
rent requirements for Material Leases as set forth above, in which event Lender
may withhold its consent in its sole and absolute discretion. If Lender does not
respond to Borrower's request for consent to a deviation from the leasing
covenants set forth herein within ten (10) days after receipt of Borrower's
request, Lender shall be deemed to have consented to such request, provided,
however, that with respect to any request to deviate from the minimum rent
requirements for Material Leases set forth above, Lender's failure to respond
within such 10-day period shall be deemed a rejection of such request.
Section 5.6 SECURITY DEPOSITS; LEASE BUY OUT CONSIDERATION. Borrower
shall maintain all security deposits paid or payable under any Lease ("SECURITY
DEPOSITS"), and separately maintain all Lease Buy Out Consideration paid by
Tenants, in separate accounts held by Borrower in a depository institution
acceptable to Lender. Security Deposit funds held in such account for any Lease
shall be used to repay the Tenant which paid the Security Deposit to Borrower or
as otherwise provided in the applicable Lease. Any Lease Buy Out Consideration
received by Borrower or its agents with respect to space within a Property shall
be used by Borrower to pay for any Tenant Improvements, Capital Expenditures,
Leasing Costs or marketing costs in connection with that Property. The
segregated accounts for Security Deposits and Lease Buy Out Consideration
required by this Section shall be subject to the general provisions of this
Agreement pertaining to any segregated account which Borrower is required to
maintain in accordance with the terms of this Agreement. Provided no Event of
Default shall then be existing under this Agreement, if a Property in connection
with which any Lease Buy Out Consideration was paid or any Security Deposits are
held will be released from the lien of the applicable Deed of Trust in
accordance with this Agreement, any amounts in the account holding such Lease
Buy Out Consideration and/or Security Deposits applicable to such Property shall
be released, concurrently with such release, to Borrower. The monthly reports
which Borrower is required to provide Lender in connection with the Security
Deposits accounts and Lease Buy Out Consideration accounts shall identify, as to
each such account, the source Properties of the Security Deposits or Lease Buy
Out Consideration therein, and the amount of Security Deposit or Lease Buy Out
Consideration funds in such account allocable to each such Property.
Section 5.7 SUBORDINATION AGREEMENTS; TENANT ESTOPPELS. Without
limiting Borrower's obligation to provide Lender with subordination,
nondisturbance and attornment agreements as required by Lender as a condition to
the Initial Advance and (as to the applicable Additional Property) each
Acquisition Advance, upon request by Lender, Borrower shall use reasonable good
faith efforts to cause the Tenants under Material Leases selected by Lender to
execute and deliver to Lender subordination, nondisturbance and attornment
agreements with respect to such Tenant's Lease within forty-five (45) calendar
days of the date of Lender's request (on a form provided by Lender to Borrower).
Borrower's failure to obtain a subordination, nondisturbance and attornment
agreement as to any Material Lease within the aforementioned 45-day period shall
not constitute a Potential Default so long as Borrower has used reasonable, good
faith efforts to obtain such subordination, nondisturbance and attornment
agreement during such period. In addition, from time to time at Lender's
request, Borrower shall request from each Tenant (and shall deliver to
-40-
<PAGE>
Lender upon receipt from such Tenant) a written estoppel in the form required by
such Tenant's Lease (or if no form is specified, in form and substance
satisfactory to Lender) confirming, among other things, the term, rent, and
other provisions and matters relating to such Lease; provided, however, that
Borrower's obligation with respect to such estoppel certificates shall be
limited to requesting such estoppel certificates from Tenants and (if accurate)
informing such Tenants of their Lease obligation to provide such estoppel
certificates. No Potential Default shall be caused by the failure of one or more
Tenants to provide an estoppel certificate after such request is made.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
To induce Lender to make the Loan, Borrower makes the following
representations and warranties to Lender, each and all of which shall be true
and correct as of the date of execution and delivery of this Agreement, and
shall survive the execution and delivery of this Agreement; provided, however,
that the representations and warranties contained herein and in the other Loan
Documents with respect to the Properties are subject to the matters detailed in
Schedules 6.4, 6.5, 6.6, 6.7, 6.17 and 6.19 hereof.
Section 6.1 PARTNERSHIP AND ORGANIZATIONAL EXISTENCE; COMPLIANCE WITH
LAW. Each of Borrower and the general partner of Borrower (1) is a limited
partnership or limited liability company, as the case may be, duly organized,
validly existing and in good standing under the laws of its state of
organization; (2) is duly qualified to do business and is in good standing under
the laws of each jurisdiction where its ownership or lease of property or the
conduct of its business requires such qualification; (3) has the requisite
organizational or partnership (as applicable) power and authority and the legal
right to own, pledge, mortgage or otherwise encumber and operate its properties,
to lease the properties it operates under lease, and to conduct its business as
now, heretofore and proposed to be conducted; (4) has all material licenses,
permits, consents or approvals from or by, and has made all material filings
with, and has given all material notices to, all Governmental Authorities having
jurisdiction, to the extent required for such ownership, operation and conduct;
(5) is in compliance with its certificate of formation and operating agreement
or certificate of limited partnership and partnership agreement (as applicable);
and (6) is in compliance with all applicable provisions of Law, except where the
failure to be in compliance would not have a Material Adverse Effect.
Section 6.2 PARTNERSHIP OR ORGANIZATIONAL POWER; AUTHORIZATION;
ENFORCEABLE OBLIGATIONS. The execution, delivery and performance by Borrower of
the Loan Documents, Ancillary Agreements and all instruments and documents to be
delivered by Borrower and by its partners, to the extent they are parties
thereto, and the creation of all Liens provided for herein and therein: (1) are
within Borrower's and its partners' partnership and/or organizational power; (2)
have been duly authorized by all necessary or proper partnership and/or
organizational action; (3) are not in contravention of any provision of
Borrower's or its partners' respective partnership agreement and/or certificate
or certificate of formation and/or operating agreement; (4) do not violate any
Law, or any order or decree of any court or Governmental Authority; (5) do not
conflict with or result in
-41-
<PAGE>
the breach or termination of, constitute a default under or accelerate any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which Borrower or any of its partners is a
party or by which Borrower or its partners or any of their property is bound;
(6) do not result in the creation or imposition of any Lien upon any of the
property of Borrower or its partners other than those in favor of Lender, all
pursuant to the Loan Documents; and (7) do not require the consent or approval
of any Governmental Authority or any other Person, other than such consents and
approvals as have been duly obtained, made or complied with on or prior to the
Closing Date. Each of the Loan Documents has been duly executed and delivered
for the benefit of or on behalf of Borrower and, where a party thereto, its
partners, and each constitutes a legal, valid and binding obligation of
Borrower, and, to the extent they are parties thereto, its partners, enforceable
against each of them in accordance with its terms.
Section 6.3 OWNERSHIP OF COLLATERAL; LIENS. (1) Borrower owns good and
marketable title to the Collateral; (2) none of the Collateral is subject to any
Liens, except Permitted Encumbrances; and (3) Borrower has received all
assignments, waivers, consents and other documents, and duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect Borrower's right, title and interest in and to the Collateral.
Section 6.4 CONDEMNATION. As of the Closing Date, except as expressly
set forth in Schedule 6.4 hereof, Borrower has not received any notice, and has
no knowledge, of any pending, threatened or contemplated condemnation proceeding
affecting any Property or any part thereof, or any proposed termination or
impairment of any parking at any Property or any part thereof in lieu of
condemnation.
Section 6.5 CASUALTY. To Borrower's knowledge, as of the Closing Date,
except as expressly set forth in Schedule 6.5 hereof, no portion of any Property
has suffered any material damage by fire or other casualty loss which has not
heretofore been completely repaired and restored to its original condition and
no portion of any Property is located in a special flood hazard area as
designated by any Federal Governmental Authorities and which is not covered by
flood insurance required pursuant to insurance provisions hereof.
Section 6.6 MATERIAL AGREEMENTS. As of the Closing Date, Borrower is
not directly, indirectly or contingently obligated with respect to any Material
Agreement relating to any Property except as expressly set forth in Schedule 6.6
hereof.
Section 6.7 PROPERTY COMPLIANCE. To Borrower's knowledge, as of the
Closing Date, except as expressly set forth in Schedule 6.7 hereof, each
Property complies with all applicable subdivision, platting, building, land use,
environmental, safety, traffic, fire and zoning Laws and requirements, except
when the failure to so comply would not have a Material Adverse Effect for such
Property.
Section 6.8 ACCESS. To Borrower's knowledge, as of the Closing Date,
each Property has access to and from public streets and roads adequate for its
intended use, and all such streets and roads have been completed, dedicated to
the public use and accepted for all purposes (including, but not limited to,
maintenance) by the appropriate Governmental Authority.
-42-
<PAGE>
Section 6.9 UTILITY SERVICES. To Borrower's knowledge, as of the
Closing Date, all utility services are available and operational in sufficient
size and capacity for the operation of each Property.
Section 6.10 PERMITS. To Borrower's knowledge, as of the Closing Date,
all material licenses, permits, inspections, authorizations, certifications and
approvals required by all Governmental Authorities having jurisdiction over each
Property have been performed or issued and paid for and are in full force and
effect.
Section 6.11 NO DEFAULT. To Borrower's knowledge, Borrower is not in
default nor is any third party in default, under or with respect to any
contract, agreement, lease or other instrument to which it is a party, except
for any default which (either individually or collectively with other defaults
arising out of the same event or events) would not have a Material Adverse
Effect.
Section 6.12 OTHER VENTURES/SINGLE PURPOSE ENTITY. Borrower is not
engaged in any joint venture or partnership with any other Person. Borrower's
sole purpose is to own and operate the Properties, and Borrower does not own any
assets other than the Properties and the other Collateral. Borrower will not
conduct any other business transactions except as contemplated by this Loan
Agreement.
Section 6.13 INVESTMENT COMPANY ACT. Borrower is not required to
register as an "investment company" under the Investment Company Act of 1940, as
amended. The making of the Loan by Lender, the application of the proceeds and
repayment thereof by Borrower and the consummation of the transactions
contemplated by this Agreement and the other Loan Documents will not violate any
applicable provision of such Act or any applicable rule, regulation or order
issued by the Securities and Exchange Commission thereunder which is binding on
Borrower.
Section 6.14 MARGIN REGULATIONS. Borrower does not own any "margin
security," as that term is defined in Regulation U of the Board of Governors of
the Federal Reserve System (the "FEDERAL RESERVE BOARD"), and the proceeds of
the Loan will be used only for the purposes contemplated hereunder. The Loan
will not be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might cause any of the loans under this
Agreement to be considered a "purpose credit" within the meaning of Regulations
T, U or X of the Federal Reserve Board. Borrower will not take or permit any
agent acting on its behalf to take any action which might cause this Agreement
or any document or instrument delivered pursuant hereto to violate any
regulation of the Federal Reserve Board.
Section 6.15 TAXES. To Borrower's knowledge, (1) all federal, state,
local and foreign tax returns, reports and statements required to be filed by
Borrower have been filed with the appropriate Governmental Authority and all
Charges and other impositions shown thereon to be due and payable have been paid
prior to the date on which any fine, penalty, interest or late charge may
-43-
<PAGE>
be added thereto for nonpayment thereof, or any such fine, penalty, interest,
late charge or loss has been paid; (2) Borrower has paid when due and payable
all Charges required to be paid by it; (3) Proper and accurate amounts have been
withheld by Borrower from their respective employees for all periods in full and
complete compliance with the tax, social security and unemployment withholding
provisions of applicable Law and such withholdings have been timely paid to the
respective Governmental Authorities; (4) Borrower has not executed or filed with
the IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any Charges; (5) Borrower has not agreed or been requested to make
any adjustment under IRC Section 481(a) by reason of a change in accounting
method or otherwise; and (6) Borrower has no obligation under any written tax
sharing agreement. If, at any time after the Closing Date, Borrower has
knowledge that any of the statements made in clauses (1) through (6) of the
immediately preceding sentence is untrue or incorrect, and failure to remedy the
condition that gave rise to the untrue or incorrect statement would have a
Material Adverse Effect, then notwithstanding that Borrower had no knowledge of
the incorrect or untrue nature of such statement as of the Closing Date,
Borrower shall diligently cure such condition to a sufficient extent that such
condition would no longer have a Material Adverse Effect.
Section 6.16 ERISA. There are no Plans maintained or contributed to by
Borrower.
Section 6.17 NO LITIGATION. To Borrower's knowledge, except as set
forth in Schedule 6.17 hereof, no action, claim or proceeding is now pending or,
to the knowledge of Borrower, threatened against Borrower, at law, in equity or
otherwise, before any court, board, commission, agency or instrumentality of any
federal, state, or local government or of any agency or subdivision thereof, or
before any arbitrator or panel of arbitrators, which, if determined adversely,
could have a Material Adverse Effect. No such claim, action or proceeding
questions the validity of any of the Loan Documents or any action taken or to be
taken pursuant thereto, or would have either individually or in the aggregate a
Material Adverse Effect. Lender acknowledges that Borrower has provided Lender
with the "Seller Disclosure Letter" (as defined in the Purchase Agreement),
including Schedule 4.7 thereto regarding litigation matters.
Section 6.18 BROKERS. No broker or finder acting on behalf of Borrower
(other than Goldman, Sachs & Co.) brought about the obtaining, making or closing
of the loans made pursuant to this Agreement and Borrower has no obligation to
any Person (other than Goldman, Sachs & Co.) in respect of any finder's or
brokerage fees in connection with the loan contemplated by this Agreement.
Section 6.19 PURCHASE AGREEMENT. A true and complete copy of the
Purchase Agreement (including all exhibits, schedules and amendments thereto)
has been delivered to Lender, and a true and complete copy of each document
delivered at the closing under the Purchase Agreement has been delivered to
Lender. Neither Borrower nor, to the best of Borrower's knowledge, any other
party is in default under the Purchase Agreement or under any instrument or
document to be delivered in connection therewith. Except as disclosed in
Schedule 6.19 hereof, Borrower (including any predecessor-in-interest to
Borrower) has not claimed any breach of a representation or warranty by the
Seller under the Purchase Agreement.
-44-
<PAGE>
Section 6.20 EMPLOYMENT AND LABOR AGREEMENTS. There are no employment,
consulting or management agreements covering management of Borrower and there
are no collective bargaining agreements or other labor agreements covering any
employees of Borrower.
Section 6.21 LIENS. The Liens granted to Lender pursuant to the
Collateral Documents are first priority Liens in and to the Collateral described
therein, subject to Permitted Encumbrances, and upon completion of any necessary
filings and recordings, will be fully perfected.
Section 6.22 FULL DISCLOSURE. To Borrower's knowledge, no information
contained in this Agreement, the other Loan Documents, or any written statement
furnished by or on behalf of Borrower pursuant to the terms of this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not misleading
in light of the circumstances under which made and in light of the written
disclosures made by Borrower to Lender.
Section 6.23 PROPERTY DOCUMENTS. Borrower has delivered to Lender true
and correct copies of all material documents related to the Properties in
Whitehall's possession or in the possession of any agent or Affiliate of
Whitehall immediately prior to the Closing Date (collectively, "PROPERTY
DOCUMENTS") prior to the Closing Date (other than confidential internal Borrower
or Whitehall memoranda and privileged communications between Borrower or
Whitehall and their respective attorneys), and there are no other material
documents, reports (including, without limitation, environmental and engineering
reports), files, correspondence, surveys and other material information of any
kind whatsoever which are in Whitehall's possession or in the possession of any
agent or Affiliate of Whitehall immediately prior to the Closing Date and which
have not been delivered to Lender.
Section 6.24 RENT ROLL. The rent roll previously delivered by Borrower
to Lender for each Property is a true and accurate copy of the rent roll for
such Property as of the date of such rent roll; provided that if Whitehall has
owned a direct or indirect interest Borrower for less than two (2) months prior
to the Closing Date, the foregoing representation is made to Borrower's
knowledge.
Section 6.25 GROUND LEASE REPRESENTATIONS. There are no ground leases
affecting any of the Properties, other than the Fidelity Federal Ground Leases.
Section 6.26 PROPERTY INFORMATION. The information in Schedule 1.1(A)
hereof with respect to each Property is correct except to the extent that the
actual square footage, acreage or number of units is not less than 95% of the
square footage, acreage or number of units set forth on said Schedule 1.1(A) for
each Property.
Section 6.27 ACQUISITION COST AND EQUITY INVESTMENT. The information in
Schedule 6.27 hereof sets forth the portion of the total purchase price, total
cash equity, Whitehall cash equity, McNeil cash equity and closing costs for all
assets acquired by Holding Company or its Affiliates pursuant to the Purchase
Agreement, allocated by Holding Company to each of the
-45-
<PAGE>
Initial Properties (and will be allocated to each of the Additional Properties,
if acquired) and to all Initial Properties and Additional Properties in the
aggregate. As of the Closing Date, the capital accounts for Whitehall and McNeil
in the Holding Company will reflect their respective equity amounts as set forth
at the bottom of Schedule 6.27. The total Whitehall equity amount set forth at
the bottom of Schedule 6.27 represents cash equity allocated to the Initial
Properties and Additional Properties.
ARTICLE 7
FINANCIAL REPORTING AND INFORMATION
Section 7.1 FINANCIAL STATEMENTS AND NOTICES. Borrower covenants and
agrees that from and after the Closing Date it shall deliver, or cause to be
delivered, to Lender:
(1) MONTHLY REPORTS. Monthly, all written statements, reports and
financial information delivered to Holding Company by the Asset Manager
pursuant to Sections 4.4.1, 4.4.2, 5.2.1(a) and (b), and 7.2 (and any other
provision) of the Asset Management Agreement including monthly property
operating statements, monthly rent rolls, aged tenant delinquency reports,
and monthly accounting and bank statements of all escrow and segregated
accounts maintained by Borrower pursuant to this Agreement.
(2) QUARTERLY REPORTS. Within 45 days after the end of each fiscal
quarter, commencing with the quarter ending March 31, 2000, a copy of the
unaudited balance sheet of Borrower as of the close of such quarter and the
related statement of income and cash flows for that portion of the Fiscal
Year ending as of the close of such quarter, all prepared by the general
partner of Borrower and Asset Manager in accordance with GAAP (subject to
the terms set forth herein and to normal year-end adjustments and excluding
footnotes and supporting schedules, if same are not available (provided
that such footnotes and supporting schedules are promptly delivered to
Lender when same become available)) and accompanied by the certification on
behalf of Borrower of the general partner of Borrower that all such
financial statements are complete and correct and present fairly in
accordance with GAAP (subject to normal year-end adjustments) the financial
position, the results of operations and the cash flows of Borrower as at
the end of such quarter and for the period then ended, and that there was
no Event of Default in existence as of such time.
(3) ANNUAL REPORTS. Within ninety (90) days after the close of each
Fiscal Year, commencing with the Fiscal Year ending December 31, 2000, a
copy of the annual audited financial statements of Borrower, consisting of
balance sheets and statements of income and capital accounts and cash flows
(setting forth beginning with the reports for the Fiscal Year ending
December 31, 2001 in comparative form in each case the figures for the
previous Fiscal Year), which financial statements shall be prepared in
accordance with GAAP, certified (only with respect to the financial
statements) without qualification by the independent certified public
accountants regularly retained by Borrower, or any other firm of
independent certified public accountants of recognized national standing
selected by Borrower, and acceptable to Lender, and accompanied by (a) a
report from such accountants
-46-
<PAGE>
to the effect that in connection with their audit examination, nothing has
come to their attention to cause them to believe that a Potential Default
or Event of Default had occurred and (b) a certification of the general
partner of Borrower that (i) all such financial statements are complete and
correct and present fairly in accordance with GAAP the financial position,
the results of operations and the cash flows of Borrower as at the end of
such year and for the period then ended, (ii) all Operating Cash Flow and
Net Capital Proceeds have been applied in accordance with the provisions of
this Agreement and (iii) that there was no Event of Default in existence as
of such time.
(4) BUDGETS. Within six (6) months after the Closing Date, Borrower
shall submit to Lender for Lender's review and approval (not to be
unreasonably withheld) a detailed, 3-year capital budget for each Property.
Such capital budgets shall include, where applicable, any then-remaining
capital repair work identified in paragraph 1 on Schedule 8.19. Thereafter,
within thirty (30) days prior to the beginning of each Fiscal Year,
Borrower shall submit to Lender for Lender's review a detailed capital
budget for each Property for such Fiscal Year.
(5) EVENTS OF DEFAULT; MATERIAL EVENTS. As soon as practicable, but in
any event within two (2) Business Days after Borrower becomes aware of the
existence of any Event of Default, or any development or other information
which would have a Material Adverse Effect, telephonic or facsimile notice
specifying the nature of such Event of Default or development or
information, including the anticipated effect thereof, which notice shall
be promptly confirmed in writing within five (5) days.
(6) PAYMENT OF CHARGES. Periodic accounting of payments made in
respect of Charges imposed upon each Property and amounts available in the
Charges Account in respect of the Property and, at Lender's request, copies
of tax bills marked "paid" in respect of each Property or canceled checks
evidencing payment of such tax bills.
Section 7.2 OTHER INFORMATION. Borrower shall deliver to Lender such
additional information regarding Borrower, its subsidiaries, its business, and
any Property within 30 days after Lender's reasonable request therefor, provided
that Borrower has reasonable access to such information at reasonable cost.
Section 7.3 AUDITS. At Lender's request, Lender may audit the
determination of Gross Receipts, Operating Expenses, Operating Cash Flow,
Capital Expenditures, Net Capital Proceeds and all escrow or segregated accounts
maintained by Borrower including escrow or segregated accounts for Security
Deposits, Charges, Lease Buy Out Consideration, and Operating Cash Flow required
to be maintained by Borrower pursuant to the terms hereof, which audit may be
conducted by Lender or its representatives reviewing Borrower's books and
records (at Lender's expense except as provided below). Borrower shall pay to
Lender, travel expenses and reasonable out-of-pocket costs incurred by Lender in
performing any single audit in any calendar year and, in addition to such audit,
any audit performed by Lender or its agent in connection with (1) Working
Capital Advances or Acquisition Advances, (2) a request from Borrower to release
any Property from the Lien of the Loan Documents, or (3) an extension of the
Term. If any audit performed by,
-47-
<PAGE>
or on behalf of, Lender discloses that Borrower's statement of Gross Receipts,
Operating Expenses, Operating Cash Flow, Capital Expenditures, escrow or
segregated accounts (for Security Deposits, Charges, Lease Buy Out Consideration
or Operating Cash Flow), Net Capital Proceeds or similar financial information
is misstated or is otherwise incorrect by greater than 5% of Borrower's reported
amount, then Borrower shall pay to Lender the full cost of Lender's audit.
Notwithstanding the foregoing, during any period that an Event of Default has
occurred and is continuing, Borrower shall be responsible for the full cost and
expense of any Lender investigation or audit conducted by Lender.
Section 7.4 COMMUNICATION WITH ACCOUNTANTS. Borrower authorizes Lender
to communicate directly with Borrower's independent certified public accountants
and authorizes those accountants to disclose to Lender any and all financial
statements and other supporting financial documents and schedules including
copies of any management letter with respect to the business, financial
condition and other affairs of Borrower.
ARTICLE 8
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, unless Lender shall otherwise
consent in writing, from and after the Closing Date and until the Maturity Date:
Section 8.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. Borrower
shall (1) do or cause to be done all things necessary to preserve and keep in
full force and effect its existence as a limited partnership, and, unless the
loss of same shall not have a Material Adverse Effect, its rights, licenses,
privileges and franchises; (2) continue to conduct its business only as
permitted hereunder; (3) not make any changes in its business objectives,
purposes or operations in any way that would have a Material Adverse Effect; and
(4) transact business only in the name of WXI/MCN Commercial Real Estate Limited
Partnership or in each case such other names as Borrower shall specify to Lender
in writing not less than thirty (30) days prior to the first date such name is
used by Borrower.
Section 8.2 PAYMENT OF INDEBTEDNESS.
(1) Borrower shall, using Gross Receipts from all of the Properties,
(a) pay and discharge or cause to be paid and discharged all Obligations,
as and when due and payable (subject to any notice or grace periods
provided in the Loan Documents), (b) pay and discharge or cause to be paid
and discharged (i) prior to the day that any interest or penalty can be
imposed thereon, all Charges imposed upon Borrower, its income and profits,
or any of its property (real, personal or mixed), and (ii) lawful claims
for labor, materials, supplies and services used by or supplied to Borrower
before any thereof shall become in default (subject to any applicable
notice or grace periods) and (c) to the extent not paid from Loan proceeds,
pay all Capital Expenditures and other Indebtedness related to any of the
Properties as and when such amounts come due.
-48-
<PAGE>
(2) Borrower may in good faith contest, by proper legal actions or
proceedings, the validity or amount of any Charges or claims arising under
clause (b) of paragraph (1) above, provided that at the time of
commencement of any such action or proceeding, and during the pendency
thereof (a) no Event of Default shall be continuing; (b) adequate Reserves
with respect thereto are maintained on the books of Borrower, in accordance
with GAAP; (c) such contest operates to suspend collection of the contested
Charges or claims and is maintained and prosecuted continuously with
diligence; (d) none of the Properties would be subject to forfeiture or
loss or any Lien by reason of the institution or prosecution of such
contest; (e) Borrower shall promptly pay or discharge such contested
Charges and all additional charges, interest, penalties and expenses, if
any, and shall deliver to Lender evidence acceptable to Lender of such
compliance, payment or discharge, if such contest is terminated or
discontinued adversely to Borrower; and (f) Lender has not advised Borrower
in writing that Lender reasonably believes that nonpayment or nondischarge
thereof would have a Material Adverse Effect. Notwithstanding the
foregoing, Borrower shall have the right to pay the Charges or claims
arising under clause (b) of paragraph (1) above and in good faith contest
by proper legal action or proceedings, the validity or amount of such
Charges or claims.
(3) If Borrower shall be in default of its obligations to pay and
discharge any Charges as provided in paragraph (1) above and provided no
contest as described in and as permitted under paragraph (2) above is in
process, Lender, at its option and without notice, may pay such Charges
and, in such event, the amount of such Charges so paid by Lender (a) shall
be added to the Obligations, (b) shall be secured by the Collateral, and
(c) shall be immediately due and payable, on demand, together with interest
thereon at the Default Rate from the date of any such payment by Lender to
the date of any repayment to Lender.
Section 8.3 BOOKS AND RECORDS. Borrower shall keep adequate records and
books of account with respect to its business activities, in which proper
entries, reflecting all of its financial transactions, are made in accordance
with GAAP.
Section 8.4 LITIGATION. Borrower shall notify Lender in writing,
promptly upon learning thereof, of any litigation commenced against Borrower,
and of the institution against Borrower of any uninsured suit or administrative
proceeding that, in either case, if determined adversely would have a Material
Adverse Effect. Any such notification shall be deemed to automatically update
Schedule 6.17 hereto to reflect the matters contained in such notification.
Section 8.5 COMPLIANCE WITH LAW. Subject to Borrower's right to contest
Charges to the extent and in the manner expressly permitted elsewhere in this
Agreement, Borrower shall comply with all Laws applicable to Borrower, and each
Property, including, with respect to Borrower only, ERISA, those regarding the
collection, payment and deposit of employees' income, unemployment and social
security taxes, except in each case where the failure to so comply will not have
a Material Adverse Effect.
-49-
<PAGE>
Section 8.6 MAINTENANCE OF PROPERTY.
(1) Borrower shall, with respect to each Property, (a) maintain the
Property and the improvements located thereon in good repair, order and
condition; (b) make all necessary repairs, renewals, replacements,
additions and improvements to the Property; (c) not abandon the Property;
(d) not permit or suffer any waste to occur in respect of the Property; (e)
refrain from impairing or diminishing the value or integrity of the
Property or the priority and security of the Lien of Lender on the
Property; (f) not remove, demolish or materially alter any of the Property
without the prior written consent of Lender in each instance, except that,
Borrower shall have the right to remove and dispose of, free of the Lien of
Lender, such fixtures as may, from time to time, become worn out or
obsolete, provided that, simultaneously with such removal, any such
fixtures shall be replaced with other fixtures that shall have the value
and utility equal to that of the replaced fixtures and which shall be free
of any security agreement or other Liens of any kind or nature whatsoever,
and by such removal and replacement, Borrower shall be deemed to have
subjected such replacement fixtures to the Lien of the Deed of Trust
encumbering such Property; (g) not execute any conditional bill of sale,
chattel mortgage or other security instrument covering any of the equipment
located at any Property or purchase any equipment unless ownership of the
same will vest unconditionally in Borrower, free from encumbrances on
delivery to the Property; (h) not make or permit to be made or installed,
any alterations or additions to the Property if doing so would, in the
opinion of Lender, impair to any extent the value of the Property; and (i)
not make, suffer or permit any nuisance to exist on the Property or any
portions thereof, except as to each of the covenants (a) through (i), to
the extent that the failure to do so (or to refrain from doing so, as
applicable) would not have a Material Adverse Effect.
(2) Borrower shall not permit, by any act or omission, any building or
any other improvement located on any property which is not subject to the
Lien of a Deed of Trust to rely upon any Property or any portion thereof or
any interest therein to fulfill any legal requirements. Borrower shall not
impair or permit the impairment of, by any act or omission, the integrity
of any Property as one or more lots separate and apart from all other
premises owned by any other Person. Except as reflected in or otherwise
contemplated by an Asset Business Plan, Borrower shall not initiate, or
permit the initiation of, or join in, any zoning change, easement or other
modification of zoning regulations in respect of any Property that would
result in a Material Adverse Effect. Except as otherwise permitted herein,
Borrower shall not (i) impose any restrictions, covenant or encumbrance
upon any Property, execute or file any subdivision plot affecting any
Property or consent to the annexation of any Property to any municipality
that would result in a Material Adverse Effect, or (ii) permit or suffer
the Property to be used by the public or any Person in such manner as might
make possible a claim of adverse usage or possession or of any implied
right or easement.
-50-
<PAGE>
Section 8.7 AGREEMENTS. Borrower shall notify Lender of any Material
Agreements entered into after the Closing Date. Borrower shall perform, within
all required time periods (after giving effect to any applicable notice or grace
periods), all of its obligations and enforce all of its rights under each
Material Agreement to which it is a party if the failure to perform such
obligations or enforce such rights would have a Material Adverse Effect.
Section 8.8 EMPLOYEE PLANS. Borrower shall not adopt any Plan without
the consent of Lender.
Section 8.9 ACCESS. Lender and any of its officers, employees and/or
agents shall have the right, exercisable as frequently as Lender (or any
representative of Lender) reasonably determines to be appropriate, during normal
business hours (or at such other times as may reasonably be requested by Lender
or any representative of Lender) to inspect any Property. Lender and any of its
officers, employees and/or agents shall have the right, exercisable as
frequently as Lender (or any representative of Lender) reasonably determines to
be appropriate, during normal business hours (or at such other times as may
reasonably be requested by Lender or any representative of Lender), to inspect,
audit and make extracts from all of Borrower's records, files and books of
account at Lender's cost except in those instances in which Lender's audit costs
are to be paid by Borrower, as provided for elsewhere in this Agreement.
Borrower shall deliver any document or instrument reasonably necessary for
Lender (or any representative of Lender), as any of them may request, to obtain
records from any service bureau maintaining records for Borrower. Borrower shall
instruct its banking and other financial institutions and its Asset Manager to
make available to Lender such information and records as Lender (or any
representative of Lender) may reasonably request.
Section 8.10 TAXES ON PAYMENTS OR SECURITY.
(1) To the extent permitted by applicable Law and subject to the last
sentence of this paragraph, any and all payments by Borrower hereunder or
under the Note shall be made free and clear of and without deduction for
any and all present or future taxes, levies, mortgage recording taxes,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding franchise taxes or taxes imposed on or measured
by the net or gross income, capital or gross receipts of Lender (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "TAXES"). If Borrower shall be
required by Law to deduct any Taxes from or in respect of any sum payable
hereunder or under the Note (for which Lender will not be able to obtain a
refund or credit against taxes other than with respect to the receipt of
payments pursuant to the Note), (a) the sum payable to Lender shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section), Lender receives an amount equal to the sum it would have received
had no such deductions been made (but only to the extent that Lender is not
able to obtain a refund or credit of such amounts deducted), (b) Borrower
shall make such deductions, and (c) Borrower shall pay the full amount
deducted to the relevant taxing or other authority in accordance with
applicable Law. Borrower will not be required to pay any amounts pursuant
to this paragraph (1) for Taxes to a subsequent holder of the Note to the
extent that GECC would not have been required to pay such Taxes.
-51-
<PAGE>
(2) To the extent permitted by applicable Law and subject to the last
sentence of this paragraph, Borrower agrees to pay any present or future
stamp or documentary taxes or any other sales, transfer, excise or property
taxes, charges or similar levies that arise from any payment made hereunder
or under the Note or from the execution, sale, transfer, delivery or
registration of, or otherwise with respect to, this Agreement or the Note,
the Loan Documents and any other agreements and instruments contemplated
thereby (hereinafter referred to as "OTHER TAXES") except for excluded
taxes described in paragraph (1) above. Borrower will not be required to
pay any amounts to a subsequent holder of the Note as provided in this
paragraph (2) to the extent that Other Taxes would not have been payable
had GECC continued to hold the Note.
(3) To the extent permitted by applicable Law, Borrower shall
indemnify Lender for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section), but not excluded taxes described in paragraph (1) above or
Taxes or Other Taxes imposed due to any action of Lender, paid by Lender
and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. This indemnification shall be made
within ninety (90) days from the date Lender makes written demand therefor.
(4) Within ninety (90) days after the date of any payment of Taxes,
Borrower shall furnish to Lender, at the address to which notices to Lender
are to be sent under this Agreement, the original or a certified copy of a
receipt evidencing payment thereof.
(5) Without prejudice to the survival of any other agreement of
Borrower, the agreements and obligations of Borrower and Lender contained
in this Section shall survive the payment in full of principal and interest
hereunder and under the Note and the termination of this Agreement.
(6) Lender shall promptly notify Borrower in writing upon receipt by
Lender of notice of any pending or threatened federal, state or local tax
audits or assessments for which Borrower would be required to indemnify
Lender pursuant to this Section. Borrower shall be entitled to participate
at its own expense in the defense of any tax claim which may be subject to
indemnification by Borrower pursuant to this Section. Lender shall not
settle any such tax claim without the prior written consent of Borrower.
(7) If Lender is entitled to a refund or credit relating to amounts
which Borrower has paid Lender pursuant to this Section, Lender shall
promptly pay to Borrower the amount of such refund or credit together with
any interest thereon upon receipt thereof. Upon reliance of an opinion of
counsel that provides that there is a reasonable basis for such claim,
Borrower can require Lender to file all necessary or appropriate tax forms
to obtain a refund or credit of an amount for which Borrower has
indemnified Lender.
-52-
<PAGE>
Section 8.11 ENFORCEMENT. At Borrower's sole cost and expense, Borrower
will appear in and defend any action growing out of or in any manner connected
with the Collateral Documents, or the obligations or liabilities of Borrower or
any other party thereunder, or any guarantee thereof, and Lender, if made a
party to any such action, may employ counsel and incur and pay the necessary
costs and expenses and reasonable attorneys' fees, and all such sums, together
with interest thereon at the Default Rate, shall immediately be due from
Borrower, shall be added to the Obligations and secured by the Collateral.
Section 8.12 [Intentionally Deleted.].
Section 8.13 [Intentionally Deleted.].
Section 8.14 MAINTENANCE OF REPRESENTATIONS; SUPPLEMENTAL DISCLOSURE.
Borrower shall cause the representations set forth in Article 6 hereof (other
than with respect to the representations that are given to the knowledge of
Borrower, as to which no further representation shall be deemed given) to remain
true as of the date of the funding of any Advance (i.e., the representations
shall be updated and made as of such later dates rather than restated at such
later dates as of the Closing Date, except that no such update shall be required
if the matter to be disclosed would not have a Material Adverse Effect).
Lender's remedies for a breach of any such updated representation regarding any
Property shall be the same as for a breach of a representation, as described in
Section 8.18. From time to time as may be necessary (in the event that such
information is not otherwise delivered by Borrower to Lender pursuant to this
Agreement), so long as there are Obligations outstanding hereunder, Borrower
will supplement or amend each Schedule or representation herein with respect to
any matter hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Schedule or as an exception to such representation or which is necessary to
correct any information in such Schedule or representation which has been
rendered inaccurate thereby, provided, however, that any notice delivered to
Lender hereunder in respect of any information that relates to a representation
shall be deemed to constitute an exception to such representation whether or not
such information would otherwise appear on a Schedule.
Section 8.15 PROPERTY DOCUMENTS; ASSET BUSINESS PLANS. Borrower shall
promptly deliver to Lender true and correct copies of any and all Property
Documents (other than internal Borrower memoranda and communications between
Borrower and its counsel) received by Borrower at any time during the term of
the Loan. Borrower shall deliver to Lender copies of all Asset Business Plans
(including annual budgets) within the time periods set forth for delivery of
such Asset Business Plans (including annual budgets) to Borrower pursuant to the
Asset Management Agreement, subject to reasonable extensions.
Section 8.16 INTEREST RATE CAP AGREEMENT. Within ninety (90) days after
the Closing Date, Borrower agrees to enter into an interest rate cap agreement
or other hedging device in connection with the Loan, which agreement or hedging
device shall be submitted to Lender for Lender's approval, which approval shall
not be unreasonably delayed or withheld. Borrower shall, upon execution of such
agreement, deliver to Lender the Collateral Assignment of Interest Rate Cap
Agreement, duly executed and delivered by Borrower in favor of Lender, together
with the consent
-53-
<PAGE>
of the counterparty thereunder to such collateral assignment. The original
interest rate cap agreement shall at all times cover the outstanding Loan
balance, plus the then undisbused Working Capital Allocation. Thereafter, within
thirty (30) days after any Acquisition Advance for an Additional Property,
Borrower shall amend the original interest rate cap agreement, or obtain a
separate interest rate cap agreement, covering such Advance and all prior
Advances not then covered by an interest rate cap agreement, which amendment or
separate agreement shall be subject to Lender's prior approval (which shall not
be unreasonably delayed or withheld). Upon execution of any such amendment or
new agreement, Borrower shall deliver to Lender an amendment to the existing
Collateral Assignment of Interest Rate Cap Agreement, or an additional
Collateral Assignment of Interest Rate Cap Agreement, covering such amendment or
new agreement, together with the consent of the counterparty thereunder to such
collateral assignment, in each case in form and substance reasonably
satisfactory to Lender.
Section 8.17 INDEMNIFICATION. Subject to the provisions of Section 12.1
hereof, Borrower shall indemnify and hold Lender harmless from and against any
and all suits, actions, proceedings, claims, damages, losses, liabilities and
expenses (including reasonable attorneys' fees and disbursements, including
those incurred upon any appeal) which may be instituted or asserted against or
incurred by Lender as the result of its having entered into any of the Loan
Documents or extended credit hereunder, including any suits, actions,
proceedings, claims, damages, losses, liabilities or expenses arising in
connection with any brokerage, finders' or other commissions or fees which any
broker or other Person claims is owing in connection with Borrower's acquisition
of the Properties or in connection with the Loan or the transactions
contemplated by the Loan Documents (except to the extent such Person claims that
such commissions or fees are owing solely by virtue of its dealings with
Lender).
Section 8.18 IMPAIRED PROPERTY. Notwithstanding anything herein to the
contrary, if any representation or covenant herein, or in any other Loan
Document, with respect to any Property has been breached and, in Lender's
reasonable opinion, such breach impairs the value of such Property (any such
Property being referred to herein as an "IMPAIRED PROPERTY") by at least five
percent (5%) of its Property Basis or $250,000, whichever is less, then (unless
Borrower proves to Lender's reasonable satisfaction that such breach was
appropriately considered in the determination of the initial Property Basis of
the Impaired Property, or Borrower establishes a cash Reserve which is
sufficient in Lender's reasonable judgment to cure such breach and is deposited
into a segregated account pledged to Lender such that Lender shall have a first
priority perfected lien upon such Reserve, in either which case, no default
shall be deemed to exist) Borrower shall either (1) cure such breach to Lender's
reasonable satisfaction, or (2) at Borrower's option (a) pay to Lender the
Adjusted Loan Basis for the Impaired Property and the other sums payable to
Lender hereunder in connection with a release of such Property (at which time
Lender shall release such Property from the Lien of the Loan Documents), or (b)
pay to Lender such sum as will, in Lender's reasonable opinion, reduce the
Adjusted Loan Basis of such Impaired Property to an amount equal to not more
than eighty-five percent (85%) of the fair market value of such Property, as
determined by Lender in its reasonable discretion; provided, however, that the
option described in clause (b) shall not be available if such breach impairs the
value of the Impaired Property by at least twenty-five percent (25%) of its
Property Basis. At Borrower's option, and without prepayment premium or penalty,
Borrower can pay the amount described in clauses (a) or (b) either in a lump sum
payment or
-54-
<PAGE>
through payment to Lender of one hundred percent (100%) of Operating Cash Flow,
after payment of (1) debt service on the Loan and (2) the Asset Management Fee
(except to the extent deducted as an Operating Expense in determining Operating
Cash Flow), until such sum has been paid in full. In the event Borrower has
elected to make such payments from Operating Cash Flow and such Operating Cash
Flow is not sufficient to complete the payments required by said clauses (a) or
(b) within 180 days after the date Lender asserted the respective breach in
question, then upon the expiration of said 180 day period, Borrower shall be
required to pay an amount which, together with all such prior payments received
by Lender from Operating Cash Flow, shall be sufficient to make such payment as
described in clauses (a) or (b) above. Lender's remedies as set forth in this
Section shall be exercisable by Lender at any time and from time to time during
the term of the Loan.
Section 8.19 PROPERTY-SPECIFIC COVENANTS. Borrower shall perform the
covenants (if any) set forth in Schedule 8.19 hereof applicable to one or more
specific Properties.
ARTICLE 9
NEGATIVE COVENANTS
Borrower covenants and agrees that, without Lender's prior written
consent, from and after the Closing Date:
Section 9.1 MERGERS, ETC. Borrower shall not directly or indirectly, by
operation of law or otherwise, merge with, consolidate with, acquire all or
substantially all of the assets or capital stock of, or otherwise combine with,
any Person.
Section 9.2 INVESTMENTS; LOANS AND ADVANCES. Except as otherwise
permitted by Sections 9.3 or 9.5 hereof, Borrower shall not make any investment
in, or make or accrue loans or advances of money to, any Person through the
direct or indirect holding of securities or otherwise, except (1) direct
obligations of the United States, or obligations unconditionally guaranteed by
the United States, (2) commercial paper rated in the highest grade by Standard &
Poor's or Moody's Investors Service, Inc., and (3) time deposits with, including
certificates of deposit issued by, bankers acceptances issued by, and repurchase
agreements with respect to investments described in clauses (1) and (2) with,
any office located in the United States of any bank, trust company or savings
association which is organized under the Laws of the United States or any state
thereof and has total assets aggregating at least $500,000,000, provided in each
case that such investment matures within one year from the date of acquisition
thereof by Borrower.
Section 9.3 INDEBTEDNESS.
(1) Borrower shall not create, incur, assume or permit to exist any
Indebtedness, except (a) Indebtedness secured by Liens permitted under
Section 9.7 hereof, (b) the Loan, (c) Indebtedness specifically approved in
writing by Lender, (d) Guaranteed Indebtedness incurred solely by
endorsement of instruments or items of payment for deposit to the general
account of Borrower except for surety bonds and performance guarantees
-55-
<PAGE>
entered into in the ordinary course of Borrower's business, and (e)
Indebtedness incurred in connection with the indemnifications given to the
Title Company in connection with the issuance of the Title Policies and
endorsements required pursuant hereto which Indebtedness shall be
subordinate in all respects to the Obligations (it being specifically
agreed, however, that payments made under the indemnifications prior to an
Event of Default for the purpose of paying delinquent real estate taxes
shall not be a default hereunder).
(2) Borrower shall not engage in any sale-leaseback or similar
transaction involving any of the Collateral.
Section 9.4 STRUCTURE; TRANSFERS.
(1) Borrower shall not amend the Partnership Agreement in any way that
would have a Material Adverse Effect.
(2) No general or limited partner of Borrower shall assign, transfer,
sell, convey, encumber, pledge or hypothecate, whether directly or
indirectly, by operation of law or otherwise, any of the partnership
interests in Borrower or permit any change in its ownership.
Notwithstanding anything to the contrary contained in this Agreement or in
any other Loan Document, so long as Whitehall directly or indirectly
retains ultimate decision making authority over the management and
operations of Borrower, the foregoing shall not prohibit (a) transfers of
interests between entities which are directly or indirectly wholly owned by
Whitehall or Holding Company provided that no cash is distributed to the
transferor in connection with such a transfer, (b) sales, transfers and
conveyances of limited partnership interests in Whitehall, (c) the
encumbrance, pledge or hypothecation of limited partnership interests in
Whitehall and (d) any assignment, transfer, sale, conveyance, encumbrance,
pledge or hypothecation by McNeil of all or any portion of its interest in
Holding Company, but only to the extent (i) permitted without Board of
Manager approval under Section 9.1(b) of the First Amended and Restated
Limited Liability Company Operating Agreement of WXI/McN Realty L.L.C.
dated as of January 31, 2000 (as in effect as of the Closing Date) (the
"HOLDING COMPANY OPERATING AGREEMENT"), or (ii) approved in advance in
writing by Lender, which approval shall not be unreasonably withheld or
delayed; provided, however, that in any case under this clause (d), the
approval, voting, appointment and other rights under the Holding Company
Operating Agreement of any subsequent holder of any of McNeil's interest in
the Holding Company shall not be any greater than the approval, voting,
appointment and other rights of McNeil under the Holding Company Operating
Agreement as of the Closing Date. In addition, Holding Company may transfer
its interest in the Borrower and in Borrower's general partner to a new
entity ("NEW HOLDING COMPANY"), upon satisfaction of all of the following
conditions: (A) Borrower or Holding Company provides Lender written notice
of Holding Company's election to transfer such interest at least forty five
(45) days prior to the proposed effective date of such transfer, (B) no
Event of Default has occurred and is continuing on the date on which Lender
receives Borrower's or Holding Company's notice or on the effective date of
such transfer, (C) the ownership of New Holding Company shall be identical
to the ownership of Holding Company, (D) Borrower shall have delivered to
Lender, legal opinions of Sullivan &
-56-
<PAGE>
Cromwell, counsel to Borrower and Whitehall, addressing the same matters
regarding the New Holding Company as are addressed with respect to Holding
Company in the original legal opinion provided by Sullivan & Cromwell as of
the Closing Date, and confirming (in light of such transfer) such matters
covered in such original opinion as Lender reasonably requires, (E) the
Asset Management Agreement shall have been terminated with respect to the
Properties and concurrently replaced with a new asset management agreement
between Borrower and the Asset Manager covering only the Properties (on the
same terms and conditions as the Asset Management Agreement), and Borrower
and the Asset Manager shall have executed and delivered to Lender, along
with the new asset management agreement, a collateral assignment of such
asset management agreement in form and substance satisfactory to Lender,
and (F) Borrower and New Holding Company shall have delivered to Lender
such other documents or items as Lender reasonably requires.
(3) Borrower shall not take any action or forbear from taking any
action (including, without limitation, the granting of consents to actions
taken or proposed to be taken by others) that would cause Borrower to be
taxable as a corporation for federal income tax purposes.
Section 9.5 MAINTENANCE OF BUSINESS. Borrower shall not engage in any
business other than the business currently contemplated by its Partnership
Agreement.
Section 9.6 AFFILIATE TRANSACTIONS.
(1) Borrower shall not enter into or be a party to any transaction
with any Affiliate of Borrower, except for (a) transactions contemplated by
this Agreement with respect to the refinancing of a Property, (b) the Asset
Management Agreement, and (c) any other arrangement, provided that the
terms are (i) commercially reasonable and competitive with amounts that
would be paid to or received from third parties on an "arm's-length" basis
and (ii) reduced to a writing covering all material aspects of such
arrangement.
(2) Borrower shall not enter into any agreement or transaction to pay
to any Person any management or similar fee based on or related to
Borrower's operating performance or income or any percentage thereof, nor
pay any management or similar fee to an Affiliate.
Section 9.7 LIENS. Borrower shall not create or permit any Lien (unless
Borrower proves to Lender's reasonable satisfaction that any such Lien was
appropriately considered in the determination of the initial Property Basis of
such Property) on any of its properties or assets except:
(1) presently existing or hereinafter created Liens in favor of
Lender;
(2) Permitted Encumbrances (provided that Borrower also may permit a
Lien on each Property for current but not delinquent property taxes,
assessments or other governmental charges or levies against such Property);
-57-
<PAGE>
(3) Liens securing Indebtedness specifically approved by Lender in
writing;
(4) non-monetary Liens which individually or in the aggregate would
not have a Material Adverse Effect; and
(5) monetary Liens which individually or in the aggregate would not
have a Material Adverse Effect and for which Borrower has established a
reserve with Lender necessary for the removal of such Lien, and Borrower is
diligently pursuing cure and/or contesting the Lien in accordance with
Section 8.2(2) hereof.
Section 9.8 EVENTS OF DEFAULT. Borrower shall not take or omit to take
any action, which act or omission would constitute (1) a Potential Default or an
Event of Default pursuant to, or noncompliance with any of, the terms of any of
the Loan Documents or the Ancillary Agreements, or (2) a material default or an
event of default (after notice and applicable grace periods set forth in such
other contract or instrument) pursuant to, or noncompliance with, any other
contract or instrument to which it is a party or by which it or any of its
property is bound, or any document creating a Lien, unless such default, event
of default or non-compliance would not have a Material Adverse Effect; provided,
however, that for purposes of this clause (2), no Material Adverse Effect shall
be deemed to have occurred as a result of a material adverse effect on any
Property individually unless such material adverse effect shall also result in a
Material Adverse Effect on Borrower or the Properties as a whole.
Section 9.9 GROUND LEASES. Except for the Fidelity Federal Ground
Leases, Borrower will not directly or indirectly become or remain liable as
lessee or as guarantor or other surety with respect to any ground leases.
Section 9.10 MATERIAL AGREEMENTS. Borrower shall not enter into any
Material Agreements.
ARTICLE 10
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
Section 10.1 EVENTS OF DEFAULT. The occurrence of any one or more of
the following events (regardless of the reason therefor) shall constitute an
"EVENT OF DEFAULT" hereunder:
(1) Borrower shall fail to make any payment of principal of, or
interest on or any other amount owing in respect of, the Loan, or any of
the other Obligations when due and payable or declared due and payable, and
such failure shall have remained unremedied for a period of five (5)
Business Days after such failure, except that with respect to expenses
payable under this Agreement, or other Obligations owing under any Loan
Document other than this Agreement, such failure shall have remained
unremedied for a
-58-
<PAGE>
period of five (5) Business Days after Borrower has received notice of such
failure from Lender.
(2) Borrower shall fail or neglect to perform, keep or observe any
other provision of this Agreement or of any of the other Loan Documents, or
Borrower shall fail or neglect to perform, keep or observe any of the
provisions of any other Loan Document and the same shall remain unremedied
for a period of thirty (30) days after Borrower shall receive written
notice of any such failure from Lender; provided, however, if such failure
or neglect is of the type which is curable but which cannot be cured within
such 30-day period, such failure or neglect shall not be an Event of
Default if Borrower, within such 30-day period, has commenced and
thereafter is diligently pursuing such cure, in which event Borrower shall
have such additional time as is reasonably required to effect such cure,
but in no event in excess of 180 days; and provided further that a breach
of a covenant with respect to one or more Properties shall not constitute
an Event of Default hereunder if such breach gives rise to Lender's
remedies with respect to an Impaired Property, so long as Borrower is
performing its obligations under the provisions hereof concerning Impaired
Properties.
(3) Any representation or warranty herein, or in any other Loan
Document, or in any written statement pursuant thereto or hereto, report,
financial statement, or certificate made or delivered to Lender by Borrower
shall be untrue or incorrect in any material respect, as of the date when
made or deemed made (including those made or deemed made in connection with
each Advance) and such representation or warranty, if made by Borrower
after the Closing Date, shall, if the condition that gave rise to the
breach of representation or warranty is capable of being cured, remain
untrue or incorrect for a period ending on the first to occur of (a) thirty
(30) days after Borrower has received written notice of the falsity or
inaccuracy of such representation or warranty from Lender, or (b) thirty
(30) days after Borrower shall become aware of such falsity or inaccuracy;
provided, however, that if the breach of the representation or warranty is
of a nature which is curable but which cannot be cured within such 30-day
period such failure shall not be an Event of Default if Borrower, within
such 30-day period, shall have commenced to cure the condition that gave
rise to the breach of representation or warranty and thereafter diligently
pursues such cure, in which event Borrower shall have such additional time
as is reasonably required to effect such cure, but in no event in excess of
one hundred eighty (180) days; and provided further that a breach of a
representation or warranty shall not constitute an Event of Default
hereunder if such breach gives rise to Lender's remedies with respect to an
Impaired Property, so long as Borrower is performing its obligations under
the provisions hereof concerning Impaired Properties.
(4) Any of the assets of Borrower to which in excess of $100,000 in
aggregate Adjusted Loan Basis has been allocated shall be attached, seized,
levied upon or subjected to a writ or distress warrant, or come within the
possession of any receiver, trustee, custodian or assignee for the benefit
of creditors of Borrower and shall remain unstayed or undismissed for
thirty (30) consecutive days; or any Person other than Borrower shall apply
for the appointment of a receiver, trustee or custodian for any of the
assets of Borrower and
-59-
<PAGE>
such application shall remain unstayed or undismissed for thirty (30)
consecutive days; or Borrower shall have concealed, removed or permitted to
be concealed or removed, any part of its property, with intent to hinder,
delay or defraud its creditors or any of them or made or suffered a
transfer of any of its property or the incurring of an obligation which may
be fraudulent under any bankruptcy, fraudulent conveyance or other similar
Law.
(5) A case or proceeding shall have been commenced against Borrower in
a court having competent jurisdiction seeking a decree or order in respect
of such Borrower (a) under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable federal, state or
foreign bankruptcy or other similar Law, (b) appointing a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar
official) of such Borrower or of any substantial part of its properties, or
(c) ordering the winding-up or liquidation of the affairs of Borrower, and
such case or proceeding shall remain undismissed or unstayed for thirty
(30) consecutive days or such court shall enter a decree or order granting
the relief sought in such case or proceeding.
(6) Borrower shall (a) file a petition seeking relief under Title 11
of the United States Code, as now constituted or hereafter amended, or any
other applicable federal, state or foreign bankruptcy or other similar Law,
(b) consent to the institution of proceedings thereunder or to the filing
of any such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or
similar official) of Borrower or of any substantial part of its properties,
(c) admit in writing its inability to pay its debts generally as such debts
become due, or (d) take any action in furtherance of any such action.
(7) Final judgment or judgments (after the expiration of all times to
appeal therefrom) for the payment of money in excess of $250,000 in the
aggregate shall be rendered against Borrower and the same shall not be (i)
fully covered (taking into account the deductible) by insurance maintained
by Borrower in accordance with the requirements of this Agreement, or (ii)
vacated, stayed, bonded, paid or discharged for a period of thirty (30)
days.
(8) Any provision of any Collateral Document, after delivery thereof
shall for any reason (other than being contrary to applicable Law or public
policy, and other than by Lender's acts) cease to be valid or enforceable
in accordance with its terms, or any security interest created under any
Collateral Document shall cease to be a valid and perfected first priority
security interest or Lien (subject to Permitted Encumbrances and except as
otherwise stated therein and other than being contrary to applicable Law or
public policy, and other than by Lender's acts) in any of the Collateral
purported to be covered thereby.
(9) Asset Manager defaults under the Asset Management Agreement beyond
applicable grace periods or ceases to act as manager under the Asset
Management Agreement (unless Lender has failed to approve an extension of
the Asset Management Agreement upon its expiration) unless in each case
Borrower has replaced Asset Manager
-60-
<PAGE>
as manager with a manager satisfactory to Lender in its reasonable
discretion within thirty (30) days.
(10) The occurrence of any "Event of Default" under the Whitehall
Indemnity.
(11) The occurrence of any breach or default under any Fidelity
Federal Ground Lease beyond any applicable grace or cure period, or the
occurrence of any other event which would entitle the landlord under any
Fidelity Federal Ground Lease to terminate the Fidelity Federal Ground
Lease to which it is a party.
Notwithstanding anything to the contrary herein or in the other Loan Documents,
if an Event of Default (which arises from the occurrence of a breach, default,
failure of condition or other event for which no cure period is provided herein)
or a Potential Default occurs hereunder or under another Loan Document because a
representation or warranty or a covenant is breached as it affects a particular
Property (a "DEFAULT PROPERTY"), such Event of Default or Potential Default may
be cured by paying to Lender, as the Release Payment for such Default Property,
the Adjusted Loan Basis for the Default Property (together with all other sums
payable to Lender in connection with a release of such Property) within ten (10)
days of written notice from Lender (as to any such Event of Default), or within
the applicable cure period provided in this Section 10.1 (as to any such
Potential Default), in which event Lender shall release all of its Liens on the
Default Property and all of the personal property Collateral related solely
thereto. Lender agrees that an Event of Default arising under Section 10.1(11)
shall cause the Fidelity Federal Property to be a Default Property, and that
such an Event of Default is curable under this paragraph.
Section 10.2 REMEDIES.
(1) If any Event of Default (other than an Event of Default which is
curable under the last paragraph of Section 10.1 and as to which the
ten-day cure period has not yet expired) shall have occurred and be
continuing, (a) Lender may, without notice, terminate this facility with
respect to funding further Advances, whereupon no additional Loan proceeds
shall be funded hereunder, and/or (b) Lender may: (i) without notice,
declare all Obligations to be forthwith due and payable, whereupon all such
Obligations shall become and be due and payable, without presentment,
demand, protest or further notice of any kind, all of which are expressly
waived by Borrower; provided, however, that upon the occurrence of an Event
of Default specified in Sections 10.1(4), (5) or (6) hereof, such
Obligations shall become due and payable without declaration, notice or
demand by Lender; and (ii) exercise all remedies available to Lender in the
Loan Documents, at law, in equity or otherwise.
(2) Upon the occurrence of an Event of Default Lender shall have the
right to request Borrower to, and Borrower shall, execute new promissory
notes (and appropriate amendments to the other Loan Documents) aggregating
the then outstanding balance due on the Loan. Borrower hereby designates
Lender as its attorney-in-fact to
-61-
<PAGE>
execute any such documents on behalf of Borrower, such appointment being
coupled with interest, and such designation shall be irrevocable.
Section 10.3 WAIVERS BY BORROWER Except as otherwise provided for in
this Agreement and applicable Law, Borrower waives (1) presentment, demand and
protest and notice of presentment, dishonor, notice of intent to accelerate and
notice of acceleration, (2) all rights to notice and a hearing prior to Lender's
taking possession or control of, or to Lender's replevy, attachment or levy
upon, the Properties or any bond or security which might be required by any
court prior to allowing Lender to exercise any of its remedies, and (3) the
benefit of all valuation, appraisal and exemption Laws. Borrower acknowledges
that it has been advised by counsel of its choice with respect to this
Agreement, the other Loan Documents and the transactions evidenced by this
Agreement and the other Loan Documents.
Section 10.4 RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by Law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held (other than deposits held by Borrower in trust for other
persons, such as Security Deposits, and other such deposits) and other
indebtedness at any time owing by Lender to or for the credit or the account of
Borrower against any and all of the Obligations of Borrower now or hereafter
existing under this Agreement and the Note held by Lender, irrespective of
whether or not Lender shall have made any demand under this Agreement or any
such Note and although such obligations may be unmatured. Lender agrees promptly
to notify Borrower after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of Lender under this
Section are in addition to other rights and remedies (including other rights of
set-off) which Lender may have.
ARTICLE 11
MISCELLANEOUS
Section 11.1 NOTICES. Except as otherwise provided herein, whenever it
is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by another, or whenever any of the parties desires to give or
serve upon another any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and either shall be delivered in person with receipt
acknowledged, by a nationally recognized overnight delivery service (such as
Federal Express), or by registered or certified mail, return receipt requested,
postage prepaid, or telecopied and confirmed by telecopy answerback, addressed
as follows:
-62-
<PAGE>
(a) If to Lender, at:
General Electric Capital Corporation
c/o GE Capital Realty Group, Inc.
16479 Dallas Parkway, Suite 400
Addison, Texas 75001-2512
Attention: Asset Manager (Whitehall/McNeil Portfolio)
Telecopy Number: (972) 447-2660
with copies to:
General Electric Capital Corporation
292 Long Ridge Road
Stamford, Connecticut 06927
Attention: Kevin L. Korsh, Esq. (Whitehall/McNeil Portfolio)
Telecopy Number: (203) 357-6768
(b) If to Borrower, at:
WXI/MCN Commercial Real Estate Limited Partnership
100 Crescent Court, Suite 1000
Dallas, Texas 75201
Attention: Todd Williams
Telecopy Number: (214) 855-6305
with copies to:
Whitehall Street Real Estate Limited Partnership XI
85 Broad Street, 10th Floor
New York, New York 10004
Attention: Chief Financial Officer
Telecopy Number: (212) 357-5505
and to:
Archon Group, L.P.
600 E. Las Colinas Boulevard, Suite 400
Irving, Texas 75039
Attention: Elizabeth W. Lambert
Telecopy Number: (972) 368-3699
-63-
<PAGE>
and to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Gary Israel, Esq.
Telecopy Number: (212) 558-3588
(c) If to Whitehall, at:
Whitehall Street Real Estate Limited Partnership XI
85 Broad Street, 10th Floor
New York, New York 10004
Attention: Chief Financial Officer
Telecopy Number: (212) 357-5505
and to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Gary Israel, Esq.
Telecopy Number: (212) 558-3588
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered,
with receipt acknowledged, telecopied and confirmed by telecopy answerback, or
the next Business Day if sent by a nationally recognized courier service, or
three (3) Business Days after the same shall have been deposited in the United
States mail. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to the persons
designated above to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
Section 11.2 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of the Loan Documents shall be effective unless in writing and signed
by the party against whom enforcement is sought.
Section 11.3 LIMITATION ON INTEREST. It is the intention of the parties
hereto to conform strictly to applicable usury Laws. Accordingly, all agreements
between Borrower and Lender with respect to the Loan are hereby expressly
limited so that in no event, whether by reason of acceleration of maturity or
otherwise, shall the amount paid or agreed to be paid to Lender or charged by
Lender for the use, forbearance or detention of the money to be lent hereunder
or otherwise, exceed the maximum amount allowed by Law. If the Loan would be
usurious under
-64-
<PAGE>
applicable Law (including the Laws of the State and the Laws of the United
States of America), then, notwithstanding anything to the contrary in the Loan
Documents: (1) the aggregate of all consideration which constitutes interest
under applicable Law that is contracted for, taken, reserved, charged or
received under the Loan Documents shall under no circumstances exceed the
maximum amount of interest allowed by applicable Law, and any excess shall be
credited on the Note by the holder thereof (or, if the Note has been paid in
full, refunded to Borrower); and (2) if maturity is accelerated by reason of an
election by Lender, or in the event of any prepayment, then any consideration
which constitutes interest may never include more than the maximum amount
allowed by applicable Law. In such case, excess interest, if any, provided for
in the Loan Documents or otherwise, to the extent permitted by applicable Law,
shall be amortized, prorated, allocated and spread from the date of advance
until payment in full so that the actual rate of interest is uniform through the
term hereof. If such amortization, proration, allocation and spreading is not
permitted under applicable Law, then such excess interest shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited on the Note (or, if the Note has been paid
in full, refunded to Borrower). The terms and provisions of this Section shall
control and supersede every other provision of the Loan Documents. The Loan
Documents are contracts made under and shall be construed in accordance with and
governed by the Laws of the State, except that if at any time the Laws of the
United States of America permit Lender to contract for, take, reserve, charge or
receive a higher rate of interest than is allowed by the Laws of the State
(whether such federal laws directly so provide or refer to the Law of any
state), then such federal Laws shall to such extent govern as to the rate of
interest which Lender may contract for, take, reserve, charge or receive under
the Loan Documents.
Section 11.4 INVALID PROVISIONS. If any provision of any Loan Document
is held to be illegal, invalid or unenforceable, such provision shall be fully
severable; the Loan Documents shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part thereof;
the remaining provisions thereof shall remain in full effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its severance
therefrom; and in lieu of such illegal, invalid or unenforceable provision there
shall be added automatically as a part of such Loan Document a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible to be legal, valid and enforceable.
Section 11.5 REIMBURSEMENT OF EXPENSES. Borrower shall pay all
reasonable out-of-pocket expenses of Lender in connection with underwriting this
Loan and the preparation of the Loan Documents (including all environmental
appraisals, structural appraisals and travel expenses (whether or not such
travel expense is incurred by third parties or in-house staff)) and the closing
and administration of the Loan made pursuant hereto (including the reasonable
fees and expenses of all of its counsel and advisors retained in connection with
the Loan Documents and the transactions contemplated thereby and advice in
connection therewith) and all fees and expenses of Lender. If, at any time or
times, regardless of the existence of an Event of Default (except with respect
to paragraphs (3) and (4) below, which shall be subject to an Event of Default
having occurred and be continuing), Lender shall employ counsel or other
advisors for advice or other representation or shall incur reasonable legal or
other costs and expenses in connection with:
-65-
<PAGE>
(1) any amendment, modification or waiver of, or consent with respect
to, any of the Loan Documents or advice in connection with the
administration of the Loan made pursuant hereto or its rights hereunder or
thereunder;
(2) any litigation, contest, dispute, suit, proceeding or action,
whether instituted by Lender, Borrower or any other Person, in any way
relating to the Properties, any of the Loan Documents or any other
agreements to be executed or delivered in connection herewith (including
any lenders' liability claim, contest, dispute, suit, proceeding or
action);
(3) any attempt to enforce any rights of Lender against Borrower or
any other Person, that may be obligated to Lender by virtue of any of the
Loan Documents;
(4) any attempt to verify, protect, collect, sell, liquidate or
otherwise dispose of the Properties;
then, and in any such event, the attorneys' and other parties' fees arising from
such services, including those of any appellate proceedings, and all reasonable
expenses, costs, charges and other fees incurred by such counsel and others in
any way or respect arising in connection with or relating to any of the events
or actions described in this Section shall be payable, on demand, by Borrower to
Lender and shall be additional Obligations secured under this Agreement and the
other Loan Documents. Without limiting the generality of the foregoing, such
expenses, costs, charges and fees may include: reasonable paralegal fees, costs
and expenses; accountants' and investment bankers' fees, costs and expenses;
court costs and expenses; photocopying and duplicating expenses; court reporter
fees, costs and expenses; long distance telephone charges; air express charges;
telegram charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such legal
services.
Section 11.6 APPROVALS; THIRD PARTIES; CONDITIONS. All approval rights
retained or exercised by Lender with respect to leases, contracts, plans,
studies and other matters are solely to facilitate Lender's credit underwriting,
and shall not be deemed or construed as a determination that Lender has passed
on the adequacy thereof for any other purpose and may not be relied upon by
Borrower or any other Person. This Agreement is for the sole and exclusive use
of Lender and Borrower and may not be enforced, nor relied upon, by any Person
other than Lender and Borrower. All conditions of the obligations of Lender
hereunder, including the obligation to make Advances, are imposed solely and
exclusively for the benefit of Lender, its successors and assigns, and no other
Person shall have standing to require satisfaction of such conditions or be
entitled to assume that Lender will refuse to make Advances in the absence of
strict compliance with any or all of such conditions, and no other Person shall,
under any circumstances, be deemed to be a beneficiary of such conditions, any
and all of which may be freely waived in whole or in part by Lender at any time
in Lender's sole discretion.
Section 11.7 LENDER NOT IN CONTROL; NO PARTNERSHIP/MEMBERSHIP. None of
the covenants or other provisions contained in this Agreement shall, or shall be
deemed to, give Lender the right or power to exercise control over the affairs
or management of Borrower, the power of Lender being limited to the rights to
exercise the remedies referred to in the Loan Documents. The
-66-
<PAGE>
relationship between Borrower and Lender is, and at all times shall remain,
solely that of debtor and creditor. No covenant or provision of the Loan
Documents is intended, nor shall it be deemed or construed, to create a
partnership, joint venture, agency or common interest in profits or income
between Lender and Borrower or to create an equity in any Property in Lender.
Lender neither undertakes nor assumes any responsibility or duty to Borrower or
to any other person with respect to any Property or the Loan, except as
expressly provided in the Loan Documents; and notwithstanding any other
provision of the Loan Documents: (1) Lender is not, and shall not be construed
as, a partner, joint venturer, alter ego, manager, controlling person or other
business associate or participant of any kind of Borrower or its stockholders,
members, or partners and Lender does not intend to ever assume such status; (2)
Lender shall in no event be liable for any Indebtedness, expenses or losses
incurred or sustained by Borrower; and (3) Lender shall not be deemed
responsible for or a participant in any acts, omissions or decisions of Borrower
or its stockholders, members, or partners. Lender and Borrower disclaim any
intention to create any partnership, joint venture, agency or common interest in
profits or income between Lender and Borrower, or to create an equity in any
Property in Lender, or any sharing of liabilities, losses, costs or expenses.
Section 11.8 TIME OF THE ESSENCE. Time is of the essence with respect
to this Agreement.
Section 11.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of Lender and Borrower and the respective
successors and assigns of Lender and Borrower, provided that neither Borrower
nor any other Borrower Party shall, without the prior written consent of Lender,
assign any rights, duties or obligations hereunder. Lender may sell, assign,
transfer or negotiate to one or more other lenders, commercial banks, insurance
companies, other financial institutions or any other Person acceptable to Lender
all or a portion of its rights and obligations under the Loan Documents,
provided, however, that (1) each such sale, assignment, transfer or negotiation
shall be of a constant, and not a varying, percentage of all of the assigning
Lender's rights and obligations under the Loan Documents, (2) any such sale,
assignment, transfer or negotiation shall not require Borrower to file a
registration statement with the Securities and Exchange Commission or apply to
qualify the Note under the blue sky laws of any state, or otherwise participate
in the selling process in a manner which could give rise to liability of
Borrower under Sections 11 or 12 of the Securities Act of 1933 or other federal
or state securities Laws, (3) acceptance of such assignment by any assignee
shall constitute the agreement of such assignee to be bound by the terms of this
Agreement applicable to Lender, (4) GECC shall have the exclusive right to
control all decisions by Lender under the Loan Documents, and (5) such sale,
assignment or other transfer shall not result in any increased cost to Borrower.
From and after the effective date of such an assignment, (a) the assignee
thereunder shall, in addition to the rights and obligations hereunder held by it
immediately prior to such effective date, have the rights and obligations
hereunder that have been assigned to it pursuant to such assignment and (b) the
assignor Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such assignment, relinquish its
rights and be released from its obligations under this Agreement (and, in the
case of an assignment and acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto). Borrower agrees that it will use its best
efforts to assist and cooperate, at Lender's cost and
-67-
<PAGE>
expense, with Lender in any manner reasonably requested by Lender to effect the
sale of any participation in, or any assignment of, any of the Loan Documents or
of any portion thereof or interest therein, including assistance in the
preparation of appropriate disclosure documents or placement memoranda. In the
event Lender assigns or otherwise transfers all or any part of the Note in
accordance with the provisions of this Section, Borrower shall, upon the request
of Lender, issue a new Note to effectuate such assignment or transfer, provided
that the total principal amount of all of the Notes does not exceed the
outstanding Loan balance plus the amount of undisbursed Loan funds then
available for disbursement, and the total amounts payable under the Notes are
not greater than the amounts payable prior to such assignment or transfer.
Section 11.10 RENEWAL, EXTENSION OR REARRANGEMENT. All provisions of
the Loan Documents shall apply with equal effect to each and all promissory
notes and amendments thereof hereinafter executed which in whole or in part
represent a renewal, extension, increase or rearrangement of the Loan. For
portfolio management purposes, during the Term Lender may elect to divide the
Loan into two or more separate loans evidenced by separate promissory notes so
long as the payment and other obligations of Borrower are not effectively
increased or otherwise modified. Borrower agrees to cooperate with Lender and to
execute such documents as Lender reasonably may request to effect such division
of the Loan.
Section 11.11 WAIVERS. No course of dealing on the part of Lender, its
officers, employees, consultants or agents, nor any failure or delay by Lender
with respect to exercising any right, power or privilege of Lender under any of
the Loan Documents, shall operate as a waiver thereof, it being understood that
any waivers must be in writing and executed by the party giving such waiver.
Section 11.12 CUMULATIVE RIGHTS. Rights and remedies of Lender under
the Loan Documents shall be cumulative, and the exercise or partial exercise of
any such right or remedy shall not preclude the exercise of any other right or
remedy.
Section 11.13 CONSTRUCTION. Words used in this Agreement and the other
Loan Documents in the singular, where the context so permits, shall be deemed to
include the plural and vice versa. The definitions of words in the singular in
this Agreement and the other Loan Documents shall apply to such words when used
in the plural where the context so permits and vice versa. Any reference to a
Loan Document or Ancillary Agreement shall be deemed to be a reference to such
Loan Document or Ancillary Agreement as it may hereafter from time to time be
amended, modified, supplemented or restated in accordance with the terms hereof.
Any accounting term used in this Agreement shall have, unless otherwise
specifically provided herein, the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with GAAP
consistently applied. That certain terms or computations are explicitly modified
by the phrase "in accordance with GAAP" shall in no way be construed to limit
the foregoing.
-68-
<PAGE>
Section 11.14 PHRASES. When used in this Agreement and the other Loan
Documents, the word "include(s)" means "include(s), without limitation," the
word "including" means "including, but not limited to," the phrase "satisfactory
to Lender" means "in form and substance satisfactory to Lender in all respects,"
the phrase "with Lender's consent" or "with Lender's approval" means such
consent or approval at Lender's discretion, the phrase "acceptable to Lender"
means "acceptable to Lender at Lender's sole discretion." The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the Exhibits and Schedules hereto, as the same
may from time to time be amended, modified or supplemented and not to any
particular section, subsection or clause contained in this Agreement.
Section 11.15 EXHIBITS AND SCHEDULES. The exhibits and schedules
attached to this Agreement are incorporated herein and shall be considered a
part of this Agreement for the purposes stated herein.
Section 11.16 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS. All titles
or headings to articles, sections, subsections or other divisions of this
Agreement and the other Loan Documents or the exhibits hereto and thereto are
only for the convenience of the parties and shall not be construed to have any
effect or meaning with respect to the other content of such articles, sections,
subsections or other divisions, such other content being controlling as to the
agreement between the parties hereto.
Section 11.17 PUBLICITY. Lender and Borrower will cooperate with
respect to an agreed-upon press release and any other official public statements
to be released by either of them with respect to the making of the Loan. Neither
Lender nor Borrower shall issue or shall permit any of its Affiliates to issue
any other press release or other official public statement with respect to the
making of the Loan except with the consent of the other, provided that nothing
contained herein shall restrict either Lender or Borrower or any Affiliate
thereof from making any public disclosure it reasonably believes is required by
Law or any oral response to any press inquiry.
Section 11.18 SURVIVAL. Except as otherwise expressly provided for in
the Loan Documents, no termination or cancellation (regardless of cause or
procedure) of any financing arrangement under this Agreement shall in any way
affect or impair the powers, obligations, duties, rights and liabilities of
Borrower or the rights of Lender relating to any transaction or event occurring
prior to such termination. Except as otherwise expressly provided herein or in
any other Loan Document, all undertakings, agreements, covenants, warranties and
representations contained in the Loan Documents shall survive such termination
or cancellation and shall continue in full force and effect until such time as
all of the Obligations have been paid in full in accordance with the terms of
the agreements creating such Obligations, at which time the same shall
terminate. Notwithstanding anything to the contrary set forth herein or in the
Hazardous Substances Indemnity Agreement, Lender, Borrower and Whitehall (by
separately executing this Agreement) specifically agree that the indemnities set
forth in Article 4 hereof and in the Hazardous Substances Indemnity Agreement
shall survive the full repayment of the Obligations only with respect to any
claim or demand pending or threatened for Environmental Liabilities and Costs
that is actually known to Borrower as of the date all Obligations are satisfied.
-69-
<PAGE>
Section 11.19 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING
CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
LENDER AND BORROWER AGREE TO SUBMIT TO PERSONAL JURISDICTION AND TO WAIVE ANY
OBJECTION AS TO VENUE IN THE COUNTY OF NEW YORK, STATE OF NEW YORK. NOTHING
HEREIN SHALL PRECLUDE LENDER OR BORROWER FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER JURISDICTION.
Section 11.20 ENTIRE AGREEMENT. This Agreement and the other Loan
Documents embody the entire agreement and understanding between Lender and
Borrower and supersede all prior agreements and understandings between such
parties relating to the subject matter hereof and thereof. Accordingly, the Loan
Documents may not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties with respect to the Loan Documents or the
transactions contemplated thereby. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision in any of the
other Loan Documents, the provision contained in this Agreement shall govern and
control.
Section 11.21 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which shall
constitute one document.
Section 11.22 WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, BORROWER, LENDER AND WHITEHALL HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT
(WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY OR ANY EXERCISE BY ANY PARTY
OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR IN ANY WAY RELATING TO
THE LOAN OR ANY PROPERTY (INCLUDING ANY ACTION TO RESCIND OR CANCEL THIS
AGREEMENT, AND ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS
FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A
MATERIAL INDUCEMENT FOR LENDER TO ENTER THIS AGREEMENT.
-70-
<PAGE>
Section 11.23 AUTHORIZED SIGNATURE. Until Lender shall be notified by
Borrower to the contrary, the signature upon any document or instrument
delivered pursuant hereto of any one (1) of the officers of the general partner
of Borrower listed in Schedule 11.23 hereto (as the same may be amended by
notice given hereunder) shall bind Borrower and be deemed to be the act of
Borrower, affixed pursuant to and in accordance with the Partnership Agreement
of Borrower and the approval of the partners of Borrower.
Section 11.24 POWER OF ATTORNEY. Notwithstanding anything contained
herein or in any other Loan Document to the contrary, in the exercise of any
remedy pursuant to any of the Loan Documents, Lender shall act as a prudent
lender would act in similar circumstances in creating liabilities for, or
settling liabilities against Borrower pursuant to any power of attorney granted
under any of the Loan Documents.
Section 11.25 ACKNOWLEDGMENT BY WHITEHALL. BY SEPARATELY EXECUTING THIS
AGREEMENT IN THE SPACE PROVIDED BELOW, WHITEHALL HEREBY ACKNOWLEDGES THAT IT
SHALL BE PERSONALLY LIABLE, JOINTLY AND SEVERALLY, FOR THE MATTERS SPECIFIED IN
CLAUSES (1), (2), (3), (4) AND (5) OF SECTION 12.1 HEREOF (SUBJECT TO THE
LIMITATIONS SET FORTH IN SECTION 12.1). IN CONNECTION WITH THE ASSUMPTION OF
SUCH LIABILITY, WHITEHALL HEREBY MAKES, IN FAVOR OF LENDER, THE WAIVERS,
AGREEMENTS AND UNDERSTANDINGS AS ARE SET FORTH IN SCHEDULE 11.25, WHICH
WAIVERS, AGREEMENTS AND UNDERSTANDINGS ARE INCORPORATED IN THIS SECTION BY THIS
REFERENCE AS THOUGH SET FORTH IN FULL HEREIN.
ARTICLE 12
LIMITATIONS ON LIABILITY
Section 12.1 LIMITATION ON LIABILITY. Except as otherwise provided
below, Lender's recourse shall be limited to the Collateral and no partners of
Borrower or any of their Affiliates or their affiliated companies, officers,
directors, shareholders, members or any other Person, disclosed or undisclosed,
shall be personally liable for the repayment of any of the Obligations, except
that the Borrower, Whitehall and the general and limited partners (subject to
the last sentence of this Section) in the Borrower (but not The Goldman Sachs
Group, Inc. and not any direct or indirect general or limited partners or
shareholders, members, officers, directors or employees of the general or
limited partners in Whitehall) shall be personally liable (1) for the Borrower's
fraud (but only to the extent of actual damages suffered by Lender caused by
such fraud), (2) whether prior to or after an Event of Default for the
Borrower's misappropriation (i.e., application in violation of the terms of this
Agreement) of insurance proceeds, condemnation awards, Operating Cash Flow, Net
Capital Proceeds, Lease Buy Out Consideration, Security Deposits and any other
amounts required to be held by Borrower in escrow or segregated accounts
pursuant to the terms hereof and any other escrow deposits, but only to the
extent of the amounts so misapplied and received by such partner, (3) for all
Environmental Liabilities and Costs to the extent indemnifiable under Article 4
hereof or under the Hazardous Substances Indemnity Agreements, (4) for failure
to
-71-
<PAGE>
maintain any insurance coverage required under this Agreement or any other Loan
Document, (5) a breach of the representations and warranties set forth in
Section 6.18, and (6) for all matters for which Whitehall is indemnifying Lender
pursuant to the Whitehall Indemnity. By separately executing this Agreement and
as further consideration for the making of the Loan by Lender, Whitehall agrees
that it shall be jointly and severally (except as otherwise expressly stated in
this Section) liable and responsible for the liabilities referenced in (1)
through (5) above, but Whitehall shall be liable only to the extent of: (a)
until such time as all of the Obligations have been paid in full, an amount
equal to the greater of (the "MAXIMUM LIABILITY"): (i) Twelve Million Dollars
($12,000,000); and (ii) fifty percent (50%) of the outstanding principal balance
of the Loan, calculated as of the date Lender delivers written notice to
Borrower and/or Whitehall of the existence of a claim, and (b) from and after
such time as all of the Obligations have been paid in full, Ten Million Dollars
($10,000,000), and in all cases the Maximum Liability shall be reduced by any
amounts theretofore paid by Whitehall pursuant to this Section. Lender agrees to
look first to the assets of Borrower in connection with the satisfaction of any
claim or liability arising from Section 8.17 or this Section but Lender shall
have the right to proceed against Whitehall and any of Borrower's partners as
stated above (subject to the last sentence of this Section) with respect to the
liabilities referenced in (1) through (5) above in the event Borrower disputes
or denies such liability or otherwise fails to hold Lender harmless in
accordance with the terms of Section 8.17. Nothing contained in this Section
12.1 (or in any other provision of this Agreement) shall in any way limit
Whitehall's liability under the Whitehall Indemnity. Notwithstanding anything
set forth herein to the contrary, it is specifically agreed and understood that
the liability of the limited partners (other than Whitehall) of the Borrower
under this Section shall be limited to fraud committed by a limited partner (but
only to the extent committed by such limited partner) and the matters set forth
in clause (2) above of this Section with respect to each such limited partner.
Section 12.2 LIMITATION ON LIABILITY OF LENDER'S OFFICERS, EMPLOYEES,
ETC. Any obligation or liability whatsoever of Lender which may arise at any
time under this Agreement or any other Loan Document shall be satisfied, if at
all, out of the Lender's assets only. No such obligation or liability shall be
personally binding upon, nor shall resort for the enforcement thereof be had to,
the property of any of Lender's shareholders, directors, officers, employees or
agents, regardless of whether such obligation or liability is in the nature of
contract, tort or otherwise.
EXECUTED as of the date first written above.
"LENDER":
GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation
By:
--------------------------------------
Paul St. Arnauld, Authorized Signatory
-72-
<PAGE>
"BORROWER":
WXI/MCN COMMERCIAL REAL
ESTATE LIMITED PARTNERSHIP, a Delaware
limited partnership
By: WXI/MCN Commercial Gen-Par, L.L.C.,
a Delaware limited liability
company, its General Partner
By: WXI/McN Realty L.L.C., a
Delaware limited liability
company, its Managing Member
By:
---------------------------
---------------------------
[Printed Name and Title]
"WHITEHALL":
WHITEHALL STREET REAL ESTATE LIMITED
PARTNERSHIP XI, a Delaware limited
partnership
By: WH Advisors, L.L.C. XI, a Delaware
limited liability company, its
General Partner
By:
---------------------------------
---------------------------------
[Printed Name and Title]
-73-
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 1.1(A)
PROPERTY INFORMATION
UNITS/NRSF/
NAME ADDRESS CITY STATE ASSETS PROPERTY TYPE
- ---- ------- ---- ----- ------ -------------
<S> <C> <C> <C> <C> <C>
Century Park 1771 E. Flamingo Road Las Vegas NV 113,837 Office
Kellogg Office 26 W. Dry Creek Circle Littleton CO 112,736 Office
One Corp. Ctr. I 7401 Metro Blvd. Edina MN 110,837 Office
Westwood Office Tampa FL 121,714 Office
One Corp. Ctr. III 7300 Metro Blvd. Edina MN 110,788 Office
La Plaza Center 4220 S. Maryland Pkwy Las Vegas NV 108,375 Office
Continental Plaza Scottsdale AZ 54,537 Office
Fidelity Federal 555 E. Ocean Blvd. Long Beach CA 124,485 Office
Northwest Plaza 3181 W. Siebenthaler Avenue Dayton OH 443,114 Retail
River Bay Plaza Hwy 301 S. & Gibsonton Road Riverview FL 79,298 Retail
Redwood Plaza 700 N. Redwood Road Salt Lake City UT 104,211 Retail
Towne Center Greenway & K-15 Highway Derby KS 93,522 Retail
Springwood Plaza 10160B W. Florissant Dellwood MO 88,189 Retail
Kendall Sunset 8890 SW 72nd Street Miami FL 85,437 Self Storage
Burbank Self Storage 175 W. Verdugo Avenue Burbank CA 79,636 Self Storage
Fountainbleau 8900 NW 12th Street Miami FL 74,629 Self Storage
AAA Century 3846 W. Century Blvd. Inglewood CA 54,325 Self Storage
Airport
AAA Sentry 2048 S. State Road 7 N. Lauderdale FL 79,386 Self Storage
Forest Hill 3455 Forest Hills Blvd. West Palm Beach FL 52,822 Self Storage
Margate Self Storage 1880 N. State Road 7 Margate FL 50,984 Self Storage
Military Trail 2300 N. Military Trail West Palm Beach FL 54,267 Self Storage
</TABLE>
SCHEDULE 1.1(A)
<PAGE>
SCHEDULE 1.1(B)
BASIS ALLOCATIONS
PROPERTY PROPERTY BASIS LOAN BASIS
-------- -------------- ----------
Century Park $ 9,291,480 $ 7,899,688
Kellogg Office $ 10,541,179 $ 8,962,192
One Corp. Ctr. I $ 9,556,065 $ 8,124,640
One Corp. Ctr. III $ 9,419,698 $ 8,008,700
Westwood Office * $ 9,939,577 $ 8,450,705
La Plaza Center $ 7,297,688 $ 6,204,551
Continental Plaza * $ 4,524,470 $ 3,846,739
Fidelity Federal $ 3,727,582 $ 3,169,219
Northwest Plaza $ 5,738,280 $ 4,878,730
River Bay Plaza $ 4,856,996 $ 4,129,456
Redwood Plaza $ 3,460,088 $ 2,941,794
Towne Center $ 2,568,542 $ 2,183,794
Springwood Plaza $ 2,185,075 $ 1,857,768
Kendall Sunset $ 6,876,958 $ 5,846,843
Burbank Self Storage $ 6,341,459 $ 5,391,558
Fountainbleau $ 4,253,302 $ 3,616,190
AAA Sentry $ 3,446,282 $ 2,930,056
AAA Century Airport $ 3,191,947 $ 2,713,818
Forest Hill $ 3,474,702 $ 2,954,219
Military Trail $ 3,012,739 $ 2,561,454
Margate Self Storage $ 2,956,470 $ 2,513,614
TOTAL $116,660,579 $ 99,185,728
============ ============
* Additional Properties
SCHEDULE 1.1(B)
<PAGE>
SCHEDULE 2.1
ADVANCE CONDITIONS
Part A - Initial Advance
Part B - General Conditions to Subsequent Advances
Part C - Working Capital Advances
PART A - INITIAL ADVANCE
Lender shall not be obligated to make any portion of the Initial
Advance available to Borrower unless and until Borrower shall have delivered to
Lender, in form and substance satisfactory to Lender and, as to any documents
(unless otherwise indicated), dated the Closing Date:
1. This Agreement, the Note and the Collateral Documents, the Hazardous
Substances Indemnity Agreement(s), the Whitehall Indemnity, and all other
Ancillary Agreements reasonably requested by Lender, in each case executed by
Borrower and, as applicable, each Borrower Party (and any other party thereto
other than Lender).
2. The payment to Lender of a commitment fee of $1,030,255 (less any
portion of Borrower's $300,000 good faith deposit applied thereto).
3. A Borrowing Date Certificate, duly executed and delivered by
Borrower.
4. Opinions of Sullivan & Cromwell, counsel to Borrower in respect of
the Loan Documents governed by New York law and formation and authority matters
regarding Borrower and the Borrower Parties; opinions of O'Melveny & Myers LLP,
counsel to Borrower in respect of the Collateral Documents governed by
California law; opinions of Greenberg Traurig, counsel to Borrower in respect of
the Collateral Documents governed by Florida law; and opinions of local counsel
of Lender in each jurisdiction in which one or more Properties are located; in
each case addressing such matters regarding the Borrower, each Borrower Party,
the Loan, the Loan Documents and/or the Properties as Lender may reasonably
specify.
5. A copy of the Partnership Agreement, and all amendments thereto,
certified as true and correct as of the Closing Date by the general partner of
Borrower.
6. A copy of Borrower's certificate of limited partnership from
Delaware certified as of a recent date by the appropriate Governmental
Authority.
7. Resolutions of the board of directors or board of managers (as
applicable) of the sole member of the general partner of Borrower, certified by
an authorized officer or manager of such member within a recent date prior to
the Closing Date, to be duly adopted and in full force and effect on such date,
authorizing (a) the consummation of each of the transactions contemplated
SCHEDULE 2.1 -- Page 1
<PAGE>
by this Agreement and the Loan Documents and Ancillary Agreements to which
Borrower is a party and (b) specific managers or officers to execute and deliver
this Agreement, the other Loan Documents and the Ancillary Agreements to which
Borrower is a party.
8. Certificates of an authorized officer or manager of the sole member
of general partner of Borrower, dated within a recent date prior to the Closing
Date, as to the incumbency of the officers or representatives of such member
authorized by the company resolutions delivered to Lender (pursuant to paragraph
(7) above) to execute and deliver this Agreement, the other Loan Documents and
other Ancillary Agreements, and any other certificate or other document to be
delivered pursuant hereto or thereto, together with a certification of the
incumbency of such authorized officer or manager, as the case may be.
9. Governmental certificates, dated the most recent practicable date
prior to the Closing Date, with telecopy updates where available, showing that
Borrower and the general partner of Borrower are each organized and in good
standing in the jurisdiction of their organization and showing that Borrower is
qualified as a foreign limited partnership in good standing in all states in
which any of the Properties are located (except to the extent that the local
counsel opinions delivered pursuant to paragraph (4) above provide that
qualification in a particular state is not required in order to own, operate,
lease, finance or otherwise deal with the Properties located in such state).
10. A copy of the organizational charter and all amendments thereto of
the general partner of Borrower and of the Holding Company, in each case
certified as of a recent date by the Secretary of State of the jurisdiction of
its organization, and a copy of the operating agreement of such general partner
and the Holding Company, certified by an authorized officer or manager of the
Holding Company as true and correct as of a recent date.
11. A partnership certificate of Whitehall and a consent of manager of
Whitehall's general partner certified by the Secretary or an Assistant Secretary
of such general partner, in each case within a recent date prior to the Closing
Date, to be duly adopted and in force and effect on such date, authorizing (a)
the consummation of the transactions contemplated by this Agreement and the Loan
Documents and Ancillary Agreements to which Whitehall is a party, and (b)
specific officers to execute and deliver this Agreement and the other Loan
Documents and Ancillary Agreements to which Whitehall is a party.
12. Certificates of the Secretary, an Assistant Secretary or a Vice
President of the general partner of Whitehall, dated within a recent date prior
to the Closing Date, as to the incumbency of the officers or representatives of
such general partner authorized by the company consent delivered to Lender (as
required herein) to execute and deliver this Agreement and the other Loan
Documents and Ancillary Agreements to which Whitehall is a party, and any other
certificate or other document to be delivered by Whitehall pursuant hereto or
thereto, together with a certification of the incumbency of such Secretary or
Assistant Secretary, as the case may be.
13. Financing Statements (Form UCC-1) in form sufficient to be duly
filed under the Uniform Commercial Code of each jurisdiction as may be necessary
or, in the reasonable opinion of Lender, desirable to perfect the security
interests created by the Deeds of Trust and the other
SCHEDULE 2.1 -- Page 2
<PAGE>
Collateral Documents pertaining to the Properties in the personal property and
fixtures described therein.
14. Certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports in respect of Borrower in the jurisdictions for
which UCC-1 Financing Statements are required, together with copies of financing
statements referenced therein (none of which shall cover property to be covered
by the Deeds of Trust or other Collateral Documents pertaining to the
Properties).
15. Evidence that all other actions necessary or, in the opinion of
Lender, desirable to perfect and protect the security interests created by the
Deeds of Trust and the other Collateral Documents pertaining to the Properties,
have been or will be taken.
16. An ALTA 1970 mortgagee policy of title insurance issued by the
Title Company for each of the Deeds of Trust, naming Lender as the insured, with
reinsurance and endorsements as Lender may require (including variable rate,
survey, creditors' rights (if applicable), comprehensive coverage, first loss,
tie-in, last dollar, future advances, access, zoning (with parking),
subdivision, doing business, usury, separate tax lot and contiguity
endorsements), containing no exceptions or exclusions other than Permitted
Encumbrances or as may be approved by Lender in writing, insuring that the
insured Deed of Trust is a valid, first-priority Lien on the Property encumbered
thereby and related collateral, and in an insured amount as required by Lender.
17. A certified and complete copy of the Purchase Agreement together
with such consents to sale, waivers of rights and remedies, and releases of
interest as Lender or its counsel may determine to be necessary or prudent to be
obtained from any Person who may be entitled to claim an interest in any of the
Properties or a right arising from the sale, conveyance or transfer of any of
the Properties to Borrower.
18. Current title, municipal violation, tax and bankruptcy searches
(and any other searches which Lender may require) for Borrower, any Borrower
Party and such other parties as Lender shall require in its sole discretion.
19. Evidence of insurance as required by this Agreement.
20. A current "as-built" survey of each of the Properties, dated or
updated to a date not earlier than thirty (30) days prior to the Closing Date,
certified to Lender and the Title Company, prepared by a licensed surveyor
reasonably acceptable to Lender and the Title Company, and conforming to
Lender's current standard survey requirements.
21. A current engineering report with respect to each Property,
covering, among other matters, inspection of heating and cooling systems, roof
and structural details and showing no failure of compliance with building plans
and specifications, applicable legal requirements (including requirements of the
Americans with Disabilities Act) and fire, safety and health standards. As
requested by Lender, such report shall also include an assessment of such
Property's tolerance for earthquake and seismic activity. Borrower shall also
provide Lender with copies of utility letters
SCHEDULE 2.1 -- Page 3
<PAGE>
from applicable service providers evidencing that each Property has adequate and
sufficient utility service for the use and purposes intended by Borrower.
22. A current Environment Site Assessment for each of the Properties.
23. If required by Lender, a current MAI appraisal for each Property.
24. A current rent roll for each Property, certified by Borrower
(provided that any rent roll delivered for a Property owned directly or
indirectly by Whitehall or an Affiliate of Whitehall for less than two (2)
months prior to the Closing Date shall be certified by Borrower to its
knowledge), together with all Non-Storage Leases not previously delivered to
Lender. Such rent roll shall include the following information: (a) tenant
names; (b) unit/suite numbers; (c) area of each demised premises and total area
of the related Property (stated in net rentable square feet); (d) rental rate
(including escalations), stated in gross amount and in amount per net rentable
square foot per year; (e) lease term (commencement, expiration and renewal
options); (f) expense passthroughs; (g) cancellation/termination provisions; (h)
security deposit; and (i) material operating covenants and co-tenancy clauses.
25. Copies of the Asset Management Agreement and the property
management agreements for the Properties, certified by Borrower as being true,
correct and complete.
26. Copies of all Material Agreements, which Material Agreements must
be approved in advance by Lender and, if required by Lender, must be
subordinated, in all respects, to the Loan Documents.
27. Borrower shall establish all accounts and escrows as required by
the terms of this Agreement and deliver to Lender satisfactory evidence thereof.
28. Evidence that the Properties and the operation thereof comply with
all legal requirements, including that all requisite certificates of occupancy,
building permits, and other licenses, certificates, approvals or consents
required of any Governmental Authority have been issued without variance or
condition and that there is no litigation, action, citation, injunctive
proceedings, or like matter pending or threatened with respect to the validity
of such matters. Borrower shall provide Lender with copies of all certificates
of occupancy and, if required by Lender, shall deliver letters from applicable
zoning, building and municipal agencies evidencing the foregoing.
29. No change shall have occurred in the financial condition of
Borrower or any Borrower Party or in the Operating Cash Flow of any of the
Properties, or in the financial condition of any major or anchor tenant, which
would have, in Lender's reasonable judgment, a Material Adverse Effect.
30. No condemnation or adverse zoning or usage change proceeding shall
have occurred or shall have been threatened against any of the Properties; none
of the Properties shall have suffered any significant damage by fire or other
casualty which has not been repaired; no Law,
SCHEDULE 2.1 -- Page 4
<PAGE>
moratorium, injunctive proceeding, restriction, litigation, action, citation or
similar proceeding or matter shall have been enacted, adopted, or threatened by
any Governmental Authority, which would have, in Lender's judgment, a Material
Adverse Effect.
31. All fees and commissions payable to real estate brokers, mortgage
brokers, or any other brokers or agents in connection with the Loan or the
acquisition of the Properties have been paid.
32. The representations and warranties contained in this Loan Agreement
and in all other Loan Documents are true and correct as of the date of the
disbursement of the Initial Advance.
33. No Potential Default or Event of Default has occurred and is
continuing.
34. A letter, executed by Borrower, addressed to its independent
certified public accountants instructing them to comply with the provisions of
Section 7.4 hereof.
35. To the extent invoices have been submitted to Borrower and
evidenced to Lender, payment of all reasonable fees and expenses of (a) Lender's
outside counsel, Sheppard, Mullin, Richter & Hampton LLP, (b) all special local
counsel retained by Lender in connection with any of the Loan Documents and the
transactions contemplated hereby and (c) all third party costs and expenses
incurred by Lender in connection with the transaction contemplated by this
Agreement, including costs of environmental appraisals, structural reports and
travel expenses.
36. Estoppel certificates and, where required by Lender, subordination,
nondisturbance and attornment agreements from Tenants under Leases as shall be
satisfactory to Lender.
37. Lender shall have verified, based upon Lender's audit, a Cash On
Cash Return of at least 10.75% and a Debt Service Coverage Ratio of at least
1.15 to 1.00.
38. Lender shall have verified that the amount of the Initial Advance
does not exceed eighty percent (80%) of the aggregate acquisition costs for all
Properties.
39. Lender shall have verified that the amount of the Initial Advance
does not exceed 85.021% of Lender's determination of the aggregate value of the
Properties, as set forth in the "Property Basis" column of Schedule 1.1(B).
40. Lender shall have determined that no developments have occurred
with respect to any pending Shareholder Litigation since the date Lender
obtained credit approval for the Loan (October 21, 1999) (the "CREDIT APPROVAL
DATE") which have a reasonable possibility of resulting in a Material Adverse
Effect, and no new or additional information regarding any pending Shareholder
Litigation shall have become known to Lender since the Credit Approval Date of
such on account of which Lender determines that such pending Shareholder
Litigation has a reasonable possibility of resulting in a Material Adverse
Effect or a material adverse effect on the Holding
SCHEDULE 2.1 -- Page 5
<PAGE>
Company. Without limiting the foregoing, none of the Properties shall be subject
to any lis pendens or other notice of pending action with respect to any
Shareholder Litigation. In addition, Lender shall have determined that there is
no other pending or threatened Shareholder Litigation (not disclosed in writing
by Borrower to Lender prior to the Credit Approval Date) which has a reasonable
possibility of resulting in a Material Adverse Effect or a material adverse
effect on the Holding Company.
41. The transactions contemplated by the Purchase Agreement, as they
relate to the Properties, shall have been consummated in all material respects
(including consideration paid and conditions precedent) in accordance with the
terms and conditions set forth in the final "Proxy Statements" (as defined in
the Purchase Agreement) dated December 14, 1999, and none of the material terms
of the proposed transactions described in such Proxy Statements shall have been
waived, modified, amended or supplemented in any material respect.
42. Such other documents or items as Lender reasonably may require. All
material documents related to the Properties and other Property Documents, if
any, in Borrower's possession (other than internal Borrower memoranda and
communications between Borrower and its counsel) prior to Closing Date shall
have been delivered to Lender.
Lender agrees that upon funding the Initial Advance, the conditions set
forth in this Part A shall be deemed satisfied (other than those conditions
waived as a requirement of the initial funding but reserved in writing by Lender
as a condition to subsequent Advances).
PART B - GENERAL CONDITIONS TO SUBSEQUENT ADVANCES
In addition to the specific conditions set forth elsewhere in this
Agreement for the particular type of Advance requested, each Advance following
the Initial Advance shall be subject to Lender's receipt, review, approval
and/or confirmation of the following, each in form and content satisfactory to
Lender in its reasonable discretion:
1. Borrower shall have delivered to Lender a Notice of Additional
Advance for the requested Advance.
2. Borrower shall have satisfied any conditions waived by Lender as a
requirement to funding the Initial Advance but reserved in writing by Lender as
a condition for subsequent Advances.
3. There shall exist no Potential Default and no Event of Default
(currently and after giving effect to the requested Advance); provided that (a)
if the Advance is a Working Capital Advance, then the foregoing requirement
regarding Potential Defaults shall apply only to monetary Potential Defaults,
and (b) if the Advance is an Acquisition Advance, then the foregoing requirement
regarding potential defaults shall apply only to monetary Potential Defaults and
those nonmonetary
SCHEDULE 2.1 -- Page 6
<PAGE>
Potential Defaults for which Lender has delivered notice to Borrower under
Section 10.1(2) and which Lender reasonably determined would have a Material
Adverse Effect.
4. The representations and warranties contained in this Loan Agreement
and in all other Loan Documents are true and correct (other than with respect to
the representations that are given to the knowledge of Borrower, as to which no
further representation shall be deemed given) on and as of the Closing Date and
as of the date of the requested Advance (i.e., the representations shall be
updated as of such dates rather than restated at such time as of the Closing
Date, except that no such update shall be required if the matter to be disclosed
would not have a Material Adverse Effect), other than breaches of
representations or warranties for which Lender has remedies under Section 8.18
so long as Borrower is performing its obligations thereunder.
5. The requested Advance shall be secured by the Loan Documents,
subject only to Permitted Encumbrances and to those exceptions to title approved
by Lender at the time of Loan closing, provided that if the Title Policies and
the endorsements originally issued thereto do not insure the priority of the
requested Advance as required herein, such priority shall be evidenced by such
additional endorsements to each Title Policy as are satisfactory to Lender.
6. Borrower shall have paid Lender's reasonable out-of-pocket costs and
expenses in connection with such advance (including title and recording charges,
taxes and filing fees and costs and expenses of Lender's inspecting engineer and
attorneys).
7. A certification from a duly authorized officer of the general
partner of Borrower, certifying that there have been no changes, alterations or
improvements to any Property which would cause the survey, or any notes or
certifications thereon with respect to such Property, to be inaccurate or in
need of modification.
8. If the Adjusted Loan Basis for any Property is being adjusted to
reflect the Advance, Borrower shall have amended any applicable Collateral
Document that contains a maximum indebtedness provision that is based upon such
Adjusted Loan Basis to increase such maximum indebtedness, if it is not already
equal, to 120% of the Adjusted Loan Basis calculated after such Advance, and
Borrower shall have paid all additional mortgage recording taxes which may be
due on account of such reallocation and all recording charges and filing fees
incurred in connection with recording any amended Collateral Documents.
The acceptance by Borrower of the proceeds of any Advance shall be
deemed to constitute, as of the date of such acceptance, a confirmation by
Borrower of the granting and continuance of Lender's Liens pursuant to the
Collateral Documents.
PART C - WORKING CAPITAL ADVANCES
In addition to the applicable terms and conditions set forth in Section
2.1 hereof, and the general conditions set forth in Part B above, each Working
Capital Advance shall also be subject
SCHEDULE 2.1 -- Page 7
<PAGE>
to Lender's receipt, review, approval and/or confirmation of the following, at
Borrower's cost and expense, each in form and substance reasonably satisfactory
to Lender:
1. Lender shall have approved the Working Capital Budget for the
Property for which the Working Capital Advance is requested.
2. Copies of any invoices to be paid with such Working Capital Advance
and, to the extent not previously delivered to Lender, evidence of the payment
of any invoice submitted with the immediately preceding request for a Working
Capital Advance.
3. Borrower shall have executed and delivered to Lender copies of all
documents, agreements, certificates, affidavits, searches or other instruments
which Lender and its counsel determine are necessary to comply with state Laws
applicable to building and construction loans.
4. Borrower shall not use any portion of any Working Capital Advance
for payment of any costs or expenses other than those for which such Advance was
requested and approved.
5. A certificate of the Architect stating that, in the professional
opinion of the Architect (or such other professional as may be reasonably
satisfactory to Lender), if an architect customarily would be retained for such
Capital Expenditures and Tenant Improvements, or a certificate of an officer of
the general partner of Borrower stating that:
(a) all of such Capital Expenditures and Tenant Improvements completed
have been done in a good and workmanlike manner and in material compliance
with the approved plans and specifications, if any, and in accordance with
all applicable provisions of Law;
(b) the sum requested is justly required to reimburse Borrower for
payments by Borrower to, or is justly due to, the contractor,
subcontractors, materialmen, laborers, engineers, architects or other
persons rendering services or supplying materials in connection with such
Capital Expenditures and Tenant Improvements (giving a brief description of
such services and materials), and that when added to all sums previously
paid out by Lender, if any, the resulting sum does not exceed the value of
the such Capital Expenditures and Tenant Improvements done to the date of
such certificate; and
(c) with respect to the certificate of the general partner of Borrower
only, the amount of the requested Working Capital Advance (as allocated to
such Property) will be sufficient (together with other funds otherwise
available to Borrower) on completion of such Capital Expenditures and
Tenant Improvements to pay for the same in full (giving in such reasonable
detail as Lender may require an estimate of the cost of such completion and
if such other funds are required as to the sources of such funds).
SCHEDULE 2.1 -- Page 8
<PAGE>
6. With respect to Capital Expenditures or Tenant Improvements the cost
of which (in the aggregate with respect to the completion of the entire project)
is or is estimated to equal or exceed $150,000:
(a) waivers or releases of liens, reasonably satisfactory to Lender,
covering that part of such Capital Expenditures and Tenant Improvements
previously paid for, if any;
(b) the request for any payment after such Capital Expenditures and
Tenant Improvements have been completed shall be accompanied by a copy of
any certificate or certificates required by Law to render occupancy and
operation of the Property legal;
(c) a construction consultant retained by Lender shall have inspected
and approved such Capital Expenditures or Tenant Improvements (as
applicable), at Borrower's cost and expense;
(d) evidence satisfactory to Lender (including compliance letters from
applicable Governmental Authorities) that the Property in connection with
which the Working Capital Advance is being made is not in violation of any
zoning, building, health, fire, traffic, environmental, wetlands, coastal
or other rules, regulations, ordinances, statutes and requirements
applicable thereto;
(e) Lender shall retain an amount equal to 10% of the cost to perform
such Capital Expenditures, until delivery of acceptable final lien waivers
or releases from all contractors performing such Capital Expenditures; and
(f) Lender shall retain an amount equal to 10% of the cost to perform
such Tenant Improvements until Lender receives delivery of acceptable final
lien waivers or releases from all contractors performing such Tenant
Improvements.
7. As to Tenant Improvements in which the cost in the aggregate for the
completion of the entire project equals or exceeds $50,000, an estoppel
certificate, from the Tenant for which such Tenant Improvements are being
performed, in form and content reasonably acceptable to Lender.
8. Proof reasonably satisfactory to Lender that the respective expenses
for which any prior Working Capital Advance was funded have been paid in full.
9. With respect to any Tenant Improvement or Leasing Cost to be paid
with such Working Capital Advance, copies of the applicable Leases in the form
required in this Agreement and, with respect to Leasing Costs, a copy of the
commission agreement (or other evidence reasonably satisfactory to Lender)
indicating that no more than one-half of the commission is payable on the date
the applicable Lease is executed and the balance is payable on the date the
Tenant occupies the premises which are being leased to the Tenant. In no event
shall any Working
SCHEDULE 2.1 -- Page 9
<PAGE>
Capital Advance with respect to a Leasing Cost exceed the portion of the Leasing
Cost then due and payable as provided in the immediately preceding sentence.
10. With respect to any Tenant Allowance, such supporting documentation
and information as may reasonably be required by Lender.
11. With respect to any funding to be advanced for Tenant Improvements
and Leasing Costs: (a) the aggregate amount of all Working Capital Advances for
any Lease shall not exceed $20.00 per square foot for Tenant Improvements; (b)
the aggregate amount of Working Capital Advances for any Leasing Costs shall not
exceed 7.5% of the total rent payable under the respective Lease during the
initial term of the Lease, or as to any renewal, 4.5% of the total rent payable
under the respective Lease during the renewal term; (c) in the event the amount
of Working Capital Advances for Tenant Improvements and Leasing Commissions for
any single Lease exceeds $400,000.00, Lender shall have the right to approve
such Lease prior to making any such advance; (d) any remaining balance of the
Lease Buy Out Consideration with respect to the space for which the Tenant
Improvement will be constructed, shall be used by Borrower for such Tenant
Improvement prior to using or requesting any Working Capital Advance therefor.
Notwithstanding the foregoing, the limitations for Tenant Improvements and
Leasing Costs set forth in the immediately preceding clauses (a) and (b)
respectively may be reasonably increased to such amount as may be requested by
Borrower, provided that Borrower is able to demonstrate to Lender's reasonable
satisfaction that the increased amount requested by Borrower is consistent with
the market in the relevant geographic market.
12. The Lease, with respect to which a Working Capital Advance is being
made for Tenant Improvements, Leasing Costs or Capital Expenditures, shall (a)
have been entered into on or after the Closing Date (or the renewal thereof
shall have been entered into on or after the Closing Date); (b) be in a lease
form reasonably acceptable to Lender; (c) contain standard subordination and
attornment provisions and shall otherwise contain terms and provisions which are
consistent with market terms for similar properties in the area, including the
terms regarding rents, concessions, tenant improvements, term (which shall not
in any event be less than three (3) years in order for such Lease to qualify for
a Working Capital Advance), renewals and leasing costs; (d) provide for a rental
rate in any one year of not less than eighty percent of the annual average
rental for the entire term thereof; (e) provide with respect to Leases which are
not triple net, for base year operating expense stops for purposes of
calculating each Tenant's operating expense escalation for each Property which
are, in the aggregate, equal to then current operating expenses for such
Property plus or minus ten percent (10%); and (f) provide that if the Tenant has
the right or option to terminate the Lease prior to its stated expiration date,
such Tenant shall reimburse Borrower for the unamortized cost of Tenant
Improvements and Leasing Costs paid for by Borrower.
13. With respect to any funding to be advanced for Capital
Expenditures, in no event shall the Working Capital Advances with respect to any
single Property exceed (in the aggregate for all Capital Expenditures made in
respect of such Property) the total amount of Loan funds allocated to Capital
Expenditures in the approved Working Capital Budget for such Property. In no
event shall a Working Capital Advance for Capital Expenditures, Tenant
Improvements or
SCHEDULE 2.1 -- Page 10
<PAGE>
Leasing Costs be available for Work or Major Work required in connection with
any casualty or condemnation.
14. With respect to Capital Expenditures and Tenant Improvements,
Borrower shall have delivered to Lender, to the extent not previously delivered
to Lender:
(a) if the cost thereof is equal to or greater than $100,000, complete
plans and specifications for such Capital Expenditures and Tenant
Improvements (approved by all Governmental Authorities whose approval is
required at such time), for Lender's approval, which approval shall not be
unreasonably withheld or delayed, which plans and specifications shall bear
the signed approval thereof by an Architect and shall be accompanied by the
Architect's signed estimate, bearing the Architect's seal, of the entire
cost of completing such Capital Expenditures and Tenant Improvements;
(b) certified or photostatic copies of all permits and approvals
required by Law in connection with the commencement and conduct such
Capital Expenditures and Tenant Improvements; and
(c) if the cost thereof is equal to or greater than $250,000, and if
required by Lender, a payment and performance bond for and/or guaranty of
the payment for and completion of such Capital Expenditures and Tenant
Improvements, which bond or guaranty shall be in form reasonably
satisfactory to Lender, and shall be signed by a surety or sureties, or
guarantor or guarantors, as the case may be, who are reasonably acceptable
to Lender, and shall be in an amount of not less than one hundred ten
percent (110%) of the Architect's estimate of the entire cost of completing
such Capital Expenditures and Tenant Improvements; provided, however, that
no such performance bond or guaranty shall be required if Borrower has
completed and paid for such Capital Expenditures or Tenant Improvements and
is seeking a Loan disbursement to reimburse Borrower for such costs.
SCHEDULE 2.1 -- Page 11
<PAGE>
SCHEDULE 2.1(5)
WORKING CAPITAL BUDGETS FOR PROPERTIES
TENANT LEASING CAPITAL
PROPERTY IMPROVEMENTS COSTS EXPENDITURES TOTAL
-------- ------------ ----- ------------ -----
Century Park $ 625,000 $ 302,000 $ 372,000 $ 1,299,000
Kellogg Office $ 463,000 $ 174,000 $ 200,000 $ 837,000
One Corp. Ctr. I $ 386,000 $ 139,000 $ 200,000 $ 725,000
Westwood Office $ 329,000 $ 170,000 $ 299,000 $ 798,000
One Corp. Ctr. III $ 519,000 $ 213,000 $ 153,000 $ 885,000
La Plaza Center $ 943,000 $ 414,000 $ 316,000 $ 1,672,000
Continental Plaza $ 284,000 $ 130,000 $ 193,000 $ 608,000
Fidelity Federal $ 594,000 $ 178,000 $ 639,000 $ 1,411,000
Northwest Plaza $ 276,000 $ 137,000 $ 333,000 $ 745,000
River Bay Plaza $ 64,000 $ 23,000 $ 33,000 $ 120,000
Redwood Plaza $ 30,000 $ 16,000 $ 40,000 $ 86,000
Towne Center $ 90,000 $ 50,000 $ 47,000 $ 187,000
Springwood Plaza $ 52,000 $ 27,000 $ 31,000 $ 111,000
Kendall Sunset $ -- $ -- $ 24,000 $ 24,000
Burbank Self Storage $ -- $ -- $ 10,000 $ 10,000
Fountainbleau $ -- $ -- $ 118,000 $ 118,000
AAA Century Airport $ -- $ -- $ 221,000 $ 221,000
AAA Sentry $ -- $ -- $ 45,000 $ 45,000
Forest Hill $ -- $ -- $ 39,000 $ 39,000
Margate Self Storage $ -- $ -- $ 29,000 $ 29,000
Military Trail $ -- $ -- $ 32,000 $ 32,000
TOTAL $ 4,655,000 $ 1,973,000 $ 3,372,000 $10,000,000
=========== =========== =========== ===========
SCHEDULE 2.1(5)
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 4.2
ENVIRONMENTAL REPORTS
PROPERTY NAME REPORT TITLE CONSULTANT DATE
===========================================================================================================================
<S> <C> <C> <C>
Continental Plaza Office Building Phase I ESA ERM 6-21-91
Phase I ESA PSI 1-15-98
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
Fidelity Federal Plaza Phase I ESA ERM 7-10-91
Comprehensive Asbestos Bulk Survey ATEC 6-7-93
Operations & Maintenance Program ATEC 6-15-93
Phase I ESA PSI 1-29-98
Asbestos O&M Program McNeil -
Asbestos Containing Material Removal PSI 10-6-98
Confirmation
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
Kellogg Office Building Phase I ESA ERM 7-10-91
Phase I ESA PSI Jan -98
Secondary Containment GTG (PSI) 1-7-98
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
Westwood Office Building Phase I ESA ERM 6-21-91
Phase I ESA, Engineering Property RERC 8-19-93
Condition Survey and ADA Survey
Phase I ESA PSI 1-23-98
Phase II ESA PSI 9-30-98
Phase I ESA Update PSI 5-1-99
City of Tampa letter City of Tampa 12-17-99
- ---------------------------------------------------------------------------------------------------------------------------
One Corporate Center I Office Bldg. Phase I ESA ERM 6-21-91
Phase I ESA Law 3-21-95
Phase I ESA PSI Jan -98
Asbestos O&M Program PSI 4-29-98
Radon Testing Results PSI 10-6-98
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
One Corporate Center III Office Bldg. Phase I ESA ERM 6-21-91
Phase I ESA Law 3-21-95
Phase I ESA PSI Jan -98
Asbestos O&M Program PSI 4-29-98
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
La Plaza Center Level I Environmental Assessment and Dressler 1-10-92
Asbestos Screening
Phase I ESA PSI 1-14-98
Asbestos O&M Program PSI 4-29-98
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
Century Park Phase I ESA ERM 7-10-91
Phase I ESA PSI 1-14-98
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 4.2 -- Page 1
<PAGE>
<TABLE>
<CAPTION>
PROPERTY NAME REPORT TITLE CONSULTANT DATE
===========================================================================================================================
<S> <C> <C> <C>
River Bay Plaza Phase I ESA ERM 7-9-91
Phase I Environmental Assessment ECT Jan -92
Phase I ESA Update ECT 4-28-97
Phase I ESA PSI 1-23-98
Phase II ESA PSI 9-30-98
Phase I ESA Update PSI 5-1-99
Limited Phase II ESA PSI 6-17-99
- ---------------------------------------------------------------------------------------------------------------------------
Towne Center Shopping Center Phase I ESA ERM 7-9-91
Phase I ESA PSI 1-26-98
Lead in the Domestic Water Testing PSI 3-2-98
Asbestos O&M Program PSI 4-29-98
Asbestos Containing Material Removal PSI 10-6-98
Confirmation
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
Springwood Plaza Shopping Center Phase I ESA ERM 7-9-91
Phase I ESA PSI 1-15-98
Asbestos O&M Program PSI 4-29-98
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
Northwest Plaza Phase I ESA ERM 7-9-91
Asbestos Bulk Sampling Survey Helix Env. 12-22-93
Phase I ESA PSI 1-23-98
Lead-based Paint O&M Program PSI 6-24-98
Asbestos O&M Program PSI 6-24-98
Phase II ESA PSI 9-25-98
Phase I ESA Update PSI 5-1-99
Phase II ESA PSI 6-1-99
- ---------------------------------------------------------------------------------------------------------------------------
Redwood Plaza Phase I ESA PSI 1-23-98
Asbestos O&M Program McNeil -
Subsurface Environmental Investigation PSI 10-01-98
Limited Soil and Groundwater PSI 3-26-99
Investigation
Voluntary Cleanup Program Application PSI 3-26-99
Phase I ESA Update PSI 5-1-99
Voluntary Cleanup Program Response State of Utah 6-1-99
Assessment of Potential Impact to Off-Site PSI 12-2-99
Wells
PSI 12-7-99
PSI 12-21-99
- ---------------------------------------------------------------------------------------------------------------------------
Burbank Self Storage Phase I ESA ERM 6-21-91
Phase I ESA PSI 1-23-98
Phase I ESA Update PSI 5-1-99
Phase II ESA PSI 6-1-99
- ---------------------------------------------------------------------------------------------------------------------------
AAA Century Airport Self Storage Phase I ESA ERM 6-21-91
Phase I ESA PSI 1-23-98
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
Margate Self Storage Phase I ESA ERM 6-21-91
Phase I ESA PSI 1-23-98
Lead in the Domestic Water Testing PSI 6-23-98
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
Fountainbleau Self Storage Phase I ESA
Phase I ESA Update
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 4.2 -- Page 2
<PAGE>
<TABLE>
<CAPTION>
PROPERTY NAME REPORT TITLE CONSULTANT 5-17-99E
===========================================================================================================================
<S> <C> <C> <C>
Kendall Sunset Self Storage Phase I ESA ERM 6-21-91
Phase I ESA Law 3-21-95
Phase I ESA PSI 1-23-98
Lead in the Domestic Water Testing PSI 3-2-98
Phase I ESA Update PSI 4-26-99
- ---------------------------------------------------------------------------------------------------------------------------
AAA Sentry Self Storage Phase I ESA ERM 6-4-91
Phase I ESA PSI 1-23-98
Phase II ESA PSI 10-5-98
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
Forest Hill Self Storage Phase I ESA ERM 6-21-91
Phase I ESA PSI 1-23-98
Lead in the Domestic Water Testing PSI 6-23-98
Phase I ESA Update PSI 5-1-99
- ---------------------------------------------------------------------------------------------------------------------------
Military Trail Self Storage Phase I ESA ERM 6-21-91
Phase I ESA PSI 1-23-98
Lead in the Domestic Water Testing PSI 3-2-98
Phase I ESA Update PSI 5-1-99
Phase II ESA PSI 6-1-99
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 4.2 -- Page 3
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 5.1(A)
TENANT DELINQUENCIES
ASSET NAME SECTION COMMENT
======================================================================================================================
<S> <C> <C>
Century Park 5.1(4) Rockwell Mortgage has vacated, but still paying rent.
- ----------------------------------------------------------------------------------------------------------------------
La Plaza 5.1(4) Universal Accounting has vacated, but still paying
rent.
- ----------------------------------------------------------------------------------------------------------------------
Springwood Plaza 5.1(4) Hub Cleaners, tenant went dark in October 1999.
Lease expires 1/31/00. Tenant owes $7,105.05.
- ----------------------------------------------------------------------------------------------------------------------
Springwood Plaza 5.1(4) Grace Home Health Care, tenant went dark in
November 1999. Lease expires 10/31/31. Tenant
owes $9,631.84. Tenant offered to settle for $1,500
cash.
- ----------------------------------------------------------------------------------------------------------------------
Towne Center 5.1(4) South Kansas Title went dark. Landlord received a
letter from tenant that they were vacating effective
12/31/99, and paid through 12/31/99. Their lease does
not expire until August 31, 2000.
- ----------------------------------------------------------------------------------------------------------------------
Towne Center 5.1(4) Genco Mortgage has moved out and paid rent through
their lease dated January 18, 2000.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 5.1(A)
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 5.1(B)
NOTICES OF TERMINATION OR DEFAULT
ASSET NAME SECTION COMMENT
======================================================================================================================
<S> <C> <C>
555 E. Ocean 5.1(5) SPCL Shipping Agency, Inc. (697/sf) recently went
dark, but still paying rent. Landlord received a letter
from the tenant dated January 21, 2000 asking to
terminate their lease effective March 31, 2000 with a
termination fee of keeping tenant's security deposit of
$3,897.60. Tenant's termination date is October 31,
2000 and has no right to terminate. Landlord to
negotiate.
- ----------------------------------------------------------------------------------------------------------------------
555 E. Ocean 5.1(5) Gulf & Atlantic Maritime Services (1,678/sf) recently
went dark. Landlord negotiated and has received a
termination fee of $20,000 that Tenant. The
agreement and check are in route to Landlord.
Existing tenant, Canada Maritime Agencies will
absorb the premises with tenant improvements.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 5.1(B)
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 5.1(C)
PURCHASE OPTIONS
ASSET NAME SECTION COMMENT
======================================================================================================================
<S> <C> <C>
Springwood Plaza 5.1(7) Schnuck Market, Inc. Tenant has right of first refusal
to purchase shopping center. Tenant has 20 days after
actual physical receipt of such notice and other data to
elect to purchase or decline.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 5.1(C)
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 5.1(D)
LEASE TERMINATION RIGHTS
ASSET NAME SECTION COMMENT
======================================================================================================================
<S> <C> <C>
Century Park 5.1(8) Department of Business and Industry are a State
agency funded on an annual basis. Should the
Department not be funded for the upcoming year,
Tenant has a right to terminate.
- ----------------------------------------------------------------------------------------------------------------------
La Plaza 5.1(8) State of Nevada, Department of Human Resources/
Division of Child and Family Services is a State
agency funded on an annual basis. Should this
Department not be funded in the upcoming year,
Tenant has a right to terminate.
- ----------------------------------------------------------------------------------------------------------------------
La Plaza 5.1(8) State of Nevada, Department of Human Resources/
Health Division/Bureau of Licensure and Certification
is a State agency funded on an annual basis. Should
this Department not be funded in the upcoming year,
Tenant has a right to terminate.
- ----------------------------------------------------------------------------------------------------------------------
La Plaza 5.1(8) State of Nevada/Board of Pharmacy is a State agency
funded on an annual basis. Should this Department
not be funded in the upcoming year, Tenant has a
right to terminate.
- ----------------------------------------------------------------------------------------------------------------------
La Plaza 5.1(8) State of Nevada/State Contractors Board is an agency
funded on an annual basis. Should this Department
not be funded in the upcoming year, Tenant has a
right to terminate.
- ----------------------------------------------------------------------------------------------------------------------
Northwest Plaza 5.1(8) $100 Store may terminate of competing store causes
10% decrease in sales. 90 days notice required.
- ----------------------------------------------------------------------------------------------------------------------
Northwest Plaza 5.1(8) Check Into Cash may terminate if Kroger is dark for
12 months or if new laws cause cancellation of lease
or reduced fee income. 60 days notice and 20% fee of
remaining base rent.
- ----------------------------------------------------------------------------------------------------------------------
Northwest Plaza 5.1(8) Fashion Cents may terminate if Kroger or Elder
Beerman vacate or abandon their space.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 5.1(D) -- Page 1
<PAGE>
<TABLE>
<CAPTION>
ASSET NAME SECTION COMMENT
======================================================================================================================
<S> <C> <C>
Northwest Plaza 5.1(8) Fiesta Salons my terminate if 2 spaces on either side
of tenant are used for adult
entertainment, massage
parlor, game room, bar,
lounge, restaurant, or pizza
delivery.
- ----------------------------------------------------------------------------------------------------------------------
Northwest Plaza 5.1(8) Katie's Hallmark my terminate if landlord leases to
another tenant who's business is primarily is selling
party supplies, greeting cards, or gift wrap and
occupying 8,000 sq. ft. or less. If Kroger or Elder
Beerman vacate tenant goes to lesser of base rent or
7% percentage rent. If replacement is not found
tenant may terminate with 3 months notice.
- ----------------------------------------------------------------------------------------------------------------------
Northwest Plaza 5.1(8) Kay-Bee Toy Works may terminate after 36th month
if sales between months 25 and 36 do not equal
$850,629.60, 90 days notice required.
- ----------------------------------------------------------------------------------------------------------------------
Northwest Plaza 5.1(8) Radio Shack may terminate if one year sales are under
$350,000 or the center is under 60% leased or if an
anchor tenant vacates and no replacement found
within 9 months. 60 days notice required.
- ----------------------------------------------------------------------------------------------------------------------
Plaza Westlake 5.1(8) Check 'N Go, with 6 months notice to Landlord, has
right to terminate lease last day of 3rd year. Last day
of 3rd year is August 31, 2001.
- ----------------------------------------------------------------------------------------------------------------------
Redwood Plaza 5.1(8) Under schedule B section 10 of the Lease with Drivers
License Division/Motor Vehicle Division. They have
the right to terminate their lease if space requirements
of the lease are altered by a Federal Act or an act of
the Utah State Legislature upon sixty (60) days notice.
- ----------------------------------------------------------------------------------------------------------------------
River Bay Plaza 5.1(8) Walgreens has the right and option to terminate their
lease as of the last day of each of the following full
calendar months: 180th, 240th, 360th & the 420th by
providing Landlord 12 months prior written notice.
Page 5, Section 3(c).
- ----------------------------------------------------------------------------------------------------------------------
Springwood Plaza 5.1(8) Countrywide Home Loans, Inc. Anytime after
12th month, tenant can buyout lease for a lump sum
payment of $7,000.00. Tenant must give 90 days
notice.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 5.1(D) -- Page 2
<PAGE>
<TABLE>
<CAPTION>
ASSET NAME SECTION COMMENT
======================================================================================================================
<S> <C> <C>
Springwood Plaza 5.1(8) Ombudsman Educational Services may terminate
lease if Riverview school
district cancels contract. 90
days notice required. Tenant
to reimburse Landlord for
unamortized tenant
improvements and leasing
commission up to $25,000.
Tenant my also cancel lease
with 60 days written notice
each year.
- ----------------------------------------------------------------------------------------------------------------------
Springwood Plaza 5.1(8) Priamerica
Financial Services my
terminate lease with 60 days
notice if grocery is not
opened for 9 months.
- ----------------------------------------------------------------------------------------------------------------------
Springwood Plaza 5.1(8) Great Clips may terminate with 30 days notice if
grocery ceases operation.
- ----------------------------------------------------------------------------------------------------------------------
Westwood Center 5.1(8) The State of Florida (Office of the Attorney General)
has an option to terminate, without penalty, in the
event a State owned building becomes available to the
Lessee for occupancy by providing Six months
advance written notice. (Please note that the State of
Florida pays in arrears!)
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 5.1(D) -- Page 3
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 5.1(E)
LEASING COMMISSIONS OWING
ASSET NAME SECTION COMMENT
======================================================================================================================
<S> <C> <C>
555 E. Ocean 5.1(9) A leasing commission is due McNeil Real Estate
Mgmt., Inc. employee, Centa Branca for William H.
Burford (1,723/sf) in the amount of $325.65 for a
renewal of a 36 month lease.
- ----------------------------------------------------------------------------------------------------------------------
555 E. Ocean 5.1(9) A leasing commission is due McNeil Real Estate
Mgmt., Inc. employee, Centa Branca for Canada
Maritime Agencies (3,789/sf) in the amount of
$1,648.22 for a renewal and relocation 60 month
lease.
- ----------------------------------------------------------------------------------------------------------------------
Century Park 5.1(9) Neal Lewis CPA
has executed a 36 month lease
extension. New expiration
date is 11/30/02.
- ----------------------------------------------------------------------------------------------------------------------
Century Park 5.1(9) Lease document out to Rogers Benefit for execution
for a 36 month lease extension. New expiration date
is 02/28/03. No outside Brokers were involved in the
renewal.
- ----------------------------------------------------------------------------------------------------------------------
One Corporate Center I 5.1(9) In-house commission of $1,088.85 for U.S. Aviation
renewal.
- ----------------------------------------------------------------------------------------------------------------------
One Corporate Center I 5.1(9) In-house commission of $444.47 for RBMG, Inc.
expansion.
- ----------------------------------------------------------------------------------------------------------------------
La Plaza 5.1(9) Carol Kuhlow has
executed a 13 month lease
extension. New expiration
date is 12/31/00.
- ----------------------------------------------------------------------------------------------------------------------
Plaza Westlake 5.1(9) Outside broker commission due CB Richard Ellis for
$6,400 for Heartland Luxury Bath.
- ----------------------------------------------------------------------------------------------------------------------
Westwood Center 5.1(9) In-house commission of $472.49, Office of the
Attorney General expansion into Ste. 650.
- ----------------------------------------------------------------------------------------------------------------------
Westwood Center 5.1(9) In-house commission of $353.40, Staffing Now, Inc.
1,240 sf. (expansion/renewal).
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 5.1(E)
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 5.1(F)
PREPAID RENTS
ASSET NAME SECTION COMMENT
======================================================================================================================
<S> <C> <C>
555 E. Ocean 5.1(10) SPCL Shipping Agency, Inc. (697/sf) has given
Landlord a check of $1,611.30 for payment of rent for
February and March, 2000. Check has not been
deposited and is being held for the borrower at the
close of escrow.
- ----------------------------------------------------------------------------------------------------------------------
Century Park 5.1(10) Kenrich has a new subtenant, holding 3 months
security deposit.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 5.1(F)
<PAGE>
SCHEDULE 6.4
CONDEMNATION PROCEEDINGS
None.
SCHEDULE 6.4
<PAGE>
SCHEDULE 6.5
CASUALTIES AND FLOOD ZONE PROPERTIES
None.
SCHEDULE 6.5
<PAGE>
SCHEDULE 6.6
MATERIAL AGREEMENTS
None.
SCHEDULE 6.6
<PAGE>
SCHEDULE 6.7
PROPERTY COMPLIANCE
None.
SCHEDULE 6.7
<PAGE>
SCHEDULE 6.17
LITIGATION
None.
SCHEDULE 6.17
<PAGE>
SCHEDULE 6.19
CLAIMS UNDER PURCHASE AGREEMENT
None.
SCHEDULE 6.19
<PAGE>
SCHEDULE 6.27
ACQUISITION COST AND EQUITY INVESTMENT
<TABLE>
<CAPTION>
GE ALLOCATIONS
BID NEW LOAN CLOSING FINANCING
PROCEEDS COSTS COSTS ALL-IN COST
<S> <C> <C> <C> <C> <C>
MCNEIL REAL ESTATE FUND X, LTD. 1,719,722 2,643,351
66 LA PLAZA Business Center $7,705,186 $6,204,551 $108,893 $167,377 7,981,456
MCNEIL REAL ESTATE FUND XIV, LTD.
79 Redwood $3,038,110 $2,941,794 $42,936 $65,996 3,147,042
MCNEIL REAL ESTATE FUND XXIV, LTD.
71 River Bay $4,400,593 $4,129,456 $62,191 $95,593 4,558,377
75 Springwood Plaza $2,073,795 $1,857,768 $29,308 $45,048 2,148,151
73 Towne Center $2,376,569 $2,183,794 $33,587 $51,625 2,461,781
MCNEIL REAL ESTATE FUND XXV, LTD.
67 Century Park $11,223,379 $7,899,688 $158,614 $243,802 11,625,795
61 Fidelity Federal Plaza $3,515,083 $3,169,219 $49,677 $76,357 3,641,116
62 Kellogg Office Building $11,166,350 $8,962,192 $157,808 $242,563 11,566,721
76 Northwest Plaza $8,567,884 $4,878,730 $121,085 $186,118 8,875,087
MCNEIL REAL ESTATE FUND XXVI, LTD.
60 Continental Plaza $4,763,507 $3,846,739 $67,320 $103,476 4,934,304
63 Westwood Office Bldg $9,448,210 $8,450,705 $133,526 $205,241 9,786,977
MCNEIL REAL ESTATE FUND XXVII, LTD.
82 AAA Century Airport Self Storage $3,722,462 $2,713,818 $52,607 $80,862 3,855,932
86 AAA Sentry Self Storage $3,567,964 $2,930,056 $50,424 $77,506 3,695,894
81 Burbank Personal Storage $6,436,023 $5,391,558 $90,957 $139,808 6,666,788
87 Forest Hill Self Storage $3,392,729 $2,954,219 $47,948 $73,699 3,514,376
84 Fountainbleau Self Storage $4,360,154 $3,616,190 $61,620 $94,714 4,516,488
85 Kendall Sunset Self Storage $7,113,117 $5,846,843 $100,526 $154,516 7,368,159
83 Margate Self Storage $3,048,479 $2,513,614 $43,082 $66,221 3,157,782
88 Military Trail Self Storage $2,979,007 $2,561,454 $42,101 $64,712 3,085,819
64 One Corporate Center I $9,700,177 $8,124,640 $137,087 $210,714 10,047,978
65 One Corporate Center III $9,087,370 $8,008,700 $128,427 $197,402 9,413,199
121,686,148 99,185,728 1,719,722 2,643,351 126,049,222
All in $126,049,222
Debt 99,185,728.0
Equity $26,863,493.64 106,441,971
WH 13,589,275.121
MC Neil 13,274,218.515
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GE ALLOCATIONS (cont.)
49.414% 10.497% 89.503%
MCNEIL TOTAL CASH
TOTAL EQUITY EQUITY EQUITY IMPLIED EQUITY
<S> <C> <C> <C> <C>
MCNEIL REAL ESTATE FUND X, LTD.
66 LA PLAZA Business Center 1,776,905 878,033 92,167 785,866
MCNEIL REAL ESTATE FUND XIV, LTD.
79 Redwood 205,248 101,420 10,646 90,774
MCNEIL REAL ESTATE FUND XXIV, LTD.
71 River Bay 428,921 211,945 22,248 189,697
75 Springwood Plaza 290,383 143,489 15,062 128,427
73 Towne Center 277,987 137,364 14,419 122,945
MCNEIL REAL ESTATE FUND XXV, LTD.
67 Century Park 3,726,107 1,841,203 193,271 1,647,932
61 Fidelity Federal Plaza 471,897 233,182 24,477 208,704
62 Kellogg Office Building 2,604,529 1,286,991 135,095 1,151,896
76 Northwest Plaza 3,996,357 1,974,744 207,289 1,767,455
MCNEIL REAL ESTATE FUND XXVI, LTD.
60 Continental Plaza 1,087,565 537,405 56,411 480,993
63 Westwood Office Bldg 1,336,272 660,300 69,312 590,988
MCNEIL REAL ESTATE FUND XXVII, LTD.
82 AAA Century Airport Self Storage 1,142,114 564,359 59,241 505,119
86 AAA Sentry Self Storage 765,838 378,428 39,724 338,705
81 Burbank Personal Storage 1,275,230 630,137 66,145 563,991
87 Forest Hill Self Storage 560,157 276,793 29,055 247,738
84 Fountainbleau Self Storage 900,298 444,870 46,698 398,172
85 Kendall Sunset Self Storage 1,521,316 751,737 78,910 672,827
83 Margate Self Storage 644,168 318,307 33,413 284,894
88 Military Trail Self Storage 524,365 259,108 27,199 231,909
64 One Corporate Center I 1,923,338 950,390 99,762 850,628
65 One Corporate Center III 1,404,499 694,013 72,851 621,163
26,863,494 13,274,219 1,393,395 11,880,824
</TABLE>
<PAGE>
SCHEDULE 8.19
PROPERTY-SPECIFIC COVENANTS
1. EXERCISE OF PURCHASE OPTION. On or before December 5, 2000, Borrower shall
have delivered to Lender evidence that Borrower has exercised its purchase
option under the Fidelity Federal Ground Lease described in paragraph 2 of
Exhibit "E". Thereafter, Borrower shall diligently and in accordance with
the provisions of such Fidelity Federal Ground Lease proceed to close its
acquisition of the fee estate in the portion of the Property covered by
such Fidelity Federal Ground Lease. Borrower and Lender intend that the
Deed of Trust which encumbers such Fidelity Federal Ground Lease shall
automatically encumber the fee estate, and any other estate in the
applicable Property, upon Borrower's acquisition thereof, without further
amendment or modification to such Deed of Trust. However, if required by
Lender, Borrower shall execute such amendments to such Deed of Trust and
the other Loan Documents, and Borrower shall obtain such endorsements to
the applicable Title Policy, as reasonably required by Lender to confirm
the validity and first position lien priority of such Deed of Trust on the
fee interest (and/or such other interest) acquired by Borrower.
Notwithstanding the foregoing, Borrower shall have no obligations under
this paragraph 1 if Borrower has obtained the release of the Property
subjected to the Fidelity Federal Ground Leases from the Lien of the Loan
Documents in accordance with Section 2.4.
2. POST CLOSING STRUCTURAL REPAIRS. Within twelve (12) months after the
Closing Date, Borrower shall have completed, Lien-free and in accordance
with applicable Laws, at least $1,000,000 of the repairs described in the
table set forth below for the designated Properties (as such work is more
particularly described in the engineering reports for such Properties
prepared by Lender's consultant(s) in connection with the Loan closing).
For purposes of determining Borrower's satisfaction of the $1,000,000
requirement in the preceding sentence, any amounts spent for any structural
repair item in excess of the "Estimated Cost" of such item (as set forth in
the table below) shall be excluded from such calculation. Within twelve
(12) months after the Closing Date Borrower and Lender shall discuss and
agree upon a work plan (including a completion schedule) for the repairs
described below which, as of such time, have yet to be completed. Unless
Lender has agreed to a revised work plan which provides to the contrary,
all such repair work shall be completed by or before the initial Maturity
Date.
<TABLE>
<CAPTION>
PROPERTY STRUCTURAL REPAIRS ESTIMATED
COST
==============================================================================================================
<S> <C> <C>
AAA Century Airport EXTERIORS
- painting, exterior entrance doors 3,450
- painting, exterior stucco and T 1-11 29,250
---------------------------------------------------------------------------
ROOFING
- roofing, built-up, rip-off & replace, 4-plies 45,500
- downspouts, aluminum, 2" x 3", .020" gauge 1,530
- replace missing faux mansard roof tiles 1,500
- replace faux mansard roof tiles 41,600
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 8.19 -- Page 1
<PAGE>
<TABLE>
<CAPTION>
PROPERTY STRUCTURAL REPAIRS ESTIMATED
COST
==============================================================================================================
<S> <C> <C>
INTERIORS
- painting, interior walls, floors and ceilings 10,400
---------------------------------------------------------------------------
ELECTRICAL SYSTEM
- exit signs, add additional exit signs 3,000
- emergency lighting, add 3,000
---------------------------------------------------------------------------
GARAGES/CARPORTS/SELF STORAGE
BUILDINGS
- leasing office carpeting/VCT 15,000
---------------------------------------------------------------------------
VERTICAL TRANSPORTATION
- full load testing, elevators 5,000
---------------------------------------------------------------------------
ADA
- upgrade, elevator cab 1,200
- upgrade toilet room, office 1,000
- --------------------------------------------------------------------------------------------------------------
$161,430
- --------------------------------------------------------------------------------------------------------------
AAA Sentry SITE
- asphalt pavement crack repair 225
- repair settlement at septic tank 66
- repair asphalt low area at main gate 250
- replace concrete sidewalk sections 180
- chain link fence repairs/replacements 2,400
- wood fence repairs/replacements 600
- replace lawn irrigation pump 1,900
---------------------------------------------------------------------------
EXTERIORS
- repair step cracking in exterior walls 150
- repair punched-in section of exterior wall 55
- repair cracking in balcony floor 50
---------------------------------------------------------------------------
ROOFING
- correct ponding deficiencies 1,500
- correct alligatoring 187.50
---------------------------------------------------------------------------
INTERIORS
- concrete floor crack repair 2,500
- provide new office furniture 2,500
---------------------------------------------------------------------------
HEATING, VENTILATION AND
AIR-CONDITIONING
- replace Rheem rooftop unit (RTU) - 2.5 ton 6,850
- replace HVAC package unit at grade 1,100
- replace ductwork in office closet 100
- install passive ventilation at storage units 10,000
---------------------------------------------------------------------------
Y2K ISSUES
- security system upgrade 1,500
$32,113.50
- --------------------------------------------------------------------------------------------------------------
Burbank ROOFING
- replace asphalt shingle roofing 1,500
---------------------------------------------------------------------------
HEATING, VENTILATION & AIR
CONDITIONING
- A/C, individual, DX air cooled condenser 2 ton 2,200
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 8.19 -- Page 2
<PAGE>
<TABLE>
<CAPTION>
PROPERTY STRUCTURAL REPAIRS ESTIMATED
COST
==============================================================================================================
<S> <C> <C>
FIRE PROTECTION &
LIFE SAFETY
- emergency lighting, add 3,000
---------------------------------------------------------------------------
ADA
- correct misc ADA toilet deficiencies 1,000
- --------------------------------------------------------------------------------------------------------------
$7,700
- --------------------------------------------------------------------------------------------------------------
Century Park SITE
- repair/replace damaged framing at interior 6,000
courtyard pergolas
- rebuild drive aisle to the south of Building B 4,000
---------------------------------------------------------------------------
STRUCTURE
- repair damaged fireproofing at structure in garage 3,500
---------------------------------------------------------------------------
EXTERIOR
- deteriorated vision glass and gasket need 10,000
replacement at both buildings for aesthetic
purposes
---------------------------------------------------------------------------
ROOF
- continual maintenance at building connections and 2,000
roof
---------------------------------------------------------------------------
VERTICAL TRANSPORTATION
- normal maintenance due to age of equipment 5,000
---------------------------------------------------------------------------
HVAC
- replace two cooling towers and rebuild enclosure 55,000
- replace boilers 17,500
- replace 10%/year of tenant heat pumps 24,000
---------------------------------------------------------------------------
LIFE SAFETY/FIRE
- install gypsum board at mechanical/electrical 2,000
rooms and fire caulk
---------------------------------------------------------------------------
ADA
- stripe pavement for parking and graphics 600
- rebuild all bathrooms 60,000
- install appropriate elevator controls 12,000
- --------------------------------------------------------------------------------------------------------------
$201,600
- --------------------------------------------------------------------------------------------------------------
Continental Plaza SITE
- repair damaged masonry wall fence on north and 2,500
west property elevations, repaint as necessary
---------------------------------------------------------------------------
STRUCTURE
- second-level balcony concrete is cracked and 25,000
allows moisture to migrate to lower surface. M/O
recommends consideration of concrete
replacement.
---------------------------------------------------------------------------
EXTERIOR
- patch/repair minor stucco cracking at perimeter 38,000
walls and repaint building
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 8.19 -- Page 3
<PAGE>
<TABLE>
<CAPTION>
PROPERTY STRUCTURAL REPAIRS ESTIMATED
COST
==============================================================================================================
<S> <C> <C>
ROOF
- replace remaining roof areas with new mineral 20,000
impregnated modified roof
---------------------------------------------------------------------------
VERTICAL TRANSPORTATION
- provide maintenance 2,000
---------------------------------------------------------------------------
LIFE SAFETY/FIRE
- install fire caulk/safe at all electrical rooms 2,000
---------------------------------------------------------------------------
ADA
- rebuild restroom entries and interiors 16,000
- --------------------------------------------------------------------------------------------------------------
$105,500
- --------------------------------------------------------------------------------------------------------------
Fidelity Federal Plaza Office SITE
Building - Recaulk plaza and building perimeter 14,350
- Reseal parking ramp 7,200
---------------------------------------------------------------------------
STRUCTURE
- Detailed non-linear structural analysis 20,000
---------------------------------------------------------------------------
ROOF
- Perform annual roof maintenance and repairs 1,500
- Properly flash exhaust fan penetrations at east 2,400
wing low roof
- Install roof drains at low roof 9,000
- Reinstall loose reglets around columns and tower 1,000
walls
---------------------------------------------------------------------------
VERTICAL TRANSPORTATION
- Install skirt switch brushes 16,000
- Annual maintenance budget 35,000
---------------------------------------------------------------------------
HVAC
- Replace boilers with low Nox boilers as required 50,000
by SCAQMD
- Replace chiller which has exceeded the normal 140,000
service life
---------------------------------------------------------------------------
ELECTRICAL
- Replace architectural lighting for tower 9,600
---------------------------------------------------------------------------
LIFE SAFETY/FIRE
- Provide exit corridor at tenth floor fitness club 9,900
---------------------------------------------------------------------------
Y2K
- Building/parking security system 5,000
- --------------------------------------------------------------------------------------------------------------
$320,950
- --------------------------------------------------------------------------------------------------------------
Forest Hill SITE
- chain link fence repairs/replacements as needed 1,000
- seal coat parking lot and restripe 7,463
---------------------------------------------------------------------------
HEATING, VENTILATION & AIR
CONDITIONING
- replace air condenser - 2 ton 3,600
- replace air handler - 2 ton 5,400
- replace air condenser - 3 ton 1,000
- replace DX air handler - 3 ton 1,200
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 8.19 -- Page 4
<PAGE>
<TABLE>
<CAPTION>
PROPERTY STRUCTURAL REPAIRS ESTIMATED
COST
==============================================================================================================
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------
$19,663
- --------------------------------------------------------------------------------------------------------------
Fountainbleau INTERIORS
- concrete floor crack repair 1,250
---------------------------------------------------------------------------
FIRE PROTECTION
- install smoke detectors in interior corridors 1,430
---------------------------------------------------------------------------
Y2K ISSUES
- security system upgrade 1,500
---------------------------------------------------------------------------
ADA
- change toilet sink to allow wheelchair use 1,000
- --------------------------------------------------------------------------------------------------------------
$5,180
- --------------------------------------------------------------------------------------------------------------
Kellogg Executive Suites SITE
- replace broken concrete sidewalk and revise 2,275
drainage at southwest corner of building
- parking area repairs 7,000
- rout and seal joint at top of concrete retaining wall, 600
lower level parking area, east side
---------------------------------------------------------------------------
EXTERIOR
- replacing sealant at all exterior caulk joints, brick 7,000
control joints, and brick window joints
- repair damaged soffit areas 1,000
- masonry crack repairs at exterior stairs 1,000
---------------------------------------------------------------------------
ROOF
- coping parapet and counterflashing 1,500
---------------------------------------------------------------------------
HVAC
- replace missing refrigerant pipe insulation and 1,000
install filter/dryer on one stage that does not
already have this equipment.
- provide complete calibration and review of 1,500
operation and pneumatic and digital controls.
---------------------------------------------------------------------------
ELECTRICAL
- complete infrared scan of the electrical system 1,000
---------------------------------------------------------------------------
ADA
- provide six additional accessible spaces including 1,200
one van accessible space
- provide visual alarms to meet ADA requirements 19,800
- provide accessible toilet partition hardware 2,000
- provide accessible door hardware at corridors 5,000
- --------------------------------------------------------------------------------------------------------------
$51,875
- --------------------------------------------------------------------------------------------------------------
Kendall Sunset SITE
- apply emulsified sealcoat (2 coats) and silica sand 5,772
to asphalt pavement
- asphalt pavement crack repair 1,050
- repair concrete sidewalk sections 6,000
---------------------------------------------------------------------------
EXTERIORS
- exterior site painting 1,036
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 8.19 -- Page 5
<PAGE>
<TABLE>
<CAPTION>
PROPERTY STRUCTURAL REPAIRS ESTIMATED
COST
==============================================================================================================
<S> <C> <C>
INTERIORS
- concrete floor crack repair 1,250
---------------------------------------------------------------------------
HEATING, VENTILATION & AIR
CONDITIONING 1,100
- Replace HVAC package unit at grade
---------------------------------------------------------------------------
Y2K ISSUES
- security system upgrade 1,500
---------------------------------------------------------------------------
ADA
- change toilet sink to allow wheelchair use 1,000
- --------------------------------------------------------------------------------------------------------------
$18,708
- --------------------------------------------------------------------------------------------------------------
La Plaza Business Center SITE
- repair/replace masonry wall along north side of 7,500
property. Repair masonry trash enclosure.
- replacement of building entryway slabs 3,000
---------------------------------------------------------------------------
EXTERIOR
- replace deteriorated reflective glass 6,000
- remove animal nesting from eaves/clear ventilation 2,000
path
---------------------------------------------------------------------------
INTERIOR
- install fire-rate material for ceilings of 1,500
mechanical/utility rooms
---------------------------------------------------------------------------
VERTICAL TRANSPORTATION
- replace elevator in Building C due to reaching end 50,000
of useful life
---------------------------------------------------------------------------
HVAC
- Replace HVAC package and split systems 26,000
---------------------------------------------------------------------------
ADA
- add vertical signage to accessible parking spaces 300
- recreate parking spot at Building D, south side, for 1,000
ADA space width requirements
- --------------------------------------------------------------------------------------------------------------
$97,300
- --------------------------------------------------------------------------------------------------------------
Margate SITE
- chain link fence repairs/replacements 1,000
- landscaping upgrades 5,000
---------------------------------------------------------------------------
STRUCTURAL SYSTEM
- continued monitoring of rear slab at Building D 1,000
---------------------------------------------------------------------------
EXTERIORS
- repair spalling in grade level slabs 1,100
---------------------------------------------------------------------------
ROOFING
- repair seams in aluminum coated built-up roof 1,000
---------------------------------------------------------------------------
INTERIORS
- concrete floor crack repair 2,500
---------------------------------------------------------------------------
FIRE PROTECTION
- install smoke detectors in interior corridors 1,287
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 8.19 -- Page 6
<PAGE>
<TABLE>
<CAPTION>
PROPERTY STRUCTURAL REPAIRS ESTIMATED
COST
==============================================================================================================
<S> <C> <C>
Y2K ISSUES
- security system upgrade 5,000
- --------------------------------------------------------------------------------------------------------------
$17,887
- --------------------------------------------------------------------------------------------------------------
Military Trail SITE
- chain link fence repairs/replacements as needed 1,000
- seal coat parking lot and restripe 3,914
---------------------------------------------------------------------------
HEATING, VENTILATION & AIR
CONDITIONING 3,600
- replace air condenser - 2 ton 5,400
- replace air handler - 2 ton 1,000
- replace air condenser - 3 ton 1,200
- replace DX air handler - 3 ton 1,600
- replace mini warehouse ventilation fan
- --------------------------------------------------------------------------------------------------------------
$17,714
- --------------------------------------------------------------------------------------------------------------
Northwest SITE
- concrete flatwork repairs 2,000
- install sump pump 2,000
- install wood planter 1,000
- concrete wheelstops and splashblocks, install 1,500
---------------------------------------------------------------------------
ROOFING
- roofs, maintenance & repair 26,600
---------------------------------------------------------------------------
ADA 1,750
- signage, install at retail entries
- --------------------------------------------------------------------------------------------------------------
$34,850
- --------------------------------------------------------------------------------------------------------------
One Corporate Center I SITE
- restripe parking spaces after reseal is complete 1,500
- repair and replace failed landscape timber retaining 8,000
wall to the east of the structure
---------------------------------------------------------------------------
STRUCTURE
- provide vertical caulk joint at cracked walls in stair 1,000
towers
---------------------------------------------------------------------------
EXTERIOR
- replace mechanically fastened EPDM membrane 32,400
with adhered membrane at westernmost roof area
---------------------------------------------------------------------------
VERTICAL TRANSPORTATION
- locate Phase I and II Fire Service instruction signs 200
to be near the key switches in each car station
- --------------------------------------------------------------------------------------------------------------
$43,100
- --------------------------------------------------------------------------------------------------------------
One Corporate Center III SITE
- restripe parking spaces after reseal is complete 1,500
- repair ponding areas in asphalt paving 1,000
- repair damaged concrete precast planter at south 2,500
entrance to structure
---------------------------------------------------------------------------
STRUCTURE
- provide vertical caulk joint at cracked walls in stair 1,000
towers
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 8.19 -- Page 7
<PAGE>
<TABLE>
<CAPTION>
PROPERTY STRUCTURAL REPAIRS ESTIMATED
COST
==============================================================================================================
<S> <C> <C>
EXTERIOR
- repair damaged concrete curbs around the site. 500
---------------------------------------------------------------------------
VERTICAL TRANSPORTATION
- locate Phase I and II fire S+A3 service instruction 200
signs to be near the key switches in each car
station
- --------------------------------------------------------------------------------------------------------------
$6,700
- --------------------------------------------------------------------------------------------------------------
Redwood SITE
- parking lot striping - 4" wide 1,084
- chain link fence repairs/replacements 1,000
- concrete curb replacement 1,050
- replace defective sight light luminaries 2,400
---------------------------------------------------------------------------
EXTERIORS
- reseal concrete tilt-up wall panel joints 5,000
---------------------------------------------------------------------------
ROOFING
- perform annual roofing maintenance & repairs 4,000
---------------------------------------------------------------------------
ADA
- renovate toilet rooms to comply with ADA 12,500
- --------------------------------------------------------------------------------------------------------------
$27,034
- --------------------------------------------------------------------------------------------------------------
River Bay SITE
- chain link fence repairs/replacements as needed 1,000
- lift canopies on trees for site visibility 1,800
---------------------------------------------------------------------------
ROOFING
- transfer EPDM roof warranty 1,000
- infrared/moisture survey of BUR and EPDM roofs 1,970
- remedial repairs at grease conditions 1,000
- replace rotted and rusted gutters 1,000
---------------------------------------------------------------------------
PLUMBING SYSTEMS
- annual backflow prevention device inspection 3,800
---------------------------------------------------------------------------
HEATING, VENTILATION & AIR
CONDITIONING
- replace RTU, 5 ton average size 2,600
- --------------------------------------------------------------------------------------------------------------
$14,170
- --------------------------------------------------------------------------------------------------------------
Springwood SITE
- repair sections of asphalt pavement 6,500
---------------------------------------------------------------------------
EXTERIORS
- repair damaged brick corners of building 1,750
---------------------------------------------------------------------------
ROOFING
- roofing, shingle, rip-off and replace 5,011
- repair roof flashings at various locations of 3,500
building
---------------------------------------------------------------------------
MECHANICAL SYSTEMS
- replace three (3) RTU's 7,500
- --------------------------------------------------------------------------------------------------------------
$24,261
- --------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 8.19 -- Page 8
<PAGE>
<TABLE>
<CAPTION>
PROPERTY STRUCTURAL REPAIRS ESTIMATED
COST
==============================================================================================================
<S> <C> <C>
Towne SITE
- concrete pavement, sidewalk & ramp repairs 2,400
---------------------------------------------------------------------------
EXTERIORS
- install replacement hollow metal doors 1,500
---------------------------------------------------------------------------
ROOFING
- repair roof edge at Suite 1 building 750
- repair roof flashings at rear of building 25,135
---------------------------------------------------------------------------
MECHANICAL SYSTEMS
- replace three (3) RTU's 7,500
- --------------------------------------------------------------------------------------------------------------
$37,285
- --------------------------------------------------------------------------------------------------------------
Westwood Office Building SITE
- repair front and side parking area asphalt paving, 5,000
sealcoat and restripe
---------------------------------------------------------------------------
STRUCTURE
- repair spalled concrete at embeds along exposed 5,000
edges of the double tees in the parking garage and
seal exposed mesh reinforcement at upper deck
topping
---------------------------------------------------------------------------
EXTERIOR
- repair/repoint cracks in CMU walls at the parking 1,500
garage
- remove rust and repaint exterior stairs and embeds 3,500
at the parking garage
- paint exterior soffits and CMU at parking structure 5,000
---------------------------------------------------------------------------
INTERIOR
- complete installation of lever-style hardware on 2,500
doors
---------------------------------------------------------------------------
HVAC
- replace condensing unit for split system in elevator 3,500
equipment room
---------------------------------------------------------------------------
ELECTRICAL
- infrared scan of electrical systems 1,000
---------------------------------------------------------------------------
ADA
- complete renovations of public restrooms on floors 21,000
2-8 for adaptable ADA compliance.
- renovate first floor restrooms for adaptable ADA 17,500
compliance
- install additional audible/visual alarms to comply 9,000
with ADA and NFPA 72 requirements
- --------------------------------------------------------------------------------------------------------------
$74,500
- --------------------------------------------------------------------------------------------------------------
</TABLE>
3. POST CLOSING REMEDIAL ACTION. Borrower shall complete the Remedial Action
described in the table set forth below for the designated Properties, which
Remedial Action shall be completed Lien-free, in accordance with all
applicable Environmental Laws, and within the applicable time period set
forth below. Such Remedial Action is more particularly described in the
environmental reports for such Properties prepared by [Lender's]
[Borrower's]
SCHEDULE 8.19 -- Page 9
<PAGE>
consultants in connection with the Loan closing. Completion of the Remedial
Action for each Property shall including obtaining a "closure" or "no
further action" letter from the lead Governmental Authority having
jurisdiction over the Remedial Action and the Property. If Borrower has
completed all Remedial Action at a Property within the applicable time
period set forth in the table below but is waiting for the appropriate
Governmental Authority to issue a "closure" or "no further action" letter
with respect to such Remedial Action, then Borrower shall have an
additional twelve (12) months beyond the designated completion date to
obtain such letter.
PROPERTY REMEDIAL ACTION COMPLETION
DATE
===========================================================================
River Bay Plaza Borrower to undertake a site 01-31-02
characterization and remediate to applicable standards,
if necessary. No further action letter required from
State of Florida.
---------------------------------------------------------------------------
Military Trail Borrower to undertake a site 01-31-02
characterization and remediate to applicable standards,
if necessary. No further action letter required from
State of Florida.
---------------------------------------------------------------------------
Redwood Plaza Borrower to undertake a site 01-31-02
characterization and remediate to applicable standards,
if necessary. No further action letter required from
State of Utah.
---------------------------------------------------------------------------
4. ZONING LETTERS FOR FLORIDA PROPERTIES. Borrower shall use commercially
reasonable efforts to obtain, as soon as reasonably practical after the
Closing Date, from the applicable local Governmental Authorities, zoning
letters addressed to Lender which are otherwise substantially identical to
the zoning letters for such Properties delivered to Lender prior to the
Closing Date. Borrower shall endeavor to obtain such revised zoning letters
within thirty (30) days after the Closing Date.
5. EVIDENCE OF QUALIFICATION TO DO BUSINESS AND GOOD STANDING. Within thirty
(30) days after the Closing Date, Borrower shall provide certified copies
of governmental certificates, dated on or after the Closing Date, showing
that Borrower is qualified as a foreign limited partnership in good
standing in all states in which any of the Properties are located.
6. TENANT ESTOPPEL CERTIFICATES AND/OR SNDA'S. Borrower shall use commercially
reasonable efforts to obtain, as soon as reasonably practical after the
Closing Date, a tenant estoppel certificate or a subordination,
nondisturbance and attornment agreement (in either case substantially in
the form previously provided to Borrower by Lender) for the following
Tenants: (a) Safeway at Redwood Plaza, (b) Kroger's at Northwest Plaza, and
(c) Elder Beerman's at Northwest Plaza.
SCHEDULE 8.19 -- Page 10
<PAGE>
7. CHARGES ACCOUNT. Within ten (10) days after the Closing Date, Borrower
shall have established the Charges Account and shall have delivered to
Lender a Depository Account Agreement executed by Borrower and the
depository institution at which the Charges Account is maintained, which
Depository Account Agreement shall be substantially in the form previously
approved by Lender. Until such time Borrower has satisfied the requirements
of the immediately preceding sentence, the Loan funds which would have been
funded into the Charges Account to satisfy Borrower's deposit obligation on
the Closing Date (as set forth in Section 3.4(1)) shall be held by Lender
in an account maintained by Lender
8. UCC TERMINATION. Within thirty (30) days after the Closing Date, Borrower
shall have delivered to Lender evidence that Borrower has obtained and
filed a UCC termination statement (executed by the appropriate secured
party) to eliminate the fixture filing currently recorded in favor of PNC
Bank in the Hennepin County, MN records against the One Corporate Center I
and One Corporate Center II Properties.
9. REVISED MILITARY TRAIL SURVEY. Within ten (10) days after the Closing Date,
Borrower shall have delivered to Lender and its counsel a revised ALTA
survey for the Military Trail Property, which revised survey shall plot
both the fee parcel(s) and easement parcel(s) which are included within the
legal description for that Property.
10. REVISED TOWNE CENTER SURVEY. Within ten (10) days after the Closing Date,
Borrower shall have delivered to Lender and its counsel a revised ALTA
survey for the Towne Center Property, which revised survey shall include
the legal description for that Property shown in the Title Company's pro
forma policy delivered to Lender on or before the Closing Date.
SCHEDULE 8.19 -- Page 11
<PAGE>
SCHEDULE 11.23
AUTHORIZED SIGNATORIES
1. Officers of Holding Company (the sole member of WXI/MCN Commercial Gen-Par,
L.L.C.)
Name Title
- -------------------- -------------------------
Stuart M. Rothenberg Director & Vice President
Daniel M. Neidich President
Michael K. Klingher Vice President
Kevin D. Naughton Vice President, Secretary & Treasurer
Ralph F. Rosenberg Vice President & Assistant Secretary
Edward Siskind Vice President & Assistant Treasurer
Todd A. Williams Vice President, Assistant Secretary & Assistant Treasurer
Elizabeth A. O'Brien Vice President & Assistant Secretary
Angie Madison Vice President & Assistant Secretary
G. Douglas Gunn Vice President & Assistant Secretary
Steven M. Feldman Vice President
Alan S. Kava Vice President
Brian J. Lahey Vice President & Assistant Treasurer
Mitchell S. Weiss Assistant Treasurer & Assistant Secretary
Elizabeth M. Burban Vice President & Assistant Secretary
Susan L. Sack Vice President
Brahm S. Cramer Vice President & Assistant Secretary
Zubin P. Irani Vice President & Assistant Secretary
Paul R. Milosevich Vice President & Assistant Secretary
Josephine Mortelliti Vice President
Richard Powers Vice President & Assistant Secretary
Jonathan A. Langer Vice President & Assistant Secretary
Ronald L. Bernstein Vice President & Assistant Secretary
Jerome S. Karr Vice President & Assistant Secretary
Daniel H. Klebes Vice President
Kim C. Bradley Vice President
Phillippe Camu Vice President
Jean de Pourtales Vice President
James R. Garman Vice President
Thomas Heslip Vice President
Douglas A. Kessler Vice President
Lahlou A. Khelifi Vice President
Steve S. Lin Vice President
Eli Muraidekh Vice President
Takenori Takahashi Vice President
Paul R. Vogel Vice President
Larry Goodwin Vice President
SCHEDULE 11.23
<PAGE>
SCHEDULE 11.25
SURETYSHIP PROVISIONS
1. THIRD PARTY OBLIGATIONS. Except as expressly provided herein,
Whitehall (referred to herein as a "THIRD PARTY OBLIGOR") waives notice of
default, presentment, demand for payment, protest, notice of protest, notice of
nonpayment or dishonor, and all other notices and demands of any kind
whatsoever; and Third Party Obligor consents and agrees that Lender may, from
time to time, without notice or demand and without affecting the enforceability
of Sections 12.1 and 11.25: (a) supplement, modify, amend, extend, renew,
accelerate or otherwise change the time for payment or the terms of the
Obligations or any part thereof, including any increase or decrease of the
rate(s) of interest thereon; (b) supplement, modify, amend, or waive, or enter
into or give any agreement, approval or consent with respect to, the Obligations
or any part thereof, or any security or guaranties, or any condition, covenant,
default, remedy, right, representation or term thereof or thereunder; (c) accept
new or additional instruments, documents or agreements in exchange for or
relative to the Obligations or any part thereof; (d) accept partial payments on
the Obligations; (e) receive and hold additional security or guaranties for the
Obligations or any part thereof; (f) release, reconvey, terminate, waive,
abandon, fail to perfect, subordinate, exchange, substitute, transfer and/or
enforce any security or guaranties, and apply any security and direct the order
or manner of sale thereof as Lender in its sole and absolute discretion may
determine; (g) release any Person from any personal liability with respect to
the Obligations or any part thereof; (h) settle, release on terms satisfactory
to Lender or by operation of applicable Laws, or otherwise liquidate or enforce
any Obligations, including any Obligations arising under Section 12.1 of the
Loan Agreement (the "NONRECOURSE CARVE-OUTS") and any security or guaranty in
any manner, consent to the transfer of any security, and bid and purchase at any
sale; (i) amend, modify, waive, supplement or terminate the Loan Agreement, the
Note or any of the other Loan Documents; and (j) consent to the merger, change
or any other restructuring or termination of the existence of Borrower or any
other Person, and correspondingly restructure the Obligations, and any such
merger, change, restructuring or termination shall not affect the enforceability
or security hereof.
2. RIGHTS INDEPENDENT. Third Party Obligor's obligations with respect
to the Nonrecourse Carve-Outs are independent of those of any other Person, and
upon the occurrence and during the continuance of an Event of Default (subject
to the limitations set forth in Section 12.1), Lender may proceed in the
enforcement of Third Party Obligor's obligations independently of any other
right or remedy that Lender may at any time hold with respect to the Nonrecourse
Carve-Outs or any security therefor (except as expressly set forth in Section
12.1). Except as set forth in Section 12.1, Third Party Obligor waives any right
to require Lender to: (a) proceed against Borrower or any guarantor or other
Person; (b) proceed against or exhaust any security for the Nonrecourse
Carve-Outs; (c) give notice of the terms, time and place of any public or
private sale of any real or personal property security for the Nonrecourse
Carve-Outs; or (d) pursue any other remedy in Lender's power whatsoever.
SCHEDULE 11.25 -- Page 1
<PAGE>
3.4. DEFERRAL OF RIGHTS OF SUBROGATION. Notwithstanding anything to the
contrary elsewhere contained herein or in any other document to which Third
Party Obligor is a party, Third Party Obligor hereby expressly agrees that,
until payment and performance in full of all Obligations, Third Party Obligor
shall not assert, with respect to Borrower and its successors and assigns
(including any surety) and any other Person, any and all rights at law or in
equity to subrogation, to reimbursement, to exoneration, to contribution, to
setoff or to any other rights that could accrue to a surety against a principal,
to a guarantor against a maker or obligor, to an accommodation party against the
party accommodated, or to a holder or transferee against a maker, and which
Third Party Obligor may have or hereafter acquire against Borrower or any other
Person in connection with or as a result of Third Party Obligor's execution,
delivery and/or performance of Sections 12.1 and 11.25 of the Loan Agreement or
any other document relating to the Nonrecourse Carve-Outs to which Third Party
Obligor is a party. Third Party Obligor agrees that, until payment and
performance in full of all Obligations, it shall not have or assert any such
rights against Borrower or its successors and assigns or any other Person
(including any surety), either directly or as an attempted setoff to any action
commenced against Third Party Obligor by Borrower (as borrower or in any other
capacity), Lender or any other Person. Third Party Obligor hereby acknowledges
and agrees that this waiver is intended to benefit Borrower and Lender and shall
not limit or otherwise affect Third Party Obligor's liability hereunder, under
any other document to which Third Party Obligor is a party, or the
enforceability hereof or thereof.
4. CONDITION OF BORROWER. Third Party Obligor represents and warrants
to Lender that: (a) the Loan Agreement is being separately executed by Third
Party Obligor at Borrower's request; and (b) Third Party Obligor has established
adequate means of obtaining from Borrower on a continuing basis financial and
other information pertaining to Borrower's businesses. Third Party Obligor
hereby waives and relinquishes any duty on the part of Lender to disclose to any
matter, fact or thing relating to the business, operation or condition of
Borrower and its assets now known or hereafter known by Lender during the life
of the Loan Agreement. With respect to any Obligations, Lender need not inquire
into the power of Borrower or the officers, partners or agents acting or
purporting to act on its behalf.
5. DEED OF TRUST ON REAL PROPERTY. Third Party Obligor acknowledges
that all or a portion of the Nonrecourse Carve-Outs is or may be secured by one
or more deed(s) of trust covering certain interests in real property. Third
Party Obligor authorizes Lender, at its sole option, without notice or demand
and without affecting the liability of Third Party Obligor for the Nonrecourse
Carve-Outs, to foreclose any or all of the deed(s) of trust and the interests in
real property secured thereby by nonjudicial sale, or to exercise any other
right or remedy with respect to the deed(s) of trust or the property covered
thereby. No such action by Lender shall release or limit the liability of Third
Party Obligor for the Nonrecourse Carve-Outs, even if the effect of that action
is to deprive Third Party Obligor of the right to reimbursement from Borrower
for any sums paid by Third Party Obligor to Lender with respect to the
Nonrecourse Carve-outs. Third Party Obligor waives any right to receive notice
of any judicial or nonjudicial sale or foreclosure of any real property subject
to any deed of trust securing the Nonrecourse Carve-Outs and the failure of
Third Party Obligor to receive any such notice shall not impair or affect Third
Party Obligor's liability hereunder.
SCHEDULE 11.25 -- Page 2
<PAGE>
6. LIMITATION. Notwithstanding anything to the contrary contained in
this Schedule 11.25, Third Party Obligor does not waive, and shall retain the
right to raise, defenses or rights of setoff that would have been available to
Third Party Obligor had it been named as a "Borrower" under the Loan Agreement,
other than any defenses available to the Borrower based upon any applicable
anti-deficiency laws or "one form of action" or "security first" laws (the
benefits and protections of which are waived by Third Party Obligor).
7. EFFECT OF WAIVERS. Third Party Obligor warrants and agrees that each
of the waivers set forth herein is made with Third Party Obligor's full
knowledge of its significance and consequences, and that under the
circumstances, the waivers are reasonable and not contrary to public policy or
Law. If any waivers are determined to be contrary to any applicable Law or
public policy, such waivers shall be effective only to the maximum extent
permitted by Law.
SCHEDULE 11.25 -- Page 3
<PAGE>
EXHIBIT "A"
FORM OF
NOTICE OF ADDITIONAL ADVANCE
Date: ________________________
General Electric Capital Corporation
- ------------------------------------
- ------------------------------------
Attention: Region Operations Manager
Gentlemen:
The undersigned, WXI/MCN Commercial Real Estate Limited Partnership,
refers to the Loan Agreement, dated as of January 31, 2000 (the "Loan
Agreement", the terms defined therein being used herein as therein defined),
between the undersigned and GENERAL ELECTRIC CAPITAL CORPORATION, and hereby
gives you notice, irrevocably, pursuant to the Loan Agreement, that the
undersigned hereby requests an Advance under the Loan Agreement, and in that
connection sets forth below the information relating to such Advance as required
by the Loan Agreement:
The date of the requested Advance shall be __________, 200__.
The aggregate amount of the requested Advance is $__________.
The Advance shall be a ["WORKING CAPITAL"] ["ACQUISITION"] Advance, and
shall be used for the following purposes: ______________________________________
- -------------------------------------------------------------------------------.
The undersigned hereby certifies that the statements contained in
paragraph 4 of Part B of Schedule 2.1 of the Loan Agreement are true on the date
hereof, and will be true on the date of the requested Advance, before and after
giving effect thereto and to the application of the proceeds therefrom. Attached
are all invoices and documents required by the applicable
EXHIBIT "A" -- Page 1
<PAGE>
provisions of Schedule 2.1 to the Loan Agreement and the amended Collateral
Documents referred to in Part B of Schedule 2.1 of the Loan Agreement.
Very truly yours,
WXI/MCN COMMERCIAL REAL
ESTATE LIMITED PARTNERSHIP, a Delaware
limited partnership
By: WXI/MCN Commercial Gen-Par, L.L.C., a
Delaware limited liability company,
its General Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its
Managing Member
By:
------------------------------
------------------------------
[Printed Name and Title]
EXHIBIT "A" -- Page 2
<PAGE>
EXHIBIT "B"
FORM OF
NOTICE TO DEPOSITORY
(Borrower's Letterhead)
________________, 2000
CERTIFIED MAIL -- RETURN
RECEIPT REQUESTED
- ----------------------------------
- ----------------------------------
- ----------------------------------
- ----------------------------------
Attn:
-----------------------------
Re: WXI/MCN Commercial Real Estate Limited Partnership ("BORROWER")
and General Electric Capital Corporation ("LENDER")
Deposit Account No. (the "ACCOUNT")
----------------------------------------------
Ladies and Gentlemen:
You are hereby notified that Borrower has granted to Lender a security
interest in, and has pledged to Lender as security, all monies at any time
deposited into or otherwise held in the Account (including without limitation
any interest earned on and added to the funds in the Account). The security
interest has been granted, and the pledge made, to secure the payment and
performance of obligations of Borrower to Lender.
The Account is an account of Borrower maintained by you at your address
given above. Borrower represents and warrants that its tax identification number
for tax reporting purposes is 75-2780394, and Borrower shall treat all income,
gains and losses from amounts in the Account as its income or loss for Federal
and State income tax purposes. It is our understanding that (1) the Account has
been established and will be maintained to allow withdrawals by Borrower alone
until you have received notice from Lender that an Event of Default has occurred
with respect to the obligations secured by the Account, after which withdrawals
may be made only by Lender (either alone or, at Lender's option, by Lender and
Borrower jointly), (2) you have not been previously advised of any security
interest or liens on the Account, and (3) you are not aware of any claims
against the Account other than claims of Lender. If you are unable to confirm
any of this information, please immediately notify Mr. Paul St. Arnauld of
Lender at 1528 Walnut Street, 9th Floor, Philadelphia, Pennsylvania 19102
(telephone: 215-772-2903).
EXHIBIT "B" -- Page 1
<PAGE>
The security interest of Lender in the Account shall continue in full
force and effect until you are notified to the contrary in writing by Lender. In
addition, this notice may not be revoked or modified except by Lender in
writing.
Please acknowledge your receipt of this notice by signing the enclosed
copy of this letter and returning it to Mr. Paul St. Arnauld at the address
given above (it being understood that your failure to do so shall in no way be
deemed to ineffectuate this notice, or be deemed non-receipt of this notice by
you).
Very truly yours,
WXI/MCN COMMERCIAL REAL
ESTATE LIMITED PARTNERSHIP, a Delaware
limited partnership
By: WXI/MCN Commercial Gen-Par, L.L.C., a
Delaware limited liability company, its General
Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its Managing
Member
By:
-------------------------------------
-------------------------------------
[Printed Name and Title]
GENERAL ELECTRIC CAPITAL CORPORATION,
a New York corporation
By:
-------------------------------------------------
-------------------------------------------------
[Printed Name and Title]
EXHIBIT "B" -- Page 2
<PAGE>
RECEIPT ACKNOWLEDGED:
- ------------------------------------------
By:
--------------------------------------
--------------------------------------
[Printed Name and Title]
EXHIBIT "B" -- Page 3
<PAGE>
EXHIBIT "C"
FORM OF
COLLATERAL ASSIGNMENT OF INTEREST RATE CAP AGREEMENT
[Attached]
EXHIBIT "C"
<PAGE>
EXHIBIT "D-1"
PROPERTY DESCRIPTION
(Century Park)
That certain real property situated in the City of Las Vegas and County
of Clark, State of Nevada, described as follows:
Government Lot Nine (9), being situated in the Northeast Quarter
(NEl/4) of the Northwest Quarter (NWl/4) of Section 23, Township 21 South, Range
61 East, M.D.M.
EXCEPTING THEREFROM the interest in and to the Northerly 50.00 feet and the
Easterly 40.00 feet of said land as conveyed to Clark County for road and
incidental purposes by Deed recorded April 23, 1963 as Document No. 353944 in
Official Records; and by Deed recorded December 6, 1967 as Document No. 674402,
in the Official Records of Clark County, Nevada.
ALSO EXCEPTING THEREFROM that certain spandrel area situate within the Northeast
(NE) corner of the East Half (El/2) of the Northeast Quarter (NEl/4) of the
Northeast Quarter (NEl/4) of the Northwest Quarter (NWl/4) of Section 23,
Township 21 South, Range 61 East, M.D.M., Nevada; also being the Southwest (SW)
corner of the intersection of Flamingo Road and Spencer Street, bounded as
follows: on the North by the South line of the North 50.00 feet thereof; on the
East by the West line of the East 40.00 feet thereof; on the Southwest (SW) by
the arc of a curve concave Southwesterly, having a radius of 25.00 feet and
being tangent to the South line of said North 50.00 feet and the West line of
said East 40.00 feet as conveyed to Clark County, by Deed recorded October 14,
1980 as Document No. 1255253, Official Records.
and further described as:
Beginning at a point that is South 50.43 feet and West 62.64 feet from the
Northeast corner of Lot 9, in the East Half (El/2) of the Northeast Quarter
(NEl/4) of the Northwest Quarter (NWl/4) of Section 23, Township 21 South, Range
61 East, M.D.M., said point also being South 62.00 feet and West 61.14 feet from
a Department of Transportation Monument in the intersection of Flamingo Road and
Spencer Avenue; THENCE around a curve to the right 34.87 feet, said curve having
a radius of 25 feet with a cord bearing South 46(degree)10'l2" East 34.87 feet;
THENCE South 1(degree)56'59" East 568.01 feet; THENCE North 89(degree)5l'36"
West 302.67 feet; THENCE North 25(degree)06'46" West 589.59 feet; THENCE North
89(degree)36'35" East 279.93 feet POINT OF BEGINNING.
EXHIBIT "D-1"
<PAGE>
EXHIBIT "D-2"
PROPERTY DESCRIPTION
(Kellogg Office)
That certain real property situated in the City of Littleton and County
of Arapahoe, State of Colorado, described as follows:
A parcel of land being all of Lot 11, and the Southeasterly 59.00 feet of Lot
12, Block 3, Highline Professional Center and a portion of Lot 1, Block 2,
Highline Professional Center South, said parcel being more particularly
described as follows:
A tract of land located in the Northwest one-quarter of Section 34 and the
Southwest one-quarter of Section 27, Township 5 South, Range 68 West of the
Sixth Principal Meridian, County of Arapahoe, State of Colorado, described as
follows:
Commencing at the Northeast corner of the Northwest one-quarter of said Section
34; thence S89(degree)49'50"W and along the North line of the Northwest
one-quarter of said Section 34 a distance of 525.49 feet to a point on the
Southwesterly right-of-way line of Dry Creek Circle, said point being a point on
curve, also being the Point of Beginning; thence along said Southwesterly
right-of-way line of Dry Creek Circle and along the arc of a curve to the left
whose center bears N30(degree)08'52"E having a delta of 2l(degree)36'44", a
radius of 255.93 feet, a distance of 96.54 feet; thence S40(degree)49'0l"E a
distance of 38.43 feet to a point on the Westerly right-of-way line of West Dry
Creek Court; thence Southerly along the Westerly right-of-way line of West Dry
Creek Court the following 3 courses:
(l) S00(degree)10'10"E, 33.79 feet to a point of curve.
(2) Along the arc of a curve left having a delta of ll(degree)l7'52", a radius
of 275.33 feet, a distance of 54.29 feet measured along the arc to a point of
tangent.
(3) S11(degree)28'02"E, 5.41 feet;
Thence S49(degree)53'll"W, 243.11 feet to a point on curve, said point being on
the Easterly right-of-way line of the Denver Water Board's Highline Canal;
thence Northwesterly along said Easterly right-of-way line the following 6
courses:
1) Along the arc of a curve left whose center bears S54(degree)40'14"W having a
delta of 25(degree)27'07", A radius of 152.97 feet, a distance of 67.95 feet
measured along the arc to a point of tangent.
2) N60(degree)46'53"W, 192.40 feet to point of curve.
3) Along the arc of a curve right having a delta of l7(degree)06'00", a radius
of 930.37 feet, distance oF 277.67 feet measured along the arc to a point of
tangent.
EXHIBIT "D-2" -- Page 1 of 2
<PAGE>
4) N43(degree)40'53"W, 0.88 feet.
5) N89(degree)43'14"E, 0.39 feet.
6) N43(degree)33'21"W a distance of 100.31 feet;
Thence N49(degree)53'll"E a distance of 400.89 feet to a point on the
Southwesterly right-of-way line of Dry Creek Circle; thence S35(degree)30'30"E
and along said Southwesterly right-of-way line a distance of 315.52 feet to a
point of curve, thence along the arc of a curve left having a delta of
24(degree)20'38", a radius of 255.93 feet, a distance of 108.74 feet to the
Point of Beginning, County of Arapahoe, State of Colorado.
EXHIBIT "D-2" -- Page 2 of 2
<PAGE>
EXHIBIT "D-3"
PROPERTY DESCRIPTION
(One Corporate Center I)
That certain real property situated in the City of Edina and County of
Hennepin, State of Minnesota, described as follows:
PARCEL 1:
Lot 1, Block 1, One Corporate Center, together with the benefits and appurtenant
easements created pursuant to that Mutual Parking and Easement Agreement filed
as Document No. 4472140, according to the recorded plat thereof, Hennepin
County, Minnesota.
PARCEL 2:
Lot 1, Block 1, One Corporate Center Phase 3, according to the recorded plat
thereof, Hennepin County, Minnesota.
EXHIBIT "D-3"
<PAGE>
EXHIBIT "D-4"
PROPERTY DESCRIPTION
(Westwood Office)
That certain real property situated in the City of Tampa and County of
Hillsborough, State of Florida, described as follows:
For a point of reference, commence at the Southeast corner of the Southwest 1/4
of the Northwest 1/4 of Section 16, Township 29 South, Range 18 East,
Hillsborough County, Florida; run thence North 50.00 feet along the East
boundary thereof and the centerline of Lois Avenue; thence South
89(degree)52'00" West, 42.00 feet to the intersection of the North right of way
line of West Spruce Street and the West right of way line of Lois Avenue for the
POINT OF BEGINNING of the herein described parcel; thence continue South
89(degree)52'00" West, 358.00 feet along the North right of way line of said
West Spruce Street; thence North 380.00 feet; thence North 89(degree)52'00"
East, 358.00 feet to a point on the West right of way line of Lois Avenue;
thence South 380.00 feet along the said West right of way line to the POINT OF
BEGINNING.
EXHIBIT "D-4"
<PAGE>
EXHIBIT "D-5"
PROPERTY DESCRIPTION
(One Corporate Center III)
That certain real property situated in the City of Edina and County of
Hennepin, State of Minnesota, described as follows:
PARCEL 1:
Lot 1, Block 1, One Corporate Center, together with the benefits and appurtenant
easements created pursuant to that Mutual Parking and Easement Agreement filed
as Document No. 4472140, according to the recorded plat thereof, Hennepin
County, Minnesota.
PARCEL 2:
Lot 1, Block 1, One Corporate Center Phase 3, according to the recorded plat
thereof, Hennepin County, Minnesota.
EXHIBIT "D-5"
<PAGE>
EXHIBIT "D-6"
PROPERTY DESCRIPTION
(La Plaza Center)
That certain real property situated in the City of Las Vegas and County
of Clark, State of Nevada, described as follows:
PARCEL I:
That portion of the Northwest Quarter (NW 1/4) of the Northwest Quarter (NW 1/4)
of Section 23, Township 21 South, Range 61 East, M.D.B.&M., more particularly
described as Parcel 1, as shown by Parcel map in File 7, Page 61 of Parcel Maps,
recorded November 14, 1975 as Document No. 529370 of Official Records, Clark
County, Nevada.
PARCEL II:
That portion of the Northwest Quarter (NW 1/4) of the Northwest Quarter (NW 1/4)
of Section 23, Township 21 South, Range 61 East, M.D.B.&M., more particularly
described as Parcel 2, as shown by Parcel map in File 7, Page 61 of Parcel Maps,
recorded November 14, 1975 as Document No. 529370 of Official Records, Clark
County, Nevada.
PARCEL III:
Government Lot Eighteen (18) in Section 23, Township 21 South, Range 61 East,
M.D.B.&M.
EXCEPTING THEREFROM the North 340 feet thereof as replatted into Lot 2 and a
portion of Lot 1 as shown by Parcel Map filed in File 7, Page 61 of Parcel Maps,
recorded November 14, 1975 as Document No. 529370 of Official Records, Clark
County, Nevada.
FURTHER EXCEPTING THEREFROM the East thirty feet (30'), the South thirty feet
(30') and the "spandrel area" in the Southeast corner thereof, as dedicated to
the County of Clark for road purposes by Deed recorded April 8, 1977 in Book 726
as Document No. 685029 in the Office of the County Recorder of Clark County,
Nevada.
Said Parcels I, II and III being more particularly described by metes and bounds
as follows:
That portion of the Northwest Quarter (NW1/4) of the Northwest Quarter (NW1/4)
of Section 23, Township 21 South, Range 61 East, M.D.B.&M., more particularly
described as follows:
COMMENCING at the Southwest Corner of the Northwest Quarter (NW1/4) of the
Northwest Quarter (NW1/4) of said Section 23; thence North 03(degree)15'00" West
along the West line thereof a distance of 277.21 feet; thence South
89(degree)50'30" East a distance of 50.09 feet to a point on the Easterly
right-of-way line of Maryland Parkway (100.00 feet wide), said point being the
TRUE POINT OF BEGINNING; thence continuing South 89(degree)50'30" East a
distance of 291.61 feet; thence South 03(degree)06'33" East a distance of 250.31
feet to a point on the Northerly right-of-way line of
EXHIBIT "D-6" -- Page 1 of 2
<PAGE>
Rochelle Avenue (60.00 feet wide); thence South 89(degree)18'15" East along said
Northerly right-of-way line a distance of 295.24 feet to a point on a tangent
curve concave to the Northwest having a radius of 15.00 feet; thence
Northeasterly along the arc of said curve through a central angle of
93(degree)39'5l" an arc length of 24.52 feet to a point on the Westerly
right-of-way line of Escondido Street (60.00 feet wide); thence North
02(degree)58'06" West along said Westerly right-of-way line a distance of 577.71
feet; thence North 89(degree)50'30" West a distance of 604.96 feet to a point on
the Easterly right-of-way line of the aforementioned Maryland Parkway; thence
South 03(degree)15'00" East along said Easterly right-of-way line a distance of
340.60 feet to the TRUE POINT OF BEGINNING.
EXHIBIT "D-6" -- Page 2 of 2
<PAGE>
EXHIBIT "D-7"
PROPERTY DESCRIPTION
(Continental Plaza)
That certain real property situated in the City of Scottsdale and
County of Maricopa, State of Arizona, described as follows:
The North half of the Southeast quarter of the Northeast quarter of the
Southeast quarter of Section 22, Township 3 North, Range 4 East of the Gila and
Salt River Base and Meridian, Maricopa County, Arizona.
EXHIBIT "D-7"
<PAGE>
EXHIBIT "D-8"
PROPERTY DESCRIPTION
(Fidelity Federal)
That certain real property situated in the City of Long Beach and
County of Los Angeles, State of California, described as follows:
EXHIBIT "D-8"
<PAGE>
EXHIBIT "D-9"
PROPERTY DESCRIPTION
(Northwest Plaza)
That certain real property situated in the City of Dayton and County of
Montgomery, State of Ohio, described as follows:
PARCEL 1:
Located in the City of Dayton, County of Montgomery, State of Ohio and being all
of Lots 79601 and 79602 and part of Lot 79603, all of the revised and
consecutive numbers of lots on the Plat of said City of Dayton, Ohio and being a
tract of land described as follows:
Beginning at the northeast corner of Lot 79601, said point being in the west
line of Philadelphia Drive, said west line being forty-five and 00/100 (45.00)
feet west of and measured at right angles to the centerline of said Philadelphia
Drive; thence with the west line of said Philadelphia Drive, South one degree
five minutes (0l(degree) 05'), West for six hundred forty-five and 25/100
(645.25) feet to the northeast corner of Lot 79600 of the revised and
consecutive numbers of lots on the Plat of said City of Dayton, Ohio; thence
with the north line of said Lot 79600, South eighty-eight degrees five minutes
(88(degree) 05') West for one hundred forty-five and 54/100 (145.54) feet to the
northwest corner of said Lot 79600; thence with the west line of said Lot 79600,
and with its southward extension, South one degree fifty-five minutes
(01(degree) 55') East for three hundred ten and 00/100 (310.00) feet to the
southeast corner of said Lot 79601, said point being in the north line of
Siebenthaler Avenue, said north line of Siebenthaler Avenue being forty-five and
00/100 (45.00) feet north of and measured at right angles to the centerline of
said Siebenthaler Avenue; thence with the north line of said Siebenthaler
Avenue, South eighty-eight degrees five minutes (88(degree) 5') West for six
hundred ninety-three and 22/100 (693.22) feet; thence North one degree
fifty-five minutes (01(degree) 55') West for five hundred forty-nine and 00/100
(549.00) feet; thence South eighty-eight degrees five minutes (88(degree) 05')
West for one hundred and 50/100 (100.50) feet; thence South one degree
fifty-five minutes (01(degree) 55') East for forty-four and 00/100 (44.00) feet;
thence North eighty-eight degrees five minutes (88(degree) 05') East for two
hundred twenty-one and 20/100 (221.20) feet; thence North one degree fifty-five
minutes (01(degree) 55') West for four hundred forty and 68/100 (440.68) feet to
a point in the north line of said Lot 79603; thence with the north lines of said
Lots 79603, 79602 and 79601, North eighty-seven degrees forty minutes
(87(degree) 40') East for one thousand one hundred ninety-four and 26/100
(1194.26) feet to the point of beginning, containing 20.689 acres more or less,
according to a survey of said premises by A. Bodenstein, Registered Surveyor,
State of Ohio.
PARCEL II:
EXHIBIT "D-9" -- Page 1 of 2
<PAGE>
Located in the City of Dayton, County of Montgomery, State of Ohio, and being
part of Lot 79603 of the revised and consecutive numbers of lots on the Plat of
said City of Dayton, Ohio, and being a tract of land described as follows:
Beginning at the southwest corner of said Lot 79603, said point being in the
north line of Siebenthaler Avenue, said north line being forty-five and 00/100
(45.00) feet north of the centerline of said Siebenthaler Avenue; thence with
the west line of said Lot 79603, North one degree fifty-five minutes (01(degree)
55') West for nine hundred forty and 62/100 (940.62) feet to a point in the
north line of said Lot 79603; thence with the north line of said Lot 79603,
North eighty-seven degrees forty minutes (87(degree) 40') East for six hundred
ninety-five and 41/100 (695.41) feet; thence South one degree fifty-five minutes
(01(degree) 55') East for four hundred forty and 68/100 (440.68) feet; thence
North eighty-eight degrees five minutes (88(degree) 05') East for two hundred
twenty-one and 20/100 (221.20) feet; thence North one degree fifty-five minutes
(01(degree) 55') West for forty-four and 00/100 (44.00) feet; thence North
eighty-eight degrees five minutes (88(degree) 05') East for one hundred and
50/100 (100.50) feet; thence South one degree fifty-five minutes (01(degree)
55') East for five hundred forty-nine and 00/100 (549.00) feet to a point in the
south line of said Lot 79603, and in the north line of said Siebenthaler Avenue;
thence with the south line of said Lot 79603 and with the north line of said
Siebenthaler Avenue, South eighty-eight degrees five minutes (88(degree) 05')
West for one thousand seventeen and 09/100 (1017.09) feet to the point of
beginning, containing 18.887 acres more or less, according to a survey of said
premises by A. Bodenstein, Registered Surveyor, State of Ohio, dated August 14,
1980.
EXHIBIT "D-9" -- Page 2 of 2
<PAGE>
EXHIBIT "D-10"
PROPERTY DESCRIPTION
(River Bay Plaza)
That certain real property situated in the City of Riverview and County
of Hillsborough, State of Florida, described as follows:
Commence at the Northwest corner of the Southeast 1/4 of Section 20, Township 30
South, Range 20 East, Hillsborough County, Florida and run thence North
89(degree) 08' 28" East along the North boundary of said Southeast 1/4, a
distance of 132.22 feet to the East right of way line of U.S. Highway No. 301
(S.R. No. 43); run thence South 0(degree) 01' 41" West along said right of way
line, 253.50 feet to the POINT OF BEGINNING; continue thence South 0(degree) 01'
41" West along said right of way line, 239.21 feet; run thence North 89(degree)
20' 11" East, 150.00 feet; thence run South 0(degree) 0l' 41" West, 150.00 feet
to the North right of way line of Uncle Tom Road; run thence North 89(degree)
20' 11" East along said right of way line, a distance of 616.25 feet; thence run
South 0(degree) 07' 58" West 10.00 feet; thence run North 89(degree) 20' 11"
East, 40.00 feet; thence run North 0(degree) 07' 58" East, a distance of 551.97
feet; thence South 89(degree) 08' 28" West, 657.31 feet; run thence South
0(degree) 01' 41" West, 150.00 feet; run thence South 89(degree) 08' 28" West,
150.00 feet to the POINT OF BEGINNING.
AND
Commence at the Northwest corner of the Southeast 1/4 of Section 20, Township 30
South, Range 20 East, Hillsborough County, Florida and run thence North
89(degree) 08' 28" East along the North boundary of said Southeast 1/4, a
distance of 132.22 feet to the East right of way line of U.S. Highway No. 301
(S.R. No. 43) for the POINT OF BEGINNING; continue thence North 89(degree) 08'
28" East, 807.47 feet; thence run South 0(degree) 07' 58" West, 103.50 feet; run
thence South 89(degree) 08' 28" West, 807.31 feet to said East right of way line
of U.S. Highway 301 (S.R. No. 43); run thence North 0(degree) 01' 41" East along
said right of way line, 103.50 feet to the POINT OF BEGINNING.
LESS AND EXCEPT that part of the hereinabove described lands for additional road
right of way for Gibsonton Drive Extension as set forth in Order of Taking
recorded in O.R. Book 5222, Page 636, Public Records of Hillsborough County,
Florida.
EXHIBIT "D-10"
<PAGE>
EXHIBIT "D-11"
PROPERTY DESCRIPTION
(Redwood Plaza)
That certain real property situated in the City of Salt Lake City and
County of Salt Lake, State of Utah, described as follows:
Beginning at a point that is North 47.68 feet and West 66.84 feet from a
monument at the intersection of Redwood Road and 700 North, said monument is
located South 89 deg. 51'52" East 1173.55 feet from a monument at the
intersection of Starcrest Drive and 700 North, said monument is also located
North 288.51 feet and West 89.35 feet from the South quarter corner of Section
27, Township 1 North, Range 1 West, Salt Lake Base and Meridian; thence North 44
deg. 12'39" East 12.89 feet; thence North 0 deg. 15'07" East 710.74 feet; thence
North 89 deg. 51'50" West 534.20 feet; thence South 0 deg. 15'07" West 382.04
feet; thence South 89 deg. 51'50" East 4.28 feet; thence South 0 deg. 42'24"
West 337.98 feet; thence South 89 deg. 51'50" East 523.66 feet to the point of
beginning.
EXHIBIT "D-11"
<PAGE>
EXHIBIT "D-12"
PROPERTY DESCRIPTION
(Towne Center)
That certain real property situated in the City of Derby and County of
Sedgwick, State of Kansas, described as follows:
Lot 1, Block 1, K-15 Plaza Second Addition, Derby, Sedgwick County, Kansas.
EXHIBIT "D-12"
<PAGE>
EXHIBIT "D-13"
PROPERTY DESCRIPTION
(Springwood Plaza)
That certain real property situated in the City of Dellwood and County
of St. Louis, State of Missouri, described as follows:
A parcel of ground in the Southwestern 1/4 of Section 6, Township 46 North,
Range 7 East, St. Louis County, Missouri, said parcel being more particularly
described as follows:
Beginning at the point of intersection of the Eastern line of Florissant Avenue
with the Northern line of property described in deed to John B. Parnello and
wife recorded in Book 4402 page 112, St. Louis County Recorder's Office; thence
along the Eastern line of Florissant Avenue the following courses and distances:
North 01 degrees 16 minutes East, 202.30 feet, North 06 degrees 58-1/2 minutes
East, 115.57 feet and North 01 degree 16 minutes East, 201.78 feet; thence
Southeastwardly 67.70 feet along a curve to the left having a radius of 75.00
feet to a point of tangency; thence South 82 degrees 36-1/4 minutes East, 64.92
feet; thence South 89 degrees 41 minutes East, 162.44 feet; thence North 01
degrees 16 minutes East, 200.00 feet; thence South 89 degrees 41 minutes East,
351.13 feet to the Western line of Dellwood Hills Plat No. 2; thence South 01
degree 16 minutes West, 675.30 feet along the Western line of Dellwood Hills
Plat No. 2 and along the Western line of Dellwood Hills to the Northern line of
said John B. Parnello property; thence North 89 degrees 41 minutes West, 645.13
feet along the Northern line of said John B. Parnello property to the Eastern
line of Florissant Avenue and the point of beginning.
EXHIBIT "D-13"
<PAGE>
EXHIBIT "D-14"
PROPERTY DESCRIPTION
(Kendall Sunset)
That certain real property situated in the City of Miami and County of
Dade, State of Florida, described as follows:
Tract A, of NATIONAL SELF STORAGE, according to the Plat thereof, recorded in
Plat Book 128, Page 64, of the Public Records of Miami-Dade County, Florida.
Tax Folio Number: 30-4033-035-0010
EXHIBIT "D-14"
<PAGE>
EXHIBIT "D-15"
PROPERTY DESCRIPTION
(Burbank Self Storage)
That certain real property situated in the City of Burbank and County of
Los Angeles, State of California, described as follows:
PARCEL 3, IN THE CITY OF BURBANK, IN THE COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, AS SHOWN ON PARCEL MAP 15782, FILED IN BOOK 165 PAGES 19 AND 20 OF
PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
SAID LAND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHERLY CORNER OF SAID PARCEL 3; THENCE SOUTH
48(degree)46'16" EAST A DISTANCE OF 327.25 FEET TO A POINT ON THE NORTHWESTERLY
RIGHT OF WAY LINE OF VERDUGO AVENUE; THENCE, ALONG SAID RIGHT OF WAY, SOUTH
41(degree)13'44" WEST, A DISTANCE OF 206.84 FEET TO THE BEGINNING OF A TANGENT
CURVE, CONCAVE NORTHERLY AND HAVING A RADIUS OF 150.00 FEET; THENCE ALONG SAID
CURVE, THROUGH A CENTRAL ANGLE OF 89(degree)59'06", A DISTANCE OF 23.56 FEET TO
A POINT ON THE NORTHEASTERLY RIGHT OF WAY LINE OF LAKE STREET; THENCE, ALONG
SAID RIGHT OF WAY, NORTH 48(degree)47'10" WEST, A DISTANCE OF 289.36 FEET;
THENCE, LEAVING SAID RIGHT OF WAY, NORTH 35(degree)20'11" EAST, A DISTANCE OF
223.09 FEET TO THE POINT OF BEGINNING.
EXHIBIT "D-15"
<PAGE>
EXHIBIT "D-16"
PROPERTY DESCRIPTION
(Fountainbleau)
That certain real property situated in the City of Miami and County of
Dade, State of Florida, described as follows:
Tract D, of SECOND ADDITION TO EXPRESSWAY INDUSTRIAL PARK, according to the Plat
thereof, recorded in Plat Book 118, Page 25, of the Public Records of Miami-Dade
County, Florida.
Tax Folio No. 30-3033-014-00201
EXHIBIT "D-16"
<PAGE>
EXHIBIT "D-17"
PROPERTY DESCRIPTION
(AAA Century Airport)
That certain real property situated in the City of Inglewood and County
of Los Angeles, State of California, described as follows:
LOTS 8, 9 AND THE WEST 50 FEET OF LOT 10 OF THE LOCKHAVEN TRACT, IN THE CITY OF
INGLEWOOD, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 17, PAGE(S) 87 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.
THE ABOVE DESCRIBED PARCEL OF LAND IS MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHWEST CORNER OF LOT 8 OF THE LOCKHAVEN TRACT, IN THE CITY
OF INGLEWOOD, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 17, PAGE 87 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY; THENCE ALONG THE NORTH LINE OF SAID LOT 8, SOUTH 89(degree) 57' 50"
EAST 250.00 FEET TO THE NORTHEAST CORNER OF THE WEST 50.00 FEET OF LOT 10 OF
SAID TRACT; THENCE ALONG THE EASTERLY LINE OF SAID WEST 50.00 FEET, SOUTH
00(degree) 00' 00" EAST 304.08 FEET THENCE NORTH 89(degree) 57' 50" WEST 250.00
FEET TO THE SOUTHWEST CORNER OF SAID LOT 8; THENCE ALONG THE WEST LINE OF SAID
LOT 8, NORTH 00(degree) 00' 00" WEST 304.08 FEET TO THE POINT OF BEGINNING.
EXHIBIT "D-17"
<PAGE>
EXHIBIT "D-18"
PROPERTY DESCRIPTION
(AAA Sentry)
That certain real property situated in the City of North Lauderdale and
County of Broward, State of Florida, described as follows:
All that part of Tract 7 in Block 96 of PALM BEACH FARMS COMPANY PLAT NO. THREE,
according to the Plat thereof, as recorded in Plat Book 2, at Pages 45 through
54, inclusive, of the Public Records of Palm Beach County, Florida, described as
follows:
Beginning at the intersection of the North line of said Tract 7, and the West
right-of-way line of Sunshine State Parkway (300 feet right-of-way) thence North
89(degree) 08' 44" West, along the North line of said Tract 7, a distance of
352.84 feet to a point 237.78 feet East of (as measured along the North line) of
the Northwest corner of said Tract 7; thence South 0(degree) 51' 16" West a
distance of 300 feet; thence North 89(degree) 08' 44" West, along a line 300
feet South of (as measured at right angles) and parallel with the North line of
said Tract 7, a distance of 200 feet to a point on the proposed Easterly
non-vehicular access right-of-way line of State Road No. 7 (U.S. #441) and a
point on a curve; thence Southerly along said proposed Easterly non-vehicular
access right-of-way line and along a curve to the right whose tangent bears
South 01(degree) 00' 09" West; with a radius of 17,288.73 feet and a central
angle of 01(degree) 08' 55" an arc distance of 95.12 feet to a point; thence
South 80(degree) 52' 54" East, a distance of 225.98 feet to a point on the said
West right-of-way line of Sunshine State Parkway; thence North 38(degree) 30'
33" East along West right-of-way line a distance of 540.09 feet to the Point oF
Beginning.
N/K/A as a portion of Tract A, THE CUMMINGS PLAT NO. 1, according to the Plat
thereof, recorded in Plat Book 126, Page 35, of the Public Records of Broward
County, Florida.
Tax Folio NO. 49-42-07-09-0011.
EXHIBIT "D-18"
<PAGE>
EXHIBIT "D-19"
PROPERTY DESCRIPTION
(Forest Hill)
That certain real property situated in the City of West Palm Beach and
County of Palm Beach, State of Florida, described as follows:
The South one-half (S 1/2) of the West one-half (W 1/2) of Lot 4, Block 4, LESS
the East 100 feet of the South 260 feet of the East one-half (E 1/2) of the West
one-half (W 1/2) of Lot 4, Block 4, all of the sub-division of Section 7,
Township 44 South, Range 43 East, according to the Palm Beach Plantations
Company Plat thereof on file in the Office of the Clerk of the Circuit Court, in
and for Palm Beach County, Florida, in Plat Book 10, Page 20, TOGETHER WITH the
West 12 feet of the South 600 feet of the East one-half (E 1/2) of the said Lot
4, Block 4, of Section 7, Township 44 South, Range 43 East, according to the
said Plat in Plat Book 10, Page 20, less and excepting therefrom the
rights-of-way of Davis Road and Forest Hill Boulevard as now laid out and in use
on the West 40 feet and the South 60 feet thereof; being more particularly
described as follows:
COMMENCE at the Southwest corner of Lot 4, Block 4, all of the Sub-Division of
SECTION 7, TOWNSHIP 44 SOUTH, RANGE 43 EAST, according to the PALM BEACH
PLANTATIONS COMPANY PLAT, thereof on file in the Office of the Clerk of the
Circuit Court, in and for Palm Beach County, Florida, in Plat Book 10, Page 20;
thence N 00(degree) 31' 45" W along the West boundary of said Lot 4, a distance
of 81.39 feet; thence N 89(degree) 28' 15" E, a distance of 40.04 feet to the
POINT OF BEGINNING; thence N 00(degree) 31' 45" W along the East Right-of-Way
line of Davis Road, a distance of 586.39 feet; thence S 87(degree) 25' 21" E, a
distance of 291.15 feet; thence S 00(degree) 09' 25" W along the East line of
the West 1/2 of said Lot 4, a distance of 70.08 feet; thence S 88(degree) 05'
30" E, a distance of 12.57 feet; thence S 00(degree) 30' 21" E, a distance of
540.78 feet to a point on the Northerly Right-of-Way line of Forest Hills
Boulevard; thence N 87(degree) 34' 29" W, along said North Right-of-Way line, a
distance of 11.99 feet; thence N 00(degree) 31' 35" W, a distance of 200.30
feet; thence N 87(degree) 20' 26" W, a distance of 100.72 feet; thence S
00(degree) 41' 29" E, a distance of 200.15 feet to a point on the aforementioned
Right-of-Way line of Forest Hills Boulevard; thence N 87(degree) 16' 01" W,
along said Right-of-Way line, a distance of 167.00 feet; thence continuing along
said Right-of-Way line, N 43(degree) 53' 32" W, a distance of 34.26 feet to the
POINT OF BEGINNING.
Tax Folio No. 00-43-44-07-00-000-52
EXHIBIT "D-19"
<PAGE>
EXHIBIT "D-20"
PROPERTY DESCRIPTION
(Margate Self Storage)
That certain real property situated in the City of Margate and County
of Broward, State of Florida, described as follows:
Lot 6 of MEARS COMMERCIAL PARK, according to the Plat thereof, recorded in Plat
Book 107, Page 12, of the Public Records of Broward County, Florida; said lands
situate, lying and being in Broward County, Florida.
Tax Folio No. 8230-09-0060
EXHIBIT "D-20"
<PAGE>
EXHIBIT "D-21"
PROPERTY DESCRIPTION
(Military Trail)
That certain real property situated in the City of West Palm Beach and
County of Palm Beach, State of Florida, described as follows:
A parcel of land lying in the SW 1/4 of the NW 1/4 of the SE 1/4 of Section 24,
Township 43 South, Range 42 East, Palm Beach County, Florida, being more
particularly described as follows:
COMMENCING at the Southwest corner of the said SW 1/4; thence North 01(degree)
23' 24" East, along the West line of said SW 1/4, a distance of 170.00 feet;
thence South 89(degree) 08' 36" East, along the North line of the South 170.0
feet of said SW 1/4, a distance of 60.00 feet to the East Right-of-Way line of
Military Trail and the POINT OF BEGINNING; thence continue South 89(degree) 08'
36" East, along the said North line of the South 170.00 feet, a distance of
210.00 feet; thence South 01(degree) 23' 24" West, along the East line of the
West 270.00 feet of said SW 1/4, a distance of 170.00 feet; thence South
89(degree) 08' 36" East, along the South line of said SW 1/4, a distance of
403.72 feet; thence North 01(degree) 21' 13" East, along the East line of said
SW 1/4, a distance of 490.02 feet; thence North 89(degree) 01' 48" West, along
the South line of the North 170.00 feet of said SW 1/4, a distance of 218.40
feet; thence South 00(degree) 51' 24" West, a distance of 220.45 feet; thence
North 89(degree) 08' 36" West, a distance of 397.05 feet to the said East
Right-of-Way of Military Trail; thence South 01(degree) 23' 24" West, along said
East right-of-way line, a distance of 100.00 feet to the POINT OF BEGINNING.
PARCEL 2 - EASEMENT ESTATE:
TOGETHER WITH a Non Exclusive Mutual Driveway Easement for pedestrian and
vehicular ingress and egress along part of a common property line as recorded in
Official Records Book 5087, Page 831 and as modified in Official Records Book
5126, Page 14, of the Public Records of Palm Beach County, Florida, more
particularly described as follows:
BEING a parcel of land lying in the Southeast one-quarter (SE 1/4) of Section
24, Township 43 South, Range 42 East, Palm Beach County, Florida, and being more
particularly described as follows:
COMMENCING at the South quarter corner of said Section 24; thence North
01(degree) 23' 24" East along the West line of said Southeast one-quarter (SE
1/4) of Section 24, a distance of 1493.28 feet; thence departing said West line,
South 88(degree) 36' 36" East, a distance of 60.00 feet to a point on the East
right-of-way line of Military Trail (S.R. 809), as now laid out and in use;
thence North 01(degree) 23' 24" East along said East right-of-way line, a
distance of 100.00 feet to the POINT OF BEGINNING of an Access Easement; thence
continue North 01(degree) 23' 24" East, a distance of 15.00 feet; thence South
89(degree) 08' 36" East, a distance of 13.63 feet to the beginning of a curve
concave to the Southwest
EXHIBIT "D-21" -- Page 1 of 2
<PAGE>
having a radius of 46.00 feet and a central angle of 47(degree) 37' 49"; thence
Southeasterly along the arc of said curve, a distance of 38.24 feet; thence
North 89(degree) 08' 36" West, a distance of 47.76 feet to the POINT OF
BEGINNING.
The bearings shown herein are relative to an assumed meridian; the North/South
Mid-Section line of Section 24-43-42 is assumed to bear North 01(degree) 23' 24"
West.
EXHIBIT "D-21" -- Page 2 of 2
<PAGE>
EXHIBIT "E"
DESCRIPTION OF FIDELITY FEDERAL GROUND LEASES
1. The leasehold estate and interest in the real property described as
Parcels 3, 4 and 5 on Exhibit "B" attached hereto, which leasehold estate and
interest was created by that certain Lease of Real Property dated May 12, 1965,
by and between Mitchell Land and Improvement Co., as lessor, and Fidelity
Federal Savings and Loan Association, as lessee, a short form of which was
recorded in Book M-2285, Page 23, Official Records of Los Angeles County,
California, as amended by an instrument entitled Amendment of Lease Description
recorded in Book M-2445, Page 583, said Official Records.
2. The leasehold estate and interest of Tenant (including an option to
purchase) in the real property described as Parcel 1 and 2 on Exhibit "B"
attached hereto, which leasehold estate and interest was created by that certain
Lease of Real Property dated August 1, 1965, by and between Clare D. Hamman, AKA
Clare Hamman and Helen S. Hamman, as lessor, and Fidelity Federal Savings and
Loan Association, as lessee, a short form of which was recorded in Book M-2341,
Page 3, Official Records of Los Angeles County, California, as amended by an
instrument entitled Amendment of Lease Description recorded in Book M-2447, Page
519, said Official Records.
3. The sub-leasehold estate and interest (including a right of first
refusal) in the real property described as Parcel 6 on Exhibit "B" attached
hereto, which sub-leasehold estate and interest was created by that certain
Sub-lease of Real Property dated February 28, 1975, between Fidelity Federal
Savings and Loan Association, as sub-lessor, and Wilshire Woods, Inc., as
sub-lessee, a short form of which was recorded in Book M-4934, Page 771,
Official Records of Los Angeles County, California.
4. The sub-leasehold estate and interest (including a right of first
refusal) in the real property described as Parcel 7 on Exhibit "B" attached
hereto, which sub-leasehold estate and interest was created by that certain
Sub-lease of Real Property dated February 28, 1975, between Fidelity Federal
Savings and Loan Association, as sub-lessor, and Wilshire Woods, Inc., as
sub-lessee, a short form of which was recorded in Book M-4934, Page 776,
Official Records of Los Angeles County, California.
EXHIBIT "E"
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
ARTICLE 1 CERTAIN DEFINITIONS..........................................................................1
Section 1.1 Certain Definitions....................................................................1
ARTICLE 2 LOAN TERMS..................................................................................15
Section 2.1 The Loan Advances.....................................................................15
Section 2.2 Interest Rate; Late Charge............................................................18
Section 2.3 Terms of Payment......................................................................19
Section 2.4 Collateral; Releases of Collateral....................................................22
Section 2.5 Adjustments to Adjusted Loan Basis....................................................24
Section 2.6 Capital Adequacy; Increased Costs; Illegality.........................................24
ARTICLE 3 INSURANCE, CONDEMNATION, DEPOSITS AND RESERVES..............................................25
Section 3.1 Insurance.............................................................................25
Section 3.2 Casualty; Use and Application of Insurance Proceeds...................................27
Section 3.3 Condemnation..........................................................................30
Section 3.4 Deposits..............................................................................31
ARTICLE 4 ENVIRONMENTAL MATTERS.......................................................................32
Section 4.1 Certain Definitions...................................................................32
Section 4.2 Representations and Warranties on Environmental Matters...............................33
Section 4.3 Covenants on Environmental Matters....................................................34
Section 4.4 No Waiver.............................................................................36
ARTICLE 5 LEASING MATTERS.............................................................................36
Section 5.1 Representations and Warranties on Leases..............................................36
Section 5.2 General Lease Requirements............................................................37
Section 5.3 Covenants.............................................................................37
Section 5.4 Additional Covenants Regarding Material Leases........................................38
Section 5.5 Lender's Consent to Deviations........................................................38
Section 5.6 Security Deposits; Lease Buy Out Consideration........................................38
Section 5.7 Subordination Agreements; Tenant Estoppels............................................39
ARTICLE 6 REPRESENTATIONS AND WARRANTIES..............................................................39
Section 6.1 Partnership and Organizational Existence; Compliance with Law.........................40
Section 6.2 Partnership or Organizational Power; Authorization; Enforceable
Obligations...........................................................................40
Section 6.3 Ownership of Collateral; Liens........................................................40
Section 6.4 Condemnation..........................................................................41
Section 6.5 Casualty..............................................................................41
Section 6.6 Material Agreements...................................................................41
Section 6.7 Property Compliance...................................................................41
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
Section 6.8 Access................................................................................41
Section 6.9 Utility Services......................................................................41
Section 6.10 Permits...............................................................................41
Section 6.11 No Default............................................................................41
Section 6.12 Other Ventures/Single Purpose Entity..................................................41
Section 6.13 Investment Company Act................................................................42
Section 6.14 Margin Regulations....................................................................42
Section 6.15 Taxes.................................................................................42
Section 6.16 ERISA.................................................................................42
Section 6.17 No Litigation.........................................................................43
Section 6.18 Brokers...............................................................................43
Section 6.19 Purchase Agreement....................................................................43
Section 6.20 Employment and Labor Agreements.......................................................43
Section 6.21 Liens.................................................................................43
Section 6.22 Full Disclosure.......................................................................43
Section 6.23 Property Documents....................................................................43
Section 6.24 Rent Roll.............................................................................44
Section 6.25 Ground Lease Representations..........................................................44
Section 6.26 Property Information..................................................................44
Section 6.27 Acquisition Cost and Equity Investment................................................44
ARTICLE 7 FINANCIAL REPORTING AND INFORMATION.........................................................44
Section 7.1 Financial Statements and Notices......................................................44
Section 7.2 Other Information.....................................................................46
Section 7.3 Audits................................................................................46
Section 7.4 Communication with Accountants........................................................46
ARTICLE 8 AFFIRMATIVE COVENANTS.......................................................................46
Section 8.1 Maintenance of Existence and Conduct of Business......................................47
Section 8.2 Payment of Indebtedness...............................................................47
Section 8.3 Books and Records.....................................................................48
Section 8.4 Litigation............................................................................48
Section 8.5 Compliance with Law...................................................................48
Section 8.6 Maintenance of Property...............................................................48
Section 8.7 Agreements............................................................................49
Section 8.8 Employee Plans........................................................................49
Section 8.9 Access................................................................................49
Section 8.10 Taxes on Payments or Security.........................................................49
Section 8.11 Enforcement...........................................................................51
Section 8.12 Intentionally Deleted.................................................................51
Section 8.13 Intentionally Deleted.................................................................51
Section 8.14 Maintenance of Representations; Supplemental Disclosure...............................51
Section 8.15 Property Documents; Asset Business Plans..............................................52
Section 8.16 Interest Rate Cap Agreement...........................................................52
Section 8.17 Indemnification.......................................................................52
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
Section 8.18 Impaired Property.....................................................................52
Section 8.19 Property-Specific Covenants...........................................................53
ARTICLE 9 NEGATIVE COVENANTS..........................................................................53
Section 9.1 Mergers, Etc..........................................................................53
Section 9.2 Investments; Loans and Advances.......................................................53
Section 9.3 Indebtedness..........................................................................54
Section 9.4 Structure; Transfers..................................................................54
Section 9.5 Maintenance of Business...............................................................55
Section 9.6 Affiliate Transactions................................................................55
Section 9.7 Liens.................................................................................56
Section 9.8 Events of Default.....................................................................56
Section 9.9 Ground Leases.........................................................................56
Section 9.10 Material Agreements...................................................................56
ARTICLE 10 EVENTS OF DEFAULT; RIGHTS AND REMEDIES......................................................57
Section 10.1 Events of Default.....................................................................57
Section 10.2 Remedies..............................................................................59
Section 10.3 Waivers by Borrower...................................................................60
Section 10.4 Right of Set-Off......................................................................60
ARTICLE 11 MISCELLANEOUS...............................................................................60
Section 11.1 Notices...............................................................................60
Section 11.2 Amendments and Waivers................................................................62
Section 11.3 Limitation on Interest................................................................62
Section 11.4 Invalid Provisions....................................................................63
Section 11.5 Reimbursement of Expenses.............................................................63
Section 11.6 Approvals; Third Parties; Conditions..................................................64
Section 11.7 Lender Not in Control; No Partnership/Membership......................................64
Section 11.8 Time of the Essence...................................................................65
Section 11.9 Successors and Assigns................................................................65
Section 11.10 Renewal, Extension or Rearrangement...................................................66
Section 11.11 Waivers...............................................................................66
Section 11.12 Cumulative Rights.....................................................................66
Section 11.13 Construction..........................................................................66
Section 11.14 Phrases...............................................................................66
Section 11.15 Exhibits and Schedules................................................................67
Section 11.16 Titles of Articles, Sections and Subsections..........................................67
Section 11.17 Publicity.............................................................................67
Section 11.18 Survival..............................................................................67
Section 11.19 GOVERNING LAW.........................................................................67
Section 11.20 Entire Agreement......................................................................68
Section 11.21 Counterparts..........................................................................68
Section 11.22 WAIVER OF JURY TRIAL..................................................................68
Section 11.23 Authorized Signature..................................................................68
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C>
Section 11.24 Power of Attorney.....................................................................68
Section 11.25 ACKNOWLEDGMENT BY WHITEHALL...........................................................69
ARTICLE 12 LIMITATIONS ON LIABILITY....................................................................69
Section 12.1 Limitation on Liability...............................................................69
Section 12.2 Limitation on Liability of Lender's Officers, Employees, Etc..........................70
</TABLE>
-iv-
<PAGE>
SCHEDULES
SCHEDULE 1.1(A) - PROPERTY INFORMATION
SCHEDULE 1.1(B) - BASIS ALLOCATIONS
SCHEDULE 2.1 - ADVANCE CONDITIONS
SCHEDULE 2.1(5) - WORKING CAPITAL BUDGETS FOR PROPERTIES
SCHEDULE 4.2 - ENVIRONMENTAL REPORTS
SCHEDULE 5.1(A) - TENANT DELINQUENCIES
SCHEDULE 5.1(B) - NOTICES OF TERMINATION OR DEFAULT
SCHEDULE 5.1(C) - PURCHASE OPTIONS
SCHEDULE 5.1(D) - LEASE TERMINATION RIGHTS
SCHEDULE 5.1(E) - LEASING COMMISSIONS OWING
SCHEDULE 5.1(F) - PREPAID RENTS
SCHEDULE 6.4 - CONDEMNATION PROCEEDINGS
SCHEDULE 6.5 - CASUALTIES AND FLOOD ZONE PROPERTIES
SCHEDULE 6.6 - MATERIAL AGREEMENTS
SCHEDULE 6.7 - PROPERTY COMPLIANCE
SCHEDULE 6.17 - LITIGATION
SCHEDULE 6.19 - CLAIMS UNDER PURCHASE AGREEMENT
SCHEDULE 6.27 - ACQUISITION COST AND EQUITY INVESTMENT
SCHEDULE 8.19 - PROPERTY-SPECIFIC COVENANTS
SCHEDULE 11.23 - AUTHORIZED SIGNATORIES
SCHEDULE 11.25 - SURETYSHIP PROVISIONS
-v-
<PAGE>
EXHIBITS
EXHIBIT "A" - FORM OF NOTICE OF ADDITIONAL ADVANCE
EXHIBIT "B" - FORM OF NOTICE TO DEPOSITORY
EXHIBIT "C" - FORM OF COLLATERAL ASSIGNMENT OF INTEREST RATE CAP
AGREEMENT
EXHIBIT "D-1" - PROPERTY DESCRIPTION (Century Park)
EXHIBIT "D-2" - PROPERTY DESCRIPTION (Kellogg Office)
EXHIBIT "D-3" - PROPERTY DESCRIPTION (One Corporate Center I)
EXHIBIT "D-4" - PROPERTY DESCRIPTION (Westwood Office)
EXHIBIT "D-5" - PROPERTY DESCRIPTION (One Corporate Center III)
EXHIBIT "D-6" - PROPERTY DESCRIPTION (La Plaza Center)
EXHIBIT "D-7" - PROPERTY DESCRIPTION (Continental Plaza)
EXHIBIT "D-8" - PROPERTY DESCRIPTION (Fidelity Federal)
EXHIBIT "D-9" - PROPERTY DESCRIPTION (Northwest Plaza)
EXHIBIT "D-10" - PROPERTY DESCRIPTION (River Bay Plaza)
EXHIBIT "D-11" - PROPERTY DESCRIPTION (Redwood Plaza)
EXHIBIT "D-12" - PROPERTY DESCRIPTION (Towne Center)
EXHIBIT "D-13" - PROPERTY DESCRIPTION (Springwood Plaza)
EXHIBIT "D-14" - PROPERTY DESCRIPTION (Kendall Sunset)
EXHIBIT "D-15" - PROPERTY DESCRIPTION (Burbank Self Storage)
EXHIBIT "D-16" - PROPERTY DESCRIPTION (Fountainbleau)
EXHIBIT "D-17" - PROPERTY DESCRIPTION (AAA Century Airport)
EXHIBIT "D-18" - PROPERTY DESCRIPTION (AAA Sentry)
EXHIBIT "D-19" - PROPERTY DESCRIPTION (Forest Hill)
EXHIBIT "D-20" - PROPERTY DESCRIPTION (Margate Self Storage)
EXHIBIT "D-21" - PROPERTY DESCRIPTION (Military Trail)
EXHIBIT "E" - DESCRIPTION OF FIDELITY FEDERAL GROUND LEASES
-vi-
<PAGE>
LIST OF DEFINED TERMS
Acquisition Advance............................................................1
Acquisition Advance Termination Date...........................................1
Additional Properties..........................................................1
Adjusted Annual Debt Service...................................................1
Adjusted Loan Basis............................................................2
Adjusted Operating Cash Flow...................................................2
Advance ......................................................................2
Affiliate......................................................................3
Agreement......................................................................3
Agreement Regarding Management Agreement.......................................3
Ancillary Agreements...........................................................3
Applicable Rate................................................................2
Approved Plans.................................................................3
Architect......................................................................3
Asset Business Plan............................................................3
Asset Management Agreement.....................................................3
Asset Management Fee...........................................................3
Asset Manager..................................................................3
Assignment of Leases...........................................................3
Borrower ......................................................................1
Borrower Party.................................................................3
Borrowing Date Certificate.....................................................3
British Banker Association Interest Settlement Rates...........................9
Business Day...................................................................4
Capital Expenditures...........................................................4
Capital Lease..................................................................4
Capital Lease Obligation.......................................................4
Capital Transaction............................................................4
Cash On Cash Limit.............................................................4
Cash On Cash Return............................................................4
Charges ......................................................................5
Charges Account................................................................5
Closing Date...................................................................5
Code ......................................................................5
Collateral.....................................................................5
Collateral Assignment of Contracts.............................................5
Collateral Assignment of Interest Rate Cap Agreement...........................5
Collateral Documents...........................................................5
Complete Taking................................................................5
Contract Rate..................................................................5
Debt Service Coverage Ratio....................................................6
Debt Service Coverage Ratio Limit..............................................6
-vii-
<PAGE>
Deed of Trust..................................................................6
Default Property...............................................................6
Default Rate...................................................................6
Discounted Funding Amount.....................................................23
Discounted Release Amount.....................................................22
Early Termination Date.........................................................6
Environmental Laws.............................................................6
Environmental Liabilities and Costs............................................6
Environmental Site Assessment..................................................6
ERISA ......................................................................6
Eurodollar Business Day........................................................9
Event of Default...............................................................7
Extension Notice...............................................................7
Extension Period..............................................................19
Federal Reserve Board..........................................................7
Fidelity Federal Ground Leases.................................................7
Fidelity Federal Property......................................................7
Fiscal Year....................................................................7
GAAP ......................................................................7
GECC ......................................................................7
Governmental Authority.........................................................7
Gross Receipts.................................................................7
Guaranteed Indebtedness........................................................8
Hazardous Materials............................................................8
Hazardous Substances Indemnity Agreement.......................................8
Holding Company................................................................8
Holding Company Operating Agreement...........................................54
Impaired Property..............................................................8
Indebtedness...................................................................8
Initial Advance................................................................8
Initial Properties.............................................................9
Interest Payment Date..........................................................9
IRC ......................................................................9
IRS ......................................................................9
Laws ......................................................................9
Lease Buy Out Consideration....................................................9
Leases ......................................................................9
Leasing Costs..................................................................9
Lender ......................................................................9
LIBOR Rate.....................................................................9
Lien ......................................................................9
Loan .....................................................................10
Loan Documents................................................................10
Major Work....................................................................10
Material Adverse Effect.......................................................10
-viii-
<PAGE>
Material Agreement............................................................10
Material Lease................................................................10
Material Leases...............................................................38
Maturity Date.................................................................10
Maximum Liability.............................................................10
Maximum Loan Amount...........................................................10
McNeil .....................................................................10
Net Capital Proceeds..........................................................11
New Holding Company...........................................................55
Non-Storage Leases............................................................11
Note .....................................................................11
Notice of Additional Advance..................................................11
Obligations...................................................................11
Operating Cash Flow...........................................................11
Operating Expenses............................................................11
Other Taxes...................................................................12
Partial Release Notice........................................................12
Partnership Agreement.........................................................12
Permitted Encumbrances........................................................12
Person .....................................................................12
Plan .....................................................................13
Potential Default.............................................................13
Properties....................................................................13
Property Basis................................................................13
Property Documents............................................................13
Purchase Agreement............................................................13
Release .....................................................................13
Release Payment...............................................................13
Remedial Action...............................................................13
Reserves .....................................................................13
Security Deposits.............................................................13
Seller .....................................................................13
Shareholder Litigation........................................................14
State .....................................................................14
Storage Properties............................................................14
Taxes .....................................................................14
Tenant .....................................................................14
Tenant Allowances.............................................................14
Tenant Improvements...........................................................14
Term .....................................................................14
Title Company.................................................................14
Title Policy..................................................................14
To Borrower's Knowledge.......................................................14
Whitehall.....................................................................15
Whitehall XII.................................................................15
-ix-
<PAGE>
Whitehall Indemnity...........................................................15
Whitehall Net Worth...........................................................15
Work..........................................................................15
Working Capital Advance.......................................................15
Working Capital Advance Allocation............................................15
Working Capital Budget........................................................15
SCHEDULE 2.1
Credit Approval Date...........................................................1
SCHEDULE 11.25
Nonrecourse Carve-Outs.........................................................1
Third Party Obligor............................................................1
-x-
<PAGE>
TERM LOAN AGREEMENT
TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT (this "Agreement") is made as of January 1,
2000 among WXI/MCN MULTIFAMILY REAL ESTATE LIMITED PARTNERSHIP, a Delaware
limited partnership, BRENDON WAY FUND XII ASSOCIATES, an Indiana general
partnership, CASTLE BLUFF FUND XII ASSOCIATES L.P., a Texas limited partnership,
and EMBARCADERO ASSOCIATES, a Georgia general partnership (each a "Borrower" and
collectively the "Borrowers"), and AMRESCO CAPITAL, L.P., a Delaware limited
partnership ("Lender").
RECITALS
A. Each of the Borrowers owns one or more Multifamily Residential
Properties (capitalized terms used but not defined shall have the meanings
ascribed to such terms in Article I of this Agreement) as more particularly
described in Exhibit A to this Agreement.
B. The Borrowers have requested that the Lender lend up to a maximum
amount of $195,783,261 to the Borrowers on a joint and several basis.
C. To secure the obligations of the Borrowers under this Agreement and
the other Loan Documents issued in connection with the Term Loan, the Borrowers
shall create a Collateral Pool in favor of the Lender. The Collateral Pool shall
be comprised of (i) Security Instruments on all of the Multifamily Residential
Properties owned by each of the Borrowers and (ii) any other Security Documents
executed by any of the Borrowers pursuant to this Agreement or any other Loan
Documents.
D. Each of the Security Documents shall be cross-defaulted (i.e., a
default under any Security Document, or under this Agreement, shall constitute a
default under each Security Document, and this Agreement) and
cross-collateralized (i.e., each Security Instrument shall secure all of the
Borrowers' obligations under this Agreement and the other Loan Documents issued
in connection with the Term Loan).
E. Subject to the terms, conditions and limitations of this Agreement,
the Lender has agreed to make the Term Loan.
NOW, THEREFORE, the Borrowers and the Lender, in consideration of the
mutual promises and agreements contained in this Agreement, hereby agree as
follows:
<PAGE>
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, the following terms shall have the
respective meanings set forth below:
"Additional Mortgaged Properties" means the Multifamily Residential
Properties identified on Exhibit A as Additional Mortgaged Properties.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management (other than property management) and policies of that
Person, whether through the ownership of voting securities, partnership
interests or by contract or otherwise.
"Agreement" means this Term Loan Agreement, as it may be amended,
supplemented or otherwise modified from time to time, including all
Recitals and Exhibits to this Agreement, each of which is hereby
incorporated into this Agreement by this reference.
"Allocable Facility Amount" means the portion of the Term Loan
allocated to a particular Mortgaged Property as set forth on Exhibit B
attached hereto minus principal payments of the Term Loan paid to Lender
and allocated to such Mortgaged Property as determined in accordance with
the information on Schedule C to the Term Note.
"Applicable Law" means (a) all applicable provisions of all
constitutions, statutes, rules, regulations and orders of all governmental
bodies, all Governmental Approvals and all orders, judgments and decrees of
all courts and arbitrators, (b) all zoning, building, environmental and
other laws, ordinances, rules, regulations and restrictions of any
Governmental Authority affecting the ownership, management, use, operation,
maintenance or repair of any Mortgaged Property, including the Americans
with Disabilities Act (if applicable), the Fair Housing Amendment Act of
1988 and Hazardous Materials Laws, (c) any building permits or any
conditions, easements, rights-of-way, covenants, restrictions of record or
any recorded or unrecorded agreement affecting or concerning any Mortgaged
Property including planned development permits, condominium declarations,
and reciprocal easement and regulatory agreements with any Governmental
Authority, (d) all laws, ordinances, rules and regulations, whether in the
form of rent control, rent stabilization or otherwise, that limit or impose
conditions on the amount of rent that may be collected from the units of
any Mortgaged Property, and (e) requirements of insurance companies or
similar organizations, affecting the operation or
2
<PAGE>
use of any Mortgaged Property or the consummation of the transactions to be
effected by this Agreement or any of the other Loan Documents.
"Appraisal" means an appraisal of a Multifamily Residential Property
or Multifamily Residential Properties conforming to the requirements of
Chapter 5 of Part III of the DUS Guide, and accepted by the Lender.
"Asset Management Agreement" shall mean the Portfolio Advisory
Agreement between WXI/McN Realty L.L.C. and the Asset Manager as amended or
modified from time to time.
"Asset Manager" shall mean Archon Group, L.P., a Delaware limited
partnership, or such successor manager as shall be hired by the Borrowers.
"Assignment of Management Agreement" means each Assignment of
Management Agreement with respect to each Mortgaged Property by and between
each Borrower and the Manager for the benefit of Lender as the same may be
amended, modified or supplemented from time to time.
"Authorized Representative" means those persons acceptable to Lender
and duly appointed and identified as such by each Borrower, in a writing
delivered to Lender which Authorized Representative shall initially be
those persons listed on Schedule 1 attached hereto, each with the authority
to act alone or with one or more persons as may be specified in such
Schedule 1.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"Bankruptcy Event" means one or more of the following events:
(a) any Borrower or any Borrower Party shall file any voluntary
petition under any Chapter of the Bankruptcy Code, or shall file any
petition for dissolution or liquidation or take other action to dissolve or
liquidate, or shall in any manner seek any relief under any local, state,
federal or other insolvency laws or other laws providing for relief of
debtors; or
(b) any involuntary petition under any Chapter of the Bankruptcy Code
shall be filed against any Borrower or any Borrower Party, or any Borrower
or any Borrower Party directly or indirectly becomes the subject of any
proceedings pursuant to any local, state, federal or other insolvency laws
or laws providing for relief of debtors, or in equity, either at the
present time or at any time hereafter, if and only if a Borrower, a
Borrower Party or any Affiliate of a Borrower or a Borrower Party has acted
in concert or conspired with such creditors of a Borrower or a Borrower
Party (other than Lender) to cause the filing thereof with the intent to
interfere with enforcement rights of Lender after the occurrence of an
Event of Default; or
3
<PAGE>
(c) any Borrower Party or any Affiliate of a Borrower Party shall file
an involuntary petition against any Borrower or any Borrower Party under
any Chapter of the Bankruptcy Code or under any insolvency, reorganization,
or similar proceeding under State law.
"Borrower" or "Borrowers" shall have the meanings set forth in the
first paragraph of this Agreement, and their permitted successors and
assigns.
"Borrower Party" means any General Partner or any Key Principal.
"Borrowing Agent" means WXI/MCN Multifamily Real Estate Limited
Partnership, a Delaware limited partnership, and its permitted successors
and assigns.
"Business Day" means a day on which each of Fannie Mae and Lender is
open for business.
"Business Plan" for any period means a business plan for operation of
the Mortgaged Properties for such period, including operating budgets,
projected rental rates, capital expenditure, budgets, leasing plans and
other items standard and customary for operation of real properties similar
to the Mortgaged Properties.
"Calendar Quarter" means, with respect to any year, any of the
following three month periods: (a) January-February-March; (b)
April-May-June; (c) July-August-September; and (d) October-November-
December.
"Closing Date" means the Initial Closing Date and each date after the
Initial Closing Date on which the funding of any remaining amount of the
Term Loan is required to take place as the result of a Term Loan Request.
"Collateral" means, the Mortgaged Properties and other collateral from
time to time or at any time encumbered by the Security Instruments, or any
other property securing any of the Borrowers' obligations under the Loan
Documents.
"Collateral Addition Description Package" has the meaning set forth in
Section 3.03-A.
"Collateral Addition Request" has the meaning set forth in Section
3.01-A.
"Collateral Agreement" shall have the meaning given that term in each
Security Instrument.
"Collateral Pool" means the aggregate total of the Collateral.
"Collateral Release Request" shall have the meaning set forth in
Section 4.02(a).
4
<PAGE>
"Collateral Release Property" shall have the meaning set forth in
Section 4.02(a).
"Completion/Repair and Security Agreement" means the Master
Completion/Repair and Security Agreement, dated January 31, 2000, by and
among the Borrowers and AMRESCO Capital, L.P., as the same may be amended,
modified or supplemented from time to time as permitted under this
Agreement.
"Compliance Certificate" means a certificate of the Borrowers in the
form attached as Exhibit C to this Agreement.
"Condemnation" with respect to any Mortgaged Property, means (a) any
action or proceeding for the taking of such Mortgaged Property, or any part
thereof or interest therein, for public or quasi-public use under the power
of eminent domain, by reason of any public improvement or condemnation
proceeding, or in any other similar manner or (b) the conveyancing of such
Mortgaged Property under the threat or contemplation of any action or
proceeding described in clause (a).
"Condemnation Proceeds" means the proceeds of any Condemnation.
"Conditions to Closing" shall have the meaning set forth in Article
III.
"Contractual Obligation" means, as to any Person, any provision of any
Security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which any of its property
is bound.
"Contribution Agreement" means the Affiliate Contribution and
Indemnity Agreement entered into on January 31, 2000 by and among each of
the Borrowers.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with any Borrower, are treated as a
single employer under Section 414 of the Code.
"Delaware Borrower" means WXI/MCN Multifamily Real Estate Limited
Partnership and its successors and assigns.
"DUS Guide" means the Fannie Mae Multifamily Delegated Underwriting
and Servicing (DUS) Guide, as such Guide may be amended from time to time,
including exhibits to the DUS Guide and amendments in the form of Lender
Memos, Guide Updates and Guide Announcements (and, if such Guide is no
longer used by Fannie Mae, the term "DUS Guide" as used in this Agreement
means the Fannie Mae Multifamily Negotiated Transactions Guide, as such
Guide may be amended from time to time, including amendments in the form of
Lender Memos, Guide Updates and Guide Announcements). All references to
specific articles and sections of, and exhibits to, the
5
<PAGE>
DUS Guide shall be deemed references to such articles, sections and
exhibits as they may be amended, modified, updated, superseded,
supplemented or replaced from time to time.
"DUS Underwriting Requirements" means the overall underwriting
requirements for Multifamily Residential Properties as set forth in the DUS
Guide.
"Environmental Report" means any Phase I environmental report and any
additional environmental report delivered to Lender with respect to the
Property.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" means any event defined to be an "Event of Default"
under Article XI.
"Fannie Mae" means the federally-chartered and stockholder-owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, 12 U.S.C. 1716 et seq and its successors and
assigns.
"Fraudulent Transfer Laws" shall have the meaning set forth in Section
14.10-A.
"Future Additional Mortgaged Property Term Loan" means a Term Loan
made by Lender to the Borrowers after the Initial Closing Date pursuant to
Article III-A.
"Future Excess Proceeds Term Loan" means a Term Loan made by Lender to
the Borrowers after the Initial Closing Date pursuant to Article III-B.
"Future Term Loan" means, as the context requires, either or both of a
Future Additional Mortgaged Property Term Loan and a Future Excess Proceeds
Term Loan.
"Future Term Loan Request" shall have the meaning set forth in Section
3.01-A.
"GAAP" means generally accepted accounting principles in the United
States in effect from time to time, consistently applied.
"Georgia Borrower" means Embarcadero Associates and its successors and
assigns.
"General Partner" means each general partner of each Borrower.
"Governmental Approval" means an authorization, permit, consent,
approval, license, registration or exemption from registration or filing
with, or report to, any Governmental Authority.
6
<PAGE>
"Governmental Authority" means any court, board, agency, commission,
office or authority of any nature whatsoever for any governmental unit
(federal, state, county, district, municipal, city or otherwise) whether
now or hereafter in existence.
"Gross Revenues" means, for any period, with respect to a Mortgaged
Property, all gross rents collected from or on behalf of tenants at the
Mortgaged Property (other than unforfeited tenant security deposits), any
other income, receipts or withdrawals from reserves (but only to the extent
such reserves were included as Operating Expenses at the times they were
set aside) derived from the Mortgaged Property (including from the use or
operation thereof) without regard to its source, including, without
limitation, tenant reimbursements for utilities, services and supplies,
security deposit forfeitures, parking rents or fees, concessions and
vending fees and laundry income and proceeds from rental interruption
insurance, but excluding Insurance Proceeds (other than proceeds from
rental interruption insurance), Condemnation Proceeds, unearned portions of
prepaid rent, other refundable items, interest on any account into which
refundable items are deposited, and proceeds from the sale or other
disposition of all or any portion of the Mortgaged Property.
"Hazardous Materials", with respect to any Mortgaged Property, shall
have the meaning given that term in the Security Instrument encumbering the
Mortgaged Property.
"Hazardous Materials Law", with respect to any Mortgaged Property,
shall have the meaning given that term in the Security Instrument
encumbering the Mortgaged Property.
"Hazardous Substance Activity" means any storage, holding, existence,
release, spill, leaking, pumping, pouring, injection, escaping, deposit,
disposal, dispersal, leaching, migration, use, treatment, emission,
discharge, generation, processing, abatement, removal, disposition,
handling or transportation of any Hazardous Materials from, under, into or
on any Mortgaged Property in violation of Hazardous Materials Laws,
including the discharge of any Hazardous Materials emanating from any
Mortgaged Property in violation of Hazardous Materials Laws through the
air, soil, surface water, groundwater or property and also including the
abandonment or disposal of any barrels, containers and other receptacles
containing any Hazardous Materials from or on any Mortgaged Property in
violation of Hazardous Materials Laws, in each case whether sudden or
nonsudden, accidental or nonaccidental.
"Impositions" means, with respect to any Mortgaged Property, all real
estate and personal property taxes, water, sewer and vault charges and all
other taxes, levies, assessments, common charges and other similar charges,
general and special, ordinary and extraordinary, foreseen and unforeseen,
of every kind and nature whatsoever, which at any time prior to, at or
after the execution of this Agreement may be assessed, levied or imposed
upon such Mortgaged Property or the rents or the ownership, use, occupancy
or enjoyment thereof, and any interest, costs or penalties with respect to
any of the foregoing.
7
<PAGE>
"Indebtedness" means, with respect to any Person, as of any specified
date, without duplication, all:
(a) indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than (i)
current trade liabilities incurred in the ordinary course of business
and payable in accordance with customary practices, and (ii) for
construction of improvements to property, if such person has a
non-contingent contract to purchase such property);
(b) other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument;
(c) obligations of such Person under any lease of property, real
or personal, the obligations of the lessee in respect of which are
required by GAAP to be capitalized on a balance sheet of the lessee or
to be otherwise disclosed as such in a note to such balance sheet;
(d) obligations of such Person in respect of acceptances (as
defined in Article 3 of the Uniform Commercial Code of the State of
New York) issued or created for the account of such Person;
(e) liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become
liable for the payment of such liabilities; and
(f) as to any Person ("guaranteeing person"), any obligation of
(a) the guaranteeing person or (b) another Person (including any bank
under any letter of credit) to induce the creation of a primary
obligation (as defined below) with respect to which the guaranteeing
person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing, or in effect guaranteeing,
any indebtedness, lease, dividend or other obligation ("primary
obligations") of any third person ("primary obligor") in any manner,
whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, to (1) purchase any
such primary obligation or any property constituting direct or
indirect security therefor, (2) advance or supply funds for the
purchase or payment of any such primary obligation or to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (3)
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation (other
than construction of improvements to property, if the primary obligor
has a non-contingent contract to purchase such property), or (4)
otherwise assure or hold harmless the owner of any such primary
obligation against loss in respect of the primary obligation,
provided, however, that the term "Contingent Obligation" shall not
include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of
8
<PAGE>
any Contingent Obligation of any guaranteeing person shall be deemed
to be the lesser of (i) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent
Obligation is made and (ii) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Contingent Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Contingent Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by such guaranteeing person in good faith.
"Indiana Partnership" means Brendon Way Fund XII Associates and
its successors and assigns.
"Initial Closing Date" means the date on which the Initial Term
Loan is advanced, which shall be on or promptly after the date of the
execution and delivery of this Agreement.
"Initial Mortgaged Properties" means the Multifamily Residential
Properties identified on Exhibit A as Initial Mortgaged Properties and
which represent the Multifamily Residential Properties which are made
part of the Collateral Pool on the Initial Closing Date.
"Initial Term Loan" means the term loan made by Lender to the
Borrower on a joint and several basis pursuant to the terms of this
Agreement in an amount equal to $181,370,917.
"Insurance Policy" means, with respect to a Mortgaged Property,
the insurance coverage and insurance certificates evidencing such
insurance required to be maintained pursuant to the Security
Instrument encumbering the Mortgaged Property.
"Insurance Proceeds" means all insurance proceeds, damages,
claims and rights of action and the right thereto under any insurance
policies with respect to a casualty or otherwise insuring and relating
to any portion of any Mortgaged Property.
"Interest Rate" means the interest rate on a Future Term Loan
determined in accordance with the procedures set forth in Article
III-A.
"Interest Rate Lock Agreement" has the meaning set forth in
Section 3.02-A.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended. Each reference to the Internal Revenue Code shall be
deemed to include (a) any successor internal revenue law and (b) the
applicable regulations whether final, temporary or proposed.
9
<PAGE>
"Key Principal" or "Key Principals" means (i) Whitehall Street
Real Estate Limited Partnership XI and Whitehall Street Real Estate
Limited Partnership XII; and (ii) any other Person that has agreed to
act as such acceptable to Fannie Mae in its sole and absolute
discretion, and in each case its permitted successor and assigns.
"Key Principal Guaranty" means the Key Principal Exceptions to
Non-recourse Guaranty dated as of January 31, 2000 executed and
delivered by each Key Principal, as the same may be amended,
supplemented or modified from time to time.
"Knowledge" or "knowledge" by any Borrower means that a member of
Senior Management has knowledge of the fact in question.
"Lease" means any lease, any sublease or subsublease, license,
concession or other agreement (whether written or oral and whether now
or hereafter in effect) pursuant to which any Person is granted a
possessory interest in, or right to use or occupy all or any portion
of any space in any Mortgaged Property, and every modification,
amendment or other agreement relating to such lease, sublease,
subsublease or other agreement entered into in connection with such
lease, sublease, subsublease or other agreement, and every guarantee
of the performance and observance of the covenants, conditions and
agreements to be performed and observed by the other party thereto.
"Lender" shall have the meaning set forth in the first paragraph
of this Agreement.
"Lien" means any mortgage, deed of trust, deed to secure debt,
security interest or other lien or encumbrance (including both
consensual and non-consensual liens and encumbrances).
"Loan Documents" means this Agreement, the Note, the Key
Principal Guaranty, the Security Documents, all documents executed by
any Borrower pursuant to the Conditions to Closing set forth in
Article III of this Agreement and any other documents executed by any
Borrower from time to time in connection with this Agreement or the
transactions contemplated by this Agreement.
"Manager" means AMS Management L.L.C. or any successor entity
hired to manage any Mortgaged Property and approved by Fannie Mae.
"Material Adverse Effect" means, with respect to any
circumstance, act, condition or event of whatever nature (including
any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding), whether singly or in
conjunction with any other event or events, act or acts, condition or
conditions, or circumstance or circumstances, whether or not related,
a material adverse change in or a materially adverse effect upon any
of (a) the business, operations, property or condition (financial or
otherwise) of the Delaware Borrower or the Borrowers taken as a whole,
(b) the ability of the Delaware Borrower or the Borrowers taken as a
whole to perform the Obligations for which they are liable, (c) the
validity, priority, perfection or enforceability
10
<PAGE>
of this Agreement or any other Loan Document or the rights or remedies
of the Lender under any Loan Document, (d) the Lender's ability to
have recourse against any Mortgaged Property, or (e) the value of any
Mortgaged Property.
"Material Adverse Effect - Portfolio Wide" has the same meaning
as Material Adverse Effect except that clause (e) of the definition of
Material Adverse Effect shall be deemed to read "the value of all of
the Mortgaged Properties taken as a whole".
"Maturity Date" means February 1, 2007.
"Maximum Percentage" shall have the meaning set forth on Exhibit
A for each Mortgaged Property.
"Maximum Rate" means the maximum interest rate which the Lender
may designate for a Future Term Loan.
"Maximum Term Loan Amount" means $195,783,261.
"MBS" means a mortgage-backed security. A MBS which is "backed"
by a Term Loan means that it is backed by an interest in the Term Note
and the Collateral Pool securing the Term Note, which interest permits
the holder of the MBS to participate in the Term Note and the
Collateral Pool to the extent of such Term Loan.
"MBS Commitment" has the meaning set forth in Section 3.02-A.
"Mortgaged Properties" means collectively, the Additional
Mortgaged Properties (but for purposes of representations, warranties
and covenants by any Borrower, only after they are acquired by such
Borrower) and the Initial Mortgaged Properties, but excluding each
Collateral Release Property from and after the date of the release of
the Collateral Release Property from the Collateral Pool.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Multifamily Residential Property" means a residential property,
located in the United States, containing five or more dwelling units
in which not more than twenty percent (20%) of the net rentable area
is or will be rented to non-residential tenants, and conforming to the
requirements of Sections 201 and 203 of Part III of the DUS Guide.
"Note" means the Term Note.
"Obligations" means the aggregate of the obligations of the
Borrowers under this Agreement and the other Loan Documents.
11
<PAGE>
"Operating Expenses" means, for any period, with respect to a
Mortgaged Property, the aggregate of all direct, ordinary, normal,
recurring and necessary expenses thereof including, without
duplication, (a) Impositions, (b) property and liability insurance
premiums, (c) wages, salaries and benefits of personnel employed on
site to manage, lease, maintain and operate the Mortgaged Property,
(d) costs or expenses of utility services to the Mortgaged Property
and tenant spaces to the extent payable by the respective Borrower,
(e) costs or expenses of providing security services to the Mortgaged
Property, if any, (f) costs or expenses of in-house or outside service
arrangements for landscaping, janitorial, window washing and cleaning,
trash, debris, make ready units, cable and satellite television and
other services, (g) expenses of maintaining, repairing and cleaning
the grounds, parking, amenities, exterior and interior spaces of the
Mortgaged Property, (h) expenses of repairing and maintaining in good
operable condition the mechanical, structural, electrical, elevator,
heating, ventilating, air conditioning and plumbing systems, (i)
property management fees payable to parties other than any Borrower
(and specifically including management fees paid to any Affiliate of
any Borrower), (j) administrative expenses including advertising
incurred at the site of the Mortgaged Property, (k) legal fees
associated with lease documentation and tenant matters and legal,
accounting and other professional fees relating to the operation of
the Mortgaged Property, (l) the replacement and repair amount with
respect to the Mortgaged Property which shall equal the aggregate
amount of the replacement reserve deposits as determined by the Lender
during the period as set forth on the applicable Replacement Reserve
Agreement irrespective of the waiver by Fannie Mae of the obligation
to fund the deposits, (m) costs for water and sewage fees, and (n) any
other property operation items that are not treated as capitalized
expenses under GAAP. All of the foregoing (including Impositions)
shall be computed on an accrual basis and in accordance with GAAP
consistently applied. During any period any Mortgaged Property is
managed by an Affiliate of any Borrower, Operating Expenses shall also
include the amount, if any, by which management fees paid by owners of
similar properties in the same geographic location exceed management
fees then payable by such Borrower. In addition, for all purposes
Operating Expenses shall exclude (i) payments on the Obligations, (ii)
depreciation and amortization, (iii) all legal, accounting and
professional fees not included in clause (k) above, and (iv) items
that would be treated as capital expenses under GAAP consistently
applied. All of the foregoing shall be presented in accordance with
Borrower's customary form of operating statements.
"Organizational Certificate" means a certificate of each Borrower
in the form attached as Exhibit D to this Agreement.
"Organizational Documents" means all certificates, instruments
and other documents pursuant to which an organization is organized or
operates, including but not limited to, (i) with respect to a
corporation, its articles of incorporation and bylaws, (ii) with
respect to a limited partnership, its limited partnership certificate
and partnership agreement, (iii) with respect to a general partnership
or joint venture, its partnership or joint venture agreement and (iv)
with respect to a limited liability company, its articles of
organization and operating agreement.
12
<PAGE>
"Outstanding" means, when used in connection with promissory
notes or other debt instruments, for a specified date, promissory
notes or other debt instruments which have been issued, but have not
been repaid in full as of the specified date.
"Ownership Interests" means, with respect to any entity, any
ownership interests in the entity and any economic rights (such as a
right to distributions, net cash flow or net income) to which the
owner of such ownership interests is entitled.
"Partnership Agreement" means each of (a) the Agreement of
Limited Partnership of WXI/MCN Multifamily Real Estate Limited
Partnership dated as of January 31, 2000, by and between WXI/MCN
Multifamily Gen-Par, L.L.C., a Delaware limited liability company, as
general partner, and WXI/McN Realty L.L.C., a Delaware limited
liability company, as limited partner, (b) the Amended and Restated
Agreement of General Partnership of Brendon Way Fund XII Associates
dated as of January 31, 2000, by and between WXI/MCN Gen-Par II,
L.L.C., a Delaware limited liability company, as a general partner,
and WXI/MCN Real Estate XII Limited Partnership, a California limited
partnership, as a general partner, (c) the Amended and Restated
Agreement of Limited Partnership of Castle Bluff Fund XII Associates
L.P. dated as of January 31, 2000, by and between Castle Bluff
Corporation, a Texas corporation, as general partner, and WXI/MCN Real
Estate XII Limited Partnership, a California limited partnership, as
limited partner, and (d) the Amended and Restated Agreement of General
Partnership of Embarcadero Associates dated as of January 31, 2000, by
and between WXI/MCN Gen-Par I, L.L.C., a Delaware limited liability
company, as a general partner, and WXI/MCN Real Estate XIV Limited
Partnership, a California limited partnership, as a general partner,
as each of the same may be amended, modified or supplemented from time
to time as permitted under this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permits" means all permits, or similar licenses or approvals
issued and/or required by an applicable Governmental Authority or any
Applicable Law in connection with the ownership, use, occupancy,
leasing, management, operation, repair, maintenance or rehabilitation
of any Mortgaged Property or any Borrower's business.
"Permitted Liens" means, with respect to a Mortgaged Property,
(i) the exceptions to title to the Mortgaged Property set forth in the
Title Insurance Policy for the Mortgaged Property which are approved
by the Lender, (ii) the Security Instrument encumbering the Mortgaged
Property, (iii) Liens for taxes and other Impositions not yet
delinquent, (iv) Liens in respect of property imposed by law arising
in the ordinary course of business such as materialmen's, mechanics',
warehousemen's, carriers', landlords' and other nonconsensual
statutory Liens which (a) are not yet due and payable or (b) are
released of record or otherwise remedied to the Lender's satisfaction
within 60 days of the date of commencement of enforcement of any such
Lien or before such earlier date on
13
<PAGE>
which the respective Borrower's interest in the applicable property is
subject to forfeiture by enforcement of any such Lien, (v) easements,
rights-of-way, restrictions (including zoning restrictions), matters
of plat, minor defects or irregularities in title, license or lease
agreements for laundry, cable tv, telephone and other similar Liens
which, in the aggregate, do not materially reduce the value of the
Mortgaged Property or materially interfere with the operation and use
of, or the ordinary conduct of business on, the Mortgaged Property
(provided that any laundry or cable tv licenses or leases shall not be
a Permitted Lien if it does not comply with Section 108 of Part III of
the DUS Guide), (vi) rights of existing and future tenants and
residents as tenants only pursuant to written Leases, (vii) any
attachment or judgment Lien with respect to a claim provided that such
claim does not remain unpaid, unstayed on appeal, undischarged,
unbonded, not fully insured or undismissed for a period of 60 days,
and (viii) any other Liens approved by the Lender.
"Person" means an individual, an estate, a trust, a corporation,
a partnership, a limited liability company or any other organization
or entity (whether governmental or private).
"Potential Event of Default" means any event which, with the
giving of notice or the passage of time, or both, would constitute an
Event of Default.
"Prepayment Premium" shall have the meaning of such term set
forth in the Note.
"Property" means any estate or interest in any kind of property
or asset, whether real, personal or mixed, and whether tangible or
intangible.
"Rate Lock Deposit" means a deposit equal to two percent
(2.0%) of the principal amount of a proposed Future Term Loan.
"Release Closing Date" means the date upon which a release
requested in a Collateral Release Request is required to take place.
"Release Price" shall have the meaning set forth in Section
4.02(c).
"Rent Roll" means, with respect to any Multifamily Residential
Property, a rent roll prepared and certified by the owner and Manager
of the Multifamily Residential Property, on Fannie Mae Form 4243, as
set forth in Exhibit III-3 of the DUS Guide, or on each Borrower's
customary forms in existence on the date hereof or as otherwise
approved by Lender.
"Rents" shall have the meaning set forth in each Security
Instrument.
"Replacement Reserve Agreement" means the Master Replacement
Reserve and Security Agreement, reasonably required by the Lender, and
completed in accordance with the requirements of the DUS Guide.
14
<PAGE>
"Request" means either or both of a Future Term Loan Request and
a Collateral Release Request.
"Rescinded Payment" shall have the meaning set forth in Section
14.09-A.
"Satisfaction Date" shall have the meaning set forth in the Key
Principal Guaranty.
"Security" has the meaning ascribed to such term in the
Securities Act of 1933, as amended.
"Security Documents" means the Security Instruments, the
Collateral Agreements, the Replacement Reserve Agreement, UCC fixture
filings, UCC financing statements and any other documents executed by
any Borrower from time to time to secure any of the Borrowers'
obligations under the Loan Documents.
"Security Instrument" means, for each Mortgaged Property, a
separate Multifamily Mortgage, Deed of Trust or Deed to Secure Debt,
Assignment of Leases and Rents and Security Agreement given by the
respective Borrower to or for the benefit of the Lender to secure the
obligations of the Borrowers under the Loan Documents. With respect to
each Mortgaged Property owned by each Borrower, the Security Instrument
shall be substantially in the form published by Fannie Mae for use in
the state in which the Mortgaged Property is located.
"Senior Management" means the partner overseeing REPIA at The
Goldman Sachs Group, Inc. ("Goldman"), the Chief Financial Officer of
REPIA at Goldman, each Vice President of Finance of REPIA at Goldman,
the Director of Portfolio Management at Archon Group L.P., and the
Designated Portfolio Manager at Archon Group L.P. (or comparable
officers of any party who may replace Archon Group L.P. as Asset
Manager).
"Servicer" means Amresco Services, L.P., a Delaware limited
partnership, or any other Person designated by Fannie Mae.
"Single-Purpose" means, with respect to a Person which is any
form of partnership or corporation or limited liability company, that
such Person at all times since its formation:
(i) has been a duly formed and existing partnership,
corporation or limited liability company, as the case
may be;
(ii) has been duly qualified in each jurisdiction in which
such qualification was at such time necessary for the
conduct of its business;
(iii) has complied with the provisions of its organizational
documents and the laws of its jurisdiction of formation
in all respects;
15
<PAGE>
(iv) has observed all customary formalities regarding its
partnership or corporate existence, as the case may be;
(v) has accurately maintained its financial statements,
accounting records and other partnership or corporate
documents separate from those of any other Person;
(vi) has not commingled its assets or funds with those of any
other Person;
(vii) has accurately maintained its own bank accounts and
books and accounts separate from those of any other
Person;
(viii) has paid its own liabilities from its own separate
assets;
(ix) has identified itself in all dealings with creditors
under its own name and as a separate and distinct
entity;
(x) has not identified itself as being a division or a part
of any other Person;
(xi) has not identified any other Person as being a division
or a part of such Person;
(xii) has been adequately capitalized in light of its
contemplated business operations;
(xiii) has not assumed, guaranteed or become obligated for the
liabilities of any other Person or held out its credit
as being available to satisfy the obligations of any
other Person (but this shall not apply to the liability
of a general partner for the debts of a partnership in
which it is a general partner);
(xiv) has not acquired obligations or securities of any other
Person;
(xv) has not made loans or advances to any other Person (but
this shall not apply to advances by a general partner to
a partnership in which it is a general partner);
(xvi) has not entered into and was not a party to any
transaction with any Affiliate of such Person, except in
the ordinary course of business and on terms which are
no less favorable to such Person than would be obtained
in a comparable arm's-length transaction with an
unrelated third party;
(xvii) has conducted its own business in its own name;
16
<PAGE>
(xviii) has paid the salaries of its own employees, if any, and
maintained a sufficient number of employees in light of
its contemplated business operations;
(xix) has allocated fairly and reasonably any overhead for
shared office space;
(xx) has not pledged its assets for the benefit of any other
entity or made any loans or advances to any person or
entity;
(xxi) has not engaged in a non-exempt prohibited transaction
described in Section 406 of ERISA or Section 4975 of the
Internal Revenue Code;
(xxii) has engaged in the business practice of using separate
stationery, invoices and checks; and
(xxiii) has corrected any known misunderstanding regarding its
separate identity.
"SMSA" means a "standard metropolitan statistical area," as
defined from time to time by the United States Office of Management
and Budget.
"Special Completion/Repair and Security Agreement" means the
Special Completion/Repair and Security Agreement, dated January 31,
2000, by and between WXI/MCN Multifamily Real Estate Limited
Partnership and AMRESCO Capital, L.P., as the same may be amended,
modified or supplemented from time to time as permitted under this
Agreement.
"Subordinated Obligations" shall have the meaning set forth in
Section 14.06-A.
"Subsidiary" means, when used with reference to a specified
Person, (i) any Person that, directly or indirectly, through one or
more intermediaries, is controlled by the specified Person, (ii) any
Person of which the specified Person is, directly or indirectly, the
owner of more than 50% of any voting class of Ownership Interests or
(iii) any Person (A) which is a partnership and (B) of which the
specified Person is a general partner and owns more than 50% of the
partnership interests.
"Surveys" means the as-built surveys of the Mortgaged Properties
prepared in accordance with the requirements of Section 113 of the DUS
Guide, or otherwise approved by the Lender.
"Taxes" means all taxes, assessments, vault rentals and other
charges, if any, general, special or otherwise, including all
assessments for schools, public betterments and general or local
improvements, which are levied, assessed or imposed by any public
authority or quasi-public authority, and which, if not paid, will
become a lien, on the Mortgaged Properties.
17
<PAGE>
"Term Loan" means the Initial Term Loan and any Future Term Loan
made by Lender to the Borrowers on a joint and several basis pursuant
to the terms of this Agreement.
"Term Note" means the promissory note dated January 31, 2000
issued by the Borrowers on a joint and several basis to the Lender to
evidence the Borrowers' obligation to repay the Term Loan, as the same
may be amended, supplemented or modified from time to time.
"Texas Partnership" means Castle Bluff Fund XII Associates L.P.
and its successors and assigns.
"Tie-In Endorsement" means an endorsement to a Title Insurance
Policy which contains substantially the same coverages, and is subject
to substantially the same or fewer exceptions (or such other
exceptions as the Lender may approve), as the form attached as Exhibit
E to this Agreement.
"Title Company" means Lawyers Title Insurance Company or such
other nationally recognized title insurance company meeting the
requirements of the DUS Guide and which Lender may reasonably approve.
"Title Insurance Policies" means the mortgagee's policies of
title insurance issued by the Title Company from time to time relating
to each of the Security Instruments, conforming to the requirements of
Section 111 of the DUS Guide, together with such endorsements,
coinsurance, reinsurance and direct access agreements with respect to
such policies as the Lender may, from time to time, consider necessary
or appropriate, whether or not required by the DUS Guide including
Tie-In Endorsements, if available, and with a limit of liability under
the policy (subject to the limitations contained in Sections 6(a)(i)
and 6(a)(iii) of the Stipulations and Conditions of the policy)
satisfactory to Lender.
"Transfer" means (A) a sale, conveyance, assignment, grant,
lease, transfer or other disposition (whether voluntary, involuntary
or by operation of law); (B) the granting, creating or attachment of a
lien, encumbrance or security interest (whether voluntary, involuntary
or by operation of law); (C) the issuance or other creation of an
ownership interest in a legal entity, including a partnership
interest, interest in a limited liability company or corporate stock;
(D) the issuance or other creation of any rights to participate in the
revenues, income or profits of a person or a legal entity; (E) the
issuance or the creation of any options, warrants or other securities
that are convertible or exchangeable into ownership interests in a
legal entity or rights to participate in the revenues, income or
profits of a person or a legal entity; (F) the withdrawal, retirement,
removal or involuntary resignation of a partner in a partnership or a
member or manager in a limited liability company; or (G) the merger,
dissolution, liquidation, or consolidation of a legal entity. For
purposes of determining whether a Transfer of an interest has
occurred, a person or entity shall be deemed to have effected or
suffered to occur a Transfer of any such interest if such interest is
or becomes subject to a pledge,
18
<PAGE>
lien, or other security interest described in clause (B) above
(regardless of whether or not such pledge is subsequently enforced or
foreclosed by the pledgee or holder of such lien or other security
interest) and, in the case of the issuance of any options or
convertible or exchangeable securities described in clause (E) above,
there shall be given effect to the exercise, conversion or exchange of
such securities. "Transfer" does not include (i) a conveyance of a
Mortgaged Property at a judicial or non-judicial foreclosure sale
under this Instrument or (ii) a Mortgaged Property becoming part of a
bankruptcy estate by operation of law under the United States
Bankruptcy Code. For purposes of defining the term "Transfer," the
term "partnership" shall mean a general partnership, a limited
partnership, a joint venture and a limited liability partnership, and
the term "partner" shall mean a general partner, a limited partner and
a joint venturer. The term "suffer to occur" as used herein is
intended to mean that, if any of the events or circumstances referred
to herein occur, any Borrower will be deemed to have suffered those
events or circumstances to occur, even if such Borrower was powerless
to prevent those events or circumstances.
"Warrantors" means the Authorized Representatives and members of
Senior Management.
ARTICLE II
THE TERM LOAN
SECTION 2.01 Term Loan Commitment. The Lender agrees, subject to the terms and
conditions of this Agreement, to make the Term Loan to the Borrowers in a
principal amount of up to the Maximum Term Loan Amount. The Term Loan shall bear
interest at the interest rate or interest rates stated in the Note. The Term
Loan shall be made in a single advance or in a number of advances pursuant to
the terms and conditions of this Agreement. The Term Loan shall be evidenced by
the Term Note. Repayment of the Term Loan shall be made in accordance with the
terms of the Term Note and with the terms of this Agreement. In the event the
full amount of the Term Loan is not advanced by Lender to the Borrowers by May
1, 2000, the obligation of the Lender to advance any remaining amount of the
Term Loan shall terminate.
SECTION 2.02 Borrowing Agency Provisions.
(a) Each Borrower hereby irrevocably designates the Borrowing Agent to
be its agent and in such capacity to receive all Term Loan proceeds, receive all
notices on behalf of the Borrowers under this Agreement, make all requests under
this Agreement, and execute, deliver and receive all instruments, certificates,
requests, documents, writings and further assurances now or hereafter required
hereunder, on behalf of such Borrower or Borrowers, and hereby authorizes the
Lender to pay over all loan proceeds hereunder in accordance with the request of
the Borrowing Agent.
(b) The handling of this credit facility as a co-borrowing facility
with a borrowing agent in the manner set forth in this Agreement is solely as an
accommodation to
19
<PAGE>
Borrowers and at their request. Neither the Lender nor Fannie Mae shall incur
liability to Borrowers as a result thereof. To induce Lender and Fannie Mae to
do so and in consideration thereof, each Borrower hereby indemnifies the Lender
and Fannie Mae and holds Lender and Fannie Mae harmless from and against any and
all liabilities, expenses, losses, damages and claims of damage or injury
asserted against Lender or Fannie Mae by any Person arising from or incurred by
reason of the handling of the financing arrangements of the Borrowers as
provided herein, reliance by Lender or Fannie Mae on any request or instruction
from Borrowing Agent or any other action taken by the Lender or Fannie Mae with
respect to this Section 2.02 except due to willful misconduct or gross (not
mere) negligence by the indemnified party.
SECTION 2.03 Disbursement of Term Loan. Subject to the satisfaction of the
Conditions to Closing, the Lender shall make the proceeds of the Initial Term
Loan available to the Borrowers on the Initial Closing Date, or on such other
Business Day as agreed upon by the Borrowing Agent and the Lender, by wire
transfer of immediately available funds to an account or such accounts
designated in writing by the Borrowing Agent.
SECTION 2.04 Payment of Principal and Interest. Principal and interest shall be
paid and applied as set forth in the Term Note. The Borrowers shall be obligated
to pay all late charges, a Default Rate of interest, the Prepayment Premium,
loan charges and costs and expenses required to be paid under the Term Note. The
Term Loan shall be subject to voluntary and involuntary prepayments as set forth
in and subject to the conditions set forth in the Term Note including, without
limitation, the requirement to pay the Prepayment Premium.
SECTION 2.05 Joint and Several Obligations. Subject to the provisions of Section
14.10-A, all of the Borrowers shall have joint and several liability for all
Obligations.
ARTICLE III
CONDITIONS TO CLOSING
SECTION 3.01 Conditions to Closing. The obligation of the Lender to make the
Initial Term Loan is subject to the following conditions precedent:
(a) Payment of Expenses. The payment by the Borrowers of the Lender's
fees and expenses payable in accordance with this Agreement for which the Lender
has presented an invoice on or before the Closing Date.
(b) No Material Adverse Change. There has been no material adverse
change in the financial condition, business or prospects of any Borrower or in
the physical condition (including as the result of any casualty), operating
performance or value of any of the Mortgaged Properties since the date of
application to Lender.
(c) No Default. There shall exist no Event of Default or Potential
Event of Default on the Closing Date.
20
<PAGE>
(d) Representations and Warranties. All representations and warranties
made by each Borrower in the Loan Documents shall be true and correct in all
material respects on the Closing Date with the same force and effect as if such
representations and warranties had been made on and as of the Closing Date.
(e) No Condemnation or Casualty. There shall not be pending or
threatened any condemnation or other taking, whether direct or indirect, against
any Mortgaged Property, and there shall not have occurred any casualty to any
improvements located on any Mortgaged Property.
(f) Delivery of Certificate. The Borrowers shall deliver a Compliance
Certificate to Lender.
(g) Title Company Deliveries. The delivery to the Title Company, for
filing and/or recording in all applicable jurisdictions, of all applicable Loan
Documents required by the Lender, including duly executed and delivered original
copies of the Security Instruments covering the Mortgaged Properties and UCC-1
Financing Statements covering the portion of the Collateral comprised of
personal property, and other appropriate instruments, in form and substance
satisfactory to the Lender and in form proper for recordation, as may be
necessary in the opinion of the Lender to perfect the Liens created by the
applicable Security Instruments and any other Loan Documents creating a Lien in
favor of the Lender, and the payment of all taxes, fees and other charges
payable in connection with such execution, delivery, recording and filing;
(h) Loan Documents. The receipt by the Lender of fully executed
original copies of each Loan Document duly executed and delivered by the parties
thereto, each of which shall be in full force and effect.
(i) Opinion. The receipt by the Lender of favorable opinions of counsel
to the Borrowers and any Key Principal, as to the due organization and
qualification of the Borrower and Key Principal, the due authorization,
execution, delivery and enforceability of each Loan Document executed in
connection with the extension of the Term Loan, and such other matters as the
Lender may require.
(j) UCC Financing Statements. The completion and delivery to the Title
Company of UCC Financing Statements relating to, without limitation, each
Security Instrument.
(k) Organizational Documents of the Borrowers and their respective
General Partners. The receipt by the Lender of:
(i) a copy, certified to be accurate and complete by an
authorized officer of the General Partner of each Borrower, of the
document, authorizing such General Partner, in its capacity as General
Partner of the respective Borrower, to execute, deliver and perform
the Loan Documents, and in its corporate capacity to execute, deliver
and perform the Loan Documents to which the respective Borrower and/or
the General
21
<PAGE>
Partner are parties and other matters contemplated thereby, and of all
other documents evidencing any other necessary action (which
certification shall state that such approvals are in full force and
effect on the Closing Date);
(ii) copies, certified to be accurate and complete by an
authorized officer of a General Partner acting on behalf of the
respective Borrower, of each General Partner's organizational
documents and any amendments thereto (which certification shall state
that such documents, as amended, are in full force and effect on the
Closing Date), together with Certificates of Good Standing issued by
the Secretary of State of their respective states of organization and
evidence of its good standing and that it is qualified to do business
in each jurisdiction in which such good standing and/or qualification
is necessary to the conduct of its business and where the failure to
be so qualified would materially adversely affect the validity or
ability of the respective Borrower to perform its obligations under
this Agreement and the other Loan Documents;
(iii) copies, certified to be accurate and complete by an
authorized officer of the General Partner of each Borrower, of the
certificate of limited partnership and Partnership Agreement of the
respective Borrower and any amendments thereto (which certification
shall state that such documents, as amended, are in full force and
effect on the Closing Date), together with Certificates of Good
Standing issued by the Secretary of State of their respective states
of organizations and Certificates of Authority to Do Business from
each State in which Mortgaged Property is located and in which such
foreign qualification is necessary;
(iv) copies, certified to be accurate and complete by an
authorized officer of the General Partner of each Borrower, of all
consents, licenses and approvals necessary for the respective Borrower
to enter into the Loan Documents and the transactions contemplated by
this Agreement and the other Loan Documents.
(l) Organizational Documents of the Key Principals and the General
Partner of each Key Principal. The receipt by the Lender of:
(i) a copy, certified to be accurate and complete by an
authorized officer of the general partner of each Key Principal, of
each document, authorizing each general partner, in its capacity as
general partner of the respective Key Principal, to execute, deliver
and perform the Loan Documents to which such Key Principals are a
party, and in its corporate capacity to execute, deliver and perform
the Loan Documents to which such Key Principals are a party, and other
matters contemplated thereby, and of all other documents evidencing
any other necessary action (which certification shall state that such
approvals are in full force and effect on the Closing Date);
22
<PAGE>
(ii) copies, certified to be accurate and complete by an
authorized officer the general partner of each Key Principal acting on
behalf of the respective Key Principal, of each such general partner's
organizational documents and any amendments thereto (which
certification shall state that such documents, as amended, are in full
force and effect on the Closing Date), together with Certificates of
Good Standing issued by the Secretary of State of their respective
states of organization and evidence of its good standing and that it
is qualified to do business in each jurisdiction in which Mortgaged
Property is located and in which the failure to be so qualified would
materially adversely affect the validity or ability of each Key
Principal to perform its obligations under this Agreement and the
other Loan Documents;
(iii) copies, certified to be accurate and complete by an
authorized officer of the general partner of each respective Key
Principal, of the certificate of limited partnership and Partnership
Agreement of each respective Key Principal and any amendments thereto
(which certification shall state that such documents, as amended, are
in full force and effect on the Closing Date), together with
Certificates of Good Standing issued by the Secretary of State of
Delaware;
(iv) copies, certified to be accurate and complete by an
authorized officer of the general partner of each Key Principal, of
all consents, licenses and approvals necessary for each Key Principal
to enter into the Loan Documents to which it is a party and the
transactions contemplated by this Agreement and the other Loan
Documents.
(m) Miscellaneous. Each Borrower shall deliver to Lender the
Contribution Agreement and such other consents, documents, certificates, closing
statements and other items as Lender may require.
SECTION 3.02 Delivery of Property-Related Documents. It shall be a condition
precedent to the funding of the Initial Term Loan that the Lender receive each
of the following, each dated as of the Closing Date, in form and substance
satisfactory to the Lender in all respects:
(a) A favorable opinion of local counsel to the Borrowers as to the
enforceability of the Security Instrument, and any other Loan Documents governed
by local law, executed in connection with the Request.
(b) A commitment for the Title Insurance Policy applicable to each
Initial Mortgaged Property and a pro forma Title Insurance Policy based on such
commitment.
(c) A certificate of insurance and Environmental Report applicable to
each Initial Mortgaged Property.
(d) The Survey applicable to each Initial Mortgaged Property.
23
<PAGE>
(e) Evidence satisfactory to the Lender of compliance of each Initial
Mortgaged Property with property laws as required by Sections 205 and 206 of
Part III of the DUS Guide.
(f) An Appraisal of each Initial Mortgaged Property.
(g) A Replacement Reserve Agreement, providing for the establishment of
a replacement reserve account, to be pledged to the Lender, in which the owner
shall (unless waived by the Lender) periodically deposit amounts for
replacements for improvements at the Mortgaged Property and as additional
security for the Borrowers' obligations under the Loan Documents.
(h) A Completion/Repair and Security Agreement, the Special
Completion/Repair and Security Agreement and any other required Collateral
Agreement, on the standard form required by the DUS Guide.
(i) An Assignment of Management Agreement, on the standard form
required by the DUS Guide.
(j) An Assignment of Leases and Rents, if the Lender determines one to
be necessary or desirable, provided that the provisions of any such assignment
shall be substantively identical to those in the Security Instrument covering
the Collateral, with such modifications as may be necessitated by applicable
state or local law.
ARTICLE III-A
FUTURE ADDITIONAL MORTGAGED PROPERTY TERM LOANS
SECTION 3.01-A Future Additional Mortgaged Property Term Loans. In order to
obtain a Future Additional Mortgaged Property Term Loan, the Borrowers may from
time to time deliver to the Lender each of (i) a written request for a Future
Additional Mortgaged Property Term Loan ("Future Additional Mortgaged Property
Term Loan Request") in the form attached as Exhibit F to this Agreement, (ii) a
written request for adding Collateral as set forth in Section 3.03-A
("Collateral Addition Request"), and (iii) the underwriting documentation
required to be delivered by the Borrowers to the Lender pursuant to Section
3.03-A(c). Each Future Additional Mortgaged Property Term Loan Request shall be
accompanied by a designation of the principal amount of the Future Additional
Mortgaged Property Term Loan. Each Future Additional Mortgaged Property Term
Loan shall mature on the Maturity Date, have a yield maintenance period and
yield maintenance premium equal to the yield maintenance period and yield
maintenance premium of the Initial Term Loan and have an amortization period
consistent with the amortization period set forth in Exhibit B. Each Future
Additional Mortgaged Property Term Loan shall bear interest at a rate per annum
equal to the Interest Rate as determined pursuant to the terms of Section
3.02-A. If all conditions contained in Sections 3.02-A, 3.03-A and 3.04-A
24
<PAGE>
are satisfied, the Lender shall make the requested Future Additional Mortgaged
Property Term Loan, at a closing to be held at offices designated by the Lender
on a Closing Date selected by the Lender, which date shall not be more than five
(5) Business Days after the Borrowing Agent's receipt of the Rate Confirmation
Form, as set forth in Section 3.02-A(c) (or on such other date to which the
Borrowers and the Lender may agree).
SECTION 3.02-A Interest on Future Terms Loans. Provided that the Closing Date
for a Future Additional Mortgaged Property Term Loan is on or prior to March 14,
2000, Borrower will have the right to obtain such Future Additional Mortgaged
Property Term Loan at the same interest rate applicable to the Initial Term Loan
pursuant to the terms and conditions of the Addendum to Rate Lock Agreement
dated as of January 31, 2000 among the Borrowers and Lender. Otherwise, the
interest rate for each Future Additional Mortgaged Property Term Loan shall be
set in accordance with the following procedures:
(a) Rate Setting. If the Borrower satisfies all of the conditions set
forth in Section 3.03-A and Section 3.04-A, then, the Borrowers may submit to
the Lender a completed and executed document in the form attached as Exhibit G
to this Agreement ("Interest Rate Lock Agreement"), together with the Rate Lock
Deposit, before 1:00 p.m. Washington, D.C. time on any Business Day.
(b) Rate Confirmation. Within one (1) Business Day after receipt of the
Rate Lock Deposit and completed and executed Interest Rate Lock Agreement, the
Lender shall solicit bids from institutional investors selected by the Lender
based on information in the Interest Rate Lock Agreement, and provided the
actual Interest Rate on the Future Additional Mortgaged Property Term Loan would
be at or below the Maximum Rate, shall obtain a commitment ("MBS Commitment")
for the purchase of Fannie Mae MBS having the bid terms described in the
Interest Rate Lock Agreement, and shall immediately deliver to the Borrowing
Agent by facsimile transmission a completed document in the form of Exhibit H
("Rate Confirmation Form").
(c) Rate Lock Deposit. In the event that the Lender obtains an MBS
Commitment and the Lender fails to fulfill the MBS Commitment because the Future
Additional Mortgaged Property Term Loan is not made, the Lender shall retain the
Rate Lock Deposit as liquidated damages, as set forth in the Interest Rate Lock
Agreement.
SECTION 3.03-A Additions of Collateral. The procedure for adding Collateral set
forth in this Section 3.03-A shall apply to all additions of Collateral in
connection with a Future Additional Mortgaged Property Term Loan requested by
the Borrowers pursuant to this Agreement. Notwithstanding anything contained
herein, Borrower may not add the properties known as Harbor Club I or Harbor
Club III, unless such properties are added pursuant to the same Collateral
Addition Request.
(a) Request. The Borrowers shall deliver a Collateral Addition Request
to the Lender, in the form attached as Exhibit I to this Agreement, to add one
or more Multifamily Residential Properties to the Collateral Pool. In the event
the Request is made prior to
25
<PAGE>
February 10, 2000, the Request shall be accompanied by a certificate executed by
an Authorized Representative stating that there has been no material adverse
change in the information shown on the most recent Rent Roll and Operating
Statement relating to the Additional Mortgaged Property from the date of the
Rent Roll and Operating Statement to the date of the Request. In the event the
Request is made after February 10, 2000 but prior to March 15, 2000, the Request
shall be accompanied by a current operating statement and current Rent Roll with
respect to each proposed Additional Mortgaged Property. In the event the request
is made on or after March 15, 2000, each Collateral Addition Request shall be
accompanied by the information required in the prior sentence and the following:
(i) pro forma balance sheets for the Delaware Borrower and (ii) the 1999
year-end balance sheet of the Key Principal, if available or, if not available,
a certificate from an Authorized Representative to the effect that the Key
Principal has not breached its Net Worth covenant set forth in Section 5 of the
Key Principal Guaranty.
(b) Additional Information. The Borrowers shall promptly deliver to the
Lender any additional information concerning the proposed Additional Mortgaged
Property that the Lender may from time to time reasonably request.
(c) Underwriting. If the respective Borrower owns or is about to
acquire any Additional Mortgaged Property and delivers to the Lender a
Collateral Addition Request, together with the underwriting documentation
required pursuant to Section 3.03-A(a), on or before March 15, 2000, the Lender
shall determine the amount of the proposed Future Additional Mortgaged Property
Term Loan based on the Lender's evaluation of the information provided pursuant
to Section 3.03-A(a) in accordance with the DUS Underwriting Requirements. In no
event shall the amount of any Future Additional Mortgaged Property Term Loan
allocated to a proposed Additional Mortgaged Property result in a debt service
coverage ratio of below 1.25:1 or a loan to value ratio of above 80%, in each
case calculated in accordance with DUS Underwriting Requirements.
SECTION 3.04-A Conditions Precedent to Future Additional Mortgaged Property Term
Loans. The obligation of the Lender to make a requested Future Additional
Mortgaged Property Term Loan is subject to the following conditions precedent:
(a) The receipt by the Lender of a Future Additional Mortgaged Property
Term Loan Request;
(b) The receipt by the Lender of a Collateral Addition Request,
together with the underwriting documentation delivered pursuant to Section
3.03-A(c);
(c) The receipt by the Lender of an executed Interest Rate Lock
Agreement, together with the Rate Lock Deposit defined therein;
(d) The approval by the Lender of the proposed Additional Mortgaged
Properties;
(e) The amount of the Future Additional Mortgaged Property Term Loan
shall not exceed the amount by which (i) the sum of the principal amount of the
Initial Term Loan and the
26
<PAGE>
principal amount of any previously advanced Future Additional Mortgaged Property
Term Loan is less than (ii) the Maximum Term Loan Amount.
(f) If required by the Lender, amendments to the Security Instruments,
reflecting the addition of the Additional Mortgaged Property to the Collateral
Pool, and the receipt by the Lender of an endorsement to each Title Insurance
Policy applicable to each Mortgaged Property, amending the effective date of the
Title Insurance Policy to the Closing Date of the proposed Future Additional
Mortgaged Property Term Loan, and showing no additional exceptions to coverage
other than the exceptions shown on the Initial Closing Date and other exceptions
approved by the Lender;
(g) The receipt of a commitment for the Title Insurance Policy
applicable to each Additional Mortgaged Property and a pro forma Title Insurance
Policy based on such commitment including a Future Additional Mortgaged Property
Term Loan and Rate Adjustment Endorsements in the forms of Exhibit L and a
Tie-In Endorsement;
(h) If any Title Insurance Policy for any Additional Mortgaged Property
contains a Tie-In Endorsement, an endorsement to each other Title Insurance
Policy containing a Tie-In Endorsement, adding a reference to the Additional
Mortgaged Property;
(i) The receipt by the Lender of a Future Term Loan origination fee
equal to 1/2 of 1% of the principal amount of the Future Term Loan and all legal
fees and expenses payable by the Borrower pursuant to Section 10.03(b);
(j) The receipt by the Lender of an Organizational Certificate;
(k) The receipt by the Lender of the deposit required under the
Replacement Reserve Agreement;
(l) The receipt by the Lender of the deposit required under the
Completion/Repair and Security Agreement and the deposit required under any
Special Completion Repair and Security Agreement;
(m) The satisfaction of all Conditions to Closing set forth in Section
3.01(a), (b), (c), (f), (g), (h) and (j) and the satisfaction of all the
Conditions set forth in Section 3.02 (as if Section 3.02 referred to the
Additional Mortgaged Properties being added to the Collateral Pool instead of
the Initial Mortgaged Properties) except for the conditions set forth in
Sections 3.02(b), (e) and (h);
(n) There shall not be pending or threatened any condemnation or other
taking, whether direct or indirect, against any Mortgaged Property, and there
shall not have occurred any casualty to any improvements located on any
Mortgaged Property, which in the case of any such condemnation or taking or
casualty would have or may reasonably be expected to have a Material Adverse
Effect - Portfolio Wide;
27
<PAGE>
(o) There has been no material adverse change in the financial
condition, business or prospects of any Borrower or in the physical condition
(including as the result of any casualty) operating performance or value of any
of the Mortgaged Properties since the Initial Closing Date which would have or
could reasonably be expected to have a Material Adverse Effect - Portfolio Wide;
(p) The representations and warranties set forth in Section 6.01(f),
(h), (l), (m), (n), (p) and (q) and in Section 6.02 shall be true and correct on
the Closing Date with the same force and effect as if such representations and
warranties had been made on or as of the Closing Date (except that such Sections
shall be deemed to refer only to matters relating to the Additional Mortgaged
Properties being added to the Collateral Pool);
(q) The representations and warranties set forth in Section 6.01(b),
(c), (d), (e), (g) shall be true and correct on the Closing Date with the same
force and effect as if such representations and warranties had been made on and
as of the Closing Date;
(r) Receipt by Lender of a lien search by Title Company relating to all
the Mortgaged Properties showing no new liens, encumbrances or other matters
adversely affecting title since the Initial Closing Date;
(s) Receipt by Lender of a T-3 endorsement to the title insurance
policy relating to the Mortgaged Properties located in Texas insuring that there
are no new liens, encumbrances or other matters adversely affecting title since
the date of the issuance of such title insurance policies; and
(t) The delivery of a written acknowledgment by Borrower of the portion
of the Term Loan allocated to each Mortgaged Property, as reasonably determined
by Lender and reflected in a revised Exhibit B prepared by Lender.
ARTICLE III - B
FUTURE EXCESS PROCEEDS TERM LOAN
SECTION 3.01-B Future Excess Proceeds Term Loan. In order to obtain a Future
Excess Proceeds Term Loan the Borrowers must deliver to the Lender within
forty-five (45) days of the Initial Closing Date, current Rent Rolls and
operating statements for each of the Mortgaged Properties, each certified by an
Authorized Representative. In addition, the Borrowers shall promptly deliver to
the Lender any additional information concerning the Mortgaged Properties that
the Lender may from time to time reasonably request. Any Future Excess Proceeds
Term Loan shall mature on the Maturity Date, have a yield maintenance period and
yield maintenance premium equal to the yield maintenance period and yield
maintenance premium of the Initial Term Loan and have an amortization period
consistent with the amortization period set forth in Exhibit B. Each Future
Excess Proceeds Term Loan shall bear interest at a rate per annum equal to the
Interest Rate as determined pursuant to the terms of Section 3.03-B. If all
conditions
28
<PAGE>
contained in Sections 3.01-B, 3.02-B, 3.03-B and 3.04-B are satisfied, the
Lender shall make the Future Excess Proceeds Term Loan, at a closing to be held
at offices designed by the Lender on a Closing Date selected by the Lender,
which date shall not be more than five (5) Business Days after the Borrowing
Agent's receipt of the Rate Confirmation Form or on such other date on which the
Borrower and Lender may agree but in any event no later than May 1, 2000.
Section 3.02-B Determination of Amount of Future Excess Proceeds Term Loan. In
the underwriting process, Lender shall rely on the cost allocation and
underwriting values used in the underwriting of the Initial Term Loan. Based on
the information provided by Borrower to Lender pursuant to the terms of Section
3.01-B, Lender shall take the following steps to determine the amount, if any,
of the Future Excess Proceeds Term Loan.
1. Lender shall evaluate each Mortgaged Property on a stand alone basis
and shall determine the maximum amount of the Term Loan which can be allocated
to each Mortgaged Property resulting from a debt service coverage ratio of not
less than 1.25:1 and a loan to value ratio of not greater than 80%, in each case
calculated in accordance with DUS Underwriting Requirements (in relation to each
Mortgaged Property, the "Post-Closing Allocation Amount" and in relation to all
Mortgaged Properties, the "Post-Closing Loan Amount").
2. Lender shall compare the original principal amount of the Initial
Term Loan (the "Closing Loan Amount") allocated to each Mortgaged Property (the
"Closing Allocation Amount") with the Post-Closing Allocation Amount relating to
each Mortgaged Property. Lender shall calculate for each Mortgaged Property the
amount, if any, by which the Closing Allocation Amount exceeds the Post-Closing
Allocation Amount (such amount, if any, in relation to each Mortgaged Property,
the "Allocation Deficit" and in relation to all the Mortgaged Properties the
"Aggregate Allocation Deficit"). If the Post-Closing Loan Amount minus the
Aggregate Allocation Deficit exceeds the Closing Loan Amount (such excess, the
"Aggregate Surplus"), then, pursuant to the terms and conditions of this Article
III-B, Lender shall advance a Future Excess Proceeds Term Loan. Such Future
Excess Proceeds Term Loan shall be an amount which approximately equals the
Aggregate Surplus. The actual principal amount of the Future Excess Proceeds
Term Loan will be determined at the time the interest rate is determined in
accordance with the provisions of Section 3.03-B below and in accordance with
DUS Underwriting Requirements. Lender shall allocate the principal amount of the
Future Excess Proceeds Term Loan to each Mortgaged Property.
SECTION 3.03-B Interest on Future Excess Proceeds Term Loans. The interest rate
for each Future Excess Proceeds Term Loan shall be set in accordance with the
following procedures:
(a) Rate Setting. If the Borrower satisfies all of the conditions set
forth in Section 3.01-B, Section 3.02-B and 3.04-B then, the Borrowers may
submit to the Lender a complete and executed document in the form attached as
Exhibit G (the Interest Rate Lock Agreement), together with the Rate Lock
Deposit, before 1:00 p.m. Washington, D.C. time on any Business Day prior to
April 24, 2000.
(b) Rate Confirmation. Within one (1) Business Day after receipt of the
Rate
29
<PAGE>
Lock Deposit and completed and executed Interest Rate Lock Agreement, the Lender
shall solicit bids from institutional investors selected by the Lender based on
information in the Interest Rate Lock Agreement, and provided the actual
Interest Rate on the Future Excess Proceeds Term Loan would be at or below the
Maximum Rate, shall obtain a commitment ("MBS Commitment") for the purchase of
Fannie Mae MBS having the bid terms described in the Interest Rate Lock
Agreement, and shall immediately deliver to the Borrowing Agent by facsimile
transmission a completed document in the form of Exhibit H ("Rate Confirmation
Form").
(c) Rate Lock Deposit. In the event that the Lender obtains an MBS
Commitment and the Lender fails to fulfill the MBS Commitment because the Future
Excess Proceeds Term Loan is not made the Lender shall retain the Rate Lock
Deposit as liquidated damages, as set forth in the Interest Rate Lock Agreement.
SECTION 3.04-B Conditions Precedent to Future Excess Proceeds Term Loan. The
obligation of the Lender to make a requested Future Excess Proceeds Term Loan is
also subject to the following conditions precedent:
(a) The receipt by the Lender of all the underwriting documentation
required by Section 3.01-B;
(b) The receipt by the Lender of an executed Interest Rate Lock
Agreement, together with the Rate Lock Deposit defined therein;
(c) The amount of the Future Excess Proceeds Term Loan shall not exceed
the amount by which the sum of the principal amount of the Initial Term Loan and
the principal amount of any previously advanced Future Term Loan is less than
the Maximum Term Loan Amount;
(d) The receipt by the Lender of a Future Term Loan origination fee
equal to 1/2 of 1% of the principal amount of the Future Term Loan and all legal
fees and expenses payable by the Borrower pursuant to Section 10.03(b);
(e) The receipt by the Lender of an Organizational Certificate;
(f) The satisfaction of all Conditions to Closing set forth in Section
3.01(a), (b), (c), (d), (f) and (h) and the satisfaction of all the Conditions
set forth in Section 3.02, except for the conditions set forth in Section
3.02(b), (e) and (h);
(g) There shall not be pending or threatened any condemnation or other
taking, whether direct or indirect, against any Mortgaged Property, and there
shall not have occurred any casualty to any improvements located on any
Mortgaged Property, which in the case of any such condemnation or taking or
casualty would have or may reasonably be expected to have a Material Adverse
Effect - Portfolio Wide;
30
<PAGE>
(h) There has been no material adverse change in the financial
condition, business or prospects of any Borrower or in the physical condition
(including as the result of any casualty) operating performance or value of any
of the Mortgaged Properties since the Initial Closing Date which would have or
could reasonably be expected to have a Material Adverse Effect - Portfolio Wide;
(i) Receipt by Lender of a lien search by Title Company relating to all
the Mortgaged Properties showing no new liens, encumbrances or other matters
adversely affecting title since the Initial Closing Date;
(j) Receipt by Lender of a T-3 endorsement to the title insurance
policy relating to the Mortgaged Properties located in Texas insuring that there
are no new liens, encumbrances or other matters adversely affecting title since
the date of the issuance of such title insurance policy; and
(k) The delivery of a written acknowledgment by Borrower of the portion
of the Term Loan allocated to each Mortgaged Property, as reasonably determined
by Lender and reflected in a revised Exhibit B prepared by Lender.
ARTICLE IV
RELEASES OF COLLATERAL
SECTION 4.01 Right to Obtain Releases of Collateral. Subject to the terms and
conditions of this Article, the Borrowers shall have the right to obtain a
release of Collateral from the Collateral Pool.
SECTION 4.02 Procedure for Obtaining Releases of Collateral.
(a) Request. In order to obtain a release of Collateral from the
Collateral Pool, the Borrowing Agent may deliver a written request for the
release of Collateral from the Collateral Pool ("Collateral Release Request") to
the Lender, in the form attached as Exhibit M to this Agreement. The Collateral
Release Request shall not be effective unless it is accompanied by the name,
address and location of the Mortgaged Property to be released from the
Collateral Pool ("Collateral Release Property").
(b) Release Closing. If all conditions contained in Section 4.03 are
satisfied, the Lender shall cause the Collateral Release Property to be released
from the Collateral Pool, at a closing to be held at offices designated by the
Lender on a Release Closing Date selected by the Lender, and Lender shall use
its commercially reasonable efforts to cause such Release Closing Date to occur
within 14 days and in any event will cause it to occur no later than 30 days
after the Lender's receipt of the Collateral Release Request (or on such other
date to which the Borrowing Agent and the Lender may agree) by executing and
delivering, and causing all applicable parties to execute and deliver, all at
the sole cost and expense of the Borrowers, instruments, in the form customarily
used by the Lender for releases in the jurisdiction governing
31
<PAGE>
the perfection of the security interest being released, releasing the applicable
Security Instrument as a Lien on the Collateral Release Property, and UCC-3
Termination Statements terminating the UCC-1 Financing Statements perfecting a
Lien on the portion of the Collateral Release Property comprised of personal
property and such other documents and instruments as the Borrowing Agent may
reasonably request evidencing the release of the applicable Collateral from any
lien securing the Obligations (including a termination of any restriction on the
use of any accounts relating to the Collateral Release Property) and the release
and return to the Borrowing Agent of any and all escrowed amounts relating
thereto. The instruments referred to in the preceding sentence are referred to
in this Article as the "Collateral Release Documents."
(c) Release Price. The "Release Price" for each Mortgaged Property
means 100% of the Allocable Facility Amount for the Mortgaged Property to be
released. In addition to the Release Price, the Borrower shall pay to the Lender
all other amounts due under the Note including interest on the principal amount
of the Note being prepaid. If the Release Closing Date occurs on a date other
than the last Business Day of a calendar month, the Borrowers shall pay to
Lender an amount equal to the interest on the amount of the principal amount of
the Note being prepaid for the entire month in which the Release Closing Date
occurs. The Borrowers agree that any Release Price relating to the Mortgaged
Properties known as Harbour Club I and Harbour Club III located in Belleville,
Michigan must be paid on the same date, i.e., the release of one such Mortgaged
Property from the Collateral Pool may only take place if the other such
Mortgaged Property is simultaneously released.
(d) Application of Release Price. The Release Price shall be treated
and applied as an optional prepayment under the Note pursuant to Section 10 of
the Note and may be paid only on the last Business Day of a calendar month. If
the Release Closing Date occurs on a day other than the last Business Day of a
calendar month, the Lender shall hold the payments as additional Collateral in
an interest bearing account until the last Business Day of such month, at which
time the Lender shall apply the amounts held by it (including interest earned
thereon) to the amount of the prepayment of the Note.
SECTION 4.03 Conditions Precedent to Release of Collateral Release Property from
the Collateral. The obligation of the Lender to release a Collateral Release
Property from the Collateral Pool by executing and delivering the Collateral
Release Documents on the Release Closing Date is subject to the satisfaction of
the following conditions precedent on or before the Release Closing Date:
(a) Receipt by the Lender of the Release Price in accordance with
Section 4.02;
(b) Receipt by the Lender of all legal fees and expenses payable by the
Borrowers in connection with the release pursuant to Section 10.03(b);
(c) Receipt by the Lender on the Release Closing Date of one or more
counterparts of each Collateral Release Document, dated as of the Release
Closing Date, signed
32
<PAGE>
by each of the parties (other than the Lender) who is a party to such Collateral
Release Document;
(d) If reasonably required by the Lender, amendments to the Note and
the Security Instruments, reflecting the release of the Collateral Release
Property from the Collateral Pool and, as to any Security Instrument so amended,
the receipt by the Lender of an endorsement to the Title Insurance Policy
insuring the Security Instrument, amending the effective date of the Title
Insurance Policy to the Release Closing Date and showing no additional
exceptions to coverage other than the exceptions shown on the Closing Date and
other exceptions approved by the Lender;
(e) If the Lender reasonably determines the Collateral Release Property
to be one phase of a project, and one or more other phases of the project are
Mortgaged Properties which will remain in the Collateral Pool ("Remaining
Mortgaged Properties"), the Lender's determination that the Remaining Mortgaged
Properties can be operated separately from the Collateral Release Property and
any other phases of the project which are not Mortgaged Properties. In making
this determination, the Lender shall evaluate whether the Remaining Mortgaged
Properties comply with the terms of Sections 203 and 208 of the DUS Guide,
which, as of the date of this Agreement, require, among other things, that a
phase which constitutes collateral for a loan made in accordance with the terms
of the DUS Guide (i) have adequate ingress and egress to existing public
roadways, either by location of the phase on a dedicated, all-weather road or by
access to such a road by means of a satisfactory easement, (ii) have access
which is sufficiently attractive and direct from major thoroughfares to be
conducive to continued good marketing, (iii) have a location which is not (A)
inferior to other phases, (B) such that inadequate maintenance of other phases
would have a significant negative impact on the phase, and (C) such that the
phase is visible only after passing through the other phases of the project and
(iv) comply with such other issues as are dictated by prudent practice. Lender
agrees that this paragraph (e) only applies to Harbour Club I and Harbour Club
III;
(f) Receipt by the Lender of endorsements to the Tie-In Endorsements of
the Title Insurance Policies, if deemed reasonably necessary by the Lender, to
reflect the release;
(g) Receipt by the Lender on the Release Closing Date of a writing,
dated as of the Release Closing Date, signed by the Borrowers, in the form
attached as Exhibit N to this Agreement, pursuant to which the Borrowers confirm
that their obligations under the Loan Documents are not adversely affected by
the release of the Collateral Release Property from the Collateral;
(h) Payment by the Borrowers of the Prepayment Premium, if any; and
(i) The satisfaction of all of the following conditions:
(i) The payment by the Borrowers of the Lender's fees and
expenses payable in accordance with this Agreement for which Lender
has presented an invoice on or before the Release Closing Date;
33
<PAGE>
(ii) There shall not be pending or threatened any condemnation or
other taking, whether direct or indirect against any Mortgaged
Property, and there shall not have occurred any casualty to any
improvements located on any Mortgaged Property, which in the case of
any such condemnation or taking or casualty would have or may
reasonably be expected to have a Material Adverse Effect Portfolio
Wide;
(iii) The receipt by the Lender of the following, each dated as
of the Release Closing Date, in form and substance satisfactory to the
Lender in all respects:
A) A Compliance Certificate;
B) An Organizational Certificate; and
C) Such other documents, instruments, approvals (and, if
requested by the Lender, certified duplicates of executed copies
thereof) and opinions as the Lender may reasonably request.
(i) There shall exist no Event of Default or Potential Event of
Default on the Release Closing Date and, after giving effect to the
transaction requested in the Collateral Release Request, no Event of
Default or Potential Event of Default shall have occurred provided
that if a Potential Event of Default exists on the proposed Release
Closing Date by virtue of a notice from Lender in accordance with
Section 11.01(g) or in the event of the failure of any Borrower to
comply with any Governmental Authority as set forth in Section
11.01(m) which Potential Event of Default in Lender's reasonable
judgment (x) is with respect to a particular Mortgaged Property and
(y) is being corrected by action instituted by the respective Borrower
and is being pursued diligently and in good faith, then the existence
of such Potential Event of Default shall not be a condition to such
Collateral Release Request provided that Borrowers satisfy all other
conditions set forth in this Section 4.03 and pledge and deposit with
Lender an amount equal to the gross proceeds of the sale of the
Collateral Release Property net of all third-party non-affiliate
transaction costs minus the Release Price. Such deposit shall be held
by Servicer in a custodial account pursuant to the DUS Guide and shall
be (i) released to the Borrowing Agent if and when the Potential Event
of Default is cured or (ii) if an Event of Default occurs, applied in
Lender's discretion. In addition, if a Potential Event of Default has
occurred that in the reasonable judgment of Lender is with respect to
a particular Mortgaged Property, then the existence of such Potential
Event of Default shall not be a condition to a Collateral Release
Request for the release of such Collateral Release Property provided
that the Borrowers satisfy all other conditions set forth in this
Section 4.03.
34
<PAGE>
ARTICLE V
TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER
SECTION 5.01 Transfers and Events that Constitute an Event of Default. Subject
to the provisions of Section 5.02, the occurrence of any of the following events
shall constitute an Event of Default under this Agreement and each Security
Instrument:
(1) a Transfer of all or any part of any Mortgaged Property or any
interest in any Mortgaged Property (including, without
limitation, any legal or equitable interest therein); or
(2) a Transfer which results in any Borrower not being a GSG
Controlled Entity; or
(3) a Transfer which results in WXI/McN Realty, L.L.C. owning,
directly or indirectly, less than 51% of the limited partnership
interests in any Borrower which is a limited partnership or less
than 51% of the general partnership interests in any Borrower
which is a general partnership; or
(4) a Transfer which results in WXI/MNL Real Estate L.L.C. (i)
owning, directly or indirectly, less than 51% of the membership
interests in WXI/McN Realty L.L.C. or (ii) no longer Controlling
WXI/McN Realty L.L.C.; or
(5) a Transfer which results in Whitehall XI (i) owning, directly or
indirectly less than 51% of the membership interests in WXI/MNL
Real Estate L.L.C. or (ii) no longer Controlling WXI/MNL Real
Estate L.L.C.; or
(6) a Transfer with respect to any Person who is at the time of
reference a Key Principal which results in such Person not being
a GSG Controlled Entity; or
(7) a Transfer which results in any general partner of any Borrower
not being a GSG Controlled Entity; or
(8) a conversion of any Borrower or Whitehall from one type of legal
entity into another type of legal entity, whether or not there is
a Transfer, including without limitation, any transaction
affecting any Borrower described in clause (G) of the definition
of "Transfer".
Lender shall not be required to demonstrate any actual impairment of
its security or any increased risk of default in order to exercise any of its
remedies with respect to an Event of
35
<PAGE>
Default under this Section 5.01.
SECTION 5.02 Exceptions to Events of Default. The occurrence of any of the
following events shall not constitute an Event of Default under this Agreement
or any Security Instrument, notwithstanding any provision of Section 5.01 to the
contrary:
(1) a Transfer to which Lender has consented pursuant to the
provisions of Section 5.03;
(2) a Transfer that occurs by devise, descent, or by operation of law
upon the death of a natural person;
(3) the grant of a leasehold interest in an individual dwelling unit
for a term of two years or less not containing an option to
purchase;
(4) a Transfer of obsolete, worn out or no longer useful Personalty
or Fixtures (as such terms are defined in the Security
Instruments) in the normal course of any Borrower's maintenance
or improvement with respect to the Mortgaged Properties in
accordance with terms hereof and the Security Instruments;
(5) the grant of an easement, if before the grant Lender determines
that the easement will not materially affect the operation or
value of the affected Mortgaged Property or Lender's interest in
the Mortgaged Property, and the Borrowers pay to Lender, upon
demand, all costs and expenses incurred by Lender in connection
with reviewing Borrowers' request;
(6) the creation of any Permitted Lien;
(7) the release by Lender of any Mortgaged Property from the lien of
a Security Instrument pursuant to Article IV of this Agreement;
(8) conversion of Whitehall XI or Whitehall XII from one type of
legal entity into another type of legal entity, or merger or
consolidation of Whitehall XI or Whitehall XII with or into
another legal entity, provided that (i) the surviving entity is a
GSG Controlled Entity, (ii) the surviving entity satisfies the
minimum net worth requirement applicable to it, if any such
requirement is applicable at the time in question, pursuant to
Section 5 of the Key Principal Guaranty executed by it, (iii) the
surviving entity is bound by all of the terms and provisions of
the Key Principal Guaranty executed by Whitehall XI and Whitehall
XII and (iv) the Lender shall receive such documentation
(including an opinion of counsel as to items (i) and (iii) above)
as Lender shall reasonably require to confirm the foregoing;
36
<PAGE>
SECTION 5.03 Procedure for Approval. Lender may, in its sole and absolute
discretion, from time to time, consent to an event that would otherwise
constitute an Event of Default under Sections 5.01 and 5.02, including, without
limitation, a Transfer of a Controlling Interest in any Borrower, which would
otherwise permit Lender to accelerate the indebtedness secured hereby or to
exercise its remedies permitted under the Loan Documents including Section 43 of
the Security Instruments. It is understood and agreed that Lender shall not
consent to a Transfer constituting an assumption of the Term Loan in part or in
whole.
In the event the Borrowing Agent requests such a consent from the
Lender, the Borrowers shall pay to Lender a $3,000 non-refundable application
fee, and if such consent is granted, a fee equal to one percent (1%) of the sums
secured by the applicable Security Instruments. In addition, the Borrowers shall
be required to reimburse Lender and Loan Servicer (as defined in the Security
Instruments) for all of Lender's and Loan Servicer's fees, costs and expenses,
including, without limitation, reasonable legal fees and expenses, incurred in
connection with considering such a request, and all other fees, costs and
expenses incurred in connection with reviewing documentation required by Lender
to analyze and evaluate all aspects of such Transfer, including without
limitation, any Transfer of a Controlling Interest in any Borrower, to the
extent such amounts exceed $3,000, irrespective of whether or not the request
for consent is approved or denied by Lender in its discretion.
SECTION 5.04 Certain Definitions. For purposes of this Section and this
Agreement, the following terms shall have the meanings set forth below:
(1) "Controlling Interest" shall mean, with respect to any entity,
ownership interests in such entity that confer upon the legal or
beneficial holder thereof Control of such entity.
(2) "Whitehall XI" means Whitehall Street Real Estate Limited
Partnership XI, a Delaware limited partnership or any entity
resulting from the merger or consolidation of Whitehall permitted
pursuant to Section 5.02(8).
(3) "Whitehall XII" means Whitehall Street Real Estate Limited
Partnership XII, a Delaware limited partnership or any entity
resulting from the merger or consolidation of Whitehall permitted
pursuant to Section 5.02(8).
(4) "Whitehall" means Whitehall XI, or Whitehall XII, or both, as the
context requires.
(5) WXI/McN Realty L.L.C. means WXI/McN Realty L.L.C., a Delaware
limited liability company.
(6) WXI/MNL Real Estate, L.L.C. means WXI/MNL Real Estate L.L.C., a
Delaware limited liability company.
37
<PAGE>
(7) "GSG" means The Goldman Sachs Group, Inc., a Delaware
corporation, or any successor thereto, including, without
limitation, any Person who succeeds to substantially all of the
business of The Goldman Sachs Group, Inc.
(8) "GSG Controlled Entity" means a partnership, corporation, limited
liability company, business trust or other business entity of
which GSG has, directly or indirectly, Control.
(9) "Control" (or any variation of such term) of one entity (the
"controlled entity") by another (the "controlling entity") means,
subject to clauses (a) and (b) below, that the controlling entity
has the power, directly or indirectly, to direct or cause the
direction of the management and policies of the controlled
entity, whether through the ownership of voting securities, by
contract, or otherwise.
(a) Except in the case of determining "Control" over Whitehall
as provided in subsection (b) below, a controlling entity
shall be deemed not to have control of a controlled entity,
unless the following circumstances also exist: (i) if the
controlled entity is a corporation, the controlling entity
owns more than 51% of the shares of the controlled entity's
capital stock that have voting power to elect directors,
including shares that have voting power by reason of the
occurrence of one or more conditions or contingencies; (ii)
if the controlled entity is a limited partnership, the
controlling entity Controls (in accordance with the balance
of this definition) the sole general partner or all of the
general partners of the partnership; (iii) if the controlled
entity is a general partnership or a joint venture, the
controlling entity owns more than 51% of the partnership or
joint venture interest in such entity; (iv) if the
controlled entity is a limited liability company, the
controlling entity owns more than 51% of the equity
interests in the limited liability company and Controls (in
accordance with the balance of this definition) a majority
of the managers or members of the limited liability company,
or (v) if the controlled entity is a business trust, the
controlling entity owns more than 51% of the equity
interests in the business trust and Controls (in accordance
with the balance of this definition) a majority of the
trustees of the business trust.
(b) In the case of determining whether an entity has "Control"
over Whitehall, "Control" means that the controlling entity
has the sole power and authority, directly or indirectly, to
direct or cause the direction of the management and policies
of the controlled entity, whether through the ownership of
voting securities, by contract, or
38
<PAGE>
otherwise, without the need for any approval from any
shareholder, member, partner or other owner of such
controlled entity or any other person or entity, except for:
(i) the rights of approval conferred on the Lender to the
extent provided in the Loan Documents;
(ii) rights conferred on a shareholder, member, partner or
other owner (r) as matter of statutory, regulatory,
decisional or common law; (s) to consent or withhold
consent to a merger, consolidation, dissolution or
liquidation; (t) to consent or withhold consent to a
sale or other disposition of all or substantially all
of the entity's assets; and (u) to consent or withhold
consent to a fundamental change in investment policies.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01 Representations and Warranties of the Borrowers. Each Borrower
hereby represents and warrants to the Lender as follows:
(a) Due Organization; Qualification. WXI/MCN Multifamily Real Estate
Limited Partnership is a limited partnership duly organized, validly existing
and in good standing under the laws of Delaware. Castle Bluff Fund XII
Associates L.P. is a limited partnership duly organized, validly existing and in
good standing under the laws of Texas. Brendon Way Fund XII Associates is a
general partnership duly organized and validly existing under the laws of
Indiana. Embarcadero Associates is a general partnership duly organized and
validly existing under the laws of Georgia. Each Borrower is duly qualified to
do business, and is in good standing, in each state in which any Mortgaged
Property is located and in each other jurisdiction in which such qualification
and/or standing is necessary to the conduct of its business and where the
failure to be so qualified would adversely affect the validity of, the
enforceability of, or the ability of the Borrower to perform its obligations
under, this Agreement and the other Loan Documents. Each General Partner of each
Borrower is a duly organized and validly existing limited liability company or
limited partnership duly qualified to do business in and in good standing under
the laws of its respective state of organization and in each other jurisdiction
in which such qualification and/or standing is necessary to the conduct of its
business and where the failure to be so qualified would adversely affect the
validity, the enforceability, or the ability of any Borrower to perform its
obligations under this Agreement and the other Loan Documents. The Partnership
Agreement of each Borrower has been duly executed and delivered by each partner,
is a legal and valid and binding agreement, enforceable in accordance with its
terms, and is in full force and effect. Each Borrower has its principal place of
business, principal office and office where it keeps its records at the notice
address set forth for the Borrowing Agent in
39
<PAGE>
Section 16.08 of this Agreement. The partners of each Borrower and the
percentage of their ownership interests and/or capital accounts of such partners
are as set forth in Schedule 2 attached hereto.
(b) Power and Authority. Each Borrower has the requisite power and
authority (i) to own its properties and to carry on its business as now
conducted and as contemplated to be conducted in connection with the performance
of the Obligations hereunder and under the other Loan Documents and (ii) to
execute and deliver this Agreement and the other Loan Documents and to carry out
the transactions contemplated by this Agreement and the other Loan Documents.
(c) Due Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents have been duly authorized by all
necessary action and proceedings by or on behalf of each Borrower, and no
further approvals or filings of any kind, including any approval of or filing
with any Governmental Authority, are required by or on behalf of any Borrower as
a condition to the valid execution, delivery and performance by such Borrower of
this Agreement or any of the other Loan Documents.
(d) Valid and Binding Obligations. This Agreement and the other Loan
Documents have been duly authorized, executed and delivered by each Borrower and
constitute the legal, valid and binding obligations of each Borrower,
enforceable against each Borrower in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
affecting the enforcement of creditors' rights generally or by equitable
principles or by the exercise of discretion by any court.
(e) Non-contravention; No Liens. Neither the execution and delivery of
this Agreement and the other Loan Documents, nor the fulfillment of or
compliance with the terms and conditions of this Agreement and the other Loan
Documents nor the performance of the Obligations:
(1) does or will conflict with or result in any breach or violation of
any Applicable Law enacted or issued by any Governmental Authority or other
agency having jurisdiction over any Borrower, any of the Mortgaged
Properties or any other portion of the Collateral or other assets of any
Borrower or any judgment or order applicable to any Borrower or to which
any Borrower, any of the Mortgaged Properties or other assets of any
Borrower are subject;
(2) does or will conflict with or result in any breach or violation
of, or constitute a default under, any of the terms, conditions or
provisions of any Borrower's Organizational Documents, any indenture,
existing agreement or other instrument to which any Borrower is a party or
to which any Borrower, any of the Mortgaged Properties or any other portion
of the Collateral or other assets of any Borrower are subject;
40
<PAGE>
(3) does or will result in or require the creation of any Lien on all
or any portion of the Collateral or any of the Mortgaged Properties, except
for the Permitted Liens; or
(4) does or will require the consent or approval of any creditor of
any Borrower, any Governmental Authority or any other Person except such
consents or approvals which have already been obtained.
(f) Pending Litigation or other Proceedings. Except as set forth on
Schedule 3 attached hereto, there is no pending or, to the best knowledge of
each Warrantor, threatened action, suit, proceeding or investigation, at law or
in equity, before any court, board, body or official of any Governmental
Authority or arbitrator against or affecting any Mortgaged Property or any other
portion of the Collateral or other assets of any Borrower, which, if decided
adversely to any Borrower, would have, or may reasonably be expected to have, a
Material Adverse Effect. No Borrower is in default with respect to any order of
any Governmental Authority.
(g) Solvency. Neither any Borrower, any General Partner, nor any Key
Principal is insolvent (within the meaning of any applicable federal or state
law relating to bankruptcy or fraudulent transfers) and will not be rendered
insolvent by the transactions contemplated by the provisions of this Agreement
and the other Loan Documents. Taking into account the benefits to each Borrower
arising pursuant to the Contribution Agreements, in connection with the
execution and delivery of each Security Instrument and the other Loan Documents
(and the delivery to, or for the benefit of, Lender of any collateral
contemplated thereunder), and the incurrence by each Borrower of the
Obligations:
(i) each Borrower did not receive less than a reasonably equivalent
value in exchange for such transfer or incurrence of the Obligations; and
(ii) each Borrower
(A) was solvent on the date that such transfer was made or such
Obligations were incurred, and did not become insolvent as a result of
such transfer or incurrence of the Obligations;
(B) is not engaged in a business or a transaction, or is not
about to engage in a business or a transaction, for which any property
remaining with such Borrower is an unreasonably small capital; and
(C) does not intend to incur, and does not believe that it will
incur, debts that would be beyond such Borrower's ability to pay as
such debts matured.
41
<PAGE>
The present fair saleable value of each Borrower's assets is not less
than the amount that will be required to pay each Borrower's probable liability
on its existing debts (including the Obligations). There (i) is no pending or,
to any Borrower's knowledge, threatened or contemplated, bankruptcy,
reorganization, receivership, insolvency or like proceeding, whether voluntary
or involuntary, affecting any Borrower, any General Partner, or any Key
Principal or any Mortgaged Property and (ii) has been no assertion or exercise
of jurisdiction over any Borrower, any General Partner or any Key Principal or
any Mortgaged Property by any court empowered to exercise bankruptcy powers.
Neither any Borrower, any General Partner, nor any Key Principal is currently
the subject of any judgment unsatisfied of record or docketed in any court of
the state in which any Mortgaged Property is located or in any court located in
the United States.
(h) No Contractual Defaults. There are no defaults by any Borrower or,
to the knowledge of any Warrantor, by any other Person under any contract to
which any Borrower is a party relating to any Mortgaged Property, including any
management, rental, service, supply, security, maintenance or similar contract,
other than defaults which do not have, and are not reasonably expected to have,
a Material Adverse Effect. No Borrower nor, to the knowledge of any Warrantor,
any other Person, has received notice or has any knowledge of any existing
circumstances in respect of which it could receive any notice of default or
breach in respect of any contracts affecting or concerning any Mortgaged
Property other than defaults which do not have, and are not reasonably expected
to have, a Material Adverse Effect. No event has occurred and is continuing, or
would result from the execution of this Agreement, or any other transaction
contemplated hereby, which constitutes a Potential Event of Default or an Event
of Default. There are no Potential Events of Default or Events of Default.
(i) Compliance with the Loan Documents. Each Borrower is in compliance
with all provisions of the Loan Documents to which it is a party or by which it
is bound. The representations and warranties made by each Borrower in the Loan
Documents are true, complete and correct as of the Closing Date and do not
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
(j) ERISA. Each Borrower is in compliance in all material respects with
all applicable provisions of ERISA and has not incurred any liability to the
PBGC for a Plan under Title IV of ERISA. None of the assets of any Borrower
constitute plan assets (within the meaning of Department of Labor Regulation ss.
2510.3-101) of any employee benefit plan subject to Title I of ERISA. Neither
any Borrower nor any member of such Borrower's Controlled Group is or ever has
been obligated to contribute to any Multiemployer Plan.
(k) Financial Information. The financial projections relating to each
Borrower and delivered to the Lender on or prior to the date hereof, if any,
were prepared on the basis of assumptions believed by the Warrantors, in good
faith at the time of preparation, to be reasonable and each Borrower is not
aware of any fact or information that would lead it to believe that such
assumptions are incorrect or misleading in any material respect. The financial
statements of each
42
<PAGE>
Borrower which have been furnished to the Lender present fairly the financial
condition of each Borrower, as of its date in accordance with GAAP, applied on a
consistent basis, and since the date of the most recent of such financial
statements no event has occurred which would have, or may reasonably be expected
to have a Material Adverse Effect, and there has not been any material
transaction entered into by each Borrower other than transactions in the
ordinary course of business. No Borrower has material contingent obligations
which are not disclosed in its most recent financial statements. No material
adverse change in the financial condition of any General Partner or any Key
Principal has occurred between the respective dates of the financial statements
which were furnished to Lender relating to such entities and the date hereof.
(l) Accuracy of Information. Each Borrower has disclosed to the Lender
in writing any fact or circumstance known to the Warrantors concerning Mortgaged
Property zoning/legal compliance, insurance coverage, access to public streets,
availability of utilities, provision of service, existing matters of title and
survey, leases, and current property taxes/assessments, which has had, or in the
reasonable judgment of such Borrower could reasonably be expected to have, a
Material Adverse Effect. All information, reports and other papers and data
furnished by each Borrower, any General Partner or any Key Principal to the
Lender were, at the time the same were so furnished, complete and correct in all
material respects, or based on good faith estimates on the date as of which such
information is stated or certified. Each Borrower has disclosed to the Lender in
writing any and all facts known to the Warrantors that have had, or in the
reasonable judgment of any Borrower could reasonably be expected to have a
Material Adverse Effect. In response to each inquiry to each Borrower relating
to any Borrower, each Mortgaged Property and the transactions contemplated by
the Loan Documents made by the Lender or Fannie Mae, each Borrower has not to
the knowledge of the Warrantors omitted to state a material fact necessary in
order to make the response to each inquiry, in light of the circumstances under
which such response was made, not misleading.
(m) No Conflicts of Interest. To the best knowledge of the Warrantors,
no member, officer, agent or employee of the Lender has been or is in any manner
interested, directly or indirectly, in that Person's own name, or in the name of
any other Person, in the Loan Documents, any Borrower or any Mortgaged Property,
in any contract for property or materials to be furnished or used in connection
with such Mortgaged Property or in any aspect of the transactions contemplated
by the Loan Documents.
(n) Governmental Approvals. No Governmental Approval not already
obtained or made is required for the execution and delivery of this Agreement or
any other Loan Document or the performance of the terms and provisions hereof or
thereof by any Borrower.
(o) Governmental Orders. No Borrower is presently under any cease or
desist order or other orders of a similar nature, temporary or permanent, of any
Governmental Authority which would have the effect of preventing or hindering
performance of its duties hereunder, nor are there any proceedings presently in
progress or to its knowledge contemplated which would, if successful, lead to
the issuance of any such order.
43
<PAGE>
(p) No Reliance. Each Borrower acknowledges, represents and warrants
that it understands the nature and structure of the transactions contemplated by
this Agreement and the other Loan Documents, that it is familiar with the
provisions of all of the documents and instruments relating to such
transactions; that it understands the risks inherent in such transactions,
including the risk of loss of all or any of the Mortgaged Properties; and that
it has not relied on the Lender or Fannie Mae for any guidance or expertise in
analyzing the financial or other consequences of the transactions contemplated
by this Agreement or any other Loan Document or otherwise relied on the Lender
or Fannie Mae in any manner in connection with interpreting, entering into or
otherwise in connection with this Agreement, any other Loan Document or any of
the matters contemplated hereby or thereby.
(q) Compliance with Applicable Law. Each of the following statements is
subject to those matters disclosed in Schedule 4. Each Borrower is in compliance
with Applicable Law, including all Governmental Approvals, if any, except for
such items of noncompliance that, singly or in the aggregate, have not had and
are not reasonably expected to cause, a Material Adverse Effect. To the
knowledge of the Warrantors, each Borrower has disclosed all violations of all
Applicable Laws. There are no state or local Applicable Laws regarding rents,
occupancy or resale restrictions which adversely affect any Mortgaged Property.
All rental restrictions relating to any Mortgaged Property as a result of any
federal government loan or assistance have been fully terminated. To the
knowledge of the Warrantors, there is no evidence of any illegal activities
relating to controlled substances on any Mortgaged Property.
(r) Single Purpose Entity. The Delaware Partnership and each General
Partner is a Single Purpose entity. The only real or personal property owned by
the Georgia Borrower are the Mortgaged Properties known as Embarcadero Club
Apartments and Tanglewood Village Apartments and assets related to or arising
out of the ownership, the operations and maintenance of such Mortgaged
Properties. The only real or personal property owned by the Indiana Borrower is
the Mortgaged Property known as Brendon Way Apartments and assets related to or
arising out of the ownership, the operations and maintenance of such Mortgaged
Property. The only real or personal property owned by the Texas Borrower is the
Mortgaged Property known as Castle Bluff Apartments and assets related to or
arising out of the ownership, the operations and maintenance of such Mortgaged
Property. None of the Georgia Borrower, the Indiana Borrower and the Texas
Borrower (i) is engaged in any business or activity other than in connection
with the ownership, management and operation of any Mortgaged Property or (ii)
owes any Indebtedness other than Indebtedness relating to the Term Loan or
secured by Permitted Liens. To the knowledge of the Warrantors, each of the
Georgia Borrower, the Indiana Borrower and the Texas Borrower is a Single
Purpose entity.
(s) Lines of Business. No Borrower is engaged in any businesses other
than the acquisition, ownership, development, leasing or management of the
Mortgaged Properties, and the conduct of these businesses does not violate its
Organizational Documents pursuant to which it is formed.
(t) Disclosure of Indebtedness. Other than as set forth on Schedule 5
attached hereto, no Borrower has any outstanding Indebtedness.
44
<PAGE>
(u) Reserved.
(v) Absence of Default in Payment of Indebtedness. No Borrower is in
default in the payment of the principal of or interest on any of its
indebtedness for borrowed money, if any, and no event of default under any
instrument under and subject to which any indebtedness has been incurred, has
occurred and is continuing, and no event has occurred and is continuing under
the provisions of any such instrument which with the lapse of time or the giving
of notice, or both, would constitute an event of default under any such
instrument.
(w) No Transfer of Interests in any Borrower. Except as otherwise
disclosed in writing to Fannie Mae or the Lender, no Transfer of any Controlling
Interest in any Borrower has occurred and is continuing since the date of the
application submitted by any Borrower to the Lender.
SECTION 6.02 Representations and Warranties of the Borrowers Relating to
Mortgaged Properties. Each Borrower hereby represents and warrants to the Lender
as follows with respect to each of the Mortgaged Properties owned by such
Borrower (as set forth on Exhibit A hereto) and with respect to other related
subject matter as set forth below.
(a) Title. The Borrower has good, valid, marketable and indefeasible
title in fee to each Mortgaged Property, free and clear of all Liens whatsoever
except the Permitted Liens. If a Mortgaged Property is a condominium, as defined
by the statutes in effect in the jurisdiction in which such Mortgaged Property
is located, a legal, valid and binding declaration establishing such condominium
is in full force and effect and the Borrower has good, valid, marketable and
indefeasible title in fee to each and every condominium unit and its appurtenant
undivided interest in the applicable common elements related to each condominium
unit subject to such declaration and the condominium units and their appurtenant
interests created by the declaration in the aggregate comprise the entire
integrated structure of which each such unit is a part. Each Mortgage, if and
when properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create a valid, perfected first lien on the Mortgaged Property
to which it relates (including the Leases, the rents and all rights to collect
rents thereunder), which, in the case of a condominium, includes each and every
condominium unit and its appurtenant undivided interest in the applicable common
elements related to each condominium unit, subject only to Permitted Liens.
Except for any Permitted Liens, there are no Liens or claims for work, labor or
materials affecting any Mortgaged Property which are or may be prior to,
subordinate to, or of equal priority with, the Liens created by the Security
Documents. The Borrower represents and warrants that the Permitted Liens do not
have, and may not reasonably be expected to have, a Material Adverse Effect.
(b) Taxes. The Borrower has filed all property and similar tax returns
required to have been filed by it with respect to each Mortgaged Property and
has paid and discharged, or caused to be paid and discharged, all installments
for the payment of real estate, property or similar taxes due to date, and all
other material Impositions imposed against,
45
<PAGE>
affecting or relating to each Mortgaged Property other than those which have not
become due, together with any fine, penalty, interest or cost for nonpayment
pursuant to such returns or pursuant to any assessments received by it. To
Borrower's knowledge, there are not presently pending any special assessments
except as otherwise disclosed by Borrower in writing to Lender prior to the date
hereof against any Mortgaged Property or any part thereof. The Borrower has no
knowledge of any tax, levy or other governmental or private assessment or charge
in respect of any Mortgaged Property which has been enacted and is not effective
on the date hereof or has been proposed and which has not been disclosed in
writing to the Lender or Fannie Mae.
(c) Zoning. Except as set forth in Schedule 4, each Mortgaged Property
complies in all material respects with all Applicable Laws affecting such
Mortgaged Property and without limiting the foregoing, all Permits, including
certificates of occupancy, have been issued and are in full force and effect.
Except as set forth on Schedule 4, neither the Borrower nor, to the knowledge of
the Borrower, any former owner of any Mortgaged Property has received any
written notification or threat of any actions or proceedings regarding the
noncompliance or nonconformity of such Mortgaged Property with Applicable Laws
or Permits, nor is the Borrower otherwise aware of any such pending actions or
proceedings.
(d) Liability for Hazardous Substances. Except as disclosed in any
Environmental Report or otherwise disclosed in writing by the Borrower to the
Lender before the date of this Agreement, to the knowledge of the Warrantors,
the Borrower has no liability, contingent or otherwise, in connection with any
Hazardous Substance Activity on or affecting any Mortgaged Property in violation
of Hazardous Materials Laws as in effect as of the Closing Date.
(e) Prohibited Activities or Conditions. Except as disclosed in any
Environmental Report or otherwise disclosed in writing by the Borrower to the
Lender before the date of this Agreement, (a) to the knowledge of the
Warrantors, no Prohibited Activities or Conditions exist or have existed at,
upon, under or within any Mortgaged Property that have not been remedied and (b)
the Borrower has not at any time caused or permitted any Prohibited Activities
or Conditions to exist at, upon, under or within any Mortgaged Property.
(f) Hazardous Materials. Except as disclosed in any Environmental
Report or otherwise disclosed in writing by the Borrower to the Lender before
the date of this Agreement, (i) neither the Borrower nor, to the knowledge of
the Warrantors, any other party has been or is involved in operations at any
Mortgaged Property which operations could reasonably be expected to lead to (A)
the imposition of liability on the Borrower under any Hazardous Materials Law in
effect as of the date of this Agreement, or on any subsequent or former owner of
such Mortgaged Property, or (B) the creation of a Lien with respect to a
liability on such Mortgaged Property under any Hazardous Materials Law in effect
as of the date hereof; (ii) the Borrower has not permitted any tenant or
occupant of such Mortgaged Property to engage in any activity that could
reasonably be expected to impose a claim or liability under any Hazardous
Materials Law in effect as of the date hereof on such tenant or occupant, on the
Borrower or on any other subsequent or former owner of such Mortgaged Property;
and (iii) the Borrower has
46
<PAGE>
not received, and has no knowledge of the issuance of, any claim, citation or
notice of any Governmental Actions.
(g) Reserved.
(h) Rent Roll. The Borrower has executed and delivered to the Lender a
Rent Roll for each Mortgaged Property. Each Rent Roll sets forth each and every
unit subject to a Lease as of the date of the Rent Roll. The information set
forth on the Rent Roll is true, correct and complete in all material respects as
of its date and there has occurred no material adverse change in the information
shown on the Rent Roll from the date of the Rent Roll to the Closing Date.
(i) Status of Landlord under Leases. Except for any assignment of
leases and rents which is a Permitted Lien or which is to be released in
connection with the consummation of the transactions contemplated by this
Agreement, the Borrower is the owner and holder of the landlord's interest under
each of the Leases of units in each Mortgaged Property and there are no prior
enforceable outstanding assignments of any such Lease, or any portion of the
rents, additional rents, charges, issues or profits due and payable or to become
due and payable thereunder. The Borrower has not granted any possessory interest
in any Mortgaged Property or right to occupy the same except under and pursuant
to provisions of existing Leases.
(j) Enforceability of Leases. The Borrower has delivered to the Lender
a true and correct copy of its current form of apartment Lease for the units in
each Mortgaged Property. The Borrower leases apartment units in each Mortgaged
Property in the ordinary course of its business. Each unit in each Mortgaged
Property that is not vacant and that has been leased by Borrower has been leased
pursuant to the Lease delivered to the Lender, with no material modifications
thereto, or pursuant to a previously used form that is not materially less
advantageous to the Borrower, except as disclosed in writing to the Lender. Each
Lease constitutes the legal, valid and binding obligation of the Borrower and,
to the knowledge of the Borrower, of each of the other parties thereto, and
except as disclosed in writing to the Lender, no notice of any default by the
Borrower which remains uncured has been delivered to Borrower by any tenant
under any Lease.
(k) No Lease Options. All premises demised to tenants under Leases for
the units in each Mortgaged Property are occupied by such tenants as tenants
only. No Lease contains any option to purchase, right of first refusal or any
other similar provision which is enforceable against the Borrower. No option to
purchase, right of first refusal or similar right which is enforceable against
the Borrower exists with respect to any Mortgaged Property.
(l) Insurance. The Borrower has delivered to the Lender certificates of
insurance currently in effect as of the date of this Agreement with respect to
each Mortgaged Property. Each such insurance policy complies in all respects
with the requirements set forth in the Security Documents. All insurance
premiums which have become due and payable have been paid.
47
<PAGE>
(m) Tax Parcels. Each Mortgaged Property is on one or more separate tax
parcels, and each such parcel or parcels is separate and apart from any other
property.
(n) Encroachments. Except as may be shown on the Survey for each
Mortgaged Property delivered to the Lender, none of the improvements located on
any Mortgaged Property encroaches upon the property of any other Person nor lies
outside of the boundaries and building restriction lines of such Mortgaged
Property and no improvement located on property adjoining any Mortgaged Property
lies within the boundaries of or in any way encroaches upon such Mortgaged
Property.
(o) Independent Unit. Except as otherwise disclosed by Borrower in
writing to Lender in connection with the application for the Term Loan, each of
the following statements in this Section 6.02(o) is true. Each Mortgaged
Property is an independent unit which does not rely on any drainage, sewer,
access, parking, structural or other facilities located on any property not
included in such Mortgaged Property or on public or utility easements for the
(a) fulfillment of any zoning, building code or other requirement of any
Governmental Authority that has jurisdiction over such Mortgaged Property, (b)
structural support or (c) the fulfillment of the requirements of any Lease or
other agreement affecting such Mortgaged Property. The Borrower, directly or
indirectly, has the right to use all amenities, easements, public or private
utilities, parking, access routes or other items necessary or currently used for
the operation of each Mortgaged Property. All public utilities are installed and
operating at each Mortgaged Property and all billed installation and connection
charges have been paid in full. Each Mortgaged Property is either (a) contiguous
to, or (b) benefits from an irrevocable unsubordinated easement permitting
access from such Mortgaged Property to a physically open, dedicated public
street, and has all necessary permits for ingress and egress and is adequately
serviced by public water, sewer systems and utilities. No building or other
improvement not located on any Mortgaged Property relies on any part of such
Mortgaged Property to fulfill any zoning requirements, building code or other
requirement of any Governmental Authority that has jurisdiction over such
Mortgaged Property for structural support or to furnish to such building or
improvement any essential building systems or utilities.
(p) Condition of Mortgaged Property. Except as otherwise disclosed by
Borrower in writing to Lender in connection with the application for the Term
Loan each of the following statements in this Section 6.02(p) is true. Each
Mortgaged Property is in good condition, order and repair, there exist no
structural or other material defects in any Mortgaged Property, whether latent
or otherwise, and the Borrower has not received notice from any insurance
company or bonding company of any defects or inadequacies in any Mortgaged
Property, or any part of it, which would adversely affect the insurability of
any Mortgaged Property or cause the imposition of extraordinary premiums or
charges for insurance or of any termination or threatened termination of any
policy of insurance or bond. To the best knowledge of the Borrower, no claims
have been made against any contractor, architect or other party with respect to
the condition of any Mortgaged Property or the existence of any structural or
other material defect therein. Each Mortgaged Property has not been materially
damaged by fire, or other casualty which damage has not been fully repaired or
for which insurance proceeds have not been received or are not expected to be
received except as disclosed in writing to Fannie Mae
48
<PAGE>
or the Lender; there are no proceedings pending for partial or total
condemnation of any Mortgaged Property except as disclosed in writing to Fannie
Mae or the Lender. No Mortgaged Property is under construction or substantial
rehabilitation.
(q) Title Insurance. The title insurance policy issued on the Closing
Date, relating to each Mortgaged Property and naming Fannie Mae as the insured
accurately reflects all liens and encumbrances known by the Borrower to exist
on, or which otherwise affect, each respective Mortgaged Property.
(r) Affiliate Contracts. Except for the contracts set forth on Schedule
6 attached hereto, the Borrower has not entered into any Contractual Obligation,
lease or other agreement with any Person that directly or indirectly controls,
is controlled by, or is under common control with, the Borrower for the
provision of any service, materials or supplies to any Mortgaged Property
(including, without limitation, any contract, Lease or agreement for the
provision of property management services, cable television services or
equipment, gas, electric or other utilities, security services or equipment,
parking services, laundry services or equipment or telephone services or
equipment).
(s) Commercial Leases. Except as disclosed on Schedule 7 attached
hereto, there are no commercial leases affecting any Mortgaged Property. Neither
the Borrower, the Key Principals the General Partner nor any Affiliate of the
Borrower, the Key Principals or the General Partner is an Affiliate or otherwise
related to the lessee under any cable television lease relating to any Mortgaged
Property.
SECTION 6.03 Representations and Warranties of the Lender. The Lender hereby
represents and warrants to the Borrower as follows:
(a) Due Organization. The Lender is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
(b) Power and Authority. The Lender has the requisite power and
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement.
(c) Due Authorization. The execution and delivery by the Lender of this
Agreement, and the consummation by it of the transactions contemplated thereby,
and the performance by it of its obligations thereunder, have been duly and
validly authorized by all necessary action and proceedings by it or on its
behalf.
ARTICLE VII
AFFIRMATIVE COVENANTS OF THE BORROWER
Each Borrower agrees and covenants with the Lender as follows:
49
<PAGE>
SECTION 7.01 [RESERVED.]
SECTION 7.02 Maintenance of Existence. Each Borrower shall maintain its
existence and continue to be a limited partnership or a general partnership (as
the case may be), organized and in good standing (if applicable) under the laws
of its respective state of organization and continue to be duly qualified to do
business in and shall remain in good standing (if applicable) in each state in
which any Mortgaged Property is located and in each other jurisdiction in which
such qualification and/or standing is necessary to the conduct of its business
and where the failure to be so qualified would adversely affect the validity,
the enforceability, or the ability of the Borrower to perform its obligations
under this Agreement and the other Loan Documents. Each General Partner shall
maintain its existence and continue to be a limited liability company organized
and in good standing under the laws of its respective state of organization, and
continue to be duly qualified to do business in and shall remain in good
standing in each jurisdiction in which such qualification and/or standing is
necessary to the conduct of its business and where the failure to be so
qualified would materially adversely affect the validity, the enforceability or
the ability of any Borrower to perform its obligations under this Agreement and
the other Loan Documents.
SECTION 7.03 [RESERVED.]
SECTION 7.04 Financial Statements; Accountants' Reports; Other Information. Each
Borrower shall keep and maintain at all times complete and accurate books of
account and records in sufficient detail to correctly reflect (x) all of their
own financial transactions and assets and (y) the results of the operation of
each Mortgaged Property and copies of all written contracts, Leases and other
material instruments which affect each Mortgaged Property (including bills,
invoices and contracts for electrical service, gas service, water and sewer
service, waste management service, telephone service and management services).
In addition, each Borrower shall furnish, or cause to be furnished, to the
Lender:
(a) Annual Financial Statements. As soon as available, and in any event
within 120 days after the close of each Borrower's fiscal year, the Borrowing
Agent shall deliver the balance sheets, statement of income, partners' equity
and retained earnings and statements of cash flow of each Borrower and each Key
Principal for such fiscal year, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date and period in
the prior fiscal year, prepared in accordance with GAAP, consistently applied,
and accompanied by a certificate of each Borrower (or each Borrower's
independent certified public accountants if requested by the Lender in its
discretion) to the effect that such financial statements have been prepared in
accordance with GAAP, consistently applied, and that such financial statements
fairly present the results of its operations and financial condition for the
periods and dates indicated, with such certification to be free of exceptions
and qualifications as to the scope of the audit or as to the going concern
nature of the business.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after each of the first three fiscal quarters of each
fiscal year, the unaudited
50
<PAGE>
balance sheet of each Borrower as of the end of such fiscal quarter, the
unaudited statement of income and retained earnings of each Borrower and the
unaudited statement of cash flows of each Borrower for the portion of the fiscal
year ended with the last day of such quarter, all in reasonable detail and
stating in comparative form the respective figures for the corresponding date
and period in the previous fiscal year, accompanied by a certificate of each
Borrower's Authorized Representative to the effect that such financial
statements have been prepared in accordance with GAAP, consistently applied, and
that such financial statements fairly present the results of its operations and
financial condition for the periods and dates indicated subject to year end
adjustments in accordance with GAAP.
(c) Quarterly Property Statements. As soon as available, and in any
event within 30 days after each Calendar Quarter, a statement of income and
expenses of each Mortgaged Property accompanied by a certificate of each
Borrower's Authorized Representative to the effect that each such statement of
income and expenses fairly presents the operations of each such Mortgaged
Property for the period indicated.
(d) Annual Property Statements. On an annual basis within one-hundred
twenty (120) days of the end of its fiscal year, an annual statement of income
and expenses of each Mortgaged Property accompanied by a certificate of each
Borrower's Authorized Representative to the effect that each such statement of
income and expenses fairly presents the operations of each such Mortgaged
Property for the period indicated. At Lender's request each Borrower shall
provide to Lender, at Borrower's expense, certified annual statements of income
and expenses of each Mortgaged Property prepared by an independent certified
public accountant satisfactory to the Lender.
(e) Updated Rent Rolls. Upon the Lender's request (but not more
frequently than quarterly), a current Rent Roll for each Mortgaged Property,
showing the name of each tenant, and for each tenant, the space occupied, the
lease expiration date, the rent payable, the rent paid and any other information
requested by the Lender and accompanied by a certificate of such Borrower's
Authorized Representative to the effect that the information set forth in such
Rent Roll is true and correct in all material respects as of its date and
contains all of the information as and when requested by the Lender.
(f) Security Deposit Information. Upon the Lender's request, an
accounting of all security deposits held in connection with any Lease of any
part of any Mortgaged Property, including the name and identification number of
the accounts in which such security deposits are held, the name and address of
the financial institutions in which such security deposits are held and the name
and telephone number of the person to contact at such financial institution,
along with any authority or release necessary for the Lender to access
information regarding such accounts.
(g) Securities Law Reporting Information. If, and for so long as, any
Borrower or any Key Principal is a reporting company under the Securities and
Exchange Act of 1934, promptly upon becoming available, (a) copies of all
financial statements, reports and proxy statements sent or made available
generally by Borrower or any Key Principal, or any of their
51
<PAGE>
Affiliates, to their respective security holders, (b) all regular and periodic
reports and all registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or a similar form) and prospectuses, if any,
filed by Borrower or any Key Principal, or any of their Affiliates, with the
Securities and Exchange Commission or other Governmental Authorities, and (c)
all press releases and other statements made available generally by Borrower or
any Key Principal, or any of their Affiliates, to the public concerning material
developments in the business of Borrower or other party.
(h) Accountants' Reports. Within 30 days after any Borrower's receipt,
copies of any reports or management letters submitted to any Borrower by its
independent certified public accountants in connection with the examination of
its financial statements made by such accountants (except for reports otherwise
provided pursuant to subsection (a) above).
(i) Business Plan. Promptly after finalization thereof, the Business
Plan of each Borrower for the year then in progress within 90 days after the end
of each calendar year.
(j) Complaints. Within 10 days after any Borrower's receipt, copies of
any complaint filed against any Borrower or any Mortgaged Property management
alleging any violation of fair housing law, handicap access or the Americans
with Disabilities Act and any final administrative or judicial dispositions of
such complaints.
(k) Asset Manager Reports. Promptly, after receipt, the reports
delivered by the Asset Manager under Section 4.4 and 5.2.1(a) of the Asset
Management Agreement as in effect as of the date hereof.
(l) [RESERVED.]
(m) Other Reports. Promptly upon receipt thereof, all schedules,
financial statements or other similar reports delivered by any Borrower pursuant
to the Loan Documents or requested by the Lender with respect to any Borrower's
business affairs or condition (financial or otherwise) or any of the Mortgaged
Properties.
(n) Certification. All certifications required to be delivered pursuant
to this Section 7.04 shall run directly to and be for the benefit of Lender and
Fannie Mae.
SECTION 7.05 Certificate of Compliance. Each Borrower shall deliver to the
Lender concurrently with the delivery of the financial statements and/or reports
required to be delivered pursuant to Section 7.04 (a) and (b) above a
certificate signed by its Authorized Representative or by it stating that, to
the best knowledge of such individual following reasonable inquiry, (i) no event
described in Section 7.08 has occurred or that notice has been given, and (ii)
no Event of Default or Potential Event of Default has occurred, or if an Event
of Default or Potential Event of Default has occurred, specifying the nature
thereof in reasonable detail and the action which Borrower is taking or proposes
to take with respect thereto. Any certificate required by this Section 7.05
shall run directly to and be for the benefit of Lender and Fannie Mae.
52
<PAGE>
SECTION 7.06 Maintain Licenses. Each Borrower shall procure and maintain in full
force and effect all licenses, Permits, charters and registrations which are
material to the conduct of its business and shall abide by and satisfy all terms
and conditions of all such licenses, Permits, charters and registrations.
SECTION 7.07 Access to Records; Discussions With Officers and Accountants. To
the extent permitted by law and in addition to the applicable requirements of
the Security Instruments, each Borrower shall permit the Lender:
(a) to inspect, make copies and abstracts of, and have reviewed or
audited, such of Borrower's books and records as may relate to the Obligations
or any Mortgaged Property;
(b) to discuss Borrower's affairs, finances and accounts with Senior
Management and, solely with respect to any information specific to any Mortgaged
Property, any site manager of such Mortgaged Property;
(c) to discuss Borrower's affairs, finances and accounts with its
independent public accountants, provided that Borrower's Authorized
Representative has been given the opportunity by the Lender to be a party to
such discussions; and
(d) to receive any other information that the Lender deems necessary or
relevant in connection with the Term Loan, any Loan Document, or the
Obligations.
Each Borrower shall maintain complete and accurate books and records
(i) reflecting all of its business affairs and transactions in accordance with
GAAP consistently applied and any applicable regulations, (ii) in sufficient
detail to correctly reflect the results of the operation of each Mortgaged
Property, and (iii) of all written contracts, leases and other instruments which
affect any Mortgaged Property (including but not limited to all bills, invoices
and contracts for electrical service, gas service, water and sewer service,
waste management service, telephone service and management services). Lender
shall have reasonable access to each Borrower's books and records and the books
and records relating to the transactions contemplated by the Loan Documents.
The books and records of each Borrower and the books and records
relating to the transactions contemplated by the provisions of the Loan
Documents shall be maintained at the address of the Borrowing Agent set forth in
Section 16.08 of this Agreement, unless any Borrower shall otherwise advise
Lender in writing.
Notwithstanding the foregoing, prior to an Event of Default or
Potential Event of Default, all inspections shall be conducted with prior notice
at reasonable times during normal business hours and during a Potential Event of
Default all such inspections shall be conducted with one day prior notice.
53
<PAGE>
SECTION 7.08 Inform the Lender of Material Events. Each Borrower shall promptly
inform the Lender in writing of any of the following (and shall deliver to the
Lender copies of any related written communications, complaints, orders,
judgments and other documents relating to the following) of which any member of
Senior Management has actual knowledge:
(a) Defaults. The occurrence of any Event of Default or any Potential
Event of Default under this Agreement or any other Loan Document;
(b) [RESERVED.];
(c) Legal Proceedings. The commencement or threat of, or amendment to,
any proceedings by or against any Borrower in any Federal, state or local court
or before any Governmental Authority, or before any arbitrator, which, if
adversely determined, would have, or at the time of determination may reasonably
be expected to have, a Material Adverse Effect;
(d) Bankruptcy Proceedings. The commencement of any proceedings by or
against any Borrower, any General Partner or any Key Principal under any
applicable bankruptcy, reorganization, liquidation, insolvency or other similar
law now or hereafter in effect or of any proceeding in which a receiver,
liquidator, trustee or other similar official is sought to be appointed for any
such party;
(e) Regulatory Supervision or Penalty. The receipt of notice from any
Governmental Authority having jurisdiction over any Borrower that (A) any
Borrower is being placed under regulatory supervision, (B) any license, Permit,
charter, membership or registration material to the conduct of any Borrower's
business or the Mortgaged Properties is to be suspended or revoked or (C) any
Borrower is to cease and desist any practice, procedure or policy employed by
it, as the case may be, in the conduct of its business, and such cessation would
have, or may reasonably be expected to have, a Material Adverse Effect;
(f) Environmental Claim. The receipt from any Governmental Authority or
other Person of any notice of violation, claim, demand, abatement, order or
other order or direction (conditional or otherwise) for any damage, including
personal injury (including sickness, disease or death), tangible or intangible
property damage, contribution, indemnity, indirect or consequential damages,
damage to the environment, pollution, contamination or other adverse effects on
the environment, removal, cleanup or remedial action or for fines, penalties or
restrictions, resulting from or based upon (a) the existence or occurrence, or
the alleged existence or occurrence, of a Hazardous Substance Activity or (b)
the violation, or alleged violation, of any Hazardous Materials Laws in
connection with any Mortgaged Property or any of the other assets of any
Borrower;
(g) Tax Audit. The receipt of notice from the Internal Revenue Service
or any state or local tax authority of any assessment relating to the tax
treatment of any Borrower as other than a partnership;
54
<PAGE>
(h) Trade Creditor Defaults. The failure of the Delaware Borrower to
pay any trade liabilities to any Persons pursuant to any Contractual Obligations
in an amount in excess of $500,000 in the aggregate or the failure of any other
Borrower to pay any trade liabilities to any Persons pursuant to any Contractual
Obligations in an amount in excess of $100,000 in the aggregate;
(i) Material Adverse Effects. The occurrence of any act, omission,
change or event which has a Material Adverse Effect subsequent to the date of
the most recent audited financial statements of any Borrower delivered by it
pursuant to Section 7.04;
(j) Accounting Changes. Any material change in any Borrower's
accounting policies or financial reporting practices;
(k) Change in Senior Management. Any change in the identity of any
member of Senior Management or any Key Principal.
SECTION 7.09 Single-Purpose Entities. Each Borrower shall at all times maintain
and conduct itself as a Single-Purpose entity.
SECTION 7.10 Inspection. Each Borrower shall permit any Person designated by the
Lender: (i) to make entries upon and inspections of the Mortgaged Properties;
and (ii) to otherwise verify, examine and inspect the amount, quantity, quality,
value and/or condition of, or any other matter relating to, any Mortgaged
Property; provided, however, that prior to an Event of Default or Potential
Event of Default, all such entries, examinations and inspections shall be
conducted with prior notice to the Borrower that owns the applicable Mortgaged
Property at reasonable times during normal business hours and during a Potential
Event of Default all such entries, examinations and inspections shall be
conducted with one day prior notice to the Borrower that owns the applicable
Mortgaged Property.
SECTION 7.11 Compliance with Applicable Laws. Each Borrower shall comply in all
material respects with all Applicable Laws now or hereafter affecting any
Mortgaged Property or any part of any Mortgaged Property or requiring any
alterations, repairs or improvements to any Mortgaged Property. Each Borrower
shall procure and continuously maintain in full force and effect, and shall
abide by and satisfy all material terms and conditions of all Permits. Borrower
shall be deemed to be in compliance with all Applicable Laws relating to and
despite the matters disclosed on Schedule 4 as required by the prior sentence
during the period in which and so long as Borrower completes the repairs
specified in Schedule 4 by May 1, 2000.
SECTION 7.12 Warranty of Title. Each Borrower shall warrant and defend (a) the
title to each Mortgaged Property and every part of each Mortgaged Property,
subject only to Permitted Liens, and (b) the validity and priority of the lien
of the applicable Loan Documents, subject only to Permitted Liens, in each case
against the claims of all Persons whatsoever.
SECTION 7.13 Defense of Actions. Each Borrower shall appear in and defend any
action or proceeding purporting to affect the security for this Agreement or the
rights or power of the
55
<PAGE>
Lender hereunder, and shall pay all reasonable out-of-pocket costs and expenses,
including the cost of evidence of title and reasonable attorneys' fees, in any
such action or proceeding in which the Lender may appear. If any Borrower fails
to perform any of the covenants or agreements contained in this Agreement, or if
any action or proceeding is commenced that is not diligently defended by it
which affects in any material respect the Lender's interest in any Mortgaged
Property or any part thereof, including eminent domain, code enforcement or
proceedings of any nature whatsoever under any Applicable Law, whether now
existing or hereafter enacted or amended, then the Lender may, but without
obligation to do so and without notice to or demand upon the Borrowing Agent or
the applicable Borrower and without releasing any Borrower from any Obligation,
make such appearances, disburse such sums and take such action as the Lender
deems necessary or appropriate to protect the Lender's interest, including
disbursement of attorney's fees, entry upon such Mortgaged Property to make
repairs or take other action to protect the security of said Mortgaged Property,
and payment, purchase, contest or compromise of any encumbrance, charge or lien
which in the judgment of the Lender appears to be prior or superior to the Loan
Documents. In the event (i) that any Security Instrument is foreclosed in whole
or in part or that any Loan Document is put into the hands of an attorney for
collection, suit, action or foreclosure, or (ii) of the foreclosure of any
mortgage, deed to secure debt, deed of trust or other security instrument prior
to or subsequent to any Security Instrument or any Loan Document in which
proceeding the Lender is made a party or (iii) of the bankruptcy of any Borrower
or any Key Principal or an assignment by any Borrower or Key Principal for the
benefit of their respective creditors, such Borrower or any Key Principal shall
be chargeable with and agrees to pay all reasonable out-of-pocket costs of
collection and defense, including actual attorneys' fees in connection therewith
and in connection with any appellate proceeding or post-judgment action involved
therein, which shall be due and payable together with all required service or
use taxes.
SECTION 7.14 Insurance Escrow. (a) So long as no Event of Default has occurred
and is continuing, Lender hereby waives the obligations of Borrower under
Section 7 of each Security Instrument with respect to the escrow of premiums for
insurance (the "Required Escrow Payments"). During any period in which the
obligation to pay the Required Escrow Payments has been waived pursuant to this
Section 7.14, each Borrower shall do one of the following:
(1) Each Borrower shall pay such insurance premiums directly to
the payee thereof and send to the Lender invoices and paid receipts,
or other documentation satisfactory to Lender, evidencing payment of
insurance premiums on the earlier of the date that such insurance is
due and payable or thirty (30) days prior to the expiration date of
the insurance policy, and shall include all such payments in its
monthly and annual property income and expense data; or
(2) at least 15 days prior to the expiration date of the
insurance policy (the "Expiring Policy") each Borrower shall provide
to Lender written proof that the expiration date of the Expiring
Policy has been extended by at least 30 days certified by the issuer
of the insurance policy. Then, at least 10 days before the original
expiration date (not the extended expiration date) of
56
<PAGE>
the Expiring Policy, each Borrower shall either (i) deliver to Lender
written proof certified by the issuer of the insurance policy that an
insurance policy replacing the Expiring Policy, or an extension of the
Expiring Policy, has been obtained, for a period of at least one year
after the original expiration date of the Expiring Policy (as
applicable, the "Renewal Policy"), and paid receipts or other
documentation establishing that it has paid its portion of the
insurance premium for the Renewal Policy or (ii) deliver an amount
equal to its portion of such insurance premium as reasonably
determined by the Lender (the "Deposit"). If any Borrower delivers the
Deposit to Lender, Lender shall hold the Deposit in a custodial
account meeting the requirements of the DUS Guide, and shall only
disburse the Deposit (plus interest) as follows:
(A) Whenever any Borrower delivers to Lender written proof
certified by the issuer of the insurance policy that the Renewal
Policy has been obtained and paid receipts or documentation
establishing that it has paid its portion of the insurance
premium, Lender shall disburse the Deposit (plus interest) to the
Borrowing Agent (unless Lender has already disbursed it pursuant
to paragraph (B) below) (the "Borrower Disbursement").
(B) If, at any time before any Borrower has delivered the
proof referred to in paragraph (A) above, the expiration date of
the Expiring Policy, as it may have been extended from time to
time according to certificates issued by the issuer to Lender, is
less than 30 days in the future, Lender may disburse the Deposit
(plus interest) to purchase the required insurance on behalf of
the Borrower (the "Purchase Event").
(b) Lender's waiver of the Required Escrow Payments shall, at the
option of Lender, be revoked upon the occurrence of any of the following events,
and each Borrower's obligations under Section 7 of the Security Instruments
shall immediately be reinstated:
(1) an Event of Default; or
(2) a Purchase Event; or
(3) a Borrower Disbursement has not taken place within three
months after original expiration date of the Expiring Policy; or
(4) any Borrower's failure to perform its obligations under
paragraph (1) and (2) of subsection (a); or
(5) any Borrower's failure to perform its obligations under
paragraph (1) of subsection (a) unless it performs its alternative
obligations under paragraph (2) of subsection (a).
57
<PAGE>
SECTION 7.15 ERISA. Each Borrower shall at all times remain in compliance in all
material respects with all applicable provisions of ERISA and similar
requirements of the PBGC.
SECTION 7.16 Loan Document Taxes. If any tax, assessment or Imposition (other
than a tax imposed on or measured by, the net income or capital (including
branch profits tax) of the Lender (or any transferee or assignee thereof,
including a participation holder)) ("Loan Document Taxes") is levied, assessed
or charged by the United States, or any State in the United States, or any
political subdivision or taxing authority thereof or therein upon any of the
Loan Documents or the obligations secured thereby, the interest of the Lender in
the Mortgaged Properties, or the Lender by reason of or as holder of the Loan
Documents, each Borrower shall pay all such Loan Document Taxes to, for, or on
account of the Lender (or provide funds to the Lender for such payment, as the
case may be) as they become due and payable and shall promptly furnish proof of
such payment to the Lender, as applicable. In the event of passage of any law or
regulation permitting, authorizing or requiring such Loan Document Taxes to be
levied, assessed or charged, which law or regulation in the opinion of counsel
to the Lender may prohibit each Borrower from paying the Loan Document Taxes to
or for the Lender, each Borrower shall enter into such further instruments as
may be permitted by law to obligate it to pay such Loan Document Taxes. In
addition, such Borrower shall pay all documentary stamp, recording, transfer,
mortgage, intangible or filing or other taxes or fees and any and all
liabilities with respect thereto, or resulting therefrom which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of or filing of record, recordation, release or discharge of, this
Agreement, the Security Instruments, or any other Loan Document. All amounts due
under this Section 7.16 shall be payable within 10 days after delivery of
written notice from the Lender to the Borrowing Agent unless a non-appealable
judicial order requires that any such payments must be made on an earlier date
in which case payment shall be made by such date on written demand therefor.
SECTION 7.17 Further Assurances. Each Borrower, at the request of the Lender,
shall execute and deliver and, if necessary, file or record such statements,
documents, agreements, UCC financing and continuation statements and such other
instruments and take such further action as the Lender from time to time may
request as reasonably necessary, desirable or proper to carry out more
effectively the purposes of this Agreement or any of the other Loan Documents or
to subject the Collateral to the lien and security interests of the Loan
Documents or to evidence, perfect or otherwise implement, to assure the lien and
security interests intended by the terms of the Loan Documents or in order to
exercise or enforce its rights under the Loan Documents.
SECTION 7.18 [RESERVED.]
SECTION 7.19 [RESERVED.]
SECTION 7.20 [RESERVED.]
58
<PAGE>
SECTION 7.21 Affiliate Contracts. Except as set forth on Schedule 6, each
Borrower shall not enter into any Contractual Obligation, lease or other
agreement with any person that directly or indirectly controls, is controlled
by, or is under common control with it for the provision of any service,
materials or supplies to any Mortgaged Property (including, without limitation,
any contract, lease or agreement for the provision of property management
services, cable television services or equipment, gas, electric or other
utilities, security services or equipment, parking services, laundry services or
equipment or telephone services or equipment).
SECTION 7.22 Manager; Management Fees. If any Manager is removed by Lender
pursuant to the terms and conditions of the Loan Documents, each Borrower agrees
to use commercially reasonable efforts to hire a new Manager on or prior to the
effective date of termination unless otherwise directed by Lender. Any new
Manager must be approved in writing by Lender prior to being hired which
approval shall be granted if Lender determines that such proposed Manager is
qualified in accordance with the criteria set forth in Section 701 of the DUS
Guide. The management agreement between the applicable Borrowers or Borrower and
the new Manager must be approved in writing by Lender and the applicable
Borrower or Borrowers and new Manager must execute and deliver to Lender a new
Assignment of Management Agreement. During any period in which any Mortgaged
Property is managed by a subsidiary of any Borrower or of any Affiliate of any
Borrower or any member of any Borrower, the management fee paid to such
management entity in respect of such Property shall not exceed the Maximum
Percentage of the Gross Revenues of such Property as specified on Exhibit A.
SECTION 7.23 [RESERVED.]
SECTION 7.24 [RESERVED.]
SECTION 7.25 Ownership of Mortgaged Properties. Each Borrower shall be the sole
owner of each of the Mortgaged Properties free and clear of any Liens other than
Permitted Liens.
SECTION 7.26 Post-Closing Requirements (a) Not later than March 1,
2000, (i) Borrower will deliver to Lender a Survey of each Initial Mortgaged
Property for which Borrower did not deliver a Survey on or before the Initial
Closing Date which Survey shall include, without limitation, a certification of
the Surveyor as set forth in paragraph 5 of the Surveyor's Certificate required
by the DUS Guide referencing the respective Title Insurance Policy delivered on
January 31, 2000 and (ii) the Title Company shall issue an endorsement to those
Title Insurance Policies relating to Mortgaged Properties where the legal
description in Schedule A (and Exhibit A attached thereto) of such Title
Insurance Policies does not conform with the legal description set forth in the
Survey with respect to such Mortgaged Properties, insuring that the legal
description contained in the Security Instruments relating to such Mortgaged
Properties is the same as the property described in Schedule A (and Exhibit A
attached thereto) of such Title Insurance Policy and as the property described
in such Survey (the "Survey Endorsement"). Borrower's failure to deliver any
such Survey or Survey Endorsement shall be an Event of Default. Lender agrees
that such an Event of Default relates solely to the
59
<PAGE>
Initial Mortgaged Properties for which the Surveys or Survey Endorsement are not
delivered and may be cured pursuant to the last paragraph of Section 11.01.
(b) After the Initial Closing Date, Borrower will deliver to Lender the
following good standing certificates or opinions of Borrower's local counsel:
(1) Not later than March 1, 2000 or March 15, 2000 with respect to the
state of Ohio (the "Initial Good Standing Deadline"), Borrowers will
deliver a good standing certificate with respect to the Delaware Borrower,
Texas Borrower and each General Partner of such Borrowers issued by the
secretary of state (or similar officer) of every state in which the
Delaware Borrower and the Texas Borrower owns a Mortgaged Property except
to the extent any such good standing certificate was delivered on or before
the Initial Closing Date (a "Missing Good Standing State").
(2) The Initial Good Standing Deadline in any Missing Good Standing
State will be extended through May 31, 2000 if Borrower's local counsel in
such Missing Good Standing State delivers, not later than the Initial Good
Standing Deadline, a legal opinion addressed to Lender to the effect that
the Delaware Borrower's failure, or the Texas Borrower's failure, or either
such Borrower's General Partner's failure, or all such failures, as the
case may be, to be duly qualified and in good standing in the state in
question will not (i) impair the legal right or ability of either such
Borrower (which will be represented by its General Partner) to employ legal
process in such state to evict a tenant of the Mortgaged Property in such
state for nonpayment of rent, or if it does impair that legal ability, such
impairment will end when such Borrower, or such Borrower's General Partner,
or both, as the case may be, becomes duly qualified and in good standing in
such state (including with respect to tenant defaults that occur before it
becomes duly qualified and in good standing), and (ii) impair the ability
of Lender to enforce the terms and provisions of the Loan Documents against
such Borrowers.
(3) Notwithstanding paragraph (1), no good standing certificate will
be required with respect to any such Borrower's General Partner in any
state in which local counsel delivers a legal opinion addressed to Lender
to the effect that such Borrower's General Partner is not required to be
qualified as a foreign corporation in such state or that the failure of
such Borrower's General Partner to be duly qualified and in good standing
in the state in question does not materially and adversely affect such
Borrower's General Partner or such Borrower.
ARTICLE VIII
NEGATIVE COVENANTS OF THE BORROWER
Each Borrower, with respect to itself, agrees and covenants with the
Lender that, at all times during the Term of this Agreement:
SECTION 8.01 Other Activities. Each Borrower shall not:
60
<PAGE>
(i) acquire any real or personal property other than any Mortgaged
Property and assets related to the operations and maintenance of any
Mortgaged Property or engage in any business or activity other than in
connection with the ownership, management and operation of any Mortgaged
Property;
(ii) amend, modify, supplement or waive any terms or provisions of
its Partnership Agreement without the prior written consent of Fannie Mae,
provided that such consent shall not be withheld, after request therefor,
if the proposed change is not inconsistent with the terms of the Loan
Documents, and will not have a Material Adverse Effect or result in a
Potential Event of Default or Event of Default;
(iii) use, or permit to be used, any Mortgaged Property for any uses
or purposes other than as a Multifamily Residential Property;
(iv) either directly or indirectly sell, transfer, exchange or
otherwise dispose of any of its assets except as permitted hereunder or by
each Mortgage;
(v) dissolve or liquidate in whole or in part (except that it is
understood that sales of Mortgaged Properties in accordance with the Loan
Documents and distribution of the resulting sales proceeds shall not be
regarded as dissolution or liquidation, even though the long-run effect
will be to result in the eventual dissolution or liquidation of any
Borrower); or
(vi) merge or consolidate with any Person.
SECTION 8.02 [RESERVED.]
SECTION 8.03 Zoning. No Borrower shall initiate or consent to any zoning
reclassification of any Mortgaged Property or seek any variance under any zoning
ordinance or use or permit the use of any Mortgaged Property in any manner that
could result in the use becoming a nonconforming use under any zoning ordinance
or any other applicable land use law, rule or regulation.
SECTION 8.04 Liens. No Borrower shall create, incur, assume or suffer to exist
any Lien on any Mortgaged Property or any part of any Mortgaged Property, except
the Permitted Liens.
SECTION 8.05 Sale. No Borrower shall sell, convey, transfer, assign or otherwise
relinquish any Mortgaged Property or any part of any Mortgaged Property or any
interest therein without the prior written consent of Lender, other than (a) as
may be permitted by the Loan Documents, or (b) to enter into Leases for units or
other space in any Mortgaged Property to any tenant in the ordinary course of
business.
SECTION 8.06 Indebtedness. No Borrower shall now or at any time in the future be
obligated with respect to Indebtedness other than (i) the Obligations, (ii)
obligations defined in subsection (c) of the definition of "Indebtedness" which
are capital leases permitted as Permitted Liens and (iii) payments owing under
the Contribution Agreement.
61
<PAGE>
SECTION 8.07 Principal Place of Business. No Borrower shall change its principal
place of business or the location of its books and records, each as set forth in
Section 6.01, without first giving 30 days' prior written notice to the Lender.
SECTION 8.08 [RESERVED]
SECTION 8.09 Condominiums. No Borrower shall submit any Mortgaged Property to a
condominium regime during the Term of this Agreement.
SECTION 8.10 Restrictions on Partnership Distributions. No Borrower shall make
any distributions of any nature or kind whatsoever to the owners of its
Ownership Interests as such if, at the time of such distribution, an Event of
Default has occurred and remains uncured.
ARTICLE IX
INDEMNIFICATION, LIABILITY AND OTHER MATTERS
SECTION 9.01 Indemnification. Each Borrower hereby releases the Lender, Fannie
Mae, the Servicer and their respective officers, directors, members,
shareholders, officials, agents, independent contractors and employees from, and
covenants and agrees to indemnify, hold harmless and defend the Lender, Fannie
Mae, the Servicer and their respective officers, members, directors,
shareholders, officials, agents, independent contractors and employees and each
of them (each an "indemnified party") from and against (a) any and all claims,
joint or several, by or on behalf of any person arising from any cause
whatsoever in connection with the transactions provided for in the Loan
Documents or otherwise in connection with each Mortgaged Property or the
execution or amendment of any document relating thereto; (b) any and all claims,
joint or several, arising from any cause whatsoever in connection with the
approval of the financing of any Mortgaged Property; (c) any and all claims,
joint or several, arising from any act or omission of any Borrower or any of its
agents, servants, employees or licensees, in connection with the Loan Documents
or any Mortgaged Property; (d) any certifications or representations made by any
person other than the party seeking indemnification in connection therewith and
the carrying out by any Borrower of any of the transactions contemplated by the
Loan Documents; (e) any and all claims arising in connection with the operations
of any Mortgaged Property, or the conditions, occupancy, use, possession,
conduct or management of work done in or about, or from the planning, design,
acquisition, installation or construction of, any Mortgaged Property or any part
of any Mortgaged Property or with respect to any act, event, condition or
circumstance in connection with any Mortgaged Property; (f) any and all losses,
claims, damages, liabilities or expenses, joint or several, arising out of or
connected with the exercise by the Lender, Fannie Mae, or the Servicer of their
respective powers or duties under any of the Loan Documents; (g) the misfeasance
or malfeasance of, or theft committed by any director, officer, employee,
partner or agent of any Borrower; (h) the violation by any Borrower of any
federal or state laws, rules or regulations relating to the maximum amount of
interest permitted to be received on account of the loan of money; (i)
representations or warranties of any Borrower contained in this Agreement, any
Loan Document
62
<PAGE>
or in any certificate furnished or delivered to the Lender, Fannie Mae or the
Servicer shall have been false when made; (j) any and all claims by any other
Person in connection with such Person having an interest in any Mortgaged
Property, other than with respect to a Permitted Lien; and (k) all reasonable
costs, counsel fees, expenses or liabilities incurred in connection with any
such claim or proceeding referred to in clause (a) through (j) above; provided,
however, that the foregoing indemnification shall not be effective to the extent
such damages are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of the indemnified party. In the event that any action or proceeding
is brought against any indemnified party with respect to which indemnity may be
sought hereunder, the Borrowers, upon written notice from the indemnified party
to the Borrowing Agent, shall assume the investigation and defense thereof,
including the employment of counsel selected by the Borrowing Agent but
reasonably acceptable to the indemnified party, and shall assume the payment of
all expenses related thereto, with full power to litigate, compromise or settle
the same in its sole discretion, provided that such indemnified party shall have
the right to review and approve or disapprove any such compromise or settlement.
Each indemnified party shall have the right, if such indemnified party shall
reasonably conclude in good faith that a conflict of interest exists, to employ
separate counsel in any such action or proceeding and participate in the
investigation and defense thereof, and the Borrowers shall pay the reasonable
fees and expenses of such separate counsel. In the event that an indemnified
party does not conclude that a conflict of interest exists and yet such party
prefers to employ separate counsel in such action or proceeding, it may do so at
its own cost and expense. If separate counsel are employed as described above,
the Borrowers and any such indemnified party agree to cooperate as may
reasonably be required in order to ensure the proper and adequate defense of any
such action, suit or proceeding, including, but not limited to, making available
to each other, and their counsel and accountants, all books and records relating
to such action, suit or proceeding. If any such counsel reasonably determines
that the rendering of such assistance will adversely affect the defense or
interests of its client, such counsel shall not be required to comply with the
terms of the immediately preceding sentence.
Notwithstanding any Transfer of any Mortgaged Property to another owner, the
Borrowers shall remain obligated to indemnify each indemnified party pursuant to
this Section with respect to acts occurring prior to the date of transfer of
legal title to such Mortgaged Property (irrespective of when a claim is actually
made).
SECTION 9.02 Survival. The indemnity provisions of Section 9.01 shall survive
the termination of this Agreement and foreclosure of any Security Instrument or
other disposition of any Mortgaged Property to the fullest extent permitted by
law. All amounts due under Section 9.01 shall be payable within 30 days after
delivery of written notice from Lender or Servicer to the Borrowing Agent unless
judicial order requires that any such payments must be made on an earlier date
in which case payment shall be made by such date on written demand therefor.
Notwithstanding anything to the contrary contained herein, any liability of a
Borrower (and any trustee or other person or persons winding up the affairs of
such Borrower pursuant to Section 17-803 of the Delaware Revised Limited
Partnership Act or the equivalent provisions of any other Applicable Law under
which a Borrower is organized) shall be deemed satisfied in full
63
<PAGE>
and fully discharged (and such Borrower and any partner, controlling Person or
Affiliate thereof shall be forever released) on (A) the date that is one year
after the Obligations are paid in full (the "Satisfaction Date"), or (B) solely
with respect to any claim or demand pending or threatened for environmental
liabilities that is actually known to such Borrower as of the Satisfaction Date,
the later to occur of (i) the date that is one year after the Satisfaction Date
or (ii) the date on which liquidation of such Borrower and final distribution of
the assets of such Borrower occurs pursuant to Section 17-804 of the Delaware
Revised Uniform Limited Partnership Act or the equivalent provisions of any
other Applicable Law under which a Borrower is organized.
SECTION 9.03 Liability of the Borrowers. The obligation of the Borrowers to make
any and all payments to Lender required by this Agreement shall not be subject
to diminution by set-off, recoupment, counterclaim (other than mandatory
counterclaims), abatement or otherwise.
SECTION 9.04 Lender, Fannie Mae and Servicer Not Liable. Neither the Lender,
Fannie Mae, the Servicer nor any of their respective officials, officers,
directors, members, shareholders, agents, independent contractors or employees
shall be responsible for or liable to any Borrower or any of its officials,
officers, directors, shareholders, members, partners, affiliates, independent
contractors or employees for (i) any act or omission of the Lender, Fannie Mae,
the Servicer or any other Person made in good faith with respect to the
validity, sufficiency, accuracy or genuineness of documents, or of any
endorsement(s) thereon (except for documents and endorsements provided by the
Lender, Fannie Mae or the Servicer, as applicable), even if such documents
should be in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (ii) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex,
telecopier or otherwise; (iii) for any loss or delay in the transmission or
otherwise of any document or draft required in order to make a Term Loan; and
(iv) for any consequences arising from causes beyond the control of the Lender,
Fannie Mae or the Servicer, as applicable. In furtherance and not in limitation
of the foregoing, the Lender (or Fannie Mae or the Servicer) may accept
documents that appear on their face to be valid and in order, without any
responsibility for further investigation. None of the above shall affect,
impair, or prevent the vesting of any rights or powers of the Lender, Fannie Mae
or the Servicer under this Agreement.
In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by the Lender, Fannie Mae or the
Servicer under or in connection with any Loan Document or any related
certificates or other documents, if taken or omitted in good faith, shall be
binding upon each Borrower and shall not put the Lender, Fannie Mae or the
Servicer under any resulting liability to any Borrower.
SECTION 9.05 WAIVERS AND CONSENTS. EACH BORROWER AGREES TO BE BOUND BY THIS
AGREEMENT AND, TO THE EXTENT PERMITTED BY LAW, (A) WAIVES AND RENOUNCES ANY AND
ALL REDEMPTION AND EXEMPTION RIGHTS AND THE BENEFIT OF ALL VALUATION AND
APPRAISAL PRIVILEGES AGAINST THE INDEBTEDNESS AND OBLIGATIONS EVIDENCED BY THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS OR BY ANY EXTENSION OR RENEWAL OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; (B) WAIVES
64
<PAGE>
PRESENTMENT AND DEMAND FOR PAYMENT, NOTICES OF NONPAYMENT AND OF DISHONOR,
PROTEST OF DISHONOR AND NOTICE OF PROTEST; (C) WAIVES ALL NOTICES IN CONNECTION
WITH THE DELIVERY AND ACCEPTANCE OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
AND ALL OTHER NOTICES IN CONNECTION WITH THE PERFORMANCE, DEFAULT OR ENFORCEMENT
OF THE PAYMENT OF ANY OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS EXCEPT AS REQUIRED BY THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS; (D)
AGREES THAT ITS LIABILITIES UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL NOT BE CONDITIONED ON THE LIABILITY OF ANY OTHER PERSON; AND (E) AGREES
THAT ANY CONSENT, WAIVER OR FORBEARANCE UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS WITH RESPECT TO AN EVENT SHALL OPERATE ONLY FOR SUCH EVENT AND NOT FOR
ANY SUBSEQUENT EVENT.
SECTION 9.06 WAIVER OF CLAIMS. IN ORDER TO INDUCE LENDER TO EXECUTE AND DELIVER
THE AGREEMENT, EACH BORROWER HEREBY REPRESENTS AND WARRANTS THAT IT HAS NO
CLAIMS, SET-OFFS OR DEFENSES AS OF THE CLOSING DATE IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR IN CONNECTION WITH ANY OF THE
OTHER LOAN DOCUMENTS. TO THE EXTENT ANY SUCH CLAIMS, SET-OFFS OR DEFENSES MAY
EXIST, WHETHER KNOWN OR UNKNOWN, THEY ARE EACH HEREBY WAIVED AND RELINQUISHED IN
THEIR ENTIRETY.
ARTICLE X
FEES
SECTION 10.01 Origination Fees. The Borrowers shall pay to the Lender an
origination fee ("Origination Fee") equal to the greater of (i) 1/2 of 1% of the
original principal amount of the Term Loan or (ii) $600,000. The Borrowers shall
pay the Origination Fee on the Initial Closing Date.
SECTION 10.02 [RESERVED.]
SECTION 10.03 Legal Fees and Expenses
(a) Legal Fees. The Borrowers shall pay, or reimburse the Lender for,
all out-of-pocket legal fees and expenses incurred by the Lender and by Fannie
Mae in connection with the preparation, review and negotiation of this Agreement
and any other Loan Documents executed on the date of this Agreement. On the date
of this Agreement, the Borrowers shall pay all such legal fees and expenses not
previously paid or for which funds have not been previously provided.
65
<PAGE>
(b) Fees and Expenses Associated with all Requests. With respect to all
Requests after the Closing Date, the Borrowers shall pay, or reimburse the
Lender for, all costs and expenses incurred by the Lender, including the
out-of-pocket legal fees and expenses incurred by the Lender in connection with
the preparation, review and negotiation of all documents, instruments and
certificates to be executed and delivered in connection with each Request, the
performance by the Lender of any of its obligations with respect to the Request,
the satisfaction of all conditions precedent to the Borrowers' rights or the
Lender's obligations with respect to the Request, and all transactions related
to any of the foregoing, including all other costs and expenses in connection
with a Request. The obligations of the Borrowers under this subsection shall be
absolute and unconditional, regardless of whether the transaction requested in
the Request actually occurs. The Borrowers shall pay such costs and expenses to
the Lender on the Closing Date or, as the case may be, after demand by the
Lender when the Lender determines that such Request will not close.
ARTICLE XI
EVENTS OF DEFAULT
SECTION 11.01 Events of Default. Each of the following events shall constitute
an "Event of Default" under this Agreement, whatever the reason for such event
and whether it shall be voluntary or involuntary, or within or without the
control of any Borrower, or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority:
(a) the occurrence of a default under any Loan Document beyond the cure
period, if any, set forth therein or the failure by any Key Principal to pay any
amount owing under a Key Principal Guaranty; or
(b) the failure by the Borrowers to pay when due any amount payable by
the Borrowers under the Note, any Security Instrument, this Agreement or any
other Loan Document including any fees, costs or expenses; or
(c) the failure by the Borrowers to pay any amounts due and owing under
Sections 16.03 hereof within five (5) days after the receipt of written notice
from the Lender that such amounts are due and owing; or
(d) any Borrower shall fail to observe or perform any term, covenant,
condition or agreement set forth in Sections 7.07, 7.08, 7.10, 7.14, 7.21, 7.22,
7.25, and 7.26 Article V and VIII; or
(e) any Borrower shall fail to observe or perform any term, covenant,
condition or agreement set forth in Section 7.02 within ten (10) days of
knowledge by any Borrower of such failure; or
66
<PAGE>
(f) the failure by any Borrower to perform or observe any covenant set
forth in Sections 7.04, 7.05, 7.09, 7.12 and 7.13 within ten (10) days after
receipt of notice from the Lender identifying such failure; or
(g) the failure by any Borrower to perform or observe any term,
covenant, condition or agreement set forth in this Agreement not specified in
paragraphs (a) though (f) above within thirty (30) days after receipt of notice
from the Lender identifying such failure; provided, however, that if such
failure shall be such that, in Lender's sole and exclusive judgment, it cannot
be corrected within such period, it shall not constitute an Event of Default if
such failure is correctable, in Lender's sole and exclusive judgment, without
resulting in a Material Adverse Effect and if corrective action is instituted by
any Borrower within such period and pursued diligently and in good faith, to
Lender's sole and exclusive satisfaction, until the failure is corrected, and
provided further that any such failure shall have been cured within 90 days of
receipt of notice of such failure; or
(h) any warranty, representation or other written statement made by or
on behalf of any Borrower, any General Partner or any Key Principal contained in
this Agreement, any other Loan Document or in any instrument furnished in
compliance with or in reference to any of the foregoing, is false or misleading
in any material respect on any date when made or deemed made; or
(i) failure by the Key Principal to maintain a Net Worth as defined in
and to the extent required under the Key Principal Guaranty, as applicable;
provided, however, such failure shall not be an Event of Default, if, within
thirty (30) days of knowledge by any Borrower of such failure, the Borrowing
Agent proposes to Lender one or more substitute "Key Principals" who have
executed a Key Principal Guaranty including the same Net Worth requirement and
otherwise identical to the existing Key Principal Guaranty in all material
respects (the effectiveness of which shall be conditioned on Lender's approval
of such substitute Key Principal) and the Lender shall have approved in its
discretion such substitute Key Principal within 60 days thereafter; or
(j) any Borrower or any General Partner or any Key Principal shall (A)
commence a voluntary case under the Federal bankruptcy laws (as now or hereafter
in effect), (B) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, debt
adjustment, winding up or composition or adjustment of debts, (C) consent to or
fail to contest in a timely and appropriate manner any petition filed against it
in an involuntary case under such bankruptcy laws or other laws, (D) apply for
or consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of a substantial part of its property, domestic or
foreign, (E) admit in writing its inability to pay, or generally not be paying,
its debts as they become due, (F) make a general assignment for the benefit of
creditors, (G) assert that any Borrower has no liability or obligations under
this Agreement or any other Loan Document to which it is a party; (H) take any
action for the purpose of effecting any of the foregoing; or (I) suffer an
attachment or other judicial seizure of
67
<PAGE>
any substantial portion of its assets or suffer an execution of a substantial
portion of its assets and such seizure is not discharged or released by bonding
or the posting of other security acceptable in form and substance to Lender
within thirty days; or (J) a case or other proceeding shall be commenced against
any Borrower or any General Partner or any Key Principal in any court of
competent jurisdiction seeking (x) relief under the Federal bankruptcy laws (as
now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts, or (y) the appointment of a trustee, receiver, custodian,
liquidator or the like of such Borrower, such General Partner or such Key
Principal, or of all or a substantial part of the property, domestic or foreign,
of such Borrower, such General Partner or such Key Principal and any such case
or proceeding shall continue undismissed or unstayed for a period of 60
consecutive calendar days, or any order granting the relief requested in any
such case or proceeding against such Borrower, such General Partner or such Key
Principal (including an order for relief under such Federal bankruptcy laws)
shall be entered; or
(k) if any provision of this Agreement or any other Loan Document or
the lien and security interest purported to be created hereunder or under any
Loan Document shall at any time for any reason cease to be valid and binding in
accordance with its terms on any Borrower or any General Partner, or any Key
Principal, as the case may be, or shall be declared to be null and void, or the
validity or enforceability hereof or thereof or the validity or priority of the
lien and security interest created hereunder or under any other Loan Document
shall be contested by any Borrower or any General Partner, or any Key Principal
seeking to establish the invalidity or unenforceability hereof or thereof, or
any Borrower, any General Partner, or any Key Principal, as the case may be,
shall deny that it has any further liability or obligation hereunder or
thereunder; or
(l) an event constituting an "Event of Default" under Article V;
(m) the failure by any Borrower to comply with any requirement of any
Governmental Authority within 30 days after written notice of such requirement
shall have been given to such Borrower by such Governmental Authority; provided
that, if action is commenced and diligently pursued by such Borrower within such
30 days, then such Borrower shall have an additional 30 days to comply with such
requirement; or
(n) a dissolution or liquidation for any reason (whether voluntary or
involuntary) of any Borrower; or
(o) any judgment against any Borrower, any attachment or other levy
against any portion of any Borrower's assets with respect to a claim or claims
in an amount in excess of $250,000 individually or $500,000 in the aggregate
remains unpaid, unstayed on appeal, undischarged, unbonded, not fully insured or
undismissed for a period of 60 days.
Notwithstanding anything to the contrary herein or in the other Loan Documents,
if an Event of Default shall occur hereunder or under another Loan Document
because a representation, warranty, affirmative covenant, negative covenant or
other provision hereunder or thereunder
68
<PAGE>
shall be breached or violated which in Lender's sole and exclusive judgment is
with respect to a particular Mortgaged Property (other than any misappropriation
of funds collected in respect thereof except for any misappropriation consisting
of (i) theft by an employee of a Manager that is not an Affiliate of any
Borrower or (ii) theft by an employee of a Manager or Asset Manager that is in
each case an Affiliate of any Borrower if all losses occasioned thereby are
fully covered by insurance), such Event of Default shall be deemed cured, upon
Borrowers' satisfaction of the conditions set forth in Article IV relating to
the release of such Mortgaged Property from the Collateral Pool within 30 days
of knowledge by the Borrower of the Event of Default. The existence of such cure
right by the Borrowers shall not in any way limit or restrict Lender's right to
exercise any and all remedies set forth in Article XII; provided, however, if
any Borrower releases such Mortgaged Property pursuant to the provisions of
Article IV as described in the preceding sentence and at the time of such
release no other Event of Default has occurred and is continuing, Lender shall
cease exercising its remedies and discontinue any proceedings it may have
initiated and the parties shall be restored to their former positions and rights
hereunder. Upon such payment and the satisfaction of the conditions set forth in
Article IV relating to the release of such Mortgaged Property, so long as no
other Event of Default shall have occurred and be continuing hereunder (other
than one that is simultaneously being cured pursuant to this paragraph), Lender
shall release all Liens on such Mortgaged Property.
ARTICLE XII
REMEDIES
SECTION 12.01 Remedies; Waivers. Upon the occurrence of an Event of Default, the
Lender may do any one or more of the following (without presentment, protest or
notice of protest, all of which are expressly waived by each Borrower):
(a) by written notice to the Borrowing Agent, to be effective upon
dispatch declare the principal of, and interest on, the Term Loan and all other
sums owing by the Borrowers to the Lender under any of the Loan Documents
forthwith due and payable, whereupon the principal of, and interest on, the Term
Loan and all other sums owing by the Borrowers to the Lender under any of the
Loan Documents will become forthwith due and payable.
(b) pursue any other remedies available to it under any of the Loan
Documents.
(c) pursue all remedies available to it at law or in equity, including
obtaining specific performance and injunctive relief.
(d) have access to and have the right to inspect, examine, have audited
and make copies of books and records and any and all accounts, data, and income
tax and other tax returns of each Borrower.
69
<PAGE>
(e) terminate contracts or employment arrangements providing for the
management or maintenance of the Property and terminate any obligation to make
Future Term Loans.
SECTION 12.02 Waivers; Rescission of Declaration. The Lender shall have the
right, to be exercised in its complete discretion, to waive any breach hereunder
(including the occurrence of an Event of Default), by a writing setting forth
the terms, conditions, and extent of such waiver signed by the Lender and
delivered to the Borrowing Agent. Unless such writing expressly provides to the
contrary, any waiver so granted shall extend only to the specific event or
occurrence which gave rise to the waiver and not to any other similar event or
occurrence which occurs subsequent to the date of such waiver.
SECTION 12.03 The Lender's Right to Protect Collateral and Perform Covenants and
Other Obligations. If any Borrower fails to perform the covenants and agreements
contained in this Agreement or any of the other Loan Documents, then the Lender
at the Lender's option may make such appearances, disburse such sums and take
such action as the Lender deems necessary, in its sole discretion, to protect
the Lender's interest, including (i) disbursement of attorneys' fees, (ii) entry
upon the Mortgaged Property to make repairs and replacements, (iii) procurement
of satisfactory insurance as provided in paragraph 5 of the Security Instrument
encumbering the Mortgaged Property, and (iv) if the Security Instrument is on a
leasehold, exercise of any option to renew or extend the ground lease on behalf
of the respective Borrower and the curing of any default of such Borrower in the
terms and conditions of the ground lease. Any amounts disbursed by the Lender
pursuant to this Section, with interest thereon, shall become additional
indebtedness of the Borrowers secured by the Loan Documents. Unless the
Borrowing Agent and the Lender agree to other terms of payment, such amounts
shall be immediately due and payable and shall bear interest from the date of
disbursement at the interest rate set forth in the Note unless collection from
the Borrowers of interest at such rate would be contrary to applicable law, in
which event such amounts shall bear interest at the highest rate which may be
collected from the Borrowers under applicable law. Nothing contained in this
Section shall require the Lender to incur any expense or take any action
hereunder.
SECTION 12.04 No Remedy Exclusive. Unless otherwise expressly provided, no
remedy herein conferred upon or reserved is intended to be exclusive of any
other available remedy, but each remedy shall be cumulative and shall be in
addition to other remedies given under the Loan Documents or existing at law or
in equity.
SECTION 12.05 No Waiver. No delay or omission to exercise any right or power
accruing under any Loan Document upon the happening of any Event of Default or
Potential Event of Default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient.
SECTION 12.06 No Notice. In order to entitle the Lender to exercise any remedy
reserved to the Lender in this Article, it shall not be necessary to give any
notice, other than such notice as
70
<PAGE>
may be required under the applicable provisions of this Agreement or any of the
other Loan Documents.
SECTION 12.07 Application of Payments. Except as otherwise expressly provided in
the Loan Documents, and unless applicable law provides otherwise, (i) all
payments received by the Lender from the Borrowers under the Loan Documents
shall be applied by the Lender against any amounts then due and payable under
the Loan Documents by the Borrowers, in any order of priority that the Lender
may determine and (ii) the Borrowers shall have no right to determine the order
of priority or the allocation of any payment it makes to the Lender.
SECTION 12.08 No Requirement of Tender of Performance. Nothing in this Agreement
shall require or be construed to require Lender to accept tender of performance
of any of the Borrowers' obligations under this Agreement after the expiration
of any time period set forth in this Agreement for the performance of such
obligations and the expiration of any applicable cure periods, if any.
ARTICLE XIII
RIGHTS OF FANNIE MAE
SECTION 13.01 [RESERVED.]
SECTION 13.02 Assignment of Rights. Each Borrower acknowledges and consents to
the assignment to Fannie Mae of all of the rights of the Lender under this
Agreement and all other Loan Documents, including the right and power to make
all decisions on the part of the Lender to be made under this Agreement and the
other Loan Documents, but Fannie Mae, by virtue of this assignment, shall not be
obligated to perform the obligations of Lender to fund the Term Loan under this
Agreement. The Servicer shall service the Term Loan.
SECTION 13.03 Release of Collateral. Each Borrower hereby acknowledges that,
after the assignment of Loan Documents contemplated in Section 13.02, the Lender
shall not have the right or power to effect a release of any Collateral pursuant
to Article IV. Each Borrower acknowledges that the Security Instruments provide
for the release of the Collateral under Article IV. Accordingly, no Borrower
shall look to the Lender for performance of any obligations set forth in Article
IV, but shall look solely to the party secured by the Collateral (i.e., Fannie
Mae) to be released for such performance. The Lender represents and warrants to
the Borrowers that the party secured by the Collateral shall be subject to the
release provisions contained in Article IV by virtue of the release provisions
in each Security Instrument.
SECTION 13.04 Replacement of Lender. At the request of Fannie Mae, the Borrowing
Agent and the Lender shall agree to the assumption by another
71
<PAGE>
lender designated by Fannie Mae, of all of the obligations of the Lender under
this Agreement and the other Loan Documents, and/or any related servicing
obligations, and, at Fannie Mae's option, the concurrent release of the Lender
from its obligations under this Agreement and the other Loan Documents, and/or
any related servicing obligations, and shall execute all releases, modifications
and other documents which Fannie Mae determines are necessary or desirable to
effect such assumption.
SECTION 13.05 Fannie Mae and Lender Fees and Expenses. Each Borrower agrees that
any provision providing for the payment of fees, costs or expenses incurred or
charged by the Lender pursuant to this Agreement shall be deemed to provide for
the Borrowers' payment of all fees, costs and expenses incurred or charged by
the Lender or Fannie Mae in connection with the matter for which fees, costs or
expenses are payable.
SECTION 13.06 Third-Party Beneficiary. Each Borrower hereby acknowledges and
agrees that Fannie Mae is a third party beneficiary of all of the
representations, warranties and covenants made by each Borrower to, and all
rights under this Agreement conferred upon, the Lender, and, by virtue of its
status as third-party beneficiary and/or assignee of the Lender's rights under
this Agreement, Fannie Mae shall have the right to enforce all of the provisions
of this Agreement against any and all of the Borrowers.
ARTICLE XIV
INSURANCE, REAL ESTATE TAXES
AND REPLACEMENT RESERVES
SECTION 14.01 Insurance and Real Estate Taxes. Each Borrower shall (unless
waived by Lender) establish funds for taxes, insurance premiums and certain
other charges for each Mortgaged Property to the extent required by Section 7(a)
of the Security Instrument for each Mortgaged Property.
SECTION 14.02 Replacement Reserves. Each of the Borrowers shall execute the
Replacement Reserve Agreement for the Mortgaged Properties and shall (unless
waived by the Lender) make all deposits for replacement reserves in accordance
with the terms of the Replacement Reserve Agreement.
ARTICLE XIV-A
CROSS-GUARANTY AND OTHER INTERBORROWER MATTERS
Section 14.01-A Cross-Guaranty. Each Borrower, on a joint and several
basis, hereby irrevocably guarantees to the Lender and its successors and
assigns, the full and prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of, all Obligations owed or hereafter
owing to the Lender by each other Borrower. In addition, each
72
<PAGE>
Borrower, on a joint and several basis, hereby irrevocably guarantees to Lender
the full and prompt payment when due, whether at maturity or earlier, by reason
of acceleration or otherwise, and at all times thereafter, of all amounts for
which each other Borrower would have been liable under Section 15.01(d) of the
Term Loan Agreement in respect of Section 18 of the Security Instruments, had it
not been for the termination of such other Borrower's obligations in respect
thereof pursuant to the last sentence of Section 18(o) of the Security
Instruments executed by such other Borrower. Each Borrower agrees that its
guaranty obligation hereunder is an unconditional guaranty of payment and
performance and not merely a guaranty of collection. The guaranty obligations of
each Borrower under this Article XIV-A shall not be subject to any counterclaim,
set-off, recoupment, deduction, cross-claim or defense based upon any claim any
Borrower may have against Lender or any other Borrower.
Section 14.02-A Waivers by Borrowers and Other Rights.
(a) The obligations of each Borrower under this Article XIV-A shall
survive any foreclosure proceeding, any foreclosure sale, any delivery of any
deed in lieu of foreclosure, and any release of record of the Security
Instruments. The obligations of each Borrower under this Article XIV-A shall be
performed without demand by the Lender and shall be unconditional irrespective
of the genuineness, validity, regularity or enforceability of this Agreement,
the Note, the Security Instruments, or any other Loan Document, and without
regard to any other circumstance which might otherwise constitute a legal or
equitable discharge of a surety or a guarantor. Each Borrower hereby waives the
benefit of all principles or provisions of law, statutory or otherwise, which
are or might be in conflict with the terms of this Article XIV-A and agrees that
its obligations shall not be affected by any circumstances, whether or not
referred to in this Article XIV-A, which might otherwise constitute a legal or
equitable discharge of a surety or a guarantor. Each Borrower hereby waives the
benefits of any right of discharge under any and all statutes or other laws
relating to guarantors or sureties and any other rights of sureties and
guarantors thereunder. Without limiting the generality of the foregoing, each
Borrower hereby waives, to the fullest extent permitted by law, diligence in
collecting the indebtedness of such Borrower to the Lender, any rights or
defenses based upon an offset by any Borrower against any obligation now or
hereafter owed to such Borrower by any other Borrower, presentment, demand for
payment, protest, all notices with respect to the Term Loan Agreement and the
Note which may be required by statute, rule of law or otherwise to preserve the
Lender's rights against such Borrower under this Article XIV-A, including notice
of acceptance, notice of any amendment of the Loan Documents, notice of the
occurrence of any default, potential Event of Default or Event of Default,
notice of intent to accelerate, notice of acceleration, notice of dishonor,
notice of foreclosure, notice of protest, and notice of the incurring by any
Borrower of any obligation or indebtedness. Each Borrower also waives, to the
fullest extent permitted by law, all rights to require the Lender to (a) proceed
against any Borrower or any other guarantor of Borrower's payment or performance
with respect to the Obligations, (b) if any Borrower or any guarantor is a
partnership, proceed against any General Partner of such Borrower or the
guarantor, (c) proceed against or exhaust any Collateral held by the Lender to
secure the repayment of the Obligations, or (d) pursue any other remedy it may
now or hereafter have against any Borrower or any General Partner of such
Borrower. It is agreed among each Borrower and Lender that all of the
73
<PAGE>
foregoing waivers and the other provisions of this Article XIV-A are of the
essence of the transaction contemplated by this Agreement and other Loan
Documents and that but for the provisions of this Article XIV-A and such waivers
the Lender would decline to enter into this Agreement.
(b) At any time or from time to time any number of times, without
notice to any Borrower in its capacity as guarantor and without affecting the
liability of any Borrower, (a) the time for payment of the principal of or
interest on the Term Loan may be extended or the Term Loan may be renewed in
whole or in part; (b) the time any Borrower's performance of or compliance with
any covenant or agreement contained in the Term Loan Agreement, the Note, the
Security Instruments or any other Loan Document, whether presently existing or
hereinafter entered into, may be extended or such performance or compliance may
be waived; (c) the maturity of the Term Loan may be accelerated as provided in
the Term Loan Agreement, the Note, the Security Instruments, or any other Loan
Document; (d) the Note, the Security Instruments, or any other Loan Document may
be modified or amended by Lender and Borrowers in any respect, including an
increase in the principal amount; and (e) and security for the Term Loan may be
modified, exchanged, surrendered or otherwise dealt with or additional security
may be pledged or mortgaged for the Term Loan.
(c) The obligations of the Borrowers under this Agreement shall be
absolute, unconditional and irrevocable and shall be paid and performed strictly
in accordance with the terms of this Agreement under all circumstances
whatsoever, including, without limitation, the following circumstances: (a) any
invalidity or unenforceability of any of the Loan Documents or any other
agreement or instrument related to the Loan Documents; (b) the existence of any
claim, set-off, defense or other right which any Borrower may have at any time
against Lender or any other Person, whether in connection with this Agreement,
any of the other Loan Documents, any Mortgaged Property, or any unrelated
transaction; (c) the surrender or impairment of any security for the performance
or observance of any of the agreements or terms of this Agreement or the other
Loan Documents; or (d) defect in title to any Mortgaged Property, any acts or
circumstances that may constitute failure of consideration, destruction of,
damage to or condemnation of any Mortgaged Property, commercial frustration of
purpose, or any change in the tax or other laws of the United States of America
or of the State or any political subdivision of either.
(d) The provisions of this Section 14.02-A(c) override all other
provisions of Sections 14.01-A and 14.02-A. Each Borrower to the extent it is
deemed a guarantor shall have the right to assert all defenses and counterclaims
that would have been available to it if it had been treated as a Borrower
(jointly and severally with the other Borrowers) instead of as a guarantor,
except for the following defenses, which each Borrower waives:
(a) any other Borrower's lack of legal capacity, the defense of ultra
vires, failure of due authorization or execution of any of the Loan
Documents and any similar defenses based on matters personal to any other
Borrower or any other Borrower's ability (or lack thereof) to enter into
and perform its obligations under the Loan Documents;
74
<PAGE>
(b) discharge of any other Borrower by reason of insolvency
proceedings or bankruptcy proceedings or any similar discharge by reason of
any of the events described in Section 11.01(j) of the Term Loan Agreement;
(c) usury;
(d) discharge of any other Borrower under an applicable statute of
limitations; and
(e) discharge of any other Borrower pursuant to the last sentence of
Section 18(o) of the Security Instruments executed by any other Borrower.
Section 14.03-A No Impairment. Each Borrower agrees that the provisions
of this Article XIV-A are for the benefit of the Lender and its successors,
transferees, endorsees and assigns, and nothing herein contained shall impair,
as between any other Borrower and the Lender, the obligations of such other
Borrower under the Loan Documents.
Section 14.04-A No Subrogation. No Borrower shall have the right of,
and hereby waives any claim for, subrogation, contribution, indemnity or
reimbursement (other than claims for contribution and indemnity under the
Contribution Agreement) against any other Borrower or any General Partner of any
other Borrower by reason of any payment by such Borrower under this Article
XIV-A, whether such right or claim arises at law or in equity or under any
contract (other than claims for contribution and indemnity under the
Contribution Agreement) or statute or otherwise, until the Obligations have been
paid in full and all the Loan Documents have been terminated.
Section 14.05-A [RESERVED].
Section 14.06-A Election of Remedies.
The Lender, in its discretion, may (a) bring suit against any one or
more of the Borrowers, jointly and severally, without any requirement that the
Lender first proceed against any other Borrower or any other Person; (b)
compromise or settle with any one or more of the Borrowers, or any other Person,
for such consideration as the Lender may deem proper; (c) release one or more of
the Borrowers, or any other Person, from liability; and (d) otherwise deal with
any Borrower and any other Person, or any one or more of them, in any manner, or
resort to any of the Collateral at any time held by it for performance of the
Obligations or any other source or means of obtaining payment of the
Obligations, and no such action shall impair the rights of the Lender to collect
from any Borrower any amount guaranteed by any Borrower under this Article
XIV-A. Nothing contained in this paragraph shall in any way affect or impair the
rights or obligations of any Borrower with respect to any other Borrower.
Section 14.07-A Subordination of Other Obligations.
75
<PAGE>
(a) Each Borrower hereby irrevocably and unconditionally agrees that
all amounts payable from time to time to such Borrower by any other Borrower
pursuant to any agreement (including the Contribution Agreement), whether
secured or unsecured, whether of principal, interest or otherwise, other than
the amounts referred to in this Article XIV-A (collectively, the "Subordinated
Obligations"), shall be and such rights, claims and indebtedness are, hereby
deferred, postponed and fully subordinated in time and right of payment to the
prior payment, performance and satisfaction in full of the Obligations;
provided, however, that payments may be received by any Borrower in accordance
with, and only in accordance with, the provisions of Section 14.07-A(b) hereof.
(b) Until the Obligations have been finally paid in full and all the
Loan Documents have been terminated, each Borrower irrevocably and
unconditionally agrees it will not ask, demand, sue for, take or receive,
directly or indirectly, by set-off, redemption, purchase or in any other manner
whatsoever, any payment with respect to, or any security or guaranty for, the
whole or any part of the Subordinated Obligations, and in issuing notes,
documents, instruments or agreements of any kind evidencing the Subordinated
Obligations, each Borrower hereby agrees that it will not receive any payment of
any kind on account of the Subordinated Obligations, so long as any of the
Obligations under the Loan Documents are outstanding or any of the terms and
conditions of any of the Loan Documents are in effect; provided, however, that,
notwithstanding anything to the contrary contained herein, if no Potential Event
of Default or Event of Default or any other event or condition which would
constitute an Event of Default after notice or lapse of time or both has
occurred and is continuing under the Loan Documents, then payments may be
received by such Borrower in respect of the Subordinated Obligations in
accordance with and provided that such Borrower and the other Borrowers make
such payment in full and strict compliance with the Contribution Agreement.
Except as aforesaid, each Borrower agrees not to accept any payment or
satisfaction of any kind of indebtedness of any other Borrower in respect of the
Subordinated Obligations and hereby assigns such rights or indebtedness to the
Lender, including the right to file proofs of claim and to vote thereon in
connection with any case under the Bankruptcy Code, including the right to vote
on any plan of reorganization. In the event that any payment on account of
Subordinated Obligations shall be received by any Borrower in violation of the
foregoing, such payment shall be held in trust for the benefit of the Lender,
and any amount so collected shall be turned over to the Lender upon demand for
application to the Obligations.
Section 14.08-A Insolvency and Liability of Other Borrowers. So long as
any of the Obligations are outstanding, if a petition under the Bankruptcy Code
is filed by or against any Borrower, the other Borrowers agree that Lender has
the right to file all claims against such Borrower in any bankruptcy or other
proceeding in which the filing of claims is required by law in connection with
indebtedness owed by such Borrower to the other Borrowers. In all such cases,
the Person or Persons authorized to pay such claims shall pay to the Lender the
full amount thereof and Lender agrees to pay such Borrower any amounts received
in excess of the amount necessary to pay the Obligations. Such Borrowers hereby
assign to the Lender, as additional Collateral, all of such Borrowers' rights to
all such payments to which such Borrowers would otherwise be entitled but not to
exceed the full amount of the Obligations. In the event that, notwithstanding
76
<PAGE>
the foregoing, any such payment shall be received by any Borrower before the
Obligations shall have been finally paid in full and all the Loan Documents have
been terminated, such payment shall be held in trust for the benefit of and
shall be paid over to the Lender upon demand. Furthermore, notwithstanding the
foregoing, the liability of each Borrower hereunder shall in no way be affected
by:
(a) the release or discharge of any other Borrower in any creditors',
receivership, bankruptcy or other proceedings; or
(b) the impairment, limitation or modification of the liability of any
other Borrower or the estate of any other Borrower in bankruptcy resulting
from the operation of any present or future provisions of the Bankruptcy
Code or other statute or from the decision in any court.
Section 14.09-A Preferences, Fraudulent Conveyances, Etc. If the Lender
is required to refund, or voluntarily refunds, any payment received from any
Borrower because such payment is or may be avoided, invalidated, declared
fraudulent, set aside or determined to be void or voidable as a preference,
fraudulent conveyance, impermissible setoff or a diversion of trust funds under
the bankruptcy laws or for any similar reason, including without limitation any
judgment, order or decree of any court or administrative body having
jurisdiction over any Borrower or any of its property, or upon or as a result of
the appointment of a receiver, intervenor, custodian or conservator of, or
trustee or similar officer for, any Borrower or any substantial part of its
property, or otherwise, or any statement or compromise of any claim effected by
the Lender with any Borrower or any other claimant (a "Rescinded Payment"), then
the other Borrowers' liability to the Lender shall continue in full force and
effect, or the other Borrowers' liability to the Lender shall be reinstated and
renewed, as the case may be, with the same effect and to the same extent as if
the Rescinded Payment had not been received by the Lender, notwithstanding the
cancellation or termination of any of the Loan Documents, and regardless of
whether the Lender contested the order requiring the return of such payment. In
addition, the other Borrowers shall pay, or reimburse the Lender for, all
expenses (including all reasonable attorneys' fees, court costs and related
disbursements) incurred by the Lender in the defense of any claim that a payment
received by the Lender in respect of all or any part of the Obligations must be
refunded. The provisions of this Section 14.09-A shall survive the termination
of the Loan Documents.
Section 14.10-A Maximum Liability of Each Borrower. Notwithstanding
anything contained in this Agreement or any of the Loan Documents to the
contrary, if the obligations of any Borrower under this Agreement or the other
Loan Documents exceed the limitations imposed under any Fraudulent Transfer Law
(as hereinafter defined), then such liability of such Borrower shall be limited
to a maximum aggregate amount equal to the largest amount that would not render
its obligations under this Agreement or the other Loan Documents subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any applicable provisions of comparable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after giving effect
to all other liabilities of such Borrower, contingent or otherwise, that
77
<PAGE>
are relevant under the Fraudulent Transfer Laws (specifically excluding,
however, any liabilities of such Borrower in respect of indebtedness to any
other Borrower or any other Person that is an Affiliate of the other Borrowers
to the extent that such indebtedness would be discharged in an amount equal to
the amount paid by such Borrower in respect of the Obligations) and after giving
effect (as assets) to the value (as determined under the applicable provisions
of the Fraudulent Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of such Borrower pursuant to applicable law or
pursuant to the terms of any agreement including the Contribution Agreement.
Section 14.11-A Liability Cumulative. The liability of each Borrower
under this Article XIV-A shall be cumulative with all liabilities of such
Borrower to the Lender under this Agreement and the other Loan Documents to
which such Borrower is a party or in respect of any Obligations of any other
Borrower.
ARTICLE XV
LIMITS ON PERSONAL LIABILITY
SECTION 15.01 Limits on Personal Liability.
(a) Except as otherwise provided in this Section 15.01, no Borrower nor
any partners of any Borrower or other persons owning any direct or indirect
interests in any Borrower shall have personal liability under this Agreement, or
any Loan Document for the repayment of the Obligations thereunder or for the
performance of any other obligations of any Borrower under the Agreement and the
Loan Documents, and Lender's only recourse for the satisfaction of the
Obligations and the performance of such other obligations shall be Lender's
exercise of its rights and remedies with respect to Mortgaged Properties and any
other collateral held by Lender as security for such Obligations. This
limitation on each Borrower's liability shall not limit or impair Lender's
enforcement of its rights against any guarantor of the Obligations or any
obligations of any Borrower.
(b) Each Borrower shall be personally liable to Lender for the
repayment of a portion of the Obligations equal to any loss or damage suffered
by Lender as a result of (1) failure of any Borrower to pay to Lender upon
demand after an Event of Default, all Rents to which Fannie Mae is entitled
under Section 3 of each Security Instrument and the amount of all security
deposits collected by any Borrower from tenants then in residence (net of all
prior disbursements therefrom pursuant to the applicable leases); or (2) failure
of any Borrower to apply all insurance proceeds and condemnation proceeds as
required by each Mortgage; or (3) failure of any Borrower to either deliver to
Lender upon written demand all books and records relating to any Mortgaged
Property after the occurrence and during the continuation of an Event of Default
or to permit Lender or its agents to audit any Borrower's books and records as
required by Section 14(d) of each Security Instrument; or (4) fraud or written
material misrepresentation by any Borrower, any Key Principal, or any officer,
director, partner, member or employee of any Borrower in connection with the
application for or creation of the Obligations or any request for any action or
consent by Lender; or (5) failure to apply Rents,
78
<PAGE>
first, to the payment of reasonable Operating Expenses (other than Mortgaged
Property management fees that are not currently payable pursuant to the term of
an Assignment of Management Agreement or any other agreement with Lender
executed in connection with this Agreement) and then to amounts ("Debt Service
Amounts") payable under this Agreement or any Loan Document, except in the case
of the foregoing clauses (1), (2) and (5) that the Borrowers will not be
personally liable (i) to the extent that the applicable Borrower lacks the legal
right to direct the disbursement of such sums or to deposit, apply or pay such
funds because of a bankruptcy, receivership or similar judicial proceeding, and
except to the extent such action by the applicable Borrower (a) would violate a
court order of a court of competent jurisdiction sought or obtained by a Person
unaffiliated with and not acting jointly or in concert with any Borrower or a
Key Principal or (b) is subject to a competing claim of a Person unaffiliated
with and not acting jointly or in concert with any Borrower or a Key Principal
(provided that no Borrower shall be relieved from liability hereunder as a
consequence of any such competing claim unless such Borrower has deposited the
disputed amount into a court of competent jurisdiction pursuant to a valid
interpleader or comparable action duly commenced), or (ii) with respect to Rents
that are distributed to any Borrower's partners if at the time of distribution
such Borrower has paid all Operating Expenses and Debt Service Amounts for the
previous months of the same calendar year in which the distribution is made; or
(6) any willful or wanton act of any Borrower which causes material damage to
any Mortgaged Property; or (7) distributions in violation of Section 8.10.
(c) Each Borrower shall become personally liable to Lender for the
repayment of all of the Obligations upon the occurrence of any of the following
Events of Default: (1) Any Borrower's acquisition of any property or operation
of any business not permitted by Section 33 of each Mortgage; or (2) a
Bankruptcy Event or (3) a Transfer that is an Event of Default under Article V
provided, however, if such Transfer arises from the grant of a leasehold
interest or the grant of an easement which fails to satisfy the requirements set
forth in Section 5.02, each Borrower shall not be personally liable to Lender
for repayment of all the Obligations if Borrower cures such Event of Default
within 30 days to Lender's satisfaction.
(d) Each Borrower shall be personally liable to Lender for full
recourse liability under any and all indemnification obligations contained in
Section 18 of each Mortgage.
(e) To the extent that any Borrower has personal liability under this
Section 15.01, Lender may exercise its rights against any Borrower personally
without regard to whether Lender has exercised any rights against any Mortgaged
Property or any other security, or pursued any rights against any guarantor, or
pursued any other rights available to Lender under the Loan Documents or
applicable law. For purposes of this Section 15.01, the term "Mortgaged
Property" shall not include any funds that (1) have been applied by any Borrower
as required or permitted by any Security Instrument prior to the occurrence of
the Event of Default, or (2) any Borrower was unable to apply as required or
permitted by such Security Instrument because of a bankruptcy, receivership or
similar judicial proceeding.
79
<PAGE>
ARTICLE XVI
MISCELLANEOUS PROVISIONS
SECTION 16.01 Counterparts. To facilitate execution, this Agreement may be
executed in any number of counterparts. It shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart, but it shall be
sufficient that the signature of, or on behalf of, each party, appear on one or
more counterparts. All counterparts shall collectively constitute a single
agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than the number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
SECTION 16.02 Amendments, Changes and Modifications. This Agreement may be
amended, changed, modified, altered or terminated only by written instrument or
written instruments signed by all of the parties hereto.
SECTION 16.03 Payment of Costs, Fees and Expenses. The Borrowers shall pay, on
demand, all fees, costs, charges or expenses (including the fees and expenses of
attorneys, accountants and other experts) incurred by the Lender in connection
with:
(a) Any amendment, consent or waiver to this Agreement or any of the
Loan Documents (whether or not any such amendments, consents or waivers are
entered into).
(b) [RESERVED.]
(c) The enforcement of, or preservation of rights or remedies under,
this Agreement or any other Loan Documents or in connection with the foreclosure
upon, sale of or other disposition of any Collateral granted pursuant to the
Loan Documents.
(d) The reasonable fees and disbursements of Lender's counsel and
accountants, including fees and expenses relating to any collection,
disbursement or application of insurance or condemnation awards, proceeds,
damages or other payments including, without limitation, all costs incurred in
connection with the application of insurance or condemnation awards to restore
or repair any Property, including, reasonable appraiser fees.
Any attorneys' fees and expenses payable by the Borrowers pursuant to this
Section shall be recoverable separately from and in addition to any other amount
included in such judgment, and such obligation is intended to be severable from
the other provisions of this Agreement and to survive and not be merged into any
such judgment. Any amounts payable by the Borrowers pursuant to this Section,
with interest thereon if not paid when due, shall become additional indebtedness
of the Borrowers secured by the Loan Documents. Such amounts shall bear interest
from the date such amounts are due until paid in full at the interest rate
applicable to the Term Loan unless collection from the Borrowers of interest at
such rate would be contrary to applicable law, in which event such amounts shall
bear interest at the highest rate which may be collected from the Borrowers
under applicable law. The provisions of this Section are
80
<PAGE>
cumulative with, and do not exclude the application and benefit to the Lender
of, any provision of any other Loan Document relating to any of the matters
covered by this Section.
SECTION 16.04 Payment Procedure. All payments to be made to the Lender pursuant
to this Agreement or any of the Loan Documents shall be made in lawful currency
of the United States of America and in immediately available funds by wire
transfer to an account designated by the Lender before 1:00 p.m. (Washington,
D.C. time) on the date when due.
SECTION 16.05 Payments on Business Days. In any case in which the date of
payment to the Lender or the expiration of any time period hereunder occurs on a
day which is not a Business Day, then such payment or expiration of such time
period need not occur on such date but may be made on the next succeeding
Business Day with the same force and effect as if made on the day of maturity or
expiration of such period, except that interest shall continue to accrue for the
period after such date to the next Business Day.
SECTION 16.06 CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
NOTWITHSTANDING ANYTHING IN THE NOTE, THE SECURITY DOCUMENTS OR ANY OF THE OTHER
LOAN DOCUMENTS TO THE CONTRARY, EACH OF THE TERMS AND PROVISIONS, AND RIGHTS AND
OBLIGATIONS OF EACH BORROWER UNDER THE NOTE, AND UNDER THE OTHER LOAN DOCUMENTS,
SHALL BE GOVERNED BY, INTERPRETED, CONSTRUED AND ENFORCED PURSUANT TO AND IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (EXCLUDING THE LAW APPLICABLE
TO CONFLICTS OR CHOICE OF LAW) EXCEPT TO THE EXTENT OF PROCEDURAL AND
SUBSTANTIVE MATTERS RELATING ONLY TO (1) THE CREATION, PERFECTION AND
FORECLOSURE OF LIENS AND SECURITY INTERESTS, AND ENFORCEMENT OF THE RIGHTS AND
REMEDIES, AGAINST THE MORTGAGED PROPERTIES, WHICH MATTERS SHALL BE GOVERNED BY
THE LAWS OF THE JURISDICTION IN WHICH THE MORTGAGED PROPERTY IS LOCATED AND (2)
THE PERFECTION, THE EFFECT OF PERFECTION AND NON-PERFECTION AND FORECLOSURE OF
DEPOSIT ACCOUNTS, WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE
JURISDICTION IN WHICH THE DEPOSIT ACCOUNT IS LOCATED. EACH BORROWER AGREES THAT
ANY CONTROVERSY ARISING UNDER OR IN RELATION TO THE NOTE, THE SECURITY DOCUMENTS
OR ANY OTHER LOAN DOCUMENT SHALL BE, EXCEPT AS OTHERWISE PROVIDED HEREIN,
LITIGATED IN THE STATE OF NEW YORK. THE LOCAL AND FEDERAL COURTS AND AUTHORITIES
WITH JURISDICTION IN THE STATE OF NEW YORK SHALL, EXCEPT AS OTHERWISE PROVIDED
HEREIN, HAVE JURISDICTION OVER ALL CONTROVERSIES WHICH MAY ARISE UNDER OR IN
RELATION TO THE LOAN DOCUMENTS, INCLUDING THOSE CONTROVERSIES RELATING TO THE
EXECUTION, JURISDICTION, BREACH, ENFORCEMENT OR COMPLIANCE WITH THE NOTE, THE
SECURITY DOCUMENTS OR ANY OTHER ISSUE ARISING UNDER, RELATING TO, OR IN
CONNECTION WITH ANY OF THE LOAN DOCUMENTS. EACH BORROWER IRREVOCABLY CONSENTS TO
SERVICE, JURISDICTION, AND VENUE OF SUCH COURTS FOR ANY LITIGATION ARISING FROM
THE NOTE,
81
<PAGE>
THE SECURITY DOCUMENTS OR ANY OF THE OTHER LOAN DOCUMENTS, AND WAIVES ANY OTHER
VENUE TO WHICH IT MIGHT BE ENTITLED BY VIRTUE OF DOMICILE, HABITUAL RESIDENCE OR
OTHERWISE. EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE LOAN DOCUMENTS, IN THE STATE
OF NEW YORK OR FEDERAL COURT. EACH BORROWER HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF ANY INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. EACH BORROWER
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 16.08. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. NOTHING
CONTAINED HEREIN, HOWEVER, SHALL PREVENT THE LENDER FROM BRINGING ANY SUIT,
ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS AGAINST ANY BORROWER, AND AGAINST
THE COLLATERAL IN ANY OTHER JURISDICTION. INITIATING SUCH SUIT, ACTION OR
PROCEEDING OR TAKING SUCH ACTION IN ANY OTHER JURISDICTION SHALL IN NO EVENT
CONSTITUTE A WAIVER OF THE AGREEMENT CONTAINED HEREIN THAT THE LAWS OF THE STATE
OF NEW YORK SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF EACH BORROWER AND THE
LENDER AS PROVIDED HEREIN OR THE SUBMISSION HEREIN BY EACH BORROWER TO PERSONAL
JURISDICTION WITHIN THE STATE OF NEW YORK. EACH BORROWER (I) COVENANTS AND
AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING UNDER ANY
OF THE LOAN DOCUMENTS TRIABLE BY A JURY AND (II) WAIVES ANY RIGHT TO TRIAL BY
JURY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST. THIS WAIVER
IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH
THE RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. FURTHER, EACH BORROWER HEREBY
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF LENDER (INCLUDING, BUT NOT LIMITED
TO, LENDER'S COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO SUCH BORROWER
THAT LENDER WILL NOT SEEK TO ENFORCE THE PROVISIONS OF THIS SECTION. THE
FOREGOING PROVISIONS WERE KNOWINGLY, WILLINGLY AND VOLUNTARILY AGREED TO BY EACH
BORROWER UPON CONSULTATION WITH INDEPENDENT LEGAL COUNSEL SELECTED BY SUCH
BORROWER'S FREE WILL.
SECTION 16.07 Severability. In the event any provision of this Agreement or in
any other Loan Document shall be held invalid, illegal or unenforceable in any
jurisdiction, such provision will be severable from the remainder hereof as to
such jurisdiction and the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired in any jurisdiction.
82
<PAGE>
SECTION 16.08 Notices.
(a) Manner of Giving Notice. Each notice, direction, certificate or
other communication hereunder (in this Section referred to collectively as
"notices" and singly as a "notice") which any party is required or permitted to
give to the other party pursuant to this Agreement shall be in writing and shall
be deemed to have been duly and sufficiently given if:
(1) personally delivered with proof of delivery thereof (any notice so
delivered shall be deemed to have been received at the time so delivered);
(2) sent by Federal Express (or other similar overnight courier)
designating morning delivery (any notice so delivered shall be deemed to
have been received on the Business Day it is delivered by the courier);
(3) sent by United States registered or certified mail, return receipt
requested, postage prepaid, at a post office regularly maintained by the
United States Postal Service (any notice so sent shall be deemed to have
been received on the Business Day it is delivered); or
(4) sent by telecopier or facsimile machine which automatically
generates a transmission report that states the date and time of the
transmission, the length of the document transmitted, and the telephone
number of the recipient's telecopier or facsimile machine (to be confirmed
with a copy thereof sent in accordance with paragraphs (1), (2) or (3)
above within two Business Days) (any notice so delivered shall be deemed to
have been received (i) on the date of transmission, if so transmitted
before 5:00 p.m. (local time of the recipient) on a Business Day, or (ii)
on the next Business Day, if so transmitted on or after 5:00 p.m. (local
time of the recipient) on a Business Day or if transmitted on a day other
than a Business Day);
addressed to the parties as follows:
As to any Borrower, to the Borrowing Agent:
WXI/MCN Multifamily Real Estate Limited Partnership
100 Crescent Court
Suite 1000
Dallas, TX 75201
Telecopy: (214) 855-6305
Attn: Doug Gunn
83
<PAGE>
with a copy to:
WXI/MCN Multifamily Real Estate Limited Partnership
85 Broad Street, 19th Floor
New York, NY 10004
Telecopy: (212) 357-5505
Attn: Chief Financial Officer
with a copy to:
WXI/MCN Multifamily Real Estate Limited Partnership
c/o Archon Group, L.P.
600 East Las Colinas Boulevard
Suite 400
Irving, TX 75039
Telecopy: (972) 368-3698
Attn: Elizabeth W. Lambert
with a copy to:
Arent Fox Kintner Plotkin & Kahn PLLC
1050 Connecticut Avenue, NW
Washington, DC 20036-5339
Telecopy: (202) 857-6395
Attn: Alan S. Dubin, Esq.
As to the Lender:
AMRESCO Capital, L.P.
700 North Pearl, Suite 2400, LB #342
Dallas, TX 75201-7424
Attn: Vice President, Multifamily Finance
Telecopy: (214) 720-1505
with a copy to:
AMRESCO Capital, L.P.
c/o AMRESCO Services, L.P.
245 Peachtree Center Avenue. N.E., Suite 1800
Atlanta, GA 30303-1231
Attn: Vice President, Loan Servicing
Phone: (800) 982-0692 or (404) 654-2418
Fax: (404) 654-2623
84
<PAGE>
with a copy to:
AMRESCO Capital, L.P.
700 North Pearl, Suite 2400, LB #342
Dallas, TX 75201-7424
Attn: General Counsel
Telecopy: (214) 999-7495
As to Fannie Mae:
Fannie Mae
3939 Wisconsin Avenue, N.W.
Washington, D.C. 20016-2899
Telecopy: (202) 752-5016
Attn: Vice President for Multifamily Asset Management
with a copy to:
Torys
237 Park Avenue
New York, NY 10017
Telecopy: (212) 682-0200
Attn: David L. Dubrow, Esq.
As to any Trustee to a Security Instrument:
to the address that is
indicated on page one of each
Security Instrument for each
Mortgaged Property
(b) Change of Notice Address; Refusal. Any party may, except in the
case of the Borrowers with respect to their designation of the Borrowing Agent
as the agent for the receipt of notices, by notice given pursuant to this
Section, change the person or persons and/or address or addresses, or designate
an additional person or persons or an additional address or addresses, for its
notices, but notice of a change of address shall only be effective upon receipt.
Each party agrees that it shall not refuse or reject delivery of any notice
given hereunder, that it shall acknowledge, in writing, receipt of the same upon
request by the other party and that any notice rejected or refused by it shall
be deemed for all purposes of this Agreement to have been received by the
rejecting party on the date so refused or rejected, as conclusively established
by the records of the U.S. Postal Service, the courier service or facsimile.
Lender and the Borrowers agree that if Lender is obligated to send a notice to
the Borrowing Agent under this Agreement, Lender shall endeavor to send a copy
to the other parties set forth above at the addresses specified above; provided,
however, any failure on the part of Lender to send such copies of any
85
<PAGE>
notices shall not render invalid or otherwise affect the validity of any such
notice to the Borrowers properly delivered thereunder.
SECTION 16.09 Further Assurances and Corrective Instruments.
(a) Further Assurances. To the extent permitted by law, the parties
hereto agree that they shall, from time to time, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such supplements
hereto and such further instruments as the Lender or the Borrowing Agent may
request and as may be required in the reasonable opinion of the Lender or its
counsel to effectuate the intention of or facilitate the performance of this
Agreement or any Loan Document.
(b) Further Documentation. Without limiting the generality of
subsection (a), in the event any further documentation or information is
required by the Lender to correct patent mistakes in the Loan Documents,
materials relating to the Title Insurance Policies or the funding of the Term
Loan, the Borrowers shall provide, or cause to be provided to the Lender, at
their cost and expense, such documentation or information. The Borrowers shall
execute and deliver to the Lender such documentation, including any amendments,
corrections, deletions or additions to the Notes, the Security Instruments or
the other Loan Documents as is reasonably required by the Lender.
SECTION 16.10 Term of this Agreement. This Agreement shall continue in effect
until the Termination Date.
SECTION 16.11 Assignments; Third-Party Rights. No Borrower shall assign this
Agreement, or delegate any of its obligations hereunder, without the prior
written consent of the Lender. The Lender may assign its rights and obligations
under this Agreement separately or together, without any Borrower's consent,
only to Fannie Mae, but may not delegate its obligations under this Agreement
unless required to do so pursuant to Section 13.04.
SECTION 16.12 Headings. Article and Section headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 16.13 General Interpretive Principles. For purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
(i) the terms defined in Article I, Section 5.04, and elsewhere in this
Agreement have the meanings assigned to them in this Agreement and include the
plural as well as the singular, and the use of any gender herein shall be deemed
to include the other genders; (ii) accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP; (iii) references
herein to "Articles," "Sections," "subsections," "paragraphs" and other
subdivisions without reference to a document are to designated Articles,
Sections, subsections, paragraphs and other subdivisions of this Agreement; (iv)
a reference to a subsection without further reference to a Section is a
reference to such subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to paragraphs and other
subdivisions; (v) a reference to an Exhibit or a
86
<PAGE>
Schedule without a further reference to the document to which the Exhibit or
Schedule is attached is a reference to an Exhibit or Schedule to this Agreement;
(vi) the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular provision; and
(vii) the word "including" means "including, but not limited to."
SECTION 16.14 Interpretation. The parties hereto acknowledge that each party and
their respective counsel have participated in the drafting and revision of this
Agreement and the Loan Documents. Accordingly, the parties agree that any rule
of construction which disfavors the drafting party shall not apply in the
interpretation of this Agreement and the Loan Documents or any amendment or
supplement or exhibit hereto or thereto.
SECTION 16.15 [RESERVED.]
SECTION 16.16 Survival of Representation and Warranties. All statements
contained in any Loan Document, or in any certificate, financial statement or
other instrument delivered by or on behalf of any Borrower (but excluding any
certificates delivered by any Persons formerly in control of a Borrower)
pursuant to or in connection with this Agreement (including but not limited to
any such statement made in or in connection with any amendment hereto or
thereto) shall constitute representations and warranties made under this
Agreement. All representations and warranties made under this Agreement (i)
shall be made and shall be true at and as of the date of this Agreement and (ii)
shall survive the execution and delivery of this Agreement, regardless of any
investigation made by Lender or on its behalf.
SECTION 16.17 Decisions in Writing. Any approval, designation, determination,
selection, action or decision of the Lender must be in writing to be effective.
SECTION 16.18 Closing Date. The parties agree that this Agreement is dated as of
the date first above written for the convenience of the parties, and agree that
it shall be effective on, from and after, and all representations and warranties
shall be made as of January 31, 2000.
[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]
87
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BORROWERS:
WXI/MCN MULTIFAMILY REAL ESTATE
LIMITED PARTNERSHIP, a Delaware
limited partnership
By: WXI/MCN Multifamily Gen-Par,
L.L.C., a Delaware limited
liability company, its General
Partner
By: WXI/McN Realty L.L.C.,
a Delaware limited liability
company, its Managing Member
By:
---------------------------
Name:
----------------------
Title:
---------------------
BRENDON WAY FUND XII ASSOCIATES, an
Indiana general partnership
By: WXI/MCN Gen-Par II, L.L.C., a
Delaware limited liability company,
its General Partner
By: WXI/McN Realty L.L.C.,
a Delaware limited liability
company, its Managing Member
By:
---------------------------
Name:
----------------------
Title:
---------------------
CASTLE BLUFF FUND XII ASSOCIATES L.P.,
a Texas limited partnership
By: Castle Bluff Corporation, a Texas
corporation, its General Partner
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
S-1
<PAGE>
EMBARCADERO ASSOCIATES, a Georgia
general partnership
By: WXI/MCN Gen-Par I, L.L.C., a
Delaware limited liability company,
its General Partner
By: WXI/McN Realty L.L.C., a
Delaware limited liability
company, its Managing Member
By:
---------------------------
Name:
----------------------
Title:
---------------------
S-2
<PAGE>
LENDER:
AMRESCO CAPITAL, L.P., a Delaware
limited partnership
By: AMRESCO Mortgage Capital, Inc.,
a Delaware corporation
Its: Sole General Partner
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
S-3
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
SCHEDULE OF MORTGAGED PROPERTIES
INITIAL MORTGAGED PROPERTY BORROWER MAXIMUM PERCENTAGE
-------------------------- -------- ------------------
(for purposes of
Section 7.22)
<S> <C> <C>
1. Berkley Hills Apartments, Madison, TN............. WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
2. Brendon Way Apartments, Indianapolis, IN.......... Brendon Way Fund XII Associates 3.50%
3. Castle Bluff Apartments, Kentwood, MI............. Castle Bluff Fund XII Associates 4.00%
L.P.
4. Cedar Run Apartments, Lexington, KY............... WXI/MCN Multifamily Real Estate 4.50%
Limited Partnership
5. Embarcadero Club Apartments, College Park, GA..... Embarcadero Associates 4.00%
6. Fairfax Apartments, Tallahassee, FL............... WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
7. Forest Park Village Apartments, Columbus, OH...... WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
8. Harbour Club I Apartments, Belleville, MI......... WXI/MCN Multifamily Real Estate 3.25%
Limited Partnership
9. Harbour Club II Apartments, Belleville, MI........ WXI/MCN Multifamily Real Estate 3.25%
Limited Partnership
10. Harbour Club III Apartments, Belleville, MI....... WXI/MCN Multifamily Real Estate 3.25%
Limited Partnership
11. Heather Square Apartments, Dallas, TX............. WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
12. Knollwood Apartments, Kansas City, MO............. WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
13. Pennbrook Place Apartments, Dallas, TX............ WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
14. Pine Hills Apartments, Livingston, TX............. WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
15. Regency Park Apartments, Fort Wayne, IN........... WXI/MCN Multifamily Real Estate 4.25%
Limited Partnership
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
INITIAL MORTGAGED PROPERTY BORROWER MAXIMUM PERCENTAGE
-------------------------- -------- ------------------
(for purposes of
Section 7.22)
<S> <C> <C>
16. Rock Creek Apartments, Portland, OR............... WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
17. Rolling Hills Apartments, Louisville,
KY................................................ WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
18. Ruskin Place Apartments, Lincoln, NE.............. WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
19. Sheraton Hills Apartments, Nashville, TN.......... WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
20. Sleepy Hollow Apartments, Cleveland, TX........... WXI/MCN Multifamily Real Estate 5.00%
Limited Partnership
21. Summer Hill Apartments, Dallas, TX................ WXI/MCN Multifamily Real Estate 3.75%
Limited Partnership
22. Sun Valley Apartments, Charlotte, NC.............. WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
23. Tanglewood Village Apartments, Carson Village,
NV................................................ Embarcadero Associates 3.25%
24. The Village Apartments, Gresham, OR............... WXI/MCN Multifamily Real Estate 3.50%
Limited Partnership
25. Westgate Apartments, Lansing, MI.................. WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
</TABLE>
<TABLE>
<CAPTION>
ADDITIONAL MORTGAGED PROPERTY BORROWER MAXIMUM PERCENTAGE
----------------------------- -------- ------------------
(for purposes of
Section 7.22)
<S> <C> <C>
1. Amargosa Creek Apartments, Lancaster, CA.......... WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
2. Cedarwood Hills Apartments, Cedar Rapids, IA...... WXI/MCN Multifamily Real Estate 4.00%
Limited Partnership
</TABLE>
S-2
<PAGE>
EXHIBIT B
ALLOCABLE FACILITY AMOUNTS
ALLOCABLE
PROPERTY/LOCATION FACILITY
----------------- AMOUNT
------
1. Berkley Hills Apartments, Madison, TN.................... $5,887,779
2. Brendon Way Apartments, Indianapolis, IN................. 17,981,923
3. Castle Bluff Apartments, Kentwood, MI.................... 5,837,889
4. Cedar Run Apartments, Lexington, KY...................... 3,169,180
5. Embarcadero Club Apartments, College Park, GA............ 10,883,084
6. Fairfax Apartments, Tallahassee, FL...................... 2,435,228
7. Forest Park Village Apartments, Columbus, OH............. 11,119,542
8. Harbour Club I Apartments, Belleville, MI................ 10,214,176
9. Harbour Club II Apartments, Belleville, MI............... 6,900,324
10. Harbour Club III Apartments, Belleville, MI.............. 12,778,134
11. Heather Square Apartments, Dallas, TX.................... 7,370,931
12. Knollwood Apartments, Kansas City, MO.................... 8,046,766
13. Pennbrook Place Apartments, Dallas, TX................... 5,691,965
14. Pine Hills Apartments, Livingston, TX.................... 2,693,440
15. Regency Park Apartments, Fort Wayne, IN.................. 3,956,776
16. Rock Creek Apartments, Portland, OR...................... 10,032,123
17. Rolling Hills Apartments, Louisville, KY................. 10,531,177
18. Ruskin Place Apartments, Lincoln, NE..................... 7,646,432
19. Sheraton Hills Apartments, Nashville, TN................. 6,126,581
20. Sleepy Hollow Apartments, Cleveland, TX.................. 2,044,358
21. Summer Hill Apartments, Dallas, TX....................... 5,725,662
22. Sun Valley Apartments, Charlotte, NC..................... 8,560,000
23. Tanglewood Village Apartments, Carson Village, NV........ 4,838,936
24. The Village Apartments, Gresham, OR...................... 4,711,414
25. Westgate Apartments, Lansing, MI......................... 6,187,097
B-1
<PAGE>
EXHIBIT C
COMPLIANCE CERTIFICATE
The undersigned (the "BORROWING AGENT") hereby certify to AMRESCO Capital, L.P.,
a California limited partnership (the "Lender"), and Fannie Mae on behalf of the
Borrowers as follows:
ARTICLE I. AGREEMENT. Each Borrower is a party to that certain Term Loan
Agreement, dated as of January 1, 2000, by and among the Borrowers and the
Lender (as amended from time to time, the "AGREEMENT"). The rights of the Lender
under the Agreement have been assigned to Fannie Mae. This Certificate is issued
pursuant to the terms of the Agreement.
ARTICLE II. SATISFACTION OF CONDITIONS. The Borrowing Agent hereby represents,
warrants and covenants to the Lender on behalf of the Borrowers that all
conditions to the Request with respect to which this Certificate is issued have
been satisfied.
ARTICLE III. CAPITALIZED TERMS. All capitalized terms used but not defined in
this Certificate shall have the meanings ascribed to such terms in the
Agreement.
Dated: _______________, ____
THE BORROWING AGENT:
WXI/MCN MULTIFAMILY REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: WXI/MCN Multifamily Gen-Par, L.L.C., a
Delaware limited liability company, its
general partner
By: WXI/McN Realty, L.L.C.,
a Delaware limited liability
company, its managing member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
C-1
<PAGE>
EXHIBIT D
ORGANIZATIONAL CERTIFICATE (DELAWARE BORROWER)
I, _______________, hereby certify as follows:
SECTION 1. POSITION. I am the _______________ of WXI/McN Realty L.L.C.,
a Delaware limited liability company, which is the Managing Member of WXI/MCN
Multifamily Gen-Par, L.L.C., a Delaware limited liability company, which is the
general partner of WXI/MCN Multifamily Real Estate Limited Partnership, a
Delaware limited partnership (the "BORROWER"), and I am authorized to deliver
this Certificate on behalf of the Borrowers.
SECTION 2. TERM LOAN AGREEMENT. The Borrowers entered into that certain
Agreement, dated as of January 1, 2000, between the Borrowers and the Lender (as
amended from time to time, the "TERM LOAN AGREEMENT"). The rights of the Lender
under the Term Loan Agreement have been assigned to Fannie Mae. This Certificate
is issued pursuant to the terms of the Term Loan Agreement.
SECTION 3. DUE AUTHORIZATION OF REQUEST. I hereby certify that no
action by the partners of the Borrowing Agent is necessary to duly authorize the
execution and delivery of, and the consummation of the transaction contemplated
by, the Request with respect to which this Certificate is delivered, or, if such
action is necessary, that attached as Exhibit A to this Certificate is a true
copy of resolutions authorizing such action duly adopted at a meeting of the
partners. Any such resolutions are in full force and effect and are unmodified
as of the date of this Certificate.
SECTION 4. NO CHANGES. Since the date of the most recent Organizational
Certificate delivered to the Lender or, if there have been none, since the date
of the Term Loan Agreement, there have been no changes in any of the
Organizational Documents of any Borrower, except as set forth in Exhibit B to
this Certificate, and each Borrower remains in good standing or is duly
qualified in each of the jurisdictions in which it is required to be in good
standing or duly qualified under the terms of the Term Loan Agreement.
[SECTION 5. INCUMBENCY CERTIFICATE. ONE OR MORE OF THE PERSONS
AUTHORIZED TO EXECUTE AND DELIVER ANY DOCUMENTS REQUIRED TO BE DELIVERED IN
CONNECTION WITH THE REQUEST ARE SET FORTH BELOW, AND A SPECIMEN SIGNATURE OF
EACH HAS BEEN PREVIOUSLY DELIVERED TO THE LENDER.
WXI/MCN REALTY L.L.C.:
1) [NAME, TITLE]
2) [NAME, TITLE]
3) [NAME, TITLE]
4) [NAME, TITLE]] [INCLUDE THIS SECTION 5 IF A CHANGE IS BEING MADE FROM
THE MOST RECENT INCUMBENCY CERTIFICATE.]
SECTION [5./6.] CAPITALIZED TERMS. All capitalized terms used but not
defined in this Certificate shall have the meanings ascribed to such terms in
the Term Loan Agreement.
D-1
<PAGE>
Dated: _________________, _____
THE BORROWER:
WXI/MCN Multifamily Real Estate Limited
Partnership a Delaware limited partnership
By: WXI/MCN Multifamily Gen-Par, L.L.C., a
Delaware limited liability company, its
general partner
By: WXI/McN Multifamily Gen-Par,
L.L.C., a Delaware limited
liability company, its managing
member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
D-2
<PAGE>
EXHIBIT E
TIE-IN ENDORSEMENT
To be annexed to and form a part of Policy No. ________________.
The said policy is hereby amended in the following manner:
The Company acknowledges that the land described in Schedule A of this policy is
part of the security for an indebtedness in the amount of [$____________] which
indebtedness is also secured by mortgages or deeds of trust which are insured
concurrently by the following policies:
Policy No. County State Amount
- ---------- ------ ----- ------
E-1
<PAGE>
Anything to the contrary notwithstanding in Paragraph 6(a)(ii) of the Conditions
and Stipulations of the Policy, the insurance coverage afforded in this Policy
is aggregated with the insurance coverage in all of the other policies
identified in this endorsement so the effective insurance coverage is
[$______________]. The total liability of the Company under this and all
policies identified in this endorsement shall not exceed such amount, but its
liability in this Policy for the land described in Schedule A remains limited by
the provisions of Paragraph 6(a)(i) and 6(a)(iii) of the Conditions and
Stipulations of this Policy. Any payment by the Company on this or any of the
Policies listed in this Endorsement shall reduce pro tanto the liability of the
Company under all policies, and the amount so paid shall be deemed a payment
under all policies.
The total liability of the Company under said Policy and any prior endorsements
attached thereto shall not exceed, in the aggregate, the face amount of said
Policy, as the same may be specifically amended in dollar amount by this or any
prior endorsements, and the costs which the Company is obligated under the
provisions of said Policy to pay.
Nothing herein contained shall be construed as extending or changing the
effective date of said commitment or policy unless otherwise expressly stated.
This endorsement is made a part of said Policy and is subject to the exclusions,
schedules, endorsements, conditions, stipulations and terms thereof, except as
modified by the provisions hereof.
Executed this ____ day of _______, 2000.
---------------------------------
COUNTERSIGNED: ________________________, President
- -------------------
__________________________ Attest:___________________, Secretary
Authorized Signatory
E-2
<PAGE>
EXHIBIT F
FUTURE ADDITIONAL MORTGAGED PROPERTY TERM LOAN REQUEST
THE TERM LOAN AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES YOU
TO MAKE THE REQUESTED FUTURE ADDITIONAL MORTGAGED PROPERTY TERM LOAN, IF ALL
CONDITIONS CONTAINED IN SECTIONS 3.02-A, 3.03-A AND 3.04-A OF THE TERM LOAN
AGREEMENT ARE SATISFIED, AT A CLOSING TO BE HELD AT OFFICES DESIGNATED BY YOU ON
A CLOSING DATE SELECTED BY YOU, AND OCCURRING ON A DATE WHICH SHALL NOT BE MORE
THAN 5 BUSINESS DAYS, AFTER THE BORROWING AGENT'S RECEIPT OF THE RATE
CONFIRMATION FORM (OR ON SUCH OTHER DATE TO WHICH WE MAY AGREE).
- --------------------, ------
VIA: _______________________
AMRESCO Capital, L.P.
700 North Pearl, Suite 2400
Dallas, TX 75201
Attention: Vice President, Multifamily Finance
[NOTE: SUBJECT TO CHANGE IN THE EVENT LENDER OR ITS ADDRESS CHANGES]
Re: FUTURE ADDITIONAL MORTGAGED PROPERTY TERM LOAN REQUEST issued pursuant
to Term Loan Agreement, dated as of January 1, 2000, by and among the
undersigned (the "Borrowers") and the Lender (as amended from time to
time, the "Term Loan Agreement")
Ladies and Gentlemen:
This constitutes a Future Additional Mortgaged Property Term Loan Request
pursuant to the terms of the above-referenced Term Loan Agreement.
SECTION 1. REQUEST. The Borrowers hereby request that the Lender make a Future
Additional Mortgaged Property Term Loan in accordance with the terms of the Term
Loan Agreement. Following is the information required by the Term Loan Agreement
with respect to this Request:
ITEM 1. Amount. The amount of the Future Additional Mortgaged Property
Term Loan shall be $_______________.
ITEM 2. Maturity Date. The Maturity Date of the Future Additional
Mortgaged Property Term Loan is as follows:
February 1, 2007.
F-1
<PAGE>
ITEM 3. Accompanying Documents and Deposit. This Future Additional
Mortgaged Property Term Loan Request is being delivered together with (i) a
Collateral Addition Request and a Collateral Addition Description Package, (ii)
the underwriting documentation required to be delivered by us pursuant to
Section 3.03-A of the Term Loan Agreement and (iii) the Rate Lock Deposit.
ITEM 4. Closing Documents. All documents, instruments and certificates
required to be delivered pursuant to the conditions contained in Sections
3.02-A, 3.03-A and 3.04-A of the Term Loan Agreement, including, but not limited
to (i) a Rate Setting Form, (ii) a Compliance Certificate, and (iii) an
Organizational Certificate will be delivered on or before the Closing Date.
ITEM 5. Wiring Information. Please wire the Future Additional Mortgaged
Property Term Loan on or before the Closing Date into our account in accordance
with the following wiring information:
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
SECTION 2. AVAILABLE COMMITMENT. The information contained in the
following table is true, correct and complete, to the undersigned's knowledge.
The undersigned acknowledges and agrees that the final determination of the
information shall be made by the Lender.
- --------------------------------------------------------------------------------
Currently Available Principal
Amount
- --------------------------------------------------------------------------------
Proposed Amount of Future
Additional Mortgaged Property
Term Loan
- --------------------------------------------------------------------------------
Remaining Available Principal
Amount after the Proposed
Future Term Loan
- --------------------------------------------------------------------------------
SECTION 3. CAPITALIZED TERMS. All capitalized terms used but not
defined in this Request shall have the meanings ascribed to such terms in the
Term Loan Agreement.
F-2
<PAGE>
Sincerely,
THE BORROWERS:
WXI/MCN MULTIFAMILY REAL ESTATE
LIMITED PARTNERSHIP, a Delaware limited
partnership
By: WXI/MCN Multifamily Gen-Par, L.L.C., a
Delaware limited liability company, its
General Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its
Managing Member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
BRENDON WAY FUND XII ASSOCIATES, an Indiana
general partnership
By: WXI/MCN Gen-Par II, L.L.C., a Delaware
limited liability company, its General
Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its
Managing Member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
CASTLE BLUFF FUND XII ASSOCIATES, L.P., a
Texas limited partnership
By: Castle Bluff Corporation, a Texas
corporation, its General Partner
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
F-3
<PAGE>
EMBARCADERO ASSOCIATES, a Georgia general
partnership
By: WXI/MCN Gen-Par I, L.L.C., a Delaware
limited liability company, its General
Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its
Managing Member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
LENDER:
AMRESCO CAPITAL, L.P., a Delaware limited
partnership
By: AMRESCO Mortgage Capital, Inc., a
Delaware corporation
Its: Sole General Partner
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
F-4
<PAGE>
WXI/MCN Real Estate Limited Partnership
- --------- ---, ----
Page 1
EXHIBIT G
WXI/MCN Multifamily Real Estate Limited Partnership
100 Crescent Court VIA FACSIMILE AND OVERNIGHT MAIL
Suite 1000
Dallas, Texas 75201
Attention: Doug Gunn
RE: INTEREST RATE LOCK RELATED TO A PROPOSED FUTURE TERM LOAN TO WXI/MCN
MULTIFAMILY REAL ESTATE LIMITED PARTNERSHIP, BRENDON WAY FUND XII
ASSOCIATES, CASTLE BLUFF FUND XII ASSOCIATES L.P. AND EMBARCADERO
ASSOCIATES (COLLECTIVELY REFERRED TO AS "BORROWERS"), BY AMRESCO CAPITAL,
L.P. ("LENDER").
Ladies/Gentlemen:
Capitalized terms not defined herein shall have the meanings given to the same
in the Term Loan Agreement among Borrowers and Lender, dated as of January 1,
2000 (the "Term Loan Agreement"). This Agreement (herein so called) confirms
that in connection with the Term Loan Agreement, and in consideration of the
mutual covenants and agreements set forth herein, we agree as follows:
1. The undertakings by Lender described below are contingent upon
Lender's receipt of (i) a fully executed copy of this Agreement and (ii) a
deposit equal to two percent (2.0%) of the proposed amount of the Loan (the
"Rate Lock Deposit"), which Rate Lock Deposit shall be non-refundable except as
set forth hereinbelow. Within the 48 hour period immediately following Lender's
receipt of the latter of the items described in (i) and (ii) preceding, Lender
is authorized by Borrowers to "lock" the interest rate payable on the Future
Term Loan at a fixed rate not to exceed the following maximum rate per annum
(the "Maximum Rate"):
_________________ percent (______%) per annum
BORROWERS' INITIALS: ___________
KEY PRINCIPAL(S)' INITIALS: ________
Subject to (i) the Maximum Rate limitation and (ii) to any election by the
Borrowers to buy down the Interest Rate, the rate at which Lender locks the
interest rate on the Future Term Loan shall be the interest rate on the Future
Term Loan. In the event that the DSCR for any Additional Mortgaged Property is
less than 1.25:1, Lender's only recourse shall be to reduce the amount of the
proposed Future Term Loan allocated to such Additional Mortgaged Property to a
level that results in (i) the DSCR for such Additional Mortgaged Property being
1.25:1, and (ii) the
G-1
<PAGE>
WXI/MCN Real Estate Limited Partnership
- --------- ---, ----
Page 2
Maximum LTV for such Additional Mortgaged Property not exceeding 80%; all in
accordance with the terms of the DUS Guide Underwriting Requirements.
2. The Rate Lock Deposit will not bear interest and shall be refundable
to Borrowers only in the event of one of the following:
(a) The Future Term Loan closes and funds on or before _________ __,
_____ (the "Designated Closing Date") in accordance with the terms of the
Term Loan Agreement;
(b) If no Designated Closing Date is specified in the blank in the
preceding paragraph 2(a), the Future Term Loan closes and funds on or
before an alternative closing date (agreed to by the Borrowers and the
Lender) in accordance with the terms of the Term Loan Agreement; or
(c) Within the time period prescribed above, Lender is unable by use
of reasonable efforts to lock the interest rate on the Future Term Loan at
a rate equal to or less than the Maximum Rate.
In the event of 2(a), 2(b) or 2(c), the Rate Lock Deposit (net of the sum by
which loan expenses exceed any deposits placed by Borrowers with Lender), shall
be refunded to Borrowers by Lender promptly after the occurrence of such event.
If neither 2(a), 2(b) or 2(c) above are applicable, then Lender will be
entitled to retain the Rate Lock Deposit in full as liquidated damages. If
Lender is entitled under this Section 2 to retain the Rate Lock Deposit,
Borrowers acknowledge and agree that such fee is intended to compensate Lender
for the costs, administrative expenses and risks associated with Lender's
entering into a forward trade agreement with an investor to purchase the
prospective mortgage backed security that Lender expects to be issued by Fannie
Mae in payment of the Future Term Loan at the time Fannie Mae purchases same
from Lender, including, without limitation, breakage fees (e.g. out-of-pocket
losses or expenses incurred or paid by Lender in connection with the
establishment and termination of the Interest Rate if locked pursuant to this
Agreement and the Term Loan Agreement is terminated for any reason without the
Future Term Loan being closed and funded). Borrowers acknowledge and agree that
(a) during the period of time occurring from the point of rate lock to the
closing and funding of the Future Term Loan and purchase thereof by Fannie Mae,
Lender will be exposed to market interest rate fluctuations and (b) the damages
described in this paragraph are difficult to ascertain and that the Rate Lock
Deposit is a fair and reasonable estimate of such damages.
EXCEPT AS DESCRIBED ABOVE IN THIS SECTION 2, THE RATE LOCK DEPOSIT (OR
ANY PORTION THEREOF) SHALL NOT BE REFUNDABLE UNDER ANY OTHER CIRCUMSTANCES.
3. Lender's agreement to lock the interest rate under this Agreement
has no bearing on
G-2
<PAGE>
WXI/MCN Real Estate Limited Partnership
- --------- ---, ----
Page 3
whether Lender will be satisfied as to all of the conditions under Sections
3.02-A, 3.03-A and 3.04-A of the Term Loan Agreement for making the Future Term
Loan.
4. THIS AGREEMENT SHALL BE DEEMED TO BE EXECUTED IN AND PERFORMABLE IN,
AND GOVERNED BY THE SUBSTANTIVE LAWS OF, THE STATE OF TEXAS (WITHOUT REGARD TO
ANY CONFLICT OF LAWS PRINCIPLES).
5. This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts together constitute one and the same instrument.
6. Borrowers may not, without the prior written consent of Lender,
assign, transfer or set over to another, in whole or in part, all or any part of
its benefits, rights, duties and obligations hereunder. Borrowers agree that
Lender may assign its benefits, rights, duties and obligations under this
Agreement, without the consent of Borrowers, to any potential purchaser of the
Future Term Loan.
7. This Agreement may be amended, changed or modified by Borrowers and
Lender only by an instrument in writing setting forth the terms of such change,
modification or amendment, and signed by each party.
8. All notices, demands, consents or requests that are either required
or desired to be given or furnished hereunder shall be in writing and shall be
sent to the appropriate party at the following addresses: (i) if to Borrowers,
to the Borrowing Agent at the address set forth on the first page hereof; and
(ii) if to Lender, at the address set forth on the first page hereof, to the
attention of the undersigned. Any such notice sent by means of telecopy shall be
deemed to be received on the day such telecopy is sent once orally confirmed by
the sender via telephone.
9. This Agreement constitutes the entire and final agreement between
Borrowers and Lender with respect to the subject matter hereof, and there are no
other agreements, understandings, undertakings, representations or warranties
among the parties hereto with respect to the subject matter hereof except as set
forth herein.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the undersigned a counterpart hereof, whereupon this
Agreement and your acceptance shall represent a binding agreement by and among
Borrowers and Lender.
G-3
<PAGE>
WXI/MCN Real Estate Limited Partnership
- --------- ---, ----
Page 4
AMRESCO CAPITAL, L.P.,
A DELAWARE LIMITED PARTNERSHIP
By: AMRESCO Mortgage Capital, Inc.,
a Delaware corporation
Its sole General Partner
By: ______________________________
Name: ___________________________
Title: ____________________________
THE FOREGOING AGREEMENT IS HEREBY CONFIRMED AND ACCEPTED AS OF THE DATE FIRST
WRITTEN ABOVE.
WXI/MCN MULTIFAMILY REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: WXI/MCN Multifamily Gen-Par, L.L.C.,
a Delaware limited liability company,
its General Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company,
its Managing Member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
BRENDON WAY FUND XII ASSOCIATES, an Indiana
general partnership
By: WXI/MCN Gen-Par II, L.L.C., a Delaware
limited liability company, its General
Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its
Managing Member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
G-4
<PAGE>
WXI/MCN Real Estate Limited Partnership
- --------- ---, ----
Page 5
CASTLE BLUFF FUND XII ASSOCIATES, L.P., a
Texas limited partnership
By: Castle Bluff Corporation, a Texas
corporation, its General Partner
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
EMBARCADERO ASSOCIATES, a Georgia general
partnership
By: WXI/MCN Gen-Par I, L.L.C., a Delaware
limited liability company, its General
Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its
Managing Member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
LENDER:
AMRESCO CAPITAL, L.P., a Delaware limited
partnership
By: AMRESCO Mortgage Capital, Inc., a
Delaware corporation
Its: Sole General Partner
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
G-5
<PAGE>
EXHIBIT H
RATE CONFIRMATION FORM
Pursuant to Section 3.02-A(b) of that certain Term Loan Agreement dated
as of January 1, 2000, as amended from time to time, the "TERM LOAN AGREEMENT")
among AMRESCO Capital, L.P., a Delaware limited partnership, (the "LENDER"), and
WXI/MCN Multifamily Real Estate Limited Partnership, a Delaware limited
partnership, Brendon Way Fund XII Associates, an Indiana general partnership,
Castle Bluff Fund XII Associates L.P., a Texas limited partnership and
Embarcadero Associates, a Georgia general partnership (the "BORROWERS"), and the
Rate Setting Form dated ______________, from the Borrowers to the Lender, the
Lender hereby confirms that it has obtained a commitment for the purchase of a
Fannie Mae MBS with the following terms:
Future Term Loan Amount $_______________________
Term/Maturity Date ___ months; Maturity Date: February 1, 2007
Interest Rate ______ %
Closing Date no later than ________________________
H-1
<PAGE>
Dated: ____________________, ______
THE LENDER:
AMRESCO Capital, L.P.,
a Delaware limited partnership
By: AMRESCO Mortgage Capital, Inc.,
a Delaware corporation
Its: Sole General Partner
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Rate Setting Date: ____________________, ______, ___:___ AM/PM Eastern Time
H-2
<PAGE>
EXHIBIT I
COLLATERAL ADDITION REQUEST
THE TERM LOAN AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES
THAT (1) IF YOU CONSENT TO THE ADDITION OF THE PROPOSED ADDITIONAL MORTGAGED
PROPERTY TO THE COLLATERAL POOL, (2) WE ELECT TO CAUSE THE PROPOSED ADDITIONAL
MORTGAGED PROPERTY TO BE ADDED TO THE COLLATERAL POOL AND (3) ALL CONDITIONS
CONTAINED IN SECTIONS 3.02-A, 3.03-A AND 3.04-A OF THE TERM LOAN AGREEMENT ARE
SATISFIED, THEN YOU SHALL PERMIT THE PROPOSED ADDITIONAL MORTGAGED PROPERTY TO
BE ADDED TO THE COLLATERAL POOL, AT A CLOSING TO BE HELD AT OFFICES DESIGNATED
BY YOU ON A CLOSING DATE SELECTED BY YOU, AND OCCURRING WITHIN 5 BUSINESS DAYS
AFTER THE BORROWING AGENT'S RECEIPT OF THE RATE CONFIRMATION FORM (OR ON SUCH
OTHER DATE TO WHICH WE MAY AGREE).
- --------------------, ------
VIA:
------------------------
AMRESCO Capital, L.P.
700 North Pearl
Suite 2400
Dallas, Texas 75201
Attention: Vice President, Multifamily Finance
[NOTE: SUBJECT TO CHANGE IN THE EVENT LENDER OR ITS ADDRESS CHANGES]
Re: COLLATERAL ADDITION REQUEST issued pursuant to Term Loan Agreement, dated
as of January 1, 2000, among the undersigned (the "BORROWERS") and the
Lender (as amended from time to time, the "TERM LOAN AGREEMENT")
Ladies and Gentlemen:
This constitutes a Collateral Addition Request pursuant to the terms of the
above-referenced Term Loan Agreement.
SECTION 1. REQUEST. The Borrowers hereby request that the Multifamily
Residential Property described in this Request be added to the Collateral Pool
in accordance with the terms of the Term Loan Agreement. Following is the
information required by the Term Loan Agreement with respect to this Request:
(a) Collateral Addition Description Package. Attached to this Request
is all information and documents relating to the Additional Mortgaged Property
required by Section 3.03-A of the Term Loan Agreement; and
I-1
<PAGE>
(b) Accompanying Documents. All reports, certificates and documents
required to be delivered pursuant to the conditions contained in Sections
3.02-A, 3.03-A and 3.04-A of the Term Loan Agreement will be delivered on or
before the Closing Date.
SECTION 2. CAPITALIZED TERMS. All capitalized terms used but not defined in
this Request shall have the meanings ascribed to such terms in the Term Loan
Agreement.
Sincerely,
THE BORROWERS:
WXI/MCN MULTIFAMILY REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: WXI/MCN Multifamily Gen-Par, L.L.C.,
a Delaware limited liability company,
its General Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its
Managing Member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
BRENDON WAY FUND XII ASSOCIATES, an Indiana
general partnership
By: WXI/MCN Gen-Par II, L.L.C., a Delaware
limited liability company, its General
Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its
Managing Member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
I-2
<PAGE>
CASTLE BLUFF FUND XII ASSOCIATES L.P., a
Texas limited partnership
By: Castle Bluff Corporation, a Texas
corporation, its General Partner
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
EMBARCADERO ASSOCIATES, a Georgia general
partnership
By: WXI/MCN Gen-Par I, L.L.C., a Delaware
limited liability company, its General
Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its
Managing Member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
I-3
<PAGE>
EXHIBIT L
FUTURE ADDITIONAL MORTGAGED PROPERTY
TERM LOAN RATE ADJUSTMENT ENDORSEMENTS
See the attached forms.
L-1
<PAGE>
EXHIBIT M
COLLATERAL RELEASE REQUEST
THE TERM LOAN AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES FOR
THERE TO OCCUR A CLOSING WITHIN 30 DAYS AFTER YOUR RECEIPT OF THIS REQUEST,
SUBJECT TO SATISFACTION OF ALL CONDITIONS CONTAINED IN SECTION 4.03 OF THE TERM
LOAN AGREEMENT. REFERENCE IS MADE TO THE TERM LOAN AGREEMENT FOR THE SCOPE OF
THE LENDER'S OBLIGATIONS WITH RESPECT TO THIS REQUEST.
- --------------------, ------
VIA:
-----------------------
AMRESCO Capital, L.P.
700 North Pearl, Suite 2400, LB #342
Dallas, TX 75201-7424
Attn: Vice President, Multifamily Finance
AMRESCO Services, L.P.
245 Peachtree Center Avenue. N.E., Suite 1800
Atlanta, GA 30303-1231
Attn: Vice President, Loan Servicing
[NOTE: SUBJECT TO CHANGE IN THE EVENT LENDER OR ITS ADDRESS CHANGES]
Re: COLLATERAL RELEASE REQUEST issued pursuant to Term Loan Agreement, dated
__________, by and between the undersigned (the "BORROWERS") and the Lender
(as amended from time to time, the "TERM LOAN AGREEMENT")
Ladies and Gentlemen:
This constitutes a Collateral Release Request pursuant to the terms of the
above-referenced Term Loan Agreement.
SECTION 1. REQUEST. The Borrowers hereby request that the Collateral
Release Property described in this Request be released from the Collateral Pool
in accordance with the terms of the Term Loan Agreement. Following is the
information required by the Term Loan Agreement with respect to this Request:
M-1
<PAGE>
(a) Description of Collateral Release Property. The name, address and
location (county and state) of the Mortgaged Property, or other designation of
the Collateral, to be released from the Collateral Pool is as follows:
Name:
------------------------------------------------
Address:
------------------------------------------------
------------------------------------------------
Location:
------------------------------------------------
(b) Accompanying Documents. All documents, instruments and certificates
required to be delivered pursuant to the conditions contained in Section 4.03 of
the Term Loan Agreement will be delivered on or before the Closing Date.
SECTION 2. RELEASE PRICE. The Borrowers shall pay the Release Price, or
such portion thereof, and all other amounts as is required pursuant to Sections
4.02 of the Term Loan Agreement as a condition to the closing of the release of
the Collateral Release Property from the Collateral Pool.
SECTION 3. CAPITALIZED TERMS. All capitalized terms used but not defined in
this Request shall have the meanings ascribed to such terms in the Term Loan
Agreement.
Sincerely,
THE BORROWING AGENT:
WXI/MCN Multifamily Real Estate Limited
Partnership a Delaware limited partnership
By: WXI/MCN Multifamily Gen-Par, L.L.C., a
Delaware limited liability company, its
general partner
By: WXI/McN Realty, L.L.C., a Delaware
limited liability company, its
Managing Member
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
M-2
<PAGE>
EXHIBIT N
BORROWERS' CONFIRMATION OF OBLIGATIONS
THIS BORROWER CONFIRMATION OF OBLIGATIONS (the "CONFIRMATION OF OBLIGATIONS") is
made on the ______ day of _____, _____, by and among
___________________________, a Delaware limited partnership, [OTHER BORROWERS]
(each a "Borrower" and collectively the "Borrowers") and AMRESCO CAPITAL, L.P.,
a Delaware limited partnership ("LENDER"), and Fannie Mae, a federally-chartered
and stockholder-owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, 12 U.S.C. ss. 1716 et seq. ("FANNIE
MAE").
RECITALS
A. The Borrowers and the Lender are parties to that certain Term Loan Agreement,
dated _________________ (as amended from time to time, the "TERM LOAN
AGREEMENT").
B. All of the Lender's right, title and interest in the Term Loan Agreement and
the Loan Documents executed in connection with the Term Loan Agreement or the
transactions contemplated by the Term Loan Agreement have been assigned to
Fannie Mae pursuant to that certain Assignment of Term Loan Agreement and Other
Loan Documents, dated ____________ (the "TERM LOAN ASSIGNMENT"). Fannie Mae has
designated the Lender as the servicer of the Term Loan.
C. The Borrowing Agent has delivered to the Lender a Collateral Release Request
pursuant to the Term Loan Agreement to release a Collateral Release Property
from the Collateral Pool.
D. The Lender has consented to the Collateral Release Request.
E. Each Borrower is executing this Confirmation of Obligations pursuant to the
Term Loan Agreement to confirm it remains liable for all of its obligations
under the Term Loan Agreement and the other Loan Documents notwithstanding the
release of the Collateral Release Property from the Collateral Pool.
NOW, THEREFORE, each Borrower, in consideration of the Lender's consent to the
release of the Collateral Release Property from the Collateral Pool and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, hereby agree as follows:
SECTION 1. CONFIRMATION OF OBLIGATIONS. Each Borrower confirms that none of
its obligations under the Term Loan Agreement and the Loan Documents is affected
by the release of the Collateral Release Property from the Collateral, and each
of its respective obligations under the Term Loan Agreement and the Loan
Documents shall remain in full force and effect, and each Borrower shall be
fully liable (subject to Section 15 of the Term Loan Agreement) for the
observance of all such obligations, notwithstanding the release of the
Collateral Release Property from the Collateral Pool.
SECTION 2. BENEFICIARIES. This Confirmation of Obligations is made for the
express benefit of both the Lender and Fannie Mae.
N-1
<PAGE>
SECTION 3. CAPITALIZED TERMS. All capitalized terms used in this
Confirmation of Obligations which are not specifically defined herein shall have
the respective meanings set forth in the Term Loan Agreement.
SECTION 4. COUNTERPARTS. This Confirmation of Obligations may be executed
in counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
[SIGNATURES ON THE FOLLOWING PAGES]
N-2
<PAGE>
THE BORROWERS:
WXI/MCN MULTIFAMILY REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: WXI/MCN Multifamily Gen-Par, L.L.C.,
a Delaware limited liability company,
its General Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its
Managing Member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
BRENDON WAY FUND XII ASSOCIATES, an Indiana
general partnership
By: WXI/MCN Gen-Par II, L.L.C., a Delaware
limited liability company, its
General Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its
Managing Member
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
CASTLE BLUFF FUND XII ASSOCIATES L.P., a
Texas limited partnership
By: Castle Bluff Corporation, a Texas
corporation, its General Partner
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
N-3
<PAGE>
EMBARCADERO ASSOCIATES, a Georgia general
partnership
By: WXI/MCN Gen-Par I, L.L.C., a Delaware
limited liability company, its General
Partner
By: WXI/McN Realty L.L.C., a Delaware
limited liability company, its
Managing Member
By:
--------------------------------
Name:
---------------------------
Title:
-------------------------
N-4
<PAGE>
AGREED TO AND ACKNOWLEDGED:
By: WHITEHALL STREET REAL ESTATE LIMITED
PARTNERSHIP XI, a Delaware limited
partnership
By: WH Advisors, L.L.C. XI, a Delaware
limited liability company, its
general partner
By:
--------------------------------
Name:
Title:
By: WHITEHALL STREET REAL ESTATE LIMITED
PARTNERSHIP XII, a Delaware limited
partnership
By: WH Advisors, L.L.C. XII, a
Delaware limited liability company,
its general partner
By:
--------------------------------
Name:
Title:
N-5
<PAGE>
THE LENDER:
AMRESCO CAPITAL, L.P., a Delaware limited
partnership
By: AMRESCO Mortgage Capital, Inc., a
Delaware corporation
Its: Sole General Partner
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
N-6
<PAGE>
FANNIE MAE:
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
N-7
<PAGE>
SCHEDULE 1
LIST OF AUTHORIZED REPRESENTATIVES
(1) The following individuals each qualify as an "Authorized Representative" as
said term is defined in Article I of the Term Loan Agreement between [Borrowers]
and AMRESCO Capital, L.P.:
NAME OFFICE
Daniel M. Neidich President
Michael K. Klingher Vice-President
Kevin D. Naughton Vice-President
Ralph F. Rosenberg Vice-President
Stuart M. Rothenberg Vice-President
Edward M. Siskind Vice-President
David M. Weil Vice-President
Todd A. Williams Vice-President
Elizabeth A. O'Brien Vice-President
Katharine K. Lauer Vice-President
Elizabeth M. Burban Vice-President
Angie Madison Vice-President
G. Douglas Gunn Vice-President
Susan L. Sack Vice-President
Steven M. Feldman Vice-President
Alan S. Kava Vice-President
Brian J. Lahey Vice-President
Brahm S. Cramer Vice-President
Larry J. Goodwin Vice-President
Ronald L. Bernstein Assistant Vice President
Zubin P. Irani Assistant Vice President
Kevin D. Naughton Secretary
Kevin D. Naughton Treasurer
Ralph F. Rosenberg Assistant Secretary
Todd A. Williams Assistant Secretary
Katharine K. Lauer Assistant Secretary
Elizabeth A. O'Brien Assistant Secretary
Elizabeth M. Burban Assistant Secretary
Angie Madison Assistant Secretary
G. Douglas Gunn Assistant Secretary
Ronald L. Bernstein Assistant Secretary
Zubin P. Irani Assistant Secretary
Brahm S. Cramer Assistant Secretary
Larry J. Goodwin Assistant Secretary
Edward M. Siskind Assistant Treasurer
Todd A. Williams Assistant Treasurer
Brian J. Lahey Assistant Treasurer
Mitchell S. Weiss Assistant Treasurer
<PAGE>
SCHEDULE 2
BORROWER/PARTNERS PERCENTAGE
- ----------------- OWNERSHIP INTEREST
------------------
WXI/MCN Multifamily Real Estate Limited Partnership
WXI/MCN Multifamily Gen-Par, L.L.C. 1%
WXI/McN Realty L.L.C. 99%
Brendon Way Fund XII Associates
WXI/MCN Gen-Par II, L.L.C. 1%
WXI/ MCN Real Estate XII Limited Partnership 99%
Castle Bluff Fund XII Associates L.P.
Castle Bluff Corporation 1%
WXI/ MCN Real Estate XII Limited Partnership 99%
Embarcadero Associates
WXI/MCN Gen-Par I, L.L.C. 1%
WXI/ MCN Real Estate XIV Limited Partnership 9%
<PAGE>
SCHEDULE 3
PENDING LITIGATION OR OTHER PROCEEDINGS
None.
<PAGE>
SCHEDULE 4
NONCOMPLIANCE/NONCONFORMITY WITH APPLICABLE LAWS OR PERMITS
1) Harbour Club - a letter dated 1/28/00 regarding Harbour's non-compliance
for docking facilities constructed at the Harbor Club, Ltd. Condominiums
under DEQ Permit No. 98-10-1133.
2) Various pool permits as disclosed to Lender.
<PAGE>
SCHEDULE 5
DISCLOSURE OF INDEBTEDNESS
None.
<PAGE>
SCHEDULE 6
CONTRACTUAL OBLIGATIONS
Management Agreement by and between applicable Borrower and AMS Management,
L.L.C. (one for each Mortgaged Property)
Portfolio Advisory Agreement by and between WXI/McN Realty L.L.C. and Archon
Group, L.P.
<PAGE>
SCHEDULE 7
COMMERCIAL LEASES
Miscellaneous laundry room leases - all disclosed to Lender.
<PAGE>
EXECUTION COPY
- --------------------------------------------------------------------------------
TERM LOAN AGREEMENT
among
WXI/MCN MULTIFAMILY REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
and
BRENDON WAY FUND XII ASSOCIATES,
an Indiana general partnership
and
CASTLE BLUFF FUND XII ASSOCIATES L.P.,
a Texas limited partnership
and
EMBARCADERO ASSOCIATES,
a Georgia general partnership
and
AMRESCO CAPITAL, L.P.,
a Delaware limited partnership
dated as of
January 1, 2000
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
RECITALS..........................................................................................................1
ARTICLE I.........................................................................................................1
ARTICLE II.......................................................................................................18
2.01 Term Loan Commitment.........................................................................18
2.02 Borrowing Agency Provisions..................................................................19
2.03 Disbursement of Term Loan....................................................................19
2.04 Payment of Principal and Interest............................................................20
2.05 Joint and Several Obligations................................................................20
ARTICLE III......................................................................................................20
3.01 Conditions to Closing........................................................................20
3.02 Delivery of Property-Related Documents.......................................................23
ARTICLE III-A....................................................................................................24
3.01-A Future Additional Mortgaged Property Term Loans..............................................24
3.02-A Interest on Future Terms Loans...............................................................24
3.03-A Additions of Collateral......................................................................25
3.04-A Conditions Precedent to Future Additional Mortgaged Property Term
Loans........................................................................................26
ARTICLE III-B....................................................................................................28
3.01-B Future Excess Proceeds Term Loan.............................................................28
3.02-B Determination of Amount of Future Excess Proceeds Term Loan..................................28
3.03-B Interest on Future Excess Proceeds Term Loans................................................29
3.04-B Conditions Precedent to Future Excess Proceeds Term Loan.....................................29
ARTICLE IV.......................................................................................................30
4.01 Right to Obtain Releases of Collateral.......................................................30
4.02 Procedure for Obtaining Releases of Collateral...............................................31
4.03 Conditions Precedent to Release of Collateral Release Property from
the Collateral...............................................................................32
ARTICLE V........................................................................................................34
5.01 Transfers and Events that Constitute an Event of Default.....................................34
5.02 Exceptions to Events of Default..............................................................35
5.03 Procedure for Approval.......................................................................36
5.04 Certain Definitions..........................................................................36
ARTICLE VI.......................................................................................................38
6.01 Representations and Warranties of the Borrowers..............................................38
6.02 Representations and Warranties of the Borrowers Relating to
Mortgaged Properties.........................................................................44
6.03 Representations and Warranties of the Lender.................................................48
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE VII......................................................................................................48
7.01 [Reserved.]..................................................................................48
7.02 Maintenance of Existence.....................................................................48
7.03 [Reserved.]..................................................................................49
7.04 Financial Statements; Accountants' Reports; Other Information................................49
7.05 Certificate of Compliance....................................................................51
7.06 Maintain Licenses............................................................................51
7.07 Access to Records; Discussions With Officers and Accountants.................................51
7.08 Inform the Lender of Material Events.........................................................52
7.09 Single-Purpose Entities......................................................................54
7.10 Inspection...................................................................................54
7.11 Compliance with Applicable Laws..............................................................54
7.12 Warranty of Title............................................................................54
7.13 Defense of Actions...........................................................................54
7.14 Insurance Escrow.............................................................................55
7.15 ERISA........................................................................................56
7.16 Loan Document Taxes..........................................................................56
7.17 Further Assurances...........................................................................57
7.18 [Reserved.]..................................................................................57
7.19 [Reserved.]..................................................................................57
7.20 [Reserved.]..................................................................................57
7.21 Affiliate Contracts..........................................................................57
7.22 Manager; Management Fees.....................................................................57
7.23 [Reserved.]..................................................................................58
7.24 [Reserved.]..................................................................................58
7.25 Ownership of Mortgaged Properties............................................................58
7.26 Post-Closing Requirements....................................................................58
ARTICLE VIII.....................................................................................................59
8.01 Other Activities.............................................................................59
8.02 [Reserved.]..................................................................................60
8.03 Zoning.......................................................................................60
8.04 Liens........................................................................................60
8.05 Sale.........................................................................................60
8.06 Indebtedness.................................................................................60
8.07 Principal Place of Business..................................................................60
8.08 [Reserved.]..................................................................................60
8.09 Condominiums.................................................................................60
8.10 Restrictions on Partnership Distributions....................................................60
ARTICLE IX.......................................................................................................61
9.01 Indemnification..............................................................................61
9.02 Survival.....................................................................................62
9.03 Liability of the Borrowers...................................................................62
9.04 Lender, Fannie Mae and Servicer Not Liable...................................................63
9.05 Waivers and Consents.........................................................................63
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
9.06 Waiver of Claims.............................................................................64
ARTICLE X........................................................................................................64
10.01 Origination Fees.............................................................................64
10.02 [Reserved.]..................................................................................64
10.03 Legal Fees and Expenses......................................................................64
ARTICLE XI.......................................................................................................65
11.01 Events of Default............................................................................65
ARTICLE XII......................................................................................................68
12.01 Remedies; Waivers............................................................................68
12.02 Waivers; Rescission of Declaration...........................................................68
12.03 The Lender's Right to Protect Collateral and Perform Covenants and
Other Obligations............................................................................68
12.04 No Remedy Exclusive..........................................................................69
12.05 No Waiver....................................................................................69
12.06 No Notice....................................................................................69
12.07 Application of Payments......................................................................69
12.08 No Requirement of Tender of Performance......................................................69
ARTICLE XIII.....................................................................................................70
13.01 [Reserved.]..................................................................................70
13.02 Assignment of Rights.........................................................................70
13.03 Release of Collateral........................................................................70
13.04 Replacement of Lender........................................................................70
13.05 Fannie Mae and Lender Fees and Expenses......................................................70
13.06 Third-Party Beneficiary......................................................................70
ARTICLE XIV......................................................................................................71
14.01 Insurance and Real Estate Taxes..............................................................71
14.02 Replacement Reserves.........................................................................71
ARTICLE XIV-A....................................................................................................71
14.01-A Cross-Guaranty...............................................................................71
14.02-A Waivers by Borrowers and Other Rights........................................................71
14.03-A No Impairment................................................................................73
14.04-A No Subrogation...............................................................................73
14.05-A [Reserved]...................................................................................74
14.06-A Election of Remedies.........................................................................74
14.07-A Subordination of Other Obligations...........................................................74
14.08-A Insolvency and Liability of Other Borrowers..................................................75
14.09-A Preferences, Fraudulent Conveyances, Etc.....................................................75
14.10-A Maximum Liability of Each Borrower...........................................................76
14.11-A Liability Cumulative.........................................................................76
ARTICLE XV.......................................................................................................76
15.01 Limits on Personal Liability.................................................................76
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
ARTICLE XVI......................................................................................................78
16.01 Counterparts.................................................................................78
16.02 Amendments, Changes and Modifications........................................................78
16.03 Payment of Costs, Fees and Expenses..........................................................78
16.04 Payment Procedure............................................................................79
16.05 Payments on Business Days....................................................................79
16.06 Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial.................................79
16.07 Severability.................................................................................81
16.08 Notices......................................................................................81
16.09 Further Assurances and Corrective Instruments................................................84
16.10 Term of this Agreement.......................................................................84
16.11 Assignments; Third-Party Rights..............................................................84
16.12 Headings.....................................................................................84
16.13 General Interpretive Principles..............................................................84
16.14 Interpretation...............................................................................85
16.15 [Reserved.]..................................................................................85
16.16 Survival of Representation and Warranties....................................................85
16.17 Decisions in Writing.........................................................................85
16.18 Closing Date.................................................................................85
</TABLE>
EXHIBIT A - Schedule of Mortgaged Properties
EXHIBIT B - Initial Allocable Facility Amounts
EXHIBIT C - Compliance Certificate
EXHIBIT D - Organizational Certificate (Each Borrower)
EXHIBIT E - Tie-In Endorsement
EXHIBIT F - Future Term Loan Request
EXHIBIT G - Interest Rate Lock Agreement
EXHIBIT H - Rate Confirmation Form
EXHIBIT I - Collateral Addition Request
EXHIBIT J - [Reserved]
EXHIBIT K - [Reserved]
EXHIBIT L - Future Term Loan Endorsement
EXHIBIT M - Collateral Release Request
EXHIBIT N - Borrowers' Confirmation of Obligations
Schedule 1 - Authorized Representatives
Schedule 2 - Partners of Borrowers/Percentage of Ownership Interest
Schedule 3 - Pending Litigation or other Proceedings
Schedule 4 - Noncompliance/Nonconformity with Applicable Laws or Permits
Schedule 5 - Disclosure of Indebtedness
Schedule 6 - Contractual Obligations
Schedule 7 - Commercial Leases
iv
<PAGE>
MCNEIL PARTNERS AND WXI/MCN REALTY
ANNOUNCE CLOSING OF ACQUISITION OF
MCNEIL REAL ESTATE FUNDS IX, X, XI, XII, XIV, XV,
XXI, XXII, XXIII, XXIV, XXV AND XXVII
NEW YORK, New York, January 31, 2000 - McNeil Partners, L.P., a
privately-held sponsor of real estate partnerships, and WXI/McN Realty,
L.L.C. (the "Company"), an affiliate of Whitehall Street Real Estate
Limited Partnership XI, a real estate investment fund managed by Goldman,
Sachs & Co., announced the closing of the acquisition by the Company of 12
publicly-traded real estate limited partnerships, including McNeil Real
Estate Funds IX, X, XI, XII, XIV, XV, XXI, XXII, XXIII, XXIV, XXV and
XXVII, and two partnerships wholly-owned by affiliates of McNeil Partners
(collectively, the "Participating Partnerships"). The Company has also
acquired certain assets of McNeil Real Estate Management, Inc. ("McREMI"),
the real estate investment and management company controlled by Robert A.
McNeil.
The closing of the transactions follows the approval of the
transactions by the limited partners of each of the Participating
Partnerships at meetings held on January 20, 2000 and January 21, 2000.
Limited partners of Fairfax Associates and McNeil Summerhill, which are
wholly-owned by Robert A. McNeil and related parties, also approved the
transactions.
Pursuant to the terms of the acquisition agreement, the limited
partners in each of the Participating Partnerships (other than those
wholly-owned by Robert A. McNeil) will receive cash merger consideration in
exchange for their limited partnership interests. In addition, each
Participating Partnership has declared a special distribution to its
limited partners equal to its positive modified net working capital balance
as of the closing date of the transaction.
The aggregate amount of merger consideration and modified net
working capital distribution to be received by limited partners of the
respective Participating Partnerships has met or exceeded the amounts
identified in their respective proxy statement. Such aggregate amounts on a
per unit basis are as follows:
Merger Consideration and
Modified Net Working Capital
Participating Partnership Distribution Per Unit
- -------------------------------------- ------------------------------
McNeil Real Estate Fund IX $428
McNeil Real Estate Fund X 232
McNeil Real Estate Fund XI 220
McNeil Real Estate Fund XII 73
McNeil Real Estate Fund XIV 215
McNeil Real Estate Fund XV 162
McNeil Real Estate Fund XXI
Current Income Units 99
Growth Shelter Units 15
McNeil Real Estate Fund XXII
Current Income Units 0.26
Growth Shelter Units 0.008
McNeil Real Estate Fund XXIII
Current Income Units 0.2676
Growth Shelter Units 0.008
McNeil Real Estate Fund XXIV 357
McNeil Real Estate Fund XXV 0.5075
McNeil Real Estate Fund XXVII 10.95
Fairfax Associates 479,061
McNeil Summerhill 35,497
Special meetings of limited partners in McNeil Real Estate Fund XX,
L.P., Regency North Associates, L.P., McNeil Midwest Properties I, L.P. and
Hearth Hollow Associates, L.P. to approve the Whitehall transaction are
scheduled for Wednesday, February 2, 2000. Closing of the transactions with
respect to such partnerships is expected to occur following the meetings,
subject to obtaining limited partner approval and satisfaction or waiver of
any additional closing conditions. Closing of the transactions with respect
to McNeil Real Estate Fund XXVI, L.P., whose limited partners have
previously approved the Whitehall transaction, is expected to occur after
the satisfaction or waiver of certain closing conditions.
Source: McNeil Partners, L.P.
Contact: Barbara Smith of McNeil Partners, L.P., 972-448-5748
