SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 5(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):September 12, 1996
ARVIDA/JMB PARTNERS, L. P.
- - - - - - - - - - - - - - - - - - - - - -
Delaware 0-16976 36-3507015
- - - - - - - - - - - - - - - - - - - - - -
(State of (Commission (IRS Employer
Organization) File Number) Identification No.)
900 North Michigan Avenue, Chicago, Illinois 60611
- - - - - - - - - - - - - - - - - - - - - - - - - -
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (312) 915-1987
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
N/A
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(Former name or former address, if changed since last report)
ARVIDA/JMB PARTNERS, L.P.
ITEM 5. OTHER EVENTS. On September 12, 1996, Arvida/JMB
Partners, L.P. (the "Partnership") and Starwood/Florida Funding, L.L.C.
("Starwood") entered into a commitment (the "Commitment") for a term
loan (the "Term Loan") to be made to the Partnership in the amount of
$160 million, consisting of an $80 million secured senior tranche and an
$80 million secured mezzanine tranche. The Commitment is attached
hereto as Exhibit 4.1 and incorporated herein by reference.
In a letter dated September 13, 1996, to the Partnership, Raleigh
Capital Associates, L.P. ("Raleigh") expressed its opposition to the
Term Loan and proposed a business combination of the Partnership with a
Raleigh entity (the "Raleigh Proposal") pursuant to which holders of
limited partnership interests (or assignee interests therein,
collectively, the "Interests") in the Partnership would be given the
choice of receiving (i) $500 per Interest in cash or (ii) $525 per
Interest, composed of $400 per Interest in cash plus a security of the
surviving entity that, according to Raleigh, would be worth at least
$125 per Interest. The Raleigh Proposal is expressly contingent upon
the Term Loan not being closed. Although the terms of the Raleigh
Proposal are very general in nature and lack specifics, it is clear that
the Raleigh Proposal values the Partnership's business for significantly
less than the Partnership believes it is worth. Accordingly, the
Partnership has advised Raleigh that it has no interest in the Raleigh
Proposal and that its business is not for sale.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibits:
4.1 Commitment for a Term Loan by and between Arvida/JMB
Partners, L.P. and Starwood/Florida Funding, L.L.C. dated
September 12, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
ARVIDA/JMB PARTNERS, L.P.
By: ARVIDA/JMB MANAGERS, INC.,
its General Partner
By: GARY A. NICKELE
Gary A. Nickele
Vice President
Date: September 18, 1996
EXHIBIT INDEX
Exhibit Description Page
4.1 Commitment for a Term Loan 6 - 27
by and between Arvida/JMB Partners
L.P. and Starwood/Florida Funding,
L.L.C. dated September 12, 1996.
STARWOOD/FLORIDA FUNDING, L.L.C.
Three Pickwick Plaza, Suite 250
Greenwich, Connecticut 06830
203-861-2100
EUGENE A. GORAB Facsimile:
Managing Director 203-861-2101
VIA FAX AND FEDERAL EXPRESS
September 12, 1996
Arvida/JMB Partners, L.P.
900 North Michigan Avenue
Chicago, Illinois 60611
Attention: Mr. Stephen Lovelette
Ladies and Gentlemen:
Based upon the preliminary information that has been provided to
us concerning Arvida/JMB Partners, L.P. and its subsidiaries and
affiliates listed on Exhibit A (the "Borrower") and the assets currently
owned by the Borrower (the "Property") and subject to the conditions,
terms and provisions set forth in this letter agreement (herein, the
"Commitment") and to Borrower's compliance with all of its duties and
obligations hereunder, Starwood/Florida Funding, L.L.C. and/or one or
more of its affiliates or co-investors (individually and collectively,
"Starwood" or "lender") hereby commits to the making of a $160 million
term loan (the "Term Loan") on the terms and conditions hereinafter set
forth. By your acceptance of this Commitment, you agree, subject to the
satisfaction of the conditions set forth in Paragraph II(c), to borrow
the Term Loan from Starwood. Borrower has represented to lender that a
purpose of the Term Loan is, among other things, to enable Borrower to
make a distribution of approximately $350 per limited partnership unit
to Borrower's limited partners.
I. TERMS OF DEBT.
Borrower: Arvida/JMB Partners, L.P.
Term Loan
Facility Amount:$160,000,000, comprised of the Tranche A Secured Term
Loan ("Tranche A") in the amount of $80,000,000 and
the Tranche B Secured Term Loan ("Tranche B") in the
amount of $80,000,000. Tranche A and Tranche B are
sometimes collectively referred to as the "Term Loan".
Points: There shall be points in the amount of $1,600,000,
which shall be earned and payable in full at closing
in consideration of Lender's funding the Term Loan,
but only if the closing occurs.
TRANCHE A
Maturity: June 30, 2002
Amortization: Principal payments (the "Base Amortization") of
$10,000,000 per annum shall be required on the last
day of each calendar year commencing with the calendar
year 1997, with the first such full payment of
$10,000,000 to be due on December 31, 1997; provided,
however, that if either or both of Arvida Parkway
Center and/or the Weston cable system have not been
sold and conveyed in 1997 and 1998,
respectively, as contemplated in the projections
agreed to by Borrower and Lender and, on account
thereof, there would be insufficient net cash flow to
pay such required Base Amortization in the applicable
calendar year, then a portion of the required Base
Amortization due in each or both of such years, as
applicable, will be deferred in the ratio that the
projected net proceeds of the applicable sale bears to
the projected cash flow after project financings of
Borrower for such year as set forth in said
projections, the amount of any such deferral to be
due on the earlier to occur of (a) closing of the sale
of such asset, or (b) December 31, 1998 on account of
Arvida Parkway Center and December 31, 1999 on account
of Weston cable. If the foregoing provisions are
applied the amount to be distributed to the partners
of Borrower shall be withheld until all principal
payments so deferred have been paid. Additional
required amortization shall be in accordance with
"Application of Proceeds" set forth below. Tranche A
may be prepaid at any time and from time to time in
whole or in part with a prepayment premium equal to 1%
of the amount being prepaid; provided, however, that
except as set forth in the next sentence, said
prepayment premium shall apply only if such prepayment
was from a refinancing of Tranche A, other than an
initial disposition by lender or refinancing of all or
any part of its interest in Tranche A as described in
the Section below entitled "Interest". Any repayment
following the acceleration of maturity of Tranche A
(whether on account of default or change of control)
shall be deemed a prepayment and the premium set forth
above shall apply to such prepayment without regard to
the source of proceeds therefor.
Interest: LIBOR + 325 bps per annum or Base or Prime Rate plus
125 bps per annum, each calculated on the basis of a
360-day year for the actual number of days elapsed.
1, 2, and 3 month LIBOR periods shall be made
available, at Borrower's option. Accrued interest
shall be due and payable in arrears and in any and all
events. Interest calculated at the Base or Prime Rate
shall be payable monthly and on the maturity of the
Tranche A Loan. Interest calculated based on LIBOR
shall be payable at the end of each LIBOR period but
in any event at the maturity of the Tranche A loan.
If Tranche A, or any portion thereof, is placed with
another lender, and if such other lender agrees to an
interest rate which is less than that set forth above,
Starwood shall make such lower rate on Tranche A (or
such portion thereof) available to Borrower. Starwood
and Borrower shall cooperate in attempting to place
Tranche A (or any portion thereof) with another lender
at a lower cost of funds to Borrower. The Prime or
Base Rate for any day shall be a rate per annum equal
to the higher of (i) the rate of interest for such day
publicly announced by The Chase Manhattan Bank in New
York City from time to time as its Prime Rate or (ii)
the sum of 0.625% plus the federal funds rate.
TRANCHE B
Maturity: June 30, 2002
Amortization: None required prior to maturity, whether scheduled or
by reason of acceleration. Tranche B shall be
prepayable in whole or in part from time to time. Any
prepayment occurring during the first 36 months of the
term shall be accompanied by payment of "Yield
Maintenance" plus 1%. Thereafter, any prepayment
shall be accompanied by a 1% prepayment premium.
Any repayment following acceleration of maturity of
Tranche B (whether on account of default or change in
control) shall be deemed a prepayment and the Yield
Maintenance plus 1% or the 1% premium, as applicable,
shall apply to such prepayment.
"Yield Maintenance" shall be an amount determined at
the time of prepayment as shall equal the present
value of the excess of (i) an amount equal to the sum
of the then remaining scheduled payments of interest
on the principal prepaid through the third anniversary
of the closing date of Tranche B plus the principal
prepaid (assuming that all principal were repaid at
the third anniversary of the closing date of Tranche
B) over (ii) an amount equal to what would be the sum
of the then remaining scheduled payments of interest
on the principal prepaid through the third anniversary
of the closing date of Tranche B plus the principal
prepaid were all principal paid at the third
anniversary of the closing date of Tranche B and were
interest calculated at the Specified Rate, with said
excess of (i) over (ii) to be present valued to the
date of prepayment using the Specified Rate as the
applicable annual discount rate. As used herein,
"Specified Rate" means, as of the prepayment date, the
then average yield to maturity on US Treasury
Obligations maturing at, or approximately at, the
third anniversary of the closing date of Tranche B.
Interest: A fixed interest rate of 15% per annum, calculated on
the basis of a 360-day year for the actual number of
days elapsed, to be paid in full and in any and all
events, quarterly in arrears.
PROVISIONS APPLICABLE TO TRANCHES A AND B
Application of
Proceeds: Except for the aggregate initial distribution to the
partners of Borrower provided for in the approved
Statement of Sources and Uses, all net cash flow
(including net cash flow generated from operations,
dispositions, project financings and refinancings it
being agreed that debt service on permitted project
financings and project refinancings will be deductions
in determining net cash flow) shall be swept (no less
frequently than bi-weekly, except that net financing
or refinancing proceeds shall be deposited into the
Collateral Account when received) into an account (the
"Collateral Account") with the collateral trustee of
the Term Loan for application in the following order
of priority:
(i) First, to reasonable and customary trustee's and
servicer's fees and costs;
(ii) Second, to amounts (other than scheduled debt
service payments or required reserves) owing under the
documents evidencing and/or memorializing Tranche A
(the "Tranche A Loan Documents"), including, but
without limitation, any principal, interest or other
amounts owing as a result of any Event of Default
under the Tranche A Loan Documents;
(iii)Third, to scheduled interest payments then due
and payable under Tranche A;
(iv) Fourth, to amounts (other than scheduled debt
service payments or any reserves) owing under the
documents evidencing and/or memorializing Tranche B
(the "Tranche B Loan Documents"), including, but
without limitation, any principal, interest or other
amounts owing as a result of any Event of Default
under the Tranche B Loan Documents;
(v) Fifth, to pay scheduled interest payments then
due and payable in respect of Tranche B;
(vi) Sixth, to pay Base Amortization;
(vii)Seventh, to fund any deficiencies in the
"Interest Reserve Account";
(viii) Eighth, commencing with the calendar year
1997, to release to Borrower the "Maximum Distribution
Amount" per partnership unit per annum, non-
cumulative, subject to the satisfaction of the
provisions of the first two sentences of clause (v) of
the covenants and only so long as there shall be no
monetary default or other Event of Default under the
Tranche A or Tranche B Loan Documents, including, but
without limitation, any default in Borrower's then
being in compliance with its "Covenants";
(ix) Ninth, to reduce (in the order of maturity
thereof, e.g., if $2,500,000.00 were paid pursuant to
this subparagraph (ix) in 1997, it would apply toward
the scheduled principal payments next becoming due in
1998, 1999, etc., under subparagraph (vi),
respectively, above) the outstanding principal balance
of Tranche A until no principal shall remain
outstanding under Tranche A; and
(x) Tenth, the balance (including any cash from time
to time in the Collateral Account which is not at such
time to be distributed under certain of the preceding
clauses due to timing and reserve requirements) shall
be deposited into the "Cash Reserve Account".
The "Maximum Distribution Amount" shall be $26.39
times the number of limited partner units (404,000)
for each of 1997 and 1998 and for each year thereafter
shall be the greater of (x) $26.39 times the number of
limited partner units (404,000) and (y) the taxable
income allocable to the partners for such year as
demonstrated to Lender's reasonable satisfaction,
times an assumed overall tax rate of 40%, but in no
event more than $47.50 times the number of limited
partner units (404,000).
Notwithstanding the foregoing, in the event of any
Event of Default occurring with respect to the Term
Loan, lender reserves the right to require that all
gross proceeds from operations,
sales, financings and refinancings be swept
immediately into the Collateral Account and, in such
event, the order of priority for application of said
gross proceeds shall be as set forth in any agreements
between the holders of the Tranche A and Tranche B
pieces and said proceeds shall be applied immediately
upon demand by lenders.
Prior to an Event of Default, distributions under
clauses (i) through (vii) shall be made on a monthly
and/or quarterly basis, as applicable, to pay amounts
currently due and payable under or with respect to
Tranche A and Tranche B. Distributions under clauses
(viii) and (ix) for a calendar year shall be made
annually within 60 days after the end of such calendar
year and only after appropriate reserves for
anticipated net deficiencies as set forth in the
applicable budgets prepared by Borrower and approved
by lender have been established. Subject to
maintaining the appropriate reserve as described
above, funds then in the Cash Reserve Account may be
used for such purposes.
Reserves: (i) An interest-bearing "Interest Reserve Account"
shall be established with a financial institution
approved by lender at closing and Borrower shall
deposit $4,000,000 into such account at closing.
Prior to any default, proceeds in such account shall
be used solely to fund any shortfalls from the
Application of Proceeds to pay scheduled interest
payments on Tranche A and on Tranche B. Said account
shall be replenished from time to time as set forth in
Application of Proceeds so as to maintain a balance of
no less than $4,000,000 (which shall be adjusted
prorata as the principal amount outstanding on Tranche
A is reduced provided no Event of Default exists).
Following an Event of Default, proceeds in said
account may be applied by the lender to any amounts
due or owing under the Loan Documents.
(ii) An interest-bearing "Operating Reserve Account"
shall be established and maintained by Borrower at
closing and Borrower shall deposit $5,000,000 into
such account at closing. Proceeds in such account
shall be used to fund operating expenses and capital
costs in accordance with lender-approved budgets.
Said account shall be replenished from time to time
out of gross cash flow (and deposits into said account
shall be deducted in determining net cash flow) so as
to maintain a balance of no less than $5,000,000. In
the event that the debt services coverage ratio as
described in clause (v) of the Section entitled
"covenants" measured on a rolling four quarter basis,
is less than 1.6 to 1 for 2 consecutive quarters, the
Operating Reserve Account shall immediately be re-
established as an account designated by lender in
which lender has a security interest and thereafter
distributions from said account shall require lender's
approval, and following an Event of Default, proceeds
in said account may be applied by the lender to any
amounts due or owing under the Loan Documents.
(iii)An interest-bearing "Cash Reserve Account" shall
be established at closing with a financial institution
approved by lender. Prior to any Event of Default,
proceeds in such account may be used to prepay Tranche
B principal with applicable Yield Maintenance and/or
premiums and to fund certain items as elsewhere herein
expressly set forth. Said account shall be
replenished from time to time as set forth in
Application of Proceeds. Following an Event of
Default, proceeds in said account may be applied by
the lender to any amounts due or owing under the Loan
Documents.
(iv) In the event that real estate taxes for a
calendar year are not paid by Borrower by November 30
in such calendar year, interest-bearing impound
accounts with a lending institution approved by lender
shall be established for monthly deposits against
accruing real estate tax and assessment liabilities
for the following quarter in equal installments over
the number of months to and including the month in
which such taxes are due and payable. After an Event
of Default such monthly deposits must be in an amount
determined by lender to be sufficient to cover annual
amounts accruing for real estate tax and assessments
liabilities. Prior to any Event of Default, proceeds
in such account shall be used solely to fund the items
reserved for in such account. Said account shall be
funded monthly from gross cash flow (and deposits into
said account shall be deducted in determining net cash
flow). Following an Event of Default, proceeds in
said account may be applied by the lender to any
amounts due or owing under the Loan Documents.
Any of Borrower's unrestricted cash on hand at closing
as set forth in the approved Statement of Sources and
Uses after the establishment of reserves and payment
of all other costs relating to the Term Loan, and
exclusive of any funds to be distributed pursuant to
the first sentence of the Section on Distributions and
Fees, shall be deposited into the Collateral Account
and applied as set forth in a closing statement of
sources and uses prepared by Borrower and approved by
Lender.
Lender shall have a first and prior security interest
in all of the aforesaid accounts.
Distributions
& Fees: Following the closing of the Loan, except for the
aggregate initial distribution to the partners of
Borrower provided for in the approved statement of
sources and uses (estimated to be approximately
$149,000,000), no distributions shall be made to the
partners of Borrower except from proceeds released to
Borrower pursuant to the Eighth Level of Application
of Proceeds. Such distributions for a calendar year
(which shall not exceed the Maximum Distribution
Amount, non-cumulative) shall be made no more
frequently than once, annually, on or before February
28th of the following calendar year, and prior to
distribution, amounts which would otherwise be
distributed pursuant to said Eighth Level shall be
held in the Cash Reserve Account. No fees, cost
reimbursements or other amounts, other than fees, cost
reimbursements and other amounts pursuant to an
approved budget or permitted distributions to
partners, shall be paid to the general partner nor to
any affiliates of the general partner.
Late Charges: Any installment of debt service not paid when due
(except that Borrower will be given a five day grace
period as to the payment of late charges once in a
consecutive twelve month period) shall be subject to a
late charge in the amount of 3% of the installment not
paid when due, which late fees will be credited
against default interest if the delinquent payment and
late charge are paid within thirty (30) days of the
due date.
Default Interest:From and after the occurrence of an Event of Default
or maturity, whether schedule or accelerated, all
amounts outstanding under the Tranche A Loan Documents
and Tranche B Loan Documents shall bear interest at
the lesser of (i) 5% per annum in excess of the actual
interest rate (including interest required to be paid
currently and deferable interest) otherwise applicable
or (ii) the highest lawful rate permitted by
applicable law.
Collateral: As to all assets currently or in the future owned by
the Borrower (the "Property"):
(i) On all portions of the Property consisting of
real property, tangible personal property or
intangible personalty relating thereto, including, but
without limitation, land, improvements thereto and
furniture, fixtures and equipment relating thereto
(collectively, the "Real Property"), Borrower shall
grant a first lien mortgage and deed of trust lien on
the Real Property and a first lien security agreement
(as to tangible and intangible personalty associated
with the Real Property), as well as a first lien
assignment of rents, profits, leases, contracts,
licenses, permits and other agreements with respect to
the Real Property, all as security for repayment of
all amounts owing from time to time under or pursuant
to the Tranche A Loan Documents and Tranche B Loan
Documents (collectively, the "Loan Documents");
provided, however, that said liens shall be second
liens to those securing the "Existing Financing" as to
the collateral currently securing the Existing
Financing; and provided further, however, that
said liens shall be second liens to those securing
"Project Financing" as to the collateral for such
Project Financing. Consents are needed from lenders
under the Existing Financing as set forth on Exhibit B
and Borrower shall make a good faith effort to obtain
the consent from those lenders to the second lien
provided for herein;
(ii) On all portions of the Property consisting of
direct and indirect interests in entities
(collectively, the "Entity Interests"), Borrower shall
grant a first lien pledge and assignment of the Entity
Interests, together with a first lien assignment and
pledge of all distributions, proceeds and profits in
respect of or pursuant to such Entity Interests, all
as security for repayment of all amounts owing from
time to time under or pursuant to the Loan Documents.
Consents are needed to grant the liens set forth in
this clause (ii) for those Entity Interests listed on
Exhibit C and Borrower will make a good faith effort
to obtain such consents;
(iii)On all remaining portions of the Property,
including, but without limitation, all tangible or
intangible personal property not dealt with above
(collectively, the "Remaining Property"), Borrower
shall grant first lien pledges and assignments of the
Remaining Property, together with a first lien
assignment and pledge of all distributions, proceeds
and profits in respect thereof or pursuant to such
Remaining Property, all as security for repayment of
all amounts owing from time to time under or pursuant
to the Loan Documents. Without limitation, except as
otherwise provided herein, lender shall have a first
lien security interest on all reserve accounts
referenced herein and no disbursements shall be made
from such accounts except as directed by lender.
The collateral interests of the Term Loan shall be
pari passu and the tranches of the Term Loan shall be
cross-defaulted. Notwithstanding the foregoing, if
the Tranche A is placed with another lender as a
senior piece, the holder of the Tranche B shall
subordinate its security interest in the collateral
pursuant to a subordination and intercreditor
agreement reasonably satisfactory to both lenders, it
being expressly agreed, however, that the Tranche B
shall in any event retain, without any requirement for
delay or postponement, whatever rights it may have in
the event of the occurrence of an Event of Default,
including, without limitation, foreclosure,
appointment of a receiver and acceleration and all of
its rights in or with respect to bankruptcy.
Subject to lender's review and approval of the
documentation of the Existing Financing and of the
collateral therefor, the Term Loan shall be subject to
the "Existing Financing", which means, collectively,
(1) $11.567 million of first mortgage financing
secured by Arvida Parkway Center, (2) $7.579 million
of first mortgage financing on the Weston Lakes Plaza,
(3) $8.029 million of first mortgage financing on the
Country Isle Plaza, (4) $3.0 million of non-recourse
third-party financing on Cullasaja (not including
deferred interest added to principal), and (5) $11.7
million of construction financing secured by Grand Bay
Buildings #2 and #5 (with all net proceeds from Grand
Bay Buildings #2 and #5 after the retirement of said
construction financing to be applied to retire Tranche
A).
Partial release mechanisms reasonably acceptable to
lender and Borrower for the collateral in the event
for the sale of portions thereof from time to time
will be established in the loan documentation.
Mechanisms reasonably acceptable to lender and
Borrower will also be established for granting lender
first mortgage liens on after acquired property,
whether by Borrower or existing or newly created
subsidiaries or affiliates.
Outside
Closing Date: December 1, 1996, subject to extension pursuant to
clause (c)(ii) of Article II hereof.
Covenants: (i) No secondary encumbrances or other financing
(recourse or nonrecourse) of any kind shall be
permitted except as otherwise expressly provided
herein. No assets shall be acquired except as set
forth in the approved budget or as otherwise expressly
permitted or consented to by lender and/or any other
lender whose approval is required.
(ii) No senior encumbrances shall be permitted except
for: (1) the Existing Financing (including any
refinancing of the loans described in 1 through 3 but
not 4 and 5); (2) an aggregate total $50 million (less
amounts outstanding from time to time on the loans
referenced in clauses [2] and [3] in the definition of
Existing Financing above) of non-recourse project
financing on material terms (including, without
limitation, those relating to the subordination of the
lien of the security for the Term Loan in the
applicable project) reasonably approved by lender
("Project Financing") from time to time on a secured
basis as to portions of the collateral for the Term
Loan that is senior in lien rights to the liens of the
Term Loan on such portion of the collateral; and (3)
assessments and other liens approved by lender in its
sole discretion as part of its due diligence. Project
Financing shall not be secured by any lien on Entity
Interests or Remaining Property. Except as provided
in the next sentence, Project Financing shall only
include development and construction financing for
projects approved by lender in an approved business
plan and shall in all events exclude land financing.
Project Financing may include up to a $20,000,000 (out
of the $50,000,000 cap) non-recourse secured revolving
line of credit for construction costs for residential
units (other than high-rise units) in the Weston
project.
(iii)The loan documents will provide for controls,
reasonably satisfactory to lender and Borrower, over
inter-company loans and advances. In any event, any
inter-company loans must be fully subordinate to
the Term Loan and all rights in bankruptcy must be
assigned to lender.
(iv) The loan documents shall not restrict any
transfers of general or limited partnership interests
in the Borrower. However, the Lender shall have the
right to consent or not consent to any transfer of a
general partner's interest in the Borrower to an
entity not controlled by, controlling or under common
control with the existing general partner, a corporate
restructuring, merger or change of control of either
the Borrower or its general partner, or a termination
of the Management Agreement (hereinafter defined),
provided that Lender's consent shall not be
unreasonably withheld in the case where, in Lender's
judgment, exercised reasonably under the
circumstances, the person or entity directly or
indirectly controlling the Borrower and/or the
Property after the consummation of such transaction is
financially qualified, is reputable, and has either
directly or through persons retained or to be retained
by it sufficient experience in managing and operating
properties and businesses similar to the Property and
Borrower's business. In the event that pursuant to
the foregoing the Lender withholds its consent to such
transfer, restructuring, merger, change-in-control or
termination, the Lender shall have the right to
accelerate the maturity of the Term Loan or of either
Tranche, provided that, in the event of any such
acceleration of maturity, repayment of the Term Loan
or accelerated Tranche, as applicable, shall be
accompanied by payment of an amount equal to the
prepayment premiums and/or Yield Maintenance set forth
above; provided that solely for the purpose of this
clause (iv), the "Specified Rate" to be used in
calculating Yield Maintenance shall equal the
Specified Rate plus 1%. The following shall, in any
event, be conditions to Lender's obligation to give
its reasonable approval of any such transfer,
restructuring, merger, change in control or
termination:
(a) Lender shall have been given such written
notice of such event as Lender may
reasonably require which shall be
accompanied by copies (or drafts) of all
documents executed or to be executed in
connection therewith and such information
as Lender may reasonably require
concerning the background, experience,
financial condition and composition of any
entity or person who shall be directly or
indirectly controlling or managing the
Borrower or the Property;
(b) Lender, upon consummation of the
transaction, shall be paid points in the
amount of one percent (1%) of the
outstanding principal amount of the Term
Loan, plus all reasonable costs and
expenses not to exceed Thirty Thousand
Dollars ($30,000.00) which Lender may
incur to evaluate the information and
documentation given to it in connection
with any of the foregoing events;
(c) no default shall exist under the Term Loan
either at the time consent is required or
on the date of effectiveness of the
transaction and no other financing shall
be defaulted thereby; and
(d) The new person or entity shall execute
such documents and instruments as Lender
may reasonably require under the
circumstances of the transaction. In any
event, Borrower shall remain a single
purpose real estate operating company.
Notwithstanding the foregoing, no transfers,
restructurings, mergers or changes of control shall be
permitted to the extent same would cause a prohibited
transaction for ERISA purposes with lender, cause a
default under any Existing Financing or in respect of
any other material obligations binding upon the
Borrower (e.g., entitlements restrictions).
(v) Borrower shall maintain a debt service coverage
ratio from net cash flow after project financing as to
the Term Loan (including payments of interest and
required amortization), that is not less than 1.6 to
1, measured quarterly on a rolling four quarters
basis. If such coverage is not maintained, no
distributions may be made to the partners of the
Borrower. An Event of Default shall exist in the
event that said coverage ratio is less than 1.3 to 1.
For purposes of the debt coverage ratio, the net cash
flow projected from the sale of Parkway Center will be
included in net cash flow for 1997 as if the gross
sale price thereof was $28,000,000, and the net cash
flow projected from the sale of Weston Cable Company
will be included in net cash flow for 1998 as if the
sale price thereof was $1,800 per subscriber, using
the total number of subscribers as of December 31,
1998, whether or not such closings actually occur
during such years (and shall not be included in any
other calendar year).
(vi) The ratio of the total liabilities of the
Borrower and its subsidiaries (on a consolidated basis
but without duplication), including, but without
limitation, all liabilities related to debt, to Net
Worth shall not exceed 4:1 at any time all or any
portion of the Term Loan remains outstanding. In
addition, in no event shall Borrower's Net Worth be
less than $40,000,000 and if Borrower's Net Worth is
less than $70,000,000 (or will be less than
$70,000,000 after any distribution to the partners),
no distributions shall be made under clause (viii) of
Application of Proceeds under Article I. This
covenant shall be determined quarterly in accordance
with GAAP. In the event that Tranche A, or any part
thereof, is sold to one or more banking institutions,
such banking institutions may require FIRREA
conforming appraisals once annually on any of
Borrower's assets.
(vii)Subject to clause (viii) below, Borrower may
acquire additional land for development provided the
following conditions are satisfied: (1) the funding
source for acquisition of such additional land shall
solely be from proceeds in the Cash Reserve Account;
(2) no defaults exist under the Term Loan or will
result from the acquisition; (3) all acquired land is
zoned and permitted primarily for residential or its
intended use in compliance with applicable legal
requirements (including, without limitation,
concurrency); and (4) the total of all land acquired
shall not exceed $20 million in acquisition cost on an
aggregate basis or $10 million in any year. From and
after the second anniversary of the closing of the
Term Loan, no additional land shall be acquired for
development. Notwithstanding the foregoing, lender
acknowledges that the purchase price for the HAE
property may be paid over an extended period of time.
Notwithstanding anything to the contrary set forth in
the Section on Application of Proceeds, net cash flow
that otherwise would have been applied to prepay
Tranche A principal under clause (x) of Application of
Proceeds but which Borrower determines will be
required for acquisition of land in accordance with an
approved budget may be deposited in the Cash Reserve
Account to be used for such purpose.
(viii) Except as may be required under existing
DRI's or to maintain or preserve entitlements, no land
shall be acquired or construction or intract lot
development shall be commenced as to any real property
during any period in which the total of unsold housing
units completed or under construction (excluding
models and midrise and highrise buildings) exceeds 20%
of the prior 12 months closings. As to midrise and
highrise buildings, no construction shall be commenced
as to such buildings unless 50% of the units therein
are subject to binding contracts.
Lender may waive compliance in whole or in part of one
or more of the Covenants from time to time in its sole
and absolute discretion; provided, however, that no
such waiver shall be binding upon lender unless set
forth in a writing delivered to Borrower, any such
waiver shall only be operative to the extent set forth
in such written waiver and no waiver shall be
construed as consent to any failure of subsequent
compliance nor as consent to any failure of compliance
with any other Covenant.
Interest Rate
Protection: If requested by lender at closing, Borrower shall
purchase an interest rate cap on $40 million of
indebtedness extending protection against LIBOR
exceeding 7% per annum on such amount of indebtedness
for a period of two years. Lender shall provide loan
proceeds (in addition to the $160 million) to purchase
such cap.
Assignments: The Term Loan shall be evidenced by negotiable
instruments and lender reserves the rights to transfer
portions of its interest in the Term Loan from time to
time provided that throughout the term of the Loan
(prior to any event of default), lender shall be the
lead lender on Tranche B and the lead lender on
Tranche A if lender retains more than a 25% interest
therein, and Borrower shall have reasonable approval
over the parties to whom lender desires to transfer
portions of its interest in the Loan.
Management
Agreement: So long as any amounts are outstanding under the Term
Loan, without the prior written consent of lender,
which consent may be granted or withheld in lender's
sole and absolute discretion, the existing management,
advisory and supervisory agreement (the "Management
Agreement") between the Borrower and Arvida Company
shall not be terminated by either party thereto
(except that Arvida Company shall have the right to
terminate in the event of the removal of the general
partner by the limited partners as set forth in the
Management Agreement but the same may cause the
acceleration of the Term Loan subject to the
conditions set forth in clause (iv) under Covenants)
nor modified in any material respect. Any new manager
or management agreement will be subject to lender's
prior reasonable approval. Except as provided above,
this condition shall control over any contrary
provisions in said Management Agreement. However, any
fees or reimbursements or other amounts to be paid to
Arvida Company pursuant to said Management Agreement
shall be subject to lender's approval from time to
time as part of the budget and annual business plan
approval process.
Budgeting
and Other
Lender Rights: Within 45 days prior to the commencement of each
calendar year, Borrower shall submit proposed
operating and capital budgets for the next ensuing
calendar year to lender for its review and approval.
Once a budget is approved, and except for tolerances
agreed to by lender as to certain line items, no
unbudgeted expenditures shall be incurred except to
the extent that such expenditures result from
emergency situations where expenditure is necessary to
protect life or preserve property. Budgets shall be
accompanied by business/marketing plans for the budget
period which shall also be subject to lender approval.
Budgets/business plans may include material
transactions (which shall be subject to lender
approval as part of the budget approval) between
Borrower and any of its affiliates, provided that such
transactions are at prices not less favorable to
Borrower than fair market prices and are on terms and
conditions not less favorable to Borrower than could
be reasonably obtained in an arm's-length basis from
unrelated third parties. Representatives of Borrower
and lender shall meet no less frequently than
quarterly, or at lender's request, monthly, to discuss
operating performance, budget variances, capital
improvement programs, proposed modifications to
marketing plans and other matters relating to the
Property and the business activities of Borrower. The
management of Borrower shall consult with and shall
consider the advice of the representatives of lender.
The documents shall provide for mechanisms mutually
acceptable to lender and Borrower to resolve disputes
between lender and Borrower over approval of the
budget.
Defaults: The documents shall provide for customary "Events of
Default" and customary notice and cure periods for
senior/mezzanine financings made to credit-worthy
borrowers, including, without limitation, payment
defaults, other monetary defaults, including failure
to maintain reserves; incorrect material
representations or warranties; failure to comply with
covenants, including negative covenants and financial
covenants; failure to perform in other material
respects under the Loan Documents; cross-default to
other Borrower indebtedness, including, without
limitation, any Existing Financing or Project
Financing; involuntary or voluntary receivership or
bankruptcy filing by or against Borrower or subsidiary
or affiliate included on the organization chart
attached hereto as Exhibit A ("Relevant Affiliate")
other than those excluded for this purpose in the loan
documents; insolvency of Borrower or any subsidiary or
Relevant Affiliate other than those excluded for this
purpose in the loan documents; and judgments; and
ERISA violations.
Recourse: The Term Loan shall be fully recourse to the Borrower,
including as to all environmental indemnities, but
shall be nonrecourse to all of its general and limited
partners. Subsidiaries of Borrower shall guaranty the
Term Loan. Deficit capital accounts of the partners
of the Borrower and partner obligations to (i) pay
amounts to other partners, (ii) contribute capital to
the Borrower or (iii) restore capital accounts, shall
not be considered assets of the Borrower for purposes
of the recourse provisions.
Governing Law: New York or Illinois, at Starwood's election.
II. CONDITIONS PRECEDENT TO CLOSING.
Starwood's obligation to make the Term Loan shall be subject to,
without limitation, satisfaction of the following "Closing Conditions",
any one of which may be waived, in whole or in part, by Starwood, in
writing:
(a) DUE DILIGENCE. Starwood shall by October 2, 1996
have completed, to its satisfaction, all fiscal and financial due
diligence with respect to the Property and the Borrower and its
subsidiaries and affiliates, including, without limitation,
environmental and engineering due diligence, due diligence
relating to the compliance of the Property and Borrower and its
subsidiaries and affiliates with all applicable laws, ordinances,
rules and regulations and due diligence relating to the value,
expenses, capital expenditures, income, liabilities of Borrower
and its subsidiaries and affiliates, litigation and other matters
relating to the Property and Borrower and its subsidiaries and
affiliates. Borrower shall cooperate with Starwood and shall
grant Starwood access to the Property, to all books, records,
files, reports, financial statements, surveys, appraisals, loan
documents, partnership documents and other matters relating to the
Property and the Borrower and its subsidiaries and Relevant
Affiliates and to all personnel, agents and consultants (including
attorneys and accountants) of Borrower after reasonable notice to
Borrower. Starwood may terminate this Commitment at any time on
or before 5:00 P.M. Eastern Standard Time on October 2, 1996, by
written notice to Borrower if its due diligence review is
unsatisfactory. Failure to give such notice shall not, however,
be construed as a waiver of any condition set forth below whether
or not review of such matter is part of Starwood's due diligence
review. Such due diligence review shall not limit or otherwise
affect the nature of the warranties of Borrower contained in the
loan documents unless Eugene Gorab or Jay Sugarman have actual
knowledge of facts disclosed in any written reports prepared by
advisors of lender making any warranty untrue at closing in any
material respect.
(b) OTHER CONDITIONS. Each condition set forth below
shall be a condition to lender's obligation to close the loan (any
one of which may be waived, in writing, by lender).
(i) Title Insurance and Surveys. At closing
Borrower will provide to Lender, from an insurance
company selected by lender and reasonably approved by
Borrower, full extended ALTA lenders policies of title
insurance insuring the priority of the real estate
collateral subject only to such exceptions as lender
may approve, with such endorsements as lender and its
counsel may require, including, but without
limitation, an endorsement deleting the creditors
rights exceptions (Borrower agreeing to provide all
financials and certificates as the title company may
require to obtain same), elimination of the survey
exception by reference to a current, as-built ALTA
completion survey to be reviewed and approved by
lender and its counsel.
(ii) No Litigation. There shall be no material
adverse (in lender's reasonable judgment) litigation
pending or known to be threatened against Borrower or
its affiliates, the Property, or lender as it relates
to the Term Loan that was not pending or known to be
threatened and disclosed to lender prior to October 2,
1996. As to litigation pending and disclosed to
lender prior to October 2, 1996, there shall have been
no material adverse (in lender's reasonable judgment)
development with respect thereto, and in no event
shall there be any injunction or other comparable
order issued which prevents the closing of the
transactions contemplated hereby.
(iii)No Bankruptcy. At no time on or before the
closing date of the transactions contemplated hereby
shall any of the following events have occurred with
respect to, by or against Borrower or any subsidiary
or Relevant Affiliate if as to such Relevant Affiliate
it would have a material adverse effect on Borrower:
(a) the commencement of a case under Title 11 of the
U.S. Code, as now constituted or hereafter amended, or
under any other applicable federal or state bankruptcy
or similar law; (b) the appointment of a trustee or
receiver of any property interest; (c) an assignment
for the benefit of creditors; (d) an attachment,
execution or other judicial seizure of a substantial
property interest; (e) the taking of, failure to take,
or submission to, any action indicating an inability
to meet its financial obligations as they accrue; or
(f) a dissolution or liquidation.
(iv) No Condemnation. At no time on or before the
closing date of the transactions contemplated hereby
shall any proceedings have been commenced with respect
to the condemnation or taking by eminent domain of any
material (in lender's reasonable determination)
portion of the Property nor shall any portion of the
Property been conveyed in lieu of any such
condemnation or eminent domain proceeding.
(v) No Casualty. At no time on or before the
closing date of the transactions contemplated hereby
shall there have occurred any destruction of or damage
or loss to any material (in lender's reasonable
judgment) portion of the Property from any cause
whatsoever, unless the same has been fully repaired
and restored as of the Closing Date.
(vi) Material Adverse Change. There shall be no
material adverse change with respect to the operation,
financial condition or prospects of the Borrower, its
subsidiaries or Relevant Affiliates, taken as a whole,
since June 30, 1996 or the Property since October 2,
1996.
(vii)Loan Documents. Borrower and Starwood shall
have reasonably agreed upon the form of all loandocuments,
including, without limitation, loanagreements, mortgages, notes,
trust indentures, servicing agreements, intercreditor agreements
(if required), cash collateral account agreements and thelike,
customary and appropriate for senior/mezzaninefinancings to credit-
worthy borrowers and includingsuch additional provisions,
warranties, conditions toclosing and covenants (it being
understood, however,that there would be no financial covenants
[other than reporting requirements] in addition to those specified
herein and no additional restrictions on financing or
acquisition of land or construction of houses orresidential
projects in addition to those specifiedherein) as are customary, such
as warranties relatingto Borrower (including, without limitation, as
to its status as a real estate operating company), its
subsidiaries and Relevant Affiliates and the Property,
requirements for attorneys' opinions, evidence of corporate
and partnership existence and authority,delivery of requisite
approvals, indemnities (subjectto the limitations set forth under
Section I entitled "Recourse") by Borrower (including, without
limitation, for ERISA, securities violations and
environmental), insurance requirements, provisionsrelating to
casualty and condemnation and reporting requirements.
(c) BORROWER CONDITIONS. Borrower's obligations to close the
Loan and borrow the funds is expressly conditioned upon (i) Borrower's
having reasonably agreed to the form of all of the loan documents,
including, without limitation, loan agreements, mortgages, notes,
trusts, indentures, servicing agreements, intercreditor agreements (if
required), cash collateral account agreements and the like, customary
and appropriate for senior/mezzanine financings to credit-worthy buyers
as set forth in subparagraph (b)(vii) above and (ii) there not being in
effect any injunction or comparable order issued by a court against
proceeding with or closing the transaction that is the subject of this
Commitment, provided that the Borrower has used reasonable efforts to
defend against the issuance of such injunction or the entry of such
order and in the event of the issuance of such injunction or order the
Outside Closing Date will be extended until December 15, 1996, if
necessary, for Borrower to seek the dissolution, removal or vacation of
such injunction or order.
III. EXCLUSIVITY AND BREAK UP FEE.
In consideration of the issuance of this Commitment and the
considerable efforts, opportunity cost, and expenses which Starwood has
incurred and will incur in analyzing and negotiating this Commitment
with you and in order to induce Starwood to proceed hereunder, Borrower
agrees that it will not pursue or negotiate any other offers for (i) one
or more portfolio financings or (ii) one or more debt recapitalizations,
in either case of a similar size (in the aggregate) or purpose (i.e., to
obtain excess financing proceeds which may be distributed to limited
partners) to the Term Loan with any third party. The provisions of this
grammatical paragraph shall neither apply after the lender's notice to
Borrower that it will not proceed with the loan for any reason nor
survive the termination of this Commitment.Unless Starwood notifies
Borrower, in writing, that Starwood has elected not to proceed with the
Term Loan due to matters disclosed in its due diligence review, in the
event that within a period commencing July 29, 1996 and ending on the
Outside Closing Date, Borrower enters into an agreement for (i) one or
more portfolio financings, or (ii) one or more debt recapitalizations,
in either case of a similar size (in the aggregate) or purpose (i.e., to
obtain excess financing proceeds which may be distributed to limited
partners) to the Term Loan with any third party, Borrower agrees to pay
to Starwood, within five days following Starwood's written demand
therefor, a "Break-Up Fee" in an amount equal to (i) Two Million Four
Hundred Thousand Dollars ($2,400,000.00) if such agreement is not with
an Affiliated Third Party, or (ii) Four Million Four Hundred Thousand
Dollars ($4,400,000.00) if such agreement is with an Affiliated Third
Party. The "Break-Up Fee", together with the expense reimbursement for
which provision is made in Article IV, will constitute agreed and
liquidated damages in full payment of all obligations of Borrower to
Lender related to or arising out of this Commitment and the transaction
that is the subject hereof and such amounts constitute Lender's sole and
exclusive remedy in such event, except that (i) if no Break-Up Fee is
payable hereunder the provisions of the following paragraph may apply
and (ii) the provisions of Article V and the penultimate paragraph of
Article IV shall apply notwithstanding the foregoing. For purposes
hereof, an "Affiliated Third Party" shall be any entity in which any
executive officer (Senior Vice President or above), director or direct
or indirect owner of a general partner of Borrower or of JMB Realty
Corporation has a direct or indirect material interest (and, for this
purpose, a "material" interest shall include, without limitation, any
entitlement to receive distributions of or on promoted or carried
interests or any entitlement to receive fees).Notwithstanding
any provision set forth in this Commitment to the contrary, in the event
of Borrower's default or breach in closing the transaction that is the
subject of this Commitment, other than a circumstance in which the
Borrower is required to pay a Break-Up Fee, in which case the obligation
to pay the Break-Up Fee shall control, Borrower will pay to lender, as
agreed and liquidated damages, the sum of $1,600,000.00 ("Liquidated
Damages Amount"), it being agreed that in such event Lender will suffer
damages incapable of exact ascertainment, and after payment thereof by
Borrower to Lender neither party will have any further rights or
obligations pursuant to this Commitment, and such amount constitutes
lender's sole and exclusive remedy except that the provisions of Article
V and the penultimate paragraph of Article IV shall survive.
IV. EXPENSES; LITIGATION COSTS.
All expenses and costs associated with lender entering into this
Commitment and with the preparation and negotiation of the loan
documents and the closing of the Term Loan, and all reasonable out of
pocket expenses incurred by lender in connection with its due diligence,
including, but without limitation, survey and title costs, recording and
filing fees and taxes, fees of independent consultants and all
attorneys' fees, costs and expenses with respect to the foregoing shall
be paid on the following basis:
(a) In the event that the Term Loan does not close due to
a default by lender in its obligation to fund, Borrower shall not
be obligated to pay any of such costs and expenses of
lender;
(b) If the Term Loan closes, Borrower shall pay all of the
aforesaid costs, provided that the maximum amount to be paid by
Borrower on account of lender's attorneys' fees and costs,
lenders' third party consultants and travel and lodging for
lenders' employees shall not exceed $325,000.00;
(c) In the event that lender terminates this Commitment
under Subsection (a)of Section II, or if a Break-Up Fee is paid,
the maximum required reimbursement for all such costs and expenses
by Borrower shall be $100,000.00; and
(d) In all other instances (except where there has been
paid the Liquidated Damages Amount) the maximum required cost
reimbursement by Borrower shall be $325,000.00.
If the Term Loan closes, all closing costs, expenses and fees
shall be paid by Borrower at closing. Otherwise, Borrower shall pay
same (provided and to the extent Borrower is required to pay same
hereunder) within thirty (30) business days of receiving an invoice
therefor.
In the event of any litigation between the parties hereto
respecting this Commitment, the costs and expenses, including, without
limitation, reasonable attorneys' fees, court costs, and costs of appeal
of the prevailing party shall be paid by the other party.
Each party, by its execution and/or acceptance hereof, hereby
represents and warrants to the other party that it has the full power
and authority to execute, deliver and perform this Agreement and that
this Agreement has been duly and validly executed and delivered by such
party and is enforceable against such party subject to and in accordance
with its terms.
V. INDEMNITY.
Borrower hereby agrees to indemnify and hold harmless Starwood and
its affiliates, including, without limitation, BSS Capital II, L.L.C.
("BSS") and all of their respective members, officers, directors,
managers, partners, employees, agents, counsel and direct or indirect
owners from and against (A) all claims for brokerage or finders fees or
commissions relating to the transactions contemplated by the Commitment
unless such broker or finder was employed by Starwood and (B) any and
all loss, cost, expense or liability incurred by any indemnified party
in respect of any claims made by any third party as a result of or in
connection with the execution and delivery of this Commitment, any
performance pursuant to this Commitment or any publicity, press release,
filing or other oral or written statements made by Borrower or its
subsidiaries, affiliates or representatives with respect to the
transactions contemplated by this Commitment, such indemnity to include,
but without limitation, claims of limited partners or of parties
currently involved in tendering for such limited partnership interests,
provided, however, that in no event shall Borrower have any liability
under such indemnification for any loss, cost, expense or liability
arising out of (x) any gross negligence, recklessness or intentional
misconduct of any indemnified party, or (y) any breach by any
indemnified party of the existing Confidentiality Agreement by and
between BSS and Borrower, or this Commitment. Borrower agrees, promptly
upon demand by Starwood, from time to time, to reimburse the undersigned
for all such indemnified losses, costs, expenses and liabilities.
Starwood represents that neither it nor any of its affiliates has
engaged or has any actual knowledge of any broker or finder in
connection with the Term Loan. In no event will Borrower be required to
pay more than one law firm for all of the Indemnified Parties. The
provisions of this Article V shall survive any termination of this
Commitment.
VI. GOVERNING LAW.
This Commitment shall be governed and construed in accordance with
Illinois law, without regard to conflict of law provisions.
VII. ENTIRE AGREEMENT.
This commitment and the exhibits hereto represent the entire
understanding of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, discussions, negotiations
and understandings, including, without limitation, that certain letter
dated July 29, 1996 between BSS and Borrower, as extended, but excluding
that certain Confidentiality Agreement dated July 18, 1996 between BSS
and the general partner of Borrower which shall survive the execution
hereof and remains in full force and effect.
VIII.ACCEPTANCE OF COMMITMENT.
The Borrower may only accept this Commitment by executing and
delivering the enclosed duplicate copies hereof to Starwood on or before
September 12, 1996, accompanied by a $100,000 deposit against the cost
reimbursement obligations of the Borrower (to be paid by a certified or
cashier's check or by wire transfer to Starwood's account). The deposit
shall not be construed as a limit on Borrower's obligation for expense
reimbursement, the only limit being as set forth in Article IV. In the
event this Commitment is not accepted in the manner set forth above on
or before September 12, 1996, then this Commitment shall automatically
expire and shall be of no further force or effect. In the event that,
for any reason, Starwood decides not to proceed with the transactions
contemplated herein, then, all out of pocket costs and expenses incurred
by lender in connection with the transactions contemplated hereby shall
be reimbursed from said deposit in accordance with Article IV hereof,
and the balance, if any, shall be returned to the Borrower provided the
Borrower shall not be in default of their obligations hereunder. In the
event the transactions contemplated hereby fail to close and the Break
Up Fee or Liquidated Damages Amount shall be owing to lender, then said
deposit may, in the discretion of lender, be applied against said Break
Up Fee or Liquidated Damages Amount, as applicable. In the event that
the transactions contemplated hereby close, then said deposit shall be
credited against the Loan Fees and the Borrower shall pay Starwood's
costs and expenses as more fully set forth in Article IV.
IX. TERMINATION.
Either party shall have the right to terminate this Commitment
(other than with respect to Borrower's Obligations under Articles III
(with respect to any accrued obligation to pay the Break-Up Fee or
Liquidated Damages Amount), IV and V hereof which shall survive any such
termination) if the Term Loan has not closed by the Outside Closing
Date, without a breach or default by either party.
X. STANDSTILL.
The provisions of the first full paragraph on page 3 of that
certain Confidentiality Agreement made as of July 18, 1996 between
Arvida/JMB Managers, Inc. and BSS Capital II, L.L.C. will be
incorporated in the loan documents and will remain in full force and
effect and binding upon lender and its affiliates, Representatives and
Investors (as said terms are defined in such Agreement) throughout the
term of the Loan.
XI. LENDER'S REPRESENTATION.
Lender represents and warrants to Borrower that lender has
adequate funds and/or resources to fund the Term Loan as contemplated in
this Commitment.
We look forward to working with you on this transaction.
Very truly yours,
Starwood/Florida Funding, L.L.C.
By: BRM of Delaware, Inc.
General Manager
By: /s/ Eugene A. Gorab
------------------------
Eugene A. Gorab
Executive Vice President
CONFIRMED AND AGREED TO BY:
Arvida/JMB Partners, L.P. , a
Delaware limited partnership
By: Arvida/JMB Managers, Inc.,
its general partner
By: /s/ Stephen A. Lovelette
----------------------------
Name: Stephen A. Lovelette
<PAGE>
EXHIBIT A
[Organizational chart of Arvida/JMB Partners, L.P. and certain of its
Affiliates]
<PAGE>
EXHIBIT B
EXISTING FINANCING
1. $8,100,0000 Loan dated June 17, 1996, from Arvida/JMB
Partners, L.P. in favor of The Variable Annuity Life
Insurance Company - Country Isles Shopping Center - Broward
County, Florida
2. $7,500,000 Loan dated January 2, 1996 from Arvida/Lakes
Plaza, L.P. in favor of Barnett Bank of Broward County, N.A.
- Lakes Plaza Shopping Center - Weston,
Broward County, Florida
3. Loan dated October 7, 1992 from Arvida/JMB Partners, Center
Office Partners, Center Retail Partners and Center Hotel
Limited Partnership in favor of The Chase Manhattan Bank
(formerly known as Chemical Bank) - Parkway Center (Income
Property), Palm Beach County, Florida
4. $24,000,000 Loan dated January 14, 1994, from Arvida/Grand
Bay Limited Partnership through Arvida/Grand Bay Limited
Partnership VI, in favor of Barnett Bank of Broward County,
N.A. - Grand Bay Condominium, Longboat Key, Sarasota,
Florida
<PAGE>
EXHIBIT C
ENTITY INTERESTS
Arvida Corporate Park Associates Joint Venture
Arvida Pompano Associates Joint Venture
Arvida/Boose Joint Venture (Metrodrama)
The AOK Group
Country Isles Associates
Cullasaja Joint Venture
HAE Joint Venture
Ocala 202
Tampa 301 Associates
