FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 33-20527
BRUNNER COMPANIES INCOME PROPERTIES L.P. I
(Exact name of small business issuer as specified in its charter)
Delaware 31-1234157
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (803) 239-1000
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
September 30, 1995
<S> <C> <C>
Assets
Cash:
Unrestricted $ 202,727
Restricted-tenant security deposits 10,431
Accounts receivable 155,647
Escrows for taxes 87,085
Other assets 211,514
Investment properties:
Land $ 4,123,131
Buildings and related personal property 20,896,612
25,019,743
Accumulated depreciation (4,859,681) 20,160,062
$20,827,466
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 5,365
Tenant security deposits 12,231
Accrued taxes 160,306
Other liabilities 10,812
Mortgage notes payable (Note B) 19,277,365
Partners' Capital (Deficit)
General partner $ (23,123)
Class A Limited Partners - (552,000 units) 1,076,652
Class B Limited Partners - (61,333 units) 307,858 1,361,387
$20,827,466
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
b) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Rental income $615,937 $ 616,310 $1,855,714 $1,871,810
Other income 4,615 5,826 14,027 10,694
Total revenues 620,552 622,136 1,869,741 1,882,504
Expenses:
Operating 56,115 56,034 135,528 144,992
General and administrative 21,183 20,488 69,650 70,576
Property management fees 19,962 23,193 61,938 68,644
Depreciation 168,279 169,165 501,163 507,495
Amortization 11,564 5,096 22,105 13,816
Interest 447,252 455,388 1,348,962 1,398,434
Property taxes 53,436 55,086 160,262 165,258
Tenant reimbursements (71,187) (46,728) (215,691) (199,152)
Total expenses 706,604 737,722 2,083,917 2,170,063
Net loss $(86,052) $(115,586) $ (214,176) $ (287,559)
Net loss allocated to general
partner (1%) $ (861) $ (1,156) $ (2,142) $ (2,876)
Net loss allocated to
Class A limited partners
(89.1%) (76,672) (102,987) (190,831) (256,215)
Net loss allocated to
Class B limited Partners
(9.9%) (8,519) (11,443) (21,203) (28,468)
$(86,052) $(115,586) $ (214,176) $ (287,559)
Net loss per limited
partnership unit $ (0.14) $ (0.19) $ (0.35) $ (0.46)
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
c) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
General Limited Partners
Partner Class A Class B Total
<S> <C> <C> <C> <C>
Original capital contributions $ 1,000 $5,520,000 $613,330 $6,134,330
Partners' capital (deficit) at
December 31, 1994 $(20,981) $1,267,483 $329,061 $1,575,563
Net loss for the nine months
ended September 30, 1995 (2,142) (190,831) (21,203) (214,176)
Partners' capital (deficit)
at September 30, 1995 $(23,123) $1,076,652 $307,858 $1,361,387
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
d) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (214,176) $ (287,559)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 501,163 507,495
Amortization of loan costs and leasing
commissions 36,605 62,112
Change in accounts:
Restricted cash 122 --
Accounts receivable (17,759) 59,053
Escrows for taxes 109,603 (81,048)
Other assets (54,651) (35,159)
Accounts payable (4,963) 408
Tenant security deposits 1,678 --
Accrued taxes (1,188) 100,735
Other liabilities (101,681) 2,654
Net cash provided by operating activities 254,753 328,691
Cash flows from investing activities: -- --
Cash flows from financing activities:
Loan extension costs (59,413) (34,911)
Payments on mortgage notes payable (532,568) (181,889)
Net cash used in financing activities (591,981) (216,800)
Net (decrease) increase in cash (337,228) 111,891
Cash at beginning of period 539,955 361,565
Cash at end of period $ 202,727 $ 473,456
Supplemental disclosure of cash flow information:
Cash paid for interest $1,478,004 $1,350,138
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
e) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b)of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the Managing General Partner, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three and
nine month periods ended September 30, 1995, are not necessarily indicative
of the results that may be expected for the fiscal year ending December 31,
1995. For further information, refer to the financial statements and footnotes
thereto included in the Partnership's annual report on Form 10-KSB for the
fiscal year ended December 31, 1994.
Reclassifications
Certain reclassifications have been made to the 1994 information to conform
to the 1995 presentation.
Note B - Mortgage Notes Payable
On September 29, 1995, the Partnership successfully closed on a loan
modification and extension for the Partnership's mortgage notes payable. A
deposit of $192,980 made in the second quarter of 1995 was applied to the
mortgage principal and an additional $157,020 was paid to reduce the outstanding
principal balance of the Georgetown note by $50,000 and the Hitchcock note by
$300,000. The maturity date of the loans was extended from June 10, 1995, to
October 10, 1998, with all three loans requiring monthly payments to be applied
first to interest at the rate of 9.0% per annum with the remainder reducing the
outstanding principal balances. All three loans are now cross-collateralized
and cross-defaulted and are being amortized over eighteen years. The principal
balances at September 30, 1995, and the monthly principal and interest payments
by property are as follows:
Principal Monthly
Balance Payments
Georgetown $ 1,527,432 $ 14,304
White Horse 6,883,442 64,460
Hitchcock 10,866,491 101,759
$19,277,365
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Partnership's investment properties consist of three retail centers.
The following table sets forth the average occupancy of the properties for the
nine months ended September 30, 1995 and 1994:
Average
Occupancy
1995 1994
Georgetown Landing
Georgetown, South Carolina 92% 100%
Whitehorse Plaza
Greenville, South Carolina 98% 99%
Hitchcock Plaza
Aiken, South Carolina 99% 99%
The decrease in occupancy at Georgetown was the result of the move out of a
tenant occupying 3,600 square feet in January of 1995. A tenant occupying 1,200
square feet at Georgetown signed a three year lease renewal in the first quarter
of 1995. Another tenant signed a new lease to occupy 1,200 square feet starting
in the fourth quarter of 1995.
The Partnership incurred a net loss of $214,176 for the nine months ended
September 30, 1995, compared to a net loss of $287,559 for the corresponding
period of 1994. A net loss of $86,082 was realized for the three months ended
September 30, 1995, compared to a net loss of $115,586 for the corresponding
period of 1994. The decrease in net loss is primarily due to a decrease
in total expenses. Interest expense decreased primarily due to loan costs which
were fully amortized in the second quarter of 1995. Interest expense also
decreased due to the reduction of the outstanding mortgage principal. Operating
expenses decreased due to lower common area maintenance expenses at Hitchcock.
Partially offsetting the decrease in total expenses was an increase in
amortization expense due to the Partnership expensing the remaining unamortized
lease commission of a tenant which vacated Hitchcock prior to the end of its
lease. The decrease in rental revenues for the nine months ended September 30,
1995, was primarily due to the lower occupancy at Georgetown during that
period.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expense. As part of this plan, the Managing General Partner attempts to protect
the Partnership from the burden of inflation-related increases in expenses by
increasing rents and maintaining a high overall occupancy level. However,
due to changing market conditions, which can result in the use of rental
concessions and rental reductions to offset softening market conditions, there
is no guarantee that the Managing General Partner will be able to sustain such
a plan.
At September 30, 1995, the Partnership had unrestricted cash of $202,727
compared to $539,955 at December 31, 1994. Net cash provided by operating
activities decreased primarily due to interest payments made September 29,
1995, at the time of the mortgage loan extension closing. Net cash used in
financing activities increased as a result of a $350,000 principal paydown on
the Georgetown and Hitchcock mortgage notes in 1995.
The sufficiency of existing liquid assets to meet future liquidity and
capital expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and meet other operating needs of the Partnership. Such assets are
currently thought to be sufficient for any near-term needs of the Partnership.
The mortgage indebtedness of $19,277,365 matures October 10, 1998. Any future
cash distributions will depend on the levels of net cash generated from
operations, property sales, and the availability of cash reserves. No cash
distributions were made during fiscal year 1994 or during the first nine months
of 1995.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index contained herein.
(b) Reports on Form 8-K:
None filed during the quarter ended September 30, 1995.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
BRUNNER COMPANIES INCOME PROPERTIES L. P. I,
a Delaware limited partnership
By: Brunner Management Limited
Partnership, an Ohio Limited Partnership,
its General Partner
By: 104 Management, Inc., an Ohio corporation,
its Managing General Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President
By: /s/Robert D. Long, Jr.
Robert D. Long, Jr.
Controller and Principal
Accounting Officer
Date: November 13, 1995
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
10.47 Third loan modification and extension agreement, cross-pledge and
default agreement, and mortgage amendment agreement relating to
Hitchcock Plaza effective September 29, 1995 by and between New
York Life Insurance Company and Brunner Companies Income
Properties, L.P. I, a Delaware Limited Partnership.
10.48 Third loan modification and extension agreement, cross-pledge and
default agreement, and mortgage amendment agreement relating to
Whitehorse Plaza effective September 29, 1995 by and between New
York Life Insurance Company and Brunner Companies Income
Properties, L.P. I, a Delaware Limited Partnership.
10.49 Third loan modification and extension agreement, cross-pledge and
default agreement, and mortgage amendment agreement relating to
Georgetown Landing effective September 29, 1995 by and between New
York Life Insurance Company and Brunner Companies Income
Properties, L.P. I, a Delaware Limited Partnership.
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Brunner
Companies Income Properties L.P. I's 1995 Third Quarter 10-QSB and is qualified
in its entirety by reference to sch 10-QSB.
</LEGEND>
<CIK> 0000830737
<NAME> BRUNNER COMPANIES INCOME PROPERTIES L.P. I
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 202,727
<SECURITIES> 0
<RECEIVABLES> 155,647
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 25,019,743
<DEPRECIATION> 4,859,681
<TOTAL-ASSETS> 20,827,466
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 19,277,365
<COMMON> 0
0
0
<OTHER-SE> 1,361,387
<TOTAL-LIABILITY-AND-EQUITY> 20,827,466
<SALES> 0
<TOTAL-REVENUES> 1,869,741
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,083,917
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,348,962
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (214,176)
<EPS-PRIMARY> (.35)
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
STATE OF SOUTH CAROLINA ) THIRD LOAN MODIFICATION AND
) EXTENSION AGREEMENT, CROSS-PLEDGE
COUNTY OF AIKEN ) AND DEFAULT AGREEMENT, AND
MORTGAGE AMENDMENT AGREEMENT
THIS THIRD LOAN MODIFICATION AND EXTENSION AGREEMENT, CROSS-PLEDGE
AND DEFAULT AGREEMENT, AND MORTGAGE AMENDMENT AGREEMENT ("Agreement") is made
and executed to be effective the 29th day of September, 1995, by and between NEW
YORK LIFE INSURANCE COMPANY ("Lender" or "New York Life"), and BRUNNER COMPANIES
INCOME PROPERTIES, L.P. I, a Delaware Limited Partnership ("Brunner" or
"Borrower" or "Maker"), who hereby agree as follows:
W I T N E S S E T H :
WHEREAS, MBB Development Associates, an Ohio General Partnership
(hereinafter "MBB Development Associates") executed its certain Promissory Note
("Note") dated June 8, 1988 whereby it promised to pay to the order of New York
Life Insurance Company the sum of Eleven Million Four Hundred Thousand Dollars
($11,400,000.00), or so much thereof as may be advanced, with interest thereon
at the rate of Nine percent (9.0%) per annum as defined in said Note; and
WHEREAS, said Note is secured in whole or in part by a certain
Mortgage, Assignment of Leases and Rents and Security Agreement ("Mortgage")
recorded on June 7, 1988, in the Office of the Register of Mesne Conveyances for
Aiken County, in Mortgage Book 1052 at Page 198 and Deed Book 1041 at Page 64;
and
WHEREAS, simultaneously with the delivery of the Note and the
Mortgage, MBB Development Associates executed and delivered to Lender an
Assignment of Lessor's Interest in Lease(s) - with Assignment of Rents Income
and Cash Collateral ("Assignment of Leases") recorded in the Office of the
Register of Mesne Conveyances for Aiken County in Book 510 at Page 336 on June
7, 1988; and likewise filed in said office a UCC Financing Statement #88-978
recorded in Mortgage Book 1052 at Page 345 on June 8, 1988; and likewise filed
said UCC Financing Statement in the Office of the Secretary of State for South
Carolina, ("UCC"); and
WHEREAS, MBB Development Associates transferred the real property
encumbered by said Note and subject to the lien of the Mortgage to Brunner
Companies Income Properties, L.P. I, by general warranty deed recorded July 12,
1988 in Title Book 1046 at Page 151 and by general warranty deed recorded
September 23, 1988 in Title Book 1057 at Page 295; and
WHEREAS, the maturity date of the Note was extended and certain terms
and conditions were modified through that certain Loan Modification and
Extension Agreement and Mortgage Amendment dated effective June 10, 1993 and
recorded September 20, 1993 in the Office of the Register of Mesne Conveyances
for Aiken County, South Carolina in Miscellaneous Book 718 at Page 337 along
with that certain UCC Financing Statement filed in said Office on September 21,
1993, as filing number 19-1453 and also filed in said Office in Mortgage Book
1579 at Page 104 ("First Modification"); and
WHEREAS, the maturity date on the Note was further extended and
certain terms and conditions were modified through that certain Second Loan
Modification and Extension Agreement and Mortgage Amendment dated effective June
10, 1994, and recorded December 29, 1994, in the Office of the Register of Mesne
Conveyances for Aiken County, South Carolina, in Miscellaneous Book Volume 777
Page 324 ("Second Modification:); and
WHEREAS, said Note, Mortgage, Assignment of Leases, UCC, First
Modification and Second Modification, as further modified hereafter by this
Agreement, are hereinafter sometimes referred to collectively as the "Aiken
Loan"; and
WHEREAS, Brunner wishes to extend the maturity date of said Aiken
Loan until October 10, 1998, and modify and amend the Aiken Loan in certain
other particulars as hereinafter provided; and
WHEREAS, Lender and Brunner have agreed to said modifications,
amendments and extension of said Aiken Loan under the terms and conditions
hereafter set forth, and wish to document said modifications, amendments and
extension by the execution and recording of this Agreement; and
WHEREAS, Brunner and Lender are also currently successor borrower and
lender respectively pursuant to that certain loan in the original principal sum
of Seven Million and Fifty Thousand Dollars ($7,050,000.00) dated June 2, 1988,
as secured by a Mortgage recorded in Mortgage Book 1936 at Page 273 in the
Office of the Register of Mesne Conveyances for Greenville, South Carolina (the
"RMC Office"), together with all related loan documents which Mortgage was
modified by that certain Loan Modification and Extension Agreement and Mortgage
Modification recorded in said RMC Office in Book 2442 at Page 240, and was
further modified by the Second Loan Modification and Extension Agreement and
Mortgage Amendment recorded in said RMC Office in Book 2632 at Page 104, and
which is being further modified and amended simultaneously herewith (the
"Greenville Loan"); and
WHEREAS, Brunner and Lender are also currently successor borrower and
lender respectively pursuant to that certain loan in the original principal sum
of One Million Six Hundred Thousand and 00/100 Dollars ($1,600,000.00) dated
June 2, 1988, as secured by a Mortgage recorded in Mortgage Book 337 at Page
133 in the Office of the Register of Mesne Conveyances for Georgetown County,
South Carolina (the "RMC Office"), together with all related loan documents
which Mortgage was modified by that certain Loan Modification and Extension
Agreement and Mortgage Amendment recorded in said RMC Office in Mortgage Book
642 at Page 299, and was further modified by that certain Second Loan
Modification and Extension Agreement and Mortgage Amendment recorded in said RMC
Office in Mortgage Book 742 at Page 248, and which is being further modified
simultaneously herewith (the "Georgetown Loan").
NOW, THEREFORE, Lender and Brunner in consideration of the sum of One
and 00/100 Dollar ($1.00), the principal reduction of the Aiken Loan by the
amount of Three Hundred Thousand and 00/100 Dollars ($300,000.00), the
additional cross-collateralization between and among the Aiken Loan, the
Greenville Loan and the Georgetown Loan, and other good and valuable
consideration paid by Brunner, the mutual covenants herein contained, the
receipt and sufficiency of which is hereby acknowledged by all parties, do
hereby agree to the modifications andamendments of the terms for payment of
the indebtedness evidenced by said Note, and to the terms of collateral security
for repayment thereof, as secured by said Mortgage and other Aiken Loan
documents, so that the same shall be due and payable as follows, and further
agree to all matters hereinafter set forth:
1. Incorporation of Recitals. The above recitals are incorporated
into and made a part of this Agreement.
2. Outstanding Principal Balance of Loan. The outstanding
principal balance of the Aiken Loan, after deducting a principal pay down of
Three Hundred Thousand and 00/100 Dollars ($300,000.00) made simultaneously
herewith, is Ten Million Eight Hundred Sixty-Six Thousand Four Hundred Ninety-
One and 18/100 ($10,866,491.18) as of the date hereof. Concurrently with the
execution of this Agreement, Brunner shall remit payments to Lender of
$53,040.83, representing the per diem interest for the period from September 10,
1995 through September 28, 1995, and $29,882.85 representing the per diem
interest for the period from September 29, 1995 through October 9, 1995, due and
payable October 10, 1995.
3. The New Maturity Date; Renewal Option. The New Maturity date
of the Aiken Loan shall be revised from June 10, 1995 to October 10, 1998.
Moreover, Brunner shall have the option to renew the existing loan balance for
an additional (2) years at an interest rate to be determined by Lender in its
sole and absolute discretion, and the amortization schedule shall be recast to
reflect a fifteen (15) year amortization schedule provided that (i) neither the
Aiken Loan nor the Greenville Loan or the Georgetown Loan is in default, (ii)
the loan to value does not exceed eighty-five percent (85%), and (iii) the debt
coverage ratio is greater than or equal to 1.10, all of which to be determined
by Lender in its sole and absolute discretion. Brunner shall notify Lender of
its intention to renew the loan not earlier than one hundred twenty (120) days
nor later than ninety (90) days prior to the New Maturity date of the Aiken
Loan.
4. The Interest Rate; Monthly Payments; Principal Balance at
Maturity. The interest rate for said Aiken Loan shall remain at Nine percent
(9.0%) per annum. The monthly installments shall be in the amount of
$101,759.00, due on the 10th day of each month, commencing with such
installments upon the tenth day of November 1995, and continuing thereafter on
the tenth day of each month to and including October 1998, at which time the
principal balance and all other sums remaining unpaid on the Aiken Loan shall
be due and payable.
5. Prepayment Provision. It is agreed that the Note for the Aiken
Loan shall be modified to provide the following prepayment privilege:
Upon ninety (90) days written notice to New York Life,
Maker may prepay the Note in full on any monthly
installment due date provided there is paid, in addition
to interest accrued to the date of such prepayment, a
prepayment fee equal to the difference between the Loan
Interest Rate and the Yield on U.S. Treasury Notes for
a term equal to the remaining original loan term times
the outstanding principal balance of the Aiken Loan at
the time of such prepayment multiplied by the number of
years and any fraction thereof on the loan term as if
there had been no prepayment. In no event shall the
prepayment fee be less than one percent (1%). The
prepayment fee is to be computed on the unpaid principal
balance at the time of such prepayment.
In the event the outstanding principal balance hereof
shall become due and payable as a result of (a) an Event
of Default (as such term is defined in the Mortgage)
causing the acceleration under this Note or the Loan
Documents, which Event of Default shall be conclusively
deemed to be a willful default for purposes of avoiding
the prepayment fee to which Holder is entitled; (b) the
exercise by Maker or any other party having the right to
redeem or to prevent a foreclosure of the Secured
Property of any right of redemption or repayment under
foreclosure laws or other action to prevent a
foreclosure of the Secured Property; (c) an acceleration
by Holder as a result of the sale or further encumbrance
of the Secured Property in violation of the applicable
provisions of the Mortgage; or (d) a casualty or
condemnation with respect to the Secured Property; then,
in such event, Maker shall pay the prepayment fee and to
the extent permitted by law, such prepayment fee shall
be calculated in the same manner as specified above;
provided that in the event such prepayment fee is
construed to be interest under the laws of the State of
South Carolina in any circumstance, such payment shall
not be required to the extent that the amount thereof,
together with other interest payable hereunder, exceeds
the maximum interest that may be lawfully charged under
the laws of the State of South Carolina.
6. Cross-Default and Cross-Collateralization. It is expressly
understood and agreed that the occurrence of a default under the Greenville
Loan or the Georgetown Loan, or any document securing either of them, or a
default under this Aiken Loan, for which no right to notice or cure shall exist,
shall constitute a cross default under each of the Greenville Loan, the
Georgetown Loan and the Aiken Loan, and the rights of enforcement and other
rights and remedies applicable to default shall be fully operative and
applicable as to each and all of said Greenville Loan, Georgetown Loan and Aiken
Loan. It is further understood and agreed that all collateral now or hereafter
securing the Greenville Loan, the Georgetown Loan and the Aiken Loan shall also
secure each of the Greenville Loan, the Georgetown Loan and the Aiken Loan.
The Mortgage and other Loan Documents for the Aiken Loan shall hereby be amended
to add the description of the collateral from each of the Greenville Loan and
the Georgetown Loan to the collateral (Secured Property) securing the Aiken
Loan, which descriptions are as set forth on Exhibit "A" and "B" hereto,
respectively, and which are incorporated into and made a part of this
Agreement.
7. Insurance. Section 1.03(F)(2) of the Aiken Mortgage is hereby
deleted and substituted in lieu thereof is the following revised Section
1.03(F)(2):
(2) In the event of any such damage or
destruction, Mortgagee shall have the option in its sole
and absolute discretion and without regard to the
adequacy of its security hereunder of applying all or
part of the insurance proceeds (i) to the Indebtedness,
whether or not then due, in the inverse order of
maturity, or (ii) to the repair or restoration of the
Improvements, or (iii) to cure any then current default
under this Mortgage or the other Loan Documents, (iv) to
reimburse the costs and expenses of Lender in connection
with the recovery of such insurance proceeds, or (v) any
combination of the foregoing.
8. Insurance. Section 1.03(F) is further amended by adding the
following provisions as new subsections:
(4) Mortgagor's Use of Proceeds. In the event
of any destruction to the Premises by fire or other
casualty (except for any destruction which occurs during
the last six (6) months of the loan term), the insurance
proceeds shall be made available to the Mortgagor for
repair and restoration after deducting and payment to
Mortgagee of Mortgagee's costs of collection and
disbursement of such proceeds and any other deductions
Mortgagee is entitled to under subsection (F)2 above,
provided:
(a) The proceeds are deposited with Mortgagee;
(b) No default shall have occurred and be continuing under
the terms of any of the Loan Documents;
(c) The insurance carrier does not deny liability to any
named insured;
(d) If Mortgagee so requests, Mortgagee is furnished with an
estimate of the cost of restoration accompanied by a
certificate of Mortgagee's Architect as to such costs;
(e) The value of the Secured Property so restored or rebuilt
shall be at least equal to what was originally erected;
(f) Mortgagor furnishes Mortgagee with evidence reasonably
satisfactory to Mortgagee that all Improvements so
restored and/or reconstructed and their use shall fully
comply with all (i) applicable easements, covenants,
conditions, restrictions or other private agreements
affecting the Premises, (ii) zoning and building laws,
ordinances and regulations and (iii) all other
applicable federal, state and municipal laws,
regulations and requirements;
(g) If the estimated cost of reconstruction exceeds the
proceeds available, at Mortgagee's option, Mortgagor
shall (i) furnish a bond of completion or provide such
other evidence satisfactory to Mortgagee of Mortgagor's
ability to meet such excess costs of (ii) deposit with
Mortgages additional funds equal to such excess;
(h) Mortgagee shall have received notice of destruction
caused by such fire or other hazard from the Mortgagor
within ten (10) days from the date thereof, which notice
shall state the date of such fire or other hazard and a
request to Mortgagee to make the insurance proceeds
available to Mortgagor;
(i) The aggregate monthly net income under all Leases
remaining in full force and effect with respect to the
Secured Property after restoration shall be in an amount
sufficient to pay the monthly installments of principal
and interest required to be paid upon the Obligations as
well as all escrows for taxes and insurance as estimated
by Mortgagee hereunder;
(j) All Leases remain in full force and effect; and
(k) Mortgagee shall have determined that such damage or
destruction is fully reparable prior to the Maturity
Date (as defined in the Note).
(5) Disbursement of the proceeds during the course of
reconstruction shall be upon the certification of
Mortgagee's Architect as to the cost of the work done
and the conformity of the work to plans and
specifications approved by Mortgagee, and evidence
supplied by a title insurance company acceptable to
Mortgagee that there are no liens arising out of the
reconstruction or otherwise. Notwithstanding the above,
a portion of the proceeds may be released prior to the
commencement of reconstruction to pay for items approved
by Mortgagee in its sole discretion. Disbursements
shall be made within ten (10) business days after a
request by Mortgagor. No payment made prior to the
final completion of work shall exceed ninety percent
(90%) of the value of the work performed from time to
time, and at all times the undisbursed balance of said
proceeds remaining with the Mortgagee must be at least
sufficient to pay for the cost of completion of the work
free and clear of liens. Final payment shall be upon a
certification of Mortgagee's Architect as to completion
in accordance with plans and specifications approved by
Mortgagee.
(6) At such time as Mortgagee's Architect shall
certify to Mortgagee that the damaged or destroyed
portion of the Secured Property has been put in a state
of repair equivalent to or better than that existing
prior to the date of such fire or other casualty, the
work shall be deemed completed. With Mortgagee's prior
written consent, which may be granted or withheld in
Mortgagee's sole discretion; any certification required
to be made by an architect or registered engineer may be
made by a reputable contractor approved by Mortgagee.
The balance of the insurance proceeds so deposited with
Mortgagee after full disbursement in accordance with the
terms herein, at the sole option of Mortgagee, shall be
either (a) returned to Mortgagor, it being understood
that such obligation or reimbursement shall not exceed
the amount of insurance proceeds for such restoration
and/or repair, or (b) applied to the payment of
installments of the Obligations in inverse order of
maturity whether or not such installments shall be due
and payable.
(7) In all cases where any destruction to the Secured
Property by fire or other casualty occurs during the
last six (6) months of the loan term, or in Mortgagee's
sole judgment, Mortgagor is not proceeding with the
repair or restoration in a manner that would entitle
Mortgagor to have the proceeds disbursed to it, or for
any other reason Mortgagee determines in its sole
judgment that Mortgagor shall not be entitled to such
proceeds pursuant to the terms of this Mortgage,
Mortgagee shall have the options set forth in subsection
F(2) above.
(8) Under no circumstances shall Mortgagee become
personally liable for the fulfillment of the terms,
covenants and conditions contained in any of the Leases
or obligated to take any action to restore the Secured
Property.
9. Covenants Regarding Hazardous Substances. Sections 1.10 and
1.13(B) of the existing Aiken Mortgage are hereby deleted in their entirety and
in lieu thereof is substituted the following:
1.10 A. Mortgagor's Representations, Warranties &
Covenants.
To the best of Mortgagor's actual knowledge,
Mortgagor represents, warrants and covenants that
Hazardous Materials are not being used, on, from, or
affecting the Secured Property in any manner and, to the
best of Mortgagor's actual knowledge, no prior owner of
the Secured Property or any tenant, subtenant, prior
tenant or prior subtenant has used "Hazardous Materials"
as such term is hereinafter defined, on, from, or
affecting the Secured Property, in any manner.
Mortgagor represents warrants and covenants: (i) that
the Secured Property is in compliance with all
Environmental Laws (as hereafter defined); (ii) that
there are no conditions existing currently or reasonably
likely to exist during the term of this Mortgage which
would subject Mortgagor to damages, penalties,
injunctive relief or cleanup costs under any
Environmental Laws as such term is hereinafter defined,
or assertions thereof, or which require or are likely to
require cleanup, removal, remedial action or other
response pursuant to Environmental Laws by Mortgagor;
(iii) that Mortgagor is not a party to any litigation or
administrative proceedings, nor so far as is known by
Mortgagor is any litigation or administrative proceeding
threatened against it, which asserts or alleges that
Mortgagor has violated or is violating Environmental
Laws or that Mortgagor is required to clean up, remove
or take remedial or other responsive action due to the
disposal, depositing, discharge, leaking or other
release of any hazardous substances or materials; (iv)
that neither the Secured Property nor Mortgagor is
subject to any judgment, decree, order or citation
related to or arising out of Environmental Laws or has
been named or listed as a potentially responsible party
by any governmental body or agency in a matter arising
under any Environmental Laws; (v) that no permits,
licenses or approvals material to the ownership or
operation of the Secured Property are required under
Environmental Laws relative to the Secured Property, or
any portion of the Secured Property; and, (vi) to the
best of Mortgagor's knowledge, there are not now, nor to
the best of Mortgagor's knowledge after due and diligent
inquiry have there ever been materials stored,
deposited, treated, recycled or disposed of, on, under
or at the Secured Property (or tanks or other facilities
thereon containing such materials) which materials or
contained materials, if known to be present at the
Secured Property or present in soils or ground water,
would require cleanup, removal or some other remedial
action under Environmental Laws. Mortgagor shall
promptly advise Mortgagee in writing of any Hazardous
Materials claims which are hereafter asserted, or if
Borrower obtains knowledge of any discharge, release, or
disposal of any Hazardous Materials in, on, under or
about the Secured Property, or that any condition
described hereinabove has occurred.
B. Definition "Environmental Laws".
Wherever used in this Mortgage and/or the Loan
Instruments, the term, "Environmental Laws" shall mean
the Comprehensive Environmental Response Compensation
and Liability Act as amended, 42 U.S.C. Section 9601, et
seq.; the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et seq.; any so-called "Superfund"
or "Superlien" law or any other federal, state, local
and foreign laws or regulations, codes, plans, orders,
decrees, judgments, injunctions, notices or demand
letters issued, promulgated or entered thereunder
relating to pollution or protection of the environment,
(collectively "Environmental Laws"), including without
limitation, Environmental Laws relating to reclamation
of land and waterways and Environmental Laws relating to
emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes into the
environment (including without limitation, ambient air,
surface water, ground water, land surface or subsurface
strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or
hazardous substances or wastes or otherwise relating to
worker health and safety or public health and safety, in
each case material to the ownership or operation of the
Secured Property. Neither the Mortgagor nor, to the
best knowledge and belief of the Mortgagor, any other
person has ever caused or knowingly permitted, in
violation of law, any Hazardous Materials to be placed,
held, located or disposed of, on, under or at the
Secured Property or any part thereof, or any other real
property legally or beneficially owned (or any interest
or estate which is owned) by the Mortgagor in any state
now or hereafter having in effect a so-called
"Superlien" law or ordinance or any part thereof (the
effect of which would be to create a lien on the Secured
Property to secure any obligation in connection with the
real property in such state), and neither the Secured
Property, nor any part thereof, nor any other real
property legally or beneficially owed (or any interest
or estate therein which is owned) by the Mortgagor in
any state now or hereafter having in effect a so-called
"Superlien" law or ordinance or any part thereof, has
ever been used (whether by the Mortgagor, to the best
knowledge of the Mortgagor, by any other person) as a
dump site or storage (whether permanent or temporary)
site for any Hazardous Materials. Mortgagor further
represents and warrants that neither Mortgagor nor, to
the best knowledge and belief of Mortgagor, any other
person has ever caused or knowingly permitted any
asbestos or under-ground, storage facility to be located
on the Secured Property. Mortgagor further represents
and warrants that neither Mortgagor nor, to the best
knowledge or belief of Mortgagor having made no
investigation, any other person has discovered any
occurrence or condition on any real property adjoining
or in the vicinity of the Secured Property that could
cause the Secured Property or any part thereof to be
subject to any restrictions on the ownership, occupancy,
transferability or use of the Secured Property under any
federal, state local law, ordinance or regulation
relating to Hazardous Materials.
C. Environmental Indemnification of Mortgagee.
Mortgagor hereby indemnifies and agrees to defend,
protect and hold Mortgagee, its partners, employees and
agents, and any successor, successors, or assigns to
Mortgagee's interest in the chain of title to the
Secured Property, harmless from and against any and all
losses, liabilities, fines, charges, damages, injuries,
penalties, response and investigation costs, costs,
expenses and claims of any and every kind whatsoever
paid, incurred or suffered by or asserted against
Mortgagee including without limitation, (a) any loss in
value of the improvements, (b) all foreseeable
consequential damages; (c) the costs of any required or
necessary repair, cleanup or detoxification of the
Secured Property, and the preparation and implementation
of any closure, remedial or other required plans; and
(d) all reasonable costs and expenses incurred by
Mortgagee in connection with clauses (a), (b) and (c)
hereof, including but not limited to, reasonable
attorneys' fees and fees of any and all other
consultants, experts and engineers and witnesses (expert
and otherwise) for, with respect to, or as a direct or
indirect result of (i) the presence on or under, or the
escape, seepage, leakage, spillage, emission, discharge
or release from, the Secured Property or any other
property legally or beneficially owned (or any interest
or estate which is owned) by Mortgagor of any Hazardous
Material (as hereinafter defined) (including, without
limitation, any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under,
through or as a result of any Environmental Laws
relating to or imposing liability or standards of
conduct concerning any Hazardous Material), or (ii) the
presence of any asbestos on the Secured Property
(including, without limitation, the cost of relocating
tenants and the cost of removal) regardless of whether
caused by, or within the control of, Mortgagor, or any
predecessor in title or any employees, agents,
contractors or subcontractors of Mortgagor, or any third
persons at any time, occupying or present on the Secured
Property, or arising out of or related to any breach of
Mortgagor's obligations under this Mortgage. Any of
such activities were or will be undertaken in accordance
with Environmental Laws. For the purposes of this
Mortgage, the term "Hazardous Material" means and
includes any flammable explosives, radioactive
materials, or hazardous, toxic or dangerous waste,
substance or related material including, but not limited
to, substances defined as such in (or for purposes of)
the Environmental Laws regulating, relating to, or
imposing liability or standards of conduct concerning,
any hazardous, toxic or dangerous waste, substance or
material, as now or at any time hereafter in effect.
The indemnification and hold harmless agreement of
Mortgagor contained herein shall survive the repayment
of all sums due under the Loan Documents and the
discharge and satisfaction of this Mortgage of transfer
of title to Mortgagee or any third party by foreclosure
or otherwise.
D. Compliance With Environmental Laws.
Mortgagor shall keep and maintain the Secured
Property in compliance with and shall not cause or
permit the Secured Property to be in violation of any
Environmental Laws or any federal, state or local laws
relating to hygiene or to the environmental conditions
on, under or about the Secured Property including, but
not limited to, soil and ground water conditions.
Mortgagor shall not use, generate, manufacture, store,
dispose or permit to exist in, on, under or about the
Secured Property any Hazardous Material. Mortgagor
hereby agrees at all times to comply fully and in a
timely manner with, and to cause all of its employees,
agents, contractors and subcontractors and any other
persons occupying or present on the Secured Property to
so comply with all Environmental Laws applicable to the
use, generation, handling, storage, treatment,
transport, storage, manufacture and disposal of any
Hazardous Material now or hereafter located or present
on or under the Secured Property, including, but not
limited to any underground storage tanks.
E. Written Consent for Environmental Action.
Without Mortgagee's prior written consent,
Mortgagor shall not take any remedial action in response
to the presence of any Hazardous Materials, on, under,
or about the Secured Property, nor enter into any
settlement agreement, consent decree, or other
compromise in respect to any Hazardous Materials claims,
which remedial action, settlement, consent or compromise
might, in Mortgagee's sole judgment, impair the value of
Mortgagee's security hereunder; provided, however, that
Mortgagee's prior consent shall not be necessary in the
event that the presence of any Hazardous Material on,
under, or about the Secured Property either poses an
immediate threat to the health, safety or welfare of any
individual or is of such a nature that an immediate
remedial response is necessary and it is not possible to
obtain Mortgagee's consent before taking such action,
provided that in such event Mortgagor shall notify
Mortgagee as soon as practicable of any action so taken.
Mortgagee agrees not to withhold its consent where such
consent is required hereunder, if either (a) a
particular remedial action is ordered by a court of
competent jurisdiction, or (b) Mortgagor establishes to
the reasonable satisfaction of Mortgagee that there is
no reasonable alternative to such remedial action which
would result in less impairment of Mortgagee's security
hereunder.
F. Mortgagee's Right to Contest Environmental Claims.
Mortgagee shall have the right, but not the
obligation, to join and participate in, as a party if it
so elects, any legal proceeding or actions initiated by
any person or entity in connection with any Hazardous
Materials claims and in such case, to have its
reasonable attorneys' fees and costs incurred in
connection therewith paid by Mortgagor.
10. Audits. Section 1.06(B) of the Aiken Mortgage shall be amended
by adding at the end of the existing sentence, the additional words "at
Mortgagor's expense".
11. Compliance with Laws. Section 1.11(K) of the Aiken Mortgage
is amended by adding at the conclusion thereof the following additional
provisions:
Mortgagor shall comply with any and all state and
federal legislation relating to environmental protection
and such other legislation, rules and regulations as are
in or may come into effect and apply them to Mortgagor,
Mortgagee, this Loan Transaction or the Secured Property
or occupancy users thereof, whether as lessees, tenants,
licensees or otherwise. Mortgagor does agree to
indemnify and hold Mortgagee harmless against any and
all claims, costs or expenses relating to such
environmental protection, real estate taxes, insurance
premiums, as well as fraud, material misrepresentation
or misappropriation of funds notwithstanding any
exculpation or non-recourse provision in the Loan
Documents.
12. Further Sales or Encumbrances. Section 1.12(B) of the Aiken
Mortgage is modified by adding to the initial paragraph at the conclusion
thereof, the following additional provisions:
For purposes of this paragraph, the following
shall also be deemed to constitute a transfer of the
Secured Property, whether made directly or through an
intermediary:
(i) If Mortgagor is a corporation, a transfer or
disposition of more than fifty percent (50%) of the
outstanding voting stock of Mortgagor; or
(ii) If Mortgagor is a partnership, a transfer of
disposition of any interest of any general partner in
Mortgagor.
Notwithstanding the foregoing, however, Mortgagor shall be permitted the one-
time right to transfer title to the Secured Property to an affiliated entity in
which the general partner is the current general partner of Mortgagor.
13. Covenants Regarding Tenant Improvement, Leasing Commissions,
Capital Improvements and Debt Service Shortfall Escrow Account. Brunner
covenants and agrees that within fifteen (15) days following the end of each
calendar quarter commencing January 1, 1996, Brunner shall deposit or cause to
be deposited into an account maintained at a commercial bank (the "Depository")
acceptable to Lender all Net Cash Flow as hereinafter defined, generated from
the use and operation of the Secured Property, during the immediately preceding
calendar quarter (the "Escrow Account"). Proof of such deposit, in the form of
either a copy of the deposit slip or a statement from the Depository, shall be
submitted to Lender no later than twenty (20) days following the end of each
calendar quarter. Provided that the Aiken Loan is not in default, the funds on
deposit in the Escrow Account shall from time to time be applied by Depository
or disbursed to Brunner to pay for tenant improvements, leasing commissions,
capital improvements and/or debt service shortfall. Additionally, a maximum
amount calculated at two percent (2%) of the total collected revenue shall be
deducted from Net Cash Flow to be applied to the payment of partnership
operating costs.
"Income" shall mean all rents, income and profits received on a cash
basis by Brunner from the Secured Property.
"Net Cash Flow" shall mean Income less operating expenses. Operating
Expenses shall include a property management fee not to exceed three percent
(3%) of the total base rental income and expense reimbursements.
Within fifteen (15) days after the end of each calendar quarter,
Brunner shall submit to Lender a statement of Net Cash Flow for the preceding
quarter, certified to be true and accurate by an officer of Brunner.
Additionally, within fifteen (15) days after the end of each calendar year
Brunner shall submit to Lender a statement of New Cash Flow for the preceding
year, certified to be true and accurate by an officer of Brunner.
Funds in the Escrow Account are to be used for costs incurred
relating to tenant improvements, leasing commissions, capital improvements and
potential debt service shortfall. Additionally a maximum amount calculated at
two percent (2%) of the total collected revenue may be deducted from Net Cash
Flow to be applied to the payment of partnership operating costs.
For disbursements (as hereinafter defined) to be made, the following
conditions must be met:
(A) All work shall be performed in a good and workmanlike manner,
using materials of at least standard grade and quality, to the
satisfaction of Lender in its sole discretion, free and clear
of any claims or liens for labor and materials.
(B) The deposits shall be held in an escrow account satisfactory
to Lender and by a Depository acceptable to Lender as
assurance of the performance of the work. Interim
disbursements (each a "Disbursement") of the Escrow Account
shall be made to Brunner for not less than Five Thousand and
00/100 Dollars ($5,000.00) per request and no more often than
one time per calendar quarter. Lender shall direct Depository
to make Disbursements conditioned upon the following:
(1) There is no default under this Aiken Loan, the
Greenville Loan or the Georgetown Loan and Brunner shall
deliver to Lender a certificate to such effect signed by
an authorized officer of Brunner;
(2) Lender's receipt and approval of the following:
(a) A Breakdown of the Disbursement among the tenant
improvements, leasing commissions, capital
improvements, debt service shortfall and
partnership operating costs.
(b) Lease(s) pertaining to the specific portions of
the Secured Property affected, subject to all of
the requirements set forth under "Occupancy
Leases and Certified Rent Roll" contained in the
Mortgage Loan Application/Commitment.
(C) Further, prior to any subsequent Disbursements, Lender shall
receive evidence of satisfactory completion of tenant
improvements, capital improvements, and payment of leasing
commissions relating to the previous Disbursement. Such
evidence shall include the following:
(1) Copies of the paid receipts related to the Disbursement.
(2) A copy of executed lien waivers signed by the leasing
agents, contractor(s) and/or subcontractor(s) paid from
the Disbursement and certificates of occupancy if
required by the local municipality.
(3) An inspection of the premises, at the option of Lender.
The fees and expenses incurred for such inspections
shall be paid by Brunner.
(D) All cost and expenses associated with the Escrow Account are
to be borne by Brunner. In the event of a default in the Loan
Documents, Lender in its sole discretion will either apply the
funds in reduction of principal or apply the funds towards any
outstanding tenant improvement costs, leasing commissions or
capital improvements.
Brunner does hereby designate First Union National Bank of South
Carolina, One Insignia Financial Plaza, Greenville, South Carolina 29601; P.O.
Box 1329, Greenville, South Carolina 29602 as the proposed Depository for
Lender's approval, and Lender does hereby approve such designation.
14. Force and Effect. It is agreed that said Note, Mortgage,
Assignment of Leases, UCC, First Modification and Second Modification, except
as expressly modified, altered or extended by this Agreement, shall be and
remain in full force and effect, and all of the terms of said documents as well
as those additional terms created hereby have been assumed by Brunner.
15. Borrower's Covenant of Payment and Compliance. Brunner, in
consideration of the above modifications, amendments and extension and of One
and 00/100 Dollar ($1.00) paid by Lender (the receipt and sufficiency of which
is hereby acknowledged), and of the mutual covenants and agreements herein
contained, does hereby covenant and agree to pay said principal sum, and
interest as set forth in this Agreement, and to comply with the other terms of
said Note, Mortgage, and Assignment of Leases, First Modification, Second
Modification and the provisions of this Agreement.
16. Effect of Agreement. The Parties hereto agree that the
execution of this Agreement shall not release any guarantor, maker or other
party of said Note or Mortgage or any undertaking in connection therewith, nor
shall this Agreement effect any release of any collateral given at any time
to secure payment of said Note or said other undertaking.
17. Brunner Representation as to Consent. Brunner represents that
no consent of any person, firm or corporation, not a party hereto, is required
for the effectiveness of this Agreement and Brunner agrees to indemnify and hold
harmless the Lender from or against any and all loss, damage or liability
whatever, including attorney's fees, arising out of the failure to obtain
consent of any person not a party hereto.
18. Rate of Interest. It is agreed that nothing herein shall mean
or be construed to mean to call for a rate of interest in excess of that allowed
to be charged by the laws of the State of South Carolina; and that if the
provisions hereof should be determined to call for a rate of interest in excess
of the maximum rate allowed by said laws as to any person, firm or corporation,
then immediately or without necessity of any further action, the interest rate
herein provided shall, as to such person, firm or corporation, be immediately
reduced by that amount necessary to eliminate said excess .
19. Binding Nature of Agreement. This Agreement shall be binding
upon, and inure to the benefit of, the parties hereto, their heirs, successors
and assigns.
IN WITNESS WHEREOF, we have hereunto set our hands and seals the day
and year first above written.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: LENDER:
NEW YORK LIFE INSURANCE COMPANY
/s/ Yvett J. Eaddy By: /s/ Patricia J. Hudson
/s/ Kim Goldberg Attest: /s/ Michael Salabella
BRUNNER:
Brunner Companies Income
Properties, L.P. I, a Delaware
Limited Partnership
By: Brunner Management Limited
Partnership, General Partner
By: 104 Management Inc.,
General Partner
/s/ Douglas G. Brown By: /s/ Robert D. Long, Jr.
/s/ Jennifer L. Hester Attest: /s/ Rachel Thompson
Attest: /s/ Kelley M. Buechler
Kelley M. Buechler
Assistant Secretary
STATE OF NEW YORK
A C K N O W L E D G E M E N T
COUNTY OF NEW YORK
I Mardeen Freeman, do hereby certify that Patricia J. Hudson, as duly
authorized Real Estate Vice President of NEW YORK LIFE INSURANCE COMPANY, on
behalf of the corporation, personally appeared before me this day and
acknowledged the due execution of the foregoing instrument, and that Patricia J.
Hudson, as duly authorized Real Estate Vice President of the corporation
personally appeared before me this day and acknowledged his/her attestation to
the foregoing instrument.
WITNESS my hand and official seal this 3rd day of October, 1995.
/s/ Mardeen Freeman (SEAL)
Notary Public for New York
My Commission Expires:6/3/97
STATE OF SOUTH CAROLINA
A C K N O W L E D G E M E N T
COUNTY OF AIKEN
I, Jennifer L. Hester, do hereby certify that Rob D. Long, Jr., as a duly
authorized officer of 104 Management, Inc., on behalf of 104 Management, Inc.
in its capacity as General Partner of Brunner Management Limited Partnership,
General Partner of Brunner Companies Income Properties, L.P. I, personally
appeared before me this day and acknowledged the due execution of the foregoing
instrument and that Rob D. Long, Jr., a duly authorized officer of 104
Management, on behalf of 104 Management Inc. in its capacity as General Partner
of Brunner Management Limited Partnership, General Partner of Brunner Companies
Income Property, L.P. I, personally appeared before me and acknowledged his/her
attestation of the foregoing instrument.
WITNESS my hand and official seal this 29th day of September, 1995.
/s/ Jennifer L. Hester (SEAL)
Notary Public for South Carolina
My Commission Expires: 3/12/01
STATE OF SOUTH CAROLINA THIRD LOAN MODIFICATION AND
EXTENSION AGREEMENT, CROSS-PLEDGE
COUNTY OF GREENVILLE AND DEFAULT AGREEMENT, AND
MORTGAGE AMENDMENT AGREEMENT
THIS THIRD LOAN MODIFICATION AND EXTENSION AGREEMENT, CROSS-PLEDGE AND
DEFAULT AGREEMENT, AND MORTGAGE AMENDMENT AGREEMENT ("Agreement") is made and
executed to be effective the 29th day of September, 1995, by and between NEW
YORK LIFE INSURANCE COMPANY ("Lender" or "New York Life"), and BRUNNER COMPANIES
INCOME PROPERTIES, L.P. I, a Delaware Limited Partnership ("Brunner" or
"Borrower" or "Maker"), who hereby agree as follows:
W I T N E S S E T H :
WHEREAS, Dayton & Associates XII, a South Carolina General Partnership,
executed its certain Promissory Note ("Note") dated June 2, 1988, whereby it
promised to pay to the order of New York Life Insurance Company the sum of SEVEN
MILLION FIFTY THOUSAND DOLLARS ($7,050,000.00), or so much thereof as may be
advanced, with interest thereon at the rate of Nine percent (9.0%) per annum as
defined in said Note; and
WHEREAS, said Note is secured in whole or in part by a certain Mortgage,
Assignment of Leases and Rents and Security Agreement ("Mortgage") recorded on
June 1, 1988, in the Office of the Register of Mesne Conveyances for Greenville
County, in Mortgage Book 1936 at Page 273; and
WHEREAS, simultaneously with the delivery of the Note and the Mortgage,
Dayton & Associates XII executed and delivered to Lender an Assignment of
Lessor's Interest in Lease(s) - with Assignment of Rents Income and Cash
Collateral ("Assignment of Leases") recorded in the Office of the Register of
Mesne Conveyances for Greenville County in Book 1326 at Page 934 on June 1,
1988; and likewise filed in said office a UCC Financing Statement #881788 on
June 2, 1988; and likewise filed on June 2, 1988 UCC Financing Statement #88-
029099 in the Office of the Secretary of State for South Carolina, ("UCC"); and
WHEREAS, Dayton & Associates XII transferred the real property encumbered
by said Loan and subject to the lien of the Mortgage to Brunner by general
warranty deed recorded July 12, 1988 in the Office of the Register of Mesne
Conveyances for Greenville County, South Carolina in Book 1331 at Page 431; and
WHEREAS, the maturity date of said Note was extended and certain terms and
conditions were modified in that certain Loan Modification and Extension
Agreement and Mortgage Amendment effective June 10, 1993 and recorded September
14, 1993 in the Office of the Register of Mesne Conveyances for Greenville
County in Mortgage Book 2442 at Page 450 along with that certain UCC Financing
Statement filed in said Office on September 21, 1993, as Document No. 93-2524
("First Modification"); and
WHEREAS, the maturity date on the Note was further extended and certain
terms and conditions were modified through that certain Second Loan Modification
and Extension Agreement and Mortgage Amendment dated effective June 10, 1994,
and recorded December 28, 1994, in the Office of the Register of Mesne
Conveyances for Greenville County, South Carolina, in Mortgage Book No. 2632 at
Page 0103; and
WHEREAS, said Note, Mortgage, Assignment of Leases, UCC, First
Modification and Second Modification, as further modified hereafter by this
Agreement, are hereinafter sometimes referred to collectively as the "Greenville
Loan"; and
WHEREAS, Brunner wishes to extend the maturity date of said Greenville
Loan until October 10, 1998, and modify and amend the Greenville Loan in certain
other particulars as hereinafter provided; and
WHEREAS, Lender and Brunner have agreed to said modifications, amendments
and extension of said Greenville Loan under the terms and conditions hereafter
set forth, and wish to document said modifications, amendments and extension by
the execution and recording of this Agreement; and
WHEREAS, Brunner and Lender are also currently successor borrower and
lender respectively pursuant to that certain loan in the original principal sum
of One Million Six Hundred Thousand Dollars ($1,600,000.00) dated June 2, 1988,
as secured by a Mortgage recorded in Mortgage Book 337 at Page 133 in the Office
of the Register of Mesne Conveyances for Georgetown County, South Carolina (the
"RMC Office"), together with all related loan documents which Mortgage was
modified by that certain Loan Modification and Extension Agreement and Mortgage
Amendment recorded in said RMC Office in Mortgage Book 642 at Page 299, and was
further modified by that certain Second Loan Modification and Extension
Agreement and Mortgage Amendment recorded in said RMC Office in Mortgage Book
742 at Page 248, and which is being further modified simultaneously herewith
(the "Georgetown Loan").
WHEREAS, Brunner and Lender are also currently successor borrower and
lender respectively pursuant to that certain loan in the original principal sum
of Eleven Million Four Hundred Thousand Dollars ($11,400,000.00) dated June 8,
1988, as secured by a Mortgage recorded in Mortgage Book 1052 at Page 198 and
Deed Book 1041 at Page 64 in the Office of the Register of Mesne Conveyances for
Aiken County, South Carolina (the "RMC Office"), together with all related loan
documents which Mortgage was modified by that certain Loan Modification and
Extension Agreement and Mortgage Amendment recorded in said RMC Office in
Miscellaneous Book 718 at Page 337 along with that certain UCC Financing
Statement Amendment Number 1453 also filed in said office in Mortgage Book 1579
at Page 104, and was further modified by that certain Second Loan Modification
and Extension Agreement and Mortgage Amendment recorded in said RMC Office in
Miscellaneous Book Volume 777 at Page 324, and which is being further modified
simultaneously herewith (the "Aiken Loan").
NOW, THEREFORE, Lender and Brunner in consideration of the sum of One and
00/100 Dollar ($1.00), the additional cross-collateralization between and among
the Greenville Loan, the Aiken Loan and the Georgetown Loan, and other good and
valuable consideration paid by Brunner, the mutual covenants herein contained,
the receipt and sufficiency of which is hereby acknowledged by all parties, do
hereby agree to the modifications and amendments of the terms for payment of the
indebtedness evidenced by said Note, and to the terms of collateral security for
repayment thereof, as secured by said Mortgage and other Greenville Loan
documents, so that the same shall be due and payable as follows, and further
agree to all matters hereinafter set forth:
1. Incorporation of Recitals. The above recitals are incorporated into
and made a part of this Agreement.
2. Outstanding Principal Balance of Loan. The outstanding principal
balance of the Greenville Loan is Six Million Eight Hundred Eighty-
Three Thousand Four Hundred Forty-Two and 06/100 Dollars
($6,883,442.06) as of the date hereof. Concurrently with the
execution of this Agreement, Brunner shall remit payments to Lender
of $32,696.35, representing the per diem interest for the period
from September 10, 1995 through September 28, 1995, and $18,929.47
representing the per diem interest for the period from September 29,
995 through October 9, 1995, due and payable October 10, 1995.
3. The New Maturity Date; Renewal Option. The New Maturity date of the
Greenville Loan shall be revised from June 10, 1995 to October 10,
1998. Moreover, Brunner shall have the option to renew the existing
loan balance for an additional (2) years at an interest rate to be
determined by Lender in its sole and absolute discretion, and the
amortization schedule shall be recast to reflect a fifteen (15) year
amortization schedule provided that (i) neither the Greenville Loan
nor the Georgetown Loan or the Aiken Loan is in default, (ii) the
loan to value does not exceed eighty-five percent (85%), and (iii)
the debt coverage ratio is greater than or equal to 1.10, all of
which to be determined by Lender in its sole and absolute
discretion. Brunner shall notify Lender of its intention to renew
the loan not earlier than one hundred twenty (120) days nor later
than ninety (90) days prior to the New Maturity date of the
Greenville Loan.
4. The Interest Rate; Monthly Payments; Principal Balance at Maturity.
The interest rate for said Greenville Loan shall remain at Nine
percent (9.0%) per annum. The monthly installments shall be in the
amount of $64,460.00, due on the 10th day of each month, commencing
with such installments upon the tenth day of November 1995, and
continuing thereafter on the tenth day of each month to and
including October 1998, at which time the principal balance and all
other sums remaining unpaid on the Greenville Loan shall be due and
payable.
5. Prepayment Provision. It is agreed that the Note for the Greenville
Loan shall be modified to provide the following prepayment
privilege:
Upon ninety (90) days written notice to New York Life, Maker
may prepay the Note in full on any monthly installment due
date provided there is paid, in addition to interest accrued
to the date of such prepayment, a prepayment fee equal to the
difference between the Loan Interest Rate and the Yield on
U.S. Treasury Notes for a term equal to the remaining original
loan term times the outstanding principal balance of the
Greenville Loan at the time of such prepayment multiplied by
the number of years and any fraction thereof on the loan term
as if there had been no prepayment. In no event shall the
prepayment fee be less than one percent (1%). The prepayment
fee is to be computed on the unpaid principal balance at the
time of such prepayment.
In the event the outstanding principal balance hereof shall
become due and payable as a result of (a) an Event of Default
(as such term is defined in the Mortgage) causing the
acceleration under this Note or the Loan Documents, which
Event of Default shall be conclusively deemed to be a willful
default for purposes of avoiding the prepayment fee to which
Holder is entitled; (b) the exercise by Maker or any other
party having the right to redeem or to prevent a foreclosure
of the Secured Property of any right of redemption or
repayment under foreclosure laws or other action to prevent a
foreclosure of the Secured Property; (c) an acceleration by
Holder as a result of the sale or further encumbrance of the
Secured Property in violation of the applicable provisions of
the Mortgage; or (d) a casualty or condemnation with respect
to the Secured Property; then, in such event, Maker shall pay
the prepayment fee and to the extent permitted by law, such
prepayment fee shall be calculated in the same manner as
specified above; provided that in the event such prepayment
fee is construed to be interest under the laws of the State of
South Carolina in any circumstance, such payment shall not be
required to the extent that the amount thereof, together with
other interest payable hereunder, exceeds the maximum interest
that may be lawfully charged under the laws of the State of
South Carolina.
6. Cross-Default and Cross-Collateralization. It is expressly understood
and agreed that the occurrence of a default under the Georgetown Loan
or the Aiken Loan, or any document securing either of them, or a
default under this Greenville Loan, for which no right to notice or
cure shall exist, shall constitute a cross default under each of the
Georgetown Loan, the Aiken Loan and the Greenville Loan, and the
rights of enforcement and other rights and remedies applicable to
default shall be fully operative and applicable as to each and all of
said Georgetown Loan, Aiken Loan and Greenville Loan. It is further
understood and agreed that all collateral now or hereafter securing the
Georgetown Loan, the Aiken Loan and the Greenville Loan shall also
secure each of the Georgetown Loan, the Aiken Loan and the Greenville
Loan. The Mortgage and other Loan Documents for the Greenville Loan
shall hereby be amended to add the description of the collateral from
each of the Georgetown Loan and the Aiken Loan to the collateral
(Secured Property) securing the Greenville Loan, which descriptions are
as set forth on Exhibits "A" and "B" hereto, respectively, and
which are incorporated into and made a part of this Agreement.
7. Insurance. Section 1.03(F)(2) of the Greenville Mortgage is hereby
deleted and substituted in lieu thereof is the following revised
Section 1.03(F)(2):
(2) In the event of any such damage or destruction, Mortgagee
shall have the option in its sole and absolute discretion and
without regard to the adequacy of its security hereunder of
applying all or part of the insurance proceeds (i) to the
Indebtedness, whether or not then due, in the inverse order of
maturity, or (ii) to the repair or restoration of the
Improvements, or (iii) to cure any then current default under
this Mortgage or the other Loan Documents, (iv) to reimburse
the costs and expenses of Lender in connection with the
recovery of such insurance proceeds; or (v) any combination of
the foregoing.
8. Insurance. Section 1.03(F) is further amended by adding the
following provisions as new subsections:
(4) Mortgagor's Use of Proceeds. In the event of any
destruction to the Premises by fire or other casualty (except for
any destruction which occurs during the last six (6) months of the
loan term), the insurance proceeds shall be made available to the
Mortgagor for repair and restoration after deducting and payment to
Mortgagee of Mortgagee's costs of collection and disbursement of
such proceeds and any other deductions Mortgagee is entitled to
under subsection (F)2 above, provided:
(a) The proceeds are deposited with Mortgagee;
(b) No default shall have occurred and be continuing under
the terms of any of the Loan Documents;
(c) The insurance carrier does not deny liability to any
named insured;
(d) If Mortgagee so requests, Mortgagee is furnished with an
estimate of the cost of restoration accompanied by a
certificate of Mortgagee's Architect as to such costs;
(e) The value of the Secured Property so restored or rebuilt
shall be at least equal to what was originally erected;
(f) Mortgagor furnishes Mortgagee with evidence reasonably
satisfactory to Mortgagee that all Improvements so
restored and/or reconstructed and their use shall fully
comply with all (i) applicable easements, covenants,
conditions, restrictions or other private agreements
affecting the Premises, (ii) zoning and building laws,
ordinances and regulations and (iii) all other
applicable federal, state and municipal laws,
regulations and requirements;
(g) If the estimated cost of reconstruction exceeds the
proceeds available, at Mortgagee's option, Mortgagor
shall (i) furnish a bond of completion or provide such
other evidence satisfactory to Mortgagee of Mortgagor's
ability to meet such excess costs of (ii) deposit with
Mortgages additional funds equal to such excess;
(h) Mortgagee shall have received notice of destruction
caused by such fire or other hazard from the Mortgagor
within ten (10) days from the date thereof, which notice
shall state the date of such fire or other hazard and a
request to Mortgagee to make the insurance proceeds
available to Mortgagor;
(i) The aggregate monthly net income under all Leases
remaining in full force and effect with respect to the
Secured Property after restoration shall be in an amount
sufficient to pay the monthly installments of principal
and interest required to be paid upon the Obligations as
well as all escrows for taxes and insurance as estimated
by Mortgagee hereunder;
(j) All Leases remain in full force and effect; and
(k) Mortgagee shall have determined that such damage or
destruction is fully reparable prior to the Maturity
Date (as defined in the Note).
(5) Disbursement of the proceeds during the course of
reconstruction shall be upon the certification of Mortgagee's
Architect as to the cost of the work done and the conformity of the
work to plans and specifications approved by Mortgagee, and evidence
supplied by a title insurance company acceptable to Mortgagee that
there are no liens arising out of the reconstruction or otherwise.
Notwithstanding the above, a portion of the proceeds may be released
prior to the commencement of reconstruction to pay for items
approved by Mortgagee in its sole discretion. Disbursements shall
be made within ten (10) business days after a request by Mortgagor.
No payment made prior to the final completion of work shall exceed
ninety percent (90%) of the value of the work performed from time to
time, and at all times the undisbursed balance of said proceeds
remaining with the Mortgagee must be at least sufficient to pay for
the cost of completion of the work free and clear of liens. Final
payment shall be upon a certification of Mortgagee's Architect as to
completion in accordance with plans and specifications approved by
Mortgagee.
(6) At such time as Mortgagee's Architect shall certify to
Mortgagee that the damaged or destroyed portion of the Secured
Property has been put in a state of repair equivalent to or better
than that existing prior to the date of such fire or other casualty,
the work shall be deemed completed. With Mortgagee's prior written
consent, which may be granted or withheld in Mortgagee's sole
discretion; any certification required to be made by an architect or
registered engineer may be made by a reputable contractor approved
by Mortgagee. The balance of the insurance proceeds so deposited
with Mortgagee after full disbursement in accordance with the terms
herein, at the sole option of Mortgagee, shall be either (a)
returned to Mortgagor, it being understood that such obligation or
reimbursement shall not exceed the amount of insurance proceeds for
such restoration and/or repair, or (b) applied to the payment of
installments of the Obligations in inverse order of maturity whether
or not such installments shall be due and payable.
(7) In all cases where any destruction to the Secured Property by
fire or other casualty occurs during the last six (6) months of the
loan term, or in Mortgagee's sole judgment, Mortgagor is not
proceeding with the repair or restoration in a manner that would
entitle Mortgagor to have the proceeds disbursed to it, or for any
other reason Mortgagee determines in its sole judgment that
Mortgagor shall not be entitled to such proceeds pursuant to the
terms of this Mortgage, Mortgagee shall have the options set forth
in subsection F(2) above.
(8) Under no circumstances shall Mortgagee become personally
liable for the fulfillment of the terms, covenants and conditions
contained in any of the Leases or obligated to take any action to
restore the Secured Property.
9. Covenants Regarding Hazardous Substances. Sections 1.10 and 1.13(B)
of the existing Greenville Mortgage are hereby deleted in their
entirety and in lieu thereof is substituted the following:
1.10 A. Mortgagor's Representations, Warranties & Covenants.
To the best of Mortgagor's actual knowledge, Mortgagor
represents, warrants and covenants that Hazardous Materials are not
being used, on, from, or affecting the Secured Property in any
manner and, to the best of Mortgagor's actual knowledge, no prior
owner of the Secured Property or any tenant, subtenant, prior tenant
or prior subtenant has used "Hazardous Materials" as such term is
hereinafter defined, on, from, or affecting the Secured Property, in
any manner. Mortgagor represents warrants and covenants: (i) that
the Secured Property is in compliance with all Environmental Laws
(as hereafter defined); (ii) that there are no conditions existing
currently or reasonably likely to exist during the term of this
Mortgage which would subject Mortgagor to damages, penalties,
injunctive relief or cleanup costs under any Environmental Laws as
such term is hereinafter defined, or assertions thereof, or which
require or are likely to require cleanup, removal, remedial action
or other response pursuant to Environmental Laws by Mortgagor; (iii)
that Mortgagor is not a party to any litigation or administrative
proceedings, nor so far as is known by Mortgagor is any litigation
or administrative proceeding threatened against it, which asserts or
alleges that Mortgagor has violated or is violating Environmental
Laws or that Mortgagor is required to clean up, remove or take
remedial or other responsive action due to the disposal, depositing,
discharge, leaking or other release of any hazardous substances or
materials; (iv) that neither the Secured Property nor Mortgagor is
subject to any judgment, decree, order or citation related to or
arising out of Environmental Laws or has been named or listed as a
potentially responsible party by any governmental body or agency in
a matter arising under any Environmental Laws; (v) that no permits,
licenses or approvals material to the ownership or operation of the
Secured Property are required under Environmental Laws relative to
the Secured Property, or any portion of the Secured Property; and,
(vi) to the best of Mortgagor's knowledge, there are not now, nor to
the best of Mortgagor's knowledge after due and diligent inquiry
have there ever been materials stored, deposited, treated, recycled
or disposed of, on, under or at the Secured Property (or tanks or
other facilities thereon containing such materials) which materials
or contained materials, if known to be present at the Secured
Property or present in soils or ground water, would require cleanup,
removal or some other remedial action under Environmental Laws.
Mortgagor shall promptly advise Mortgagee in writing of any
Hazardous Materials claims which are hereafter asserted, or if
Borrower obtains knowledge of any discharge, release, or disposal of
any Hazardous Materials in, on, under or about the Secured Property,
or that any condition described hereinabove has occurred.
B. Definition "Environmental Laws".
Wherever used in this Mortgage and/or the Loan Instruments,
the term, "Environmental Laws" shall mean the Comprehensive
Environmental Response Compensation and Liability Act as amended, 42
U.S.C. Section 9601, et seq.; the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq.; any so-called "Superfund" or
"Superlien" law or any other federal, state, local and foreign laws
or regulations, codes, plans, orders, decrees, judgments,
injunctions, notices or demand letters issued, promulgated or
entered thereunder relating to pollution or protection of the
environment, (collectively "Environmental Laws"), including without
limitation, Environmental Laws relating to reclamation of land and
waterways and Environmental Laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes or otherwise relating to worker
health and safety or public health and safety, in each case material
to the ownership or operation of the Secured Property. Neither the
Mortgagor nor, to the best knowledge and belief of the Mortgagor,
any other person has ever caused or knowingly permitted, in
violation of law, any Hazardous Materials to be placed, held,
located or disposed of, on, under or at the Secured Property or any
part thereof, or any other real property legally or beneficially
owned (or any interest or estate which is owned) by the Mortgagor in
any state now or hereafter having in effect a so-called "Superlien"
law or ordinance or any part thereof (the effect of which would be
to create a lien on the Secured Property to secure any obligation in
connection with the real property in such state), and neither the
Secured Property, nor any part thereof, nor any other real property
legally or beneficially owed (or any interest or estate therein
which is owned) by the Mortgagor in any state now or hereafter
having in effect a so-called "Superlien" law or ordinance or any
part thereof, has ever been used (whether by the Mortgagor, to the
best knowledge of the Mortgagor, by any other person) as a dump site
or storage (whether permanent or temporary) site for any Hazardous
Materials. Mortgagor further represents and warrants that neither
Mortgagor nor, to the best knowledge and belief of Mortgagor, any
other person has ever caused or knowingly permitted any asbestos or
under-ground, storage facility to be located on the Secured
Property. Mortgagor further represents and warrants that neither
Mortgagor nor, to the best knowledge or belief of Mortgagor having
made no investigation, any other person has discovered any
occurrence or condition on any real property adjoining or in the
vicinity of the Secured Property that could cause the Secured
Property or any part thereof to be subject to any restrictions on
the ownership, occupancy, transferability or use of the Secured
Property under any federal, state local law, ordinance or regulation
relating to Hazardous Materials.
C. Environmental Indemnification of Mortgagee.
Mortgagor hereby indemnifies and agrees to defend, protect and
hold Mortgagee, its partners, employees and agents, and any
successor, successors, or assigns to Mortgagee's interest in the
chain of title to the Secured Property, harmless from and against
any and all losses, liabilities, fines, charges, damages, injuries,
penalties, response and investigation costs, costs, expenses and
claims of any and every kind whatsoever paid, incurred or suffered
by or asserted against Mortgagee including without limitation, (a)
any loss in value of the improvements, (b) all foreseeable
consequential damages; (c) the costs of any required or necessary
repair, cleanup or detoxification of the Secured Property, and the
preparation and implementation of any closure, remedial or other
required plans; and (d) all reasonable costs and expenses incurred
by Mortgagee in connection with clauses (a), (b) and (c) hereof,
including but not limited to, reasonable attorneys' fees and fees of
any and all other consultants, experts and engineers and witnesses
(expert and otherwise) for, with respect to, or as a direct or
indirect result of (i) the presence on or under, or the escape,
seepage, leakage, spillage, emission, discharge or release from, the
Secured Property or any other property legally or beneficially owned
(or any interest or estate which is owned) by Mortgagor of any
Hazardous Material (as hereinafter defined) (including, without
limitation, any losses, liabilities, damages, injuries, costs,
expenses or claims asserted or arising under, through or as a result
of any Environmental Laws relating to or imposing liability or
standards of conduct concerning any Hazardous Material), or (ii) the
presence of any asbestos on the Secured Property (including, without
limitation, the cost of relocating tenants and the cost of removal)
regardless of whether caused by, or within the control of,
Mortgagor, or any predecessor in title or any employees, agents,
contractors or subcontractors of Mortgagor, or any third persons at
any time, occupying or present on the Secured Property, or arising
out of or related to any breach of Mortgagor's obligations under
this Mortgage. Any of such activities were or will be undertaken in
accordance with Environmental Laws. For the purposes of this
Mortgage, the term "Hazardous Material" means and includes any
flammable explosives, radioactive materials, or hazardous, toxic or
dangerous waste, substance or related material including, but not
limited to, substances defined as such in (or for purposes of) the
Environmental Laws regulating, relating to, or imposing liability or
standards of conduct concerning, any hazardous, toxic or dangerous
waste, substance or material, as now or at any time hereafter in
effect. The indemnification and hold harmless agreement of
Mortgagor contained herein shall survive the repayment of all sums
due under the Loan Documents and the discharge and satisfaction of
this Mortgage of transfer of title to Mortgagee or any third party
by foreclosure or otherwise.
D. Compliance With Environmental Laws.
Mortgagor shall keep and maintain the Secured Property in
compliance with and shall not cause or permit the Secured Property
to be in violation of any Environmental Laws or any federal, state
or local laws relating to hygiene or to the environmental conditions
on, under or about the Secured Property including, but not limited
to, soil and ground water conditions. Mortgagor shall not use,
generate, manufacture, store, dispose or permit to exist in, on,
under or about the Secured Property any Hazardous Material.
Mortgagor hereby agrees at all times to comply fully and in a timely
manner with, and to cause all of its employees, agents, contractors
and subcontractors and any other persons occupying or present on the
Secured Property to so comply with all Environmental Laws applicable
to the use, generation, handling, storage, treatment, transport,
storage, manufacture and disposal of any Hazardous Material now or
hereafter located or present on or under the Secured Property,
including, but not limited to any underground storage tanks.
E. Written Consent for Environmental Action.
Without Mortgagee's prior written consent, Mortgagor shall not
take any remedial action in response to the presence of any
Hazardous Materials, on, under, or about the Secured Property, nor
enter into any settlement agreement, consent decree, or other
compromise in respect to any Hazardous Materials claims, which
remedial action, settlement, consent or compromise might, in
Mortgagee's sole judgment, impair the value of Mortgagee's security
hereunder; provided, however, that Mortgagee's prior consent shall
not be necessary in the event that the presence of any Hazardous
Material on, under, or about the Secured Property either poses an
immediate threat to the health, safety or welfare of any individual
or is of such a nature that an immediate remedial response is
necessary and it is not possible to obtain Mortgagee's consent
before taking such action, provided that in such event Mortgagor
shall notify Mortgagee as soon as practicable of any action so
taken. Mortgagee agrees not to withhold its consent where such
consent is required hereunder, if either (a) a particular remedial
action is ordered by a court of competent jurisdiction, or (b)
Mortgagor establishes to the reasonable satisfaction of Mortgagee
that there is no reasonable alternative to such remedial action
which would result in less impairment of Mortgagee's security
hereunder.
F. Mortgagee's Right to Contest Environmental Claims.
Mortgagee shall have the right, but not the obligation, to
join and participate in, as a party if it so elects, any legal
proceeding or actions initiated by any person or entity in
connection with any Hazardous Materials claims and in such case, to
have its reasonable attorneys' fees and costs incurred in connection
therewith paid by Mortgagor.
10. Audits. Section 1.06(B) of the Greenville Mortgage shall be amended
by adding at the end of the existing sentence, the additional words
"at Mortgagor's expense".
11. Compliance with Laws. Section 1.11(K) of the Greenville Mortgage is
amended by adding at the conclusion thereof the following additional
provisions:
Mortgagor shall comply with any and all state and federal
legislation relating to environmental protection and such other
legislation, rules and regulations as are in or may come into effect
and apply them to Mortgagor, Mortgagee, this Loan Transaction or the
Secured Property or occupancy users thereof, whether as lessees,
tenants, licensees or otherwise. Mortgagor does agree to indemnify
and hold Mortgagee harmless against any and all claims, costs or
expenses relating to such environmental protection, real estate
taxes, insurance premiums as well as fraud, material
misrepresentation or misappropriation of funds notwithstanding any
exculpation or non-recourse provision in the Loan Documents.
12. Further Sales or Encumbrances. Section 1.12(B) of the Greenville
Mortgage is modified by adding to the initial paragraph at the
conclusion thereof, the following additional provisions:
For purposes of this paragraph, the following shall also be
deemed to constitute a transfer of the Secured Property, whether
made directly or through an intermediary:
(i)If Mortgagor is a corporation, a transfer or disposition of
more than fifty percent (50%) of the outstanding voting stock
of Mortgagor; or
(ii)If Mortgagor is a partnership, a transfer of disposition
of any interest of any general partner in Mortgagor.
Notwithstanding the foregoing, however, Mortgagor shall be permitted the one-
time right to transfer title to the Secured Property to an affiliated entity in
which the general partner is the current general partner of Mortgagor.
13. Covenants Regarding Tenant Improvement, Leasing Commissions, Capital
Improvements and Debt Service Shortfall Escrow Account. Brunner covenants
and agrees that within fifteen (15) days following the end of each
calendar quarter commencing January 1, 1996, Brunner shall deposit or
cause to be deposited into an account maintained at a commercial bank (the
"Depository") acceptable to Lender all Net Cash Flow as hereinafter
defined, generated from the use and operation of the Secured Property,
during the immediately preceding calendar quarter (the "Escrow Account").
Proof of such deposit, in the form of either a copy of the deposit slip or
a statement from the Depository, shall be submitted to Lender no later
than twenty (20) days following the end of each calendar quarter. Provided
that the Greenville Loan is not in default, the funds on deposit in the
Escrow Account shall from time to time be applied by Depository or
disbursed to Brunner to pay for tenant improvements, leasing commissions,
capital improvements and for debt service shortfall. Additionally, a
maximum amount calculated at two percent (2%) of the total collected
revenue shall be deducted from Net Cash Flow to be applied to the payment
of partnership operating costs.
"Income" shall mean all rents, income and profits received on a cash basis
by Brunner from the Secured Property.
"Net Cash Flow" shall mean Income less operating expenses. Operating
expenses shall include a property management fee not to exceed three percent
(3%) of the total base rental income and expense reimbursements.
Within fifteen (15) days after the end of each calendar quarter, Brunner
shall submit to Lender a statement of Net Cash Flow for the preceding quarter,
certified to be true and accurate by an officer of Brunner. Additionally,
within fifteen (15) days after the end of each calendar year Brunner shall
submit to Lender a statement of New Cash Flow for the preceding year, certified
to be true and accurate by an officer of Brunner.
Funds in the Escrow Account are to be used for costs incurred relating to
tenant improvements, leasing commissions, capital improvements and potential
debt service shortfall. Additionally a maximum amount calculated at two percent
(2%) of the total collected revenue may be deducted from Net Cash Flow to be
applied to the payment of partnership operating costs.
For disbursements (as hereinafter defined) to be made, the following
conditions must be met:
(A) All work shall be performed in a good and workmanlike manner, using
materials of at least standard grade and quality, to the
satisfaction of Lender in its sole discretion, free and clear of any
claims or liens for labor and materials.
(B) The deposits shall be held in an escrow account satisfactory to
Lender and by a Depository acceptable to Lender as assurance of the
performance of the work. Interim disbursements (each a
"Disbursement") of the Escrow Account shall be made to Brunner for
not less than Five Thousand and 00/100 Dollars ($5,000.00) per
request and no more often than one time per calendar quarter.
Lender shall direct Depository to make Disbursements conditioned
upon the following:
(1) There is no default under this Greenville Loan, the
Georgetown Loan or the Aiken Loan and Brunner shall
deliver to Lender a certificate to such effect signed by
an authorized officer of Brunner;
(2) Lender's receipt and approval of the following:
(a) A Breakdown of the Disbursement among the tenant
improvements, leasing commissions, capital
improvements, debt service shortfall and
partnership operating costs.
(b) Lease(s) pertaining to the specific portions of
the Secured Property affected, subject to all of
the requirements set forth under "Occupancy Leases
and Certified Rent Roll" contained in the Mortgage
Loan Application/Commitment.
(C) Further, prior to any subsequent Disbursements, Lender shall receive
evidence of satisfactory completion of tenant improvements, capital
improvements, and payment of leasing commissions relating to the
previous Disbursement. Such evidence shall include the following:
(1) Copies of the paid receipts related to the Disbursement.
(2) A copy of executed lien waivers signed by the leasing
agents, contractor(s) and/or subcontractor(s) paid from
the Disbursement and certificates of occupancy if
required by the local municipality.
(3) An inspection of the premises, at the option of Lender.
The fees and expenses incurred for such inspections
shall be paid by Brunner.
(D) All cost and expenses associated with the Escrow Account are to be
borne by Brunner. In the event of a default in the Loan Documents,
Lender in its sole discretion will either apply the funds in
reduction of principal or apply the funds towards any outstanding
tenant improvement costs, leasing commissions or capital
improvements.
Brunner does hereby designate First Union National Bank of South Carolina,
One Insignia Financial Plaza, Greenville, South Carolina 29601; P.O. Box
1329, Greenville, South Carolina 29602 as the proposed Depository for
Lender's approval, and Lender does hereby approve such designation.
14. Force and Effect. It is agreed that said Note, Mortgage, Assignment
of Leases, UCC, First Modification and Second Modification, except as
expressly modified, altered or extended by this Agreement, shall be and
remain in full force and effect, and all of the terms of said documents as
well as those additional terms created hereby have been assumed by
Brunner.
15. Borrower's Covenant of Payment and Compliance. Brunner, in
consideration of the above modifications, amendments and extension and of
One and 00/100 Dollar ($1.00) paid by Lender (the receipt and sufficiency
of which is hereby acknowledged), and of the mutual covenants and
agreements herein contained, does hereby covenant and agree to pay said
principal sum, and interest as set forth in this Agreement, and to comply
with the other terms of said Note, Mortgage, and Assignment of Leases,
First Modification, Second Modification and the provisions of this
Agreement.
16. Effect of Agreement. The Parties hereto agree that the execution of
this Agreement shall not release any guarantor, maker or other party of
said Note or Mortgage or any undertaking in connection therewith, nor
shall this Agreement effect any release of any collateral given at any
time to secure payment of said Note or said other undertaking.
17. Brunner Representation as to Consent. Brunner represents that no
consent of any person, firm or corporation, not a party hereto, is
required for the effectiveness of this Agreement and Brunner agrees to
indemnify and hold harmless the Lender from or against any and all loss,
damage or liability whatever, including attorney's fees, arising out of
the failure to obtain consent of any person not a party hereto.
18. Rate of Interest. It is agreed that nothing herein shall mean or be
construed to mean to call for a rate of interest in excess of that allowed
to be charged by the laws of the State of South Carolina; and that if the
provisions hereof should be determined to call for a rate of interest in
excess of the maximum rate allowed by said laws as to any person, firm or
corporation, then immediately or without necessity of any further action,
the interest rate herein provided shall, as to such person, firm or
corporation, be immediately reduced by that amount necessary to eliminate
said excess.
19. Binding Nature of Agreement. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereto, their heirs, successors
and assigns.
IN WITNESS WHEREOF, we have hereunto set our hands and seals the day
and year first above written.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: LENDER:
NEW YORK LIFE INSURANCE COMPANY
/s/ Yvett J. Eaddy By: /s/ Patricia J. Hudson
/s/ Kim Goldberg Attest: /s/ Michael Salabella
BRUNNER:
Brunner Companies Income
Properties, L.P. I, a Delaware
Limited Partnership
By: Brunner Management Limited
Partnership, General Partner
By: 104 Management Inc.,
General Partner
/s/ Douglas G. Brown By: /s/ Robert D. Long, Jr.
/s/ Jennifer L. Hester Attest: /s/ Rachel Thompson
Attest: /s/ Kelley M. Buechler
Kelley M. Buechler
Assistant Secretary
STATE OF NEW YORK )
) A C K N O W L E D G E M E N T
COUNTY OF NEW YORK )
I Mardeen Freeman, do hereby certify that Patricia J. Hudson, as duly
authorized Real Estate Vice President of NEW YORK LIFE INSURANCE COMPANY, on
behalf of the corporation, personally appeared before me this day and
acknowledged the due execution of the foregoing instrument, and that Patricia
J. Hudson, as duly authorized Real Estate Vice President of the corporation
personally appeared before me this day and acknowledged his/her attestation
to the foregoing instrument.
WITNESS my hand and official seal this 3rd day of October, 1995.
/s/ Mardeen Freeman (SEAL)
Notary Public for New York
My Commission Expires:6/3/97
STATE OF SOUTH CAROLINA )
) A C K N O W L E D G E M E N T
COUNTY OF GREENVILLE )
I, Jennifer L. Hester, do hereby certify that Rob D. Long,Jr., as a duly
authorized officer of 104 Management, Inc., on behalf of 104 Management, Inc.
in its capacity as General Partner of Brunner Management Limited Partnership,
General Partner of Brunner Companies Income Properties, L.P. I, personally
appeared before me this day and acknowledged the due execution of the foregoing
instrument and that Rob D. Long, Jr., a duly uthorized officer of 104
Management, on behalf of 104 Management Inc. in its capacity as General Partner
of Brunner Management Limited Partnership, General Partner of Brunner Companies
Income Property, L.P. I, personally appeared before me and acknowledged his/her
attestation of the foregoing instrument.
WITNESS my hand and official seal this 29 day of September, 1995.
/s/ Jennifer L. Hester (SEAL)
Notary Public for South Carolina
My Commission Expires: 3/12/01
STATE OF SOUTH CAROLINA ) THIRD LOAN MODIFICATION AND
) EXTENSION AGREEMENT, CROSS-PLEDGE
COUNTY OF GEORGETOWN ) AND DEFAULT AGREEMENT, AND
MORTGAGE AMENDMENT AGREEMENT
THIS THIRD LOAN MODIFICATION AND EXTENSION AGREEMENT, CROSS-PLEDGE AND
DEFAULT AGREEMENT, AND MORTGAGE AMENDMENT AGREEMENT ("Agreement") is made and
executed to be effective the 29th day of September, 1995, by and between NEW
YORK LIFE INSURANCE COMPANY ("Lender" or "New York Life"), and BRUNNER COMPANIES
INCOME PROPERTIES, L.P. I, a Delaware Limited Partnership ("Brunner" or
"Borrower" or "Maker"), who hereby agree as follows:
W I T N E S S E T H :
WHEREAS, Dayton & Associates XII, a South Carolina General Partnership,
executed its certain Promissory Note ("Note") dated June 2, 1988, whereby it
promised to pay to the order of New York Life Insurance Company the sum of One
Million Six Hundred Thousand Dollars ($1,600,000.00), or so much thereof as may
be advanced, with interest thereon at the rate of Nine percent (9.0%) per annum
as defined in said Note; and
WHEREAS, said Note is secured in whole or in part by a certain Mortgage,
Assignment of Leases and Rents and Security Agreement ("Mortgage") recorded on
June 1, 1988, in the Office of the Register of Mesne Conveyances for Georgetown
County, in Mortgage Book 337 at Page 133 and Deed Book 388 at Page 235; and
WHEREAS, simultaneously with the delivery of the Note and the Mortgage,
Dayton & Associates XII executed and delivered to Lender an Assignment of
Lessor's Interest in Lease(s) - with Assignment of Rents Income and Cash
Collateral ("Assignment of Leases") recorded in the Office of the Register of
Mesne Conveyances for Georgetown County in Book 288 at Page 224 on June 1, 1988;
and likewise filed in said office a UCC Financing Statement #000463 on June 3,
1988; and likewise filed on June 2, 1988 UCC Financing Statement #88-029099 in
the Office of the Secretary of State for South Carolina, ("UCC"); and
WHEREAS, Dayton and Associates XII transferred the real property
encumbered by said Loan and subject to the lien of the Mortgage to Brunner by
general warranty deed recorded July 12, 1988 in the Office of the Georgetown
County Clerk of Court in Book 294 at Page 94; and
WHEREAS, the maturity date of the Note was extended and certain terms and
conditions were modified by that certain Loan Modification and Extension
Agreement and Mortgage Amendment dated effective June 10, 1993 and recorded
September 21, 1993 in the Office of the Register of Mesne Conveyances for
Georgetown County, South Carolina in Book 642 at Page 299 along with that
certain UCC Financing Statement recorded in said Office on September 21, 1993 as
Document No. 63-1 ("First Modification"); and
WHEREAS, the maturity date on the Note was further extended and certain
terms and conditions were modified through that certain Second Loan Modification
and Extension Agreement and Mortgage Amendment dated effective June 10, 1994,
and recorded December 29, 1994, in the Office of the Register of Mesne
Conveyances for Georgetown County, South Carolina, in Book No. 742 at Page 248
("Second Modification"); and
WHEREAS, said Note, Mortgage, Assignment of Leases, UCC, First
Modification and Second Modification, as further modified hereafter by this
Agreement, are hereinafter sometimes referred to collectively as the "Georgetown
Loan"; and
WHEREAS, Brunner wishes to extend the maturity date of said Georgetown
Loan until October 10, 1998, and modify and amend the Georgetown Loan in certain
other particulars as hereinafter provided; and
WHEREAS, Lender and Brunner have agreed to said modifications, amendments
and extension of said Georgetown Loan under the terms and conditions hereafter
set forth, and wish to document said modifications, amendments and extension by
the execution and recording of this Agreement; and
WHEREAS, Brunner and Lender are also currently successor borrower and
lender respectively pursuant to that certain loan in the original principal sum
of Seven Million and Fifty Thousand Dollars ($7,050,000.00) dated June 2, 1988,
as secured by a Mortgage recorded in Mortgage Book 1936 at Page 273 in the
Office of the Register of Mesne Conveyances for Greenville, South Carolina (the
"RMC Office"), together with all related loan documents which Mortgage was
modified by that certain Loan Modification and Extension Agreement and Mortgage
Modification recorded in said RMC Office in Book 2442 at Page 240, and was
further modified by the Second Loan Modification and Extension Agreement and
Mortgage Amendment recorded in said RMC Office in Book 2632 at Page 104, and
which is being further modified and amended simultaneously herewith (the
"Greenville Loan"); and
WHEREAS, Brunner and Lender are also currently successor borrower and
lender respectively pursuant to that certain loan in the original principal sum
of Eleven Million Four Hundred Thousand Dollars ($11,400,000.00) dated June 8,
1988, as secured by a Mortgage recorded in Mortgage Book 1052 at Page 198 and
Deed Book 1041 at Page 64 in the Office of the Register of Mesne Conveyances for
Aiken County, South Carolina (the "RMC Office"), together with all related loan
documents which Mortgage was modified by that certain Loan Modification and
Extension Agreement and Mortgage Amendment recorded in said RMC Office in
Miscellaneous Book 718 at Page 337 along with that certain UCC Financing
Statement Amendment Number 1453 also filed in said office in Mortgage Book 1579
at Page 104, and was further modified by that certain Second Loan Modification
and Extension Agreement and Mortgage Amendment recorded in said RMC Office in
Miscellaneous Book Volume 777 at Page 324, and which is being further modified
simultaneously herewith (the "Aiken Loan").
NOW, THEREFORE, Lender and Brunner in consideration of the sum of One and
00/100 Dollar ($1.00), the principal reduction of the Georgetown Loan by the
amount of Fifty Thousand and 00/100 Dollars ($50,000.00), the additional cross-
collateralization between and among the Georgetown Loan, the Greenville Loan and
the Aiken Loan, and other good and valuable consideration paid by Brunner, the
mutual covenants herein contained, the receipt and sufficiency of which is
hereby acknowledged by all parties, do hereby agree to the modifications and
amendments of the terms for payment of the indebtedness evidenced by said Note,
and to the terms of collateral security for repayment thereof, as secured by
said Mortgage and other Georgetown Loan documents, so that the same shall be due
and payable as follows, and further agree to all matters hereinafter set forth:
1. Incorporation of Recitals. The above recitals are incorporated into
and made a part of this Agreement.
2. Outstanding Principal Balance of Loan. The outstanding principal
balance of the Georgetown Loan, after deducting a principal pay down of Fifty
Thousand and 00/100 Dollars ($50,000.00) made simultaneously herewith, is One
Million Five Hundred Twenty-Seven Thousand Four Hundred Thirty-One and 66/100
Dollars ($1,527,431.66) as of the date hereof. Concurrently with the execution
of this Agreement, Brunner shall remit payments to Lender of $7,492.80,
representing the per diem interest for the period from September 10, 1995
through September 28, 1995, and $4,200.44 representing the per diem interest for
the period from September 29, 1995 through October 9, 1995, due and payable
October 10, 1995.
3. The New Maturity Date; Renewal Option. The New Maturity date of the
Georgetown Loan shall be revised from June 10, 1995 to October 10, 1998.
Moreover, Brunner shall have the option to renew the existing loan balance for
an additional (2) years at an interest rate to be determined by Lender in its
sole and absolute discretion, and the amortization schedule shall be recast to
reflect a fifteen (15) year amortization schedule provided that (i) neither the
Georgetown Loan nor the Greenville Loan or the Aiken Loan is in default, (ii)
the loan to value does not exceed eighty-five percent (85%), and (iii) the debt
coverage ratio is greater than or equal to 1.10, all of which to be determined
by Lender in its sole and absolute discretion. Brunner shall notify Lender of
its intention to renew the loan not earlier than one hundred twenty (120) days
nor later than ninety (90) days prior to the New Maturity date of the Georgetown
Loan.
4. The Interest Rate; Monthly Payments; Principal Balance at Maturity.
The interest rate for said Georgetown Loan shall remain at Nine percent (9.0%)
per annum. The monthly installments shall be in the amount of Fourteen Thousand
Three Hundred Four and No/100 Dollars ($14,304.00) due on the 10th day of each
month, commencing with such installments upon the tenth day of November 1995,
and continuing thereafter on the tenth day of each month to and including
October 1998, at which time the principal balance and all other sums remaining
unpaid on the Georgetown Loan shall be due and payable.
5. Prepayment Provision. It is agreed that the Note for the Georgetown
Loan shall be modified to provide the following prepayment privilege:
Upon ninety (90) days written notice to New York Life, Maker may
prepay the Note in full on any monthly installment due date provided
there is paid, in addition to interest accrued to the date of such
prepayment, a prepayment fee equal to the difference between the
Loan Interest Rate and the Yield on U.S. Treasury Notes for a term
equal to the remaining original loan term times the outstanding
principal balance of the Georgetown Loan at the time of such
prepayment multiplied by the number of years and any fraction
thereof on the loan term as if there had been no prepayment. In no
event shall the prepayment fee be less than one percent (1%). The
prepayment fee is to be computed on the unpaid principal balance at
the time of such prepayment.
In the event the outstanding principal balance hereof shall become
due and payable as a result of (a) an Event of Default (as such term
is defined in the Mortgage) causing the acceleration under this Note
or the Loan Documents, which Event of Default shall be conclusively
deemed to be a willful default for purposes of avoiding the
prepayment fee to which Holder is entitled; (b) the exercise by
Maker or any other party having the right to redeem or to prevent a
foreclosure of the Secured Property of any right of redemption or
repayment under foreclosure laws or other action to prevent a
foreclosure of the Secured Property; (c) an acceleration by Holder
as a result of the sale or further encumbrance of the Secured
Property in violation of the applicable provisions of the Mortgage;
or (d) a casualty or condemnation with respect to the Secured
Property; then, in such event, Maker shall pay the prepayment fee
and to the extent permitted by law, such prepayment fee shall be
calculated in the same manner as specified above; provided that in
the event such prepayment fee is construed to be interest under the
laws of the State of South Carolina in any circumstance, such
payment shall not be required to the extent that the amount thereof,
together with other interest payable hereunder, exceeds the maximum
interest that may be lawfully charged under the laws of the State of
South Carolina.
6. Cross-Default and Cross-Collateralization. It is expressly
understood and agreed that the occurrence of a default under the Greenville Loan
or the Aiken Loan, or any document securing either of them, or a default under
this Georgetown Loan, for which no right to notice or cure shall exist, shall
constitute a cross default under each of the Greenville Loan, the Aiken Loan and
the Georgetown Loan, and the rights of enforcement and other rights and remedies
applicable to default shall be fully operative and applicable as to each and all
of said Greenville Loan, Aiken Loan and Georgetown Loan. The Mortgage and other
Loan Documents for the Georgetown Loan shall hereby be amended to add the
description of the collateral from each of the Greenville Loan and the Aiken
Loan to the collateral (Secured Property) securing the Georgetown Loan, which
descriptions are as set forth on Exhibits "A" and "B" hereto, respectively, and
which are incorporated into and made a part of this Agreement.
7. Insurance. Section 1.03(F)(2) of the Georgetown Mortgage is hereby
deleted and substituted in lieu thereof is the following revised Section
1.03(F)(2):
(2) In the event of any such damage or destruction, Mortgagee
shall have the option in its sole and absolute discretion and
without regard to the adequacy of its security hereunder of applying
all or part of the insurance proceeds (i) to the Indebtedness,
whether or not then due, in the inverse order of maturity, or (ii)
to the repair or restoration of the Improvements, or (iii) to cure
any then current default under this Mortgage or the other Loan
Documents, (iv) to reimburse the costs and expenses of Lender in
connection with the recovery of such insurance proceeds, or (v) any
combination of the foregoing.
8. Insurance. Section 1.03(F) is further amended by adding the
following provisions as new subsections:
(4) Mortgagor's Use of Proceeds. In the event of any destruction
to the Premises by fire or other casualty (except for any
destruction which occurs during the last six (6) months of the loan
term), the insurance proceeds shall be made available to the
Mortgagor for repair and restoration after deducting and payment to
Mortgagee of Mortgagee's costs of collection and disbursement of
such proceeds, and any other deductions Mortgagee is entitled to
under subsection (F)2 above, provided:
(a) The proceeds are deposited with Mortgagee;
(b) No default shall have occurred and be continuing under
the terms of any of the Loan Documents;
(c) The insurance carrier does not deny liability to any
named insured;
(d) If Mortgagee so requests, Mortgagee is furnished with an
estimate of the cost of restoration accompanied by a
certificate of Mortgagee's Architect as to such costs;
(e) The value of the Secured Property so restored or rebuilt
shall be at least equal to what was originally erected;
(f) Mortgagor furnishes Mortgagee with evidence reasonably
satisfactory to Mortgagee that all Improvements so
restored and/or reconstructed and their use shall fully
comply with all (i) applicable easements, covenants,
conditions, restrictions or other private agreements
affecting the Premises, (ii) zoning and building laws,
ordinances and regulations and (iii) all other
applicable federal, state and municipal laws,
regulations and requirements;
(g) If the estimated cost of reconstruction exceeds the
proceeds available, at Mortgagee's option, Mortgagor
shall (i) furnish a bond of completion or provide such
other evidence satisfactory to Mortgagee of Mortgagor's
ability to meet such excess costs of (ii) deposit with
Mortgages additional funds equal to such excess;
(h) Mortgagee shall have received notice of destruction
caused by such fire or other hazard from the Mortgagor
within ten (10) days from the date thereof, which notice
shall state the date of such fire or other hazard and a
request to Mortgagee to make the insurance proceeds
available to Mortgagor;
(i) The aggregate monthly net income under all Leases
remaining in full force and effect with respect to the
Secured Property after restoration shall be in an amount
sufficient to pay the monthly installments of principal
and interest required to be paid upon the Obligations as
well as all escrows for taxes and insurance as estimated
by Mortgagee hereunder;
(j) All Leases remain in full force and effect; and
(k) Mortgagee shall have determined that such damage or
destruction is fully reparable prior to the Maturity
Date (as defined in the Note).
(5) Disbursement of the proceeds during the course of
reconstruction shall be upon the certification of Mortgagee's
Architect as to the cost of the work done and the conformity of the
work to plans and specifications approved by Mortgagee, and evidence
supplied by a title insurance company acceptable to Mortgagee that
there are no liens arising out of the reconstruction or otherwise.
Notwithstanding the above, a portion of the proceeds may be released
prior to the commencement of reconstruction to pay for items
approved by Mortgagee in its sole discretion. Disbursements shall
be made within ten (10) business days after a request by Mortgagor.
No payment made prior to the final completion of work shall exceed
ninety percent (90%) of the value of the work performed from time to
time, and at all times the undisbursed balance of said proceeds
remaining with the Mortgagee must be at least sufficient to pay for
the cost of completion of the work free and clear of liens. Final
payment shall be upon a certification of Mortgagee's Architect as to
completion in accordance with plans and specifications approved by
Mortgagee.
(6) At such time as Mortgagee's Architect shall certify to
Mortgagee that the damaged or destroyed portion of the Secured
Property has been put in a state of repair equivalent to or better
than that existing prior to the date of such fire or other casualty,
the work shall be deemed completed. With Mortgagee's prior written
consent, which may be granted or withheld in Mortgagee's sole
discretion; any certification required to be made by an architect or
registered engineer may be made by a reputable contractor approved
by Mortgagee. The balance of the insurance proceeds so deposited
with Mortgagee after full disbursement in accordance with the terms
herein, at the sole option of Mortgagee, shall be either (a)
returned to Mortgagor, it being understood that such obligation or
reimbursement shall not exceed the amount of insurance proceeds for
such restoration and/or repair, or (b) applied to the payment of
installments of the Obligations in inverse order of maturity whether
or not such installments shall be due and payable.
(7) In all cases where any destruction to the Secured Property by
fire or other casualty occurs during the last six (6) months of the
loan term, or in Mortgagee's sole judgment, Mortgagor is not
proceeding with the repair or restoration in a manner that would
entitle Mortgagor to have the proceeds disbursed to it, or for any
other reason Mortgagee determines in its sole judgment that
Mortgagor shall not be entitled to such proceeds pursuant to the
terms of this Mortgage, Mortgagee shall have the options set forth
in subsection F(2) above.
(8) Under no circumstances shall Mortgagee become personally
liable for the fulfillment of the terms, covenants and conditions
contained in any of the Leases or obligated to take any action to
restore the Secured Property.
9. Covenants Regarding Hazardous Substances. Sections 1.10 and 1.13(B)
of the existing Georgetown Mortgage are hereby deleted in their entirety and in
lieu thereof is substituted the following:
1.10 A. Mortgagor's Representations, Warranties &
Covenants.
To the best of Mortgagor's actual knowledge, Mortgagor
represents, warrants and covenants that Hazardous Materials are not
being used, on, from, or affecting the Secured Property in any
manner and, to the best of Mortgagor's actual knowledge, no prior
owner of the Secured Property or any tenant, subtenant, prior tenant
or prior subtenant has used "Hazardous Materials" as such term is
hereinafter defined, on, from, or affecting the Secured Property, in
any manner. Mortgagor represents warrants and covenants: (i) that
the Secured Property is in compliance with all Environmental Laws
(as hereafter defined); (ii) that there are no conditions existing
currently or reasonably likely to exist during the term of this
Mortgage which would subject Mortgagor to damages, penalties,
injunctive relief or cleanup costs under any Environmental Laws as
such term is hereinafter defined, or assertions thereof, or which
require or are likely to require cleanup, removal, remedial action
or other response pursuant to Environmental Laws by Mortgagor; (iii)
that Mortgagor is not a party to any litigation or administrative
proceedings, nor so far as is known by Mortgagor is any litigation
or administrative proceeding threatened against it, which asserts or
alleges that Mortgagor has violated or is violating Environmental
Laws or that Mortgagor is required to clean up, remove or take
remedial or other responsive action due to the disposal, depositing,
discharge, leaking or other release of any hazardous substances or
materials; (iv) that neither the Secured Property nor Mortgagor is
subject to any judgment, decree, order or citation related to or
arising out of Environmental Laws or has been named or listed as a
potentially responsible party by any governmental body or agency in
a matter arising under any Environmental Laws; (v) that no permits,
licenses or approvals material to the ownership or operation of the
Secured Property are required under Environmental Laws relative to
the Secured Property, or any portion of the Secured Property; and,
(vi) to the best of Mortgagor's knowledge, there are not now, nor to
the best of Mortgagor's knowledge after due and diligent inquiry
have there ever been materials stored, deposited, treated, recycled
or disposed of, on, under or at the Secured Property (or tanks or
other facilities thereon containing such materials) which materials
or contained materials, if known to be present at the Secured
Property or present in soils or ground water, would require cleanup,
removal or some other remedial action under Environmental Laws.
Mortgagor shall promptly advise Mortgagee in writing of any
Hazardous Materials claims which are hereafter asserted, or if
Borrower obtains knowledge of any discharge, release, or disposal of
any Hazardous Materials in, on, under or about the Secured Property,
or that any condition described hereinabove has occurred.
B. Definition "Environmental Laws".
Wherever used in this Mortgage and/or the Loan Instruments,
the term, "Environmental Laws" shall mean the Comprehensive
Environmental Response Compensation and Liability Act as amended, 42
U.S.C. Section 9601, et seq.; the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq.; any so-called "Superfund" or
"Superlien" law or any other federal, state, local and foreign laws
or regulations, codes, plans, orders, decrees, judgments,
injunctions, notices or demand letters issued, promulgated or
entered thereunder relating to pollution or protection of the
environment, (collectively "Environmental Laws"), including without
limitation, Environmental Laws relating to reclamation of land and
waterways and Environmental Laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes or otherwise relating to worker
health and safety or public health and safety, in each case material
to the ownership or operation of the Secured Property. Neither the
Mortgagor nor, to the best knowledge and belief of the Mortgagor,
any other person has ever caused or knowingly permitted, in
violation of law, any Hazardous Materials to be placed, held,
located or disposed of, on, under or at the Secured Property or any
part thereof, or any other real property legally or beneficially
owned (or any interest or estate which is owned) by the Mortgagor in
any state now or hereafter having in effect a so-called "Superlien"
law or ordinance or any part thereof (the effect of which would be
to create a lien on the Secured Property to secure any obligation in
connection with the real property in such state), and neither the
Secured Property, nor any part thereof, nor any other real property
legally or beneficially owed (or any interest or estate therein
which is owned) by the Mortgagor in any state now or hereafter
having in effect a so-called "Superlien" law or ordinance or any
part thereof, has ever been used (whether by the Mortgagor, to the
best knowledge of the Mortgagor, by any other person) as a dump site
or storage (whether permanent or temporary) site for any Hazardous
Materials. Mortgagor further represents and warrants that neither
Mortgagor nor, to the best knowledge and belief of Mortgagor, any
other person has ever caused or knowingly permitted any asbestos or
under-ground, storage facility to be located on the Secured
Property. Mortgagor further represents and warrants that neither
Mortgagor nor, to the best knowledge or belief of Mortgagor having
made no investigation, any other person has discovered any
occurrence or condition on any real property adjoining or in the
vicinity of the Secured Property that could cause the Secured
Property or any part thereof to be subject to any restrictions on
the ownership, occupancy, transferability or use of the Secured
Property under any federal, state local law, ordinance or regulation
relating to Hazardous Materials.
C. Environmental Indemnification of Mortgagee.
Mortgagor hereby indemnifies and agrees to defend, protect and
hold Mortgagee, its partners, employees and agents, and any
successor, successors, or assigns to Mortgagee's interest in the
chain of title to the Secured Property, harmless from and against
any and all losses, liabilities, fines, charges, damages, injuries,
penalties, response and investigation costs, costs, expenses and
claims of any and every kind whatsoever paid, incurred or suffered
by or asserted against Mortgagee including without limitation, (a)
any loss in value of the improvements, (b) all foreseeable
consequential damages; (c) the costs of any required or necessary
repair, cleanup or detoxification of the Secured Property, and the
preparation and implementation of any closure, remedial or other
required plans; and (d) all reasonable costs and expenses incurred
by Mortgagee in connection with clauses (a), (b) and (c) hereof,
including but not limited to, reasonable attorneys' fees and fees of
any and all other consultants, experts and engineers and witnesses
(expert and otherwise) for, with respect to, or as a direct or
indirect result of (i) the presence on or under, or the escape,
seepage, leakage, spillage, emission, discharge or release from, the
Secured Property or any other property legally or beneficially owned
(or any interest or estate which is owned) by Mortgagor of any
Hazardous Material (as hereinafter defined) (including, without
limitation, any losses, liabilities, damages, injuries, costs,
expenses or claims asserted or arising under, through or as a result
of any Environmental Laws relating to or imposing liability or
standards of conduct concerning any Hazardous Material), or (ii) the
presence of any asbestos on the Secured Property (including, without
limitation, the cost of relocating tenants and the cost of removal)
regardless of whether caused by, or within the control of,
Mortgagor, or any predecessor in title or any employees, agents,
contractors or subcontractors of Mortgagor, or any third persons at
any time, occupying or present on the Secured Property, or arising
out of or related to any breach of Mortgagor's obligations under
this Mortgage. Any of such activities were or will be undertaken in
accordance with Environmental Laws. For the purposes of this
Mortgage, the term "Hazardous Material" means and includes any
flammable explosives, radioactive materials, or hazardous, toxic or
dangerous waste, substance or related material including, but not
limited to, substances defined as such in (or for purposes of) the
Environmental Laws regulating, relating to, or imposing liability or
standards of conduct concerning, any hazardous, toxic or dangerous
waste, substance or material, as now or at any time hereafter in
effect. The indemnification and hold harmless agreement of
Mortgagor contained herein shall survive the repayment of all sums
due under the Loan Documents and the discharge and satisfaction of
this Mortgage of transfer of title to Mortgagee or any third party
by foreclosure or otherwise.
D. Compliance With Environmental Laws.
Mortgagor shall keep and maintain the Secured Property in
compliance with and shall not cause or permit the Secured Property
to be in violation of any Environmental Laws or any federal, state
or local laws relating to hygiene or to the environmental conditions
on, under or about the Secured Property including, but not limited
to, soil and ground water conditions. Mortgagor shall not use,
generate, manufacture, store, dispose or permit to exist in, on,
under or about the Secured Property any Hazardous Material.
Mortgagor hereby agrees at all times to comply fully and in a timely
manner with, and to cause all of its employees, agents, contractors
and subcontractors and any other persons occupying or present on the
Secured Property to so comply with all Environmental Laws applicable
to the use, generation, handling, storage, treatment, transport,
storage, manufacture and disposal of any Hazardous Material now or
hereafter located or present on or under the Secured Property,
including, but not limited to any underground storage tanks.
E. Written Consent for Environmental Action.
Without Mortgagee's prior written consent, Mortgagor shall not
take any remedial action in response to the presence of any
Hazardous Materials, on, under, or about the Secured Property, nor
enter into any settlement agreement, consent decree, or other
compromise in respect to any Hazardous Materials claims, which
remedial action, settlement, consent or compromise might, in
Mortgagee's sole judgment, impair the value of Mortgagee's security
hereunder; provided, however, that Mortgagee's prior consent shall
not be necessary in the event that the presence of any Hazardous
Material on, under, or about the Secured Property either poses an
immediate threat to the health, safety or welfare of any individual
or is of such a nature that an immediate remedial response is
necessary and it is not possible to obtain Mortgagee's consent
before taking such action, provided that in such event Mortgagor
shall notify Mortgagee as soon as practicable of any action so
taken. Mortgagee agrees not to withhold its consent where such
consent is required hereunder, if either (a) a particular remedial
action is ordered by a court of competent jurisdiction, or (b)
Mortgagor establishes to the reasonable satisfaction of Mortgagee
that there is no reasonable alternative to such remedial action
which would result in less impairment of Mortgagee's security
hereunder.
F. Mortgagee's Right to Contest Environmental Claims.
Mortgagee shall have the right, but not the obligation, to
join and participate in, as a party if it so elects, any legal
proceeding or actions initiated by any person or entity in
connection with any Hazardous Materials claims and in such case, to
have its reasonable attorneys' fees and costs incurred in connection
therewith paid by Mortgagor.
10. Audits. Section 1.06(B) of the Georgetown Mortgage shall be amended
by adding at the end of the existing sentence, the additional words "at
Mortgagor's expense".
11. Compliance with Laws. Section 1.11(K) of the Georgetown Mortgage is
amended by adding at the conclusion thereof the following additional provisions:
Mortgagor shall comply with any and all state and federal
legislation relating to environmental protection and such other
legislation, rules and regulations as are in or may come into effect
and apply them to Mortgagor, Mortgagee, this Loan Transaction or the
Secured Property or occupancy users thereof, whether as lessees,
tenants, licensees or otherwise. Mortgagor does agree to indemnify
and hold Mortgagee harmless against any and all claims, costs or
expenses relating to such environmental protection, real estate
taxes, insurance premiums, as well as fraud, material
misrepresentation or misappropriation of funds notwithstanding any
exculpation or non-recourse provision in the Loan Documents.
12. Further Sales or Encumbrances. Section 1.12(B) of the Georgetown
Mortgage is modified by adding to the initial paragraph at the conclusion
thereof, the following additional provisions:
For purposes of this paragraph, the following shall also be
deemed to constitute a transfer of the Secured Property, whether
made directly or through an intermediary:
(i) If Mortgagor is a corporation, a transfer or
disposition of more than fifty percent (50%) of the outstanding
voting stock of Mortgagor; or
(ii) If Mortgagor is a partnership, a transfer of
disposition of any interest of any general partner in Mortgagor.
Notwithstanding the foregoing, however, Mortgagor shall be permitted the one-
time right to transfer title to the Secured Property to an affiliated entity in
which the general partner is the current general partner of Mortgagor.
13. Covenants Regarding Tenant Improvement, Leasing Commissions, Capital
Improvements and Debt Service Shortfall Escrow Account. Brunner covenants and
agrees that within fifteen (15) days following the end of each calendar quarter
commencing January 1, 1996, Brunner shall deposit or cause to be deposited into
an account maintained at a commercial bank (the "Depository") acceptable to
Lender all Net Cash Flow as hereinafter defined, generated from the use and
operation of the Secured Property, during the immediately preceding calendar
quarter (the "Escrow Account"). Proof of such deposit, in the form of either a
copy of the deposit slip or a statement from the Depository, shall be submitted
to Lender no later than twenty (20) days following the end of each calendar
quarter. Provided that the Georgetown Loan is not in default, the funds on
deposit in the Escrow Account shall from time to time be applied by Depository
or disbursed to Brunner to pay for tenant improvements, leasing commissions,
capital improvements and/or debt service shortfall. Additionally, a maximum
amount calculated at two percent (2%) of the total collected revenue shall be
deducted from Net Cash Flow to be applied to the payment of partnership
operating costs.
"Income" shall mean all rents, income and profits received on a cash basis
by Brunner from the Secured Property.
"Net Cash Flow" shall mean Income less operating expenses. Operating
expenses shall include a property management fee not to exceed three percent
(3%) of the total base rental income and expense reimbursements.
Within fifteen (15) days after the end of each calendar quarter, Brunner
shall submit to Lender a statement of Net Cash Flow for the preceding quarter,
certified to be true and accurate by an officer of Brunner. Additionally,
within fifteen (15) days after the end of each calendar year Brunner shall
submit to Lender a statement of New Cash Flow for the preceding year, certified
to be true and accurate by an officer of Brunner.
Funds in the Escrow Account are to be used for costs incurred relating to
tenant improvements, leasing commissions, capital improvements and potential
debt service shortfall. Additionally a maximum amount calculated at two percent
(2%) of the total collected revenue may be deducted from Net Cash Flow to be
applied to the payment of partnership operating costs.
For disbursements (as hereinafter defined) to be made, the following
conditions must be met:
(A) All work shall be performed in a good and workmanlike manner, using
materials of at least standard grade and quality, to the
satisfaction of Lender in its sole discretion, free and clear of any
claims or liens for labor and materials.
(B) The deposits shall be held in an escrow account satisfactory to
Lender and by a Depository acceptable to Lender as assurance of the
performance of the work. Interim disbursements (each a
"Disbursement") of the Escrow Account shall be made to Brunner for
not less than Five Thousand and 00/100 Dollars ($5,000.00) per
request and no more often than one time per calendar quarter.
Lender shall direct Depository to make Disbursements conditioned
upon the following:
(1) There is no default under this Georgetown Loan, the
Greenville Loan or the Aiken Loan and Brunner shall
deliver to Lender a certificate to such effect signed by
an authorized officer of Brunner;
(2) Lender's receipt and approval of the following:
(a) A Breakdown of the Disbursement among the tenant
improvements, leasing commissions, capital
improvements, debt service shortfall and
partnership operating costs.
(b) Lease(s) pertaining to the specific portions of
the Secured Property affected, subject to all of
the requirements set forth under "Occupancy Leases
and Certified Rent Roll" contained in the Mortgage
Loan Application/Commitment.
(C) Further, prior to any subsequent Disbursements, Lender shall receive
evidence of satisfactory completion of tenant improvements, capital
improvements, and payment of leasing commissions relating to the
previous Disbursement. Such evidence shall include the following:
(1) Copies of the paid receipts related to the Disbursement.
(2) A copy of executed lien waivers signed by the leasing
agents, contractor(s) and/or subcontractor(s) paid from
the Disbursement and certificates of occupancy if
required by the local municipality.
(3) An inspection of the premises, at the option of Lender.
The fees and expenses incurred for such inspections
shall be paid by Brunner.
(D) All cost and expenses associated with the Escrow Account are to be
borne by Brunner. In the event of a default in the Loan Documents,
Lender in its sole discretion will either apply the funds in
reduction of principal or apply the funds towards any outstanding
tenant improvement costs, leasing commissions or capital
improvements.
Brunner does hereby designate First Union National Bank of South Carolina,
One Insignia Financial Plaza, Greenville, South Carolina 29601; P.O. Box 1329,
Greenville, South Carolina 29602, as the proposed Depository for Lender's
approval, and Lender does hereby approve such designation.
14. Force and Effect. It is agreed that said Note, Mortgage, Assignment
of Leases, UCC, First Modification and Second Modification, except as expressly
modified, altered or extended by this Agreement, shall be and remain in full
force and effect, and all of the terms of said documents as well as those
additional terms created hereby have been assumed by Brunner.
15. Borrower's Covenant of Payment and Compliance. Brunner, in
consideration of the above modifications, amendments and extension and of One
and 00/100 Dollar ($1.00) paid by Lender (the receipt and sufficiency of which
is hereby acknowledged), and of the mutual covenants and agreements herein
contained, does hereby covenant and agree to pay said principal sum, and
interest as set forth in this Agreement, and to comply with the other terms of
said Note, Mortgage, and Assignment of Leases, First Modification, Second
Modification and the provisions of this Agreement.
16. Effect of Agreement. The Parties hereto agree that the execution of
this Agreement shall not release any guarantor, maker or other party of said
Note or Mortgage or any undertaking in connection therewith, nor shall this
Agreement effect any release of any collateral given at any time to secure
payment of said Note or said other undertaking.
17. Brunner Representation as to Consent. Brunner represents that no
consent of any person, firm or corporation, not a party hereto, is required for
the effectiveness of this Agreement and Brunner agrees to indemnify and hold
harmless the Lender from or against any and all loss, damage or liability
whatever, including attorney's fees, arising out of the failure to obtain
consent of any person not a party hereto.
18. Rate of Interest. It is agreed that nothing herein shall mean or be
construed to mean to call for a rate of interest in excess of that allowed to be
charged by the laws of the State of South Carolina; and that if the provisions
hereof should be determined to call for a rate of interest in excess of the
maximum rate allowed by said laws as to any person, firm or corporation, then
immediately or without necessity of any further action, the interest rate herein
provided shall, as to such person, firm or corporation, be immediately reduced
by that amount necessary to eliminate said excess.
19. Binding Nature of Agreement. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereto, their heirs, successors and
assigns.
IN WITNESS WHEREOF, we have hereunto set our hands and seals the day
and year first above written.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: LENDER:
NEW YORK LIFE INSURANCE COMPANY
/s/ Yvett J. Eaddy By: /s/ Patricia J. Hudson
/s/ Kim Goldberg Attest: /s/ Michael Salabella
BRUNNER:
Brunner Companies Income
Properties, L.P. I, a Delaware
Limited Partnership
By: Brunner Management Limited
Partnership, General Partner
By: 104 Management Inc.,
General Partner
/s/ Douglas G. Brown By: /s/ Robert D. Long, Jr.
/s/ Jennifer L. Hester Attest: /s/ Rachel Thompson
Attest: /s/ Kelley M. Buechler
Kelley M. Buechler
Assistant Secretary
STATE OF NEW YORK
A C K N O W L E D G E M E N T
COUNTY OF NEW YORK
I Mardeen Freeman, do hereby certify that Patricia J. Hudson, as duly
authorized Real Estate Vice President of NEW YORK LIFE INSURANCE COMPANY, on
behalf of the corporation, personally appeared before me this day and
acknowledged the due execution of the foregoing instrument, and that Patricia
J. Hudson, as duly authorized Real Estate Vice President of the corporation
personally appeared before me this day and acknowledged his/her attestation to
the foregoing instrument.
WITNESS my hand and official seal this 3rd day of October, 1995.
/s/ Mardeen Freeman (SEAL)
Notary Public for New York
My Commission Expires:6/3/97
STATE OF SOUTH CAROLINA )
) A C K N O W L E D G E M E N T
COUNTY OF GEORGETOWN )
I, Jennifer L. Hester, do hereby certify that Rob D. Long,Jr., as a duly
authorized officer of 104 Management, Inc., on behalf of 104 Management, Inc.
in its capacity as General Partner of Brunner Management Limited Partnership,
General Partner of Brunner Companies Income Properties, L.P. I, personally
appeared before me this day and acknowledged the due execution of the foregoing
instrument and that Rob D. Long, Jr., a duly authorized officer of 104
Management, on behalf of 104 Management Inc. in its capacity as General Partner
of Brunner Management Limited Partnership, General Partner of Brunner Companies
Income Property, L.P. I, personally appeared before me and acknowledged his/her
attestation of the foregoing instrument.
WITNESS my hand and official seal this 29 day of September, 1995.
/s/ Jennifer L. Hester (SEAL)
Notary Public for South Carolina
My Commission Expires: 3/12/01
