THIRD AMENDMENT OF LOAN AGREEMENT AND
SECOND AMENDMENT OF NOTE
THIRD AMENDMENT OF LOAN AGREEMENT AND SECOND AMENDMENT OF NOTE (as the same
may be amended or otherwise modified from time to time, the "Amendment"), dated
as of the 25th day of September, 1998, among FLEET BANK, NATIONAL ASSOCIATION, a
national banking association, having an office at 1133 Avenue of the Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Fleet"), FIRST AMERICAN BANK TEXAS, SSB,
a Texas State Savings Bank, having an office at 00000 Xxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxx, Xxxxx 00000 ("FAB";
Fleet and FAB are, collectively, the "Lender"); CORPORATE REALTY INCOME FUND I,
L.P., a Delaware limited partnership, having an office at 000 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Borrower"); and FLEET, as Agent for the
Lender.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Loan Agreement dated as of September 26,
1996 between Fleet and Borrower (as heretofore amended and as the same may
further be amended or otherwise modified from time to time, the "Loan
Agreement"), Fleet made a loan to Borrower in the original principal amount of
up to Forty-Four Million and 00/100 ($44,000,000.00) Dollars (the "Loan");
WHEREAS, the Loan is evidenced by that certain promissory note of even date
with the Loan Agreement (as heretofore amended and as the same may further be
amended or otherwise modified from time to time, the "Note") made by Borrower
payable to the order of Fleet;
WHEREAS, pursuant to that certain Intercreditor Agreement dated as of
February 28, 1997 (as heretofore amended and as the same may further be amended
or otherwise modified from time to time, the "Intercreditor Agreement") among
Fleet, FAB and The Travelers Insurance Company ("Travelers") and consented to by
Borrower, FAB and Travelers have become parties to the Loan Agreement and Fleet
was appointed to act as Agent; and
WHEREAS, Lender and Borrower desire to modify and amend the terms and
provisions of the Loan Agreement as hereinafter provided.
NOW, THEREFORE, in consideration of the covenants set forth herein and for
other good and valuable consideration, the receipt and legal sufficiency of
which is hereby acknowledged, Lender, Borrower and Agent hereby agree as
follows:
1. Definitions. All capitalized terms used herein without definition and which
are defined in the Loan Agreement are used herein with the meanings
assigned to such terms in the Loan Agreement.
2. Amendments to Loan Agreement. The Loan Agreement is hereby modified as
follows:
a. EXHIBIT C (which is referred to in SECTION 6.10(c) of the Loan
Agreement) is hereby amended to provide for new Loan allocations for
the Projects. Such revised Loan allocations are as follows:
REVISED LOAN ALLOCATIONS FOR PROJECTS
(i) Alamo Towers in San Antonio, Texas -- $6,575,800.
(ii) 2.06 acre site in the Los Angeles Corporate Center, located in
Monterey Park, California -- $847,700.
(iii) 6.1 acre site at 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx
-- $1,862,000.
(iv) 4.96 acre site in the Flatiron Industrial Park in the City of
Boulder, Colorado -- $4,875,500.
(v) 6.75 acre site in the Las Colinas Office Center, Irving, Texas
-- $7,942,900.
(vi) 5 acre site at 0000 Xxxxxx Xxxxxx, Xxxxx Xxxxxxxxxx, Xxx Xxxxxx
-- $6,355,300.
(vii) 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx -- $20,540,800.
b. SECTION 1.01 is hereby modified to delete the reference to a principal
sum of "FORTY-FOUR MILLION AND NO/100THS DOLLARS ($44,000,000)" and,
to substitute in lieu thereof, a reference to "FORTY-NINE MILLION AND
NO/100THS DOLLARS ($49,000,000)".
c. To add the following as a new SECTION 2.11: "Borrower represents,
warrants and covenants that Borrower has taken or shall timely take
all reasonably necessary and appropriate steps to ascertain the extent
of and, on a timely basis, adequately address the risk that computer
applications used by Borrower and/or by Borrower's suppliers, vendors
and customers may be unable to recognize or perform, without error,
date-sensitive functions involving certain dates prior to and after
December 31, 1999."
d. SECTION 6.02 is hereby amended to delete the word "or" in the next to
last line of the SECTION and add the following at the end of the
SECTION after the word "Owner": ", or (viii) reimbursing the general
partner of Borrower for amounts such general partner has advanced to
Borrower to enable Borrower to pay for tenant buildout expenses and
leasing costs".
2
e. SECTION 6.04 is hereby amended to:
(i) delete the second sentence of the SECTION and, to substitute the
following in lieu thereof: "Advances shall be limited to one
Advance per month and shall be in minimum amounts of $100,000 and
integral multiples of $10,000." and
(ii) delete the reference to a principal amount of "Forty-Four Million
Dollars ($44,000,000)" and, to substitute in lieu thereof, a
reference to a principal amount of "Forty-Nine Million Dollars
($49,000,000)".
f. SECTION 6.12 is hereby amended to add the following at the end of the
SECTION: "Any unsecured debt of Borrower owing to the general partner
of Borrower on account of such expenses and costs is hereby permitted;
provided, however, that in no event may any such unsecured debt owing
to the general partner exceed $3,000,000. If requested by Lender,
Borrower will cause the general partner to execute and deliver a
subordination agreement reasonably satisfactory to Lender and
Borrower."
g. SECTION 6.17 is hereby deleted and the following is substituted in
lieu thereof:
"SECTION 6.17 Borrower's Distributions. (a) Provided no Default shall
exist and no event or circumstance shall have occurred or arisen which
would constitute a Default but for any unsatisfied requirement for the
giving of notice or passage of time or both, Borrower may distribute
to its partners up to ninety percent (90%) of the sum of net income
from real estate operations plus depreciation plus amortization plus
or minus step rent adjustments (as shown on Borrower's financial
statements and calculated in a manner consistent with its statement
for the period ending December 31, 1997; such sum hereinafter referred
to as "Cash From Operations"). Compliance with this covenant will be
tested as of the last day of each fiscal quarter for the preceding
twelve (12) consecutive calendar months. The foregoing covenant shall
only apply to properties for such periods as such properties are
Projects.
(b) Provided that Lender has agreed to release its liens and security
interests from one or more of the Projects pursuant to SECTION 6.10,
and has so released the same, Borrower, in addition to distributions
permitted under SECTION 6.17(a), may distribute to its partners the
net proceeds from the sale or refinance of such Project(s).
3
(c) The application of the compliance covenant set forth in SECTION
6.17(a) above shall be determined for each calendar quarter by taking
the gross distributions made to partners of the Borrower during such
calendar quarter and reducing same by the amount of any net proceeds
from the sale or refinancing of any Project distributed to the
partners of the Borrower during such calendar quarter; provided,
however, that, in the event a distribution of such proceeds from the
sale or refinancing of a Project is made all or substantially all in
any one calendar quarter, such proceeds shall, for purposes of the
application of the compliance covenant of SECTION 6.17(a), be deemed
to have been distributed to the partners of the Borrower equally over
the four calendar quarters of the year in which such net proceeds of
sale or refinancing were realized.
h. The definition of "Debt Service Coverage Ratio" is hereby deleted and
the following is substituted in lieu thereof:
"'Debt Service Coverage Ratio' shall mean Cash From Operations
from the Projects (encumbered by the Mortgages at the time
compliance with the covenant is being tested) plus fees paid to
the general partners over and above commercially reasonable
property management and fees (such sum the "Adjusted Cash From
Operations") for the preceding twelve (12) consecutive calendar
months divided by a constant amortization (principal and
interest) payment assuming (i) the then outstanding principal
balance of the Loan, (ii) a 300 month term and (iii) an annual
interest rate equal to the sum of (a) the prevailing yield on the
then most recently issued United States Treasury obligations
having a maturity of five years and (b) 1.50%.
3. Amendments to Note. The Note is hereby modified as follows:
The reference on the first page of the Note to a "Principal Amount" of
$44,000,000 is hereby amended to be a reference to a "Principal Amount" of
$49,000,000.
4. Outstanding Loans. Borrower represents and warrants to Lender that, without
giving effect to any Loan advances made concurrently with the execution and
delivery of this Amendment, the outstanding principal amount of the Loan is
$42,212,000, that there are no offsets, defenses or counterclaims to its
obligations under the Loan Documents and to the extent that any such
offsets, defenses or counterclaims exist without its knowledge, the same
are hereby waived to the fullest extent permitted by law. Except as
modified by this Amendment and by amendments to the other Loan Documents
being executed and delivered
4
concurrently herewith, the terms and provisions of the Loan Documents are
hereby ratified and confirmed in all respects and continue in full force
and effect.
5. Modifications. No provision of this Amendment may be waived, amended or
supplemented except by a written instrument executed by Borrower, Lender
and Agent.
6. Successors and Assigns. This Amendment, which sets forth the entire
understanding of the parties hereto with respect to the subject matter
hereof, inures to the benefit of, and shall be binding upon, the parties
hereto and their respective successors and assigns.
7. Severability. In the event that any one or more of the provisions contained
in this Amendment shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Amendment,
but this Amendment shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
8. Captions; Counterparts. Captions used in this Amendment are for convenience
of reference only and shall not be deemed a part of this Amendment nor used
in the construction of its meaning. This Amendment may be signed in
counterparts.
5
IN WITNESS WHEREOF, Borrower, Lender and Agent have duly executed this
Amendment, as of the date and year first above
CORPORATE REALTY INCOME FUND
I, L.P.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
---------------------------------
Xxxxxx X. Xxxxxxx, Xx.,
General Partner
By: 1345 REALTY CORPORATION,
General Partner
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
---------------------------------
Xxxxxx X. Xxxxxxx, Xx.,
President
FLEET BANK, NATIONAL ASSOCIATION,
as a Lender and as Agent
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Title: Senior Vice President
FIRST AMERICAN BANK TEXAS, SSB
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Title: Vice President
6
