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BOS-BUS:410206.10
SUPPLEMENT AND AMENDMENT
TO CONSTRUCTION LOAN AGREEMENT
This SUPPLEMENT AND AMENDMENT (this "Supplement"),
dated as of October 27, 1997 is by and among (i) Xxxxxx
X. Xxxxxx, as Trustee of GOVERNMENT CENTER GARAGE
REALTY TRUST, a Massachusetts nominee trust (the
"Borrower") at the direction of GCGA Limited
Partnership, sole beneficiary of the Borrower, and (ii)
XXXX XXXXXX REALTY YIELD PLUS, L.P., a Delaware limited
partnership and XXXX XXXXXX REALTY YIELD PLUS II, L.P.,
a Delaware limited partnership (collectively, the
"Lenders"). Capitalized terms used herein without
definition shall have the meanings assigned to such
terms in the Amended Loan Agreement (as defined below).
WHEREAS, the Borrower and the Lender executed and
delivered that certain Construction Loan Agreement
dated as of April 26, 1989 (the "Original Loan
Agreement"), that certain First Amendment to
Construction Loan Agreement dated as of October 12,
1989 (the "First Amendment"), that certain Second
Amendment to Construction Loan Agreement, dated as of
June 22, 1990 and that certain Second Amendment to
Construction Loan Agreement, dated as of June 12, 1991
(collectively, the "Second Amendment"), and that
certain Supplemental Loan Agreement, dated as of
September 20, 1993 (the "Supplemental Agreement"); the
Original Loan Agreement, as amended by the First
Amendment, the Second Amendment, the Supplemental
Agreement and by this Agreement, and as the same may be
further amended from time to time, is hereinafter
referred to as the "Amended Loan Agreement", pursuant
to which, prior to the date hereof, the Lender agreed
to lend up to an aggregate of Fifty Nine Million Two
Hundred Thousand Dollars ($59,200,000) to the Borrower,
on which amount interest has accrued through September
30, 1997 in an amount equal to $12,304,808; and
WHEREAS, in connection with the Original Loan
Agreement, the Borrower agreed to pay to the Lender
Additional Interest, as defined in, and on the terms
and conditions set forth in, that certain Additional
Interest Agreement, dated as of April 26, 1989 by and
between the Borrower and the Lender, as amended by that
certain First Amendment to Additional Interest
Agreement dated as of June 22, 1990 by and between the
Borrower and the Lender, as further amended by that
certain Second Amendment to Additional Interest
Agreement dated as of September 20, 1993 by and between
the Borrower and the Lender, and as further amended by
that certain Third Amendment to Additional Interest
Agreement dated as of the date hereof (as so amended,
and as may be further amended from time to time, the
"Amended Additional Interest Agreement"); and
WHEREAS, on October 15, 1996, each of the Borrower
and GCGA Limited Partnership, sole beneficiary of the
Borrower, filed voluntary petitions for relief under
Title 11 of the United States Code, 11 U.S.C. 101 et
seq. (the "Bankruptcy Code"), Case Numbers 96-18495-PM-
11 and 96-18494-PM-11, jointly administered
(collectively, the "Proceeding") in the United States
Bankruptcy Court for the District of Maryland (Southern
Division) (the "Bankruptcy Court"); and
WHEREAS, each of the Borrower and the Lender and
certain other persons are party to that certain
Settlement Agreement, dated as of October 27, 1997 (the
"Settlement Agreement"), with respect to the settlement
of the Proceeding and Lender's and certain other
persons' claims with respect to the real and personal
property commonly known as "Government Center Garage,"
located at Xxx Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
(the "Property"); and
WHEREAS, the Borrower and the Lender desire to
enter into certain agreements relating to the Loans on
the term and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises
and of the mutual covenants herein contained and
contained in the Settlement Agreement, the Borrower and
the Lender hereby agree as follows:
1. Additional Loans. Pursuant to the terms of
the Settlement Agreement, and upon satisfaction of the
conditions and in accordance with the procedures
contained in Section 1.3 below, Lender agrees to lend
to Borrower, from and after the date hereof until the
Office Loan Maturity Date, up to an additional
$3,000,000 (the "Additional Loans") for the purpose of
funding the payment of certain costs incurred by
Borrower in connection with Tenant Improvements at the
Property.
1.1. Term of Additional Loans. The
Additional Loans shall constitute "Loans" under and as
defined in the Amended Loan Agreement and shall be due
and payable on the Office Loan Maturity Date.
1.2. Interest on Additional Loans. The
Additional Loans shall bear interest at a rate equal to
twelve percent (12%) per annum plus any additional
interest due to Lender under the Amended Additional
Interest Agreement. Interest on the principal amount
of the Additional Loans shall be payable monthly, in
arrears, on the first day of each month commencing with
the month immediately following the date hereof out of
the first funds available from the Property's cash flow
(after Borrower pays necessary operating costs and its
obligations with respect to the First Mortgage Loan and
makes escrow payments for real estate taxes relating to
the Property). If at any time there is insufficient
cash flow from the Property to pay all interest due
hereunder, such unpaid interest shall accrue and shall
be added to the principal amount of the Loans and shall
thereafter bear interest at a rate of ten percent (10%)
per annum. Notwithstanding any of the foregoing to the
contrary, all interest accrued or payable hereunder
shall be due and payable at maturity of the Loans,
whether upon acceleration or otherwise.
1.3. Repayment of Additional Loans. The
Additional Loans shall be repaid out of the first funds
available from the Property's cash flow (after payment
of all obligations to The Standard Fire Insurance
Company ("SFIC"), assignee of The Aetna Casualty and
Surety Company under that certain Promissory Note,
dated October 12, 1989 in the original principal amount
of $37,750,000 and after making escrow payments
required pursuant to the terms of the Mortgage and
Security Agreement, dated as of October 12, 1989 by and
between Borrower and SFIC for real estate taxes
relating to the Property and after the payment of costs
of operating the Property).
1.4. Conditions to Advances of Additional
Loans. Borrower may apply to the Lender for advances
of Additional Loans for Tenant Improvements as
described in and in accordance with Section 2.3 of the
Amended Loan Agreement. Such applications shall be
prepared by the Borrower and approved by the Lender in
accordance with Section 2.3 of the Amended Loan
Agreement.
1.5. Covenants of Borrower With Respect to
Additional Loans. Borrower hereby confirms that the
covenants contained in the Amended Loan Agreement,
including without limitation, those contained in
Sections 3.8 and 8 of the Amended Loan Agreement shall
also apply to the Borrower with respect to the
Additional Loans.
1.6. Additional Loans to Constitute Loans.
Each of the Borrower and the Lender acknowledges and
confirms that all Additional Loans advanced hereunder
shall constitute "Loans" and "Office Loans" for all
purposes of the Amended Loan Agreement, and shall be
obligations of the Borrower to the Lender, secured by
the Collateral as described in Section 6 of the Amended
Loan Agreement; provided that the Bankruptcy Estate of
Xxxxxxx X. and Xxxxx Xxx Xxxxx shall have no liability
under the Guaranties.
2. Amendments to Amended Loan Agreement. (a)
The parties hereto agree that Section 3.5 of the
Amended Loan Agreement is hereby amended by (i)
deleting the words "eight percent (8%) per annum"
contained in the second line thereof and replacing them
with the words "ten percent (10%) per annum"; and (ii)
by adding the following sentence to the end of such
Section 3.5:
"Interest on the principal amount of the Loans
(including any Additional Loans) shall be payable
monthly, in arrears, on the first day of each
month out of the first funds available from the
Property's cash flow (after Borrower pays
necessary operating costs and its obligations with
respect to the First Mortgage Loan and makes
escrow payments for real estate taxes relating to
the Property). If at any time there is
insufficient cash flow from the Property to pay
all interest due hereunder, such unpaid interest
shall accrue and shall be added to the principal
amount of the Loans and shall thereafter bear
interest at a rate of ten percent (10%) per annum.
Notwithstanding any of the foregoing to the
contrary, all interest accrued or payable
hereunder shall be due and payable at maturity of
the Loans, whether upon acceleration or
otherwise."
(b) The parties hereto agree that the Loan
Agreement is hereby amended by adding a new Section
9.2.5 thereto, to read in its entirety as follows:
"9.2.5. Restriction on Rights of Lender.
Notwithstanding anything contained in the Settlement
Agreement, dated as of October 27, 1997 (the
"Settlement Agreement") among the Borrower, the Lender
and certain other parties named therein, nothing
contained in the Settlement Agreement (including
without limitation, Section 4.01 or 4.07 thereof) shall
in any way restrict the Lender from exercising any or
all of its rights and remedies under any or all of the
Loan Documents in accordance with their respective
terms, or as otherwise provided by applicable law, by
virtue of the existence of a default or Event of
Default under the Loan Documents, other than a default
or an Event of Default that is the result of an event
or circumstance that (A) is solely within the control
of the general partner of GCG and (B) does not require,
any (i) amounts to be funded (except for (1) the
payments expressly required to be made by GCG on or
before the Settlement Date (as defined in the
Settlement Agreement) pursuant to Article V of the
Settlement Agreement, (2) to the extent, on the terms
and subject to the conditions contained in the Loan
Documents, the Additional Loans (as defined in the
Supplement and Amendment to Loan Agreement, dated as of
October 27, 1997) and (3) to the extent of cash flow
from the Property (after the payment of obligations to
The Standard Fire Insurance Company (assignee of The
Aetna Casualty and Surety Company) and making of escrow
payments for real estate taxes relating to the Property
and the payment of costs of operating and maintaining
the Property)) or (ii) extraordinary actions to be
taken by the general partner of GCG or any of their
affiliates in order to be avoided."
(c) The parties hereto further agree that
Schedule A to the Amended Loan Agreement is hereby
amended by adding the words "as each such agreement may
be supplemented, amended or modified from time to time"
at the end of the definition of "Loan Documents"
contained in such Schedule A.
3. Representations and Warranties of Borrower.
The Borrower represents and warrants to the Lender
that:
(a) (i) GCG and GCA are limited partnerships duly
organized and validly existing under the laws
of the Commonwealth of Massachusetts; (ii)
the Borrower is a validly created nominee
trust under the laws of the Commonwealth of
Massachusetts, and Xxxxxxx X. Xxxxx is its
only current trustee; (iii) GCG and GCA are
duly qualified to do business in all
jurisdictions where the ownership of property
or the conduct of business by each requires
such qualification; and (iv) the Borrower,
GCG and GCA and each of their general
partners have all requisite power and
authority to own and operate their respective
properties and to carry on their respective
operations as conducted and proposed to be
conducted;
(b) This Supplement has been duly authorized,
executed and delivered by the Borrower;
(c) Each of the Other Settlement Documents (as
hereinafter defined) has been duly
authorized, executed and delivered by the
Borrower;
(d) This Agreement and the Other Settlement
Documents constitute valid and binding
obligations of the Borrower in accordance
with their respective terms, except as
enforceability may be limited by applicable
bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the
enforcement of creditor's rights generally;
(e) The execution, delivery and performance of
this Supplement and the Other Settlement
Documents, compliance by the Borrower with
the provisions hereof and of the Other
Settlement Documents, and the consummation of
the transactions contemplated hereby and
thereby have been duly authorized by all
necessary trust and partnership action on the
part of the Borrower and will not conflict
with, result in a breach of or constitute a
default under (i) any agreement, indenture or
instrument to which the Borrower is a party
or by which it is bound or (ii) the
organizational documents of the Borrower;
(f) Other than the Other Settlement Documents,
there are no contracts or other agreements
which are not cancellable in thirty (30)
days, binding on Borrower or the Project,
including without limitation, any
arrangements with the City of Boston or the
BRA, except as shown on Exhibit J to the
Amended Loan Agreement. There is not on the
date hereof, any management agreement with
respect to the Project other than the
Management Agreement; and
(g) Except as otherwise set forth on Schedule 3
hereto, to the best knowledge of the
Borrower, without having made any independent
inquiry, each of the representations and
warranties contained in Sections 7.4-7.6 and
7.9-7.14 of the Amended Loan Agreement are
true and correct as of the date hereof as if
made on the date hereof and are incorporated
herein by reference.
As used herein, the term "Other Settlement Documents"
shall mean, collectively, (i) the following documents
of even date herewith by and between the Borrower and
the Lender: (a) Third Amendment to Additional Interest
Agreement; (b) Third Amendment to Second Mortgage and
Security Agreement; (c) Second Amendment to Second
Conditional Assignment of Rent and Leases; (d) Second
Amendment to Assignments, (e) Conditional Assignment of
Management Agreement and (f) Third Amendment to Notes
and (ii) the Settlement Agreement.
4. Further Assurances. Each of the Borrower and
the Lender shall cooperate with the other, and shall
execute, acknowledge and deliver such documents and
take such further actions as may be reasonably
requested by the other, to carry out the provisions
hereof and of the Other Settlement Documents and the
transactions contemplated hereby and thereby.
5. Ratification of Amended Loan Agreement. As
modified hereby, the Amended Loan Agreement is hereby
ratified and confirmed in all respects by the parties
hereto and shall remain in full force and effect in
accordance with its terms.
6. Non-Recourse Nature. Notwithstanding
anything contained herein or in any other Loan Document
to the contrary, none of Xxxxxxx X. Xxxxx, the
Bankruptcy Estate of Xxxxxxx X. and Xxxxx Xxx Xxxxx nor
any partner of GCA or GCG shall have any liability
hereunder or under the Loan Documents, including
without limitation, any liability with respect to a
breach of the representations and warranties set forth
in paragraph 3 hereof, the Guaranties or the recourse
liability after the End Transaction (as defined in the
Amended Additional Interest Agreement). The foregoing
provisions of this paragraph shall not (y) prevent
recourse to the Project or (z) constitute a waiver,
release or discharge of the Borrower's obligations
evidenced by the Amended Loan Agreement, but the same
shall continue until paid or discharged, and provided
further, that the foregoing provisions of this
paragraph shall not limit the right of any person to
name the Borrower or any transferee of Borrower's
interest in the Project received after the date hereof
as a party defendant in any action or suit for
repossession of the Project or in the exercise of any
other remedy under the Amended Loan Agreement. The
foregoing provisions of this Section 6 shall not be
deemed or construed to reduce, limit, restrict,
terminate or in any other manner modify or amend the
provisions of Article VII or VIII of the Settlement
Agreement.
7. Governing Law. This Agreement is to be
governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts.
8. Counterparts. This Agreement may be executed
in counterparts and as so executed shall constitute but
one Agreement.
IN WITNESS WHEREOF, the Borrower and the Lender have
duly executed this Supplement under seal as of the 27th
day of October, 1997.
BORROWER
GOVERNMENT CENTER GARAGE
REALTY
TRUST
By:
/s/Xxxxxx X. Xxxxxx , Trustee
LENDER
XXXX XXXXXX REALTY YIELD
PLUS,,L.P.
By: Xxxx Xxxxxx Realty Yield
Plus,
Inc., general partner
By:
/s/Xxxxxx X. Xxxxxx
Title:
XXXX XXXXXX REALTY YIELD PLUS
II,
L.P.
By: Xxxx Xxxxxx Realty Yield
Plus
II, Inc., general partner
By:
/s/Xxxxxx X. Xxxxxx
Title:
