AMENDMENT NO. 10 TO CREDIT AGREEMENT, WAIVERS
AND CONSENTS RELATING TO AMRESCO DEBT
AMENDMENT, WAIVERS and CONSENTS dated as of October 19, 1999 among
PERINI CORPORATION (the "Borrower"), the banks listed on the signature pages
hereof (collectively, the "Banks"), and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW
YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Banks and the Agent are parties to an Amended
and Restated Credit Agreement dated as of January 17, 1997 (as heretofore
amended, the "Credit Agreement");
WHEREAS, the Borrower has proposed to contribute certain real property
(including its headquarters building) located in Framingham, Massachusetts to a
newly created, 100%-owned subsidiary and to obtain financing secured by such
real property pursuant to the terms and conditions contained in the August 13,
1999 Application/Commitment of Amresco Capital, L.P. attached hereto as Exhibit
A; and
WHEREAS, the Borrower has requested certain amendments to the Credit
Agreement in connection therewith, and the parties have agreed to amend certain
provisions of the Credit Agreement as provided herein;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. Unless otherwise specifically defined herein,
each term used herein which is defined in the Credit Agreement shall have the
meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall from and after the date hereof refer to
the Credit Agreement as amended hereby.
Section 2. Amendment to Definitions. Section 1.01 of the Credit
Agreement is amended by inserting, in appropriate alphabetical order, the
following definitions:
EXHIBIT 10.27
"Amresco Commitment Letter" means the August 13, 1999
Application/Commitment issued to Amresco Capital, L.P . by the Borrower and a
borrower to be determined, in the form attached as Exhibit A to Amendment No. 10
to Credit Agreement dated as of October 19, 1999.
"Amresco Debt" means Debt owed by the New Headquarters Subsidiary to
Amresco Capital, L.P., in the aggregate principal amount of not more than
$7,250,000 and having the terms and conditions described in the Amresco
Commitment Letter.
"Headquarters Building" means the office building located at ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇.
"New Headquarters Subsidiary" means a 100%-owned Subsidiary of the
Borrower formed for the purpose of acquiring the Headquarters Building from the
Borrower, leasing the office space in such office building to the Borrower,
incurring and servicing the Amresco Debt and conducting such other activities
incidental thereto as contemplated by the Amresco Commitment Letter.
Section 3. Amendment to Debt Covenant.
(a) Section 5.08(a) of the Credit Agreement is amended by: (1)
deleting the word "and" at the end of clause (vi); (2) changing
clause (vii) to clause (viii); and (3) inserting the following
new clause (vii) immediately after clause (vi):
"(vii) the limited recourse Guarantee by the Borrower of the
Amresco Debt as described in the Amresco Commitment
Letter; and".
(b) Section 5.08(b) of the Credit Agreement is amended by: (1)
deleting the word "and" at the end of clause (v); (2) changing
clause (vi) to clause (vii); and (3) inserting the following new
clause (vi) immediately after clause (v):
"(vi) the Amresco Debt; and".
Section 4. Amendment to Negative Pledge Covenant. Section 5.11 of the
Credit Agreement is amended by: (1) deleting the word "and" at the end of clause
(e); (2) inserting a semi-colon and the word "and" at the end of clause (f); and
(3) inserting the following new clause (g):
"(g) Liens on the Headquarters Building granted to Amresco
Capital, L.P. to secure the Amresco Debt."
2
EXHIBIT 10.27
Section 5. Amendment to Sale of Assets Covenant. Section 5.12(b) of the
Credit Agreement is amended by: (1) deleting the word "and" at the end of clause
(iv); (2) inserting a semi-colon and the word "and" at the end of clause "(v)";
and (3) inserting the following new clause (vi):
"(vi) the transfer of the Headquarters Building by the
Borrower to the New Headquarters Subsidiary."
Section 6. Amendment to Real Estate Investments Covenant. Section 5.15
of the Credit Agreement is amended by adding the following proviso at the end
thereof:
"; provided that notwithstanding the foregoing, the Borrower
shall be permitted to transfer the Headquarters Building to the New
Headquarters Subsidiary."
Section 7. Consents and Waivers in Connection with Creation of New
Headquarters Subsidiary and Amresco Debt.
(a) Each Bank consents to the creation of the New Headquarters
Subsidiary, but if the New Headquarters Subsidiary is created as
a corporation, then such consent is conditional on the following
occuring promptly following such creation (and, in any event, on
or prior to the date of closing of the Amresco Debt): (i) the
Borrower Pledge Agreement shall be amended to add all of the
shares of capital stock of the New Headquarters Subsidiary and
the related rights, entitlements, privileges and other interests
described in Section 3 thereof as Collateral thereunder and (ii)
the Borrower shall deliver certificates representing such
capital stock to the Agent, with duly executed instruments of
transfer or assignment in blank in form and substance
satisfactory to the Agent.
(b) Each Bank consents to the amendment to the Borrower Pledge
Agreement contemplated by clause (a) above, and acknowledges and
agrees that upon the effectiveness of this Amendment, the Agent
is authorized to execute and deliver such amendment to the
Borrower Pledge Agreement.
(c) Each Bank waives the requirements of Section 5.16 of the Credit
Agreement to the extent it would require the New Headquarters
Subsidiary to guaranty the Borrower's obligations under the
Credit Agreement or to ▇▇▇▇▇ ▇ ▇▇▇▇ on its assets to secure such
guaranty; provided that this waiver shall expire at such time as
the New Headquarters Subsidiary shall not be prohibited by the
terms and conditions of the Amresco Debt from giving such a
guaranty or granting a Lien on its assets to secure such
guaranty.
3
EXHIBIT 10.27
(d) Each Bank waives the requirements of Section 5.18 of the Credit
Agreement to the extent it would prohibit the Borrower from
transferring the Headquarters Building to the New Headquarters
Subsidiary or from leasing the Headquarters Building from the
New Headquarters Subsidiary as contemplated by the Amresco
Commitment Letter.
(e) Each Bank waives the requirements of Section 5.20 of the Credit
Agreement to the extent it would prohibit the Borrower from
using a portion of the proceeds of the Amresco Debt to pay the
principal, interest and other amounts owed to ▇▇▇▇▇▇ Trust and
Savings Bank in respect of the reimbursement obligations arising
as a result of the drawing under the letter of credit issued by
▇▇▇▇▇▇ Trust and Savings Bank ("▇▇▇▇▇▇ Bank") as described in
the Forbearance Agreement dated as of September 23, 1999 between
▇▇▇▇▇▇ Bank and Perini Building Corporation.
(f) Each Bank acknowledges and agrees that the Agent is authorized
to release the Mortgage on the Headquarters Building upon the
closing of the Amresco Debt, but only if the Commitments are
reduced at such time by an aggregate amount equal to the amount
by which 100% of the aggregate principal amount of the Amresco
Debt exceeds the sum of (i) the aggregate amount paid to ▇▇▇▇▇▇
Bank for amounts described in clause (e) and (ii) the
out-of-pocket transaction costs incurred by the Borrower or the
New Headquarters Subsidiary in connection with the Amresco Debt,
including all fees, commissions and reserve or escrow fundings
described in the Amresco Commitment Letter.
Section 8. Representations and Warranties Correct; No Default. The
Borrower represents and warrants that on and as of the date hereof, after giving
effect to this Amendment, Waivers and Consents, (a) the representations and
warranties of each Obligor contained in each Financing Document, as amended, to
which it is a party are true, other than the representation and warranty
contained in Section 4.04(c) of the Credit Agreement to the extent that the
Borrower cannot make such representation and warranty due solely to the status
of the ▇▇▇▇▇▇ Center project and (b) no Default under the Credit Agreement
exists.
Section 9. Effect of Amendments, Waivers and Consents. Except as
expressly set forth herein, this Amendment, Waivers and Consents shall not
constitute an amendment or waiver of any term or condition of the Credit
Agreement or any other Financing Document, and all such terms and conditions
shall remain in full force and effect and are hereby ratified and confirmed in
all respects.
Section 10. Governing Law. This Amendment, Waivers and Consents shall be
governed by and construed in accordance with the laws of the State of New York.
Section 11. Counterparts. This Amendment, Waivers and Consents may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
4
EXHIBIT 10.27
Section 12. Consent by Subsidiary Guarantors. By signing this Amendment,
Waivers and Consents below, each Subsidiary Guarantor affirms its obligations
under the Subsidiary Guarantee Agreement and acknowledges that this Amendment,
Waivers and Consents shall not alter, release, discharge or otherwise affect any
of such obligations, all of which shall remain in full force and effect and are
hereby ratified and confirmed in all respects.
Section 13. Effectiveness. This Amendment, Waivers and Consents shall
become effective as of the date hereof when the Agent shall have received duly
executed counterparts hereof signed by the Borrower, each Bank and each
Subsidiary Guarantor (or, in the case of any party as to which an executed
counterpart shall not have been received, the Agent shall have received
telegraphic, telex or other written confirmation from such party of execution of
a counterpart hereof by such party).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment,
Waivers and Consents to be duly executed by their respective authorized officers
as of the date first above written.
5
EXHIBIT 10.27
APPLCATION/COMMITMENT
BORROWER: Single Asset Entity To-Be-Determined
c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
FDP Financial Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
August 13, 1999
AMRESCO CAPITAL, L.P.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Loan Application together with all attachments and any
amendments thereto agreed to by the parties in writing, (the
"Application"), submitted by Borrower (as defined below) to
Lender (as defined below) relating to the proposed Loan (as
defined below) in the original principal sum of $7,275,000.00
and secured by, among other things, a first mortgage on ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ (the "Property")
Dear Sir:
The undersigned hereby submits this Application/Commitment (this "Application")
to AMRESCO Capital, L.P., its successors and assigns ("Lender"), for a first
mortgage loan up to the principal amount set forth below (the "Loan") to
Borrower (as defined below), subject to the terms and conditions contained
herein (including the Standard Terms and Conditions attached hereto). It is
acknowledged that this Application shall not constitute a commitment by Lender
to make the Loan (a "Commitment") to Borrower unless and until (a) this
Application is executed by Borrower and Key Principals and delivered to Lender
accompanied by the Processing Fee, the Application Fee, the completed
Environmental Questionnaire and Certificate (the form of which is attached
hereto) and the items identified on the Borrower Documentation List (attached
hereto) and (b) Lender's issuance of a Commitment. Furthermore, the Commitment
and the consummation of the Loan are conditioned
EXHIBIT 10.27
upon the (a) completion by Lender of a due diligence investigation of Borrower,
its principals and the Property (as defined below) confirming that Borrower, its
principals and the Property are as represented and meet Lender's underwriting
criteria, (b) execution and delivery by Borrower of the required documentation
relating to the Loan, and (c) absence of any changed circumstances which may
materially and adversely affect the proposed Loan. All documents and
investigation(s) must be acceptable to Lender and all conditions must be
satisfied in a manner acceptable to Lender. Capitalized terms used in this
Application shall have the meanings set forth below. Capitalized terms used in
this Application and not otherwise defined below are defined in the Standard
Terms and Conditions attached hereto and incorporated by reference.
Property: That office building which is further described below:
Name: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ (▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇): ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇
Type: Two Story Office Building
No. of Units: N/A
No. of Stories: Two
Physical Occupancy: 100%
Year Built: Unknown
Land Area: 7.3 acres
Parking Spaces: Unknown
Acquisition: No
Security: The Loan shall be secured by a first and prior mortgage or deed of
trust on the Property and a perfected first security interest in all
leases, rents, income and profits, and all other personal property,
rights and interests owned by Borrower and related or appurtenant to the
Property. SEE SPECIAL CONDITION #13.
Borrower: Borrower must be a single asset entity meeting Lender's single asset
entity requirements, ("Single Asset Entity"), which means a United
States corporation, limited partnership or limited liability company
which does not and cannot by virtue of its organizational documents
engage in any business other than owning and operating the Property
which cannot acquire or own material assets other than the Property and
incidental personal property, and which (i) maintains its assets in a
way which segregates and identifies such assets separate and apart from
the assets of any other person or entity, (ii) holds itself out to the
public as a separate legal entity from any other person or entity, (iii)
conducts business solely in its name, (iv) shall not have any
indebtedness other than the Loan and indebtedness for trade payables
incurred in
2
EXHIBIT 10.27
the ordinary course of business, and (v) otherwise complies with rating
agency standards for a single purpose entity.
Key Principals: Perini Corporation will execute a guaranty with respect to the
limited recourse carve-out provisions (as described herein).
Loan Amount: $7,275,000.00 (Subject to adjustment at the time of rate lock
and/or upon final approval of the Appraisal. The adjustment shall be based upon
the Maximum Loan to Value and/or Minimum Debt Service Coverage required
described herein.)
Term: Ten (10) years from the first day of the first calendar month following
the Closing Date or, if the Closing Date is the first day of a calendar month,
ten (10) years from such day.
Amortization of Principal: Twenty (25) years, with the understanding that the
Loan is payable in full at the end of the Term.
Interest Rate: The greater of (a) 7.8% per annum or (b) a rate per annum equal
to the Treasury Rate (defined as the yield for the "on the run" most recently
issued and currently traded 10-year United States Treasury Note as determined by
Lender) plus 245 basis points (the "Interest Rate Spread").
Rate Lock: The Interest Rate will be set no earlier than 9:00 a.m. (New York
time) two (2) Business Days prior to the related funding date for no charge or
deposit. If the Loan does not close within such two (2) Business Day period,
except due to Lender's willful default, Borrower will reimburse Lender for any
costs related to changes in interest rates.
3
EXHIBIT 10.27
Maximum Loan
to Value Ratio: The lesser of:
(A) Seventy five percent (75%) of the appraised value of the
Property pursuant to the Appraisal; or
(B) Seventy five percent (75%) of the purchase price of the Property
if the Loan is being made in connection with an acquisition of
the Property, or the property has been purchased within the last
twelve months.
Minimum Debt Service Coverage Ratio: 1.25x, which is calculated as the ratio of
(a) Lender's estimated net underwritable cash flow from the Property over a
trailing twelve (12) month period adjusted, if necessary, to reflect the results
of an audit of the Property cash flows ("Net Cash Flow"), divided by (b) the
loan constant [which shall be (i) the sum of twelve (12) regularly scheduled
principal and interest payments divided by (ii) the Loan Amount ("Loan
Constant") ] times the Loan Amount.
Closing Date/ Commitment Expiration Date: Unless extended by Lender, the Loan
must close and fund on such a date (the "Closing Date") not later than the
thirtieth (30th ) Business Day following Borrower's acceptance of the Commitment
(the "Commitment Expiration Date"), unless Lender shall, in its sole discretion,
otherwise agree, in writing. For purposes hereof, the "Effective Date of the
Commitment" shall be the date Lender issues its Commitment. Should the
Commitment be issued without any material changes to Application, Borrower's
signature to the Application will be deemed as acceptance of the Commitment and
the thirty (30) day period will run from issuance of the Commitment. Borrower
and Key Principals acknowledge time is of the essence in regard to closing the
Loan on or before the Commitment Expiration Date.
LENDER'S FEES:
Processing Fee: $5,000. The Processing Fee is payable to Lender simultaneously
with submission of this Application. The Processing Fee shall be earned by
Lender upon Lender's completion of its site inspection.
Application Fee: $22,500. The Application Fee is payable to Lender
simultaneously with submission of this Application. The Application Fee is
non-refundable upon submission of this Application, except as described below in
the "Use of Lender's Fees/Partial
4
EXHIBIT 10.27
Refund" provision. The Application Fee will be used by Lender to cover all of
the costs of the Phase I Environmental Report, the Engineering Report and the
Appraisal (the "Third Party Analyses"), as well as Lender's usual and customary
attorneys' fees incurred in connection with legal due diligence and
documentation of the Loan. The Application Fee does not include, and Borrower
shall pay the costs of (i) a Phase II Environmental Report, or any additional
environmental analyses, if applicable, a seismic survey, or any other
extraordinary engineering reports or analyses; (ii) expenses and/or
disbursements of Lender's legal counsel; (iii) third party reviewer fees; and
(iv) legal fees incurred as a result of significant negotiations of the Loan
Documents, extraordinary and/or complex legal issues uncovered by the due
diligence performed by Lender or Lender's counsel, or non-standard loan
provisions. By way of example (but not by way of limitation), additional legal
fees may be incurred for items such as assignment of existing indebtedness
secured by the Property, environmental issues, or condominium projects with
bifurcated ownership. Borrower authorizes Lender to order the Third Party
Analyses upon receipt of signed Application and related fees. SEE SPECIAL
CONDITION #4.
Use of Lender's Fees/Partial Refund:
A. The Processing Fee is earned by Lender upon completion of its
site inspection of the Property and is thereafter non-refundable
to Borrower under all circumstances. In the event Lender does
not complete its site inspection of the Property within fourteen
(14) days after its receipt of this signed Application and the
items to be submitted herewith, Borrower may, at its option,
terminate this Application by written notice to Lender and
receive a full refund of the Processing Fee and the Application
Fee.
B. In the event the Loan closes in accordance with the terms of
this Application, the Application Fee will be retained by
Lender.
C. If the Loan does not close for any reason other than a Borrower
Default described in subparagraph (D) set forth below, including
Borrower's decision to terminate this Application (by written
notice to Lender) because the Commitment issued by Lender is on
terms materially different from those contained in this
Application, then the balance of the Application Fee in excess
of the costs of the Third Party Analyses, Lender's attorneys'
fees and costs incurred to date and the Loan Expenses (as
defined in section 4 of the attached Standard Terms and
Conditions) incurred by Lender to date will be refunded to
Borrower.
D. In the event that the Commitment expires or is terminated by
Lender because Borrower, its Key Principals or agents (i) made a
material misrepresentation, (ii) fail to timely furnish
information requested under the Commitment or to comply with a
condition precedent within their control, (iii) terminate
negotiations prior to execution of the Loan Documents or (iv)
otherwise
5
EXHIBIT 10.27
refuse to close the Loan (individually or collectively, a
"Borrower Default"), then Lender will be entitled to retain the
entire Application Fee, in its entirety, and to recover from
Borrower and Key Principals, as liquidated damages, the amount
by which the costs of the Third Party Analyses, Lender's
attorneys' fees and costs incurred to date and the Loan Expenses
incurred by Lender to date exceed the Application Fee. In such
event, Borrower will also be solely responsible for the payment
of any fee or commission due Broker (if any) or any other broker
involved in the proposed Loan. This subparagraph (D) will
survive the expiration or termination of this Application and
the Commitment, if any, that may subsequently be issued by
Lender. SEE SPECIAL CONDITION #5.
OTHER LOAN TERMS:
Limited Recourse: No deficiency or other judgment for repayment of principal and
interest on the Loan will be entered by Lender against Borrower or Key
Principals following an Event of Default (as defined in the Loan Documents)
except in the event of fraud or material misrepresentation by Borrower or Key
Principals in connection with the Loan (including, but not limited to, the
failure to pay the first full monthly payment of principal and interest when due
and failure to timely establish the Lockbox required should Borrower fail to
comply with the Reporting Requirements, as set forth hereinafter). In addition,
Borrower and Key Principals will be liable for Lender's standard carve-outs and
limitations as set forth in Section 2 of the Standard Terms and Conditions.
Repayment Terms: If funding of the Loan does not occur on the first day of a
calendar month, Borrower will pay interest accruing up to the first day of the
next calendar month, in advance at closing. Thereafter, principal and interest
(payable in arrears) shall be due in monthly installments until maturity.
Interest shall be computed and payable in arrears on a monthly basis of a
360-day year for the actual number of days elapsed (subject to the provisions of
the Loan Documents limiting interest to the maximum amount allowed by law).
Prepayment: Except in the case of casualty or condemnation proceeds actually
applied to the Loan balance, the Loan may not be prepaid except as provided
herein below. After the earlier of: (i) the first five (5) years following the
full funding of the Loan; or (ii) two years after securitization of the Loan,
Borrower may defease the Loan and have the lien on the property released by
purchasing U.S. Treasury securities in an amount sufficient to pay the remaining
principal and interest due on the Loan as scheduled. Provided Borrower has not
previously elected the option to defease, prepayment will be permitted during
the last three (3) months of the term of the Loan without payment of these fees.
6
EXHIBIT 10.27
Assumability: The Loan may be assumed upon prior written approval of Lender, its
agent, successors, or assigns in accordance with the terms of the Loan Documents
and the payment by Borrower of a one percent (1%) assumption fee, which right is
not limited to one such assumption. SEE SPECIAL CONDITION #6.
Additional Encumbrances: No additional financing of any type will be allowed on
the Property, Borrower or on the constituent interests in Borrower. SEE SPECIAL
CONDITION #7 & #13.
Reporting Requirements: During the Loan Term, Borrower and all indemnitors and
guarantors of the Loan shall keep adequate books and records of account in
accordance with generally accepted accounting principles and furnish to Lender
the following, all as more particularly set forth in the Loan Documents:
(i) On a monthly basis, rent rolls and property operating statements
for the immediately preceding month or such prior period as
Lender shall require, or if the Loan has been securitized or
sold as a whole loan by Lender, quarterly and annual rent rolls
and property operating statements;
(ii) Annual property operating statements and operating budgets;
(iii) Borrower's quarterly and annual balance sheets and profit and
loss statements relating to the Property; and
(iv) Such other additional financial and management information as
Lender may require from time to time
Springing Lockbox: If Borrower fails to comply with a reporting
requirement, as set forth above and in the Loan Documents, twice in any
twelve (12) month period during the Term, the Borrower will be obligated
to establish a lockbox account with Lender, its successors or assigns,
and enter into a cash management agreement (the "Lockbox") with Lender,
its successors or assigns. Borrower will have thirty (30) days from the
date of the second default during any twelve (12) month period to
institute the Lockbox. Failure to institute the Lockbox within this
thirty (30) day period will result in the Loan becoming full recourse to
the Borrower and Key Principals and will constitute a default under the
Loan. SEE SPECIAL CONDITION #8.
Failure to deliver the financial information as required in the Loan
Documents within the time period specified therein shall constitute an
Event of Default under the Loan Documents.
7
EXHIBIT 10.27
ESCROWS AND RESERVES:
Operating Escrows: A monthly escrow for taxes, insurance, and other special
assessments will be required. At closing, the escrow must be funded initially in
an amount which, when the required monthly payments are added thereto, will be
sufficient in Lender's estimation to pay such charges on the first day of the
calendar month preceding the month when due. SEE SPECIAL CONDITION #9, #11, #12
& #16.
General Replacement: A general replacement reserve of $0.20 per square foot per
year will be funded through monthly deposits by Borrower. Monies deposited will
be released to Borrower for reimbursement of exterior, structural, HVAC and
mechanical improvements and repairs in accordance with the terms of the
applicable Loan Documents. This reserve may be increased after Lender's
evaluation of the Engineering Report, but in no event will the monthly deposit
be less than $0.20 per square foot for office.
Repairs: 125.0% of the estimated cost of any needed maintenance and repairs as
determined by Lender's evaluation of the Engineering Report will be deposited at
closing, if such costs exceed the greater of one half of one percent (.5%) of
the Loan Amount or $10,000, for subsequent release to Borrower, upon completion
of the required maintenance and repair, for reimbursement of the costs of such
maintenance and repairs (not to exceed the amount budgeted for such maintenance
and repairs), which must be completed within the time period established by
Lender.
TI/LC's: A reserve for future tenant improvements and leasing commissions in the
amount of $50,000 will be funded by Borrower at closing; thereafter, the amount
of $25,000 per year will be funded through monthly deposits by Borrower until
the balance in this reserve is at least $200,000. If the balance in this reserve
is subsequently reduced below such amount (whether on account of expenditures
approved by Lender or its servicer or otherwise), or if there is any event of
default (or any event with which notice or lapse of time or both could
constitute an event of default) under the Loan Documents, then Borrower shall
resume making monthly deposits in such reserve until a balance of at least
$200,000 is restored and there is no uncured event of default. Lender shall
release to Borrower the lesser of (i) the actual amounts expended by Borrower or
(ii) $8.00/sq. ft. to reimburse Borrower for costs incurred in accordance with
the terms of the applicable Loan Documents. This reserve may be increased after
Lender's evaluation of the Appraisal and market survey. SEE SPECIAL CONDITION #3
& #12.
Other: Lender may require additional funding of the foregoing at closing as well
as any escrow for any other purpose as may be provided in the Loan Documents,
all of which shall be pursuant to escrow agreements acceptable to Lender and
executed by Borrower at closing. At this time, Lender is unaware of the need for
any
8
EXHIBIT 10.27
such additional escrow but merely wishes to retain the right to require any such
other additional escrow should it become necessary. SEE SPECIAL CONDITION #10.
Grace and Cure Period: Payments are due and payable on the first of each
calendar month. Payments will be considered to be late, and subject to a late
charge without notice, if the payments have not been received by the fifth day
of each calendar month. If the default is not timely cured, then the Loan will
be subject to default interest and Lender may exercise its other remedies under
the Loan Documents. SEE SPECIAL CONDITION #15.
Loan Closing Conditions: Lender's agreement to fund the Loan is contingent upon
its receipt and approval of (a) an appraisal prepared by an independent
appraiser acceptable to Lender in accordance with FIRREA/USPAP standards (the
"Appraisal"), (b) capital expenditure budget(s), (c) engineering report(s), (d)
environmental report(s), (e) legal opinion(s) regarding the Borrower's ownership
structure, the enforceability of the Loan documents and such other matters as
Lender's counsel may require, (f) title insurance, (g) survey(s), (h) certified
current and historical rent rolls and property operating statements, (i)
management agreement(s), (j) organizational documents, (k) financial statements,
credit reports and UCC, litigation, bankruptcy and judgment searches for the
Borrower, the Controlling Entity, all entities comprising the Borrower and Key
Principals (as defined herein), (l) copies of the standard form of lease, (m)
copies of all commercial space leases, historical tenant sales data, provided
tenant is required to report same to Landlord, tenant estoppels and
subordination, non-disturbance and attornments agreements, (n) current and prior
years' real estate tax statements, (o) evidence of casualty, liability and other
insurance, (p) evidence of establishment of operations and maintenance plans for
possible asbestos-containing materials, lead-based paint or radon, if
applicable, (q) evidence of compliance with all applicable laws and ordinances,
(r) acceptable evidence of a Minimum DSCR (as defined in herein) for the
Property at closing together with (s) such other documentation as Lender may, in
its sole and absolute discretion, require. All of the aforementioned items must
be satisfactory to Lender and its counsel, in their sole discretion.
Lender will make the Loan to Borrower only if Lender receives and
approves the items set forth in clauses (a) through (s) above.
Special Conditions Supplement: Special provisions of this Application are set
forth in the Special Conditions Supplement attached and incorporated herein by
reference. If any such special provision is in conflict with another term or
condition of this Application, the special provisions shall control.
9
EXHIBIT 10.27
Borrower shall have five (5) Business Days from the date of this
Application to execute this Application and submit it to Lender. If Lender does
not receive Borrower's submission of this Application by the close of business
on the fifth (5th) Business Day from the date hereof, Lender may thereafter
refuse, at its option, to accept Borrower's Application. Time is of the essence
with respect to all obligations under this Application.
THE FUNDING AND CLOSING OF THE LOAN IS SUBJECT TO A DETERMINATION BY THE
LENDER IN ITS SOLE DISCRETION THAT THE LOAN CAN BE EITHER SOLD OR TRANSFERRED
UPON TERMS, (INCLUDING PURCHASE PRICE), AND CONDITIONS ACCEPTABLE TO THE LENDER.
THIS APPLICATION, AND THE OTHER LOAN DOCUMENTS REFERRED TO OR
CONTEMPLATED HEREIN, REPRESENT OR WILL REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
The provisions of this Application and resulting Commitment, if any,
cannot be waived or modified unless such waiver or modification is in writing
and signed by the Lender, Borrower and Key Principals, if any. The Loan
Application and related materials submitted to Lender shall survive the issuance
of any such Commitment.
BORROWER:
By: To Be Determined
Name:
Title:
Tax I.D. No.:
KEY PRINCIPALS: Perini Corporation
By:
Printed Name:
Title: ____________________________________
Tax I.D. No.:
Attachments:
Special Conditions Supplement
Standard Terms and Conditions
Surveyor Selection
Survey Requirements
Title Requirements
Borrower Documentation List
10
EXHIBIT 10.27
Environmental Questionnaire and Certificate
[to be completed by Borrower and returned with signed Application]
11
EXHIBIT 10.27
ACKNOWLEDGEMENT OF RECEIPT OF APPLICATION AND PROCESSING AND APPLICATION FEE in
the amount of $ by Lender on _______________, 1999.
LENDER: AMRESCO CAPITAL, L.P.,
a Delaware limited partnership
By: AMRESCO Mortgage Capital, Inc.,
a Delaware corporation
its sole General Partner
By:
Name:
Title:
12
EXHIBIT 10.27
ISSUANCE OF COMMITMENT
LENDER HEREBY ISSUES THIS COMMITMENT in accordance with the terms hereof on this
day of , 1999 (the "Effective Date of this Commitment").
LENDER: AMRESCO CAPITAL, L.P.,
a Delaware limited partnership
By: AMRESCO Mortgage Capital, Inc.,
a Delaware corporation
its sole General Partner
By:
Name:
Title:
13
EXHIBIT 10.27
SPECIAL CONDITIONS SUPPLEMENT
Prior to closing the Loan, the following conditions must have been
fulfilled to Lender's satisfaction:
1. This transaction is subject to Lender's approval of a comprehensive
credit review of Perini Corp.
2. Borrower will be required to enter into a 25-year lease, acceptable to
Lender, with Perini Corp. at a rental rate equal to or greater than
$11.75 per square foot (triple net) for the entire net rentable area.
The rental rate will be verified by an independent appraiser as to
market validity and may be subject to adjustment based upon such
appraisal. Borrower will also provide estoppel and subordination
agreement related thereto.
3. In lieu of the TI/LC reserve requirements set forth above, Borrower may
elect to provide to Lender at closing a letter of credit in the amount
of $140,000.00 relating to the TI/LC reserve. Any such letter of credit
must be an irrevocable letter of credit furnished by Borrower at its own
expense for the benefit of Lender and its assigns, to be in transferable
form reasonably acceptable to Lender and issued by a financial
institution acceptable to Lender. Such letter of credit shall be held as
additional collateral for the term of the Loan and shall be subject to
being drawn down in the case of an event of default, as defined in the
Loan Documents. Borrower shall notify Lender should it elect this letter
of credit option at least two weeks prior to funding and closing of the
Loan.
4. Lender will contact Borrower and receive Borrower's written permission
to proceed if Lender's additional expenses, which are to be paid
separately by Borrower, set forth as (i), (ii), (iii) and (iv) in the
Application Fee section above, will exceed $5,000.00.
5. Lender is not responsible for the payment of any fee or commission due
Broker, as defined hereinafter. Neither Borrower nor Lender has
contracted with, nor knows of any broker, other than broker who has
participated in the application for the Loan or the transactions
contemplated by the Commitment (the "Broker").
6. Notwithstanding the assumption fee set forth in the Assumption section
above, the Loan may be assumed upon prior written approval of Lender,
its agent, successors, or assigns in accordance with the terms of the
Loan Documents and the payment by Borrower of a one half of one per cent
(.5%) assumption fee, which right is not limited to one such assumption.
7. Reference in the Additional Encumbrances section above to no additional
financing being allowed on the constituents in the Borrower should not
be construed as a requirement that Perini Corporation not incur
additional debt.
8. In regard to the Springing Lockbox provision set forth in the Reporting
Requirements section
1
EXHIBIT 10.27
above, Lender will agree to a 10 day notice and cure period for any
failure to comply with a reporting requirement set forth herein and in
the Loan Documents. In addition, notwithstanding the terms set forth in
the Loan Documents, Borrower will provide its required financial
reports, as described therein, on or before 45 days after the end of
each month/quarter and within 90 days following the end of each calendar
year.
9. The phrase "special assessments" used in the Operating Escrows section
above refers to any assessments, fees or taxes assessed against the
Property by any governmental body.
10. Should any additional escrows be required pursuant to the Other section
above, any such escrow shall be pursuant to an escrow agreement
acceptable to Lender and Borrower.
11. Notwithstanding the Operating Escrows section above, Borrower may elect
to provide to Lender at closing the following:
TAXES: The amount of all taxes and other assessments on the Property will be
among the deductions used in underwriting cash flow available for debt service;
however, Lender agrees to defer its right under the Loan Documents to require
monthly escrow deposits for the payment of taxes and other assessments on the
Property as long as there exists no event of default (or event with which notice
or lapse of time or both could constitute an event of default) under the Loan
Documents, and the following conditions are met to Lender's satisfaction:
Borrower provides to Lender at closing an amount sufficient to make
one-half the then-current required payment, whether quarterly or
semi-annually. Lender shall hold this amount in escrow as additional
collateral for the term of the Loan.
o The sole fee simple owner of the Property is Borrower or an
entity which Lender has approved in writing (not only as an
acceptable transferee and assumptor generally but also as to the
suspension of such escrow payments specifically).
o Borrower delivers tax receipts and other evidence satisfactory
to Lender of the payment of all taxes at least twenty (20) days
prior to their becoming due and all taxes are paid as required
by the Loan Documents.
If Lender determines that any of the foregoing conditions are not
satisfied, then Lender may, in addition to its other remedies under
applicable law and the Loan Documents, require that Borrower immediately
pay all unpaid taxes and that escrows for all taxes on the Property be
established and fully funded in accordance with Lender's standard
provisions.
INSURANCE: The amount of premiums for all insurance required under the Loan
Documents will be among the deductions used in underwriting cash flow available
for debt service; however,
2
EXHIBIT 10.27
Lender agrees to defer its right under the Loan Documents to require monthly
escrow deposits for the payment of premiums for insurance on the Property as
long as there exists no event of default (or event with which notice of lapse of
time or both could constitute an event of default) under the Loan Documents and
the following conditions are met to Lender's satisfaction
Borrower provides to Lender at closing an amount sufficient to pay one
half the then-current insurance premium payment, whether annual or
semi-annual, which shall be held in escrow as additional collateral for
the term of the Loan.
o The sole fee simple owner of the Property is Borrower or an
entity which Lender has approved in writing (not only as an
acceptable transferee and assumptor generally but also as to the
suspension of such escrow payments specifically).
o Lender has received, prior to Closing, original insurance
policies or Accord 27 certificates specifically identifying the
Property from an insurance company acceptable to Lender and
meeting Lender's rating requirements naming Lender and its
assigns as payees under a standard mortgagee clause and
providing that the policy will not be terminated without thirty
(30) days (or such shorter time as may be acceptable to Lender)
prior written notice delivered to Lender or its servicer, and
such policy or certificate assigns a coverage amount at least
equal to the amount required by Lender.
o Borrower provides written evidence satisfactory to Lender that
all such insurance premiums are paid current at the time of
Closing and at all times during the Term of the Loan.
o If Lender determines that any of the foregoing conditions are not
satisfied, then Lender may, in addition to its other remedies under
applicable law and the Loan Documents, require that Borrower immediately
pay all unpaid premiums for insurance and that escrows for insurance be
established and fully funded in accordance with Lender's standard
provisions.
12. Provided Borrower does not elect to fund this reserve with a letter of
credit as described above, subject to the payment of Lender's or its
servicer's service charges in connection with such accounts and subject
to the collateral and other provisions of the applicable Loan Documents,
Lender or its servicer will allocate to Borrower (and Borrower will
report as income) an amount of interest on the average monthly balance
in the specific reserve for tenant improvements and leasing commissions,
based on a business money market savings account rate (or a comparable
rate) quoted by the depository institution selected by Lender or its
servicer. Such interest shall be part of such escrow fund and shall be
held or disbursed as provided in the escrow agreement and other Loan
Documents. Lender and its servicer shall not be responsible for
obtaining any specific return or yield on such funds, which may be
invested with escrows for other loans.
13. Borrower and its managing members or members will not, during the term
of the Loan, incur any
3
EXHIBIT 10.27
indebtedness contrary to the bankruptcy remote requirements referred to
in this Application, including, without limitation, any financing
directly or indirectly secured by any lien on or other interest in the
Property evidenced by a note.
14. Notwithstanding the liquidated damages set forth in D of the Use of
Lender's Fees/Partial Refund section, Lender's liquidated damages shall
be capped at one per cent (1%) of the Loan Amount in the event of a
Borrower Default.
15. For informational purposes only in regard to a question regarding notice
and cure provisions, Lender is providing the following excerpt from the
mortgage form loan document:
General Event of Default: In addition to Section 24[Events of Default] above, it
shall also be an Event of Default if for more than ten (10) days after notice
from Mortgagee, Mortgagor shall continue to be in default under any other term,
covenant or condition of the Note, this Mortgage or the other Loan Documents in
the case of any default which can be cured by the payment of a sum of money or
for thirty (30) days after notice from Mortgagee in the case of any other
default, provided that if such default cannot reasonably be cured within such
thirty (30) day period and Mortgagor shall have commenced to cure such default
within such thirty (30) day period and thereafter diligently and expeditiously
proceeds to cure the same, such thirty (30) day period shall be extended for so
long as it shall require Mortgagor in the exercise of due diligence to cure such
default, it being agreed that no such extension shall be for a period in excess
of sixty (60) days. Notwithstanding the foregoing, Mortgagee agrees to give to
Mortgagor notice as described in this Section 25 of a default referred to in
Section 24 (j) - (q) above.
Provision of this excerpt is not meant to imply that notice will be given under
any circumstances other than those set forth in the Loan Documents. Borrower has
been informed that notice and cure is not applicable to monetary defaults as set
forth in the Note.
4
EXHIBIT 10.27
16. Subject to the payment of Lender's or its servicer's service charges in
connection with such accounts and subject to the collateral and other
provisions of the applicable Loan Documents, Lender or its servicer will
allocate to Borrower (and Borrower will report as income) an amount of
interest on the average monthly balance in taxes and insurance, based on
a business money market savings account rate (or a comparable rate)
quoted by the depository institution selected by Lender or its servicer.
Such interest shall be part of such escrow fund and shall be held or
disbursed as provided in the escrow agreement and other Loan Documents.
Lender and its servicer shall not be responsible for obtaining any
specific return or yield on such funds, which may be invested with
escrows for other loans.
5
EXHIBIT 10.27
[REMOVE THIS PAGE PRIOR TO SENDING TO BORROWER]
REVIEWED BY ACLP LEGAL COUNSEL.
_____________________________________ _____________________________
Counsel Date
1
EXHIBIT 10.27
STANDARD TERMS AND CONDITIONS:
THESE STANDARD TERMS AND CONDITIONS ARE ATTACHED TO AND MADE A PART OF
THE RELATED APPLICATION. ALL CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN HAVE
THE RESPECTIVE MEANINGS SET FORTH IN THE APPLICATION.
1. Due Diligence/Reports.
Lender will provide to Borrower a detailed Due Diligence and Legal
Checklist. Borrower agrees to provide in a timely fashion to Lender and its
agents all information as well as any other items Lender may request in order to
underwrite and close the Loan. Borrower acknowledges that if the Application is
accepted by Lender, and Lender thereafter issues a Commitment, Lender is issuing
the Commitment and underwriting the Loan based upon: (i) the timeliness of the
receipt of information and (ii) reliance on the representations by Borrower, its
Key Principals and agents concerning the Property, and the financial and other
condition(s) of Borrower and Key Principals. The failure to furnish complete and
accurate information in a timely manner or to cooperate in the underwriting and
closing of the Loan may cause the Commitment to expire and/or entitle Lender to
terminate the Commitment on account of such Borrower default.
Lender's due diligence investigations shall include, but not be limited
to, the receipt and review of the following items (in form and substance
satisfactory to Lender), each of which will be obtained at the expense of
Borrower and submitted to Lender in sufficient time for Lender to adequately
evaluate its acceptability: (i) evidence of proper zoning, permitting, licensing
and certificates of occupancy for the Property; (ii) operating statements,
balance sheets, tax returns and supporting documentation for Borrower and Key
Principals for the past three calendar years; (iii) a year-to-date operating
statement for the Property for the current year; (iv) if applicable, copies of
reciprocal operating agreements, and property owners association documents for
the Property (including all amendments and guarantees thereof); (v) evidence of
the availability of all utility service at the Property; (vi) a copy of the
Management Agreement for the Property; (vii) evidence of the absence of material
litigation (including current or past bankruptcies) affecting Borrower, Key
Principals and/or their respective principals or the Property; and (viii)
certificates and affidavits of Borrower, Key Principals and/or their respective
principals with respect to certain of the above items and such other items as
Lender may reasonably request. In addition, Borrower shall, at its expense,
cause Lender to receive, at the closing of the Loan, a lender's title insurance
policy, in form and substance satisfactory to Lender and from a title insurance
company satisfactory to Lender, in the amount of the Loan. If the Property has
not been inspected and approved by Lender prior to issuance of this Commitment,
then an inspection of the Property and Lender's approval is required.
Third Party Analyses: In addition to the investigations set forth above,
at Borrower's expense, Lender shall commission a Phase I environmental report
and review (the "Phase I Environmental Report") by the environmental consultants
(collectively, the "Environmental Consultant") and an engineering report (the
"Engineering Report") by the engineer (the "Engineer") selected by Lender. If
recommended by the Environmental Consultant in the Phase I Environmental Report,
Lender shall require a Phase II environmental analysis be performed at
Borrower's expense and the results be submitted to Lender in a written report.
All analyses and reports by the Environmental Consultant and the Engineer must
be acceptable to Lender.
At Borrower's expense, Lender shall also commission a full narrative
appraisal of the Property (the "Appraisal") by an independent appraiser (the
"Appraiser") selected by Lender. The making of the Loan is contingent
1
EXHIBIT 10.27
upon the Appraisal setting forth a current fair market value as determined by
using the lesser of a leased fee or fee simple analysis of the Property
necessary to satisfy the Maximum Loan to Value Ratio and confirming the
appropriateness of market rents and market vacancy calculations used in
connection with the issuance of the Commitment.
Borrower hereby authorizes Lender to engage the Appraiser, the
Environmental Consultant and the Engineer for the purposes described herein.
Borrower further authorizes the Environmental Consultant, the Engineer and the
Appraiser to perform such analyses, to contact such persons, entities or
governmental authorities and to perform such non-intrusive and intrusive
analyses of the Property as each shall deem appropriate. Borrower shall have no
claim against Lender relating to the conduct by such persons of any activities
or the willful misconduct or negligence of such persons in connection with those
activities.
2. Loan Documents.
The definitive documentation for the Loan (the "Loan Documents") will
include, but not be limited to: (i) a promissory note; (ii) a first lien deed of
trust, deed to secure debt or mortgage and security agreement; (iii) an absolute
assignment of leases and rents; (iv) an absolute and unconditional guaranty of
payment of the carve-outs and limitations with respect to exculpation set forth
in the Loan Documents executed jointly and severally by the Key Principals; (v)
a Hazardous Substances Indemnity Agreement indemnifying Lender for all costs
incurred by Lender in connection with the removal of any hazardous substances
from the Property, regardless of whether or not Borrower caused the presence of
such hazardous substance, and against any loss, cost, damage or expense that
Lender may incur, directly or indirectly, as a result of or in connection with
the assertion against Lender of any claim relating to the presence or removal of
any hazardous substance on the Property; (vi) UCC-1 financing statements; (vii)
a Manager's Consent and Subordination of Management Agreement (which will also
be executed by the property manager for the Property), (viii) Borrower's Closing
Certificate; (ix) if required by Lender, a lead based paint acknowledgment and
indemnification agreement; and (x) if required by Lender, an asbestos operations
and maintenance agreement.
The Loan Documents will provide that upon the occurrence and during the
continuation of any Event of Default, the Loan shall bear interest at a default
rate equal to the lesser of (i) five percent (5%) above the Interest Rate, or
(ii) the maximum rate permitted by law. A late charge equal to five percent (5%)
of the lesser of (i) five percent (5%) of any installment or other payment due
under the Note or (ii) the maximum amount permitted by law will be assessed if
any payment is not made within any applicable grace period permitted under the
Note. Any late charge allowed under the Loan Documents may be assessed whether
or not a notice of any event of default is required or given.
Under the Loan Documents, Borrower and Key Principals will be liable for
principal and interest on the Loan in the event of fraud or material
misrepresentation by Borrower or Key Principals in connection with the Loan
(including, but not limited to, the failure to pay the first full monthly
payment of principal and interest and failure to timely establish the Lockbox
required should Borrower fail to comply with the Reporting Requirements
described herein).
In addition, Key Principals will be liable for damages relating to
certain recourse obligations, paraphrased hereinafter, including, but not
limited to, (i) physical waste caused by Borrower or its Agents, or removal,
after an Event of Default, of any portion of the Property; (ii) misapplication
or conversion of proceeds of insurance or condemnation; (iii) failure to deliver
tenant security deposits; and/or rents and other funds due Lender under the Loan
Documents accruing after an Event of Default, except as used to pay amounts
required to be paid under the Loan Documents.
2
EXHIBIT 10.27
Borrower will be liable for damages relating to certain recourse
obligations, paraphrased hereinafter, including, but not limited to, (i) breach
of Borrower's agreements regarding environmental laws or regulations of
hazardous substances; (ii) failure to obtain Lender's prior written consent to a
transfer of, or other lien or encumbrance on, the Property or transfer of a
majority interest in the borrowing entity; (iii) voluntary bankruptcy,
involuntary bankruptcy (unless such proceeding is dismissed within ninety (90)
days without entry of an order for relief being entered and no other event of
default has occurred under the Loan Documents at the time of such dismissal) or
other legal proceedings delaying or impairing Lender in the exercise of its
rights to the Property; (iv) failure to pay taxes or other liens or insurance
premiums (or to make escrow payments for such purposes) as provided in the Loan
Documents; (v) gross negligence or willful misconduct of Borrower, Key
Principals, its principals, directors, beneficiaries, shareholders, partners,
members, trustees, agents, affiliates, officers or employees, or any person
owning, directly or indirectly, any legal or beneficial interest in Borrower, or
any successors or assignors of the foregoing, (collectively, "Agents") resulting
in damage to or loss of value in the Property not reimbursed to Lender through
insurance carried by Borrower or exposing Lender to liability claims or
litigation costs; (vi) seizure of any of the Property resulting from any
criminal wrongdoing by any person or entity other than Lender; (vii) physical
waste caused by Borrower or its Agents, failure by Borrower to maintain, repair
or restore the Property as required by the Loan Documents, or removal, after an
Event of Default, of any portion of the Property; (viii) misapplication or
conversion of proceeds of insurance or condemnation; (ix) failure to pay
lienable charges for labor and materials furnished prior to foreclosure; (x)
failure to deliver tenant security deposits after an Event of Default; (xi)
failure to deliver rents and other funds due Lender under the Loan Documents
accruing after an Event of Default, except as used to pay amounts required to be
paid under the Loan Documents; (xii) removal of Personal Property (as defined in
the Loan Documents) from the Property by or on behalf of Borrower, or its
Agents, and failure to replace with Personal Property of the same utility and of
the same or greater value; (xiii) any act of arson by Borrower or its Agents; or
(xiv) any fees or commissions paid by Borrower after the occurrence of, and
during the continuance of, an event of default to its Agents in violation of the
terms of the Loan Documents.
At closing, Lender's standard form Loan Documents will be executed by
Borrower without material change and in form and substance satisfactory to
Lender in its sole discretion to enable the Loan to be eligible for inclusion in
a possible securitization pool (See Section 12 herein). The Loan and Loan
Documents related thereto, must meet standards for the commercial mortgage
securitization market as determined by Lender, its successors and assigns, from
time to time. Borrower and Key Principals shall cooperate, as necessary, to
ensure compliance in this regard. The Loan Documents shall be governed in
accordance with the laws of the state where the Property is located except where
it is customary for out of state lenders to select the state of lender's
domicile to govern matters other than lien perfection and the exercise of
remedies relating to the Property.
3. Borrower's Representations.
Borrower represents to Lender that no pending action, suit or
proceeding, or any governmental investigation or any arbitration, exists or, to
the knowledge of Borrower, is threatened against Borrower or the Property before
any governmental or administrative body, agency or official which (i) challenges
the validity of the Commitment or the Loan Documents, or the authority of
Borrower to enter into the Commitment or the Loan Documents or to perform the
transactions herein or therein, or (ii) would have a material adverse effect on
the occupancy of the Property or on the business, financial condition or results
of operations of Borrower, Key Principals or the Property. Borrower shall
deliver to Lender a certificate confirming the truth and accuracy of the
foregoing representation at the closing of the Loan.
3
EXHIBIT 10.27
Borrower represents to Lender: (i) it has previously provided to Lender
(a) (except for multi-family or self-storage tenants, if applicable), true,
correct and complete counterpart executed copies of all leases with tenants at
the Property (and all amendments and supplements thereto and agreements
collateral thereto including, but not limited to, any guarantees thereof)
(collectively, the "Leases"), (b) a standard form of lease for the Property, and
(c) a true, complete and correct rent roll of the Property as of the date set
forth thereon (the "Rent Roll"); (ii) the Rent Roll remains true, complete and
correct as of the date hereof; (iii) it has neither provided nor received any
notices of default with respect to the Leases; (iv) except as noted on the Rent
Roll, it knows of no default of the landlord or the tenants under the Leases;
and, (v) it has not been notified, in writing or otherwise, by any tenant of the
discontinuance of, or intent to discontinue, its operations at the Property. The
standard form of lease must be satisfactory to Lender. All Leases and the
identity of all tenants and guarantors thereunder must be consistent with the
information set forth in the Rent Roll and satisfactory to Lender.
Borrower shall promptly notify Lender of any facts or circumstances
which result in a change to the information set forth in the Rent Roll. At the
closing of the Loan, Borrower shall deliver to Lender (i) a rent roll for the
Property dated as of the Closing Date (the "Closing Rent Roll") which shall be
consistent in form to the Rent Roll and (ii) a certification by Borrower that
the Closing Rent Roll and all Leases theretofore provided to Lender by Borrower
are true, correct and complete in all respects. Borrower must proffer a written
explanation for, and Lender must agree, in its sole discretion, to accept said
explanation, for any differences between facts and circumstances on the Closing
Rent Roll and the facts and circumstances on the Rent Roll.
Borrower represents (i) it has previously delivered to Lender true,
correct and complete copies of operating statements of the Property for the
lesser of the past three (3) calendar years or as many years as the Property has
existed and a year-to-date operating statement of the Property for the current
calendar year (which, to the extent included therein, contain true and accurate
schedules of tenant improvements, leasing commissions and other capital
expenditures), balance sheets and profit and loss statements, federal and state
income tax returns, tenant sales figures and all financial statements or reports
prepared by independent certified public accountants with respect to Borrower
for the lesser of the past three (3) calendar years or as many years as the
Borrower has existed, and (ii) the current budget, site plan and leasing plan
prepared by Borrower and submitted to Lender with respect to the Property
constitute good faith projections of the facts and circumstances set forth
therein and Borrower is aware of no facts or circumstances which would adversely
affect such projections.
Except as set forth in the Environmental Questionnaire and Certificate
attached hereto and made a part of the Application, or previously delivered to
Lender, Borrower represents to Lender it is not aware of any of the following
affecting the Property, either currently or historically: any
asbestos-containing materials, lead-based paint, storage tanks, toxic
substances, hazardous waste or any other adverse environmental condition.
Except as set forth on a separate written explanation attached hereto
and made a part of the Application, or previously delivered to Lender, neither
Borrower, any Key Principal, nor any Principal Owner (as defined below) of
Borrower has closed any other loan with Lender within the last two (2) years nor
has any other loans pending with Lender.
Except as set forth in detail in a separate written explanation attached
hereto and made a part of the Application, or previously delivered to Lender,
Borrower represents to Lender that neither Borrower, its Principal Owners (being
defined as any person or entity directly or indirectly owning or controlling
twenty-five percent [25%] or more of an ownership interest in Borrower or having
the power to direct the management and policies of Borrower, whether by
contract, through an ownership interest, or otherwise) nor any Key Principal (i)
has during the past seven (7) years, had any judgment remain unsatisfied for
more than thirty (30) days; (ii) has during the past seven (7) years,
4
EXHIBIT 10.27
transferred its right, title, and interest in a property through a deed-in-lieu
or foreclosure action, or has filed or has had filed against it any action under
the bankruptcy laws of the United States; (iii) is currently a co-maker,
endorser or guarantor on or of any note (except as disclosed to Lender in
writing as provided above); (iv) is currently a party to any lawsuit; (v) has
received notice of, or is otherwise aware of, any bankruptcy, insolvency or
comparable proceedings, condemnation, litigation, or any other action against or
affecting the Property, Borrower or any Key Principals or contemplates filing
any such proceedings; or (vi) has ever been convicted of a felony. Any such
exception must be acceptable to Lender.
On the Closing Date, Borrower shall certify to Lender if an adverse
change has occurred in the: (i) occupancy of the Property; or (ii) the business,
financial condition or results of operations of Borrower, Key Principals or the
Property from that set forth on the rent rolls, financial statements and reports
referred to above. Any such adverse change must be acceptable to Lender.
As of the date hereof and throughout the term of the Loan, Borrower and
Key Principals, if any, represent, warrant and covenant that (i) neither
Borrower nor any of its Principal Owners is, or will be, an "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or other retirement arrangement, which is subject
to Title I of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"); (ii) the assets of Borrower or any Principal Owners do
not, and will not, constitute "plan assets" of one or more such plans or
arrangements for purposes of Title I of ERISA or Section 4975 of the Code; (iii)
neither Borrower nor any Principal Owner is or will be a "governmental plan"
within the meaning of Section 3(32) of ERISA; and (iv) transactions by or with
Borrower or any Principal Owners are not, and will not be, subject to state
statutes applicable to Borrower regulating investments of and fiduciary
obligations with respect to governmental plans. The provisions of this paragraph
shall survive the termination of the Application (and, if accepted by Lender,
the Commitment) and Borrower and Key Principals warrant the representations made
in this paragraph shall continue to be true and correct until all sums owed
under the Loan Documents have been paid in full.
The Loan Documents shall contain additional representations and
warranties of Borrower concerning Borrower, its constituent partner(s),
shareholder(s) or member(s) and the Property.
4. Lender's Fees, Costs and Expenses.
Borrower shall, as a condition to the effectiveness of the Application
and, if accepted by Lender, the Commitment, deposit with Lender amounts equal to
those set forth as the Processing Fee and the Application Fee. Borrower shall
pay all costs and expenses incurred in connection with underwriting, preparing
for and closing the Loan (the "Loan Expenses"), whether or not the Loan is
closed. Borrower understands the Loan Expenses include, but are not limited to,
the following: (i) the costs of any additional analyses of the Property, such
as, any Phase II Environmental Site Assessments or other environmental analyses,
seismic surveys, and any additional structural or engineering surveys; (ii) all
inspection fees, credit report fees, insurance policy review fees, title
insurance report fees, surveyor's fees, disbursements/expenses of Lender's
counsel, any extraordinary legal fees incurred by Lender not covered by the
Application Fee, fees for filing and recording the Mortgage and other Loan
Documents and fees for all title, UCC, litigation and tax lien searches; (iii)
to the extent permitted by applicable law, all note taxes, intangibles taxes,
transfer taxes, tangible personal property taxes, documentary stamp taxes, and
all taxes relating to or arising from, the Loan Documents; (iv) third party
reviewer fee and (v) all license and permit fees, fees in connection with the
preparation and delivery of releases or assignments (which must be acceptable to
Lender) of any existing mortgage, premiums for title and other insurance, escrow
and disbursement fees and other closing costs; and (v) all out-of-pocket losses
or expenses incurred, or paid, by Lender in connection with the establishment
and termination of the Interest Rate if it is locked at the request, or with the
consent, of Borrower and the Commitment expires or is terminated for
5
EXHIBIT 10.27
any reason without the Loan being closed and funded. This paragraph shall
survive the termination of the Application (and, if accepted by Lender, the
Commitment), and if Borrower fails to pay all Loan Expenses, then Key Principals
shall each be jointly and severally responsible for such payment. Loan Expenses
do not include, and Borrower shall have no other obligation to pay the costs of
any Third Party Analyses or Lender's usual and customary legal fees which are
covered under the Application Fee section of the Application.
5. Brokers.
Borrower agrees to pay, indemnify and hold the Lender harmless from any
and all loss, cost or expense arising out of, or relating to, the claims of any
brokers or anyone claiming a right to any fees in connection with the financing
of the Property. Borrower has not contracted with, nor does it know of, any
broker, other than broker who has participated in the application for the Loan
or the transactions contemplated by the Commitment (the "Broker"). Borrower
acknowledges that Broker (if any) does not have the authority to, and cannot,
bind Lender in any respect, including, without limitation, the authority to
waive any conditions or make any changes to this Application, and the resulting
Commitment, if any.
6. Termination.
Upon written notice to the addressee, Lender may, if this Application is
accepted by Lender, terminate the Commitment if any of the following events
occur:
a. Without Lender's prior written consent, Borrower sells, transfers,
pledges, encumbers or assigns its interest in the Property (or any part
thereof).
b. Without Lender's prior written consent, the sale, transfer, pledge,
encumbrance or assignment of any equitable or beneficial ownership
interest in Borrower.
c. A material, adverse change in the following:
i) the occupancy of the Property;
ii) the business, financial condition or result of operations of
Borrower, Key Principals, or the Property; or
iii) the business, financial condition or result of operations of any
tenant of the Property whose gross annual rent is equal to or
exceeds three percent (3%) of the gross annual rent arising from
the Property and/or whose net rentable area is equal to or
exceeds three percent (3%) of the net rentable area of the
Property.
d. Any petition of bankruptcy, insolvency or reorganization is filed by, or
against, Borrower, Key Principals, the Property and/or any tenant of the
Property.
e. Any material damage, destruction or alteration occurs with respect to
the improvements located upon the Property, whether or not covered by
insurance.
f. Borrower and/or Key Principals breaches any provision contained in the
Application or, if accepted by Lender, the Commitment.
6
EXHIBIT 10.27
g. Borrower and/or Key Principals has made any representation or warranty
to Lender which was false or misleading when made in any material
respect or which becomes false or misleading in any material respect.
h. Condemnation proceedings are pending or threatened against any part of
the Property.
i. Borrower's and/or Key Principals' failure to satisfy any condition set
forth in the Application or, if accepted by Lender, the Commitment.
j. Material, adverse change in the commercial lending market.
Lender's delay in exercising its right to terminate the Commitment upon
the occurrence of any of the above events shall not be construed as a waiver of
such right. The failure of Lender to act in any such event shall not be
construed as a waiver of its right to act with respect to any subsequent event
of a similar nature. Upon termination, Lender's obligations pursuant to the
Commitment shall cease and be of no further force and effect.
7. Lender Authorized.
Borrower agrees Lender and its agents are authorized to enter the
Property for any purpose related to the Application during normal business hours
upon reasonable notice to Borrower. Lender is further authorized to obtain
credit reports on Borrower and Key Principals and to obtain verification of
statements made in the Application and any attachments hereto.
8. Lender Approval.
Except as otherwise expressly provided, any instance where the consent
or approval of Lender is required, or may be given, or where any determination,
judgment or decision is to be rendered by Lender under this Application, such
approval and consent shall be given or withheld in Lender's sole and absolute
discretion.
9. Additional Definitions/Liquidated Damages.
For the purposes of the Application, (i) the term "Business Day" shall
mean any day other than Saturday, Sunday or any other day on which banks are
required or authorized to close in Dallas, Texas or New York, New York; (ii) the
singular case includes the plural and the plural the singular; and (iii) the
terms "include(s)" and "including" shall mean "include(s), without limitation,"
and "including, without limitation," respectively. Where any sums are stated as
being full liquidated damages, including, but not limited to as more fully set
forth in paragraph 18, both parties acknowledge such sums are stated in
circumstances in which it is difficult to ascertain the sum required to
compensate Lender or Borrower for the loss of opportunity to make or obtain the
Loan, the loss of opportunity to make or obtain other loans on account of the
time and attention relating to the Loan, the internal expenses incurred by
Lender or Borrower in connection with the review and processing of material
information relating to the Loan and such provision for liquidated damages
represents the reasonable, good faith attempt of the parties to liquidate such
damages in advance.
7
EXHIBIT 10.27
10. Servicing/Assignment.
The Loan Documents will include provisions permitting Lender to freely
transfer the servicing of the Loan. In addition, without Borrower's consent,
Lender may assign all or any portion of its rights in the Loan. Borrower shall
cooperate in connection with any such transfer and/or assignment. Without
limiting the circumstances in which Lender may assign the Loan, Borrower
acknowledges that Lender may assign the Loan in connection with a securitization
involving the Loan and other assets.
11. Counterparts.
The Application may be signed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed and delivered, shall be an original, but all of which shall together
constitute one and the same instrument.
12. Secondary Market.
If closed and funded, Borrower acknowledges Lender intends to sell the
Loan, and such a sale may include the securitization of the Loan through a real
estate mortgage investment conduit or other securitization structure. Lender,
its servicer, and their respective successors and assigns, have the right to
disclose any information concerning the proposed Loan, Borrower, Key Principals
and the Property as Lender deems necessary in connection with any such sale.
Furthermore, any assignee of Lender or its servicer may continue to make such
information available as each deems necessary in connection with any securities
relating to the Loan and all shall have the benefit of any warranty, indemnity
or other covenant of Borrower or Key Principals under the Application, such as
survive the closing of the Loan. . In the event the Loan is securitized or sold
as a whole loan, Borrower agrees to meet with representatives of the national
credit rating agencies and prospective purchasers and investors to discuss the
business and operations of the Property and to cooperate with the reasonable
requests of such representatives, purchasers, investors and Lender's assignees
or successors.
13. No Assignment or Third-Party Reliance.
Unless otherwise approved in writing by Lender, Borrower's rights under
the Application may not be assigned to, or relied on by, any person or entity
who is not a party hereto other than any borrowing entity to be formed in
accordance with the requirements of the Application.
14. Public Announcement.
Upon closing of the Loan, Lender (at its own expense) is authorized to
issue news releases and to publish announcements in newspapers, trade journals
and other appropriate media, containing information about the Loan as may be
deemed noteworthy by Lender, including without limitation the legal and trade
name (and, if such information is public, the ownership affiliation) of
Borrower, the term and amount of the Loan, and the name, nature and location of
the Property. This provision shall survive the closing of the Loan.
15. Title Company Selection.
Lender has previously experienced closings which are expedited and
result in fewer costs to the Borrower if the title commitment and closing are
coordinated through a national office of a title underwriter ("Title Company").
The Title Company will (a) handle all funds, escrow functions and related
aspects of closing the Loan for such portion of the title premium as it may
receive
8
EXHIBIT 10.27
in accordance with applicable law (which amount shall be paid by Borrower), as
well as issue title commitment and policy; and (b) cooperate with the local
title agent selected by Borrower, if any. Accordingly, please select an
underwriter from the list set forth below:
_____ Alamo Title Insurance
_____ Chicago Title Insurance Company
_____ Commonwealth Land Title Insurance Company
_____ Fidelity National Title Insurance
_____ Lawyers Title Insurance Company
_____ Security Union Insurance Company
_____ TICOR Title Insurance
_____ Transnation Title Insurance Company of New York
If the Borrower desires to utilize the following local agent (whom
Borrower represents is an authorized agent for the underwriter selected above),
Borrower agrees and acknowledges: (i) Borrower is solely responsible for the
payment of any additional fee or expense related to the use of this local title
agent (which increase shall be in the range of $500.00 - $1,000.00) in addition
to the payment of monies owed to the Title Company and (ii) Borrower will not
contact local agent regarding this loan until the Title Company has done so.
Name:___________________________________________
Address:___________________________________________
City, State, ZIP:____________________________________
Lender and Borrower agree that the closing of the Loan, including
execution of all Loan Documents shall take place at the offices of a local
agent.
16. Surveyor Selection.
Lender has previously experienced closings which are expedited and
result in fewer costs to Borrower if the survey is obtained through a national
office of a surveyor. If Borrower elects to choose a surveyor, other than such
national surveyor, Borrower agrees and acknowledges: i) Borrower has ordered a
survey from and has furnished Lender's survey requirements to the following
surveyor, who shall provide such survey to Lender no later than twenty (20) days
before the closing of the Loan; ii) Borrower is solely responsible for the
payment of the fee of this surveyor selected by Borrower. The local surveyor
selected by Borrower, if any, is:
Company Name: ___________________________
Address: ___________________________
City, State ZIP: ___________________________
Contact: ___________________________
Phone/Fax: ___________________________
Date Ordered: ___________________________
9
EXHIBIT 10.27
17. Borrower's Counsel:
IF LOAN AMOUNT IS LESS THAN $5,000,000: Counsel for Borrower shall have
no ownership, employment or familial relationship to Borrower, Key Principals or
any of their affiliates, if any.
IF LOAN AMOUNT IS $5,000,000 TO $15,000,000: Counsel for Borrower shall
have no ownership, employment or familial relationship to Borrower, Key
Principals, or any of their affiliates, if any. In addition, the law firm
representing Borrower and/or Key Principals must have Errors and Omissions
coverage in the minimum amount of $1,000,000. A statement setting forth this
coverage must be included in the opinion letter delivered by said firm.
IF THE LOAN AMOUNT IS GREATER THAN $15,000,000: Counsel for Borrower
shall have no ownership, employment or familial relationship to Borrower, Key
Principals, or any of their affiliates, if any. In addition, the law firm
representing Borrower and/or Key Principals must have Errors and Omissions
coverage in the minimum amount of $5,000,000. A statement setting forth this
coverage must be included in the opinion letter delivered by said firm.
18. Governing Laws.
THE APPLICATION AND, IF ACCEPTED BY LENDER, THE RESULTING COMMITMENT,
SHALL BE DEEMED TO BE EXECUTED, PERFORMED, GOVERNED, CONSTRUED, APPLIED, AND
ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF, THE STATE OF TEXAS (WITHOUT
REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND THE APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA. BORROWER AND KEY PRINCIPALS IRREVOCABLY SUBMIT TO THE
JURISDICTION OF ANY COURT OF COMPETENT JURISDICTION IN THE STATE OF TEXAS IN
CONNECTION WITH ANY PROCEEDING OUT OF OR RELATING TO THE APPLICATION, AND, IF
ACCEPTED BY LENDER, THE RESULTING COMMITMENT.
The Loan Documents shall be governed in accordance with the laws of the
state where the Property is located except where it is customary for out of
state lenders to select the state of lender's domicile to govern matters other
than lien perfection and the exercise of remedies relating to the Property.
19. Waiver of Jury Trial; Limitation on Damages.
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND KEY
PRINCIPALS AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY
JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH
RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE APPLICATION (AND, IF
ACCEPTED BY LENDER, THE RESULTING COMMITMENT), THE OTHER LOAN DOCUMENTS, OR ANY
CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. IN NO EVENT
SHALL LENDER OR ANY ASSIGNEE OF THE LOAN BE LIABLE FOR ANY SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES WHATSOEVER (INCLUDING BY WAY OF ILLUSTRATION
BUT NOT LIMITATION, LOSS OF BUSINESS PROFITS OR OPPORTUNITY, PAIN AND SUFFERING,
EMOTIONAL DISTRESS, OR LOSS OR DIMINUTION OF BUSINESS REPUTATION OR GOODWILL).
FURTHERMORE BY THEIR EXECUTION OF THE APPLICATION, BORROWER AND KEY PRINCIPALS
EACH WAIVE ANY RIGHT TO CLAIM OR SEEK ANY SUCH DAMAGES. LENDER'S LIABILITY FOR
ANY DAMAGES CLAIMED BY BORROWER OR ANY KEY PRINCIPALS FOR ANY CAUSE WHATSOEVER
ARISING OUT OF, OR IN ANY WAY
10
EXHIBIT 10.27
RELATED TO, THE APPLICATION, ITS ACCEPTANCE, (AND THE RESULTING COMMITMENT, IF
ANY,) INCLUDING LENDER'S NEGLIGENCE, SHALL BE LIMITED TO ONE PERCENT (1%) OF THE
LOAN AMOUNT AS FULL LIQUIDATED DAMAGES. THIS PARAGRAPH SHALL SURVIVE THE
TERMINATION OF THE COMMITMENT AND THE CLOSING OF THE LOAN. SEE SPECIAL CONDITION
#14.
20. Equal Credit Opportunity Act Notice
THE FEDERAL EQUAL CREDIT OPPORTUNITY ACT PROHIBITS CREDITORS FROM
DISCRIMINATING AGAINST CREDIT APPLICANTS ON THE BASIS OF RACE, COLOR, RELIGION,
NATIONAL ORIGIN, SEX, MARITAL STATUS, AGE (PROVIDED THE APPLICANT HAS THE
CAPACITY TO ENTER INTO A BINDING CONTRACT), BECAUSE ALL OR PART OF THE
APPLICANT'S INCOME DERIVES FROM ANY PUBLIC ASSISTANCE PROGRAM OR BECAUSE THE
APPLICANT HAS IN GOOD FAITH EXERCISED ANY RIGHT UNDER THE CONSUMER CREDIT
PROTECTION ACT. THE FEDERAL AGENCY THAT ADMINISTERS COMPLIANCE WITH THIS LAW
CONCERNING THIS CREDITOR IS THE FEDERAL TRADE COMMISSION, EQUAL CREDIT
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇.
21. Disclosure Notice
IF YOUR APPLICATION FOR BUSINESS CREDIT IS DENIED, YOU HAVE THE RIGHT TO
A WRITTEN STATEMENT OF THE SPECIFIC REASONS FOR THE DENIAL. TO OBTAIN THE
STATEMENT, PLEASE CONTACT AMRESCO CAPITAL, L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇ - LB #342, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ATTENTION: LEGAL DEPARTMENT, (214)
953-7700, WITHIN SIXTY (60) DAYS FROM THE DATE YOU ARE NOTIFIED OF OUR DECISION.
WE WILL SEND YOU A WRITTEN STATEMENT OF REASONS FOR THE DENIAL WITHIN THIRTY
(30) DAYS OF RECEIVING YOUR REQUEST FOR THE STATEMENT.
11
EXHIBIT 10.27
Instructions to Surveyor
All surveys shall be performed in accordance with "Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys," jointly established and adopted
by ALTA and ACSM in 1997, and meeting the accuracy requirements of an Urban
Survey as defined therein, except that the accuracy and precision requirements
are modified to meet the current minimum technical accuracy requirements of your
state.
1. The complete and correct legal description of the land (The "Land") as
shown on the title insurance commitment or preliminary title report.
(NOTE: It must be possible to trace the legal description of the Land on
the survey by following the bearings and dimensions around the
boundaries of the Land.)
2. The location of all recorded easements and of all unrecorded easements
ascertainable by an inspection of the Land, which benefit or burden the
Land. (NOTE: All recorded easements are to be identified by a document
recording number or by Book and Page numbers of recording). If such an
easement cannot be located, a note to this effect should be included.
3. All areas affected by any recorded restrictions of access limitations.
(NOTE: All such areas are to be identified by a document recording
number or by Book and Page numbers of recording).
4. The location of all monuments designating corners and other boundaries
of the Land.
5. The distances and bearings of all boundaries of the property and the
location of all changes in bearing.
6. In the case of curved boundaries, complete curve data, including length
of the arc, and the chord distance and bearing.
7. The location of all adjoining streets, roads, highways and alleys, with
names, rights-of-way widths and distances from the Land noted. If none
adjoin the Land, then the location of the nearest public street, road or
highway and its distance from the Land, together with the location of
the private access easement thereto.
8. The location of public access to the Land and of all entrance drives and
curb-cuts.
9. The exact dimensions of any encroachments on the Land.
10. A directional indicator showing North.
11. The street address of each improvement.
1
EXHIBIT 10.27
12. The zoning designation of the Land.
13. The dimensions of the Land.
14. The perimeter dimensions and height of each improvement and the location
of each improvement as measured from the two (2) nearest property lines
or other defined points. Identify, and show, if possible, setback,
height and bulk restrictions of record or disclosed by applicable zoning
or building codes (in addition to those recorded in subdivision maps).
If none, so state.
15. The location of all paved parking areas and the number and type (e.g.
handicapped, motorcycle, regular, etc.) of parking spaces contained
therein.
16. The location of all walkways driveways and alleys on or crossing the
property.
17. All applicable municipal building setback lines.
18. The location of existing observable onsite easements and/or service
lines for natural gas, telephone, electricity, water and sanitary and
storm sewers, and their points of connection with the public system.
19. The area of the Land.
20. The exterior dimensions of each building at ground level.
21. All entrances and exits to and from each building.
22. Any portion of the Land which is located in a flood plain or in any
other flood hazard, mudslide hazard or flood danger area as designated
by applicable governmental authorities (with proper annotation based on
Federal Floor Insurance Rate Maps or the State or local equivalent, by
scaled map location and graphic plotting only).
23. Legend of all symbols and abbreviations used.
24. Vicinity map showing the property surveyed in reference to nearby
highway(s) or major street intersection(s).
25. All substantial, visible improvements (in addition to buildings, such as
signs, parking areas, bus stop enclosures, swimming pools, etc.)
2
EXHIBIT 10.27
26. Physical evidence of all encroaching structures and projections within 5
feet of the boundary of the property (including those outside the
boundary).
27. The character and location of all walls, buildings, fences and other
visible improvements within five (5) feet of each side of the boundary
lines shall be noted.
28. The location of any ponds, lakes, springs, or rivers bordering or
running through the property shall be shown.
29. The following surveyor's certificate:
3
EXHIBIT 10.27
SURVEYOR'S CERTIFICATE
To: AMRESCO Capital, L.P., a Delaware limited partnership, its successors
and assigns; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital, Inc. and its successors
and assigns, [BORROWER] and [TITLE INSURANCE COMPANY]
This is to certify that (a) this map of survey and the property
description with respect thereto are true and correct and represent an actual
field survey of the real property shown hereon; (b) such survey was conducted
under the direct supervision of the undersigned Registered Land Surveyor; (c)
such map of survey shows the premises specifically described in [title
commitment]; (d) such survey complies with all requirements, terms and
conditions of the Lender's Instructions to Surveyor, the receipt of which is
hereby acknowledged; and (e) such map of survey was made (i) in accordance with
"Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys", jointly
established and adopted by ALTA and ACSM in 1997 and includes Items 2, 3, 4, 6,
7(a), 8, 9 and 10, and to the extent necessary to determine compliance with
applicable zoning requirements, items 7(b) and 7(c), on Table A, "Optional
Survey Responsibilities and Specifications", specifically defined therein, and
(ii) pursuant to the Accuracy Standards (as adopted by ALTA and ACSM and in
effect on the date of this certification) of an Urban Survey.
[Signature]
[Type name of surveyor below signature line]
Registration No._______________
Date: [Date]
[Seal]
4
EXHIBIT 10.27
TITLE REQUIREMENTS
Title insurance insures AMRESCO Capital, L.P., a Delaware limited partnership,
its successors and assigns, as to the first priority lien of the mortgage
subject only to permitted encumbrances, none of which should interfere with the
current use or the value of the mortgage. Lender requires that title insurance
is provided by a company acceptable to it and authorized to do business in the
jurisdiction where the property is located. The policy must comply with the
following Lender requirements:
o The title insurance policy (the "Policy") must equal the stated
principal amount of the Loan. If such amount exceeds the single risk
limit determined by Lender from time to time with respect to the title
company issuing the Policy, arrangements must be made for reinsurance
and/or co-insurance which are satisfactory to Lender.
o The Policy must name AMRESCO Capital, L.P., a Delaware limited
partnership, its successors and assigns as the insured. The effective
date of the Policy and all endorsements must be the date of recording of
the mortgage or the day of funding, whichever is later. If the loan will
be funded prior to the recordation of the mortgage, the Policy must
insure the "gap" between funding and recording.
o The Policy must be written on the standard 1992 American Land Title
Association ("ALTA") form of loan policy or on the 1987 or 1970 form of
ALTA loan policy. The 1990 form of ALTA Loan Policy is not acceptable.
If these forms are not available in a particular jurisdiction by statute
or regulation, the equivalent form approved for use in such state may be
used. If the 1987 or 1970 form of ALTA loan policy or the equivalent
form is issued, the Policy cannot contain any creditors' rights or
similar exception or exclusion which must be deleted by endorsement. If
the Policy contains any provisions for the arbitration of claims, such
provisions must also be deleted by endorsement.
o All standard exceptions, (i.e., parties in possession, matters not shown
on the public records, any state of facts that an accurate survey or
physical inspection might show, claims or liens of mechanics or
material-men) must be deleted. An exception for "rights of tenants, as
tenants only" is acceptable. Other exceptions unacceptable to ACLP's
counsel should be deleted or insured over in a manner acceptable to
ACLP's counsel. Recorded leases should be reflected in the Policy as
subordinate to the security instrument.
o If the Policy contains exceptions for taxes, assessments or other
lienable items, the Policy must insure that such items are not yet due
and payable.
o The legal description in the Policy must conform to the survey, and the
Policy should specifically refer to the survey. All appurtenant
easements that benefit the property should be included in
1
EXHIBIT 10.27
Schedule A of the Policy. A so-called "Meridian" legal description in
the absence of a metes and bounds description or a Surveyor endorsement
(see below) is unacceptable.
o Each Policy should contain the following standard endorsements or their
equivalent, unless such endorsements are not applicable or are not
available by statute or regulation in the jurisdiction where the
property is located:
a. Comprehensive Endorsement (ALTA Form 9)
b. Survey Endorsement (Land Same as Survey)
c. Usury Endorsement
d. Variable Rate Endorsement (if applicable)
e. Environmental lien protection Endorsement (ALTA Form 8. 1)
f. Separate tax lot endorsement
g. Contiguity endorsement
h. Mortgage tax endorsement
i. If blanket easements affect the property, a CLTA 103.1 or
equivalent endorsement
j. Access endorsement
k. Zoning endorsement (ALTA Form 3.1 with parking)
2
EXHIBIT 10.27
BORROWER DOCUMENTATION LIST
Borrower is responsible for providing all of the following documentation
and underwriting information with the signed Application:
A. Required to Obtain Third Party Reports
1. Brief description of the Borrower, Key Principals and property
manager
2. Neighborhood map
3. Copy of site plan and building layout/floor plan
4. Color photographs (including aerial photographs, if available)
of Property and surrounding area
5. Property operating statements and occupancy for (i) the lesser
of the past three (3) full calendar years, or as many years as
Property has existed, (ii) current year-to-date actual and
remainder of the year budget and (iii) trailing 12-month
statements, if available, each signed, dated and certified*
correct by the Borrower/Key Principal
6. Current rent roll (or other evidence of leasing status), signed,
dated and certified correct by the Borrower/Key Principal (dated
within 30 days of closing)
7. Capital expenditures (i) incurred for the lesser of the past
three (3) years, or as many years as Property has existed, and
(ii) budgeted for the next 12 months for the Property, each
signed, dated and certified correct by the Borrower/Key
Principal
* certified documents must contain the following language
preceding the required signature of the certifying party:
"Certified true and correct".
B. Property and Lease Data
1. One copy of each lease currently in effect (with all
modifications, amendments and assignments)
2. Real Estate Tax Bills for the lesser of the past three (3) full
calendar years, or as many years as the Property has existed,
and current year-to-date
1
EXHIBIT 10.27
3. Monthly Occupancy History for the lesser of the past three (3)
full calendar years, or as many years as the Property has
existed, and current year-to-date (certified, dated and signed)
4. For Retail, Industrial, Office only - Most recent Financial
Statements for all major tenants (more than 20% of NRSF or Total
Revenue), to the extent available
5. For Retail, Industrial, Office only - List of all current tenant
concessions (including free rent and above standard tenant
allowance) (letter signed by Borrower)
6. For Retail only - Sales History for the lessor of the past three
(3) full calendar years, or as many years as the Property has
existed, and current year-to-date for all major tenants which
account for more than 20% of NRSF or Total Revenue
7. Existing Survey, if available
8. Existing Title Policy, if available
C. Property Management Data
1. Executed Property Management Agreement (or Asset Management
Agreement, if applicable)
2. All known current property code violations and other litigation
affecting the Property (letter signed by Borrower)
3. Name, address and telephone number of insurance agent with whom
Lender is to coordinate.
4. Copy of Property Insurance Policies (including casualty,
liability and rent loss)
5. For Hotel only - Copy of franchise agreement
6. For an Acquisition only - Contract of Sale
D. Financial Data
1. Financial Statements for Borrower (and Borrower's corporate
general partner, if applicable) and each Key Principal as of
prior year-end and current year-to-date (certified, dated and
signed)
2
EXHIBIT 10.27
2. Federal Tax Return for Borrower and each Key Principal for the
prior year (signed and dated)
3. Three (3) credit references for the Borrower and each Key
Principal, including each reference's address and phone number
4. Sources and Uses of Funds - Detailed breakdown of allocation of
loan proceeds, including, but not limited to, estimated payoff
of existing mortgage, fees, expenses, and amount to be retained
by Borrower, if any.
E. Organizational Documents
If Borrower is a Partnership, copies of:
1. Partnership Agreement and all modifications/amendments thereto
(if this entity is to be formed, or agreement amended to
incorporate single-purpose provisions, provide drafts of
documents prior to final execution)
2. Certified Certificate of Limited Partnership, if applicable
3. List of current partners and their respective partnership
interests
If Borrower (or its general partner or managing member) is a
Corporation, copies of:
1. Certified Articles of Incorporation (if entity is to be formed,
or existing documents are to be modified, provide drafts of the
documents before final execution)
2. List of all officers and directors of the corporation
3. List of current stockholders and their respective ownership
interests
If Borrower is a Trust, copies of:
1. Trust Agreement (if entity is to be formed, or existing
documents are to be modified, provide drafts of the documents
before final execution)
2 List of current trustees
3. List of current beneficiaries
3
EXHIBIT 10.27
If Borrower is a Limited Liability Company, copies of:
1. Certified Articles of Organization and Regulations (if entity is
to be formed, or existing documents are to be modified, provide
drafts of the documents before final execution)
2. List of current managers
3. List of current members and their respective ownership interests
NOTE: Lender's Counsel will deliver to Borrower's Counsel SPV
(single-purpose) provisions for use in the organizational
documents.
This list is for convenience only to inform Borrower of certain items
Borrower must furnish in connection with the Loan. Nothing herein shall
bind Lender or constitute any commitment, approval, or waiver by Lender.
Lender reserves the right to require that all of its requirements,
whether or not shown on this list, be fully satisfied prior to closing.
4
EXHIBIT 10.27
ENVIRONMENTAL QUESTIONNAIRE AND CERTIFICATE
Definitions. The following definitions shall apply to this Environmental
Questionnaire and Certificate (the "Questionnaire").
A "Hazardous materials" means any element, substance, compound, or
mixture, including disease-causing agents which (i) after release into
the environment and upon exposure, ingestion, inhalation, or
assimilation into any organism, either directly or indirectly, will or
may reasonably be anticipated to cause death, disease, behavioral
abnormalities, cancer, genetic mutation, physiological malfunctions
(including malfunctions in reproduction) or physical deformations, in
such organisms or their offspring or (ii) pose a substantial present or
potential hazard to human health or the environment when improperly
treated, stored, transported or disposed of or otherwise managed.
B. "Property " means the land, the buildings thereon, and the other
improvements, as applicable, thereon which are to be the security for
the Loan from AMRESCO CAPITAL, L.P. being applied for by Borrower in the
attached Application ("the Loan").
______________________________________________________________________________
1. Are any hazardous materials generated, stored, treated, or disposed of
or expected to be generated, store, treated, or disposed of on the
Property?
Yes _____ No _____
If the answer to 1. is yes, please explain in detail the nature of those
items (attach additional pages if necessary).
2. a. To the best of your knowledge, have any hazardous materials (i) been
disposed of or released at, on, or under the Property, (ii) been
disposed of or released at on or under land abutting the Property, or
(iii) migrated from other land to the Property?
Yes _____ No _____
If the answer to 2a. is yes, please explain in detail the nature of
those items (attach additional pages if necessary).
1
EXHIBIT 10.27
b. To the best of your knowledge, are there any landfills or sites
listed under the Comprehensive Environmental Response Compensation and
Liability Act of 1980 as amended ("CERCLA") or any comparable state
statute located within a quarter mile radius of the Property?
Yes _____ No _____
If the answer to 2.b. is yes, please explain in detail the nature of
those items (attach additional pages if necessary).
3. Are any oil or petroleum related products now being stored in drums,
containers and/or tanks on the Property other than minor amounts stored
for personal, household or routine maintenance purposes?
Yes _____ No _____
If the answer to 3. is yes, please explain in detail the nature of those
items (attach additional pages if necessary).
4. a. Are any active underground or other storage tanks on the Property?
Yes _____ No _____
b. If the answer to 4.a. is yes, state the type and quantity of material
being stored, the location, type of tank material, if known, and age of
each tank. In addition, please describe the leak containment system,
detection system and the inventory control system utilized for each
tank. (Attach additional pages if necessary.)
c. If the answer to 4.a. is yes, state the date the tank was last tested
for tightness, and whether each tank is registered with any governmental
entity. In addition, please attach copies of the most recent test
results for each tank and all registration materials. If the tank is not
required to be registered, attach a copy of the relevant regulations
exempting registration.
d. Does any empty or unused underground or above ground tank exist on
the property?
Yes _____ No _____
If the answer to 4.d. is yes, state the location of each (attach
additional pages if necessary.
e. To the best of your knowledge, has there ever been any underground or
above ground tank on the Property that has been removed?
2
EXHIBIT 10.27
Yes _____ No _____
If the answer to 4.e. is yes, state the approximate location, if known,
and provide copies of any documentation in your possession regarding the
removal of the tank.
f. To the best of your knowledge, are there now or has there ever been
any leaking underground storage tank located within a radius of 1/8th of
a mile from the Property?
Yes _____ No _____
5. a. Does the Property have any materials which contain as a component
asbestos?
Yes _____ No _____
If the answer to 5.a. is yes, please describe the materials and their
location (attach additional pages, if necessary).
b. Is any electrical transformer (whether pole or pad mounted) any other
electrical equipment (i.e., elevator, hydraulic lift) located on the
Property?
Yes _____ No _____
If the answer to 5.b. is yes, please describe its location (attach
additional pages, if necessary).
c. Does the Property contain urea formaldehyde foam insulation in its
building materials?
Yes _____ No _____
If the answer to 5.c. is yes, please describe its location (attach
additional pages, if necessary).
d. Has radon gas ever been detected on the Property?
Yes _____ No _____
If the answer to 5.d. is yes, please describe its location (attach
additional pages, if necessary).
e. Has methane gas ever been detected on the Property?
3
EXHIBIT 10.27
Yes _____ No _____
If the answer to 5.e. is yes, please describe its location (attach
additional pages, if necessary).
f. If the Property consists of multifamily, congregate care or
daycare facility, are you aware of the presence of any
lead-based materials (e.g., paint, piping or pipe fittings)?
Yes _____ No _____
If the answer to 5.f. is yes, please describe the materials and the
location (attach additional pages, if necessary).
g. Has there ever been an active dry cleaning processing
establishment located on the Property?
Yes _____ No _____
If the answer to 5.g. is yes, please describe the materials and the
location (attach additional pages, if necessary).
h. Has any dry cleaning solvent ever been detected on the Property?
Yes _____ No _____
If the answer to 5.h. is yes, please describe location (attach
additional pages, if necessary).
6. a. What is the name of the seller from whom you bought the Property?
Name: ____________________________________________________________
b. Describe the current use of the Property and the use at the time you
acquired it (attach additional
pages, if necessary).
__________________________________________________________________
c. Will any future use ever be different from the current use? If the
answer to 6.c. is yes, please describe all proposed future uses (attach
additional pages, if necessary).
__________________________________________________________________
4
EXHIBIT 10.27
7. (To be answered if the Property is in Connecticut, Maine, or Rhode
Island:)
a. Was the Property transferred out of or described as part of a larger
parcel within the past five years (relates to state superlien statute
"clawback" provisions)?
Yes _____ No _____
b. If the answer to 7.a. is yes, please describe by boundaries the
larger parcel of which the Property was a part (attach additional pages
if necessary).
5
EXHIBIT 10.27
I/(We) certify (i) that each of the above answers is true and complete;
(ii) that to the best of my (our) knowledge there is no violation of federal,
state, or local environmental laws on the Property, except as described herein;
and (iii) that I (we) will immediately notify AMRESCO CAPITAL, L.P. if at any
time while the Loan is outstanding I (we) learn that any of the above answers
either was not true when made or is no longer true.
I/(We) understand that if any of the above answers has been answered in
the affirmative or are not confirmed by Phase I Environmental Site Assessment,
AMRESCO CAPITAL, L.P. may require (i) satisfactory answers to further questions,
to be provided by AMRESCO CAPITAL, L.P. and/or (ii) further investigation of the
Property, including, in AMRESCO CAPITAL, L.P.'s sole discretion, soil and
groundwater sampling and monitoring, with results satisfactory to AMRESCO
CAPITAL, L.P. in its sole discretion, as a condition or conditions to closing
the proposed Loan.
BORROWER:
______________________________________
By: _______________________________
Name: _______________________________
Title: _______________________________
Date: _______________________________
KEY PRINCIPAL(S):
By: ______________________________
Name: ______________________________
Title: ______________________________
Date: ______________________________