THIRD MODIFICATION AGREEMENT
THIS THIRD MODIFICATION AGREEMENT (this "Agreement") is executed
as of December __, 1993, by and among GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation ("Lender"), MXM MORTGAGE, L.P., a
Delaware limited partnership ("New Borrower"), MXM MORTGAGE CORP., a
Delaware corporation ("Old Borrower"; New Borrower and Old Borrower
being herein together called "Borrower"), on the following terms and
conditions:
RECITALS:
A. Lender and Old Borrower entered into that Loan Agreement
dated June 17, 1991, as amended by letter amendment dated August 22,
1991, as further amended by First Renewal, Extension and Modification
Agreement (the "First Modification") dated June 17, 1992 among Lender,
Old Borrower, Maxxam Inc. and Maxxam Group Inc. (Maxxam Inc. and
Maxxam Group Inc. being herein together called "Guarantors"), and as
further amended by Loan Increase, Extension and Modification Agreement
dated December 30, 1992 among Lender, Old Borrower and Guarantors (the
"Increase Modification"; the Loan Agreement, as amended, being herein
called the "Loan Agreement"), pursuant to which Lender has agreed to
make a loan to Borrower (the "Loan"), as evidenced by a $115,220,000
Promissory Note dated June 17, 1991, (the "Original Note"), and a
$17,740,000 Promissory Note dated December 30, 1992 (the "Increase
Note"; the Original Note and the Increase Note being herein
collectively called the "Notes"), the Notes bearing interest and being
payable to the order of Lender as therein provided.
B. Taking into account releases of collateral, the indebtedness
evidenced by the Original Note and the Increase Note is secured by,
among other collateral, the following:
(1) the following instruments styled First Deed of Trust and
Security Agreement (collectively called the "First Lien Deed of
Trust"):
(a) that First Deed of Trust and Security Agreement of even
date with the Loan Agreement, executed by Old Borrower, recorded in
Volume 5091, Page 0751, et seq., of the Official Public Records of
Real Property of Bexar County, Texas [Southwest Medical, Redondo
Place, Med Centre Pointe, Nacon Plaza], under Film Code No. 037-12-
1689 and corrected and refiled under Film Code No. 038-03-0657 of the
Official Public Records of Real Property of Harris County, Texas
[Spring Valley, Westminster], in Volume 727, Page 416, et seq., of the
Deed of Trust
Records of Midland County, Texas [Oak Ridge], and in Volume 10293,
Page 1892, et seq., of the Deed of Trust Records of Tarrant County,
Texas [West Lake Gardens];
(b) that First Deed of Trust and Security Agreement dated
November 5, 1991, executed by Old Borrower, filed for recording in the
Office of the County Clerk of Harris County, Texas under Clerk's File
No. N403252 and recorded at Film Code No. 006-52-1287, et seq., of the
Official Public Records of Real Property of Harris County, Texas
[Richmond Square];
(c) that First Deed of Trust and Security Agreement dated
February 4, 1992, executed by Old Borrower, filed for recording in the
Office of the County Clerk of Harris County, Texas under Clerk's File
No. N527998 and recorded at Film Code No. 014-55-1789, et seq., of the
Official Public Records of Real Property of Harris County, Texas
[Westchase];
(d) that First Deed of Trust and Security Agreement dated
May 5, 1992, executed by Old Borrower and recorded at Volume 5356,
Page 1511, et seq., of the Official Public Records of Real Property of
Bexar County, Texas [San Antonio Imaging]; and
(e) that First Deed of Trust and Security Agreement dated
September 7, 1993, executed by Old Borrower, recorded at Volume 5792,
Page 1933, et seq., of the Official Public Records of Real Property of
Bexar County, Texas [Pipers Creek, Shadow Valley], filed for recording
in the Office of the County Clerk of Harris County, Texas under
Clerk's File No. P442690 and recorded at Film Code No. 169-55-3591, et
seq., of the Official Public Records of Real Property of Harris
County, Texas [Westbrook, Colonies], and recorded at Volume 11231,
Page 0137, et seq., of the Deed of Trust Records of Tarrant County,
Texas [Bentley Village];
each such instrument encumbering the real and other property
described therein (the "Real Property"); and
(2) the following instruments styled Assignment of Rents and
Leases (collectively called the "Rental Assignment"):
(a) that Assignment of Rents and Leases dated of even date
with the Loan Agreement, executed by
Old Borrower and recorded in Volume 5091, Page 0826, et seq., of the
Official Public Records of Real Property of Bexar County, Texas
[Southwest Medical, Redondo Place, Med Centre Pointe, Nacon Plaza],
under Film Code No. 037-12-1762 of the Official Public Records of Real
Property of Harris County, Texas [Spring Valley, Westminster], in
Volume 1085, Page 176, et seq., of the Deed Records of Midland County,
Texas [Oak Ridge], and in Volume 10293, Page 1967, et seq., of the
Deed of Trust Records of Tarrant County, Texas [West Lake Gardens],
Texas;
(b) that Assignment of Rents and Leases dated November 5,
1991, executed by Old Borrower, filed for recording in the Office of
the County Clerk of Harris County, Texas under Clerk's File No.
N403253 and recorded at Film Code No. 006-52-1312, et seq., of the
Official Public Records of Real Property of Harris County, Texas
[Richmond Square];
(c) that Assignment of Rents and Leases dated February 4,
1992, executed by Old Borrower, filed for recording in the Office of
the County Clerk of Harris County, Texas under Clerk's File No.
N527999 and recorded at Film Code No. 014-55-1816, et seq., of the
Official Public Records of Real Property of Harris County, Texas
[Westchase];
(d) that Assignment of Rents and Leases dated May 5, 1992,
executed by Old Borrower, recorded in Volume 5356, Page 1538, et seq.,
of the Official Public Records of Real Property of Bexar County, Texas
[San Antonio Imaging]; and
(e) that Assignment of Rents and Leases dated September 7,
1993, executed by Old Borrower, recorded at Volume 5792, Page 1961, et
seq., of the Official Public Records of Real Property of Bexar County,
Texas [Pipers Creek, Shadow Valley], filed for recording in the Office
of the County Clerk of Harris County, Texas under Clerk's File No.
P442691, and recorded at Film Code No. 169-55-3618, et seq., of the
Official Public Records of Real Property of Harris County, Texas
[Westbrook, Colonies], and recorded at Volume 11231, Page 0179, et
seq., of the Deed Records of Tarrant County, Texas [Bentley Village];
(3) that Second Deed of Trust and Security Agreement dated
December 30, 1992, executed by Old Borrower and recorded in Volume
5581, Page 1347, et seq., of the Real Property Records of Bexar
County, Texas [Southwest Medical, Redondo Place, Med Centre Pointe,
Nacon Plaza, San Antonio Imaging], at Clerk's File No. P101069 and
Film Code No. 120-51-2685, et seq., of the Real Property Records of
Harris County, Texas [Spring Valley, Westminster, Richmond Square,
Westchase], in Volume 778, Page 175, et seq., of the Deed of Trust
Records of Midland County, Texas [Oak Ridge], and in Volume 10957,
Page 2238, et seq., of the Real Property Records of Tarrant County,
Texas [Westlake Gardens] (the "Second Deed of Trust"; the First Deed
of Trust and the Second Deed of Trust being herein collectively called
the "Deed of Trust"); and
(4) that Security Agreement and Pledge of Mortgage Loans and
Mortgage Loan Documents (the "Mortgage Pledge Agreement") of even date
with the Loan Agreement executed by Old Borrower and Lender and
pledging to Lender, as security for the Loan, certain mortgage loans
(the "Mortgage Loans") [Balcones, Enfield Courts, Park North Tech,
Parc Bay, Turtle Creek, Trestles]
(the Loan Agreement, the Notes, the Deed of Trust, the Rental
Assignment, the Mortgage Pledge Agreement, the First Modification, the
Increase Modification, and all other Security Instruments (as such
term is defined in the Loan Agreement) or other documents evidencing,
governing, guaranteeing, securing, or otherwise pertaining to the Loan
being hereinafter collectively referred to as the "Loan Documents");
C. Lender, Old Borrower, New Borrower and Guarantors entered
into that Consent and Assumption Agreement dated December 10, 1993,
under which Lender consented to the transfer and conveyance of the
Real Property and the Mortgage Loans to New Borrower (and pursuant to
which Old Borrower has transferred and conveyed the Real Property, the
Mortgage Loans, and the rights of Old Borrower under the Loan
Agreement to New Borrower), and New Borrower has assumed the
obligations and liabilities of Old Borrower under the Loan and the
Loan Documents; and
D. Borrower has requested that Lender make available
$25,000,000 to Borrower as additional Subsequent Advances under the
Loan Agreement, through re-advances of principal reductions of the
Original Note, and Lender is agreeable to such additional Subsequent
Advances on the terms of that Fourth Amendment to Loan Agreement of
even date herewith between Lender and Borrower (the "Fourth
Amendment"), and the modification of the Notes and the other Loan
Documents as hereinafter set forth;
AGREEMENT:
NOW, THEREFORE, in consideration of Ten and No/100 Dollars
($10.00) and other good and valuable consideration, Lender, Borrower,
and Guarantors do hereby agree as follows:
1. Revolving Line of Credit. The last two (2) sentences of the
first paragraph of the Original Note are amended and restated as
follows:
To the extent of payments against the principal balance from
applications of sales of Projects and Mortgage Loans and from payments
made in satisfaction or partial satisfaction of Mortgage Loans, and
other principal reductions, the Loan shall be a "revolving line of
credit"; that is, subject to the terms of the Loan Agreement, and any
amendments to the Loan Agreement, portions of the principal sum of
this Note may be advanced, repaid, and readvanced. The books and
records of GECC shall be prima facie evidence of all sums due GECC
under this Note and the Other Security Documents.
2. Maturity Date. Borrower and Lender confirm that the
Maturity Date (as defined in the Original Note and last amended in the
Increase Modification) is and continues to be December 31, 1997, and
that the Maturity Obligations (as defined in the Original Note) shall
be fully payable on that date.
3. Payment Terms. Borrower and Lender agree (a) that from and
after the date hereof, interest only on the outstanding principal
balance of the Original Note shall be payable monthly on the first day
of each month beginning January 1, 1994 and continuing to and
including December 1, 1997, at the Contract Rate (as such rate was
modified and redefined in Section 3 of the First Modification), and
(b) that the obligation of Borrower to make quarterly payments from
Excess Cash Flow for application to the outstanding principal balance
of the Original Note, as agreed and established in Section 4 of the
First Modification, is hereby waived.
4. Prepayment. The prepayment provisions set forth on pages 2
and 3 of the Note, as amended and restated in Section 4 of the First
Modification, and further amended and restated in Section 17 of the
Increase Modification, are further amended and restated as follows:
Borrower may prepay the Note in part so long as
(a) such prepayment would not reduce the unpaid principal
balance of the Note below $10,000,000, and
(b) the aggregate Loan allocation of that portion of the
Mortgaged Property comprised of multi-family apartment projects, as
determined in accordance with that Fourth Amendment to Loan Agreement
between Borrower and GECC dated December 30, 1993 (the "Fourth
Amendment to Loan Agreement"), is not less than forty percent (40%) of
the aggregate Loan allocation of all of the Mortgaged Property and the
Mortgage Loans, as determined in accordance with the Fourth Amendment
to Loan Agreement (the "Apartments Percentage Requirement"),
with proceeds from the payment or prepayment of any Mortgage
Loan, or with proceeds of any sale of any Mortgage Loan to a third
party, or with proceeds of any sale of any Project to any third party,
upon ten (10) days prior written notice to Lender, by paying to GECC
the Minimum Release Amount for such Mortgage Loan or Project (as
defined and specified in the Loan Agreement, as modified in the Fourth
Amendment to Loan Agreement); provided, however, and it is understood
and agreed, (i) that Borrower shall have no right to prepay any
portion of the principal balance of this Note before July 1, 1995
except through application of proceeds of the payment or prepayment of
Mortgage Loans or the sale of Mortgage Loans and Projects to third
parties, and (ii) that prior to July 1, 1995 Borrower shall not be
entitled to prepay any portion of the principal balance of this Note
through any whole or partial refinancing of the indebtedness under
this Note; provided, however, that if as a result of any prepayment of
the principal balance of this Note either (x) the outstanding
principal balance of this Note would be less than $10,000,000, or (y)
the Apartments Percentage Requirement would not be satisfied, then
Borrower shall pay to GECC the entire outstanding principal balance
of, and all accrued and unpaid interest, on this Note.
All prepayments of the Note shall otherwise comply with
the requirements for releases under the Loan Agreement, as modified by
the Fourth Amendment to Loan Agreement. GECC reserves the right to
require any payment of the indebtedness evidenced by this Note,
whether such payment is of a regular installment or represents a
prepayment, prepayment
charge, or final payment, to be wired via federal funds or other
immediately available funds.
5. Ratification and Confirmation of Loan Documents. Borrower
and Lender agree that the Loan Agreement, the Notes, the Deed of
Trust, the Rental Assignment, the Mortgage Pledge Agreement, and the
other Loan Documents are hereby ratified and confirmed as valid and
continuing obligations of Borrower, and that the Deed of Trust, the
Rental Assignment, and the Mortgage Pledge Agreement shall continue to
secure and/or provide payment for the Notes, as modified by this
Agreement, and Borrower promises to pay to the order of Lender at P.
O. Box 102771, Atlanta, Georgia 30368-0771, the indebtedness evidenced
by the Notes, as herein modified.
6. No Impairment of Security. Borrower hereby agrees that the
agreements contained herein shall in no manner affect or impair the
Original Note or the Increase Note, the liens or security interests
securing same, and that said liens and security interests shall not in
any manner be waived, altered or vitiated by such agreements, and
Borrower further agrees that, as expressly modified hereby, all terms
and provisions of the Loan Documents shall be and remain in full force
and effect.
7. No Default, Defenses, Counterclaims, Etc. Borrower hereby
covenants and warrants that none of the Loan Documents are in default;
that there are no defenses, counterclaims or offsets to such Loan
Documents.
8. Costs and Expenses. Borrower agrees to pay all costs
incurred in connection with the execution and consummation of this
Agreement, including but not limited to, all recording costs, the
premium for such endorsements to the policies of title insurance
insuring the Deed of Trust as may be required by Lender with respect
to this Agreement, and the reasonable fees and actual expenses of
Lender's counsel. Borrower further covenants and agrees to deliver or
cause to be delivered such evidence of existence, capacity,
authorization, qualification, or enforceability of its obligations as
Lender may require.
9. Limitation on Interest. All agreements between Borrower and
Lender, whether now existing or hereafter arising and whether written
or oral, are hereby expressly limited so that in no contingency,
whether by reason of acceleration of the maturity of the Notes, or
otherwise, shall the interest contracted for, charged, received, paid
or agreed to be paid to the holder of the Notes exceed the maximum
amount permissible under applicable law. If, from any circumstance
whatsoever, interest would otherwise be payable to the holder of the
Notes in excess of the maximum lawful amount, the interest payable to
the holder of the Notes shall be reduced to the maximum amount
permitted by applicable law; and if from any circumstance the holder
of the Notes shall ever receive anything of value deemed interest by
applicable law in excess of the maximum amount allowed by law, an
amount equal to any excessive
interest shall be applied to the reduction of the principal amount
owing under the Notes, and not to the payment of interest, or if such
excessive interest exceeds such unpaid balance of principal of the
Notes, such excess shall be refunded to Borrower. All interest paid
or agreed to be paid to the holder of the Notes, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of the Notes (including the period of
any renewal or extension thereof) so that the interest on the Notes
shall not exceed the maximum amount permitted by applicable law. This
paragraph shall control all agreements between Borrower and the holder
of the Notes.
EXECUTED by the parties hereto as of the date and year first
above written.
BORROWER:
OLD BORROWER: MXM MORTGAGE CORP.,
a Delaware corporation
By:
Erik Eriksson, Jr.,
Vice President
NEW BORROWER: MXM MORTGAGE, L.P.,
a Delaware limited partnership
By: MXM GENERAL PARTNER, INC.,
a Delaware corporation,
General Partner
By:
Erik Eriksson, Jr.,
Vice President
LENDER: GENERAL ELECTRIC CAPITAL CORPORATION,
a New York corporation
By:
Ty Albright, Project Manager
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me this _____ day of
December 1993, by ERIK ERIKSSON, JR., Vice President of MXM MORTGAGE
CORP., a Delaware corporation, on behalf of said corporation.
(SEAL)
Notary Public in and for
the State of Texas
Print name of notary
My Commission Expires:
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me this _____ day of
December 1993, by ERIK ERIKSSON, JR., Vice President of MXM GENERAL
PARTNER, INC., a Delaware corporation and General Partner of MXM
MORTGAGE, L.P., a Delaware limited partnership, on behalf of said
corporation and said limited partnership.
(SEAL)
Notary Public in and for
the State of Texas
Print name of notary
My Commission Expires:
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me this _____ day of
December, 1993, by TY ALBRIGHT, Project Manager of GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation, on behalf of said
corporation.
(SEAL)
Notary Public in and for
the State of Texas
Print name of notary
My Commission Expires: