-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Op12VIyMpASqXI8eEQ9SIl1hKvgp2oapqybkEm8rSsmnyOB11PfEoHByHsFiARaf UjGKUcRajq0McVjLO+BbzQ== 0000734761-95-000009.txt : 19951119 0000734761-95-000009.hdr.sgml : 19951119 ACCESSION NUMBER: 0000734761-95-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND XXI L P CENTRAL INDEX KEY: 0000734761 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330030615 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13356 FILM NUMBER: 95590338 BUSINESS ADDRESS: STREET 1: 13760 NOEL RD,. SUITE 700, LB70 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144485800 MAIL ADDRESS: STREET 1: 2711 LBJ FREEWAY, SUITE 900 CITY: DALLAS STATE: TX ZIP: 75234 FORMER COMPANY: FORMER CONFORMED NAME: SOUTHMARK REALTY PARTNERS LTD DATE OF NAME CHANGE: 19920413 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended September 30, 1995 ------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to_____________ Commission file number 0-13356 MCNEIL REAL ESTATE FUND XXI, L.P. - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) California 33-0030615 - ------------------------------------------------------------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (214) 448-5800 ----------------------- Indicate by check mark whether the registrant, (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No___ MCNEIL REAL ESTATE FUND XXI, L.P. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS BALANCE SHEETS (Unaudited) September 30, December 31, 1995 1994 ------------ ----------- ASSETS - ------ Real estate investments: Land..................................................... $ 3,607,307 $ 3,607,306 Buildings and improvements............................... 33,123,927 32,646,371 36,731,234 36,253,677 Less: Accumulated depreciation and amortization......... (14,879,046) (13,696,125) 21,852,188 22,557,552 Assets held for sale........................................ - 8,153,520 Cash and cash equivalents................................... 2,027,768 1,151,098 Cash segregated for security deposits....................... 182,238 205,581 Accounts receivable, net of allowance for doubtful accounts of $17,302 and $51,086 at September 30, 1995 and December 31, 1994, respectively...................... 124,556 663,548 Advances to affiliates - General Partner.................... - 362,186 Escrow deposits............................................. 648,457 252,798 Deferred borrowing costs, net of accumulated amortization of $73,379 and $186,603 at September 30, 1995 and December 31, 1994, respectively...................... 486,581 413,094 Prepaid expenses and other assets........................... 73,688 225,680 ----------- ---------- $ 25,395,476 $33,985,057 =========== ========== LIABILITIES AND PARTNERS' DEFICIT - --------------------------------- Mortgage notes payable, net................................. $ 22,062,706 $28,914,573 Mortgage notes payable - affiliates......................... 733,900 2,064,900 Accounts payable and accrued expenses....................... 334,329 430,340 Accrued property taxes...................................... 367,315 480,166 Payable to affiliates - General Partner..................... 4,019,343 3,079,178 Advances from affiliates - General Partner.................. 661,145 1,910,982 Security deposits and deferred rental income................ 193,080 228,012 ---------- ---------- 28,371,818 37,108,151 ---------- ---------- Partners' deficit: Limited partners - 50,000 Units authorized; 47,308 and 47,326 Units outstanding at September 30, 1995 and December 31, 1994, respectively, (24,949 and 24,960 Current Income Units outstanding at September 30, 1995 and December 31, 1994, respectively, and 22,359 and 22,366 Growth/Shelter Units outstanding at September 30, 1995 and December 31,1994, respectively)............... (2,628,966) (2,774,251) General Partner.......................................... (347,376) (348,843) ---------- ---------- (2,976,342) (3,123,094) ---------- ---------- $25,395,476 $33,985,057 ========== ==========
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXI, L.P. STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ----------------------------- ----------------------------- 1995 1994 1995 1994 ---------- ---------- ---------- --------- Revenue: - ------- Rental revenue................ $1,523,538 $2,009,084 $5,057,887 $6,065,037 Interest...................... 27,334 21,109 86,576 54,880 Gain on disposition of real estate...................... - - 1,615,811 29,440 Other income.................. 1,524 - 3,952 154,134 --------- --------- --------- --------- Total revenue............... 1,552,396 2,030,193 6,764,226 6,303,491 --------- --------- --------- --------- Expenses: Interest...................... 541,237 771,140 1,844,910 2,235,843 Interest - affiliates......... 31,277 85,091 165,581 226,315 Depreciation and amortization................ 418,203 535,037 1,325,801 1,533,793 Property taxes................ 144,023 194,537 442,160 531,655 Personnel costs............... 199,148 210,485 613,232 615,655 Utilities..................... 114,335 121,767 335,573 359,073 Repairs and maintenance....... 199,156 245,200 547,099 677,972 Property management fees - affiliates........... 78,324 108,653 271,870 335,755 Other property operating expenses.................... 152,716 130,158 428,311 344,698 General and administrative.... 4,537 15,164 41,715 57,855 General and administrative - affiliates.................. 193,735 235,371 601,222 715,451 --------- --------- --------- --------- Total expenses.............. 2,076,691 2,652,603 6,617,474 7,634,065 --------- --------- --------- ---------- Net income (loss)................ $ (524,295) $ (622,410) $ 146,752 $(1,330,574) ========= ========= ========= ========== Net income (loss) allocable to limited partners - Current Income Unit................... (47,186) (56,017) 13,208 (119,752) Net income (loss) allocable to to limited partners - Growth/ Shelter Unit.................. (471,865) (560,169) 132,077 (1,197,516) Net income (loss) allocable to General Partner............ (5,244) (6,224) 1,467 (13,306) --------- --------- --------- ---------- Net income (loss)................ (524,295) (622,410) 146,752 (1,330,574) ========= ========= ========= ========== Net income (loss) per limited partnership unit: Current Income Units.......... $ (1.89) $ (2.24) $ .53 $ (4.79) ========= ========= ========= ========== Growth/Shelter Units.......... $ (21.10) (25.01) 5.91 (53.46) ========= ========= ========= ==========
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXI, L.P. STATEMENTS OF PARTNERS' DEFICIT (Unaudited) For the Nine Months Ended September 30, 1995 and 1994 Total Partners' General Limited Equity Partner Partners (Deficit) ---------- ----------- ----------- Balance at December 31, 1993.............. $(329,927) $ (901,571) $(1,231,498) Net loss General Partner........................ (13,306) - (13,306) Current Income Units................... - (119,752) (119,752) Growth/Shelter Units................... - (1,197,516) (1,197,516) --------- ---------- ---------- Total net loss............................ (13,306) (1,317,268) (1,330,574) --------- ---------- ---------- Balance at September 30, 1994............. $ (343,233) $(2,218,839) $(2,562,072) ========= ========== ========== Balance at December 31, 1994.............. $ (348,843) $(2,774,251) $(3,123,094) Net income General Partner........................ 1,467 - 1,467 Current Income Units................... - 13,208 13,208 Growth/Shelter Units................... - 132,077 132,077 --------- ---------- ---------- Total net income.......................... 1,467 145,285 146,752 --------- ---------- ---------- Balance at September 30, 1995............. $ (347,376) $(2,628,966) $(2,976,342) ========= ========== ==========
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXI, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Increase (decrease) in Cash and Cash Equivalents Nine Months Ended September 30, ----------------------------------- 1995 1994 ---------- ---------- Cash flows from operating activities: Cash received from tenants........................ $5,224,781 $6,332,236 Cash paid to suppliers............................ (1,904,727) (2,516,718) Cash paid to affiliates........................... (278,977) (730,528) Interest received................................. 77,148 31,702 Interest received - affiliates.................... 71,614 - Interest paid..................................... (1,882,234) (2,004,961) Deferred borrowing costs paid..................... (169,146) (20,000) Interest paid to affiliates....................... (496,075) (97,948) Property taxes paid............................... (673,395) (541,111) ---------- ---------- Net cash provided by (used in) operating activities............................ (31,011) 452,672 ---------- ---------- Cash flows from investing activities: Additions to real estate investments.............. (484,174) (634,688) Net proceeds from disposition of real estate...... 2,199,917 39,850 Repayment of advances to affiliates............... 300,000 20,874 ---------- ---------- Net cash provided by (used in) investing activities.............................. 2,015,743 (573,964) ---------- ---------- Cash flows from financing activities: Proceeds from refinancings........................ 60,103 - Principal payments on mortgage notes payable......................................... (195,165) (259,553) Repayment of advances from affiliates............. (973,000) - ---------- ---------- Net cash used in financing activities................ (1,108,062) (259,553) ---------- ---------- Net increase (decrease) in cash and cash equivalents....................................... 876,670 (380,845) Cash and cash equivalents at beginning of period............................................ 1,151,098 1,773,720 ---------- ---------- Cash and cash equivalents at end of period........... $ 2,027,768 $1,392,875 ========== =========
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXI, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities Nine Months Ended September 30, --------------------------------- 1995 1994 --------- --------- Net income (loss).................................... $ 146,752 $(1,330,574) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization..................... 1,325,801 1,533,793 Amortization of deferred borrowing costs.......... 45,270 62,908 Amortization of discounts on mortgage notes payable................................... 15,823 131,937 Interest added to advances to affiliates - General Partner, net of payments................ 62,186 (23,178) Interest added to advances from affiliates - General Partner, net of payments................ (276,837) 93,828 Gain on disposition of real estate................ (1,615,811) (29,440) Changes in assets and liabilities: Cash segregated for security deposits........... 23,343 28,527 Accounts receivable............................. 141,264 57,560 Escrow deposits................................. (395,659) 79,443 Deferred borrowing costs........................ (169,146) (20,000) Prepaid expenses and other assets............... 48,408 (24,086) Accounts payable and accrued expenses........... 50,100 (434,790) Accrued property taxes.......................... (36,594) (25,787) Payable to affiliates - General Partner......... 594,115 320,677 Security deposits and deferred rental income.... 9,974 31,854 ---------- ---------- Total adjustments............................. (177,763) 1,783,246 ---------- ---------- Net cash provided by (used in) operating activities............................ $ (31,011) $ 452,672 =========== =========
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXI, L.P. Notes to Financial Statements (Unaudited) September 30, 1995 NOTE 1. - ------ McNeil Real Estate Fund XXI, L.P., (the "Partnership"), formerly known as Southmark Realty Partners, Ltd. was organized on November 23, 1983 as a limited partnership under the provisions of the California Revised Limited Partnership Act to acquire and operate commercial and residential properties. The general partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a Delaware limited partnership, an affiliate of Robert A. McNeil ("McNeil"). The principal place of business for the Partnership and the General Partner is 13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240. In the opinion of management, the financial statements reflect all adjustments necessary for a fair presentation of the Partnership's financial position and results of operations. All adjustments were of a normal recurring nature. However, the results of operations for the nine months ended September 30, 1995 are not necessarily indicative of the results to be expected for the year ending December 31, 1995. NOTE 2. - ------ The financial statements should be read in conjunction with the financial statements contained in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1994, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate Fund XXI, L.P. c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. NOTE 3. - ------ The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. The Partnership has suffered recurring losses from operations and has relied on advances from affiliates to meet its debt obligations and to fund capital improvements. There is no guarantee that such advances will continue to be available. These conditions raise substantial doubt about the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. NOTE 4. - ------ Certain reclassifications have been made to prior period amounts to conform to the current presentation. NOTE 5. - ------ The Partnership pays property management fees equal to 5% of gross rental receipts for its residential properties and 6% of gross rental receipts for its commercial properties to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing property management services for the Partnership's residential and commercial properties and leasing services for its residential properties. McREMI may also choose to provide leasing services for the Partnership's commercial properties, in which case McREMI will receive property management fees from such commercial properties equal to 3% of the property's gross rental receipts plus leasing commissions based on the prevailing market rate for such services where the property is located. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. The Partnership is paying an asset management fee which is payable to the General Partner. Through 1999, the Asset Management Fee is calculated as 1% of the Partnership's tangible asset value. Tangible asset value is determined by using the greater of (i) an amount calculated by applying a capitalization rate of 9% to the annualized net operating income of each property or (ii) a value of $10,000 per apartment unit for residential property and $50 per gross square foot for commercial property to arrive at the property tangible asset value. The property tangible asset value is then added to the book value of all other assets excluding intangible items. The fee percentage decreases subsequent to 1999. Total accrued but unpaid asset management fees of $2,430,388 were outstanding at September 30, 1995. The Partnership pays a disposition fee to an affiliate of the General Partner equal to 3% of the gross sales price for brokerage services performed in connection with the sale of the Partnership's properties. The fee is due and payable at the time the sale closes. In connection with the sales of Suburban Plaza and Wyoming Mall, total accrued but unpaid disposition fees of $346,050 were outstanding at September 30, 1995. The General Partner has, in its discretion, advanced funds to the Partnership to meet its working capital requirements. These advances, which are unsecured and due on demand, accrue interest at a rate equal to the prime lending rate plus 1%. The total advances from affiliates at September 30, 1995 and December 31, 1994 consist of the following: September 30, December 31, ------------ ----------- 1995 1994 ---------- --------- Advances from General Partner - revolver............. $ - $ 92,371 Advances from General Partner - other................ - 380,060 Advances purchased by General Partner................ 630,574 1,131,143 Accrued interest payable............................. 30,571 307,408 ---------- --------- $ 661,145 $1,910,982
In April 1995, the Partnership utilized $1,320,745 of the proceeds from the sales of Suburban Plaza and Wyoming Mall to repay affiliate advances and accrued interest. McNeil Real Estate Fund XXVII, L.P., ("McNeil XXVII") an affiliate of the General Partner, is permitted to make nonrecourse mortgage loans to affiliates under certain conditions and limitations and subject to availability of funds. In 1992, the Partnership borrowed $972,000 from McNeil XXVII, which was secured by a third lien mortgage on Suburban Plaza. This loan and the accrued interest were repaid at the sale of Suburban Plaza. Additionally, the Partnership had a $359,000 mortgage loan from an affiliate of the General Partner that was secured by a second lien mortgage on Suburban Plaza. This loan and the related accrued interest were also repaid at the sale of Suburban Plaza. During 1992, the Partnership made advances totaling $320,874 to McNeil Real Estate Fund XXII, L.P. ("McNeil XXII"), the joint owner of Wyoming Mall, for tenant improvements and operations at Wyoming Mall. The advances, which were unsecured and due on demand, accrued interest at 9 1/2%. During the second period of 1994, McNeil XXII was able to repay $20,874 of the advances, leaving $300,000 of advances still owed to the Partnership, plus accrued interest. In April 1995, McNeil XXII utilized the proceeds from the sale of Wyoming Mall to repay the remaining balance of $300,000 of the advance plus the accrued interest of $71,614. Compensation and reimbursements paid to or accrued for the benefit of the General Partner and its affiliates are as follows: Nine Months Ended September 30, ------------------------------- 1995 1994 ------- ------- Property management fees............................. $ 271,870 $335,755 Charged to gain on disposition of real estate: Disposition fee........................................ 346,050 - Charged to interest -affiliates: Interest on advances from affiliates - General Partner......................................... 70,908 93,828 Interest on mortgage note payable - affiliates.... 94,673 132,487 Charged to general and administrative -affiliates: Partnership administration........................ 301,077 310,230 Asset management fee.............................. 300,145 405,221 --------- --------- $1,384,723 $1,277,521 ========= =========
The payable to affiliates - General Partner at September 30, 1995 and December 31, 1994 consisted primarily of unpaid asset management fees, property management fees, disposition fees and partnership general and administrative expenses and are due and payable from current operations. NOTE 6. - ------ On March 31, 1995, Suburban Plaza was sold to an unrelated third party for a cash price of $6,910,000. Cash proceeds and the gain on the disposition is detailed below: Gain on Sale Cash Proceeds ------------ ------------- Sales Price.......................................... $ 6,910,000 $ 6,910,000 Selling costs........................................ (293,754) (86,454) Retirement of mortgage discount...................... (683,198) Carrying value....................................... (3,691,594) Accounts receivable.................................. (315,979) Deferred borrowing costs............................. (479) Prepaid expenses..................................... (63,548) ---------- Gain on disposition of real estate................... $ 1,861,448 ========== Retirement of mortgage note.......................... (3,963,489) Retirement of mortgage notes - affiliates............ (1,331,000) Accrued interest paid on retired notes............... (146,111) Real estate tax proration............................ (38,368) Credit for security deposit liability................ (22,325) ---------- Net cash proceeds.................................... $ 1,322,253 ==========
On March 31, 1995, Wyoming Mall was sold to an unrelated third party for a cash price of $9,250,000. The Partnership had a 50% undivided interest in the assets, liabilities and operations of Wyoming Mall, owned jointly with McNeil Real Estate Fund XXII, L.P. Cash proceeds and the gain on the disposition is detailed below: Gain on Sale Cash Proceeds ------------ ------------- Sales Price.......................................... $4,625,000 $4,625,000 Selling costs........................................ (234,838) (96,088) Mortgage note prepayment penalty..................... (138,441) (138,441) Carrying value....................................... (4,325,663) Accounts receivable.................................. (81,749) Deferred borrowing costs............................. (49,910) Prepaid expenses..................................... (40,036) ---------- Loss on disposition of real estate................... $ (245,637) ========== Retirement of mortgage note.......................... (3,452,337) Payment of 1994 taxes at closing..................... (23,735) Real estate tax proration............................ (14,154) Credit for security deposit liability................ (22,581) ---------- Net cash proceeds.................................... $ 877,664 ==========
NOTE 7. - ------ The mortgage notes payable on Bedford Green and Woodcreek Apartments that matured in June 1995 were refinanced in July 1995 for $3,300,000 and $2,812,500, respectively. The new mortgage loans bear an interest rate of 8.48%, require monthly principal and interest payments of $25,327 and $21,586, respectively, and mature in July 2002. The following is a summary of the cash proceeds relating to the refinancings: Bedford Green Woodcreek Total --------- --------- --------- New loan proceeds.................. $3,300,000 $2,812,500 $6,112,500 Existing debt retired.............. (3,118,570) (2,933,827) (6,052,397) --------- --------- --------- Loan proceeds.................... $ 181,430 $ (121,327) $ 60,103 ========= ========= =========
The Partnership incurred loan costs of $169,146 related to the refinancing. An additional $404,074 of tax, insurance and property replacement escrows were established at the closing of the refinancing. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------ --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- Net income for the first nine months of 1995 was $146,752 as compared to a net loss of $1,330,574 for the same period in 1994. On March 31, 1995, Wyoming Mall was sold to an unrelated third party for a cash price of $9,250,000. The Partnership had a 50% undivided interest in the assets, liabilities and operations of Wyoming Mall, owned jointly with McNeil Real Estate Fund XXII, L.P. The Partnership received net cash proceeds of $877,664 from the sale of the property and recorded a loss on disposition of real estate of $245,637. The Partnership recorded $258,066 of revenue and $272,049 of expense for the first nine months of 1995 for Wyoming Mall. Suburban Plaza was sold to an unrelated third party for a cash price of $6,910,000. The Partnership received net cash proceeds of $1,322,253 and recorded a gain on disposition of real estate of $1,861,448. The Partnership recorded $306,746 of revenue and $328,727 of expense for the first nine months of 1995 for Suburban Plaza. The Partnership's working capital needs have been supported by net proceeds from the December 1993 sale of Hickory Lake Apartments and the March 1995 sales of Suburban Plaza and Wyoming Mall and by deferring certain affiliate payables. In addition, the sale of Homestead Manor on February 22, 1994 provided net cash proceeds of $39,850. The Partnership has had little ready cash reserves since its inception. It has been largely dependent on affiliates to support its operations. Although no additional advances from affiliates were required during the first nine months of 1995, at September 30, 1995 the Partnership owed affiliate advances of $661,145 and payables to affiliates for property management fees, Partnership general and administrative expenses, asset management fees and disposition fees totaling $4,019,343. In April 1995, the proceeds from the sales of Suburban Plaza and Wyoming Mall enabled the Partnership to repay $1,320,745 of affiliate advances and accrued interest. RESULTS OF OPERATIONS - --------------------- Revenue: Rental revenue decreased by $485,546 and $1,007,150 for the three and nine months ended September 30, 1995, respectively, as compared to the same periods in 1994. The decrease is primarily due to the sales of Suburban Plaza and Wyoming Mall in the first quarter of 1995. Interest income increased by $6,225 and $31,696 for the three and nine months ended September 30, 1995, respectively, as compared to the same periods in 1994. The increase was due primarily to higher average cash balances that resulted from the sale proceeds of Suburban Plaza and Wyoming Mall. During the first quarter of 1995, the partnership recognized a gain on disposition of real estate on Suburban Plaza of $1,861,448 and a loss on the sale of Wyoming Mall of $245,637. During the first quarter of 1994, the partnership recognized a gain on disposition of real estate on Homestead Manor Apartments of $29,440. Also related to the sale of Homestead Manor Apartments, the partnership reduced previously accrued property taxes of $154,134, which was recorded as other income during the first quarter of 1994. Expenses: Total expenses decreased by $575,912 and $1,016,591 for the three and nine months ended September 30, 1995, respectively, as compared to the same periods in 1994. The decreases in interest expense, depreciation and amortization expense, property taxes, utilities and property management fees are primarily due to the sales of Suburban Plaza and Wyoming Mall in the first quarter of 1995. Interest expense-affiliates decreased by $53,814 and $60,734 for the three and nine months ended September 30, 1995, respectively, as compared to the same periods in 1994. The decrease was mainly due to the repayment of $973,000 of advances from affiliates in the second quarter of 1995. Repairs and maintenance expense decreased by $46,044 and $130,873 for the three and nine months ended September 30, 1995, respectively as compared to the same periods in 1994. The decrease was mainly due to the sales of Suburban Plaza and Wyoming Mall. Additionally, Evergreen Square and Governour's Square Apartments completed interior upgrade programs in early 1994; therefore contract painting and supplies as well as interior light fixture replacement expenses decreased in 1995. Other property operating expenses increased by $22,558 and $83,613 for the three and nine months ended September 30, 1995, respectively, as compared to the same period in 1994, mainly due to an increase in property hazard insurance rates at Governour's Square, Breckenridge and Evergreen Square Apartments. In addition, Suburban Plaza had an increase in legal fees relating to the sale of the property in March 1995. General and administrative expense decreased by $10,627 and $16,140 for the three and nine months ended September 30, 1995, as compared to the same period in 1994. In 1994 the Partnership paid approximately $11,000 of state withholding taxes on behalf of the limited partners. No such withholding taxes were paid in 1995. General and administrative expense-affiliates decreased by $41,636 and $114,229 for the three and nine months ended September 30, 1995, as compared to the same period in 1994. The decrease was due mainly to a decline in the asset management fees, the result of a decrease in tangible asset value of the partnership, on which the fee is based, primarily because of the sale of Homestead Manor Apartments, Suburban Plaza and Wyoming Mall. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- At September 30, 1995, the Partnership held cash and cash equivalents of $2,027,768. The Partnership used $31,011 of cash from operating activities during the first nine months of 1995 as compared to cash provided by operations of $452,672 for the same period of 1994. The decrease in cash received from tenants, cash paid to suppliers and interest paid is primarily due to the sales of Suburban Plaza and Wyoming Mall. Interest paid to affiliates increased due to the payment of accrued interest on affiliate advances. The Partnership incurred $169,146 of deferred borrowing costs relating to the refinancings of Bedford Green and Woodcreek Apartments. Property taxes paid and escrowed increased due to the additional escrow deposits required when Bedford Green and Woodcreek Apartments were refinanced. Cash provided by investing activities totaled $2,015,743 for the first nine months of 1995 as compared to cash used in investing activities of $573,964 for the same period of 1994. Cash used for additions to real estate totaled $484,174 for the nine months ended September 30, 1995 as compared to $634,688 for the same period of the prior year. The Partnership received $2,199,917 of proceeds from the sales of Suburban Plaza and Wyoming Mall during the first nine months of 1995. The Partnership received $39,850 from the sale of Homestead Manor Apartments during the first nine months of 1994. Additionally, in 1995 the Partnership received $300,000 from McNeil XXII for repayment of previous advances for Wyoming Mall. Cash used in financing activities totaled $1,108,062 for the first nine months of 1995 as compared to $259,553 for the same period of 1994. In April 1995, the Partnership utilized a portion of the property sales proceeds to repay affiliate advances totaling $973,000. This increase was partially offset by a reduction in mortgage principal payments due to the retirement of the mortgage notes related to Wyoming Mall and Suburban Plaza when the properties were sold. Additionally the mortgage notes related to Bedford Green and Woodcreek Apartments were refinanced in July 1995 giving the Partnership $60,103 of net proceeds. Short-term liquidity - -------------------- In March 1995, the Partnership sold two of its properties, Suburban Plaza and Wyoming Mall, for net cash proceeds of $2,199,917. In April 1995, the Partnership utilized $1,320,745 of the proceeds to repay advances from affiliates and accrued interest. The mortgage notes payable on Bedford Green and Woodcreek Apartments that matured in June 1995 were refinanced in July 1995 for $3,300,000 and $2,812,500, respectively. The new mortgage loans bear an interest rate of 8.48%, require monthly principal and interest payments of $25,327 and $21,586, respectively, and mature in July 2002. The Partnership incurred loan costs of $169,146 related to the refinancing. An additional $404,074 of tax, insurance and property replacement escrows were established at the closing of the refinancing. For the rest of 1995, present cash balances, operations of the properties and proceeds from the sale of Suburban Plaza and Wyoming Mall are expected to provide sufficient cash for normal operating expenses, debt service payments and budgeted capital improvements. The Partnership has no established lines of credit from outside sources. Although affiliates of the Partnership have previously funded cash deficits, there can be no assurance the Partnership will receive additional funds. Other possible actions to resolve cash deficiencies include refinancing, deferring major capital or repair expenditures on Partnership properties except where improvements are expected to enhance the competitiveness and marketability of the properties, deferring payables to or arranging financing from affiliates or the ultimate sale of other properties. The General Partner has established a revolving credit facility not to exceed $5,000,000 in the aggregate which is available on a "first-come first-served" basis to the Partnership and other affiliated partnerships, if certain conditions are met. Borrowings under the facility may be used to fund deferred maintenance, refinancing obligations and working capital needs. There is no assurance that the Partnership will receive any additional funds under the facility because no amounts have been reserved for any particular partnership. As of September 30, 1995, $2,362,004 remained available for borrowing under the facility; however, additional funds could be available as other partnerships repay existing borrowings. Additionally, the General Partner has, in its discretion, advanced funds to the Partnership in addition to the revolving credit facility. The General Partner is not obligated to advance funds to the Partnership and there is no assurance that the Partnership will receive additional funds. McNeil Real Estate Fund XXVII, L.P., ("McNeil XXVII") an affiliate of the General Partner, is permitted to make nonrecourse mortgage loans to affiliates under certain conditions and limitations and subject to availability of funds. In 1992, the Partnership borrowed $972,000 from McNeil XXVII, which was secured by a third lien mortgage on Suburban Plaza. This loan was repaid at the sale of Suburban Plaza on March 31, 1995. Additionally, the Partnership had a $359,000 mortgage loan from an affiliate of the General Partner that was secured by a second lien mortgage on Suburban Plaza. This loan and the related accrued interest were also repaid at the sale of Suburban Plaza on March 31, 1995. Long-term liquidity - ------------------- Operations of the Partnership's properties are expected to provide sufficient cash flow for operating expenses, debt service payments and capital improvements in the foreseeable future. The proceeds from the sales of Wyoming Mall and Suburban Plaza will enable the Partnership to reduce a significant portion of its affiliate debt as well as affiliate payables. The Partnership has significant mortgage maturities during 1997, and management expects to refinance these mortgage notes as they mature. If management is unable to refinance the mortgage notes as they mature; the Partnership will require other sources of cash. No such sources have been identified. These conditions raise substantial doubt about the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Distributions - ------------- To maintain adequate cash balances of the Partnership, distributions to Current Income Unit holders were suspended in 1989. There have been no distributions to Growth/Shelter Units holders. Distributions to Unit holders will remain suspended for the foreseeable future. The General Partner will continue to monitor the cash reserves and working capital needs of the Partnership to determine when cash flows will support distributions to the Unit holders. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------ -------------------------------- (a) Exhibits. Exhibit Number Description 4. Amended and Restated Limited Partnership Agreement dated March 26, 1992. (Incorporated by reference to the Current Report of the Registrant on Form 8-K dated March 26, 1992, as filed on April 9, 1992). 10.15 Loan Agreement dated July 14, 1995 between Fleet Real Estate Capital, Inc. and Bedford Green Fund XXI, L.P. 10.16 Loan Agreement dated July 14, 1995 between Fleet Real Estate Capital, Inc. and Woodcreek Fund XXI, L.P. 11. Statement regarding computation of Net Income (Loss) per Limited Partnership Unit: Net income (loss) per limited partnership unit is computed by dividing net income (loss) allocated to the limited partners by the weighted average number of limited partnership units outstanding. Per unit information has been computed based on 24,949 and 24,982 Current Income Units outstanding in 1995 and 1994, respectively, and 22,359 and 22,400 Growth/Shelter Units outstanding in 1995 and 1994, respectively.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended September 30, 1995. MCNEIL REAL ESTATE FUND XXI, L.P. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized: McNEIL REAL ESTATE FUND XXI, L.P. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner November 13, 1995 By: /s/ Donald K. Reed - ------------------------------------- --------------------------------------------- Date Donald K. Reed President and Chief Executive Officer November 13, 1995 By: /s/ Robert C. Irvine - ------------------------------------- --------------------------------------------- Date Robert C. Irvine Chief Financial Officer of McNeil Investors, Inc. Principal Financial Officer November 13, 1995 By: /s/ Carol A. Fahs - ------------------------------------- --------------------------------------------- Date Carol A. Fahs Chief Accounting Officer of McNeil Real Estate Management, Inc.
EX-27 2 FDS
5 9-MOS DEC-31-1995 SEP-30-1995 2,210,006 0 199,540 (17,302) 0 0 36,731,234 (14,879,046) 25,395,476 0 22,796,606 0 0 0 0 25,395,476 5,057,887 6,764,226 0 0 4,606,983 0 2,010,491 0 0 0 0 0 0 146,752 0 0
EX-99 3 Loan No. 55-9506015 MORTGAGE NOTE $2,812,500.00 July 14, 1995 FOR VALUE RECEIVED, WOODCREEK FUND XXI, L.P., a Texas limited partnership having its principal office at 13760 Noel Road, Suite 700, Dallas, Texas 75240 ("Maker") promises to pay to the order of FLEET REAL ESTATE CAPITAL, INC., a Rhode Island corporation, or its assigns ("Payee") having its principal office at 4275 Executive Square, Suite 200, La Jolla, California 92037, the Principal Amount (as defined below), together with interest from the date hereof at the Interest Rate (as defined below). Interest accruing hereunder shall be calculated on the basis of a 360-day year of twelve 30-day months. WHEN USED HEREIN, the following capitalized terms shall have the following meanings: "Commencement Date" shall be September 1, 1995. "Closing Date" shall be July 19, 1995. "Default Rate" shall be the Interest Rate plus five percent (5%) per annum. "Interest Rate" shall be eight and forty-eight one hundredths percent (8.48%) per annum. "Lockout Period" shall be the period from July 19, 1995 through August 1, 1999. "Maturity Date" shall be July 14, 2002. "Monthly Amount" shall be the sum of Twenty-One Thousand Five Hundred Eighty-Five and 84/100 Dollars ($21,585.84). "Payment Date" shall be the first business day of each month commencing on the first business day of the second full month after the closing date and continuing to and including the Maturity Date. "Principal Amount" shall be Two Million Eight Hundred Twelve Thousand Five Hundred and No/100 United States Dollars. The Principal Amount and interest thereon shall be due and payable in lawful money of the United States as follows: Loan No. 55-9506015 (a) On the date hereof, all accrued and unpaid interest on the unpaid balance through the end of the month in which the Closing Date occurs shall be due and payable. Thereafter, commencing on the Commencement Date, eighty-three (83) equal monthly installments of principal and interest at the Monthly Amount each shall be due and payable. Each installment of principal and interest shall be applied first to interest and the remainder thereof to reduction of principal. Each monthly installment shall be due on each Payment Date. In addition, all amounts advanced by Payee pursuant to applicable provisions of the Security Documents (as hereinafter defined), together with any interest at the Default Rate or other charges as therein provided, shall be immediately due and payable hereunder. In the event any such advance is not so repaid by Maker, Payee may, at its option, first apply any payments received hereunder to repay said advances together with any interest thereon or other charges as provided in the Security Documents, and the balance, if any, shall be applied in payment of any installment then due. The entire remaining unpaid balance of principal of this Note, all interest accrued thereon and all other sums payable hereunder or under the Security Documents shall be due and payable in full on the Maturity Date. (b) Amounts due on this Note shall be payable, without any counterclaim, setoff or deduction whatsoever, at the office of Payee or its agent or designee at the address set forth in Exhibit 1 or at such other place as Payee or its agent or designee may from time to time designate in writing. (c) This Note is secured by a Deed of Trust, Mortgage, Security Agreement and Assignment of Rents and Leases of even date herewith (the "Mortgage") from Maker to Payee and by an Assignment of Rents and Leases of even date herewith (the "Assignment") from Maker to Payee. The Mortgage, the Assignment and any other instrument given at any time to secure this Note are hereinafter collectively called the "Security Documents." (d) This Note may not be prepaid prior to the end of the Lockout Period, except as set forth herein. Any prepayment of this Note, in whole or in part, prior to the end of the Lockout Period, except as permitted herein, shall constitute an "Event of Default" under the Mortgage. Maker has the right to prepay the principal of this Note in full or in part on any Payment Date after the end of the Lockout Period, upon sixty days' prior written notice and payment, together with the portion of the principal to be prepaid, of a prepayment premium in an amount calculated as specified in Appendix 1. The calculation of the prepayment premium shall be made by Payee and shall, absent manifest error, be conclusive. In the event this Note is prepaid from the proceeds of insurance or condemnation awards in accordance with Sections 10, 11 and 12 of the Mortgage either prior to or after the end of the Lockout Period, a prepayment premium shall be payable calculated as specified in Appendix 1. Notwithstanding the foregoing, this Note may be prepaid without a prepayment Loan No. 55-9506015 premium during the one hundred eighty (180) day period prior to the Maturity Date. Upon acceleration of this Note in accordance with its terms and the terms of the Security Documents, Maker agrees to pay the prepayment premium described above in the amount that would be due if a voluntary payment were made on the date of such acceleration. A tender of payment of the amount necessary to pay and satisfy the entire unpaid principal balance of this Note or any portion thereof at any time after an Event of Default under the Mortgage or an acceleration by Payee of the indebtedness evidenced hereby, whether such payment is tendered voluntarily, during or after foreclosure of the Mortgage, or pursuant to realization upon other security, shall constitute a purposeful evasion of the prepayment terms of this Note, shall be deemed to be a voluntary prepayment hereof, and Maker shall be required to pay the prepayment premium as described above. Partial prepayments of principal shall not change the Payment Dates or amounts of subsequent monthly installments, unless Payee shall otherwise agree in writing. Notwithstanding the foregoing, nothing in this paragraph (d) shall vary or negate the provisions of Section 18(c) of the Mortgage. (e) If Maker defaults in the payment of any installment of principal and interest on the date on which it shall fall due or in the performance of any of the agreements, conditions, covenants, provisions or stipulations contained in this Note or in the Security Documents, and if such default shall continue beyond any grace period provided for in the Mortgage so as to constitute an Event of Default thereunder, then Payee, at its option and without further notice to Maker, may declare immediately due and payable the entire unpaid principal balance of this Note, together with interest thereon at an annual rate after the date of such default equal to the Default Rate, together with all sums due by Maker under the Security Documents, anything herein or in the Security Documents to the contrary notwithstanding. The foregoing provision shall not be construed as a waiver by Payee of its right to pursue any other remedies available to it under the Mortgage, this Note or any other Security Document, nor shall it be construed to limit in any way the application of the Default Rate. Any payment hereunder may be enforced and recovered in whole or in part at such time by one or more of the remedies provided to Payee in this Note or in the Security Documents. In the event that: (i) this Note or any Security Document is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding; (ii) an attorney is retained to represent Payee in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors' rights and involving a claim under this Note or any Security Document; (iii) an attorney is retained to protect or enforce the lien of the Mortgage or any Security Document; or (iv) an attorney is retained to represent Payee in any other proceedings whatsoever in connection with this Note, the Mortgage, any of the Security Documents or any portion of the Mortgaged Property (as defined in the Mortgage), then Maker shall pay to Loan No. 55-9506015 Payee all reasonable attorney's fees, costs and expenses incurred in connection therewith, including costs of appeal, together with interest on any judgment obtained by Payee at the Default Rate. (f) If Maker defaults in the payment of any monthly installment on the Payment Date, and such default is not cured within five days thereafter, then Maker shall pay to Payee a late payment charge in an amount equal to six percent (6%) of the amount of the installment not paid as aforesaid. An additional late charge equal to six percent (6%) of the monthly payment due will be charged for each successive month the payment remains outstanding. Said late charge payments, if payable, shall be secured by the Mortgage and the other Security Documents, shall be payable without notice or demand by Payee, and are independent of and have no effect upon the rights of Payee under paragraph (e) above. (g) Maker and all endorsers, sureties and guarantors hereby jointly and severally waive all applicable exemption rights, valuation and appraisement, presentment for payment, demand, notice of demand, notice of nonpayment or dishonor, protest and notice of protest of this Note, and all other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of this Note. Maker and all endorsers, sureties and guarantors consent to any and all extensions of time, renewals, waivers or modifications that may be granted by Payee with respect to the payment or other provisions of this Note and to the release of the collateral or any part thereof, with or without substitution, and agree that additional makers, endorsers, guarantors or sureties may become parties hereto without notice to them or affecting their liability hereunder. (h) Payee shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by Payee, and then only to the extent specifically set forth in writing. A waiver of one event shall not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event. (i) This Note shall be governed by and construed in accordance with the laws of the State in which the Mortgaged Property is located (the "State"). (j) The parties hereto intend and believe that each provision in this Note comports with all applicable law. However, if any provision in this Note is found by a court of law to be in violation of any applicable law, and if such court should declare such provision of this Note to be unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such provision shall be given full force and effect to the fullest possible extent that is legal, valid and enforceable, that the remainder of this Note shall be construed as if such unlawful, void or unenforceable provision were not contained therein, and that the rights, obligations and interest of Maker and Loan No. 55-9506015 the holder hereof under the remainder of this Note shall continue in full force and effect; provided, however, that if any provision of this Note which is found to be in violation of any applicable law concerns the imposition of interest hereunder, the rights, obligations and interests of Maker and Payee with respect to the imposition of interest hereunder shall be governed and controlled by the provisions of the following paragraph. (k) It being the intention of Payee and Maker to comply with the laws of the State with regard to the rate of interest charged hereunder, it is agreed that, notwithstanding any provision to the contrary in this Note, the Mortgage, or any of the other Security Documents, no such provision, including without limitation any provision of this Note providing for the payment of interest or other charges, shall require the payment or permit the collection of any amount ("Excess Interest") in excess of the maximum amount of interest permitted by law to be charged for the use or detention, or the forbearance in the collection, of all or any portion of the indebtedness evidenced by this Note. If any Excess Interest is provided for, or is adjudicated to be provided for, in this Note, the Mortgage, or any of the other Security Documents, then in such event: (i) the provisions of this paragraph shall govern; (ii) Maker shall not be obligated to pay any Excess Interest; (iii)any Excess Interest that Payee may have received hereunder shall, at the option of Payee, be (x) applied as a credit against the unpaid principal balance then due under this Note, accrued and unpaid interest thereon not to exceed the maximum amount permitted by law, or both, (y) refunded to the payor thereof or (z) any combination of the foregoing; (iv)the applicable interest rate or rates provided for herein shall be automatically subject to reduction to the maximum lawful rate allowed to be contracted for in writing under the applicable usury laws of the aforesaid State, and this Note, the Mortgage and the other Security Documents shall be deemed to have been, and shall be, reformed and modified to reflect such reduction in such interest rate or rates; and (v) Maker shall not have any action or remedy against Payee for any damages whatsoever or any defense to enforcement of this Note, Mortgage or any other Security Document arising out of the payment or collection of any Excess Interest. (l)Upon any endorsement, assignment, or other transfer of this Note by Payee or by operation of law, the term "Payee," as used herein, shall mean such endorsee, assignee, or other transferee or successor to Payee then becoming the holder of this Note. This Note shall inure to the benefit of Payee and its Loan No. 55-9506015 successors and assigns and shall be binding upon the undersigned and its successors and assigns. The term "Maker" as used herein shall include the respective successors and assigns, legal and personal representatives, executors, administrators, devisees, legatees and heirs of Maker. (m) Any notice, demand or other communication which any party may desire or may be required to give to any other party shall be in writing and shall be given as provided in the Mortgage. (n) To the extent that Maker makes a payment or Payee receives any payment or proceeds for Maker's benefit, which are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver, custodian or any other party under any bankruptcy law, common law or equitable cause, then, to such extent, the obligations of Maker hereunder intended to be satisfied shall be revived and continue as if such payment or proceeds had not been received by Payee. (o) Maker shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to Payee all documents, and take all actions, reasonably required by Payee from time to time to confirm the rights created or now or hereafter intended to be created under this Note and the Security Documents, to protect and further the validity, priority and enforceability of this Note and the Security Documents, to subject to the Security Documents any property of Maker intended by the terms of any one or more of the Security Documents to be encumbered by the Security Documents, or otherwise carry out the purposes of the Security Documents and the transactions contemplated thereunder; provided, however, that no such further actions, assurances and confirmations shall increase Maker's obligations under this Note. (p) No modification, amendment, extension, discharge, termination or waiver (a "Modification") of any provision of this Note, or any one or more of the other Security Documents, nor consent to any departure by Maker therefrom, shall in any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given. Except as otherwise expressly provided herein, no notice to, or demand on, Maker shall entitle Maker to any other or future notice or demand in the same, similar or other circumstances. Payee does not hereby agree to, nor does Payee hereby commit itself to, enter into any Modification. (q) Maker hereby expressly and unconditionally waives, in connection with any suit, action or proceeding brought by Payee on this Note, any and every right it may have to (a) a trial by jury, (b) interpose any counterclaim therein (other than a counterclaim which can only be asserted in the suit, action or proceeding brought by Payee on this Note and cannot be maintained in a separate action) and (c) have the same consolidated with any other or separate suit, action or proceeding. Loan No. 55-9506015 (r) Notwithstanding any provision to the contrary in the Mortgage or this Note, Payee shall not have any recourse to any asset of Maker or its partners other than the Mortgaged Property in order to satisfy the indebtedness for payment of the principal and interest evidenced by this Note, and Payee's sole recourse for satisfaction of the payment of principal and interest evidenced by this Note shall be to exercise its rights against the Mortgaged Property encumbered by the Mortgage and the other collateral securing this Note. The foregoing sentence shall not be deemed or construed to be a release of the indebtedness evidenced by this Note or in any way impair, limit or otherwise affect the lien of the Mortgage or any such other instrument securing repayment of this Note or prevent Payee from naming Maker, its partners, or their successors or assigns as a defendant to any action to enforce any remedy for default so long as there is no personal or deficiency money judgment sought or entered against Maker, its partners, or their successors or assigns for payment of principal and interest evidenced by this Note. Notwithstanding the foregoing provisions of this paragraph, it is expressly understood and agreed that the aforesaid limitation of liability shall no way affect or apply to Maker's or its partners' continued personal liability for the payment to Payee of: (i) any loss or damage occurring by reason of all or any part of the Mortgaged Property being encumbered by a voluntary lien (other than the Mortgage) granted by Maker; (ii) any Rents (as defined in the Mortgage), issues, profits and/or income collected by Maker in excess of normal and verifiable operating expenses from the Mortgaged Property after default by Maker hereunder, under the Mortgage or under any other instrument securing or referring to this Note; (iii) unrefunded security deposits made by tenants of the Mortgaged Property; (iv) payment of Taxes, as defined in Section 5 of the Mortgage, and insurance premiums, payment of which is required to be made by Maker under the Mortgage; (v) Rents, security deposits with respect to leases of the Mortgaged Property, insurance proceeds, condemnation awards and any other payments or consideration which Maker receives and to which Payee is entitled pursuant to the terms of the Mortgage or of any other Security Document; Loan No. 55-9506015 (vi) damage to the Mortgaged Property from waste committed or permitted by Maker; (vii) loss or damage occurring by reason of the failure of Maker to comply with any of the provisions of Section 35 of the Mortgage; (viii) any loss or claim incurred by or asserted against Payee as a result of fraud or misrepresentation by Maker or any of the partners thereof with respect to any certification, representation or warranty made by Maker or such other persons to Payee herein or in any of the Security Documents; (ix) all indebtedness and obligations arising under or pursuant to that certain Environmental Indemnity dated of even date herewith executed by Maker, the general partner of Maker and McNeil Real Estate Fund XXI, L.P. for the benefit of Payee; and (x) reasonable attorney's fees incurred by Payee in connection with suit filed on account of any of the foregoing clauses (i) through (ix). IN WITNESS WHEREOF, Maker has caused this Note to be executed and delivered as of the day and year first above written. WOODCREEK FUND XXI, L.P., a Texas limited partnership By: Woodcreek Fund XXI Corp., a Delaware corporation, General Partner By: ---------------------------------- Name: ---------------------------------- Title: ---------------------------------- Loan No. 55-9506015 APPENDIX 1 Calculation of Prepayment Premium The prepayment premium shall be equal to the greater of (A) one percent (1%) of the portion of the principal amount of this Note being repaid or (B) the product of (i) a fraction whose numerator is an amount equal to the portion of the principal balance of this Note being prepaid and whose denominator is the entire outstanding principal balance of this Note on the date of such prepayment (after subtracting the amount of any scheduled principal payment due on such Payment Date), multiplied by (ii) an amount equal to the remainder obtained by subtracting (x) an amount equal to the entire outstanding principal balance of this Note as of the date of such prepayment (after subtracting the amount of any scheduled principal payment due on such Payment Date) from (y) the present value as of the date of such prepayment of the remaining scheduled payments of principal and interest on this Note (including any final installment of principal payable on the Maturity Date) determined by discounting such payments at the Discount Rate (as hereinafter defined). For purposes of this Note: (x) "Discount Rate" shall mean the rate which, when compounded monthly, is equivalent to the Treasury Rate (defined below); and (y) "Treasury Rate" shall mean the yield calculated by the linear interpolation of the yield, as reported in Federal Reserve Statistical Release H.15-Selected Interest Rates under the heading "U.S. government securities/Treasury constant maturities" for the week ending prior to the date of the relevant prepayment of this Note, of U.S. Treasury constant maturities with a maturity date (one longer and one shorter) most nearly approximating the Maturity Date of this Note. In the event Release H.15 is no longer published, the Payee shall select a comparable publication to determine the Treasury Rate. Loan No. 55-9506015 EXHIBIT 1 Amounts due on this note shall be payable to Fleet Real Estate Capital, Inc. at the following address: Fleet Real Estate Capital, Inc. 4275 Executive Square Suite 200 La Jolla, CA 92037 Loan No.: 55-9506015 EX-99 4 Loan No. 55-9506016 MORTGAGE NOTE $3,300,000.00 July 14, 1995 FOR VALUE RECEIVED, BEDFORD GREEN FUND XXI, L.P., a Texas limited partnership having its principal office at 13760 Noel Road, Suite 700, Dallas, Texas 75240 ("Maker") promises to pay to the order of FLEET REAL ESTATE ----- CAPITAL, INC., a Rhode Island corporation, or its assigns ("Payee") having its ----- principal office at 4275 Executive Square, Suite 200, La Jolla, California 92037, the Principal Amount (as defined below), together with interest from the date hereof at the Interest Rate (as defined below). Interest accruing hereunder shall be calculated on the basis of a 360-day year of twelve 30-day months. WHEN USED HEREIN, the following capitalized terms shall have the following meanings: "Commencement Date" shall be September 1, 1995. ----------------- "Closing Date" shall be July 19, 1995. ------------ "Default Rate" shall be the Interest Rate plus five percent ------------- (5%) per annum. "Interest Rate" shall be eight and forty-eight one hundredths ------------- percent (8.48%) per annum. "Lockout Period" shall be the period from July 19, 1995 --------------- through August 1, 1999. "Maturity Date" shall be July 14, 2002. ------------- "Monthly Amount" shall be the sum of Twenty-Five Thousand --------------- Three Hundred Twenty-Seven and 38/100 Dollars ($25,327.38). "Payment Date" shall be the first business day of each month ------------- commencing on the first business day of the second full month after the closing date and continuing to and including the Maturity Date. "Principal Amount" shall be Three Million Three Hundred ----------------- Thousand and No/100 United States Dollars. The Principal Amount and interest thereon shall be due and payable in lawful money of the United States as follows: Loan No. 55-9506016 (a) On the date hereof, all accrued and unpaid interest on the unpaid balance through the end of the month in which the Closing Date occurs shall be due and payable. Thereafter, commencing on the Commencement Date, eighty-three (83) equal monthly installments of principal and interest at the Monthly Amount each shall be due and payable. Each installment of principal and interest shall be applied first to interest and the remainder thereof to reduction of principal. Each monthly installment shall be due on each Payment Date. In addition, all amounts advanced by Payee pursuant to applicable provisions of the Security Documents (as hereinafter defined), together with any interest at the Default Rate or other charges as therein provided, shall be immediately due and payable hereunder. In the event any such advance is not so repaid by Maker, Payee may, at its option, first apply any payments received hereunder to repay said advances together with any interest thereon or other charges as provided in the Security Documents, and the balance, if any, shall be applied in payment of any installment then due. The entire remaining unpaid balance of principal of this Note, all interest accrued thereon and all other sums payable hereunder or under the Security Documents shall be due and payable in full on the Maturity Date. (b) Amounts due on this Note shall be payable, without any counterclaim, setoff or deduction whatsoever, at the office of Payee or its agent or designee at the address set forth in Exhibit 1 or at such other place as Payee or its agent or designee may from time to time designate in writing. (c) This Note is secured by an Open-End Mortgage, Deed of Trust, Security Agreement and Assignment of Rents and Leases of even date herewith (the "Mortgage") from Maker to -------- Payee and by an Assignment of Rents and Leases of even date herewith (the "Assignment") from Maker to Payee. The Mortgage, ---------- the Assignment and any other instrument given at any time to secure this Note are hereinafter collectively called the "Security Documents." -------- --------- (d) This Note may not be prepaid prior to the end of the Lockout Period, except as set forth herein. Any prepayment of this Note, in whole or in part, prior to the end of the Lockout Period, except as permitted herein, shall constitute an "Event of Default" under the Mortgage. Maker has the right to prepay the principal of this Note in full or in part on any Payment Date after the end of the Lockout Period, upon sixty days' prior written notice and payment, together with the portion of the principal to be prepaid, of a prepayment premium in an amount calculated as specified in Appendix 1. The calculation of the prepayment premium shall be made by Payee and shall, absent manifest error, be conclusive. In the event this Note is prepaid from the proceeds of insurance or condemnation awards in accordance with Sections 10, 11 and 12 of the Mortgage either prior to or after the end of the Lockout Period, a prepayment premium shall be payable calculated as specified in Appendix 1. Notwithstanding the foregoing, this Note may be prepaid without a prepayment premium during the one hundred eighty (180) day period prior Loan No. 55-9506016 to the Maturity Date. Upon acceleration of this Note in accordance with its terms and the terms of the Security Documents, Maker agrees to pay the prepayment premium described above in the amount that would be due if a voluntary payment were made on the date of such acceleration. A tender of payment of the amount necessary to pay and satisfy the entire unpaid principal balance of this Note or any portion thereof at any time after an Event of Default under the Mortgage or an acceleration by Payee of the indebtedness evidenced hereby, whether such payment is tendered voluntarily, during or after foreclosure of the Mortgage, or pursuant to realization upon other security, shall constitute a purposeful evasion of the prepayment terms of this Note, shall be deemed to be a voluntary prepayment hereof, and Maker shall be required to pay the prepayment premium as described above. Partial prepayments of principal shall not change the Payment Dates or amounts of subsequent monthly installments, unless Payee shall otherwise agree in writing. Notwithstanding the foregoing, nothing in this paragraph (d) shall vary or negate the provisions of Section 18(c) of the Mortgage. (e) If Maker defaults in the payment of any installment of principal and interest on the date on which it shall fall due or in the performance of any of the agreements, conditions, covenants, provisions or stipulations contained in this Note or in the Security Documents, and if such default shall continue beyond any grace period provided for in the Mortgage so as to constitute an Event of Default thereunder, then Payee, at its option and without further notice to Maker, may declare immediately due and payable the entire unpaid principal balance of this Note, together with interest thereon at an annual rate after the date of such default equal to the Default Rate, together with all sums due by Maker under the Security Documents, anything herein or in the Security Documents to the contrary notwithstanding. The foregoing provision shall not be construed as a waiver by Payee of its right to pursue any other remedies available to it under the Mortgage, this Note or any other Security Document, nor shall it be construed to limit in any way the application of the Default Rate. Any payment hereunder may be enforced and recovered in whole or in part at such time by one or more of the remedies provided to Payee in this Note or in the Security Documents. In the event that: (i) this Note or any Security Document is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding; (ii) an attorney is retained to represent Payee in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors' rights and involving a claim under this Note or any Security Document; (iii) an attorney is retained to protect or enforce the lien of the Mortgage or any Security Document; or (iv) an attorney is retained to represent Payee in any other proceedings whatsoever in connection with this Note, the Mortgage, any of the Security Documents or any portion of the Mortgaged Property (as defined in the Mortgage), then Maker shall pay to Payee all reasonable attorney's fees, costs and expenses incurred in connection Loan No. 55-9506016 therewith, including costs of appeal, together with interest on any judgment obtained by Payee at the Default Rate. (f) If Maker defaults in the payment of any monthly installment on the Payment Date, and such default is not cured within five days thereafter, then Maker shall pay to Payee a late payment charge in an amount equal to six percent (6%) of the amount of the installment not paid as aforesaid. An additional late charge equal to six percent (6%) of the monthly payment due will be charged for each successive month the payment remains outstanding. Said late charge payments, if payable, shall be secured by the Mortgage and the other Security Documents, shall be payable without notice or demand by Payee, and are independent of and have no effect upon the rights of Payee under paragraph (e) above. (g) Maker and all endorsers, sureties and guarantors hereby jointly and severally waive all applicable exemption rights, valuation and appraisement, presentment for payment, demand, notice of demand, notice of nonpayment or dishonor, protest and notice of protest of this Note, and all other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of this Note. Maker and all endorsers, sureties and guarantors consent to any and all extensions of time, renewals, waivers or modifications that may be granted by Payee with respect to the payment or other provisions of this Note and to the release of the collateral or any part thereof, with or without substitution, and agree that additional makers, endorsers, guarantors or sureties may become parties hereto without notice to them or affecting their liability hereunder. (h) Payee shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by Payee, and then only to the extent specifically set forth in writing. A waiver of one event shall not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event. (i) This Note shall be governed by and construed in accordance with the laws of the State in which the Mortgaged Property is located (the "State"). ----- (j) The parties hereto intend and believe that each provision in this Note comports with all applicable law. However, if any provision in this Note is found by a court of law to be in violation of any applicable law, and if such court should declare such provision of this Note to be unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such provision shall be given full force and effect to the fullest possible extent that is legal, valid and enforceable, that the remainder of this Note shall be construed as if such unlawful, void or unenforceable provision were not contained therein, and that the rights, obligations and interest of Maker and the holder Loan No. 55-9506016 hereof under the remainder of this Note shall continue in full force and effect; provided, however, that if any provision of -------- ------- this Note which is found to be in violation of any applicable law concerns the imposition of interest hereunder, the rights, obligations and interests of Maker and Payee with respect to the imposition of interest hereunder shall be governed and controlled by the provisions of the following paragraph. (k) It being the intention of Payee and Maker to comply with the laws of the State with regard to the rate of interest charged hereunder, it is agreed that, notwithstanding any provision to the contrary in this Note, the Mortgage, or any of the other Security Documents, no such provision, including without limitation any provision of this Note providing for the payment of interest or other charges, shall require the payment or permit the collection of any amount ("Excess Interest") in excess of the maximum amount of ------ -------- interest permitted by law to be charged for the use or detention, or the forbearance in the collection, of all or any portion of the indebtedness evidenced by this Note. If any Excess Interest is provided for, or is adjudicated to be provided for, in this Note, the Mortgage, or any of the other Security Documents, then in such event: (i) the provisions of this paragraph shall govern; (ii) Maker shall not be obligated to pay any Excess Interest; (iii) any Excess Interest that Payee may have received hereunder shall, at the option of Payee, be (x) applied as a credit against the unpaid principal balance then due under this Note, accrued and unpaid interest thereon not to exceed the maximum amount permitted by law, or both, (y) refunded to the payor thereof or (z) any combination of the foregoing; (iv) the applicable interest rate or rates provided for herein shall be automatically subject to reduction to the maximum lawful rate allowed to be contracted for in writing under the applicable usury laws of the aforesaid State, and this Note, the Mortgage and the other Security Documents shall be deemed to have been, and shall be, reformed and modified to reflect such reduction in such interest rate or rates; and (v) Maker shall not have any action or remedy against Payee for any damages whatsoever or any defense to enforcement of this Note, Mortgage or any other Security Document arising out of the payment or collection of any Excess Interest. (l) Upon any endorsement, assignment, or other transfer of this Note by Payee or by operation of law, the term "Payee," as used herein, shall mean such endorsee, assignee, or other transferee or successor to Payee then becoming the holder of this Note. This Note shall inure to the Loan No. 55-9506016 benefit of Payee and its successors and assigns and shall be binding upon the undersigned and its successors and assigns. The term "Maker" as used herein shall include the respective successors and assigns, legal and personal representatives, executors, administrators, devisees, legatees and heirs of Maker. (m) Any notice, demand or other communication which any party may desire or may be required to give to any other party shall be in writing and shall be given as provided in the Mortgage. (n) To the extent that Maker makes a payment or Payee receives any payment or proceeds for Maker's benefit, which are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver, custodian or any other party under any bankruptcy law, common law or equitable cause, then, to such extent, the obligations of Maker hereunder intended to be satisfied shall be revived and continue as if such payment or proceeds had not been received by Payee. (o) Maker shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to Payee all documents, and take all actions, reasonably required by Payee from time to time to confirm the rights created or now or hereafter intended to be created under this Note and the Security Documents, to protect and further the validity, priority and enforceability of this Note and the Security Documents, to subject to the Security Documents any property of Maker intended by the terms of any one or more of the Security Documents to be encumbered by the Security Documents, or otherwise carry out the purposes of the Security Documents and the transactions contemplated thereunder; provided, however, that no such further actions, assurances and confirmations shall increase Maker's obligations under this Note. (p) No modification, amendment, extension, discharge, termination or waiver (a "Modification") of any provision of ------------ this Note, or any one or more of the other Security Documents, nor consent to any departure by Maker therefrom, shall in any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given. Except as otherwise expressly provided herein, no notice to, or demand on, Maker shall entitle Maker to any other or future notice or demand in the same, similar or other circumstances. Payee does not hereby agree to, nor does Payee hereby commit itself to, enter into any Modification. (q) Maker hereby expressly and unconditionally waives, in connection with any suit, action or proceeding brought by Payee on this Note, any and every right it may have to (a) a trial by jury, (b) interpose any counterclaim therein (other than a counterclaim which can only be asserted in the suit, action or proceeding brought by Payee on this Note and Loan No. 55-9506016 cannot be maintained in a separate action) and (c) have the same consolidated with any other or separate suit, action or proceeding. (r) Notwithstanding any provision to the contrary in the Mortgage or this Note, Payee shall not have any recourse to any asset of Maker or its partners other than the Mortgaged Property in order to satisfy the indebtedness for payment of the principal and interest evidenced by this Note, and Payee's sole recourse for satisfaction of the payment of principal and interest evidenced by this Note shall be to exercise its rights against the Mortgaged Property encumbered by the Mortgage and the other collateral securing this Note. The foregoing sentence shall not be deemed or construed to be a release of the indebtedness evidenced by this Note or in any way impair, limit or otherwise affect the lien of the Mortgage or any such other instrument securing repayment of this Note or prevent Payee from naming Maker, its partners, or their successors or assigns as a defendant to any action to enforce any remedy for default or prevent Payee from exercising any assignments of rents and leases or obtaining the appointment of a receiver so long as there is no personal or deficiency money judgment sought or entered against Maker, its partners, or their successors or assigns for payment of principal and interest evidenced by this Note. Notwithstanding the foregoing provisions of this paragraph, it is expressly understood and agreed that the aforesaid limitation of liability shall no way affect or apply to Maker's or its partners' continued personal liability for the payment to Payee of: (i) any loss or damage occurring by reason of all or any part of the Mortgaged Property being encumbered by a voluntary lien (other than the Mortgage) granted by Maker; (ii) any Rents (as defined in the Mortgage), issues, profits and/or income collected by Maker in excess of normal and verifiable operating expenses from the Mortgaged Property after default by Maker hereunder, under the Mortgage or under any other instrument securing or referring to this Note; (iii) unrefunded security deposits made by tenants of the Mortgaged Property; (iv) payment of Taxes, as defined in Section 5 of the Mortgage, and insurance premiums, payment of which is required to be made by Maker under the Mortgage; (v) Rents, security deposits with respect to leases of the Mortgaged Property, insurance proceeds, condemnation awards and any other payments or consideration which Maker receives and to which Payee Loan No. 55-9506016 is entitled pursuant to the terms of the Mortgage or of any other Security Document; (vi) damage to the Mortgaged Property from waste committed or permitted by Maker; (vii) loss or damage occurring by reason of the failure of Maker to comply with any of the provisions of Section 35 of the Mortgage; (viii) any loss or claim incurred by or asserted against Payee as a result of fraud or misrepresentation by Maker or any of the partners thereof with respect to any certification, representation or warranty made by Maker or such other persons to Payee herein or in any of the Security Documents; (ix) all indebtedness and obligations arising under or pursuant to that certain Environmental Indemnity dated of even date herewith executed by Maker, the general partner of Maker and McNeil Real Estate Fund XXI, L.P. for the benefit of Payee; and (x) reasonable attorney's fees incurred by Payee in connection with suit filed on account of any of the foregoing clauses (i) through (ix). IN WITNESS WHEREOF, Maker has caused this Note to be executed and delivered as of the day and year first above written. BEDFORD GREEN FUND XXI, L.P., a Texas limited partnership By: Bedford Green Fund XXI Corp., a Delaware corporation, General Partner By: -------------------------------------------- Name: -------------------------------------------- Title: -------------------------------------------- Loan No. 55-9506016 APPENDIX 1 ---------- Calculation of Prepayment Premium --------------------------------- The prepayment premium shall be equal to the greater of (A) one percent (1%) of the portion of the principal amount of this Note being repaid or (B) the product of (i) a fraction whose numerator is an amount equal to the portion of the principal balance of this Note being prepaid and whose denominator is the entire outstanding principal balance of this Note on the date of such prepayment (after subtracting the amount of any scheduled principal payment due on such Payment Date), multiplied by (ii) an amount equal to the remainder obtained by subtracting (x) an amount equal to the entire outstanding principal balance of this Note as of the date of such prepayment (after subtracting the amount of any scheduled principal payment due on such Payment Date) from (y) the present value as of the date of such prepayment of the remaining scheduled payments of principal and interest on this Note (including any final installment of principal payable on the Maturity Date) determined by discounting such payments at the Discount Rate (as hereinafter defined). For purposes of this Note: (x) "Discount Rate" shall mean the rate which, when compounded -------------- monthly, is equivalent to the Treasury Rate (defined below); and (y) "Treasury Rate" shall mean the yield calculated by the linear ------------- interpolation of the yield, as reported in Federal Reserve Statistical Release H.15-Selected Interest Rates under the heading "U.S. government securities/Treasury constant maturities" for the week ending prior to the date of the relevant prepayment of this Note, of U.S. Treasury constant maturities with a maturity date (one longer and one shorter) most nearly approximating the Maturity Date of this Note. In the event Release H.15 is no longer published, the Payee shall select a comparable publication to determine the Treasury Rate. Loan No. 55-9506016 EXHIBIT 1 --------- Amounts due on this note shall be payable to Fleet Real Estate Capital, Inc. at the following address: Fleet Real Estate Capital, Inc. 4275 Executive Square Suite 200 La Jolla, CA 92037 Loan No.: 55-9506016 -----END PRIVACY-ENHANCED MESSAGE-----