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EX-10 - FSP GALLERIA NORTH CORPex10-1.htm
EX-10 - FSP GALLERIA NORTH CORPex10-3.htm
EX-10 - FSP GALLERIA NORTH CORPex10-2.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 1, 2012

 

 

FSP GALLERIA NORTH CORP.

(Exact name of registrant as specified in its charter)

 

Delaware 000-51940 20-1641289

(State or other jurisdiction

of incorporation)

(Commission
File Number)
(IRS Employer
Identification No.)

 

 

401 Edgewater Place, Suite 200, Wakefield, Massachusetts 01880
(Address of principal executive offices) (Zip Code)

 

 

Registrant’s telephone number, including area code: (781) 557-1300

 

 

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

Item 1.01 Entry into a Material Definitive Agreement.

 

FSP Galleria North Corp. (the “Registrant”) is a Delaware corporation formed to purchase, own and operate a sixteen-story Class “A” office tower containing approximately 379,518 rentable square feet of space located on approximately 4.8 acres of land in Dallas, Texas (the “Property”). The Registrant operates in a manner intended to qualify as a real estate investment trust, or REIT, for federal income tax purposes. The Registrant acquired the Property through a limited partnership, FSP Galleria North Limited Partnership (the “Borrower”), of which the Registrant is the sole limited partner and of which FSP Galleria North LLC, a wholly-owned subsidiary of the Registrant, is the sole general partner. The sole business of the Borrower is to own and operate the Property; the sole business of each of FSP Galleria North LLC and the Registrant is to hold the equity interests of the Borrower.

On February 1, 2012, the Borrower provided a Secured Promissory Note (Revolving) (the “Note”) in favor of Franklin Street Properties Corp. (the “Lender”) to evidence a revolving line of credit facility for $15,000,000.00 (the “Loan”). The Borrower is an affiliate of the Lender. Pursuant to the Note, the Borrower may borrow, repay and reborrow funds in the form of advances from the Lender from time to time so long as no event of default exists, provided; however, that the aggregate principal amount of all advances outstanding at any time shall in no event exceed $15,000,000.00. The Borrower is required to pay the Lender a fee in an amount equal to 0.50% of each advance. The proceeds of the Loan are anticipated to be used for capital improvements and/or to pay operating expenses of the Property, including without limitation, tenant improvement allowances and leasing commissions. The Borrower is obligated to pay interest only on the outstanding principal amount of each advance from the date of such advance until payment in full of such advance at a per annum interest rate equal to the LIBOR Rate. The LIBOR Rate means the per annum rate of interest reported in the Wall Street Journal as the “Latest”, “One month”, “London interbank offered rate, or Libor” plus five hundred (500) basis points. As of February 1, 2012, the LIBOR Rate was 5.26%. The outstanding principal amount of the Loan, together with any accrued but unpaid interest, shall be due and payable on the earlier to occur of (i) January 30, 2015 and (ii) the date on which an event of default shall have occurred. The Note may be prepaid in whole or in part at any time without premium or penalty.

The Note is evidenced by a Revolving Loan Agreement dated February 1, 2012 by and between the Borrower and the Lender (the “Loan Agreement”) and is secured by a Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing dated February 1, 2012 from the Borrower in favor of the Lender (the “Deed of Trust”) (the Note, the Loan Agreement and the Deed of Trust are collectively referred to as the “Loan Documents”). The Deed of Trust constitutes a lien against the Property and has been recorded in the land records of Dallas County, Texas. The Loan Documents contain customary representations and warranties, as well as customary events of default and affirmative and negative covenants.

The Registrant has in the past engaged in and currently engages in related party transactions with the Lender and its subsidiaries FSP Investments LLC and FSP Property Management LLC (collectively “FSP”).  The Registrant expects to continue to have related party transactions with FSP in the form of management fees paid to FSP to manage the Registrant on behalf of its stockholders.  FSP Property Management LLC currently provides the Registrant with asset management and financial reporting services.  The asset management agreement between the Registrant and FSP Property Management LLC requires the Company to pay FSP Property Management LLC a monthly fee equal to one percent (1%) of the gross revenues of the Property.  The asset management agreement between the Registrant and FSP Property Management LLC may be terminated by either party without cause at any time, upon at least thirty (30) days’ written notice.

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The Registrant was organized in September 2004 by FSP Investments LLC (member, FINRA and SIPC), a wholly-owned subsidiary of the Lender. FSP Investments LLC acted as a real estate investment firm and broker/dealer with respect to (a) the organization of the Registrant, (b) the acquisition of the Property and (c) the sale of equity interests in the Registrant. The Lender holds the sole share of the Registrant’s common stock, $.01 par value per share (the “Common Stock”). Between December 2004 and August 2005, FSP Investments LLC completed the sale of equity interests in the Registrant through the offering on a best efforts basis of 860 shares of preferred stock, $.01 par value per share (the “Preferred Stock”). The Registrant sold the Preferred Stock for an aggregate consideration of approximately $86,000,000 in a private placement offering to "accredited investors" within the meaning of Regulation D under the Securities Act of 1933. Between December 31, 2004 and August 23, 2005, the Registrant held 18 investor closings, at each of which shares of Preferred Stock were sold and funds were received.

The Note, the Deed of Trust and the Loan Agreement are attached to this Current Report on Form 8-K as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3, respectively, and are incorporated herein by reference. The foregoing summaries of the Note, the Deed of Trust and the Loan Agreement are qualified in their entirety by the complete text of the Note, Deed of Trust and the Loan Agreement filed herewith.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information contained above under Item 1.01 is incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)Exhibits.

 

See Exhibit Index attached hereto.

 

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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 hereunto duly authorized.

 

  FSP GALLERIA NORTH CORP.
   
Date:  February 2, 2012 By:  /s/ George J. Carter
 

George J. Carter

President and Chief Executive Officer

 
       

 

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EXHIBIT INDEX

 

 

Exhibit No. Description
   
10.1 Secured Promissory Note (Revolving), dated February 1, 2012, from FSP Galleria North Limited Partnership in favor of Franklin Street Properties Corp.
   
10.2 Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated February 1, 2012, from FSP Galleria North Limited Partnership in favor of Franklin Street Properties Corp.
   
10.3 Revolving Loan Agreement, dated February 1, 2012, by and between FSP Galleria North Limited Partnership and Franklin Street Properties Corp.

 

 

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