March 20, 1996
Xxxxxx Financial, Inc.
000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: $7,000,000 Loan ("Loan") from Xxxxxx
Financial, Inc. ("Lender") to THE
COSMOPOLITAN AT XXXXX PARK, LLC, a Delaware
limited liability company ("Borrower")
Ladies & Gentlemen:
Reference is hereby made to the above-referenced Loan
evidenced by that certain Promissory Note Secured by Mortgage of
even date herewith ("Note") and secured by, among other things,
that certain Mortgage, Assignment of Rents and Security Agreement
of even date herewith ("Mortgage"). All capitalized terms used
herein and not otherwise defined shall have the same meanings
ascribed to them in the Note and/or the Mortgage.
Xxxxxxx Xxxxxx herein referred to as a "Principal" is
a manager of Borrower and shall directly or indirectly benefit
from the making of the Loan. It is in the direct financial
interest and to the benefit of Principal to execute and deliver
this letter agreement ("Agreement") to Lender so as to induce
Lender to make the Loan to and for the benefit of Borrower.
Accordingly, Principal agrees that Principal shall, together with
Xxxxxxxx, be jointly and severally personally liable to pay the
following (collectively the "Retained Liabilities"): (A) the
Principal Amount in the event of, and all damages, including but
not limited to attorneys' fees and expenses, arising from, the
breach of the provisions contained in Paragraphs 8 (inspection),
10 (financial statements), 15 (transfers of the property or
beneficial interest in Borrower; assumption), 16 (no additional
liens) and 17 (single asset entity) of the Mortgage; and (B) all
damages, including but not limited to attorneys' fees and
expenses, arising from:
(i) the collection and receipt of proceeds and income
from the Property and the other assets and obligations
securing the Loan by or for the benefit of Borrower or
Principal following an Event of Default which are not
paid to Lender or applied to the Property in the
ordinary course of business;
(ii) fraud;
(iii) material misrepresentation;
(iv) misapplication or misappropriation of funds which
come into the possession of Borrower or Principal;
(v) intentional or material waste to the Property; or
(vi) the obligations set forth in the Hazardous
Substance Indemnity Agreement from Borrower and
Principal to Lender of even date herewith, as hereafter
amended, if at all.
Principal agrees that the liability of Principal shall
be direct and immediate as a primary and not a secondary
obligation or liability, and is not conditional or contingent
upon the pursuit of any remedies against Borrower or any other
person, or against any collateral or liens held by Xxxxxx.
Principal waives any rights which it may have to require that (a)
Lender first proceed against Borrower or any other person or
entity with respect to the Retained Liabilities or (b) Lender
first proceed against any collateral held by Xxxxxx or (c) any
party to be joined in any proceeding to enforce the Retained
Liabilities.
Principal waives any rights to enforce any remedy which
Lender may have against Borrower, any rights to participate in
any security for the Loan and any rights of indemnity,
reimbursement, contribution or subrogation which Principal may
have against Borrower with respect to the Retained Liabilities.
Principal consents and agrees that Lender may at any
time, and from time to time, without notice to or further consent
from Principal and either with or without consideration do any
one or more of the following, all without affecting the
agreements contained herein or the liability of Principal for the
Retained Liabilities: (a) release Principal hereunder; (b)
surrender without substitution any property or other collateral
of any kind or nature whatsoever held by Xxxxxx, or by any
person, firm or corporation on Xxxxxx's behalf or for Xxxxxx's
account, securing the Loan or the Retained Liabilities; (c)
modify the terms of any document evidencing, securing or setting
forth the terms of the Loan; (d) grant releases, compromises and
indulgences with respect to the Loan or the Retained Liabilities
or any persons or entities now or hereafter liable thereon; or
(e) take or fail to take any action of any type whatsoever with
respect to the Loan or the Retained Liabilities.
Principal xxxxxx xxxxxx and agrees not to assert or
take advantage of any defense based upon:
(a) The incapacity, lack of authority, death or
disability of Borrower or any other person or entity;
(b) The failure of Lender to commence an action
against Borrower or to proceed against or exhaust any
security held by Xxxxxx at any time or to pursue any other
remedy whatsoever at any time;
(c) Any duty on the part of Lender to disclose to
Principal any facts Lender may now or hereafter know
regarding Borrower regardless of whether Xxxxxx has reason
to believe that any such facts materially increase the risk
beyond that which Principal intends to assume or has reason
to believe that such facts are unknown to Principal,
Principal acknowledging that it is fully responsible for
being and keeping informed of the financial condition and
affairs of Borrower;
(d) Lack of notice of default, demand of performance
or notice of acceleration to Borrower or any other party
with respect to the Loan or the Retained Liabilities;
(e) The consideration for this Agreement;
(f) Any acts or omissions of Lender which vary,
increase or decrease the risk on Principal;
(g) Any statute of limitations affecting the liability
of Principal hereunder, the liability of Borrower or any
guarantor, if any, under the Loan Documents, or the
enforcement hereof, to the extent permitted by law;
(h) The application by Borrower of the proceeds of the
Loan for purposes other than the purposes represented by
Borrower to Lender or intended or understood by Xxxxxx or
Principal;
(i) An election of remedies by Xxxxxx, including
any election to proceed against any collateral by judicial
or nonjudicial foreclosure, whether real property or
personal property, or by deed in lieu thereof, and whether
or not every aspect of any foreclosure sale is commercially
reasonable, and whether or not any such election of remedies
destroys or otherwise impairs the subrogation rights of
Principal or the rights of Principal to proceed against
Borrower or any guarantor for reimbursement, or both;
(j) Any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor
in any other aspects more burdensome than that of a
principal;
(k) Xxxxxx's election, in any proceeding instituted
under the Federal Bankruptcy Code, of the application of
Section 1111(b) (2) of the Federal Bankruptcy Code or any
successor statute; and
(l) Any borrowing or any grant of a security interest
under Section 364 of the Federal Bankruptcy Code.
PRINCIPAL, AND LENDER BY ITS ACCEPTANCE OF THIS
AGREEMENT, HEREBY WAIVES ITS (HIS) RESPECTIVE RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE
SUBJECT MATTER OF THIS AGREEMENT AND THE BUSINESS RELATIONSHIP
THAT IS BEING ESTABLISHED. THIS WAIVER IS KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY MADE BY PRINCIPAL AND BY XXXXXX,
AND PRINCIPAL ACKNOWLEDGES THAT NEITHER XXXXXX NOR ANY PERSON
ACTING ON BEHALF OF XXXXXX HAS MADE ANY REPRESENTATIONS OF FACT
TO INDUCE THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY ACTIONS
WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. PRINCIPAL AND
XXXXXX ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT PRINCIPAL AND LENDER
HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH OF THEM WILL CONTINUE TO RELY ON THIS
WAIVER IN THEIR RELATED FUTURE DEALINGS. PRINCIPAL AND XXXXXX
FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED (OR HAVE HAD
THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS
AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL.
Principal further agrees that the provisions of this
Agreement shall bind Principal's heirs, personal representatives,
successors and assigns, as the case may be.
Principal acknowledges that such Principal's execution
and delivery of this Agreement to Lender is a material inducement
to Xxxxxx's making of the Loan to Borrower.
PRINCIPAL:
__________________________________________________
Name: Xxxxxxx Xxxxxx
