EXHIBIT 10.2
LOAN AGREEMENT
AMONG
SUNDANCE CUSTOM HOMES, INC.
AND
OTHER SUBSIDIARY HOLDINGS, INC.,
AS BORROWERS,
AND
LASALLE BANK NATIONAL ASSOCIATION, a national
banking association, as Lender
TABLE OF CONTENTS
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Section Page No.
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1. RECITALS........................................................... 1
2. DEFINITIONS ....................................................... 1
3. COMMITMENT TO LEND; COMMITMENT FEE................................. 5
3.1 Maximum Loan Amount ....................................... 5
3.2 Loan Advances Evidenced by Note ........................... 5
3.3 Payment of Interest and Principal ......................... 5
3.4 Default Rate .............................................. 5
3.5 Late Charge ............................................... 5
3.6 Fees ...................................................... 5
4. LOAN DOCUMENTS..................................................... 5
5. DISBURSEMENT OF THE LOAN........................................... 8
5.1 Conditions Precedent ...................................... 8
5.2 Disbursement Requests ..................................... 8
5.3 Certifications, Representations and Warranties ............ 9
6. REPRESENTATIONS AND WARRANTIES..................................... 9
6.1 Borrower................................................... 9
6.2 Guarantors ................................................ 9
6.3 Title ..................................................... 9
6.4 Validity and Enforceability of Documents .................. 10
6.5 Litigation ................................................ 10
6.6 Utilities; Authorities .................................... 10
6.7 Solvency .................................................. 10
6.8 Financial Statements ...................................... 11
6.9 Compliance with Laws ...................................... 11
6.10 Financing Statements ...................................... 11
6.11 Event of Default .......................................... 11
6.12 Lease Agreements .......................................... 11
6.13 Responsible Property Transfer Act ......................... 12
6.14 No Defects ................................................ 12
6.15 Additional Agreements ..................................... 12
7. BORROWER'S COVENANTS............................................... 12
7.1 Compliance with Laws ...................................... 13
7.2 Inspection ................................................ 13
7.3 Mechanics'Liens ........................................... 13
7.4 Release by Lender.......................................... 13
7.5 Financial Statements; Reports ............................. 14
7.6 Affirmation of Representations and Warranties ............. 15
7.7 Title ..................................................... 15
7.8 Proceedings Affecting Property ............................ 15
7.9 Disposal and Encumbrance of Property ...................... 15
7.10 Insurance ................................................. 15
7.11 Performance of Obligations; Notice of Default ............. 16
7.12 Restrictions Affecting Borrower ........................... 16
7.13 Use of Receipts ........................................... 16
7.14 Management and Leasing Agreements; Subordination .......... 16
7.15 Additional Documents ...................................... 17
7.16 Borrower's Accounts ....................................... 17
8. LOAN EXPENSES...................................................... 17
9. LENDER'S REPRESENTATIVES........................................... 17
10. EVENTS OF DEFAULT.................................................. 17
11. REMEDIES .......................................................... 19
12. MISCELLANEOUS ..................................................... 19
12.1 Additional Indebtedness ................................... 19
12.2 Additional Acts ........................................... 19
12.3 Loan Agreement Governs .................................... 20
12.4 Additional Advances ....................................... 20
12.5 Amendment; Waiver; Approval ............................... 20
12.6 Notice .................................................... 20
12.7 Benefit; Assignment ....................................... 21
12.8 Governing Law ............................................. 21
12.9 Indemnity ................................................. 21
12.10 Headings................................................... 21
12.11 No Partnership or Joint Venture ........................... 22
12.12 Time is of the Essence .................................... 22
12.13 Invalid Provisions ........................................ 22
12.14 Offset .................................................... 22
12.15 Acts by Lender ............................................ 22
12.16 Binding Provisions ........................................ 22
12.17 Counterparts .............................................. 22
12.18 No Third Party Beneficiary ................................ 22
12.19 Publicity ................................................. 23
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12.20 JURISDICTION AND VENUE .................................... 23
12.21 WAIVER OF RIGHT TO JURY TRIAL ............................. 23
iii
LOAN AGREEMENT
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This Loan Agreement ("Agreement") is dated as of July 8th, 1999, by and
between SUNDANCE CUSTOM HOMES, INC., an Illinois corporation and OTHER
SUBSIDIARY HOLDINGS, INC. , an Illinois corporation (collectively, "Borrowers"),
and LASALLE BANK NATIONAL ASSOCIATION, a national banking association
("Lender").
1. RECITALS.
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1.1 The Borrowers are engaged in the businesses of land acquisition,
land development and the construction and sale of attached and detached
single-family homes, including condominiums, and residential loft
condominiums, and commercial development incidental thereto.
1.2 The Borrowers have requested that Lender make a loan to the
Borrowers in the maximum principal amount of $5,000,000 to provide letters
of credit and working capital and other amounts necessary for them to
operate their respective businesses. Lender has agreed to make said loan
subject to the terms and conditions set forth herein.
1.3 In consideration of the mutual agreements set forth herein and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Borrowers and Lender agree as follows:
2. DEFINITIONS. As used in this Agreement, the following terms shall
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have the following meanings:
2.1 "Applicable Laws" shall mean all laws, statutes, ordinances,
rules, regulations, judgments, decrees or orders of any state, federal or
local government or agency which are applicable to the Obligors and/or the
Property.
2.2 "Assignment of Rents" shall mean the Assignment of Rents and
Leases of even date herewith to be made by Borrowers to Lender to secure
the Loan, as the same may be hereafter amended or otherwise modified from
time to time.
2.3 "Buildings" shall mean any building located on the Land.
2.4 "Business Day" shall mean each day excluding Saturdays, Sundays
and any other day on which Lender is closed for business to the public.
2.5 "Default Rate" shall mean the Interest Rate plus five percent
(5%) per annum.
2.6 "Event of Default" shall have the meaning ascribed to it in
Section 10 of this Agreement.
2.7 "Fixed Rate" shall mean, for any Interest Period, a fixed
interest rate per annum, which rate shall be equal to the LIBOR Rate
applicable to such Interest Period plus 2.5%.
2.8 "Floating Rate" shall mean 1/2% plus the Prime Rate in effect
from time to time.
2.9 "Guarantors" shall mean Xxxxxxx Xxxxxxxxx and Sundance Homes,
Inc., an Illinois corporation.
2.10 "Guaranty" shall mean the guaranties to be made by the
Guarantors in favor of Lender, guaranteeing the repayment of the Loan and
performance of the Borrowers' other obligations under the Loan Documents,
as the same may be hereafter amended or otherwise modified from time to
time.
2.11 "Hazardous Materials" shall mean and include any and all
hazardous, toxic or dangerous substances, wastes and materials and other
pollutants and contaminants as defined or described in any or all
applicable federal, state or local statutes, laws, ordinances, codes,
rules, regulations, orders or decrees now or hereafter regulating, relating
to or imposing liability or standards of conduct with respect to
environmental matters, including, without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. (S)
9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C.
(S)1801 et seq.), the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976, as amended by the Solid and
Hazardous Waste Amendments of 1984 (42 U.S.C. (S)6901 et seq.), the Federal
Water Pollution Control Act, as amended by the Clean Water Act of 1977 and
the Water Quality Act of 1987 (33 U.S.C. (S)1251 et seq.), the Toxic
Substances Control Act of 1976 (15 U.S.C. (S)2601 et seq.), the Emergency
Planning and Community Right-to-Know Act of 1986 (42 U.S.C. (S)11001 et
seq.), the Clear Air Act of 1966, as amended (42 U.S.C. (S)7401 et seq.),
the National Environmental Policy Act of 1970 (42 U.S.C. (S)4321 et seq.),
the Rivers and Harbours Act of 1899 (33 U.S.C. (S)401 et seq.), the
Endangered Species Act of 1973, as amended (16 U.S.C. (S)1531 et seq.), the
Safe Drinking Water Act of 1974, as amended (42 U.S.C. (S)300(f) et seq.),
and the Occupational Safety and Health Act of 1970, as amended (29 U.S.C.
(S)651 et seq.) and all rules, regulations and guidance documents
promulgated or published thereunder, all as amended or hereinafter amended.
Without intending to limit the scope or breadth of the foregoing
definition, the term Hazardous Materials shall include asbestos, urea
formaldehyde, polychlorinated biphenyls, crude oil, radioactive materials
and underground storage tanks.
2.12 "Improvements" shall mean the Buildings and other structures and
all paving, lighting, landscaping, utility lines and equipment and all
other site improvements and all other improvements on the Land or hereafter
constructed thereon.
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2.13 "Indemnity Agreement" shall mean the Environmental Indemnity
Agreement of even date herewith made by Borrowers and the Guarantors in
favor of Lender, as the same may be hereafter amended or otherwise modified
from time to time.
2.14 "Interest Period" shall have the meaning ascribed to such term
in Section 3.8 below.
2.15 "Interest Rate Determination Date" shall mean the date on which
Lender determines the Fixed Rate applicable to a requested LIBOR Loan or
the continuation thereof. The Interest Rate Determination Date shall be
the second Business Day prior to the first day of the Interest Period
applicable to such LIBOR Loan.
2.16 "Interest Rate" shall mean either the Fixed Rate or the Floating
Rate, as applicable.
2.17 "Land" shall mean the real property legally described on Exhibit
A attached hereto.
2.18 "Letter of Credit" shall have the meaning given to such term in
Section 3.7 below.
2.19 "Letter of Credit Liability" means, at any time, the sum of (i)
the aggregate amount then available to be drawn or that may thereafter be
drawn under then outstanding Letters of Credit, and (ii) all amounts that
have theretofore been drawn on a Letter of Credit and that have not been
reimbursed or repaid to Lender.
2.20 "LIBOR Loan" shall mean each portion of the Loan that is bearing
interest at an applicable Fixed Rate.
2.21 "LIBOR Rate" shall mean,with respect to any LIBOR Loan for the
applicable Interest Period, the per annum rate of interest equal to the
quotient obtained by dividing (i) the rate of interest determined by Lender
to be the average per annum rate at which deposits in United States dollars
are generally offered in the London Interbank Market at 11:00 a.m. London,
England, time, two Business Days before the first day of such Interest
Period, for a period equal to such Interest Period and in the amount of
such LIBOR Loan, by (ii) the difference between 100% and any applicable
reserve requirements (rounded upward to the nearest whole multiple of
1/100th of one percent per annum (including, without limitation, any
applicable maximum reserve requirements for "Eurocurrency Liabilities"
under Regulation D of the Board of Governors of the Federal Reserve System
(or any similar reserves under any successor regulations).
2.22 "LIBOR Rate Taxes" shall have the meaning ascribed to such term
in Section 3.8 below.
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2.23 "Loan" shall mean the loan from Lender to Borrowers in an amount
not to exceed $5,000,000 in the aggregate which is to be disbursed pursuant
to this Agreement and which loan shall otherwise be governed by the
provisions hereof.
2.24 "Loan Advance" shall mean a disbursement of all or any portion
of the Loan.
2.25 "Loan Documents" shall mean this Agreement, the Assignment of
Rents, the Mortgage, the Note, the Security Agreement, the Guaranty, the
Indemnity Agreement, and every other document now or hereafter evidencing,
securing or otherwise executed in conjunction with the Loan, together with
all amendments and modifications thereof.
2.26 "Loan Expenses" shall mean the expenses, charges, costs
(including both hard costs and soft costs) and fees relating to the making,
administration, negotiation, documentation or any other aspect of the Loan,
including, without limitation, Lender's reasonable attorneys' fees and
costs in connection with the negotiation, documentation and enforcement of
the Loan, all recording fees and charges, title insurance charges and
premiums, escrow fees, fees of insurance consultants, costs of surveys and
of other bonds required by the Title Company in connection with clearing
title to the Real Property or the issuance of title reports, binders,
policies and the like, and all other costs, expenses, charges and fees
referred to in or necessitated by the terms of this Agreement or any of the
other Loan Documents.
2.27 "Material Adverse Effect" means that any one or more of the
following could occur (i) a material adverse effect on the business
operations, properties, assets or condition (financial or otherwise) of the
Borrowers individually or taken as a whole, (ii) any event or condition
which could materially adversely affect any Borrower=s ability to perform
under the terms of any of the Loan Documents, or (iii) any material adverse
effect on the ability of Lender to enforce the terms of any of the Loan
Documents.
2.28 "Maturity Date" shall mean July 7, 2001.
2.29 "Mortgage" shall mean the Mortgage of even date herewith
encumbering the Real Property to be made by Borrowers to Lender to secure
the Loan, as the same may be hereafter amended or otherwise modified from
time to time.
2.30 "Note" shall mean the note evidencing the Loan to be made by
Borrowers payable to the order of Lender in the original principal amount
of $5,000,000, as the same may be hereafter amended or otherwise modified
from time to time.
2.31 "Obligations" means all Loans, advances, debts, reimbursement
obligations, liabilities, and obligations, for monetary amounts (whether or
not such
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amounts are liquidated or determinable) owing at any time by one or more of
the Borrowers to Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced
by any note, agreement or other instrument, arising under any of the Loan
Documents. This term includes, without limitation, all interest, prepayment
fees, charges, expenses, attorneys' fees and any other sum chargeable to
one or more of the Borrowers under any of the Loan Documents.
2.32 "Obligors" shall mean Borrowers and the Guarantors
2.33 "Official Body" means any government or political subdivision or
any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic.
2.34 "Permitted Exceptions" shall mean the exceptions to the title of
the Real Property set forth in the Title Policies and reasonably approved
by Lender .
2.35 "Person" shall mean any individual, firm, corporation, business
enterprise, trust, association, joint venture, partnership, governmental
body or other entity, whether acting in an individual, fiduciary or other
capacity.
2.36 "Personal Property" shall mean and include any and all
furniture, furnishings, appliances, equipment and all fixtures (to the
extent such fixtures are attached in a manner so as not to be deemed to be
part of the Real Property) to be located at the Land which will be used or
usable in connection with the ownership, development or operation of the
Real Property and which will be owned, leased or otherwise possessed by
Borrowers or any of their affiliates.
2.37 "Prime Rate" shall mean the per annum rate of interest announced
or published publicly from time to time by Lender at its principal place of
business in Chicago, Illinois, as its prime or equivalent rate of interest,
which rate is not necessarily the lowest rate of interest charged by Lender
with respect to commercial loans.
2.38 "Principal Balance" shall mean the unpaid principal balance of
the Loan outstanding from time to time.
2.39 "Property" shall mean the Real Property and the Personal
Property and all other tangible and intangible assets benefiting or
otherwise appertaining to the Real Property, including, without limitation,
all of the collateral for the Loan described in the Loan Documents.
2.40 "Real Property" shall mean the Land, the Improvements and all
easements and appurtenants thereto.
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2.41 "Security Agreement" shall mean the security agreement
encumbering the Personal Property to be made by the Borrowers to Lender to
secure the Loan, as the same may be hereafter amended or otherwise modified
from time to time..
2.42 "Survey" shall mean the plat of surveys of the Real Property as
described in Section 4.4 below.
2.43 "Title Company" shall mean Ticor Title Insurance Company.
2.44 "Title Policies" shall mean the title insurance policies
described in Section 4.4 below.
2.45 "Unit" means an attached or detached single family residential
dwelling, including a townhome or condominium or loft unit, that is a part
of the Real Property.
2.46 "Unmatured Default" shall mean an event or circumstance that
with the giving of notice, the passage of time, or both, would constitute
an Event of Default.
3. COMMITMENT TO LEND; COMMITMENT FEE.
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3.1 Maximum Loan Amount. Lender agrees to lend to Borrowers, and
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Borrowers agree to borrow from Lender, an amount not to exceed $5,000,000
in the aggregate for the purposes, upon the terms and subject to the
conditions contained in this Agreement. Notwithstanding anything contained
in this Article to the contrary, Loan Advances shall be limited to such
amounts as Borrowers are eligible to receive pursuant to, and upon
compliance with, the conditions of Article 5 hereof. Borrowers may prepay
all or any part of the Loan at any time and from time to time upon five
days prior written notice to Lender without cost or penalty. Borrowers
shall not be entitled to reborrow portions of the Loan that are repaid or
prepaid pursuant to.
3.2 Loan Advances Evidenced by Note. All Loan Advances hereunder
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shall be evidenced by the Note, which shall be executed and delivered by
Borrowers simultaneously with the execution of this Agreement.
3.3 Partial Releases/Interest Rate and Payment of Interest and
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Principal.
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(a) Notwithstanding anything contained herein to the contrary,
the Borrowers shall have the right to enter into and perform sales
contracts with creditworthy third party purchasers of the Units on a
form contract submitted to and approved in writing by Lender, provided
that (i) no Unmatured Default or Event of Default then exists, and
(ii) the gross sales price for the Unit being sold is not less than
95% of the minimum sales price therefor previously agreed upon in
writing by Lender. The Borrowers shall deliver to Lender a copy of
each fully
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signed contract within five days after Lender's request therefor.
Concurrently with the closing of the sale of each Unit, Borrowers
shall pay to Lender an amount equal to the greater of (i) fifty two
percent (52%) of the gross sales price of such Unit or (ii) fifty two
percent (52%) of the appraised value of such Unit as determined by
Lender, whereupon Lender will issue a partial release of the lien of
the Loan Documents covering such Unit.
(b) Except as set forth to the contrary in Section 3.8 below,
the principal balance of the Loan shall bear interest at the Floating
Rate. Commencing on August 1, 1999, and on the first day of each month
thereafter through and including the month in which the Maturity Date
occurs, installments of accrued and unpaid interest shall be due and
payable. The unpaid principal balance of the Loan, if not sooner
declared to be due in accordance with the terms of the Loan Documents,
together with all accrued and unpaid interest thereon and any other
amount due Lender pursuant to this Agreement and the Loan Documents,
shall be due and payable in full on the Maturity Date.
3.4 Default Rate. At any time after the Maturity Date or otherwise
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when an Event of Default exists under this Agreement or any of the other
Loan Documents, the Principal Balance and any other amounts then owing by
Borrowers to Lender shall bear interest at the Default Rate.
3.5 Late Charge. If any payment of interest or principal due under
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the Note is not made within five days after such payment is due, then, in
addition to the payment of the amount so due, Borrowers shall pay to Lender
a "late charge" of five cents for each whole dollar so overdue to defray
part of the cost of collecting and handling such late payment.
3.6 Fees. Lender has fully earned a non-refundable loan and
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administration fee in the amount of $50,000, and, concurrently with the
execution of this Agreement, the unpaid balance of such fee shall be due
and payable by Borrowers, together with an additional $500 closing charges
fee which shall be used by Lender to pay certain costs incurred in
connection with the closing of the Loan.
3.7 Letters of Credit. Provided that no Event of Default or
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Unmatured Default then exists, Lender agrees, subject to the following
additional conditions, to issue from time to time one or more Letters of
Credit on Lender's standard form and otherwise in form and substance
acceptable to Lender in an aggregate amount not to exceed $850,000;
provided, however, that prior to and as a condition to Lender being
obligated to issue any Letter of Credit, Borrowers shall pay to Lender an
issuance fee equal to 1% of the amount thereof and such issuance fee shall
be deemed to be fully earned upon the payment thereof. Any amounts
disbursed by Lender under a Letter of Credit at any time and from time to
time shall be deemed disbursements of proceeds of the Loan and shall
7
be due and payable by Borrowers to Lender upon written demand from Lender,
together with interest thereon until paid at the Default Rate. If any
Letter of Credit is outstanding on the Business Day immediately preceding
the Maturity Date of the Loan (or if an amount has then been drawn on a
Letter of Credit which has not been reimbursed or repaid), Lender may
demand delivery of cash collateral in an amount equal to the then
outstanding Letter of Credit Liability, and such cash collateral may be
retained by Lender until such time as the Letter of Credit Liability is
reduced to $0. Lender may apply such cash collateral to the payment of any
amounts thereafter drawn on the Letters of Credit which have not been
reimbursed or repaid to Lender by Borrowers. The failure to deliver such
cash collateral upon demand shall constitute an immediate Event of Default
under the Loan Documents. So long as any Letter of Credit is outstanding,
Lender shall not be required to issue a full release of any of the Loan
Documents. Notwithstanding anything contained herein to the contrary, if
and to the extent any outstanding Letters of Credit are reduced or released
without having been drawn upon, Borrowers shall have the right to borrow
the amount of any such reduction or release, provided that the principal
amount of the Loan outstanding at such time is not greater than 52% of the
appraised value of the Real Property then subject to the lien of the Loan
Documents, as determined by Lender.
3.8 LIBOR Option. Notwithstanding anything to the contrary set forth
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in the Amended Revolving Note, Borrowers shall have the option to elect to
have all or a portion of the Loan bear interest at the Fixed Rate, in
accordance with the terms and conditions hereof.
(a) Conversion or Continuation.
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(i) Subject to the provisions of Subparagraphs 3.8 (c) and
3.8 (d), Borrowers shall have the option (i) to request that a Loan
Advance be made at the Fixed Rate rather than the Floating Rate, (ii)
to convert at any time the interest rate charged on all or any part of
the Principal Balance of the Loan from the Floating Rate to a Fixed
Rate; or (iii) upon the expiration of any Interest Period applicable
to a LIBOR Loan, to continue all or any portion of the same as a LIBOR
Loan, and the succeeding Interest Period of such continued LIBOR Loan
shall commence on the expiration date of the Interest Period
applicable thereto; provided, that no portion of the outstanding Loan
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may be continued as, or be converted into, a LIBOR Loan when any Event
of Default has occurred and is continuing. Any Loan Advance to be
made at a Fixed Rate and any partial conversion or continuation of the
Loan under this Section shall be in a minimum amount of $50,000, and
in integral multiples of $50,000 in excess of that amount.
(ii) If Borrowers request that a Loan Advance bear interest
at the Fixed Rate or if Borrowers desire to convert all or a portion
of the Loan to a LIBOR Loan or to continue all or any portion of a
LIBOR Loan as the same,
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Borrowers shall notify Lender no later than 10:00 a.m. (Chicago time)
on the second Business Day prior to the aforementioned request or the
proposed conversion or continuation date. Each notice shall specify
(i) the proposed Loan Advance disbursement date or the conversion or
continuation date (which shall be a Business Day), as applicable, (ii)
the principal amount of the applicable Loan Advance or the principal
amount of the Loan to be converted to or continued as a LIBOR Loan, as
applicable, and (iii) the requested Interest Period. In lieu of
delivering the above-described notice, Borrowers may give Lender
notice by telephone of any proposed LIBOR Loan or the conversion or
continuation of a LIBOR Loan by the time required under this Section,
provided that such notice is confirmed in writing by delivery or fax
to Lender of such notice in no event later than 4:00 p.m. (Chicago
time) on the date of such notice.
(iii) Notice of any proposed LIBOR Loan or of conversion to
or continuation of a LIBOR Loan (or notice by telephone in lieu
thereof) shall be irrevocable and Borrowers shall be bound in
accordance with the terms of such notice.
(iv) If notice of the continuation of a LIBOR Loan is not
delivered by Borrowers in a timely manner, the amount of such LIBOR
Loan shall bear interest at the Floating Rate as of the termination
date of the applicable Interest Period and shall no longer bear
interest at the Fixed Rate unless it is thereafter converted to a new
LIBOR Loan in the manner described above.
(b) Interest Periods. By giving notice as required hereunder,
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Borrowers shall have the option, subject to the other provisions of
this Section, to specify an interest period equal to or less than
ninety (90) days (each an "Interest Period") during which all or a
portion of the Loan shall bear (or, if already a LIBOR Loan, continue
to bear) interest at the LIBOR Rate. The determination of Interest
Periods shall be subject to the following provisions:
(i) In the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the day on
which the immediately preceding Interest Period expires;
(ii) If any Interest Period would otherwise expire on a day
which is not a Business Day, the Interest Period shall be extended to
expire on the next succeeding Business Day (unless the next succeeding
Business Day is in the next calendar month, in which event the
Interest Period shall expire on the immediately preceding Business
Day);
(iii) Borrowers may not select an Interest Period which
terminates later than the maturity date of the Loan;
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(iv) There shall be no more than five separate Interest
Periods (and, therefore, no more than five separated LIBOR Loans) in
effect at any one time.
(c) Special Provisions Governing LIBOR Loans.
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(i) Determination of Interest Rate. On the Interest Rate
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Determination Date, Lender shall determine (which determination shall,
absent manifest error, be presumptively correct) the Fixed Rate that
shall apply to the requested LIBOR Loan and shall promptly give notice
thereof to Borrowers. If on any Interest Rate Determination Date
Lender is unable to obtain the applicable LIBOR Rate quotations,
Lender shall give Borrowers prompt notice thereof and the LIBOR Loan
requested shall continue to bear interest (or, in the case of a
requested continuation of a LIBOR Loan, shall commence bearing
interest at the end of the then current Interest Period therefor) at
the Floating Rate.
(ii) Interest Rate Unascertainable, Inadequate or Unfair.
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If, with respect to any Interest Period, (i) any change occurs in any
applicable law or governmental rule, regulation or order (or any
interpretation thereof and including the introduction of any new law
or governmental rule, legislation or order) affecting the interbank
Eurodollar market for such Interest Period, or (ii) other
circumstances affecting the interbank Eurodollar market for such
Interest Period results in the then applicable Fixed Rates not
adequately reflecting the cost to Lender of making or funding the
LIBOR Loans, Lender shall give notice thereof to Borrowers, whereupon
until Lender has determined that the circumstances giving rise to such
inadequacy no longer exist, (A) the right of Borrowers to elect to
have any portion of the Loan bear interest based upon the Fixed Rate
shall be suspended for such Interest Period, and (B) each outstanding
LIBOR Loan shall bear interest at the Floating Rate commencing on the
last day of the then current Interest Period therefor, notwithstanding
any prior election by Borrowers to the contrary.
(d) Illegality. In the event that on any date Lender shall have
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reasonably determined that the making or continuation of any LIBOR
Loan has become unlawful by compliance by Lender in good faith with
any law, governmental rule, regulation or order of any governmental
body or authority, then Lender shall promptly give notice to Borrowers
of that determination. Upon the giving of such notice, Borrowers'
right to request of Lender and Lender's obligation to make LIBOR Loans
shall be immediately suspended to the extent specified in such notice,
and if any LIBOR Loans are then outstanding, each such LIBOR Loan
shall immediately commence bearing interest at the Floating Rate. If
Lender determines at any time following its giving of the
aforementioned notice that Lender may lawfully make LIBOR Loans of the
type(s) referred to in
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such notice, Lender shall promptly give notice to Borrowers of such
determination, whereupon Borrowers' right to request of Lender and
Lender's obligation to make LIBOR Loans of such type(s) shall be
restored..
(e) Compensation. Borrowers shall compensate Lender, within
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three Business Days following Borrowers' receipt of the written
statement described below, for all losses, expenses and liabilities
(including, without limitation, any loss or expense incurred by reason
of liquidation or reemployment of deposits or other funds acquired by
Lender to fund or maintain Lender's LIBOR Loans to Borrowers) which
Lender may sustain in connection with the funding or maintenance of
LIBOR Loans, including, without limitation, expenses and liabilities
incurred (i) if such LIBOR Loans are not made when requested due to
Borrowers' actions or inactions, (ii) if any prepayment of any LIBOR
Loan occurs for any reason on a date which is not the last day of the
applicable Interest Period, (iii) as a consequence of any required
conversion of the interest rate applicable to a LIBOR Loan to a
Floating Rate, or (iv) as a consequence of any other failure by
Borrowers to repay the Loan when required. Lender shall promptly
deliver to Borrowers a written statement as to such losses, expenses
and liabilities, which statement shall be rebuttably presumed correct.
(f) LIBOR Rate Taxes. Borrowers agrees that:
----------------
(i) Additional Payments. Borrowers shall pay, prior to the
-------------------
date on which penalties attach thereto, all present and future stamp
and other taxes, levies, or costs and charges whatsoever imposed,
assessed, levied or collected on or in respect of the Loan solely as a
result of the interest rate being determined by reference to the LIBOR
Rate or any payments of principal, interest or other amounts made on
or in respect of a Loan made to Borrowers when the interest rate is
determined by reference to the LIBOR Rate (all such taxes, levies,
costs and charges being herein collectively called "LIBOR Rate
Taxes"); provided however, that LIBOR Rate Taxes shall not include
-------- -------
income or franchise taxes imposed by any jurisdiction (except that
Borrowers shall be liable for the payment of the amount of any
additional net income or franchise taxes attributable to payments made
by Borrowers pursuant to this Section).
(ii) Indemnity. Borrowers shall indemnify Lender against,
---------
and reimburse Lender on demand for, any LIBOR Rate Taxes paid by
Lender. Lender shall provide Borrowers with appropriate receipts for
any payments or reimbursements made by Borrowers pursuant to this
Section.
4. LOAN DOCUMENTS. Prior to the disbursement of the Loan, each Borrower
--------------
shall execute and/or deliver to Lender those of the following documents and
other items required
11
to be executed and/or delivered by such Borrower, and shall cause to be executed
and/or delivered to Lender those of the following documents and other items
required to be executed and/or delivered by others, all of which documents and
other items shall contain such provisions as shall be required to conform to
this Agreement and otherwise shall be satisfactory in form and substance to
Lender:
4.1 The Loan Documents.
4.2 UCC financing statements perfecting the security interests
created by the Security Agreement.
4.3 Such insurance policies and certificates (with premiums prepaid)
evidencing builder's risk insurance, all-risk, fire and extended coverage,
hazard and comprehensive liability insurance, including contractual
liability, workmen's compensation insurance, rental loss insurance for not
less than one year, and such other insurance as Lender reasonably requires
covering the Property, in such form, with such endorsements, in such
amounts, with deductibles and with such carriers as shall be acceptable to
Lender, and naming Lender as an additional insured party on all liability
policies and as mortgagee/additional loss payee on the builder's risk and
other property damage policies and containing a prohibition against
cancellation for nonpayment of premiums or any other reason or modification
without thirty days prior written notice to Lender. Any provision of this
Section to the contrary notwithstanding, all insurance policies required to
be carried under this Agreement shall provide expressly that they shall not
be rendered invalid by a waiver of the right of subrogation by any insured
and that the insurer shall have no right to be subrogated to Lender.
Borrowers shall deliver (or cause to be delivered) to Lender either (i) an
original of each such insurance policy, or (ii) a copy of each such policy
certified by the issuing agent as being a true, correct and complete copy
of the original.
4.4 Surveys of the Real Property (the "Surveys") in form and
substance reasonably acceptable to Lender.
4.5 ALTA Loan Policies of Title Insurance (the "Title Policies")
issued by the Title Company in the full amount of the Note insuring that
the Mortgage will be a first priority lien upon the fee simple title to the
Real Property to the extent of advances made by Lender from time to time
under this Agreement, subject to no liens, claims, exceptions or
encumbrances except the Permitted Exceptions and containing the following
endorsements:
(a) ALTA Form 3.0 Zoning Endorsement;
(b) Comprehensive Endorsement No. 1 (ALTA Form 9)
12
(c) Access Endorsement;
(d) Survey Endorsement;
(e) Contiguity Endorsement, if applicable;
(f) Restrictions Endorsement No. 1, if applicable;
(g) Tie-In Endorsement;
(h) Condominium (or PUD) Endorsement No. 4 (or 5), if
applicable;
(i) Letter of Credit Endorsement;
(j) Mechanics' Lien Endorsement;
(k) Utility Facility Endorsement;
(l) Endorsement deleting the creditors' rights exception;
(m) Usury Endorsement; and
(n) Such additional endorsements as may be reasonably required
by Lender based upon its review of the Title Policies and Surveys.
4.6 Copies of such documents, if any, as Borrowers have provided the
Title Company in connection with the issuance and underwriting of the Title
Policy.
4.7 Copies of all recorded documents described in the Title Policy.
4.8 Current Uniform Commercial Code, federal and state tax lien and
judgment searches, pending suit and litigation searches and bankruptcy
court filings searches covering each Obligor and disclosing no matters
objectionable to Lender.
4.9 Opinion letter from legal counsel for Borrowers and the
Guarantors (which counsel must be approved by Lender with respect to the
issuance of such opinion) opining to the authority of said parties to
execute, deliver and perform their respective obligations under the Loan
Documents, to the validity and binding effect of the Loan Documents and to
such other matters as Lender and its counsel shall require.
4.10 Evidence that (i) no portion of the Real Property is located in
an area designated by the Secretary of Housing and Urban Development as
having special flood hazards, or if any portion of the Real Property is so
located, evidence that flood insurance
13
is in effect; and (ii) no portion of the Real Property is located in a
federally, state or locally designated wetland or other type of government
protected area.
4.11 Certified copies of the By-Laws and Articles of Incorporation of
each Borrower, together with all amendments thereto, and such resolutions
and other documents as Lender deems appropriate evidencing the authority of
each Borrower and the Guarantors to execute and deliver the Loan Documents
to which such Persons are a party and to perform the obligations
contemplated hereby and thereby.
4.12 Certified copies of all service contracts, development
agreements and other agreements affecting the use, development or operation
of the Property, if any.
4.13 Evidence that the environmental condition of the Property is
satisfactory to Lender. Such evidence shall include, but shall not be
limited to, a Phase I Environmental Audit certified to Borrowers and Lender
and setting forth an asbestos evaluation and other environmental
investigations of the Property and the areas surrounding the Property.
Such testing and investigation shall be performed by an environmental
professional acceptable to Lender in a manner satisfactory to Lender.
4.14 Evidence that, as of the date of the initial Loan Advance, there
has been no material adverse change in the financial or other projections
for the Property, the physical condition of the Property or the financial
condition of the Guarantors since the date of the most recent financial
statements or projections delivered to Lender or the most recent
inspections of the condition of the Property made by Lender, as the case
may be.
4.15 Such other assignments, certificates, opinions and other
documents, instruments and information affecting or relating to Lender's
interest in the Property or the use, operation or development of the
Property as Lender may reasonably require.
5. DISBURSEMENT OF THE LOAN.
------------------------
5.1 Conditions Precedent. In addition to the other conditions set
--------------------
forth herein, the obligation of Lender to make the initial and any
subsequent disbursement of the Loan under this Agreement shall be
conditioned upon and subject to the payment to Lender of all loan fees then
owing from Borrowers to Lender and to satisfaction of all of the following
conditions:
(a) All representations and warranties contained in this
Agreement and in the other Loan Documents shall be true in all
material respects on and as of the date of such disbursement.
14
(b) Each Borrower shall have performed all of its obligations
under all Loan Documents which are required to be performed on or
prior to the date of such disbursement.
(c) To the extent that any disbursement is to pay for any item
covered by a Letter of Credit, Lender shall have received a
certificate from a duly authorized representative of the beneficiary
of such Letter of Credit approving the request for the disbursement
and amending the Letters of Credit to decrease the amount thereof by
the amount of such disbursement.
(d) No Event of Default shall have occurred that has not been
waived in writing by Lender, and no Unmatured Default shall then
exist.
5.2 Disbursement Requests.
---------------------
(a) Borrowers shall request and Lender shall be required to make
disbursement of the Loan not more frequently than once each calendar
month.
(b) Notwithstanding anything contained herein to the contrary,
Lender shall not be required to make any disbursement of the Loan if
the aggregate amount of the Loan previously disbursed by Lender,
together with the disbursement of the Loan requested by Borrowers and
the then outstanding Letter of Credit Liability, would exceed
$5,000,000.
5.3 Certifications, Representations and Warranties. Each request for
----------------------------------------------
disbursement by Borrowers shall constitute (a) Borrowers' certification
that the representations and warranties contained in Article 6 below are
true and correct in all material respects as of the date of such request,
and (b) Borrowers' certification that Borrowers are in compliance with the
conditions contained in this Article 5.
6. REPRESENTATIONS AND WARRANTIES. In order to induce Lender to execute
------------------------------
this Agreement and to make the Loan, each Borrower represents and warrants to
Lender as follows:
6.1 Borrower. Each Borrower is a corporation duly organized, validly
--------
existing and in good standing under the laws of its jurisdiction of
incorporation and has full corporate power to own, operate and lease its
properties and to carry on its business as now conducted. Each Borrower is
duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is required for
the conduct of such Person's business.
15
6.2 Guarantors. Guarantors have full power and authority to execute
----------
the Loan Documents to which they are a party.
6.3 Title. Each Borrower has good, indefeasible and merchantable
-----
title to and ownership, free and clear of all liens other than Permitted
Encumbrances, of all the assets and properties of every kind and nature
(tangible and intangible, real and personal) required to carry on its
business as presently conducted.
6.4 Corporate Power; Authorization. The execution and delivery by
------------------------------
each Borrower of the Loan Documents (to the extent they are parties
thereto), and the performance of the obligations required thereby, (i) are
within such Person's corporate power; (ii) have been duly authorized by all
necessary or proper corporate action; (iii) are not in contravention of any
provision of such Person's respective certificates or articles of
incorporation or by-laws; (iv) will not, to the best knowledge of the
Borrowers, violate any law or regulation, or any order or decree of any
court or governmental instrumentality; (v) will not conflict with or result
in the breach or termination of, constitute a default under or accelerate
any performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which any Borrower or any subsidiary of
any Borrower is a party or by which any Borrower or any subsidiary of any
Borrower or any of their property is bound; (vi) will not result in the
creation or imposition of any lien upon any of the property of any
Borrower; and (vii) do not require the consent or approval of any Person.
6.5 Execution and Binding Effect. This Agreement and the other Loan
----------------------------
Documents have been duly and validly executed and delivered by each
Borrower and constitute the legal, valid and binding obligation of the
Borrowers, enforceable in accordance with the terms hereof and thereof,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights and
except as may be limited by the exercise of judicial discretion in applying
general principles of equity (regardless of whether considered in a
proceeding in equity or at law).
6.6 Authorizations and Filings. No authorization, consent, approval,
--------------------------
license, exemption or other action by, and no registration, qualification,
designation, declaration or filing with, any Official Body is or will be
necessary in connection with the execution, performance and delivery of
this Agreement, the Notes, any other Loan Document, consummation of the
transactions herein or therein contemplated, performance of or compliance
with the terms and conditions hereof or thereof or to ensure the legality,
validity, and enforceability hereof or thereof.
6.7 Litigation. There is not any condition, event or circumstance
----------
existing, or any litigation, arbitration, governmental or administrative
proceeding, action, examination, claims or demand pending or, to the best
of each Borrower's knowledge
16
after due inquiry, threatened affecting any Borrower or the Guarantors or
the Property, or involving the validity or enforceability of the Loan
Documents or involving any risk of a judgment or liability which, if
satisfied, would have an adverse effect on the financial condition,
business or properties of each Borrower, the Guarantors or the priority of
the lien of the Mortgage, or which would prevent any Borrower or the
Guarantors from complying with or performing his or its obligations under
this Agreement, the Note, the Guaranty or any of the other Loan Documents
within the time limits set forth therein for such compliance or performance
and no basis for any such matter exists.
6.8 Utilities; Authorities. All utilities necessary for use,
----------------------
operation and occupancy of the Property (including, without limitation,
water, storm sewer, sanitary sewer and drainage, electric, gas and
telephone facilities) are available at the boundaries of the Land (or in
the streets adjoining the Land), and all requirements for the use of such
utilities have been fulfilled. All building, zoning, safety, disabled
persons, health, fire, water district, sewerage and environmental
protection agency permits and other licenses and permits which are required
by any governmental authority for the use, occupancy and operation of the
Property have been obtained by or furnished to the respective Borrower and
are in full force and effect or will be obtained by and maintained in full
force and effect by such Borrower when and as required by any governmental
authority.
6.9 Solvency. Each Obligor is solvent and able to pay such Obligor's
--------
debts as such debts become due, and has capital sufficient to carry on such
Obligor's present business transactions. The value of each Obligor's
property, at a fair valuation, is greater than the sum of such Obligor's
debts. No Obligor is bankrupt or insolvent, nor has any Obligor made an
assignment for the benefit of such Obligor's creditors, nor has there been
a trustee or receiver appointed for the benefit of such Obligor's
creditors, nor has there been any bankruptcy, reorganization or insolvency
proceedings instituted by or against any Obligor, nor will any Obligor be
rendered insolvent by such Obligor's execution, delivery or performance of
the Loan Documents or by the transactions contemplated thereunder.
6.10 Financial Statements. All financial statements submitted to
--------------------
Lender relating to the Borrowers, the Guarantors and the Property are true,
complete and correct, and have been prepared in accordance with sound
accounting principles consistently applied and fairly present the financial
condition of the Person to which they pertain and the other information
therein described and do not contain any untrue statement of a material
fact or omit to state a fact material to the financial statement submitted
or this Agreement. No material adverse change has occurred in the
financial condition of each Borrower, the Guarantors or the Property since
the dates of each such financial statements.
6.11 Compliance with Laws. The use, occupancy and operation of the
--------------------
Property for its intended purposes is not in violatation any Applicable
Laws, any
17
contractual arrangements with third parties or any covenants, conditions,
easements, rights of way or restrictions of record. Neither Borrowers nor
any agent thereof has received any notice, written or otherwise, alleging
any such violation, which violation has not previously been cured. The
Property is in full compliance and conformity with all zoning requirements,
including without limitation, those relating to setbacks, height, parking,
floor area ratio, fire lanes and percentage of land coverage, and will not
be a non-conforming or special use. No right to any off-site facilities
will be necessary to insure compliance by the Property with all Applicable
Laws.
6.12 Financing Statements. There are no UCC financing statements in
--------------------
effect other than those to be filed and/or recorded by Lender which name
Borrowers as debtor and pertaining to any rights in any of the Personal
Property.
6.13 Lease Agreements. Each Borrower has delivered to Lender true,
----------------
complete and correct copies of each lease and all amendments thereto
(collectively, the "Leases") and a certified rent roll, in effect as of the
date hereof. The Leases are in full force and effect, unamended. The
tenants under each of the Leases are legally required to pay all sums and
perform all obligations set forth in the Leases, without concessions,
abatements or offsets. None of the tenants under the Leases have asserted
any offsets, defenses or claims against rent payable by them or other
performance or obligations otherwise due from them under any of the Leases.
None of the tenants under the Leases are in default in the payment of any
sums or to any Borrower's knowledge, in the performance of any other
obligations required of them under their Leases, nor does any Unmatured
Default then exist. No Borrower is in default in the performance of any of
its obligations under the Leases. Each tenant under the Leases is in full
and complete possession of the premises demised under the Lease, such
possession having been delivered by a Borrower pursuant to the Lease and
having been accepted by the tenant. The improvements to any premises that
any Borrower is required to furnish under a Lease have been completed in
all respects in accordance with the requirements under the Leases, and the
premises demised under each Lease are open for the use of the tenant, its
customers, employees and invitees. All contributions required to be paid
by any Borrower to any tenant in connection with improvements required
under any Lease have been paid in full. All duties or obligations of any
Borrower required under any Lease which were an inducement to such tenant
to enter into such Lease have been fully performed. No tenant is entitled
to any further rent credit, rental abatement, rebate, allowance or other
inducement or concession under or with respect to any Lease. Each Lease
constitutes the entire rental agreement between the appropriate Borrower
and said tenant with respect to the premises demised under said lease and
no Lease has been amended, modified, supplemented or superseded, except as
disclosed to Lender. No rent under any Lease has been prepaid, except the
current month's rent. Except as expressly set forth in the Leases, no
tenant has any outstanding options or rights of first refusal to purchase
all or any portion of the Property or to purchase or lease any other part
of the Property, nor does any tenant have any options or rights to
terminate any Lease. To the best
18
knowledge of each Borrower, no actions, whether voluntary or involuntary,
are pending against any tenant or any guarantor of any Lease under any
bankruptcy, insolvency or similar laws of the United States or any state
thereof. Each tenant is current with respect to, and is paying the full
rent and other charges stipulated in the Leases (including, without
limitation, required operating and tax payments).
6.14 Responsible Property Transfer Act. There are no facilities on
---------------------------------
the Real Estate that are subject to reporting under (S)312 of the federal
Emergency Planning and Community Right-To-Know Act of 1986, 43 U.S.C.
(S)11022, and federal regulations promulgated thereunder. The Real Estate
does not contain any underground storage tanks.
6.15 No Defects. There are no defects in the design or construction
----------
of any Building which would have a material adverse affect on its value,
safety or intended use.
6.16 Additional Agreements. There are no management, leasing,
---------------------
development or other agreements in existence that affect the Property.
6.17 Year 2000. The Borrowers have reviewed the areas within their
---------
business and operations which could be adversely affected by, and have
developed or are developing a program to address on a timely basis, the
"Year 2000 Problem" (that is, the risk that computer applications used by
the Borrowers may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and any date on or
after December 31, 1999), and have made related appropriate inquiry of
material suppliers and vendors. Based on such review and program, each
Borrower believes that the "Year 2000 Problem" will not have a material
adverse effect on such Borrower or its operations or business. From time to
time, at the request of Lender, Borrowers shall provide to the Lender such
updated information or documentation as is requested regarding the status
of their efforts to address the Year 2000 problem
7. BORROWERS' COVENANTS.
--------------------
7.1 Compliance with Laws. Each Borrower shall comply or cause
--------------------
compliance with all Applicable Laws governing the development, use and
operation of the Property. Evidence of such compliance shall be submitted
to Lender on request.
7.2 Preservation of Existence and Franchises. Each Borrower shall
----------------------------------------
maintain its corporate existence, rights and franchises in full force and
effect in its jurisdiction of incorporation. Each Borrower shall qualify
and remain qualified as a foreign corporation in each jurisdiction where
required by the nature of such entity's business.
7.3 Inspection. Upon reasonable prior written or oral notice (which
----------
shall not be required in the event of an emergency), Borrowers shall permit
inspection of the
19
Property by Lender and any other agent or designee of Lender. In addition,
upon reasonable prior written or oral notice (which shall not be required
in the event of an emergency), Borrowers shall permit Lender and/or its
agents and designees access to and the right to inspect, audit and copy all
books, records, contracts and other documents and information relating to
any Borrower, the Guarantors or the Property. Lender shall use reasonable
efforts to keep confidential all information and documentation obtained by
Lender in connection with such audits and inspections, except to the extent
that Lender determines, in its reasonable discretion, a need to disclose
same; provided, however, under no circumstances shall Lender have any
liability to Borrowers in the event of an unintentional disclosure or
disclosure deemed necessary by Lender. All such books, records and accounts
of operations relating to the Property shall be kept in accordance with
sound accounting practices consistently applied. Borrowers shall promptly
respond to any inquiry from Lender for information with respect to the
Property, which information may be verified by Lender at Borrowers'
expense; provided, however, that Lender shall at all times be entitled to
rely upon any statements or representations made by any Borrower or any
agent thereof.
7.4 Mechanics' Liens. Borrowers shall not permit any mechanics' lien
----------------
claims to be filed or otherwise asserted against the Property or against
any funds due any contractor or subcontractor, and Borrowers shall promptly
(and in any event within fifteen days after any Borrower has received
notice of such filing) discharge or cause to be discharged the same in case
of the filing of any claims for lien or proceedings for the enforcement
thereof; provided that in connection with any such lien or claim which
Borrowers may in good faith desire to contest, Borrowers may contest the
same by appropriate legal proceedings diligently prosecuted, but only if
Borrowers shall furnish to the Title Company such security or indemnity as
the Title Company requires to induce the Title Company to issue an
endorsement to the Title Policy insuring over the exception created by such
lien, and provided further, that Lender shall not be required to make any
further disbursements of the Loan until any mechanics' lien claims have
been so insured against by the Title Company.
7.5 Financial Accounting Practices. Each Borrower shall make and
------------------------------
keep books, records and accounts which, in reasonable detail, accurately
and fairly reflect its transactions and dispositions of its assets and
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (a) transactions are executed in accordance with
management's general or specific authorization, (b) transactions are
recorded as necessary (i) to permit preparation of financial statements
(other than monthly financial statements) in conformity with GAAP and (ii)
to maintain accountability for assets, (c) access to assets is permitted
only in accordance with management's general or specific authorization and
(d) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
20
7.6 Government Authorizations. Each Borrower shall at all times
-------------------------
obtain and maintain in force all authorizations, consents, approvals,
licenses, exemptions and other actions by, and all registrations,
qualifications, designations, declarations and other filings with, any
Official Body necessary in connection with (i) the execution and delivery
of this Agreement, the Notes and/or the other Loan Documents, consummation
of the transactions herein or therein contemplated, performance of or
compliance with the terms and conditions hereof or thereof or to ensure the
legality, validity and enforceability hereof or thereof or (ii) the
ownership and operation of the properties of any Borrower and the conduct
of their respective business.
7.7 Closings through Title Insurer. Each Borrower shall close the
------------------------------
sale of any home, condominium, townhome or Unit owned by such Borrower only
through the Title Insurer acting as disbursing agent or escrow agent in
connection with such sale in accordance with the terms of the Disbursement
Agreement.
7.8 Appraisals. Appraisals on each parcel of real property
----------
constituting Property may be obtained by Lender at the Borrowers' sole cost
and expense at any time that Lender reasonably believes a material
financial change has occurred with respect to the Borrowers or such
Property.
7.9 Release by Lender. With respect to the matters set forth in
-----------------
Section 7.4 above, if any Borrower shall (a) fail promptly to discharge any
asserted liens or claims, or (b) fail promptly to contest asserted liens or
claims or to give security or indemnity in the manner provided in Section
7.3 above, or (c) having commenced to contest the same, and having given
such security or indemnity, fail to prosecute such contest with diligence,
or to maintain such indemnity or security so required by the Title Company
for its full amount, or (d) upon adverse conclusion of any such contest,
fail promptly to cause any judgment or decree to be satisfied and lien to
be released, then Lender may, but shall not be required to, procure the
release and discharge of any such claim and any judgment or decree thereon
and, further, may, in its sole discretion, effect any settlement or
compromise of the same, or may furnish such security or indemnity to the
Title Company, and any amounts so expended by Lender, including premiums
paid or security furnished in connection with the issuance of any surety
company bonds, shall be deemed to constitute disbursements of the proceeds
of the Loan hereunder and shall bear interest from the date so disbursed
until paid at the Default Rate. In settling, compromising or discharging
any claims for lien, Lender shall not be required to inquire into the
validity or amount of any such claim.
7.10 Financial Statements; Reports. Borrowers will from time to time
-----------------------------
furnish to Lender such information and reports, financial and otherwise,
concerning each Obligor and the operation of the Property as Lender
reasonably requires, including, without limitation, the following:
21
(a) Within ninety days after the end of each fiscal year,
compiled financial statements of the Property on a form acceptable to
Lender, setting forth the information therein required as of December
31 of the immediately preceding year, containing income and expense
statements and a balance sheet. The financial statements shall be
prepared by an independent accounting firm in accordance with
generally accepted accounting principles consistently applied and
shall be certified by the chief financial officer of Borrowers as
fairly and accurately presenting the information contained therein.
(b) Within ninety days after the end of each fiscal year,
financial statements and the federal and state income tax returns for
each Obligor, such financial statements to be on Lender's standard
form or another form acceptable to Lender, setting forth the
information therein required as of December 31 of the immediately
preceding year, and certified by such Obligor as fairly and accurately
presenting the information contained therein.
(c) Within thirty days after requested by Lender, a rent roll
covering all leases of space in the Property, on a form acceptable to
Lender, and certified by the chief financial officer of Borrowers as
fairly and accurately presenting the information contained therein,
together with conformed copies of all leases of space in the Property
not previously delivered to Lender.
7.11 Affirmation of Representations and Warranties. Each Borrower
---------------------------------------------
agrees that all representations and warranties of Borrower contained in
Article 6 hereof shall remain true in all material respects at all times
until the Loan is repaid in full.
7.12 Title. Except for (i) the Mortgage and other security for the
-----
Loan, (ii) the lien of general real estate taxes payment of which is not
yet due, (iii) mechanics' liens which are contested in the manner permitted
in Paragraphs 7.4 above, and (iv) any other Permitted Exceptions, each
Borrower shall keep its fee simple title in the Property free and clear of
all liens, claims and encumbrances, whether senior or junior to or at
parity with the Mortgage.
7.13 Proceedings Affecting Property. If any proceedings are filed
------------------------------
seeking to enjoin or otherwise prevent or declare invalid or unlawful the
occupancy, use, maintenance or operation of the Property, or any portion
thereof, Borrowers shall cause such proceedings to be vigorously contested
in good faith, and in the event of an adverse ruling or decision, prosecute
all allowable appeals therefrom, and shall, without limiting the generality
of the foregoing, resist the entry or seek the stay of any temporary or
permanent injunction that may be entered, and use its best efforts to bring
about a favorable and speedy disposition of all such proceedings. All such
proceedings, including without limitation, all of Lender's costs, and fees
and disbursements of Lender's counsel in connection with any such
proceedings, whether or not Lender is a
22
party thereto, shall be at Borrowers' expense. To the extent that Lender
incurs any such expenses, including attorneys' fees and fees and charges
for court costs, bonds and the like, Borrowers shall reimburse Lender for
such expenses and the amount due Lender shall bear interest from the date
so incurred by Lender until repaid to Lender at the Default Rate and shall
be payable to Lender on demand. The foregoing provisions of this Section
shall not limit or affect the provisions of Section 9(i) below.
7.14 Disposal and Encumbrance of Property. Except as expressly
------------------------------------
permitted pursuant to Section 3.3 above, Borrowers shall not, without
Lender's prior written consent, suffer, permit or enter into any agreement
for any sale, lease, transfer, or in any way encumber or dispose of or
grant or suffer any security or other assignment (collateral or otherwise)
of or in all or any portion of the Property. Any consent given by Lender
or any waiver of default under this Section, shall not constitute a consent
to, or waiver of any right, remedy or power of Lender under any subsequent
default hereunder.
7.15 Insurance. Borrowers shall pay all premiums on all insurance
---------
policies required from time to time under this Agreement, and thirty days
prior to expiration of any such policies, Borrowers shall furnish to
Lender, with premiums prepaid, additional and renewal policies in form, and
with companies, coverage, deductibles and amounts satisfactory to Lender.
In the event of failure by Borrowers to provide such insurance, Lender may,
but shall not be required to, place insurance and treat the amounts
expended therefor as disbursements of Loan proceeds and such amounts from
the date so expended by Lender until repaid to Lender shall bear interest
at the Default Rate.
7.16 Performance of Obligations; Notice of Default. Each Borrower
---------------------------------------------
shall promptly and fully perform and comply in all respects with the
obligations, terms, agreements, provisions and requirements of this
Agreement and the other Loan Documents and all other documents and
instruments relating thereto and will not permit to occur any default or
breach hereunder or thereunder. Borrowers shall promptly give to Lender
notice of the occurrence of any Unmatured Default or of any event that
could have a Material Adverse Effect on any security for the Loan or on any
Borrower's ability to perform its obligations under this Agreement or any
of the other Loan Documents or on the Guarantors' ability to perform their
obligations under the Guaranty and the other Loan Documents to which they
are a party.
7.17 Restrictions Affecting Borrowers. Each Borrower covenants and
--------------------------------
agrees that, without the prior written consent of Lender, there shall not
occur: (i) any amendment or modification of the by-laws or articles of
incorporation of any Borrower. At all times prior to the repayment of the
Loan, (A) Borrowers shall not make or permit any distributions of cash flow
or cash proceeds to any partner, subpartner, member, shareholder, officer,
director or affiliate of any member of any Borrower and all excess cash
flow from the Property shall be paid to Lender and applied to the repayment
of the Principal Balance; (C) Borrowers shall not enter into any contract
or agreement for the
23
provision of services or otherwise with respect to the Property with any
partner, subpartner, member, shareholder, officer, director or affiliate of
any member of a Borrower unless such contract or agreement is an arms-
length, market rate agreement and is cancelable upon thirty days written
notice from any owner of the Property; and (D) Borrowers shall not be
dissolved or its existence terminated.
7.18 Use of Receipts. Borrowers shall cause all rents and other
---------------
income and receipts realized and received by any Borrower, if any, from and
in connection with the Property to be used for the purpose of paying the
actual costs and expenses incurred by Borrowers in connection with the
ownership, operation, management and repair of the Property, including
without limitation, operating expenses, real estate taxes, insurance
premiums and interest on the Loan.
7.19 Management and Leasing Agreements; Subordination. Borrowers
------------------------------------------------
shall not amend, extend, substitute or enter into any new management or
leasing agreement covering all or any portion of the Property without
Lender's prior written consent. In the event that Lender grants such
consent, Borrowers shall cause the manager or leasing broker under said
agreement to enter into an agreement with Lender, acceptable in form and
substance to Lender, pursuant to which said manager or broker subordinates
its liens for unpaid fees to the liens of the Mortgage and the other Loan
Documents.
7.20 Additional Documents. Borrowers shall not execute or record any
--------------------
document pertaining to, affecting or running with all or any portion of the
Property without the prior written approval of Lender of the form and
substance of such documents, which approval shall not be unreasonably
withheld.
7.21 Borrowers' Accounts. Each Borrower shall maintain the
-------------------
operating, security deposit and reserve accounts for the Property with
Lender and pledge the same to Lender as security for the Loan.
8. LOAN EXPENSES. Borrowers agree to pay all of the Loan Expenses. Any
-------------
Loan Expenses paid by Lender shall bear interest commencing on the date demand
for repayment thereof is made by Lender until repaid to Lender at the Default
Rate and shall be paid by Borrowers upon demand, or may be paid by Lender at any
time by disbursement of proceeds of the Loan. Any Loan Expenses paid by Lender
shall be reimbursed to Lender by Borrowers regardless of whether there shall be
any disbursements of the Loan.
9. LENDER'S REPRESENTATIVES. Lender, at Borrowers' expense, shall have
------------------------
the right to engage personnel in connection with negotiation, documentation,
administration and servicing of the Loan.
24
10. EVENTS OF DEFAULT. An Event of Default shall mean the occurrence or
-----------------
existence of one or more of the following events or conditions (whatever the
reason for such Event of Default and whether voluntary, involuntary or effected
by operation of Law):
(a) Payment. The Borrowers shall fail to pay (i) any interest on the
-------
Loan or principal when due (whether resulting from maturity, declaration or
otherwise), (ii) any Obligation payable on demand within five days after
such demand, and/or (iii) any other Obligation within ten days after
written receipt of notice thereof; or
(b) Misrepresentation. Any representation or warranty made by a
-----------------
Borrower under this Agreement or any Loan Document or any statement made by
a Borrower in any financial statement, certificate, report, exhibit or
document furnished to Lender pursuant to this Agreement or any other Loan
Document shall prove to be false or misleading in any material respect; or
(c) General Covenant Default. Any Borrower shall breach any other
------------------------
covenant, condition or provision hereof or of any other Loan Document and
such breach shall not have been remedied for a period of thirty days after
the earlier of a Borrower's knowledge or notice thereof to such Borrower
from Lender; provided, however, that if such breach by its nature cannot
reasonably be cured within such thirty days, then no Event of Default shall
exist hereunder if such Borrower diligently commences and continues to
pursue such remedy, provided that (i) such breach is capable of being
cured, (ii) such breach does not cause any Material Adverse Effect, and
(iii) in no event shall the period within which such Borrower may attempt
to remedy such breach extend beyond ninety days from the date of the notice
relating thereto, or such Borrower's knowledge thereof. The foregoing cure
period is intended only to apply in circumstances not referred to in any of
the other paragraphs of this Section, and a Borrower's right to a grace or
cure period, if any, with respect to such other circumstances are to be
governed by the provisions of such other paragraphs; or
(d) Judgments. One or more final judgments for the payment of money
---------
shall have been entered against any Borrower or the Borrowers, which
judgment or judgments exceed $250,000 in the aggregate (exclusive of those
judgments for which the Borrowers' insurer has acknowledged coverage), and
such judgment or judgments shall have remained undischarged and unstayed
for a period of sixty consecutive days; or
(e) Garnishment or Attachment against Assets. A writ or warrant of
----------------------------------------
attachment, garnishment, execution, distraint or similar process shall have
been issued against any of the assets of any Borrower which shall have
remained undischarged and unstayed for a period of sixty consecutive days;
or
25
(f) Failure to Obtain Consents or Approvals. Any authorization,
---------------------------------------
consent, approval, license, exemption, registration, qualification,
designation, declaration, filing or other action or undertaking now or
hereafter made by or with any Official Body in connection with this
Agreement, a Note or any other Loan Document or any such action or
undertaking now or hereafter necessary to make this Agreement, a Note or
any other Loan Document legal, valid, enforceable and admissible in
evidence is not obtained or shall have ceased to be in full force and
effect or shall have been modified or amended or shall have been held to be
illegal or invalid; or
(g) Involuntary Bankruptcy. A proceeding shall have been instituted
----------------------
in respect of a Borrower:
(i) seeking to have an order for relief entered in respect of
such Person, or seeking a declaration or entailing a finding that such
Person is insolvent or a similar declaration or finding, or seeking
dissolution, winding-up, charter revocation or forfeiture,
liquidation, reorganization, arrangement, adjustment, composition or
other similar relief with respect to such Person, its assets or its
debts under any law relating to bankruptcy, insolvency, relief of
debtors or protection of creditors, termination of legal entities or
any other similar law now or hereafter in effect, or
(ii) seeking appointment of a receiver, trustee, custodian,
liquidator, assignee, sequestrator or other similar official for such
Person or for all or any substantial part of its property,
and such proceeding shall result in the entry, making or grant of any such
order for relief, declaration, finding, relief or appointment, or such
proceeding shall remain undismissed and unstayed for a period of sixty
consecutive days; or
(h) Insolvency; Voluntary Bankruptcy. Any Borrower shall become
--------------------------------
insolvent or admit in writing its inability to pay its debts as they
mature, or otherwise become generally unable to pay its debts as they
become due, or voluntarily suspend transaction of business or cease to
conduct its business as now conducted (whether voluntarily or
involuntarily), or make a general assignment for the benefit of creditors,
or consent to any such order for relief, declaration, finding or relief
described therein, or consent to any such appointment or to the taking of
possession by any such official of all or any substantial part of its
property whether or not any such proceeding is instituted, or dissolve,
windup or liquidate itself or any substantial part of its property, or take
any action in furtherance of any of the foregoing; or
(i) Loss of Permit. Any permit material to the business, operations
--------------
or financial condition of any Borrower shall be terminated, suspended or
revoked; or
26
(j) Uninsured Loss. There shall occur any uninsured damage to, or
--------------
loss, theft, or destruction of, any of the properties or assets of any
Borrower in excess of $250,000; or
(k) Government Liens. A notice of lien or assessment is filed or
----------------
recorded with respect to all or any of any Borrower's assets by the United
States, or any department, agency or instrumentality thereof, or by any
state, county, municipal or other governmental agency, including, without
limitation, or if any taxes or debts owing at any times hereafter to any
one of these becomes a lien or encumbrance upon any such Person's assets
and the same is not released within thirty days after the same becomes a
lien or encumbrance; provided that such Person shall have the right to
contest by appropriate proceedings any such lien, levy or assessment if
such Person provides Lender with a bond or indemnity satisfactory to Lender
assuring the payment of such lien, levy or assessment; or
(l) Unreimbursed Letter of Credit Draw. Lender is not reimbursed by
----------------------------------
the Borrowers for a draft drawn under a Letter of Credit issued hereunder
on the date demand is made for such reimbursement by Lender;
(m) Loss of Priority. The Loan Documents after delivery thereof shall
----------------
for any reason (other than pursuant to the terms thereof) cease to create a
valid and perfected first priority lien on the Property (subject to
Permitted Encumbrances) purported to be covered hereby or thereby.
11. REMEDIES. Upon the occurrence of any Event of Default, Lender, in
--------
addition to availing itself of any remedies conferred upon it at law or in
equity and by the terms of the Note, the Mortgage and the other Loan Documents,
may pursue any one or more of the following remedies first, concurrently or
successively with each other and with any other available remedies, it being the
intent hereof that none of such remedies shall be to the exclusion of any
others:
(a) Take possession of all or a portion of the Property and do
anything necessary or desirable in Lender's sole judgment to fulfill the
obligations of Borrowers hereunder. All sums expended by Lender pursuant
to this Article 11 shall be deemed to have been paid to Borrowers and
secured by the Mortgage and the other Loan Documents, and shall bear
interest at the Default Rate until repaid to Lender.
(b) Withhold further disbursements of proceeds of the Loan.
(c) Declare the unpaid indebtedness evidenced by the Note to be
immediately due and payable.
27
(d) Apply the balance of any deposits made with Lender toward the
repayment of the Loan.
12. MISCELLANEOUS.
-------------
12.1 Additional Indebtedness. If any advances or payments made by
-----------------------
Lender pursuant to this Agreement or any other Loan Document, together with
disbursements of the Loan, shall exceed the aggregate face amount of the
Note, all such advances and payments shall constitute additional
indebtedness secured by the Mortgage and all other security for the Loan,
and shall bear interest at the Default Rate from the date advanced until
paid.
12.2 Additional Acts. Borrowers shall, upon request, execute and
---------------
deliver such further instruments and documents and do such further acts and
things as may be reasonably required to provide to Lender the evidence of
and security for the Loan contemplated by this Agreement.
12.3 Loan Agreement Governs. In the event of any inconsistency
----------------------
between any provision of this Agreement and any provision of any other Loan
Document, the provision of this Agreement shall govern; provided, however,
that the provisions of all of the Loan Documents shall be construed as an
integrated set of provisions governing the Loan and, accordingly, shall be
interpreted and construed liberally to give the maximum validity,
enforceability and effect to all of such provisions.
12.4 Additional Advances. If an Event of Default shall occur, Lender
-------------------
may, but shall not be obligated to, take any and all actions to cure such
default, and all amounts expended in so doing, all Loan Expenses and all
other amounts paid or advanced by Lender pursuant to the Loan Documents,
and all other amounts advanced by Lender in connection with preserving any
security for the Loan, shall constitute additional advances of the Loan,
shall be secured by the Mortgage and all other security for the Loan, and
shall bear interest at the Default Rate from the date advanced until paid.
12.5 Amendment; Waiver; Approval. This Agreement shall not be
---------------------------
amended, modified or supplemented without the written agreement of each
Borrower and Lender at the time of such amendment, modification or
supplement. No waiver of any provision of this Agreement or any of the
other Loan Documents shall be effective unless set forth in writing signed
by the party making such waiver, and any such waiver shall be effective
only to the extent therein set forth. Failure by Lender to insist upon
full and prompt performance of any provisions of this Agreement or any of
the other Loan Documents, or to take action in the event of any breach of
any such provision or upon the occurrence of any Event of Default, shall
not constitute a waiver of any rights of Lender, and Lender may at any time
thereafter exercise all available rights and remedies with respect to such
breach or Event of Default. Receipt by Lender of any instrument or
document shall not
28
constitute or be deemed to be an approval thereof. Any approvals required
under any of the other Loan Documents must be in writing, signed by Lender
and directed to a Borrower.
12.6 Notice. All notices, communications and waivers under this Loan
------
Agreement shall be in writing and shall be (i) delivered in person or (ii)
mailed, postage prepaid, either by registered or certified mail, return
receipt requested, or (iii) sent by overnight express carrier, addressed in
each case as follows:
To Lender: LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxx Xxxxxxxx
With copy to: Schwartz, Cooper, Xxxxxxxxxxx & Xxxxxx, Chtd.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxx, Esq.
To Borrower: c/o Sundance Homes, Inc.
00 Xxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxx
With copy to: Xxxxxxx, Xxxxxxx & Xxxxxx
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
or to any other address as to either of the parties hereto, as such party
shall designate in a written notice to the other party hereto. All notices
sent pursuant to the terms of this Section shall be deemed received (i) if
personally delivered, then on the date of delivery, (ii) if sent by
overnight, express carrier, then on the next Business Day immediately
following the day sent, or (iii) if sent by registered or certified mail,
then on the earlier of the third Business Day following the day sent or
when actually received.
12.7 Benefit; Assignment. The rights, powers and remedies of Lender
-------------------
under this Agreement shall inure to the benefit of Lender and its
successors and assigns. The rights and obligations of Borrowers under this
Agreement may not be assigned and any purported assignment by Borrowers
shall be null and void.
12.8 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Illinois.
29
12.9 Indemnity. Each Borrower agrees to indemnify, defend and hold
---------
Lender harmless from and against any and all liabilities, obligations,
losses, damages, claims, costs and expenses (including reasonable
attorneys' fees and court costs) of whatever kind or nature which may be
imposed on, incurred by or asserted against Lender at any time which relate
to or arise from the offer for sale or sale of any interest in any
Borrower, the acquisition or sale or offer for sale of all or any portion
of the Property and/or the ownership, use, operation or maintenance of the
Property, including, without limitation, any brokerage commissions or
finder's fees asserted against Lender with respect to the making of the
Loan or the acquisition of the Property; provided, however, that the
foregoing indemnity shall not extend to any liabilities, obligations,
claims, losses, costs, damages or expenses resulting from the gross
negligence or willful misconduct of Lender.
12.10 Headings. The titles and headings of the articles, sections
--------
and paragraphs of this Agreement have been inserted as a matter of
convenience of reference only and shall not control or affect the meaning
or construction of any of the terms or provisions of this Agreement.
12.11 No Partnership or Joint Venture. Lender, by executing and
-------------------------------
performing this Agreement shall not become a partner or joint venturer with
Borrowers or any member of Borrowers or any of their respective associates
or affiliates and all inspections of the Property herein provided for are
for the sole benefit of Lender.
12.12 Time is of the Essence. Time is of the essence of the payment
----------------------
of all amounts due Lender under the Loan Documents and performance and
observance by Borrowers of each covenant, agreement, provision and term of
this Agreement and the other Loan Documents.
12.13 Invalid Provisions. In the event that any provision of this
------------------
Agreement is deemed to be invalid by reason of the operation of law, or by
reason of the interpretation placed thereon by any administrative agency or
any court, Borrowers and Lender shall negotiate an equitable adjustment in
the provisions of the same in order to effect, to the maximum extent
permitted by law, the purpose of this Agreement and the validity and
enforceability of the remaining provisions, or portions or applications
thereof, shall not be affected thereby and shall remain in full force and
effect.
12.14 Offset. Without limitation of any other right or remedy of
------
Lender hereunder or provided by law, any indebtedness relating to the
Property or its operation and now or hereafter owing to Borrowers by Lender
(including, without limitation, any amounts on deposit in any demand, time,
savings, passbook or like account maintained by Borrowers with Lender) may
be offset and applied by Lender hereunder, or under the Note, the Mortgage
or any of the other Loan Documents.
30
12.15 Acts by Lender. Notwithstanding anything herein contained to
--------------
the contrary, Lender will not be required to make any disbursement or
perform any other act under this Agreement if, as a result thereof, Lender
will violate any law, statute, ordinance, rule, regulation or judicial
decision applicable thereto.
12.16 Binding Provisions. The covenants, warranties, agreements,
------------------
obligations, liabilities and responsibilities of Borrowers under this
Agreement shall be binding upon and enforceable against each Borrowers and
its legal representatives, administrators, successors and permitted
assigns.
12.17 Counterparts. This Agreement may be executed in counterparts,
------------
and all said counterparts when taken together shall constitute one and the
same Agreement.
12.18 No Third Party Beneficiary. This Agreement is only for the
---------------------------
benefit of the parties hereto and their permitted successors and assigns.
No other person or entity shall be entitled to rely on any matter set forth
herein without the prior written consent of such parties.
12.19 Publicity. Subject to compliance with Applicable Laws, Lender
---------
reserves the right to publicize the making of the Loan in any manner it
deems appropriate, including, without limitation, advertisements in trade
journals and newspapers.
12.20 JURISDICTION AND VENUE. EACH BORROWER HEREBY AGREES THAT ALL
----------------------
ACTIONS OR PROCEEDINGS INITIATED BY ANY BORROWER AND ARISING DIRECTLY OR
INDIRECTLY OUT OF THIS LOAN AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE
LITIGATED IN THE CIRCUIT COURT OF XXXX COUNTY, ILLINOIS, OR THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS OR, IF LENDER
INITIATES SUCH ACTION, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH ACTION
AND WHICH HAS JURISDICTION. EACH BORROWER HEREBY EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED BY LENDER IN ANY OF SUCH COURTS, AND HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED
THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER
PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
A BORROWER AT THE ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT TO THIS
LOAN AGREEMENT. EACH BORROWER WAIVES ANY CLAIM THAT CHICAGO, ILLINOIS OR
THE NORTHERN DISTRICT OF ILLINOIS IS AN INCONVENIENT FORUM OR AN IMPROPER
FORUM BASED ON LACK OF VENUE. SHOULD ANY BORROWER, AFTER BEING SO SERVED,
FAIL TO
31
APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED
WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING THEREOF, SUCH
BORROWER SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE
ENTERED BY LENDER AGAINST SUCH BORROWER AS DEMANDED OR PRAYED FOR IN SUCH
SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE EXCLUSIVE CHOICE OF FORUM FOR
EACH BORROWER SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT BY LENDER OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE
TAKING BY LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE
JURISDICTION, AND EACH BORROWER HEREBY WAIVES THE RIGHT, IF ANY, TO
COLLATERALLY ATTACK ANY SUCH JUDGMENT OR ACTION.
12.21 WAIVER OF RIGHT TO JURY TRIAL. LENDER AND EACH BORROWER
-----------------------------
ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS LOAN
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREIN AND THEREIN WOULD BE BASED UPON DIFFICULT AND COMPLEX
ISSUES AND, THEREFORE, THE PARTIES AGREE THAT ANY COURT PROCEEDING ARISING
OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
SUNDANCE CUSTOM HOMES, INC., an LASALLE BANK NATIONAL ASSOCIATION, a
Illinois corporation national banking association
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx Xxxxxxxx
-------------------------------- --------------------------------
Title: Vice President and Title: Commercial Banking Officer
Chief Financial Officer -----------------------------
-----------------------------
OTHER SUBSIDIARY HOLDINGS, INC.,
an Illinois corporation
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Title: Vice President and
Chief Financial Officer
-----------------------------
32
Exhibit A
---------
Legal Descriptions of the Land
------------------------------
