MASTER LOAN AND SECURITY AGREEMENT
THIS MASTER LOAN AND SECURITY AGREEMENT ("Agreement"), dated as of the 14th day
of October, 1993, by and between THE BALCOR COMPANY, a Delaware corporation,
with its principal place of business at 0000 Xxxx Xxxx, Xxxxxx, Xxxxxxxx 00000,
or any Affiliate (as hereinafter defined) of The Balcor Company who shall join
in this Agreement and make any advance, on behalf of The Balcor Company,
pursuant to this Agreement (the "Lender"), and Balcor Realty Investors-84, an
Illinois limited partnership (the "Principal Partnership"), with its principal
place of business at 0000 Xxxx Xxxx, Xxxxxx, Xxxxxxxx 00000.
RECITALS
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A. Lender has made or may in the future make advances to, or has guaranteed or
may in the future guarantee the obligations of the Principal Partnership from
time to time; and
B. The Principal Partnership has made or may make advances to one or more of
its subpartnerships, using funds provided by the Lender; and
C. The Principal Partnership and Lender wish to formalize their arrangement
regarding advances and enter into this Agreement to cover all advances,
including those previously made and those which may be made in the future; and
D. All current advances are payable on demand, and to induce Lender to forego,
on the date hereof, demand on such advances, and to provide security to Lender
for advances previously made and for additional advances which may be made in
the future, the Principal Partnership and/or one or more subpartnerships will
pledge certain assets as security for Borrower's Liabilities (as hereinafter
defined); and
E. The parties anticipate that upon request by the Principal Partnership from
time to time, Lender may at its sole option and in its sole and absolute
discretion make advances to the Principal Partnership directly, or to one or
more subpartnerships of the Principal Partnership, it being understood that
Lender may refuse to make any additional advances and may call as due and
payable any amounts owing hereunder for any or no reason;
NOW THEREFORE, in consideration of any loan, advance, extension of credit,
letter of credit, guarantee and/or other financial accommodation at any time
made by Lender to or for the benefit of the Principal Partnership, and of the
promises set forth herein, the parties hereto agree as follows:
1. DEFINITIONS AND TERMS
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1.1 The following words, terms and/or phrases shall have the meanings set forth
thereafter and such meanings shall be applicable to the singular and plural
form thereof, giving effect to the numerical difference; whenever the context
so requires, the use of "it" in reference to Borrower shall mean "Borrower" as
hereinafter defined:
(A) "Accounts": the definition ascribed to this term in Paragraph 4.1 below.
(B) "Affiliate": any "Person" (hereinafter defined) (i) in which Borrower, one
or more partners of Borrower, one or more equity interest holders of Borrower,
any "Subsidiary" (hereinafter defined), and/or any "Parent" (hereinafter
defined), individually, jointly and/or severally, now or at any time or times
hereafter, has or have an equity or other ownership interest equal to or in
excess of five percent (5%) of the total equity of or other ownership interest
in such Person; and/or (ii) which directly or indirectly through one or more
intermediaries controls or is controlled by, or is under common control with
Borrower. For purposes of this definition, control shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
Partnership Interests, "Stock" (hereinafter defined), by contract or otherwise.
Notwithstanding the foregoing, unless the context otherwise requires, neither
Lender, nor any affiliate of Lender (other than a Person who is an affiliate of
Lender solely because of his interest in Borrower, and who, if he had no
interest in Borrower, would not be an affiliate of Lender) shall be deemed to
be an Affiliate of Borrower hereunder.
(C) "Agreement": this Master Loan and Security Agreement.
(D) "And/or": one or the other or both, or any one or more or all, of the
things or Persons in connection with which the conjunction is used.
(E) "Base Rate": a rate of interest per annum which at a minimum shall be equal
to Lender's average cost of funding as determined by Lender on a daily basis in
any manner deemed reasonable by Lender and which, at a maximum shall be a rate
per annum as determined on a daily basis and as designated by Lender which does
not exceed the maximum limit permitted to be charged by "Affiliates", as such
term is defined in, and as permitted pursuant to, the Borrower's Partnership
Agreement, as amended from time to time.
(F) "Borrower": the Principal Partnership.
(G) "Borrower's Liabilities": all obligations and liabilities of Borrower to
Lender (including, without limitation, all debts, claims and indebtednesses)
whether primary, secondary, direct, contingent, fixed or otherwise, heretofore,
now and/or from time to time hereafter owing, due or payable, however
evidenced, created, incurred, acquired or owing and however arising, whether
under this Agreement or the "Other Agreements" (hereinafter defined), or by
oral agreement or operation of law or otherwise.
(H) "Borrower's Obligations": all terms, conditions, warranties,
representations, agreements, undertakings, covenants and provisions (other than
Borrower's Liabilities) to be performed, discharged, kept, observed or complied
with by Borrower pursuant to this Agreement and/or any of the Other Agreements.
(I) "Charges": all national, federal, state, county, city, municipal and/or
other governmental (or any instrumentality, division, agency, body or
department thereof, including, without limitation, the Pension Benefit Guaranty
Corporation) taxes, levies, assessments, charges, liens, claims or encumbrances
upon and/or relating to the "Collateral" (hereinafter defined), Borrower's
Liabilities, Indebtedness (hereinafter defined), Borrower's Obligations,
Borrower's business, Borrower's ownership and/or use of any of its assets,
and/or Borrower's income and/or gross receipts.
(J) "Collateral": the definition ascribed to this term in Paragraph 4.1 below.
(K) "Equipment": the definition ascribed to this term in Paragraph 4.1 below.
(L) "Event of Default": the definition ascribed to this term in Paragraph 12.1
below.
(M) "Financials": those financial statements of Borrower heretofore or
concurrently herewith delivered by or on behalf of Borrower to Lender.
(N) "General Intangibles": the definition ascribed to this term in Paragraph
4.1 below.
(O) "Guarantor": any Person which has guaranteed or hereafter guarantees to
Lender the payment, collection or performance of all or any portion of
Borrower's Liabilities and/or Borrower's Obligations, and/or has granted or
hereafter grants to Lender a security interest in, or lien or encumbrance upon,
some or all of such Person's real and/or personal property to secure the
payment and/or performance of all or any portion of Borrower's Liabilities
and/or Borrower's Obligations.
(P) "Hazardous Material": any hazardous substance, or any pollutant or
contaminant defined as such in (or for purposes of) the Comprehensive
Environmental Response Compensation and Liability Act of 1980 or any other
applicable local, state or federal environmental protection, health or safety
statute, law, ordinance, code, rule or regulation relating to or imposing
liability or standards concerning hazardous, toxic or dangerous waste,
substance, material, smoke, gas or particulate matter, as now or at any time
hereafter in effect, or any other hazardous, toxic or dangerous waste,
substance or material, including, without limitation, asbestos, polychlorinated
biphenyls, petroleum, including crude oil or any fraction thereof which is
liquid at standard conditions of temperature or pressure, and any radioactive
material in any form or condition.
(Q) "Indebtedness": all obligations and liabilities of Borrower to any Person
other than Lender (including, without limitation, all debts, claims and
indebtedness) whether primary, secondary, direct, contingent, fixed or
otherwise, heretofore, now and/or from time to time hereafter owing, due or
payable, however evidenced, created, incurred, acquired or owing and however
arising, whether under written or oral agreement, by operation of law, or
otherwise. Indebtedness includes, without limiting the generality of the
foregoing: (i) obligations or liabilities of any Person that are secured by any
lien, claim, encumbrance or security interest upon property owned by Borrower
even though Borrower has not assumed or become liable for the payment therefor;
and (ii) obligations or liabilities created or arising under any lease of real
or personal property, or conditional sale or other title retention agreement
with respect to property used and/or acquired by Borrower, even though the
rights and remedies of the lessor, seller and/or lender thereunder are limited
to repossession of such property.
(R) "Loans": any and all loans, advances, extensions of credit, letters of
credit, guarantees and/or other financial accommodations of any kind or nature
made by Lender at any time to, for the benefit or at the request of Borrower
pursuant to this Agreement and/or any of the Other Agreements.
(S) "Mortgages": the Mortgage, Mortgages, Deed of Trust or Deeds of Trust, Deed
to Secure Debt and Deeds to Secure Debt in the forms acceptable to Lender, and
any other Mortgages, Deeds of Trust or Deeds to Secure Debt given by Borrower
to Lender at any time or from time to time hereafter.
(T) "Obligor": any Person who is and/or may become obligated to Borrower under
or on account of Accounts.
(U) "Other Agreements": all agreements, instruments and documents, including,
without limitation, bond agreements, loan agreements, security agreements,
guaranties, mortgages, deeds of trust, deeds to secure debt, notes,
applications and agreements for letters of credit, letters of credit, advices
of credit, banker's acceptances, pledges, powers of attorney, consents,
assignments, contracts, notices, leases, financing statements and all other
written matter heretofore, now and/or from time to time hereafter executed by
and/or on behalf of Borrower and delivered to Lender, or issued by Lender upon
the application and/or other request of, and on behalf of, Borrower.
(V) "Parent": any Person, now or at any time or times hereafter, owning or
controlling (alone or with Borrower, any Subsidiary and/or any other Person) at
least a majority of the issued and outstanding Stock or other ownership
interest of Borrower or any Subsidiary (hereinafter defined). For purposes of
this definition, control shall have the same meaning ascribed to this term in
Subparagraph l.l(B) above.
(W) "Partnership Interest": any right, title and interest, direct or indirect,
including general partnership interests, limited partnership interests, rights
to receive profits, proceeds or distributions.
(X) "Person": any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, institution,
entity, party or government (whether national, federal, state, county, city,
municipal or otherwise, including without limitation any instrumentality,
division, agency, body or department thereof).
(Y) "Real Property": the definition ascribed to this term in Paragraph 4.1
below.
(Z) "Records": the definition ascribed to this term in Paragraph 4.1 below.
(AA) "Revolving Loan": any one or more Loans made or to be made by Lender to
Borrower from time to time pursuant to Paragraph 3.1.
(AB) "Revolving Note": the Revolving Promissory Note attached hereto as Exhibit
A, in the form to be hereafter executed and delivered by Borrower in favor of
Lender.
(AC) "Stock": all shares, interests, participations or other equivalents
(however designated) of or in a corporation, whether or not voting, including,
but not limited to, common stock, warrants, preferred stock, convertible
debentures and all agreements, instruments and documents convertible, in whole
or in part, into any one or more or all of the foregoing.
(AD) "Subsidiary": (i) with respect to any Person who is a corporation, any
Person at least a majority of whose issued and outstanding Stock or other
ownership interests now or at any time hereafter is owned by Borrower and/or
one or more Subsidiaries, (it) with respect to any Person who is a partnership,
any Person, a majority of whose interests are owned, directly or indirectly, by
the Principal Partnership.
(AE) "Supplemental Documentation": the definition ascribed to this term in
Paragraph 4.2 below.
1.2 Except as otherwise defined in this Agreement or the Other Agreements, all
words, terms and/or phrases used herein and therein shall be defined by the
applicable definition therefor (if any) in the Uniform Commercial Code as
adopted by the State of Illinois.
1.3 Any accounting terms which are used in this Agreement which are not
specifically defined herein shall have the meanings customarily given them in
accordance with generally accepted accounting principles.
2. LOAN: GENERAL TERMS
2.1 Except as otherwise provided in notes or other instruments issued and/or
made by Borrower to Lender specifically containing provisions in conflict with
this Paragraph (in which event the conflicting provisions of said notes or
other instruments shall govern and control) that portion of Borrower's
Liabilities consisting of: (a) principal payable on account of any Loan shall
be payable by Borrower to Lender on demand; (b) costs, fees and expenses
payable by Borrower to Lender shall be payable to Lender or to such other
Person or Persons designated by Lender, on demand; (c) interest payable by
Borrower to Lender shall be payable by Borrower monthly, and prior to demand,
only if and to the extent that Borrower's cash flow for any month shall exceed
Borrower's expenses and debt service for such month; and (d) the balance of
Borrower's Liabilities, if any, shall be payable by Borrower to Lender on
demand. All of such payments to Lender shall be payable at Lender's principal
place of business specified at the beginning of this Agreement or at such other
place or places as Lender may designate in writing to Borrower. All of such
payments to Persons other than Lender shall be payable at such place or places
as Lender may designate in writing to Borrower.
2.2 Any Loan may or may not (at Lender's sole and absolute discretion) be
evidenced by additional notes or other instruments issued or made by Borrower
to Lender. Where any Loan is not so evidenced, it shall be evidenced solely by
entries upon the ledgers, books, records and/or computer records of Lender
maintained for that purpose.
2.3 All of Borrower's Liabilities shall constitute one obligation secured by
Lender's security interest, lien or encumbrance in or upon the Collateral and
by all other security interests, liens, claims and encumbrances heretofore, now
and/ or from time to time hereafter granted by Borrower and/or any Guarantor to
Lender.
2.4 Borrower warrants and represents to Lender that Borrower shall use the
proceeds of each Loan solely for business purposes and consistently with all
applicable laws and statutes. Borrower further warrants and represents to
Lender and covenants with Lender that Borrower is not in the business of
extending credit for the purpose of purchasing or carrying margin Stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of the Loan will be used to purchase or carry
any margin Stock or to extend credit to others for the purpose of purchasing or
carrying any margin Stock.
2.5 Notwithstanding anything contained in this Agreement or the Other
Agreements to the contrary, the principal portion of Borrower's Liabilities
outstanding at any one time shall not exceed in the aggregate the principal
amount of the applicable Revolving Note. Lender, in its sole and absolute
discretion, at any time and from time to time, may suspend the restrictions
imposed in this Paragraph.
2.6 Borrower hereby authorizes and directs Lender to disburse, for and on
behalf of Borrower and for Borrower's account, the proceeds of any Loans to
such Person or Persons as Borrower or any Person specified in Paragraph 14.12
of this Agreement shall direct, whether in writing or orally.
2.7 Borrower shall pay to Lender as part of Borrower's Liabilities, on demand,
any and all charges asserted by a bank or other institution against Lender for
or with respect to Lender's forwarding to Borrower or at the direction of
Borrower of proceeds of any Loans or for or with respect to Lender's depositing
for collection any check or item of payment received and/or delivered to Lender
on account of Borrower's Liabilities.
2.8 Lender, in its sole and absolute discretion, without notice thereof to
Borrower, may disburse any or all proceeds of any Loan to pay any costs,
expenses or other amounts required to be paid by Borrower hereunder and not so
paid, and/or to pay any Person as Lender deems necessary to insure that the
security interest, lien or other encumbrance granted to Lender in the
Collateral shall at all times have the priority represented and covenanted in
this Agreement and the Other Agreements. All monies so disbursed by Lender
shall be a part of Borrower's Liabilities, payable by Borrower to Lender on
demand.
2.9 Borrower's Liabilities shall bear interest at the rate specified in any
note or other instrument evidencing the same, or, in the absence thereof, at a
daily rate equal to the daily rate equivalent (computed on the basis of a
360-day year and charged for actual days elapsed) at the Base Rate. The
foregoing rate of interest shall fluctuate hereafter from time to time
concurrently with and in an amount equal to each increase or decrease in the
Base Rate.
2.10 Lender shall have no obligation to make any advance to Borrower hereunder.
This Agreement shall be in effect until terminated by Lender at any time in its
sole and absolute discretion, or until terminated by Borrower at any time when
Borrower's Liabilities are equal to zero dollars ($0). On or before the
termination date, Borrower shall pay to Lender, in full, in cash or by
certified or cashier's check, Borrower's Liabilities.
3. LOAN: DISBURSEMENTS
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3.1 Lender may, in its sole and absolute discretion, upon the request of
Borrower, loan to Borrower on a revolving credit basis (the "Revolving Loan")
up to the maximum principal amount of the Revolving Note. In no event shall
Lender be required to advance any amounts hereunder and Lender shall have the
right to evaluate each and every request for each extension of credit or
advance hereunder. Notwithstanding anything in this Paragraph 3.1 to the
contrary, Lender may at any time and from time to time, in Lender's sole and
absolute discretion, loan to Borrower more than the above stated amount,
without notice to any Guarantor or any other Person which might be liable to
Lender on account of Borrower's Liabilities and/or Borrower's Obligations,
provided, however, that any such over-advance shall not establish a custom or
course of dealing or entitle Borrower to any subsequent over-advance under the
same or different circumstances. The indebtedness of Borrower under a Revolving
Loan shall be evidenced by a Revolving Note.
4. COLLATERAL: GENERAL TERMS
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4.1 To secure the prompt payment to Lender of Borrower's Liabilities and the
prompt, full and faithful performance by Borrower of Borrower's Obligations,
Borrower hereby grants to Lender a security interest in and to, and assigns and
pledges to Lender, all of Borrower's now existing and/or owned and hereafter
arising and/or acquired: (a) Real Property of Borrower, now owned or hereafter
acquired and all rights and interests therein, including, without limitation,
all land and buildings, structures and other improvements and chattels now on
such real estate or hereafter erected or placed thereon, all mineral, oil and
gas rights, all shrubbery, trees and crops and/or produce growing, grown or
produced thereon, all air, water and riparian rights, whether or not
appurtenant, all water stock, all easements, tenements, hereditaments,
appurtenances, all rights in any abutting public or private streets and alleys
and submerged land (the "Real Property"); (b) notes, assignments of rents,
mortgages, deeds of trust, deeds to secure debt, security agreements, chattel
mortgages, financing statements, and similar items described in Paragraphs 7.1
and 7.2 hereof (collectively, "Loan Packages"); (c) all of Borrower's
Partnership Interests, (including, without limitation, all of Borrower's
Partnership Interests in all of those partnerships listed on Exhibit B); (d)
accounts, chattel paper, contract rights, leases and rental income thereunder,
leasehold interests, rents, letters of credit, instruments and documents
("Accounts"), and all goods whose sale, lease or other disposition by Borrower
have given rise to Accounts and have been returned to or repossessed or stopped
in transit by Borrower; (e) all patents, copyrights and trademarks, and all
applications for and registrations of the foregoing, all franchise rights,
tradenames, goodwill, beneficial interests, rights to tax refunds and all other
general intangibles of any kind or nature whatsoever ("General Intangibles");
(f) all inventory of Borrower, wherever located, whether in transit, held by
others for Borrower's account, covered by warehouse receipts, purchase orders
and contracts, or in the possession of any carriers, forwarding agents,
truckers, warehousemen, vendors or other Persons, including, without
limitation, all raw materials, work in process, finished merchandise, supplies,
goods, incidentals, office supplies and packaging materials ("Inventory"); (g)
goods (other than Inventory), machinery, equipment, vehicles, appliances,
furniture, furnishings and fixtures ("Equipment"); (h) monies, reserves,
deposits, certificates of deposit and deposit accounts and interest or
dividends thereon, securities, cash, cash equivalents and other property now or
at any time or times hereafter in the possession or under the control of Lender
or its bailee; (i) all books, records, computer records, ledger cards, programs
and other computer materials, customer and supplier lists, invoices, orders and
other property and general intangibles at any time evidencing or relating to
Collateral ("Records"); (j) all accessions to any of the Collateral and all
substitutions, renewals, improvements and replacements of and additions
thereto; (k) all insurance policies insuring, or proceeds of or relating to,
any of the foregoing; (l) all present and future judgments, awards of damage
and settlements made as a result of or in lieu of any taking of any of the
Collateral, or any part thereof, under the power of eminent domain, or for any
damage (whether caused by such taking or otherwise); and (m) all other property
of Borrower, real and/or personal, now owned or hereafter acquired; (n) all
products and proceeds of the foregoing (whether such proceeds are in the form
of cash, cash equivalents, proceeds of insurance policies, Real Estate,
Accounts, General Intangibles, Inventory, Equipment, Records or otherwise). All
of the foregoing is referred to herein individually and collectively as the
"Collateral." Borrower shall make appropriate entries upon its financial
statements and Records disclosing Lender's security interest in and assignment
and pledge of the Collateral.
4.2 Borrower shall execute and/or deliver to Lender, at any time and from time
to time hereafter at the request of Lender, all agreements, instruments,
documents and other written matter (the "Supplemental Documentation") that
Lender reasonably may request, in form and substance acceptable to Lender, to
perfect and maintain perfected Lender's security interest, lien and/or
encumbrance in and/or assignment and pledge of the Collateral and to consummate
the transactions contemplated in or by this Agreement and the Other Agreements.
Borrower, irrevocably, hereby appoints Lender (and all Persons designated by
Lender for that purpose) as Borrower's true and lawful agent and
attorney-in-fact to sign the name of Borrower on the Supplemental Documentation
and to deliver the Supplemental Documentation to such Persons as Lender, in its
sole and absolute discretion, may elect. Borrower agrees that a carbon,
photographic or photostatic copy, or other reproduction, of this Agreement or
of any financing statement, shall be sufficient as a financing statement.
4.3 Lender (by any of its officers, employees and/or agents) shall have the
right, at any time or times during Borrower's usual business hours, to inspect
the Collateral (and the premises upon which it is located) and all related
Records and to verify the amount and condition of or any other matter relating
to the Collateral. All costs, fees and expenses incurred by Lender, or for
which Lender becomes obligated, in connection with such inspection and/or
verification shall constitute part of Borrower's Liabilities, payable by
Borrower to Lender on demand.
4.4 Borrower hereby warrants and represents to and covenants with Lender that:
(a) Lender's security interest in the Collateral is now and at all times
hereafter shall have a first priority, except for any permanent financing
secured by the Collateral, which may have priority over Lender's security
interest in the Collateral and except as permitted under Paragraph 10.2(a); (b)
the principal place of business of Borrower in Illinois is the location
specified at the beginning of this Agreement, and Borrower has no other offices
or locations and does not keep Collateral at any other office or location
except at the location of any of Borrower's Real Property and Borrower shall
not remove the Records and/or the Collateral from its principal place of
business and shall not keep any of such Records and/or the Collateral at any
other office or location unless Borrower gives Lender written notice thereof at
least thirty (30) days prior thereto and the same is within the continental
United States of America. Borrower, by written notice delivered to Lender at
least thirty (30) days prior thereto, shall advise Lender of Borrower's opening
of any new office or place of business or its closing of any then existing
office or place of business and any new office or place of business shall be
within the continental United States of America.
4.5 Lender, in its sole and absolute discretion, without waiving or releasing
any of Borrower's Obligations or any Event of Default, may at any time or times
hereafter, but shall be under no obligation to, pay, acquire and/or accept an
assignment of any security interest, lien, encumbrance or claim asserted by any
Person against the Collateral. All sums paid by Lender in respect thereof and
all costs, fees and expenses, including reasonable attorneys' fees, court
costs, expenses and other charges relating thereto incurred by Lender or for
which Lender becomes obligated on account thereof shall be part of Borrower's
Liabilities payable by Borrower to Lender on demand.
4.6 Immediately upon Borrower's receipt of that portion of the Collateral
consisting of Loan Packages, chattel paper and/or evidenced by an instrument
and/or document, Borrower shall xxxx the same to show that such Collateral is
subject to a security interest in favor of Lender and shall deliver the
original thereof to Lender, together with appropriate endorsement and/ or other
specific evidence of assignment thereof to Lender, in form and substance
acceptable to Lender.
4.7 Lender may, in its sole and absolute discretion, retain as additional
Collateral or release to Borrower, from time to time, such portion of the
monies, reserves and proceeds received by Lender with respect to the Collateral
as Lender may determine. All such monies, reserves and proceeds and other
property of Borrower in the possession of Lender or its bailee at any time or
times hereafter are hereby pledged by Borrower to Lender as additional
Collateral hereunder, and, in Lender's sole and absolute discretion, may be
held by Lender until Borrower's Liabilities are paid in full or, at any time,
may be applied by Lender on account of Borrower's Liabilities.
4.8 No authorization given by Lender pursuant to this Agreement or the Other
Agreements to sell any specified portion of Collateral or any items thereof,
and no waiver by Lender in connection therewith shall establish a custom or
constitute a waiver of the prohibition contained in this Agreement against such
sales, with respect to any portion of the Collateral or any item thereof not
covered by said authorization.
4.9 Regardless of the adequacy of any Collateral, any deposits or other sums at
any time credited by or payable or due from Lender or any bailee of Lender to
Borrower, or any monies, cash, cash equivalents, certificates of deposit,
securities, instruments, documents or other assets of Borrower in the
possession or control of Lender or its bailee for any purpose may at any time
be reduced to cash and applied by Lender to, or setoff by Lender against,
Borrower's Liabilities hereunder.
5. COLLATERAL: REAL PROPERTY
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5.1 Borrower represents and warrants to Lender that Borrower has good, valid
and indefeasible title and ownership of all Real Property described in each
Mortgage given by Borrower as mortgagor.
5.2 If Borrower shall acquire any Real Property, which Real Property is
adjacent to or contiguous to any Real Property included within the Collateral
and owned by such Borrower, or any rights title or interest in or to any such
Real Property, Borrower shall promptly execute and deliver to Lender a Mortgage
in recordable form, mortgaging such Real Property to Lender, and such property,
and all of Borrower's right, title and interest therein shall be included
within the Collateral.
5.3 Lender's right and interest in the Real Property shall include all of
Borrower's right, title and interest in and to any contract for the sale of any
Real Property, including Borrower's future right or interest in any such
contract, whether now existing or hereinafter arising, and all proceeds from
any such sale.
6. COLLATERAL: EQUIPMENT
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6.1 Borrower warrants and represents to Lender that Borrower has good,
indefeasible, and merchantable title, free and clear of all liens, claims and
encumbrances, except for any permanent financing secured by the Collateral and
as permitted under Paragraph 10.2(a), to and ownership of the Equipment
described and/or listed on the Schedule of Equipment delivered to Lender and/or
located on each of Borrower's places of business specified in Paragraph 4.4
hereof, and on each parcel of Real Property mortgaged hereunder and that
Equipment shall be kept and/or maintained solely thereat.
6.2 Borrower shall keep and maintain the Equipment in good operating condition
and repair and shall make all necessary replacements thereof and renewals
thereto so that the value and operating efficiency thereof shall at all times
be maintained and preserved.
6.3 Borrower, immediately on demand by Lender, shall deliver to Lender any and
all evidence of ownership of, including without limitation, certificates of
title to and applications for title to, any Equipment.
6.4 Borrower shall notify Lender within five (5) business days after it shall
acquire any Equipment covered by certificates of title. With respect to such
newly acquired Equipment, Borrower shall deliver to Lender, simultaneously with
such notice, the certificates of title relating to such Equipment and
appropriate financing statements, if required by applicable law, duly completed
by Borrower, to enable Lender to perfect its lien in such Equipment.
7. COLLATERAL: LOAN PACKAGES
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7.1 Borrower shall obtain from any of its subpartnerships to which it shall
extend any loan or credit, or for whose benefit it shall provide any guarantee,
letter of credit or other security or security enhancement (collectively, an
"Accommodation"), a note or notes evidencing the loan, credit or Accommodation
substantially in the form of Exhibit C, a mortgage, deed of trust or deed to
secure debt acceptable to Lender which shall include the provisions set forth
in Exhibit D, and such assignments of rents, security agreements, financing
statements and similar items as Lender may request. A11 of such mortgages,
deeds of trust or deeds to secure debt shall secure in addition to any loans
and Accommodations made by Borrower to such subpartnership, the loans and
Accommodations made by Borrower to each and every other subpartnership, then
existing or thereafter arising, and all modifications, extensions, advances and
refinancing thereof, and each such note, mortgage, deed of trust, deed to
secure debt, assignment of rents, security agreement and other instrument or
document evidencing or securing such loan or Accommodation shall provide that
any default by any subpartnership on any Loan Package shall be a default under
each and every other Loan Package.
7.2 Borrower shall obtain from each of its subpartnerships, other than those
described in Paragraph 7.1, a mortgage, deed of trust or deed to secure debt
acceptable to Lender which shall include the provisions set forth on Exhibit D,
and an assignment of rents, security agreement and financing statement, which
shall secure the loans and Accommodations made by Borrower to each and every
other subpartnership, then existing or thereafter arising, and all
modifications, extensions, advances and refinancings thereof, and each such
mortgage, deed of trust or deed to secure debt shall provide that any default
by any subpartnership on any Loan Package shall be a default thereunder.
7.3 Borrower represents and warrants to Lender that it has good, valid and
marketable title to all of the Loan Packages, free and clear of any and all
claims, liens and encumbrances.
7.4 At Lender's request, Borrower shall assign to Lender by recordable document
any and all documents evidencing and securing any loon in a Loan Package, and
cause such assignment to be duly recorded.
7.5 Until otherwise notified by Lender, and provided Borrower is not in default
hereunder, Borrower shall administer the Loan Packages as though they had not
been assigned to Lender hereunder, and Borrower shall be entitled to collect
any and all loans to its subpartnership borrowers, and to exercise any and all
rights under all documents evidencing and securing any and all such loans,
including the taking of any and all legal action to collect such loans.
8. COLLATERAL: PARTNERSHIP INTERESTS
----------------------------------
8.1 Borrower represents and warrants to Lender that it has good, valid and
marketable title to all of the Partnership Interests owned by it, free and
clear of any and all claims, liens and encumbrances.
8.2 At Lender's request, Borrower shall notify each partnership in which it
holds a Partnership Interest of the assignment thereof to Lender, and shall use
its best efforts to cause the partnership to record or recognize such
assignment; provided, however, in no event shall Lender act as, or be deemed to
have acted as, a general partner of any such partnership, unless and until
Lender consents to act as a general partner, and signs a document specifically
naming Lender as a general partner and in which Lender specifically consents to
acting as a general partner.
8.3 At Lender's request, Borrower shall execute and deliver to Lender, or file
in the appropriate governmental offices, any and all UCC financing statements
and other comparable instruments to perfect Lender's security interest in the
Partnership Interests.
8.4 Until otherwise notified by Lender, and provided Borrower is not in default
hereunder, Borrower shall be entitled to deal with each of the partnerships in
which Borrower holds a Partnership Interest, as though the Partnership Interest
had not been assigned to Lender hereunder, and Borrower shall be entitled to
collect any and all distributions to Borrower, and to exercise any and all
rights under the applicable partnership agreement.
9. WARRANTIES. REPRESENTATIONS AND COVENANTS: INSURANCE AND TAXES
--------------------------------------------------------------
9.1 Borrower, at its sole cost and expense, shall furnish or cause to be
furnished to Lender original policies or true and certified copies of insurance
on the Collateral (to the extent coverage is applicable) as follows:
(A) Insurance against loss or damage to Collateral by fire, lightning or
malicious mischief, and such hazards as are now or hereafter included in "All
Risk" coverage and against such other insurable practices which are insured for
property of like kind and character as the Collateral. The amounts of such
insurance shall be equal to one hundred percent (100%) of the full replacement
cost of the improvements located on the Collateral, without deduction for
depreciation, but in no event shall the amount of such insurance be less than
replacement cost, with one hundred percent (100%) coinsurance. Such policies of
insurance shall contain a Replacement Cost Endorsement, an Inflation Guard
Endorsement, an Agreed Amount Endorsement, and such other endorsements as are
required by Lender;
(B) One hundred percent (100%) rent or business interruption insurance in an
amount equal to not less than one (1) year's rent from any of the Collateral
which is rental property without coinsurance;
(C) Flood insurance in the amount of one hundred percent (100%) replacement
cost of the Collateral if available, but not less than the maximum amounts
available to Borrower under the applicable National Flood Insurance guidelines
as to such portions of the Collateral which is Real Property situated in an
area now or subsequently designated as having special flood and/or mudslide
hazards;
(D) Earthquake insurance as available if the Collateral which Is Real Property
is now situated in or subsequently designated as in a seismographic earthquake
zone;
(E) Boiler and machinery insurance to one hundred percent (100%) replacement
cost for boilers, turbines, electrical machinery, and miscellaneous equipment;
(F) At least two million dollars ($2,000,000) per occurrence of comprehensive
general liability insurance on an occurrence form. This requirement may be met
in combination with an umbrella policy with the permission of the Lender;
(G) Increased cost of Demolition and Increased Cost of Construction insurance;
(H) Other insurance as Lender may reasonably require.
All such policies of insurance shall be subject to the reasonable approval of
Lender as to the issuing company or companies, content, amount of coverage,
form and expiration dates. The insurance company or companies chosen must be
licensed in the state in which any of the Collateral insured is located and
must have a minimum rating of A: Class VIII in the most recent issue of Best's
Rating Guide. All insurance policies shall contain a Noncontributory Standard
Mortgagee clause, or its equivalent, and a Lender's Loss Payable Endorsement,
in form and content acceptable to Lender, in favor of Lender. All policies
shall name Lender as an additional insured and contain waiver of subrogation
and mortgagee clauses in favor of Lender. Policies shall also provide for
thirty (30) days written notice to Lender in advance of cancellation of said
policies for any reason for material modification of said policies and then ten
(10) days written notice to Lender in advance of payment of any insurance
claims under said policies to any Person. Renewal policies shall be submitted
to the Lender with paid receipts for the insurance premium fifteen (15) days
prior to expiration each year. The Lender shall have the option, but not the
obligation, to purchase insurance for the Collateral if existing insurance is
not adequate. Borrower, irrevocably, appoints Lender (and all officers,
employees or agents designated by Lender) as Borrower's true and lawful agent
and attorney-in-fact for the purpose of endorsing the name of Borrower on any
check, draft, instrument or other item of payment for the proceeds of such
policies of insurance. Furthermore, Borrower, irrevocably, appoints Lender (and
all officers, employees or agents designated by Lender) as Borrower's true and
lawful agent and attorney-in-fact, from and after an Event of Default, for
purposes of making, settling and adjusting claims under such policies of
insurance, and for making all determinations and decisions with respect to such
policies of insurance. In the event Borrower at any time or times hereafter
shall fail to obtain or maintain any of the policies of insurance required
above or to pay any premium in whole or in part relating thereto, then Lender,
without waiving or releasing any of Borrower's Obligations or any Event of
Default hereunder, may at any time or times thereafter (but shall be under no
obligation to do so) obtain and maintain such policies of insurance and pay
such premium and take any other action with respect thereto which Lender deems
advisable. All sums so disbursed by Lender, including reasonable attorneys'
fees, court costs, expenses and other charges relating thereto, shall be part
of Borrower's Liabilities, payable by Borrower to Lender on demand.
9.2 Borrower shall pay promptly, when due, all of the Charges, provided,
however, that notwithstanding the foregoing, Borrower may permit or suffer the
Charges to attach to Borrowers assets and may dispute, without prior payment
thereof, the Charges, provided that Borrower, in good faith, shall be
contesting the attachment and enforcement thereof in an appropriate proceeding,
enforcement thereof against any assets of Borrower shall be stayed and
appropriate reserves therefor shall have been established on the Records of
Borrower in accordance with generally accepted accounting principles. In the
event Borrower, at any time or times hereafter, shall fail to pay the Charges
required herein, Borrower shall so advise Lender thereof in writing; Lender
may, without waiving or releasing any of Borrower's Obligations or any Event of
Default hereunder, in its sole and absolute discretion, at any time or times
thereafter, make such payment, or any part thereof, and take any other action
with respect thereto which Lender deems advisable. All sums so paid by Lender
and any expenses, including reasonable attorneys' fees, court costs, expenses
and other charges relating thereto, shall be part of Borrower's Liabilities,
payable by Borrower to Lender on demand.
9.3 Borrower shall require each of its subpartnership borrowers to provide to
Borrower for its benefit as a lender, the insurance described in, and to agree
to the provisions of, Paragraphs 9.1 and 9.2.
10. WARRANTIES. REPRESENTATIONS AND COVENANTS: GENERAL
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10.1 Except as disclosed in writing to Lender, Borrower warrants and represents
to and covenants with Lender that: (a) Borrower and each Subsidiary of Borrower
is and at all times hereafter shall be a limited partnership duly organized and
existing and in good standing under the laws of the state of its organization
and qualified or licensed to do business and in good standing in all states in
which the laws thereof require Borrower to be so qualified and/or licensed; (b)
Borrower has the right, power and capacity and is duly authorized and empowered
to enter into, execute, deliver and perform this Agreement and the Other
Agreements; (c) the execution, delivery and/or performance by Borrower of this
Agreement and the Other Agreements shall not, by the lapse of time, the giving
of notice or otherwise, constitute a violation of any applicable law or a
breach of any provision contained in Borrower's Agreement of Limited
Partnership or Certificate of Limited Partnership, or contained in any
agreement, instrument or document to which Borrower is now or hereafter a party
or by which it Is or may become bound, or result in or require the creation of
any lien, security interest, charge or other encumbrance upon or with respect
to any now-owned or hereafter arising or acquired properties of Borrower; (d)
this Agreement and the Other Agreements are and will be the legal, valid and
binding agreements of Borrower enforceable in accordance with their terms,
except as enforcement thereof may be subject to the effect of applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and to general principles of equity (regardless of
whether such enforcement is sought in a proceeding in equity or at law); (e)
Borrower has and at all times hereafter shall have good, indefeasible and
merchantable title to and ownership of the Collateral, free and clear of all
liens, claims, security interests and encumbrances except those of Lender, and
those referred to in Paragraph 10.2(a) below; (f) except for (A) trade payables
arising in the ordinary course of its business since the dates reflected in the
Financials, (B) other accruals similar in nature or type to accruals shown on
the Financials and arising in the ordinary course of its business since the
dates reflected in the Financials (C) Indebtedness disclosed in the Financials,
(D) Borrower's obligations to issuers of letters of credit, and (E) the
Borrower's Liabilities, Borrower has no Indebtedness; (g) Borrower is not
subject to the renegotiation of any government contracts; (h) Borrower
possesses adequate assets, licenses, patents, copyrights, trademarks and
tradenames to continue to conduct its business as previously conducted by it;
(i) Borrower has and is in good standing with respect to all governmental
permits, certificates, consents and franchises necessary to continue to conduct
its business as previously conducted by it and to own or lease and operate its
properties as now owned or leased by it; (j) none of said permits,
certificates, consents or franchises contain any term, provision, condition or
limitation more burdensome than such as are generally applicable to Persons
engaged in the same or similar business as Borrower; (k) Borrower is not a
party to any contract or agreement or subject to any charge, restriction,
judgment, decree or order materially and adversely affecting its business,
property, assets, operations or condition, financial or otherwise; (l) Borrower
is not, and will not be during the term or any renewal term hereof, in
violation of any applicable statute, regulation or ordinance of the United
States of America, of any state, city, town, municipality, county or of any
other jurisdiction, or of any agency thereof, in any respect materially and
adversely affecting its business, property, assets, operations or condition,
financial or otherwise; (m) Borrower has filed or caused to be filed all tax
returns which are required to be filed, and has paid all Charges shown to be
due and payable on said returns or on any assessments made against it or any of
its property, and all other Charges imposed on it or any of its properties by
any governmental authority; (n) the Financials fairly and accurately present
the assets, liabilities and financial conditions and results of operations of
Borrower and such other Persons described therein as of and for the periods
ending on such dates and have been prepared in accordance with federal income
tax requirements or generally accepted accounting principles and such
principles have been applied on a basis consistently followed in all material
respects throughout the periods involved; (o) there has been no material and
adverse change in the assets, liabilities or financial condition of Borrower
since the date of the Financials; and (p) the execution, delivery and
performance by Borrower of this Agreement and/or the Other Agreements will not,
except to the extent caused by independent actions of Lender, impose on or
subject Lender to any liability, whether fixed or contingent, in respect of any
environmental protection or other law, rule or regulation (including, without
limitation, rules and regulations of the United States Environmental Protection
Agency) controlling, governing or relating to the pollution or contamination of
the air, water or land.
10.2 Borrower warrants and represents to and covenants with Lender that
Borrower shall not, without Lender's prior written consent thereto, which
Lender may or may not give in its sole discretion, concurrently or hereafter:
(a) grant a security interest in, assign, sell or transfer any of Borrower's
assets to any Person or permit, grant, or suffer a lien, claim or encumbrance
upon any of Borrower's assets except: (i) liens created by this Agreement and
the Other Agreements; (ii) liens for Charges which are not yet due and payable,
or which are permitted pursuant to Paragraph 9.2 of this Agreement; (iii)
mechanics', materialmen's, bankers', carriers', warehousemen's and similar
liens arising in the ordinary course of business and securing obligations of
Borrower that are not overdue for a period of more than sixty (60) days or are
being contested in good faith by appropriate proceedings diligently pursued,
provided that in the case of any such contest any such proceedings commenced
for the enforcement of such lien shall have been duly suspended and such
provision for the payment of such liens has been made on the books of Borrower
as may be required by generally accepted accounting principles; (iv) liens
arising in connection with worker's compensation, unemployment insurance, old
age pensions and social security benefits which are not overdue or are being
contested in good faith by appropriate proceedings diligently pursued, provided
that in the case of any such contest any proceedings commenced for the
enforcement of such liens shall have been duly suspended and such provision for
the payment of such liens has been made on the books of Borrower as may be
required by generally accepted accounting principles; (v) liens incurred in the
ordinary course of business to secure the performance of statutory obligations
arising in connection with progress payments or advance payments due under
contracts with the United States Government or any agency thereof entered into
in the ordinary course of business, liens incurred or deposits made in the
ordinary course of business to secure the performance of tenders, statutory
obligations, bids, leases, performance bonds, fee and expense arrangements with
trustees and fiscal agents and other similar obligations (exclusive of
obligations incurred in connection with the borrowing of money or the payment
of the deferred purchase price of property) and liens directly securing appeal
and release bonds, provided that adequate provision for all such obligations
has been made on the books of Borrower in accordance with generally accepted
accounting principles; and (vi) zoning restrictions, easements, licenses,
restrictions on the use of Real Property or minor irregularities in title
thereto, which do not materially detract from the value or impair the use of
such Real Property; (b) permit or suffer any levy, attachment or restraint to
be made affecting any of its assets or the Collateral; (c) permit or suffer any
receiver, trustee or assignee for the benefit of creditors, or any other
custodian to be appointed to take possession of all or any of Borrower's assets
or any of the Collateral; (d) sell all or substantially all of its assets to
any Person; (e) modify, amend or supplement Borrower's Certificate of Limited
Partnership or Agreement of Limited Partnership or similar document; (f) enter
into any transaction not in the ordinary course of business which materially
and adversely affects Borrower's ability to repay Borrower's Liabilities or
Indebtedness, or materially and adversely affects the Collateral; (g) except as
otherwise permitted under the terms of Borrower's partnership agreement as it
may be in effect on the date hereof, other than In the ordinary course of
business, make any investment in the Stock or obligations of any Person,
provided, however, notwithstanding the foregoing, Borrower may make investments
in certificates of deposit of a banking institution having a net worth in
excess of S100,000,000 or in securities of the United States of America or
commercial paper with a P1 (or equivalent) rating (all of the foregoing
maturing within one year); (h) guaranty or otherwise, in any way, become liable
with respect to the obligations or liabilities of any Person, including,
without limitation, by agreement to maintain net worth or working capital, or
to purchase the obligations or property of any such Person, or to furnish funds
to any such Person, directly or indirectly, through the purchase of goods,
supplies or services, or obtain upon its credit the issuance of any letter or
letters of credit for the obligations of any such Person, provided, however,
that the foregoing shall not apply to endorsement of instruments or items of
payment for deposit or collection in the ordinary course of business; (i) make
any material change in Borrower's capital structure or in any of its business
objectives, purposes and operations which might in any way adversely affect the
repayment of Borrower's Liabilities; (j) other than as specifically permitted
in or contemplated by this Agreement, encumber, pledge, mortgage, sell, lease
or otherwise dispose of or transfer, whether by sale, merger, consolidation or
otherwise, any of Borrower's assets; (k) redeem, retire, purchase or otherwise
acquire, directly or indirectly, any of Borrower's Partnership Interests; (l)
redeem or otherwise acquire any Indebtedness, except as required in accordance
with the express terms of the agreement or instrument creating or evidencing
such Indebtedness, or if such Indebtedness is superior, in right of payment, to
Borrower's Liabilities, and then so long as no Event of Default shall have
occurred or would occur after giving effect thereto; (m) enter into any
transactions, including, without limitation, the purchase, sale or exchange of
property or the rendering of any services, with any Affiliate, or enter into,
assume or suffer to exist any employment, management, administration, advisory
or consulting contract with any Affiliate or any officer, director or partner
of any Affiliate, except a transaction or contract which is in the ordinary
course of business, is otherwise permitted by this Agreement and is upon fair
and reasonable terms no less favorable than would be obtained in a comparable
arms-length transaction with a Person not an Affiliate; (n) distribute any cash
to partners or make any distributions or transfers of Borrower's property or
assets or make any loans, advances and/or extensions of credit to any Persons;
(o) terminate or withdraw from any pension (or similar) plan so as to result in
any material liability or penalty (in the sole opinion of Lender) of Borrower
to the pension plan, pension trustee, Pension Benefit Guaranty Corporation or
otherwise, or permit to occur any Reportable Event or Prohibited Transaction
(as defined in Title IV of the Employee's Retirement Income Security Act of
1974 as the same may be amended and in effect from time to time), or any other
event or condition, which presents a material risk (in the sole opinion of
Lender) of such termination or withdrawal; (p) incur Indebtedness (other than
Borrower's Liabilities) except renewals or extensions of existing Indebtedness
and interest thereon and/or refinancings of existing indebtedness (provided the
same is not increased in connection therewith), and trade payables arising in
the ordinary course of business; (q) except pursuant to this Agreement and the
Other Agreements, issue any power of attorney or other contract or agreement
giving any Person power or control over the day-to-day operations of Borrower's
business; (r) fail to comply in any material respect with any applicable
provision of the Comprehensive Environmental Response Compensation and
Liability Act of 1980 or any other applicable local, state or federal
environmental protection health or safety, statute, health or safety or
regulation relating to or imposing liability or standards concerning Hazardous
Material; (s) purchase, invest in or otherwise acquire, by purchase or capital
or financing lease real estate, machinery, equipment or other fixed assets
which in the aggregate require an expenditure by Borrower in any one fiscal
year of Borrower exceeding, in the aggregate, S100,000.
10.3 Borrower warrants and represents to and covenants with Lender that
Borrower shall do all of the following during the term of this Agreement unless
Lender waives any such requirement in writing: (a) pay or discharge or
otherwise satisfy at or before maturity or before the same becomes delinquent,
all Indebtedness, provided, however, that Borrower shall not be required to pay
any Indebtedness which is unsecured while the same is being contested by it in
good faith and by appropriate proceedings so long as Borrower shall have set
aside on its books reserves in accordance with generally accepted accounting
principles with respect thereto and title to any property of Borrower is not
jeopardized; (b) preserve and maintain its existence, rights, privileges and
franchises in the jurisdiction of its organization, and qualify and remain
qualified to do business in each other jurisdiction in which such qualification
is necessary in view of its business or operations; (c) comply with all laws,
rules, regulations and governmental orders (federal, state and local) having
applicability to it or to the business or businesses at any time conducted by
it, where the failure to so comply would have a material adverse effect, either
individually or in the aggregate, on the business, condition (financial or
otherwise) and assets, operations or prospects of Borrower; (d) duly and
punctually pay and perform each of its obligations under this Agreement and the
Other Agreements in accordance with the terms thereof; and (e) furnish to
Lender, as soon as possible and in any event within five (5) days after
Borrower shall have obtained knowledge of the occurrence of an Event of
Default, the written statement of the Chief Financial Officer of Borrower
setting forth the details of such Event of Default and the action which
Borrower proposes to take with respect thereto.
10.4 Borrower shall require that each subpartnership borrower give to it, as
lender, the representations and warranties, and agree to all of the covenants
contained in Paragraphs 10.1, 10.2, and 10.3.
11. WARRANTIES. REPRESENTATIONS AND COVENANTS: FINANCIAL
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STATEMENTS
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11.1 Borrower covenants with Lender that Borrower shall keep Records and
prepare financial statements and shall cause to be furnished to Lender, at
Lender's request, the following (all of the foregoing and following to be kept
and prepared at Lender's option, either in accordance with tax accounting or in
accordance with generally accepted accounting principles, applied on a basis
consistent with the Financials unless Borrower's certified public accountants
concur In any changes therein and such changes are consistent with then
generally accepted accounting principles):
(A) As soon as available but not later than ninety (90) days after the close of
each fiscal year of Borrower, a copy of the tax return and, if generally
accepted accounting is requested by Lender or elected by Borrower, a copy of
the annual audit report of Borrower and its Subsidiaries prepared on a
consolidated and consolidating basis in conformity with generally accepted
accounting principles and consisting of a balance sheet of Borrower and its
Subsidiaries as of the end of, and related statements of operations and cash
flow for, such year, together with a reconciliation of capital of Borrower and
its Subsidiaries for such year.
(B) Concurrently with the delivery of the audited financial statements
described in Subparagraph (A) above if required or given, (1) a certificate of
the aforesaid certified public accountants certifying to Lender that based upon
their examination of the affairs of Borrower, performed in connection with the
preparation of said financial statements, they are not aware of the occurrence
or existence of any condition or event which constitutes or upon notice or
lapse of time or both would constitute an Event of Default or, if they are
aware thereof, the nature thereof and (ii) the acknowledgment of such certified
public accountants, in form and substance reasonably acceptable to Lender, to
the effect that the Lender shall be permitted to rely thereupon for purposes of
Paragraph 5535.1 of Chapter 111 of the Illinois Annotated Statutes,
notwithstanding that the Lender is not in privity of contract with Such
certified public accountants in respect of such financial statements.
(C) Such other data and information (financial and otherwise) as Lender, from
time to time, may request bearing upon or related to the Collateral, Borrower's
financial condition and/or results of operations.
11.2 Borrower shall require that each subpartnership borrower give to it, as
lender, the representations and warranties, and agree to all of the covenants
contained in Paragraph 11.1.
12. DEFAULT
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12.1 The occurrence of any one of the following events shall constitute a
default ("Event of Default") under this Agreement: (a) Borrower shall default
in the performance or observance of any of Borrower's Obligations under this
Agreement; (b) if any representation or warranty on the part of Borrower
contained in this Agreement or the Other Agreements, or any document,
instrument or certificate delivered pursuant hereto or thereto shall have been
incorrect in any material respect when made or deemed made; (c) if Borrower
fails to pay Borrower's Liabilities, when due and payable or declared due and
payable; (d) if the Collateral, any Collateral securing the obligations to
Lender of any Guarantor or any other material portion of Borrower's or any such
Guarantor's assets are attached, seized, subjected to a writ of distress
warrant, or are levied upon, or come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors and the same is not
terminated or dismissed within twenty (20) days thereafter; (e) if a petition
under any section or chapter of the Bankruptcy Reform Act of 1978, as amended,
or any similar law or regulation shall be filed by Borrower or any Guarantor or
if Borrower or any Guarantor shall make an assignment for the benefit of its
creditors or if any case or proceeding is filed by Borrower or any Guarantor
for its dissolution or liquidation; (f) if Borrower or any Guarantor is
enjoined, restrained or in any way prevented by court order from conducting all
or any material part of its business affairs or if a petition under any section
or chapter of the Bankruptcy Reform Act of 1978, as amended, or any similar law
or regulation is filed against Borrower or any Guarantor or if any case or
proceeding is filed against Borrower or any Guarantor for its dissolution or
liquidation and such injunction, restraint or petition is not dismissed or
stayed within thirty (30) days after the entry or filing thereof; (g) if an
application is made by Borrower or any Guarantor for the appointment of a
receiver, trustee or custodian for the Collateral, any Collateral securing such
Guarantor's obligations to Lender or any other material portion of Borrower's
or such Guarantor's assets; (h) if an application is made by any Person other
than Borrower or any Guarantor for the appointment of a receiver, trustee, or
custodian for the Collateral, any Collateral securing such Guarantor's
obligation's to Lender or any other material portion of Borrower's or such
Guarantor's assets and the same is not dismissed within thirty (30) days after
the application therefor; (i) except as permitted in Paragraph 9.2 above, if a
notice of any Charge is filed of record with respect to all or any of
Borrower's assets, or if any Charge becomes a lien or encumbrance upon the
Collateral or any other of Borrower's assets and the same is not released
within thirty (30) days after the same becomes a lien or encumbrance; (j) if
Borrower is in default in the payment of Indebtedness (other than Borrower's
Liabilities) and such default is declared and is not cured within the time, if
any, specified therefor in any agreement governing the same; (k) the death or
incompetency of any Guarantor (which is an individual), or the appointment of a
conservator for all or any material portion of Borrower's or any such
Guarantor's assets or the Collateral; (l) the occurrence of a default or Event
of Default under any agreement, instrument and/or document executed and
delivered by any Guarantor to Lender, which is not cured within the time, if
any, specified therefor in such agreement, instrument or document; (m) the
occurrence of a default or an Event of Default under any of the Other
Agreements, which is not cured within the time, if any, specified therefor in
such Other Agreement; (n) if one or more judgments or decrees shall be entered
against Borrower, involving, individually, or in the aggregate, a liability of
$25,000 or more and all such judgments or decrees shall not have been vacated,
discharged or stayed pending appeal within thirty (30) days from the entry
thereof; (o) if this Agreement or any of the Other Agreements shall cease for
any reason to be in full force and effect (other than by reason of the
satisfaction of all of Borrower's Liabilities or voluntary release by Lender of
any Other Agreement) or Borrower or any other Person (other than Lender) shall
disavow its obligations thereunder, or shall contest the validity or
enforceability of any thereof; or (p) if any lien or security interest in any
Collateral or any Collateral securing the obligations of any Guarantor to
Lender shall for any reason cease to be a legal, valid, perfected or
enforceable lien on and security interest in such Collateral or Guarantor's
Collateral (other than by reason of the payment in full of all obligations
secured thereby or voluntary release by the secured party of such Collateral or
Guarantor's Collateral).
12.2 All of Lender's rights and remedies under this Agreement and the Other
Agreements are cumulative and nonexclusive.
12.3 Upon an Event of Default or the occurrence of any one of the events
described in Paragraph 12.1 (notwithstanding Borrower's right to cure the same
thereafter), without notice by Lender to or demand by Lender of Borrower,
Borrower's Liabilities shall be due and payable, forthwith.
12.4 Upon an Event of Default, Lender, in its sole and absolute discretion,
may: (a) exercise any one or more of the rights and remedies accruing to a
secured party under the Uniform Commercial Code of the relevant state or states
and any other applicable law upon default by a debtor; (b) enter, with or
without process of law and without breach of the peace, any premises where the
Collateral is or may be located, and without charge or liability to Lender
therefor seize and remove the Collateral from said premises and/or remain upon
said premises and use the same for the purpose of collecting, preparing and
disposing of the Collateral; and (c) sell or otherwise dispose of the
Collateral at public or private sale for cash or credit, provided, however,
that Borrower shall be credited with the net proceeds of such sale only when
such proceeds are actually received by Lender pursuant to Paragraph 14.1
hereof.
12.5 Upon an Event of Default, Borrower, immediately upon demand by Lender,
shall assemble the moveable Collateral and make it available to Lender at a
place or places to be designated by Lender which are reasonably convenient to
Lender and Borrower. Borrower recognizes that in the event Borrower fails to
perform, observe or discharge any of Borrower's Obligations, no remedy of law
will provide adequate relief to Lender, and agrees that Lender shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages.
12.6 Any notice required to be given by Lender of a sale, lease, other
disposition of the Collateral or any other intended action by Lender, deposited
in the United States mail, postage prepaid and duly addressed to Borrower at
its principal place of business specified at the beginning of this Agreement
not less than ten (10) days prior to such proposed action, shall constitute
commercially reasonable and fair notice to Borrower thereof.
12.7 Upon an Event of Default, Borrower agrees that Lender may, if Lender deems
it reasonable, postpone or adjourn any such sale of the Collateral from time to
time by an announcement at the time and place of sale or by announcement at the
time and place of such postponed or adjourned sale, without being required to
give a new notice of sale. Borrower agrees that Lender has no obligation to
preserve rights against prior parties to the Collateral. Further, Borrower
waives and releases any cause of action and claim against Lender as a result of
Lender's possession, collection or sale of the Collateral, any liability or
penalty for failure of Lender to comply with any requirement imposed on Lender
relating to notice of sale, holding of sale or reporting of sale of the
Collateral, and, to the extent permitted by law, any right of redemption from
such sale.
12.8 In the event Lender seeks possession of the Collateral through replevin or
other court process, Borrower hereby irrevocably waives (a) any bond, surety or
security required as an incident to such possession, and (b) any demand for
possession of the Collateral prior to commencement of any suit or action to
recover possession thereof.
12.9 Upon the occurrence of any one of the events described in Paragraph 12.1
above, notwithstanding Borrower's right to cure the same before it becomes an
Event of Default, Lender, if it determines that the Collateral or the payment
of Borrower's Liabilities is jeopardized, may enforce such of its rights and
remedies under this Article as Lender deems necessary or proper.
13. CONDITIONS PRECEDENT TO DISBURSEMENT
------------------------------------
13.1 In no event shall Borrower request that Lender make any advance or
additional or future advances to Borrower unless, in addition to satisfaction
of the conditions set forth in Paragraphs 13.2 and 13.3 hereof, Lender shall
have received (if Lender shall have so requested), prior to any such advance,
the following, duly executed and in form and substance satisfactory to Lender:
(A) a duly executed copy of this Agreement;
(B) the Applicable Revolving Note, duly executed by Borrower, payable to the
order of Lender;
(C) the applicable Mortgage;
(D) UCC-1 Financing Statements, duly executed by Borrower, showing Borrower as
Debtor, in favor of Lender, as Secured Party, in the jurisdiction in which
Borrower maintains its chief executive office and in each other jurisdiction in
which Borrower conducts its business operations and/or maintains Collateral;
(E) UCC-2 Financing Statements, duly executed by Borrower, showing Borrower as
Debtor, in favor of Lender, as Secured Party, in each county in which Borrower
owns Real Property or maintains equipment or fixtures;
(F) UCC/Tax/Judgment Lien Search Report with respect to Borrower, together with
duly executed releases and/ or termination statements as Lender may request;
(G) certified copies of the Certificate of Limited Partnership of Borrower;
(H) copy of Borrower's Agreement of Limited Partnership certified to by one of
Borrower's general partners;
(I) certificate(s) of Insurance in respect of all property, casualty, liability
and other insurance maintained by Borrower in respect of the Collateral or
otherwise in respect of its business, together with lender loss payable and
other endorsements acceptable as to form and substance to Lender; and
(J) such other opinions, documents, assignments, certificates or approvals as
Lender reasonably may request.
All of the foregoing shall be in form and substance reasonably acceptable to
Lender and its counsel.
13.2 Lender shall not make any advance or additional or future advances to
Borrower unless and until all proceedings taken in connection with the
transaction contemplated by this Agreement, and all instruments, authorizations
and other documents applicable thereto, shall be satisfactory in form and
substance to Lender.
13.3 In addition to the foregoing, prior to Lender making of any advances
additional or future advances hereunder, all of the following shall have been
satisfied in a manner satisfactory to Lender:
(A) No change in the condition or operations, financial or otherwise, of
Borrower or any Affiliate, shall have occurred which change, in the sole credit
judgment of Lender, may have a material adverse effect on Borrower or such
Affiliate or on any of the Collateral;
(B) All of the representations and warranties of Borrower set forth in this
Agreement and each of the Other Agreements to which Borrower as a party shall
be true and correct on the date of the contemplated Loan to the same extent as
originally made on such date; and
(C) No Event of Default or event or condition which, with notice, lapse of time
and/or the making of the contemplated Loan, would constitute an Event of
Default shall exist or be continuing.
13.4 Any provision herein to the contrary notwithstanding, Lender shall have no
obligation to make any advance hereunder, even if all of the above conditions
shall have been satisfied, and each and every advance shall be at Lender's sole
option and discretion
14. GENERAL
-------
14.1 Any check, draft or similar item of payment by or for the account of
Borrower delivered to Lender on account of Borrower's Liabilities shall,
provided the same is honored and final settlement thereof is reflected by
irrevocable credit to Lender, be applied by Lender on account of Borrower's
Liabilities two (2) business days after the date Lender actually receives the
same. A "business day" shall mean any day upon which national banks with a
principal place of business in Chicago, Illinois are authorized or required by
law to be open for the transaction of commercial banking business.
14.2 That portion of Borrower's Liabilities consisting of monies, costs,
expenses or advances to be reimbursed by Borrower to Lender pursuant to this
Agreement shall be payable by Borrower to Lender on demand.
14.3 Borrower waives the right to direct the application of any and all
payments at any time or times hereafter received by Lender on account of
Borrower's Liabilities and Borrower agrees that Lender shall have the
continuing exclusive right to apply and reapply any and all such payments in
such manner as Lender may deem advisable, notwithstanding any entry by Lender
upon any of its books and records.
14.4 Borrower covenants, warrants and represents to Lender that all
representations and warranties of Borrower contained in this Agreement and the
Other Agreements shall be true at the time of Borrower's execution of this
Agreement and the Other Agreements, shall survive the execution, delivery and
acceptance thereof by the parties thereto and the closing of the transactions
described therein or related thereto and shall be true from the time of
Borrower's execution of this Agreement to the end of the term hereof.
14.5 This Agreement and the Other Agreements may not be modified, altered or
amended except by an agreement in writing signed by Borrower and Lender.
Borrower may not sell, assign or transfer this Agreement or the Other
Agreements or any portion thereof, including, without limitation, Borrower's
rights, titles, interests, remedies, powers and/or duties thereunder. Borrower
hereby consents to Lender's sale, assignment, transfer or other disposition, at
any time and from time to time hereafter, of this Agreement or the Other
Agreements, or of any portion thereof, including, without limitation, Lender's
rights, titles, interests, remedies, powers and/or duties.
14.6 Lender's failure at any time or times hereafter to require strict
performance by Borrower of any provision of this Agreement shall not waive,
affect or diminish any right of Lender thereafter to demand strict compliance
and performance therewith. Any suspension or waiver by Lender of an Event of
Default by Borrower under this Agreement or the Other Agreements shall not
suspend, waive or affect any other Event of Default by Borrower under this
Agreement or the Other Agreements, whether the same is prior or subsequent
thereto and whether of the same or of a different type. None of the
undertakings, agreements, warranties, covenants and representations of Borrower
contained in this Agreement or the Other Agreements and no Event of Default by
Borrower under this Agreement or the Other Agreements shall be deemed to have
been suspended or waived by Lender unless such suspension or waiver is by an
instrument in writing signed by an officer of Lender and directed to Borrower
specifying such suspension or waiver.
14.7 If any provision of this Agreement or the Other Agreements or the
application thereof to any Person or circumstance is held invalid or
unenforceable, the remainder of this Agreement and the Other Agreements and the
application of such provision to other Persons or circumstances will not be
affected thereby and the provisions of this Agreement and the Other Agreements
shall be severable in any such instance.
14.8 This Agreement and the Other Agreements shall be binding upon and inure to
the benefit of the successors and assigns of Borrower and Lender. This
provision, however, shall not be deemed to modify Paragraph 14.5 hereof.
14.9 The provisions of the Other Agreements are incorporated in this Agreement
by this reference thereto. Except as otherwise provided in this Agreement and
except as otherwise provided in the Other Agreements by specific reference to
the applicable provision of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision in the Other
Agreements, the provision contained in this Agreement shall govern and control.
14.10 Except to the extent provided to the contrary in this Agreement and in
the Other Agreements, no termination or cancellation (regardless of cause or
procedure) of this Agreement or the Other Agreements shall in any way affect or
impair the powers, obligations, duties, rights and liabilities of Borrower or
Lender in any way or respect relating to (i) any transaction or event occurring
prior to such termination or cancellation, (ii) the Collateral And/or (iii) any
of the undertakings, agreements, covenants, warranties and representations of
Borrower contained in this Agreement or the Other Agreements. All such
undertakings, agreements, covenants, warranties and representations shall
survive such termination or cancellation.
14.11 Except as otherwise specifically provided in this Agreement, Borrower
waives any and all notice or demand which Borrower might be entitled to receive
with respect to this Agreement or the Other Agreements by virtue of any
applicable statute or law, and waives presentment, demand and protest and
notice of presentment, protest, default, dishonor, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Lender on which Borrower may in any way be
liable and here by ratifies and confirms whatever Lender may do in this regard.
14.12 Until Lender is notified by Borrower to the contrary in writing by
registered or certified mail directed to Lender's principal place of business,
the signature upon this Agreement or upon any of the Other Agreements of any
partner, manager, employee or agent of Borrower, or of any other Person
designated in writing to Lender by any of the foregoing, or of a "Designated
Person" (as that term is defined in Borrower's Certificate of even date
herewith, constituting one of the Other Agreements) shall bind Borrower and be
deemed to be the duly authorized act of Borrower.
14.13 Borrower hereby appoints Lender as Borrower's agent and attorney-in-fact
for the purpose of carrying out the provisions of this Agreement and the Other
Agreements, and taking any action and executing any agreement, instrument or
document which Lender may deem necessary or advisable to accomplish the
purposes hereof which appointment is irrevocable and coupled with an interest.
All monies paid for the purposes herein, and all costs, fees and expenses paid
or incurred in connection therewith, shall be part of Borrower's Liabilities,
payable by Borrower to Lender on demand.
14.14 Upon demand by Lender therefor, Borrower shall reimburse Lender for all
costs, fees and expenses incurred by Lender, or for which Lender becomes
obligated, in connection with the negotiation, preparation and conclusion of
this Agreement and the Other Agreements, including, without limitation,
attorneys' fees, costs and expenses, search fees, costs and expenses, title
insurance policy fees, costs and expenses, filing and recording fees and all
taxes payable in connection with this Agreement or the Other Agreements.
14.15 This Agreement and the Other Agreements are submitted by Borrower to
Lender (for Lender's acceptance or rejection thereof) at Lender's principal
place of business as an offer by Borrower to borrow monies from Lender now and
from time to time hereafter and shall not be binding upon Lender or become
effective until and unless accepted by Lender, in writing, at said place of
business. If so accepted by Lender, this Agreement and the Other Agreements
shall be deemed to have been made at said place of business. This Agreement and
the Other Agreements shall be governed and controlled by the laws of the State
of Illinois as to interpretation, enforcement, validity, construction, effect
and in all other respects without reference to principles of choice of law.
14.16 If at any time or times hereafter Lender: (a) employs counsel for advice
or other representation (i) with respect to the Collateral, this Agreement, the
Other Agreements or the administration thereof, (ii) to represent Lender in any
litigation, contest, dispute, suit or proceeding or to commence, defend or
intervene or to take any other action in or with respect to Any litigation,
contest, dispute, suit or proceeding (whether instituted by Lender, Borrower or
any other Person) in any way or respect relating to the Collateral, this
Agreement, the Other Agreements or Borrower's affairs, or (iii) to enforce any
rights of Lender against Borrower, any Guarantor or any other Person which may
be obligated to Lender by virtue of this Agreement or the Other Agreements,
including without limitation, any Obligor; (b) takes any action with respect to
administration of the Collateral, this Agreement or the Other Agreements, or to
protect, collect, sell, liquidate or otherwise dispose of the Collateral;
and/or (c) attempts to or enforces any of Lender's rights or remedies under
this Agreement or the Other Agreements, including without limitation Lender's
rights or remedies with respect to the Collateral, the reasonable costs, fees
and expenses incurred by Lender in any manner or way with respect to the
foregoing, shall be part of Borrower's Liabilities, payable by Borrower to
Lender on demand.
14.17 Borrower releases Lender from any and all causes of action or claims
which Borrower may now or hereafter have for any asserted loss or damage to
Borrower claimed to be caused by or arising from: (a) any failure of Lender to
protect, enforce or collect in whole or in part any of the Collateral; (b)
Lender's notification to any Obligor of Lender's security interests in the
Accounts; (c) Lender's directing any Obligor to pay any sums owing to Borrower
directly to Lender; and (d) any other act or omission to act on the part of
Lender, its officers, agents or employees, except for willful misconduct.
14.18 To the extent that Lender receives any payment on account of Borrower's
Liabilities, or any proceeds of Collateral are applied on account of Borrower's
Liabilities, and any such payment(s) and/or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
subordinated and/or required to be repaid to a trustee, receiver or any other
Person under any bankruptcy act, state or federal law, common law or equitable
cause, then, to the extent of such payment(s) or proceeds received, Borrower's
Liabilities or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment(s) and/or proceeds had
not been received by Lender and applied on account of Borrower's Liabilities.
14.19 Except as otherwise provided herein, this Agreement and the Other
Agreements supersede in their entirety any other agreement or understanding
between Lender and Borrower with respect to loans and advances made by Lender
and all commitments of Lender in connection therewith.
14.20 Each notice, demand or other communication in connection with this
Agreement shall be in writing and shall be deemed to be given to and served
upon the addressee thereof (i) upon actual delivery to such addressee at its
address set forth above, (ii) on the next business day after delivery thereof
to an overnight courier service, in accordance with such service's rules, or
(iii) on the third business day after the deposit thereof in the United States
mails, certified mail, first class postage prepaid, addressed to such addressee
at its address set forth above. By notice complying with this Paragraph, any
party may from time to time designate a different address as its address for
the purpose of the receipt of notices hereunder.
14.21 So long as the general partner of Borrower is an affiliate of The Balcor
Company, in no event shall any general partner of the Borrower have any
liability for breach of any covenants, representation or warranty, or for any
deficiency which may remain after the enforcement of Lender's rights and
remedies hereunder and under any of the Other Agreements; provided, however,
that if the general partner of the Borrower is not an affiliate of The Balcor
Company, then such general partner shall be fully liable for any such breach
and any such deficiency, and by agreeing to act as such general partner, such
Person agrees to and accepts such liability.
14.22 No Person shall be liable for the obligations of any other Person
hereunder (except to the extent that a Person shall be liable for the
obligations of any partnership in which it is a general partner, except as
otherwise provided in Paragraph 14.21), and no property, rights or assets of
any Person shall be deemed to be Collateral for the obligations of any other
Person hereunder, unless such Person has specifically agreed, in writing, to
become liable for such obligations or to pledge its assets for such
obligations. It is not intended that the obligations of any Person be
cross-collateralized hereunder, but that any advance hereunder to any Person be
collateralized with only such Person's assets, notwithstanding that there may
be more than one Borrower hereunder.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year specified at the beginning hereof.
Balcor Investors - 84, an Illinois Limited
Partnership
By: Balcor Partners - XV, its general Partner
By: RGF-Balcor Associates-II, a partner
By: The Balcor Company, a partner
By: /s/Xxxxx Xxxx
------------------------
Xxxxx Xxxx
Executive Vice President
Accepted this day of , 1993, at Lender's
principal place of business in the Village of Skokie, State of
Illinois.
THE BALCOR COMPANY
By: /s/Xxxxx Xxxx
------------------------
Name: Xxxxx Xxxx
------------------------
Title: Executive Vice President
------------------------
EXHIBIT A
Attached to and Forming a
Part of Loan and Security
Agreement Dated as of
October 14, 1993, By and Between
The Balcor Company and
Balcor Realty Investors - 84
Form of Revolving Note
----------------------
EXHIBIT B
Attached to and Forming a
Part of Loan and Security
Agreement Dated as of
October 14, 1993, By and Between
The Balcor Company and
Balcor Realty Investors - 84
List of Partnerships Owned by Borrower
--------------------------------------
Antlers Investors
Xxxxxxxx Investors
Desert Sands Investors
Chesapeake Associates
Chesapeake Investors
Chestnut Ridge Partners Phase II
Chimney Ridge Investors
Courtyards of Xxxxxxx Limited Partnership
Creekwood Investors
Drayton Investors
Highland Investors
Pinebrook Investors
Quails Lake Investors
Ridgepoint Hill Investors
Westwood Investors
Overland Investors
Woodland Hills Partners Limited Partnership
