_________________________________________________FOR RECORDERS USE ONLY__
_________________________________________________________________________
Exhibit 10.41
SECOND AMENDMENT OF CONSTRUCTION
LOAN AGREEMENT, MORTGAGE, NOTES AND OTHER LOAN DOCUMENTS
THIS SECOND AMENDMENT OF CONSTRUCTION LOAN AGREEMENT,
MORTGAGE, NOTES AND OTHER LOAN DOCUMENTS (this "Amendment") is made
as of February 23, 2001, by and between CMC HEARTLAND PARTNERS III,
LLC, a Delaware limited liability company ("Borrower") and BANK ONE,
ILLINOIS, N.A., a national banking association ("Lender").
RECITALS:
A. Pursuant to that certain Construction Loan Agreement
dated as of October 20, 1999, as amended by that certain First
Amendment of Construction Loan Agreement, Notes and Other Loan
Documents dated as of January __, 2000 (the "First Amendment") by
and between Borrower and Lender (as amended, restated, modified or
supplemented from time to time and in effect, collectively, the
"Loan Agreement"), Xxxxxx agreed to make a construction loan to
Borrower in an amount not to exceed $5,250,000 (the "Construction
Loan") and make available a Letter of Credit in the amount of
$3,000,000. All capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Loan
Agreement.
B. The Construction Loan was evidenced by that certain Mortgage Note
in the amount of $5,250,000 dated as of October 20, 1999 made by Xxxxxxxx and
payable, as amended by the First Amendment to the order of Lender (the
"Mortgage Note"). All draws made under the Letter of Credit were evidenced
by that certain Demand Note in the amount of $3,000,000 dated as of
October 20, 1999, made by Xxxxxxxx and payable to the order of Lender, as
amended by the First Amendment (the "Demand Note").
______________________________________________________________________________
This instrument was prepared by Permanent Real Estate Tax Index
and, after recording, return to: Nos.:
00-00-000-000
Xxxxxxxx, Xxxxxx, Xxxxxxxxxxx & 00-00-000-000
Xxxxxx 00-00-000-000
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000 Common Address:
Attn: Xxxx X. Xxxxx, Esq.
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C. The Notes were secured by, among other things, the following
documents, all of which are dated as of October 20, 1999, and all of which
were amended by the First Amendment:
(i) Mortgage made by Xxxxxxxx in favor of Xxxxxx and recorded
in the Real Estate Records of Cook County, Illinois (the "Recorder") on
October 21, 1999, as Document No. 99992384 (the "Mortgage") creating a
first mortgage lien on certain real estate located in Chicago,
Illinois, and legally described in Exhibit A attached thereto;
(ii) Assignment of Rents and Leases made by Xxxxxxxx in favor of
Xxxxxx and recorded in the Office of the Recorder on October 21, 1999,
as Document No. 99992618 (the "Assignment of Rents");
(iii) Security Agreement made by the Borrower, as Debtor, to
Lender, as Secured Party; and
(iv) Environmental Indemnity Agreement made by the Borrower for
the benefit of Xxxxxx.
The aforementioned documents, the Loan Agreement, the Notes and all of the
other documents or agreements delivered to Lender to secure or evidence the
Loans or to otherwise induce Lender to disburse the proceeds of the
Construction Loan and issue the Letter of Credit are hereinafter referred to
collectively as the "Loan Documents".
D. As of the date hereof, the Construction Loan and the Mortgage
Note have been repaid in full to Lender and the Letter of Credit has been
returned to Lender and all amounts due Lender under the Demand Note have been
paid in full to Lender.
X. Xxxxxxxx has requested that Xxxxxx extend an additional loan to
Borrower.
X. Xxxxxx is willing to extend an additional loan to Borrower,
notwithstanding the fact that Lender has no obligation to do so, subject to
and upon the terms and conditions set forth below in this Amendment.
NOW, THEREFORE, in order to induce Xxxxxx to agree to the foregoing,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Xxxxxxxx and Xxxxxx hereby agree as follows:
1. Incorporation of Recitals. The Recitals set forth above are
incorporated herein and made a part hereof.
2. Land Loan. Xxxxxx agrees to lend to Borrower on the Amendment
Effective Date, and Xxxxxxxx agrees to borrow from Lender $3,000,000 (the
"Land Loan"), upon the terms and subject to the conditions contained in this
Amendment, the Land Loan shall be evidenced by the Land Loan Mortgage Note
(as hereinafter defined).
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3. Maturity Date. The maturity date of the Land Loan shall be
February 23, 2002, and all references to the "Maturity Date" in the Loan
Documents shall be deemed to be February 23, 2002. Borrower shall have no
right to further extend the Maturity Date.
4. Interest Rate. The Land Loan shall accrue interest at the Loan
Rate and shall be due and payable on the Maturity Date (as redefined in
Paragraph 3 above). Interest shall be computed on the basis of a year
consisting of 360 days and shall be based on the actual number of days during
the period for which interest is being charged.
5. Repayment of the Land Loan. Payments of principal and interest
due under the Land Loan and evidenced by the Land Loan Mortgage Note, if not
sooner declared to be due in accordance with the provisions hereof, shall be
made as follows:
(a) Commencing on April 2, 2001 and on the first Business Day
of each calendar month thereafter through and including the calendar
month in which the Maturity Date occurs, accrued and unpaid interest
only on the unpaid principal balance of the Land Loan shall be due and
payable;
(b) Upon the consummation of each sale of a Unit, Borrower
shall make a principal payment to Lender in an amount equal to 50% of
the Net Sales Proceeds with respect to such Unit;
(c) If on May 31, 2001, the unpaid principal balance of the
Land Loan is greater than $2,500,000, then Borrower shall repay a
portion of the Land Loan on such date in an amount equal to the
difference between (i) the then unpaid principal balance of the Land
Loan and (ii) $2,500,000.
(d) If on August 31, 2001, the unpaid principal balance of the
Land Loan is greater than $2,000,000, then Borrower shall repay a
portion of the Land Loan on such date in an amount equal to the
difference between (i) the then unpaid principal balance of the Land
Loan and (ii) $2,000,000.
(e) If on November 30, 2001, the unpaid principal balance of
the Land Loan is greater than $1,500,000, then Borrower shall repay a
portion of the Land Loan on such date in an amount equal to the
difference between (i) the then unpaid principal balance of the Land
Loan and (ii) $1,500,000.
(f) The principal balance of this Note, if not sooner declared
to be due in accordance with the terms hereof or the Loan Agreement,
together with all accrued and unpaid interest thereon, shall be due and
payable in full on the Maturity Date.
6. Security. The Mortgage, the Assignment of Rents and the other
Loan Documents shall secure repayment of the Land Loan Mortgage Note.
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7. Mortgaged Property. Xxxxxx and Xxxxxxxx hereby agree that as of
the date hereof, the legal description of the remaining Land encumbered by
the Mortgage, as amended by this Amendment (after taking into account the
recording of the Condominium Documents regarding a portion of the Land and
partial releases heretofore delivered by Lender) is set forth on Exhibit A
attached hereto. All reference in Loan Documents to Land or Property shall
only refer to the property legally described on Exhibit A attached hereto.
8. Construction Loan; Letter of Credit. Borrower hereby
acknowledges and agrees that Construction Loan has been paid in full to
Lender and Xxxxxxxx no longer has the right to receive any further
disbursements of the Construction Loan. Xxxxxxxx hereby acknowledges and
agrees that the Letter of Credit has been returned to Lender and all amount
due Lender from the Demand Note have been paid in full to Lender.
9. Required Deliveries. This Amendment shall become effective on
the date (the "Amendment Effective Date") on which all of the following
conditions have been satisfied:
(a) This Amendment has been duly executed by Xxxxxxxx and
delivered to Lender;
(b) Borrower delivers to Lender a Note in the principal amount
of $3,000,000 in form and substance reasonably acceptable to Lender in
its sole discretion (the "Land Loan Mortgage Note") made by Borrower
and payable to Lender;
(c) Heartland Partners, L.P., a Delaware limited partnership
("Heartland Partners"), executes and delivers to Lender a Guaranty, in
form and substance reasonably acceptable to Lender in its sole
discretion, which Guaranty shall unconditionally guaranty the repayment
in full of the Land Loan and all, other obligations of the Borrower to
Lender.
(d) Xxxxxx receives payment of the Land Loan Fee (as
hereinafter defined);
(e) Xxxxxx receives an additional endorsement to First American
Title Insurance Company Loan Policy No. N9901868 issued by Near North
National Title Corporation (the "Title Policy") which (i) amends the
description of the Mortgage insured under the Title Policy to include
this Amendment, (ii) amends the description of the Assignment of Rents
to include this Amendment, (iii) extends the effective date of the
Title Policy to the date of the recording of this Amendment, (iv)
includes no additional exceptions to title other than those that have
been approved in writing by Lender and (v) states that all real estate
taxes and assessments applicable to the Property which are due and
payable as of the date of such endorsement have been paid in full;
(f) Xxxxxx receives a certified copy of resolutions evidencing
the authority of Borrower and Heartland Partners to execute and deliver
this Amendment, the Land Loan Mortgage Note and the Guaranty; and
(g) Lender has received such other documents as Lender may
reasonably require.
Xxxxxxxx's failure to deliver the aforementioned documents and items to
Lender on or before March 15, 2001 shall, at the option of Lender, result in
this Amendment (including all agreements of Lender contained herein) being
null and void and of no further force and effect.
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10. References. All references to the Loans contained in any of the
Loan Documents shall be deemed to include the Land Loan. All references to
the Note contained in any of the Loan Documents shall be deemed to include
the Land Loan Mortgage Note. All references to the Loan Agreement, the
Notes, the Mortgage and the other Loan Documents contained in any of the Loan
Documents shall be deemed to refer to each of such documents as amended by
this Amendment.
11. Payment of Loan Fee and Additional Loan Expenses. Concurrently
with the execution and delivery of this Amendment by Xxxxxxxx, Borrower shall
pay to Lender a non-refundable loan fee in the amount of $22,500 (the "Land
Loan Fee"). Furthermore, Xxxxxxxx hereby agrees to pay all of Xxxxxx's
reasonable attorneys' fees incurred in connection with the negotiation and
documentation of the agreements contained in this Amendment, the Land Loan
Mortgage Note and Guaranty, all recording fees and charges, title insurance
charges and premiums and all other expenses, charges, costs and fees referred
to in, necessitated by or otherwise relating to this Amendment (collectively,
the "Additional Loan Expenses"). If the Additional Loan Expenses are not
paid to Lender within five days after written demand therefor by Xxxxxx, the
Additional Loan Expenses shall bear interest from the date so incurred until
paid at an annual rate equal to the Default Rate.
12. Defaults. Borrower represents and warrants that, as of the date
hereof, no Event of Default or event or condition which could become an Event
of Default with the giving of notice or passage of time, or both, exists
under the Loan Agreement or any of the other Loan Documents. Xxxxxxxx
further acknowledges and agrees that an Event of Default under the Loan
Agreement, the Land Loan Mortgage Note and the other Loan Documents shall be
deemed to exist upon the occurrence of a breach of any of the
representations, warranties or covenants set forth in this Amendment.
13. No Defenses. Borrower represents and warrants there is not any
condition, event or circumstance existing, or any litigation, arbitration,
governmental or administrative proceedings, actions, examinations, claims or
demands pending or threatened affecting Borrower, Heartland Partners or the
Property, or which would prevent the Borrower or Heartland Partners from
complying with or performing its respective obligations under the Loan
Agreement, the Land Loan Mortgage Note, the Mortgage or the other Loan
Documents, and no basis for any such matter exists.
14. Authority to Execute Amendment; No Conflict. Borrower represents
and warrants that it has full power and authority to execute and deliver this
Amendment, the Land Loan Mortgage Note and to perform its respective
obligations hereunder. Upon the execution and delivery hereof, this
Amendment and the Land Loan Mortgage Note will be valid, binding and
enforceable upon Borrower in accordance with its terms. Execution and
delivery of this Amendment does not and will not contravene, conflict with,
violate or constitute a default under any applicable law, rule, regulation,
judgment, decree or order or any agreement, indenture or instrument to which
Borrower is a party or is bound.
15. Amendment Binding. This Amendment shall be binding on the
Borrower and its successors and permitted assigns, and shall inure to the
benefit of Lender and its successors and assigns.
16. Continued Effectiveness. Except as expressly provided herein,
the Loan Agreement and the other Loan Documents shall remain in full force
and effect in accordance with their respective terms.
17. Counterparts. This Amendment may be executed in counterparts,
and all said counterparts when taken together shall constitute one and the
same Amendment.
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IN WITNESS WHEREOF, this Amendment has been entered into as of the date
first above written.
CMC HEARTLAND PARTNERS III, LLC, a BANK ONE, ILLINOIS, NA, a national
Delaware limited liability company banking association
By: CMC Heartland Partners, a By: ______________________________
Delaware general partnership, Xxxxxx X. Xxxxxxx, Vice
the sole member of Borrower President
By:
_____________________________________
Xxxxx Xxxxxxxx, President
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STATE OF )
)SS
COUNTY OF )
I, _______________________, a Notary Public in and for said County, in
the State aforesaid, do hereby certify that Xxxxxx X. Xxxxxxx is personally
known to me to be the same person whose name is subscribed to the foregoing
instrument as such Vice President, of Bank One, Illinois, NA, a national
banking association (the "Bank"), appeared before me this day in person and
severally acknowledged that he signed and delivered the said instrument as
his own free and voluntary act, and as the free and voluntary act of the Bank
for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this ____ day of _________, 2001.
___________________________________
NOTARY PUBLIC
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STATE OF ILLINOIS )
)SS.
COUNTY OF COOK )
I,____________________________, a Notary Public in and for said County,
in the State aforesaid, do hereby certify that Xxxxx Xxxxxxxx, the President
and Chief Executive Officer of CMC Heartland Partners, a Delaware general
partnership ("CMC"), which is the sole member of CMC Heartland Partners III,
LLC, a Delaware limited liability company ("CMC III"), who is personally
known to me to be the same person whose name is subscribed to the foregoing
instrument as such officer appeared before me this day in person and
acknowledged that he signed and delivered the said instrument as his own free
and voluntary act and as the free and voluntary act of CMC and CMC III, for
the uses and purposes therein set forth.
GIVEN under my hand and notarial seal, this ____ day of __________, 2001
_______________________________________
NOTARY PUBLIC
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
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