August 9, 1999
Xxxxxx Financial, Inc.
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx Express Servicing Dept.
Re: Loan No. 99-086
Re: $32,000,000.00 Loan ("Loan") from Xxxxxx Financial, Inc., a
Delaware corporation ("Lender") to 000 Xxxxx Xxxxxx Limited
Partnership, a Delaware limited partnership ("Borrower")
Ladies & Gentlemen:
Reference is hereby made to the above-referenced Loan evidenced by that
certain Consolidated and Restated Promissory Note of even date herewith ("Note")
and secured by, among other things, that certain Mortgage Consolidation,
Assignment of Rents, Security Agreement and Fixture Filing of even date herewith
("Mortgage"). All capitalized terms used herein and not otherwise defined shall
have the same meanings ascribed to them in the Note and/or the Mortgage.
Xxxxxx X. Xxxxxxx, Xx. (herein referred to as a "Principal") owns
indirectly some of the general partnership interests and limited partnership
interests in Borrower. It is in the direct financial interest and to the benefit
of Principal to execute and deliver this letter agreement ("Agreement") to
Lender so as to induce Lender to make the Loan to and for the benefit of
Borrower. Accordingly, Principal agrees that Principal shall, together with
Xxxxxxxx, be jointly and severally personally liable to pay the following
(collectively the "Retained Liabilities"):
(a) all losses, damages, costs and expenses, including attorneys' fees
and expenses, incurred by Xxxxxx as a result of:
(i) the collection and receipt of proceeds and income from the
Property and the other assets and obligations securing the
Loan by or for the benefit of Borrower or any Principal
following an Event of Default which are not paid to Lender
or applied to the Property in the ordinary course of
business;
(ii) fraud by Borrower or by any partner or officer of Borrower
with a management role in Borrower;
(iii) material misrepresentation by Borrower or any other person
or entity which is an officer of Borrower or any partner of
Borrower with a management role in connection with the
Loan;
(iv) misapplication or misappropriation of funds in which Xxxxxx
has a security interest which come into the possession of
Borrower or any Principal;
(v) intentional or material waste to the Property;
(vi) the breach of the obligations set forth in the Hazardous
Substance Indemnification Agreement from Borrower and
Principal to Lender of even date herewith, as hereafter
amended, if at all;
(vii) the breach of the provisions contained in Paragraph 15
(transfers of the property or beneficial interest in
Borrower; assumption) of the Mortgage;
(viii) the breach of the provisions contained in Paragraph 16 (no
additional liens) of the Mortgage; or
(ix) the breach of the provisions contained in Paragraph 17
(single asset entity) of the Mortgage; and
(b) any claim for any commissions or brokerage fees relating to the
Loan.
The foregoing shall in no way limit or impair the enforcement against the
Property or any other security granted by the Loan Documents of any of the
Lender's rights and remedies pursuant to the Loan Documents.
Principal agrees that the liability of Principal shall be direct and
immediate as a primary and not a secondary obligation or liability, and is not
conditional or contingent upon the pursuit of any remedies against Borrower or
any other person, or against any collateral or liens held by Xxxxxx. Principal
waives any rights which it may have to require that (a) Lender first proceed
against Borrower, or any other person or entity with respect to the Retained
Liabilities, (b) Lender first proceed against any collateral held by Lender or
(c) any party be joined in any proceeding to enforce the Retained Liabilities.
Principal agrees not to exercise any rights to enforce any remedy which
Xxxxxx may have against Borrower, any rights to participate in any security for
the Loan and any rights of indemnity, reimbursement, contribution or subrogation
which Principal may have against Borrower or against any other person or entity
with respect to the Retained Liabilities until the Indebtedness of Borrower to
Lender under the Note and the Loan Documents has been satisfied in full.
Principal consents and agrees that Lender may at any time, and from time
to time, without notice to or further consent from Principal and either with or
without consideration do any one or more of the following, all without affecting
the agreements contained herein or the liability of Principal for the Retained
Liabilities: (a) release any person who may hereafter become a Principal
hereunder; (b) surrender without substitution any property or other collateral
of any kind or nature whatsoever held by Xxxxxx, or by any person, firm or
corporation on Lender's behalf
or for Lender's account, securing the Loan or the Retained Liabilities; (c)
modify the terms of any document evidencing, securing or setting forth the terms
of the Loan; (d) grant releases, compromises and indulgences with respect to the
Loan or the Retained Liabilities or any persons or entities now or hereafter
liable thereon; or (e) take or fail to take any action of any type whatsoever
with respect to the Loan or the Retained Liabilities.
Principal xxxxxx xxxxxx and agrees not to assert or take advantage of any
defense based upon:
(a) the incapacity, lack of authority, death or disability of
Borrower, or any other person or entity;
(b) the failure of Lender to commence an action against Borrower or
any other person or to proceed against or exhaust any security
held by Xxxxxx at any time or to pursue any other remedy
whatsoever at any time;
(c) any duty on the part of Lender to disclose to Principal any facts
Lender may now or hereafter know regarding Borrower regardless of
whether Xxxxxx has reason to believe that any such facts
materially increase the risk beyond that which Principal intends
to assume or has reason to believe that such facts are unknown to
Principal, Principal acknowledging that it is fully responsible
for being and keeping informed of the financial condition and
affairs of Borrower;
(d) lack of notice of default, demand of performance or notice of
acceleration to Borrower, or any other party with respect to the
Loan or the Retained Liabilities;
(e) the consideration for this Agreement;
(f) any acts or omissions of Lender which vary, increase or decrease
the risk on Principal;
(g) any statute of limitations affecting the liability of Principal
hereunder, the liability of Borrower or any guarantor, if any,
under the Loan Documents, or the enforcement hereof, to the extent
permitted by law;
(h) the application by Borrower of the proceeds of the Loan for
purposes other than the purposes represented by Borrower to Lender
or intended or understood by Xxxxxx or Principal;
(i) an election of remedies by Xxxxxx, including any election to
proceed against any collateral by judicial or nonjudicial
foreclosure, whether real property or personal property, or by
deed in lieu thereof, and whether or not every aspect of any
foreclosure sale is commercially reasonable, and whether or not
any such election of remedies destroys or otherwise impairs the
subrogation rights of Principal or the rights of Principal to
proceed against Borrower or any guarantor for reimbursement, or
both;
(j) any statute or rule of law which provides that the obligation of a
surety must be neither larger in amount nor in any other aspects
more burdensome than that of a principal;
(k) Xxxxxx's election, in any proceeding instituted under the Federal
Bankruptcy Code, of the application of Section 1111(b)(2) of the
Federal Bankruptcy Code or any successor statute; and
(l) any borrowing or any grant of a security interest under Section
364 of the Federal Bankruptcy Code.
Principal covenants and agrees to provide to Xxxxxx a draft copy of his
financial statements prepared in accordance with sound accounting principles
applied on a consistent basis, certified by such Principal to be a true and
complete copy of such financial statements and in form reasonably satisfactory
to Lender, within sixty (60) days of the end of each calendar year, with a final
version of such final statements to be provided to Lender within ninety (90)
days of the end of each calendar year.
PRINCIPAL AND XXXXXX XXXXXX XXXXX THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON, OR ARISING OUT OF THIS AGREEMENT.
PRINCIPAL AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THIS WAIVER IN
ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER
IN THEIR RELATED FUTURE DEALINGS. PRINCIPAL AND XXXXXX REPRESENT AND WARRANT
THAT EACH HAS HAD THE OPPORTUNITY TO REVIEW THIS JURY WAIVER WITH ITS LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
Principal further agrees that the provisions of this Agreement shall bind
each Principal's heirs, personal representatives, successors and assigns, as the
case may be.
Notwithstanding anything in this Agreement or in the Loan Documents to
the contrary, Principal's liability hereunder, including for the Retained
Liabilities, shall terminate if (a) Xxxxxx X. Xxxxxxx Xx. shall no longer be a
general partner of Corporate Realty Income Fund I, L.P. and (b) a successor
general partner or another individual or entity acceptable to Lender in Lender's
reasonable discretion agrees to assume all of Principal's liabilities hereunder.
This Agreement shall be governed by, and shall be construed and enforced
in accordance with, the internal laws of the State of Illinois, without regard
to conflicts of law principles.
Principal acknowledges that Principal's execution and delivery of this
Agreement to Lender is a material inducement to Xxxxxx's making of the Loan to
Borrower.
PRINCIPAL:
_____________________________
Name: Xxxxxx X. Xxxxxxx, Xx.
