Exhibit 10.8
This Document Prepared By
And After Recording Return To:
Xxxxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxx, Esq.
LOAN MODIFICATION AGREEMENT
---------------------------
THIS LOAN MODIFICATION AGREEMENT (this or the "Agreement") is made and
entered into as of June 19, 1997, by and between NATIONAL BANK OF CANADA, New
York, a duly licensed branch of National Bank of Canada, a Canadian bank
("Lender"), and MUTUAL BENEFIT CHICAGO MARRIOTT SUITE HOTEL PARTNERS, L.P., a
Rhode Island limited partnership ("Borrower").
R E C I T A L S:
---------------
A. Lender has previously made a loan in the principal amount of Twenty-
Five Million Five Hundred Thousand Dollars ($25,500,000) (the "Loan") to
Borrower pursuant to the terms of a certain Amended and Restated Loan Agreement
dated as of September 24, 1996 by and between Borrower and Lender. The Loan is
evidenced by a certain Amended and Restated Secured Promissory Note dated
September 24, 1996 made by Borrower to Lender in the principal amount of Twenty-
Five Million Five Hundred Thousand Dollars ($25,500,000) (the "Note"), and the
Loan is secured by (i) a certain Amended and Restated Leasehold Mortgage dated
as of September 24, 1996 (the "Mortgage") constituting a lien in favor of Lender
on Borrower's leasehold estate under a certain lease between Borrower, as
tenant, and Simon-Rosemont Developers, as landlord (the "Landlord"), relating to
certain real property legally described in Exhibit A attached hereto and by this
reference made a part hereof, said lease being referred to in the Loan Agreement
as the "Ground Lease" and more fully described in Exhibit E thereof, (ii) a
certain Assignment of Leases and Rents, dated as of September 24, 1996 (the
"Assignment of Rents") made by Borrower in favor of Lender, and (iii) certain
other documents and instruments which, together with the Loan Agreement, the
Note, the Mortgage and the Assignment of Rents, are referred to herein and in
the Loan Agreement as the "Loan Documents." The Mortgage was recorded in the
Office of the Recorder of Deeds of Xxxx County, Illinois on September 25, 1996
as Document No. 96733025 and the Assignment of Rents was recorded in the Office
of the Recorder of Deeds of Xxxx County, Illinois on September 25, 1996 as
Document No. 96733026.
B. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Loan Agreement.
C. Borrower and Lender desire to amend the Loan Documents in order to
modify certain provisions therein relating to the timing of Excess Cash Flow
Payments, as set forth hereinbelow.
AGREEMENT:
---------
NOW, THEREFORE, in consideration of the foregoing, and in consideration of
the mutual covenants set forth hereinbelow, the Borrower and Lender hereby agree
as follows:
1. Amendments to Note.
------------------
(a) With respect to Excess Cash Flow Payments that are attributable
to Excess Cash Flow for Fiscal Year 1997 and subsequent Fiscal Years,
subsections (a) and (b) of Section 2.3 of the Note are hereby deleted in
their entirety and the following language is hereby substituted in lieu
thereof:
"On June 24, 1998 and on June 24 of each year thereafter during
the term of this Note, Borrower shall pay to Lender an amount
equal to all Excess Cash Flow attributable to the preceding
Fiscal Year. All Scheduled Principal Payments and other items
referred to in clauses (a) through (i) of Section 1.26 of this
Note which are accrued and paid in any given Fiscal Year shall
be deducted from Net House Profit for the Fiscal Year in which
they are accrued and paid, for the purpose of determining
Excess Cash Flow and Excess Cash Flow Payments attributable to
said Fiscal Year; any such items which are paid after the close
of said Fiscal Year shall not be deducted in determining Excess
Cash Flow and Excess Cash Flow Payments attributable to said
Fiscal Year, unless said items are accrued during the Fiscal
Year for which the Excess Cash Flow Payment is being
determined. All such amounts that are accrued during a given
Fiscal Year, but are not paid during said Fiscal Year, shall be
identified in the financial information required to be
furnished pursuant to Article 7 of the Loan Agreement. At no
time will an Excess Cash Flow Payment that is made during any
given Fiscal Year be deducted in determining Excess Cash Flow
attributable to the Fiscal Year during which said Excess Cash
Flow
2
Payment is made. By way of illustration only, an example
of such a calculation is attached hereto as Schedule 1."
(b) With respect to Excess Cash Flow Payments attributable to
Fiscal Year 1996, Borrower and Lender hereby agree and stipulate that, in
payments made to Lender on December 24, 1996 and April 11, 1997,
respectively, Borrower paid in full to Lender the Restructuring Fee and
Lender's Expenses, with the exception of certain Lender's Expenses in the
amount of $11,357.50 (the "Additional Lender's Expenses"). Borrower and
Lender acknowledge and agree that based upon the audited financial
statements submitted to Lender with respect to Fiscal Year 1996, the Excess
Cash Flow Payment that would be required to be paid by Borrower to Lender
on June 24, 1997, but for the Additional Lender's Expenses, would be
$315,949. Borrower hereby agrees to pay $315,949 to Lender on June 24,
1997, in addition to the Scheduled Principal Payment and the payment of
Base Rate Interest due on said date, and Borrower and Lender hereby agree
that said payment shall be applied as follows:
(i) $11,357.50 shall be applied by Lender as satisfaction in
full of the Additional Lender's Expenses; and
(ii) The remainder, in the amount of $304,591.50, shall be
applied by Lender as an Excess Cash Flow Payment in
reduction of the principal balance of the Loan.
2. Loan Agreement. Lender hereby acknowledges that Lender has received
--------------
the materials required to be delivered by Borrower pursuant to clause (iii) of
Article 7 of the Loan Agreement. Lender hereby waives any default based upon
Borrower's failure to deliver said information and materials within the time
period specified in said clause (iii). Lender's waiver of said time period,
however, shall be limited to the timing and delivery of the information and
materials relating to Fiscal Year 1996 and shall not apply with respect to or
affect the obligations of Borrower under Article 7 of the Loan Agreement to
deliver to Lender information and materials related to Fiscal Years subsequent
to Fiscal Year 1996 or to any other obligations of Borrower to Lender under
Article 7 of the Loan Agreement for each and every Fiscal Year hereunder,
including Fiscal Year 1996.
3. Cross References in Loan Documents. The Loan Agreement and each of
----------------------------------
the other Loan Documents (including without limitation the Mortgage and the
Assignment of Rents) is hereby modified and amended so that (i) the term "Loan
Documents" shall include this Agreement and (ii) all references in any Loan
Document (including without limitation the Mortgage and the Assignment of Rents)
to the Note or the Loan Agreement shall be deemed to be refer to the Note, or
the Loan Agreement, as the case may be, as modified pursuant to this Agreement.
3
4. Waiver of Default. Lender hereby waives any and all defaults (and any
-----------------
corresponding right to collect default interest) in connection with the timing
and amounts of any payments made by Borrower from the date of the Note through
the date of this Agreement.
5. Lender's Modification Expenses. Borrower shall, promptly on demand by
------------------------------
Lender, pay to Lender all expenses (including but not limited to attorneys' fees
and expenses) incurred by Lender and its participants as a result of the
modification of the Loan pursuant to this Agreement (said expenses being
referred to herein as "Lender's Modification Expenses"). To the extent that
Lender's Modification Expenses are less than or equal to $6,500, Borrower's
payment of Lender's Modification Expenses shall be classified in the category of
expenses set forth in Section 1.26(e) of the Note with respect to Fiscal Year
1997 and shall be charged against the limit on such expenses as set forth in
Section 1.26(e) of the Note; to the extent that Lender's Modification Expenses
exceed $6,500, the amount of such excess shall be treated, for the purposes of
determining Excess Cash Flow, as though said amount were a Lender's Expense.
6. Conditions Precedent to Modification. Notwithstanding anything to the
------------------------------------
contrary contained herein, the modification of the Loan Documents pursuant to
this Agreement shall be subject to the satisfaction of the following conditions
precedent:
(a) Borrower shall have executed and delivered to Lender this
Agreement, as joined in by the General Partner and Host Marriott for the
sole purposes set forth in the respective Joinders attached hereto;
(b) This Agreement shall have been recorded in the Office of the
Recorder of Deeds of Xxxx County, Illinois; and
(c) Lender shall have received, at Borrower's sole cost and
expense, an endorsement dated the date of recordation of this Agreement, in
form and substance acceptable to Lender, to the First American Title
Insurance Company Policy of Title Insurance No. LP 3212867 dated September
25, 1996, subject to no additional title exceptions from such policy and
confirming that the validity and first priority of the lien of the Mortgage
and the Assignment of Rents has been unaffected by the execution and
delivery of this Agreement.
7. Further Assurances. Borrower hereby agrees to execute and deliver to
------------------
Lender, as and when requested by Lender, such UCC-3 Financing Statements, and
such letters to depositary institutions, as may be required by Lender following
the execution and delivery of this Agreement, in order to continue unmodified
the priority and perfection of the liens, pledges and other security interests
in favor of Lender under the Loan Documents.
8. Representations and Warranties of Borrower. Borrower hereby
------------------------------------------
represents and warrants to Lender as follows:
4
(a) There have been no modifications or amendments to Borrower's
Amended and Restated Agreement of Limited Partnership (the "Partnership
Agreement") other than as certified by the General Partner on September 24,
1996;
(b) Borrower is in good standing under the laws of Rhode Island and
is duly qualified as a foreign limited partnership to transact business in
Illinois;
(c) The General Partner is in good standing in the State of Delaware
and has approved the execution and delivery of this Agreement by the
Borrower;
(d) This Agreement has been duly authorized, executed and delivered
in accordance with the requirements of law and in accordance with the
requirements of Borrower's Certificate of Limited Partnership and the
Partnership Agreement and any amendments thereto; and
(e) The Ground Lease is in full force and effect, Borrower is not in
default thereunder and there have been no modifications or amendments to
the Ground Lease except as noted in the Certificate of the General Partner
relating to the Ground Lease dated as of September 24, 1996.
9. Miscellaneous.
-------------
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois except to the extent preempted by
United States federal law.
(b) Borrower and Lender each acknowledge that there are no other
understandings, agreements or representations, either oral or written,
express or implied, that are not embodied in the Loan Documents and this
Agreement, which collectively represent a complete integration of all prior
and contemporaneous agreements and understandings of Borrower and Lender;
and that all such prior understandings, agreements and representations are
hereby modified as set forth in this Agreement. Except as expressly
modified hereby, the terms of the Loan Documents are and remain unmodified
and in full force and effect.
(c) This Agreement may be executed in any number of counterparts and
each such counterpart shall be deemed to be an original. All such
counterparts shall constitute one and the same instrument and shall be
enforceable against all parties hereto, notwithstanding that they are not
all signatories to the same counterpart.
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
MUTUAL BENEFIT CHICAGO MARRIOTT
SUITE HOTEL PARTNERS, L.P., a Rhode Island
limited partnership
By: MOHS CORPORATION, a Delaware
corporation, its sole General Partner
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
-----------------------------------
Title: Vice President
----------------------------------
NATIONAL BANK OF CANADA
By: /s/ E. Xxxx Xxxxxxx /s/ J. Xxxxxxx Xxxxx
-------------------------------------------
Name: E. Xxxx Xxxxxxx J. Xxxxxxx Xxxxx
-----------------------------------------
Title: Vice President Vice President
----------------------------------------
6
JOINDER
-------
The undersigned, MOHS Corporation, hereby joins in the attached Loan
Modification Agreement dated June 19, 1997, for the sole purposes of (i)
consenting to the execution thereof by the Borrower, (ii) reaffirming the terms
and provisions of the Foreclosure Guaranty, and (iii) agreeing that,
notwithstanding the execution, delivery and recordation of the Loan Modification
Agreement, the Foreclosure Guaranty shall remain in full force and effect in
accordance with its terms.
MOHS CORPORATION, a Delaware
corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
-----------------------------------
Title: Vice President
----------------------------------
7
JOINDER
-------
The undersigned, Host Marriott Corporation, a Delaware corporation, hereby
joins in the attached Loan Modification Agreement dated June 19, 1997 for the
sole purposes of (i) reaffirming the terms and provisions of the Environmental
Indemnification Agreement dated June 12, 1989 made by Host Mariott Corporation,
formerly known as Marriott Corporation, in favor of Lender, and (ii) agreeing
that, notwithstanding the execution, delivery and recordation of the Loan
Modification Agreement, said Environmental Indemnification Agreement shall
remain in full force and effect in accordance with its terms.
HOST MARRIOTT CORPORATION, a
Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
-----------------------------------
Title: Senior VP and Treasurer
----------------------------------
8
STATE OF MARYLAND
SS
COUNTY OF XXXXXXXXXX
I, Xxxxx Xxxxxxxx, a Notary Public, in and for said County, in
the State aforesaid, DO HEREBY CERTIFY that Xxxxx X. Xxxxx,
Vice President of MOHS CORPORATION, a Delaware corporation,
personally known to me to be the same person whose name is subscribed to the
foregoing instrument as such Vice President appeared before me this day in
person and acknowledged that he/she signed and delivered said instrument as
his/her own free and voluntary act and as the free and voluntary act of said
corporation in its capacity as General Partner of Mutual Benefit Chicago
Marriott Suite Hotel Partners, L.P., for the uses and purposes therein set
forth.
GIVEN under my hand and Notarial Seal, this 20th day of June, 1997.
/s/ Xxxxx Xxxxxxxx
------------------------------------
Notary Public
My Commission expires:______________
XXXXX XXXXXXXX
NOTARY PUBLIC STATE OF MARYLAND
My Commission Expires October 18, 0000
XXXXX XX XXX XXXX
XX
XXXXXX XX XXX XXXX
I, Una Xxxxxx Xxxx, a Notary Public, in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that E. Xxxx Xxxxxxx and J. Xxxxxxx Xxxxx, Vice
Presidents of NATIONAL BANK OF CANADA, New York, a duly licensed branch of
National Bank of Canada, a Canadian bank, personally known to me to be the same
person whose name is subscribed to the foregoing instrument as such Vice
Presidents appeared before me this day in person and acknowledged that he/she
signed and delivered said instrument as his/her own free and voluntary act and
as the free and voluntary act of said bank, for the uses and purposes therein
set forth.
GIVEN under my hand and Notarial Seal, this 19 day of June, 1997.
/s/ Una Xxxxxx Xxxx
------------------------------------
Notary Public
UNA XXXXXX XXXX
Notary Public, State of New York
No. 01-F15056871
Qualified in Queens County
Commission Expires March 11, 1998
My Commission expires:
--------------
STATE OF MARYLAND
SS
COUNTY OF XXXXXXXXXX
I, Xxxxx Xxxxxxxx, a Notary Public, in and for said County, in
the State aforesaid, DO HEREBY CERTIFY that Xxxxx X. Xxxxxxxxx,
Senior Vice President of HOST MARRIOTT CORPORATION, a Delaware
corporation, personally known to me to be the same person whose name is
subscribed to the foregoing instrument as such Sr. Vice President appeared
before me this day in person and acknowledged that he/she signed and delivered
said instrument as his/her own free and voluntary act and as the free and
voluntary act of said corporation, for the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal, this 23 day of June,
1997.
/s/ Xxxxx Xxxxxxxx
------------------------------------
Notary Public
My Commission expires: _____________
XXXXX XXXXXXXX
NOTARY PUBLIC STATE OF MARYLAND
MY COMMISSION EXPIRES OCTOBER 18, 1998
