EXHIBIT 10.40
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LOAN AGREEMENT
XXXXXXX PROPERTIES, LLC
and
FIRST BANK
_________, 2000
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TABLE OF CONTENTS
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PAGE
1. DEFINITIONS AND RULES OF INTERPRETATION................... -1-
1.1. Definitions............................................. -1-
1.2. Rules of Interpretation................................. -9-
2. THE NOTE; INTEREST; MATURITY AND PREPAYMENT...............-10-
2.1. The Note................................................-10-
2.2. Funds for Payments......................................-10-
2.3. Computations............................................-10-
2.4. Maturity................................................-11-
2.5. Commitment Fee..........................................-11-
2.6. Interest on Overdue Amounts.............................-11-
2.7. Prepayment..............................................-11-
2.8. Alienation..............................................-11-
3. AGREEMENT TO MAKE NOTE B ADVANCES; LIMITATIONS............-11-
3.1. Agreement to Make Advances under Note B.................-11-
3.2. Draw Request............................................-11-
3.3. Amount; Notice and Frequency of Advances................-12-
3.4. Advances Do Not Constitute a Waiver.....................-12-
3.5. Cessation of Disbursements..............................-12-
4. CONDITIONS TO CLOSING.....................................-12-
4.1. Loan Documents..........................................-13-
4.2. Contracts...............................................-13-
4.3. Certified Copies of Organizational Documents............-13-
4.4. Deliveries..............................................-13-
4.5. Legal Opinions..........................................-15-
4.6. Lien Search.............................................-15-
4.7. Appraisal...............................................-15-
4.8. Commitment Fee; Other Fees and Expenses................-15-
4.9. Performance; No Default.................................-15-
4.10. Truth of Representations and Warranties................-15-
4.11. Waiver of Requirements.................................-15-
5. CONDITIONS OF SUBSEQUENT ADVANCES.........................-16-
5.1. Prior Conditions Satisfied..............................-16-
5.2. Performance; No Default.................................-16-
5.3. No Damage...............................................-16-
5.4. Receipt of Documents by the Lender......................-16-
5.5. Liens...................................................-16-
6. CERTAIN RIGHTS OF THE LENDER............................. -16-
6.1. Right to Obtain Appraisals............................. -16-
7. REPRESENTATIONS AND WARRANTIES........................... -17-
7.1. Organization; Authority; Etc........................... -17-
7.2. Title to Property and other Properties................. -18-
7.3 Financial Statements................................... -18-
7.4. No Material Changes, Etc............................... -18-
7.5. Litigation............................................. -18-
7.6. No Materially Adverse Contracts, Etc................... -19-
7.7. Compliance With Other Instruments, Laws, Etc........... -19-
7.8. Tax Status............................................. -19-
7.9. No Event of Default.................................... -19-
7.10. Investment Company Act................................ -19-
7.11. Absence of Financing Statements, Etc.................. -19-
7.12. Setoff, Etc........................................... -19-
7.13. Condition of Property................................. -20-
7.14. Other Contracts....................................... -20-
7.15. Real Property Taxes; Special Assessments.............. -20-
7.16. Effect of Draw Request................................ -20-
8. AFFIRMATIVE COVENANTS OF THE BORROWER.................... -20-
8.1. Punctual Payment....................................... -20-
8.2. Maintenance of Office.................................. -20-
8.3. Records and Accounts................................... -20-
8.4. Financial Statements, Certificates and Information..... -21-
8.5. Notices................................................ -22-
8.6. Existence; Maintenance of Properties................... -23-
8.7. Insurance.............................................. -23-
8.8. Taxes.................................................. -24-
8.9. Inspection of Property, Other Properties and Books..... -25-
8.10. Compliance with Laws, Contracts, Licenses, and Permits -25-
8.11. Further Assurances.................................... -25-
8.12. Operating Accounts.................................... -26-
8.13. Reserve Accounts...................................... -26-
9. NEGATIVE COVENANTS OF THE BORROWER....................... -26-
9.1. Restriction on Leases.................................. -26-
9.2. Restrictions on Easements, Covenants and Restrictions.. -26-
9.3. Restrictions on Liens, Etc............................. -27-
9.4. Merger, Consolidation and Disposition of Assets........ -27-
10. EVENTS OF DEFAULT AND REMEDIES.......................... -28-
10.1. Events of Default......................................-28-
10.2. Acceleration...........................................-31-
10.3. Other Remedies.........................................-32-
10.4. Distribution of Collateral Proceeds....................-33-
10.5. Power of Attorney......................................-33-
10.6. Waivers................................................-33-
11. MISCELLANEOUS AND GENERAL................................-33-
11.1. Setoff.................................................-33-
11.2. Expenses...............................................-34-
11.3. Indemnification........................................-34-
11.4. Rights of Third Parties................................-35-
11.5. Survival of Covenants, Etc.............................-35-
11.6. Participations.........................................-35-
11.7. Relationship...........................................-35-
11.8. Notices................................................-35-
11.9. Governing Law..........................................-36-
11.10. Consent to Jurisdiction; Waivers......................-37-
11.11. Headings..............................................-37-
11.12. Counterparts..........................................-37-
11.13. Entire Agreement, Etc.................................-37-
11.14. Consents, Amendments, Waivers, Etc....................-37-
11.15. Time of the Essence...................................-38-
11.16. Severability..........................................-38-
11.17. Assignments...........................................-38-
11.18. Waiver and Release by Borrower........................-38-
11.19. Construction..........................................-39-
11.20. Further Assurance.....................................-39-
11.21. Binding Effect........................................-39-
11.22. Exhibits..............................................-39-
11.23. Termination...........................................-39-
11.24. Loan Documents........................................-39-
11.25. Leases................................................-39-
11.26. Liability of the Lender...............................-39-
LOAN AGREEMENT
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THIS LOAN AGREEMENT, dated this ____ day of __________ 2000, by and between
XXXXXXX PROPERTIES, LLC, a Georgia limited liability company, and its successors
and assigns (the "Borrower") having its principal place of business at 0
Xxxxxxxxx Xxxxxx Xxxx, Xxxxx 0000 Xxxxxxx, Xxxxxxx 00000 and FIRST BANK, a
Missouri banking corporation ("Lender") having its principal business address
at 000 X.X. Xxxxxxxxx, Xxxxxx, Xxxxxxxx 00000.
WITNESSETH:
RECITAL. Borrower has requested Lender to lend Borrower the sum of Eleven
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Million Dollars ($11,000,000.00) as provided herein (the "Loan"), and Lender is
willing to do so upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises herein contained, other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and each intending to be legally bound hereby, the parties agree
as follows:
1. DEFINITIONS AND RULES OF INTERPRETATION.
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1.1. Definitions. The following terms shall have the meanings set forth
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in this Section 1 or elsewhere in the provisions of this Agreement or other Loan
Documents referred to below:
Advance. Any disbursement of the proceeds of the Loan made or to be made
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by the Lender pursuant to the terms of this Agreement.
Affiliate. With respect to any Person (the "Specified Person") means any
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Person (1) who directly or indirectly controls, or is controlled by, or is under
common control with such Specified Person; (2) who directly or indirectly
beneficially owns or controls ten percent (10%) or more of the beneficial
ownership (voting stock, general partnership interests, or otherwise) of such
Specified Person; (3) ten percent (10%) or more of the beneficial ownership
(voting stock, general partnership interests, or otherwise) of whom is owned,
directly or indirectly, by the Specified Person; (4) who is an officer,
director, partner, member, or trustee of the Specified Person; or (5) in whom
the Specified Person is an officer, director, partner, member, or trustee. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
through the ownership of voting securities, partnership interests, membership
interests or otherwise, by contract or otherwise.
Agreement. This Agreement, including any Schedules and Exhibits hereto.
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Appraisal. An appraisal of the value of the Property, determined on an
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orderly liquidation basis, performed by a qualified independent appraiser
selected by the Lender.
Balance Sheet Date. March 31, 2000.
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Business Day. Any day on which Lender is open for the transaction of
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banking business.
Closing Date. The first date on which the conditions set forth in Section
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4 have been satisfied.
Collateral. All of (a) the property, rights and interests of the Borrower
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that are or are intended to be subject to the security interests, assignments,
and mortgage liens created by the Loan Documents, including, without limitation,
the Property, the Personal Property, and (b) the Guaranty.
Combined Debt Service Coverage Ratio. (a) EBITDA, less Replacement
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Reserves required pursuant to Section 8112, less real estate and personal
property taxes for the Property, for all of the Property for the period in
question divided by (b) Debt service for the period in question. The Combined
Debt Service Coverage Ratio shall be calculated as of the end of each fiscal
quarter of the Borrower for the previous four fiscal quarters of Borrower. The
term "Debt" for purposes of this paragraph only shall mean the then current
principal and interest payments due under the Note for the period in question.
Consolidated or consolidated. With reference to any term defined herein,
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shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Debt Service Coverage Ratio. (a) EBITDA for a Person for the period in
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question divided by (b) Debt service for the period in question. The Debt
Service Coverage Ratio shall be calculated as of the end of each fiscal quarter
of the Borrower for the previous four fiscal quarters of Borrower. The term
"Debt" for purposes of this paragraph only shall mean all liabilities of
Borrower determined in accordance with generally accepted accounting principles.
Default. A condition or event which would, with the giving of notice or
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lapse of time or both, constitute an Event of Default.
Default Rate. The default rate of interest set forth in the Note.
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Distribution. The declaration or payment of any dividend on or in respect
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of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly; the return of capital by the
Borrower to its shareholders as such; or any other distribution by the Borrower
to Borrower's beneficial owners.
Dollars or $. Dollars in lawful currency of the United States of America.
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EBITDA. Earnings before interest, taxes, depreciation and amortization
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determined in accordance with Generally Accepted Accounting Principles.
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Event of Default. See Section 10.
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Financial Statements. Those items required pursuant to Section 84 hereof.
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Financing Statements. Uniform Commercial Code Form 1 Financing
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Statement(s) from the Borrower in favor of the Lender giving notice of a
security interest in the Collateral, such financing statements to be in form and
substance satisfactory to the Lender.
Generally Accepted Accounting Principles. Principles that are (a)
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consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time
and (b) consistently applied with past financial statements of the Borrower
adopting the same principles; provided that a certified public accountant would,
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insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
Ground Lease. That certain Lease between the City of Springfield,
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Illinois (the "City") and Xxxxx Plaza, Inc. ("Xxxxx") dated November 17, 1964,
as amended by that certain Amended Lease between the City and Xxxxx, dated
November 29, 1966 and recorded June 19, 1967 in the Office of the Recorder of
Sangamon County, Illinois in Mortgage Records 1015 at Page 798 as Document No.
482815, as amended by that certain Amendment to Lease between City and Xxxxx,
recorded August 1, 1986, in the Office of the Recorder of Sangamon County,
Illinois as Document No. 32736, and as amended by that certain Amendment to
Lease between City and Xxxxx, dated February 22, 1996, and that certain
Amendment to Lease between City and Xxxxx dated June 23, 1997, neither of which
Amendments was not recorded.
Guarantor or Guarantors. Xxxxxxx Inns, Inc. a Georgia corporation having
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an address at 0 Xxxxxxxxx Xxxxxx Xxxx, Xxxxx 000 Xxxxxxx, Xxxxxxx 00000.
Guaranty or Guaranties. The Unconditional Continuing Guaranty of All
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Obligations and Security Agreement, dated or to be dated on or prior to the
Closing Date, made by each Guarantor in favor of the Lender, pursuant to which
each Guarantor guarantees to the Lender the payment and performance of the
Obligations, such Guaranties to be in form and substance satisfactory to the
Lender.
Hospitality. Xxxxxxx Hospitality, LLC., a Georgia limited liability
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company.
Indemnity Agreement. The Indemnity Agreement dated or to be dated on or
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prior to the Closing Date, made by the Borrower and the Guarantor in favor of
the Lender, pursuant to which the Borrower and the Guarantor agree to indemnify
the Lender with respect to Hazardous Materials, Environmental Laws, and
Accessibility Laws, such Indemnity Agreement to be in form and substance
satisfactory to the Lender.
Individual Debt Service Coverage Ratio. (a) EBITDA, less Replacement
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Reserves required
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pursuant to Section 8112, less real estate and personal property taxes for the
Property, hereunder for the Normal Property, the Peoria Property, or the
Springfield Property, as the case may be for the period in question divided by
(b) Debt service for the period in question. The Individual Debt Service
Coverage Ratio shall be calculated as of the end of each fiscal quarter of the
Borrower for the previous four fiscal quarters of Borrower. The term "Debt" for
purposes of this paragraph only shall mean, with respect to the Normal Property,
the Peoria Property, or the Springfield Property, as the case may be, the then
current principal and interest payments due under the Note for the period in
question times a fraction, the numerator of which is the appraised value of the
Normal Property, the Peoria Property, or the Springfield Property as of the date
hereof, as the case may be, and the denominator of which is the aggregate
appraised value of all of the Normal Property, the Peoria Property, and the
Springfield Property as of the date hereof.
Leases. Leases, licenses, and agreements, whether written or oral,
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relating to the use or occupation of space in the improvements on the Property
by Persons other than the Borrower.
Loan. The loan which is the subject of this Agreement.
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Loan Amount. Eleven Million Dollars ($11,000,000.00).
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Loan Documents. This Agreement, Note A, Note B, the Indemnity Agreement,
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the Normal Mortgage, the Peoria Mortgage, the Springfield Mortgage, the
Financing Statements, the Normal Assignment of Leases, the Peoria Assignment of
Leases, the Springfield Assignment of Leases, the Normal Assignment of Deposit
Account, Peoria Assignment of Deposit Account, Springfield Assignment of Deposit
Account, and all other agreements, documents and instruments now or hereafter
evidencing, securing or otherwise relating to the Loan.
Master Lease. That certain Master Lease Agreement between Borrower (and/or
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affiliates of Borrower) and Hospitality dated as of May 7, 1999, and amended by
Amendment No. 1 to Master Lease Agreement dated as of May 7, 1999, and as
amended by Amendment No. 2 to Master Lease Agreement dated as of November 2,
2000, and as amended by Amendment No. 3 to Master Lease Agreement dated as of
November 22, 2000, whereby Hospitality leases various properties from Borrower
(and/or affiliates of Borrower) including the Normal Property, the Peoria
Property, and the Springfield Property.
Maturity Date. _____________, 2005.
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Mortgage. Collectively, the Normal Mortgage, the Peoria Mortgage, and the
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Springfield Mortgage.
Normal Assignment of Deposit Account. The Assignment of Deposit Account
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for the Normal Property, dated or to be dated on or prior to the Closing Date,
made by the Borrower in favor of the Lender, pursuant to which the Borrower
assigns its right, title and interest in the Normal Reserve Account, such
Assignment of Deposit Account to be in form and substance satisfactory to the
Lender.
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Normal Assignment of Leases. The Assignment of Leases and Rents, dated or
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to be dated on or prior to the Closing Date, made by the Borrower in favor of
the Lender, pursuant to which the Borrower assigns its right, title and interest
as landlord in and to the Leases and the rents, issues and profits of the Normal
Property, such Assignment of Leases and Rents to be in form and substance
satisfactory to the Lender.
Normal Mortgage. That certain Mortgage and Security Agreement encumbering
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the Normal Property, executed and delivered by Borrower in favor of Lender in
connection with the Loan.
Peoria Assignment of Deposit Account. The Assignment of Deposit Account
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for the Peoria Property, dated or to be dated on or prior to the Closing Date,
made by the Borrower in favor of the Lender, pursuant to which the Borrower
assigns its right, title and interest in the Peoria Reserve Account, such
Assignment of Deposit Account to be in form and substance satisfactory to the
Lender.
Peoria Assignment of Leases. The Assignment of Leases and Rents, dated or
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to be dated on or prior to the Closing Date, made by the Borrower in favor of
the Lender, pursuant to which the Borrower assigns its right, title and interest
as landlord in and to the Leases and the rents, issues and profits of the Peoria
Property, such Assignment of Leases and Rents to be in form and substance
satisfactory to the Lender.
Peoria Mortgage. That certain Mortgage and Security Agreement encumbering
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the Peoria Property, executed and delivered by Borrower in favor of Lender in
connection with the Loan.
Note. Collectively, Note A and Note B.
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Note A. That certain promissory note in the amount of Six Million Dollars
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($6,000,000.00) executed of even date herewith.
Note B. That certain promissory note in the amount of Five Million Dollars
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($5,000,000.00) executed of even date herewith.
Obligations. The obligations of Borrower to:
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(A) To repay all indebtedness, obligations and liabilities of the
Borrower to the Lender, individually or collectively, existing on the date of
this Agreement or arising thereafter, including any extensions, amendments,
modifications, renewals, refinancings, refundings thereof and substitutions
therefor, whether direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Agreement, any of the other Loan Documents, or the Note or other instruments at
any time evidencing any thereof, or otherwise.
(B) To repay to Lender all amounts advanced by Lender hereunder or
otherwise on
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behalf of Borrower, including, but without limitation, advances for principal or
interest payments to prior secured parties, mortgagee, or lienors, or for taxes,
levies, insurance, rent, repairs to or maintenance or storage of any of the
Collateral; and
(C) To reimburse Lender, on demand, for all of Lender's expenses and
costs, including without limitation the reasonable fees and expenses of its
counsel, in connection with the enforcement of this Agreement, the preparation
of the documents required hereunder, and the closing of the Loan, and including
without limitation, any proceeding brought or threatened to enforce payment of
any of the obligations referred to in the foregoing paragraphs (A) and (B).
Permitted Liens. Liens, security interests and other encumbrances
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permitted by Section 93.
Person. Any individual, corporation, partnership, limited liability
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company, trust, unincorporated association, business, or other legal entity, and
any government or any governmental agency or political subdivision thereof.
Personal Property. All goods, materials, supplies, inventory, furnishings,
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fixtures, furniture, machinery, equipment, all other items of tangible personal
property, all general intangibles, all drawings, designs, specifications, blue
prints, plans, promotional brochures, mailing lists, records, customer lists,
all instruments, chattel paper, documents and accounts, and all proceeds,
substitutes, replacements, accretions, accessions and products of any of the
foregoing now or hereafter owned or acquired by the Borrower, wherever located,
and either (i) to be located on or incorporated into the Property, (ii) used in
connection with the construction of the Improvements or (iii) to be used in
connection with the ownership, operation, or maintenance of the Property,
excluding, however, leased computer equipment and software used in connection
with the Property.
Property. Collectively the real property described on Exhibit A, A1 and
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A2, attached hereto and incorporated herein located in XxXxxx County, Illinois,
(the "Normal Property"), in Peoria County, Illinois (the "Peoria Property"), in
Sangamon County, Illinois, (the "Springfield Property") respectively together
with all improvements thereon and appurtenances thereto and more fully described
in each Mortgage.
Springfield Assignment of Deposit Account. The Assignment of Deposit
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Account for the Springfield Property, dated or to be dated on or prior to the
Closing Date, made by the Borrower in favor of the Lender, pursuant to which the
Borrower assigns its right, title and interest in the Springfield Reserve
Account, such Assignment of Deposit Account to be in form and substance
satisfactory to the Lender.
Springfield Assignment of Leases. The Assignment of Leases and Rents,
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dated or to be dated on or prior to the Closing Date, made by the Borrower in
favor of the Lender, pursuant to which the Borrower assigns its right, title and
interest as landlord in and to the Leases and the rents, issues and profits of
the Springfield Property, such Assignment of Leases and Rents to be in form and
substance satisfactory to the Lender.
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Springfield Mortgage. That certain Leasehold Mortgage and Security
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Agreement encumbering the Springfield Property, executed and delivered by
Borrower in favor of Lender in connection with the Loan.
Sublease. That certain Sublease of the Property between Xxxxx and
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Xxxxxxxxx Motor Inn Corporation ("SMIC"), dated November 29, 1966, and recorded
June 19, 1967, in the Office of the Recorder of Sangamon County, Illinois in
Book 1015 of Mortgages, Page 798, as Document No. 482815 ("the 1966 Sublease"),
which 1966 Sublease was amended pursuant to that certain Amendment to Sublease
between Xxxxx and SMIC recorded August 1, 1986, in the Office of the Recorder of
Sangamon County, Illinois as Document No. 32737 (the "1986 Amendment"), and
further amended by that certain Amendment to Sublease between Xxxxx and Motel
Equity Venture Limited Partnership ("Motel Equity"), dated September 4, 1987,
and recorded September 11, 1987, in the Office of the Recorder of Sangamon
County, Illinois as Document No. 78779 (the "1987 Amendment") (the 1966
Sublease, as amended from time to time, including the 1986 Amendment and the
1987 Amendment, are referred to herein as the "Original Sublease"). Pursuant to
that certain Assignment of Sublease and Amendment to Sublease, dated July 31,
1986, and recorded August 1, 1986, in the Office of the Recorder of Sangamon
County, Illinois as Document No. 32738, SMIC assigned all of its rights, title,
interest and estate in, to and under the Original Sublease to Xxx X. Xxxxx,
Xxxxx X. Xxxxx and Xxxxx Xxxxx (collectively the "Xxxxx'x"). Pursuant to that
certain Assignment of Sublease and Amendment to Sublease, dated November 13,
1986, and recorded on March 26, 1987, in the Office of the Recorder of Sangamon
County, Illinois as Document No. 59565, the Xxxxx'x assigned all of their
rights, title, interest and estate in, to and under the Original Sublease to
Private Capital Ltd. ("Private Capital"). Pursuant to that certain Assignment
of Sublease and Amendment to Sublease, dated June 30, 1987, and recorded July 1,
1987, in the office of the Recorder of Sangamon County, Illinois as Document No.
71462, Private Capital assigned all of its rights, title, interest and estate
in, to and under the Original Sublease to Motel Equity. Pursuant to that
certain Assignment and Assumption of Sublease, dated as of October 21, 1993, and
recorded October 26, 1993, in the Office of the Recorder of Sangamon County,
Illinois as Document No. 93-47344, Motel Equity assigned all of its rights,
title, interest and estate in, to and under the Original Sublease to Summit
Avenue Properties, Inc. ("SAPI"). Pursuant to that certain Assignment and
Assumption Agreement dated as of August 26, 1996, and recorded August 27, 1996,
in the office of Sangamon County, Illinois as Document No. 96-34549, SAPI
assigned all of its right, title, interest and estate in, to and under the
Original Sublease to SI Springfield Corporation ("SISC"). The Original Sublease
was further amended by the certain Amended and Restated Sublease between Xxxxx
and SISC dated August 26, 1996, and recorded August 27, 1996, in the office of
the Recorder of Sangamon County, Illinois as Document No. 96-34550 (the
"Sublease"). Xxxxx and SISC further entered into an Amendment to Amended and
Restated Sublease dated as of July __, 1997, extending the term of the Sublease
to May 20, 2034. Signature Inns, Inc.("SII") merged into Xxxxxxx Inns, Inc., a
Georgia corporation ("JII"), on May 7, 1999. Prior to such merger, SISC was a
wholly owned subsidiary of SII and is now a wholly owned subsidiary of JII. On
May 28, 1997, SII entered into a letter agreement with the City regarding the
encroachment of a cantilevered canopy over a City Water, Light and Power
Easement (the "Encroachment Agreement"), which was not recorded. Pursuant to
that certain Assignment and Assumption Agreement dated as of __________________,
2000, SISC assigned all of its right, title, interest and estate in, to and
under the Sublease to Borrower.
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Subordination Agreement. Agreements among the Lender, the Borrower, and
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Hospitality pursuant to which Hospitality agrees to subordinate its rights under
the Master Lease to the lien of the Normal Mortgage, the Peoria Mortgage, and
the Springfield Mortgage, such agreements to be in form and substance
satisfactory to the Lender.
Survey. An ALTA/ACSM survey of each Property prepared by a registered land
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surveyor certified to Lender and the Title Company, which survey is to show the
same by metes and bounds together with all easements as actually located
(referring to same by book and page number of recordation or if the same cannot
be located then, indicating the same), set back lines, improvements, walks,
alleys, drives, former streets and alleys, if vacated, adjoining public roads,
streets, or other thoroughfares, and all appurtenant easements, the proposed
location of the buildings, a legal description of the Property and the area of
the Property in square feet, dimensions, area, and locations of improvements,
ingress and egress to and from the Property; parking area; easements, including
all appurtenant easements, the location of adjacent streets, and such additional
details as Lender may reasonably request, together with satisfactory evidence
that the improvements on the Property do not and will not encroach upon any
property line, building set-back line or easement.
Surveyor's Certificate. With respect to any Survey, a certificate executed
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by the surveyor who prepares such Survey dated as of a recent date and
containing such information relating to each Property as the Lender or the Title
Insurance Company may require.
Taking. Any condemnation for public use of, or damage by reason of, the
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action of any Governmental Authority, or any transfer by private sale in lieu
thereof, either temporarily or permanently.
Title Insurance Company. First Associates Title LLC, with a usual place of
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business at 000 Xxxxx XxXxxxxx Xxxx, Xx. Xxxxx, Xxxxxxxx 00000-0000.
Title Policy-Springfield. An ALTA standard form title insurance policy
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issued by the Title Insurance Company (with such reinsurance or co-insurance as
the Lender may require, any such reinsurance to be with direct access
endorsements) in an amount not less than the Loan Amount insuring the priority
of the Mortgage and that the Borrower holds marketable leasehold title to the
Springfield Property, subject only to such exceptions as the Lender may approve
and which shall not contain exceptions for mechanics liens, persons in occupancy
(except under Leases which have been approved by Lender) or matters which would
be shown by a survey, shall not insure over any matter except to the extent that
any such affirmative insurance is acceptable to the Lender in its sole
discretion, and shall contain such endorsements and affirmative insurance as the
Lender in its discretion may require, including but not limited to (a) a
comprehensive endorsement, (b) a variable rate of interest endorsement, (c) a
future advance endorsement, and (d) an ALTA form 3.1 zoning endorsement.
Title Policy-Normal. An ALTA standard form title insurance policy issued
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by the Title
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Insurance Company (with such reinsurance or co-insurance as the Lender may
require, any such reinsurance to be with direct access endorsements) in an
amount not less than the Loan Amount insuring the priority of the Mortgage and
that the Borrower holds marketable fee title to the Normal Property, subject
only to such exceptions as the Lender may approve and which shall not contain
exceptions for mechanics liens, persons in occupancy (except under Leases which
have been approved by Lender) or matters which would be shown by a survey, shall
not insure over any matter except to the extent that any such affirmative
insurance is acceptable to the Lender in its sole discretion, and shall contain
such endorsements and affirmative insurance as the Lender in its discretion may
require, including but not limited to (a) a comprehensive endorsement, (b) a
variable rate of interest endorsement, (c) a future advance endorsement, and (d)
an ALTA form 3.1 zoning endorsement.
Title Policy-Peoria. An ALTA standard form title insurance policy issued
-------------------
by the Title Insurance Company (with such reinsurance or co-insurance as the
Lender may require, any such reinsurance to be with direct access endorsements)
in an amount not less than the Loan Amount insuring the priority of the Mortgage
and that the Borrower holds marketable fee title to the Peoria Property, subject
only to such exceptions as the Lender may approve and which shall not contain
exceptions for mechanics liens, persons in occupancy (except under Leases which
have been approved by Lender) or matters which would be shown by a survey, shall
not insure over any matter except to the extent that any such affirmative
insurance is acceptable to the Lender in its sole discretion, and shall contain
such endorsements and affirmative insurance as the Lender in its discretion may
require, including but not limited to (a) a comprehensive endorsement, (b) a
variable rate of interest endorsement, (c) a future advance endorsement, and (d)
an ALTA form 3.1 zoning endorsement.
1.2. Rules of Interpretation.
-----------------------
(a) A reference to any agreement, budget, document or schedule shall
include such agreement, budget, document or schedule as revised, amended,
modified or supplemented from time to time in accordance with its terms and the
terms of this Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) The words "include", "includes" and "including" are not limiting.
(f) The words "approval" and "approved", as the context so
determines, means an approval in writing given to the party seeking approval
after full and fair disclosure to the party giving approval of all material
facts necessary in order to determine whether approval should be granted.
-9-
(g) Reference to a particular Section refers to that section of this
Agreement unless otherwise indicated.
(h) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
2. THE NOTE; INTEREST; MATURITY AND PREPAYMENT.
-------------------------------------------
2.1. The Note. The Loan shall be evidenced by a promissory note of the
--------
Borrower in substantially the form of Exhibit B1 hereto ( "Note A"), a
-----------
promissory note of the Borrower in substantially the form of Exhibit B2 hereto
-----------
("Note B") (Note A and Note B are hereinafter collectively sometimes referred to
as the "Note" or the "Notes") each dated as of the Closing Date and completed
with appropriate insertions. The Notes shall be payable to the order of Lender
in an aggregate principal amount equal to the Loan Amount.
2.2. Funds for Payments.
------------------
(a) All payments of principal, interest, fees and any other amounts
due under the Notes or under any of the other Loan Documents shall be made to
the Lender, at its office at 000 X.X. Xxxxxxxxx, Xxxxxx, Xxxxxxxx 00000, or at
such other location that the Lender may from time to time designate, in each
case not later than 2:00 p.m. (Peoria, Illinois time) on the day when due in
immediately available funds in lawful money of the United States.
(b) All payments by the Borrower under the Note and under any of the
other Loan Documents shall be made without setoff or counterclaim and free and
clear of and without deduction for any taxes, levies, imposts, duties, charges,
fees, deductions, withholdings, compulsory loans, restrictions or conditions of
any nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein unless the
Borrower is compelled by law to make such deduction or withholding. If any such
obligation to deduct or withhold is imposed upon the Borrower with respect to
any amount payable by it under the Note or under any of the other Loan
Documents, the Borrower will pay to the Lender on the date on which such amount
is due and payable under the Note or under such other Loan Document, such
additional amount in dollars as shall be necessary to enable the Lender to
receive the same amount which the Lender would have received on such due date
had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Lender certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made by
the Borrower under the Note or under such other Loan Document.
2.3. Computations. Interest on the Note shall be calculated on a daily
------------
basis by dividing the annual rate of interest by 360 to obtain the daily
interest rate. All interest due hereunder shall be paid for the actual number
of days elapsed. Whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due date for such
payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension.
-10-
2.4. Maturity. The Borrower promises to pay to the Lender on the
--------
Maturity Date, and there shall become absolutely due and payable on the Maturity
Date, the principal balance of the Notes outstanding on such date, together with
any and all accrued and unpaid interest thereon.
2.5. Commitment Fee. The Borrower agrees to pay to the Lender on the
--------------
Closing Date a commitment fee in the amount of Eighty-Two Thousand Five Hundred
Dollars ($82,500.00).
2.6. Interest on Overdue Amounts. Overdue principal and (to the extent
---------------------------
permitted by applicable law) interest and all other overdue amounts payable
hereunder or under any of the other Loan Documents shall bear interest payable
on demand at the Default Rate until such amount shall be paid in full (whether
before or after judgment).
2.7. Prepayment. The Borrower shall have the right, at its election, to
----------
repay the outstanding amount principal balance of the Note, as a whole or in
part, at any time without penalty or premium. Each such partial prepayment shall
be in an integral multiple of One Thousand Dollars ($1,000.00), on the principal
repaid to the date of payment. No amount prepaid by the Borrower may be
reborrowed.
2.8. Alienation. It is agreed, and the Mortgage and the Note shall so
----------
provide, that all indebtedness evidenced by the Note shall at the option of the
holder of the Note become forthwith due and payable upon any assignment, sale,
voluntary encumbrance, or other attempted alienation of the Property.
3. AGREEMENT TO MAKE NOTE B ADVANCES; LIMITATIONS.
----------------------------------------------
3.1. Agreement to Make Advances under Note B. Subject to the terms and
---------------------------------------
conditions of this Agreement, the Lender agrees to lend to the Borrower and the
Borrower may borrow from time to time between the Closing Date and December
____, 2001, upon submission by the Borrower of a Draw Request to the Lender in
accordance with Section 32, such amounts as are requested by the Borrower up to
a maximum aggregate principal amount equal to the amount of Note B. Each Draw
Request for an Advance hereunder shall constitute a representation and warranty
by the Borrower that the conditions set forth in Section 5 have been satisfied
on the date of such Draw Request.
3.2. Draw Request. At such time as the Borrower shall desire to obtain
------------
an Advance under Note B, the Borrower shall complete, execute and deliver to the
Lender a Draw Request in the form of Exhibit C, attached hereto (hereinafter
---------
referred to as "Draw Request"). Each Draw Request shall state with
particularity the purpose for which the Advance is requested and, in the event
that any of such Advance is for the purpose of paying for labor or materials
supplied with respect to any Property it shall be accompanied by written lien
waivers from the contractor and such laborers, subcontractors and materialmen
for work done and materials supplied by them. Borrower shall also
provide Lender such other information, documentation and certification as the
Lender shall reasonably request.
-11-
3.3. Amount; Notice and Frequency of Advances. Each Draw Request shall
----------------------------------------
be submitted to the Lender at least three (3) Business Days prior to the date of
the requested Advance, and no more frequently than once each month and shall be
for an amount not less than Fifty Thousand Dollars ($50,000.00).
3.4. Advances Do Not Constitute a Waiver. No Advance made by the Lender
-----------------------------------
shall constitute a waiver of any of the conditions to the obligation of the
Lender to make further Advances nor, in the event the Borrower fails to satisfy
any such condition, shall any such Advance have the effect of precluding the
Lender from thereafter declaring such failure to satisfy a condition to be an
Event of Default.
3.5. Cessation of Disbursements. Lender shall have the right to cause a
--------------------------
cessation of Advances to Borrower and shall not be obligated to make any further
Advances to Borrower upon the occurrence of any of the following:
3.5.1. A Default or Event of Default hereunder;
3.5.2. If any of the improvements on the Property are materially
damaged by fire or other casualty and not repaired within a reasonable period of
time, unless Lender actually receives insurance proceeds or a cash deposit from
Borrower sufficient in Lender's judgment to pay for the repair of such
improvements in a timely manner; and
3.5.3. If Borrower fails to deliver any items or documents required
for disbursement hereunder or if an extension is granted by Lender for delivery
of such item or document, then failure to deliver such item or document during
any such extension.
3.6. Certain Events. At the time of any Advance:
--------------
3.6.1. No Default. No Default or Event of Default shall have occurred
----------
and be continuing;
3.6.2. Adverse Change. No material adverse change shall have occurred
--------------
in the financial condition of Borrower since the submission of Financial
Statements of Borrower on or about the date of this Agreement;
3.6.3. Loan Documents. All of the Loan Documents shall be in full
--------------
force and effect; and
3.6.4. Representations and Warranties. All of the representations and
------------------------------
warranties of Borrower shall be true and correct.
4. CONDITIONS TO CLOSING. The obligation of the Lender to close shall be
---------------------
subject to the satisfaction of the following conditions precedent:
-12-
4.1. Loan Documents. Each of the Loan Documents shall have been duly
--------------
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to the Lender.
Lender shall have received a fully executed copy of each such document.
4.2. Contracts. The Borrower shall have delivered to the Lender correct
---------
and complete photocopies of all contracts relating to the Property and the
Personal Property.
4.3. Certified Copies of Organizational Documents. The Lender shall have
--------------------------------------------
received:
4.3.1. Certified copies of (i) the Articles of Organization and all
amendments thereto of Borrower certified by the Secretary of the State of
Georgia; (ii) the operating agreement and all amendments thereto of Borrower;
(iii) certified copies of any required consent of Borrower's members; and (iv)
the names and signatures of the all of the members or the managers of Borrower
signing the Loan Documents; and containing (v) a certificate of good standing of
Borrower under the laws of the States of Georgia and Illinois;
4.3.2. A certificate by Guarantor's secretary certifying: (i) a copy
of resolutions of Guarantor's Board of Directors authorizing the execution,
delivery, and performance of the Loan Documents; (ii) a complete copy of
Guarantor's By-Laws and all amendments thereto; (iii) a complete copy of
Guarantor's Articles of Incorporation and all amendments thereto certified by
the Secretary of the State of Georgia; (iv) the incumbency and signatures of the
officers of Guarantor signing the Loan Documents; and containing (v) a
certificate of good standing of Guarantor under the laws of the States of
Georgia and Illinois;
4.3.3. Certified copies of (i) the Articles of Organization and all
amendments thereto of Hospitality certified by the Secretary of the State of
Georgia; (ii) the operating agreement and all amendments thereto of Hospitality;
(iii) certified copies of any required consent of Hospitality's members; and
(iv) the names and signatures of the all of the members or the managers of
Hospitality signing the Loan Documents; and containing (v) a certificate of good
standing of Hospitality under the laws of the States of Georgia and Illinois;
4.4. Deliveries. The following items or documents shall have been
----------
delivered to the Lender by the Borrower and shall be in form and substance
satisfactory to the Lender:
4.4.1. Title Policies. The Normal Title Policy, the Peoria Title
--------------
Policy and the Springfield Title policy, together with proof of payment of all
fees and premiums for such policies and true and accurate copies of all
documents listed as exceptions under such policies.
4.4.2. Insurance. If requested by Lender, duplicate originals or
---------
certified copies of all policies of insurance required by the Mortgages to be
obtained and maintained by the Borrower and certificates of insurance evidencing
the insurance required by Section 87 to be obtained and maintained by the
Borrower.
-13-
4.4.3. Evidence of Access; Availability of Utilities. Evidence as to:
---------------------------------------------
(i) the methods of access to and egress from the Property, and
nearby or adjoining public ways, meeting the reasonable requirements of the
Property and the status of completion of any required improvements to such
access;
(ii) the availability of water supply and storm and sanitary
sewer facilities meeting the reasonable requirements of the Property; and
(iii) the availability of all other required utilities, in
location and capacity sufficient to meet the reasonable needs of the Property;
4.4.4. Environmental Report. An environmental site assessment report
--------------------
or reports of one or more qualified environmental engineering or similar
inspection firms approved by the Lender, which report or reports shall indicate
a condition of the Property and any existing improvements thereon in all
respects satisfactory to the Lender in its sole discretion and upon which report
or reports the Lender is expressly entitled to rely.
4.4.5. Survey. A Survey of the Normal Property, the Peoria Property
------
and the Springfield Property (and any existing improvements thereon) and
Surveyor's Certificate.
4.4.6. Taxes. Evidence of payment of all real estate taxes and
-----
municipal charges on the Property (and any existing improvements thereon) which
were due and payable prior to the Closing Date.
4.4.7. Financial Statements. Financial Statements as required
--------------------
pursuant to Section 84 hereof.
4.4.8. Flood Plain. Evidence satisfactory to Lender the Property is
-----------
not in a federally designated flood plain zone or, in lieu thereof, a federally
subsidized policy of flood insurance naming Lender as mortgagee.
4.4.9. Zoning Letters. Evidence satisfactory to Lender the Property
--------------
is zoned to permit its current use.
4.4.10. Ground Lease; Estoppel. Fully executed photocopies of the
----------------------
Ground Lease with respect to the Springfield Property, together with an estoppel
from the City of Springfield, Illinois, in form and substance satisfactory to
the Lender.
4.4.11. Sublease; Estoppel. Fully executed photocopies of the Sublease
------------------
together with an estoppel from Xxxxx, in form and substance satisfactory to
the Lender; and together with evidence that Borrower is an "Approved
Sublessee," as such term is defined in the Ground Lease.
-14-
4.4.12. Master Lease. Copies of the fully executed Master Lease and
------------
all amendments thereto.
4.4.13. Subordination Agreements. Fully executed Subordination
------------------------
Agreements, each in recordable form relating to each Mortgage.
4.5. Legal Opinions. The Lender shall have received favorable opinions
--------------
in form and substance satisfactory to the Lender, addressed to the Lender and
dated as of the Closing Date, from Borrower's counsel relating to such matters
as the Lender shall reasonably request.
4.6. Lien Search. The Lender shall have received a certification from
-----------
Title Insurance Company or counsel satisfactory to the Lender (which shall be
updated from time to time at the Borrower's expense upon request by the Lender)
that a search of the public records disclosed no conditional sales contracts,
security agreements, chattel mortgages, leases of personalty, financing
statements or title retention agreements which affect the Collateral.
4.7. Appraisal. The Lender shall have received an Appraisal for each
---------
Property, in form and substance satisfactory to the Lender, stating that the
Property has an aggregate fair market value of at least Seventeen Million Four
Hundred Thousand Dollars ($17,400,000.00).
4.8. Commitment Fee; Other Fees and Expenses. The Borrower shall have
----------------------------------------
paid to Lender:
4.8.1. Commitment Fee. The commitment fee pursuant to Section 25
--------------
hereof;
4.8.2. Attorneys' Fees. Lender's attorneys' fees and expenses; and
---------------
4.8.3. Other Fees. All other fees and expenses of Lender incurred in
----------
connection with the Loan.
4.9. Performance; No Default. The Borrower shall have performed and
-----------------------
complied with all terms and conditions herein required to be performed or
complied with by it on or prior to the date of the initial Advance, and on the
date of the initial Advance, there shall exist no Default or Event of Default.
4.10. Truth of Representations and Warranties. The representations and
---------------------------------------
warranties made by the Borrower and the Guarantors in the Loan Documents or
otherwise made by or on behalf of the Borrower or the Guarantors in connection
therewith or after the date thereof shall have been true and correct in all
respects when made and shall also be true and correct in all respects on the
date of the initial Advance.
4.11. Waiver of Requirements. Lender in its sole and absolute discretion,
----------------------
may temporarily waive the requirements to deliver one or more of the items or
documents required in this Section 4 with respect to one or more Advances under
the Loan, however, at the sole and absolute discretion of Lender, such items or
documents must be delivered to Lender prior to any further Advances of
-15-
the Loan unless Lender otherwise agrees in writing.
5. CONDITIONS OF SUBSEQUENT ADVANCES. The obligation of the Lender to make
---------------------------------
any Advance after the date hereof shall be subject to the satisfaction of the
following conditions precedent:
5.1. Prior Conditions Satisfied. All conditions precedent to the closing
--------------------------
and any prior Advance shall continue to be satisfied as of the date of such
subsequent Advance.
5.2. Performance; No Default. The Borrower shall have performed and
-----------------------
complied with all terms and conditions herein required to be performed or
complied with by it on or prior to the date of such Advance, and on the date of
such Advance there shall exist no Default or Event of Default.
5.3. No Damage. The Improvements shall not have been injured or damaged
---------
by fire, explosion, accident, flood or other casualty, unless the Lender shall
have received insurance proceeds sufficient in the reasonable judgment of Lender
to effect the satisfactory restoration of the Improvements and to permit the
completion thereof on or prior to the Completion Date.
5.4. Receipt of Documents by the Lender. The Lender shall have received
----------------------------------
the following items or documents which shall be in form and substance
satisfactory to the Lender:
5.4.1. Draw Request. A Draw Request complying with the requirements
------------
hereof, including those set forth in Section 32 hereof; and
5.4.2. Endorsement to Title Policy. If required by the Title Insurance
---------------------------
Company in order to provide coverage against mechanics' or materialmens' liens
or to insure the priority of the Mortgage, a "date down" endorsement to the
Title Policy indicating no change in the state of title and containing no survey
exceptions not approved by the Lender, which endorsement shall, expressly or by
virtue of a proper "pending disbursements" clause or endorsement in the Title
Policy, increase the coverage of the Title Policy to the aggregate amount of all
proceeds of the Loan advanced on or before the effective date of such
endorsement;
5.5. Liens. There shall be no liens filed of record against the
-----
Property. Borrower shall provide Lender with written notice of any liens filed
against the Property not later than three (3) Business Days following Borrower's
receipt of notice of such liens. In addition, Borrower shall cause the Title
Insurance Company to furnish Lender monthly reports of any liens filed against
the Property. Lender shall have no obligation to make any Advances so long as
any such liens are of record; provided, however, that the Borrower shall not be
required to pay or discharge any lien filed against the Property so long as it,
in good faith, shall be concurrently contesting any such lien and shall have
either escrowed or posted a bond in an amount equal to one hundred and fifty
percent (150%) of the amount being contested.
6. CERTAIN RIGHTS OF THE LENDER.
----------------------------
6.1. Right to Obtain Appraisals. The Lender shall have the right to
--------------------------
obtain from time to time,
-16-
at the Borrower's cost and expense, updated Appraisals of the Property, provided
--------
that so long as no Default or Event of Default shall have occurred and be
continuing, the Borrower shall only be obligated to pay for the costs and
expenses associated with one such Appraisal during any twelve (12) month period.
The costs and expenses incurred by the Lender in obtaining such Appraisals shall
be paid by the Borrower forthwith upon billing or request by the Lender for
reimbursement therefor.
7. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants to
------------------------------
the Lender as follows:
7.1. Organization; Authority; Etc.
----------------------------
7.1.1. Organization; Good Standing.
---------------------------
(i) Borrower is and shall continue to be a limited liability
company organized and validly existing under the laws of the State of
Georgia and authorized to do business in Illinois; and Borrower has and
shall continue to have the lawful power to own its properties and to engage
in the business it conducts;
(ii) Borrower is and shall continue to be a corporation
organized and validly existing under the laws of the State of Georgia and
shall continue to be authorized to transact business in the State of
Illinois; and Borrower has and shall continue to have the lawful power to
own its properties and to engage in the business it conducts;
(iii) Borrower (i) has all requisite power to own its property
and conduct its business as now conducted and as presently contemplated,
and (ii) is in good standing as a foreign entity and is duly authorized to
do business in the jurisdiction where the Property is located and in each
other jurisdiction where such qualification is necessary except where a
failure to be so qualified in such other jurisdiction would not have a
materially adverse effect on its business, assets or financial condition.
7.1.2. Authorization. The execution, delivery and performance of this
-------------
Agreement and the other Loan Documents to which the Borrower or the Guarantor is
or is to become a party and the transactions contemplated hereby and thereby (i)
are within the authority of such Person, (ii) have been duly authorized by all
necessary proceedings on the part of such Person, (iii) do not conflict with or
result in any breach or contravention of any provision of law, statute, rule or
regulation to which such Person is subject or any judgment, order, writ,
injunction, license or permit applicable to such Person, (iv) do not conflict
with any provision of the articles of incorporation or bylaws, or any agreement
or other instrument binding upon, such Person, and (v) do not require the
approval or consent of, or filing with, any governmental agency or authority
other than those already obtained and the filing of the Mortgage, the Assignment
of Leases and the Financing Statements in the appropriate public records with
respect thereto.
7.1.3. Enforceability. The execution and delivery of this Agreement
--------------
and the other Loan Documents to which the Borrower or the Guarantor is or is to
become a party will result in
-17-
valid and legally binding obligations of such Person enforceable against it in
accordance with the respective terms and provisions hereof and thereof, except
as enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of
creditors' rights and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
7.2. Title to Property and other Properties.
--------------------------------------
7.2.1. The Borrower holds good clear record and marketable fee simple
absolute title to the Normal Property and Peoria Property and leasehold title
to the Springfield Property, and owns the Personal Property, subject to no
rights of others, including any mortgages, leases, conditional sale agreements,
title retention agreements, liens or other encumbrances.
7.2.2. The Borrower owns all of the assets reflected in the audited
balance sheet of the Borrower as of the Balance Sheet Date or acquired since
that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date), subject to no rights of others,
including any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.
7.3. Financial Statements. There has been furnished to the Lender an
--------------------
audited balance sheet of the Borrower as of the Balance Sheet Date, and a
statement of income for the fiscal year then ended, certified by Borrower's
Certified Public Accountant. Such balance sheet and statement of income have
been prepared in accordance with generally accepted accounting principles and
fairly present the financial condition of the Borrower as of the close of
business on the date thereof and the results of operations for the fiscal year
then ended. As of the date of this Agreement, there are no liabilities or
contingent liabilities of the Borrower known to the officers of the Borrower
which are not disclosed in said balance sheet and the related notes thereto
-------------
other than the Obligations.
7.4. No Material Changes, Etc. Since the Balance Sheet Date, there has
------------------------
occurred no adverse change in the financial condition or business of the
Borrower as shown on or reflected in the audited balance sheet of the Borrower
as of the Balance Sheet Date, or the consolidated statement of income for the
fiscal year then ended, other than changes in the ordinary course of business
that have not had any adverse effect either individually or in the aggregate on
the business or financial condition of the Borrower. Since the Balance Sheet
Date, the Borrower has not made any Distribution.
7.5. Litigation. There are no actions, suits, proceedings or
----------
investigations of any kind pending or threatened against the Borrower or the
Guarantor before any court, tribunal or administrative agency or board that, if
adversely determined, might, either in any case or in the aggregate, adversely
affect the properties, assets, financial condition or business of such Person or
materially impair the right of such Person to carry on business substantially as
now conducted by it, or result in any liability not adequately covered by
insurance, or for which adequate reserves are not
-18-
maintained on the balance sheet of such Person, or which question the validity
of this Agreement or any of the other Loan Documents, any action taken or to be
taken pursuant hereto or thereto, or any lien or security interest created or
intended to be created pursuant hereto or thereto, or which will adversely
affect the ability of the Borrower or the Guarantor to construct, use and occupy
the Property or to pay and perform the Obligations in the manner contemplated by
this Agreement and the other Loan Documents.
7.6. No Materially Adverse Contracts, Etc. Borrower is not subject to
------------------------------------
any charter, corporate or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is expected in the future to have a
materially adverse effect on the business, assets or financial condition of the
Borrower. Borrower is not a party to any contract or agreement that has or is
expected, in the judgment of the Borrower's officers, to have any materially
adverse affect on the business of the Borrower.
7.7. Compliance With Other Instruments, Laws, Etc. Borrower is not in
--------------------------------------------
violation of any provision of its organizational documents, by-laws, or any
agreement or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, statute, license, rule
or regulation, in any of the foregoing cases in a manner that could result in
the imposition of penalties or materially and adversely affect the financial
condition, properties or business of the Borrower.
7.8. Tax Status. The Borrower (a) has made or filed all federal and
----------
state income and all other tax returns, reports and declarations required by any
jurisdiction to which any of them is subject and (b) have paid all taxes and
other governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and by appropriate proceedings, and (c) have set aside on their books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Borrower know of no basis for any such
claim.
7.9. No Event of Default. No Default or Event of Default has occurred
-------------------
and is continuing.
7.10. Investment Company Act. Borrower is not an "investment company", or
----------------------
an "affiliated company" or a "principal underwriter" of an "investment company",
as such terms are defined in the Investment Company Act of 1940.
7.11. Absence of Financing Statements, Etc. There is no financing
------------------------------------
statement, security agreement, chattel mortgage, real estate mortgage or other
document filed or recorded with any filing records, registry, or other public
office, that purports to cover, affect or give notice of any present or possible
future lien on, or security interest in, (a) any Collateral or (b) any other
assets or property of the Borrower or any rights relating thereto.
7.12. Setoff, Etc. The Collateral and the rights of the Lender with
-----------
respect to the Collateral
-19-
are not subject to any setoff, claims, withholdings or other defenses. The
Borrower is the owner of the Collateral free from any lien, security interest,
encumbrance and any other claim or demand.
7.13. Condition of Property. Neither the Property nor any part thereof is
---------------------
now damaged or injured as result of any fire, explosion, accident, flood or
other casualty or has been the subject of any Taking, and to the knowledge of
the Borrower, no Taking is pending or contemplated.
7.14. Other Contracts. The Borrower has made no contract or arrangement
---------------
of any kind or type whatsoever (whether oral or written, formal or informal),
the performance of which by the other party thereto could give rise to a lien or
encumbrance on the Property.
7.15. Real Property Taxes; Special Assessments. There are no unpaid or
----------------------------------------
outstanding real estate or other taxes or assessments on or against the Property
or any part thereof which are payable by the Borrower (except only real estate
taxes not yet due and payable). The Borrower has delivered to the Lender true
and correct copies of real estate tax bills for the Property for the past fiscal
tax year. No abatement proceedings are pending with reference to any real
estate taxes assessed against the Property. There are no betterment assessments
or other special assessments presently pending with respect to any part of the
Property, and the Borrower has received no notice of any such special assessment
being contemplated.
7.16. Effect of Draw Request. Each Draw Request submitted to the Lender
----------------------
as provided in Section 32 hereof shall constitute an affirmation that the
representations and warranties contained in Section 7 of this Agreement and in
the other Loan Documents remain true and correct as of the date thereof (except
to the extent of changes resulting from transactions contemplated or permitted
by the Loan Documents and changes occurring in the ordinary course of business
that singly or in the aggregate are not adverse); and, unless the Lender is
notified to the contrary, in writing, prior to the date of the requested Advance
or any portion thereof, shall constitute an affirmation that the same remain
true and correct on the date of such Advance.
8. AFFIRMATIVE COVENANTS OF THE BORROWER. The Borrower covenants and agrees
-------------------------------------
that, so long as any Obligations are outstanding:
8.1. Punctual Payment. The Borrower will duly and punctually pay or
----------------
cause to be paid the principal and interest on the Loan and all other amounts
provided for in the Note, this Agreement and the other Loan Documents to which
the Borrower is a party, all in accordance with the terms of the Note, this
Agreement and such other Loan Documents.
8.2. Maintenance of Office. The Borrower will maintain its chief
---------------------
executive office in DeKalb County, Georgia, or at such other place in the United
States of America as the Borrower shall designate upon written notice to the
Lender, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents may be given or made.
8.3. Records and Accounts. The Borrower will (a) keep true and accurate
--------------------
records and books of account in which full, true and correct entries will be
made in accordance with generally accepted
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accounting principles and (b) maintain adequate accounts and reserves for all
taxes (including income taxes), depreciation and amortization of its properties,
contingencies, and other reserves.
8.4. Financial Statements, Certificates and Information. The Borrower
--------------------------------------------------
will deliver or cause to be delivered to the Lender:
8.4.1. As soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrower, the consolidated
balance sheet of the Borrower at the end of such year, and the related
consolidated statement of income, statement of retained earnings and statement
of cash flows for such year, each setting forth in comparative form the figures
for the previous fiscal year and all such statements to be in reasonable detail,
prepared in accordance with generally accepted accounting principles, and
accompanied by an auditor's report prepared without qualification by an
independent certified public accountant acceptable to the Lender;
8.4.2. As soon as practicable, but in any event not later than forty-
five (45) days after the end of each of the first three (3) fiscal quarters of
the Borrower, copies of the unaudited balance sheet of the Borrower as at the
end of such quarter, and the related unaudited statement of income, statement of
retained earnings and statement of cash flows for the portion of the Borrower's
fiscal year then elapsed, all in reasonable detail and prepared in accordance
with generally accepted accounting principles, together with a certification by
the principal financial or accounting officer of the Borrower that the
information contained in such financial statements fairly presents the financial
position of the Borrower on the date thereof (subject to year-end adjustments);
8.4.3. Contemporaneously with the delivery of the financial statements
referred to in subsection 841 above, a statement of all contingent liabilities
of the Borrower which are not reflected in such financial statements or referred
to in the notes thereto, and a statement of projected cash flows of the Borrower
for the current fiscal year, all in reasonable detail and certified by the
principal financial or accounting officer of the Borrower;
8.4.4. Contemporaneously with mailing thereof, copies of all material
of a financial nature sent to the stockholders of the Borrower;
8.4.5. As soon as practicable, but in any event not later than one
hundred and twenty (120) days after the end of each fiscal year of the Property,
the operating statement for the Property at the end of such year, and the
related statement of income for such year, each setting forth in comparative
form the figures for the previous fiscal year and all such statements to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles, prepared without qualification by Borrower's chief financial officer
or by an independent certified public accountant acceptable to the Lender;
8.4.6. As soon as practicable, but in any event not later than forty-
five (45) days after the end of each of the first three (3) fiscal quarters of
the Property for any fiscal year, the operating statement for the Property at
the end of such quarter, and the related statement of income for such quarter,
each setting forth in comparative form the figures for the previous fiscal year
and all such
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statements to be in reasonable detail, prepared in accordance with generally
accepted accounting principles, prepared without qualification by Borrower's
chief financial officer or by an independent certified public accountant
acceptable to the Lender;
8.4.7. Within thirty (30) days following the end of each calendar
year, and from time to time as Lender shall reasonably request, but no more
frequently than quarterly, Guarantor's audited balance sheet and profit and loss
statement prepared in accordance with generally accepted accounting principles
consistently applied;
8.4.8. Within thirty (30) days after the due date therefore, if
requested by the Lender, copies of each Guarantor's state and federal tax
returns;
8.4.9. From time to time such other financial data and information
(including accountants' management letters) as the Lender may reasonably
request.
8.5. Notices.
-------
8.5.1. Defaults. The Borrower will promptly notify the Lender in
--------
writing of the occurrence of any Default or Event of Default, specifying the
nature and existence of such Default or Event of Default and what action the
Borrower is taking or proposes to take with respect thereto. If any Person shall
give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Agreement or under
any note, evidence of indebtedness, indenture or other obligation to which or
with respect to which the Borrower is a party or obligor, whether as principal
or surety, and such default would permit the holder of such note or obligation
or other evidence of indebtedness to accelerate the maturity thereof, which
acceleration would have a material adverse effect on the Borrower, the Borrower
shall forthwith give written notice thereof to the Lender, describing the notice
or action and the nature of the claimed default.
8.5.2. Notification of Claims Against Collateral. The Borrower will,
-----------------------------------------
immediately upon becoming aware thereof, notify the Lender in writing of any
setoff, claims, withholdings or other defenses to which any of the Collateral,
or the rights of the Lender with respect to the Collateral, are subject.
8.5.3. Notice of Litigation and Judgments. The Borrower will give
----------------------------------
notice to the Lender in writing within fifteen (15) days of becoming aware of
any litigation or proceedings threatened in writing or any pending litigation
and proceedings affecting the Property or affecting the Borrower or to which the
Borrower is or is to become a party involving an uninsured claim against the
Borrower that has a reasonable likelihood of being adversely determined and
could reasonably be expected to have a material adverse effect on the Borrower
and stating the nature and status of such litigation or proceedings. The
Borrower will give notice to the Lender, in writing, in form and detail
satisfactory to the Lender, within ten (10) days of any judgment not covered by
insurance, final or otherwise, against the Borrower in an amount in excess of
Ten Thousand Dollars ($10,000.00).
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8.5.4. Notice of Occupancy of Tenants. The Borrower will give written
------------------------------
notice to the Lender at least ten (10) days prior to the commencement of, and
again on the date of, occupancy of the improvements on the Property by any
tenant under a Lease, stating the name of the tenant, the date of occupancy, and
the area so occupied.
8.6. Existence; Maintenance of Properties. The Borrower will do or cause
------------------------------------
to be done all things necessary to preserve and keep in full force and effect
its existence as a Georgia corporation. The Borrower will do or cause to be done
all things necessary to preserve and keep in full force all of its rights and
franchises. The Borrower (a) will cause all of its properties used or useful in
the conduct of its business to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment, (b) will cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Borrower may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, and (c) will continue to engage primarily
in the businesses now conducted by it and in related businesses.
8.7. Insurance.
---------
8.7.1. Borrower's Insurance. The Borrower will obtain and maintain
--------------------
insurance with respect to the Property as required by the Mortgage including but
not limited to:
(1) hazard insurance, covering such hazards as Lender may
reasonably require, including without limitation, fire, earthquake, and
tornado insurance, together with an ordinance or law coverage endorsement
(form CP 04 05 or its equivalent), and insurance for vandalism and
malicious mischief with respect to the Property with such insurance
companies and in an amount not less than the greater of: (1) the "full
insurable value" of the Property or (2) such other amounts as may from time
to time be required by Lender, with no co-insurance clauses in the policies
of insurance unless Lender shall consent thereto in writing. The "full
insurable value" shall mean the actual replacement (excluding foundation
and excavation costs and costs of underground flues, pipes, drains, and all
uninsurable items) after deduction for physical depreciation and shall be
determined from time to time at the request of Lender, not more frequently
than once every five (5) years by an architect, contractor or appraisal
company, or one of the insurers, and in any case, selected by and paid for
by Borrower and approved by the Lender;
(2) comprehensive general liability and property damage with
bodily injury coverage with broad form coverage or with broad form coverage
endorsement with such companies and in such amounts as Lender may
reasonably require;
(3) business interruption or rent loss insurance in an amount of
not less than a sum equal to twelve (12) months rental or other income from
all Leases or other uses, together with an ordinance or law - increased
period of restoration endorsement (form CP 15 31 or its equivalent);
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(4) in the event any part of the Property is located in a flood
plain, flood insurance in an amount reasonably acceptable to Lender;
(5) during the period of any construction, a Contractor's All
Risk Policy form, for the full insurable value of the Property; and
(6) such other insurance from time to time reasonably required
by Lender, all with such coverages, in such forms and with such insurers as
may be required by Lender.
All insurance policies shall not be cancelable or modifiable without at
least thirty (30) days' written notice to Lender. All property insurance shall
include the standard non-contributory mortgagee's clause or its equivalent in
favor of Lender naming Lender as mortgagee with loss payable to Lender as such
mortgagee. All other policies shall name Lender as an additional named insured.
Borrower will deliver to Lender such policies marked "PAID", and new
policies as replacement for any existing policies at least thirty (30) days
before the date of expiration. Borrower shall pay or cause to be paid, as and
when due, all premiums for all insurance policies.
Borrower hereby agrees that, in the event Borrower fails to pay or cause to
be paid the premium on any such insurance when due, Lender may do so and be
reimbursed by Borrower therefor together with interest at the Default Rate. All
amounts recoverable under any such policies with respect to the Property are
hereby assigned to Lender. Borrower shall keep all such policies of insurance
constantly assigned, pledged, and delivered to Lender for further securing the
Obligations. In the event of a loss, each insurance company is authorized and
directed to make payment for such loss directly to Lender, and Lender is
authorized to adjust and compromise such loss proceeds without the consent of
Borrower and to collect, receive, and receipt for such proceeds in the name of
Borrower and Lender, and to endorse Borrower's name upon any check in payment of
loss; provided, however, that prior to the occurrence of a Default or Event of
Default hereunder Borrower shall be entitled to participate in all negotiations
and settlement conferences regarding the same and shall have the right to
approve the amount of all such settlements or compromises, which approval shall
not be unreasonably withheld or delayed. This power shall be coupled with an
interest and shall be irrevocable. All insurance proceeds shall be applied by
Lender in accordance with the provisions of the Mortgage or if none, shall be
applied to the Obligations whether or not the same are then due and payable.
The Borrower will maintain with respect to its other properties and business
insurance with financially sound and reputable insurers against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent.
8.8. Taxes.
-----
8.8.1. The Borrower will pay all taxes, assessments and other
governmental charges imposed upon it with respect to the Property or imposed
upon the Property at the time and in the
-24-
manner required by the Mortgage. The Borrower will promptly pay and discharge
(by bonding or otherwise) all claims for labor, material or supplies that if
unpaid might by law become a lien or charge against the Property or any part
thereof or might affect the priority of the lien created by the Mortgage.
8.8.2. The Borrower will duly pay and discharge, or cause to be paid
and discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and its other real properties, sales
and activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
--------
assessment, charge, levy or claim with respect to properties other than the
Property need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if the Borrower shall
have set aside on its books adequate reserves with respect thereto; and provided
--------
further that the Borrower will pay all such taxes, assessments, charges, levies
-------
or claims forthwith upon the commencement of proceedings to foreclose any lien
that may have attached as security therefor.
8.9. Inspection of Property, Other Properties and Books.
--------------------------------------------------
8.9.1. The Borrower shall permit the Lender to visit and inspect the
Property and will cooperate with the Lender during such inspections.
8.9.2. The Borrower shall permit the Lender at the Borrower's expense
to examine the books of account of the Borrower (and to make copies thereof and
extracts therefrom) and to discuss the affairs, finances and accounts of the
Borrower with, and to be advised as to the same by, its officers, all at such
reasonable times and intervals as the Lender may reasonably request; provided
--------
that the Borrower shall only be obligated to pay the expenses associated with
one such investigation during any twelve (12) month period.
8.10. Compliance with Laws, Contracts, Licenses, and Permits. The
------------------------------------------------------
Borrower will comply with, (a) the applicable laws and regulations wherever its
business is conducted, including all Environmental Laws, (b) the provisions of
its organizational documents, and other charter documents and by-laws, (c) all
agreements and instruments by which it or any of its properties may be bound,
including, in the case of the Borrower the and all restrictions, covenants and
easements affecting the Property, (d) all applicable decrees, orders and
judgments, and (e) all licenses and permits required by applicable laws and
regulations for the conduct of its business or the ownership, use or operation
of its properties.
8.11. Further Assurances.
------------------
8.11.1. Regarding Preservation of Collateral. The Borrower will
------------------------------------
execute and deliver to the Lender such further documents, instruments,
assignments and other writings, and will do such other acts necessary or
desirable, to preserve and protect the Collateral at any time securing or
intended to secure the Obligations, as the Lender may require.
-25-
8.11.2. Regarding this Agreement. The Borrower will cooperate with,
------------------------
and will do such further acts and execute such further instruments and documents
as the Lender shall reasonably request to carry out to the Lender's satisfaction
the transactions contemplated by this Agreement and the other Loan Documents.
8.12. Operating Accounts. Borrower shall deposit and maintain all
-------------------
operating and deposit accounts for the Normal Property, Peoria Property and the
Springfield Property with Lender.
8.13. Reserve Accounts. On the date hereof, Borrower shall deposit One
----------------
Hundred Thousand ($100,000.00) with Lender to be maintained in Account #
9920952268 (the "Normal Reserve Account"). On or about the 1/st/ day of each
month hereunder beginning on February 1, 2001, Borrower shall deposit monthly
three percent (3%) of the gross revenue from the Normal Property received during
the preceding month into the Normal Reserve Account. On the date hereof,
Borrower shall deposit One Hundred Thousand ($100,000.00) with Lender to be
maintained in Account # 9920952255 (the "Peoria Reserve Account"). On or about
the 1/st/ day of each month hereunder beginning on February 1, 2001, Borrower
shall deposit monthly three percent (3%) of the gross revenue from the Peoria
Property received during the preceding month into the Peoria Reserve Account.
On or before February 1, 2001, Borrower shall deposit One Hundred Thousand
($100,000.00) with Lender to be maintained in Account # 9920952271 (the
"Springfield Reserve Account"). On or about the 1/st/ day of each month
hereunder beginning on February 1, 2001, Borrower shall deposit monthly three
percent (3%) of the gross revenue from the Springfield Property received during
the preceding month into the Springfield Reserve Account. Each of the Reserve
Accounts shall be interest bearing accounts. Withdrawals from each Reserve
Account may only be made after February 1, 2001, to fund furniture, fixture and
equipment expenditures incurred in connection with the Property to which the
respective Reserve Account is related, with such all such withdrawals being
subject to the Lender's prior written approval. Each of the Reserve Accounts
shall be assigned to Lender as additional Collateral for the Obligations
pursuant to the Assignment of Deposit Account for each Property.
9. NEGATIVE COVENANTS OF THE BORROWER. The Borrower covenants and agrees
----------------------------------
that, so long as any Obligation is outstanding:
9.1. Restriction on Leases. Except for the Master Lease, the Borrower
---------------------
will not become a party to, or agree to become a party to, any Lease affecting
the Property without the prior approval of the Lender. The Borrower will not
amend, supplement or otherwise modify, or (except in the ordinary course of
business as a result of a tenant default) terminate or cancel, or accept the
surrender of, or grant any concessions to or waive the performance of any
obligations of any tenant under, any Lease (other than extensions of the lease
term under the same or better terms) without the prior approval of the Lender.
Except in the ordinary course of business as a result of a tenant default, the
Borrower will not, directly or indirectly, cause or permit to exist any
condition which would result in the termination or cancellation of, or which
would relieve the performance of any obligations of any tenant under, any Lease.
-26-
9.2. Restrictions on Easements, Covenants and Restrictions. The Borrower
-----------------------------------------------------
will not create or allow to be created or to exist any easement, right of way,
restriction, covenant, condition, license or other right in favor of any Person
which affects or might affect title to the Property or the use and occupancy of
the Property or any part thereof without (i) submitting to the Lender the
proposed instrument creating such easement, right of way, covenant, condition,
license or other right, accompanied by a survey showing the exact proposed
location thereof and such other information as the Lender may reasonably
request, and (ii) obtaining the prior approval of the Lender.
9.3. Restrictions on Liens, Etc. The Borrower will not (a) create or
--------------------------
incur or allow to be created or incurred or to exist any lien, encumbrance,
mortgage, pledge, charge, restriction or other security interest of any kind
upon the Property, or upon the income or profits therefrom; (b) transfer the
Property or assets or the income or profits thereof for the purpose of
subjecting the same to the payment of indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c) acquire, or
agree or have an option to acquire, any property or assets related to the
Property upon conditional sale or other title retention or purchase money
security agreement, device or arrangement; (d) allow to exist for a period of
more than thirty (30) days after the same shall have been incurred any
indebtedness or claim or demand against it that if unpaid might by law or upon
bankruptcy or insolvency, or otherwise, be given any priority whatsoever over
its general creditors; or (e) sell, assign, pledge or otherwise transfer any
accounts, contract rights, general intangibles, chattel paper or instruments
related to the Property, with or without recourse; provided that the Borrower
--------
may create or incur or allow to be created or incurred or to exist the following
(hereinafter referred to as "Permitted Liens"):
(i) liens to secure taxes, assessments and other governmental
charges in respect of obligations not overdue;
(ii) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age pensions or
other Social Security obligations;
(iii) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties other than the Property in existence less than
one hundred and twenty (120) days from the date of creation thereof in respect
of obligations not overdue;
(iv) liens in favor of the Lender under the Loan Documents or
otherwise; and
(v) other liens on the Property consisting of easements, rights of
way, covenants and restrictions if and to the extent the same have been approved
by the Lender.
9.4. Merger, Consolidation and Disposition of Assets.
-----------------------------------------------
9.4.1. The Borrower will not become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock acquisition
(other than the acquisition of assets in the ordinary course of business
consistent with past practices).
-27-
9.4.2. The Borrower will not become a party to or agree to or effect
any disposition of the Property or any part thereof.
9.4.3. The Borrower will not become a party to or agree to effect any
disposition of assets, other than the disposition of assets not included in the
Property in the ordinary course of business, consistent with past practices.
10. EVENTS OF DEFAULT AND REMEDIES.
------------------------------
10.1. Events of Default. The term "Event of Default" as used herein,
-----------------
shall mean the occurrence of any of the following events:
10.1.1. The failure of Borrower to pay the Obligations, or any part
thereof, as said Obligations become due in accordance with the terms of the Note
or of any other notes, instruments, documents or agreements now or hereafter
evidencing, securing, or related to the Obligations, which failure shall
continue for five (5) days after the giving of written notice that such amount
is due by Lender or when accelerated pursuant to any provision thereof or of the
Mortgage; or
10.1.2. The failure by Borrower, or any other party thereto, to
punctually and fully perform and observe each term, covenant, agreement, or
condition contained herein or in the Note, the Mortgage, the Loan Documents or
in any other notes, instruments, or agreements now or hereafter evidencing,
securing, or related to the Obligations; or
if such failure shall continue for more than thirty (30) days after the giving
of written notice thereof by Lender or, if such failure is incapable of being
cured within said thirty (30) day period, Borrower fails to commence to cure
said failure within said thirty (30) day period or fails to diligently prosecute
said cure; or
10.1.3. The default by Borrower or Guarantor under any other notes,
agreements, mortgages, deeds of trust, security agreements, or any other
obligations of Borrower or Guarantor to Lender, whether or not secured by the
Collateral; or
10.1.4. Any failure by the Borrower or Guarantor to pay at maturity,
or within any applicable period of grace, any obligation for borrowed money or
credit received, or any failure to observe or perform any material term,
covenant or agreement contained in any agreement by which it is bound,
evidencing or securing borrowed money or credit received for such period of time
as would permit (assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued thereunder to accelerate
the maturity thereof; or
10.4.5. A sale, transfer, conveyance, lease, contract for deed, or
other disposition of all or any part of the Collateral or any interest therein,
including a sale, transfer, conveyance, lease,
-28-
contract for deed, or other disposition occasioned by an assignment for the
benefit of creditors, appointment of a receiver, adjudication as a bankrupt, or
the filing or instituting of bankruptcy proceedings by or against Borrower,
without prior written notice to Lender and without Lender's prior written
consent, which consent shall be at Lender's sole option and shall be upon such
terms and conditions as Lender shall, at its sole option, elect; or
10.1.6. Title to the Collateral is or becomes unsatisfactory to the
Lender by reason of any lien, charge, encumbrance, title condition or exception
(including without limitation, any mechanic's, materialman's or similar
statutory or common law lien or notice thereof), and such matter causing title
to be or become unsatisfactory is not cured or removed (including by bonding)
within twenty (20) days after notice thereof from the Lender to the Borrower; or
10.1.7. Borrower shall place or allow the placement of a mortgage or
deed of trust or other lien or encumbrance upon all or any portion of the
Collateral; or
10.1.8. Any party other than Borrower shall assume or enter or
undertake the performance of the obligations of Borrower under the Note, the
Mortgage, or under any of the other Loan Documents; or
10.1.9. The occurrence of any act or omission which would authorize or
permit the holder or owner of an indebtedness or obligation secured by any
superior lien against any of the Collateral to foreclose the superior lien; or
10.1.10. Any substantial change in the legal or beneficial ownership
of the Borrower or Guarantor; or
10.1.11. Any Guarantor denies that such Guarantor has any liability or
obligations under such Guarantor's Guaranty or the Indemnity Agreement, or shall
notify the Lender of the Guarantor's intention to attempt to cancel or terminate
such Guaranty or the Indemnity Agreement, or shall fail to observe or comply
with any term, covenant, condition and agreement under such Guaranty or the
Indemnity Agreement or any Guarantor gives notice to Lender that such Guarantor
shall not be liable for any future Obligations or if Borrower gives notice of
its intent to terminate the future advance clause under the Mortgage; or
10.1.12. Any representation or warranty made or deemed to be made by
or on behalf of the Borrower or the Guarantor in this Agreement or in any of the
other Loan Documents, or in any report, certificate, financial statement
document or other instrument delivered pursuant to or in connection with this
Agreement or any of the other Loan Documents, shall prove to have been false or
incorrect in any material respect upon the date when made or deemed to be made
or repeated; or
10.1.13. Any dissolution, termination, partial or complete
liquidation, merger or consolidation of the Borrower or the guarantor, or any
sale, transfer or other disposition of all or substantially all of the assets of
the Borrower or the Guarantor, other than as permitted under the terms of this
Agreement; or
-29-
10.1.14. Any of the Loan Documents shall be canceled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or with
the express prior approval of the Lender, or any action at law, suit in equity
or other legal proceeding to cancel, revoke or rescind any of the Loan Documents
shall be commenced by or on behalf of the Borrower or the guarantor which is a
party thereto or any of their respective stockholders, partners, members or
beneficiaries, or any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of the
Loan Documents is illegal, invalid or unenforceable in accordance with the terms
thereof; or
10.1.15. Any suit or proceeding shall be filed against the Borrower,
the Guarantor or the Property which, if adversely determined, would have a
materially adverse affect on the ability of the Borrower or the Guarantor to
perform each and every one of their respective obligations under and by virtue
of the Loan Documents; or
10.1.16. Any uninsured final judgment in excess of Ten Thousand
Dollars ($10,000.00) shall be entered against the Borrower or the Guarantor and
shall remain undischarged, unsatisfied and unstayed, for more than thirty (30)
days, whether or not consecutive; or
10.1.17. The Borrower or the Guarantor shall: (1) become insolvent,
(2) file a voluntary petition in bankruptcy under Title 11 of the United States
Code, or an order for relief shall be issued against the Borrower or the
Guarantor in any involuntary petition in bankruptcy under Title 11 of the United
States Code, or the Borrower or the Guarantor shall file any petition or answer
seeking or acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief for itself under any
present or future federal, state or other law or regulation relating to
bankruptcy, insolvency or other relief of debtors, or the Borrower or the
Guarantor shall seek or consent to or acquiesce in the appointment of any
custodian, trustee, receiver, conservator or liquidator of the Borrower or the
Guarantor, respectively, or of all or any substantial part of its respective
property, or the Borrower or the Guarantor shall make an assignment for the
benefit of creditors, or the Borrower or the Guarantor shall fail generally to
pay its debts as such debts become due, or the Borrower or the Guarantor shall
give notice to any governmental authority or body of insolvency or pending
insolvency or suspension of operations; or
10.1.18. A court of competent jurisdiction shall enter any order,
judgment or decree approving a petition filed against the Borrower or the
Guarantor seeking any reorganization, arrangement, composition, readjustment,
liquidation or similar relief under any present or future federal, state or
other law or regulation relating to bankruptcy, insolvency or other relief for
debtors, or appointing any custodian, trustee, receiver, conservator or
liquidator of all or any substantial part of its property and the same is not
dismissed within sixty (60) days after the institution thereof; or
10.1.19. If the Collateral is seized under any writ or process of
court or by any trustee or receiver; or
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10.1.20. The Borrower or the Guarantor shall be indicted for a federal
crime, a punishment for which could include the forfeiture of any of its assets;
or
10.1.21. The Property or any part thereof is subject to a Taking; or
10.1.22. Any "Event of Default," as defined in any of the other Loan
Documents, shall occur; or
10.1.23. Failure of Borrower to deposit and maintain or cause to be
deposited or maintained the Operating Accounts as set forth in Section 8.12
hereof; or
10.1.24. Failure of Borrower to deposit and maintain the Reserve
Accounts as set forth in Section hereof; or
10.1.25. The occurrence of a default (beyond any applicable cure
periods) under the Ground Lease or the Sublease; or
10.1.26. Any termination of the Ground Lease or the Sublease; or
10.1.27. Failure to maintain an Individual Debt Service Coverage
Ratio of at least 1.15 to 1 for each of the Normal Property, the Peoria Property
and the Springfield Property at all times hereunder prior to and including
December ____, 2001; or
10.1.28. Failure to maintain an Individual Debt Service Coverage Ratio
of at least 1.25 to 1 for each of the Normal Property, the Peoria Property and
the Springfield Property at all times hereunder from and after December ____,
2001; or
10.1.29. Failure to maintain a Combined Debt Service Coverage Ratio of
at least 1.25 to 1 for the Normal Property, the Peoria Property and the
Springfield Property at all times hereunder; or
10.1.30. Failure of Guarantor to maintain a Debt Service Coverage
Ratio of at least 1.25 to 1 at all times hereunder.
10.2. Acceleration. If any one or more of the Events of Default shall
------------
occur, the Lender may, by notice to the Borrower, declare all unpaid principal
of and accrued interest on the Note, together with all other amounts owing under
the Loan Documents, to be immediately due and payable, whereupon same shall
become and be immediately due and payable, anything in the Loan Documents to the
contrary notwithstanding, and without presentment, protest, demand or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided that if any one or more of the Events of Default specified in Section
--------
10117 or Section 10118 shall occur with respect to the Borrower and all unpaid
principal of and accrued interest on the Note, together with all other amounts
owing under the Loan Documents, automatically shall become and be immediately so
due and payable, without any declaration or other act on the part of the Lender.
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10.3. Other Remedies. If any one or more of the Events of Default shall
--------------
have occurred, and whether or not the Lender shall have accelerated the maturity
of the Loan pursuant to Section 102, the Lender, if owed any amount with respect
to the Loan may proceed to protect and enforce its rights and remedies under
this Agreement, the Note or any of the other Loan Documents by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations are
evidenced. Without limiting the generality of the foregoing, Lender may
immediately, without demand of performance and without other notice (except as
specifically required by this Agreement or the Loan Documents) or demand
whatsoever to Borrower, all of which are hereby expressly waived, sell at public
or private sale or otherwise realize upon, the whole or, from time to time, any
part of the Collateral, or any interest which Borrower may have therein. Any
remainder of the proceeds after satisfaction in full of the Obligations shall be
distributed as required by applicable Laws. Notice of any sale or other
disposition of any of the Collateral consisting of personal property shall be
given to Borrower at least five (5) days before the time of any intended public
sale or of the time after which any intended private sale or other disposition
of the Collateral is to be made, which Borrower hereby agrees shall be
reasonable notice of such sale or other disposition. Borrower agrees to
assemble, or to cause to be assembled, at its own expense, the Collateral at
such place or places as Lender shall designate. At any such sale or other
disposition, Lender may, to the extent permissible under applicable Laws,
purchase the whole or any part of the Collateral, free from any right of
redemption on the part of Borrower, which right is hereby waived and released.
With respect to the exercise of Lender's right to nonjudicial foreclosure sale
of the Property pursuant to the terms of the Mortgage, Lender shall be governed
by the terms and conditions of the Mortgage and other applicable law of Illinois
regarding real estate foreclosures. Without limiting the generality of any of
the rights and remedies conferred upon Lender under this Section, Lender may, at
Lender's sole option, to the full extent permitted by applicable Laws:
10.3.1. Enter upon the premises of Borrower, exclude Borrower
therefrom, and take immediate possession of the Collateral, either personally or
by means of a receiver appointed ex parte by a court of competent jurisdiction,
-- -----
using all necessary force to do so;
10.3.2. Use, operate, manage, and control the Collateral in any lawful
manner;
10.3.3. Collect and receive all rents, income, revenue, earnings,
issues and profits therefrom; and
10.3.4. Maintain, repair, renovate, complete, alter, or remove the
Collateral as Lender may determine in its discretion.
No remedy conferred upon the Lender or the holder of any Note in this
Agreement or in any of the other Loan Documents is intended to be exclusive of
any other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or thereunder or now or hereafter
existing at law or in equity or by statute or any other provision of law.
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10.4. Distribution of Collateral Proceeds. In the event that, following
-----------------------------------
the occurrence or during the continuance of any Default or Event of Default, the
Lender receives any monies in connection with the enforcement of any the Loan
Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows:
10.4.1. First, to the payment of or the reimbursement to Lender for or
in respect of all reasonable costs, expenses, disbursements and losses which
shall have been incurred or sustained by the Lender in connection with the
collection of such monies by the Lender, for the exercise, protection or
enforcement by the Lender of all or any of the rights, remedies, powers and
privileges of the Lender under this Agreement or any of the other Loan Documents
or in respect of the Collateral or in support of any provision of adequate
indemnity to the Lender against any taxes or liens which by law shall have, or
may have, priority over the rights of the Lender to such monies;
10.4.2. Second, to all other Obligations in such manner and order or
preference as the Lender may determine in Lender's sole discretion;
10.4.3. Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Lender of all of the
Obligations, to the payment of any obligations required to be paid pursuant to
(S) 9-504(1)(c) of the Uniform Commercial Code of the State of Illinois; and
10.4.4. Fourth, the excess, if any, shall be returned to the Borrower
or to such other Persons as are entitled thereto.
10.5. Power of Attorney. For the purposes of carrying out the provisions
-----------------
and exercising the rights, remedies, powers and privileges granted by or
referred to in this Section 10, the Borrower hereby irrevocably constitutes and
appoints the Lender its true and lawful attorney-in-fact, with full power of
substitution, to execute, acknowledge and deliver any instruments and do and
perform any acts which are referred to in this Section 10, in the name and on
behalf of the Borrower. The power vested in such attorney-in-fact is, and shall
be deemed to be, coupled with an interest and irrevocable.
10.6. Waivers. The Borrower hereby waives to the extent not prohibited by
-------
applicable law (a) all presentments, demands for performance, notices of
nonperformance (except to the extent required by the provisions hereof or of any
of the other Loan Documents), protests and notices of dishonor, (b) any
requirement of diligence or promptness on the part of the Lender in the
enforcement of its rights (but not fulfillment of its obligations) under the
provisions of this Agreement or any of the other Loan Documents, and (c) any and
all notices of every kind and description which may be required to be given by
any statute or rule of law and any defense of any kind which the Borrower may
now or hereafter have with respect to its liability under this Agreement or
under any of the other Loan Documents.
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11. MISCELLANEOUS AND GENERAL.
-------------------------
11.1. Setoff. Regardless of the adequacy of any collateral, during the
------
continuance of any Event of Default, any deposits (general or specific, time or
demand, provisional or final, regardless of currency, maturity, or the branch of
Lender where such deposits are held) or other sums credited by or due from
Lender to the Borrower and any securities or other property of the Borrower in
the possession of Lender may be applied to or set off against the payment of
Obligations and any and all other liabilities, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, of the
Borrower to the Lender.
11.2. Expenses. The Borrower agrees to pay (a) the reasonable costs of
--------
producing and reproducing this Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Lender (other than
taxes based upon the Lender's net income), including any recording, mortgage or
intangibles taxes in connection with the Mortgage, or other taxes payable on or
with respect to the transactions contemplated by this Agreement, including any
taxes payable by the Lender after the Closing Date (the Borrower hereby agreeing
to indemnify the Lender with respect thereto), (c) all title insurance premiums,
(d) the reasonable fees, expenses and disbursements of the Lender's counsel or
any local counsel to the Lender incurred in connection the making of the Loan
and the preparation, review, administration or interpretation of the Loan
Documents and other instruments mentioned herein, and amendments, modifications,
extensions, approvals, consents or waivers hereto or hereunder, (e) the fees,
expenses and disbursements of the Lender incurred by the Lender in connection
with the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein (including all Appraisal fees and surveyor
fees) (f) all reasonable out-of-pocket expenses (including reasonable attorneys'
fees and costs, which attorneys may be employees of the Lender and including
attorneys' fees for representation in proceedings under the Bankruptcy Code) and
the fees and costs of consultants, accountants, auctioneers, receivers, brokers,
property managers, appraisers, investment bankers other experts retained by any
Lender in connection with (i) the enforcement of or preservation of rights under
any of the Loan Documents against the Borrower or the Guarantor or the
administration thereof after the occurrence of a Default or Event of Default and
(ii) any litigation, proceeding, or dispute whether arising hereunder or
otherwise, in any way related to the Lender's relationship with the Borrower or
the Guarantor, and (g) all reasonable fees, expenses and disbursements of the
Lender incurred in connection with UCC searches, UCC filings, title rundowns,
title searches, or mortgage recordings. The covenants of this Section 112 shall
survive payment or satisfaction of payment of all amounts owing with respect to
the Note.
11.3. Indemnification. The Borrower agrees to indemnify, defend, and hold
---------------
Lender harmless from and against any and all claims, actions and suits, whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of this Agreement
or any of the other Loan Documents or the transactions contemplated hereby and
thereby, in each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of internal counsel incurred in
connection with any such investigation, litigation or other proceeding. In
litigation, or the preparation therefor, the Lender shall be entitled to select
its own counsel and, in addition to the foregoing indemnity, the Borrower agrees
to pay promptly the reasonable fees and expenses of such counsel. The
obligations of the Borrower under
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this Section 113 shall survive the repayment of the Loan and shall continue in
full force and effect so long as the possibility of such claim, action or suit
exists. If, and to the extent that the obligations of the Borrower under this
Section 113 are unenforceable for any reason, the Borrower hereby agrees to make
the maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law.
11.4. Rights of Third Parties. All conditions to the performance of the
-----------------------
obligations of the Lender under this Agreement are imposed solely and
exclusively for the benefit of the Lender and no other Person shall have
standing to require satisfaction of such conditions in accordance with their
terms and no other Person shall, under any circumstances, be deemed to be a
beneficiary of such conditions, any and all of which may be freely waived in
whole or in part by the Lender at any time if in its sole discretion it deems it
desirable to do so. No third party shall have any right whatsoever hereunder to
compel compliance with any provision hereof, whether at law or in equity.
11.5. Survival of Covenants, Etc. All covenants, agreements,
--------------------------
representations and warranties made herein, in the Note, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrower or the Guarantor pursuant hereto and thereto shall be deemed to
have been relied upon by the Lender, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Lender of the Loan, as herein contemplated, and shall continue in full force and
effect so long as any amount due under this Agreement or the Note or any of the
other Loan Documents remain outstanding. All statements contained in any
certificate or other paper delivered to any Lender or the Lender at any time by
or on behalf of the Borrower or the Guarantor pursuant hereto or in connection
with the transactions contemplated hereby shall constitute representations and
warranties by the Borrower or the Guarantor hereunder.
11.6. Participations. Lender may sell participations to one or more banks
--------------
or other entities in all or a portion of Lender's rights and obligations under
this Agreement and the other Loan Documents. The Borrower agrees that in
addition to disclosures made in accordance with standard banking practices any
Lender may disclose information obtained by Lender pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder.
11.7. Relationship. The relationship between the Lender and the Borrower
------------
is solely that of a lender and borrower, and nothing contained herein or in any
of the other Loan Documents shall in any manner be construed as making the
parties hereto partners, joint venturers or any other relationship other than
lender and borrower.
11.8. Notices. Each notice, demand, election or request provided for or
-------
permitted to be given pursuant to this Agreement (hereinafter in this Section
118 referred to as "Notice") must be in writing and shall be deemed to have been
properly given or served by personal delivery or by sending same by overnight
courier or by depositing same in the United States Mail, postpaid and registered
or certified, return receipt requested, or by facsimile transmission or
telegraph and addressed as follows:
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(A) If to Borrower: Xxxxxxx Properties, LLC
0 Xxxxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Fax Number: 000-000-0000
with a copy to: Xxxxx Xxxxxx
0 Xxxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Fax: 000-000-0000
(B) If to Lender: First Bank
000 X.X. Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Fax Number: 000-000-0000
with a copy to: Xxxxxx X. Xxxxxx, III
Xxxxxxxxx Xxxxxxxx LLP
Xxx Xxxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Fax Number: (000) 000-0000
Each Notice shall be effective upon being personally delivered or upon being
sent by overnight courier or by facsimile transmission or telegraph or upon
being deposited in the United States Mail as aforesaid. The time period in
which a response to such Notice must be given or any action taken with respect
thereto (if any), however, shall commence to run from the date of receipt if
personally delivered, sent by overnight courier, or sent by facsimile
transmission or telegraph, or if so deposited in the United States Mail, the
earlier of three (3) Business Days following such deposit or the date of receipt
as disclosed on the return receipt. Rejection or other refusal to accept or the
inability to deliver because of changed address for which no Notice was given
shall be deemed to be receipt of the Notice sent. By giving at least thirty
(30) days prior Notice thereof, the Borrower, the Lender shall have the right
from time to time and at any time during the term of this Agreement to change
their respective addresses and each shall have the right to specify as its
address any other address within the United States of America. Notwithstanding
anything herein to the contrary, the "copy to" Notice to be given as set forth
above is a courtesy copy only; and a Notice given to such person is not
sufficient to effect giving a Notice to the principal party, nor does a failure
to give such a courtesy copy of a Notice constitute a failure to give Notice to
the principal party.
11.9. Governing Law. This Agreement and each of the other Loan Documents,
-------------
except as otherwise specifically provided therein, are contracts under the laws
of the State of Illinois and shall
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for all purposes be construed in accordance with and governed by the laws of
said State (excluding the laws applicable to conflicts or choice of law).
11.10. Consent to Jurisdiction; Waivers. THE BORROWER HEREBY IRREVOCABLY
--------------------------------
AND UNCONDITIONALLY (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF
ILLINOIS OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND (B) WAIVES ANY AND ALL
PERSONAL RIGHTS UNDER THE LAWS OF ANY STATE (I) TO THE RIGHT, IF ANY, TO TRIAL
BY JURY, (II) TO OBJECT TO JURISDICTION WITHIN THE STATE OF ILLINOIS OR VENUE IN
ANY PARTICULAR FORUM WITHIN THE STATE OF ILLINOIS, AND (III) TO THE RIGHT, IF
ANY, TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL DAMAGES. THE BORROWER AGREES THAT, IN
ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW,
ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED DIRECTED TO THE BORROWER
AT THE ADDRESS SET FORTH IN SECTION 118 ABOVE, AND SERVICE SO MADE SHALL BE
COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL BE SO MAILED. NOTHING CONTAINED
HEREIN, HOWEVER, SHALL PREVENT THE LENDER FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING OR EXERCISING ANY RIGHTS AGAINST ANY COLLATERAL AND AGAINST THE
BORROWER, AND AGAINST ANY PROPERTY OF THE BORROWER, IN ANY OTHER STATE.
INITIATING SUCH SUIT, ACTION OR PROCEEDING OR TAKING SUCH ACTION IN ANY STATE
SHALL IN NO EVENT CONSTITUTE A WAIVER OF THE AGREEMENT CONTAINED HEREIN THAT THE
LAWS OF THE STATE OF ILLINOIS SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF THE
BORROWER, THE LENDER HEREUNDER OR THE SUBMISSION HEREIN BY THE BORROWER TO
PERSONAL JURISDICTION WITHIN THE STATE OF ILLINOIS.
11.11. Headings. The captions in this Agreement are for convenience of
--------
reference only and shall not define or limit the provisions hereof.
11.12. Counterparts. This Agreement and any amendment hereof may be
------------
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, and all of
which together shall constitute one instrument. In proving this Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.
11.13. Entire Agreement, Etc. The Loan Documents and any other documents
---------------------
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in Section 11.14.
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11.14. Consents, Amendments, Waivers, Etc. Except as otherwise expressly
----------------------------------
set forth in any particular provision of this Agreement, any consent or approval
required or permitted by this Agreement to be given by the Lender may be given,
and any term of this Agreement or of any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrower of any terms of this Agreement or such other instrument or the
continuance of any Default or Event of Default may be waived (either generally
or in a particular instance and either retroactively or prospectively) with, but
only with, the written consent of the Lender. No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other circumstances.
All rights and remedies of Lender are cumulative and concurrent and the exercise
of one right or remedy shall not be deemed a waiver or release of any other
right or remedy.
11.15. Time of the Essence. Time is of the essence with respect to each
-------------------
and every covenant, agreement and obligation of the Borrower under this
Agreement and the other Loan Documents.
11.16. Severability. The provisions of this Agreement are severable, and
------------
if any term, covenant or condition of this Agreement or the application thereof
to any person or circumstance shall to any extent be invalid or unenforceable,
the remainder of this Agreement or the application of such term, covenant, or
condition to persons or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby and each term, covenant, and
condition of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
11.17. Assignments. Borrower may not assign its rights under this
-----------
Agreement. Lender may transfer, assign, negotiate, pledge, sell, grant
participations or otherwise hypothecate all or any portion of this Agreement,
and/or the Loan contemplated herein, and any of its rights and security
hereunder to additional parties (the "Additional Parties"). Within fifteen (15)
days after receipt of written request from Lender specifically referring to this
paragraph and indicating that a response must be received within such fifteen
(15) day period, Borrower shall furnish to Lender a statement certifying the
terms and conditions of the Loan. Borrower's failure to effectively respond to
such request shall be conclusively construed as Borrower's consent and approval
of the terms set forth therein, and Lender and all Additional Parties shall be
entitled to rely conclusively upon such consent and approval. Borrower consents
to the review of any loan documents, financial statements and other documents
and information of Borrower for the purpose of evaluation and analysis of
Borrower and the Property by such Additional Parties.
11.18. Waiver and Release by Borrower. To the maximum extent permitted by
------------------------------
applicable Laws, Borrower:
11.18.1. Waives: (1) protest of all commercial paper at any time held
by Lender on which Borrower is any way liable; and (2) notice and opportunity to
be heard, after acceleration in the manner provided in Section 10 before
exercise by Lender of the remedies of self-help, set-off, or of other summary
procedures permitted by any applicable Laws or by any agreement with
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Borrower and, except where required hereby or by any applicable Laws, notice of
any other action taken by Lender; and
11.18.2. Releases Lender and its officers, attorneys, agents and
employees from all claims for loss or damage caused by any act or omission on
the part of any of them except willful misconduct or gross negligence.
11.19. Construction. The provisions of this Agreement shall be in addition
------------
to those of the
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