XXXXXX BROTHERS HOLDINGS INC.
D/B/A XXXXXX CAPITAL, A DIVISION
OF XXXXXX BROTHERS HOLDINGS INC.
Three World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
EXTENDED RATE LOCK AGREEMENT
August 10, 1998
Xx. Xxxxxxx Xxxxxxxx
President
Inland Mortgage Corporation
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Re: Property commonly known as Inland Portfolio of 12 Retail
Properties (the "Property")
Dear Xx. Xxxxxxxx:
Reference is made to that certain Commitment Letter (the
"Commitment") dated July 29, 1998 between you or an affiliate ("Borrower")
and Xxxxxx Brothers Holdings Inc. d/b/a Xxxxxx Capital, a division of
Xxxxxx Brothers Holdings Inc. ("Lender"), as the same may have been
amended by amendments executed by Lender prior to the date hereof. All
capitalized terms not defined herein shall have the meanings ascribed to
them in the Commitment.
This letter agreement (this "Agreement") has been entered into for
the purposes of establishing the procedures for determining the Rate, Loan
Amount and Commitment Fee referred to in the Commitment. This letter shall
constitute the Extended Rate Lock Agreement referred to in the Commitment.
Section One. Rate Lock Deposit - (a) Simultaneously with the
execution hereof, Borrower shall provide to Leader its certified check,
bank check or wire transfer of immediately available funds to the account
designated on the signature page hereof (the "Account") in an amount equal
to the Rate Lock Deposit described on Schedule I attached hereto and by
this reference made a part hereof (the "Rate Lock Deposit"). Borrower
shall, within one (1) Business Day of Lender's request made at any time
following (i) the first time that the Treasury Yield has decreased by the
First Decrease Amount (as described on Schedule 1) or more (as determined
by Lender) from the Treasury Yield at the time of the determination of the
Rate and the Loan Amount (the "First Decrease" and (ii) each subsequent
time that the Treasury Yield has decreased by
the Additional Decrease Amount (as described on Schedule 1) or more (as
determined by Lender) after the First Decrease (and regardless of whether at the
time of any such request or on the date any such payment is due the Treasury
Yield shall have thereafter increased above such decreased amounts), wire
transfer the Additional Rate Lock Deposit Amount (as described in Schedule 1)
in
immediately available funds to the Account as an additional Rate Lock Deposit
hereunder. All references herein to the Rate Lock Deposit shall be deemed to
include all such additional Rate Lock Deposits. The Rate Lock Deposit shall be
hold by Lender in accordance with the terms hereof.
(b) If the Loan has not closed prior to the sixtieth (60th) day following
determination of the Rate, Borrower shall pay to Lender a per diem Rate Lock
Fee
(as described on Schedule 1), which Rate Lock Fee shall (i) accrue and be
earned
on said sixtieth (60th ) day and each day thereafter, through and including the
earlier to occur of the termination of the Commitment or the closing of the
Loan, and (ii) be paid weekly, in advance, on said sixtieth (60th) day and on
the corresponding day of each succeeding week thereafter, through and including
the earlier to occur of the termination of the Commitment or the closing of the
Loan. To the extent that any portion of a Rate Lock Fee payment is unearned at
closing, such unearned portion shall be credited to Borrower at closing,
provided, however, that if the Commitment is terminated, except through default
of lender all Rate Lock Fee payments, whether earned or unearned, shall become
non-refundable to Borrower and be retained by Lender. The provisions of this
subsection (b) shall not be deemed to imply that the, term of the Commitment is
extended beyond the expiration date set forth therein.
(c) Borrower's failure to make required Rate Lock Deposits or Rate Lock
Fee
payments in accordance with the foregoing shall result in a termination of the
Commitment and this Agreement.
(d) In determining the applicable Treasury Yield, Lender shall use "on
the
run" pricing.
Section Two. Determination of Fixed Rate and Loan Amount, (a) Upon
satisfaction of the conditions set forth in the Commitment for Rate Lock, the
Rate and the Loan Amount shall be determined in accordance with the procedures
set forth in this Section Two.
(b) Borrower may, from time to time after 9:00 am. and before 4:00 p.m.
New
York City time on any Business Day that it is also a day on which the Chicago
Board of Trade is open, request Lender to provide to Borrower quotes over the
telephone of the Rate and (subject to Section Three hereof) the Loan Amount.
Quotes of the Rate shall be determined on the basis of the Treasury Yield, as
determined by Lender, plus the Applicable Spread. Quotes of the Loan Amount
shall not be in excess of the Loan Amount set forth in the Commitment.
(c) If Borrower wishes to establish the Rate and the Loan Amount on the
basis of any such quote, Borrower shall orally confirm its acceptance at the
time of such quote, complete the form of Determination Notice attached hereto
as
Schedule 2 by properly filling in the blanks set forth therein
with the Rate and
Loan Amount quoted by Lender and the date of such quote, execute such form in
the appropriate space provided therein and transmit via facsimile such form to
Lender at the facsimile number of Lender set forth on the signature page hereof
on the same day as such
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quote, Borrower acknowledges that (i) Lender shall not be bound by any quotes
provided to Borrower with respect to the Rate and the Loan Amount unless a
Determination Notice has been Properly completed, signed and returned by
Borrower to Lender in accordance with the preceding sentence and (ii) Borrower
shall be bound by determinations of the Rate and Loan Amount made by Lender in
good faith on the basis of Borrower's oral acceptance of any such quotes,
notwithstanding Borrower's failure or refusal to complete and/or execute the
Determination Notice in accordance with the terms of this Section 2(c), if
Lender has entered into an interest rate hedging transaction (the "Hedge") on
the basis of such oral acceptance.
(d) The Determination Notice shall be in the following form and shall be
delivered to Lender (to the attention of the "Attention Party" designated on
Schedule 1) via facsimile transmission at Lender's facsimile number
set forth on
the signature page hereof.
(e) Notwithstanding anything contained herein or in the Commitment to the
contrary, once the Rate and the Loan Amount are determined in accordance with
the foregoing, no portion of the Rate Lock Deposit shall be refundable to
Borrower under any circumstances, except in the event the Loan closes prior to
the termination of the Commitment, in which care the entire Rate Lock Deposit
(less any amounts thereof applied by Leader in accordance with Section 3(b))
shall be refunded to Borrower. Under no circumstances shall the
Rate Lock Fee be
refunded to Borrower.
Section Three. Effect on Commitment. (a) Borrower
acknowledges that, except
to the extent set forth on Schedule 1, Lender's execution and
submission of this
Agreement to Borrower, Borrower's execution of this Agreement and acceptance of
the terms hereof, or Lender's acceptance of the Rate Lock Deposits or Rate Lock
Fee payments shall not constitute a modification,. extension, ratification or
(if expired) reinstitution of the Commitment. Borrower acknowledges and agrees
that Lender may determine the Rate and the Loan Amount pursuant to the terms
hereof notwithstanding (i) Lender's failure to receive (in form satisfactory
to Lender) the environmental report, engineering report or appraisal referred
to in the Commitment (if any), (ii) Lender's or Lender's Counsel failure to
commence and/or conclude their due diligence investigations described in the
Commitment (including, but not limited to, those related to Lender's
determination of sustainable net operating income or value of the Property) or
to agree upon any definitive documentation with respect to the Loan, or (iii)
Borrower's satisfaction of any of the conditions to closing set forth in the
Commitment, and that none of the aforementioned items shall be deemed to have
been waived, received or satisfied by virtue of Lender's determination of the
Rate and Loan Amount hereunder. Without limitation to the foregoing, Borrower
acknowledges that the Loan Amount determined in accordance with the terms
hereof shall be subject to reduction following Lender's determination of the
value of the Property and/or Lender's final determination of sustainable net
operating income, after adjustment for applicable reserves to the extent
necessary to satisfy the Maximum Loan to Value Percentage (if any) or the
Minimum Debt Service Coverage Ratio set forth in the Commitment.
(b) In the event the Loan Amount finally determined by Lender is less than
the Loan Amount determined in accordance with Section Two hereof, Lender shall
have the right at any time prior to the closing of the Loan (i) to terminate
such portion of the Hedge as Lender shall determine
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to be unnecessary for such reduced Loan Amount and (ii) to apply any portion of
the Rate Lock Deposit to the payment of any loss, cost, damage or expense which
Lender may suffer as the result of such termination.
Section Four. Indemnification. If the Loan shall not close in accordance
with the requirements of the Commitment, Borrower shall indemnify Lender from
and against all loss, cost, damage, or expense incurred by Lender in connection
with the maintenance or termination (as of any date determined
by Lender) of any
Hedge entered into by Lender.
Section Five. Notices. Except as set forth herein with respect to
Determination Notices, all notices, requests, and other communications to any
party hereunder shall be in writing and shall be given to such party at its
address or facsimile number set forth on the signature page hereof. Each such
notice, request, or other communication shall be effective (i) when delivered
personally, (ii) if given by facsimile, when such facsimile is transmitted to
the telecopier number specified in this Section Five, (iii) if given by
certified or registered mail, return receipt requested, 72 hours after such
communication is deposited in the mails with first-class postage prepaid,
addressed as aforesaid, (iv) by Federal Express or other nationally recognized
overnight delivery service, on the next Business Day after such
communication is
deposited with such delivery service, or (v) if given by any other means, when
delivered at the address specified in this Section Five. All notices sent by
facsimile transmission shall be conclusively determined to have
been provided if
(a) a confirmation report of such transmission is retained by the sender, (b)
such confirmation report does not indicate a malfunction
in transmission and (c)
a copy of such notice is mailed to the intended recipient by certified mail,
return receipt requested, Federal Express or other recognized overnight courier
within one Business Day of its facsimile transmission,
Section Six. Miscellaneous. This Agreement shall constitute the entire
agreement of the parties with respect to the subject matter hereof and shall
supersede all prior agreements, correspondence and other materials relating to
such subject matter. This Agreement may only be modified by a
written instrument
signed by Lender and Borrower.
Section Seven. Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
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Kindly indicate your acceptance of the above terms by signing in the space
provided below.
Very truly yours,
XXXXXX BROTHERS HOLDINGS INC.,
D/B/A XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: SVP
Lender' s Facsimile Number
(000) 000-0000
Lender's Account for Wire Transfers:
Citibank N.A.
ABA. No. 000000000
Account No. 00000000
Attention: Xxxxxx Xxxxxx
Re: Inland Portfolio of 12 Retail Properties
Acknowledged and Agreed to:
Inland Real Estate Corporation
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Borrower's Facsimile Number:
(000) 000-0000
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SCHEDULE 1
Rate Lock Deposit: $1,246,000
First Decrease Amount: 40 basis points
Additional Decrease Amount: 15 basis points
Additional Rate Lock
Deposit Amount: $600,000
Attention Party: Xxxxx Xxxxxxx
Rate Lock Fee: $75.00 per million per day, payable in weekly installments.
SCHEDULE 2
DETERMINATION NOTICE
VIA FACSIMILE TO (000) 000-0000
XXXXXX BROTHERS HOLDINGS INC.
XXXXXX CAPITAL. A DIVISION
OF XXXXXX BROTHERS HOLDINGS INC.
Three World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Re: Extended Rate Lock Agreement for Inland Portfolio of 12 Retail
Properties
Gentlemen:
Reference is made to the above referenced Extended Rate Lock
Agreement. All
capitalized terms shall have the meanings described therein. This shall confirm
our agreement that the Rate Lock Amount and the Rate shall be in the following
amounts:
Rate Lock Amount: $62,000,000
Rate: 6.36 %
Date of Determination: 8/11/98
Very truly yours,
Inland Real Estate Corporation
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
