EXHIBIT 4-D
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LOAN AGREEMENT
dated as of
November 24, 1998
between
JMB INCOME PROPERTIES, LTD. - XI
and
DRESDNER BANK AG, NEW YORK
BRANCH AND GRAND CAYMAN BRANCH
LOAN AGREEMENT
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THIS LOAN AGREEMENT (this "Agreement") is dated as of the 24th day of
November, 1998 by and between JMB INCOME PROPERTIES, LTD. - XI, an Illinois
limited partnership ("Borrower"), and DRESDNER BANK AG, NEW YORK BRANCH AND
GRAND CAYMAN BRANCH and its permitted successors and assigns ("Lender").
R E C I T A L S:
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A. Borrower is the owner of certain Property (as hereinafter
defined) located in Hackensack, New Jersey.
B. Borrower has requested Lender to make a loan (the "Loan") to
Borrower in the aggregate principal amount of Thirty Four Million Dollars
($34,000,000) in connection with a fully enclosed, regional shopping mall
located on the Property and known as the Riverside Square Mall (the
"Mall").
C. The Loan is evidenced by a certain Mortgage Note dated as of
even date herewith in the aggregate principal amount of Thirty Four Million
Dollars ($34,000,000) (the "Note").
D. The Note is secured by, among other things, (i) that certain
Mortgage, Assignment of Leases and Security Agreement executed by Borrower)
dated as of even date herewith in favor of Lender (the "Mortgage"); (ii)
that certain Assignment of Leases and Rents executed by Borrower as of even
date herewith in favor of Lender (the "Assignment of Leases"); (iii) that
certain Environmental Indemnity Agreement executed by Borrower dated as of
even date herewith in favor of Lender (the "Indemnity Agreement"); (iv)
that certain Subordination of Management Agreement executed by the manager
of the Property as of even date herewith in favor of Lender (the
"Subordination of Management Agreement"); and (v) certain other loan
documents.
E. Subject to the terms and conditions of this Agreement, Lender
has agreed to make the Loan to Borrower.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein contained, the sufficiency of
which is hereby acknowledged, the parties hereto represent and agree as
follows:
ARTICLE 1
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INCORPORATION AND DEFINITIONS
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1.1 INCORPORATION AND DEFINITIONS: The foregoing recitals and all
exhibits attached hereto are hereby made a part of this Agreement. The
following terms shall have the following meanings in this Agreement:
(a) BUSINESS DAY: Any day on which national banking
associations are required to be open for business in Chicago, Illinois, New
York City and London, England.
(b) DEBT AMORTIZATION CHARGES: An amount reasonably
determined by Lender to be the monthly payment which would be required to
amortize the portion of the principal amount of the Loan outstanding during
such month over a period of twenty-five (25) years using an interest rate
equal to the ten (10) year United States Treasury note annual yield as of
the date Lender determines Total Interest Expense based upon published
quotes for Treasury notes having ten (10) years to maturity, as published
in the Wall Street Journal, subject, however, to a minimum annual constant
of 9.25%.
(c) DEFAULT: As defined in Section 6.1 hereof.
(d) ERISA: The Employee Retirement Income Security Act of
1974, as amended from time to time and any regulations promulgated
thereunder.
(e) GAAP: Generally accepted accounting principles,
uniformly applied.
(f) JMB: JMB Realty Corporation, a Delaware corporation, and
the managing general partner of Borrower.
(g) LAND: The real property subject to the lien of the
Mortgage, legally described on Exhibit A of the Mortgage.
(h) LEASE: Any lease, whether written or oral, now or
hereafter entered into by or on behalf of Borrower with respect to any
portion of the Property.
(i) LOAN AMOUNT: Thirty Four Million Dollars
($34,000,000.00).
(j) LOAN DOCUMENTS: This Agreement, the Note, the Mortgage,
the Assignment of Leases, the Indemnity Agreement, the Subordination of
Management Agreement and such other documents as may now or hereafter be
executed by Borrower to Lender to evidence or secure the Note, together
with all modifications, amendments, substitutions and renewals thereof.
(k) MALL: As defined in Recital B of this Agreement.
(l) MAJOR LEASE: Any Lease covering an aggregate square
footage in excess of 5,000 square feet.
(m) MATERIAL ADVERSE EFFECT: A material adverse effect on (a)
the business, operations, property or condition (financial or otherwise) of
Borrower taken as a whole which would materially impair Borrower's ability
to repay the Loan to the extent required by the Loan Documents or otherwise
perform its obligations under this Agreement or any of the other Loan
Documents or (b) the validity or enforceability of this Agreement or any of
the other Loan Documents or the rights or remedies of Lender thereunder or
hereunder.
(n) MORTGAGE: As defined in the Preamble.
(o) NET OPERATING INCOME: With respect to any fiscal period
of Borrower, the gross rental and other ordinary income from the operation
of the Property, less all expenses incurred in connection with the
operation of the Property during such fiscal period (including, without
limitation, real estate taxes, management fees and bad debt expenses), but
before payment of or provision for Total Interest Expense for such fiscal
period, income taxes for such period, tenant allowances, lease commissions,
capital additions and depreciation, amortization, and other non-cash
expenses for such fiscal period, all as determined in accordance with GAAP.
(p) NOTE: As defined in the Preamble.
(q) PERSON: Any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or government (whether
national, federal, state, provincial, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body
or department thereof).
(r) PROPERTY: The Land which is legally described on Exhibit
A attached hereto together with all improvements thereon and all rights
appurtenant thereto.
(s) TOTAL DEBT SERVICE: For any fiscal period of Borrower,
the sum (without double-counting) of (i) Total Interest Expense for such
period, plus (ii) Debt Amortization Charges of Borrower.
(t) TOTAL INTEREST EXPENSE: For any fiscal period of
Borrower, the aggregate amount of interest required in accordance with GAAP
to be paid or accrued by Borrower during such period under the Note.
(u) YEAR 2000 PROBLEM: Any significant risk that computer
hardware, software or equipment containing embedded microchips essential to
the business or operations of Borrower will not, in the case of dates or
time periods occurring after December 31, 1999, function at least as
reliably and effectively as in the case of time periods occurring before
January 1, 2000, including the making of accurate Leap Year calculations.
ARTICLE 2
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THE LOAN
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2.1 AGREEMENT TO BORROW AND LEND; NOTE. Borrower agrees to borrow
from Lender, and Lender agrees to lend to Borrower, Thirty Four Million
Dollars ($34,000,000) on the terms of and subject to the conditions of this
Agreement and the other Loan Documents.
2.2 PRINCIPAL AND INTEREST; EXTENSION OPTION. Payments of
principal and interest shall be due and payable to Lender as described in
the Note. The entire principal balance of the Note and all accrued and
unpaid interest thereon shall be due, if not sooner paid, on November 24,
1999 (the "Maturity Date"). Borrower shall have the option to extend the
Maturity Date to May 24, 2000, provided that (i) Borrower shall notify
Lender in writing (the "Extension Notice") of its election to extend the
Maturity Date not less than thirty (30) days prior to the original Maturity
Date; (ii) Borrower shall deliver to Lender, with the Extension Notice, a
non-refundable extension fee in the amount of $34,000; (iii) on the date
Borrower notifies Lender of its intent to extend the Maturity Date and on
the original Maturity Date, there shall be no Default or any event or
circumstance which, with the giving of notice or passage of time, would
constitute a Default under the Loan Agreement or any other Loan Document;
(iv) on the date Borrower notifies Lender of its intent to extend the
Maturity Date and on the original Maturity Date, there shall have been no
Material Adverse Effect; (v) on the date Borrower notifies Lender of its
intent to extend the original Maturity Date, Borrower shall deliver to
Lender annual projections for the following year prepared by Borrower of
operating expenses, cash flows, capital expenditures, tenant improvements
and other income expenses of Borrower relating to the Property in form and
substance reasonably acceptable to Lender; and (vi) Borrower shall deliver
a certification from an authorized officer of Borrower to Lender,
simultaneously with the delivery of the Extension Notice, stating that the
ratio of Net Operating Income (estimated by Borrower and approved by Lender
in its reasonable discretion based upon all executed Leases at the
Property) for the twelve-month period following the original Maturity Date
to estimated Total Debt Service for the same period shall be 1.85 to 1.00
or greater (the "Income Ratio"), which certification shall include
Borrower's calculation of estimated Net Operating Income and estimated
Total Debt Service and a current copy of a certified rent roll for the
Property.
Notwithstanding the foregoing, in the event that the Property does
not generate the foregoing Income Ratio at the time the extension is
requested and at the original Maturity Date, then Borrower may pay down the
outstanding principal balance of the Loan on or before the original
Maturity Date in order to achieve such ratio and qualify for the extension
of the Maturity Date.
Borrower shall not be permitted to prepay all or any portion of the
Note except as provided in the Note.
2.3 LOAN FEE. In consideration of Lender's agreement to make the
Loan, as provided in paragraph 2.1 hereof, Borrower shall pay to Lender a
non-refundable fee in the amount of $68,000 as a condition precedent to
funding the proceeds of the Loan.
2.4 CONDITIONS PRECEDENT. The loan proceeds shall be disbursed by
Lender to Borrower only upon satisfaction of the following conditions
precedent, as determined by Lender in its sole discretion:
(a) Delivery by Borrower to Lender of the original executed
Note, as described in the Recitals.
(b) Delivery to Lender of a fully executed copy of this
Agreement and the other Loan Documents.
(c) Delivery to Lender of the Mortgage.
(d) Delivery to Lender of a pro-forma ALTA-1992 loan title
insurance policy for the Property (the "Loan Policy"), which Loan Policy
shall (i) insure that the Mortgage creates a valid perfected first lien
against title to the Property to the extent of the stated amount of the
Note, (ii) provide such endorsements as Lender may reasonably request and
as are available in the jurisdiction where the Property is located, and
(iii) raise only such exceptions to title on the Property as Lender may
approve.
(e) Delivery to Lender of a comprehensive phase I
environmental report, in form and substance acceptable to Lender and
prepared by Versar, Inc.
(f) Delivery to Lender of an appraisal satisfactory to Lender
prepared by an appraiser who is a member of the American Institute of Real
Estate Appraisers and who is approved by Lender. The appraisal must show
an appraised value of the Property, such that the ratio of the appraised
value of the Property to the principal amount of the Loan shall be no more
than fifty-five percent (55%) at stabilization.
(g) Delivery to Lender of an ALTA Survey reasonably
satisfactory to Lender prepared by ▇▇▇▇▇▇▇ Engineering.
(h) Delivery to Lender of copies of all existing contracts
providing for the management, operation or leasing of the Property or any
improvements thereon, including, without limitation, that certain Property
Management Agreement (the "Management Agreement") entered into between
Borrower and Urban Retail Properties Co. ("Urban"), together with the
Subordination of Management Agreement.
(i) Delivery to Lender of tenant estoppel letters or
operating agreement estoppel letters, as the case may be, and
subordination, non-disturbance and attornment agreements ("SNDA"), in form
and substance reasonably satisfactory to Lender, from Major Tenants at the
Property occupying at least fifty percent (50%) in the aggregate of the
gross leasable area of the Property; provided, however, that although no
SNDA shall be delivered by Bloomingdale's Real Estate, Inc., as it is not a
tenant under a Lease, the gross leasable area of the Bloomingdales store
shall be included in determining whether or not the fifty percent (50%)
threshold has been met.
(j) Payment to Lender of (i) the loan fee described above,
which fee shall be due and payable upon delivery of this Agreement by
Borrower to Lender, and (ii) the expenses described in paragraph 9.2
hereof.
(k) Receipt and approval by Lender of all opinion letters,
authorization and other due diligence items previously requested by Lender
with respect to the Property.
(l) Receipt and approval by Lender of certificates of
insurance on the Property, as required by the Mortgage.
(m) Delivery to and approval by Lender of Borrower's annual
projections for calendar years 1998 and 1999 prepared by Borrower of
operating expenses, cash flows, capital expenditures, tenant improvements
and other income expenses of Borrower relating to the Property.
(n) Delivery to and approval by Lender of a certified rent
roll for the Property.
(o) Delivery to Lender of all Leases requested by Lender,
which Leases shall be satisfactory to Lender in its reasonable discretion.
(p) Delivery to and approval by Lender of such other papers
and documents regarding Borrower or the Property as
Lender may reasonably require.
ARTICLE 3
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REPRESENTATIONS, WARRANTIES AND COVENANTS
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3.1 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Lender as of the date hereof:
(a) Borrower has good and insurable fee simple title to the
Land and is the owner of the Property, subject only to liens and
encumbrances described in the Loan Policy, rights of existing tenants in
possession and such other liens, encumbrances and exceptions as may be
reasonably approved or permitted by Lender.
(b) Borrower is duly organized and validly existing under the
laws of the State of Illinois. Borrower has full power and authority to
conduct its business as presently conducted, to enter into the Loan
Documents and to perform all of its duties and obligations thereunder.
Such execution and performance have been duly authorized by all necessary
corporate, shareholder, member or partnership approval. The ownership and
operation of the Property and the operation of Borrower's partnership in
accordance with Borrower's partnership agreement, is the sole business of
Borrower.
(c) This Agreement, the Mortgage, the Note, the other Loan
Documents and any other documents and instruments required to be executed
and delivered by Borrower in connection with the Loan, when executed and
delivered, will constitute the duly authorized, valid and legally binding
obligations of the party required to execute the same and will be enforce-
able strictly in accordance with their respective terms (except to the
extent that enforceability may be affected or limited by equitable
remedies, applicable bankruptcy, insolvency, fraudulent conveyance and
other similar debtor relief laws affecting the enforcement of creditors'
rights generally). No basis presently exists for any claim by Borrower
against Lender under this Agreement, the Note, the Mortgage, the other Loan
Documents or with respect to the Loan and to the actual knowledge of
Borrower, enforcement of the Mortgage and the Loan Documents in accordance
with their respective terms is subject to no defenses of any kind.
(d) The execution, delivery and performance of this
Agreement, the Mortgage, the Note, the other Loan Documents and any other
documents or instruments to be executed and delivered by Borrower pursuant
to or in connection with this Loan will not, in any material respect:
(i) violate any provisions of law or any applicable regulation, order,
writ, injunction or decree of any court or governmental authority, or
(ii) conflict with, be inconsistent with, or result in any breach or
default of any of the terms, covenants, conditions or provisions of any
indenture, mortgage, deed of trust, instrument, document, agreement or
contract of any kind to which Borrower is a party or by which Borrower may
be bound. To the actual knowledge of Borrower, Borrower is not in default
(without regard to grace or cure periods) under any contract or agreement
to which it is a party, the effect of which default would materially and
adversely affect the performance by Borrower of its obligations pursuant to
and as contemplated by the terms and provisions of the Mortgage and the
other Loan Documents.
(e) To the actual knowledge of Borrower, no agreement,
document, instrument, restriction, litigation or proceeding (or, to
Borrower's actual knowledge, threatened litigation or proceeding or basis
therefor) exists which could adversely affect the validity or priority of
the liens and security interests granted Lender hereunder or under the Loan
Documents or which could materially and adversely affect the ability of
Borrower to perform its obligations under the Loan Documents.
(f) To the actual knowledge of Borrower, the Property does
not violate or conflict with, in any material respects, any applicable law,
statute, ordinance, rule, regulation or order of any kind, including, with-
out limitation, environmental laws, zoning, building, land use, noise
abatement, occupational health and safety or other laws, any building
permit or any condition, grant, easement, covenant, condition or
restriction, whether recorded or not, except to the extent that such
violation would not constitute a Material Adverse Effect.
(g) To the actual knowledge of Borrower, except as disclosed
to Lender in that certain Environmental Site Assessment Report dated
October 9, 1998, prepared by Versar, Inc. (the "Report") with respect to
the Property delivered to Lender, there are no facilities on the Property
which are subject to reporting under Section 312 of the Federal Emergency
Planning and Community Right-to-Know Act of 1986 (42 U.S.C. Section 11022),
and federal regulations promulgated thereunder and the Premises do not
contain any underground storage tanks.
(h) As of the respective dates of certification or
preparation, all historical financial statements submitted by Borrower to
Lender in connection with this Loan are true and correct in all material
respects and fairly present the cash flows of the entities or property
which are their subjects.
(i) As of the respective dates of certification or
preparation, all financial statements, budgets, schedules, opinions,
certificates, statements, applications, rent rolls, affidavits, agreements,
contracts, and other materials submitted to Lender in connection with or in
furtherance of the Loan by Borrower or any of Borrower's agents or
contractors fully and fairly, in all material respects, state the matters
with which they purport to deal.
(j) Borrower has timely filed all federal, state and other
governmental tax and similar returns which it is required by law to file
with respect to Borrower and/or the Property and the operation and business
thereof, and all taxes and other sums which are shown to be payable under
such returns have been fully paid or, if Borrower is contesting or
disputing payment thereof, Borrower had timely filed all extensions,
protests, objections and other documentation necessary to contest or
dispute such taxes before penalties are assessed thereto.
(k) To the actual knowledge of Borrower, Borrower now
possesses and holds all necessary and material licenses, franchises,
governmental permits, certificates, consents and other approvals required
to conduct and operate the business of the Property as presently conducted
thereon except to the extent such violation would not constitute a Material
Adverse Effect.
(l) Except as disclosed in writing to Lender, or as may
hereafter be disclosed to Lender in the engineering reports, if any, to be
delivered to Lender, any and all material improvements, fixtures, equipment
and facilities on the Property are in good operating condition and repair
and the Property is free from material structural defects and the parking
areas have adequate drainage.
(m) Borrower has not incurred any material accumulated
funding deficiency within the meaning of ERISA or any material liability to
the Pension Benefit Guaranty Corporation established under ERISA, or any
successor thereto, in connection with any employee benefit plan established
or maintained by Borrower; the execution and delivery by Borrower of this
Agreement, the Note and the other Loan Documents will not involve any pro-
hibited transaction within the meaning of ERISA or Section 4975 of the
International Revenue Code of 1986, as amended.
(n) Borrower has reviewed, or will expeditiously review, its
operations with a view to assessing whether its business will be vulnerable
to a Year 2000 Problem or will be vulnerable to the effects of a Year 2000
Problem suffered by any of Borrower's major commercial counter-parties.
Borrower shall take all commercially reasonable actions necessary to assure
that its computer-based and other systems are able to effectively process
data, including dates before, on and after January 1, 2000, without
experiencing any Year 2000 Problem that could cause a Material Adverse
Effect. At the written request of Lender, Borrower will provide Lender
with assurances and substantiations (including, but not limited to, the
results of internal or external audit reports prepared in the ordinary
course of business) reasonably acceptable to Lender as to the capability of
Borrower to conduct its business and operations before, on and after
January 1, 2000 without experiencing a Year 2000 Problem causing a Material
Adverse Effect. Borrower represents and warrants that it has a reasonable
basis to believe that no Year 2000 Problem will cause a Material Adverse
Effect.
(o) Borrower has removed, or has caused the removal of, that
certain 55-gallon drum containing waste oil, previously located on the
Property. Such removal was conducted in a commercially reasonable manner
in compliance with all laws, ordinances and regulations and no leakage or
spillage occurred on or about the Property.
All representations and warranties contained in this Agreement or any
of the other Loan Documents shall survive the execution and delivery of
this Agreement for as long as any portion of the Loan remains outstanding.
3.2 COVENANTS. To induce Lender to make the Loan, Borrower hereby
covenants to Lender, for as long as any portion of the Loan shall be
outstanding, as follows:
(a) From and after the date hereof, Borrower shall not engage
in any business other than the ownership and operation of the Property,
without the prior written consent of Lender.
(b) All financial statements to be submitted by Borrower to
Lender in connection with the Loan will, for the periods covered thereby,
be true and correct in all material respects and fairly present the
respective cash flows of the entities or property which are their subjects.
(c) Borrower shall hereafter continue to timely file all
federal, state and other governmental tax and similar returns which it is
required by law to file with respect to Borrower and/or the Property and
the operation and business thereof, and Borrower shall continue to pay all
taxes and other sums which are shown to be due and payable by Borrower
under such returns, if any; or, if Borrower elects to contest the payment
or amount of any such taxes, Borrower shall comply with the provisions of
Article 4.2 of the Mortgage.
(d) During the term of the Loan, Borrower shall promptly
furnish to Lender a written notice of any litigation in which Borrower is
named a defendant or any litigation which, if adversely determined, would
constitute a Material Adverse Effect.
(e) Borrower shall pay Total Interest Expense when due
and punctually perform and observe all of the requirements of (i) this
Agreement; (ii) the Note; (iii) the Mortgage; (iv) the Assignment of
Leases; (v) the Indemnity Agreement; (vi) the Subordination of Management
Agreement; and (vii) the other Loan Documents. Borrower shall have the
privilege of making prepayments on the principal amount of the Note (in
addition to the required payments thereunder) in accordance with the terms
and conditions set forth in the Note, but not otherwise.
(f) Borrower shall cause the Property to be owned, operated
and maintained in compliance, in all material respects, with applicable
laws, statutes, ordinances, rules, regulations and orders, including,
without limitation, environmental laws, zoning, building land use, noise
abatement, occupational health and safety and other laws, building permits,
grants, easements, covenants and restrictions.
(g) From and after the date hereof, Borrower shall maintain a
ratio of Net Operating Income to Total Debt Service of 1.75:1 or more, as
determined by Borrower's accountant to the reasonable satisfaction of
Lender, at the end of each fiscal quarter of Borrower.
(h) Without the prior written consent of Lender, Borrower
shall not incur any direct or contingent debts other than the Loan;
provided, however, nothing contained herein shall prohibit Borrower from
acquiring goods, supplies or merchandise for the Property on normal trade
credit, including equipment leases and purchase money financing on
equipment and personalty, and debts in existence on the date of this
Agreement as disclosed to Lender in writing.
(i) From and after the date hereof, Borrower shall not
create, assume, allow or permit any lien, security interest or other
encumbrance to attach to all or any portion of the Property nor grant,
pledge, lien or assign any interest in Borrower nor merge the assets of
Borrower with any other entity, except to the extent permitted under
Section 7.2 hereof.
(j) From and after the date hereof, JMB shall not create,
assume, allow or permit any lien or security interest to attach to all or
any portion of its partnership interest in Borrower.
(k) From after the date hereof, Borrower shall not allow or
permit any lien or security interest to attach to all or any portion of
JMB's partnership interest in Borrower.
(l) Borrower shall cause any and all management fees payable
with respect to the Property to be fully subordinated to the rights of
Lender under the Note and the other Loan Documents pursuant to the
Subordination of Management Agreement.
(m) Borrower shall not change the person or entity
responsible for managing the Property without the prior written consent of
Lender, which consent shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing, Lender acknowledges and consents
to Urban as manager of the Property.
(n) Borrower shall keep books of account and prepare
financial statements and shall cause to be furnished to Lender the
following financial information, all of which shall be kept and prepared in
accordance with GAAP, consistently applied, unless Borrower's certified
public accountants concur in any changes therein and such changes are
disclosed to Lender in writing and reasonably acceptable to Lender:
(i) Promptly after becoming available, but not later
than forty-five (45) days after the end of each fiscal quarter of Borrower,
commencing with the fiscal quarter ending December 31, 1998, unaudited
balance sheets of Borrower as of the end of such quarter, and the related
statements of income and statement of cash flow for that portion of the
fiscal year of Borrower ending as of the end of such quarter, certified by
Borrower's chief financial officer or accounting officer as prepared in
accordance with GAAP, consistently applied, and fairly presenting the
financial position and operations of Borrower for such period, subject,
however, to ordinary and customary year-end adjustments and the absence of
footnotes;
(ii) Concurrently with the delivery of the financial
statement described in Subsection (i) above, a statement in reasonable
detail showing the calculations used in determining compliance with the
financial covenants contained herein (which calculations shall be subject
to Lender's review and approval), and a certificate of Borrower's chief
financial officer or accounting officer certifying to Lender that there
does not exist any Default or, if such officer is aware of a Default, the
nature thereof;
(iii) Within forty-five (45) days after the end of each
fiscal quarter of Borrower during the term of the Loan, a certification
from an authorized officer of Borrower stating Borrower's calculation of
the ratio of Net Operating Income to Total Debt Service, together with the
financial information and calculations used by Borrower to obtain its
results;
(iv) As soon as available but in any event not later
than forty-five (45) days after the end of calendar year 1998, and
subsequent years thereafter during the term of the Loan, annual projections
for the following year prepared by Borrower of operating expenses, cash
flows, capital expenditures, tenant improvements and other income expenses
of Borrower relating to the Property;
(v) Within forty-five (45) days after the end of each
fiscal quarter of Borrower during the term of the Loan, a certified rent
roll for the Property; and
(vi) Such other data and information (financial and
otherwise) as Lender may, from time to time, reasonably request, relating
to the Property, Borrower's financial condition or the results of
operations.
(o) Borrower shall notify Lender as promptly as possible if
Borrower has actual knowledge of (i) the occurrence of any Default,
(ii) any litigation, claim or proceeding against or affecting Borrower
seeking the payment of money by Borrower in excess of One Million Dollars
($1,000,000), whether in the form of damages, fines, penalties or costs,
(iii) any action, claim, proceeding or dispute involving Borrower and any
court, board, commission, agency or instrumentality of any federal, state
or local government or any agency or subdivision thereof, which if
adversely resolved could be reasonably expected to result in a Material
Adverse Effect, or (iv) any Material Adverse Effect.
(p) Except to the extent permitted under Section 7.2 hereof,
Borrower shall not fail to maintain its organizational existence, or
dissolve or liquidate all or substantially all of its assets, or merge or
consolidate with any other corporation or entity or purchase any stock or
assets of any other person, association, partnership, corporation or
entity, other than assets used in the ordinary course of business of
Borrower or enter into any pool, joint venture or syndicate with any other
party.
(q) Borrower shall permit Lender, its agents and
representatives, to inspect the Property and inspect, audit and make
extracts from Borrower's records, files, books of account, computer
software and disks during normal business hours and upon not less than 48
hours prior notice at the place where such books and records are
customarily kept.
(r) Based upon the recommendations set forth in the Report,
Borrower has requested and Saks Fifth Avenue ("Saks") has relocated the
majority of certain chemicals, previously located in the mechanical room in
the demised premises of Saks as described in the Report, to an area of the
Saks premises without floor drains; to the actual knowledge of Borrower,
such relocation was conducted in a commercially reasonable manner in
compliance with all laws, ordinances and regulations without leakage or
spillage occurring on or about the Property. As to the remainder of such
chemicals which for practical reasons shall remain in the mechanical room,
Borrower has requested that Saks utilize a form of secondary containment in
order to safeguard against any potential leakage, spillage or discharge of
such chemicals and to ensure storage in compliance with all applicable
laws, ordinances and regulations. Borrower agrees to use commercially
reasonable efforts to ensure compliance by Saks with such request.
ARTICLE 4
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THEATER LEASE/LEASING COSTS
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Lender acknowledges that Borrower is currently engaged in, or
hereafter may enter into negotiations for the construction and leasing of a
theater to be located in the Mall (the "Theater"). Borrower agrees that it
shall not enter into a lease for the Theater without the prior written
consent of Lender; provided, however, that Lender hereby approves of the
terms and conditions with respect to such lease as set forth on Exhibit A
attached hereto and incorporated herein. Lender's consent shall not be
required with respect to such lease provided that the material terms and
conditions thereof are substantially similar to those set forth in
Exhibit A as determined by Lender in its reasonable discretion. Lender
shall be deemed to have approved any such lease after the 10th business day
after the date Lender has received such lease if no changes or objections
thereto are sent to Borrower within such time period. In the event that
Borrower enters into a lease for the Theater, and if Borrower is
responsible for the cost of tenant's build-out (not to exceed $4,600,000)
or leasing commissions (not to exceed $80,000) in connection therewith
(collectively referred to as the "Leasing Costs"), Borrower shall deposit,
with a title insurance company reasonably acceptable to Lender, the amount
necessary or required to fully satisfy the Leasing Costs (the "Construction
Escrow"), together with such other documents and materials reasonably
requested by Lender, including, without limitation, (i) a project budget
for construction of the Theater and (ii) plans and specifications detailing
the construction of the Theater. To secure payment of the Note and
performance of Borrower's obligations under the Loan Documents, Borrower
agrees to execute and deliver to Lender, such documents and agreements
reasonably requested by Lender, in a form reasonably approved by Borrower,
pledging and granting to Lender a continuing security interest in any
amounts required to be deposited with the title company pursuant to this
Section, including without limitation, a Deposit, Pledge and Security
Agreement, in a form reasonably approved by Borrower, together with any
other documents or instruments reasonably requested by Lender to perfect a
continuing security interest in such monies. Amounts held in the
Construction Escrow shall be disbursed pursuant to the terms, and subject
to the conditions of, a construction escrow agreement in form and substance
reasonably acceptable to Lender and Borrower.
ARTICLE 5
---------
INTENTIONALLY DELETED
---------------------
ARTICLE 6
---------
DEFAULTS; REMEDIES
------------------
6.1 DEFAULTS. If one or more of the following events (herein
called "Defaults") shall occur and be continuing:
(a) If any default is made in the due and punctual payment of
principal due on the Maturity Date (as such date may be extended pursuant
the extension option set forth in Section 2.2) or if any default is made in
the due and punctual payment of interest within five (5) business days
after the date such payment is due under the Note;
(b) Except as otherwise provided under this Paragraph 6.1, if
a default shall exist and be continuing in the performance or observance of
any other covenant or agreement of Borrower under the Note, the Mortgage,
this Agreement or any other document or instrument regulating, evidencing
or securing the Loan, including, but not limited to, any of the Loan
Documents, which default continues for a period of fifteen (15) business
days after written notice thereof is given to Borrower; provided that if
Borrower shall commence to cure such default and thereafter diligently
pursue such cure, and such default does not have a Material Adverse Effect,
then Borrower shall have up to thirty (30) days to cure such default;
(c) The occurrence of a Prohibited Transfer (as defined in
the Mortgage);
(d) If any representation or warranty contained herein or in
any other Loan Document or if any of the information contained in any
documentation provided to Lender by Borrower in conjunction with the Loan
shall not be true and accurate in all material respects as of the date
made;
(e) If:
(i) Borrower shall file a voluntary petition in
bankruptcy or for relief under the federal Bankruptcy Act or any similar
state or federal law;
(ii) Borrower shall file a pleading in any proceeding
admitting insolvency;
(iii) Within ninety (90) days after the filing against
Borrower of any involuntary proceeding under the federal Bankruptcy Act or
similar state or federal law, such proceedings shall not have been vacated;
(iv) All or substantially all of Borrower's assets are
attached, seized, subjected to a writ or distress warrant, or are levied
upon, unless such attachment, seizure, writ, warrant or levy is vacated
within ninety (90) days;
(v) Borrower shall make an assignment for the benefit
of creditors or shall consent to the appointment of a receiver or trustee
or liquidator of all or substantially all of its property, or the Property;
or
(vi) Any order appointing a receiver, trustee or
liquidator of Borrower or all or substantially all of Borrower's property
or the Property is not vacated within ninety (90) days following the entry
thereof;
(f) If a notice of lien, levy or assignment is filed or
recorded with respect to the Property or with respect to all or any of the
assets of Borrower by the United States government or any department,
agency or instrumentality thereof or by any state, county, municipal or
other governmental agency, or if any taxes or debts owing at any time or
times hereafter to any one of them becomes a lien or encumbrance upon the
Property or any other of Borrower's assets and any of the foregoing is not
released, bonded or otherwise secured to Lender's reasonable satisfaction
within thirty (30) days after the same becomes a lien or encumbrance;
(g) The dissolution of Borrower;
(h) Any Major Lease which exceeds 20,000 square feet, or
Major Leases which in the aggregate exceed 20,000 square feet, shall
terminate or be canceled due to the default or breach of obligations
thereunder by the landlord; provided, however, that termination or
cancellation due to rights of tenants set forth in their leases to
terminate in the event that certain co-tenancy conditions have not been met
shall not be deemed a Default hereunder; or
(i) If Borrower shall enter into a lease for the Theater
which has Leasing Costs, and Borrower shall fail to pay such Leasing Costs
as and when required by the lease and such failure continues beyond any
applicable periods of notice or cure under the lease;
then Lender, at its option and without affecting the lien created by the
Mortgage or any other Loan Document or the priority of said lien or any
other right of Lender hereunder, may declare, without further notice, all
indebtedness owing to Lender under the Loan Documents immediately due with
interest thereon at the Default Rate, and Lender may immediately proceed
to foreclose the Mortgage and to exercise any right provided by the
Mortgage, the Note, the other Loan Documents or otherwise.
ARTICLE 7
---------
ASSIGNMENTS
-----------
7.1 LENDER'S RIGHT TO ASSIGN. Lender shall have the right, at any
time and from time to time during the term of the Loan, to sell, assign,
transfer or convey all or any portion of its interest in the Loan, the
Note, and the other Loan Documents and may sell participation interests in
such rights and security therein to any bank, insurance company or other
financial institution (a "Transferee") and Borrower agrees that it shall
fully cooperate with Lender and such Transferee to facilitate such
transfer, at Lender's sole cost and expense. In no event shall such sale
increase Borrower's liability or obligations under the Loan Documents.
Upon a sale of all or any portion of Lender's interest in the Loan and
security therefor and assumption of such interest by a Transferee, Borrower
agrees that Lender shall have no further liability with respect to the
interest or interests so sold. If requested, Borrower agrees that it shall
execute such documents, estoppels, confirmations and agreements, including,
without limitation, a replacement note or notes in favor of Lender and any
such Transferee(s), to evidence their respective rights in the Loan and the
Loan Documents.
7.2 BORROWER'S RIGHT TO ASSIGN. Except as specifically permitted
below, Borrower shall not have the right to sell, assign, convey or
otherwise transfer all or any portion of its interests in the Loan or the
Loan Documents without the prior written consent of Lender; provided,
however, that the following transfers shall be permitted without Lender's
consent: (i) the transfer of partnership interests in Borrower among the
existing partners of Borrower, (ii) transfers of limited partnership
interests in Borrower, in whole or in part, (iii) the transfer of JMB's
existing general partnership interest in Borrower, in whole or in part, to
any partnership, corporation or other entity that is directly or indirectly
controlling, controlled by or under common control with JMB (each such
entity a "JMB Affiliate"), (iv) the transfer or assignment (including,
without limitation, the pledging or
granting of a lien, mortgage, security interest or other encumbrance or
alienation) of the ownership
interests in the limited partners of Borrower, and (v) the transfer or
assignment of the ownership interest in the general partnership interest in
Borrower, provided that JMB or a JMB Affiliate has retained or will retain
(A) the existing general partnership interest in Borrower and (B) the
ability to control, directly or indirectly, the day-to-day operations and
management of Borrower. In addition to the foregoing, Borrower shall be
permitted a sale of the Property on one occasion to an unaffiliated bona-
fide purchaser, provided that Lender, in its sole and absolute discretion,
approves such bona-fide purchaser prior to such sale.
ARTICLE 8
---------
INDEMNITY
---------
8.1 INDEMNITY. Borrower hereby indemnifies Lender, and its
directors, officers, employees, affiliates, agents, successors and assigns
(collectively, "Indemnified Persons") against, and agrees to hold each such
Indemnified Person harmless from, any and all losses, claims, damages and
liabilities, actually incurred (excluding speculative and consequential
damages) including expenses relating to such claims, including reasonable
counsel fees and expenses, incurred by such Indemnified Person arising out
of any claim, litigation, investigation or proceeding (whether or not such
Indemnified Person is a party thereto) relating to any transactions,
services or matters that are the subject of this Agreement or the other
Loan Documents; provided, however, that such indemnity shall not apply to
any such losses, claims, damages, or liabilities or related expenses
determined by a court of competent jurisdiction to have arisen from the
gross negligence or willful misconduct of such Indemnified Person. The
agreements of Borrower in this Section 8.1 shall be in addition to any
liability that Borrower may otherwise have. All amounts due under this
Section 8.1 shall be payable as incurred upon written demand therefor.
ARTICLE 9
---------
MISCELLANEOUS
-------------
9.1 NOTICES. Any notice, demand or other communication which any
party hereto may desire or may be required to give to any other party under
this Agreement or the other Loan Documents shall be in writing, and shall
be deemed given (i) if and when personally delivered, (ii) upon receipt or
refusal thereof if sent by Federal Express or any other nationally
recognized overnight courier addressed to a party at its address set forth
below, (iii) upon receipt or refusal thereof if deposited in United States
registered or certified mail, postage prepaid, or (iv) upon receipt if sent
by telecopy, addressed to a party at its address set forth below, or at
such other place as such party may have designated to all other parties by
notice in writing in accordance herewith:
(a) If to Borrower: JMB Income Properties, Ltd. - XI
c/o JMB Realty Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Lender: Dresdner Bank AG
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Except as otherwise specifically required herein, notice of the exercise of
any right or option granted to Lender by this Agreement is not required to
be given. Failure to deliver copies of notices shall not render the notice
invalid.
9.2 EXPENSES. Borrower shall be liable for payment of all
reasonable costs incurred by Lender in connection with making the Loan, the
preparation, execution and delivery of this Agreement and the other Loan
Documents, the enforcement of the Loan Documents and Lender's rights and
remedies thereunder, including, without limitation, reasonable attorneys'
fees and costs, consultants' fees and costs, recording fees, title
insurance premiums, environmental assessment fees and appraisal fees.
9.3 APPRAISAL. Upon the occurrence and continuation of a Default,
Lender may request a new or updated MAI appraisal for the Property and
Borrower shall cooperate with Lender in obtaining such appraisal. Borrower
shall be liable for the cost and expense of such appraisal during the term
of the Loan.
9.4 ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS. This Agreement and
the other Loan Documents contain the entire agreement and understanding of
the parties hereto with respect to the subject matter hereof and the same
may not be amended, modified or discharged, nor may any of their terms be
waived, except by an instrument in writing signed by the party to be bound
thereby.
9.5 FURTHER ASSURANCES. The parties hereto each agree to do,
execute, acknowledge and deliver all such further acts, instruments and
assurances and to take all such further action, in good faith and in a
commercially reasonable manner as shall be necessary or desirable to fully
carry out this Agreement and to fully consummate and effect the transaction
contemplated hereby. Any consents or approvals required by or of the
parties hereto shall not be unreasonably withheld or delayed.
9.6 NO THIRD PARTY BENEFITS. This Agreement is for the sole and
exclusive benefit of the parties hereto and their respective permitted
successors and assigns, and no third party is intended to or shall have any
rights hereunder.
9.7 ASSIGNS. The terms and provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
9.8 INTERPRETATION.
(a) The headings and captions herein are inserted for
convenient reference only and the same shall not limit or construe the
paragraphs or sections to which they apply or otherwise affect the
interpretation hereof.
(b) The terms "hereby," hereof," "herein," "hereunder" and
any similar terms shall refer to this Agreement, and the term "hereafter"
shall mean after, and the term "heretofore" shall mean before, the date of
this Agreement.
(c) Words of the masculine, feminine or neuter gender shall
mean and include the correlative words of other genders, and words
importing the singular number shall mean and include the plural number and
vice versa.
(d) Words importing persons shall include firms,
associations, partnerships (including limited partnerships), trusts,
corporations and other legal entities, including public bodies, as well as
natural persons.
(e) The terms "include," "including" and similar terms shall
be construed as if followed by the phrase "without being limited to."
9.9 COUNTERPARTS. This Agreement and any document or instrument
executed pursuant thereto may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
9.10 COMPUTATION OF TIME. Whenever under the terms of this Agree-
ment the time for performance of a covenant or condition falls upon a
Saturday, Sunday or holiday, such time for performance shall be extended to
the next Business Day. Otherwise all references herein to "days" shall
mean calendar days.
9.11 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, in which
the transactions contemplated herein were negotiated, the Note and other
Loan Documents were executed and delivered, and where the principal offices
of Lender are located.
9.12 TIME OF THE ESSENCE. Time is of the essence of this agreement.
9.13 SEVERABILITY. If any provision of this Agreement shall be
judicially or administratively held invalid or unenforceable for any
reason, such holding shall not be deemed to affect, alter, modify or impair
in any way any other provision hereof.
9.14 SUBMISSION TO JURISDICTION; WAIVERS. Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of Illinois located in Chicago, Illinois, the courts of the
United States of America for the Northern District of Illinois, and
appellate courts from any thereof.
(b) to the extent permitted by applicable law, consents that
any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action
or proceeding in any such court or that such action or proceeding was
brought in an inconvenient court and agrees not to plead or claim the same.
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in paragraph 9.1 hereof
or at such other address of which Lender shall have been notified pursuant
thereof.
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction.
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
9.15 ACKNOWLEDGMENTS. Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) Lender has no fiduciary relationship with or fiduciary
duty to Borrower arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between Lender and
Borrower in connection herewith or therewith is solely that of creditor and
debtor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among Lender or Borrower.
9.16 WAIVERS OF JURY TRIAL. BORROWER AND LENDER HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
9.17 CONFLICTS. In the event of any conflict between the terms of
this Agreement and the terms of the Mortgage, the terms of this Agreement
shall control.
9.18 LIMITATION OF LIABILITY. No present or future partner of
Borrower, and no advisor, trustee, director, officer, member, partner,
employee, beneficiary, shareholder, participant or agent of any entity
which now or hereafter holds a direct or indirect interest in a partner of
Borrower, shall have any personal liability, directly or indirectly, under
or in connection with this Agreement or any agreement made or entered into
under or pursuant to or in connection with this Agreement, made at any time
or times, heretofore or hereafter, and Lender, its successors and assigns,
shall look solely to the collateral of Borrower given to Lender as security
for the Loan for the payment of any claim against, or for any performance
by, Borrower, and Lender hereby waives any and all such personal liability.
The limitations of liability provided in this paragraph are in addition to,
and not in limitation of, any limitation on liability applicable provided
by law or by any other contract, agreement or instrument.
[SIGNATURES FOLLOW]
IN WITNESS WHEREOF, this Agreement is effective as of the day and
year first above written.
BORROWER:
JMB INCOME PROPERTIES, LTD. - XI
By: JMB Realty Corporation,
Its Managing General Partner
By:
Name:
Title: Vice President
LENDER:
DRESDNER BANK AG, NEW YORK BRANCH AND
GRAND CAYMAN BRANCH
By:
Name:
Title:
By:
Name:
Title:
JOINDER
-------
The undersigned hereby consents to, and joins in the terms and conditions
of the foregoing Loan Agreement solely for the purposes of the covenants
set forth in Section 3.2 (j) thereof, intending to be bound thereby as
fully and with the same effect as if the undersigned had executed such
instrument.
JMB Realty Corporation,
a Delaware corporation
By:
Name:
Title: Vice President
Dated as of November 24th 1998.
EXHIBIT A
---------
SUMMARY OF THEATER LEASE TERMS
------------------------------
See Attached
MORTGAGE NOTE
-------------
$34,000,000 Chicago, Illinois
November 24, 1998
THIS MORTGAGE NOTE ("Note") is dated as of the 24th day of November, 1998,
by JMB INCOME PROPERTIES, LTD. - XI, an Illinois limited partnership
("Borrower") to the order of DRESDNER BANK AG, NEW YORK BRANCH AND GRAND
CAYMAN BRANCH, its successors and assigns ("Lender").
FOR VALUE RECEIVED, Borrower hereby promises to pay to the order of
Lender in the manner provided hereinafter, the principal sum of Thirty Four
Million Dollars ($34,000,000) pursuant to the terms of this Note and that
certain Loan Agreement of even date herewith (as amended or replaced from
time to time, the "Loan Agreement"), between Borrower and Lender, and its
respective successors and assigns with interest thereon, as follows:
1. CERTAIN DEFINITIONS. As used herein, the following terms shall
have the indicated meanings:
A. ADDITIONAL COST. Any Funding Cost or any other cost
incurred by Lender after the date hereof as a result of (i) the
introduction of, (ii) any change in, or (iii) any changed effect of,
(iv) any change in the interpretation of any law, rule, regulation or other
requirement imposed, interpreted, administered and/or enforced by any
United States federal, state or other governmental or monetary authority
which increases Lender's direct cost (such as a reserve requirement), which
is, is deemed to be or is made applicable against any assets held by, or
deposits or accounts in or with, or credits extended by Lender and which
causes Lender to incur any cost in, or increases the effective cost to
Lender of, lending to Borrower at the LIBOR Based Rate, or decreases the
effective spread or yield of one and one-thirtieth of one percent (1.30%)
per annum which would be made by Lender between LIBOR and the LIBOR Based
Rate.
B. BUSINESS DAY. Any day on which national banking
associations are required to be open in Chicago, Illinois, New York City,
and London, England.
C. CONTRACT. Any contract for 30, 60, 90 or 180 days (as
available), as elected by Borrower (or any other period expressly agreed to
by Lender and Borrower), made by Lender, or available to be made by Lender,
in the London, Cayman Islands or Nassau Interbank Markets to obtain the
deposit with Lender of the sum required to fund a LIBOR Portion for the
respective Contract Period.
D. CONTRACT PAYMENT DATE. For each Contract, the date on
which it matures, except that if the Contract matures on a day which is not
a Business Day, with respect to a LIBOR Portion, the date shall be the next
succeeding day which is a Business Day.
E. CONTRACT PERIOD. The term of a Contract, which shall be
30, 60, 90 or 180 days (as available or any other available period
expressly agreed to by Lender and Borrower) for which Borrower elects to be
charged interest on a LIBOR Portion at the LIBOR Based Rate. No Contract
Period shall extend beyond the Maturity Date. For any LIBOR Portion in
respect of which Lender chooses not to accept a deposit, the Contract
Period thereof shall mean the interest period for which Borrower has
elected to be charged at the LIBOR Rate for a LIBOR Portion.
F. CONVERSION DATE. For interest computation purposes, and
as may be appropriate, the effective date on which:
(i) a LIBOR Portion becomes a part or all of the
Floating Rate Based Funds; or
(ii) the whole or a portion of the principal balance
from time to time outstanding of the Loan which is Floating Rate Based
Funds becomes a part or all of a LIBOR Portion; or
(iii) an expiring LIBOR Portion is converted into a part
or all of another LIBOR Portion.
G. DEBT AMORTIZATION CHARGES. As defined in the Loan
Agreement.
H. DEFAULT. As defined in Article 6 of the Loan Agreement.
I. DEFAULT RATE. Four percent (4%) per annum plus the Prime
Rate with respect to Floating Rate Based Funds and four percent (4%) per
annum plus the LIBOR Based Rate with respect to any LIBOR Portion.
J. FLOATING RATE BASED FUNDS. At any time, the portion of
the outstanding principal balance of the Loan on which interest is being
charged at the Floating Interest Rate.
K. FLOATING INTEREST RATE. The Prime Rate from time to time
in effect, each computed based on the actual number of days elapsed and a
year of three hundred sixty (360) days.
L. FUNDING COSTS. Any costs, expenses, penalties and/or
charges incurred by Lender arising directly from or relating directly to,
as the case may be, the early termination, breakage or other disposition of
a Contract because of payment or prepayment of a LIBOR Portion prior to the
Contract Payment Date or termination of such LIBOR Rate Portion, all as
determined by Lender in good faith.
M. INDEBTEDNESS. All of Borrower's liabilities, obligations
and indebtedness to Lender of any kind and nature, including, without
limitation, all principal, interest, fees, charges and other expenses due
hereunder or under any of the other Loan Documents or any other agreement.
N. INTERBANK MARKET. Any interbank market, whether located
in London, England, or the Cayman Islands, or Nassau, the Bahamas, or in
any other location satisfactory to Lender, where Lender, or any branch,
subsidiary, parent or affiliate of Lender, may purchase or sell deposits of
U.S. dollars to other banks for fixed periods.
O. LIBOR. For each Contract, the interest rate quoted by
Lender on such Contract, which shall be the rate of interest per annum
(computed on basis of a three hundred sixty (360)-day year) at which a
deposit in U.S. dollars in the sum equal to the corresponding LIBOR Portion
is offered to Lender in the Interbank Market for the Contract Period at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of a Contract Period. The use of such offered interest rate to
define the LIBOR Based Rate shall not obligate Lender to accept a deposit
in order to charge interest on a LIBOR Portion at the LIBOR Based Rate once
Borrower elects to be charged interest at such rate on a portion of the
principal balance of the Loan (a LIBOR Portion) for a definite period (the
Contract Period).
P. LIBOR BASED RATE. For any given LIBOR Portion for its
corresponding Contract Period, the sum of (1) the quotient of (a) LIBOR
divided by (b) one minus the Reserve Requirement, if required by present or
future regulations imposed by any United States federal, state or other
governmental monetary authority (expressed as a decimal and rounded upward,
if necessary, to the next higher 1/100 of 1%), plus (2) 1.30% per annum
computed on the actual number of days elapsed and a year computed on the
basis of a three hundred sixty (360)-day year.
Q. LIBOR PORTION. Each portion (if there is more than one
Contract in existence) of the principal balance from time to time
outstanding on which, as a result of Borrower's election, Borrower is
charged interest at the corresponding LIBOR Based Rate. No LIBOR Portion
shall be less than One Million Dollars ($1,000,000).
R. LOAN. A Thirty Four Million Dollar ($34,000,000) loan
made by Lender to Borrower as evidenced, in part, by this Note and secured
by the Loan Documents hereinafter described.
S. LOAN DOCUMENTS. As defined in the Loan Agreement.
T. MATURITY DATE. November 24, 1999, or such earlier date as
the entire outstanding principal balance of this Note and accrued and
unpaid interest thereon, and any other sums which are due and payable
pursuant to the terms and provisions of this Note are due and payable by
reason of the acceleration of the maturity of this Note; subject, however,
to Borrower's right to extend the Maturity Date to May 24, 2000, as
provided in the Loan Agreement.
U. MORTGAGE. As defined in the Loan Agreement.
V. PAYMENT DATE. The first day of December, 1998 and the
first day of each month thereafter during the term hereof.
W. PRIME RATE. The average of the prime rates or reference
rates announced or published by Citibank and The Chase Manhattan Bank, N.A.
The "Prime Rate" is a base reference rate of interest adopted by Lender as
a general benchmark from which the Lender determines the floating interest
rates chargeable on various loans to borrowers with varying degrees of
creditworthiness and Borrower acknowledges and agrees that Lender has made
no representations whatsoever that the "Prime Rate" is the interest rate
actually offered by Lender to borrowers of any particular creditworthiness.
X. REGULATION D. Regulation D of the Board of Governors of
the Federal Reserve System from time to time in effect, and any successor
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
Y. RESERVE REQUIREMENT. With respect to any Contract
Period, the daily average during each such respective period of the maximum
aggregate reserve requirement (including, but not limited to, all basic
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements
during such period) which is imposed under Regulation D on nonpersonal time
deposits of One Hundred Thousand Dollars ($100,000.00) or more with a
maturity equal to the particular Contract Period.
2. PRINCIPAL AND INTEREST; ADDITIONAL COSTS. Principal and
interest thereon shall be due and payable by Borrower as follows:
A. INTEREST. Interest on each LIBOR Portion shall accrue at
the LIBOR Based Rate and shall be computed and payable monthly in arrears
on the first day of each calendar month during the term hereof. Interest
on each Floating Rate Based Funds Portion shall accrue at the Floating
Interest Rate and shall be computed and payable monthly in arrears on the
first day of each calendar month during the term hereof. Notwithstanding
anything in this Note or the Mortgage to the contrary, interest due on any
LIBOR Portion on the date of any termination, breakage or other disposition
of its covering Contract must and shall be paid to Lender and received by
Lender in good, cleared funds, at the place designated by Lender, by 12:00
noon eastern time on the date such interest is due from Lender by reason of
the termination, breakage or other disposition in accordance with the
foregoing, time being of the essence. With respect to any portion of the
Loan which is not bearing interest at the LIBOR Based Rate, interest shall
accrue on the amount of the principal balance outstanding hereunder from
time to time at the Floating Interest Rate. Any change in the Floating
Interest Rate shall become effective on the date of each change in the
Prime Rate. Such interest shall be paid monthly in arrears on the first
day of each calendar month of the term hereof. Interest shall accrue on
any LIBOR Portion of the Loan at the LIBOR Based Rate. Each determination
of LIBOR by Lender shall be conclusive and binding for all purposes hereof
in the absence of manifest error. From and after the occurrence of a
Default or the Maturity Date of this Note, whether by acceleration or
otherwise, interest shall accrue on the amount of the principal balance
outstanding hereunder at the Default Rate and shall be payable upon demand.
B. PRINCIPAL. The entire outstanding principal balance of
this Note and any accrued and unpaid interest thereon shall be due and
payable (if not sooner paid) on the Maturity Date, as such date may be
extended pursuant to the terms and subject to the conditions set forth in
the Loan Agreement (or on the first Business Day thereafter if such day is
not a Business Day) unless due and payable earlier by reason of the
acceleration of the maturity of this Note.
C. ADDITIONAL COSTS. Borrower agrees to pay to Lender
any Additional Costs incurred by Lender, from time to time and on demand
and all such Additional Costs shall be considered additional interest on
the principal sum outstanding under this Note. Any notice of Additional
Costs to be paid shall include a statement, in reasonable detail, as to the
basis upon which said sum(s) have been computed. Any such notices of
Additional Cost to be paid and any computations of such costs given or
submitted by Lender to Borrower shall be presumptively correct and
presumptive evidence of Borrower's obligation to pay such costs.
3. FLOATING INTEREST RATE OPTIONS. Unless a LIBOR option is
designated by Borrower on all or portions of the Loan as provided in
Section 4 below, the entire outstanding principal balance of the Loan shall
accrue interest at the Floating Interest Rate.
4. LIBOR OPTIONS. Provided that no Default has occurred and is
continuing under this Note or any other Loan Document, Borrower shall have
the option to cause the entire outstanding principal balance of the Loan or
any portion thereof subject to the provisions of this Agreement, to be
covered by one or more LIBOR Portions. Borrower shall make such election,
subject to:
(i) Lender's receiving written notice of the election not less than
three (3) Business Days prior to the date requested by Borrower for
commencement of the Contract Period of the Contract required to cover the
LIBOR Portion;
(ii) the availability to Lender of a Contract to cover such LIBOR
Portion effective on the requested date of commencement for the Contract
Period; and
(iii) Borrower's paying any Additional Cost incurred by Lender from
time to time which is attributable to such LIBOR Portion.
If Borrower shall fail to elect a new Contract on or before any Contract
Payment Date, then so long as no Default has occurred and is continuing, on
the Contract Payment Date, Lender shall convert any expiring Contract to a
new LIBOR Portion having the same Contract Period as the expiring Contract.
However, no more than five (5) LIBOR Portions of the Loan may be
outstanding at any one time.
5. PREPAYMENT.
A. PREPAYMENTS. The portion of this Note comprised of Floating
Rate Based Funds may be prepaid, either in whole or in part, at any time,
upon three (3) Business Days' prior notice to Lender, provided, however,
that each prepayment shall be accompanied by a payment of all interest
accrued at the Floating Interest Rate as of that date on the principal
balance outstanding hereunder and provided further that any such prepayment
made within six (6) months after the effective date of this Note shall be
accompanied by payment of a premium equal to .10% of the principal balance
outstanding hereunder ("Prepayment Premium"). The portion of this Note
comprised of a LIBOR Portion may be prepaid only on the Contract Payment
Date applicable thereto, provided that if any such LIBOR portions are
prepaid during the first six (6) months after the effective date of this
Note, Borrower shall also remit to Lender an amount equal to the Prepayment
Premium. After the sixth (6th) month anniversary of this Note, no
Prepayment Premium shall be due or payable. If Borrower shall now or
hereafter have a right to prepay such LIBOR Portion by operation of law or
otherwise, or if Borrower shall elect to prepay a LIBOR Portion on a date
other than a Contract Payment Date, such prepayment must be accompanied by
a simultaneous payment of any Additional Cost, Funding Costs and accrued
interest on any covering Contract which Lender may incur, attributable to
any such LIBOR Portion which is being prepaid in whole or in part. For
purposes hereof, upon acceleration of this Note, the portion of this Note
comprised of a LIBOR Portion having a Contract Payment Date subsequent to
the date of acceleration shall nevertheless be due and payable, payment
therefor must be accompanied by payment of any such Additional Cost,
Funding Costs and accrued interest on any covering Contract attributable to
any such LIBOR Portion and any foreclosure decree entered with respect to
the Loan shall include such Additional Cost, Funding Costs and accrued
interest.
B. APPLICATION OF PREPAYMENTS. Any prepayments of the Loan shall
be applied first to any Additional Cost then due and owing to Lender by
Borrower, second to any other expenses due Lender under the Loan Documents,
third to interest accrued at the Floating Interest Rate, fourth, to
interest accrued at the LIBOR Rate and last to a LIBOR Portion; provided,
however, that mandatory prepayments shall not be applied by Lender to a
LIBOR Portion until the Contract Payment Date. All payments shall be
applied to this Note.
All payments made on account of the indebtedness evidenced by this
Note shall be made in currency and coin of the United States of America
which shall be legal tender for public and private debts at the time of
payment. Said payments and prepayments are to be made by wire transfer of
Federal funds as follows:
Wire transfer to Dresdner Bank AG,
New York Branch and Grand Cayman Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Credit Account No.: 112537
Reference: JMB Income Properties, Ltd. - XI
(include type of payment)
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
6. DEFAULT. The payment of this Note is secured by, among other
things, the Mortgage and the other Loan Documents, which are held by
Lender. By this reference, the Loan Agreement is incorporated by reference
as if fully set forth herein. It is agreed that upon occurrence and during
the continuance of any Default, then, at any time thereafter, at the
election of the holder or holders hereof and without additional notice to
Borrower, the principal sum remaining unpaid hereon, together with accrued
interest thereon, shall become at once due and payable at the place of
payment as aforesaid, and Lender may proceed to foreclose the Mortgage, to
exercise any other rights and remedies available to Lender under the
Mortgage and the other Loan Documents, and to exercise any other rights and
remedies against Borrower or with respect to this Note which Lender or the
holder hereof may have at law, in equity or otherwise.
7. WAIVER. The remedies of Lender, as provided herein or in the
Mortgage or any other Loan Document, shall be cumulative and concurrent,
and may be pursued singularly, successively or together, at the sole
discretion of Lender, and may be exercised as often as occasion therefor
shall arise. Failure of Lender, for any period of time or on more than one
occasion, to exercise the option to accelerate the Maturity Date of this
Note shall not constitute a waiver of the right to exercise the same at any
time thereafter or in the event of any subsequent Default unless such prior
Default giving rise to such right to accelerate the Maturity Date of this
Note has theretofore been cured. No act of omission or commission of
Lender, including specifically any failure to exercise any right, remedy or
recourse, shall be deemed to be a waiver or release of the same; any such
waiver or release is to be effected only through a written document
executed by Lender and then only to the extent specifically recited
therein. A waiver or release with reference to any one event shall not be
construed as a waiver or release of any subsequent event or as a bar to any
subsequent exercise of Lender's rights or remedies hereunder. Except as
otherwise specifically required herein, notice of the exercise of any right
or remedy granted to Lender by this Note is not required to be given.
8. ENFORCEMENT COSTS. If (i) this Note or any Loan Document is
placed in the hands of an attorney for collection or enforcement or is
collected or enforced through any legal proceeding; (ii) an attorney is
retained to represent Lender in any bankruptcy, reorganization,
receivership, or other proceedings affecting creditors' rights and
involving a claim under this Note or any of the Loan Documents; (iii) an
attorney is retained to protect or enforce the lien of the Mortgage or any
of the Loan Documents; or (iv) an attorney is retained after the occurrence
of a Default to represent Lender in any other proceedings of the Borrower
whatsoever in connection with this Note, the Mortgage, any of the Loan
Documents or any property subject thereto, then Borrower shall pay to
Lender all reasonable attorneys' fees, costs and expenses incurred in
connection therewith, in addition to all other amounts due hereunder.
From and after the occurrence and during the continuance of a
Default, Lender is expressly authorized to apply payments made under this
Note as Lender may elect against any or all amounts, or portions thereof,
then due and payable hereunder or under the Mortgage or any other Loan
Document, the outstanding principal balance due under this Note, the unpaid
and accrued interest due under this Note, or any combination of the
foregoing.
9. WAIVER. Borrower and any and all others who are now or may
become liable for all or part of the obligations of Borrower, under this
Note (all of the foregoing being referred to collectively herein as
"Obligors") jointly and severally: (i) to the fullest extent allowed by
law, waive and renounce any and all redemption and exemption rights and the
benefit of all valuation and appraisement privileges against the
indebtedness evidenced by this Note or by any extension or renewal hereof;
(ii) to the fullest extent allowed by law, waive presentment and demand for
payment, notices of nonpayment and of dishonor, protest of dishonor, and
notice of protest; (iii) to the fullest extent allowed by law, waive all
notices in connection with the delivery and acceptance hereof and all other
notices in connection with the performance, default or enforcement of the
payment hereof or hereunder (except as otherwise expressly provided herein
or in the Loan Agreement); (iv) to the fullest extent allowed by law, waive
any and all lack of diligence and delays in the enforcement of the payment
hereof; (v) agree that the liability of each of the Obligors shall be
without regard to the liability of any other person or entity for the
payment hereof, and shall not be affected in any manner by any indulgence
or forbearance granted or consented to by Lender to any of them with
respect hereto; (vi) consent to any and all extensions of time, renewals,
waivers or modifications that may be granted by Lender with respect to the
payment or other provisions hereof, and to the release of any security at
any time given for the payment hereof, or any part thereof, with or without
substitution, and to the release of any person or entity liable for the
payment hereof; and (vii) consent to the addition of any and all other
makers, indorsers, guarantors and other Obligors for the payment hereof,
and to the acceptance of any and all other security for the payment hereof,
and agree that the addition of any such Obligors or security shall not
affect the liability of any of the Obligors for the payment hereof. Time
is of the essence hereof.
10. GOVERNING LAW AND OTHER AGREEMENTS. Borrower agrees that:
(i) this instrument and the rights and obligations of all parties hereunder
shall be governed by and construed under the substantive laws of the State
of Illinois, without reference to the conflicts of laws principles of such
state; (ii) the obligation evidenced by this Note is an exempted
transaction under the Truth In Lending Act, 15 U.S.C. Section 1601 et seq.;
and (iii) the proceeds of the indebtedness evidenced by this Note will not
be used for the purchase of registered equity securities within the purview
of Regulation "U" issued by the Board of Governors of the Federal Reserve
System.
11. INTERPRETATION. The parties hereto intend and believe that
each provision in this Note comports with all applicable law. However, if
any provision in this Note is found by a court of law to be in violation of
any applicable law, and if such court should declare such provision of this
Note to be unlawful, void or unenforceable as written, then it is the
intent of all parties hereto that such provision shall be given full force
and effect to the fullest possible extent that it is legal, valid and
enforceable, that the remainder of this Note shall be construed as if such
unlawful, void or unenforceable provision were not contained therein, and
that the rights, obligations and interests of Borrower and the holder
hereof under the remainder of this Note shall continue in full force and
effect; provided, however, that if any provision of this Note which is
found to be in violation of any applicable law concerns the imposition of
interest hereunder, the rights, obligations and interests of Borrower and
Lender with respect to the imposition of interest hereunder shall be
governed and controlled by the provisions of the following paragraph.
12. EXCESS INTEREST. It being the intention of Lender and Borrower
to comply with the laws of the State of Illinois with regard to the rate of
interest charged hereunder, it is agreed that, notwithstanding any
provision to the contrary in this Note, the Mortgage, or any of the other
Loan Documents, no such provision, including, without limitation, any
provision of this Note providing for the payment of interest or other
charges and any provision of the Loan Documents providing for the payment
of interest, fees, costs or other charges, shall require the payment or
permit the collection of any amount ("Excess Interest") in excess of the
maximum amount of interest permitted by law to be charged for the use or
detention, or the forbearance in the collection, of all or any portion of
the indebtedness evidenced by this Note. If any Excess Interest is
provided for, or is adjudicated to be provided for, in this Note, the
Mortgage, or any of the other Loan Documents, then in such event:
(a) the provisions of this Section shall govern and control;
(b) neither Borrower nor any of the other Obligors shall be
obligated to pay any Excess Interest;
(c) any Excess Interest that Lender may have received
hereunder at the option of Lender, shall be (i) applied as a credit against
the then outstanding principal balance due under this Note, accrued and
unpaid interest thereon not to exceed the maximum amount permitted by law,
or both, (ii) refunded to the payor thereof, or (iii) any combination of
the foregoing;
(d) the applicable interest rate or rates shall be
automatically subject to reduction to the maximum lawful rate allowed to be
contracted for in writing under the applicable usury laws of the aforesaid
State, and this Note, the Mortgage, and the other Loan Documents shall be
deemed to have been, and shall be, reformed and modified to reflect such
reduction in such interest rate or rates; and
(e) neither Borrower nor any of the other Obligors shall have
any action or remedy against Lender for any damages whatsoever or any
defense to enforcement of the Note, Mortgage or any other Loan Document
arising out of the payment or collection of any Excess Interest.
13. SUCCESSORS AND ASSIGNS. Upon any endorsement, assignment or
other transfer of this Note by Lender or by operation of law, the term
"Lender," as used herein, shall mean such endorsee, assignee or other
transferee or successor to Lender then becoming the holder of this Note.
This Note shall inure to the benefit of Lender and its successors and
assigns and shall be binding upon the undersigned and its successors and
assigns. The terms "Borrower" and "Obligors," as used herein, shall
include the respective successors, assigns, legal and personal
representatives, executors, administrators, devisees, legatees and heirs of
Borrower and any other Obligors.
14. NOTICES. Any notice, demand or other communication which any
party hereto may desire or may be required to give to any other party
hereto shall be given in the manner provided in the Loan Agreement.
15. LIMITATION OF LIABILITY. No present or future partner of
Borrower, and no advisor, trustee, director, officer, member, partner,
employee, beneficiary, shareholder, participant or agent of any entity
which now or hereafter holds a direct or indirect interest in a partner of
Borrower, shall have any personal liability, directly or indirectly, under
or in connection with this Note, or any agreement made or entered into
under or pursuant to or in connection with this Note, made at any time or
times, heretofore or hereafter, and Lender, its successors and assigns,
shall look solely to the collateral of Borrower given to Lender as security
for the Loan for the payment of any claim against, or for any performance
by, Borrower, and Lender hereby waives any and all such personal liability.
The limitations of liability provided in this paragraph are in addition to,
and not in limitation of, any limitation on liability applicable provided
by law or by any other contract, agreement or instrument.
IN WITNESS WHEREOF, Borrower has executed this Note as of the day and
year first above written.
BORROWER:
JMB INCOME PROPERTIES, LTD. - XI
By: JMB Realty Corporation,
its Managing General Partner
By:
Name:
Title: Vice President