REVOLVING PROMISSORY NOTE
("Note")
US $14,000,000.00 June 1, 1992
FOR VALUE RECEIVED, ON DEMAND, the undersigned, BALCOR REALTY
INVESTORS-84, an Illinois limited partnership (hereinafter
referred to as "Borrower"), hereby promises to pay to the order
of THE BALCOR COMPANY, a Delaware corporation (hereinafter
referred to as "Lender"), with its principal office at ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the
holder hereof may from time to time designate in writing, in
lawful money of the United States of America, the principal sum
of Fourteen Million and no/100 Dollars (S14,000,000.00) or such
lesser amount as may have been disbursed hereunder, together with
interest on the unpaid principal amount hereof from time to time
outstanding, at the rates provided for in Section 1 below. The
entire principal sum hereof, together with all accrued and unpaid
interest thereon shall be due and payable on demand ("Maturity
Date").
1. Interest, Interest Rate and Time of Interest Payments.
(a) "Base Rate" shall mean Lender's average cost of funding as
determined by Lender on a daily basis in any manner deemed
reasonable by Lender and which, at a maximum, shall be a rate per
annum as determined on a daily basis and as designated by Lender
which does not exceed the maximum limit permitted to be charged
by "Affiliates", as such term is defined in, and as permitted
pursuant to, the Borrower's Partnership Agreement in effect prior
to the Maturity Date. The rate of interest which accrues hereon
shall change from time to time concurrently with ▇▇▇▇▇▇'s average
cost of funding as determined daily by Lender.
(b) "Disbursement Date" shall mean the date on which the initial
disbursement of funds pursuant to this Note occurs.
(c) "Senior Note" shall mean a promissory note or notes secured
by a mortgage or mortgages which is or are senior to this Note
and any mortgage or mortgages securing this Note.
(d) "Senior Mortgage" shall mean a mortgage securing a Senior
Note.
(e) The stated interest rate ("Stated Rate") shall be equal to
the Base Rate.
(f) The amount of monthly interest to be paid each month prior to
the occurrence of any "Event of Default" (as defined in the
"Agreement", which is hereinafter defined) shall be an amount
equal to the lesser of: (1) the amount of interest computed at
the Base Rate on the amount outstanding under this Note or (2)
the amount of Cash Flow (as hereinafter defined) for the
preceding calendar month. The amount of such monthly interest
shall be referred to as the "Monthly Interest."
(g) Monthly Interest shall be payable in arrears on the fifteenth
day of each month, commencing with the first month following the
Disbursement Date. Interest shall be calculated on the basis of a
360 day year, but shall be computed for the actual number of days
in the period for which interest is charged.
(h) Each month, the difference between the amount of interest at
the Stated Rate and the paid Monthly Interest shall accrue
("Accrued Interest") and become due and payable on the Maturity
Date. However, if the Cash Flow during any calendar month is in
excess of the amount necessary to pay Monthly Interest for that
month, then such excess shall be applied first towards Accrued
Interest and then to principal.
(i) Upon a sale of or refinancing of any real estate owned by the
Borrower (each a "Borrower Property" and collectively, the
"Borrower Properties") or by any partnership in which the
Borrower has an equity interest (each a "Subpartnership" and
collectively the "Subpartnerships") of any real estate which is
owned by such Subpartnership (each a "Subpartnership Property"
and collectively the "Subpartnership Properties"), whether or not
such real estate is subject to any mortgage, deed of trust or
deed to secure debt which secures this Note, the refinancing of
any Superior Note or the refinancing of the indebtedness
evidenced by this Note, the "Net Proceeds" from such sale or
refinancing shall be applied first to Accrued Interest, then to
current interest and then to principal. "Net Proceeds" shall mean
the gross proceeds from the sale or refinancing of a Borrower
Property or a Subpartnership Property minus payment of the
indebtedness of a Senior Note, reasonable brokerage commissions,
points and/or fees paid in the case of a refinancing, title
insurance premiums, attorneys' fees and costs and normal closing
costs and recording fees.
(j) Cash Flow for the Borrower shall mean the sum of:
i. the "Gross Income" for all Borrower Properties less the
"Operating Expenses" for all Borrower Properties in a calendar
month; plus
ii. with respect to each Subpartnership, provided the Gross
Income for the calendar month from the Subpartnership Property
owned by such Subpartnership is greater than Operating Expenses
for such calendar month for such Subpartnership Property, the
Gross Income for such Subpartnership Property for such calendar
month minus the Operating Expenses for such Subpartnership
Property for such calendar month.
Gross Income shall mean all of the income derived from each such
Borrower Property or Subpartnership Property and/or the operation
thereof, including but not limited to, non-refundable security
deposits, income from concessionaires and laundry equipment
placed in and about each such Borrower Property or Subpartnership
Property. Operating Expenses for a Borrower Property or
Subpartnership Property shall mean the amount necessary to pay
all sums due on a Senior Note and a Senior Mortgage which is a
lien on such Borrower Property or Subpartnership Property, plus
all reasonable operating expenses of such Borrower Property or
Subpartnership Property. For purposes of determining Operating
Expenses for each Borrower Property or Subpartnership Property,
such expenses shall be those which are incurred at market rates,
allocable to the period in question (whether paid or payable),
including management fees (calculated at the lesser of the amount
actually paid or 5% of gross rentals), and equal monthly amounts
for insurance, real estate and personal property taxes or escrow
deposits. All of such Operating Expenses shall be determined
under generally accepted accounting principles, consistently
applied. Cash Flow for any calendar month shall be reduced by all
contributions and advances made by the Borrower to each
Subpartnership whose Subpartnership Property had Operating
Expenses in excess of Gross Income in such calendar month,
provided such contributions or advances shall have been made with
the consent of The Balcor Company (and consent for any month
shall not imply or require that The Balcor Company shall consent
for a subsequent month) and provided the funds for such
contribution or advance resulted from operations of Partnership
Properties or Subpartnership Properties and were not the result
of draws under this Note.
(k) In no event shall the amount paid or agreed to be paid
hereunder exceed the highest lawful rate permissible under
applicable law; and if under any circumstance whatsoever,
fulfillment of any provision of this Note, at the time
performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by applicable law,
then ipso facto, the obligation to be fulfilled shall be reduced
to the limit of such validity, and if from any circumstance the
holder of this Note should receive as interest an amount which
would exceed the highest lawful rate allowable under law, such
amount which would be excessive interest shall be applied to the
reduction of the unpaid principal balance due under this Note and
not to the payment of interest, or if such excess interest
exceeds the unpaid balance of principal, the excess shall be
refunded to Borrower.
2. Issued Under Master Loan and Security Agreement.
Advances under this Note evidence indebtedness incurred upon oral
or written request of the Borrower pursuant to a certain Master
Loan and Security Agreement (the "Agreement") between the
Borrower and the Lender dated as of , 1992, and made a part of
this Note, as the same may be amended from time to time.
3. Demand Nature of Note.
It is expressly understood and agreed by the Borrower that this
Note matures upon issuance, and the Borrower further acknowledges
and agrees that the Lender, at any time, without notice, and
without reason may demand that this Note be immediately paid in
full. The demand nature of this Note shall not be deemed modified
by reference herein to a default or Event of Default. The
Borrower further acknowledges and agrees that, for purposes of
this Note, to the extent there is reference to an Event of
Default, such reference is for the purpose of permitting the
Lender to receive "Default Interest" (as hereinafter defined) and
to terminate the right of Borrower to limit its interest payments
to Cash Flow. It is expressly agreed that Lender may exercise its
demand rights hereunder whether or not an Event of Default has
occurred. The Borrower further acknowledges and agrees that the
Lender, with or without reason and without notice, may from time
to time make demand for partial payments hereunder and that such
demands shall not preclude the Lender from demanding at any time
that this Note be immediately paid in full.
4. Acceleration and Attorneys' Fees.
If any installment under this Note is not paid when due, the
entire principal amount outstanding hereunder and accrued
interest thereon and the Accrued Interest shall at once become
due and payable, at the option of the Lender. The Lender may
exercise this option to accelerate during any default by the
Borrower regardless of any prior forbearance. In the event of any
default in the payment of this Note, and if the same is referred
to an attorney at law for collection or any action at law or in
equity is brought with respect hereto, the Borrower shall pay the
Lender all expenses and costs, including, but not limited to,
attorneys' fees.
5. Late Charges and Default Interest.
If any installment under this Note is not received by the Lender
within ten (10) calendar days after the installment is due, the
Borrower shall pay to the Lender a late charge of four percent
(4%) of such installment, such late charge to be immediately due
and payable without demand by the Lender. If any installment
under this Note remains past due for ten (10) calendar days or
more, the outstanding principal balance of this Note shall bear
interest "Default Interest") during the period in which the
Borrower is in default at a rate of four percent (4%) per annum
in excess of the Base Rate, or, if such Default Interest may not
be collected from the Borrower under applicable law, then at the
maximum increased rate of interest, if any, which may be
collected from the Borrower under applicable law.
6. Prepayments.
The unpaid principal and Accrued Interest of this Note may be
prepaid in whole or in part without premium or penalty.
Prepayments shall be applied against the outstanding principal
balance of this Note and shall not extend or postpone the due
date of any subsequent monthly installments or change the amount
of such installments, unless the Lender shall agree otherwise in
writing.
7. Modifications.
From time to time, without affecting the obligation of the
Borrower or its successors or assigns to pay the outstanding
principal balance of this Note and observe the covenants of the
Borrower contained herein, without affecting the guaranty of any
person, corporation, partnership or other entity for payment of
the outstanding principal balance of this Note, without giving
notice to or obtaining the consent of the Borrower, the
successors or assigns of the Borrower or guarantors, and without
liability on the part of the Lender, the Lender may, at its
option, extend the time for payment of said outstanding principal
balance or any part thereof, reduce the payments thereon, release
anyone liable on any of said outstanding principal balance,
accept a renewal of this Note, modify the terms and time of
payment of said outstanding principal balance, join in any
extension or subordination agreement, release any security given
therefor, take or release other or additional security, and agree
in writing with the Borrower to modify the rate of interest of
this Note or change the amount of the monthly installments
payable hereunder.
8. Waivers.
Presentment, notice of dishonor, and protest are hereby waived by
all makers, sureties, guarantors and endorsers hereof. This Note
shall be the joint and several obligation of all makers,
sureties, guarantors and endorsers, and shall be binding upon
them and their successors and assigns.
9. Choice of Law.
This Note was made, executed and delivered in Skokie, Illinois
and shall be governed by the laws of the State of Illinois.
10. Limited Liability in Certain Cases.
So long as the general partner of Borrower is an affiliate of The
Balcor Company, in no event shall any general partner of the
Borrower have any liability for the payment hereof or for any
deficiency which may remain after the enforcement of ▇▇▇▇▇▇'s
rights and remedies hereunder; provided, however, that if the
general partner of the Borrower is not an affiliate of The Balcor
Company, then such general partner shall be fully liable for
payment hereof, and for any deficiency, and by agreeing to act as
such general partner, such person agrees to and accepts such
liability.
BALCOR REALTY INVESTORS-84, an
Illinois limited partnership
By: BALCOR PARTNERS-XV
By: RGF-BALCOR ASSOCIATES-II
By: THE BALCOR COMPANY
By: /s/▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇
Executive Vice President