16-43 Resolution No. 16-43
RESOLUTION
AUTHORIZING EXECUTION OF THIRD AMENDMENT AGREEMENT
TO REDEVELOPMENT AGREEMENT WITH CAPSTONE DEVELOPMENT GROUP, LLC
(100 E. Chicago Street)
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that
David J. Kaptain, Mayor, and Kimberly A. Dewis, City Clerk, be and are hereby authorized and
directed to execute third amendment agreement to redevelopment agreement on behalf of the City of
Elgin with Capstone Development Group,LLC,a copy of which is attached hereto and made a part
hereof by reference.
s/David J. Kaptain
David J. Kaptain, Mayor
Presented: March 16, 2016
Adopted: March 16, 2016
Vote: Yeas: 6 Nays: 2 Abstain: 1
Attest:
s/Kimberly Dewis
Kimberly Dewis, City Clerk
THIRD AMENDMENT AGREEMENT
THIS THIRD AMENDMENT AGREEMENT ("Third Amendment Agreement") is made
and entered into as of the 16th day of March, 2016, by and between the City of Elgin, an Illinois
municipal corporation (hereinafter referred to as the "City"); and Capstone Development Group,
LLC, a Missouri limited liability company (hereinafter referred to as "Developer").
WHEREAS, the City and the Developer have previously entered into a Redevelopment
Agreement dated October 8, 2014, as amended by First Amendment Agreement dated April 22,
2015 and by Second Amendment Agreement dated December 16, 2015 (collectively, the"Subject
Redevelopment Agreement") relating to the redevelopment of the Elgin Tower Building on the
property commonly known as 100 E. Chicago Street, Elgin, Illinois; and
WHEREAS, the Developer has represented to the City that it has received approval on its
$8,500,000.00 end loan financing with Midland States Bank of Joliet, Illinois,and has also secured
State of Illinois historic tax credit financing for the Subject Redevelopment of the Subject
Property; and
WHEREAS, Developer has represented to the City that it has received tentative approval
of federal historic tax credit financing for the Subject Redevelopment of the Subject Property, but
requires approximately sixty (60) days to finalize the federal historic tax credit financing for the
Subject Redevelopment of the Subject Property; and
WHEREAS, in order to expedite the construction of the Subject Redevelopment on the
Subject Property, and specifically to allow for the Developer to commence with certain
Preconstruction Activities(hereinafter defined)for the Subject Redevelopment,the Developer will
be proceeding with an installment purchase agreement with respect to the purchase of the Subject
Property and the City has agreed to loan a portion of the Subject Monetary Development
Assistance to the Developer for Preconstruction Activities, all as hereinafter provided for in this
Third Amendment Agreement; and
WHEREAS,the parties wish to enter into this Third Amendment Agreement to provide for
certain further amendments to the Subject Redevelopment Agreement.
NOW, THEREFORE, for and in consideration of the mutual undertakings set forth herein,
and the mutual undertakings set forth in the Subject Redevelopment Agreement, as amended, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. That the foregoing recitals are hereby incorporated into this Third Amendment
Agreement.
2. That the Subject Redevelopment Agreement be and is hereby further amended as
follows:
A. That Section 3(c) of the Subject Redevelopment Agreement be and is hereby
amended to read as follows:
"(c) Developer shall close on the "Initial Closing" under its installment purchase
agreement with respect to the Subject Property within seven (7) days following the
entry into the Third Amendment Agreement. Developer shall commence with
Preconstruction Activities (hereinafter defined) for the Subject Redevelopment of
the Subject Property within ten (10) days following the entry into the Third
Amendment Agreement. "Preconstruction Activities" are defined to include
installing a protective construction canopy over the sidewalk area along the
perimeter of the entire Subject Property; façade stabilization including initial
repairs to the exterior façade of the building; commencement of environmental
remediation, which includes but is not limited to, asbestos removal and lead paint
abatement; cleaning out the building; and mobilization. With respect to the
protective construction canopy, Developer shall provide for the installation of a
protective construction canopy over the sidewalk area along the perimeter of the
entire Subject Property no later than within seven (7) days following the Initial
Closing. Developer shall acquire fee simple title to the Subject Property on the first
to arrive of(i) within one hundred twenty (120) days of the entry into the Third
Amendment Agreement and (ii) such earlier date as Purchaser may be prepared to
close on its $8,500,000 end-loan financing with Midland States Bank and its
associated state and federal tax credit financing. Developer shall commence
construction of the Subject Redevelopment on the Subject Property within one
hundred twenty (120) days following the entry into the Third Amendment
Agreement. Developer shall be deemed to have commenced construction of the
Subject Redevelopment of the Subject Property upon Developer obtaining a
building permit from the City for the Subject Redevelopment and the
commencement of the initial actual construction activities associated with the
Subject Redevelopment. In the event that the Developer does not complete the
Initial Closing on the installment contract purchase for the Subject Property within
seven (7) days of the entry into the Third Amendment Agreement, or does not
commence Preconstruction Activities for the Subject Redevelopment of the Subject
Property within ten (10) days of the entry into the Third Amendment Agreement,
or does not acquire fee simple title to the Subject Property within one hundred
twenty (120) days of the entry into the Third Amendment Agreement, or does not
commence construction of the Subject Redevelopment of the Subject Property
within one hundred twenty (120) days of the entry into the Third Amendment
Agreement, then Developer shall provide the City notice thereof, whereupon,
absent any written agreement between the parties to extend any such deadlines,
either party shall have the right, by written notice to the other, to terminate this
Agreement, whereupon this Subject Redevelopment Agreement shall be cancelled
and null and void with no further liability of either party hereunder, except for the
Developer's obligation to repay to the City the Subject Preconstruction Loan as
provided in Section 4(c-1) hereof and the Business Loan Agreement. In the event
the Initial Closing does not occur within seven(7)days following the entry into this
Third Amendment Agreement by reason of a Seller default and not through any
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fault on the part of Developer, then the City shall give reasonable consideration to
extend the date of the Initial Closing (and the other dates in this paragraph) for up
to seven (7) additional days. In the event the Seller is unable to acquire fee simple
title to the Subject Property by the date required in this paragraph by reason of a
Seller default and not through any fault on the part of the Developer, then upon
written notice to the City of such Seller default, the City shall give reasonable
consideration to extending the date by which Developer will acquire fee simple title
to the Subject Property (and extend the other dates provided for in this paragraph)
for such reasonable period as may be required while Developer acts diligently and
in good faith to force the Seller to convey said fee simple title to the Developer
through lawful means."
B. That Section 3(d) of the Subject Redevelopment Agreement be and is hereby
amended by amending the time frame for the referenced "Completion Date" therein from four
hundred twenty (420) days following the commencement of construction of the Subject
Redevelopment to three hundred sixty-five (365) days following the entry into this Third
Amendment Agreement.
C. That Section 4(a) of the Subject Redevelopment Agreement be and is hereby
amended by amending the amount of the Subject Monetary Development Assistance referred to
therein of"Four Million Seven Hundred Thousand Dollars ($4,700,000.00)" to read "Six Million
Three Hundred Fifty Thousand Dollars ($6,350,000.00)".
D. That Section 4(b) of the Subject Redevelopment Agreement be and is hereby
amended by amending the amount of the Subject Monetary Development Assistance referred to
therein from $4,700,000.00 to $6,350,000.00.
E. That Section 4(c)of the Subject Redevelopment Agreement be and is hereby further
amended by adding additional subparagraphs (c-1) and (c-2) to read as follows:
"(c-1) In order to expedite the construction of the Subject Redevelopment on the Subject
Property, and specifically to allow for the Developer to commence with the
Preconstruction Activities for the Subject Redevelopment, the City agrees to loan
a portion of the Subject Monetary Development Assistance to the Developer's
affiliate Elgin Tower LLC, an Illinois limited liability company ("Elgin Tower
LLC") to be utilized by the Developer and Elgin Tower LLC solely and only for
the costs associated with the Preconstruction Activities. The City agrees to loan to
the Developer and Elgin Tower LLC from the Subject Monetary Development
Assistance the amount of Six Hundred Thousand Dollars ($600,000.00) to be
utilized by the Developer and Elgin Tower LLC for costs of the Preconstruction
Activities (hereinafter referred to as the "Subject Preconstruction Loan"). The
terms for such Subject Preconstruction Loan, including, but not limited to, the
interest rate, repayment term, note and mortgage, shall be pursuant to the Business
Loan Agreement between the City, Developer and Elgin Tower LLC attached
hereto and made a part hereof as Exhibit C (the "Business Loan Agreement").
Notwithstanding the fact that the City is making the Subject Preconstruction Loan
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to Developer's affiliate Elgin Tower LLC, Developer Capstone Development
Group, LLC, a Missouri limited liability company, hereby unconditionally
guarantees the repayment to the City of the Subject Preconstruction Loan as
provided herein and as provided in the Business Loan Agreement. The City shall
disburse the Subject Preconstruction Loan in installments as determined by the City
when authorized draws from the construction escrow are due to be paid,
commencing no earlier than at, or within three (3) days following the Developer's
Initial Closing on the installment contract purchase of the Subject Property. The
disbursement of the funds for the Subject Preconstruction Loan shall be through a
construction escrow at the title company being used by the Developer for making
construction payouts for the work being performed on the Subject Redevelopment
of the Subject Property. The City shall be a party to such construction escrow and
the City's written approval shall be required for the disbursements from such
construction escrow. Following the repayment of the Subject Preconstruction Loan
by the Developer to the City, such $600,000.00 shall be deemed to be included as
part of the Subject Monetary Development Assistance of $6,350,000.00 and
disbursed to the Developer as provided in Section 4(c) hereof
(c-2) In addition to the Subject Monetary Development Assistance to be provided to the
Developer as defined in the preceding subsections of this Section 4, the City also
agrees to rebate a portion of the real estate taxes paid by the Developer for the
Subject Property as described in this subsection. Upon the completion of the
Subject Redevelopment of the Subject Property by the Developer, for the five year
period commencing with the real estate tax year of 2017 payable in 2018 and
continuing through the real estate tax year of 2021 payable in 2022,the City agrees
to rebate to Developer's affiliate Elgin Tower LLC real estate taxes for the Subject
Property paid by Elgin Tower LLC for the Subject Property in excess of$50,000
in any of those five real estate tax years. For the purposes of clarification and
example,in the event the real estate taxes paid by Elgin Tower LLC for the Subject
Property for the real estate tax year 2017 payable in 2018 are in the total amount of
$80,000, the City shall rebate to Elgin Tower LLC for that real estate tax year the
amount of$30,000. Following the payment by Elgin Tower LLC of all of the real
estate taxes for the Subject Property for the applicable tax year, Elgin Tower LLC
shall provide the City proof of payment thereof and a request for the rebate pursuant
to this Section in the event the real estate taxes paid for the Subject Property exceed
$50,000 for that real estate tax year. The City shall pay the rebate to Elgin Tower
LLC within thirty(30) days of receiving such documentation and request.
F. That Section 5(a) of the Subject Redevelopment Agreement be and is hereby
amended to read as follows:
"(a) This Agreement and all the parties' obligations hereunder are expressly subject to
and contingent upon the Developer(or a single purpose entity owned or controlled
by the Developer or the Developer's principals and/or investors) Initial Closing on
the installment purchase agreement for the Subject Property within seven (7) days
following the entry into the Third Amendment Agreement and acquiring fee simple
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title to the Subject Property within one hundred twenty (120) days following the
entry into the Third Amendment Agreement. In the event the Developer does not
complete the closing on the installment contract purchase for the Subject Property
within seven (7) days of the entry into the Third Amendment Agreement, or does
not acquire fee simple title to the Subject Property within one hundred twenty(120)
days of the entry into the Third Amendment Agreement, then Developer shall
provide the City notice of same,whereupon, absent any written agreement between
the parties to extend such acquisition deadlines,either party shall have the right,by
written notice to the other,to terminate this Agreement,whereupon this Agreement
shall be cancelled and null and void with no further liability of either party
hereunder, except for the Developer's obligation to repay the City the Subject
Preconstruction Loan as provided in Section 4(c-1) hereof and the Business Loan
Agreement."
G. That Section 5(b) of the Subject Redevelopment Agreement be and is hereby
deleted from the Subject Redevelopment Agreement.
3. That if Capstone assigns its right to purchase the Subject Property to Elgin Tower
LLC, and if Elgin Tower LLC does then close on the purchase of the Subject Property by the date
required in this Third Amendment Agreement, then if Capstone shall also assign its rights under
the Subject Redevelopment Agreement to Elgin Tower LLC and does provide such assignment in
writing to the City, (i) Elgin Tower LLC shall be substituted for Capstone as the "Developer"
under the Subject Redevelopment Agreement and shall be entitled to all rights and subject to all
obligations of the Developer thereunder and (ii) Capstone shall be released from the Subject
Redevelopment Agreement and shall have no further rights or obligations thereunder, except for
Capstone's guarantee and obligation to repay the City the Subject Preconstruction Loan as provided
in Section 4(c-1) hereof and the Business Loan Agreement.
4. That in the event of any conflict with the terms of this Third Amendment
Agreement and the terms of the Subject Redevelopment Agreement, the First Amendment
Agreement or the Second Amendment Agreement, the terms of this Third Amendment Agreement
shall supersede and control.
5. That except as specifically and expressly amended in this Third Amendment
Agreement, the terms of the Subject Redevelopment Agreement, as previously amended, shall
remain in full force and effect.
{SIGNATURE PAGE FOLLOWS}
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IN WITNESS WHEREOF, the parties hereto have entered into and executed this Third
Amendment Agreement as of the date and year first written above.
CITY OF IN, a nicipal corporation,
I
By: L 7'•
M.yor
Attes :
)t11,46
City e k
CAPSTONE DEVELOPMENT GROUP, LLC
a Missouri limited liability company
William L. Luchini
Title: Member
ELGIN TOWER LLC
An Illinois limited liabilit company
By: �� /, 4,Z14•&
William L. Luchini
Title: Manager
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EXHIBIT C
BUSINESS LOAN AGREEMENT
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BUSINESS LOAN AGREEMENT
THIS AGREEMENT, dated as of this 23rd day of March, 2016, between the City of
Elgin, an Illinois municipal corporation(hereinafter referred to as "Lender"), and Elgin Tower LLC,
an Illinois limited liability company (hereinafter referred to as "Borrower"), and Capstone
Development Group,L.L.C., a Missouri limited liability company(hereafter"Capstone").
RECITALS
A. Borrower is an affiliate of Capstone.
B. Capstone previously entered into a Real Estate Sale Agreement dated November 18,
2014(the"Contract")with the Stickling Foundation, an Illinois not-for-profit corporation("Seller")
for the purchase and sale of the Subject Property(hereafter defined).
C. Although the said Contract was terminated, it has since been reinstated,and Capstone
has been replaced as the"Purchaser"by the Borrower.
D. Capstone and the Lender did execute and enter into a certain Redevelopment
Agreement dated October 8, 2014(the"RDA")regarding the redevelopment of that certain parcel of
real estate in the City of Elgin commonly known as the Elgin Tower Building, 100 E. Chicago Street,
Elgin, Illinois 60120, and more particularly described in the said RDA (the "Subject Property").
The RDA has been subsequently amended. The terms and provisions of the RDA, as amended, are
hereby incorporated herein by reference, and capitalized terms used but not otherwise defined herein
shall have the meanings as set forth in the RDA.
E. The Subject Property is and legally described as on the attached Mortgage(hereafter
defined) and is also sometimes hereinafter referred to as the "Real Estate".
F. Borrower has requested that Lender extend to Borrower a certain loan ("Credit
Facility") in the principal amount of Six Hundred Thousand Dollars ($600,000.00), the proceeds of
which will be used for the purposes set forth below. Capstone has agreed to act as guarantor of the
obligations of the Borrower.
G. Lender is willing to extend the Credit Facility to Borrower only on the terms and
conditions set forth herein.
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CONSIDERATION
In consideration of the mutual observance by the parties of their respective covenants
and obligations as set forth below, of the extension by Lender to Borrower of the Credit Facility on
the terms set forth below, and of other good and valuable consideration, the receipt and sufficiency
of which are hereby mutually acknowledged, it is agreed as follows (with the above-stated Recitals
being incorporated herein by reference).
AGREEMENT
1. Term Loan.
(a) Provided that Borrower shall first tender to Lender all performance required
herein for the extension of such credit, Lender shall lend and make available
to Borrower a Credit Facility of Six Hundred Thousand Dollars($600,000.00)
on the following basic repayment terms:
Maximum Credit Facility: $600,000.00
Payments required of
Borrower: Principal and interest on the principal
balance of the Credit Facility from
time to time outstanding,payable as set
forth in the Term Note attached as
Exhibit 1.
Interest Rate: Zero Percent (0.0%) adjusted,
however, to the Default Rate (as
defined in the attached Term Note)
after the occurrence of an Event of
Default (as defined in paragraph 6).
Maturity Date: As defined in the Note
Prepayment: Borrower shall have the right to prepay
this Credit Facility, in full or in part, at
any time or from time to time without
penalty or additional charge.
(b) The Credit Facility will be disbursed in increments through the Construction
Escrow (as described in Section 3).
(c) To evidence its obligation to repay the Credit Facility, the Borrower shall
execute and deliver to Lender at the Loan Closing (hereafter defined) that
certain Term Note in the form attached hereto as Exhibit 1.
2. Collateral. To secure and collateralize the prompt payment to Lender of all of
Borrower's obligations to Lender under this Loan Agreement and the Term Note and any other
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documents, agreements and instruments executed by Borrower and delivered to Lender pursuant to
this Loan Agreement(collectively the"Loan Documents"),Borrower shall grant,and shall cause the
Seller to join in the granting, of that to Lender of a junior mortgage and security agreement against
the Real Estate in the form attached hereto as Exhibit 2 (the"Mortgage")It is agreed and understood
that said Mortgage (i) shall be junior and subordinate to those mortgages and encumbrances
enumerated in Schedule B-Section II of that certain commitment for title insurance dated March 4,
2016,issued by Lake Shore Title Agency as Commitment Number 1438898(the"Commitment")as
Items 3,4, 5, 6 and 8, and(ii) shall be subject to those additional title exceptions in the Commitment
as enumerated as Items 1, 7, 9, 10, 11, 17, 18, 19 and 20 (all, collectively, the "Permitted
Exceptions"). Among the Permitted Exceptions are various prior mortgages (collectively, the
"Senior Mortgages") granted by the Stickling Foundation to prior mortgagees (collectively, the
"Senior Lenders").
3. Warranties and Representations of Borrower. Borrower hereby covenants,
represents and warrants to Lender as follows:
(a) At the time of closing(the"Loan Closing")and extension to Borrower of the
funds representing the Credit Facility, the Borrower will be the contract
purchaser from the Seller of the Real Estate.
(b) The funds represented by the Credit Facility will be disbursed by the Lender
and deposited by the Borrower into an escrow("Construction Escrow")with
Lake Shore Title Agency or its underwriter under the terms of that certain
construction loan escrow trust disbursement agreement in the form attached
hereto as Exhibit 3 and used only for the purpose of the Subject
Redevelopment(as defined in the RDA) of the Real Estate.
(c) The execution,delivery and performance by Borrower of the Loan Documents
shall not, by their execution or performance, the lapse of time, the giving of
notice or otherwise, constitute a violation of any applicable law, rule or
regulation or a breach of any provision contained in Borrower's organizational
documents or operating agreement or contained in any agreement,instrument,
indenture or other document to which Borrower is now a party or by which it
is bound;
(d) Borrower will, pursuant to this Agreement, create in favor of Lender, and
Lender will hereby acquire a valid and enforceable junior mortgage lien upon
the Real Estate.
All of the covenants, warranties and representations herein set forth are made by Borrower and shall
be true at the time of the execution of this Agreement and at the time of the extension of the Credit
Facility, and shall survive the execution, delivery and acceptance of the Loan Documents and the
closing of the loan transaction described herein.
4. Additional Covenants of Borrower. In further consideration of the extension of the
Credit Facility to Borrower by Lender, Borrower covenants and agrees as follows:
(a) At the Loan Closing hereunder, Borrower shall deliver to Lender, at
Borrower's expense, a Six Hundred Thousand Dollar ($600,000.00) 2006
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ALTA loan policy of title insurance (the "Loan Policy of Title Insurance")
issued to Lender by Lake Shore Title Agency (the "Title Insurance
Company"), insuring the Mortgage to be a valid junior mortgage lien, upon
the fee title to the Real Estate, subject only to taxes for 2014 and 2015 and
subsequent years, and to Schedule B-Section II exceptions 9, 10, 11, 17, 18,
19 and 20 as set forth on that commitment dated March 4, 2016 from
Lakeshore Title Agency bearing commitment number 1438898 (the "Title
Commitment"), , and to the general exceptions to the loan policy
(collectively the "Permitted Exceptions").
(b) Borrower shall pay or reimburse Lender for all recording fees, title insurance
expenses, and other out-of-pocket expenses incurred by Lender in connection
with the documentation and extension of the Credit Facility and the perfection
of the security interests granted to the Lender hereunder.
5. Term of Agreement. This Agreement shall remain in full force and effect until
Borrower shall have fully performed all of its obligations to Lender under the Loan Documents. The
exercise by Lender of any of its rights and remedies hereunder shall not terminate this Agreement.
6. Default: Remedies on Default.
(a) The occurrence of any one or more of the following events (an "Event of
Default")shall constitute a breach and default by Borrower hereunder as well
as under each and every other one of the Loan Documents:
(i) If Borrower shall fail to make any payment, when and as due, of
principal and/or interest to Lender under or with respect to the Credit
Facility and/or Term Note and such failure shall continue for more
than 5 days following written notice from Lender to Borrower;
(ii) If Borrower shall breach any covenant or obligations set forth in this
Loan Agreement or in any of the other Loan Documents to be executed
and delivered by Borrower, to Lender (other than the obligation to
make payments under the Term Note) and such breach or failure
continues for more than 30 days following written notice from Lender
to Borrower;
(iii) If any statement, warranty, or representation made in any of the Loan
Documents by Borrower is not true and correct in any material respect.
(iv) If Borrower is dissolved or becomes subject to any proceeding in
bankruptcy or makes an assignment of its assets to a trustee for the
benefit of its creditors.
(vi) If a material portion of the assets of Borrower become attached,seized,
levied upon, foreclosed against or otherwise come within the
possession or control of any receiver, trustee, creditor or any other
party.
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(vii) If Borrower shall materially breach its obligations under the RDA.
(b) Upon the occurrence of an Event of Default, all indebtedness or other sums
then owed by Borrower to Lender hereunder,under the Term Note and under
any other Loan Document shall, at the election of the Lender, and without
demand, notice, or legal process of any kind, be declared, and immediately
shall become,due and payable,and Lender shall have the following rights and
remedies:
(i) To accelerate and enforce the Term Note against the Borrower and to
obtain judgment through legal proceedings brought in a court of
competent jurisdiction;
(ii) To enforce through foreclosure its lien against the Real Estate arising
under the Mortgage;
(iii) To exercise such other and further rights as may be available to Lender
under any of the other Loan Documents and/or under Illinois law.
All of the remedies set forth herein shall be cumulative in nature, and shall be
in addition to, and not in lieu of any other rights or remedies available to
Lender under Illinois law.
(c) Notwithstanding anything to the contrary stated in any of the Loan
Documents, in any proceeding between the parties arising out of or in
connection with this Agreement or the breach or enforcement hereof of any of
the documents delivered pursuant hereto, venue shall properly lie in the
Circuit Court of Kane County, Illinois, and Borrower hereby waives any
objection to the commencement or transfer of any such proceeding to said
venue.
7. Loan Closing: Conditions to Loan Closing.
(a) Subject to the fulfillment of the conditions in Section 7(b) below, the transaction
described in this Agreement shall be closed at the offices of the Title Insurance Company in Elgin,
Illinois (or at such other place as the parties may mutually agree) on or before March 23, 2016, or at
such other date as the parties may agree and simultaneously with the closing by the Borrower on its
installment purchase of the Real Estate from the Seller. At such closing (the "Loan Closing") each
party shall tender to the other all performance required hereunder and under any other of the Loan
Documents as of said date.
(b) As a condition precedent to the Loan Closing, Borrower shall fulfill or furnish the
following to Lender at least five (5) days prior to the Loan Closing (or at such later time as to
which Lender may agree), the following items or materials, all of which must be strictly
satisfactory to Lender and Lender's counsel in form, content and execution:
(i) Covenants. Fulfillment by Borrower of the covenants set forth in Section 4
above.
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(ii) Insurance Policies. Borrower shall, during the term of this Agreement,
procure at its expense and keep in force the insurance coverages required by the Mortgage.
All insurance shall be in form, content and amounts approved by Lender and written by an
insurance company or companies licensed to do business in the state in which the Real
Estate is located and domiciled in the United States or a governmental agency or
instrumentality approved by Lender. The policies for such insurance shall have attached
thereto standard mortgagee clauses in favor of and permitting Lender to collect any and all
proceeds payable thereunder and shall include a 30 day (except for nonpayment of
premium, in which case, a 10 day) notice of cancellation clause in favor of Lender. All
policies or certificates of insurance shall be delivered to and held by Lender as further
security for the payment of the Note and any other obligations arising under the Loan
Documents, with evidence of renewal coverage delivered to Lender at least 30 days before
the expiration date of any policy.
8. Subordination to Rights of Senior Lender. For the absence of doubt, Lender
acknowledges that all of its rights in the Real Estate as arising hereunder and/or under the Mortgage,
any policy of insurance or any other documents or instruments delivered in connection with this
Business Loan Agreement, shall be subject and subordinate to the rights of the Senior Lenders under
the Senior Mortgages.
9. Miscellaneous.
(a) If, at any time or times subsequent to the occurrence of an Event of Default,
Lender employs counsel for advice or other representation, or incurs legal
and/or costs or expenses in connection with(i)any litigation,contest,dispute,
suit, proceeding, or action (whether instituted by Lender, Borrower, or any
other person) in any way related to this Agreement, any other Loan
Documents or ancillary agreements, or the interest of Borrower of Lender in
the Collateral; and/or(ii) any attempt to enforce any rights of Lender against
Borrower then, in any such event,the reasonable attorney's fees arising from
such services and all reasonably incurred expenses, costs, charges, and other
fees of such counsel shall be added to the indebtedness otherwise owed by
Borrower to Lender hereunder and shall be payable upon demand.
(b) This Agreement,the other Loan Documents,and the RDA constitute the entire
agreement of the parties with regard to the subject matter set forth herein, all
other and further agreements and understandings having been merged herein
and extinguished hereby. Notwithstanding the foregoing,the Real Estate Sale
Agreement and the existing leases between Borrower and Seller shall not be
merged into this Agreement.
(c) This Agreement shall be interpreted, governed, and construed in accordance
with the laws of the State of Illinois.
(d) Any notice required or otherwise given hereunder shall be in writing and
may be served upon the parties either personally or by certified mail, return
receipt requested, addressed to the party to be notified as follows:
If to Lender: City of Elgin
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Attn: Sean Stegall, City Manager
150 Dexter Court
Elgin, Illinois 60120
With copy to: William A Cogley, Esq.
150 Dexter Court
Elgin, Illinois 60120
If to Borrower: The Elgin Tower LLC
763 S. New Ballas, Suite 300
St. Louis,MO 63141
Attn: William Luchini, Manager
With copy to: Peter C. Bazos, Esq.
Bazos, Freeman, Schuster
& Braithwaite, LLC
1250 Larkin Ave., Suite 100
Elgin, Illinois 60123
Fax: 847-742-9777
If mailed as aforesaid,notice shall be deemed to have been given on the date
of such mailing. Any party may change the address to which notice is to be
given to it/him by giving notice of such change in the manner provided herein.
(e) Neither this Agreement nor any of the Loan Documents may be modified,
altered or amended except by an agreement in writing signed by all of the
parties thereto.
(f) Lender's failure, at any time or times hereafter, to require strict performance
by Borrower of any provision of this Agreement shall not constitute a waiver,
or affect or diminish any right of Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver by Lender
of an Event of Default by Borrower under this Agreement or the Loan
Documents shall not suspend, constitute a waiver of or affect any other Event
of Default by Borrower under this Agreement or any Loan Document,whether
the same is prior or subsequent thereto and whether of the same or of a
different type. None of the undertakings, agreements, warranties and
covenants of the Borrower contained in this Agreement or the Loan
Documents and no Event of Default by Borrower thereunder shall be deemed
to have been suspended or waived by Lender unless such suspension or waiver
is by an instrument in writing signed by an officer of Lender and directed to
Borrower(as the case may be) specifying such suspension or waiver.
(g) Whenever possible, each provision of this Agreement shall be interpreted in
such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
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(h) This Agreement and the Loan Documents shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns and
personal representatives.
(i) The paragraph/section titles contained in this Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not a
part of the agreement between the parties hereto.
(j) This Agreement is and shall be deemed and construed to be the joint and
collective work product of Lender and Borrower and, as such, this
Agreement shall not be construed against either party, as the otherwise
purported drafter of same, by any court of competent jurisdiction in order to
resolve any inconsistency, ambiguity, vagueness or conflict in terms or
provisions, if any, contained herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first set forth above.
[signature page to follow]
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LENDER
CITY OF ELGIN, an Illinois municipal corporation
By: L
David K. stain, ayor
ATTEST:
egi4,,,
0111,6
Kim Dewis, ity Clerk
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BORROWER
ELGIN TOWER LLC, an Illinois limited liability company
By: G?/
William Luchini, Manager
CAPSTONE DEVELOPMENT GROUP, L.L.C.
By: /ti
14434 'r
Name: William L. Luchini
Title: Member
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EXHIBIT 1
TERM NOTE
SECURED INSTALLMENT NOTE
$600,000.00 Elgin, Illinois
March 23, 2016
FOR VALUE RECEIVED, Elgin Tower LLC, an Illinois limited liability company
("Borrower"), hereby promises to pay to the order of the City of Elgin, an Illinois municipal
corporation, ("Lender"), in the manner provided hereinafter, the principal sum of Six Hundred
Thousand Dollars ($600,000.00) (the "Loan")together with interest on the unpaid principal balance
from time to time outstanding hereunder at the rate of Zero Percent(0.0%)per annum(hereinafter the
"Regular Interest Rate") Such principal and interest shall be paid as follows:
(a) The entire outstanding principal balance, together with accrued but unpaid interest
thereon shall be due and payable, if not sooner paid, on the first to occur of the
following dates or events:
(i) The occurrence of an Event of Default as described in that certain Business
Loan Agreement between Borrower and Lender bearing even date herein (the
"Loan Agreement"), the terms and provisions of which are hereby
incorporated herein by reference. Capitalized terms used but not otherwise
defined herein shall have the meanings as set forth in Loan Agreement; or
(ii) The first to occur(i)July 22,2016 or(ii)Borrower's closing on its commercial
loan with Midland States Bank for first mortgage financing with respect to the
Real Estate and its associated federal and state tax credit financing (the
"Maturity Date").
As used herein,the term "business day,"shall mean any day on which Illinois banking
associations are required to be open for business in Chicago, Illinois.
Interest on the unpaid principal balance due under this Note shall be calculated on the basis
of a 360-day year, a 30-day month and the actual number of days elapsed in any portion of a month
for which interest may be due(i.e.-the 365/360 method).
From and after an Event of Default (defined hereinafter), interest shall accrue on the
amount of the principal balance outstanding hereunder at the rate of six percent(6%)above the stated
Regular Interest Rate herein(the "Default Rate").
All payments received on account of the indebtedness evidenced by this Note shall be first
applied to accrued interest (if any) due on the outstanding principal balance, with the remainder, if
any, to be applied to the outstanding principal balance. The principal balance of this Note may be
prepaid, in whole or in part at any time, without penalty.
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
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debts at the time of payment. Said payments and prepayments are to be made at such place as the
legal holder of this Note may from time to time in writing appoint and, in the absence of such
appointment,then at the office of Lender at 150 Dexter Court, Elgin, Illinois.
The payment of this Note is secured by a Junior Mortgage and Security Agreement
("Mortgage")bearing even date herewith made and executed by Borrower in favor of Lender against
the real estate commonly known as 100 E. Chicago Street, Elgin, Kane County, Illinois (the "Real
Estate").
The terms and provisions of the Mortgage are hereby incorporated herein by reference
including, without limitation, the provisions contained within paragraph 15 of the Mortgage
prohibiting and restricting any sale, transfer, mortgage, or pledge of the Premises therein described
(any such prohibited action being hereinafter referred as a "Prohibited Transfer"). Further, the
Mortgage, together with the Loan Agreement, each bearing even date herein, shall sometimes
hereinafter be collectively referred to as the "Security Instruments".
The occurrence of any one or more of the following events shall constitute a default by the
Borrower under this Note and shall be referred to as an "Event of Default":
(a) If Borrower fails to pay any of Borrower's liabilities or obligations to Lender
hereunder and such failure continues for five (5) calendar days following written
notice by Lender to Borrower thereof; or
(b) If Borrower fails to perform,keep or observe any term,provision,condition,covenant,
warranty or representation contained in this Note other than with respect to any
payment required hereunder, which is required to be performed, kept or observed by
Borrower, and such failure continues for more than thirty(30)days following written
notice thereof by Lender to Borrower; or
(c) If Borrower fails to perform, keep, or observe any term, provision, condition,
covenant,warranty,or representation contained in the Security Instruments;or
(d) If the collateral described in any of the Security Instruments is/are attached, seized,
subjected to a writ of distress warrant,or is levied upon or becomes subject to any lien
or come within the possession of any receiver, trustee, custodian or assignee for the
benefit of creditors; or
(e) If Borrower becomes insolvent or generally fails to pay, or admits in writing his
inability to pay, debts as they become due; if a petition under any section or chapter
of the United States Bankruptcy Code or any similar law or regulation is filed by or
against Borrower; if Borrower shall make an assignment for the benefit of creditors
or upon the death or incompetency of the Borrower or the appointment of a
conservator for all or any portion of the Borrower's assets or the collateral under the
security instruments;or
(1) If a Prohibited Transfer occurs (as defined in Section 15 of the Mortgage); or
(g) If an Event of Default shall occur under the Loan Agreement.
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Upon the occurrence of an Event of Default then, at the Lender's option, and without notice
by Lender to Borrower except as otherwise expressly required herein:
(i) The total unpaid principal balance due Lender under this Note, together with all
accrued and unpaid interest thereon, shall be due and payable forthwith;
(ii) Lender may exercise any one or more of the rights and remedies accruing to a secured
party under the Uniform Commercial Code of the relevant jurisdiction and any other
applicable law upon default by a debtor with respect to any collateral comprised of
personal property assets;
(iii) Lender may foreclose its lien arising under the Mortgage;
(iv) Lender may enter, without process of law and without breach of the peace, any Real
Estate where any of the collateral described in the Security Instruments is or may be
located, and may seize or remove the said collateral from said Real Estate and/or
remain upon said Real Estate and use the same for the purpose of collecting,repairing
and disposing of the collateral; and/or
(v) Lender may sell or otherwise dispose of the said personal property collateral at public
or private sale for cash or credit, provided, however, that Borrower shall be credited
with the net proceeds of any said sale only when the same are actually received by the
Lender,unless otherwise required by law.
(vi) Lender may exercise such other rights and remedies as may be provided for in the
Loan Agreement.
If, following the occurrence of an Event of Default, any attorney is engaged by Lender, (a)to
collect the indebtedness evidenced hereby, whether or not legal proceedings are thereafter instituted
by Lender; (b) to foreclose its interest against any of the collateral described in either or both of the
Security Instruments;(c)to represent Lender in any bankruptcy,reorganization,receivership,or other
proceedings affecting creditors' rights and involving a claim under this Note; (d) to protect the
Lender's lien/security interest arising under the Security Instruments in any of the collateral described
therein; (e)to represent Lender in any other proceedings whatsoever in connection with this Note,the
Security Instruments or the collateral described therein;or(f)to advise Lender with regard to its rights
under this Note or the Security Instruments; or (g) to represent Lender in monitoring the loan
evidenced by this Note or any renewal,restructure, amendment or the like applicable thereto; then in
each such case Borrower shall pay to Lender all reasonable attorneys' fees and expenses incurred by
Lender in connection therewith, in addition to all other amounts due hereunder.
Lender's remedies under this Note and the Security Instruments shall be cumulative and
concurrent and may be pursued singly, successively, or together against the Borrower, the collateral
described in the Security Instruments or any portion or combination of such collateral and other
security, and Lender may resort to every other right or remedy available at law or in equity without
first exhausting the rights and remedies contained herein, all in Lender's sole discretion. Failure of
Lender, for a period of time or on more than one occasion, to exercise its option to accelerate the
Maturity Date shall not constitute a waiver of the right to exercise the same at any time during the
continued existence of the Event of Default or in the event of any subsequent Event of
Default. Lender shall not by any other omission or act be deemed to waive any of its rights or
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remedies hereunder unless such waiver be in writing and signed by Lender,and then only to the extent
specifically set forth therein. A waiver in connection with one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy in connection with a subsequent event.
The 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") agree to be jointly and severally bound hereby and jointly and severally: (i) waive and
renounce any and all 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) waive
presentment and demand for payment, notices of nonpayment and of dishonor, protest of dishonor,
and notice of protest; (iii) 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
(iv)consent to the addition of any and all other makers,endorsers,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 Obligors for the
payment hereof.
Time is of the essence hereof.
The Borrower agrees that 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, and that this
obligation constitutes a business loan within the purview of Illinois Compiled Statutes, 815 ILCS
205/4.
The parties hereto intend and believe that each provision in this Note comports with all
applicable law. However, if any provision of 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 provisions 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.
To induce Lender to accept this Note, Borrower irrevocably agrees that all actions or
proceedings in any way,manner or respect, arising out of, from or related to this Note or the Security
Instruments shall be litigated in courts having situs within the Circuit Court of Kane County, Illinois.
Borrower hereby waives any right it may have to transfer or change the venue of any litigation brought
against Borrower by Lender in accordance with this paragraph.
Borrower irrevocably waives any right to trial by jury in any action or proceeding (A) to
enforce or defend any rights under or in connection with this Note or any amendment, instrument,
document or agreement delivered or which may in the future be delivered in connection herewith or
in connection with the Security Instruments or (B) arising from any dispute or controversy in
connection with or related to this Note,the Security Instruments or any such amendment,instrument,
document or agreement and agrees that any such action or proceeding shall be tried before a court
and not before a jury.
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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 term "Borrower" and "Obligors," as used herein, shall include the respective
successors, assigns, legal and personal representatives, executors, administrators, devisees, legatees
and heirs of the Borrower.
Any notice,demand,or other communication which any party may desire or may be required
to give to any other party shall be in writing, and shall be deemed given if and when personally
delivered,or on the date of being deposited in the United States Mail,registered or certified,postage
prepaid, addressed to a party at its address set forth below, or to such other address as the party to
receive such notice may have designated to all other parties by notice in accordance herewith:
If to Lender: City of Elgin
Attention: Sean Stegall, City Manager
150 Dexter Court
Elgin, Illinois 60120
With copy to: William A. Cogley, Esq.
City of Elgin
150 Dexter Court
Elgin, Illinois 6010
If to Borrower: The Elgin Tower LLC
Attn: William Luchini
763 S.New Ballas, Suite 300
St. Louis,MO 63141
With copy to: Peter C. Bazos, Esq.
Bazos, Freeman, Schuster
& Braithwaite, LLC
1250 Larkin Ave., Suite 100
Elgin, Illinois 60123
Fax: 847-742-9777
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IN WITNESS WHEREOF, the undersigned has caused these presents to be signed and
executed as of this 23rd day of March, 2016.
The Elgin Tower LLC
By: ovt
William Luchini, Manager
GUARANTY
The undersigned, Capstone Development Group, L.L.C., a Missouri limited liability company,
hereby guarantees to the Lender the full payment and performance by the Borrower of the
Borrower's obligations under the Term Note set forth above.
CAPSTONE DEVELOPMENT GROUP, L.L.C.
By:
Name: William L. Luchini
Title: Member
Dated: March 23, 2016
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EXHIBIT 2
JUNIOR MORTGAGE
JUNIOR MORTGAGE AND SECURITY AGREEMENT
THIS JUNIOR MORTGAGE(the"Mortgage"),is made as of March 23,2016 by The Elgin Tower
LLC, an Illinois limited liability company (the "Borrower"), The Stickling Foundation, an Illinois
not-for-profit corporation(the"Title Holder")to the City of Elgin,an Illinois municipal corporation
(the "Lender").
WITNESSETH:
WHEREAS, Borrower, its affiliate, Capstone Development Group, L.L.C., a Missouri
limited liability company ("Capstone"), and Lender did execute and enter into a certain Business
Loan_Agreement bearing even date herewith (the `Business Loan Agreement"), the terms and
provisions of which are incorporated herein by reference. Capitalized terms used but not otherwise
defined here shall have the meanings as set forth in the Business Loan Agreement.
WHEREAS, Pursuant to the Business Loan Agreement, Borrower has executed and
delivered to Lender a Secured Installment Note bearing even date herewith (the "Note"), payable to
the order of Lender in the principal sum of Six Hundred Thousand and no/100 Dollars($600,000.00);
bearing interest at 0.0%per annum (with a default rate of interest in the amount of 6.0%per annum)
payable in full at the Maturity Date(which is not later than July 22, 2016).
WHEREAS,the Borrower is the Contract Purchaser of the Premises(hereafter defined), and
the Title Holder is the Contract Seller to the Borrower of said Premises.
WHEREAS, the Premises (as hereafter defined) is subject to various senior mortgages
granted by The Stickling Foundation to the Palmer Foundation (the `Senior Lender"), as more
particularly set forth in the Business Loan Agreement and, as such, this Mortgage is intended to be a
junior mortgage which grants to the Lender a mortgage lien against the Premises subject and
subordinate to the rights of the Senior Lender.
NOW, THEREFORE, to secure the payment of the principal indebtedness under the Loan
Agreement and Note and interest and premiums,if any,on the principal indebtedness under the Note
(and all replacements,renewals and extensions thereof, in whole or in part) according to its tenor and
effect, and to secure the payment of all other sums which may be at any time due and owing or
required to be paid under the Note or this Mortgage (collectively sometimes referred to herein as
"Indebtedness Hereby Secured"); and to secure the performance and observance of all the
covenants, agreements and provisions contained in this Mortgage, the Note, the Business Loan
Agreement between Borrower, Capstone, and Lender, Assignment of Rents, or any document or
instrument executed pursuant to any loan commitment letter issued by Lender (the "Loan
Documents") made by Borrower and Lender; and to charge the properties, interests and rights
hereinafter described with such payment, performance and observance, and for other valuable
consideration, the receipt and sufficiency whereof is hereby acknowledged, the Borrower and Title
Holder DO HEREBY WARRANT, BARGAIN, GRANT, REMISE, RELEASE, ALIEN,
MORTGAGE AND CONVEY unto Lender, its successors and assigns forever, the Land (as
hereinafter defined) together with the following described property, rights and interests, all of which
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are hereby pledged primarily and on a parity with the Land and not secondarily and are,together with
the Land, collectively hereinafter referred to as the "Premises":
THE LAND (the "Land") is located in Kane County, Illinois and is legally described as
follows:
See Exhibit A attached hereto.
TOGETHER WITH all buildings,structures and improvements of every nature whatsoever
now or hereafter situated on the Land, and all fixtures, of every nature whatsoever now or
hereafter owned by Borrower and Title Holder and located in or on, or attached to,or used or
intended to be used in connection with the operation of,the Land,building, structures or other
improvements, including all extensions, additions, improvements, betterments, renewals,
substitutions, and replacements to any of the foregoing and all of the right, title and interest
of Borrower and Title Holder in and to any such fixtures together with the benefit of any
deposits or payments now or hereafter made on such fixtures by Borrower and Title Holder
or on its/their behalf, collectively the "Improvements";
TOGETHER WITH all easements, rights of way, gores of land, streets, ways, alleys,
passages, sewer rights, waters, water course, water rights and power, and all estates, rights,
titles,interests,privileges,liberties,tenements,hereditaments and appurtenances whatsoever,
in any way belonging, relating or appertaining to the Land, or which hereafter shall in any
way belong, relate or be appurtenant thereto, whether now owned or hereafter acquired by
Borrower and Title Holder,and the reversion and reversions,remainder and remainders,rents,
issues and profits thereof; and all the estate, right, title, interest, property, possession, claim
and demand whatsoever, at law as well as in equity, of Borrower and Title Holder of, in and
to the same;
TOGETHER WITH all rents, royalties, issues,profits, revenue, income and other benefits
from the Premises to be applied against the Indebtedness Hereby Secured;provided,however,
that permission is hereby given to Borrower and Title Holder so long as no Default has
occurred hereunder,to collect,receive,take,use and enjoy such rents,royalties,issues,profits,
revenue, income and other benefits as they become due and payable,but not more than one
(1) month in advance thereof;
TOGETHER WITH all right, title and interest of Borrower and Title Holder in and to any
and all leases now or hereafter on or affecting the Premises, whether written or oral, and all
agreements for use of the Premises (the "Leases"), together with all security therefor and all
monies payable thereunder, subject, however, to the conditional permission hereinabove
given to Borrower and Title Holder to collect the rentals under any such Lease;
TOGETHER WITH all fixtures and articles of personal property now or hereafter
owned by Mortgagor and forming a part of or used in connection with the Real Estate or
the Improvements,including,but without limitation, any and all air conditioners, antennae,
appliances, apparatus, awnings, basins, bathtubs, bidets, boilers, bookcases, cabinets,
carpets, coolers, curtains, dehumidifiers, disposals, doors, drapes, dryers, ducts, dynamos,
elevators, engines, equipment, escalators, exercise equipment, fans, fittings, floor
coverings, furnaces, furnishings, furniture, hardware, heaters, humidifiers, incinerators,
lighting,machinery,motors,ovens,pipes,plumbing,pumps,radiators,ranges,recreational
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facilities, refrigerators, screens, security systems, shades, shelving, sinks, sprinklers,
stokers, stoves, toilets, ventilators, wall coverings, washers, windows, window coverings,
wiring, and all renewals or replacements thereof or articles in substitution therefor,whether
or not the same are or shall be attached to the Real Estate or the Improvements in any
manner; it being mutually agreed that all of the aforesaid property owned by Borrower and
Title Holder and placed on the Real Estate or the Improvements, so far as permitted by law,
shall be deemed to be fixtures, a part of the realty,and security for the Indebtedness Hereby
Secured (the "Collateral"); notwithstanding the agreement hereinabove expressed that
certain articles of property form a part of the realty covered by this Mortgage and be
appropriated to its use and deemed to be realty, to the extent that such agreement and
declaration may not be effective and that any of said articles may constitute goods (as said
term is used in the Uniform Commercial Code of the State of Illinois as the same may be
amended from time to time("Code"),this instrument shall constitute a security agreement,
creating a security interest in such goods, as collateral, in Mortgagee, as a secured party,
and Mortgagor, as Debtor, all in accordance with the Code; and
TOGETHER WITH all proceeds of the foregoing, including, without limitation, all
judgments, awards of damages and settlements hereafter made resulting from condemnation
proceeds or the taking of the Premises or any portion thereof under the power of eminent
domain, any proceeds of any policies of insurance, maintained with respect to the Premises
or proceeds of any sale, option or contract to sell the Premises or any portion thereof; and
Borrower and Title Holder hereby authorize, direct and empower Lender at its option, on
behalf of Borrower and Title Holder, or the successors or assigns of Borrower and Title
Holder, to adjust, compromise, claim, collect and receive such proceeds, to give proper
receipts and acquittances therefor,and,after deducting expenses of collection,to apply the net
proceeds as a credit upon any portion, as selected by Lender, of the Indebtedness Hereby
Secured, notwithstanding the fact that the same may not then be due and payable or that the
Indebtedness Hereby Secured is otherwise adequately secured.
TO HAVE AND TO HOLD the Premises unto the Lender, its successors and assigns, forever,
for the purposes and upon the uses herein set forth together with all right to possession of the Premises
after the occurrence of any Default as hereinafter defined; the Borrower and Title Holder hereby
RELEASING AND WAIVING all rights under and by virtue of the homestead exemption laws of
the State in which the Premises are located.
PROVIDED, NEVERTHELESS, if Borrower shall pay in full when due the Indebtedness
Hereby Secured and shall duly and timely perform and observe all of the terms,provisions,covenants
and agreements herein and in the Note and the Loan Agreement,if any provided to be performed and
observed by the Borrower, then this Mortgage and the estate, right and interest of Lender in the
Premises shall cease and become void and of no effect, but shall otherwise remain in full force and
effect.
THE BORROWER FURTHER COVENANTS AND AGREES AS FOLLOWS:
1. Payment of Indebtedness and Performance of Covenants. Borrower shall (a) pay when due
the Indebtedness Hereby Secured; and (b) duly and punctually perform and observe all of the terms,
provisions, conditions, covenants and agreements on Borrower's part to be performed or observed as
provided in the Note, this Mortgage, and any applicable Loan Agreement, or other finance or loan
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document executed by Borrower in connection with the Indebtedness Hereby Secured. Borrower
shall have the privilege of making pre-payments without penalty on the principal of the Note (in
addition to the required payments thereunder) in accordance with the terms and conditions set forth
in the Note.
2. Maintenance, Repair, Compliance with Law, Use, Etc. Borrower shall (i) promptly repair,
restore, replace or rebuild any portion of the Improvements which may become damaged or be
destroyed, whether or not proceeds of insurance are available or sufficient for the purpose; (ii) keep
the Premises in good condition and repair, free from waste; (iii) complete, within a reasonable time,
any building or buildings or other Improvements now or at any time in the process of erection upon
the Premises; (iv) comply with all requirements of statutes, ordinances, rules, regulations, orders,
decrees and other requirements of law relating to the Premises or any part thereof by any federal,state
or local authority; (v)refrain from any action and correct any condition which would increase the risk
of fire or other hazard to the Improvements or any portion thereof and (vi) observe and comply with
any conditions and requirements necessary to preserve and extend any and all rights,licenses,permits
(including, without limitation, zoning variances, special exceptions and non-conforming uses),
privileges, franchises and concessions that are applicable to the Premises or its use and
occupancy. Without the prior written consent of Lender, Borrower shall not cause, suffer or permit
any unlawful use of,or nuisance to exist upon, the Premises.
3. Liens.
A. Prohibition. Other than the Senior Mortgages (as defined in the Business Loan
Agreement),Borrower and Title Holder shall not create or suffer or permit any mortgage,lien,charge
or encumbrance to attach to or be filed against the Premises,including mechanic's liens,materialmen's
liens or other claims for lien made by parties claiming to have provided labor or materials with respect
to the Premises (which liens are herein defined as "Mechanic's Liens") and excepting only the lien
of real estate taxes and assessments not due or delinquent,any liens and encumbrances of Lender,and
any other lien or encumbrance permitted by the terms of any Loan Agreement,if any(the"Permitted
Liens").
B. Contest of Mechanic's Liens Claims. Notwithstanding the foregoing prohibition
against mechanic's liens against the Premises, Borrower,or any party obligated to Borrower to do so,
may in good faith and with reasonable diligence contest the validity or amount of any mechanic's lien
and defer payment and discharge thereof during the pendency of such contest,provided: (i)that such
contest shall have the effect of preventing the sale or forfeiture of the Premises or any part thereof,or
any interest therein,to satisfy such Mechanic's Lien; (ii) that,within ten(10)days after Borrower has
been notified of the filing of such Mechanic's Lien,Borrower shall have notified Lender in writing of
Borrower's intention to contest such Mechanic's Lien or to cause such other party to contest such
Mechanic's Lien; and(iii)that Borrower shall have obtained a title insurance endorsement over such
Mechanic's Liens insuring Lender against loss or damage by reason of the existence of such
Mechanic's Liens or Borrower shall have deposited or cause to be deposited with Lender at such place
as Lender may from time to time in writing appoint, and in the absence of such appointment,then at
the place of payment designated in the Note, a sum of money which shall be sufficient in the
reasonable judgment of Lender to pay in full such Mechanic's Lien and all interest which might
become due thereon, and shall keep on deposit an amount so sufficient at all times, increasing such
amount to cover additional interest whenever, in the reasonable judgment of Lender, such increase is
advisable. Such deposits are to be held without any allowance of interest. In case Borrower shall fail
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to maintain or cause to be maintained sufficient funds on deposit as hereinabove provided, shall fail
to prosecute such contest or cause such contest to be prosecuted with reasonable diligence or shall fail
to pay or cause to be paid the amount of the Mechanic's Lien plus any interest finally determined to
be due upon the conclusion of such contest,to the extent such amount exceeds the amount on deposit
with Lender, Lender may, at its option, apply the money as deposited in payment of or on account of
such Mechanic's Lien,or that part thereof then unpaid,together with all interest thereon. If the amount
of money so deposited shall be insufficient for the payment in full of such Mechanic's Lien,together
with all interest thereon, Borrower shall forthwith, upon demand, deposit with Lender a sum which,
when added to the funds then on deposit,shall be sufficient to make such payment in full. In the event
the contest of the Mechanic's Lien claim is ultimately resolved in favor of the claimant, Lender shall
apply the money so deposited in full payment of such Mechanic's Lien or that part thereof then unpaid,
together with all interest thereon(provided Borrower is not then in default hereunder)when furnished
with evidence satisfactory to Lender of the amount of payment to be made. Any overplus remaining
in the control of Lender shall be paid to Borrower,provided Borrower is not then in default hereunder.
4. Taxes and Liens.
A. Payment. Borrower shall pay or cause to be paid when due and before any penalty attaches,
all general and special taxes,assessments,water charges, sewer charges,and other fees,taxes,charges
and assessments of every kind and nature whatsoever, levied or assessed against the Premises or any
part thereof or any interest therein or any obligation or instrument secured hereby,and all installments
thereof (all herein generally called ("Taxes"), whether or not assessed against Borrower, and
Borrower shall furnish to Lender receipts therefor on or before the date the same are due; and shall
discharge any claim or lien relating to Taxes upon the Premises, other than matters expressly
permitted by the terms of the Loan Agreement, if any. Notwithstanding the foregoing, upon the
occurrence of any breach or other default by the Borrower under any of the Loan Documents,which
breach or default is not cured within the time, if any allowed for such a cure in said documents, then
the Lender,in addition to all other rights and remedies,shall have the right to require that the Borrower
escrow, on a monthly basis, 1112` of the estimated annual real estate Taxes last levied against the
Real Estate. The 2014 Taxes are delinquent and have been sold and will be not be redeemed and paid
prior to the Maturity Date.
B. Contest. Borrower may, in good faith and with reasonable diligence, contest or cause to be
contested the validity or amount of any such Taxes,provided that:
(a) such contest shall have the effect of preventing the collection of the Taxes so
contested and the sale or forfeiture of the Premises or any part thereof or interest therein to
satisfy the same;
(b) Borrower has notified Lender in writing of the intention of Borrower to contest
the same or to cause the same to be contested before any Tax has been increased by any
interest,penalties,or costs; and
(c) Borrower has deposited or caused to be deposited with Lender, at such place as
Lender may from time to time in writing designate, a sum of money or other security
acceptable to Lender that,when added to the monies or other security, if any, deposited with
Lender, pursuant to Paragraph 8 hereof, is sufficient, in Lender's reasonable judgment to pay
in full such contested tax and all penalties and interest that might become due thereon, and
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shall keep on deposit an amount sufficient, in Lender's reasonable judgment, to pay in full
such contested tax, increasing such amount to cover additional penalties and interest
whenever, in Lender's reasonable judgment, such increase is advisable.
In the event Borrower fails to prosecute such contest with reasonable diligence or fails to maintain
sufficient funds on deposit as hereinabove provided, Lender may, at its option apply the monies and
liquidate any securities deposited with Lender, in payment of, or on account of, such Taxes, or any
portion thereof then unpaid, including all penalties and interest thereon. If the amount of the money
and any such security so deposited is insufficient for the payment in full of such Taxes,together with
all penalties and interest thereon, Borrower shall forthwith,upon demand, either deposit with Lender
a sum that,when added to such funds then on deposit with Lender,is sufficient to make such payment
in full,or,if Lender has applied funds on deposit on account of such Taxes,restore such deposit to an
amount satisfactory to Lender. Provided that Borrower is not then in default hereunder, Lender shall,
if so requested in writing by Borrower, after final disposition of such contest and upon Borrower's
delivery to Lender of an official bill for such Taxes, apply the money so deposited in full payment of
such Taxes or that part thereof then unpaid, together with all penalties and interest thereon.
5. Change in Tax Laws. If, by the laws of the United States of America, or of any state or
municipality having jurisdiction over Lender, Borrower or the Premises, any Tax is imposed or
become due in respect of the issuance of the Note or the recording of this Mortgage, Borrower shall
pay such Tax in the manner required by such law. In the event that any law, statute,rule,regulation,
order or court decree has the effect of deducting from the value of the Premises for the purpose of
taxation any lien thereon,or imposing upon Lender the payment of the whole or any part of the Taxes
required to be paid by the Borrower, or changing in any way relating to the taxation of mortgages or
debts secured by mortgages or the interest of Lender in the Premises, or the manner of collection of
Taxes, so as to affect this Mortgage, the Indebtedness Hereby Secured or Lender, then, and in any
such event, Borrower, upon demand by Lender, shall pay such Taxes, or reimburse Lender therefor
on demand, unless Lender determines, in Lender's reasonable judgment, that such payment or
reimbursement by Borrower is unlawful; in which event the Indebtedness Hereby Secured shall be
due and payable within thirty(30) days after written demand by Lender to Borrower.Nothing in this
Paragraph 5 shall require Borrower to pay any income,franchise or excise Tax imposed upon Lender,
excepting only such which may be levied against the income of Lender as a complete or partial
substitute for Taxes required to be paid by Borrower pursuant hereto.
6. Insurance Coverage. Borrower will insure the Premises against such perils and hazards, and
in such amounts and with such limits, as Lender may from time to time reasonably require, and in
any event will continuously maintain the following described policies of insurance (the "Insurance
Policies"):
(a) Casualty insurance against loss and damage by all risks of physical loss or damage,
including fire,windstorm,flood,earthquake and other risks covered by the so-called extended
coverage endorsement in amounts not less than the full insurable replacement value of all
Improvements;
(b) Comprehensive public liability against death,bodily injury and property damage in an
amount not less than One Million Two Hundred Thousand Dollars ($1,200,000.00); and
(c) The types and amounts of coverage as are customarily maintained by owners or
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operators of like properties.
7. Insurance Policies. All Insurance Policies shall be in form, companies and amounts
reasonably satisfactory to Lender. All Insurance Policies insuring against casualty and other
appropriate policies shall include non-contributing mortgagee endorsements in favor of and with loss
payable to Lender, as well as standard waiver of subrogation endorsements, shall provide that the
coverage shall not be terminated or materially modified without thirty (30) days' advance written
notice to Lender and shall provide that no claims shall be paid thereunder without ten (10) days'
advance written notice to Lender. Borrower will deliver all Insurance Policies, premium prepaid, to
Lender and, in case of Insurance Policies about to expire, Borrower will deliver renewal or
replacement policies not less than thirty (30) days prior to the date of expiration. The requirements
of the preceding sentence shall apply to any separate policies of insurance taken out by Borrower
concurrent in form or contributing in the event of loss with the Insurance Policies. Insurance Policies
maintained by any tenants under the Leases may, if in conformity with the requirements of this
Mortgage be utilized by Borrower in satisfaction of Borrower's obligation to provide the insurance
coverages provided by those Insurance Policies.
8. Deposits for Taxes and Insurance Premiums. Following the occurrence of any Default (as
defined in Paragraph 16 hereunder by Borrower),but subject to the rights of the Senior Lien Holders,
then if required by Lender, Borrower shall pay to Lender, monthly, installments of Taxes and
assessments to be levied upon the Premises, and installments of the premiums that will become due
and payable to renew the insurance hereinabove provided; said installments to be substantially equal
and to be in such amount as will assure to Lender that not less than thirty(30) days before the time
when such Taxes and premiums respectively become due, Borrower will have paid to Lender a
sufficient amount to pay such Taxes and premiums in full. Said amounts paid to Lender hereunder
need not be segregated or kept in a separate fund and no interest shall accrue or be payable thereon.
Said amounts shall be held by Lender as additional security for the payment of the Indebtedness
Hereby Secured. Said amount shall be applied to the payment of said Taxes, assessments and
insurance premiums when the same become due and payable; provided, however, that Lender shall
have no liability for any failure to so apply said amounts for any reason whatsoever. Nothing herein
contained shall in any manner limit the obligation of Borrower to pay Taxes and to maintain insurance
as above provided. In the event of any Default by Borrower, Lender may, at its option but without
any obligation on its part so to do, apply said amount upon said Taxes, assessments and insurance
premiums, and/or toward the payment of any amounts payable by Borrower to Lender under the
Mortgage and/or toward the payment of the Indebtedness Hereby Secured or any portion thereof,
whether or not then due or payable. Lender shall not require payments hereunder so long as Borrower
makes timely payment of Taxes and insurance and provides Lender with evidence of same.
9. Proceeds of Insurance. Borrower will give Lender prompt notice of any loss or damage to
the Premises, and subject to the rights of the Senior Lender with respect to the existing Mortgage
against the Land:
(a) In case of loss or damage covered by any of the Insurance Policies, Lender (or,
after entry of decree of foreclosure,the purchaser at the foreclosure sale or decree creditor,as
the case may be) is hereby authorized at its option either (i) to settle and adjust any claim
under such Insurance Policies without the consent of Borrower,provided such settlement be
done in a commercially reasonable manner, or (ii) allow Borrower to settle and adjust such
claim without the consent of Lender; provided that in either case Lender shall, and is hereby
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authorized to, collect and receipt for any such insurance proceeds. Each insurance company
which has issued an Insurance Policy is hereby authorized and directed to make payment for
all losses covered by any Insurance Policy to Lender alone, and not to Lender and Borrower
jointly.
(b) Lender shall apply the proceeds of Insurance Policies consequent upon any
casualty to reimburse Borrower for the cost of restoring,repairing,replacing or rebuilding the
loss or damage of the casualty subject to the considerations and in accordance with the
provision of Paragraph 10 hereof, but only if(i) Borrower is not in default hereunder at the
time of such loss or at any time subsequent thereto prior to the full disbursement of said
proceeds and (ii) the said proceeds (together with any additional funds as Borrower may
deposit with Lender)are first demonstrated by Borrower to Lender to be sufficient to complete
the full restoration and repair of the Premises based upon firm proposals and cost estimates
provided by Borrower to Lender.
(c) Borrower hereby covenants to restore, repair, replace or rebuild the
Improvements,to be of at least equal value,and of substantially the same character as prior to
such loss or damage,all to be effected in accordance with plans,specifications and procedures
to be first submitted to and approved by Lender, and Borrower shall pay all costs of such
restoring, repairing,replacing or rebuilding.
10. Disbursement of Insurance Proceeds. Subject to the rights of the Senior Lender, insurance
proceeds held by Lender for restoration,repairing,replacement or rebuilding of the Premises shall be
disbursed from time to time upon Lender being furnished with (i) evidence satisfactory to it of the
estimated cost of the restoration, repair, replacement and rebuilding, (ii) funds (or assurances
satisfactory to Lender that such funds are available)sufficient in addition to the proceeds of insurance
to complete and fully pay for the restoration, repair, replacement and rebuilding, and (iii) such
architect's certificates, waivers of lien, contractor's sworn statements, title insurance endorsements,
plats of survey and such other evidences of cost, payment and performance as Lender may require
and approve. No payment made prior to the final completion of the restoration, repair, replacement
and rebuilding shall exceed ninety percent (90%) of the value of the work performed from time to
time, as such value shall be determined by Lender in its reasonable judgment; funds other than
proceeds of insurance shall be disbursed prior to disbursement of such proceeds, except as may
otherwise be provided in the Loan Agreement and at all times the undisbursed balance of such
proceeds remaining in the hands of Lender, together with funds deposited or irrevocably committed
to the satisfaction of Lender by or on behalf of Borrower to pay the cost of such repair, restoration,
replacement or rebuilding, shall be at least sufficient in the reasonable judgment of Lender to pay the
entire unpaid cost of the restoration, repair, replacement or rebuilding, free and clear of all liens or
claims for lien. Any surplus which may remain out of insurance proceeds held by Lender after
payment of such costs of restoration,repair, replacement or rebuilding shall be paid to Borrower.
11. Condemnation and Eminent Domain. Subject to the rights of the existing Senior Lender
with respect to the existing Mortgage against the Land, any and all awards heretofore or hereafter
made or to be made to the present, or any subsequent, owner of the Premises, by any governmental
or other lawful authority for the taking,by condemnation or eminent domain,of all or any part of the
Premises,(including any award from the United States government at any time after the allowance of
a claim therefor,the ascertainment of the amount thereof, and the issuance of a warrant for payment
thereof) (the"Awards"), are hereby assigned by Borrower and Title Holder to Lender,which Awards
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Lender is hereby authorized to collect and receive from the condemnation authorities, and Lender is
hereby authorized to give appropriate receipts and acquittances therefor. Borrower and Title Holder
shall give Lender immediate notice of the actual or threatened commencement of any condemnation
or eminent domain proceedings affecting all or any part of the Premises and shall deliver to Lender
copies of any and all papers served in connection with any such proceedings. Borrower and Title
Holder further agrees to make,execute,and deliver to Lender,at any time upon request,free and clear
and discharged of any encumbrance of any kind whatsoever,any and all further assignments and other
instruments deemed necessary by Lender for the purpose of validly and sufficiently assigning all
Awards and other compensation heretofore and hereafter made to Borrower and Title Holder for any
taking,either permanent or temporary,under any such proceeding. If any portion of or interest in the
Premises if taken by condemnation or eminent domain, either temporarily or permanently, and the
remaining portion of the Premises is not,in the reasonable judgment of Lender, a complete economic
unit having equivalent value to the Premises as it existed prior to the taking, then, at the option of
Lender,the entire Indebtedness Hereby Secured shall immediately become due and payable. Lender
shall be entitled to apply the proceeds towards repayment of such portion of the Indebtedness Hereby
Secured as it deems appropriate without affecting the lien of this Mortgage. In the event of any partial
taking of the Premises or any interest in the Premises, which, in the reasonable judgment of Lender
leaves the Premises as a complete economic unit having equivalent value to the Premises as it existed
prior to the taking, and provided no default has occurred and is then continuing, the Award shall be
applied to reimburse Borrower and Title Holder for the cost of plans, specifications and procedures
which must be submitted to and approved by Lender, and such Award shall be disbursed in the same
manner as is herein above provided for the application of insurance proceeds provided that any surplus
after payment of such costs shall be applied on account of the Indebtedness Hereby Secured. If the
Award is not applied for reimbursement of such restoration costs, the Award shall be applied against
the Indebtedness Hereby Secured, in such order or manner as Lender shall elect.
12. Assignment of Rents, Leases and Profits. To further secure the Indebtedness Hereby
Secured,but subject to the rights of the Senior Lender, Borrower and Title Holder hereby sell, assign
and transfer unto Lender all of the rents, leases, issues and profits now due and which may hereafter
become due under or by virtue of any leases ("Leases") which may have been heretofore or may be
hereafter made or agreed to by Borrower and Title Holder or the beneficiary or beneficiaries of
Borrower and Title Holder or the agents of any of them or which may be made or agreed to by Lender
under the powers herein granted, it being the intention hereby to establish an absolute transfer and
assignment of all such leases, rents and all avails thereunder, to Lender. Borrower represents and
agrees that no rent has been or will be paid by any person in possession of any portion of the Premises
for more than thirty(30) days in advance and that the payment of none of the rents to accrue for any
portion of the Premises has been or will be waived, released, reduced, discounted or otherwise
discharged or compromised by Borrower. Nothing herein contained shall be construed as constituting
Lender a mortgagee in possession in the absence of the taking of actual possession of the Premises
by Lender pursuant to Paragraph 17 hereof. Borrower and Title Holder further agrees to assign and
transfer to Lender all future Leases upon all or any part of the Premises and to execute and deliver, at
the request of Lender, all such further assurances and assignments in the Premises as Lender shall
from time to time require. Although it is the intention of the parties that the assignment contained in
this Paragraph shall be a present assignment, it is expressly understood and agreed, anything herein
contained to the contrary notwithstanding, that Lender shall not exercise any of the rights or powers
conferred upon it by this Paragraph until a Default shall exist under this Mortgage. In the event
Lender requires that Borrower and Title Holder execute and record a separate Collateral Assignment
of Rents or separate assignments of any of the Leases to Lender, the terms and provisions of those
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assignments shall control in the event of a conflict between the terms of this Mortgage and the terms
thereof.
13. Observation of Lease Assignment. Borrower expressly covenants and agrees that if
Borrower, as lessor under any of the Leases transferred, sold or assigned hereunder, shall fail to
perform or fulfill any term, covenant, condition or provision of said Lease on its part to be performed
or fulfilled at the times and in the manner in said Lease provided, and Borrower shall fail to cure the
same within 30 days thereafter, or if Borrower shall transfer, terminate, amend, modify or void any
of the Leases without Lender's prior written consent, except within the ordinary course of business,
then and in such event the same shall constitute a Default hereunder and at the option of Lender, and
upon written notice to Borrower, the Indebtedness Hereby Secured shall become due and payable as
in the case of other defaults.
14. Lender's Performance of Borrower's Obligations. In case of Default, Lender, either before
or after acceleration of the Indebtedness Hereby Secured or the foreclosure of the lien hereof and
during the period of redemption, if any, may, but shall not be required to, make any payment or
perform any act herein required of Borrower(whether or not Borrower is personally liable therefor)
in any form and manner deemed expedient to Lender. Lender may, but shall not be required to,
complete any unfinished construction, furnishing and equipping of the Improvements and rent,
operate and manage the Premises and such Improvements and pay operating costs and expenses,
including management fees, of every kind and nature in connection therewith, so that the Premises
shall be operational and usable for their intended purposes. All monies paid, and all expenses paid or
incurred in connection therewith (including attorney's fees), and other monies advanced by Lender
to protect the Premises and the lien hereof, or to complete construction, furnishing and equipping or
to rent, operate and manage the Premises or to pay any such operating costs and expenses thereof or
to keep the Premises operational and usable for their intended purpose shall be so much additional
Indebtedness Hereby Secured, whether or not the Indebtedness Hereby Secured, as a result thereof,
shall exceed the face amount of the Note, and shall become immediately due and payable on
demand. Inaction of Lender shall never be considered as a waiver of right accruing to it on account
of any Default nor shall the provisions of this Paragraph or any exercise by Lender of its rights
hereunder prevent any Default from constituting a Default. Lender, in making any payment hereby
authorized (a) relating to Taxes, may do so according to any bill, statement or estimate, without
inquiry into the validity of any Tax, assessments, sale, forfeiture,tax lien or title or claim thereof; (b)
for the purchase, discharge, compromise or settlement of any lien, may do so without inquiring as to
the validity or amount of any claim for lien which may be asserted; or (c) in connection with the
completion of construction, furnishing or equipping of the Premises or the rental, operation or
management of the Premises or the payment of operating costs and expenses thereof, may do so in
such amounts and to such persons as Lender may deem appropriate. Nothing contained herein shall
be construed to require Lender to advance or expend monies for any purpose mentioned herein,or for
any other purpose.
15. Restrictions on Transfer. Borrower and Title Holder shall not, without the prior written
consent of Lender (which consent may be withheld by Lender for any reason and in its sole and
absolute discretion), create, effect, contract for, consent to, suffer or permit any conveyance, sale,
assignment, transfer, lien, pledge, mortgage, security interest or other encumbrance or alienation (or
any agreement to do any of the foregoing)of the Premises(any one or more of said prohibited actions
being sometimes hereinafter referred to as a "Prohibited Transfer"), excepting only sales or other
dispositions of Collateral (herein called "Obsolete Collateral") no longer useful in connection with
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the operation of the Premises,provided that prior to the sale or other disposition thereof,such Obsolete
Collateral has been replaced by Collateral of at least equal value and utility which is subject to the
lien hereof with the same priority as with respect to the Obsolete Collateral;in each case whether any
such conveyance, sale,assignment,transfer,lien,pledge,mortgage, security interest,encumbrance or
alienation is effected directly, indirectly, voluntarily or involuntarily, by operation of law or
otherwise;provided,however,that the foregoing provisions of this Paragraph 15 shall not apply(i)to
liens securing the Indebtedness Hereby Secured, (ii) to the lien of current Taxes and assessments not
in default, or (iii) to leases and subleases of the Premises or portions thereof having a duration
(including all renewal options)of less than six (6) years.
16. Defaults. If one or more of the following events (herein called "Defaults") shall occur:
(a) If any default be made in the due and punctual payment of monies required under
the Note or under this Mortgage,as and when the same is due and payable and any applicable
period of grace expressly allowed for the cure of such default in such document shall have
expired;
(b) If any default shall exist under any other document or instrument regulating,
evidencing, securing or guaranteeing any of the Indebtedness Hereby Secured including,but
not limited to, the Loan Agreement, or Loan Document, in each case after the expiration of
any period of grace expressly allowed for the cure of such default in such other document or
instrument;
(c) The occurrence of a Prohibited Transfer;
(d) If any default shall be made in the due and punctual performance or observance
of any other agreement or condition contained in the Mortgage or Note and said default is not
cured within any grace or cure period expressly allowed for the cure of such default;
(e) If:
(i) Borrower shall file a voluntary petition in bankruptcy or for arrangement,
reorganization or other relief under any chapter of the Federal Bankruptcy Act or any
similar law, state or federal, now or hereafter in effect;
(ii) Borrower shall file an answer or other pleading in any proceeding
admitting insolvency,bankruptcy, or inability to pay its debts as they mature;
(iii) Within sixty (60) days after the filing against Borrower of any
involuntary proceeding under the Federal Bankruptcy Act or similar law, state or
federal, now or hereafter in effect, such proceedings shall not have been vacated;
(iv) All or a substantial part 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(60)days;
(v) Borrower shall be adjudicated a bankrupt;
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(vi) Borrower shall make an assignment for the benefit of creditors or shall
admit in writing its inability to pay its debts generally as they become due or shall
consent to the appointment of a receiver or trustee or liquidator of all or the major part
of its property, or the Premises; or
(vii) Any order appointing a receiver, trustee or liquidator of Borrower is not
vacated within sixty(60) days following the entry thereof;
(f) If Title Holder shall file a voluntary petition in bankruptcy or for arrangement,
reorganization or other relief under any chapter of the Federal Bankruptcy Act or any similar
law, state or federal, now or hereafter in effect, in any such proceeding the interest of the
Borrower as a contract purchaser of the Premises is terminated.
then Lender is hereby authorized and empowered, at its option and without affecting the lien hereby
created or the priority of said lien or any other right of Lender hereunder, to declare, without further
notice, all Indebtedness Hereby Secured to be immediately due and payable with interest thereon at
the Default Rate specified in the Note, whether or not such Default be thereafter remedied by
Borrower, and Lender may immediately proceed to foreclose this Mortgage and/or to exercise any
right, power or remedy provided by this Mortgage, the Note, the Loan Agreement, or by law or in
equity or any other document or instrument regulating, evidencing, security or guaranteeing any of
the Indebtedness Hereby Secured.
17. Foreclosure. When the Indebtedness Hereby Secured, or any part thereof, shall become
due, whether by acceleration or otherwise, Lender shall have the right to foreclose the lien hereof in
accordance with the laws of the State in which the Premises are located and to exercise any other
remedies of Lender provided in the Note, this Mortgage and the Loan Agreement of which Lender
may have at law,in equity or otherwise. In any suit to foreclose the lien hereof,there shall be allowed
and included as additional Indebtedness Hereby Secured in the decree of sale, all expenditures and
expenses which may be paid or incurred by or on behalf of Lender (including, without limitation,
reasonable attorney's fees) for appraiser's fees, outlays for documentary and expert evidence,
stenographer's charges, publication costs, and costs (which may be estimated as to items to be
expended after entry of the decree) of procuring all such abstracts of title, title searches and
examinations, title insurance policies, and similar data and assurance with respect to title as Lender
may deem reasonably necessary either to prosecute such suit or to evidence to bidders at sales which
may be had pursuant to such decree the true conditions of the title to or the value of the Premises. All
expenditures and expenses of the nature mentioned in this Paragraph shall be so much additional
Indebtedness Hereby Secured and shall be immediately due and payable by Borrower.
18. Right of Possession. Subject to the rights of the Senior Lender, upon the filing of a
complaint to foreclose this Mortgage, or at any time thereafter, Borrower and Title Holder shall,
forthwith upon demand of Lender (if such demand be made), surrender to Lender, and Lender shall
be entitled to take actual possession of,the Premises or any part thereof,personally or by its agent or
attorneys,and Lender,in its discretion,may enter upon and take and maintain possession of all or any
part of the Premises, together with all documents, books, records, papers, and accounts of Borrower
and Title Holder or the then owner of the Premises relating thereto, and may exclude Borrower and
Title Holder, such owner, and any agents and servants thereof,wholly therefrom and may, on behalf
of Borrower and Title Holder or such owner, or in its own name as Lender and under the powers
herein granted:
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(a) hold,operate,manage, and control all or any part of the Premises and conduct
the business, if any, thereof, either personally or by its agents, with full power to use
such measures, legal or equitable, as in its discretion may be deemed proper or
necessary to enforce the payment or security of the rents,issues,deposits,profits, and
avails of the Premises, including, without limitation, actions for recovery of rent,
actions in forcible detainer, and actions in distress for rent;
(b) cancel or terminate any Lease or sublease of all or any part of the Premises for
any cause or on any ground that would entitle Borrower and Title Holder to cancel the
same;
(c) elect to disaffirm any Lease or sublease of all or any part of the Premises made
subsequent to this Mortgage without Lender's prior written consent;
(d) extend or modify any then existing Leases and make new Leases of all or any
part of the Premises, which extensions, modifications, and new Leases may provide
for terms to expire,or for options to lessees to extend or renew terms to expire,beyond
the maturity date of the loan evidenced by the Note and the issuance of a deed or deeds
to a purchaser or purchasers at a foreclosure sale, it being understood and agreed that
any such Leases,and the options or other such provisions to be contained therein,shall
be binding upon Borrower and Title Holder, all persons whose interests in the
Premises are subject to the lien hereof, and the purchaser or purchasers at any
foreclosure sale, notwithstanding any redemption from sale, discharge of the
Indebtedness Hereby Secured, satisfaction of any foreclosure decree, or issuance of
any certificate of sale or deed to any such purchaser;
(e) make all necessary or proper repairs, decorations, renewals, replacements,
alterations,additions,betterments,and improvements in connection with the Premises
as may seem reasonably necessary to Lender, to insure and reinsure the Property and
all risks incidental to Lender's possession,operation, and management thereof, and to
receive all rents, issues, deposits,profits, and avails therefrom; and
(f) apply the net income to the payment of taxes, Premiums and other charges
applicable to the Premises, or in reduction of the Indebtedness Hereby Secured, in
such order and manner as Lender shall select.
Nothing herein contained shall be construed as constituting Lender a mortgagee in possession in the
absence of the actual taking of possession of the Premises.
19. Receiver. Subject to the rights of the Senior Lender, upon the filing of a complaint to
foreclosure this Mortgage or at any time thereafter, the court in which such complaint is filed may
appoint a receiver of the Premises. Such appointment may be made either before or after sale,without
notice, without regard to solvency or insolvency of Borrower and Title Holder at the time of
application for such receiver, and without regard to the then value of the Premises or whether the
same shall be then occupied as a homestead or not; and Lender hereunder or any employee or agent
thereof may be appointed as such receiver. Such receiver shall have the power to collect the rents,
issues and profits of the Premises during the pendency of such foreclosure suit and, in case of a sale
S:\wpdocs\Work`39096\Term Loan From City\Loan Package V6.docx 19
and deficiency, during the full statutory period of redemption, if any, whether there be a redemption
or not,as well as during any further times when Borrower,except for the intervention of such receiver,
would be entitled to collection of such rents, issues and profits, and such receiver shall have all other
powers which may be necessary or are usual in such cases for the protection, possession, control,
management and operation of the Premises during the whole of said period. The court may, from
time to time, authorize the receiver to apply the net income from the Premises in payment in whole
or in part of: (a)the Indebtedness Hereby Secured or the indebtedness secured by a decree foreclosing
this Mortgage, or any tax, special assessment, or other lien which may be or become superior to the
lien hereof or of such decree, provided such application is made prior to the foreclosure sale; or (b)
the deficiency in case of a sale and deficiency.
20. Foreclosure Sale. The proceeds of any foreclosure sale of the Premises shall be distributed
and applied in the following order of priority: first, on account of all costs and expenses incident to
the foreclosure proceedings,including all such items as are mentioned in Paragraph 17 hereof;second,
all other items which, under the terms hereof, constitute Indebtedness Hereby Secured additional to
that evidenced by the Note,with interest on such items as herein provided;third,to interest remaining
unpaid upon the Note; fourth, to the principal remaining unpaid upon the Note; and lastly, any
overplus to Borrower, and its successors or assigns, as their rights may appear. In the event of any
foreclosure sale of said Premises, the same may be sold in one or more parcels. In addition, Lender
may be the purchaser at any foreclosure sale of the Premises or any part thereof.
21. Insurance during Foreclosure. In case of any insured loss after foreclosure proceedings
have been instituted, the proceeds of any Insurance Policy, if not applied in rebuilding or restoring
the Improvements, as aforesaid, shall be used to pay the amount due in accordance with any decree
of foreclosure that may be entered in any such proceedings, and the balance, if any, shall be paid as
the court may direct. In the case of foreclosure of this Mortgage,the court,in its decree,may provide
that the Lender's clause attached to each of the casualty Insurance Policies may be cancelled and that
the decree creditor may cause a new loss clause to be attached to each of said casualty Insurance
Policies making the loss thereunder payable to said decree creditors; and any such foreclosure decree
may further provide that in case of one or more redemptions under said decree,pursuant to the statutes
in such case made and provided, then in every such case, each and every successive redemptor may
cause the preceding loss clause attached to each casualty Insurance Policy to be cancelled and a new
loss payable clause to be attached thereto, making the loss thereunder payable to such redemptor. In
the event of foreclosure sale, Lender is hereby authorized, without the consent of Borrower and Title
Holder,to assign any and all Insurance Policies to the purchaser at the sale,or to take such other steps
as Lender may deem advisable to cause the interest of such purchaser to be protected by any of the
Insurance Policies without credit or allowance to Borrower and Title Holder for prepaid Premiums
thereon.
22. Waiver of Right of Redemption and Reinstatement. The Borrower and Title Holder hereby
waive any and all rights of redemption from sale under any order or decree of foreclosure of this
Mortgage, on its own behalf and on behalf of each and every person, except decree or judgment
creditors of Borrower and Title Holder, acquiring any interest in or title to the Premises subsequent
to the date of this Mortgage.
23. Rights Cumulative. Each right, power and remedy herein conferred upon Lender is
cumulative and in addition to every other right,power or remedy,express or implied,now or hereafter
provided by law or in equity,and each and every right,power and remedy herein set forth or otherwise
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so existing may be exercised from time to time as often and in such order as may be deemed expedient
to Lender. The exercise of one right, power or remedy shall not be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy; and no delay or omission of Lender
in the exercise of any right, power or remedy accruing hereunder or arising otherwise shall impair
any such right, power or remedy, or be construed to be a waiver of any Default or acquiescence
therein.
24. Successors and Assigns.
A. Holder of the Note. This Mortgage and each and every covenant, agreement, and other
provision hereof shall be binding upon Borrower and Title Holder and its successors and assigns
(including, without limitation, each and every record owner from time to time of the Premises or any
other person having an interest therein),and shall inure to the benefit of Lender and its successors and
assigns. Wherever herein Lender is referred to, such reference shall be deemed to include the holder
from time to time of the Note, whether so expressed or not; and each such holder from time to time
of the Note shall have and enjoy all of the rights, privileges, powers, options and benefits afforded
hereby and hereunder, and may enforce each and all of the terms and provisions hereof, as fully and
to the same extent and with the same effect as if such holder of the Note from time to time were herein
by name specifically granted such rights,privileges,powers,options and benefits,and were herein by
name designated Lender.
B. Covenants Run With Land; Successor Owners. All of the covenants of this Mortgage shall
run with the Land and be binding on any successor owners of the Land. In the event that the
ownership of the Premises or any portion thereof becomes vested in a person or persons other than
Borrower and Title Holder, Lender may,without notice to Borrower and Title Holder,deal with such
successor or successors in interest of Borrower and Title Holder with reference to this Mortgage and
the Indebtedness Hereby Secured in the same manner as with Borrower and Title Holder without in
any way releasing or discharging Borrower and Title Holder from its obligations
hereunder. Borrower and Title Holder will give immediate written notice to Lender of any
conveyance,transfer,or change of ownership of the Premises,but nothing in this Paragraph shall vary
or negate the provisions of Paragraph 15 hereof.
25. Effect of Extensions and Amendments. If the payment of the Indebtedness Hereby
Secured,or any part thereof,be extended or varied,or if any part of the security or guarantees therefor,
or interested in the Premises, shall be held to assent to such extension, variation or release, and their
liability, and the lien, and all provisions hereof, shall continue in full force and effect the right of
recourse against all such persons being expressly reserved by Lender, notwithstanding any such
extension,variation or release. Any person, firm or corporation taking a Mortgage,or other lien upon
the Premises or any part thereof or any interest therein, shall take the said lien subject to the rights of
Lender to amend, modify, extend or release the Note, this Mortgage or any other document or
instrument evidencing, securing or guaranteeing the Indebtedness Hereby Secured,in each and every
case without obtaining the consent of the holder of such junior lien and without the lien of this
Mortgage losing its priority over the rights of any such junior lien.
26. Execution of Estoppel Letter. From time to time, Borrower will furnish within ten (10)
days after Lender's request a written and duly acknowledged statement of the amount due under the
Note and under this Mortgage and whether any alleged offsets or defenses exist against the
Indebtedness Hereby Secured.
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27. Maximum Amount Hereby Secured. This Mortgage also secures the payment of and
includes all future or further advances as shall be made at all times,with respect to the Land,regardless
of whether loan proceeds have been disbursed, by the Lender herein or its successors or assigns, to
and for the benefit of the Borrower, its heirs,personal representatives, or assigns, to the same extent
as if such future advances were made on the date of the execution of this Mortgage. The total amount
of Indebtedness Hereby Secured by this Mortgage may decrease or increase from time to time, but
the total unpaid balance so secured at any one time shall not exceed One Million and no/100 Dollars
($1,000,000.00),together with interest thereon and any and all disbursements made by the Lender for
the payment of Taxes, or insurance on the Premises covered by the lien of this Mortgage and for
reasonable attorney's fees, loan commissions, service charges, liquidated damages, expenses and
court costs incurred in the collection of any or all of such sums of money. Such further or future
advances shall be wholly optional with the Lender and the same shall bear interest at the same rate as
specified in the Note referred to herein, unless said interest rate shall be modified by subsequent
agreement.
28. Subrogation. If any part of the Indebtedness Hereby Secured is used directly or indirectly
to pay off, discharge or satisfy, in whole or in part, any prior lien or encumbrance upon the Premises
or any part thereof, then Lender shall be subrogated to the rights of the holder thereof in and to such
other lien or encumbrance and any additional security held by such holder, and shall have the benefit
of the priority of the same.
29. Option to Subordinate. Subject to the terms of any specific agreement relating to
subordination of leases, at the option of Lender,this Mortgage shall become subject and subordinate,
in whole or in part(but not with respect to priority of entitlement to insurance proceeds or any Award
in condemnation) to any and all Leases of all or any part of the Premises upon the execution by
Lender and recording thereof, at any time hereafter,in the Office of the Recorder of Deeds in and for
the county wherein the Premises are situated, of a unilateral declaration to that effect.
30. Governing Law. The place of negotiation, execution, and delivery of this Mortgage and
the location of the Property being the State of Illinois, this Mortgage shall be construed and enforced
according to the laws of that State,without reference to the conflicts of law principles of that State.
31. Business Loan. Borrower certifies and agrees that the proceeds of the Note will be used
for the purposes specified in The Business Loan Agreement,and that the principal obligation secured
hereby constitutes a "business loan" coming within the definition 815 ILCS 205/4(i)(c).
32. Inspection of Premises. Lender and its representatives and agents shall have the right to
inspect the Premises at all reasonable times.
33. Security Agreement. Borrower, Title Holder and Lender agree that this Mortgage shall
constitute a Security Agreement within the meaning of the Code with respect to (a) all sums at any
time on deposit for the benefit of Borrower or held by the Lender(whether deposited by or on behalf
of Borrower or anyone else) pursuant to any of the provisions of this Mortgage or the other Loan
Documents, and (b)with respect to any personal property included in the granting clauses of this
Mortgage, which personal property may not be deemed to be affixed to the Premises or may not
constitute a "fixture" (within the meaning of Section 9-102(41) of the Code) (which property is
hereinafter referred to as "Personal Property"), and all replacements of, substitutions for, additions
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to, and the proceeds thereof(all of said Personal Property and the replacements, substitutions and
additions thereto and the proceeds thereof being deemed to be a part of the "Collateral"), and that a
security interest in and to the Collateral is hereby granted to the Lender, and the Collateral and all of
Borrower's and Title Holder's right, title and interest therein are hereby assigned to Lender, all to
secure payment of the Indebtedness Hereby Secured. All of the provisions contained in this Mortgage
pertain and apply to the Collateral as fully and to the same extent as to any other property comprising
the Premises; and the following provisions of this Paragraph shall not limit the applicability of any
other provision of this Mortgage but shall be in addition thereto:
(a) Borrower and/or Title Holder(being the"Debtor"as that term is used in the Code) is
and will be the true and lawful owner of the Collateral, subject to no liens, charges or encumbrances
other than the lien hereof, other liens and encumbrances benefiting Lender and no other party, and
liens and encumbrances, if any, expressly permitted by the other Loan Documents.
(b) The Collateral is to be used by Borrower and/or Title Holder solely for business
purposes.
(c) The Collateral will be kept at the Real Estate and, except for Obsolete Collateral (as
defined in Paragraph 15), will not be removed therefrom without the consent of Lender (being the
Secured Party as that term is used in the Code). The Collateral may be affixed to the Real Estate but
will not be affixed to any other real estate.
(d) The only persons having any interest in the Premises are Borrower, Tile Holder, and
Lender and holders of interests, if any, expressly permitted hereby.
(e) Upon an Event of Default hereunder, Lender shall have the remedies of a secured
party under the Code, subject to the rights of the Senior Lender, including, without limitation, the
right to take immediate and exclusive possession of the Collateral, or any part thereof, and for that
purpose, so far as Borrower and Title Holder can give authority therefor, with or without judicial
process, may enter (if this can be done without breach of the peace) upon any place which the
Collateral or any part thereof may be situated and remove the same therefrom (provided that if the
Collateral is affixed to real estate,such removal shall be subject to the conditions stated in the Code);
and Lender shall be entitled to hold, maintain, preserve and prepare the Collateral for sale, until
disposed of, or may propose to retain the Collateral subject to Borrower's and Title Holder'sw right
of redemption in satisfaction of Borrower's obligations, as provided in the Code. Lender may render
the Collateral unusable without removal and may dispose of the Collateral on the Premises. Lender
may require Borrower and Title Holder to assemble the Collateral and make it available to Lender for
his possession at a place to be designated by Lender which is reasonably convenient to both parties.
Lender will give Borrower and Title Holder at least ten(10)days'notice of the time and place of any
public sale of the Collateral or of the time after which any private sale or any other intended disposi-
tion thereof is made. The requirements of reasonable notice shall be met if such notice is mailed,by
certified United States mail or equivalent, postage prepaid, to the address of Borrower and Title
Holder hereinafter set forth at least ten (10) days before the time of the sale or disposition. Lender
may buy at any public sale. Lender may buy at private sale if the Collateral is of a type customarily
sold in a recognized market or is of a type which is the subject of widely distributed standard price
quotations. Any such sale may be held in conjunction with any foreclosure sale of the Premises. If
Lender so elects, the Premises and the Collateral may be sold as one lot. The net proceeds realized
upon any such disposition, after deduction for the expenses of retaking, holding, preparing for sale,
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selling and the reasonable attorneys' fees and legal expenses incurred by Lender, shall be applied
against the Indebtedness in such order or manner as Lender shall select. Lender will account to
Borrower and Title Holder for any surplus realized on such disposition.
(f) The terms and provisions contained in this Paragraph 33,unless the context otherwise
requires, shall have the meanings and be construed as provided in the Code.
(g) This Mortgage is intended to be a financing statement within the purview of
Section 9-502(b) of the Code with respect to the Collateral and the goods described herein, which
goods are or may become fixtures relating to the Premises. The addresses of Borrower(Debtor) and
Lender(Secured Party)are herein below set forth. This Mortgage is to be filed for recording with the
Recorder of Deeds of the county or counties where the Premises are located. Borrower is the contract
purchaser, and Title Holder is the record owners of the Premises.
(h) To the extent permitted by applicable law, the security interest created hereby is
specifically intended to cover all Leases between Borrower and Title Holder or its agents as lessor,
and various tenants named therein, as lessee, including all extended terms and all extensions and
renewals of the terms thereof, as well as any amendments to or replacement of said Leases, together
with all of the right,title and interest of Borrower and Title Holder, as lessor thereunder.
34. Time is of the Essence. Time is of the essence of this Mortgage, and any other document
or instrument evidencing or securing the Indebtedness Hereby Secured.
35. Captions and Pronouns. The captions and headings of the various sections of this Mortgage
are for convenience only, and are not to be construed as confining or limiting in any way the scope or
intent of the provisions hereof. Whenever the context requires or permits, the singular shall include
the plural,the plural shall include the singular,and the masculine, feminine and neuter shall be freely
interchangeable.
36. 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 in writing, and shall be deemed given if
and when personally delivered, or on the second business day after being deposited in the United
States mail,registered or certified,postage prepaid,addressed to a party at its address set forth below,
or to such other address as the party to receive such notice may have designated to all other parties by
notice in accordance herewith:
If to Lender: City of Elgin
Attn: Sean Stegall, City Manager
150 Dexter Court
Elgin, Illinois 60120
With copy to: William A. Cogley, Esq.
City of Elgin
150 Dexter Court
Elgin, Illinois 60120
If to Borrower The Elgin Tower LLC
Attn: William Luchini, Manager
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763 S. New Ballas, Suite 300
St. Louis, MO 63141
With copy to: Peter C. Bazos, Esq.
Bazos, Freeman, Schuster& Braithwaite LLC
1250 Larkin Ave., Suite 100
Elgin, Illinois 60123
Fax: 847-742-9777
If to Title Holder: The Stickling Foundation
Attn: Neal Pitcher, Esq., President
1350 Grandstand Place
Elgin, IL 60123
Except as otherwise specifically required herein, notice of the exercise of any right, power or option
granted to Lender by this Mortgage is not required to be given.
37. Subordination to Rights of Senior Lender. For the absence of doubt, Lender
acknowledges that all of its rights in the Real Estate as arising hereunder and/or under this Mortgage,
the Business Loan Agreement, or any policy of insurance or any other documents or instruments
delivered in connection with this Business Loan Agreement, shall be subject and subordinate to the
rights of the Senior Lenders under the Senior Mortgages.
[signature pages to follows]
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IN WITNESS WHEREOF,The Borrower and the Title Holder have caused these presents to be
signed on the date first set forth above.
Elgin Tower LLC
an Illinois limited liability company
By: lttt
(1""
Name: William Luchini,Manager
STATE OF ILLINOIS )
) SS.
COUNTY OF Kau r= )
I, the undersigned, a Notary Public in and for said County, in the State aforesaid, DO
HEREBY CERTIFY that, William Luchini, personally known to me to be the Manager of Elgin
Tower LLC, and personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person, and acknowledged that as such
Manager he signed and delivered the said instrument as their free and voluntary act and deed of said
Elgin Tower LLC, for the uses and purposes therein set forth.
Givender my hand and official seal this
23-day of March, 2016.
.44"11111
'EAL)
"OFFICIAL SEAL"
PETER C BAZOS
Notary Public, State of Illinois
My Commission Expires 5/18/2018
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The Stickling Foundation
an Illinois not-for-profit corporation
/ /
/4,
Neal Pitcher, P esident
STATE OF ILLINOIS )
) SS.
COUNTY OF )6,,,e )
I, the undersigned, a Notary Public in and for said County, in the State aforesaid, DO
HEREBY CERTIFY that, Neal Pitcher, personally known to me to be the President of Stickling
Foundation, and personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person, and acknowledged that as such
President he signed and delivered the said instrument as their free and voluntary act and deed of said
Stickling Foundation, for the uses and purposes therein set forth.
Given under my hand and official seal this
/1
v d of March 2016.
"OFFICIAL SEAL"
n W NANCY R PICKENS
K .. Z Notary Public, State of Illinois
fj.„... My Commission Expires 12/22/2017
(SEAL)
THIS INSTRUMENT PREPARED BY AND
WHEN RECORDED RETURN DOCUMENT TO:
PETER C. BAZOS
Bazos, Freeman, Schuster, &Braithwaite, LLC
1250 Larkin Avenue, Suite 100
Elgin, Illinois 60123
847/742-8800
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EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
PARCEL ONE:
That part of Lots 3 and 4 In Block 19 of the Original Town of Elgin on the East side of Fox River,
described as follows: Beginning at the Southeast corner of said Lot 4; thence North along the East
line of said lot, 60 feet; thence West at right angles to said East line, 66 feet to the West line of
said lot; thence Southwesterly at right angles to the Easterly line of River Street to the Westerly
line of said Lot 3; thence Southerly Along said Westerly line and along the Westerly line of Lot 4
aforesaid to the South line of said Lot 4; thence East along the South line of said lot, 49.5 feet to
the point of beginning, in the City of Elgin, Kane County, Illinois.
PARCEL TWO:
That part of Lot 3 in Block 19 of the Original Town of Elgin on the East side of Fox River,
described as follows;Beginning at a point on the westerly line of Lot 3 aforesaid,44 feet Southerly
from the Northwest corner thereof; thence Southerly along the Westerly line of said lot, 53 feet
and 8 inches to the Northerly line of the lot conveyed to the Home National Bank of Elgin by deed
dated June 3, 1890, and recorded June 17, 1890 as document 30468,in.book 266,page 115;thence
Easterly at right angles to the Easterly line of River Street, 19 foot 9 inches to the East line of said
Lot 3; thence North along said East line to a point therein from which a line drawn at right angles
to the Easterly line of River Street would intersect the place of beginning; thence Westerly at right
angles to River Street and along said line 60 feet and 2 inches to the point of beginning, in the City
of Elgin, Kane County, Illinois
PARCEL THREE:
The North 21 feet of the South 81 feet of Lot 4, (measured on the East line of said lot) in Block 19
of the Original Town of Elgin on the East side of Fox River, in Section 14, Township 41 North,
Range 8 East of the Third Principal Meridian, in the City of Elgin, Kane County, Illinois.
Property Address: 100 East Chicago Street
State: Illinois
County: Kane
City: Elgin
PIN: 06-14-283-018
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EXHIBIT 3
CONSTRUCTION ESCROW
LST
is*L PC
•Il;aO_M.
CONSTRUCTION LOAN ESCROW AGREEMENT
847-785-0300 (PHONE) 847-758-0600 (FAX)
Escrow Number: 1438898
TO: Lakeshore Title Agency("Escrowee")
From time to time the City of Elgin, an Illinois municipal corporation (hereinafter referred to as "Lender"), will
deposit with Escrowee such proceeds,as it shall determine,from a$600,000 loan secured by a mortgage or trust deed
(hereinafter referred to as the "Mortgage") on the premises legally described in Lakeshore Title Agency's policy or
commitment for a construction loan policy of title insurance bearing number No.1438898 (hereinafter referred to as
"CLP")which is commonly known as: 100 E Chicago St Elgin IL 60120(hereinafter referred to as the"Premises").
From time to time Elgin Tower LLC,an Illinois limited liability company(hereinafter referred to as"Owner") may
also deposit or cause to be deposited funds not constituting mortgage proceeds into this Escrow which said funds shall
also be disbursed by Escrowee pursuant to the provisions of this Agreement.
Escrowee is hereby authorized and directed to disburse the funds deposited hereunder in the following manner:
1. Pay costs of construction of a certain improvement to be erected on the Premises;
2. Obtain releases and satisfaction of liens and other encumbrances, if any, pursuant to statements of
amounts due which must be approved by Owner and Lender;and
3. Pay such other amounts as are approved by Owner and Lender.
The Inspector/Architect is to be: and the General Contractor is to be:
Crestwood Building Associates,Inc.,a Missouri corporation(hereinafter referred to as the"General Contractor")
There will be monthly disbursement draws which are to be made in accordance with the terms and conditions of this
escrow,as hereinafter set forth.
I. REQUIREMENTS PRIOR TO FIRST DISBURSEMENT
A. Prior to the first disbursement of funds hereunder, it is a requirement of this escrow that Escrowee
be furnished with the following:
1. Lender Initial Escrow Certification approving the condition of title to the Premises as set
forth in the above-referenced CLP;
2. An approval by Lender for loan disbursement purposes of the Owner's and the General
B-1
Contractor's Sworn Statement which are provided at I.A.3 and I.A.4 below;
3. An Owner's Sworn Statement disclosing every contract entered into by Owner and setting
forth in detail the names,addresses,and telephone numbers of all contractors with whom it
has contracted, type of labor and materials to be furnished, amounts of the contracts
(including extras and credits),amounts previously paid to date,amounts of current request,
accumulative retainages to date,and balances due;
4. A General Contractor's Sworn Statement setting forth in detail the names, addresses, and
telephone numbers of all contractors with whom it has contracted, type of labor and
materials to be furnished,amounts of the contracts(including extras and credits),amounts
previously paid to date, amounts of current request, accumulative retainages to date, and
balances due;
B. Escrowee shall be prepared to furnish Lender a Construction Loan Disbursement Endorsement to
the CLP covering the requested disbursements, or if such a policy has not been previously issued,
Escrowee shall be prepared to furnish to Lender the CLP with a Construction Loan Disbursement
Endorsement therein insuring the amount of the requested disbursement.
II.REQUIREMENTS FOR EACH DISBURSEMENT
Prior to each disbursement of funds hereunder, including the first disbursement, it is a requirement of this
escrow that Escrowee be furnished:
A. A General Contractor's Sworn Statement to and including date of disbursement,setting forth in detail
the names,addresses,and telephone numbers of all contractors with whom it has contracted,type of
labor and materials to be furnished,amounts of the contracts(including extras and credits),amounts
previously paid to date, amounts of current request, accumulative retainages to date, and balances
due;
B. An Owner's Sworn Statement amended to and including the date of disbursement, setting forth in
detail the names, addresses and telephone numbers of all contractors with whom it has contracted,
type of labor and materials to be furnished,amounts of the contracts(including extras and credits),
amounts previously paid to date, amounts of current request, accumulative retainages to date, and
balances due;
C. An executed Owner and Lender Payment Authorization for the requested disbursement;
D. Evidence that sufficient funds are available to cover the requested disbursements and to pay for the
completion of the improvement, including extras, change orders, and non-construction items for
which waivers have not been deposited and for which funds have not previously been deposited;
E. Sufficient funds to cover unpaid title,recording and escrow charges,and transfer taxes;
F. Statements,Sworn Statements,supporting lien waivers(consisting of at least Final Waivers of Lien
or Waivers of Lien to Date as appropriate), dated as of the date of the Owner's and General
Contractor's Sworn Statement(s), and releases of lien, if necessary, satisfactory to Lakeshore Title
Agency.
G. Escrowee may,at its option,verify information submitted by Owner and General contractor or may
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require Owner and General Contractor to furnish to Escrowee verification by contractors and
subcontractors and material suppliers who have contracted with Owner and/or General Contractor.
III. METHOD OF DISBURSEMENT
All disbursements for construction purposes will be made by Escrowee directly to contractors,
subcontractors, and material men listed and for the amounts shown on the Owner's and General
Contractor's Sworn Statement(s), unless General Contractor submits a Letter of Direction giving
Escrowee authorization to pay, executed by the subcontractor or material men certifying their
payment in full has been made as to the disbursement in question. In the event the General
Contractor and any subcontractor jointly authorize, in writing, Escrowee shall pay any funds due
one to the other,Escrowee may,but is not obligated to,comply with such authorization.
IV. ENDORSEMENT TO POLICY
As Escrowee makes a partial disbursement of mortgage proceeds hereunder, it will furnish Lender
a WFG National Title Insurance Company (Underwriter) Construction Loan Disbursement
Endorsement,to the Construction Loan Policy.
V. REQUIREMENTS FOR FINAL DISBURSEMENT
Prior to the final disbursement of the funds hereunder, it is a requirement of this escrow that
Escrowee by furnished the following:
A. All required documentation for the final disbursement as delineated at II.A.through II.G.,inclusive,
above;
B. A Composite Mortgage Statement(ALTA Form)executed by Owner and Lender.
C. Any and all other documents,undertakings, statements,releases, certifications,or things necessary
or desirable to Lakeshore Title Agency, in its sole discretion, so that Lakeshore Title Agency is
prepared to issue its final Construction Loan Disbursement Endorsement to the CLP,subject to usual
terms,conditions and exceptions contained in that form of policy and also subject to the exceptions
appearing in the above-reference CLP, and any Construction Loan Disbursement Endorsement
heretofore issued,as approved by Lender pursuant to paragraph 1.A.1,hereof.
With respect to the condition of title,the liability of Escrowee in making any disbursements in reliance upon the title
evidence referred to above shall not extend to the determination of whether or not it is acceptable to Lender, the
furnishing of funds for disbursement by the Lender being considered the acceptance of title as so reported.
VI. OUT-OF-BALANCE LOAN
If at any time during the course of construction,the total of the unpaid disclosed cost of construction of the
improvement,as indicated by the sum of the column totals on the Owner's and General Contractor's Sworn
Statement(s),exceeds the amount of the undisbursed mortgage proceeds,as calculated by subtracting the
total amount of liability of Lakeshore Title Agency,shown on the Construction Loan Disbursement
Endorsements from the face amount of the mortgage,Escrowee need not make further disbursements under
the terms of this escrow until Owner has deposited in this escrow the sum necessary to make the funds
equal to the unpaid disclosed cost of construction,or unless specifically directed to do so by Lender.Also if
Escrowee discovers a misstatement in a Sworn Statement furnished by General Contractor or Owner,it
shall: (1)stop disbursements until the misstatement has been corrected;and(2)inform Lender prior to
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making a further disbursement even though the same has been corrected.
VII. LIABILITY OF ESCROWEE AND LAKESHORE TITLE AGENCY
The functions and duties assumed by Escrowee include only those described in this Agreement and the
liability of Lakeshore Title Agency is limited to the terms,conditions and exceptions contained in the CLP.
Escrowee is not obligated to act except in accordance with the terms and conditions of this Agreement.
Neither Lakeshore Title Agency,nor Escrowee insure that the Improvement will be completed,nor do they
insure that the Improvement,when completed,will be in accordance with plans and specifications,nor do
they insure that sufficient funds will be available for completion nor do they make the certifications of the
Inspector/Architect their own,nor do they assume any liability for same other than procurement of the
report/certificate as one of the conditions precedent to each disbursement. Lakeshore Title Agency and
Escrowee assume no liability to Owner relating to protection against mechanics lien claims.
VIII. BILLING
A. Bill all title,recording,escrow charges,and transfer taxes,to Owner. All such title,recording,escrow
charges,and transfer taxes are to be considered as a cost of construction of the Improvement for
purposes of paragraph VI of this Agreement.
B. An annual maintenance fee,as determined by the then current rate schedule,will commence one year
from the date of this agreement,and may be deducted from the funds on deposit.
IX. GENERAL CONDITIONS
A. At any time prior to its commencement of disbursement of funds hereunder,Escrowee reserves the right
to decline commencement of disbursement of funds if Lakeshore Title Agency declines to insure any risk
offered for insurance hereunder,whereupon Escrowee shall return to Lender any documents in its possession
relating to such loan and the funds received by it. Commencement of disbursement of funds makes this
Agreement effective as to all funds received and disbursed for the construction of the Improvement.
B. Where,after the first disbursement,a further title search reveals a subsequently arising exception over
which Lakeshore Title Agency is unwilling to insure,Escrowee will notify Lender and may discontinue
disbursement until the exception has been disposed of to the satisfaction of Lender and Lakeshore Title
Agency. A mechanics lien claim over which Lakeshore Title Agency is required to insure hereunder does
not warrant discontinuance of disbursements.
C. Escrowee shall not be responsible for any loss of documents or funds while such documents or funds are
not in its custody. Documents or funds deposited in the United States mail, given to a delivery service, or
sent by wire transfer shall not be construed as being in the custody of Escrowee unless and until actually
received by Escrowee.
D. Escrowee shall not be liable for loss caused by any error in the reports or certifications furnished it
hereunder as to work in place.
E. All approvals of acts hereunder by any party to this Agreement shall be in writing.
F. In fulfilling its responsibilities,Escrowee shall be bound solely by the express terms of this agreement.
G. Escrowee shall be entitled to assume the genuineness of all signatures and the authenticity of all lien
waivers, Sworn Statements and directions and of all other documents and things delivered to it pursuant to
this Agreement (collectively, "Documents"), if such Documents are submitted as originals; and the
conformity with originals of all Documents submitted as copies. Furthermore,in making its examination of
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the Documents delivered to it under this Agreement, Escrowee shall be entitled to assume that each entity
and/or person signing on behalf of such entity had full power and authority to enter into and perform all of
its obligations thereunder;and Escrowee shall also be entitled to assume the due authorization by each such
entity of all requisite action and the due execution and delivery of such Documents by each such entity.
H. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois.
If there be more than one person designated herein,the verbs and pronouns associated therewith, although
expressed in the singular, shall be read and construed as plural. Whenever the masculine gender is used
herein it shall also be read and construed as the feminine, as the case may be. It is mutually agreed and
understood by and between the parties hereto that the agreements herein contained shall extend to and be
obligatory and binding upon the heirs, executors, administrators, successors, and assigns of the respective
parties hereto.
J. In the event that any provision of this Agreement,or part thereof,shall be held to be void or unenforceable
by a final, non-appealable order entered by a court of competent jurisdiction, such determination shall not
affect or impair the enforceability of the remaining portions of this Agreement.
K. Each party hereto represent and warrants to the other parties hereto that it has full power and authority
to execute this Agreement and to perform or cause to be performed the obligations on its part to be performed.
L. In the computation of a period of time, if any, expressed in this Agreement, the day of the act or event
from which said period of time runs shall be excluded and the last day of such period shall be included,
unless it falls on a Saturday,Sunday,or legal holiday observed by the office of the Recorder of Deeds of the
county in which the Premises is located,in which case the period shall be deemed to run until the end of the
next day which is not a Saturday,Sunday,or such legal holiday.
M. This Agreement constitutes the entire agreement of the parties hereto and supersedes any prior or
contemporaneous agreements,representations or understandings,whether written,or oral. This Agreement
may be amended only by written instrument executed by each of the parties hereto.
N. The captions contained in this Agreement are for convenience only and are not part of the terms
provisions or conditions of this Agreement.
O. Except as to deposits of funds for which Escrowee has received express written direction concerning
investment or other handling,the parties hereto agree that the Escrowee shall be under no duty to invest or
reinvest any deposits at any time held by it hereunder; and further that Escrowee may commingle such
deposits with other deposits or with its own funds in the manner provided for the administration of funds
under 205 ILCS 620/2-8 (1992), and may use any part of the all such funds for its own benefit without
obligation to any party for interest or earnings derived thereby, if any; provided, however, nothing herein
shall diminish Escrowee's obligation to apply the full amount of deposits in accordance with the terms of
this agreement. However, any funds deposited hereunder with Escrowee and which have not yet been
disbursed by Escrowee pursuant to the terms of the Construction Loan Escrow Agreement shall be
immediately returned to Lender,without notice to any other party hereto,if at any time or from time to time
Lender demands the return thereof. If no such demand is made by lender, Escrowee shall continue to have
the Escrow funds in accordance with the terms of the Construction Loan Escrow Agreement.
In the event the Escrowee is requested to invest deposits hereunder, it shall not be held responsible for any
loss of principal or interest which may be incurred as a result of making the investments or redeeming said
investment for the purposes of this escrow.
X. NOTICES
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All notices and demands, whether required or otherwise, shall be in writing and served
personally or by registered or certified mail, return receipt requested, with proper
postage or delivery prepaid, to the parties at the following address:
To Escrowee:
LAKESHORE TITLE AGENCY
Construction Escrow No. 1438898
3501 Algonquin Rd Ste 120
Rolling Meadows IL 60008
To Owner:
ELGIN TOWER LLC_
Address andThone ber:
To Lender:
CITY OF ELGIN_
Address and Telephone Number:
150 Dexter Court
Elgin, IL 60120
Attention: William A. Cogley
Corporation Counsel
847-931-5659
cogley_y@cityofelgin.org
To General Contractor:
CRESTWOOD BUILDING ASSOCIATES, INC.
Address and Telephon Nu er:
or such other addresses as a party may designate by written notice so served.Each such notice shall be deemed
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served on the date the U.S.MAIL return receipt is signed,or delivery is refused,or the notice is designated by the
Postal authorities as not deliverable;or the date when personally served on such party,as the case may be.
XI. COMPENSATION OF ESCROWEE
Escrowee shall be compensated for its services rendered under this Agreement at the time of, and from the
funds deposited for, each disbursement. In addition, Escrowee shall be paid for investment or reinvestment
of funds (if directed jointly by Owner and Lender) and for any other special services that may be rendered
by it, in accordance with invoices rendered by Escrowee from time to time. All fees and title charges due
Escrowee and title charges, search fees, recording fees, transfer taxes, and the like due to Lakeshore Title
Agency, and any other costs and/or fees advanced by Escrowee on behalf of any party to this Agreement
shall be paid to Escrowee prior to or contemporaneously with issuance of each Construction Loan
Disbursement Endorsement to the CLP.
XII. BINDING EFFECT
This Agreement may be executed in multiple original counterparts duly executed by Beneficiary, Trustee,
Lender, and Contractor;provided,however, this Agreement shall not become binding upon Escrowee until
it has received manually executed original copies of the same from each of the foregoing named parties and
Escrowee has accepted the same and delivered copies of said executed Agreement to each of said parties.
XIII. DEFAULT UNDER MORTGAGE
In the event of default under the Mortgage as declared by Lender and/or foreclosure of the Mortgage by
Lender,Escrowee shall have the right to discontinue further disbursements under this Agreement.
Dated this day of March,2016.
FOR LEN/'R: ��j 44i1-1
(Sign re) '„,
David J. Kaptain Mayor Kimberly A. Dewis, City Clerk
(Name) (Title)
FOR THE OWNER;
ELGIN TOWER
/LLC E./9,1- 4:::(
(Signature)
The undersigned agrees that this Agreement shall not be construed as,nor is it the intent of any of the parties hereto
to give any benefits,rights,privileges,actions or remedies to any person,partnership,firm or corporation,other than
Lakeshore Title Agency, Lender,and Owner,under a third-party beneficiary theory or otherwise.
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FOR THE GENERAL CONTRACTOR:
CRESTWOOD BUILDING ASSOCIATES, INC.
4L u")
(Firm)
(Signature)
(Name) (Title)
Construction Escrow Number:
Accepted on this day of , 2016.
By:
Lakeshore Title Agency
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