Loan No. 31-0900011A
$10,150,000.00 San Francisco, California
September 9, 1999
1.PROMISE TO PAY. For value received, the undersigned FREMONT HOLDING L.L.C., a
Delaware limited liability company ("Borrower"), promise(s) to pay to the order
of XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Lender"), 0000 Xxxxxx Xxxx Xxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, or at such other place as may be
designated in writing by Lender, the principal sum of TEN MILLION ONE HUNDRED
FIFTY THOUSAND AND NO/100THS DOLLARS ($10,150,000.00) ("Loan"), with interest
thereon as specified herein. All sums owing hereunder are payable in lawful
money of the United States of America, in immediately available funds, without
offset, deduction or counterclaim of any kind.
2.SECURED BY DEED OF TRUST. This Note is secured by, among other things, that
Deed of Trust and Absolute Assignment of Rents and Leases and Security
Agreement(and Fixture Filing) ("Deed of Trust") of even date herewith,
encumbering certain real property described therein ("Property").
3.DEFINITIONS. For the purposes of this Note, the following terms shall have
the following meanings:
"Business Day" shall mean any day other than a Saturday, Sunday, legal holiday
or other day on which commercial banks in California are authorized or required
by law to close. All references in this Note to a "day" or a "date" shall be
to a calendar day unless specifically referenced as a Business Day.
"Default" shall have the meaning set forth in the Deed of Trust.
"Disbursement Date" shall mean the date upon which the Loan proceeds are funded
into escrow in connection with the closing of the Loan.
"Effective Date" shall mean the date the Deed of Trust is recorded in the
Office of the County Recorder of the county where the Property is located and
Lender authorizes the Loan proceeds to be released to Borrower.
"Loan Documents" shall mean the documents listed in Exhibit B attached hereto
and incorporated herein by this reference.
"Maturity Date" shall mean October 1, 2014.
4. INTEREST; PAYMENTS.
4.1 Definitions. The following terms shall have the meanings indicated:
"Actual/360 Basis" shall mean on the basis of a 360-day year and charged
on the basis of actual days elapsed for any whole or partial month in
which interest is being calculated.
"30/360 Basis" shall mean on the basis of a 360-day year consisting of 12
months of 30 days each.
"Interest Rate" shall mean a fixed interest rate equal to 1.70 plus the
yield to maturity at the bid price of obligations of the United States
Treasury which will mature on the date that is 15 years after the
Disbursement Date or, if a bid price is not readily quoted in the public
securities market for such obligations as will mature on the earliest date
thereafter for which a bid price is readily quoted in the public securities
market. The Interest Rate shall be determined on the Disbursement Date.
4.2 Interest Accrual. Interest on the outstanding principal balance of this
Note shall accrue from the Disbursement Date at an annual rate equal to
the Interest Rate calculated on an Actual/360 Basis.
4.3 Payments. Monthly payments hereunder shall commence on the first day of
the calendar month following the Disbursement Date and continue on the
first day of each calendar month thereafter through the Maturity Date. If
the Disbursement Date is a date other than the first day of a calendar
month, the first monthly payment shall be interest only. Subsequent
monthly payments shall be calculated on the basis of an equal-payment 15
year amortization of principal and interest. Notwithstanding that interest
on this Note accrues on an Actual/360 Basis, the total amount of each such
amortized monthly payment of principal and interest shall be determined
using a 30/360 Basis. On the Maturity Date, all unpaid principal and
accrued but unpaid interest shall be due and owing in full. All interest
shall be paid in arrears.
4.4 Acknowledgments. Borrower acknowledges that interest calculated on an
Actual/360 Basis exceeds interest calculated on a 30/360 Basis and,
therefore: (a) a greater portion of each monthly installment of principal
and interest will be applied to interest using the Actual/360 Basis than
would be the case if interest accrued on a 30/360 Basis; and (b) the
unpaid principal balance of this Note on the Maturity Date will be greater
using the Actual/360 Basis than would be the case if interest accrued on a
30/360 Basis.
4.5 Application of Payments. In the absence of a specific determination by
Lender to the contrary, all payments paid by Borrower to Lender in
connection with the obligations of Borrower under this Note and under the
other Loan Documents shall be applied in the following order of priority:
(a) to amounts, other than principal and interest, due to Lender pursuant
to this Note or the other Loan Documents; (b) to accrued but unpaid
interest on this Note; and (c) to the unpaid principal balance of this
Note. Borrower irrevocably waives the right to direct the application of
any and all payments at any time hereafter received by Xxxxxx from or on
behalf of Borrower, and Borrower irrevocably agrees that Lender shall have
the continuing exclusive right to apply any and all such payments against
the then due and owing obligations of Borrower in such order of priority as
Lender may deem advisable.
5. LATE CHARGE; DEFAULT RATE.
5.1 Late Charge. If any payment required hereunder is not paid on or before
the fifth calendar day of the month in which it is due, Borrower shall pay
a late or collection charge, as liquidated damages, equal to 4% of the
amount of such unpaid payment. Borrower acknowledges that Xxxxxx will
incur additional expenses as a result of any late payments hereunder, which
expenses would be impracticable to quantify, and that Xxxxxxxx's payments
under this paragraph are a reasonable estimate of such expenses. The
foregoing to the contrary notwithstanding, no late or collection charge
shall be payable by Borrower as a result of any delay in the payment of any
sum due and payable on the Maturity Date.
5.2 Default Rate. Commencing upon a Default and continuing until such Default
shall have been cured by Borrower, all sums owing on this Note shall bear
interest until paid in full at a rate per annum equal to 5% plus the
Interest Rate ("Default Rate").
6.MAXIMUM RATE PERMITTED BY LAW. Neither this Note nor any of the other Loan
Documents shall require the payment or permit the collection of any interest or
any late payment charge in excess of the maximum rate permitted by law. If any
such excess interest or late payment charge is provided for under this Note or
any of the other Loan Documents or if this Note or any of the other Loan
Documents shall be adjudicated to provide for such excess, neither Borrower nor
Borrower's successors or assigns shall be obligated to pay such excess, and the
right to demand the payment of any such excess shall be and hereby is waived,
and this provision shall control any other provision of this Note or any of the
other Loan Documents. If Lender shall collect amounts which are deemed to
constitute interest and which would increase the effective interest rate to a
rate in excess of the maximum rate permitted by law, all such amounts deemed to
constitute interest in excess of the maximum legal rate shall, upon such
determination, at the option of Lender, be returned to Borrower or credited
against the outstanding principal balance of this Note.
7.ACCELERATION. If (a) Borrower shall fail to pay when due any sums payable
under this Note; (b) any other Default shall occur; or (c) any other event or
condition shall occur which, under the terms of the Deed of Trust or any other
Loan Document, gives rise to a right of acceleration of sums owing under this
Note, then Lender, at its sole option, shall have the right to declare all sums
owing under this Note immediately due and payable; provided, however, that if
the Deed of Trust or any other Loan Document provides for the automatic
acceleration of payment of sums owing under this Note, all sums owing under this
Note shall be automatically due and payable in accordance with the terms of the
Deed of Trust or such other Loan Document.
8. BORROWER'S LIABILITY.
8.1 Limitation. Except as otherwise provided in this Section 8, Xxxxxx's
recovery against Borrower under this Note and the other Loan Documents
shall be limited solely to the Property and the "Collateral" (as defined in
the Deed of Trust).
8.2 Exceptions. Nothing contained in Section 8.1 or elsewhere in this Note
or the other Loan Documents, however, shall limit in any way the personal
liability of Borrower owed to Lender for any losses or damages incurred by
Xxxxxx (including, without limitation, any impairment of Lender's security
for the Loan) with respect to any of the following matters: (a) fraud or
willful misrepresentation; (b) material physical waste of the Property or
the Collateral; (c) failure to pay property or other taxes, assessments or
charges (other than amounts paid to Lender for taxes, assessments or
charges pursuant to Impounds as defined in Exhibit A and where Lender
elects not to apply such funds toward payment of the taxes, assessments or
charges owed) which may create liens senior to the lien of the Deed of
Trust on all or any portion of the Property; (d) failure to deliver any
insurance or condemnation proceeds or awards or any security deposits
received by Borrower to Lender or to otherwise apply such sums as required
under the terms of the Loan Documents or any other instrument now or
hereafter securing this Note; (e) failure to apply any rents, royalties,
accounts, revenues, income, issues, profits and other benefits from the
Property which are collected or received by Borrower during the period of
any Default or after acceleration of the indebtedness and other sums owing
under the Loan Documents to the payment of either (i) such indebtedness or
other sums or (ii) the normal and necessary operating expenses of the
Property; or (f) any breach by Borrower of any covenant in this Note or in
the Deed of Trust regarding Hazardous Materials (as defined in the Deed of
Trust) or any representation or warranty of Borrower regarding Hazardous
Materials proving to have been untrue when made.
8.3 No Release or Impairment. Nothing contained in Section 8.1 shall be
deemed to release, affect or impair the indebtedness evidenced by this Note
or the obligations of Borrower under, or the liens and security interests
created by the Loan Documents, or Xxxxxx's rights to enforce its remedies
under this Note and the other Loan Documents, including, without
limitation, the right to pursue any remedy for injunctive or other
equitable relief, or any suit or action in connection with the
preservation, enforcement or foreclosure of the liens, mortgages,
assignments and security interests which are now or at any time hereafter
security for the payment and performance of all obligations under this Note
or the other Loan Documents.
8.4 Prevail and Control. The provisions of this Section 8 shall prevail and
control over any contrary provisions elsewhere in this Note or the other
Loan Documents.
9.NON-TRUSTOR BORROWER. If any Borrower is not also a "Trustor" under the Deed
of Trust, such Borrower hereby makes all representations and warranties in favor
of Lender contained in Article 5 of the Deed of Trust, all covenants contained
in Section 6.15 of the Deed of Trust, and all indemnities of Lender contained in
Section 6.19 of the Deed of Trust, jointly and severally with the "Trustor."
10. MISCELLANEOUS.
10.1 Joint and Several Liability. If this Note is executed by more than one
person or entity as Borrower, the obligations of each such person or entity
shall be joint and several. No person or entity shall be a mere
accommodation maker, but each shall be primarily and directly liable
hereunder.
10.2 Waiver of Presentment. Except as otherwise provided in any other Loan
Document, Borrower hereby waives presentment, demand, notice of dishonor,
notice of default or delinquency, notice of acceleration, notice of
nonpayment, notice of costs, expenses or losses and interest thereon, and
notice of interest on interest and late charges.
10.3 Delay In Enforcement. No previous waiver or failure or delay by Xxxxxx
in acting with respect to the terms of this Note or the Deed of Trust shall
constitute a waiver of any breach, default or failure of condition under
this Note, the Deed of Trust or the obligations secured thereby. A waiver
of any term of this Note, the Deed of Trust or of any of the obligations
secured thereby must be made in writing signed by Xxxxxx, shall be limited
to the express terms of such waiver, and shall not constitute a waiver of
any subsequent obligation of Borrower. The acceptance at any time by
Lender of any past-due amount shall not be deemed to be a waiver of the
right to require prompt payment when due of any other amounts then or
thereafter due and payable.
10.4 Time of the Essence. Time is of the essence with respect to every
provision hereof.
10.5 Governing Law. This Note was accepted by Xxxxxx in the state of
California and the proceeds of this Note were disbursed from the state of
California, which state the parties agree has a substantial relationship to
the parties and to the underlying transaction embodied hereby.
Accordingly, in all respects, including, without limiting the generality of
the foregoing, matters of construction, validity, enforceability and
performance, this Note, the Deed of Trust and the other Loan Documents and
the obligations arising hereunder and thereunder shall be governed by, and
construed in accordance with, the laws of the state of California
applicable to contracts made and performed in such state and any applicable
law of the United States of America, except that at all times the
provisions for the enforcement of Lender's STATUTORY POWER OF SALE granted
under the Deed of Trust securing this Note and the creation, perfection and
enforcement of the security interests created pursuant thereto and pursuant
to the other Loan Documents shall be governed by and construed according to
the law of the state where the Property is located. Except as provided in
the immediately preceding sentence, Borrower hereby unconditionally and
irrevocably waives, to the fullest extent permitted by law, any claim to
assert that the law of any jurisdiction other than California governs the
Deed of Trust, this Note and the other Loan Documents.
10.6 Consent to Jurisdiction. Borrower irrevocably submits to the
jurisdiction of: (a) any state or federal court sitting in the state of
California over any suit, action, or proceeding, brought by Borrower
against Lender, arising out of or relating to this Note or the Loan
evidenced hereby; (b) any state or federal court sitting in the state where
the Property is located or the state in which Borrower's principal place of
business is located over any suit, action or proceeding, brought by Lender
against Borrower, arising out of or relating to this Note or the Loan
evidenced hereby; and (c) any state court sitting in the county of the
state where the Property is located over any suit, action, or proceeding,
brought by Xxxxxx to exercise its STATUTORY POWER OF SALE under the Deed of
Trust or any action brought by the Lender to enforce its rights with
respect to the Collateral. Borrower irrevocably waives, to the fullest
extent permitted by law, any objection that Borrower may now or hereafter
have to the laying of venue of any such suit, action, or proceeding brought
in any such court and any claim that any such suit, action, or proceeding
brought in any such court has been brought in an inconvenient forum.
10.7 Counterparts. This Note may be executed in any number of counterparts,
each of which when executed and delivered shall be deemed an original and
all of which taken together shall be deemed to be one and the same Note.
10.8 Heirs, Successors and Assigns. All of the terms, covenants, conditions
and indemnities contained in this Note and the other Loan Documents shall
be binding upon the heirs, successors and assigns of Borrower and shall
inure to the benefit of the successors and assigns of Lender. The
foregoing sentence shall not be construed to permit Borrower to assign the
Loan except as otherwise permitted in this Note or the other Loan
Documents.
10.9 Severability. If any term of this Note, or the application thereof to
any person or circumstances, shall, to any extent, be invalid or
unenforceable, the remainder of this Note, or the application of such term
to persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term of this Note
shall be valid and enforceable to the fullest extent permitted by law.
10.10 Consents and Approvals. Wherever Lender's consent, approval, acceptance
or satisfaction is required under any provision of this Note or any of the
other Loan Documents, such consent, approval, acceptance or satisfaction
shall not be unreasonably withheld, conditioned or delayed by Lender unless
such provision expressly so provides.
11.NOTICES. All notices and other communications that are required or permitted
to be given to a party under this Note shall be in writing and shall be sent to
such party, either by personal delivery, by overnight delivery service, by
certified first class mail, return receipt requested, or by facsimile
transmission to the address or facsimile number below. All such notices and
communications shall be effective upon receipt of such delivery or facsimile
transmission. The addresses and facsimile numbers of the parties shall be:
Borrower: Lender:
FREMONT HOLDING L.L.C.
00000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
FAX No.: (000) 000-0000
Xxxxx Fargo Bank, N.A.
0000 Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Loan No. 31-0900011A
FAX No.: (000) 000-0000
12. ADDITIONAL TERMS AND CONDITIONS. The additional terms and conditions set
forth in Exhibit A attached hereto are incorporated herein by this reference.
13.PREPAYMENT. Borrower acknowledges that any prepayment of this Note will cause
Lender to lose its interest rate yield on this Note and will possibly require
that Lender reinvest any such prepayment amount in loans of a lesser interest
rate yield (including, without limitation, in debt obligations other than first
mortgage loans on commercial properties). As a consequence, Xxxxxxxx agrees as
follows, as an integral part of the consideration for Xxxxxx's making the Loan:
13.1 Restrictions. Any voluntary prepayment of this Note: (a) is prohibited
except during the last 3 months of the term, (b) is permitted in full
only, and not in part; and (c) may only be made on the first day of a
month.
13.2 Prepayment Charge. Except as provided below, if this Note is prepaid
prior to the last 3 months of the term, whether such prepayment is
involuntary or upon acceleration of the principal amount of this Note by
Lender following a Default, Borrower shall pay to Lender on the prepayment
date (in addition to all other sums then due and owing to Lender under the
Loan Documents) a prepayment charge equal to the greater of the following
two amounts: (a) an amount equal to 1% of the then outstanding principal
balance of the Loan; or (b) an amount equal to (i) the amount, if any, by
which the sum of the present values as of the prepayment date of all
unpaid principal and interest payments required under this Note,
calculated by discounting such payments from their respective scheduled
payment dates back to the prepayment date at a discount rate equal to the
Periodic Treasury Yield (defined below) exceeds the outstanding principal
balance of the Loan as of the prepayment date, multiplied by (ii) a
fraction whose numerator is the amount of the prepayment and whose
denominator is the outstanding principal balance of the Loan as of the
prepayment date. Notwithstanding the foregoing, no prepayment charge
shall apply in respect to any insurance or condemnation proceeds received
by Xxxxxx and applied by Xxxxxx to the outstanding principal balance of
the Loan. For purposes of the foregoing, "Periodic Treasury Yield" means
(c) the annual yield to maturity of the actively traded non-callable
United States Treasury fixed interest rate security (other than any such
security which can be surrendered at the option of the holder at face
value in payment of federal estate tax or which was issued at a
substantial discount) that has a maturity closest to (whether before, on
or after) the Maturity Date (or if two or more such securities have
maturity dates equally close to the Maturity Date, the average annual
yield to maturity of all such securities), as reported in The Wall Street
Journal or other authoritative publication or news retrieval service on
the fifth Business Day preceding the prepayment date, divided by (d) 12,
if scheduled payment dates are monthly, or 4, if scheduled payment dates
are quarterly.
13.3 Waiver. Borrower waives any right to prepay this Note except under the
terms and conditions set forth in this Section and agrees that if this
Note is prepaid, Borrower will pay the prepayment charge set forth above.
Borrower hereby acknowledges that: (a) the inclusion of this waiver of
prepayment rights and agreement to pay the prepayment charge for the right
to prepay this Note was separately negotiated with Lender; (b) the
economic value of the various elements of this waiver and agreement was
discussed; (c) the consideration given by Borrower for the Loan was
adjusted to reflect the specific waiver and agreement negotiated between
Borrower and Lender and contained herein; and (d) this waiver is intended
to comply with California Civil Code Section 2954.10.
Borrower's Initials: ________
13.4 Insurance Proceeds; Condemnation Awards. Notwithstanding anything
herein to the contrary, no prepayment charge shall be due and owing with
respect to any involuntary prepayment resulting from Xxxxxx's application
of any insurance proceeds or condemnation awards to the Loan.
14.DEFEASANCE. At any time after the Lockout Expiration Date (defined below),
Borrower may elect to cause Lender to release the Property and the Collateral
from the lien of the Deed of Trust and the other Loan Documents and to accept
other collateral in substitution therefor, in accordance with the provisions of
this Section ("Defeasance"), at Borrower's sole cost and expense. "Lockout
Expiration Date" means the earlier of (a) the second anniversary of the
"startup day" (as defined in Internal Revenue Code Section 860(G)(a)(9)) of any
"real estate mortgage investment conduit" (as defined in Internal Revenue Code
Section 860D) that holds this Note and (b) the 4th anniversary of the date of
this Note.
14.1 Conditions. Borrower shall only have the right to cause a Defeasance if
no Default has occurred and is continuing and all of the following
conditions have been satisfied:
a. Notice. Borrower shall give at least 60 days but not more than 90 days'
notice to Lender specifying the date of Xxxxxxxx's intended
Defeasance ("Release Date"), which date shall be a scheduled payment
date;
b. Payments. Borrower shall pay in full, on or before the Release Date,
all accrued and unpaid interest and all other sums due under this
Note and the other Loan Documents on or before the Release Date,
including without limitation, (i) all costs and expenses paid or
incurred by Lender or its agents in connection with the Defeasance,
the purchase of the Defeasance Collateral (defined below), the
release of the Property and the Collateral, the review of the
proposed Defeasance Collateral and the preparation of the Defeasance
Security Agreement (defined below) and related documentation, and
(ii) any revenue, documentary stamp, intangible or other taxes,
charges or fees due in connection with the transfer or assumption of
this Note or the Defeasance;
c. Deliveries. Borrower shall deliver the following items to Lender on or
before the Release Date:
(i) immediately available funds ("Defeasance Deposit") in an
amount sufficient to enable Lender to purchase, through means
and sources customarily employed and available to Lender, for
the account of Borrower, direct, non-callable obligations of
the United States of America that provide for payments prior,
but as close as possible, to all successive scheduled payment
dates occurring after the Release Date, with each such payment
being equal to or greater than the amount of the corresponding
installment of principal and interest required to be paid under
this Note (including, without limitation, all amounts due on
the Maturity Date) for the balance of the term hereof
("Defeasance Collateral"), each of which shall be duly endorsed
by the holder as directed by Xxxxxx or accompanied by a written
instrument of transfer in form and substance satisfactory to
Lender in its sole discretion (including, without limitation,
such instruments as may be required by the depository
institution holding such securities or the issuer of such
securities, as the case may be, to effectuate book-entry
transfers and pledges through the book-entry facilities of such
institution) in order to perfect upon the delivery of the
Defeasance Security Agreement (as defined below) the first
priority security interest in the Defeasance Collateral in
favor of Xxxxxx;
(ii) a pledge and security agreement, in form and substance
satisfactory to Lender in its sole discretion, creating a first
priority security interest in favor of Lender in the Defeasance
Collateral ("Defeasance Security Agreement"), which shall
provide, among other things, that any payments generated by the
Defeasance Collateral shall be paid directly to Lender and
applied by Lender to amounts then due and payable under this
Note and that any excess received by Lender from the Defeasance
Collateral over the amounts payable by Borrower under this Note
shall be refunded to Borrower promptly after each scheduled
payment date;
(iii) a certificate of Borrower certifying that all of the
requirements of this Section 14.1 have been satisfied;
(iv) an opinion of counsel for Borrower in form and substance and
delivered by counsel satisfactory to Lender in its sole
discretion stating, among other things, that (aa) Lender has a
perfected first priority security interest in the Defeasance
Collateral, (bb) the Defeasance Security Agreement is
enforceable against Borrower in accordance with its terms and
(cc) any REMIC Trust formed pursuant to a securitization will
not fail to maintain its status as a "real estate mortgage
investment conduit" within the meaning of Internal Revenue Code
Section 860D, as amended from time to time, or any successor
statute, as a result of the Defeasance;
(v) a certificate from a firm of independent certified public
accountants acceptable to Lender certifying that the Defeasance
Collateral satisfies the requirements of Section 14.1c(i);
(vi) written evidence from the applicable rating agencies that
the Defeasance will not result in a downgrading, withdrawal or
qualification of the respective ratings in effect immediately
prior to the Defeasance for any securities issued in connection
with the securitization which are then outstanding;
(vii) such other certificates, documents or instruments as Lender
may reasonably require, including, without limitation, such
amendments to this Note and the other Loan Documents as Lender
deems appropriate to reflect the Defeasance.
14.2 Release of Lien. Upon satisfaction of all conditions specified above,
the Property and the Collateral shall be released from the lien of the
Deed of Trust and the other Loan Documents, and the Defeasance Collateral
and the proceeds thereof shall constitute the only collateral which shall
secure the obligations of Borrower under this Note and the other Loan
Documents. Lender shall, at Xxxxxxxx's expense, execute and deliver any
agreements reasonably requested by Borrower to release the lien of the
Deed of Trust from the Property.
14.3 Defeasance Deposit. Borrower hereby authorizes and directs Lender,
using the means and sources customarily employed and available to Lender,
to use the Defeasance Deposit to purchase the Defeasance Collateral as
agent and for the account of Borrower. Payments from the Defeasance
Collateral shall be made directly to Lender for application to the Loan.
Any part of the Defeasance Deposit exceeding the amount necessary to
purchase the Defeasance Collateral and to pay the other costs which
Borrower is obligated to pay under this Section 14 shall be refunded to
Borrower. Xxxxxxxx agrees to pay all sums referred to in Section 14.1b
above on or before the Release Date.
14.4 Assignment and Assumption. Upon the release of the Property and the
Collateral in accordance with this Section 14, Borrower shall, at the
request of Lender, assign all of its right, title and interest in and to
the pledged Defeasance Collateral and all its obligations and rights under
this Note, the Defeasance Security Agreement and the other Loan Documents,
to a successor entity designated by Borrower and approved by Lender in its
sole discretion. Such successor entity shall execute an assumption
agreement in form and substance satisfactory to Lender in its sole
discretion pursuant to which it shall assume Borrower's obligations under
this Note, the Defeasance Security Agreement and the other Loan Documents.
As conditions to such assignment and assumption, Borrower shall: (a)
deliver to Lender a new limited guaranty in form and substance
satisfactory to Lender in its sole discretion executed by the principals
of such successor entity; (b) deliver to Lender an opinion of counsel in
form and substance and delivered by counsel satisfactory to Lender in its
sole discretion stating, among other things, that such assumption
agreement is enforceable against Borrower and such successor entity in
accordance with its terms and that this Note, the Defeasance Security
Agreement and the other Loan Documents, as so assumed, are enforceable
against such successor entity in accordance with their respective terms;
and (c) pay all costs and expenses incurred by Lender or its agents in
connection with such assignment and assumption (including, without
limitation, the review of the proposed transferee and the preparation of
the assumption agreement and related documentation). Upon such
assumption, Borrower shall be relieved of its obligations under this Note,
the Defeasance Security Agreement and the other Loan Documents other than
those obligations which are specifically intended to survive the payment
of the Loan or other termination, satisfaction or assignment of this Note,
the Defeasance Security Agreement or the other Loan Documents or Lender's
exercise of its rights and remedies under any of such documents and
instruments.
15.WAIVER OF JURY TRIAL. XXXXXX AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS NOTE OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF XXXXXX OR
BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN
TO BORROWER.
"BORROWER"
FREMONT HOLDING L.L.C.,
a Delaware limited liability company
By: Fremont Management, Inc.,
a Delaware corporation,
Manager
By: _______________________________
Its: _______________________________
Loan No. 31-0900011A
EXHIBIT A TO PROMISSORY NOTE
Additional Terms And Conditions
This Exhibit A is attached to and forms a part of that Promissory Note ("Note")
executed by FREMONT HOLDING L.L.C., a Delaware limited liability company
("Borrower") in favor of XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Lender").
16. DISBURSEMENT OF LOAN PROCEEDS; LIMITATION OF LIABILITY. Borrower hereby
authorizes Xxxxxx to disburse the proceeds of the Loan, after deducting any and
all fees owed by Borrower to Lender in connection with the Loan, to First
American Title Guaranty Company. With respect to such disbursement, Xxxxxxxx
understands and agrees that Xxxxxx does not accept responsibility for errors,
acts or omissions of others, including, without limitation, the escrow company,
other banks, communications carriers or clearinghouses through which the
transfer of Loan proceeds may be made or through which Lender receives or
transmits information, and no such entity shall be deemed Xxxxxx's agent. As a
consequence, Lender shall not be liable to Borrower for any actual (whether
direct or indirect), consequential or punitive damages which may arise with
respect to the disbursement of Loan proceeds, whether or not (a) any claim for
such damages is based on tort or contract, or (b) either Lender or Borrower
knew or should have known of the likelihood of such damages in any situation.
17. FINANCIAL STATEMENTS.
17.1 Statements Required. During the term of the Loan and while any
liabilities of Borrower to Lender under any of the Loan Documents remain
outstanding and unless Lender otherwise consents in writing, Borrower
shall provide to Lender the following:
a. Operating Statement. Not later than 30 days after and as of the end of
each calendar quarter, an operating statement, signed and dated by
Xxxxxxxx and in a form acceptable to Lender, showing all revenues and
expenses during such month or quarter and year-to-date, relating to
the Property, including, without limitation, all information
requested under any of the Loan Documents;
b. Rent Roll. Not later than 30 days after and as of the end of each
calendar quarter, a rent roll signed and dated by Xxxxxxxx and in a
form acceptable to Lender, showing the following lease information
with regard to each tenant: the name of the tenant, monthly or other
periodic rental amount, dates of commencement and expiration of the
lease, and payment status;
c. Balance Sheet. If requested by Xxxxxx, not later than 90 days after and
as of the end of each fiscal year, a balance sheet, signed and dated
by Xxxxxxxx and in a form acceptable to Lender (or audited financial
statements if Borrower obtains them), showing all assets and
liabilities of Borrower; and
d. Other Information. From time to time, upon Xxxxxx's delivery to
Borrower of at least 10 days' prior written notice, such other
information with regard to Borrower, principals of Borrower,
guarantors or the Property as Lender may reasonably request in
writing.
17.2 Form; Warranty. Xxxxxxxx agrees that all financial statements to be
delivered to Lender pursuant to Section 2.1 shall: (a) be complete and
correct; (b) present fairly the financial condition of the party;
(c) disclose all liabilities that are required to be reflected or reserved
against; and (d) be prepared in accordance with the same accounting
standard used by Borrower to prepare the financial statements delivered to
and approved by Xxxxxx in connection with the making of the Loan or other
accounting standards acceptable to Lender. Borrower shall be deemed to
warrant and represent that, as of the date of delivery of any such
financial statement, there has been no material adverse change in
financial condition, nor have any assets or properties been sold,
transferred, assigned, mortgaged, pledged or encumbered since the date of
such financial statement except as disclosed by Xxxxxxxx in a writing
delivered to Lender. Xxxxxxxx agrees that all rent rolls and other
information to be delivered to Lender pursuant to Section 2.1 shall not
contain any misrepresentation or omission of a material fact.
17.3 Late Charge. If any financial statement, leasing schedule or other item
required to be delivered to Lender pursuant to Section 2.1 is not timely
delivered, Borrower shall promptly pay to Lender, as a late charge, the
sum of $500 per item. In addition, Borrower shall promptly pay to Lender
an additional late charge of $500 per item for each full month during
which such item remains undelivered following written notice from Lender.
Borrower acknowledges that Xxxxxx will incur additional expenses as a
result of any such late deliveries, which expenses would be impracticable
to quantify, and that Borrower's payments under this Section 2.3 are a
reasonable estimate of such expenses.
18. IMPOUNDS.
18.1 Amounts. Borrower shall deposit with Xxxxxx, the amounts ("Impounds")
stated below on the dates stated below, for the purpose of paying the
costs stated below:
a. Taxes. On the first payment date on which both principal and interest
under the Loan are payable and on each payment date thereafter, an
amount estimated from time to time by Lender in its sole discretion
to be sufficient to pay for taxes and other liabilities payable by
Borrower under Section 6.9 of the Deed of Trust. The initial
estimated monthly amount to be deposited by Borrower on each payment
date is $11,130.00.
b. Capital Expenditures. $1,538.00 on the first payment date on which both
principal and interest under the Loan are payable and on each payment
date thereafter for payment or reimbursement of Capital Expenditures
(defined below).
18.2 Application.
a. Taxes. If no Default exists, Lender shall apply the Impounds to the
payment of the taxes and other liabilities stated above.
b. Capital Expenditures. If no Default exists, Xxxxxx shall release the
Impounds to Borrower once a month, to pay or reimburse Borrower for
the Capital Expenditures stated above; provided, however, that Lender
shall have received and approved each of the following:
(i) Xxxxxxxx's written request for such release, describing the
Capital Expenditures and certifying that all Capital
Expenditures have been paid or incurred by Borrower for work
completed lien-free and in a workmanlike manner;
(ii) copies of invoices supporting the request for such release;
and
(iii) if deemed necessary by Xxxxxx, an inspection report signed
by an inspector selected by Xxxxxx, whose fees and expenses
shall be paid by Xxxxxxxx, and such other evidence as Lender
shall require, confirming borrower's certification.
18.3 General. Any portion of the Impounds that exceeds the amount required
for payment of the foregoing costs shall be repaid to Borrower upon
Borrower's compliance with the foregoing. Reference is made to
Section 6.12(b) of the Deed of Trust for a description of the account into
which the Impounds shall be deposited and for a description of certain
rights and remedies of Lender with respect to amounts in such account.
Notwithstanding anything to the contrary in the Deed of Trust, all
accounts containing Impounds for taxes, insurance and capital expenditures
shall bear interest at a rate established by Lender or its servicing
agent, which may or may not be the highest rate then available.
18.4 Maintenance and Construction.
a. Capital Expenditures. Borrower shall complete the lien-free performance
or installation of the Capital Expenditures (as defined below) from
time to time as necessary, in a workmanlike manner and in accordance
with all applicable laws, ordinances, rules and regulations. "Capital
Expenditures" shall mean major repairs and replacements to maintain or
improve the Property, including, without limitation, structural
repairs, roof replacements, HVAC repairs and replacements, mechanical
and plumbing repairs and replacements and boiler repair and
replacements.
b. Right of Inspection. Lender shall have the right to enter upon the
Property at all reasonable times to inspect all work for the purpose
of verifying information disclosed or required pursuant to this Note.
Notwithstanding the foregoing, Lender shall not be obligated to
supervise or inspect any work or to inform Borrower or any third
party regarding any aspect of any work.
18.5 Release. Xxxxxx shall release any Impounds to Borrower through a funds
transfer of such Impounds initiated by Xxxxxx to the following account or
such other account as Borrower specifies in a notice to Lender:
Bank Name:
ABA Routing
No.:
Account Name:
Reference:
Advise:
Lender will determine the funds transfer system and other means to be used
in making each such release. Xxxxxxxx agrees that each such funds transfer
initiated by Xxxxxx will be deemed to be a funds transfer properly
authorized by Borrower, even if the transfer is not actually properly
authorized by Borrower. Borrower acknowledges that Lender will rely on the
account number and ABA routing number set forth above or specified in a
notice from Borrower to Lender, even if such account number identifies an
account with a name different from the name so specified, or the routing
number identifies a bank different from the bank so specified. If
Xxxxxxxx learns of any error in the transfer of any Impounds or of any
transfer which was not properly authorized, Xxxxxxxx shall notify Lender
as soon as possible in writing but in no case more than 14 days after
Xxxxxx's first confirmation to Borrower of such transfer.
19. ONE-TIME RIGHT OF TRANSFER OF PROPERTY. Notwithstanding anything to the
contrary contained in Section 6.15 of the Deed of Trust, Lender shall, one time
only, consent to the voluntary sale or exchange of all of the Property by
Trustor (as defined in the Deed of Trust) to a bona-fide third party purchaser,
without any modification of the terms of this Note or the other Loan Documents,
if no Default has occurred and is continuing and all of the following
conditions have been satisfied:
19.1 Lender's reasonable determination that the proposed purchaser, the
proposed guarantor, if any, and the Property all satisfy Lender's then
applicable credit review and underwriting standards, taking into
consideration, among other things, (a) any decrease in the Property's cash
flow which would result from any increase in real property taxes due to
any anticipated reassessment of the Property for tax purposes and (b) any
requirement of Lender that the proposed borrowing entity satisfy Lender's
then applicable criteria for a single asset or special purpose bankruptcy
remote entity;
19.2 Lender's reasonable determination that the proposed purchaser possesses
satisfactory recent experience in the ownership and operation of properties
comparable to the Property;
19.3 the execution and delivery to Lender of such documents and instruments as
Lender shall reasonably require, in form and content reasonably
satisfactory to Lender, including, without limitation, (i) an assumption
agreement under which the purchaser assumes all obligations and liabilities
of Borrower under this Note and the other Loan Documents and agrees to
periodically pay such new or additional Impounds to Lender as Lender may
reasonably require, and (ii) a consent to the transfer by any existing
guarantor and a reaffirmation of such guarantor's obligations and
liabilities under any guaranty made in connection with the Loan or a new
guaranty executed by a new guarantor reasonably satisfactory to Lender;
19.4 if required by Xxxxxx, delivery to Lender of evidence of title insurance
reasonably satisfactory to Lender insuring Lender that the lien of the Deed
of Trust and the priority thereof will not be impaired or affected by
reason of such transfer or exchange of the Property;
19.5 payment to Lender of an assumption fee equal to 1% of the then
outstanding principal balance of this Note;
19.6 if required by Xxxxxx, deposit with Lender of any new or additional
Impounds;
19.7 reimbursement to Lender of any and all costs and expenses paid or
incurred by Lender in connection with such transfer or exchange, including,
without limitation, all in-house or outside counsel attorneys' fees, title
insurance fees, appraisal fees, inspection fees, environmental consultant's
fees and any fees or charges of the applicable rating agencies; and
19.8 if required by Lender, delivery to Lender of written evidence from the
applicable rating agencies that such transfer or exchange will not result
in a downgrading, withdrawal or qualification of the respective ratings in
effect immediately prior to the transfer or exchange for any securities
issued in connection with the securitization of the Loan which are then
outstanding.
Lender shall fully release Borrower and any existing guarantor from any further
obligation or liability to Lender under this Note and the other Loan Documents
upon the assumption by the purchaser and any new guarantor of all such
obligations and liabilities and the satisfaction of all other conditions
precedent to a transfer or exchange in accordance with the provisions of this
Section.
Loan No. 31-0900011A
EXHIBIT B TO PROMISSORY NOTE
Loan Documents and Other Related Documents
This Exhibit B is attached to and forms a part of that Promissory Note ("Note")
executed by FREMONT HOLDING L.L.C., a Delaware limited liability company
("Borrower") in favor of XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Lender").
00.XXXX DOCUMENTS. The documents numbered 1.1 through 1.6 below of even date
herewith (unless otherwise specified) and any amendments, modifications and
supplements thereto which have received the prior written approval of Lender
and any documents executed in the future that are approved by Xxxxxx and that
recite that they are "Loan Documents" for purposes of this Note are
collectively referred to as the "Loan Documents".
20.1 This Note;
20.2 Deed of Trust;
20.3 State of California Uniform Commercial Code - Financing Statement - Form
UCC-1;
20.4 Limited Liability Company Borrowing Certificate;
20.5 Corporate Resolution Authorizing Limited Liability Company Activity and
Certificate of Incumbency;
20.6 Estoppel, Non-Disturbance and Attornment Agreement.
21. OTHER RELATED DOCUMENTS WHICH ARE NOT LOAN DOCUMENTS.
21.1 Agreement for Disbursement Prior to Recording and Amendment to Note.
PROMISSORY NOTE SECURED BY DEED OF TRUST
