DEED OF TRUST NOTE
Exhibit
10.2
FINAL
EXECUTION VERSION
Loan
No. 00-0000000
$_____________________September
18, 2006
FOR
VALUE RECEIVED COMPANY
SUBSIDIARY,
a
Tennessee limited partnership having an address c/o Equity Inns, Inc., 0000
Xxxx
Xxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000 ("Maker")
promises to pay to the order of
CAPMARK BANK,
a Utah
Industrial Bank f/k/a GMAC Commercial Mortgage Bank, a Utah industrial bank
(together with its successors or assigns or any servicers selected by the
holder(s) of this Note from time to time in its sole discretion to service
the
Loan, "Payee"),
at
one of its principal places of business at 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxx 00000, Attn: President, or at such place as the holder hereof
may
from time to time designate in writing, the principal sum of
$________________________________ (the "Loan"),
in
lawful money of the United States of America, with interest thereon to be
computed on the unpaid principal balance from time to time outstanding at the
Interest Rate (as such term is defined in Section 1(a) hereof), and to be paid
in installments on the first (1st) day of each calendar month as
follows:
(a)
A
constant payment of principal and interest in the amount of
$_________________________________ (the "Monthly
Debt Service Payment Amount"),
on
the first (1st) day of October, 2006 and on the first day of each of the next
succeeding months thereafter (each a "Monthly
Payment Date")
through and including the Monthly Payment Date immediately prior to the Maturity
Date (as defined below); each such constant payment (i) shall be computed
based on a three-hundred-sixty (360) day year comprised of twelve (12) months
of
thirty (30) days each and an amortization schedule of three hundred (300) months
and (ii)(A) shall be applied to the payment of interest then due and
payable; and (B) the balance applied toward the reduction of the principal
sum,
except as otherwise provided in the Loan Documents (as hereinafter defined);
and
(b) the
balance of said principal sum together with all accrued and unpaid interest
thereon shall be due and payable on the first (1st) day of October, 2016
(the
"Maturity
Date").
Interest on the principal sum of this Note (whether under subsection (a)
or (b)
hereof) shall be calculated on the basis of a three-hundred-sixty (360) day
year
and shall be charged on the principal balance outstanding from time to time
based
on
a 360-day year
comprised of twelve (12) months of thirty (30) days each. All amounts due
under
this Note shall be payable without setoff, counterclaim or any other deduction
whatsoever.
Maker
has
the option, effective any time during the term of the Loan, to arrange for
the
automatic wire transfer on the Monthly Payment Date of the Monthly Debt Service
Payment Amount from Maker’s bank account to an account designated by Payee
pursuant to the terms and conditions of an automatic payment authorization
form.
1. Calculation
of Interest; Application of Payments.
(a) The
term
"Interest
Rate"
as used
in this Note shall mean from the date of this Note through and including the
date this Note is paid in full, a rate of Five and Sixty-Five One Hundredths
percent (5.65%).
(b) Payments
under this Note shall be applied first to the payment of interest and other
costs and charges due in connection with this Note or the Debt (as such term
is
defined in Section 4 hereof), as Payee may determine in its sole discretion,
and
then to reduction of the outstanding principal balance. All amounts due under
this Note shall be payable without setoff, counterclaim or any other deduction
whatsoever.
(c) From
and
after the date of this Note, interest shall accrue on the unpaid principal
balance from time to time outstanding on this Note at the Interest Rate. All
of
the Debt shall be due and payable on the Maturity Date.
(d) MAKER
UNDERSTANDS AND ACKNOWLEDGES THAT THIS NOTE AND THE OTHER LOAN DOCUMENTS DO
NOT
PROVIDE FOR FULL AMORTIZATION OF THE PRINCIPAL SUM AND, THEREFORE, UPON THE
MATURITY DATE OR EARLIER ACCELERATION, A BALLOON PAYMENT OF THE THEN OUTSTANDING
BALANCE OF THE PRINCIPAL SUM WILL BE REQUIRED, ALONG WITH PAYMENT IN FULL OF
OTHER SUMS DUE HEREUNDER.
2. Security
for the Loan.
(a) This
Note
is secured by: (i) that certain Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing dated as of the date hereof from Maker
to
Payee (the "Deed
of Trust")
affecting the real property and improvements identified therein (the
"Property");
(ii)
that certain Assignment of Assignment of Leases, Rents and Profits, affecting
the Property and dated as of the date hereof from Maker to Payee (the
"Assignment
of Assignment");
(iii)
that certain Assignment of Leases, Rents and Profits from ENN College Station,
L.L.C., a Delaware limited liability company ("ENN")
to
Maker (the "Assignment");
(iv)
an Environmental Indemnity Agreement dated as of the date hereof among Payee,
Maker, Equity Inns, Inc., a Tennessee corporation (“Guarantor”)
(the
"Environmental
Agreement");
(v) a
Guaranty of Recourse Obligations dated as of the date hereof from Guarantor
for
the benefit of Payee (the "Guaranty");
(vi)
that certain Assignment of Assignment of Contracts, Licenses, Permits,
Agreements, Warranties and Approvals dated as of the date hereof from Maker
to
Payee (the "Assignment
of Contract Assignment");
(vii) that certain Assignment of Contracts, Licenses, Permits, Agreements,
Warranties and Approvals dated as of the date hereof from ENN to Maker (the
"Contract
Assignment");
(viii) a Replacement Reserve Agreement dated as of the date hereof from Maker
for the benefit of Payee (the "Replacement
Reserve");
(ix)
a Consent and Subordination Agreement dated as of the date hereof by and between
Maker, Payee and Crossroads Hospitality Company, L.L.C., a Delaware limited
liability company (the "Consent
Subordination Agreement");
(x) a
Subordination Agreement dated as of the date hereof by and between Maker, Payee
and ENN (the "Subordination
Agreement");
(xi)
a Completion Guaranty dated as of the date hereof from Guarantor for the benefit
of Payee (the “Completion
Guaranty”);
(xii)
and such other documents now or hereafter executed by Maker and/or others and
by
or in favor of Payee, which wholly or partially secure or guarantee payment
of
this Note including, without limitation, any collateral assignments, reserve
and/or escrow accounts and Uniform Commercial Code Financing Statements (such
other documents, collectively, the "Other
Security Documents").
(b) As
used
herein, the term "Loan
Documents"
means,
collectively, this Note, the Deed of Trust, the Assignment, the Assignment
of
Assignment, the Environmental Agreement, the Guaranty, the Consent Subordination
Agreement, the Contract Assignment, the Assignment of Contract Assignment,
the
Replacement Reserve Agreement, the Repair Escrow Agreement, the Subordination
Agreement, the Completion Guaranty, the Other Security Documents and any and
all
other documents executed in connection with the Loan.
3. Late
Charge.
If any
sum payable under this Note is not paid prior to the tenth (10th)
day
after the date such payment is due (other than when the entire Debt is due
on
the Maturity Date or earlier accelerated maturity date), Maker shall pay to
Payee on demand an amount equal to the lesser of: (i) five percent (5%) of
such
overdue and unpaid sum or (ii) the maximum lawful rate of interest permitted
on
the overdue obligation outstanding for the period for which such amount is
overdue, to defray the expenses incurred by Payee in handling and processing
such delinquent payment and to compensate Payee for the loss of the use of
such
delinquent payment, and such additional amount shall be secured by the Deed
of
Trust and the other Loan Documents. The additional payments required under
this
paragraph shall be in addition to and shall in no way limit any other rights
and
remedies provided for in this Note, the Deed of Trust or any of the Loan
Documents, as well as all other remedies provided by law.
4. Events
of Default.
The
entire outstanding principal balance of this Note, together with all accrued
and
unpaid interest thereon and all other sums due under the Loan Documents (all
such sums, collectively, the "Debt"),
or
any portion thereof, shall without notice become immediately due and payable
at
the option of Payee: (a) if any payment required in this Note is not paid prior
to the fifth (5th) day after the date when due or on the Maturity Date; (b)
upon
the occurrence of any other default under this Note, which continues more than
thirty (30) days following written notice thereof from Payee; provided, however,
that if the cure of such default cannot reasonably be accomplished within such
thirty (30) day period and Maker shall have promptly and diligently commenced
to
cure such default within such thirty (30) day period, then the period to cure
shall be deemed extended for up to an additional sixty (60) days from Payee's
notice of such default so long as Maker diligently and continuously proceeds
to
cure such default to Payee's satisfaction; or (c) upon the happening of any
other Event of Default under and as defined in the Deed of Trust, not cured
beyond the applicable cure period (each of the foregoing, an "Event
of Default").
In
the event that Xxxxx retains counsel to collect the Debt or to protect or
foreclose the security provided in connection herewith, Maker also agrees to
pay
on demand all costs of collection incurred by Xxxxx, including attorneys' fees
for the services of counsel whether or not suit is brought. In addition, the
prevailing party shall be entitled to recover attorney fees in any suit or
action on appeal.
5. Default
Rate Interest.
Maker
does hereby agree that upon the occurrence of an Event of Default, including
Maker's failure to pay the Debt in full on the Maturity Date, Payee shall be
entitled to receive, and Maker shall pay, interest on the entire outstanding
principal balance and any other amounts due at the rate equal to the Interest
Rate plus five percent (5%) (the "Default
Rate"),
but
not to exceed the maximum rate permitted by applicable law. Interest shall
accrue and be payable at the Default Rate from the occurrence of the Event
of
Default until all such Events of Default have been fully cured. The Default
Rate
interest shall be deemed secured by the Deed of Trust. This provision, however,
shall not be construed as an agreement or privilege to extend the date of the
payment of the Debt, nor as a waiver of any other right or remedy accruing
to
Payee by reason of the occurrence of any Event of Default. The additional
payments required under this paragraph shall be in addition to and shall in
no
way limit any other rights and remedies provided for in this Note, the Deed
of
Trust or any of the Loan Documents, as well as all other remedies provided
by
law.
6. Prepayment.
(a) Other
than as set forth in Section 7 hereof, and in accordance with Section 68 of
the
Deed of Trust, Maker shall have no right to prepay all or any portion of the
Loan during the period commencing on the date hereof to but not including the
Monthly Payment Date which is one (1) month prior to the Maturity Date. From
and
after one (1) month prior to the Maturity Date, the Loan may be prepaid in
whole, but not in part at any time, together with accrued interest to the date
of such prepayment on the principal amount prepaid and together with all of
Payee's fees and expenses related thereto, without penalty or premium,
provided that
if a
prepayment is made other than on a Monthly Payment Date, Maker shall pay
interest on the amount prepaid through and including the last day of the
calendar month in which the prepayment occurs. Any such prepayment shall be
subject, in each case, to the satisfaction of the condition precedent that
Maker
shall provide not less than thirty (30) days' prior written notice to Payee
specifying the Monthly Payment Date (or, if applicable, any other date) on
which
such prepayment is to occur and indicating the principal amount of this Note to
be so prepaid. Except as set forth above, this Note may not be prepaid prior
to
the Maturity Date; provided,
however,
upon
the earlier of (a) the first (1st) day of the third (3rd) year after the Loan
is
sold into a securitization, or (b) the first (1st) day of the fourth
(4th)
year
after the Closing Date, and which in each case is at least thirty (30) days
prior to the Maturity Date, Maker shall have the right and option to release
the
Property (as defined in the Deed of Trust) from the lien of the Deed of Trust
in
accordance with the terms and provisions set forth in Section 68 of the Deed
of
Trust.
(b) Notwithstanding
anything herein to the contrary, no prepayment consideration shall be due in
the
event that Payee elects to apply the proceeds of a condemnation award or
insurance settlement on a Property towards the reduction of the principal
balance of this Note pursuant to the terms of the Deed of Trust. At Payee's
option, (i) the monthly payments of principal and interest on the Loan shall
be
reduced to an amount which would amortize the reduced outstanding principal
balance of the Loan over the remaining amortization term, or (ii) the monthly
payments of principal and interest shall not be modified and the partial
prepayment shall be applied to the payments of principal otherwise due on the
remaining monthly payment date(s) in inverse order of maturity, and the term
of
the Loan shall be reduced, if necessary, to reflect the actual Loan amortization
schedule as modified by the application of this clause (ii).
7. Repayment
Upon Default
If
all or
any part of the principal amount of this Note is prepaid upon acceleration
of
the Loan following the occurrence of an Event of Default prior to the Monthly
Payment Date which is one (1) month immediately preceding the Maturity Date,
then, in addition to such principal payment, Maker shall be required to make
such payments (the "Yield
Maintenance Payments")
in an
amount equal to the excess, if any, of (i) the sum of (A) the aggregate
respective present values of all scheduled interest payments payable on each
Monthly Payment Date in respect of this Note (or the portion of all such
interest payments corresponding to the portion of the principal of this Note
to
be prepaid upon acceleration) for the period from the date of such prepayment
upon acceleration to the Monthly Payment Date which is one (1) month immediately
preceding the Maturity Date, discounted monthly at a rate equal to the Treasury
Constant Maturity Yield Index and based on a 360-day year of twelve 30-day
months and (B) the aggregate respective present values of all scheduled
principal payments payable on each Monthly Payment Date in respect of this
Note
(or the then unpaid portion thereof to be prepaid upon acceleration) assuming
the then outstanding principal balance of this Note is paid in full on the
Monthly Payment Date which is one (1) month immediately preceding the Maturity
Date, discounted monthly at a rate equal to the Treasury Constant Maturity
Yield
Index and based on a 360-day year of twelve 30-day months minus
(ii) the
then current outstanding principal amount of this Note (or the then unpaid
portion thereof to be prepaid upon acceleration). The Yield Maintenance Payments
to be paid in connection with any prepayment under this Section 7 shall be
determined in good faith by Payee and shall be conclusive and binding on Maker
(absent mani-fest error). For purposes of this Section 7, the amount of
this Note (or the portion of the principal of this Note to be prepaid upon
acceleration) on the date of prepayment shall be determined after giving effect
to any payment of scheduled amortization made on such date. For purposes hereof,
"Treasury
Constant Maturity Yield Index"
shall
mean the average yield for "This Week" as reported by the Federal Reserve Board
in Federal Reserve Statistical Release H.15(519) ("FRB
Release")
published during the second full week preceding the prepayment date (caused
by
acceleration of the Loan following the occurrence of an Event of Default) for
instruments having a maturity coterminous with the remaining term of this Note.
In the event the FRB Release is no longer published, Payee shall select a
comparable publication to determine the Treasury Constant Maturity Yield Index.
If there is no Treasury Constant Maturity Yield Index for instruments having
a
maturity coterminous with the remaining term of this Note, then the weighted
average yield to maturity of the Treasury Constant Maturity Yield Indices with
maturities next longer and shorter than such remaining average life to maturity
shall be used, calculated by averaging (and rounding upward to the nearest
whole
multiple of 1/100 of 1% per annum, if the average is not such a multiple) the
yields of the relevant Treasury Constant Maturity Yield Indices (rounded, if
necessary, to the nearest 1/100 of 1% with any figure of 1/200 or above rounded
upward).
8. Limitations
on Recourse.
(a)
Subject to the qualifications set forth in this Section, neither Maker nor
Guarantor nor any partner, member, shareholder, officer or director of either
of
them (collectively, the "Maker
Group")
shall
be personally liable either at law or in equity for the repayment of the Debt
or
the failure of performance of any other obligation evidenced by the Note or
contained in the Deed of Trust or the Other Security Documents, and Xxxxx will
satisfy any judgments, orders or decrees on account of the failure to repay
such
Debt and/or the failure to perform any such obligation, from the Property and
any other real or personal property, tangible or intangible, as Maker, Guarantor
or any other entity shall have pledged or assigned to secure this Note by any
of
the Loan Documents, except that Payee may bring a foreclosure action, an action
for specific performance or any other appropriate action or proceeding to enable
Payee to enforce and realize upon this Note, the Deed of Trust, the Other
Security Documents, and the interests in the Property and any other collateral
given to Payee pursuant to the Deed of Trust and the Other Security Documents;
provided,
however,
that,
except as specifically provided in this Section, any judgment in any such action
or proceeding shall be enforceable against Maker Group only to the extent of
Maker Group's interest in the Property and in any other collateral given to
Payee. Xxxxx, by accepting this Note, the Deed of Trust and the Other Security
Documents, agrees that it shall not sue for, seek or demand any deficiency
judgment against Maker Group in any such action or proceeding, under, by reason
of or in connection with the Deed of Trust, the Other Security Documents or
this
Note. The provisions of this Section shall not, however: (i) constitute a
waiver, release or impairment of any obligation evidenced or secured by the
Deed
of Trust, the Environmental Agreement, the Guaranty or the Other Security
Documents or this Note; (ii) impair the right of Payee to name Maker as a party
defendant in any action or suit for foreclosure and sale under the Deed of
Trust; (iii) affect the validity or enforceability of any guaranty or indemnity
made in connection with the Deed of Trust, this Note or the Other Security
Documents; (iv) impair the right of Payee to obtain the appointment of a
receiver; (v) impair the right of Payee to bring suit with respect to fraud
or
misrepresentation by Maker or Maker's Group in connection with the Deed of
Trust, this Note, the Environmental Agreement, the Guaranty or the Other
Security Documents; (vi) affect the validity or enforceability of the
Environmental Agreement or limit the liability of Maker or Guarantor thereunder;
or (vii) affect the validity or enforceability of the Guaranty or limit the
liability of Guarantor thereunder.
(b) Nothing
herein shall be deemed to be a waiver of any right which Payee may have under
Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy
Code to file a claim for the full amount of the Debt secured by the Deed of
Trust or to require that all collateral shall continue to secure all of the
debt
owing to Payee in accordance with this Note, the Deed of Trust, the
Environmental Agreement, the Guaranty and the Other Security
Documents.
(c) Notwithstanding
the foregoing provisions of this Section or any other provision in the Loan
Documents, Maker and Guarantor, jointly and severally, shall be fully liable
for
and shall indemnify Payee for any or all loss, cost, liability, judgment, claim,
damage or expense sustained, suffered or incurred by Payee (including, without
limitation, Payee's attorneys' fees) arising out of or attributable or relating
to:
(i) fraud
or
misrepresentation by Maker's Group or Guarantor in connection with the
Loan;
(ii)
the
gross
negligence or willful misconduct of Maker's Group or Guarantor, their respective
agents or employees (not including lessees or property managers), or physical
waste of the Property by Maker or Guarantor;
(iii)
the
breach of provisions in the Deed of Trust or the Environmental Agreement
concerning Environmental Laws, Hazardous Substances and Asbestos (as each such
term is defined in the Deed of Trust), and any indemnification of Payee in
the
Deed of Trust or any other Loan Document with respect to such Environmental
Laws, Hazardous Substances and Asbestos;
(iv)
the
removal or disposal of any portion of the Property after default under this
Note, the Deed of Trust, the Environmental Agreement, the Guaranty or any other
Loan Document;
(v)
the
misapplication or conversion by Maker or Guarantor of: (A) any insurance
proceeds paid by reason of any loss, damage or destruction to the Property;
(B)
any awards or other amounts received in connection with the condemnation of
all
or a portion of the Property; or (C) rents, issues, profits, proceeds, accounts
or other amounts received by Maker or Guarantor (in the case of clause (C)
following an Event of Default under this Note, the Deed of Trust, the
Environmental Agreement, the Guaranty or any other Loan Document);
(vi) Maker's
failure to pay taxes, assessments, charges for labor or materials or other
charges that may result in liens on any portion of the Property; provided,
however, that Maker's and Guarantor's liability hereunder shall cease with
respect to such amounts incurred from and after such time, if any, that Payee
forecloses the Deed of Trust or accepts a deed in lieu of foreclosure of the
Deed of Trust;
(vii) Maker's
failure to pay insurance deductibles or premiums in respect of any insurance
required under the Loan Documents to be maintained in respect of the Property;
provided, however, that Maker's and Guarantor's liability hereunder shall cease
with respect to such amounts incurred from and after such time, if any, that
Payee forecloses the Deed of Trust or accepts a deed in lieu of foreclosure
of
the Deed of Trust;
(viii)
the
deductible amount of any insurance maintained in respect of the
Property;
(ix)
the
costs
incurred by Xxxxx (including attorneys' fees) in connection with the collection
or enforcement of the Debt;
(x) Maker's
failure to make the Property repairs or alterations required under the Loan
Documents, including, without limitation, alterations required in order to
comply with the Americans With Disabilities Act;
(xi) Maker's
failure to permit on-site inspections of the Property or to provide financial
reports and information pertaining to the Property as required by the Deed
of
Trust, unless, in either case, such failure is the result of a good faith error
and is cured within ten (10) days after notice;
(xii)
any
security deposits or advance deposits collected with respect to the Property
which are not delivered to Payee upon a foreclosure of the Property or action
in
lieu thereof;
(xiii) Maker
fails to obtain Xxxxx's written consent to any subordinate
financing;
(xiv) Maker's
failure to obtain Xxxxx's prior written consent to any transfer of the Property
or of any ownership interest in Maker; and
(xv) Maker
fails to comply with the provisions of Section 11 of the Deed of Trust
pertaining to its single-purpose entity status.
(d) Notwithstanding
the foregoing, the agreement of Payee not to pursue recourse liability as set
forth in subsection (a) above SHALL BE AND BECOME NULL AND VOID and shall be
of
no further force or effect if: (i) any financial information concerning Maker
or
Guarantor provided by Maker or Guarantor or any of their respective employees
or
agents is fraudulent in any respect, contains any fraudulent information or
misrepresents in any material respect the financial condition of Maker or such
Guarantor; (ii) a voluntary bankruptcy or insolvency proceeding is commenced
by
Maker or Maker’s managing member/general partner; or (iii) an involuntary
bankruptcy or insolvency proceeding is commenced by any party against Maker
or
Maker’s managing member/general partner and is not unconditionally dismissed
within ninety (90) days of filing. Upon the occurrence of any of the foregoing
events, Maker and Guarantor shall have full joint and several recourse liability
for all sums due under the Loan Documents.
(e) Nothing
in this Section shall be interpreted or construed to impair, limit the liability
of or otherwise affect the terms, conditions, requirements and obligations
of
Guarantor under the Guaranty or Maker or Guarantor under the Environmental
Agreement.
9. No
Usury.
The
provisions of this Note and of all agreements between Maker and Payee, whether
now existing or hereafter arising and whether written or oral, including, but
not limited to, the Loan Documents, are hereby expressly limited so that in
no
contingency or event whatsoever, whether by reason of demand or acceleration
of
the maturity of this Note or otherwise, shall the amount contracted for,
charged, taken, reserved, paid or agreed to be paid (defined as "Interest” for
purposes of this section) to Payee for the use, forbearance or detention of
the
money loaned under this Note exceed the maximum amount permissible under
applicable law. If, from any circumstance whatsoever (including, without
limitation, the receipt of any late charge or similar amount), performance
or
fulfillment of any provision hereof or of any agreement between Maker and Payee
shall, at the time performance or fulfillment of such provision shall be due,
exceed the limit for Interest prescribed by law or otherwise transcend the
limit
of validity prescribed by applicable law, then ipso facto the obligation to
be
performed or fulfilled shall be reduced to such limit, and if, from any
circumstance whatsoever, Payee shall ever receive anything of value deemed
Interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive Interest shall be applied to the reduction of the
principal balance owing under this Note in the inverse order of its maturity
(whether or not then due) or at the option of Payee be paid over to Maker,
and
not to the payment of Interest. All Interest (including any amounts or payments
judicially or otherwise under the law deemed to be Interest) contracted for,
charged, taken, reserved, paid or agreed to be paid to Payee shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of this Note including any extensions and renewals
hereof until payment in full of the principal balance of this Note so that
the
Interest thereon for such full term will not exceed at any time the maximum
amount permitted by applicable law. Maker hereby agrees that as a condition
precedent to any claim seeking usury penalties against Xxxxx, Maker will provide
written notice to Xxxxx, advising Payee in reasonable detail of the nature
and
amount of the violation, and Payee shall have sixty (60) days after receipt
of
such notice in which to correct such usury violation, if any, by either
refunding such excess interest to Maker or crediting such excess interest
against this Note and/or any other indebtedness then owing by Maker to Payee.
To
the extent that Payee is relying on Chapter 303, as amended, of the Texas
Finance Code to determine the maximum amount of Interest permitted by applicable
law on the principal of this Note, Payee will utilize the weekly rate ceiling
from time to time in effect as provided in such Chapter 303, as amended. To
the
extent United States federal law permits a greater amount of interest than
is
permitted under Texas law, Payee will rely on United States federal law instead
of such Chapter 303, as amended, for the purpose of determining the maximum
amount permitted by applicable law. Additionally, to the extent permitted by
applicable law now or hereafter in effect, Payee may, at its option and from
time to time, implement any other method of computing the maximum lawful rate
under such Chapter 303, as amended, or under other applicable law by giving
notice, if required, to Maker as provided by applicable law now or hereafter
in
effect. In no event shall the provisions of Chapter 346 of the Texas Finance
Code (which regulates certain revolving credit loan accounts and revolving
tri-party accounts) apply to the indebtedness evidenced hereby. This Section
2.3
will control all agreements between Maker and Payee.
10. Transfers
Not Permitted.
Without
the prior written consent of Payee, Maker shall not sell, convey, alienate,
mortgage, encumber, pledge or otherwise transfer, or permit the transfer of,
directly or indirectly, the Property or ownership interests of Maker or Maker's
general partner except for transfers otherwise permitted in the Deed of
Trust.
11. Authority.
Maker
represents that Maker has full power, authority and legal right to execute,
deliver and perform its obligations pursuant to this Note, the Deed of Trust
and
the other Loan Documents to which it is a party and that this Note, the Deed
of
Trust and the other Loan Documents constitute valid and binding obligations
of
Maker.
12. Notices.
All
notices or other communications required or permitted to be given pursuant
hereto shall be given in the manner specified in the Deed of Trust directed
to
the parties at their respective addresses as provided therein.
13. Loan
Assumption. The
Loan
may not be assumed by any third party prior to the first (1st) anniversary
of
the date hereof. Thereafter, a single transfer of the Property or legal or
beneficial interests in the Property or Maker will be allowed, subject to the
prior written consent of Payee, by a third party approved by Xxxxx in its
reasonable discretion. Any approved assumption shall be subject to delivery
to
Payee of an (a) assumption agreement, and related certificates, agreements
and
opinions, in form and substance reasonably acceptable to Payee, delivery of
appropriate ratification/assumption agreements and legal opinions; (b)
assumption fee equal to one percent (1.0%) of the then unpaid principal balance
of the Loan; (c) payment of all costs and expenses incurred by Payee in
connection with the assumption; and (d) a written confirmation from all
applicable rating agencies selected by Payee that such assumption will not
result in a withdrawal, downgrade or qualification of the respective ratings
by
the applicable rating agencies of any securities in connection with the
securitization of the Loan which are then outstanding and in effect immediately
prior to such assumption.
14. Governing
Law.
THE
NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
IN
WHICH THE REAL PROPERTY ENCUMBERED BY THE DEED OF TRUST IS LOCATED, WITHOUT
REGARD FOR CONFLICTS OF LAWS PRINCIPLES OR OTHERWISE, AND THE APPLICABLE LAWS
OF
THE UNITED STATES OF AMERICA.
15. Time
of Essence.
Time is
of the essence of each liability and obligation of Maker hereunder.
16. Certain
Waivers.
To the
fullest extent permitted by law, Maker and all guarantors, sureties and
endorsers, severally waive all applicable exemption rights, whether under any
state constitution, homestead laws or otherwise, and also severally waive
diligence, valuation and appraisement, presentment for payment, protest and
demand, notice of protest, notice of default, notice of intention to accelerate
all sums under the Note or the Loan Documents, notice of acceleration of all
sums under the Note or the Loan Documents, demand and dishonor and diligence
in
collection and nonpayment of this Note and all other notices in connection
with
the delivery, acceptance, performance, default, or enforcement of the payment
of
this Note (except notice of default and any other notice as specifically
provided for in this Note, the Deed of Trust or the Loan Documents). To the
fullest extent permitted by law, Maker further waives all benefit that might
accrue to Maker by virtue of any present or future laws exempting any Property,
or any other property, real or personal, or the proceeds arising from any sale
of any such property, from attachment, levy, or sale under execution, or
providing for any stay of execution to be issued on any judgment recovered
on
this Note or in any action to foreclose the Deed of Trust, injunction against
sale pursuant to power of sale, exemption from civil process or extension of
time for payment. Xxxxx agrees that any real estate that may be levied upon
pursuant to a judgment obtained by virtue of this Note, or any writ of execution
issued thereon, may be sold upon any such writ in whole or in part in any order
desired by Xxxxx. In
addition, to the extent permitted by applicable law, Maker hereby agrees that
Payee may bring separate actions on this Note and on any of the Loan Documents
and Maker waives any rights it may have under the law of the state in which
any
Property is located to object to or raise a defense in any such action regarding
such splitting of causes of action. Notwithstanding anything to the contrary
contained in this Note or the other Loan Documents, Sections 51.003 through
51.005 of the Texas Property Code are not being waived.
17. Effect
of Waiver.
No
failure to exercise, and no delay in exercising any right, power or remedy
hereunder or under any other Loan Document shall impair any right, power or
remedy which Payee may have, nor shall any such delay be construed to be a
waiver of any of such rights, powers or remedies, or an acquiescence in any
breach or default under this Note or any other Loan Document, nor shall any
waiver of any breach or default of Maker hereunder or under any other Loan
Document be deemed a waiver of any default or breach subsequently occurring.
The
rights and remedies herein specified are cumulative and not exclusive of any
rights or remedies which Payee would otherwise have.
18. Severability
of Provisions.
In case
any one or more of the provisions contained in this Note should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way
be affected or impaired thereby.
19. Successors
and Assigns.
This
Note shall be binding upon and inure to the benefit of Maker, Payee and their
respective successors and assigns; provided,
however,
that,
except as specifically provided herein or in the Deed of Trust, Maker may not
directly or indirectly, sell, assign or otherwise transfer all or any part
of
the Property or any interest therein, or any of Maker's rights and obligations
under this Note, or take or permit any other action prohibited by the Deed
of
Trust, without the prior written consent of Payee, which Payee may give or
withhold in its absolute discretion.
20. Transfer
of Loan.
(a)
Payee may, at any time, sell, transfer or assign this Note, the Deed of Trust
and the other Loan Documents, and any or all servicing rights with respect
thereto, or grant participations therein or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated
or
unrated public offering or private placement. Payee may forward to each
purchaser, transferee, assignee, servicer, participant or investor in such
securities or any credit rating agency rating such securities (collectively,
the
"Investor")
and
each prospective Investor, all documents and information which Payee now has
or
may hereafter acquire relating to Maker, Guarantor and the Property, whether
furnished by Maker, Guarantor or otherwise as Payee determines necessary or
desirable consistent with full disclosure for purposes of marketing and
underwriting the Loan; provided,
however,
that
Xxxxx shall use reasonable efforts not to unnecessarily disclose Maker's and
Guarantor’s confidential information. Maker shall furnish and hereby consents to
Payee furnishing to such Investors or such prospective Investors any and all
information concerning Maker, Guarantor and the Property as may be reasonably
requested by Payee, any Investor or any prospective Investor in connection
with
any sale, transfer or participation interest.
(b) Upon
any
transfer or proposed transfer contemplated above and by the Loan Documents,
at
Xxxxx's request, Maker and Guarantor shall provide an estoppel certificate,
certifying as to the then true state of facts, to the Investor or any
prospective Investor in such form, substance and detail as Payee, such Investor
or prospective Investor may require.
21. Securitization
and Transfer.
Payee
may
sell the Loan, interests in the Loan, issue securities backed by or evidencing
ownership of the Loan in one or more public or private offerings and/or further
tranche the Loan or divide the Loan into two or more component parts or notes
(as described more fully in Section 22 below) and/or pledge the Loan (or any
interest therein) at any time without Maker's or Guarantor’s consent. Maker
shall cooperate with Payee in connection with the sale, participation, pledge
or
the securitization of all or a part of the Loan and obtaining ratings from
one
or more rating agencies, which cooperation shall include (i) providing
additional information regarding the Property, Maker or any of its affiliates
or
Guarantor, including without limitation, additional appraisals, environmental
reports, engineering reports and similar due diligence materials, and updates,
verifications and consents with respect to such materials that were delivered
on
or prior to the Closing Date (as defined in the Deed of Trust), (ii) supplying
such documentation, financial statements, and reports that may be required
to
comply with Regulation S-X of the federal securities law, (iii) making
modifications to the Loan Documents or the organizational documents, revisions
to existing opinions or supplying additional opinions, (iv) delivering
additional Manager and Franchisor estoppel letters, subordination agreements
or
similar agreements and (v) participating (including senior management of Maker)
in meetings and presentations to the rating agencies and prospective investors,
provided that no such modification, revision, additional documents, or other
action in connection with such cooperation shall materially increase the
substantive obligations or materially decrease the substantive rights of Maker
or Guarantor pursuant to the Loan Documents. The cost of providing such
additional opinions, additional documents, revisions to existing opinions or
modifications to the Loan Documents or other actions in connection with such
cooperation shall be borne by Payee, except Maker will pay the cost of making
reasonable amounts of photocopies and postage. At the request of Payee, Maker
shall make such representations and warranties as of the date of the
securitization as are customary for Makers to make in securitization
transactions, review any factual information or disclosures with respect to
the
Property, Maker, and its affiliates contained in any private placement
memorandum, prospectus, registration statement, or other offering materials
relating to any sale or securitization of the Loan, and Maker and its sponsor
or
parent, as applicable, shall indemnify Payee against any loss or expense
incurred as a result of any misstatements or omissions in any written offering
material approved by Maker, its general partner or any of their
affiliates.
22. Note
Structure.
Payee
shall have the right, in its sole discretion, between the Closing Date and
a
sale, participation or securitization of the Loan, to require that the Loan
be
divided into two or more separate (or component) notes, of which the aggregate
weighted average coupon rate shall, as of the sale or securitization, equal
the
initial Interest Rate on the Loan on the Closing Date (adjusted to account
for
amortization), but each of which may have a different interest rate and a
different amortization schedule, which notes may be included in separate
transactions, and which notes may be secured by pari-passu or senior/subordinate
deeds of trust and security agreements. In no event shall such bifurcation
of
this Note affect the overall loan economics expected by Maker or Guarantor
or
alter Maker's or Guarantor’s substantive rights or obligations under the Loan
Documents.
23. Remedies
Available.
The
remedies of Payee, as provided herein or in any other Loan Document, shall
be
cumulative and concurrent, and may be pursued singularly, successively or
together, at the sole discretion of Payee, and may be exercised as often as
occasion therefor shall arise. No act of omission or commission of Payee,
including specifically any failure to exercise any right, remedy or recourse,
shall be deemed to be a waiver or release of the same, and any waiver or release
with reference to any one event shall not be construed as continuing or as
a bar
to, or as a waiver or release of, any subsequent right, remedy or recourse
as to
a subsequent event.
24. Maker's
Covenants.
Maker
agrees that (a) the obligation evidenced by this Note is an exempted transaction
under the Truth-in-Lending Act, 15 U.S.C. '
1601,
et seq.
(1982);
(b) said obligation constitutes a business loan within the purview of the law
of
the state in which the Property is located, for the purpose of the application
of any laws that distinguish between consumer loans and business loans and
that
have as their purpose the protection of consumers in the state in which the
Property is located; and (c) it hereby waives any objections to
venue.
25. Extension
of Time.
Maker
consents to any extension of time for the payment hereof, release of all or
any
part of the security for the payment hereof or release of any party liable
for
Maker's liabilities or obligations hereunder or under any of the other Loan
Documents. Any such extension or release may be made without notice to Maker
and
without discharging Maker's liability.
26. Payee.
Reference in this Note to "Payee"
shall
mean the original Payee hereunder so long as such Payee shall be the holder
of
this Note and thereafter shall mean any subsequent holder of this
Note.
27. WAIVER
OF JURY TRIAL.
MAKER
AND PAYEE EACH HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE
OF
RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT
ANY
SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS NOTE, THE DEED
OF
TRUST, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION
ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY MAKER AND PAYEE, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH RIGHT TO TRIAL BY JURY
WOULD OTHERWISE ACCRUE. MAKER AND PAYEE EACH ARE HEREBY AUTHORIZED TO FILE
A
COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER
BY
EACH OTHER.
28. Submission
to Jurisdiction.
MAKER
AND PAYEE EACH HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY STATE OF
TEXAS COURT SITTING IN BRAZOS COUNTY OR THE UNITED STATES OF AMERICA FEDERAL
DISTRICT COURT HAVING JURISDICTION OVER BRAZOS COUNTY IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE AND HEREBY AGREE NOT TO
ASSERT THAT IT IS NOT SUBJECT TO THE JURISDICTION OF THE FOREGOING COURTS.
EITHER MAKER OR PAYEE MAY, AT ITS SOLE DISCRETION, ELECT THE STATE OF TEXAS,
BRAZOS COUNTY, OR THE UNITED STATES OF AMERICA FEDERAL DISTRICT COURT HAVING
JURISDICTION OVER BRAZOS COUNTY AS THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING. MAKER AND PAYEE EACH HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO SUCH VENUE
AS
BEING AN INCONVENIENT FORUM OR IMPROPER VENUE.
29. Miscellaneous.
(a) No
release of any security for the Debt or any person liable for payment of the
Debt, no extension of time for payment of this Note or any installment hereof,
and no alteration, amendment or waiver of any provision of the Loan Documents
made by agreement between Payee and any other person or party shall release,
modify, amend, waive, extend, change, discharge, terminate or affect the
liability of Maker, and any other person or party who might be or become liable
for the payment of all or any part of the Debt, under the Loan
Documents.
(b) This
Note
may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Maker or Payee,
but only by an agreement or other document in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
(c) Whenever
used, the singular number shall include the plural, the plural the singular,
and
the words "Payee"
and
"Maker"
shall
include their respective successors, assigns, heirs, executors and
administrators.
30. Service
of Process.
Process
in any suit, action or proceeding of the nature referred to in Section 28 hereof
may be served in any manner permitted by law and nothing herein shall limit
Payee’s right to bring proceedings against Maker in the courts of any other
jurisdiction.
31. Tax
Identification Number.
Maker
represents and warrants that its current tax identification number is
00-0000000.
THE
WRITTEN LOAN DOCUMENTS TO WHICH MAKER IS A PARTY REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
THERE
ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURE
APPEARS ON FOLLOWING PAGE]
IN
WITNESS WHEREOF,
Xxxxx
has duly executed and delivered this Deed of Trust Note under seal as of the
day
and year first above written.
MAKER:
COMPANY
SUBSIDIARY.,
a
Tennessee
limited partnership
By: Company
Subsidiary, a
Tennessee
corporation, its
general
partner
By:__________________________(SEAL)
Name:________________________
Title:_________________________
PAY
TO
THE ORDER OF
,
WITHOUT
REPRESENTATION OR RECOURSE
CAPMARK
BANK
By:
Name:
Title:
Date:
