PROMISSORY NOTE
Exhibit 6(e)
|
$3,500,000.00
|
Date:
July 30, 2021
|
|
|
Maturity
Date: October 31, 2021
|
FOR
VALUE RECEIVED, GK PREFERRED INCOME II (RIDGMAR) SPE, LLC, a
Delaware limited liability company (“GK Borrower”) and 1551
XXXXXXXXX PARTNERS SPE, LLC, a Delaware limited liability company
(“Xxxxxxxxx
Borrower”; and together with GK Borrower, individually
or collectively, as the context requires, “Borrower”), jointly and
severally, hereby promise to pay to the order of GK INVESTMENT
PROPERTY HOLDINGS II, LLC, a Delaware limited liability company
(“Lender”) the principal
sum of THREE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS
($3,500,000.00), with interest thereon, according to the terms of
this Promissory Note (this “Note”).
1. Interest
Rate.
1.1
The unpaid principal balance of this Note shall bear interest from
the date of this Note through the Maturity Date at a rate equal to
twenty percent (20%) per annum (the “Interest Rate”). Interest
shall be calculated on the basis of a 360-day year and the actual
number of days elapsed in any portion of a month in which interest
is due.
1.2
From and after the Maturity Date or upon the occurrence and during
the continuance of an Event of Default (as defined below) interest
shall accrue on the unpaid principal balance of this Note until
paid at a rate equal to five percent (5.00%) per annum in excess of
the Interest Rate (the “Default Interest
Rate”).
1.3
No clause or provision in this Note shall be construed or shall so
operate (a) to raise the Interest Rate set forth in this Note above
the lawful maximum, if any, in effect from time to time in the
applicable jurisdiction for loans to borrowers of the type, in the
amount, for the purposes, and otherwise of the kind contemplated,
or (b) to require the payment or the doing of any act contrary to
law, but if any clause or provision contained shall otherwise so
operate this Note, in whole or in part, then (i) such clauses or
provisions shall be deemed modified to the extent necessary to be
in compliance with the law, or (ii) to the extent not possible,
shall be deemed void as though not contained and the remainder of
this Note shall remain operative and in full force and
effect.
2. Payments.
2.1
Payments under this Note, if not sooner paid or declared to be due
in accordance with the terms hereof, shall be made as
follows:
(a) Borrower
shall make monthly payments of accrued interest only to Lender,
with said payments being due and payable on the 15th day of each
calendar month during the term of this Note.
(b) Borrower’s
monthly payment of accrued interest shall be calculated and paid at
an interest rate equal to twelve percent (12%) per annum, with the
balance of all accrued and unpaid interest to be due and payable on
the Maturity Date.
(c) The
principal balance of this Note, if not sooner paid or declared to
be due in accordance with the terms hereof, together with all
accrued and unpaid interest thereon and any other amounts due and
payable hereunder, shall be due and payable in full in a single
“balloon payment” on the Maturity Date.
2.2
Borrower may prepay this Note, in whole or in part, at any time
without prepayment penalty or premium. Prepayments shall be
allocated among principal, interest and fees at the sole discretion
of the Lender unless otherwise agreed or required by applicable
law.
2.3
Borrower will pay the obligations due under this Note to Lender at
000 Xxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, or at
such other place as the Lender may designate from time to time in
writing.
2.4
Borrower agrees that to the extent any payment is received by
Lender in connection with this Note, and all or any part of such
payment is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid by Lender or paid
over to a trustee, receiver or any other entity, whether under any
bankruptcy act or otherwise (any such payment is hereinafter
referred to as a “Preferential Payment”),
then this Note shall continue to be effective or shall be
reinstated, as the case may be, and whether or not Lender is in
possession of this Note, and, to the extent of such payment or
repayment by Xxxxxx intended to be satisfied by such Preferential
Payment shall be revived and continued in full force and effect as
if said Preferential Payment had not been made.
2.5
Borrower hereby acknowledges and agreements that the payment
obligations due under this Note are subject to that certain
Intercreditor Agreement of even date herewith by and among, Lender,
GK Investment Holdings, LLC, a Delaware limited liability company
and GK Secured Income V, LLC, a Delaware limited liability
company.
3. Security.
The payment and performance of all of the obligations represented
by this Note are evidenced and/or secured by, among other things,
(i) that certain Deed of Trust, Assignment of Leases and Rents and
Security Agreement of even date herewith granting a first priority
lien, mortgage and security interest to the Lender in the real
property commonly known as 1888 Green Oaks Road, Fort Worth,
Tarrant County, Texas (the “Property”); and (ii) such
other documents given to evidence or secure payment of this Note
(collectively, the “Loan Documents”).
Reference is hereby made to the Loan Documents, which are
incorporated herein by reference, for a statement of the covenants
and agreements contained therein, a statement of the rights,
remedies and security afforded thereby, and all matters contained
therein.
4. Use
of Proceeds. The proceeds of this Note shall be used by
Borrower solely for the purpose of effectuating payment a portion
of the discounted payoff amounts paid to Xxxxxxxx’s former
senior secured lender and mezzanine lender.
5. Default.
The occurrence and continuance of any one or more of the following
events shall be considered an “Event of
Default”:
5.1
Borrower fails to pay when due any amount payable under this Note,
within five (5) days of the due date for such payment.
5.2
The commencement of any proceeding in bankruptcy by or against
Borrower or alleging that Borrower is insolvent or unable to pay
its debts as they mature, or for the readjustment of
Borrower’s debts, whether under the United States Bankruptcy
Code or under any other law, whether state or federal, now or
hereafter existing, for the relief of debtors, or the commencement
of any analogous statutory or non-statutory proceeding involving
Borrower; provided, however, that if such commencement of
proceedings against Xxxxxxxx is involuntary, such action shall not
constitute an Event of Default unless such appointment is not
revoked or such proceeding is not dismissed within sixty (60) days
after the commencement of such proceedings.
2
6. Remedies.
At the election of Xxxxxx, and without notice, the principal
balance remaining unpaid under this Note and all accrued and unpaid
interest thereon and any other amounts due hereunder, shall be and
become immediately due and payable in full upon the occurrence of
an Event of Default. Failure to exercise this option shall not
constitute a waiver of the right to exercise same in the event of
any subsequent Event of Default. Upon an Event of Default, Lender
may proceed under any remedy permitted herein, or pursuant to law
or equity. No holder hereof shall, by any act of omission or
commission, be deemed to waive any of its rights, remedies or
powers hereunder unless such waiver is in writing and signed by the
holder hereof, and then only to the extent specifically set forth
therein. The rights, remedies and powers of the holder hereof, as
provided in this Note are cumulative and concurrent and may be
pursued singly, successively or together against Borrower and any
security given at any time to secure repayment hereof, all at the
sole discretion of the holder hereof.
7. Financial
Statements. Promptly when available, and in any event,
within ten (10) days following the end of each calendar month
during the term of this Note, Borrower shall deliver to Lender a
copy of the unaudited financial statements of Borrower regarding
such month then ended, together with such other documentation and
information as Lender may reasonably request.
8. Extension
of Maturity Date. Provided no Event of Default shall exist,
Borrower shall have the right, exercisable one (1) time, to extend
the Maturity Date for one (1) month until November 30, 2021.
Borrower may exercise such right only by providing written notice
to Lender at least five (5) days prior to the current Maturity
Date, together with an extension fee equal to one percent (1.00%)
of the outstanding principal balance of the Note. Such fee shall be
paid prior to, and as a condition to, any such
extension.
9. Miscellaneous.
9.1
This Note, together with the Loan Documents, constitutes the entire
agreement among Borrower and Lender and contains all of the
agreements with respect to the subject matter hereof, and
supersedes any prior understandings, agreements, or representations
by or among Borrower and Xxxxxx, whether written or oral, to the
extent they relate in any way to the subject matter.
9.2
Lender may at any time assign its rights in this Note. This Note
shall inure to the benefit of and may be enforced by Xxxxxx and its
successor and assigns.
9.3
No amendment, modification or waiver of any provision of this Note
shall be valid unless the same shall be in writing and signed by
Xxxxxxxx and Lender. No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior
or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent such occurrence.
9.4
The section headings contained in this Note are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Note.
9.5
This Note is the result of arm’s length negotiations
conducted by and among Xxxxxxxx and Lender and, therefore, the
usual rules of construction requiring that ambiguities are to be
resolved against a particular party shall not be applicable in the
construction of this Note.
9.6
If at any time or times hereafter following an Event of Default
Lender employs counsel (whether or not there is a lawsuit) to
enforce any rights of Lender against Borrower under this Note or
any of the other Loan Documents, or attempts to or enforces any of
Lender’s rights or remedies under this Note, the costs and
expenses incurred by Lender in any manner or way with respect to
the foregoing, including, without limitation, attorneys’ fees
and costs through appeal and in post-judgment proceedings, shall be
part of the obligations owing under this Note, payable by Borrower
to Lender on demand.
3
9.7
Whenever possible each provision of this Note shall be interpreted
in such manner as to be effective and valid under applicable law,
but if any provision of this Note shall be prohibited or invalid
under such law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the
remainder of said documents. As used in this Note, the singular
shall include the plural, and masculine, feminine and neuter
pronouns shall be fully interchangeable, where the context so
requires.
9.8
If this Note is executed by more than one party, the obligations
and liabilities of each Borrower hereunder shall be joint and
several and shall be binding and enforceable against each Borrower
and their respective successors and permitted assigns.
9.9
BORROWER WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT BORROWER MAY HAVE TO CLAIM OR RECOVER FROM LENDER IN ANY
LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES.
9.10
THE VALIDITY OF THIS NOTE, ITS CONSTRUCTION, INTERPRETATION AND
ENFORCEMENT, AND THE RIGHTS OF XXXXXXXX AND LENDER SHALL BE
DETERMINED UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
9.11
JURY
WAIVER. XXXXXX AND BORROWER, EACH HAVING BEEN REPRESENTED BY
COUNSEL OR HAVING THE OPPORTUNITY TO BE REPRESENTED BY COUNSEL,
EACH KNOWINGLY AND VOLUNTARILY, TO THE MAXIMUM EXTENT PERMITTED BY
LAW, EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY ACTION,
CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING ARISING UNDER OR WITH
RESPECT TO THIS NOTE OR THE TRANSACTIONS RELATED HERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, XXXXXXXX HEREBY AGREES THAT ANY SUCH ACTION,
CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING SHALL BE DECIDED BY A
COURT TRIAL WITHOUT A JURY AND THAT XXXXXX MAY FILE A COPY OF THIS
NOTE WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN EVIDENCE OF THE
CONSENT OF BORROWER TO THE WAIVER OF ITS RIGHT TO TRIAL BY
JURY.
[SIGNATURE
PAGE FOLLOWS]
4
IN
WITNESS WHEREOF, Xxxxxxxx has duly executed this Note as of the day
and year first written above.
|
|
BORROWER:
GK
PREFERRED INCOME II (RIDGMAR)
SPE,
LLC, a Delaware limited liability company
By: GK
Development, Inc., its Manager
By:
/s/ Xxxx
Xxxxxxxxx
Name:
Xxxx Xxxxxxxxx
Title:
President
XXXXXXXX:
1551
XXXXXXXXX PARTNERS SPE, LLC, a
Delaware limited
liability company
By: GK
Development, Inc., its Manager
By: /s/ Xxxx
Xxxxxxxxx
Name:
Xxxx Xxxxxxxxx
Title:
President
|
