EXHIBIT 10.4
Loan No. V_05536
FIXED RATE NOTE
$1,900,000.00 September 17, 1999
FOR VALUE RECEIVED TECHCOURT, LLC, a Virginia limited liability
company (hereinafter referred to as "Borrower"), promises to pay to the order of
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, a New York banking corporation, its
successors and assigns (hereinafter referred to as "Lender"), at the office of
Lender or its agent, designed, or assignee at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attention: Loan Servicing, or at such place as Lender or its agent,
designee, or assignee may from time to time designate in writing, the principal
sum of ONE MILLION NINE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,900,000.00), 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
Applicable Interest Rate (hereinafter defined) at all times prior to the
occurrence of an Event of Default (as defined in the Security Instrument
[hereinafter defined]), and to be paid in installments as set forth below.
Unless otherwise herein defined, all initially capitalized terms shall have the
meanings given such terms in the Security Instrument.
1. PAYMENT TERMS
Principal and interest due under this Note shall be paid as follows:
(a) A payment of interest only on the date hereof for the
period from the date hereof through September 30, 1999, both inclusive;
(b) A constant payment of $14,034.35, on the first day of
November, 1999 and on the first day of each calendar month thereafter, up to and
including the first day of September, 2009; and
(c) On the Anticipated Repayment Date and on the first
day of each calendar month thereafter until this Note is paid in full, in the
manner set forth in Section 18 of this Note;
with payments under this Note to be applied pursuant to the provisions of
Section 18 of this Note, or if the provisions of Section 18 of this Note are not
yet effective, as follows:
(i) First, to the payment of interest and other
costs and charges due in connection with this Note or the Debt, as
Lender may determine in its sole discretion; and
(ii) The balance shall be applied toward the
reduction of the principal sum;
XXXXXX GUARANTY TRUST COMPANY
and on the first day of October, 2009 (the "Maturity Date" or the "Anticipated
Repayment Date"), the entire outstanding principal balance hereof, together with
all accrued but unpaid interest thereon, shall be due and payable in full,
provided, however, that in the event such amounts are not paid in full on such
date, the Maturity Date shall be extended to the first day of October, 2029 (the
"Extended Maturity Date"). Interest on the principal sum of this Note shall be
calculated on the basis of a three hundred sixty (360) day year and paid for the
actual number of days elapsed. All amounts due under this Note shall be payable
without setoff, counterclaim or any ether deduction whatsoever.
2. INTEREST
The term "Applicable Interest Rate" as used in this Note shall mean (a)
from the date of this Note through but not including the Anticipated Repayment
Date, a rate per annum equal to Eight and Seven One Hundredths Percent (8.07%)
(the "Initial Interest Rate"), and (b) from and after the Anticipated Repayment
Date through and including the date this Note is paid in full, a rate per annum
equal to the greater of (i) the Initial Interest Rate plus two percent (2.0%),
or (ii) the Treasury Index (as hereinafter defined) plus two and one-tenth
percent (2.1%) plus two percent (2%) ((i) or (ii), as applicable, the "Revised
Interest Rate"). The term "Treasury Index" for purposes of this Section 2 means
the yield calculated by the linear interpolation of the yields, as reported in
Federal Reserve Statistical Release H.15-Selected Interest Rates under the
heading "U.S. Government Securities/Treasury Constant Maturities" for the week
ending prior to the Anticipated Repayment Date, of U.S. Treasury constant
maturities with maturity dates (one longer and one shorter) most nearly
approximating ten (10) years after the Anticipated Repayment Date. (In the event
Release H.I5 is no longer published, Lender shall select a comparable
publication to determine the Treasury Rate.)
3. SECURITY
This Note is secured by, and Xxxxxx is entitled to the benefits of, the
Security Instrument, the Assignment, the Environmental Agreement, and the other
Loan Documents (hereinafter defined). The term "Security Instrument" means the
Deed of Trust and Security Agreement dated the date hereof given by Borrower for
the use and benefit of Lender covering the estate of Borrower in certain
premises as more particularly described therein (which premises, together with
all properties, rights, titles, estates and interests now or hereafter securing
the Debt and/or other obligations of Borrower under the Loan Documents, are
collectively referred to herein as the "Property"). The term "Assignment" means
the Assignment of Leases and Rents of even date herewith executed by Xxxxxxxx in
favor of Xxxxxx. The term "Environmental Agreement" means the Environmental
Indemnity Agreement of even date herewith executed by Xxxxxxxx in favor of
Xxxxxx. The term "Escrow Agreement" means the Escrow Agreement for Reserves and
Impounds of even date herewith executed by Xxxxxxxx in favor of Xxxxxx. The term
"Loan Documents" refers collectively to this Note, the Security Instrument, the
Assignment, the Environmental Agreement, the Escrow Agreement and any and all
other documents executed in connection with this Note or now or hereafter
executed by Xxxxxxxx and/or others and by or in favor of Lender, which wholly or
partially secure or guarantee payment of this Note or pertains to indebtedness
evidenced by this Note.
XXXXXX GUARANTY TRUST COMPANY
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4. LATE FEE
If any installment payable under this Note is not received by Lender
within ten (10) days after the date on which it is due (without regard to any
applicable cure and/or notice period), Borrower shall pay to Lender upon demand
an amount equal to the lesser of (a) five percent (5%) of such unpaid sum or (b)
the maximum amount permitted by applicable law to defray the expenses incurred
by Lender in handling and processing such delinquent payment and to compensate
Lender for the loss of the use of such delinquent payment, and such amount shall
be secured by the Loan Documents.
5. DEFAULT AND ACCELERATION
So long as an Event of Default exists, Lender may, at its option,
without notice or demand to Borrower, declare the Debt immediately due and
payable. All remedies hereunder, under the Loan Documents and at law or in
equity shall be cumulative. In the event that it should become necessary to
employ counsel to collect the Debt or to protect or foreclose the security for
the Debt or to defend against any claims asserted by Borrower arising from or
related to the Loan Documents, Xxxxxxxx also agrees to pay to Lender on demand
all costs of collection or defense incurred by Xxxxxx, including reasonable
attorneys' fees for the services of counsel whether or not suit be brought.
6. DEFAULT INTEREST
Upon the occurrence of an Event of Default Borrower shall pay interest
on the entire unpaid principal sum and any other amounts due under the Loan
Documents at the rate equal to the lesser of (a) the maximum rate permitted by
applicable law, or (b) the greater of (i) five percent (5%) above the Applicable
Interest Rate or (ii) five percent (5%) above the Prime Rate (hereinafter
defined), in effect at the time of the occurrence of the Event of Default (the
"Default Rate"). The term "Prime Rate" means the prime rate reported in the
Money Rates section of The Wall Street Journal. In the event that The Wall
Street Journal should cease or temporarily interrupt publication, the term
"Prime Rate" shall mean the daily average prime rate published in another
business newspaper, or business section of a newspaper, of national standing and
general circulation chosen by Xxxxxx. In the event that a prime rate is no
longer generally published or is limited, regulated or administered by a
governmental or quasi-governmental body, then Lender shall select a comparable
interest rate index which is readily available and verifiable to Borrower but is
beyond Lender's control. The Default Rate shall be computed from the occurrence
of the Event of Default until the actual receipt and collection of a sum of
money determined by Xxxxxx to be sufficient to cure the Event of Default.
Amounts of interest accrued at the Default Rate shall constitute a portion of
the Debt, and shall be deemed secured by the Loan Documents. This clause,
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 Lender by reason of the occurrence of any Event of Default.
XXXXXX GUARANTY TRUST COMPANY
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7. PREPAYMENT
(a) The principal balance of this Note may not be prepaid
in whole or in part (except with respect to the application of casualty or
condemnation proceeds) prior to the Maturity Date. If following the occurrence
of any Event of Default, Borrower shall tender payment to Lender or Lender shall
receive proceeds (whether through foreclosure or the exercise of the other
remedies available to Lender under the Security Instrument or the other Loan
Documents), Borrower shall pay in addition to interest accrued and unpaid on the
principal balance of this Note and all other sums then due under this Note and
the other Loan Documents a prepayment consideration in an amount equal to the
greater of (A) one percent (1%) of the outstanding principal balance of this
Note at the time such payment or proceeds are received, or (B) (x) the present
value as of the date such payment or proceeds are received of the remaining
scheduled payments of principal and interest from the date such payment or
proceeds are received through the Maturity Date (including any balloon payment)
determined by discounting such payments at the Discount Rate (as hereinafter
defined), less (y) the amount of the payment or proceeds received. The term
"Discount Rate" means the rate which, when compounded monthly, is equivalent to
the Treasury Rate (as hereinafter defined), when compounded semi-annually. The
term "Treasury Rate" means the yield calculated by the linear interpolation of
the yields, as reported in Federal Reserve Statistical Release H.15-Selected
Interest Rates under the heading "U.S. Government Securities/Treasury Constant
Maturities" for the week ending prior to the date the payment or such proceeds
are received, of U.S. Treasury constant maturities with maturity dates (one
longer and one shorter) most nearly approximating the Maturity Date. (In the
event Release H.15 is no longer published, Lender shall select a comparable
publication to determine the Treasury Rate.) Lender shall notify Borrower of the
amount and the basis of determination of the required prepayment consideration,
which shall be conclusive except in the case of manifest error. Notwithstanding
the foregoing, Borrower shall have the additional privilege to prepay the entire
principal balance of this Note (together with any other sums constituting the
Debt) on any scheduled payment date occurring on or after that date which is
three (3) months preceding the Maturity Date without any fee or consideration
for such privilege.
(b) If the prepayment results from the application to the
Debt of the casualty or condemnation proceeds from the Property, no prepayment
consideration will be imposed. Partial prepayments of principal resulting from
the application of casualty or condemnation proceeds to the Debt shall not
change the amounts of subsequent monthly installments nor change the dates on
which such installments are due, unless Lender shall otherwise agree in writing.
(c) (i) Notwithstanding any provision of this
Section 7 to the contrary, at any time during which voluntary prepayment of this
Note is prohibited by Section 7(a) hereof and after the earlier of (1) the date
which is two (2) years after the "startup day," within the meaning of Section
860G(a)(9) of the Internal Revenue Code of 1986, as amended from time to time or
any successor statute (the "Code"), of a "real estate mortgage investment
conduit," within the meaning of Section 860D of the Code, that holds this Note,
and (2) a regularly scheduled payment date on or after that date which is four
(4) years after the date of this Note, and provided no Event of Default (or any
event which with the passage of time or the giving of notice, or both,
XXXXXX GUARANTY TRUST COMPANY
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could become an Event of Default) has occurred under the Security Instrument or
under any of the Loan Documents, Borrower may cause the release of the Property
(in whole but not in part) from the lien, terms and conditions (including
without limitation the assignment of leases) of the Security Instrument and the
other Loan Documents other than this Note upon the satisfaction of the following
conditions precedent:
(A) not less than thirty (30) days
prior written notice to Lender specifying a regularly scheduled payment
date (the "Release Date") on which the Defeasance Deposit (hereinafter
defined) is to be made;
(B) the payment to Lender of interest
accrued and unpaid on the principal balance of this Note to and
including the Release Date;
(C) the payment to Lender of all other
sums, not including scheduled interest or principal payments, due under
this Note, the Security Instrument and the other Loan Documents;
(D) the payment to Lender of the
Defeasance Deposit; and
(E) the delivery to Lender of:
(1) a security agreement, in
form and substance satisfactory to Lender,
creating a first priority lien on the
Defeasance Deposit and the U.S. Obligations
(hereinafter defined) purchased on behalf of
Borrower with the Defeasance Deposit in
accordance with this subparagraph (the
"Security Agreement");
(2) a release of the Property
from the lien of the Security Instrument
(for execution by Xxxxxx) in a form
appropriate for the jurisdiction in which
the Property is located;
(3) an officer's certificate
of Borrower certifying that the requirements
set forth in this subparagraph (i) have been
satisfied;
(4) an opinion of counsel for
Xxxxxxxx in form satisfactory to Xxxxxx
stating, among other things, that Xxxxxx has
a perfected first priority security interest
in the Defeasance Deposit and the U.S.
Obligations purchased by Xxxxxx on behalf of
Borrower;
(5) an opinion of a certified
public accountant acceptable to Lender to
the effect that the Defeasance Deposit is
adequate to provide payment on or prior to,
but as close as possible to, all successive
scheduled payment dates after the Release
Date upon which interest and principal
payments are required under this
XXXXXX GUARANTY TRUST COMPANY
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Note (including the amounts due on the
Maturity Date) and in amounts equal to the
scheduled payments due on such dates under
this Note;
(6) evidence in writing from
the applicable Rating Agencies to the effect
that such release will not result in a re-
qualification, reduction or withdrawal of
any rating in effect immediately prior to
such defeasance for any Securities;
(7) payment of all of Xxxxxx's
expenses incurred in connection with the
defeasance including, without limitation,
reasonable attorneys fees; and
(8) such other certificates,
documents or instruments as Lender may
reasonably request.
In connection with the conditions set forth in subsection (c)(i)(E)
above, Borrower hereby appoints Lender as its agent and attorney-in-fact for the
purpose of using the Defeasance Deposit to purchase U.S. Obligations which
provide payment on or prior to, but as close as possible to, all successive
scheduled payment dates after the Release Date upon which interest and principal
payments are required under this Note (including the amounts due on the Maturity
Date) and in amounts equal to the scheduled payments due on such dates under
this Note (the "Scheduled Defeasance Payments"). Borrower, pursuant to the
Security Agreement or other appropriate document, shall authorize and direct
that the payments received from the U.S. Obligations may be made directly to
Lender and applied to satisfy the obligations of the Borrower under this Note.
(ii) Upon compliance with the requirements of this subsection (c),
the Property shall be released from the lien of the Security Instrument and the
pledged U.S. Obligations shall be the sole source of collateral securing this
Note. Any portion of the Defeasance Deposit in excess of the amount necessary to
purchase the U.S. Obligations required by subparagraph (c)(i) above and satisfy
the Borrower's obligations under this subsection (c) shall be remitted to the
Borrower with the release of the Property from the lien of the Security
Instrument.
(iii) For purposes of this subsection (c), the following terms shall
have the following meanings:
(A) The term "Defeasance Deposit" shall mean an
amount equal to 100% of the remaining principal amount of this
Note, the Yield Maintenance Premium, any costs and expenses
incurred or to be incurred in the purchase of the U.S.
Obligations necessary to meet the Scheduled Defeasance
Payments and any revenue, documentary stamp or intangible
taxes or any other tax or charge due in connection with the
transfer of this Note or otherwise required to accomplish the
agreements of this subsection;
XXXXXX GUARANTY TRUST COMPANY
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(B) The term "Yield Maintenance Premium" shall
mean the amount (if any) which, when added to the remaining
principal amount of this Note, will be sufficient to purchase
U.S. Obligations providing the required Scheduled Defeasance
Payments; and
(C) The term "U.S. Obligations" shall mean
direct non-callable obligations of the United States of
America.
(iv) Upon the release of the Property in accordance with
this subsection (c), Borrower shall, at Xxxxxx's request, assign all its
obligations and rights under this Note, together with the pledged Defeasance
Deposit, to a successor special purpose entity designated by Xxxxxxxx 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 and the Security Agreement. In connection with such assignment and
assumption, Borrower shall (x) 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 Security Agreement and the other Loan Documents,
as so assumed, are enforceable against such successor entity in accordance with
their respective terms, and (y) 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). In connection with such
assignment and assumption, Borrower and any Guarantor may be released of
personal liability under the Note and the other Loan Documents, but only as to
acts or events occurring after the closing of such assignment and assumption.
(v) Upon the release of the Property in accordance with
this subsection (c), Borrower shall have no further right to prepay this Note
pursuant to the other provisions of this Section 7 or otherwise.
8. SAVINGS CLAUSE
This Note is subject to the express condition that at no time shall
Borrower be obligated or required to pay interest on the principal balance due
hereunder at a rate which could subject Lender to either civil or criminal
liability as a result of being in excess of the maximum interest rate which
Borrower is permitted by applicable law to contract or agree to pay. If by the
terms of this Note, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of such
maximum rate, the Applicable Interest Rate or the Default Rate, as the case may
be, shall be deemed to be immediately reduced to such maximum rate and all
previous payments in excess of the maximum rate shall be deemed to have been
payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the Debt, shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of this Note until payment in full so that the rate or amount
of interest on account of the Debt does not exceed the maximum lawful rate of
interest from time to time in effect and
XXXXXX GUARANTY TRUST COMPANY
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applicable to the Debt for so long as the Debt is outstanding. Notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents,
it is not the intention of Lender to accelerate the maturity of any interest
that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
9. WAIVERS
(a) Except as specifically provided in the Loan
Documents, Borrower and any endorsers, sureties or guarantors hereof jointly and
severally waive presentment and demand for payment, notice of intent to
accelerate maturity, notice of acceleration of maturity, protest and notice of
protest and non-payment, all applicable exemption rights, valuation and
appraisement, notice of demand, and all other notices in connection with the
delivery, acceptance, performance, default or enforcement of the payment of this
Note and the bringing of suit and diligence in taking any action to collect any
sums owing hereunder or in proceeding against any of the rights and collateral
securing payment hereof. Borrower and any surety, endorser or guarantor hereof
agree (i) that the time for any payments hereunder may be extended from time to
time without notice and consent, (ii) to the acceptance by Lender of further
collateral, (iii) the release by Lender of any existing collateral for the
payment of this Note, (iv) to any and all renewals, waivers or modifications
that may be granted by Lender with respect to the payment or other provisions of
this Note, and/or (v) that additional Borrowers, endorsers, guarantors or
sureties may become parties hereto all without notice to them and without in any
manner affecting their liability under or with respect to this Note. No
extension of time for the payment of this Note or any installment hereof shall
affect the liability of Borrower under this Note or any endorser or guarantor
hereof even though the Borrower or such endorser or guarantor is not a party to
such agreement.
(b) Failure of Lender to exercise any of the options
granted herein to Lender upon the happening of one or more of the events giving
rise to such options shall not constitute a waiver of the right to exercise the
same or any other option at any subsequent time in respect to the same or any
other event. The acceptance by Lender of any payment hereunder that is less than
payment in full of all amounts due and payable at the time of such payment shall
not constitute a waiver of the right to exercise any of the options granted
herein to Lender at that time or at any subsequent time or nullify any prior
exercise of any such option without the express written acknowledgment of the
Lender.
10. EXCULPATION
(a) Notwithstanding anything in the Loan Documents to the
contrary, but subject to the qualifications below, Xxxxxx and Borrower agree
that:
(i) Borrower shall be liable upon the Debt and
for the other obligations arising under the Loan Documents to the full
extent (but only to the extent) of the security therefor; provided,
however, that in the event (A) of fraud, wilful misconduct or material
misrepresentation by Borrower, its members, its principals, its
affiliates, its agents or its employees or by any Guarantor or any
Indemnitor in connection with the loan evidenced by this Note, (B) of
Xxxxxxxx's breach or default under Section 8.2 of the
XXXXXX GUARANTY TRUST COMPANY
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Security Instrument, or (C) the Property or any part thereof becomes an
asset in a voluntary bankruptcy or insolvency proceeding, the
limitation on recourse set forth in this Subsection 10(a) will be null
and void and completely inapplicable, and this Note shall be with full
recourse to Borrower.
(ii) If a default occurs in the timely and proper payment
of all or any part of the Debt, Lender shall not enforce the liability
and obligation of Borrower to perform and observe the obligations
contained in this Note or the Security Instrument by any action or
proceeding wherein a money judgment shall be sought against Borrower,
except that Lender may bring a foreclosure action, action for specific
performance or other appropriate action or proceeding to enable Lender
to enforce and realize upon the Security Instrument, the Other Loan
Documents and the interest in the Property, the Rents and any other
collateral given to Lender created by the Security Instrument and the
Other Loan Documents; provided, however, that any judgment in any
action or proceeding shall be enforceable against Borrower only to the
extent of Xxxxxxxx's interest in the Property, in the Rents and in any
other collateral given to Lender. Xxxxxx, by accepting this Note and
the Security Instrument, agrees that it shall not, except as otherwise
herein provided, sue for, seek or demand any deficiency judgment
against Borrower in any action or proceeding, under or by reason of or
under or in connection with this Note, the Other Loan Documents or the
Security Instrument.
(iii) The provisions of this Subsection 10(a) shall not (A)
constitute a waiver, release or impairment of any obligation evidenced
or secured by this Note, the Other Loan Documents or the Security
Instrument; (B) impair the right of Lender to name Borrower as a party
defendant in any action or suit for judicial foreclosure and sale under
the Security Instrument; (C) affect the validity or enforceability of
any indemnity, guaranty, master lease or similar instrument made in
connection with this Note, the Security Instrument, or the Other Loan
Documents; (D) impair the right of Lender to obtain the appointment of
a receiver; (E) impair the enforcement of the Assignment executed in
connection herewith; (F) impair the right of Lender to enforce the
provisions of Article 11 of the Security Instrument; or (G) impair the
right of Lender to obtain a deficiency judgment or judgment on this
Note, against Borrower if necessary to obtain any insurance proceeds or
condemnation awards to which Xxxxxx would otherwise be entitled under
the Security Instrument; provided, however, Lender shall only enforce
such judgment against the insurance proceeds and/or condemnation
awards.
(iv) Notwithstanding the provisions of this Article to the
contrary, Borrower shall be personally liable to Lender for the Losses
it incurs due to: (A) the misapplication or misappropriation of Rents;
(B) the misapplication or misappropriation of insurance proceeds or
condemnation awards; (C) Borrower's failure to return or to reimburse
Lender for all Personal Property taken from the Property by or on
behalf of Borrower and not replaced with Personal Property of the same
utility and of the same or greater value; (D) any act of actual waste
or arson by Borrower, any principal, affiliate, general partner or
member thereof or by any Indemnitor or any Guarantor; (E) any fees or
commissions paid by Borrower to any principal, affiliate, general
partner or member of Borrower, any Indemnitor or any Guarantor in
violation of the terms of this Note, the Security
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Instrument or the Other Loan Documents; (F) Xxxxxxxx's failure to
comply with the provisions of Section 11.2 of the Security Instrument;
or (G) any breach of the Environmental Indemnity.
(b) Nothing herein shall be deemed to be a waiver of any
right which Lender may have under Sections 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the
Debt or to require that all collateral shall continue to secure all of the Debt,
owing to Lender in accordance with this Note, the Security Instrument and the
Other Loan Documents.
11. AUTHORITY
Borrower (and the undersigned representative of Borrower, if any)
represents that Borrower has full power, authority and legal right to execute,
deliver and perform its obligations pursuant to this Note and the other Loan
Documents and that this Note and the other Loan Documents constitute legal,
valid and binding obligations of Borrower. Borrower further represents that the
loan evidenced by the Loan Documents was made for business or commercial
purposes and not for personal, family or household use.
12. NOTICES
All notices or other communications required or permitted to be given
pursuant hereto shall be given in the manner and be effective as specified in
the Security Instrument, directed to the parties at their respective addresses
as provided therein.
13. TRANSFER
Lender shall have the unrestricted right at any time or from time to
time to sell this Note and the loan evidenced by this Note and the Loan
Documents or participation interests therein. Borrower shall execute,
acknowledge and deliver any and all instruments requested by Xxxxxx to satisfy
such purchasers or participants that the unpaid indebtedness evidenced by this
Note is outstanding upon the terms and provisions set out in this Note and the
other Loan Documents. To the extent, if any, specified, in such assignment or
participation, such assignee(s) or participant(s) shall have the rights and
benefits with respect to this Note and the other Loan Documents as such
assignee(s) or participant(s) would have if they were the Lender hereunder.
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14. WAIVER OF TRIAL BY JURY
BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS NOTE
OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH INCLUDING, BUT NOT LIMITED TO, THOSE RELATING TO (A)
ALLEGATIONS THAT A PARTNERSHIP EXISTS BETWEEN XXXXXX AND BORROWER; (B) USURY OR
PENALTIES OR DAMAGES THEREFOR; (C) ALLEGATIONS OF UNCONSCIONABLE ACTS, DECEPTIVE
TRADE PRACTICE, LACK OF GOOD FAITH OR FAIR DEALING, LACK OF COMMERCIAL
REASONABLENESS, OR SPECIAL RELATIONSHIPS (SUCH AS FIDUCIARY, TRUST OR
CONFIDENTIAL RELATIONSHIP); (D) ALLEGATIONS OF DOMINION, CONTROL, ALTER EGO,
INSTRUMENTALITY, FRAUD, REAL ESTATE FRAUD, MISREPRESENTATION, DURESS, COERCION,
UNDUE INFLUENCE, INTERFERENCE OR NEGLIGENCE; (E) ALLEGATIONS OF TORTIOUS
INTERFERENCE WITH PRESENT OR PROSPECTIVE BUSINESS RELATIONSHIPS OR OF ANTITRUST;
OR (F) SLANDER, LIBEL OR DAMAGE TO REPUTATION. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY XXXXXXXX, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A
TRIAL BY JURY WOULD OTHERWISE ACCRUE. XXXXXX IS HEREBY AUTHORIZED TO FILE A COPY
OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY
BORROWER.
15. APPLICABLE LAW
This Note shall be governed by and construed in accordance with the
laws of the state in which the real property encumbered by the Security
Instrument is located (without regard to any conflict of laws or principles) and
the applicable laws of the United States of America.
16. JURISDICTION
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY COURT OF
COMPETENT JURISDICTION LOCATED IN THE STATE IN WHICH THE PROPERTY IS LOCATED IN
CONNECTION WITH, ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
XXXXXX GUARANTY TRUST COMPANY
17. NO ORAL CHANGE
The provisions of this Note and the Loan Documents may be amended or
revised only by an instrument in writing signed by the Borrower and Lender. This
Note and all the other Loan Documents embody the final, entire agreement of
Xxxxxxxx and Lender and supersede any and all prior commitments, agreements,
representations and understandings, whether written or oral, relating to the
subject matter hereof and thereof and may not be contradicted or varied by
evidence of prior, contemporaneous or subsequent oral agreements or discussions
of Xxxxxxxx and Xxxxxx. There are no oral agreements between Borrower and
Lender.
17B.. ESTABLISHMENT OF COLLATERAL ACCOUNT - LOCKBOX AGREEMENT
Except as expressly set forth in section 18(a)(v) of this Note,
Borrower hereby covenants and agrees, on or before the Collateral Account
Effective Date (as hereinafter defined), to enter into one or more clearing and
deposit agreements acceptable to Lender between Borrower, Lender and one or more
financial institutions (which may be Lender or an affiliate or subsidiary of
Lender) acceptable to Lender (together with any modification, amendment,
substitution or replacement thereof, hereinafter collectively referred to as the
"Lock-Box Agreement") in form and substance satisfactory to Lender which shall
provide, among other things, that all Rents and other sums collected from, or
arising with respect to, the Property be deposited in the deposit account (the
"Collateral Account") established in connection with such Lock-Box Agreement,
and that such amounts shall be disbursed in accordance with this Note. Borrower
shall not have a right of withdrawal in respect to the Collateral Account.
Borrower shall pay all costs and expenses required under the Lock-Box Agreement
or in connection with the Collateral Account and all of Lender's out-of-pocket
costs and expenses in connection with the preparation and negotiation of the
Lock-Box Agreement. On or before the Collateral Account Effective Date, Borrower
shall deliver to Lender for delivery, at Borrower's expense, by certified mail,
return receipt requested, to all tenants of the Property an irrevocable written
notice in form and substance satisfactory to Lender directing such tenants to
pay their rent and other amounts due under their leases to the depository under
the Lock-Box Agreement for deposit into the Collateral Account. Additionally,
each lease, license and occupancy agreement executed after the Collateral
Account Effective Date affecting any of the Property must provide, in a manner
approved by Lender, that tenant, lessee or licensee, as appropriate, is required
to make all payments due to Borrower under the terms of such lease, license or
occupancy agreement to the depository of the Collateral Account by check,
cashiers check or money order made payable to Lender or its successors or
assigns. Upon the occurrence of any default under this Note or the Security
Instrument, Lender may apply any sums then held pursuant to the Lock-Box
Agreement to the payment of the Obligations (as defined in the Security
Instrument) in any order in its sole discretion. Until expended or applied,
amounts held in the Collateral Account pursuant to the Lock-Box Agreement shall
constitute additional security for the Obligations. The Lock-Box Agreement when
and if executed shall be a "Loan Document" for all purposes under this Note, the
Security Instrument and the other Loan Documents. Borrower hereby irrevocably
constitutes and appoints Lender the attorney-in-fact of Xxxxxxxx, coupled with
an interest, to, upon Xxxxxxxx's failure to do so in accordance with the terms
hereof, without notice to Borrower, execute and deliver the Lock-Box Agreement
and the notices to tenants described in this Section 17B and to take any other
action necessary or desirable in Xxxxxx's judgment to carry out the intention of
this Section 17B.
XXXXXX GUARANTY TRUST COMPANY
12
18. ANTICIPATED REPAYMENT DATE PROVISIONS
(a) The following subsections shall apply from and after june 30,
2009 (the "COLLATERAL ACCOUNT EFFECTIVE DATE"):
(i) Except as hereinafter set forth in subsection (v) of
this Section 18(a) Borrower shall be obligated to pay, and Lender shall
collect from the Collateral Account (as defined in Section 19 below) to
the extent of funds on deposit in such account, on the Collateral
Account Effective Date and on the first day of each calendar month
thereafter, up to but excluding the Anticipated Repayment Date the
following payments to be applied by Lender in the listed order of
priority:
(1) First, to the payment of the amount set
forth in Section 1(b) of this Note (the "MONTHLY DEBT SERVICE
PAYMENT AMOUNT") to be applied first to the payment of
interest computed at the Initial Interest Rate with the
remainder applied to the reduction of the outstanding
principal balance of this Note;
(2) Second, to payments to the Tax and Insurance
Funds (as defined in the Escrow Agreement) in accordance with
the terms and conditions of the Escrow Agreement;
(3) Third, to payments to the On-going
Replacement Funds and the TI&LC Funds (each as defined in the
Escrow Agreement) in accordance with the terms and conditions
of the Escrow Agreement;
(4) Fourth, to payments for monthly Operating
Expenses (as hereinafter defined), pursuant to the terms and
conditions of the related Approved Budget (as hereinafter
defined);
(5) Fifth, to payment for Extraordinary Expenses
(as hereinafter defined) approved by Xxxxxx, if any;
(6) Sixth, to payment of any other amounts due
under the Loan Documents; and
(7) Lastly, any excess amounts shall remain on
deposit in the Collateral Account.
(ii) For the calendar year in which the Collateral Account
Effective Date occurs and for each calendar year thereafter until this
Note is paid in full, Borrower shall submit to Lender for Lender's
written approval an annual budget (an "ANNUAL BUDGET") not later than
(i) 60 days prior to the Collateral Account Effective Date for the
calendar year in which the Collateral Account Effective Date occurs and
(ii) sixty (60) days prior to the commencement of each calendar year
thereafter, in form satisfactory to Lender setting forth in reasonable
detail budgeted monthly operating income and monthly operating capital
and other expenses for the Property. Each Annual Budget shall contain,
among other things, limitations on management fees, third party service
fees and other expenses as Lender may reasonably determine. Each Annual
Budget must be satisfactory
XXXXXX GUARANTY TRUST COMPANY
13
to Lender in its sole discretion and each such Annual Budget approved
by Lender in accordance with the terms hereof shall hereinafter be
referred to as an "Approved Budget." Until such time as Lender approves
a proposed Annual Budget, the most recently Approved Budget shall
apply; provided, that such Approved Budget shall be adjusted to reflect
actual increases in real estate taxes, insurance premiums and utilities
expenses.
(iii) In the event that Borrower must incur any
extraordinary operating expense or capital expense not set forth in the
applicable Approved Budget or reserved for in the On-going Replacement
Fund (each, an "EXTRAORDINARY EXPENSE"), then Borrower shall promptly
deliver to Lender a reasonably detailed explanation of such proposed
Extraordinary Expense for Xxxxxx's approval.
(iv) For the purposes of this Note, "OPERATING EXPENSES"
shall mean, for any period, the operating expenses for the operation
and maintenance of the Property as set forth in an Approved Budget to
the extent such expenses are actually paid by Borrower and excluding
(1) expenses for which Borrower shall be reimbursed from, or which
shall be paid for out of, any Funds (as defined in the Escrow
Agreement), and (2) any management fees payable to affiliates of the
Borrower unless Lender has approved the same in its sole discretion
pursuant to an Approved Budget or otherwise pursuant to a management
agreement approved by Lender.
(v) Notwithstanding the other provisions of this Section
18(a), in the event that, not less than ten (10) business days prior to
the Collateral Account Effective Date, Borrower delivers to Lender
either (i) a written commitment (the "COMMITMENT") for the refinancing
of the Loan evidenced by this Note from a Qualified Lender (as
hereinafter, defined), which reasonably provides for the consummation
of such refinance prior to the Anticipated Repayment Date or (ii) other
evidence in form and substance satisfactory to Lender in its sole
determination of Borrower's ability to refinance the loan evidenced by
this Note prior to the Collateral Account Effective Date, then, in
either such event, the terms of Sections 17B and 18(a)(i), (a)(ii),
(a)(iii) and (a)(iv) of this Note shall be inoperative, provided,
however, that upon (x) the failure of such refinance to be consummated
in accordance with the terms of the Commitment or such other evidence,
as applicable, (y) the termination of the Commitment for any reason or
(z) any adverse change in circumstances with respect to Borrower or any
principals of Borrower, the Property, the proposed lender or otherwise,
as determined by Lender in its sole determination, which, if Lender's
reasonable judgment, significantly decreases the likelihood of such
refinance being consummated prior to the Anticipated Repayment Date,
the terms of Sections 17B and 18(a)(i), (a)(ii), (a)(iii), (a)(iv) of
this Note shall immediately become operative and Borrower shall
immediately comply with any of the terms thereof which, except for the
operation of this subsection (v), Borrower would theretofore have been
obligated to comply. "QUALIFIED LENDER" shall mean a financial
institution or other lender with a long-term credit rating which is not
less than investment grade.
(b) In the event that Borrower does not prepay the entire
principal balance of this Note and any other amounts outstanding under this Note
or any of the other Loan Documents on
XXXXXX GUARANTY TRUST COMPANY
14
or prior to the Anticipated Repayment Date, the provisions of Sections
18(a)(ii), (a)(iii), and (a)(iv) as set forth above shall remain in full force
and effect, and the following subsections also shall apply:
(i) From and after the Anticipated Repayment Date,
interest shall accrue on the unpaid principal balance from time to time
outstanding under this Note at the Revised Interest Rate. Interest
accrued at the Revised Interest Rate and not paid pursuant to this
Section 18(b) shall be deferred and added to the principal balance of
this Note on an annual basis and shall earn interest at the Revised
Interest Rate to the extent permitted by applicable law (such accrued
interest and any interest thereon is hereinafter referred to as
"ACCRUED INTEREST"). All of the unpaid principal balance of this Note,
including, without limitation, any Accrued Interest, if not sooner paid
pursuant to the provisions hereof shall be due and payable on the
Extended Maturity Date.
(ii) Borrower shall be obligated to pay, and Lender shall
collect from the Collateral Account to the extent of funds on deposit
in such account, on the Anticipated Repayment Date and on the first day
of each calendar month thereafter to and including the Extended
Maturity Date the following payments from amounts in the Collateral
Account to be applied in the listed order of priority:
(1) First, to the payment of the Monthly Debt
Service Payment Amount to be applied first to the payment of
interest computed at the Initial Interest Rate with the
remainder applied to the reduction of the outstanding
principal balance of this Note;
(2) Second, to payments to the Tax and Insurance
Funds (as defined in the Escrow Agreement) in accordance with
the terms and conditions of the Escrow Agreement;
(3) Third, to payments to the On-going
Replacement Funds and TI&LC Funds (each as defined in the
Escrow Agreement) in accordance with the terms and conditions
of the Escrow Agreement;
(4) Fourth, to payments for monthly Operating
Expenses pursuant to the terms and conditions of the related
Approved Budget;
(5) Fifth, to payment for Extraordinary Expenses
approved by Xxxxxx, if any;
(6) Sixth, to payment of the outstanding
principal balance of this Note until such outstanding
principal balance is paid in full; and
(7) Seventh, payments to Lender of the balance
of the funds then on deposit in the Collateral Account to be
applied to (x) any other amounts due under the Loan Documents,
and (y) Accrued Interest in whatever proportion and priority
as Lender may determine.
XXXXXX GUARANTY TRUST COMPANY
15
(8) Nothing in this Article 18 shall limit, reduce or
otherwise affect Borrower's obligations to make payments of the Monthly Debt
Service Payment Amount, payments to the Tax and Insurance Funds, On-going
Replacement Funds, TI&LC Funds and payments of other amounts due hereunder and
under the other Loan Documents, whether or not Rents (as defined in the Security
Instrument) are available to make such payments.
Executed as of the day and year first above written.
BORROWER:
TECHCOURT, LLC,
a Virginia limited liability company
By: First Potomac Realty Investments Limited
Partnership, a Delaware limited partnership
Its Sole Member
By: First Potomac Realty Investment Trust, Inc.,
a Maryland corporation
Its Sole General Partner
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
[Corporate Seal]
XXXXXX GUARANTY TRUST COMPANY
