FORM OF AMENDED, RESTATED AND CONSOLIDATED PROMISSORY NOTE
Exhibit
10.4
FORM
OF AMENDED, RESTATED AND CONSOLIDATED PROMISSORY NOTE
$____________
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January 15,
2010
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Loan
No. ___________
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THIS AMENDED, RESTATED AND
CONSOLIDATED PROMISSORY NOTE is made by XXXX-XXXX REALTY, L.P., a Delaware limited
partnership (“Borrower”)
to the order of THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, a New Jersey corporation (“Lender”, which shall also mean
successors and assigns who become holders of this Note).
WHEREAS, Borrower is the maker
of, or has assumed the obligations of the maker of, that certain Amended and
Restated Promissory Note dated as of November 12, 2004 in the original
principal amount of _____________ ($__________) and payable to the order of
Lender, and of that_____________ ($__________) and payable to the order of
Lender (collectively, the “Existing Note”; the loan evidenced by the Existing
Note is herein referred to as the “Existing Loan”);
WHEREAS, the Existing Loan was
made pursuant to that certain Amended and Restated Loan Agreement dated as of
November 12, 2004 (the “Existing Loan Agreement”) by and among, inter alia,
Lender and Borrower relating to seven (7) cross-collateralized and
cross-defaulted loans in the aggregate principal amount of $150,000,000.00;
and
WHEREAS, as of the date
hereof, The Prudential Insurance Company of America, a New Jersey corporation
(“Prudential”), has assigned to VPCM, LLC, a Virginia limited liability company
(“VPCM”), an undivided interest in and to the Existing Loan and Existing Note
and the other documents that further evidence or secure the indebtedness
evidenced thereby, so that Prudential and VPCM shall be co-lenders with respect
to such indebtedness; and
WHEREAS, Borrower and Lender
have agreed, pursuant to that certain Amended and Restated Loan Agreement dated
of even date herewith (the “Loan Agreement”) by and among, inter alia, Lender,
VPCM, and Borrower relating to seven (7) cross-collateralized and
cross-defaulted loans in the aggregate principal amount of $150,000,000.00
(individually, a “Crossed Loan”, and collectively, the “Crossed Loans”), each of
which Crossed Loans consists of a loan made by Prudential and a loan made by
VPCM as co-lenders with respect to such indebtedness, which amount includes the
Loan (as hereinafter defined) evidenced by this Note, to refinance the seven (7)
cross-collateralized and cross-defaulted loans referenced in the Existing Loan
Agreement, to amend and restate the terms thereof, and to re-allocate the loan
amounts among the seven (7) Crossed Loans representing additional advances to
certain borrowers under the Loan Agreement and corresponding reductions of loan
amounts to other borrowers under the Loan Agreement; and
WHEREAS, Borrower and Lender
have agreed in the manner hereinafter set forth to divide the Existing Note and
Existing Loan into two notes and loans, one in the amount of and evidenced by
this Note and one in the amount of $__________ evidenced by that certain
Amended, Restated and Consolidated Promissory Note (the “Companion Note”) in
favor of VPCM from Borrower in such amount and secured by the Instrument (as
hereinafter defined), and to reduce the amount of the indebtedness to Borrower
by the principal amount of $__________ under the loan now evidenced by this Note
and under the loan now evidenced by the Companion Note in the amount of
$$__________, which amount reflects a reallocation of the loan amounts from the
Existing Loan to Borrower to certain of the other six (6) Crossed Loans governed
by the Existing Loan Agreement and represents a repayment by Borrower to effect
such reduction, and (i) to amend the Note Rate on the Existing Note and
Existing Loan, and on the Companion Note and the loan evidenced thereby, to six
and twenty five hundredths percent (6.25%) per annum, (ii) to extend the
maturity date of the Loan evidenced by the Existing Note, and of the loan
evidenced by the Companion Note, to January 15, 2017, and (iii) to
modify certain other terms and provisions of the Existing Note by amending and
restating the terms thereof into this new Amended, Restated and Consolidated
Promissory Note in the principal sum of _____________ ($__________) (the “Loan”)
with a corresponding amendment and restatement evidenced by the Companion Note;
and
NOW, THEREFORE, in
consideration of the foregoing recitals, which are incorporated into the
operative provisions of this Note by this reference, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
conclusively acknowledged, Borrower hereby covenants and agrees with Lender as
follows:
B. Amendment
and Restatement of Existing Note. All of the terms, covenants
and provisions of the Existing Note are hereby modified, amended and restated
herein and in the Companion Note so that henceforth such terms, covenants and
provisions shall be those set forth in this Amended, Restated and Consolidated
Promissory Note and the Companion Note, and the Existing Note, as so modified,
amended and restated in their entirety, are hereby ratified and confirmed in all
respects by Borrower.
(a) Interest
only shall be paid in arrears in thirty (30) monthly installments of
_____________ ($__________) each, commencing on February 15, 2010 and
continuing on the fifteenth (15th) day of each succeeding month to and including
July 15, 2012. Each payment due date under Paragraphs 1(a)
and 1(b) of this Note is referred to as a “Due Date”.
(b) Principal
and interest shall be paid in fifty three (53) monthly installments of
_____________ ($__________) each commencing on August 15, 2012 and
continuing on the fifteenth (15th) day of each succeeding month to and including
December 15, 2016.
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(c) The
entire Obligations (as defined in the Instrument (defined below)) shall be due
and payable on January 15, 2017 (“Maturity
Date”). “Maturity” shall mean the
Maturity Date or earlier date that the Obligations may be due and payable by
acceleration by Lender as provided in the Documents.
(d) Interest
on the Balance for any full month shall be calculated on the basis of a three
hundred sixty (360) day year consisting of twelve (12) months of thirty (30)
days each. For any partial month, interest shall be due in an amount
equal to (i) the Balance multiplied by (ii) the Note Rate divided by
(iii) 360 multiplied by (iv) the number of days during such partial
month that any Balance is outstanding to (but excluding) the date of
payment.
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With
respect to the foregoing provisions, Borrower hereby expressly agrees as
follows:
(a) The
Note Rate provided herein has been determined based on the sum of (i) the
Treasury Rate in effect at the time the Note Rate was determined under the Loan
application submitted to Lender, plus (ii) an interest rate spread over
such Treasury Rate, which together represent Lender’s agreed-upon return for
making the proceeds of the Loan hereunder available to Borrower over the term of
such Loan.
(b) The
determination of the Note Rate, and in particular the aforesaid interest rate
spread, were based on the expectation and agreement of Borrower and Lender that
the principal sums advanced hereunder would not be prepaid during the term of
this Note, or if any such prepayment occurs, the Prepayment Premium (calculated
in the manner set forth above) would apply (except as expressly permitted by
this Note).
(c) The
Lender’s business involves making financial commitments to others based in part
on the returns it expects to receive from this Note and other similar loans made
by Lender, and Lender’s financial performance as a business depends not only on
the returns from each loan or investment it makes but also upon the aggregate
amounts of the loans and investments it is able to make over any given period of
time.
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(d) In
the event of a prepayment hereunder, Lender will be required to redeploy the
funds received into other loans or investments, which (i) may not provide a
return to Lender comparable to the return Lender anticipates based on the Note
Rate and (ii) may reduce the total amount of loans or investments Lender is
able to make during the term of the Loan, which in turn may impair the
profitability of Lender’s business. Therefore, in order to compensate
Lender for the potential impact and risks to its business of prepayments under
this Note, Lender has limited Borrower’s right to prepay this Note and has
offered the method of calculation of the Prepayment Premium set forth
above.
(e) Borrower
acknowledges that (i) Lender could have determined that it would not permit
any prepayments under the Note during its term, and therefore, in electing to
permit prepayments hereunder, Lender is entitled to determine and negotiate the
terms on which it will accept prepayments of its loans, and (ii) Borrower
could have elected to negotiate more permissive prepayment provisions and/or a
more favorable manner of calculating the Prepayment Premium, but in such event
the applicable interest rate spread, and therefore the Note Rate, would have
been higher to compensate Lender for the potential loss of income on account of
the risk that Borrower might elect to prepay this Note at an earlier time and/or
for a lesser Prepayment Premium than set forth herein.
Therefore,
in consideration of Lender’s agreement to the Note Rate set forth herein, and in
recognition of Lender’s reliance on the prepayment provisions of this Note
(including the method of calculating the Prepayment Premium), Borrower agrees
that the manner of calculation of the Prepayment Premium set forth in this Note
represents bargained-for compensation to Lender for granting to Borrower the
privilege of prepaying this Note on the terms set forth herein and for the
potential loss of future income to Lender arising from having to redeploy the
amounts prepaid under this Note into other loans or investments. As
such, the Prepayment Premium constitutes reasonable compensation to Lender for
making the Loan on the terms reflected in this Note and does not represent any
form of damages (liquidated or otherwise), nor does it represent a
penalty.
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(a) any
amounts accrued and/or payable under any indemnities, guaranties, master leases
or similar instruments (which indemnities, guaranties, master leases, and
instruments consist, as of Closing, of the following
instruments: that certain Environmental and ERISA Indemnity
Agreement, that certain Recourse Liabilities Guaranty, and that certain Partial
Recourse Guaranty, each dated as of even date herewith, and Sections 8.03,
8.04, 8.05, 8.06 and 8.07 of the Instrument) furnished in connection with the
Loan, but excluding indemnities arising solely under Section 8.02 of the
Instrument;
(b) subject
to Section 4(b) of that certain Cash Management Agreement between Borrower,
Lender and VPCM of even date herewith (the “Cash Management Agreement”), the
amount of any assessments and taxes (accrued and/or payable prior to the
completion by Lender of a foreclosure on the Property or acceptance by Lender of
a deed or other conveyance of the Property in lieu of such foreclosure,
including the pro-rata share of current real estate taxes) with respect to the
Property;
(c) the
amount of any security deposits, rents prepaid more than one (1) month in
advance, or prepaid expenses of tenants to the extent not turned over to
(i) Lender upon foreclosure, sale (pursuant to power of sale), or
conveyance in lieu thereof, or (ii) a receiver or trustee for the Property
after appointment;
(d) the
amount of any insurance proceeds or condemnation awards neither turned over to
Lender nor used in compliance with the Documents;
(e) damages
suffered or incurred by Lender as a result of Borrower (i) entering into a
new Lease, (ii) entering into an amendment or termination of an existing
Lease, or (iii) accepting a termination, cancellation or surrender of an
existing Lease (other than with respect to a Lease with a Major Tenant which is
addressed in Paragraph 9(d) below) in breach of the leasing restrictions
set forth in Section 7 of the Assignment; provided, however, that in the
case of clauses (ii) and (iii) above, the Recourse Parties liability shall be
limited to the greater of:
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(1)
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the
present value (calculated at the Discount Rate) of the aggregate total
dollar amount (if any) by which (A) rental income and/or other tenant
obligations prior to the amendment or termination of the Lease exceeds
(B) rental income and/or other tenant obligations after the amendment
or termination of such Lease; and
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(2)
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any
amendment or termination fee or other consideration paid by or on behalf
of a tenant;
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provided,
however, that, in such event, such liability shall be limited to the Crossed
Loan (or Crossed Loans) applicable to the Individual Property (or Individual
Properties) in which the Lease is located;
(f) subject
to Section 4(b) of the Cash Management Agreement, damages suffered or
incurred by Lender by reason of any waste of the Property;
(g) the
amount of any rents or other income from the Property received by any of the
Recourse Parties after a default under the Documents and not otherwise applied
to the indebtedness under this Note or to the current (not deferred) operating
expenses of the Property; PROVIDED, HOWEVER, THAT THE RECOURSE
PARTIES SHALL HAVE PERSONAL LIABILITY for amounts paid as expenses to a person
or entity related to or affiliated with any of the Recourse Parties except for
(A) reasonable salaries for on-site employees, (B) a reasonable
allocation of the salaries of off-site employees for accounting and management,
and (C) out-of-pocket expenses of Borrower’s management company relating to
the Property, but in no event shall such expenses include any profit or be
greater than prevailing market rates for any such services;
(h) the
face amount of any letter of credit required under the Documents or otherwise in
connection with the Loan that (i) Borrower fails to maintain or
(ii) as to which Borrower fails to replace such letter of credit with, or
post in lieu of such letter of credit, a cash deposit paid to Lender and held by
Lender as additional collateral under the Documents;
(i) the
amount of any security deposit (a “Security Deposit”) cashed or
applied by Borrower or any termination fee, cancellation fee or any other fee
(collectively, a “Lease
Termination Fee”) received by Borrower (x) in connection with a
lease termination, cancellation, surrender or expiration (but Lease Termination
Fees shall not include the application of, or surrender of, lease security
deposits at the scheduled expiration of the applicable lease in lieu of the
payment of the corresponding amount of rentals) within one hundred twenty (120)
days prior to or after an Event of Default under the Documents, (y) which
is greater than one (1) month’s base rent for the Lease to which the Security
Deposit and/or Lease Termination Fee applies, and (z) which is not either
(A) paid to Lender (or an escrow agent selected by Lender) to be disbursed
for the payment of Lender approved (or deemed approved) (1) tenant
improvements and/or (2) market leasing commissions, or, (B) if the
applicable Lease Termination Fees total less than $1,000,000 (with respect to
all of the Crossed Loans and properties that are the subject of the Loan
Agreement) in the aggregate during any such one hundred twenty (120) day period,
actually disbursed by Borrower for the payment of the Obligations (any Lease
Termination Fees that total more than $1,000,000 with respect to all of the
Crossed Loans and properties that are the subject of the Loan Agreement in the
aggregate during any such one hundred twenty (120) day period must, to the
extent in excess of such $1,000,000 aggregate threshold, be paid to Lender for
escrow as set forth in clause (A) to avoid recourse liability resulting under
this clause (i));
(j) following
a default under the Documents, all attorneys’ fees, including allocated costs of
Lender’s staff attorneys, and other expenses incurred by Lender in enforcing the
Documents if Borrower contests, delays, or otherwise hinders or opposes
(including, without limitation, the filing of a bankruptcy by Borrower or any
owners of any equity interests therein) any of Lender’s enforcement
actions; provided, however, that if in such action Borrower
successfully proves that no default occurred under the Documents, Borrower shall
not be required to reimburse Lender for such attorneys’ fees, allocated costs
and other expenses; and
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(k) damages
suffered or incurred by Lender as a result of Borrower’s breach or violation of
Sections 2.10or 3.21 of the Instrument.
(l) the
“Recourse Guaranteed Amount”, as defined in the Partial Recourse Guaranty of
even date herewith from Xxxx-Xxxx Realty, L.P. (“Recourse Guarantor”), which
recourse liability shall be recourse to Borrower, jointly and severally with
Recourse Guarantor, to the same extent that Recourse Guarantor has recourse
liability for the Loan (all indebtedness evidenced by the Note and all
obligations set forth in the Documents) under the Partial Recourse Guaranty, as
Borrower covenants and agrees that the Loan shall be recourse to Borrower,
jointly and severally with Recourse Guarantor, to the same extent that Recourse
Guarantor has recourse liability for the Loan under the Partial Recourse
Guaranty, and that Borrower’s recourse under the Documents with respect to such
liability under the Partial Recourse Guaranty shall be reduced and/or released
at the same time and on the same terms as provided above for Recourse Guarantor;
and
(m) if,
pursuant to any lease under Section 3.4(c)(iii) of the Loan Agreement,
Borrower shall elect not to pay in full all leasing commissions for the initial
term of such lease (Borrower being required to pay all commissions when due), to
the extent of all leasing commissions for the initial term of such lease that
are not paid in full;
(n) Borrower
and the Recourse Parties shall, as set forth in Section 8.6 of the Loan
Agreement, have recourse liability for any Additional Parking Costs;
and
(o) Borrower
and the Recourse Parties shall, as set forth in Section 8.7 of the Loan
Agreement, have recourse liability for any Xxxxxx Title Loss.
(a) there
shall be any breach or violation of Article V of the Instrument; or
(b) there
shall be any fraud or material misrepresentation by any of the Recourse Parties
in connection with the Property, the Documents, the Loan Application, or any
other aspect of the Loan; or
(c) the
Property or any part thereof shall become an asset in (i) a voluntary
bankruptcy or insolvency proceeding or (ii) an involuntary bankruptcy or
insolvency proceeding which is not dismissed within ninety (90) days of
filing; provided, however, that this Paragraph 9(c) shall not
apply if (A) an involuntary bankruptcy is filed by Lender, or (B) the
involuntary filing was initiated by a third-party creditor independent of any
collusive action, participation or collusive communication by (1) Borrower,
(2) any partner, shareholder or member of Borrower or Borrower’s general
partner or managing member, or (3) any of the Recourse Parties;
or
(d) any
of the Recourse Parties (i) enters into a Lease with a Major Tenant,
(ii) enters into an amendment or termination of any Lease with a Major
Tenant, or (iii) accepts the termination, cancellation or surrender of any
Lease with a Major Tenant, in breach of the leasing restrictions set forth in
Section 7 of the Assignment; provided, however, that, in such event, such
liability shall be limited to the Crossed Loan (or Crossed Loans) applicable to
the Individual Property (or Individual Properties) in which the Lease is
located, except that in the event that the damages suffered or incurred by
Lender as a result of any of the Recourse Parties taking any such action
described in clauses (i), (ii) or (iii) above exceeds the amount of such Crossed
Loan (or Crossed Loans) applicable to the Individual Property (or Individual
Properties) in which the Lease is located, then the Recourse Parties shall have
joint and several personal liability for all such damages suffered or incurred
by Lender as a result of any of the Recourse Parties taking any such action
described in clauses (i), (ii) or (iii) above.
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IN WITNESS WHEREOF, this Note
has been duly executed by Borrower as of the date first set forth
above.
BORROWER:
XXXX-XXXX REALTY, L.P.,
a Delaware limited partnership
By:
XXXX-XXXX REALTY CORPORATION, a Maryland corporation, General
Partner
By:
____________________
Name: Xxxxx
Xxxxxxxxx
Title: Executive
Vice President and Chief Financial Officer
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