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EXHIBIT 10.13
NOTE SECURED BY DEED OF TRUST
$3,400,000.00 Phoenix, Arizona
November 9, 1990
THIS NOTE SECURED BY DEED OF TRUST ("Note") is made as of the 9th day
of November, 1990, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, a single man, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as
Trustee of the Waipio Trust II, (collectively, "Borrower"), to the order of THE
TRAVELERS INSURANCE COMPANY, a Connecticut corporation ("Lender").
1. DEFINITIONS.
Borrower agrees that, for the purposes of this Note, the following
terms shall have the following respective meanings ascribed thereto.
1.1 "Dollars" shall mean dollars in lawful currency of The United
States of America.
1.2 "Default Rate" shall mean Four Percent (4%) per annum in excess of
the Interest Rate but not in excess of the maximum interest rate permitted by
law.
1.3 "Interest Rate" shall mean Nine and Five-Eighths Percent (9.625%)
per annum.
1.4 "Loan Year" shall mean the period of twelve(12) consecutive
calendar months next following the month in which all or any part of the
Original Principal Amount is first advanced by Lender to or for the benefit of
Borrower and each period of twelve (12) consecutive calendar months thereafter
to and including the Maturity Date; provided, however, if all or any part of the
Original Principal Amount is first advanced on the first day of a calendar
month, the Loan Year shall include the month in which the Original Principal
Amount is so advanced.
1.5 "Maturity Date" shall mean the fifth (5th) anniversary of the date
of this Note, or (except for purposes of Paragraph 2.2 hereof) such earlier date
the entire Outstanding Principal Balance and accrued and unpaid interest
thereon, and any other sums which are due and payable pursuant to the terms and
provisions of this Note, are due and payable by reason of the acceleration of
the maturity of this Note.
1.6 "Original Principal Amount" shall mean Three Million Four Hundred
Thousand And No/100 Dollars ($3,400,000.00).
1.7 "Outstanding Principal Balance" shall mean the aggregate of all
sums advanced by Lender to or for the benefit of Borrower hereunder and not
repaid.
1.8 "Payment Date" shall mean the first day of January, 1991 and the
first day of each month thereafter during the term hereof.
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1.9 "Term" shall mean the period of sixty (60) consecutive calendar
months next following the month in which all or any part of the Original
Principal Amount is first advanced by Lender to or for the benefit of Borrower;
provided, however, if all or any part of the Original Principal Amount is first
advanced on the first day of a calendar month, the Term shall include the month
in which the Original Principal Amount is so advanced.
2. PAYMENT OF INTEREST AND PRINCIPAL.
For Value Received, Borrower hereby promises to pay to the order of
Lender the principal amount of Three Million Four Hundred Thousand And No/100
Dollars ($3,400,000.00), together with interest as provided hereinbelow as
follows:
2.1 Payment of Interest and Principal.
(a) Interest shall accrue on the Outstanding Principal Balance
at the Interest Rate.
(b) Interest only on the Outstanding Principal Balance shall
be payable in arrears at the Interest Rate in equal monthly
installments on each Payment Date following the date hereof until the
end of the second (2nd) Loan Year. If at the date set forth above for
the first Payment Date, interest has accrued for a period of more than
thirty (30) days, said first monthly installment shall be increased to
the extent that the amount of interest accrued exceeds thirty (30)
days' interest.
(c) Interest and principal shall be payable in equal monthly
installments based upon a thirty (30) year amortization of the
Outstanding Principal Balance with interest at the Interest Rate (which
installments are estimated to be $28,899.64 per month), commencing on
the first day of the third (3rd) Loan Year and on each Payment Date
thereafter.
(d) The Outstanding Principal Balance shall be payable in full
on the Maturity Date.
2.2 Prepayment.
Upon thirty (30) days' prior written notice to Lender, Borrower may
prepay this Note in full (but not in part except by application of insurance and
condemnation proceeds) by paying, in addition to the Outstanding Principal
Balance hereof, interest accrued hereon and all other amounts due under this
Note and the Deed of Trust (as defined below), and a prepayment premium equal to
the greater of:
(i) An amount equal to the product of: (A) one
percent (1%) of the Outstanding Principal Balance thereof
multiplied by (B) the quotient of the number of full and
partial months remaining to the Maturity Date as of the
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date prepayment will be made, divided by the number of
full and partial months comprising the Term, or;
(ii) An amount determined by: (A) multiplying the
amount, if any, by which the Interest Rate (payable monthly)
exceeds the Monthly Treasury Yield (as hereinafter defined),
by (B) the amount of the Outstanding Principal Balance hereof
as of the date prepayment will be made, and (C) dividing the
product thereof by twelve (12) to obtain the cash flow amount
to be received each month or partial month from the date
prepayment will be made to the Maturity Date; this series of
monthly cash flow amounts will then be (D) discounted to a
present value utilizing (i) a discount rate equal to the
Monthly Treasury Yield divided by twelve (12), and (ii) the
Number of Months Remaining to the Maturity Date (as
hereinafter defined) as of the date prepayment will be made.
The "Monthly Treasury Yield" is defined as the semi-annual yield or
average semi-annual yield available on United States Treasury instruments having
a maturity date closest to (before, on, or after) the Maturity Date, as reported
in the Wall Street Journal or similar publication on the fifth business day
preceding the date prepayment will be made, converted to a monthly equivalent
yield. The "Number of Months Remaining to the Maturity Date" is defined as the
number of months or partial months remaining to the Maturity Date as of the date
prepayment will be made, rounded to two decimal places.
No partial prepayment of this Note is permitted except in the event of
an application of insurance or condemnation proceeds. Notwithstanding the
foregoing, no prepayment premium shall be payable if Borrower voluntarily
prepays this Note in full within the last three (3) calendar months immediately
preceding the Maturity Date and on the date such prepayment is made Lender has
not exercised and is not entitled to exercise its acceleration rights under
Paragraph 3.2 hereof. Except as hereinabove set forth, no full or partial
prepayments of principal shall be allowed.
Borrower acknowledges that it possesses no right to prepay the Note
except as expressly provided herein. For the purposes of this Note, prepayment
shall mean any event whereby the debt evidenced by this Note is fully or
partially satisfied prior to its Maturity Date in any manner, whether
voluntarily or involuntarily (excluding scheduled payments required hereunder or
the receipt of insurance or condemnation proceeds) including, without
limitation, any payment after Default (as defined below), any payment after the
Maturity Date is accelerated, any payment by any holder of a subordinate
interest in the Premises (as defined below), any payment by any sale or transfer
pursuant to judicial order or trustee's sale under the Deed of Trust or deed in
lieu thereof, or any payment by sale or other method under any bankruptcy or
insolvency proceedings. Lender shall not be required to accept any prepayment if
it does not include payment of the required premium.
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Upon acceleration of the maturity of this Note, the prepayment premium shall be
the amount that would be due if a voluntary prepayment were allowed and made at
the time of such acceleration. Borrower and Lender agree that if this Note is
prepaid for any reason (other than by application of insurance or condemnation
proceeds, which application shall not result in payment of a prepayment premium)
Lender shall receive the applicable prepayment premium as partial compensation
for the cost of reinvesting the prepayment proceeds and for the loss of the
contracted rate of return on this Note and that the amount of the applicable
prepayment premium is reasonable Borrower agrees that Lender shall not be
obligated, as a condition precedent to its receipt of the prepayment premium
provided for, to actually reinvest all or any part of the amount prepaid in any
Selected Treasury Instrument(s), or in any other United States Treasury
Instruments or obligations.
2.3 Default Interest. Subsequent to a Default, any principal or accrued
interest not paid when due shall bear interest at the Default Rate.
2.4 Principal and Interest at Maturity. The entire Outstanding
Principal Balance and accrued and unpaid interest thereon, and any and all other
sums which are due and payable pursuant to the terms and provisions of the Note,
the Deed of Trust or the other Loan Documents (as defined in the Deed of Trust)
shall be due and payable on the Maturity Date.
2.5 Calculation of Interest. All interest on this Note shall be
calculated on the basis of twelve 30-day months, provided, however, that for
portions of the Outstanding Principal Balance which are outstanding for less
than a full calendar month, interest on such portion of the Outstanding
Principal Balance shall be calculated on the basis of a 365-day year and the
actual number of days elapsed in any portion of a month for which interest may
be due on such portion of the Outstanding Principal Balance.
2.6 Application of Payments Prior to Default. Prior to the invocation
of the terms and provisions of Paragraph 3.2 hereof, all monies paid by Borrower
to Lender shall be applied in the following order of priority: (a) first, toward
repayment of all amounts advanced by Lender under the provisions of the Loan
Documents to protect and preserve the collateral (if any); (b) next, toward
payment of the "Tax and Insurance Deposits" required under Paragraph 9(a) of the
Deed of Trust (as hereinafter defined); (c) next, toward payment of all amounts
due and owing pursuant to Paragraph 3.5 hereof (if any); (d) next, toward
payment of all amounts due and owing pursuant to Paragraph 3.4 hereof (if any);
(e) next, toward payment of interest which has accrued on the Outstanding
Principal Balance and which is due and payable; (f) next, toward the payment of
all amounts due and owing pursuant to Paragraph 2.2 hereof (if any); and (g)
last, toward payment of the Outstanding Principal Balance.
2.7 Payments after Default. All unpaid interest that has accrued on the
Outstanding Principal Balance, whether prior or
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subsequent to the occurrence of the Default, shall be paid at the time of, and
as a condition precedent to, the curing of the Default. While any Default
exists, Lender is expressly authorized to apply payments made to it as it may
elect against (1) any or all amounts, or portions thereof, then due and payable
hereunder, (2) the Outstanding Principal Balance, or (3) any combination
thereof.
2.8 Place of Payment. Payments and prepayments to be made under this
Note are to be made at such place as the legal holder of this Note may from time
to time in writing appoint, and, in the absence of such appointment, then at the
following address:
The Travelers Insurance Company
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Account No. 205607
3. SECURITY, DEFAULTS, AND REMEDIES.
3.1 Security for Payment. The payment of this Note is secured by, among
other things, a Deed of Trust and Security Agreement with Assignment of Rents
and Leases and Fixture Filing (the "Deed of Trust"), of even date herewith made
by Borrower, as Trustor, to American Title Insurance Company, as Trustee, in
favor of Lender, as Beneficiary, constituting a first lien on certain real
estate in the City of Phoenix, County of Maricopa, State of Arizona, commonly
known as Park Northern Shopping Center (the "Premises"). By this reference, the
Deed of Trust is incorporated by reference as if fully set forth herein.
3.2 Occurrence of Default; Acceleration of Maturity Date. It is agreed
that upon occurrence of any of the following events of default under this Note
(a "Default"):
(a) default in the payment of principal or interest when
due; or
(b) occurrence of a Prohibited Transfer under the Deed of
Trust (as defined therein); or
(c) default in the performance or observance of any other
covenant or agreement of Borrower contained herein which is not cured
within twenty (20) days after receipt by Borrower of written notice of
such default; or
(d) occurrence of any Default under the Deed of Trust (as
defined therein); or
(e) occurrence of any default under any secondary junior
financing obtained by Borrower, repayment of which is secured by a
security interest granted in any part or all of the Premises; or
(f) occurrence of any Default (as defined therein) under any
of the other Loan Documents,
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then, at any time thereafter, at the election of the holder or holders hereof
and without additional notice to Borrower, the principal sum remaining unpaid
hereon, together with accrued interest thereon, shall become at once due and
payable at the place of payment as aforesaid, and Lender may proceed to exercise
any rights and remedies available to Lender under the Deed of Trust and the
other Loan Documents, and to exercise any other rights and remedies against
Borrower or with respect to this Note which Lender may have at law, in equity or
otherwise.
3.3 Nature of Remedies. The remedies of Lender as provided herein or in
the Deed of Trust or any of the other Loan Documents, shall be cumulative and
concurrent, and may be pursued singularly, successively or together, at the sole
discretion of Lender, and may be exercised as often as occasion therefor shall
arise. Failure of Lender, for any period of time or on more than one occasion,
to exercise its option to accelerate the Maturity Date of this Note shall not
constitute a waiver of the right to exercise the same at any time thereafter or
in the event of any subsequent Default. No act of omission or commission of
Lender, including specifically any failure to exercise any right, remedy or
recourse, shall be deemed to be a waiver or release of the same; any such waiver
or release is to be effected only through a written document executed by Lender
and then only to the extent specifically recited therein. A waiver or release in
connection with any one event shall not be construed as a waiver or release of
any subsequent event or as a bar to any subsequent exercise of Lender's rights
or remedies hereunder. Unless otherwise specifically set forth herein, notice of
the exercise of any right or remedy granted to Lender by this Note is not
required to be given.
3.4 Payment of Attorneys' Fees and Costs. If: (i) this Note or any Loan
Document is placed in the hands of an attorney for collection or enforcement or
is collected or enforced through any legal proceeding; (ii) if an attorney is
retained to represent Lender in any bankruptcy, reorganization, receivership, or
other proceedings affecting creditors' rights and involving a claim under this
Note or any of the Loan Documents; (iii) if an attorney is retained to protect
or enforce the lien of the Deed of Trust or any of the Loan Documents; or (iv)
if an attorney is retained to represent Lender in any other proceedings
whatsoever in connection with this Note, the Deed of Trust, any of the Loan
Documents or any property subject thereto, then Borrower shall pay to Lender all
reasonable attorneys' fees, costs and expenses incurred in connection therewith,
in addition to all other amounts due hereunder.
3.5 Late Charge. If any installment of interest or principal is not
paid when due, Borrower shall pay to Lender a late charge of Four Percent (4%)
of the amount so overdue in order to defray part of the expense incident to
handling such delinquent payment or payments. Such late charge shall be in
addition to and separate from any increase in interest due hereunder as a result
of calculation of interest due hereunder at the Default Rate.
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4. OTHER GENERAL AGREEMENTS.
4.1 Notices. Any notice which any party hereto may desire or may be
required to give to any other party hereto shall be in writing, and shall be
deemed given (i) if and when personally delivered, (ii) upon receipt if sent by
a nationally recognized overnight courier addressed to a party at its address
set forth below, or (iii) on the third (3rd) business day after being deposited
in United States registered or certified mail, postage prepaid, addressed to a
party at its address set forth below, or at such other place as such party may
have designated to all other parties by notice in writing in accordance
herewith:
(a) If to Borrower: ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
and
To Property Manager: Coldwell Banker Commercial
Real Estate Services
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
(b) If to Lender: The Travelers Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Regional Counsel
and
The Travelers Companies
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Post Office Box 17480
Denver, Colorado 80217-0480
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Notwithstanding anything contained herein to the contrary, any notice to
Borrower which is not also delivered to Property Manager for any reason shall
not be deemed to be ineffective. Except as otherwise specifically required
herein, notice of the exercise of any right or option granted to Lender by this
Note is not required to be given.
4.2 Governing Law and Other Agreements. Borrower agrees that: (i) this
instrument and the rights and obligations of the parties hereunder shall be
governed by the laws of the State of Arizona, including the conflict of law
principles of such state; (ii) the obligation evidenced by this Note is an
exempted transaction under the Truth In Lending Act, 15 U.S.C. Section 1601, et
seq.; (iii) the proceeds of the indebtedness evidenced by this Note will not be
used for the purchase of registered equity securities within the purview of
Regulation "U" issued by the Board of Governors of the
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Federal Reserve System; and (iv) upon the Maturity Date, Lender shall not have
any obligation to refinance the indebtedness evidenced by this Note or to extend
further credit to Mortgagor.
4.3 Interpretation. The headings of sections and paragraphs in this
Note are for convenience only and shall not be construed in any way to limit or
define the content, scope, or intent of the provisions hereof. 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. The
parties hereto intend and believe that each provision in this Note comports with
all applicable law. However, if any provision in this Note is found by a court
of law to be in violation of any applicable law, and if such court should
declare such provision of this Note to be unlawful, void or unenforceable as
written, then it is the intent of all parties to the fullest possible extent
that it is legal, valid and enforceable, that the remainder of this Note shall
be construed as if such unlawful, void or unenforceable provision were not
contained therein, and that the rights, obligations and interests of Borrower
and the holder hereof under the remainder of this Note shall continue in full
force and effect; provided, however, that if any provision of this Note which is
found to be in violation of any applicable law concerns the imposition of
interest hereunder, the rights, obligations and interests of Borrower and Lender
with respect to the imposition of interest hereunder shall be governed and
controlled by the provisions of Paragraph 4.5 hereof. Time is of the essence of
this Note.
4.4 Waiver. Borrower and any and all others who are now or may become
liable for all or part of the obligations of Borrower under- this Note
(collectively the "Obligors") agree to be jointly and severally bound hereby and
jointly and severally, to the extent permitted by law and, except as may be
limited by Section 4.7 below: (i) waive and renounce any and all redemption and
exemption rights and the benefit of all valuation and appraisement privileges
against the indebtedness evidenced by this Note or by any extension or renewal
hereof; (ii) waive presentment and demand for payment, notices of nonpayment and
of dishonor, protest of dishonor, and notice of protest; (iii) waive all notices
in connection with the delivery and acceptance hereof and all other notices in
connection with the performance, default, or enforcement of the payment hereof
or hereunder; (iv) waive any and all lack of diligence and delays in the
enforcement of the-payment hereof; (v) agree that the liability of each of
Obligors shall be unconditional and without regard to the liability of any other
person or entity for the payment hereof, and shall not in any manner be affected
by any indulgence or forbearance granted or consented to by Lender to any of
them with respect hereto; (vi) consent to any and all extensions of time,
renewals, waivers, or modifications that may be granted by Lender with respect
to the payment or other provisions hereof, and to the release of any security at
any time given for the payment hereof, or any part thereof, with or without
substitution, and to the release of any person or entity liable for the payment
hereof; and (vii) consent to the addition of any and all-other makers,
endorsers, guarantors, and other obligors for the payment hereof,
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and to the acceptance of any and all other security for the payment hereof, and
agree that the addition of any such obligors or security shall not affect the
liability of any of Obligors for the payment hereof.
4.5 Rate of Interest. Borrower agrees to an effective rate of interest
that is the rate stated in Paragraph 1.3 above plus any additional rate of
interest resulting from any other charges in the nature of interest paid or to
be paid in connection with this Note.
4.6 Successors Lenders and Assigns. Upon any endorsement, assignment,
or other transfer of this Note by Lender or by operation of law, the term
"Lender," as used herein, shall mean such endorsee, assignee, or other
transferee or successor to Lender then becoming the holder of this Note. This
Note shall inure to the benefit of Lender and its successors and assigns and
shall be binding upon the undersigned and its successors and assigns. The terms
"Borrower" and "Obligors," as used herein, shall include the respective
successors, assigns, legal and personal representatives, executors,
administrators, devisees, legatees and heirs of Borrower and any other Obligors.
4.7 No Personal Liability. Without in any manner releasing, impairing
or otherwise affecting this Note, the Deed of Trust or any other instrument
securing this Note or the validity thereof or hereof or the lien thereof, there
is no personal liability of Borrower or any corporation, partnership,
individual, or firm which is a present or future partner of Borrower, or of any
present or future partner of Borrower, or any of their respective successors or
assigns, hereunder or under any of the other Loan Documents entered into for the
loan evidenced hereby, and no monetary or deficiency judgment shall be sought or
enforced against Borrower or any corporation, partnership, individual, or firm
which is a present or future partner or present or future constituent entity of
Borrower, or of any present or future partner of Borrower, or any of their
respective successors or assigns; provided, however, that a judgment may be
sought against Borrower to the extent necessary to enforce the rights of Lender
in, to, or against the Premises securing the indebtedness evidenced by this Note
and covered by the Deed of Trust and the other Loan Documents. Notwithstanding
any of the foregoing, nothing contained in this paragraph shall be deemed to
prejudice the rights of Lender: (1) to recover all loss, damage, cost and
expense (including attorneys fees) incurred by Lender as a result of breach of
Borrower's warranties, representations and covenants contained in Paragraph 36
or Paragraph 43 of the Deed of Trust, or in Paragraph 6(d) of that certain
Mortgage Loan Application executed by Borrower on September 25, 1990 (the
"Application") or as a result of intentional or negligent waste of the Premises;
(2) to recover all rents, revenues, issues and profits from the Premises (a)
received during the period of any default under the Loan Documents or after
acceleration of the indebtedness and other sums owing under the Loan Documents
and (b) not applied to payment of such indebtedness or other sums or to payment
of the normal operating expenses of the Premises; (3) to recover all rents from
the Premises collected more
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than one (1) month in advance which are not earned at the time of occurrence of
any default under the Loan Documents and which are not applied to payment of the
aforesaid indebtedness or other sums or to payment of the normal operating
expenses of the Premises; (4) to recover all insurance proceeds and condemnation
awards in respect of the Premises which are not applied in accordance with the
provisions of the Loan Documents; and (5) to recover any portion of the
Transaction Fee (as defined in the Application) not paid as provided in the
Application. Borrower promises to pay to Lender all amounts described in clauses
(1) through (5) above on demand by Lender and agrees that it will be personally
liable for payment of all such sums.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of
the day and year first above written.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, a single man
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as Trustee of
the Waipio Trust II
BORROWER
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