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EXHIBIT 10.3
MORTGAGE NOTE
THIS MORTGAGE NOTE IS NON-NEGOTIABLE
$15,000,000.00 October
15, 2008
FOR VALUE RECEIVED, SAYREVILLE SEAPORT ASSOCIATES, L.P., a Delaware
limited partnership, ("Borrower") hereby promises to pay to the
order of NL Industries, Inc., a New Jersey corporation ("NL
Industries") and NL Environmental Management Services, Inc., a New
Jersey corporation ("NL Environmental" together with NL Industries
and any and all of their successors and assigns and/or any other
holder of this Note, collectively, the "Lender"), without offset,
in immediately available funds in lawful money of the United States
of America, at its offices 5430 LBJ Freeway, Suite 1700, Dallas,
TX 75240, or at such other place or places as may
hereafter be designated by Lender, the principal sum of FIFTEEN
MILLION DOLLARS and No/100 Dollars ($15,000,000.00) (or the
unpaid balance of all principal advanced against this Note, if that
amount is less), together with interest on the unpaid principal
balance of this Note from day to day outstanding as hereinafter
provided (the "Loan").
1. Payment Schedule and
Maturity Date. Principal and interest shall be due and
payable during the term of this Note as follows:
(a) Interest only on the
outstanding principal balance of this Note shall be due and payable
on the first day of November, 2008 and on the first day of each and
every month thereafter to maturity, as the same may be extended as
hereinafter more particularly set forth; and
(b) Unless the maturity of
this Note shall be extended as hereinafter more particularly set
forth in Section 2 hereof or unless sooner paid, this Note shall
mature and the entire principal balance of this Note, together with
all accrued and unpaid interest thereon, shall be due and payable
on October 10, 2010 (the "Maturity Date").
2. Extension
or Modification of the Note.
(a) Upon
the granting of the twelve (12) month extension option (the
"Extension Option") under and pursuant to the terms of Section 2 of
those certain Mortgage Notes (collectively, the "Bank Notes") in
the aggregate amount of $70,000,000.00, each of even date herewith,
given by Borrower to each of Bank of America, N.A. ("Administrative
Agent"), the Northern Trust Company ("Northern Trust") and The
Provident Bank ("Provident" and Northern Trust together with the
Administrative Agent, each individually a "Bank" and collectively,
the "Banks"), the Maturity Date of this Note shall be automatically
extended (without the necessity of any further documentation) for
the same twelve (12) month period, expiring on October 10,
2011. Except as set forth in this Section 2(a), Lender
shall have no obligation to otherwise extend the Maturity Date of
this Note.
(b) Whether
or not the extension becomes effective, Borrower shall pay all
out-of-pocket costs and expenses incurred by Lender in connection
with the proposed extension (pre- and post-closing), including,
without limitation, reasonable legal fees, which shall be due and
payable promptly upon written demand by Lender, and any failure to
pay such amounts shall constitute a Default hereunder.
3. Security;
Loan Documents. This Note is secured by, among other
things, a Leasehold Mortgage, Assignment, Security Agreement and
Fixture Filing, dated of even date herewith, executed by Borrower
in favor of Lender covering Borrower's leasehold
interest in certain property in the Borough of Sayreville,
Middlesex County, New Jersey as more particularly described therein
(the "Property"), (such mortgage, as it may have been or may be
amended, restated, modified or supplemented from time to time, is
herein referred to as the "Mortgage"). This Note and all
other documents now or hereafter evidencing, securing, guaranteeing
or executed in connection with the Loan, as the same have been or
may be amended, restated, modified or supplemented from time to
time, are herein sometimes called individually a "Loan Document"
and together the "Loan Documents." This Note is subject
to the terms of that certain Intercreditor, Subordination and
Standstill Agreement, of even date herewith, by and among
Administrative Agent, on behalf of itself and the other Banks,
Borrower and Lender (the "Intercreditor Agreement").
4. Interest
Rate. (a) The
unpaid principal balance of this Note from day to day outstanding
which is not past due, shall bear interest at a fluctuating rate of
interest per annum equal to the interest rate set forth in and as
determined pursuant to the Bank Notes, as the same may be modified
from time to time. Any and all modification of the Bank
Notes regarding the determination of the interest rate shall be
binding on Lender and Borrower with respect to this Note without
the need for any further documentation.
(b) Any
principal of, and to the extent permitted by applicable law, any
interest on this Note, and any other sum payable hereunder, which
is not paid when due (after the expiration of any applicable grace
and/or cure period provided therefor) shall bear interest, from the
date due and payable until paid, payable on demand, at a rate per
annum (the "Past Due Rate") equal to four percent (4%) per annum in
excess of the interest rate otherwise payable under this Note,
including the period following entry of any judgment on or relating
to this Note or the other Loan Documents. Interest on
any such judgment shall accrue and be payable at the Past Due Rate,
and not at the statutory rate of interest, after judgment, any
execution thereon, and until actual receipt by Lender of payment in
full of this Note and said judgment. Interest at the
Past Due Rate shall be collectible as part of any judgment
hereunder and shall be secured by the Mortgage and the other Loan
Documents. The Past Due Rate shall apply to all sums
outstanding under the Loan after a Default and also after entry of
a judgment or judgments against Borrower (whether in a mortgage
foreclosure action or otherwise). Said judgment(s) shall
bear interest at the Past Due Rate until satisfied in
full. Notwithstanding anything to the contrary in this
Note, Borrower shall only be obligated to pay interest at the Past
Due Rate if, as and when the Past Due Rate is charged by the Banks
under the Bank Notes.
5. Prepayment. Except
for interest payments as and when due under the Note, there shall
be no prepayments of this Note. Notwithstanding the
foregoing, if the Bank Notes are prepaid in whole, the Note shall
be prepaid in whole as well.
6. Late
Charges. If Borrower shall fail to make any payment
under the terms of this Note within ten (10) days after the date
such payment is due, Borrower shall pay to Lender on demand a late
charge equal to four percent (4%) of such payment. Such
ten (10) day period shall not be construed as in any way extending
the due date of any payment. The "late charge" is
imposed for the purpose of defraying the expenses incident to
handling such delinquent payment. This charge shall be
in addition to, and not in lieu of, any other remedy Lender may
have and is in addition to any fees and charges of any agents or
attorneys which Lender may employ upon the occurrence of a default
hereunder, whether authorized herein or by law.
7. Certain
Provisions Regarding Payments. All payments made as
scheduled on this Note shall be applied, to the extent thereof, to
late charges, to accrued but unpaid interest, unpaid principal, and
any other sums due and unpaid to Lender under the Loan Documents,
in such manner and order as Lender may elect in its sole
discretion. All prepayments on this Note shall be
applied, to the extent thereof, to accrued but unpaid interest on
the amount prepaid, to the remaining principal installments, and
any other sums due and unpaid to Lender under the Loan Documents,
in such manner and order as Lender may elect in its sole
discretion, including but not limited to application to principal
installments in inverse order of maturity. Except to the
extent that specific provisions are set forth in this Note or
another Loan Document with respect to application of payments, all
payments received by Lender with respect to the Loan shall be
applied, to the extent thereof, to the indebtedness secured by the
Mortgage in such manner and order as Lender may elect in its sole
discretion, any instructions from Borrower or anyone else to the
contrary notwithstanding. Remittances in payment of any
part of the indebtedness other than in the required amount in
immediately available U.S. funds shall not, regardless of any
receipt or credit issued therefor, constitute payment until the
required amount is actually received by Lender in immediately
available U.S. funds and shall be made without offset, demand,
counterclaim, deduction, or recoupment (each of which is hereby
waived) and accepted subject to the condition that any check or
draft may be handled for collection in accordance with the practice
of the collecting bank or banks. Acceptance by the
holder hereof of any payment in an amount less than the amount then
due on any indebtedness shall be deemed an acceptance on account
only, notwithstanding any notation on or accompanying such partial
payment to the contrary, and shall not in any way excuse the
existence of a Default.
8. Defaults. (a) It
shall be a default ("Default") under this Note if (i) any
principal, interest or other amount of money due under this Note is
not paid in full within ten (10) days after the date as and when
due, regardless of how such amount may have become due; (ii) any
covenant, agreement or condition herein (other than one involving
the payment of money) is not fully and timely performed, observed
or kept and such failure remains uncured for more than thirty (30)
days after written notice thereof shall have been sent by Lender to
Borrower, unless the nature of the failure is such that (X) it
cannot be cured within the thirty (30) day period, (Y) Borrower
institutes corrective action within the thirty (30) day period, and
(Z) Borrower diligently pursues such action until the failure is
remedied and completes the cure thereof within a period of an
additional thirty (30
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