Exhibit 10.7
Loan No.
62-5204531
(NOTE: THIS
PROMISSORY NOTE MAY REQUIRE A BALLOON PAYMENT AT
MATURITY)
PROMISSORY
NOTE
$13,800,000.00
(U.S.)
September 11,
2008
FOR VALUE RECEIVED, the
undersigned (" Borrower ") promises to pay to the order of
WASHINGTON MUTUAL BANK , a federal association, at its
office at National Commercial Operations Center, P.O. Box 650528,
Dallas, Texas 75265-0528, or at such other place as the
holder of this Note (" Lender ") may from time to time
designate in writing, the sum of Thirteen Million Eight Hundred
Thousand and No/100 Dollars ($13,800,000.00) in lawful
money of the United States, with interest thereon from the date of
disbursement by Lender (whether into escrow or otherwise) until
paid at the rates set forth below.
Interest accruing on
this Note will be calculated on the basis of a 360-day year
consisting of twelve (12) months of thirty (30) days each
(" 30/360 Basis "). The Monthly Payment Amounts (as
defined below) will also be calculated on an 30/360
Basis.
SECTION
1.
Interest
Rate .
Throughout the term of the Loan, this Note and all amounts
owing under the other Security Documents (hereinafter defined) will
bear interest at a rate of Five and Seventy-Seven Hundredths of
One Percent (5.77%) .
SECTION
2.
Periodic
Payments .
(a)
Interest-Only
Period .
Beginning on November 1, 2008 (the " Initial
Monthly Payment Date ") and on the same day of each calendar
month thereafter until and including October 1, 2009
(the " Monthly Payment Dates "), Borrower shall make monthly
payments of interest (the " Interest Payment Amounts ") to
Lender in an amount sufficient to fully repay any accrued and
unpaid interest at the applicable Interest Rate.
(b)
Amortization
Period .
Beginning on November 1, 2009 (the " Initial
Amortized Payment Date ") and on each Monthly Payment Date
thereafter, Borrower shall make monthly payments of principal and
interest (together with Interest Payment Amounts, collectively, the
" Monthly Payment Amounts ") to Lender in an amount
sufficient to fully repay the unpaid principal balance of this
Note, together with interest at the applicable Interest Rate by the
end of the Amortization Period (hereinafter defined) in
substantially equal installments. Each Monthly Payment Amount
will be calculated on the basis of an amortization period of 360
months (the " Amortization Period ") ending on the date that
is that number of months after the day that is one month before the
Initial Amortized Payment Date.
(c)
Loan Resize
Payment .
Within five (5) business days after
September 11, 2010 (the " Resizing Test Date "),
Borrower shall provide evidence satisfactory to Lender of the Debt
Service Coverage Ratio for the prior ninety (90) day period.
To the extent that as of the Resizing Test Date, the Debt
Service Coverage Ratio for the prior ninety (90) day period is
less than 1.20, Borrower shall pay to Lender, in addition to any
payments due under Section 2(a) or (b) above, a
principal payment equal to the Resize Payment, such payment to be
made to Lender within sixty (60) days from the Resizing Test
Date. For the purposes of this Section 2(c), the "
Resize Payment " shall be the positive difference, if any,
between (i) the then outstanding principal balance, minus
(ii) that amount, which when used in the Debt Service Coverage
Ratio calculation would result in a Debt Service Coverage Ratio of
1.20.
SECTION
3.
Maturity .
Any and all remaining
unpaid principal of and interest on this Note shall be due and
payable in full on September 11, 2013 (the "
Maturity Date "), subject, however, to the right of
acceleration as herein provided and as provided in the Security
Documents.
SECTION
4.
Application of
Payments .
So long as no Event of
Default (as used in this Note, the terms "Event of Default" and
"Default" have the meanings given to those terms in the Security
Instrument described in Section 7 ) exists, payments
under this Note and the Security Documents shall be applied:
(a) first, to the payment of accrued interest;
(b) second, at the option of Lender, to the payment of any
other amounts owing under this Note or secured by the Security
Documents, other than accrued interest and principal, including,
but not limited to advances Lender may have made for attorneys'
fees or for taxes, assessments, insurance premiums, or other
charges on any property given as security for this Note and late
charges due hereunder, all if calculated and/or accrued in
accordance with the Loan Documents; and (c) third, to the
reduction of principal of this Note. After the occurrence and
during the continuance of an Event of Default, Lender may apply
such payments to the obligations secured by the Security Instrument
in such manner as it may elect in its sole discretion, subject to
applicable law and any applicable requirements of the Loan
Documents.
SECTION
5.
Prepayment
.
Borrower may prepay its
obligation under this Note only if, to the extent and on the terms
and subject to the conditions set forth in an addendum to this Note
attached hereto and incorporated herein by this reference. If
no such addendum is attached to this Note, Borrower may not prepay
its obligation under this Note. Notwithstanding the
foregoing, if no such addendum is attached to this Note and Lender,
in its sole discretion, agrees to permit a prepayment, then it may
do so on such terms and conditions as it may require in its sole
discretion. No partial prepayment of this Note shall change
the date or amount of any subsequent monthly payment required under
the terms of this Note prior to payment in full of all amounts
owing under this Note unless otherwise agreed in writing by Lender
in its sole discretion.
SECTION
6.
Late
Charge .
If any amount payable
under this Note is not paid within ten (10) days after the due
date thereof, Borrower shall pay a late charge of five
percent (5%) of the delinquent amount as liquidated damages
for the extra expense in handling past due payments; provided,
however that no such late charge shall be payable with respect to
any balloon payment due on the Maturity Date. Any late charge
payable under this section is in addition to any interest payable
at the Default Rate (as defined below).
SECTION
7.
Security .
This Note is secured by
a deed of trust, security agreement, assignment of leases and rents
and fixture filing or a mortgage, security agreement, assignment of
leases and rents and fixture filing or similar instrument (the "
Security Instrument ") of even date herewith, encumbering
the real property described in the Security Instrument. The
Security Instrument and any and all other documents securing this
Note are collectively referred to as the "Security Documents";
provided, however, that " Security Documents " specifically
shall not mean and shall not include the certificate and indemnity
agreement regarding hazardous substances being delivered
concurrently herewith to Lender by Borrower (the " Indemnity
Agreement "). The real property and the other collateral
provided for in the Security Documents are collectively referred to
as the " Property ."
Notwithstanding anything
to the contrary in this Note or the Security Documents, this Note
shall not evidence Borrower's obligations under the Indemnity
Agreement and nothing contained in this Note or the Security
Documents shall be deemed to limit or expand Borrower's obligations
under such Indemnity Agreement. All of such obligations under
such Indemnity Agreement shall constitute the separate, unsecured
recourse obligations of Borrower and shall not be deemed to be
evidenced by this Note or secured by the Security
Documents.
SECTION
8.
Default;
Remedies .
If any amount payable
under this Note is not paid within ten (10) days after the
date when due or if any other Event of Default has occurred and is
continuing, then, at the option of Lender, the entire indebtedness
evidenced hereby shall become immediately due and payable.
Upon the occurrence of an Event of Default, and without
notice or demand, all amounts owed under this Note, including all
accrued but unpaid interest, shall thereafter bear interest at 5%
per annum above the Interest Rate that would have been applicable
from time to time had there been no Event of Default (the "
Default Rate ") until all Events of Default are cured.
Failure to exercise any option granted to Lender hereunder
shall not waive the right to exercise the same in the event of any
subsequent Event of Default. Interest at the Default Rate
shall commence to accrue upon the occurrence of any Event of
Default, including the failure to pay this Note at maturity.
Borrower shall pay all interest accrued at the Default Rate
on each Monthly Payment Date or within ten (10) days of demand by
Lender. Any judgment for amounts owing under this Note or the
Security Documents shall bear interest at the Default
Rate.
SECTION
9.
Attorneys' Fees,
Etc .
In the event of any
Default, or in the event that any dispute arises relating to the
interpretation, enforcement, or performance of this Note, Lender
shall be entitled to collect from Borrower within ten (10) days of
demand all reasonable fees and expenses incurred in connection
therewith, including but not limited to reasonable fees of
attorneys, accountants, appraisers, environmental inspectors,
consultants, expert witnesses, arbitrators, mediators, and court
reporters. Without limiting the generality of the foregoing,
Borrower shall pay all such costs and expenses incurred in
connection with: (a) arbitration or other alternative dispute
resolution proceedings, trial court actions, and appeals;
(b) bankruptcy or other insolvency proceedings of Borrower,
any guarantor or other party liable for any of the obligations of
this Note or any party having any interest in any security for any
of those obligations; (c) judicial or nonjudicial foreclosure
on, or appointment of a receiver for, any property securing this
Note; (d) postjudgment collection proceedings; (e) all
unsuccessful claims, counterclaims, cross-claims, and defenses
asserted by Borrower or any guarantor in any of the foregoing
whether or not they arise out of or are related to this Note or any
security for this Note; (f) all preparation for any of the
foregoing; and (g) all settlement negotiations with respect to
any of the foregoing.
SECTION
10.
Maximum
Interest .
No provision of this
Note, the Security Instrument or the other Security Documents shall
require the payment or permit the collection of interest in excess
of the maximum permitted by law. If any excess of interest in
such respect is herein provided for, neither Borrower nor its
successors or assigns shall be obligated to pay that portion of
such interest that is in excess of the maximum permitted by law,
and the right to demand the payment of any such excess shall be and
is hereby waived and this Section 10 shall control any
provision of this Note, the Security Instrument or the other
Security Documents that is inconsistent herewith. If,
notwithstanding the foregoing, Lender receives any payment that
constitutes interest in an amount in excess of the maximum amount
allowed by applicable law, the excess shall be applied to reduce
the principal balance of the Secured Obligations (as defined in the
Security Instrument) without payment of a prepayment premium.
Borrower and Lender intend at all times to comply with
applicable laws governing the maximum rate or amount of interest
payable on or in connection with the Secured Obligations. If
the applicable law is ever judicially interpreted so as to render
usurious any amount payable under this Note, the Security
Instrument or any other Security Document, or contracted for,
charged, taken, reserved or received with respect to the Secured
Obligations, or if acceleration of the maturity of the Secured
Obligations, or if any prepayment by Borrower results in Borrower
having paid any interest in excess of that permitted by applicable
law, then Borrower and Lender expressly intend that all excess
amounts collected by Lender shall be applied to reduce the unpaid
principal balance of the Secured Obligations (or, if the Secured
Obligations have been or would thereby be paid in full, shall be
refunded to Borrower), and the provisions of this Note, the
Security Instrument and the other Security Documents immediately
shall be deemed reformed and the amounts thereafter collectible
under this Note, the Security Instrument and the other Security
Documents reduced, without the necessity of the execution of any
new documents, so as to comply with applicable law, but so as to
permit the recovery of the fullest amount otherwise payable under
this Note, the Security Instrument and the other Security
Documents. The right to accelerate the maturity of the
Secured Obligations does not include the right to accelerate any
interest that has not otherwise accrued on
