PROMISSORY NOTE SECURED BY DEED OF TRUST
Loan
No. 31 - 0900266A
$8,000,000.00
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San Francisco, California
December 21, 2000 |
| 1. |
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PROMISE TO PAY. For value received, the
undersigned BARBER LANE ASSOCIATES L. P.
, a California limited partnership
(‘Borrower”), promise(s) to pay to the order of WELLS
FARGO BANK, NATIONAL ASSOCIATION (“Lender”), 1320
Willow Pass Road, Suite 205, Concord, California 94520, or at
such other place as may be designated in writing by Lender, the
principal sum of EIGHT MILLION AND NO/ 10 0 THS
DOLLARS ($8 , 0 0 0 , 0 0 0 . 00) (“Loan”),
with interest thereon as specified herein. All sums owing hereunder
are payable in lawful money of the United States of America, in
immediately available funds, without offset, deduction or
counterclaim of any kind. |
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| 2. |
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SECURED BY DEED OF TRUST. This Note is secured
by, among other things, that Deed of Trust and Absolute Assignment
of Rents and Leases and Security Agreement (and Fixture Filing)
(“Deed of Trust”) of even date herewith, encumbering
certain real property described therein
(“Property”). |
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| 3. |
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DEFINITIONS. For the purposes of this Note, the
following terms shall have the following meanings: |
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“Business Day” shall mean any day other than a
Saturday, Sunday, legal holiday or other day on which commercial
banks in California are authorized or required by law to close. All
references in this Note to a “day” or a
“date” shall be to a calendar day unless specifically
referenced as a Business Day. |
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“Default” shall have the meaning set forth in the
Deed of Trust. |
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“Disbursement Date” shall mean the date upon which
the Loan proceeds are funded into escrow in connection with the
closing of the Loan. |
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“Effective Date” shall mean the date the Deed of
Trust is recorded in the Office of the County Recorder of the
county where the Property is located and Lender authorizes the Loan
proceeds to be released to Borrower. |
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“Loan Documents” shall mean the documents listed in
Exhibit B attached hereto and incorporated herein by this
reference. |
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“Maturity Date” shall mean February 1,
2011. |
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| 4. |
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INTEREST; PAYMENTS. |
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4.1 |
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Definitions. The following terms shall have the meanings
indicated: |
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“Actual/360 Basis” shall mean on the basis
of a 360-day year and charged on the basis of actual days elapsed
for any whole or partial month in which interest is being
calculated. |
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“30/360 Basis” shall mean on the basis of a
360-day year consisting of 12 months of 30 days each.
“Interest Rate” shall mean a fixed annual rate of
7 . 4 5 5 %. |
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4.2 |
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Interest Accrual. Interest on the outstanding principal
balance of this Note shall accrue from the Disbursement Date at an
annual rate equal to the Interest Rate calculated on an Actual/360
Basis. |
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4.3 |
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Payments. Monthly payments hereunder shall commence on
the first day of the calendar month following the Disbursement Date
and continue on the first day of each calendar month thereafter
through the Maturity Date. If the Disbursement Date is a date other
than the fast day of a calendar month, the fast monthly payment
shall be interest only. Subsequent monthly payments shall be
calculated on the basis of an equal-payment 30 year amortization of
principal and interest. Notwithstanding that interest on this Note
accrues on an Actual./360 Basis, |
the total
amount of each such amortized monthly payment of principal and
interest shall be determined using a 30/360 Basis. On the Maturity
Date, all unpaid principal and accrued but unpaid interest shall be
due and owing in full. All interest shall be paid in arrears.
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4.4 |
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Acknowledgments. Borrower acknowledges that
interest calculated on an ActuaU360 Basis exceeds interest
calculated on a 30/360 Basis and, therefore: (a) a greater
portion of each monthly installment of principal and interest will
be applied to interest using the Actual/360 Basis than would be the
case if interest accrued on a 30/360 Basis; and (b) the unpaid
principal balance of this Note on the Maturity Date will be greater
using the Actuall360 Basis than would be the case if interest
accrued on a 30/360 Basis. |
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4.5 |
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Application of Payments. In the absence of a
specific determination by Lender to the contrary, all payments paid
by Borrower to Lender in connection with the obligations of
Borrower under this Note and under the other Loan Documents shall
3e applied in the following order of priority: (a) to amounts,
other than principal and interest, due to Lender pursuant to this
Note or the other Loan Documents; (b) to accrued but unpaid
interest on this Note; and (c) to the unpaid principal balance
of this Note. Borrower irrevocably waives the right to direct the
application of any and all payments at any time hereafter received
by Lender from or on behalf of Borrower, and Borrower irrevocably
agrees that Lender shall have the continuing exclusive right to
apply any and all such payments against the then due and owing
obligations of Borrower in such order of priority as Lender may
deem advisable. |
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LATE CHARGE; DEFAULT RATE. |
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5.1 |
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Late Charge. If all or any portion of any payment or
deposit required hereunder (other than the payment due on the
Maturity Date) is not paid or deposited on or before the fourth day
following the day on which such payment or deposit is due, Borrower
shall pay a late or collection charge, as liquidated damages, equal
to 5% of the amount of such unpaid payment or deposit. If all or
any portion of the payment due on the Maturity Date is paid more
than 4 days after the Maturity Date and on a date other than
the first day of a month, Borrower shall pay a late or collection
charge, as liquidated damages, equal to the interest which would
have accrued on such amount during the period commencing on the
date payment of such amount is actually made and ending on the last
day of the month in which payment of such amount is actually made.
Borrower acknowledges that Lender will incur additional expenses as
a result of any late payments or deposits hereunder, which expenses
would be impracticable to quantify, and that Borrower’s
payments under this Section 5.1 are a reasonable estimate of
such expenses. |
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5.2 |
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Default Rate. Commencing upon a Default and
continuing until such Default shall have been cured by Borrower,
all sums owing on this Note shall bear interest until paid in full
at an annual rate equal to 5% plus the h terest Rate, but not
higher than the maximum rate of interest permitted by applicable
law (“Default Rate”). |
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MAXIMUM RATE PERMITTED BY LAW. Neither this Note
nor any of the other Loan Documents shall require the payment or
permit the collection of any interest or any late payment charge in
excess of the maximum rate permitted by law. If any such excess
interest or late payment charge is provided for under this Note or
any of the other Loan Documents or if this Note or any of the other
Loan Documents shall be adjudicated to provide for such excess,
neither Borrower nor Borrower’s successors or assigns shall
be obligated to pay such excess, and the right to demand the
payment of any such excess shall be and hereby is waived, and this
provision shall control any other provision of this Note or any of
the other Loan Documents. If Lender shall collect amounts which are
deemed to constitute interest and which would increase the
effective interest rate to a rate in excess of the maximum rate
permitted by law, all such amounts deemed to constitute interest in
excess of the maximum. legal rate shall, upon such determination,
at the option of Lender, be returned to Borrower or credited
against the outstanding principal balance of this Note. |
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ACCELERATION. If (a) Borrower shall fail to
pay when due any sums payable under this Note; (b) any other
Default shall occur; or (c) any other event or condition shall
occur which, under the terms of the Deed of Trust or any other Loan
Document, gives rise to a right of acceleration of sums owing under
this Note, then Lender, at its sole option, shall have the right to
declare all sums owing under this Note immediately duc and payable;
provided, however, that if the Deed of Trust or any other Loan
Document provides for the automatic acceleration of payment of sums
owing under this Note, all sums owing under this Note shall be
automatically due and payable in accordance with the terms of the
Deed of Trust or such other Loan Document. |
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8.1 |
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Limitation. Except as otherwise provided in this
Section 8, Lender’s recovery against Borrower under this
Note and the other Loan Documents shall be limited solely to the
Property and the “Collateral” (as defined in the Deed
of Trust). |
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8.2 |
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Exceptions. Nothing contained in Section 8.1
or elsewhere in this Note or the other Loan Documents, however,
shall limit in any way the personal liability of Borrower owed to
Lender for any losses or damages incurred by Lender (including,
without limitation, any impairment of Lender’s security for
the Loan) with respect to any of the following matters:
(a) fraud or willful misrepresentation;; (b) material
physical waste of the Property or the Collateral; (c) failure
to pay property or other taxes, assessments or charges from
available property cash flow (other than amounts paid to Lender for
taxes, assessments or charges pursuant to Impounds as defined in
Exhibit A and where Lender elects not to apply such funds
toward payment of the taxes, assessments or charges owed) which may
create liens senior to the lien of the Deed of Trust on all or any
portion of the Property; (d) failure to deliver any insurance
or condemnation proceeds or awards or any security deposits
received by Borrower to Lender or to otherwise apply such sums as
required under the terms of the Loan Documents or any other
instrument now or hereafter securing this Note; (e) failure to
apply any rents, royalties, accounts, revenues, income, issues,
profits and other benefits from the Property which are collected or
received by Borrower during the period of any Default or after
acceleration of the indebtedness and other sums owing under the
Loan Documents to the payment of either (i) such indebtedness
or other sums or (ii) the normal and necessary operating
expenses of the Property; or (f) any breach by Borrower of any
covenant in this Note or in the Deed of Trust regarding Hazardous
Materials (as defined in the Deed of Tnrst) or any representation
or warranty of Borrower regarding Hazardous Materials proving to
have been untrue when made. |
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8.3 |
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No Release or Impairment. Nothing contained in
Section 8.1 shall be deemed to release, affect or impair the
indebtedness evidenced by this Note or the obligations of Borrower
under, or the liens and security interests created by the Loan
Documents, or Lender’s rights to enforce its remedies under
this Note and the other Loan Documents, including, without
limitation, the right to pursue any remedy for injunctive or other
equitable relief, or any suit or action in connection with the
preservation, erforcement or foreclosure of the liens, mortgages,
assignments and security interests which are now or at a.any time
hereafter security for the payment and performance of all
obligations under this Note or the other Loan Documents. |
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8.4 |
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Prevail and Control. The provisions of this
Section 8 shall prevail and control over any contrary
provisions elsewhere in this Note or the other Loan Documents. |
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NON-TRUSTOR BORROWER. If any Borrower is not also
a "
Tmstor ” under the
Deed of Trust, such Borrower hereby makes all representations and
warranties in favor of Lender contained in Article 5 of the
Deed of Trust, all covenants contained in Section 6.15 of the
Deed of Trust, and all indemnities of Lender contained in
Section 6.19 of the Deed of Trust, jointly and severally with
the “Trustor.” |
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10.1 |
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Joint and Several Liability. If this Note is
executed by more than one person or entity as Borrower, the
obligations of each such person or entity shall be joint and
several. No person or entity shall be a mere accommodation maker,
but each shall be primarily and directly liable hereunder. |
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10.2 |
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Waiver of Presentment. Except as otherwise
provided in any other Loan Document, Borrower hereby waives
presentment, demand, notice of dishonor, notice of default or
delinquency, notice of intent to accelerate, notice of
acceleration, notice of nonpayment, notice of costs, expenses or
losses and interest thereon, and notice of interest on interest and
late charges. |
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10.3 |
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Delay In Enforcement. No previous waiver or
failure or delay by Lender in acting with respect to the terms of
this Note or the Deed of Trust shall constitute a waiver of any
breach, default or failure of condition under this Note, the Deed
of Trust or the obligations secured thereby. A waiver of any term
of this Note, the Deed of Trust or of any of the obligations
secured thereby must be made in writing signed by Lender, shall be
limited to the express terms of such waiver, and shall not
constitute a waiver of any subsequent obligation of Borrower. The
acceptance at any time by Lender of any past-due amount shall not
be deemed to be a waiver of the right to require prompt payment
when due of any other amounts then or thereafter due and
payable. |
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10.4 |
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Time of the Essence. Time is of the essence with
respect to every provision hereof |
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10.5 |
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Governing Law. This Note was accepted by Lender
in the slate of California and the proceeds of this Note were
disbursed from the state of California, which state the parties
agree has a substantial relationship to the parties and to the
underlying transaction embodied hereby. Accordingly, in all
respects, including, without limiting the generality of the
foregoing, matters of construction, validity, enforceability and
performance, this Note, the Deed of Trust and the other Loan
Documents and the obligations arising hereunder and thereunder
shall be governed by, and construed in accordance with, the laws of
the state of California applicable to contracts made and performed
in such state and any applicable law of the United States of
America, except that at all times the provisions for the
enforcement of Lender’s STATUTORY POWER OF SALE granted under
the Deed of Trust securing this Note and the creation, perfection
and enforcement of the security interests created pursuant thereto
and pursuant to the other Loan Documents shall be governed by and
construed according to the law of the state where the Property is
located. Except as provided in the immediately preceding sentence,
Borrower hereby unconditionally and irrevocably waives, to the
fullest extent permitted by law, any claim to assert that the law
of any jurisdiction other than California governs the Deed o f
Trutt, this Note and the other Loan Documents. |
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10.6 |
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Consent to Jurisdiction , .
Borrower irrevocably submits to the jurisdiction of: (a) any
state or federal court sitting in the state of California over any
suit, action, or proceeding, brought by Borrower against Lender,
arising out of or relating to this Note or the Loan evidenced
hereby; (b) any state or federal court sitting in the state
where the Property is located or the state in which Borrower
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s principal place of business is located over any suit, action or
proceeding, brought by Lender against Borrower, arising out: of or
relating to this Note or the Loan evidenced hereby; and
(c) any state court sitting in the county of the state where
the Property is located over any suit, action, or proceeding,
brought by Lender to exercise its STATUTORY POWER OF SALE under the
Deed of Trust or any action brought by the Lender to enforce its
rights with respect to the Collateral. Borrower irrevocably waives,
to the fullest extent permitted by law, any objection that Borrower
may now or hereafter have to the laying of venue of any such suit,
action, or proceeding brought in a.ny such court and any claim that
any such suit, action, or proceeding brought in any such court has
been brought in an inconvenient forum. |
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10.7 |
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Counterparts. This Note may be executed in any
number of counterparts, each of which when executed and delivered
shall be deemed an original and all of which taken together shall
be deemed to be one and the same Note. |
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10.8 |
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Heirs, Successors and Assigns. All of the terns,
covenants, conditions and indemnities contained in this Note and
the other an Documents shall be binding upon the heirs, successors
and assigns of Borrower and shall inure to the benefit of the
successors and assigns of Lender. The foregoing sentence shall not
be construed to permit Borrower to assign the Loan except as
otherwise petted in this Note or the other Loan Documents. |
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10.9 |
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Severability. If any tern of this Note, or the
application thereof to any person or circumstances, shall, to any
extent, be invalid or unenforceable, the remainder of this Note, or
the application of such term to persons or circumstances other than
those as to which it is invalid or unenforceable, shall not be
affected thereby, and each term of this Note shall be valid and
enforceable to the fullest extent permitted by law. |
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10.10 |
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Consents and Approvals. Wherever Lender’s
consent, approval, acceptance or satisfaction is required under any
provision of this Note or any of the other Loan Documents, such
consent, approval, acceptance or satisfaction shall not be
unreasonably withheld, conditioned or delayed by Lender unless such
provision expressly so provides. |
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NOTICES. All notices and other communications
that are required or permitted to be given to a party under this
Note shall be in writing and shall be sent to such party, either by
personal delivery, by overnight delivery service, by certified
first class mail, return receipt requested, or by facsimile
transmission to the address or facsimile number below. All such
notices and communications shall be effective upon receipt of such
delivery or facsimile transmission. The addresses and facsimile
numbers of the parties shall be: |
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Borrower: |
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Lender: |
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BARBER LANE
ASSOCIATES L.P.
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Wells Fargo Bank, N.A. |
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490 California
Ave.
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1320 Willow Pass Road,
Suite 205 |
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4th Floor
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Concord, CA 94520 |
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Palo Alto, CA
94301
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Loan No. 31-0900266A |
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FAX No.:
(650) 326-9333
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FAX No.: (925) 691-5947 |
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With copies
to:
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Cooley Godward
LLP
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One Maritime Plaza
20 th
Floor
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San Francisco, CA
94111
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Attn: Paul
Churchill, Esq.
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(415) 951-3699
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| 12. |
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ADDITIONAL TERMS ANI) CONDITIONS. The additional
terms and conditions set forth in Exhibit A
attached hereto are incorporated herein by this reference. |
| 13. |
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PREPAYMENT. Borrower acknowledges that any
prepayment of this Note will cause Lender to lose its interest rate
yield on this Note and will possibly require that Lender reinvest
any such prepayment amount in loans of a lesser interest rate yield
(including, without limitation, in debt obligations other than
first mortgage loans on commercial properties). As a consequence,
Borrower agrees as follows, as an integral part of the
consideration for Lender’s making the Loan: |
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13.1 |
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Voluntary Prepayment. Any voluntary prepayment of
this Note: (a) is prohibited except during the last 3
months of the term, (b) is permitted in full only, and not in
part. |
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13.2 |
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Prepayment Charge. |
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a. |
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Basic Charge. Except as provided below, if this Note is
prepaid prior to the last 3 months of the term, whether such
prepayment is involuntary or upon acceleration of the principal
amount of this Note by Lender following a Default, Borrower shall
pay to Lender on the prepayment date (in addition to all other sums
then due and owing to Lender under the Loan Documents) a prepayment
charge equal to the greater of the following two amounts:
(a) an amount equal to 1% of the then outstanding principal
balance of the Loan; or (b) an amount equal to (i) the amount,
if any, by which the sum of the present values as of the
prepayment date of all unpaid principal and interest payments
required under this Note, calculated by discounting such payments
from their respective scheduled payment dates back to the
prepayment date at a discount rate equal to the Periodic Treasury
Yield (defined below) exceeds the outstanding principal balance of
the Loan as of the prepayment date, multiplied by (ii) a
fraction whose numerator is the amount of the prepayment and whose
denominator is the outstanding principal balance of the Loan as of
the prepayment date. For purposes of the foregoing, “Periodic
Treasury Yield” means (c) the annual yield to maturity of the
actively traded :ion-callable United States Treasury fixed interest
rate security (other than any such security which can be
surrendered at the option of the holder at face value in payment of
federal estate tax or which was issued at a substantial discount)
that has a maturity closest to (whether before, on or after) the
Maturity Date (or if two or more such securities have maturity
dates equally close to the Maturity Date, the average annual yield
to maturity of all such securities), as reported in The Wall Street
Journal or other authoritative publication or news retrieval
service on the fifth Business Day preceding the prepayment date,
divided by (d) 12, if scheduled payment dates are monthly, or
4, if scheduled payment dates are quarterly. |
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b. |
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Additional Charge. If this Note is prepaid on any day
other than the first day of a month, whether such prepayment is
involuntary or upon full acceleration of the principal amount of
this Note by Lender following a Default, Borrower shall pay to
Lender on the prepayment date (in addition to the basic prepayment
charge described in Section 13.2a. above and all other sums
then due and owing to Lender under this Note and the other Loan
Documents) an additional prepayment charge equal to the interest
which would otherwise have accrued on the amount prepaid (had such
prepayment not occurred during |
the period
commencing on the prepayment date and ending on the last day of the
month in which the prepayment occurred.
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Exclusion. Notwithstanding the foregoing, no prepayment
charge of any kind shall apply in respect to any prepayment
resulting from the application of any insurance or condenmation
proceeds received by Lender and applied by Lender to the
outstanding principal balance of the Loan. |
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13.3 |
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Effect of Prepayment. No partial prepayment of
this Note shall change the dates or amounts of subsequent monthly
installments of principal and interest, unless Lender otherwise
agrees in writing. |
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13.4 |
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Waiver. Borrower waives any right to prepay this Note
except under the terms and conditions set forth in this Section and
agrees that if this Note is prepaid, Borrower will pay the
prepayment charge set forth above. Borrower hereby acknowledges
that: (a) the inclusion of this waiver of prepayment rights
and agreement to pay the prepayment charge for the right to prepay
this Norse was separately negotiated with Lender; (b) the
economic value of the various elements of this waiver and agreement
was discussed; (c) the consideration given by Borrower for the
Loan was adjusted to reflect the specific waiver and agreement
negotiated between Borrower and Lender and contained herein; and
(d) this waiver is intended to comply with California Civil
Code Section 2954.10. |
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Borrower’s Initials:
HDB
RP
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14.
DEFEASANCE.
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14.1 |
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Defeasance Definitions. The following terms shall
have the meanings indicated: |
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“Allocated Loan Amount” means that portion of the
Loan which has been allocated to each Individual Property which is
being dcfeased, |
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“Code” means the Internal Revenue Code of 1986, as
amended to date and as further amended from time to time, or any
successor statutes thereto, together with applicable regulations
issued pursuant thereto in temporary or final form. |
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“Defeasance” means the Borrower’s
substitution of collateral and Lender’s full or partial
release of the lien of the Deed of Trust upon satisfaction of all
of the terms and conditions of this Section 14. |
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“Defeasance Collateral” means obligations or
securities, not subject to prepayment, call or early redemption,
that are direct obligations of, or obligations fully guaranteed as
to timely payment by, the United States of America that are backed
by the full faith and credit of the United States, together with
all revenues and proceeds of such obligations or securities. |
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“Defeasance Date” means the date upon which the
Defeasance is completed. |
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“Defeasance Security Agreements” shall have the
meaning specified in Section 14.3 d.(ii). “Individual
Property” means property as described in Exhibit A of
the Deed of Trust. |
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“Lockout Expiration Date” means the later of
(a) two years after the Startup Day (defined below) of the
REMIC (defined below), if any, that holds this Note on the
Defeasance Date, and (b) the 3RD anniversary of the
date of this Note. |
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“Rating Agencies” means Fitch ICBA, Inc.,
Moody’s Investor Services, Inc., Standard & Poor’s
Rating Services and any other nationally-recognized statistical
rating organization that, in connection with the securitization of
the Loan by a REMIC, maintains a rating on the Defeasance Date of
the securities issued by the REMIC. |
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“REMIC” means a “real estate mortgage
investment conduit” within the meaning of Section 860D of the
Code. |
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“Startup Day” means the “startup day”
within the meaning of Section 860G(a)(9) of the Code. |
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“Successor Borrower” means an entity designated by
Lender whose sole purpose is to own the Defeasance Collateral
delivered by Borrower under this Section 14 and assume
Borrower’s obligations with respect to the Loan or portion of
the Loan affected by the Defeasance, either alone, or together with
the Defeasance Collateral for other, previously deceased loans or
portions of loans assumed by Successor Borrower which are also held
by the REMIC that holds this Note. The Successor Borrower shall, in
either case, be restricted from taking actions that could result in
its bankruptcy or dissolution |
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14.2 |
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Borrower Right to Defease. At any time after the
Lockout Expiration Date, Borrower may elect to effect a Defeasance
of the entire Loan or one or more partial Defcas.nces of an
Individual Property in accordance with the provisions of this
Section 14, at Borrower’s sole cost and expense. |
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14.3 |
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Conditions. Borrower shall only have the right to
cause a Defeasance if all of the following conditions have been
satisfied: |
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a. |
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Notice. Borrower shall give at least 45 days but rot more
than 90 days written notice to Lender specifying the
Borrower’s intended Defeasance Date and, for a partial
Defeasance, the Individual Property affected. Simultaneously with
the delivery cf such notice, Borrower shall deposit with Lender an
amount estimated by Lender to be sufficient to reimburse
Lender’s reasonable anticipated expenses in connection with
the Defeasance, for which Borrower shall be so |
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