SECURED PROMISSORY
NOTE
$4,000,000 September
25, 2008
FOR VALUE RECEIVED SSTI 15 MCCLURE DR, LLC, a Delaware limited
liability company, and SSTI 1742 PASS RD, LLC, a Delaware limited
liability (collectively hereinafter referred to as "
Borrower "), jointly and severally promise to pay to the
order of SPECTRUM REALTY MEZZANINE FUND I, LLC, a Delaware limited
liability company, its successors and assigns (hereinafter referred
to as " Lender "), at the office of Lender or its agent,
designee, or assignee at 4121 Cox Road, Suite 107, Glen Allen,
Virginia 23060, or at such place as Lender or its agent, designee,
or assignee may from time to time designate in writing, the
principal sum of Four Million And No/100 Dollars ($4,000,000.00),
or so much thereof as shall have been disbursed hereunder from time
to time and remains unpaid, in lawful money of the United States of
America, with interest thereon to be computed on the unpaid
principal balance from time to time outstanding at the Applicable
Interest Rate (hereinafter defined), at all times prior to the
occurrence of an Event of Default (as defined in the Security
Instrument [hereinafter defined]), and to be paid in installments
as set forth below. Unless otherwise herein defined, all initially
capitalized terms shall have the meanings given such terms in the
Security Instrument.
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PAYMENT TERMS.
(a) Upon
the closing of the loan evidenced by this Note (the "Closing")
Lender shall lend and Borrower shall borrow the sum of Four Million
and No/100 Dollars ($4,000,000.00) (the "Funded Loan Amount").
(b)
Upon the Closing, Borrower shall pay to Lender a loan fee (the
"Initial Loan Fee") equal to three percent (3%) of the Funded Loan
Amount. The Initial Loan Fee shall be netted out of the Funded Loan
Amount proceeds.
(c)
Borrower shall make payments of interest only on the unpaid
principal amount of this note from the date of the Loan until the
Maturity Date at a rate per annum equal to the Applicable Interest
Rate (as hereinafter defined), calculated on the basis of a year of
360 days for the actual number of days elapsed. Accrued interest
shall be payable on the first day of each calendar month, up to and
including the first day of March 2009. Any amount hereunder which
is not paid when due (whether at stated maturity, by acceleration
or otherwise), shall accrue interest from the due date until the
date such amount is paid in full at the Default Rate. All payments
hereunder shall be made in lawful money of the United States of
America and in immediately available funds. Any extension of time
for the payment of the principal of this note resulting from the
Maturity Date falling on a non-Banking Day shall be included in the
computation of interest. Payments under this Note shall be applied
as follows:
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First, to the payment of interest and other costs and charges due
in connection with this Note or the Debt, as Lender may determine
in its sole discretion; and
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The balance shall be applied toward the reduction of the principal
sum;
and the balance of said principal sum,
together with accrued and unpaid interest and any other amounts due
under this Note shall be due and payable on March 25, 2009 or upon
earlier maturity hereof whether by acceleration or otherwise (the "
Maturity Date "). Interest on the principal sum of this Note
shall be calculated and accrue daily on the basis of the then
outstanding principal balance, a three hundred sixty (360) day year
and paid for the actual number of days elapsed. All amounts due
under this Note shall be payable without setoff, counterclaim or
any other deduction whatsoever.
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INTEREST. The term " Applicable Interest Rate " means a rate
of thirteen percent (13%) per annum.
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EXTENSIONS AND EXTENSION FEES. Borrower may in its sole discretion,
upon the written consent of Lender and provided no Default exists
under this Note or the Security Instrument (as hereinafter
defined), extend the Maturity Date for an additional term of one
(1) month (the " Extension Term "). Subject to the
provisions herein, Borrower may opt to exercise the Extension Term
three (3) consecutive times and in each instance must provide
Lender with written notice of Borrowers option to enter into an
Extension Term no later than fifteen (15) days prior to the pending
Maturity Date or Extension Term maturity date (each an "
Extension Term Maturity Date "). In no event shall the
Maturity Date be extended beyond June 25, 2009. Borrower shall pay
to Lender a fee equal to one percent (1%) of the then outstanding
principal balance of this Note for each exercised Extension Term
(each an " Extension Fee "), and each such Extension Fee
shall be due and payable in lawful monies of the United States of
America in immediately available funds paid into escrow upon
Lender's written consent to each such Extension Term. Each
Extension Fee shall be in addition to all other fees and interest
to be paid by Borrower hereunder. Each Extension Fee shall be paid
by Borrower in consideration of Lender granting such Extension Term
and shall not be deemed a penalty.
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SECURITY. This Note is secured by, and Lender is entitled to the
benefits of, the Security Instrument and the other Loan Documents
(as defined in the Security Agreement). The term " Security
Instrument " means the Mortgage and Security Agreement given by
SSTI 15 McClure Dr, LLC and the Deed of Trust and Security
Agreement given by SSTI 1742 Pass Rd, LLC, each dated the date
hereof, for the use and benefit of Lender covering the estate of
Borrower in the Property (as defined therein).
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LATE FEE. If any installment is not received by the Lender prior to
the 15 th calendar day after the same is due (without
regard to any applicable cure and/or notice period), Borrower shall
pay to Lender upon demand an amount equal to four percent (4%)
of such unpaid sum to defray the expenses incurred by Lender in
handling and processing such delinquent payment and to compensate
Lender for the loss of the use of such delinquent payment, and such
amount shall be secured by the Loan Documents. In no event shall
any late fee apply or be due and payable with respect to the unpaid
principal balance of this Note, whether payable at maturity of this
Note, upon acceleration or otherwise.
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EXPENSES OF COLLECTION. In the event that it should become
necessar
