Item 1.01 Entry into a Material Definitive Agreement.
On February 3, 2009, Whitestone REIT, a Maryland real estate investment trust (the “Company”), operating through its subsidiary, Whitestone Centers LLC (the “Borrower”), executed four Promissory Notes (the “Sun Life Promissory Notes”) totaling $9,941,000 payable to Sun Life Assurance Company of Canada (the “Lender”) with an applicable interest rate of 6.63% per annum. Monthly payments totaling $74,882.11 are due beginning April 1, 2009 and are due on the first day of each calendar month thereafter through the maturity date of March 1, 2014.
The Sun Life Promissory Notes are non-recourse loans secured by certain of the Borrower’s properties and a limited guarantee by the Company.
In conjunction with each Sun Life Promissory Note, a Deed of Trust and Security Agreement (the “Sun Life Security Instrument”) and an Assignment of Leases and Rents were executed by the Borrower which contain customary terms and conditions, including representations, warranties and covenants by the Borrower that include, without limitation, warranty of title, insurance requirements and maintenance, use and management of the properties.
The four Sun Life Promissory Notes contain events of default that include, among other things, non-payment and default under the Sun Life Security Instrument. Upon occurrence of an event of default, the Lender is entitled to accelerate all obligations of the Borrower. The Lender will also be entitled to receive the entire unpaid principal balance and unpaid interest at a default rate.
As a condition of the loans evidenced by the Sun Life Promissory Notes, the properties have been registered with the Texas Commission on Environmental Quality and have been accepted into the Texas Dry Cleaning Facility Relief Fund. The Borrower is required to maintain this registration on each property until a no action letter has been received for such property by the Texas Commission on Environmental Quality.
The proceeds from the Sun Life Promissory Notes will be used to increase the Company’s working capital.
The foregoing description of the Sun Life Promissory Notes is qualified in its entirety by the full terms and conditions of the Sun Life Promissory Notes, copies of which are furnished herewith as Exhibits 10.1, 10.2, 10.3, and 10.4 to the Current Report on Form 8-K and are incorporated herein by reference.
Item 2.03 Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure contained in Item 1.01 above is incorporated in this Item 2.03 by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 Promissory Note dated February 3, 2009 between Whitestone CentersLLC and Sun Life Assurance Company of Canada
10.2 Promissory Note dated February 3, 2009 between Whitestone CentersLLC and Sun Life Assurance Company of Canada
10.3 Promissory Note dated February 3, 2009 between Whitestone CentersLLC and Sun Life Assurance Company of Canada
10.4 Promissory Note dated February 3, 2009 between Whitestone CentersLLC and Sun Life Assurance Company of Canada
