Loan No. 55-9506015
MORTGAGE NOTE
$2,812,500.00 July 14, 1995
FOR VALUE RECEIVED, WOODCREEK FUND XXI, L.P., a Texas limited partnership
having its principal office at 13760 Noel Road, Suite 700, Dallas, Texas 75240
("Maker") promises to pay to the order of FLEET REAL ESTATE CAPITAL, INC., a
Rhode Island corporation, or its assigns ("Payee") having its principal office
at 4275 Executive Square, Suite 200, La Jolla, California 92037, the Principal
Amount (as defined below), together with interest from the date hereof at the
Interest Rate (as defined below). Interest accruing hereunder shall be
calculated on the basis of a 360-day year of twelve 30-day months.
WHEN USED HEREIN, the following capitalized terms shall have
the following meanings:
"Commencement Date" shall be September 1, 1995.
"Closing Date" shall be July 19, 1995.
"Default Rate" shall be the Interest Rate plus five percent
(5%) per annum.
"Interest Rate" shall be eight and forty-eight one hundredths
percent (8.48%) per annum.
"Lockout Period" shall be the period from July 19, 1995
through August 1, 1999.
"Maturity Date" shall be July 14, 2002.
"Monthly Amount" shall be the sum of Twenty-One Thousand
Five Hundred Eighty-Five and 84/100 Dollars ($21,585.84).
"Payment Date" shall be the first business day of each month
commencing on the first business day of the second full month
after the closing date and continuing to and including the
Maturity Date.
"Principal Amount" shall be Two Million Eight Hundred Twelve
Thousand Five Hundred and No/100 United States Dollars.
The Principal Amount and interest thereon shall be due and payable in
lawful money of the United States as follows:
Loan No. 55-9506015
(a) On the date hereof, all accrued and unpaid interest on the unpaid
balance through the end of the month in which the Closing Date occurs shall be
due and payable. Thereafter, commencing on the Commencement Date, eighty-three
(83) equal monthly installments of principal and interest at the Monthly Amount
each shall be due and payable. Each installment of principal and interest shall
be applied first to interest and the remainder thereof to reduction of
principal. Each monthly installment shall be due on each Payment Date. In
addition, all amounts advanced by Payee pursuant to applicable provisions of the
Security Documents (as hereinafter defined), together with any interest at the
Default Rate or other charges as therein provided, shall be immediately due and
payable hereunder. In the event any such advance is not so repaid by Maker,
Payee may, at its option, first apply any payments received hereunder to repay
said advances together with any interest thereon or other charges as provided in
the Security Documents, and the balance, if any, shall be applied in payment of
any installment then due. The entire remaining unpaid balance of principal of
this Note, all interest accrued thereon and all other sums payable hereunder or
under the Security Documents shall be due and payable in full on the Maturity
Date.
(b) Amounts due on this Note shall be payable, without any counterclaim,
setoff or deduction whatsoever, at the office of Payee or its agent or designee
at the address set forth in Exhibit 1 or at such other place as Payee or its
agent or designee may from time to time designate in writing.
(c) This Note is secured by a Deed of Trust, Mortgage, Security Agreement
and Assignment of Rents and Leases of even date herewith (the "Mortgage") from
Maker to Payee and by an Assignment of Rents and Leases of even date herewith
(the "Assignment") from Maker to Payee. The Mortgage, the Assignment and any
other instrument given at any time to secure this Note are hereinafter
collectively called the "Security Documents."
(d) This Note may not be prepaid prior to the end of the Lockout Period,
except as set forth herein. Any prepayment of this Note, in whole or in part,
prior to the end of the Lockout Period, except as permitted herein, shall
constitute an "Event of Default" under the Mortgage. Maker has the right to
prepay the principal of this Note in full or in part on any Payment Date after
the end of the Lockout Period, upon sixty days' prior written notice and
payment, together with the portion of the principal to be prepaid, of a
prepayment premium in an amount calculated as specified in Appendix 1. The
calculation of the prepayment premium shall be made by Payee and shall, absent
manifest error, be conclusive. In the event this Note is prepaid from the
proceeds of insurance or condemnation awards in accordance with Sections 10, 11
and 12 of the Mortgage either prior to or after the end of the Lockout Period, a
prepayment premium shall be payable calculated as specified in Appendix 1.
Notwithstanding the foregoing, this Note may be prepaid without a prepayment
Loan No. 55-9506015
premium during the one hundred eighty (180) day period prior to the Maturity
Date. Upon acceleration of this Note in accordance with its terms and the terms
of the Security Documents, Maker agrees to pay the prepayment premium described
above in the amount that would be due if a voluntary payment were made on the
date of such acceleration. A tender of payment of the amount necessary to pay
and satisfy the entire unpaid principal balance of this Note or any portion
thereof at any time after an Event of Default under the Mortgage or an
acceleration by Payee of the indebtedness evidenced hereby, whether such payment
is tendered voluntarily, during or after foreclosure of the Mortgage, or
pursuant to realization upon other security, shall constitute a purposeful
evasion of the prepayment terms of this Note, shall be deemed to be a voluntary
prepayment hereof, and Maker shall be required to pay the prepayment premium as
described above. Partial prepayments of principal shall not change the Payment
Dates or amounts of subsequent monthly installments, unless Payee shall
otherwise agree in writing. Notwithstanding the foregoing, nothing in this
paragraph (d) shall vary or negate the provisions of Section 18(c) of the
Mortgage.
(e) If Maker defaults in the payment of any installment of principal and
interest on the date on which it shall fall due or in the performance of any of
the agreements, conditions, covenants, provisions or stipulations contained in
this Note or in the Security Documents, and if such default shall continue
beyond any grace period provided for in the Mortgage so as to constitute an
Event of Default thereunder, then Payee, at its option and without further
notice to Maker, may declare immediately due and payable the entire unpaid
principal balance of this Note, together with interest thereon at an annual rate
after the date of such default equal to the Default Rate, together with all sums
due by Maker under the Security Documents, anything herein or in the Security
Documents to the contrary notwithstanding. The foregoing provision shall not be
construed as a waiver by Payee of its right to pursue any other remedies
available to it under the Mortgage, this Note or any other Security Document,
nor shall it be construed to limit in any way the application of the Default
Rate. Any payment hereunder may be enforced and recovered in whole or in part at
such time by one or more of the remedies provided to Payee in this Note or in
the Security Documents. In the event that: (i) this Note or any Security
Document is placed in the hands of an attorney for collection or enforcement or
is collected or enforced through any legal proceeding; (ii) an attorney is
retained to represent Payee in any bankruptcy, reorganization, receivership, or
other proceedings affecting creditors' rights and involving a claim under this
Note or any Security Document; (iii) an attorney is retained to protect or
enforce the lien of the Mortgage or any Security Document; or (iv) an attorney
is retained to represent Payee in any other proceedings whatsoever in connection
with this Note, the Mortgage, any of the Security Documents or any portion of
the Mortgaged Property (as defined in the Mortgage), then Maker shall pay to
Loan No. 55-9506015
Payee all reasonable attorney's fees, costs and expenses incurred in connection
therewith, including costs of appeal, together with interest on any judgment
obtained by Payee at the Default Rate.
(f) If Maker defaults in the payment of any monthly installment on the
Payment Date, and such default is not cured within five days thereafter, then
Maker shall pay to Payee a late payment charge in an amount equal to six percent
(6%) of the amount of the installment not paid as aforesaid. An additional late
charge equal to six percent (6%) of the monthly payment due will be charged for
each successive month the payment remains outstanding. Said late charge
payments, if payable, shall be secured by the Mortgage and the other Security
Documents, shall be payable without notice or demand by Payee, and are
independent of and have no effect upon the rights of Payee under paragraph (e)
above.
(g) Maker and all endorsers, sureties and guarantors hereby jointly and
severally waive all applicable exemption rights, valuation and appraisement,
presentment for payment, demand, notice of demand, notice of nonpayment or
dishonor, protest and notice of protest of this Note, and all other notices in
connection with the delivery, acceptance, performance, default or enforcement of
the payment of this Note. Maker and all endorsers, sureties and guarantors
consent to any and all extensions of time, renewals, waivers or modifications
that may be granted by Payee with respect to the payment or other provisions of
this Note and to the release of the collateral or any part thereof, with or
without substitution, and agree that additional makers, endorsers, guarantors or
sureties may become parties hereto without notice to them or affecting their
liability hereunder.
(h) Payee shall not be deemed, by any act of omission or commission, to
have waived any of its rights or remedies hereunder unless such waiver is in
writing and signed by Payee, and then only to the extent specifically set forth
in writing. A waiver of one event shall not be construed as continuing or as a
bar to or waiver of any right or remedy to a subsequent event.
(i) This Note shall be governed by and construed in accordance with the
laws of the State in which the Mortgaged Property is located (the "State").
(j) The parties hereto intend and believe that each provision in this Note
comports with all applicable law. However, if any provision in this Note is
found by a court of law to be in violation of any applicable law, and if such
court should declare such provision of this Note to be unlawful, void or
unenforceable as written, then it is the intent of all parties hereto that such
provision shall be given full force and effect to the fullest possible extent
that is legal, valid and enforceable, that the remainder of this Note shall be
construed as if such unlawful, void or unenforceable provision were not
contained therein, and that the rights, obligations and interest of Maker and
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the holder hereof under the remainder of this Note shall continue in full force
and effect; provided, however, that if any provision of this Note which is found
to be in violation of any applicable law concerns the imposition of interest
hereunder, the rights, obligations and interests of Maker and Payee with respect
to the imposition of interest hereunder shall be governed and controlled by the
provisions of the following paragraph.
(k) It being the intention of Payee and Maker to comply with the laws of
the State with regard to the rate of interest charged hereunder, it is agreed
that, notwithstanding any provision to the contrary in this Note, the Mortgage,
or any of the other Security Documents, no such provision, including without
limitation any provision of this Note providing for the payment of interest or
other charges, shall require the payment or permit the collection of any amount
("Excess Interest") in excess of the maximum amount of interest permitted by law
to be charged for the use or detention, or the forbearance in the collection, of
all or any portion of the indebtedness evidenced by this Note. If any Excess
Interest is provided for, or is adjudicated to be provided for, in this Note,
the Mortgage, or any of the other Security Documents, then in such event:
(i) the provisions of this paragraph shall govern;
(ii) Maker shall not be obligated to pay any Excess Interest;
(iii)any Excess Interest that Payee may have received hereunder shall,
at the option of Payee, be (x) applied as a credit against the unpaid principal
balance then due under this Note, accrued and unpaid interest thereon not to
exceed the maximum amount permitted by law, or both, (y) refunded to the payor
thereof or (z) any combination of the foregoing;
(iv)the applicable interest rate or rates provided for herein shall be
automatically subject to reduction to the maximum lawful rate allowed to be
contracted for in writing under the applicable usury laws of the aforesaid
State, and this Note, the Mortgage and the other Security Documents shall be
deemed to have been, and shall be, reformed and modified to reflect such
reduction in such interest rate or rates; and
(v) Maker shall not have any action or remedy against Payee for any
damages whatsoever or any defense to enforcement of this Note, Mortgage or any
other Security Document arising out of the payment or collection of any
Excess Interest.
(l)Upon any endorsement, assignment, or other transfer of this Note by
Payee or by operation of law, the term "Payee," as used herein, shall mean such
endorsee, assignee, or other transferee or successor to Payee then becoming the
holder of this Note. This Note shall inure to the benefit of Payee and its
Loan No. 55-9506015
successors and assigns and shall be binding upon the undersigned and its
successors and assigns. The term "Maker" as used herein shall include the
respective successors and assigns, legal and personal representatives,
executors, administrators, devisees, legatees and heirs of Maker.
(m) Any notice, demand or other communication which any party may
desire or may be required to give to any other party shall be in writing and
shall be given as provided in the Mortgage.
(n) To the extent that Maker makes a payment or Payee receives any
payment or proceeds for Maker's benefit, which are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver, custodian or any other party
under any bankruptcy law, common law or equitable cause, then, to such extent,
the obligations of Maker hereunder intended to be satisfied shall be revived
and continue as if such payment or proceeds had not been received by Payee.
(o) Maker shall execute and acknowledge (or cause to be executed
and acknowledged) and deliver to Payee all documents, and take all actions,
reasonably required by Payee from time to time to confirm the rights created or
now or hereafter intended to be created under this Note and the Security
Documents, to protect and further the validity, priority and enforceability of
this Note and the Security Documents, to subject to the Security Documents any
property of Maker intended by the terms of any one or more of the Security
Documents to be encumbered by the Security Documents, or otherwise carry out the
purposes of the Security Documents and the transactions contemplated thereunder;
provided, however, that no such further actions, assurances and confirmations
shall increase Maker's obligations under this Note.
(p) No modification, amendment, extension, discharge, termination or
waiver (a "Modification") of any provision of this Note, or any one or more of
the other Security Documents, nor consent to any departure by Maker therefrom,
shall in any event be effective unless the same shall be in a writing signed by
the party against whom enforcement is sought, and then such waiver or consent
shall be effective only in the specific instance, and for the purpose, for
which given. Except as otherwise expressly provided herein, no notice to, or
demand on, Maker shall entitle Maker to any other or future notice or demand
in the same, similar or other circumstances. Payee does not hereby agree to,
nor does Payee hereby commit itself to, enter into any Modification.
(q) Maker hereby expressly and unconditionally waives, in connection
with any suit, action or proceeding brought by Payee on this Note, any and
every right it may have to (a) a trial by jury, (b) interpose any counterclaim
therein (other than a counterclaim which can only be asserted in the suit,
action or proceeding brought by Payee on this Note and cannot be maintained in
a separate action) and (c) have the same consolidated with any other or separate
suit, action or proceeding.
Loan No. 55-9506015
(r) Notwithstanding any provision to the contrary in the Mortgage or
this Note, Payee shall not have any recourse to any asset of Maker or its
partners other than the Mortgaged Property in order to satisfy the
indebtedness for payment of the principal and interest evidenced by this Note,
and Payee's sole recourse for satisfaction of the payment of principal and
interest evidenced by this Note shall be to exercise its rights against
the Mortgaged Property encumbered by the Mortgage and the other collateral
securing this Note. The foregoing sentence shall not be deemed or construed
to be a release of the indebtedness evidenced by this Note or in any way
impair, limit or otherwise affect the lien of the Mortgage or any such other
instrument securing repayment of this Note or prevent Payee from naming Maker,
its partners, or their successors or assigns as a defendant to any action to
enforce any remedy for default so long as there is no personal or deficiency
money judgment sought or entered against Maker, its partners, or their
successors or assigns for payment of principal and interest evidenced by this
Note. Notwithstanding the foregoing provisions of this paragraph, it is
expressly understood and agreed that the aforesaid limitation of liability
shall no way affect or apply to Maker's or its partners' continued personal
liability for the payment to Payee of:
(i) any loss or damage occurring by reason of all or any part
of the Mortgaged Property being encumbered by a voluntary lien (other than
the Mortgage) granted by Maker;
(ii) any Rents (as defined in the Mortgage), issues, profits
and/or income collected by Maker in excess of normal and verifiable operating
expenses from the Mortgaged Property after default by Maker hereunder, under the
Mortgage or under any other instrument securing or referring to this Note;
(iii) unrefunded security deposits made by tenants of the
Mortgaged Property;
(iv) payment of Taxes, as defined in Section 5 of the Mortgage,
and insurance premiums, payment of which is required to be made by Maker under
the Mortgage;
(v) Rents, security deposits with respect to leases of the
Mortgaged Property, insurance proceeds, condemnation awards and any other
payments or consideration which Maker receives and to which Payee is entitled
pursuant to the terms of the Mortgage or of any other Security Document;
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(vi) damage to the Mortgaged Property from waste committed or
permitted by Maker;
(vii) loss or damage occurring by reason of the failure of Maker
to comply with any of the provisions of Section 35 of the Mortgage;
(viii) any loss or claim incurred by or asserted against Payee as
a result of fraud or misrepresentation by Maker or any of the partners thereof
with respect to any certification, representation or warranty made by Maker or
such other persons to Payee herein or in any of the Security Documents;
(ix) all indebtedness and obligations arising under or pursuant
to that certain Environmental Indemnity dated of even date herewith executed by
Maker, the general partner of Maker and McNeil Real Estate Fund XXI, L.P. for
the benefit of Payee; and
(x) reasonable attorney's fees incurred by Payee in connection
with suit filed on account of any of the foregoing clauses (i) through (ix).
IN WITNESS WHEREOF, Maker has caused this Note to be executed and delivered
as of the day and year first above written.
WOODCREEK FUND XXI, L.P., a Texas limited partnership
By: Woodcreek Fund XXI Corp., a Delaware corporation, General Partner
By:
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Name:
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Title:
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Loan No. 55-9506015
APPENDIX 1
Calculation of Prepayment Premium
The prepayment premium shall be equal to the greater of (A) one percent
(1%) of the portion of the principal amount of this Note being repaid or (B) the
product of (i) a fraction whose numerator is an amount equal to the portion of
the principal balance of this Note being prepaid and whose denominator is the
entire outstanding principal balance of this Note on the date of such prepayment
(after subtracting the amount of any scheduled principal payment due on such
Payment Date), multiplied by (ii) an amount equal to the remainder obtained by
subtracting (x) an amount equal to the entire outstanding principal balance of
this Note as of the date of such prepayment (after subtracting the amount of any
scheduled principal payment due on such Payment Date) from (y) the present value
as of the date of such prepayment of the remaining scheduled payments of
principal and interest on this Note (including any final installment of
principal payable on the Maturity Date) determined by discounting such payments
at the Discount Rate (as hereinafter defined).
For purposes of this Note:
(x) "Discount Rate" shall mean the rate which, when compounded monthly, is
equivalent to the Treasury Rate (defined below); and
(y) "Treasury Rate" shall mean the yield calculated by the linear
interpolation of the yield, as reported in Federal Reserve Statistical
Release H.15-Selected Interest Rates under the heading "U.S.
government securities/Treasury constant maturities" for the week
ending prior to the date of the relevant prepayment of this Note, of
U.S. Treasury constant maturities with a maturity date (one longer
and one shorter) most nearly approximating the Maturity Date of this
Note. In the event Release H.15 is no longer published, the Payee
shall select a comparable publication to determine the Treasury Rate.
Loan No. 55-9506015
EXHIBIT 1
Amounts due on this note shall be payable to Fleet Real Estate Capital,
Inc. at the following address:
Fleet Real Estate Capital, Inc.
4275 Executive Square
Suite 200
La Jolla, CA 92037
Loan No.: 55-9506015