EXHIBIT 10.3
LOAN NO.: 94-0950936
PROMISSORY NOTE
$100,000,000.00 Southfield, Michigan
September 9, 2005
FOR VALUE RECEIVED, TABB Realty, LLC, a Michigan limited liability company
("Borrower"), having its principal place of business at 41605 Ann Arbor Road,
Plymouth, Michigan 48170 promises to pay to the order of PNC Bank, National
Association ("Lender"), at the following address: 10851 Mastin, Suite 300,
Overland Park, Kansas 66210, or such other place as the holder hereof may from
time to time designate in writing, the principal sum of One Hundred Million and
No/100 Dollars ($100,000,000.00) in lawful money of the United States of
America, with interest thereon to be computed from the date of disbursement
under this Promissory Note (the "Note") at the Applicable Interest Rate
(hereinafter defined), and to be paid in installments as follows:
A. A payment, on the date of disbursement, representing interest from the
date of disbursement through the last day of the calendar month in
which such disbursement is made;
B. Except as provided in Section 21(j) below, a constant payment of
$690,148.46 (the "Monthly Debt Service Payment")(based upon a twenty
(20) year amortization schedule assuming a 360 day year consisting of
12 months of 30 days each) on the first day of November, 2005 and on
the first day of each calendar month thereafter up to and including
the first day of September, 2015; and
C. The balance of said principal sum, all unpaid interest thereon and all
other amounts owed pursuant to this Note, the Security Instruments
(hereinafter defined), the Other Security Documents (hereinafter
defined), or otherwise in connection with the loan evidenced by this
Note (the "Loan") shall be due and payable on the first day of
October, 2015 (the "Maturity Date").
All payments to be made by Borrower to Lender shall be deemed received by
Lender only upon Lender's actual receipt of same.
1. Applicable Interest Rate. Interest accruing on the principal sum of this
Note shall be calculated based upon a per annum interest rate divided by 360
days resulting in a per diem interest amount that will accrue for each calendar
day in a year of 365 days (366 days in a leap year). The term "Applicable
Interest Rate" as used in this Note shall mean, from the date of this Note
through and including the Maturity Date, a rate of Five and 54/100 percent
(5.54%) per annum (also sometimes referred to as the "Initial Interest Rate").
2. Application. All payments on this Note shall be applied at any time and
from time to time in the following order: (i) the payment or reimbursement of
any expenses (including but not limited to late charges), costs or obligations
(other than the principal hereof and interest hereon) for which Borrower shall
be obligated or Lender entitled pursuant to the provisions hereof or of the
Security Instruments or the Other
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Security Documents, (ii) the payment of accrued but unpaid interest thereon,
(iii) the payment of unpaid escrow amounts required herein, in the Security
Instruments or in the Other Security Documents, and (iv) the payment of all or
any portion of the principal balance then outstanding hereunder, in either the
direct or inverse order of maturity, at Lender's option.
3. Late Charge. If any part of the Debt (hereinafter defined) is not
actually received by Lender by close of business on the fifth (5th) day after
the date on which it was due, Borrower shall pay to Lender an amount (the "Late
Charge") equal to the lesser of five percent (5%) of such unpaid portion of the
missed payment or the maximum amount permitted by applicable law, 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. All
such Late Charges shall be automatically due and payable without notice or
demand and shall be secured by the Security Instruments and the Other Security
Documents.
4. Security; Defined Terms; Incorporation by Reference. This Note is
secured by the Security Instruments and the Other Security Documents. The term
"Security Instrument" as used in this Note shall mean each of the (i)Mortgage,
Security Agreement, Assignment of Leases and Rents and Fixture Filing
encumbering certain property located at 7150 Jefferson Metro Parkway, McCalla,
Jefferson County, Alabama (the "Alabama Property"), (ii) the Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Filing encumbering certain
property located at 4211 Amberjack Boulevard, Plant City, Hillsborough County,
Florida (the "Florida Property"), (iii) the Mortgage, Security Agreement,
Assignment of Leases and Rents and Fixture Filing encumbering certain property
located at 4101 Pardue Road, Pineville, Rapides Parish, Louisiana (the
"Louisiana Property"), (iv) the Mortgage, Security Agreement, Assignment of
Leases and Rents and Fixture Filing encumbering certain property located at 3310
West Springfield, Champaign, Champaign County, Illinois (the "Illinois
Property"), (v) the Mortgage, Security Agreement, Assignment of Leases and Rents
and Fixture Filing encumbering certain property located at 108 Industrial Drive,
East Longmeadow, Hampden County, Massachusetts (the "Massachusetts
Property"),(vi) the Mortgage, Security Agreement, Assignment of Leases and Rents
and Fixture Filing encumbering certain property located at 500 North Dunham
Street, Dundee, Monroe County, Michigan (the "Dundee Property"),(vii) the
Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing
encumbering certain property located at 41605 Ann Arbor Road, Plymouth, Wayne
County, Michigan (the "Plymouth Property"), (viii) the Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Filing encumbering certain
property located at 1351 Hix Road, Westland, Wayne County, Michigan (the
"Westland Property"), (ix) the Mortgage, Security Agreement, Assignment of
Leases and Rents and Fixture Filing encumbering certain property located at
18015 State Route #65, Jackson Center, Shelby County, Ohio (the "Route #65
Property"), (x) the Mortgage, Security Agreement, Assignment of Leases and Rents
and Fixture Filing encumbering certain property located at 300 Washington
Street, Jackson Center, Shelby County, Ohio (the "Washington Street Property"),
(xi) the Mortgage, Security Agreement, Assignment of Leases and Rents and
Fixture Filing encumbering certain property located at 435 Rousch Road, Lima,
Allen County, Ohio (the "Lima Property"), (xii) the Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Filing encumbering certain
property located at 850 West Smith Road, Medina, Medina County, Ohio (the
"Medina Property"), (xiii) the Deed of Trust, Security Agreement, Assignment of
Leases and Rents and Fixture Filing encumbering certain property located at 3201
Miller Park, Garland, Dallas County, Texas (the "Garland Property") and (xiv)the
Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture
Filing encumbering certain property located at 222 Kerry Street, Highlands,
Harris County, Texas (the "Highland Property") which secure the Debt (sometimes
referred to individually as an "Individual Security Instrument" and sometimes
referred to collectively as the "Security Instruments". The term "Other Security
Documents" means all documents other than this Note or the Security Instruments
now or hereafter executed
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and/or delivered by Borrower and/or others and to or in favor of Lender, which
wholly or partially secure, evidence or guarantee payment of the Debt, provide
for any indemnity in favor of or payment to Lender related to the Debt, this
Note or the Mortgaged Property (as defined in paragraph 21(d) below), provide
for any escrow/holdback arrangements or for any actions to be completed by
Borrower subsequent to the date hereof, or are otherwise related to the loan
evidenced by this Note including, without limitation, the Lockbox Agreement (as
defined in paragraph 21(a)(i) below). All amounts due and payable under this
Note, together with all sums due under the Security Instruments and the Other
Security Documents, including any applicable Prepayment Consideration
(hereinafter defined) and all applicable attorney fees and costs, are
collectively referred to herein as the "Debt." Where appropriate, the singular
number shall include the plural, the plural shall include the singular, and the
words "Lender" and "Borrower" shall include their respective successors,
assigns, heirs, personal representatives, executors and administrators.
5. Prepayment/Defeasance.
(a) When Permitted. Except as provided in Section 21(j) below, prior to
July 1, 2015 (the "Early Payment Date"), Borrower shall not have the right to
prepay all or any portion of the Debt at any time during the term of this Note
(except for any prepayment permitted under the Security Instruments in the event
of a casualty or condemnation). No Prepayment Consideration (hereinafter
defined) will be due from any prepayment of this Note (in whole but not in part)
on or after the Early Payment Date. In the event of a prepayment on or after
such date, Borrower shall pay, together with the amount of such prepayment, an
amount equal to (i) all accrued and unpaid interest, and (ii) any other sums due
under this Note, the Security Instruments or any Other Security Document.
Additionally, any such prepayment not actually received by Lender before 5:00
p.m., central time, on the 5th day of any calendar month must also include the
interest which would have accrued on the amount of such prepayment during the
entire calendar month in which the prepayment is made.
(b) Notice. Borrower may give written notice to Lender specifying the date,
which date must be on or after the Early Payment Date, on which a full
prepayment of the Debt is to be made (the date of any prepayment hereunder,
whether pursuant to such notice or not, and whether voluntary or involuntary,
being herein called the "Prepayment Date"). Lender shall receive this notice not
more than sixty (60) days and not less than thirty (30) days prior to the
Prepayment Date. If any such notice of prepayment is given, the entire Debt,
including any applicable Prepayment Consideration (as defined below), shall be
due and payable on the Prepayment Date.
(c) Prepayment After Event of Default. If following the occurrence of any
Event of Default, Borrower shall tender payment of an amount sufficient to
satisfy the Debt at any time prior to or after a sale of the Mortgaged Property,
either through foreclosure or the exercise of the other remedies available to
Lender under the Security Instruments or the Other Security Documents, such
tender by Borrower shall be deemed to be a voluntary prepayment under this Note
in the amount tendered and in such case Borrower shall also pay to Lender, with
respect to the amount tendered, the applicable Prepayment Consideration set
forth in this Note, which Prepayment Consideration shall be immediately due and
payable. Lender shall not be obligated to accept any such prepayment of this
Note unless it is accompanied by an amount (the "Prepayment Consideration")
equal to the greater of: (x) one percent (1%) of the outstanding principal
balance of this Note at the time of prepayment; or (y) the Yield Maintenance
Amount (hereinafter defined).
Lender shall not be obligated to accept any such tender unless it is
accompanied by all Prepayment
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Consideration due in connection therewith. Borrower acknowledges that the
Prepayment Consideration is a bargained for consideration and not a penalty, and
Borrower recognizes that Lender would incur substantial additional costs and
expenses in the event of a prepayment of the Debt and that the Prepayment
Consideration compensates Lender for such costs and expenses (including without
limitation, the loss of Lender's investment opportunity during the period from
the date such tender is accepted until the Maturity Date). Borrower agrees that
Lender shall not, as a condition to receiving the Prepayment Consideration, be
obligated to actually reinvest the amount prepaid in any treasury obligation or
in any other manner whatsoever. Except as otherwise set forth in the Security
Instruments, no Prepayment Consideration will be due for involuntary prepayments
resulting from any Casualty (as defined in each of the Security Instruments) or
Condemnation (as defined in each of the Security Instruments).
Yield Maintenance Amount. The "Yield Maintenance Amount" shall mean the
present value, as of the Prepayment Date, of the remaining scheduled payments of
principal and interest from the Prepayment Date through the Maturity Date
(including any balloon payment) determined by discounting such payments at the
Discount Rate (hereinafter defined), less the amount of principal being prepaid.
The term "Discount Rate" shall mean the rate which, when compounded monthly, is
equivalent to the Treasury Rate (hereinafter defined) when compounded
semi-annually. The term "Treasury Rate" shall mean the yield calculated by the
linear interpolation of the yields, 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
Prepayment Date, of U.S. Treasury constant maturities with maturity dates (one
longer and one shorter) most nearly approximating the Maturity Date. (In the
event Release H.15 is no longer published, Lender shall select a comparable
publication to determine the Treasury Rate.) Lender shall notify Borrower of the
amount and the basis of determination of the required Prepayment Consideration.
(d) Defeasance. Any provision hereof to the contrary notwithstanding, at
any time during the Defeasance Period (as defined below), Borrower may obtain a
release of the Mortgaged Property from the lien of the Security Instruments in
whole but not in part only upon the satisfaction of the following conditions:
(i) not less than thirty (30) days prior written notice shall be given
to Lender specifying a date (the "Defeasance Date") on which the Defeasance
Collateral (as defined below) is to be delivered, such date being the first
day of the month;
(ii) all accrued and unpaid interest and all other sums due under this
Note, the Security Instruments and the Other Security Documents up to the
Defeasance Date, including, without limitation, all reasonable costs and
expenses incurred by Lender or its agents in connection with such
defeasance, including, without limitation, any legal fees and expenses
incurred in connection with obtaining and reviewing the Defeasance
Collateral, the preparation of the Defeasance Security Agreement (as
defined below) and related documentation, accountant fees, and investment
advisor fees, all of which shall be paid in full on or prior to the
Defeasance Date;
(iii) no Event of Default, and no event or condition that, with the
giving of notice or passage of time or both, would constitute an Event of
Default, shall exist either at the time Borrower gives notice of the
Defeasance Date to Lender or on the Defeasance Date;
(iv) Borrower shall deliver to Lender on or before the Defeasance Date
direct, non-callable obligations of the United States of America in such
form and amount that
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provide for the payments prior, but as close as possible, to all successive
regularly scheduled monthly payment dates, including the Maturity Date,
with such payments being equal to or greater than the amount of the
corresponding monthly payment required to be paid under this Note
(hereafter, "Scheduled Defeasance Payments") for the balance of the term
hereof and the amount required to be paid on the Maturity Date (such
obligations are collectively and singularly referred to herein as
"Defeasance Collateral") each of which shall be duly endorsed by the holder
thereof as directed by Lender or accompanied by a written instrument of
transfer in form and substance wholly satisfactory to Lender (including,
without limitation, such instrument as may be required by the depository
institution holding such securities or the issuer thereof, as the case may
be, to effectuate book-entry transfers and pledges through the book-entry
facilities of such institution) in order to perfect a first priority
security interest in such Defeasance Collateral in favor of Lender. The
Defeasance Collateral may be purchased by Lender on Borrower's behalf, in
which case Borrower shall deposit with Lender at least three days before
the Defeasance Date a sum sufficient, in Lender's sole and absolute
discretion, to purchase the Defeasance Collateral. Any sums in excess of
the amount necessary to purchase the Defeasance Collateral shall be
remitted to Borrower upon release of the Mortgaged Property.
(v) Borrower shall deliver the following to Lender, at Borrower's
cost, on or prior to the Defeasance Date:
(A) a pledge and security agreement, in form and substance
satisfactory to Lender in its sole discretion, creating a first
priority security interest in favor of Lender in the Defeasance
Collateral (the "Defeasance Security Agreement");
(B) a certificate of Borrower certifying that all of the
requirements hereunder for a defeasance have been satisfied;
(C) an opinion of counsel in form and substance and delivered by
counsel satisfactory to Lender in its sole discretion stating, among
other things, (x) that Lender has a perfected first priority security
interest in the Defeasance Collateral, (y) that the Defeasance
Security Agreement is enforceable against Borrower in accordance with
its terms and (z) that the defeasance will not cause the entity which
holds this Note to fail to qualify as a "real estate mortgage
investment conduit" (a "REMIC"), within the meaning of Section 860D of
the Internal Revenue Code of 1986, as amended from time to time or any
successor statute (the "Code");
(D) an opinion of an independent certified public accountant
acceptable to Lender representing and warranting to Lender that the
Defeasance Collateral will generate monthly amounts equal to or
greater than the Scheduled Defeasance Payments including the amount
required to be paid on the Maturity Date of this Note, and such other
approvals required by Lender;
(E) evidence in writing from each of the Rating Agencies to the
effect that such release will not result in a qualification, downgrade
or withdrawal of any rating in effect immediately prior to the
Defeasance Date for any securities or "Pass-Through Certificates"
issued pursuant to the terms of a trust and servicing agreement in the
event that this Note or any interest therein is included in a REMIC or
other securitization vehicle;
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(F) such other certificates, opinions, documents or instruments
as Lender may reasonably require;
(G) upon approval by Lender of the schedule of Defeasance
Collateral to be delivered to Lender, Borrower shall (i) pay Lender a
nonrefundable fee, in an amount reasonably determined by Lender, as
compensation for the review, analysis and processing of the defeasance
request; and (ii) if required by Lender, deposit with Lender an amount
estimated by Lender to be sufficient to fund all other fees, costs and
expenses related to the defeasance, including Lender's reasonable
attorneys' fees and expenses and rating agency fees, if any and
expenses together with all expenses and costs associated with the
release of the lien on the Mortgaged Property. Borrower shall be
responsible for all fees, costs and expenses associated with the
defeasance which, if not covered by the above deposit, shall be paid
to Lender no later than the Defeasance Date;
(H) written approval from the Rating Agencies of the defeasance;
and
(I) a newly issued non-consolidation opinion in form and
substance and issued by counsel acceptable to Lender and the Rating
Agencies.
Upon compliance with the foregoing requirements relating to the delivery of
the Defeasance Collateral, the Mortgaged Property shall be released from the
lien of the Security Instruments and the Defeasance Collateral shall constitute
collateral which shall secure this Note and the Debt. No partial Defeasance of
the Mortgaged Property shall be permitted.
The "Defeasance Period" shall mean the period of time: (1) commencing on
the date which is the later to occur of: (A) two (2) years after the "start-up
day", within the meaning of Section 860(G)(a)(9) of the Code, of the REMIC that
holds this Note; and (B) three (3) years after the date of the first regularly
scheduled monthly payment due hereunder, and (2) ending on the Early Payment
Date. The "Rating Agencies" shall mean, collectively, Standard and Poor's
Ratings Services, Moody's Investors Service, Inc., and Fitch ICBA, Inc., and
their respective successors and assigns, to the extent each of the foregoing
performed credit rating services for the REMIC or other securitization vehicle
which owns this Note.
(e) Successor Borrower. In connection with a defeasance under this Section,
Borrower shall establish or designate a successor entity (the "Successor
Borrower") which shall be a single purpose entity approved by Lender in its sole
discretion. Borrower shall transfer and assign all obligations, rights and
duties under and to this Note together with the Defeasance Collateral to such
Successor Borrower. Such Successor Borrower shall assume the obligations under
this Note and the Security Instruments and Borrower shall be relieved of its
obligations under such documents except for any such representations that
specifically survive the defeasance. Borrower shall pay $1,000 to any such
Successor Borrower as consideration for assuming the obligations under this Note
and the Security Instruments. Borrower shall pay all costs and expenses incurred
by Lender, including Lender's attorneys' fees and expenses, incurred in
connection with establishment of the Successor Borrower.
(f) Defeasance Collateral Account. All cash from interest and principal
payments paid on the Defeasance Collateral shall be paid over to Lender for each
Scheduled Defeasance Payment and applied first to accrued and unpaid interest
and then to principal. Any cash from interest and principal paid on the
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Defeasance Collateral not needed to pay accrued and unpaid interest or principal
shall be retained in a designated account established by Borrower or Successor
Borrower as the case may be, (the "Defeasance Collateral Account") which shall
constitute additional collateral for the loan evidenced hereby. The Defeasance
Collateral Account shall contain only cash from interest and principal paid on
the Defeasance Collateral. Borrower or Successor Borrower, as applicable, shall
be the owner of the Defeasance Collateral Account and shall report all income
accrued thereon for federal, state and local income tax purposes and shall pay
all costs and expenses associated with opening and maintaining the account and
may pay all costs and expenses associated with maintaining the Successor
Borrower from such account. Lender shall have no responsibility to fund any
Scheduled Defeasance Payments and shall not be liable in any way by reason of
any insufficiency in the Defeasance Collateral Account. Upon an assumption by
Successor Borrower acceptable to Lender, Borrower shall be relieved of its
obligations under this Note and the Defeasance Security Agreement and, to the
extent such documents relate to the Mortgaged Property, the Other Security
Documents.
(g) Release of Security Instruments Following Defeasance. Upon compliance
with the requirements hereunder for a defeasance, the Mortgaged Property shall
be released from the lien of the Security Instruments and the Other Security
Documents, and the Defeasance Collateral shall constitute collateral securing
this Note. Lender will, at Borrower's expense, execute and deliver any
agreements reasonably requested by Borrower to release the lien of the Security
Instruments from the Mortgaged Property.
(h) Purchase of Defeasance Collateral. In the event of purchase by Lender
of the Defeasance Collateral, such purchase may, in Lender's sole and absolute
discretion be through an affiliate of Lender or a third party entity. Borrower
shall be responsible for the payment of any brokerage or other transaction fees
in connection with such purchase.
6. Default. An "Event of Default" shall occur if:
(a) Borrower fails to make the full and punctual payment of any amount
payable hereunder or under any of the Security Instruments or Other Security
Documents, which failure is not cured on or before the fifth (5th) day after the
date of written notice from Lender to Borrower of such failure;
(b) Borrower fails to pay the entire outstanding principal balance
hereunder, together with all accrued and unpaid interest, on the date when due,
whether on the Maturity Date, upon acceleration or prepayment or otherwise; or
(c) an Event of Default (as defined in any of the Security Instruments or
any of the Other Security Documents) has occurred under any of the Security
Instruments and/or Other Security Documents.
7. Acceleration. The whole of the Debt, including without limitation, the
principal sum of this Note, all accrued interest and all other sums due under
this Note, the Security Instruments and the Other Security Documents, together
with any applicable Prepayment Consideration, shall become immediately due and
payable at the option of Lender, without notice, at any time following the
occurrence of an Event of Default.
8. Default Interest. Upon the occurrence of an Event of Default (including
without limitation, the failure of Borrower to pay the Debt in full on the
Maturity Date), Lender shall be entitled to receive and
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Borrower shall pay interest on the entire unpaid principal balance at the rate
(the "Default Rate") equal to the greater of: (a) four percent (4%) above the
Applicable Interest Rate; or (b) four percent (4%) above the Prime Rate
(hereinafter defined) in effect at the time of the occurrence of the Event of
Default; provided, however, that notwithstanding the foregoing, in no event
shall the Default Rate exceed the Maximum Rate (hereinafter defined). The term
"Prime Rate" shall mean the prime rate reported in the Money Rates section of
The Wall Street Journal for the date (the "Default Rate Calculation Date") upon
which the Event of Default occurred, or if no publication occurs upon such date,
then the date of publication immediately preceding the date of the Event of
Default. In the event that The Wall Street Journal should cease or temporarily
interrupt publication, the term "Prime Rate" shall mean the daily average prime
rate published upon the Default Rate Calculation Date in another business
newspaper, or business section of a newspaper, of national standing chosen by
Lender. In the event that a prime rate is no longer generally published or is
limited, regulated or administered by a governmental or quasi-governmental body,
then Lender shall select a comparable interest rate index which is readily
available and verifiable to Borrower but is beyond Lender's control. The Default
Rate shall be computed from the occurrence of the Event of Default until the
actual payment in full of the Debt. This charge shall be added to the Debt, and
shall be deemed secured by the Security Instruments. This clause, however, shall
not be construed as an agreement or privilege to extend the Maturity Date, nor
as a waiver of any other right or remedy accruing to Lender by reason of the
occurrence of any Event of Default.
9. Attorney Fees. In the event that Lender employs attorney(s) to collect
the Debt, to enforce the provisions of this Note or to protect or foreclose the
security herefor, Borrower agrees to pay Lender's attorney fees and
disbursements, whether or not suit be brought. Such fees shall be immediately
due and payable.
10. Limit of Validity. This Note is subject to the express condition that
at no time shall Borrower be obligated or required to pay interest or other
charges on the Debt at a rate which may subject Lender to civil or criminal
liability as a result of such rate exceeding the maximum interest rate which
Borrower is permitted to pay by applicable law (the "Maximum Rate"). If by the
terms of this Note, Borrower is at any time required or obligated to pay
interest or other charges on the Debt at a rate in excess of the Maximum Rate,
the rate of interest due under this Note shall be deemed to be immediately
reduced to the Maximum Rate and any previous payments in excess of the Maximum
Rate shall be deemed to have been payments in reduction of principal and not on
account of the interest due hereunder.
11. No Oral Amendments. This Note may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act or failure to
act on the part of Borrower or Lender, but only by an agreement in writing
signed by the party against whom enforcement of any modification, amendment,
waiver, extension, change, discharge or termination is sought.
12. Exculpation. Subject to the provisions of this Section, Borrower's
liability under this Note, the Security Instruments or the Other Security
Documents shall only extend to the Mortgaged Property and other collateral given
to secure the Debt, and Lender shall not enforce such liability against any
other asset, property or funds of Borrower; provided, however, the foregoing
shall not:
(a) impair the right of Lender to bring suit and obtain personal, recourse
judgments against any person or entity (including Borrower) relating to any
losses sustained by Lender in connection with any fraud, intentional
misrepresentation, waste, or misappropriation of tenant security deposits or
rents collected more than one (1) month in advance by Borrower;
(b) impair the right of Lender to name, and obtain a judgment against any
person or entity
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(including Borrower) to the extent required by law to either obtain a judgment
of specific performance with respect to any of the provisions of this Note, the
Security Instruments or any of the Other Security Documents, or to foreclose the
Security Instruments and obtain title to the Mortgaged Property and other
collateral given to secure the Debt;
(c) affect the validity or enforceability of, or impair the right of Lender
to bring suit and obtain personal, recourse judgments against any person or
entity (including Borrower) to enforce any guaranty, indemnity or release of
liability made by such person or entity (whether made in this Note, the Security
Instruments, any of the Other Security Documents or in any other separate
agreement);
(d) impair the right of Lender to obtain the appointment of a receiver;
(e) impair the enforcement of any Assignments of Leases and Rents executed
in connection herewith; or
(f) affect the validity or enforceability of, or impair the right of Lender
to bring suit and obtain personal, recourse judgments against any person or
entity (including Borrower) relating to any losses sustained by Lender in
connection with any of the provisions of this Note, the Security Instruments or
any of the Other Security Documents requiring that: (i) any person or entity
maintain any insurance over any of the Mortgaged Property, or (ii) any insurance
proceeds or condemnation awards be paid to Lender; or
(g) impair the right of Lender to bring suit and obtain personal, recourse
judgments against any person or entity (including Borrower) for the full amount
of the Debt if the Mortgaged Property or any part thereof shall become an asset
in: (i) a voluntary bankruptcy or insolvency proceeding, or (ii) an involuntary
bankruptcy or insolvency proceeding: (A) which is commenced by any person or
entity controlling, controlled by or under common control with Borrower (the
"Borrowing Group") or (B) in which any member of the Borrowing Group objects to
a motion by Lender for relief from any stay or injunction from the foreclosure
of the Security Instruments or any other remedial action permitted under this
Note, the Security Instruments or any of the Other Security Documents.
Items (a) through (g) above are collectively the "Non-Recourse Exceptions".
To the extent Borrower is a general partnership and Lender is required under
applicable law to pursue its remedies against the persons or entities
constituting Borrower, each reference to the phrase "(including Borrower)" in
the Non-Recourse Exceptions shall be deemed to read "(including Borrower or any
person or entity constituting Borrower)". Borrower's liability under the
Non-Recourse Exceptions, excepting item (g), shall be limited to the amount of
any losses or damages sustained by Lender in connection with such Non-Recourse
Exceptions. Nothing herein shall be deemed to be a waiver of any right which
Lender may have under Sections 506(a), 506(b), 1111(b) or any other provisions
of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt
secured by the Security Instruments or to require that all of the Mortgaged
Property and other collateral given to secure the Debt shall continue to secure
all of the Debt.
13. Assignment. Lender, and its successors, endorsees and assigns, may
freely transfer and assign this Note. Borrower's right to transfer its rights
and obligations with respect to the Debt, and to be released from liability
under this Note, shall be governed by the Security Instruments.
14. Applicable Law; Jurisdiction. This Note shall be governed and construed
in accordance with the laws of the state in which the real property encumbered
by the Security Instruments are located. Borrower hereby submits to personal
jurisdiction in the state courts located in said state and the federal courts of
the
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United States of America located in said state for the enforcement of Borrower's
obligations hereunder and waives any and all personal rights under the law of
any other state to object to jurisdiction within such state for the purposes of
any action, suit, proceeding or litigation to enforce such obligations of
Borrower.
15. Joint and Several Liability. If Borrower consists of more than one
person or entity, the obligations and liabilities of each such person or entity
shall be joint and several.
16. Waiver of Presentment, Etc. Borrower and all others who may become
liable for the payment of all or any part of the Debt do hereby severally waive
presentment and demand for payment, notice of dishonor, protest, notice of
protest, and notice of intent to accelerate the maturity hereof (and of such
acceleration), except to the extent that specific notices are required by this
Note, the Security Instruments or the Other Security Documents.
17. No Waiver. Any failure by Lender to insist upon strict performance by
Borrower of any of the provisions of this Note, the Security Instruments or the
Other Security Documents shall not be deemed to be a waiver of any of the terms
or provisions of this Note, the Security Instruments or the Other Security
Documents, and Lender shall have the right thereafter to insist upon strict
performance by Borrower of any and all of the terms and provisions of this Note,
the Security Instruments or the Other Security Documents.
18. Notices. Except as otherwise specified herein, any notice, consent,
request or other communication required or permitted to be given hereunder shall
be in writing, addressed to the other party as set forth below (or to such other
address or person as either party or person entitled to notice may by notice to
the other party specify), and shall be: (a) personally delivered; (b) delivered
by Federal Express or other comparable overnight delivery service; or (c)
transmitted by United States certified mail, return receipt requested with
postage prepaid; to:
Lender: PNC Bank, National Association
10851 Mastin, Suite 300
Overland Park, Kansas 66210
Attention: Closing Department
Borrower: TABB Realty, LLC
41605 Ann Arbor Road
Plymouth, Michigan 48170
Attention: Michael J. Plotzke
Unless otherwise specified, all notices and other communications shall be deemed
to have been duly given on the first to occur of actual receipt of the same or:
(i) the date of delivery if personally delivered; (ii) one (1) business day
after depositing the same with the delivery service if by overnight delivery
service; and (iii) three (3) days following posting if transmitted by mail.
Borrower must prominently display Lender's Loan Number (as set forth on page 1
of this Note) on all notices or communications to Lender.
19. Severability. If any term, covenant or condition of this Note is held
to be invalid, illegal or unenforceable in any respect, this Note shall be
construed without such provision.
20. Time of the Essence. Time shall be of the essence in the performance of
all obligations of Borrower hereunder.
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21. Additional Terms and Provisions. Certain additional and supplemental
terms and provisions of this Note are set forth in this paragraph. The terms and
provisions of this paragraph control and supersede any conflicting terms and
provisions contained in this Note.
(a) Anything herein to the contrary notwithstanding, if Lender determines,
in its sole discretion, at any time during the calendar month
immediately preceding the Maturity Date that the Loan will not be paid
as required on the Maturity Date, Lender shall have the option to, (i)
exercise its rights under this Note, the Security Instruments and the
Other Security Documents to, among other things, foreclose upon the
Mortgaged Property, or (ii) forbear from exercising its rights under
this Note, the Security Instruments and the Other Security Documents
to, among other things, foreclose upon the Mortgaged Property (an
"Optional Lender Forbearance"). In any such event, Lender shall notify
Borrower of its decision and the following shall occur if Lender has
elected to forbear from exercising its rights under this Note, the
Security Instruments and the Other Security Documents :
(i) On the first day of the month immediately following the Maturity
Date and on the first day of each calendar month thereafter,
Borrower shall pay to Lender an amount (each a "Property Cash
Flow Payment Amount") equal to the greater of (a) the Monthly
Debt Service Payment Amount, and (b) Gross Income (as defined in
the Security Agreement and Lockbox Agreement (the "Lockbox
Agreement") executed contemporaneously herewith) received by it
in connection with the Mortgaged Property.
(ii) Each Property Cash Flow Payment Amount paid after the Maturity
Date shall be applied in accordance with the Lockbox Agreement.
Interest accrued at the Adjusted Interest Rate (defined below)
and not paid shall be deferred and added to the indebtedness
evidenced by this Note.
(iii) Lender's decision to forbear from exercising its rights under
this Note, the Security Instruments and the Other Security
Documents shall be revocable at any time by Lender without notice
to Borrower. Upon any such revocation, Lender shall be entitled
to pursue any and all remedies available to it under this Note,
the Security Instruments, the Other Security Documents, at law or
in equity.
(iv) Anything herein to the contrary notwithstanding, Borrower shall
have the right to pay the Loan in full on the Maturity Date.
(b) Paragraph 1 is amended to add the following at the end of said
paragraph: "In the case of an Optional Lender Forbearance as provided
herein, the term "Applicable Interest Rate " shall mean the Adjusted
Interest Rate from and after the Maturity Date through and including
the date this Note is paid in full. The term "Adjusted Interest Rate"
shall mean the greater of (x) the Initial Interest Rate plus five
percent (5.0%); or (y) the Yield Rate on the then-current on-the-run
10-year U.S. Treasury Obligation (the "Specified U.S. Treasury
Security") plus five percent (5.0%). The term "Yield Rate" shall mean
the yield rate for the Specified U.S. Treasury Security as such yield
rate is reported in the Wall Street Journal on the fifth (5th)
business day preceding the Maturity Date. In the event that no such
yield rate is published for the Specified U.S. Treasury Security, then
the nearest equivalent U.S. Treasury Security shall be selected at
Lender's sole discretion, and the yield rate therefor shall be the
"Yield
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Rate". If the publication of such yield rates in the Wall Street
Journal is discontinued, Lender shall determine such yield rates from
another source selected by Lender."
(c) Paragraph 2 is amended to insert the following at the beginning of the
first sentence: "Except as set forth in the Lockbox Agreement (as
defined in Paragraph 21(a)(i) below)."
(d) For purposes hereof the term "Mortgaged Property" shall mean the
"Mortgaged Property" (as defined in the Security Instruments taken
collectively), and the term "Individual Property" shall mean each
"Mortgaged Property" (as defined in each "Individual Security
Instrument"). With respect to Borrower and the Mortgaged Property,
nothing contained herein or in any of the Security Instruments or the
other Security Documents shall be construed as requiring Lender to
resort to any Individual Property for the satisfaction of any of the
Debt in preference or priority to any other Individual Property, and
Lender may seek satisfaction out of all of the Mortgaged Property or
any part thereof, in its absolute discretion in respect of the Debt.
In addition, upon the occurrence of an Event of Default prior to the
Maturity Date and at anytime thereafter, Lender shall have the right
from time to time to partially foreclose the Security Instruments in
any manner and for any amounts secured by the Security Instruments
then due and payable as determined by Lender in its sole discretion
including, without limitation, the following circumstances: (i) in the
event Borrower defaults beyond any applicable grace period in the
payment of one or more scheduled payments of principal and interest,
Lender may foreclose one or more of the Security Instruments to
recover such delinquent payments, or (ii) in the event Lender elects
to accelerate less than the entire outstanding principal balance of
the Loan, Lender may foreclose one or more of the Security Instruments
to recover so much of the principal balance of the Loan as Lender may
accelerate and such other sums secured by one or more of the Security
Instruments as Lender may elect. Notwithstanding one or more partial
foreclosures, the Mortgaged Property shall remain subject to the
Security Instruments to secure payment of sums secured by the Security
Instruments and not previously recovered.
(e) Borrower acknowledges that Lender has made the Loan to Borrower upon
the security of its collective interest in the Mortgaged Property and
in reliance upon the aggregate of each Individual Property
constituting the Mortgaged Property taken together being of greater
value as collateral security than the sum of each Individual Property
constituting the Mortgaged Property taken separately. Borrower agrees
that : (i) an Event of Default under any of the Security Instruments
shall constitute an Event of Default under this Note and under each of
the other Individual Security Instruments; (ii) an Event of Default
under this Note or the Other Security Documents shall constitute an
Event of Default under each Security Instrument; (iii) each Individual
Security Instrument shall constitute security for the Note as if a
single blanket lien were placed on all of the Mortgaged Property as
security for the Note; and (iv) such cross-defaulting shall in no
event be deemed to constitute a fraudulent conveyance.
(f) The last sentence of section 5(a) is hereby modified to delete "on the
5th day" and to replace said words with, "on or before the 5th day".
(g) Anything herein to the contrary notwithstanding but except as provided
in Section 5(j) and except for a Casualty Release (as defined in the
Security Instruments), Borrower shall not
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have the right to obtain the release of any Individual Property from
the lien of any Security Instrument or the Other Security Documents
pursuant to Paragraph 5(d) unless Borrower simultaneously obtains the
release of all of the Mortgaged Property.
(h) The definition of "Defeasance Period" contained in the penultimate
sentence of Section 5(d) is hereby deleted and replaced with the
following: "The "Defeasance Period" shall mean the period of time: (1)
commencing on the date which is two (2) years after the "start-up
day", within the meaning of Section 860(G)(a)(9) of the Code, of the
REMIC that holds this Note; and (2) ending on the Early Payment Date".
(i) For purposes of this Note, the term "Allocated Loan Amount" shall mean
the portion of the Debt allocated, solely for purposes of performing
certain calculations hereunder, to each Individual Property, as set
forth in Schedule 1 annexed hereto.
(j) The following New Section 5(i) is hereby added to the end of Section
5:
(i) Voluntary Release of No More Than Three (3) Individual
Properties. Borrower may obtain a release of the lien of
Individual Security Instruments (hereinafter an "Individual
Release") encumbering UP TO (BUT NO MORE THAN)THREE (3)
INDIVIDUAL PROPERTIES (each a "Release Property" and collectively
the "Release Properties") prior to the Early Payment Date
provided the following items (1)-(4) are satisfied (which items
(1) - (4) are referred to herein as the "General Release
Criteria"): (1) no Event of Default, and no event or condition
that, with the giving of notice or passage of time or both, would
constitute an Event of Default, shall then exist, (2) TABB
Realty, LLC remains the title owner of all of the Mortgaged
Property with no Transfer or Change in Ownership (as defined in
the Security Instruments) having occurred, (3) THE TOTAL
ALLOCATED LOAN AMOUNT ASSIGNED TO THE RELEASE PROPERTIES DOES NOT
EXCEED IN THE AGGREGATE THE SUM OF $20,000,000.00, and (4) the
conditions set forth in Section 5(i)(A) below are satisfied with
respect to any Individual Release occurring prior to the
Defeasance Period and the conditions set forth in Section 5(i)(B)
below are satisfied with respect to any Individual Release
occurring during the Defeasance Period.
(A) Individual Release Prior to Defeasance Period - Yield
Maintenance. Provided the General Release Criteria are
satisfied and the Defeasance Period has not commenced,
Borrower may obtain an Individual Release of a Release
Property by making a payment to the Lender of an amount
equal to 125% of the Allocated Loan Amount (the "Partial
Prepayment Amount") PLUS prepayment consideration equal to
the Yield Maintenance Amount attributable and calculated
based upon that portion of the Debt equal to the Partial
Prepayment Amount (the "Partial Prepayment Consideration").
Lender shall not be obligated to accept any such tender
unless it is accompanied by all Partial Prepayment
Consideration due in connection therewith. Borrower
acknowledges that the Partial Prepayment Consideration is a
bargained for consideration and not a penalty, and Borrower
recognizes that Lender would incur substantial additional
costs
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and expenses in the event of a prepayment of all or any
portion of the Debt and that the Partial Prepayment
Consideration compensates Lender for such costs and expenses
(including without limitation, the loss of Lender's
investment opportunity during the period from the date such
tender is accepted until the Maturity Date). Borrower agrees
that Lender shall not, as a condition to receiving the
Partial Prepayment Consideration, be obligated to actually
reinvest the amount prepaid in any treasury obligation or in
any other manner whatsoever. Except as otherwise set forth
in the Security Instruments, no Partial Prepayment
Consideration will be due for involuntary prepayments
resulting from any Casualty (as defined in each of the
Security Instruments) or Condemnation (as defined in each of
the Security Instruments). An Individual Release pursuant to
this Section 5(i)(A) shall also satisfy and be subject to
compliance with the following terms and conditions:
(I) Notice. Borrower shall give written notice to
Lender specifying the date on which the Individual
Release is to be made under this Section 5(i)(A)
(the "Individual Property Release Date"). Lender
shall receive this notice not more than sixty (60)
days and not less than thirty (30) days prior to
the Individual Property Release Date. If any such
notice of partial prepayment is given, the Partial
Prepayment Amount, including any Partial
Prepayment Consideration, shall be due and payable
on the Individual Property Release Date, unless
the Borrower provides Lender with at least five
(5) business days prior written notice of its
election to revoke the notice required by this
paragraph;
(II) Rating Agency Approval. Borrower acknowledges that
Lender may require Borrower to and, if Lender so
requires, Borrower shall obtain and deliver to
Lender other documentation evidencing that the
proposed Individual Release will not (i) cause the
then owner of the Note to fail to qualify as a
REMIC (a "REMIC Opinion"); and (ii) result in a
qualification, downgrade or withdrawal of any
credit rating then in effect for any securities or
certificates issued by the then owner of the Note
in connection with a securitization which includes
the Note (a "Rating Agency No-Downgrade Letter");
(III) Borrower Certificate. Lender shall receive a
certificate of Borrower certifying that all of the
requirements hereunder for an Individual Release
have been satisfied;
(IV) Debt Service Coverage Ratio. Upon an Individual
Release contemplated under this Section 5(i)(A),
the Debt Service
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Coverage Ratio, as determined by Lender utilizing
the definitions provided below, for all Individual
Properties to remain encumbered by an Individual
Security Instrument securing this Note (after
giving effect to the Individual Release) on a
collective basis shall be equal to or greater than
1.65:1 for a period of no less than six (6)
calendar months immediately preceding the
Individual Release;
(V) Loan-To-Value Ratio. The loan-to-value ratio, as
determined by Lender, for all Individual
Properties to remain encumbered by an Individual
Security Instrument securing this Note (after
giving effect to the Individual Release) on a
collective basis shall be equal to or less than
65%, based upon new or updated appraisals obtained
by Lender at the expense of Borrower if the Lender
(or loan servicer) shall determine that new or
updated appraisals would be necessary to comply
with generally accepted standards for securitized
commercial loans;
(VI) Costs and Expenses. Borrower shall have paid all
actual third party costs incurred or to be
incurred by Lender in reviewing and documenting
the Individual Release, including all legal,
recording, and title costs which shall include any
amendments or modifications to the title policies
accepted by Lender on or about the closing of the
Loan;
(VII) Delivery of Funds. Any Partial Prepayment Amount
plus applicable Partial Prepayment Consideration
not actually received by Lender before 5:00 p.m.,
central time, on or before the 5th calendar day of
any month must also include the interest which
would have accrued on the amount of such partial
prepayment during the entire calendar month in
which the partial prepayment is made;
(VIII) Reamortization of Loan. Upon Lender's receipt of
the Partial Prepayment Amount plus any Partial
Prepayment Consideration remitted in compliance
with this Section 5(i)(A), Lender shall apply the
Partial Prepayment Amount to the Debt and shall
reamortize the outstanding Debt utilizing: (a) the
Applicable Interest Rate, (b) the sum of the
principal balance of the Debt less the Partial
Prepayment Amount, and (c) a period equal to the
number of calendar months remaining on the
original twenty (20) year amortization period as
of the first day of the calendar month immediately
following Lender's receipt of the Partial
Prepayment Amount; which reamortization
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calculation shall result in a new Monthly Debt
Service Payment which shall commence on the first
day of the calendar month immediately following
Lender's receipt of the Partial Prepayment Amount
plus any Partial Prepayment Consideration.
Borrower shall execute any amendment and/or
restatement of this Note, the Security Instruments
or the Other Security Documents and obtain any
endorsements to the title policies accepted by
Lender upon the closing of the Loan as Lender
shall request to accomplish the Individual Release
and reamortization of the Loan under this section
5 (i)(A);
(IX) Borrower shall simultaneously with the Individual
Release of the Release Property transfer title to
the Release Property to a person(s), party(ies) or
entity(ies) other than Borrower or any person,
party or entity owned or controlled by Borrower
(the "Release Parcel Owner") or, if such person,
party or entity is owned or controlled by
Borrower, Borrower shall deliver to Lender a
non-consolidation opinion letter in form and
substance satisfactory to Lender; and
(X) Upon compliance with foregoing requirements
relating to an Individual Release prior to the
Defeasance Period, the Individual Property subject
to the Individual Release under this section
5(i)(A) shall be released from the lien of the
applicable Individual Security Instrument.
(B) Individual Release During Defeasance Period - Partial
Defeasance. Provided the General Release Criteria are
satisfied, but only during the continuation of the
Defeasance Period, Borrower may obtain an Individual Release
of Release Property by effectuating a partial defeasance (a
"Partial Defeasance")subject to satisfaction of all of the
following terms and conditions:
(I) Notice. Borrower shall provide Lender not less
than thirty (30) days prior written notice
specifying: (i) a date (the "Partial Defeasance
Date") which shall be the first day of a calendar
month) on which Borrower shall have satisfied the
conditions in this Section 5(i)(B) and shall
effect the Partial Defeasance, and (ii) the
Individual Property or Properties sought to be the
subject of the Partial Defeasance;
(II) Borrower shall have paid all accrued and unpaid
interest and all other sums due under this Note,
the Security
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Instruments and the Other Security Documents up to
the Partial Defeasance Date, including, without
limitation, all reasonable costs and expenses
incurred by Lender or its agents in connection
with such Partial Defeasance, including, without
limitation, any legal fees and expenses incurred
in connection with obtaining and reviewing the
Partial Defeasance Collateral (defined below), the
preparation of any Defeasance Security Agreement
and related documentation, accountant fees, and
investment advisor fees, all of which shall be
paid in full on or prior to the Partial Defeasance
Date;
(III) Borrower shall deliver to Lender on or before the
Partial Defeasance Date direct, non-callable
obligations of the United States of America in
such form and amount that provide for the payments
prior, but as close as possible, to all successive
regularly scheduled monthly payment dates,
including the Maturity Date, with such payments
being equal to or greater than the amount of the
corresponding monthly payment required to be paid
under the Defeased Note (as defined below and
hereafter, "Scheduled Partial Defeasance
Payments") for the balance of the term thereof and
the amount required to be paid on the Maturity
Date of the Defeased Note (such obligations are
collectively and singularly referred to herein as
"Partial Defeasance Collateral") each of which
shall be duly endorsed by the holder thereof as
directed by Lender or accompanied by a written
instrument of transfer in form and substance
wholly satisfactory to Lender (including, without
limitation, such instrument as may be required by
the depository institution holding such securities
or the issuer thereof, as the case may be, to
effectuate book-entry transfers and pledges
through the book-entry facilities of such
institution) in order to perfect a first priority
security interest in such Partial Defeasance
Collateral in favor of Lender. The Partial
Defeasance Collateral may be purchased by Lender
on Borrower's behalf, in which case Borrower shall
deposit with Lender at least three days before the
Partial Defeasance Date a sum sufficient, in
Lender's sole and absolute discretion, to purchase
the Partial Defeasance Collateral. Any sums in
excess of the amount necessary to purchase the
Partial Defeasance Collateral shall be remitted to
Borrower upon release of the Individual Property
which is the subject of the Partial Defeasance.
(IV) Borrower shall prepare all necessary documents to
amend and restate this Note and issue two
substitute notes, one
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note having a principal balance equal to 125% of
the Allocated Loan Amount for the Release Property
or Release Properties, as the case may be (the
"Defeased Note") and the other note having a
principal balance equal to the excess of (A) the
original principal amount of the Loan, over (B)
the amount of Defeased Note (the "Undefeased
Note"). The Defeased Note and Undefeased Note
shall have identical terms as the Note except for
the principal balance and except for the monthly
debt service payment. The Defeased Note and the
Undefeased Note shall be cross defaulted and cross
collateralized. A Defeased Note may not be the
subject of any further defeasance;
(V) Rating Agency Approval. Borrower acknowledges that
Lender may require Borrower to and, if Lender so
requires, Borrower shall obtain and deliver to
Lender other documentation evidencing that the
proposed Partial Defeasance will not (i) cause the
then owner of the Note to fail to qualify as a
REMIC (a "REMIC Opinion"); and (ii) result in a
qualification, downgrade or withdrawal of any
credit rating then in effect for any securities or
certificates issued by the then owner of the Note
in connection with a securitization which includes
the Note (a "Rating Agency No-Downgrade Letter");
(VI) Borrower Certificate. Lender shall receive a
certificate of Borrower certifying that all of the
requirements hereunder for a Partial Defeasance
have been satisfied;
(VII) Debt Service Coverage Ratio. Upon a Partial
Defeasance contemplated under this Section
5(i)(B), the Debt Service Coverage Ratio, as
determined by Lender utilizing the definitions
provided below, for all Individual Properties to
remain encumbered by an Individual Security
Instrument securing this Note and/or the
Undefeased Note (after giving effect to the
Partial Defeasance) on a collective basis shall be
equal to or greater than 1.65:1 for a period of no
less than six (6) calendar months immediately
preceding the Partial Defeasance;
(VIII) Loan-To-Value Ratio. The loan-to-value ratio, as
determined by Lender, for all Individual
Properties to remain encumbered by an Individual
Security Instrument securing this Note and/or the
Undefeased Note (after giving effect to the
Individual Release) on a collective basis shall be
equal to or less than 65%, based upon new or
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updated appraisals obtained by Lender at the
expense of Borrower if the Lender (or loan
servicer) shall determine that new or updated
appraisals would be necessary to comply with
generally accepted standards for securitized
commercial loans;
(IX) Borrower shall have delivered to Lender and the
Rating Agencies shall have received from Borrower
with respect to the matters referred to in clause
(VII) of this Section 5(i)(B): (i) statements of
the Net Operating Income (defined below) and debt
service (both on a consolidated basis and
separately for the applicable Individual Property
or Individual Properties which are the subject of
the Partial Defeasance) for the applicable
measuring period and (ii) based on the foregoing
statements of Net Operating Income and Debt
Service, calculations of the debt service coverage
ratio both with and without giving effect to the
proposed Partial Defeasance, and (iii)
calculations of the ratios referred to in such
clause (VII) above, accompanied by a Borrower's
Certificate stating that such statements,
calculations and information are true, correct and
complete in all material respects;
(X) Borrower shall have satisfied all of the
conditions set forth in Section 5(d)(v)(A)-(I) of
this Note with respect to the Partial Defeasance,
Defeased Note, Undefeased Note, Partial Defeasance
Collateral and Scheduled Partial Defeasance
Payments;
(XI) Successor Borrower. In connection with a Partial
Defeasance under this Section, Borrower shall, at
Lender's request, establish a Successor Borrower
which shall be a single purpose entity approved by
Lender in its sole discretion. Borrower shall, at
Lender's request, transfer and assign all
obligations, rights and duties under and to the
Defeased Note together with the Partial Defeasance
Collateral to such Successor Borrower. Such
Successor Borrower shall assume the obligations
under the Defeased Note and the Security
Instruments which are the subject of the Partial
Defeasance and Borrower shall be relieved of its
obligations under such documents except for any
such representations that specifically survive the
Partial Defeasance. Borrower shall pay $1,000 to
any such Successor Borrower as consideration for
assuming the obligations under the Defeased Note
and the Security Instruments which are the subject
of the Partial Defeasance. Borrower shall pay all
costs and expenses incurred by Lender, including
Lender's attorneys' fees and
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expenses, incurred in connection with
establishment of the Successor Borrower;
(XII) Partial Defeasance Collateral Account. All cash
from interest and principal payments paid on the
Partial Defeasance Collateral shall be paid over
to Lender for each Scheduled Partial Defeasance
Payment and applied first to accrued and unpaid
interest and then to principal. Any cash from
interest and principal paid on the Partial
Defeasance Collateral not needed to pay accrued
and unpaid interest or principal shall be retained
in a designated account established by Borrower or
Successor Borrower as the case may be, (the
"Partial Defeasance Collateral Account") which
shall constitute additional collateral for the
Loan. The Partial Defeasance Collateral Account
shall contain only cash from interest and
principal paid on the Partial Defeasance
Collateral. Borrower or Successor Borrower, as
applicable, shall be the owner of the Partial
Defeasance Collateral Account and shall report all
income accrued thereon for federal, state and
local income tax purposes and shall pay all costs
and expenses associated with opening and
maintaining the account and may pay all costs and
expenses associated with maintaining the Successor
Borrower from such account. Lender shall have no
responsibility to fund any Scheduled Partial
Defeasance Payments and shall not be liable in any
way by reason of any insufficiency in the Partial
Defeasance Collateral Account. Upon an assumption
by Successor Borrower acceptable to Lender,
Borrower shall be relieved of its obligations
under the Defeased Note and the Defeasance
Security Agreement;
(XIII) Borrower shall simultaneously with the
Individual Release of the Release Parcel subject
to the Partial Defeasance transfer title to said
Release Parcel to a person(s), party(ies) or
entity(ies) other than Borrower or any person,
party or entity owned or controlled by Borrower
(the "Release Parcel Owner") or, if such person,
party or entity is owned or controlled by
Borrower, Borrower shall deliver to Lender a
non-consolidation opinion letter in form and
substance satisfactory to Lender;
(XIV) Release of Individual Security Instrument
Securing Partially Defeased Individual Property.
Upon compliance with the requirements hereunder
for a Partial Defeasance, the Individual Property
which was the subject of the Partial Defeasance
shall be released from the lien of its respective
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Individual Security Instrument and the Other
Security Documents, and the Partial Defeasance
Collateral shall constitute collateral securing
the Defeased Note. Lender will, at Borrower's
expense, execute and deliver any agreements
reasonably requested by Borrower to release only
the lien of the Individual Security Instrument
from the Individual Property which was the subject
of the Partial Defeasance complying with this
Section 5(i)(B). The Partial Defeasance shall not
in any way affect the Security Instruments which
encumber Individual Properties which were not the
subject of the Partial Defeasance; and
(XV) Purchase of Partial Defeasance Collateral. In the
event of purchase by Lender of the Partial
Defeasance Collateral, such purchase may, in
Lender's sole and absolute discretion be through
an affiliate of Lender or a third party entity.
Borrower shall be responsible for the payment of
any brokerage or other transaction fees in
connection with such purchase.
(k) The following terms shall apply to the defined terms contained in this
Section 21:
(i) For purposes hereof, "debt service coverage ratio" shall mean for
any period the ratio of Net Operating Income to Debt Service.
(ii) For purposes hereof, Debt Service shall mean the amount of
interest and any escrow or reserve deposits and principal
payments due and payable in accordance with this Note, the
Security Instruments or the Other Security Documents during any
applicable period other than at the Maturity Date.
(iii) For purposes hereof, Net Operating Income shall mean the excess
of Operating Income over Operating Expenses for such period, as
such amount may be adjusted by Lender in accordance with Lender's
Underwriting Standards (as defined in the Security Instruments).
(iv) For purposes hereof, Operating Income shall mean, for any period,
all income of Borrower during such period from the operation of
the Mortgaged Property. Operating Income specifically shall
include (i) all amounts payable to Borrower by any person or
entity as rent and other amounts under leases, license
agreements, occupancy agreements, concession agreements or other
agreements relating to the Mortgaged Property (including
reimbursements and percentage rents) up to a maximum occupancy of
95%, (ii) business interruption insurance proceeds, and (iii) all
other amounts which in accordance with generally accepted
accounting principles are included in Borrower's annual financial
statements
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as operating income attributable to the Mortgaged Property.
Notwithstanding the foregoing, Operating Income shall not include
(a) any Insurance Proceeds (as defined in the Security
Instruments, other than business interruption insurance proceeds)
or awards with respect to a Condemnation (as defined in the
Security Instrument) and, in either such case, only to the extent
allocable to the applicable reporting period, (b) any proceeds
resulting from the Transfer (as defined in the Security
Instruments) of all or any portion of the Mortgaged Property, (c)
any rent or similar payments attributable to a period prior to
the date on which the actual payment thereof is due and payable,
(d) any item of income otherwise includable in Operating Income
but paid directly by any tenant to a person or entity other than
Borrower, provided such item of income is an item of expense
(such as payments for utilities paid directly to a utility
company) and is otherwise excluded from the definition of
Operating Expenses, (e) security deposits received from tenants
or other deposits made by patrons of the Mortgaged Property until
forfeited or applied, (f) tips and gratuities (including service
charges added to customer's bill or statement in lieu of
gratuities which are payable to employees), (g) sales taxes,
excise taxes, gross receipt taxes, admission taxes, entertainment
taxes, tourist taxes or charges, and any other taxes collected
directly from tenants, customers, guests or patrons or included
as part of the sales price of any goods or services, unless
included in Operating Expenses, (h) credits, refunds, discounts
or rebates made to tenants, customers, guests or patrons, (i)
sums and credits received in settlement of claims for loss or
damage to merchandise, (j) income from the sale of furnishings,
fixtures or equipment and (k) bad debts. Operating Income shall
be calculated on a cash basis of accounting with normal accrual
adjustments and, except to the extent otherwise provided in this
definition or required by Lender, in accordance with generally
accepted accounting principles.
(v) For purposes hereof, Operating Expenses shall mean for any
period, without duplication, all expenses actually paid or
payable by Borrower during such period in connection with the
operation, management, maintenance, repair and use of the
Mortgaged Property, determined on a cash basis of accounting with
normal accrual adjustments, and except to the extent otherwise
provided in this definition, in accordance with generally
accepted accounting principles. Operating Expenses specifically
shall include (i) all payments required to be made pursuant to
any operating agreements applicable to the Mortgaged Property,
(ii) property management fees (which shall not, in the aggregate,
exceed 4% of Mortgaged Property revenues), incentive fees and
license, advertising and sale expenses, subject
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to provisions set forth below in this definition, (iii)
departmental expenses incurred at departments within the
Mortgaged Property, (iv) administrative and general expenses, (v)
the cost of inventories and fixed asset supplies consumed in the
operation of the Mortgaged Property, (vi) a reasonable reserve
for uncollectible accounts, (vii) costs and fees for independent
professionals, technical consultants, operational experts
(including quality assurance inspectors) or other third parties
retained to perform services required or permitted hereunder or
under any of the other Loan Documents, (viii) cost of attendance
by employees at training and manpower development programs, (ix)
association dues, (x) computer processing charges, (xi)
operational equipment and other lease payments as reasonably
approved by Lender, and (xii) Taxes and Other Charges (as such
terms are defined in the Security Instruments). Notwithstanding
the foregoing, Operating Expenses shall not include (1)
depreciation or amortization, (2) income taxes or other charges
in the nature of income taxes, (3) any expenses (including legal,
accounting and other professional fees, expenses and
disbursements) incurred in connection with the making of the Loan
or the sale, exchange, transfer, financing or refinancing of all
or any portion of the Mortgaged Property or in connection with
the recovery of Insurance Proceeds (as defined in the Security
Instrument) which are applied to prepay the Note, (4) Debt
Service, and (5) any item of expense which would otherwise be
considered within Operating Expenses pursuant to the provisions
above but is paid directly by any tenant or reimbursed by a
tenant to Borrower.
(l) The following sentence is added as the fourth sentence of Paragraph 8:
"The Prime Rate is a reference rate and does not necessarily represent
the lowest or best rate charged by banks including, without
limitation, Lender."
(m) Section 12 is hereby deleted and replaced with the following:
12. Exculpation. Subject to the provisions of this Section, Borrower's
liability under this Note, the Security Instruments or the Other
Security Documents shall only extend to the Mortgaged Property and
other collateral given to secure the Debt, and Lender shall not
enforce such liability against any other asset, property or funds of
Borrower; provided, however, that so long as Borrower owns the
Mortgaged Property, the terms of this Section shall be enforced only
against the Borrower or any entity constituting Borrower. However, the
foregoing shall not:
(a) impair the right of Lender to bring suit and obtain personal,
recourse judgments against any person or entity (including Borrower)
relating to any losses sustained by Lender in connection with any
fraud, intentional misrepresentation, physical waste, or
misappropriation of tenant security deposits or rents collected more
than one (1) month in advance by Borrower;
(b) impair the right of Lender to name, and obtain a judgment
against any person or entity (including Borrower) to the extent
required by law to either obtain a judgment of specific performance
with respect to any of the provisions of this Note, the Security
Instruments or any of the Other Security Documents, or to foreclose
the Security Instruments and obtain title to the Mortgaged Property
and other collateral given to secure the Debt;
(c) affect the validity or enforceability of, or impair the right
of Lender to bring suit and obtain personal, recourse judgments
against any person or entity (including Borrower) to enforce any
guaranty, indemnity or release of liability made by such person or
entity (whether made in this Note,
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the Security Instruments, any of the Other Security Documents or in
any other separate agreement);
(d) impair the right of Lender to obtain the appointment of a
receiver;
(e) impair the enforcement of any Assignments of Leases and Rents
executed in connection herewith; or
(f) affect the validity or enforceability of, or impair the right
of Lender to bring suit and obtain personal, recourse judgments
against any person or entity (including Borrower) relating to any
losses sustained by Lender in connection with any of the provisions of
this Note, the Security Instruments or any of the Other Security
Documents requiring that: (i) any person or entity maintain any
insurance over any of the Mortgaged Property, or (ii) any insurance
proceeds or condemnation awards be paid to Lender; or
(g) impair the right of Lender to bring suit and obtain personal,
recourse judgments against any person or entity (including Borrower)
for the full amount of the Debt if the Mortgaged Property or any part
thereof shall become an asset in: (i) a voluntary bankruptcy or
insolvency proceeding, or (ii) an involuntary bankruptcy or insolvency
proceeding: (A) which is commenced by any person or entity
controlling, controlled by or under common control with Borrower (the
"Borrowing Group") or (B) in which any member of the Borrowing Group
objects to a motion by Lender for relief from any stay or injunction
from the foreclosure of the Security Instruments or any other remedial
action permitted under this Note, the Security Instruments or any of
the Other Security Documents.
Items (a) through (g) above are collectively the "Non-Recourse
Exceptions". To the extent Borrower is a general partnership and
Lender is required under applicable law to pursue its remedies against
the persons or entities constituting Borrower, each reference to the
phrase "(including Borrower)" in the Non-Recourse Exceptions shall be
deemed to read "(including Borrower or any person or entity
constituting Borrower)". Borrower's liability under the Non-Recourse
Exceptions, excepting item (g), shall be limited to the amount of any
losses or damages sustained by Lender in connection with such
Non-Recourse Exceptions. Nothing herein shall be deemed to be a waiver
of any right which Lender may have under Sections 506(a), 506(b),
1111(b) or any other provisions of the U.S. Bankruptcy Code to file a
claim for the full amount of the Debt secured by the Security
Instruments or to require that all of the Mortgaged Property and other
collateral given to secure the Debt shall continue to secure all of
the Debt.
(n) Section 14 is hereby deleted and replaced with the following:
14. Applicable Law; Jurisdiction. This Note shall be governed and
construed in accordance with the laws of the State of Michigan.
Borrower hereby submits to personal jurisdiction in the state courts
located in the State of Illinois, the other States where the Mortgaged
Property is located and the federal courts of the United States of
America located in said states for the enforcement of Borrower's
obligations hereunder and waives any and all personal rights under the
law of any other state to object to jurisdiction within such states
for the purposes of any action, suit, proceeding or litigation to
enforce such obligations of Borrower.
BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND
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INTENTIONALLY WAIVE ANY RIGHT THEY, OR THEIR RESPECTIVE SUCCESSORS OR ASSIGNS,
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THE LOAN
EVIDENCED BY THIS NOTE OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE,
THE SECURITY INSTRUMENT OR ANY OF THE OTHER SECURITY DOCUMENTS, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF
BORROWER OR LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER'S MAKING
OF THE LOAN SECURED BY THE SECURITY INSTRUMENT AND THE OTHER SECURITY DOCUMENTS.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Borrower has duly executed this Promissory Note to be
effective the day and year first above written.
"Borrower"
TABB Realty, LLC,
a Michigan limited liability company
By: TABB Management, Inc.,
a Michigan corporation,
its Manager
By: /s/ Michael J. Plotzke
--------------------------------
Name: Michael J. Plotzke
Title: Vice President and Treasurer
STATE OF MICHIGAN )
) SS
COUNTY OF OAKLAND )
I, Phyllis A. Menken, a Notary Public in and for said County,
in the State aforesaid, DO HEREBY CERTIFY, that Michael J. Plotzke, the Vice
President and Treasurer of TABB Management, Inc., a Michigan corporation, the
Manager of TABB Realty, a Michigan limited liability company, who is personally
known to me to be the same person whose name is subscribed to the foregoing
instrument as such Vice President and Treasurer, appeared before me this day in
person and acknowledged that he signed and delivered the said instrument as his
own free and voluntary act and as the free and voluntary act of said limited
liability company, for the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal this 9th day of September, 2005.
/s/ Phyllis A. Menken
----------------------------------------
Notary Public
My Commission Expires: October 31, 2010
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This Endorsement forms a part of that certain Promissory Note in the stated
principal amount of One Hundred Million and No/100 Dollars ($100,000,000.00)
dated September 9, 2005, made by TABB Realty, LLC, a Michigan limited liability
company, to PNC Bank, National Association.
Pay to the order of _______________________________________________,
without recourse.
PNC Bank, National Association
By: /s/ Jeannette Butler
------------------------------------
Jeannette Butler, Vice President
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SCHEDULE I
ALLOCATED LOAN AMOUNTS
PROPERTY LOCATION ALLOCATED LOAN AMOUNT*
-------- -------- ----------------------
Alabama Property Jefferson County, Alabama $ 8,926,000.00
Florida Property Hillsborough County, Florida $ 7,706,000.00
Louisiana Property Rapides Parish, Louisiana $19,746,000.00
Illinois Property Champaign County, Illinois $14,128,000.00
Massachusetts Property Hampden County, Massachusetts $ 5,715,000.00
Dundee Property Monroe County, Michigan $ 2,761,000.00
Plymouth Property Wayne County, Michigan $ 5,426,000.00
Westland Property Wayne County, Michigan $ 4,816,000.00
Route #65 Property Shelby County, Ohio $10,275,000.00
Washington Street Property Shelby County, Ohio $ 883,000.00
Lima Property Allen County, Ohio $ 2,119,000.00
Medina Property Medina County, Ohio $ 5,266,000.00
Garland Property Dallas County, Texas $ 9,889,000.00
Highland Property Harris County, Texas $ 2,344,000.00
* The release amount pursuant to Section 21(j) is 125% of the Allocated Loan
Amount set forth above.
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Promissory Note
Last revised 7/5/05
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