Exhibit 10.12
COPY
DEED OF TRUST NOTE
$11,800,000.00 Baltimore, Maryland
September 20, 1988
FOR VALUE RECEIVED, BROWN'S WHARF LIMITED PARTNERSHIP, a Maryland limited
partnership (the "Borrower"), promises to pay to the order of MERCANTILE-SAFE
DEPOSIT AND TRUST COMPANY, a Maryland banking corporation (the "Bank"), at
its principal office in Baltimore, Maryland, or at such other place or to
such other party as the holder hereof may from time to time designate, the
principal sum of ELEVEN MILLION EIGHT HUNDRED THOUSAND DOLLARS
($11,800,000.00) or so much thereof as may be advanced by Bank to Borrower
pursuant to the terms of a Building Loan Agreement of even date herewith (the
"Building Loan Agreement") with interest on the unpaid principal balance from
the date of this Deed of Trust Note, until paid, at either of the interest
rates as follows:
(1) A rate of one quarter of one percent (.25%) per annum in
excess of the Prime Rate. "Prime Rate" means the prime commercial
lending rate of the Bank as publicly announced to be in effect from
time to time. The Prime Rate is not necessarily the lowest rate of
interest charged by the Bank for commercial or other types of
loans. It is understood that the Prime Rate is only one of the
bases for computing interest on loans made by the Bank and that by
basing interest on the Prime Rate, the Bank has not committed to
charge and the Borrower has not in any way bargained for interest
based on a lower or the lowest rate at which the Bank may now or
in the future make loans to other borrowers. Any change in the rate
of interest as a result of a change in the Prime Rate shall be
effective as of the date of the change in the Prime Rate; or,
(2) On the condition that Bank be given five (5) business days
notice of Borrower's choice, Borrower may fix the rate of interest
for each advance, under the Building Loan Agreement, after ninety
(90) days from the date on which said Advance was made for a period
of three (3) months, six (6) months or one (1) year. The rate of
interest for the three (3) month period shall be one and three
quarters percent (1.75%) in excess of the three (3) month "CD Rate"
(as hereinafter defined); the rate of interest for the six (6)
month period shall be one and three quarters percent (1.75%) in
excess of the six (6) month CD
Rate; the rate of interest for the one (1) year period shall be one
and three quarters percent (1.75%) in excess of the one (1) year
CD Rate. "CD Rate" means the rate for Certificates of Deposit
appearing in the Wall Street Journal, Eastern Edition, plus a CD
Reserve Requirement (as hereinafter defined), and shall be average
negotiable rates paid by major New York banks on primary new issues
of negotiable Certificates of Deposit usually on amounts of
$1,000,000.00 and more; the minimum unit is $100,000.00. "CD
Reserve Requirement" shall, on any day mean that percentage
(expressed as a decimal fraction) which is in effect on such day,
as provided by the Board of Governors of the Federal Reserve System
(or any successor governmental body) for determining the maximum
reserve requirements (including without limitation, basic,
supplemental, marginal and emergency reserves) under Regulation D
applicable to 3-month non-personal time deposits in units of
$100,000.00 or more (issued by member banks of the Federal Reserve
Bank of New York having time deposits exceeding $1,000,000,000.00)
rounded to the next highest .01 of one percent. Each determination
by Lender of the CD Reserve Requirement shall, in the absence of
manifest error, be conclusive and binding.
In all instances in which the CD Rate does not apply (including
instances where no CD Rate election notice is given), the rate of interest to
be paid hereunder shall be that set forth in the paragraph numbered 1 above.
Except when the loan evidenced hereby shall bear interest at a CD
Rate, the interest rate in effect from time to time shall be reduced to the
Prime Rate when all of the following shall occur:
(1) when (a) Bank has approved the form lease for the "Project,"
defined in the Building Loan Agreement, which approval shall not be
unreasonably withheld, and (b) Bank has approved the creditworthiness of each
tenant. Leases submitted to the Bank for approval shall be deemed to be
approved unless Bank notifies Borrower to the contrary within fifteen (15)
days of submittal; and
(2) when leases (approved as provided above) have been executed
which provide for (i) rents of at least Fifteen Dollars ($15.00) absolutely
net or Eighteen Dollars ($18.00) gross per square foot for at least 70%
(73,430 square feet) of the Project, and (ii) terms of at least five (5)
years for at least 80% (83,920 square feet) of the Project; and
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(3) when the leases have been executed by the tenant and
collaterally assigned to Bank; and
(4) when the tenants have executed and delivered estoppel letters
and subordination, non-disturbance and attornment agreements.
Payments of accrued interest only shall be due and payable in
consecutive monthly installments commencing October 1, 1988, and continuing on
the first day of each month thereafter until September 20, 1995, at which
time the entire unpaid balance of principal and any accrued but unpaid
interest, if not sooner paid, shall be due and payable in full.
All payments hereunder shall be applied first to the payment of
interest and any balance, if any, to the payment of principal. Interest shall
be charged, calculated on the basis of a 360 day year factor applied to
actual days. Interest and principal shall be payable in lawful money of the
United States, which shall be legal tender in payment of all debts and dues,
public and private at the time of payment.
"Loan Year" means any twelve (12) consecutive month period
commencing October 1, 1988 and on each yearly anniversary thereof.
Upon the occurrence of an "Event of Default" (as defined
hereinafter), the entire unpaid principal balance shall bear interest
thereafter at the rate of one percent (1%) per annum in excess of the then
applicable interest rate due hereunder until such "Event of Default" is cured.
The principal sum may be prepaid in whole or in part at any time
after ten (10) days prior written notice, without payment of premium or
penalty therefor.
Borrower shall pay to Bank a loan origination Fee in the amount of
one percent (1%) of the Loan, or One Hundred Eighteen Thousand Dollars
($118,000.00), which shall be paid as follows: Fifty Nine Thousand Dollars
($59,000.00) shall be paid upon the execution of this Deed of Trust Note, and
Fifty Nine Thousand Dollars ($59,000.00) shall be paid on the earlier to
occur of the commencement of the third (3rd) Loan Year, or the payment, in
full, of this Deed of Trust Note.
This Deed of Trust Note is secured by a Deed of Trust and Security
Agreement of even date herewith from the Borrower to Herbert B. Williams and
Bruce D. McLean, Trustees, and recorded among the Land Records of Baltimore
City, Maryland (the "Deed of Trust").
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All notices, requests and demands upon the respective parties hereto
shall be in writing and shall be sent by hand delivery or Federal Express or
other commercial courier addressed as follows or to such other address as the
respective party may designate by a notice to the others:
if to the Bank
Mercantile-Safe Deposit & Trust Company
Two Hopkins Plaza
Baltimore, Maryland 21201
Attention: Herbert B. Williams
Senior Vice President
if to the Borrower
Brown's Wharf Limited Partnershipj
c/o CPI Brown's Wharf, Inc.
250 West Pratt Street
Baltimore, Maryland 21201-2423
Attention: Secretary, 23rd Floor
With copies to
Constellation Holdings, Inc.
250 West Pratt Street
Baltimore, Maryland 21201-2423
Attention: General Counsel, 23rd Floor
and
Historical Developers of Pennsylvania, Inc.
201 North Broad Street
Philadelphia, Pennsylvania 19107
Attention: President
All such notices shall be deemed to have been given one (1) business day
after the date on which the same was sent or upon receipt, whichever shall
first occur.
The happening of any one or more of the following events shall
constitute an Event of Default under this Note:
(a) The Borrower fails to make any payment within five (5)
days of the date when due; or
(b) The Borrower fails to perform or comply with any other
covenant, term or condition of this Agreement, and such failure continues
uncured for 30 days after written notice thereof from the Bank to the
Borrower; or
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(c) An Event of Default (as defined therein) shall have occurred
and be continuing under the Deed of Trust. Guaranty, or Building Loan
Agreement; or
(d) Any representation or warranty made by the Borrower in this
Note proves to have been incorrect or misleading in any material respect
either on the date when made or on the date reaffirmed pursuant to the terms
of this Note.
It is expressly agreed that upon the happening of an Event of Default
hereunder or under any of the Loan Documents, the entire unpaid balance of
the principal sum due hereunder, plus all accrued interest shall, at the
option of the holder hereof, at once become and be due and payable.
Upon the occurrence of an Event of Default hereunder and if this Note is
collected by an attorney, the Borrower agrees to pay all costs of collection,
including reasonable and verifiable attorney's fees.
The maker and endorsers hereof jointly and severally, and all others who
may become liable for all or any part of this obligation severally, waive
demand, notice of presentment for payment, notice of protest and notice of
the dishonor and non-payment.
Borrower stipulates and warrants that the purpose of the loan evidenced
hereby is for the purpose of a business or commercial investment within the
meaning of Sections 12-101(c) and 12-103(e) of the Commercial Law Article of
the Annotated Code of Maryland. Borrower further stipulates that all loan
proceeds will be used for said purposes.
Borrower also covenants and agrees that in the event that any sum
required hereunder or under said Deed of Trust should not be received by the
holder hereof within ten (10) days from its due date, a late charge of five
cents ($.05) for each One Dollar ($1.00) so overdue may, in addition to any
other remedies provided for hereunder, be charged for the purpose of
defraying expenses incident to handling such delinquent payments.
In the event that any provision (or any part of any provision)
contained in this Note shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision (or remaining part of
the affected provision) of this Note, but this Note shall be construed as if
such invalid, illegal or unenforceable provision (or part thereof) had never
been contained herein but only to the extent it is invalid, illegal or
unenforceable. All words beginning with a capital letter and not defined
herein shall have the meaning provided in the Deed of Trust.
Borrower covenants and agrees that this Deed of Trust Note shall be
governed by and construed in accordance with the laws of the State of
Maryland.
WITNESS: BROWN'S WHARF LIMITED PARTNERSHIP
By: CPI Brown's Wharf, Inc.,
a general partner
/s/ By: /s/
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Treasurer/Assistant Secretary
By: HISTORICAL DEVELOPERS OF
PENNSYLVANIA, INC., doing
Attest: business in Maryland as
Historical Real Estate
Developers, Inc.,
a general partner
/s/ By: /s/
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Assistant Secretary Vice President