THIS AMENDED AND RESTATED PROMISSORY NOTE
) is made as of this
day of October, 2007 by and among SCIENCE PARK CENTER LLC, a California
liability company, as maker, having its principal place of business at 12790 El Camino Real, San
), and MORGAN STANLEY MORTGAGE CAPITAL INC., a New York
corporation, as lender, having an address at 1221 Avenue of the Americas, 27th
, New York
R E C I T A L S
, Science Park Center LLC, a California
limited liability company, (Science
) and Teachers Insurance and Annuity Association of America, a New York
), are parties to that certain Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing Statement, dated as of October 25, 2004, recorded on October
28, 2004, as Document No. 2004-1019903, in the San Diego County Recorders Office (the
), as assigned by TIAA to Lender pursuant to that certain Assignment
and Assumption of Interest Under Deed of Trust, dated as of March 1, 2007, and recorded on March
22, 2007 as Document No. 2007-0196204, with the Recorders Office (as so assigned and as the same
hereafter may be further amended, modified, supplemented, consolidated or assigned, the
), securing a loan made by TIAA to Science Park in the original principal amount
of Forty-Nine Million Five Hundred Thousand and No/100 Dollars ($49,500,000.00) (the Original
), which Original Loan is evidenced by that certain Promissory Note, dated as of October
25, 2004, made by Science Park to TIAA, as endorsed by TIAA to Lender pursuant to that certain
Allonge dated March 1, 2007 (as so endorsed, the Original Note
) (the Mortgage and the Original
Note, together with the other loan documents entered into in connection with the Original Loan or
otherwise included in the term Loan Documents as defined in the Mortgage, as assigned by TIAA to
Lender, are collectively referred to herein as the Loan Documents
NOW, THEREFORE, in consideration of the foregoing Recitals and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower covenants
and agrees as follows:
||All recitals set forth above are true and correct and constitute a material
part of this Note.
||Borrower acknowledges that it has no defenses, counterclaims or offsets with
respect to any of its obligations contained in the Original Note.
||The outstanding principal balance of the Original Loan as of the date hereof
||The Original Note is hereby amended and restated in its entirety, to
hereinafter read and provide as follows:
||San Diego, California
||October 2, 2007
FOR VALUE RECEIVED, SCIENCE PARK CENTER LLC, a California
limited liability company
), having its principal place of business at 12790 El Camino Real, San Diego,
92130, promises to pay to MORGAN STANLEY MORTGAGE CAPITAL INC., a New York
), having an address at 1221 Avenue of the Americas, 27th
, New York
10020 or at such other place as Lender designates in writing, the principal sum of
Forty-Nine Million Five Hundred Thousand Dollars ($49,500,000.00) (the principal sum or so much of
the principal sum as may be advanced and outstanding from time to time, the Principal
in lawful money of the United States of America, with interest on the Principal from and after the
date advanced at the fixed rate of six and forty-eight hundredths percent (6.48%) per annum (the
Fixed Interest Rate
) and as otherwise provided herein.
This Promissory Note (the Note) is secured by, among other things, the Deed of
Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the Deed of
Trust) dated the date of this Note made by Borrower for the benefit of Teachers Insurance and
Annuity Association of America, (TIAA) and assigned by TIAA to Lender pursuant to that
certain Assignment and Assumption of Interest Under Deed of Trust, dated as of March 1, 2007, as
security for the Loan. All capitalized terms not expressly defined in this Note will have the
definitions set forth in the Deed of Trust.
Section 1. Payments of Principal and Fixed Interest.
(a) Borrower will make monthly installment payments (Debt Service Payments) as
(i) Intentionally Omitted.
(ii) On October 1, 2007, and on the first day of each succeeding calendar month
through and including November 1, 2014 payments in the amount of Three Hundred Twelve
Thousand Two Hundred Twenty-One and 25/100 Dollars ($312,221.25), each of which will be
applied first to accrued interest on the Principal at the Fixed Interest Rate and then to
(b) On November 1, 2014 (the Maturity Date), Borrower will pay the Principal in
full together with accrued interest at the Fixed Interest Rate and all other amounts due under the
Section 2. Certain Definitions. In addition to other definitions set forth
elsewhere in this Note, the following definitions apply:
Default Discount Rate means the Discount Rate less 300 basis points.
Rate shall mean the rate which, when compounded monthly, is equivalent to the
Yield Maintenance Treasury Rate, when compounded semi-annually.
Evasion Premium means the greater of (i) an amount equal to the product of the
Prepayment Percentage plus 300 basis points times the Prepayment Date Principal, or (ii) the
difference between (x) the present value on the Prepayment Date of all scheduled principal and
interest payments (including any principal payment due on the Prepayment Date) from the
Prepayment Date through the Maturity Date determined by discounting such payments by the Default
Discount Rate and (y) the principal balance of the Loan as of the Prepayment Date.
Lockout Period means the first thirty-six (36) months of the
Prepayment Date shall mean the date on which prepayment
Prepayment Date Principal means the Principal on the date as of which a Prepayment
Premium or Evasion Premium is calculated (as specified below).
Percentage means one percent (1%).
Premium shall mean an amount equal to the greater of: (i) one percent
(1%) of the principal amount of the Loan being prepaid or (ii) the difference between (x) the
present value as of the Prepayment Date of all scheduled principal and interest payments
(including the principal payment due on the Prepayment Date) from the Prepayment Date through the
Maturity Date determined by discounting such payments at the Discount Rate and (y) the principal
balance of the Loan as of the Prepayment Date. In no event, however, shall Lender be required to
reinvest any prepayment proceeds in U.S. Treasury obligations or otherwise.
Maintenance Treasury Rate shall mean the yield calculated by Lender by the
linear interpolation of the yields, as reported in the 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 or one shorter) most nearly approximating the Maturity Date. In
the event Release H.I5 is no longer published, Lender shall select a comparable publication to
determine the Yield Maintenance Treasury Rate.
Section 3. Prepayment Provisions.
(a) This Note may not be prepaid in whole or in part at any time, except as follows:
(i) This Note may be prepaid to the extent that casualty insurance proceeds or
condemnation awards with respect to the Property are applied to the Debt in accordance with
the Loan Documents, and, provided that there is no Event of Default under the Loan
Documents, any such prepayments will be without premium. Unless Lender elects otherwise in
its sole discretion, partial prepayments of Principal resulting from the application of
such proceeds or awards to the Debt shall not reduce the amounts of subsequent monthly
installments nor change the dates on which such installments are due (the effect of which
may be to cause the Debt to repaid earlier than the Maturity Date).
(ii) Provided there is no Event of Default under the Loan Documents, this Note may be
prepaid in full but not in part with the payment of the Prepayment Premium upon 60 days
prior notice to Lender; provided, however, that such 60-day prior notice
may specify a one calendar-week period during which the prepayment will occur, if such
notice is followed by a second notice to Lender, received by Lender not later than ten days
before the first Business Day of such week, which specifies the Business Day during such
week on which prepayment will occur (and if such second notice is not timely received by
Lender, the first Business Day of such week shall be deemed to be the date designated by
Borrower for the prepayment).
(iii) Provided there is no Event of Default under the Loan Documents, this Note may be
prepaid in full but not in part, without premium, during the last ninety (90) days of the
Term, upon 30 days prior notice to Lender; provided, however, that such
30-day prior notice may specify a one calendar-week period during which the prepayment will
occur, if such notice is followed by a second notice to Lender, received by Lender not
later than ten days before the first Business Day of such week, which specifies the
Business Day during such week on which prepayment will occur (and if such second notice is
not timely received by Lender, the first Business Day of such week shall be deemed to be
the date designated by Borrower for the prepayment).
(iv) In no event may this Note be prepaid without simultaneous prepayment in full of
any other notes secured by the Loan Documents.
(v) Any prepayment received by Lender on a date other than a date on which Debt
Service Payments are due shall include interest which would have accrued thereon to the
next such date and such amounts (i.e., principal and interest prepaid by Borrower) shall be
held by Lender as collateral security for the Loan in an interest bearing account, with
interest accruing on such amounts to the benefit of Borrower; such amounts prepaid shall be
applied to the Loan on the next date on which a Debt Service Payment is due with any
interest on such funds paid to Borrower on such date provided no Event of Default then
(b) After an Acceleration or upon any prepayment not permitted by the Loan
Documents, any tender of payment of the amount necessary to satisfy the Debt accelerated, any
judgment of foreclosure, any statement of the amount due at the time of foreclosure (including
foreclosure by power of sale), any claim for amounts due under this Note, and any tender of
payment made during any redemption period after foreclosure, will include an Evasion Premium,
calculated as of the date of the Acceleration or the date of such unpermitted prepayment, as
the case may be.
(c) [Intentionally omitted]
(d) Borrower acknowledges that:
(i) a prepayment without payment of the applicable Prepayment Premium or
Evasion Premium (the Premiums) will cause damage to Lender;
(ii) the Premiums are intended to compensate Lender for the loss of its investment and
the expense incurred and time and effort associated with making the Loan, which will not be
fully repaid if the Loan is prepaid without payment of the applicable Premium;
(iii) it will be extremely difficult and impractical to ascertain the extent of
Lenders damages caused by a prepayment after an Event of Default or any other prepayment
not permitted by the Loan Documents; and
(iv) the Premiums represent Lenders and Borrowers reasonable estimate of Lenders
damages for prepayment and are not a penalty.
(e) BORROWER HEREBY ACKNOWLEDGES AND AGREES THAT LENDER WOULD NOT LEND TO BORROWER THE LOAN
EVIDENCED BY THIS NOTE WITHOUT (1) BORROWERS WAIVER OF ANY RIGHTS IT MAY HAVE UNDER CALIFORNIA
CIVIL CODE SECTION 2954.10 TO PREPAY THIS NOTE IN WHOLE OR IN PART, WITHOUT PENALTY, UPON
ACCELERATION OF THE MATURITY DATE OF THIS NOTE, AND (2) BORROWERS AGREEMENT, AS SET FORTH ABOVE,
TO PAY LENDER THE APPLICABLE PREMIUM UPON THE SATISFACTION OF ALL OR ANY PORTION OF THE PRINCIPAL
INDEBTEDNESS EVIDENCED HEREBY FOLLOWING THE ACCELERATION OF THE MATURITY DATE HEREOF BY REASON OF A
DEFAULT HEREUNDER OR UNDER THE DEED OF TRUST INCLUDING, WITHOUT LIMITATION, A DEFAULT ARISING FROM
THE CONVEYANCE OF ANY RIGHT, TITLE OR INTEREST IN THE PROPERTY ENCUMBERED BY THE DEED OF TRUST
WHICH IS NOT PERMITTED THEREBY AND BORROWER HAS CAUSED THOSE PERSONS SIGNING THIS NOTE ON
BORROWERS BEHALF TO SEPARATELY EXECUTE THE AGREEMENT CONTAINED IN THIS PARAGRAPH, IN COMPLIANCE
WITH CALIFORNIA CIVIL CODE SECTION 2954.10. BY PLACING ITS SIGNATURE BELOW, BORROWER ACKNOWLEDGES
THAT (I) THE GENERAL PARTNERS, PRINCIPALS OR MEMBERS, AS THE CASE MAY BE, OF BORROWER ARE
KNOWLEDGEABLE REAL ESTATE DEVELOPERS OR INVESTORS, (II) BORROWER FULLY UNDERSTANDS THE EFFECT OF
THE ABOVE WAIVER, (III) THE MAKING OF THE LOAN BY LENDER AT THE RATE SET FORTH ABOVE IS SUFFICIENT
CONSIDERATION FOR SUCH WAIVER, AND (IV) LENDER WOULD NOT MAKE THE LOAN WITHOUT SUCH WAIVER.
Section 4. Intentionally Omitted.
Section 5. Events of Default:
is an Event of Default under this Note:
(i) if Borrower fails to pay any amount due, as and when required, under this
Note or any other Loan Document and the failure continues for a period of 5 days; or
(ii) if an Event of Default occurs under and as defined in any other Loan
(b) If an Event of Default occurs, Lender may declare all or any portion of the Debt
immediately due and payable (Acceleration) and exercise any of the other Remedies.
Section 6. Default Rate. Interest on the Principal will accrue at the Default
Interest Rate from the date an Event of Default occurs.
Section 7. Late Charges.
(a) If Borrower fails to pay any Debt Service Payment when due or fails to pay any amount due
under the Loan Documents on the Maturity Date (in either event, without giving consideration to
any grace period contained in the Loan Documents), Borrower agrees to pay to Lender an amount (a
Late Charge) equal to five cents ($.05) for each one dollar ($1.00) of the delinquent
(b) Borrower acknowledges that:
(i) a delinquent payment will cause damage to Lender;
(ii) the Late Charge is intended to compensate Lender for loss of use of the
delinquent payment and the expense incurred and time and effort associated with recovering
the delinquent payment;
(iii) it will be extremely difficult and impractical to ascertain the extent of
Lenders damages caused by the delinquency; and
(iv) the Late Charge represents Lender and Borrowers reasonable estimate of
Lenders damages from the delinquency and is not a penalty.
Section 8. Limitation of Liability. This Note is subject to the
limitations on liability set forth in the Article of the Deed of Trust entitled Limitation of
Section 9. WAIVERS. IN ADDITION TO THE WAIVERS SET FORTH IN THE ARTICLE OF
THE DEED OF TRUST ENTITLED
WAIVERS, BORROWER WAIVES PRESENTMENT
FOR PAYMENT, DEMAND, DISHONOR
AND, EXCEPT AS EXPRESSLY SET FORTH IN THE LOAN DOCUMENTS, NOTICE OF ANY OF THE FOREGOING. BORROWER
FURTHER WAIVES ANY PROTEST, LACK OF DILIGENCE OR DELAY IN COLLECTION OF THE DEBT OR ENFORCEMENT OF
THE LOAN DOCUMENTS. BORROWER AND ALL INDORSERS, SURETIES AND GUARANTORS OF THE OBLIGATIONS
CONSENT TO ANY EXTENSIONS OF TIME, RENEWALS, WAIVERS AND MODIFICATIONS THAT LENDER MAY GRANT WITH
RESPECT TO THE OBLIGATIONS AND TO THE RELEASE OF ANY SECURITY FOR THIS NOTE AND AGREE THAT
ADDITIONAL MAKERS MAY BECOME PARTIES TO THIS NOTE AND ADDITIONAL INDORSERS, GUARANTORS OR SURETIES
MAY BE ADDED WITHOUT NOTICE AND WITHOUT AFFECTING THE LIABILITY OF THE ORIGINAL MAKER OR ANY
ORIGINAL INDORSER, SURETY OR GUARANTOR.
Section 10. Commercial Loan. The Loan is made for the purpose of carrying on
a business or commercial activity or acquiring real or personal property as an investment or
carrying on an investment activity and not for personal or household purposes.
Section 11. Usury Limitations. Borrower and Lender intend to comply with all
Laws with respect to the charging and receiving of interest. Any amounts charged or received by
Lender for the use or forbearance of the Principal to the extent permitted by Law, will be
amortized and spread throughout the Term until payment in full so that the rate or amount of
interest charged or received by Lender on account of the Principal does not exceed the Maximum
Interest Rate. If any amount charged or received under the Loan Documents that is deemed to be
interest is determined to be in excess of the amount permitted to be charged or received at the
Maximum Interest Rate, the excess will be deemed to be a permitted prepayment of Principal when
paid, without premium, and any portion of the excess not capable of being so applied will be
refunded to Borrower. If during the Term the Maximum Interest Rate, if any, is eliminated, then
for purposes of the Loan, there will be no Maximum Interest Rate.
. Applicable Law.
This Note is governed by and will be
construed in accordance with the Laws of the State of California
, without regard to conflict of law
Section 13. Time of the Essence. Time is of the essence with respect to
the payment and performance of the Obligations.
Section 14. Cross-Default. A default under any other note now or hereafter
secured by the Loan Documents or under any loan document related to such other note constitutes a
default under this Note and under the other Loan Documents. When the default under the other
note constitutes an Event of Default under that note or the related loan document, an Event of
Default also will exist under this Note and the other Loan Documents.
Section 15. Construction. Unless expressly provided otherwise in this Note,
this Note will be construed in accordance with the Exhibit attached to the Deed of Trust entitled
Rules of Construction.
Section 16. Deed of Trust Provisions Incorporated. To the extent not
otherwise set forth in this Note, the provisions of the Articles of the Deed of Trust entitled
Expenses and Duty to Defend,
Waivers, Notices, and
Miscellaneous and the Section of the Deed of Trust entitled General Provisions
Pertaining to Remedies are applicable to this Note and deemed incorporated by reference as if
set forth at length in this Note.
Section 17. Joint and Several Liability: Successors and Assigns. If Maker
consists of more than one entity, the obligations and liabilities of each such entity will be
joint and several. This Note binds Borrower and its successors, assigns, heirs, administrators,
executors, agents and representatives and inures to the benefit of Lender and its successors,
assigns, heirs, administrators, executors, agents and representatives.
Section 18. Absolute Obligation. Except for the Section of this Note
entitled Limitation of Liability, no reference in this Note to the other Loan
Documents and no other provision of this Note or of the other Loan Documents will
impair or alter the obligation of Borrower, which is absolute and unconditional, to pay
the Principal, interest at the Fixed Interest Rate and any other amounts due and
payable under this Note, as and when required.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first set