Exhibit 10.1
Loan No. V_00303
FIXED RATE NOTE
$8,100,000.00 September 15, 1997
FOR VALUE RECEIVED CADIZ PROPERTIES, INC., a Texas corporation
(hereinafter referred to as "Borrower"), promises to pay to the order of ▇▇▇▇▇▇
GUARANTY TRUST COMPANY OF NEW YORK, a New York banking corporation, its
successors and assigns (hereinafter referred to as "Lender"), at the office of
Lender or its agent, designee, or assignee at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Loan Servicing, or at such place as Lender or its agent,
designee, or assignee may from time to time designate in writing, the principal
sum of EIGHT MILLION ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($8,100,000.00), in
lawful money of the United States of America, the Applicable Interest Rate
(hereinafter defined) at all times prior to the occurrence of an Event of
Default (as defined in the Security Instrument [hereinafter defined]), and to be
paid in installments as set forth below. Unless otherwise herein defined, all
initially capitalized terms shall have the meanings given such terms in the
Security Instrument.
1. PAYMENT TERMS
Principal and interest due under this Note shall be paid as follows:
(a) A payment of interest only on the date hereof for the
period from the date of the advance of the principal evidenced hereby through
September 30, 1998, both inclusive; and
(b) A constant payment of Sixty-Nine Thousand Seven Hundred
Eighty-One and 86/100 Dollars ($69,781.86), on the first day of November, 1997
and on the first day of each calendar month thereafter up to and including the
first day of September, 2007;
(i) First, to the payment of interest and other costs
and charges due in connection with this Note or the Debt, as Lender may
determine in its sole discretion; and
(ii) The balance shall be applied toward the reduction
of the principal sum;
and the balance of said principal sum, together with accrued and unpaid interest
and any other amounts due under this Note shall be due and payable on the first
day of October, 2007 or upon earlier maturity hereof whether by acceleration or
otherwise (the "Maturity Date"). Interest on the principal sum of this Note
shall be calculated on the basis of a three hundred sixty (360) day year
composed of twelve (12) months of thirty (30) days each, expect that Internet
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calculated with reference to the maximum rate permitted by applicable law shall
be calculated by multiplying the actual number of days elapsed in such period by
a daily rate based on a year of 365/366 days (as applicable). All amounts due
under this Note shall be payable without setoff, counterclaim or a any other
deduction whatsoever.
2. INTEREST
The term "Applicable Interest Rate" means from the date of this Note
through and including the Maturity Date, a rate of eight and two-fifths percent
(8.40%) per annum.
3. SECURITY
This Note is secured by, and ▇▇▇▇▇▇ is entitled to the benefits of, the
Security Instrument, the Assignment, the Environmental Agreement, and the other
Loan Documents (hereinafter defined). The term "Security Instrument" means the
Deed of Trust and Security Agreement dated the date hereof given by Borrower for
the use and benefit of Lender covering the estate of Borrower in certain
premises as more particularly described therein, which premises, together with
all properties, rights, titles, estates and interests now or hereafter securing
the Debt and/or other obligations of Borrower under the Loan Documents, are
collectively referred to herein as the ("Property"). The term "Assignment" means
the Assignment of Leases and Rents of even date herewith executed by ▇▇▇▇▇▇▇▇ in
favor of ▇▇▇▇▇▇. The term "Environmental Agreement" means the Environmental
Liabilities Agreement of even date herewith executed by ▇▇▇▇▇▇▇▇ and/or others
in favor of ▇▇▇▇▇▇. The term "Loan Documents" refers collectively to this Note,
the Security Instrument, the Assignment, the Environmental Agreement, and any
and all other documents executed in connection with this Note or now or
hereafter executed by ▇▇▇▇▇▇▇▇ and/or others and by or in favor of Lender, which
wholly or partially secure or guarantee payment of this Note or pertains to
indebtedness evidenced by this Note.
4. LATE FEE
If any installment payable under this Note (including the final
installment due on the Maturity Date) is not received by Lender within ten (10)
days after the date on which it is due (without regard to any applicable cure
and/or notice period), Borrower shall pay to Lender upon demand an amount equal
to the lesser of (a) five percent (5%) of such unpaid sum or (b) the maximum
amount permitted by applicable law to delay 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, and such amount shall be secured by
the Loan Documents.
5. DEFAULT AND ACCELERATION
So long as an Event of Default exist, Lender may, at its option,
without notice or demand to Borrower, declare the Debt immediately due and
payable. All remedies hereunder, under the Loan Documents and at law or in
equity shall be cumulative. In the event that it should become necessary to
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employ counsel to collect the Debt or to protect or foreclose the security for
the Debt or to defend against any claims asserted by Borrower arising from or
related to the Loan Documents, ▇▇▇▇▇▇▇▇ also agrees to pay to Lender on demand
all costs of collection or defense incurred by ▇▇▇▇▇▇, including reasonable
attorneys' fees for the services of counsel whether or not suit be brought.
6. DEFAULT INTEREST
Upon the occurrence of an Event of Default, Borrower shall pay interest
on the entire unpaid principal sum and any other amounts due under the Loan
Documents at the rate equal to the lesser of (a) the maximum rate permitted by
applicable law, or (b) the greater of (i) five percent (5%) above the Prime Rate
(hereinafter defined) in effect at the time of the occurrence of the Event of
Default (the "Default Rate"). The term "Prime Rate" means the prime rate
reported in the Money Rates section of The Wall street Journal. 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 in
another business newspaper, or business section of a newspaper, of national
standing and general circulation chosen by ▇▇▇▇▇▇. 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 receipt and collection
of a sum of money determined by ▇▇▇▇▇▇ to be sufficient to cure the Event of
Default. Amounts of interest accrued at the Default Rate shall constitute a
portion of the Debt, and shall be deemed secured by the Loan Documents. This
clause, however, shall not be construed as an agreement or privilege to extend
the date of the payment of the Debt, nor as a waiver of any other right or
remedy accruing to Lender by reason of the occurrence of any Event of Default.
7. PREPAYMENT
(a) The principal balance of this Note may not be prepaid in
whole or in part (except with respect to the application of casualty or
condemnation proceeds) prior to the fifth Loan Year (as hereinafter defined).
During the fifth Loan Year or at anytime thereafter, provided no Event of
Default exists, the principal balance of this Note may be prepaid, in whole but
not in part (except with respect to the application of casualty or condemnation
proceeds), on any scheduled payment date under this Note upon not less than
thirty (30) days prior written notice to Lender specifying the scheduled payment
date on which prepayment is to be made (the "Prepayment Date") and upon payment
of (i) interest accrued and unpaid on the principal balance of this Note to and
including the Prepayment Date, (ii) all other sums then due under this Note and
the other Loan Documents, and (iii) a prepayment consideration in an amount
equal to the greater of (A) one percent (1%) of the outstanding principal
balance of this Note at the time of prepayment, or (B) (x) 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
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balloon payment) determined by discounting such payments at the Discount Rate
(as hereinafter defined), less (y) the amount of principal being prepaid. The
term "Prepayment Date" means the rate which, when compounded monthly, is
equivalent to the Treasury Rate (as hereinafter defined), when compounded
semi-annually. The term "Treasury Rate" means 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.
Notwithstanding the foregoing, Borrower shall have the additional privilege to
prepay the entire principal balance of this Note (together with any other sums
constituting the Debt) on any scheduled payment date during the six (6) months
preceding the Maturity Date without any fee or consideration for such privilege.
If any such notice of prepayment is given, the principal balance of this Note
and the other sums required under this paragraph shall be due and payable on the
Prepayment Date. Lender shall not be obligated to accept any prepayment of the
principal balance of this Note unless it is accompanied by the prepayment
consideration due in connection therewith. The term "Loan Year" for purposes of
this paragraph means each complete 365-day period (366 days in a leap year)
after the first scheduled payment date set forth in Section 1 of this Note.
(b) 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 a sale of the Property, either through foreclosure or the exercise
of the other remedies available to Lender under the Security Instrument, such
tender by Borrower shall be deemed to be a voluntary prepayment under this Note
in the amount tendered. If at the time of such tender, prepayment of the
principal balance of this Note is not permitted, Borrower shall, in addition to
the entire Debt, also pay to Lender a sum equal to interest which would have
accrued on the principal balance of this Note at the Applicable Interest Rate in
effect on the date which is five (5) days prior to the date of prepayment, from
the date of such tender to the first day of the period during which prepayment
of the principal balance of this Note would have been permitted, together with a
prepayment consideration equal to the prepayment consideration which would have
been payable as of the first day of the period in which prepayment is permitted
under this Note. If at the time of such tender, prepayment of the principal
balance of this Note is permitted, Borrower shall, in addition to the entire
Debt, also pay to Lender the applicable prepayment consideration specified in
this Note.
(c) If the prepayment results from the application to the Debt
of the casualty or condemnation proceeds from the Property, no prepayment
consideration will be imposed. Partial prepayments of principal resulting from
the application of casualty or insurance proceeds to the Debt shall not change
the amounts of subsequent monthly installments nor change the dates on which
such installments are due, unless Lender shall otherwise agree in writing.
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8. SAVINGS CLAUSE
This Note is subject to the express condition that at no time shall
Borrower be obligated or required to pay interest on the principal balance due
hereunder at a rate which could subject Lender to either civil or criminal
liability as a result of being in excess of the maximum interest rate which
Borrower is permitted by applicable law to contract or agree to pay. If by the
terms of this Note, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of such
maximum rate, the Applicable Interest Rate or the Default Rate, as the case may
be, shall be deemed to be immediately reduced to such maximum rate and all
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. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the Debt, shall to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of this Note until payment in full so that the rate or amount
of interest on account of the Debt does not exceed the maximum lawful rate of
interest from time to time in effect and applicable to the Debt for so long as
the Debt is outstanding. Notwithstanding anything to the contrary contained
herein or in any of the other Loan Documents, it is not the intention of Lender
to accelerate the maturity of any interest that has not accrued at the time of
such acceleration or to collect unearned interest at the time of such
acceleration.
9. WAIVERS
(a) Except as specifically provided in the Loan Documents,
Borrower and any endorsers, sureties or guarantors hereof jointly and severally
waive presentment and demand for payment; notice of intent to accelerate
maturity, notice of acceleration of maturity, protest and notice of protest and
non-payment, all applicable exemption rights, valuation and appraisement, notice
of demand, and all other notices in connection with the delivery, acceptance,
performance, default or enforcement of the payment of this Note and the bringing
of suit and diligence in taking any action to collect any sums owing hereunder
or in proceeding against any of the rights and collateral securing payment
hereof. Borrower and any surety, endorser or guarantor hereof agree (i) that the
time for any payments hereunder may be extended from time to time without notice
and consent, (ii) to the acceptance by Lender of further collateral, (iii) the
release by Lender of any existing collateral for the payment of this Note, (iv)
to any and all renewals, waivers or modifications that may be granted by Lender
with respect to the payment or other provisions of this Note, and/or (v) that
additional Borrowers, endorsers, guarantors or sureties may become parties
hereto all without notice to them and without in any manner affecting their
liability under or with respect to this Note. No extension of time for the
payment of this Note or any installment hereof shall affect the liability of
Borrower under this Note or any endorser or guarantor hereof even though the
Borrower or such endorser or guarantor is not a party to such agreement.
(b) Failure of Lender to exercise any of the options granted
herein to Lender upon the happening of one or more of the events giving rise to
such options shall not constitute a waiver of the right to exercise the same or
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any other option at any subsequent time in respect to the same or any other
event. The acceptance by Lender of any payment hereunder that is less than
payment in full of all amounts due and payable at the time of such payment shall
not constitute a waiver of the right to exercise any of the options granted
herein to Lender at that time or at any subsequent time or nullify any prior
exercise of any such option without the express written acknowledgment of the
Lender.
10. EXCULPATION
(a) Notwithstanding anything in the Loan Documents to the
contrary, but subject to the qualifications below, ▇▇▇▇▇▇ and Borrower agree
that:
(i) Borrower shall be Liable upon the Debt and
for the other obligations arising under the Loan Documents to the full extent
(but only to the extent) of the security therefor, provided, however, that in
the event (A) of fraud, wilful misconduct or material misrepresentation by
Borrower, its general partners, if any, its members, if any, its principals, its
affiliates, its agents or its employees or by any Guarantor or any Indemnitor in
connection with the loan evidenced by this Note, (B) of Borrower's breach or
default under Sections 4.3 or 8.2 of the Security Instrument, or (C) the
Property or any part thereof becomes an asset in a voluntarybankruptcy or
insolvency proceeding, the limitation on recourse set forth in this Subsection
10(a) will be null and void and completely inapplicable, and this Note shall be
with full recourse to Borrower;
(ii) If a default occurs in the timely and proper
payment of all or any part of the Debt, Lender shall not enforce the liability
and obligation of Borrower to perform and observe the obligations contained in
this Note or the Security Instrument by any action or proceeding wherein a money
judgment shall be sought against Borrower, except that Lender may bring a
foreclosure action, action for specific performance or other appropriate action
or proceeding to enable Lender to enforce and realize upon the Security
Instrument, the Other Loan Documents and the interest in the Property, the Rents
and any other collateral given to Lender created by the Security Instrument and
the Other Loan Documents; provided, however, that any judgment in any action or
proceeding shall be enforceable against Borrower only to the extent of
▇▇▇▇▇▇▇▇'s interest in the Property, in the Rents and in any other collateral
given to Lender. ▇▇▇▇▇▇, by accepting this Note and the Security Instrument
agrees that it shall not, except as otherwise herein provided, sue for, seek or
demand any deficiency judgment against Borrower in any action or proceeding,
under or by reason of or under or in connection with this Note, the Other Loan
Documents or the Security Instrument.
(iii) The provisions of this Subsection 10(a) shall
not (A) constitute a waiver, release or impairment of any obligation evidenced
or secured by this Note, the Other Loan Documents or the Security Instrument;
(B) impair the right of Lender to name Borrower as a party defendant in any
action or suit for judicial foreclosure and sale under the Security Instrument;
(C) affect the validity or enforceability of any indemnity, guaranty, master
lease or similar instrument made in connection with this Note, the Security
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Instrument, or the Other Loan Documents; (D) impair the right of Lender to
obtain the appointment of a receiver, (E) impair the enforcement of the
Assignment executed in connection herewith; (F) impair the right of Under to
enforce the provisions of Article 11 of the Security Instrument; or (G) impair
the right of Lender to obtain a deficiency judgment or judgment on this Note
against Borrower if necessary to obtain any insurance proceeds or condemnation
awards to which ▇▇▇▇▇▇ would otherwise be entitled under the Security
Instrument; provided, however, Lender shall only enforce such judgment against
the insurance proceeds and/or condemnation awards.
(iv) Notwithstanding the provisions of this Article
to the contrary, Borrower shall be personally liable to Lender for the Losses it
incurs due to: (A) the misapplication or misappropriation of Rents; (B) the
misapplication or misappropriation of insurance proceeds or condemnation awards;
(C) Borrower's failure to return or to reimburse Lender for all Personal
Property taken from the Property by or on behalf of Borrower and not replaced
with Personal Property of the same utility and of the same or greater value; (D)
any act of actual waste or arson by Borrower, any principal, affiliate, general
partner or member thereof or by any Indemnitor or any Guarantor, (E) any fees or
commissions paid by Borrower to any principal, affiliate, general partner or
member of Borrower, any Indemnitor or any Guarantor in violation of the terms of
this Note, the Security Instrument or the Other Loan Documents; (F) Borrower's
failure to comply with the provisions of Section 11.2 of the Security
Instrument; or (G) any breach of the Environmental Indemnity.
(b) 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 Bankruptcy Code to file a claim for the full amount of the
Debt or to require that all collateral shall continue to secure all of the Debt
owing to Lender in accordance with this Note, the Security Instrument and the
Other Loan Documents.
11. AUTHORITY
Borrower (and the undersigned representative of Borrower, if any)
represents that Borrower has full power, authority and legal right to execute,
deliver and perform its obligations pursuant to this Note and the other Loan
Documents and that this Note and the other Loan Documents constitute legal,
valid and binding obligations of Borrower. Borrower further represents that the
loan evidenced by the Loan Documents was made for business or commercial
purposes and not for personal, family or household use.
12. NOTICES
All notices or other communications required or permitted to be given
pursuant hereto shall be given in the manner and be effective as specified in
the Security Instrument, directed to the parties at their respective addresses
as provided therein.
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13. TRANSFER
Lender shall have the unrestricted right at any time or from time to
time to sell this Note and the loan evidenced by this Note and the Loan
Documents or participation interests therein. Borrower shall execute,
acknowledge and deliver any and all instruments requested by ▇▇▇▇▇▇ to satisfy
such purchasers or participants that the unpaid indebtedness evidenced by this
Note is outstanding upon the terms and provisions set out in this Note and the
other Loan Documents. To the extent, if any, specified in such assignment or
participation, such assignee(s) or participant(s) shall have the rights and
benefits with respect to this Note and the other Loan Documents as such
assignee(s) or participant(s) would have if they were the Lender hereunder.
14. WAIVER OF TRIAL BY JURY
BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS NOTE
OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH INCLUDING, BUT NOT LIMITED TO, THOSE RELATING TO W
ALLEGATIONS THAT A PARTNERSHIP EXISTS BETWEEN ▇▇▇▇▇▇ AND BORROWER; (B) USURY OR
PENALTIES OR DAMAGES THEREFOR; (C) ALLEGATIONS OF UNCONSCIONABLE ACTS. DECEPTIVE
TRADE PRACTICE, LACK OF GOOD FAITH OR FAIR DEALING, LACK OF COMMERCIAL
REASONABLENESS, OR SPECIAL RELATIONSHIPS (SUCH AS FIDUCIARY,TRUST OR
CONFEDENTIAL RELATIONSHIP); (D) ALLEGATIONS OF DOMINION, CONTROL, ALTER EGO,
INSTRUMENTALITY, FRAUD, REAL ESTATE FRAUD, MISREPRESENTATION, DURESS, COERCION,
UNDUE INFLUENCE INTERFERENCE OR NEGLIGENCE; (E) ALLEGATIONS OF TIORTIOUS
INTERFERENCE WITH PRESENT OR PROSPECTIVE BUSINESS RELATIONSHIPS OR OF ANTITRUST,
OR (F) SLANDER, LIBEL OR DAMAGE TO REPUTATION. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY ▇▇▇▇▇▇▇▇, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A
TRIAL BY JURY WOULD 0THERWISE ACCRUE. ▇▇▇▇▇▇ IS HEREBY AUTHORIZED TO FILE A COPY
OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY
BORROWER.
15. APPLICABLE LAW
This Note shall be governed by and construed in accordance with the
laws of the State of Texas (without regard to any conflict of laws or
principles) and the applicable laws of the United States of America.
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16. JURISDICTION
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY COURT OF
COMPETENT JURISDICTION LOCATED IN THE STATE IN WHICH THE PROPERTY IS LOCATED IN
CONNECTION WITH ANY PROCEEDING OUT OF OR RELATING TO THIS NOTE.
17. NO ORAL CHANGE
The provisions of this Note and the Loan Documents may be amended or
revised only by an instrument in writing signed by the Borrower and Lender. This
Note and all the other Loan Documents embody the final, entire agreement of
▇▇▇▇▇▇▇▇ and Lender and supersede any and all prior commitments, agreements,
representations and understandings, whether written or oral, relating to the
subject matter hereof and thereof and may not be contradicted or varied by
evidence of prior, contemporaneous or subsequent oral agreements or discussions
of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇. There are no oral agreements between Borrower and
Lender.
Executed as of the day and year first above written.
BORROWER
CADIZ PROPERTIES, INC.,
a Texas corporation
By:/s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Secretary
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