Exhibit
99.1
PROMISSORY
NOTE
$11,200,000.00
Houston,
Texas
August
5, 2008
FOR VALUE
RECEIVED, Whitestone Corporate Park West, LLC, a Texas limited liability company
("Borrower"),
having its principal place of business at 2600 South Gessner, Suite 500,
Houston, Texas 77063, promises to pay to the order of MidFirst Bank, a federally
chartered savings association ("Lender"), at the following address: MidFirst
Plaza, P.O. Box 26750, Oklahoma City, Oklahoma 73126, or such other place as the
holder hereof may from time to time designate in writing, the principal sum of
ELEVEN MILLION TWO-UNDRED THOUSAND AND NO/100 DOLLARS ($11,200,000.00) in lawful
money of the United States of America, with interest thereon to be computed from
the date of disbursement under this Promissory Note (this
"Note")
at the
Applicable Interest Rate (hereinafter defined), and to be paid in installments
as follows:
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A.
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A
payment, on the date of disbursement (the
"Disbursement Date"),
representing interest from the date of disbursement through the
last day of the calendar month in which such disbursement is
made;
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B.
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A
constant payment of $70,939.00 (based upon an amortization schedule over
360 months assuming a 360 day year consisting of 12 months of 30 days
each) on the first day of October, 2008 and on the first day of each
calendar month thereafter up to and including the first day of August,
2015; and
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C.
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The
balance of said principal sum, all unpaid interest thereon and all other
amounts owed pursuant to this Note, the Security Instrument (hereinafter
defined), the Other Security Documents (hereinafter defined), or otherwise
in connection with the loan evidenced by this Note shall be due and
payable on the first day of September, 2015 (the
"Maturity
Date").
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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
on the basis of a 360-day year comprised of twelve (12) thirty (30) day months,
except that interest due and payable for a period of less than a full month
shall be calculated by multiplying the actual number of days elapsed in such
period by a daily rate based on said 360 day year, provided that such method of
calculation does not cause the effective rate of interest on the loan evidenced
hereby to exceed the maximum lawful rate of interest applicable hereto as
calculated on the basis of a 365 or 366 day 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 Six and 52/100 percent (6.52%) per
annum.
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 Instrument or the
Other Security Documents, (ii) the payment of accrued but unpaid interest
thereon, (iii)
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the
payment of unpaid escrow amounts required herein, in the Security Instrument or
in the Other Security Documents, if any, 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. Any payment made by
Borrower must be received by Lender in immediately available funds no later than
4:00 p.m. Oklahoma City time in order to receive same day credit; any payment
received thereafter shall be considered to have been made on the following
business day.
3.
Late Charge.
If any
part of the Debt (hereinafter defined) is not actually received by Lender by
close of business on the fifteenth (15th) day after the date on which it was
due, Borrower shall pay to Lender an amount (the
"Late Charge")
equal
to the lesser of four percent (4%) 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 Instrument and the Other Security Documents. In
addition, Borrower shall pay to Lender a charge of $25.00 if a check or
preauthorized charge with which Borrower makes a payment on this Note is
dishonored or refused by Borrower's payor institution, and Lender may, at its
option, thereafter require any sums due under this Note to be paid by wire
transfer of federal funds, cashier's check or certified funds. Borrower's
payment of a Late Charge or the payment of interest at the default Rate (defined
below) shall not excuse late payment or constitute a waiver of any rights of
Lender.
4.
Security; Defined Terms;
Incorporation by Reference.
This Note is secured by the Security
Instrument and the Other Security Documents. The term
"Security Instrument"
as used in this Note shall mean the Deed of Trust, Security Agreement,
Assignment of Leases and Rents and Fixture Filing, executed and delivered by
Borrower contemporaneously with this Note and which secures the Debt. The term
"Other Security
Documents"
means all documents other than this Note or the Security
Instrument now or hereafter executed 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 the Security Instrument), 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. All amounts due and
payable under this Note, together with all sums due under the Security
Instrument and the Other Security Documents, including any applicable Prepayment
Consideration (hereinafter defined) and all applicable reasonable attorney fees
and costs, are collectively referred to herein as the
"Debt."
The term
"business day" or "business days" shall mean those days (other than Saturdays or
Sundays) upon which banks are generally open in Texas and Oklahoma for the
conduct of substantially all of their commercial lending activities, and wire
transfers of funds can be made. 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.
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Optional Prepayment; Prepayment
Premium.
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(a)
Optional prepayments shall not be permitted except as specifically provided in
this Section 5, and Lender may refuse to accept any prepayment that does not
comply with this Section. Prepayments of principal may be made in full, but not
in part (except in the event of casualty loss or condemnation as described
below), on any installment payment due date described in paragraph B on the
first page of this Note, with advance written notice to Lender not later than 30
days prior to such prepayment stating that Borrower intends to prepay this Note
in full on the date specified in such notice. Any prepaid amounts specified in
such notice shall become due and payable at the time provided in
such
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notice.
Such notice shall not suspend or defer the payment of regularly scheduled
principal and interest installments as they become due. Any prepayment by
Borrower, except as described in subparagraph (c) below, shall include a
Prepayment Consideration equal to (i) three percent (3%) of the unpaid principal
balance if prepaid during the first, second or third Loan Year, (ii) two percent
(2%) of the unpaid principal balance if prepaid during the fourth or fifth Loan
Year, and (iii) one percent (1%) of the unpaid principal balance if prepaid
during the sixth and seventh Loan Year. For purposes of the preceding sentences,
a "Loan Year" shall mean the period of time beginning September 1 of any given
year and continuing through and including the following August 31 (provided that
the first Loan Year shall also include the days remaining in August, 2008 as of
the Disbursement Date).
(b)
In the
event that Lender accelerates the maturity of this Note at any time during which
a Prepayment Consideration applies, and a tender of payment in excess of the
minimum amount necessary to reinstate the Loan is made by or on behalf of
Borrower in an amount sufficient to satisfy the Debt prior to or at a sheriffs
sale, trustee's sale or other foreclosure sale of the Mortgaged Property, or
during any redemption period following such sale, such tender shall be
considered to constitute a voluntary prepayment and shall require payment of the
Prepayment Consideration provided for in this Section 5, and Lender shall not be
required to accept such payment if it does not include the Prepayment
Consideration required under this Section 5. Alternatively or additionally,
Lender may seek injunctive relief in a court of competent jurisdiction to
restrain or prohibit a purposeful default by Borrower, in which event Borrower
shall pay to Lender legal and other expenses incurred by Lender in connection
with such default and Lender's efforts to restrain such default. Lender shall be
entitled to include the amount of the Prepayment Consideration in any credit bid
at a sheriffs sale, trustee's sale or other foreclosure of the Mortgaged
Property. Borrower expressly waives the provisions of any present or future
statute or law which prohibits or may prohibit the collection of a prepayment
premium, prepayment consideration or charge upon acceleration, and acknowledges
and agrees that the foregoing waiver constitutes separate consideration for
Lender's agreement to make the loan evidenced hereby, and that Lender would not
have made such loan and/or would have charged a higher interest rate without
such a waiver.
(c)
Notwithstanding
the foregoing: (A) no Prepayment Consideration shall be charged on any
prepayment caused by Lender's election to apply insurance proceeds or
condemnation awards to the Debt under the terms of the Security Instrument; (B)
no Prepayment Consideration shall be charged on any prepayment made within the
one-hundred eighty (180) day period immediately preceding the Maturity Date; and
(C) in no event shall the Prepayment Consideration exceed an amount equal to the
excess, if any, of (i) interest calculated at the highest applicable rate
permitted by applicable law, as construed by courts having jurisdiction thereof,
on the principal balance of this Note from time to time outstanding from the
date of closing of the Loan to the date of such acceleration, over (ii) interest
theretofore paid and accrued on this Note. The amount of any prepayment shall
never be less than the full amount of the then outstanding principal and
interest.
6.
Default.
An
"Event of Default"
shall occur if:
(a)
Borrower
fails to make the full and punctual payment of any amount payable hereunder
within fifteen (15) days of the date on which it was due, or under the Security
Instrument or Other Security Documents as and when the same becomes due and
payable;
(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
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(
c
) an
Event of Default (as defined in the Security Instrument or any of the Other
Security Documents) has occurred under the Security Instrument and/or Other
Security Documents after any applicable grace period.
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
Instrument 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 Borrower shall pay interest on the entire
unpaid principal balance at the rate (the
"Default
Rate") equal
to four percent (4%) above the Applicable Interest Rate; provided, however, that
notwithstanding the foregoing, in no event shall the Default Rate exceed the
Maximum Rate (hereinafter defined). 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 Instrument. 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 reasonable attorney fees and disbursements,
whether or not suit be brought. Such fees shall be immediately due and
payable.
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Use of Proceeds; Limit
of Validity.
The proceeds of this Note are to be used for business,
commercial, investment or other similar purposes and no portion thereof will be
used for personal, family or household use. It is expressly stipulated and
agreed to be the intent of Borrower and Lender at all times to comply with the
applicable Texas law governing the maximum rate or amount of interest payable on
this Note or the Debt and by the Other Security Documents (or applicable United
States federal law to the extent that it permits Lender to contract for, take,
reserve or receive a greater amount of interest than under Texas law) (the
"Maximum Rate").
If
(i) the applicable law is ever judicially interpreted so as to render usurious
any amount called for under this Note, the Security Instrument, or under any of
the Other Security Documents, or contracted for, charged, taken, reserved or
received with respect to the indebtedness evidenced by this Note, the Security
Instrument, or the Other Security Documents, or (ii) Lender's exercise of the
option herein contained to accelerate the maturity of this Note or any
prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by applicable law, then it is Borrower's and Lender's express
intent that (a) all excess amounts theretofore collected by Lender be credited
on the principal balance of this Note (or, if this Note has been or would
thereby be paid in full, refunded to Borrower), and (b) the provisions of this
Note, the Security Instrument, and the Other Security Documents immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new document so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder and thereunder. All sums paid or agreed to
be paid to Lender for the use, forbearance and detention of the indebtedness
evidenced hereby and by the Security Instrument, and the Other Security
Documents shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed
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the usury
ceiling from time to time in effect and applicable to such indebtedness for so
long as Debt is outstanding. To the extent that Lender is relying on Chapter
303, as amended, of the Texas Finance Code to determine the maximum amount of
interest permitted by applicable law on the principal of this Note, Lender will
utilize the weeldy rate ceiling from time to time in effect as provided in such
Chapter 303, as amended. To the extent United States federal law permits a
greater amount of interest than is permitted under Texas law, Lender will rely
on United States federal law instead of such Chapter 303, as amended, for the
purpose of determining the maximum amount permitted by applicable law.
Additionally, to the extent permitted by applicable law now or hereafter in
effect, Lender may, at its option and from time to time, implement any other
method of computing the maximum lawful rate under such Chapter 303, as amended,
or under other applicable law by giving notice, if required, to Borrower as
provided by applicable law now or hereafter in effect. In no event shall the
provisions of Chapter 346 of the Texas Finance Code (which regulates certain
revolving credit loan accounts and revolving triparty accounts) apply to the
indebtedness evidenced hereby. Notwithstanding anything to the contrary
contained herein, or in the Security Instrument, or in any of the Other Security
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.
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.
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 Instrument.
13.
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
Instrument is located and the laws of the United States applicable to
transactions in such state. Borrower hereby submits to personal jurisdiction in
the state courts located in said state and the federal courts of the 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.
14.
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.
15.
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 Instrument or the
Other Security Documents.
16.
No Waiver.
Any
failure by Lender to insist upon strict performance by Borrower of any of the
provisions of this Note, the Security Instrument 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 Instrument 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 Instrument or the
Other Security Documents.
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17.
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:
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Lender:
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MidFirst
Bank, a federally chartered savings association
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MidFirst
Plaza
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P.O.
Box 26750
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Oklahoma
City, Oklahoma 73126
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Attention:
Closing Department
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Borrower:
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Whitestone
Corporate Park West, LLC,
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a
Texas limited liability company
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2600
South Gessner, Suite 500
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Houston,
Texas 77063
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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 (set forth on page 1 of this Note) on
all notices or communications to Lender.
18.
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.
19.
Time of the Essence.
Time shall be of the essence in the performance of all obligations
of
Borrower hereunder.
BORROWER
AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY,
OR THEIR RESPECTIVE SUCCESSORS AND 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.
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BORROWER:
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Whitestone
Corporate Park West, LLC, a
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Texas
limited liability company
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By:
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Whitestone
REIT Operating Partnership, L.P.,
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a
Delaware limited partnership,
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its
Sole Member
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By:
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Whitestone REIT,
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a Maryland real estate investment trust,
its
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General Partner
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By:
/s/ John J.
Dee
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Name: John J. Dee
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Title: Executive Vice
President
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