Whitestone
REIT
|
(Exact
name of registrant as specified in its
charter)
|
Maryland
|
000-50256
|
76-0594970
|
||
(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer
Identification
No.)
|
2600
South Gessner, Suite 500, Houston,
Texas 77063
|
(Address
of principal executive offices) (Zip
Code)
|
(713)
827-9595
|
(Registrant's
telephone number, including area
code)
|
Not
Applicable
|
(Former
name or former address, if changed since last
report)
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)
|
·
|
Non-recourse
loans on specific properties or groups of properties,
and
|
·
|
A smaller
revolving credit facility secured by unencumbered
properties
|
·
|
Non-recourse
loans on specific properties or groups of properties,
and
|
·
|
A smaller
revolving credit facility secured by unencumbered
properties
|
Item 2.03 | Creation of Direct Financial Obligation or an Obligation under an Off- Balance Sheet Arrangement of a Registrant. |
Item 9.01 | Financial Statements and Exhibits. |
99.1
|
Promissory
Note dated October 1, 2008 between Whitestone Centers LLC and Sun Life
Assurance Company of Canada
|
99.2
|
Promissory
Note dated October 1, 2008 between Whitestone Centers LLC
and Sun Life Assurance Company of
Canada
|
99.3
|
Promissory
Note dated October 1, 2008 between Whitestone Centers LLC and Sun Life
Assurance Company of Canada
|
99.4
|
Promissory
Note dated October 1, 2008 between Whitestone Centers LLC and Sun Life
Assurance Company of Canada
|
99.5
|
Promissory
Note dated October 1, 2008 between Whitestone Centers LLC and Sun Life
Assurance Company of Canada
|
99.6
|
Promissory
Note dated October 1, 2008 between Whitestone Offices LLC and Nationwide
Insurance Company
|
99.7
|
Extension
of Revolving Credit Facility
|
Date:
October 7, 2008
|
WHITESTONE
REIT
|
||
By:
|
/s/
David K. Holeman
|
||
David
K. Holeman
Chief
Financial Officer
|
|||
1.
|
DEFINED TERMS
.
As
used in this Promissory Note, the following terms shall have the following
meanings:
|
|
1.1.
Borrower:
Whitestone
Centers LLC, a Texas limited liability company,
its
successors and assigns.
|
||
1.2. Lender : Sun Life Assurance Company of Canada, a Canadian corporation, together with other holders from time to time of this Note. | ||
1.3. Guarantor: Whitestone REIT, a Maryland real estate investment trust. | ||
1.4. Principal Sum: $2,050,000.00. | ||
1.5. Monthly Payment: $15,320.48. | ||
1.6. Date of Disbursement: October 1 , 2008. | ||
1.7.
Interest
Rate:
6.53% per
annum.
|
||
1.8. Default Rate: the Interest Rate plus five percent (5%) per annum, but in no event greater than the maximum lawful rate of interest. | ||
1.9. Maturity Date: October 1, 2013. | ||
1.10. Amortization Period: Twenty (20) years from the Interest Only Payment Date. | ||
1.11. Interest Only Payment Date: October 1, 2008, being the first day of the first month after the Date of Disbursement. | ||
1.12. First Payment Date : November 1, 2008, being the first day of the second month after the Date of Disbursement. | ||
1.13. Lender ’ s Payment Address: | Sun Life Assurance Company of Canada | |
c/o
Kinghorn Driver Hough & Co.
|
||
1300
Post Oak Blvd., Suite 1200
|
||
Houston,
Texas 77056
|
1.14. Permitted Prepayment Period: the period commencing on Date of Disbursement and ending on the Maturity Date, subject to and in accordance with the provisions of Paragraphs 12 and 13 of this Note. | |
1.15. Mortgage: a Deed of Trust and Security Agreement of even date with this Note from Borrower to, or for the benefit of, Lender, which secures Borrower ’ s obligations hereunder, and which covers property in Harris County, Texas, and all modifications or amendments thereto or extensions thereof. | |
1.16. Loan Documents, Insurance Proceeds, Laws, Taking Proceeds, Secured Debt, Property, and Event of Default : shall have the same meanings as in the Mortgage. |
Sunridge | 1 |
2.
|
DEBT
.
For
value received, Borrower promises to pay to the order of Lender, the
Principal Sum with interest on unpaid principal from the Date of
Disbursement at the Interest Rate. Interest shall be calculated on a
360-day year of twelve 30-day
months.
|
3.
|
PAYMENTS
.
Borrower
shall pay the Monthly Payment to Lender commencing on the First Payment
Date and continuing on each monthly anniversary thereof until the Maturity
Date. If a payment date is a non-business day, the Monthly Payment shall
be due on the next business day. On the Interest Only Payment
Date, Borrower shall pay the interest then due and accrued from the Date
of Disbursement.
|
4.
|
LATE
CHARGE
AND
ADDITIONAL
INTEREST.
Borrower
recognizes that if it does not make the Monthly Payments when due, Lender
will incur additional administrative expenses in servicing the loan, will
lose the use of the money due and will be frustrated in meeting its other
financial and loan commitments. Lender and Borrower acknowledge
that different methods could be used to calculate Lender
’
s
actual damages if the Monthly Payment is not made when due. To avoid
disputes over which method shall apply, Borrower agrees that a late charge
equal to four percent (4%) of each Monthly Payment which is not made when
due is a reasonable method for calculating said
damages. Borrower shall pay such late charge to Lender
immediately after the due date for each Monthly Payment which is not made
when due. The payment of such late charge shall not affect
Lender's other rights and remedies under this Note and the other Loan
Documents.
|
5.
|
APPLICATION
OF
PAYMENTS.
Unless
Lender elects otherwise, all sums received by Lender in payment hereunder
shall be applied first to late charges, costs of collection or
enforcement, all expenditures made by Lender pursuant to the Loan
Documents, and any other similar amounts due, if any, under this Note and
the other Loan Documents, then to amounts due pursuant to Paragraph 13 of
this Note, then to interest which is due and payable under this Note and
the remainder to principal due and payable under this Note. If
an Event of Default has occurred and is continuing, such payments may be
applied to sums due hereunder or under the other Loan Documents in any
order and combination that Lender may, in its sole discretion,
determine.
|
6.
|
WAIVERS.
Borrower
waives presentment for payment, demand, notice of nonpayment, notice of
intention to accelerate the maturity of this Note, diligence in
collection, commencement of suit against any obligor, notice of protest,
and protest of this Note and all other notices in connection with the
delivery, acceptance, performance, default or enforcement of the payment
of this Note, before or after maturity of this Note, with or without
notice to Borrower, and agrees that Borrower
’
s
liability shall not be in any manner affected by any indulgence, extension
of time, renewal, waiver or modification granted or consented to by
Lender. Borrower consents to any and all extensions of time,
renewals, waivers or modifications that may be granted by Lender with
respect to the payment or other provisions of this Note, and to any
substitution, exchange or release of the collateral for this Note, or any
part thereof, with or without substitution of said collateral, and agrees
to the addition or release of any guarantor, all whether primarily or
secondarily liable, before or after maturity of this Note, with or without
notice to Borrower, and without affecting Borrower's liability
under this Note.
|
7.
|
NO
USURY
.
It
is the intent of Lender and Borrower in the execution of this Note and all
other Loan Documents to contract in strict compliance with applicable
usury law. In furtherance thereof, Lender and Borrower
stipulate and agree that none of the terms and provisions contained in
this Note, or in any other Loan Documents, shall ever be construed to
create a contract to pay for the use, forbearance or detention of money,
interest at a rate in excess of the maximum interest rate permitted to be
charged by applicable law; that neither the Borrower nor any guarantors,
endorsers or other parties now or hereafter becoming liable for payment of
this Note shall ever be obligated or required to pay interest on this Note
at a rate in excess of the maximum interest that may be lawfully charged
under applicable law; and that the provisions of this Paragraph 7 shall
control over all other provisions of this Note and any other Loan
Documents which may be in apparent conflict herewith. Lender
expressly disavows any intention to charge or collect excessive unearned
interest or finance charges in the event the maturity of this Note is
accelerated. If the maturity of this Note shall be accelerated
for any reason or if the principal of this Note is paid prior to the end
of the term of this Note, and as a result thereof the interest received
for the actual period of existence of the loan evidenced by this Note
exceeds the applicable maximum lawful rate, Lender shall, at its option,
either refund to Borrower the amount of such excess or credit the amount
of such excess against the principal balance of this Note then outstanding
and thereby shall render inapplicable any and all penalties of any kind
provided by applicable law as a result of such excess
interest. In the event that Lender shall contract for, charge
or receive any amount or amounts and/or any other thing of value which are
determined to constitute interest which would increase the effective
interest rate on this Note to a rate in excess of that permitted to be
charged by applicable law, an amount equal to interest in excess of the
lawful rate shall, upon such determination, at the option of Lender, be
either immediately returned to Borrower or credited against the principal
balance of this Note then outstanding, in which event any and all
penalties of any kind under applicable law as a result of such excess
interest shall be inapplicable. By execution of this Note,
Borrower acknowledges that it believes the loan evidenced by this Note to
be non-usurious and agrees that if, at any time, Borrower should have
reason to believe that such loan is in fact usurious, it will give Lender
notice of such condition and Borrower agrees that Lender shall have sixty
(60) days in which to make appropriate refund or other adjustment in order
to correct such condition if in fact such exists. The term
“applicable law” as used in this Note shall
mean the laws
of the State of Texas or the laws of the United States, whichever laws
allow the greater rate of interest, as such laws now exist or may be
changed or amended or come into effect in the
future.
|
8.
|
ACCELERATION
AND
OTHER
REMEDIES
.
The
rights and remedies of Lender are set forth in the other Loan Documents
and include, without limitation, the right to declare the Secured Debt,
including the principal balance of this Note and accrued interest,
immediately due and payable in case of an Event of
Default.
|
9.
|
JOINT
AND
SEVERAL
LIABILITY.
If
there is more than one Borrower and/or Guarantor, the obligations and
covenants of each Borrower and/or Guarantor shall be joint and
several.
|
10.
|
AMENDMENTS.
This
Note may not be changed or amended orally, but only by an agreement in
writing, signed by the party against whom enforcement is
sought.
|
11.
|
GOVERNING
LAW.
This
Note shall be governed by and construed in accordance with the laws of the
state in which the Property is
located.
|
12.
|
PREPAYMENT.
Borrower
shall have no right to prepay, and Lender shall have no obligation to
accept tendered payments of, any portion of the unpaid Principal Sum
outstanding under this Note prior to the beginning of the Permitted
Prepayment Period. Borrower may prepay the entire unpaid Principal Sum
(but not any lesser amount) (the “Amount Prepaid”), with accrued interest
thereon to the date of prepayment, on any date on which a Monthly Payment
is due after the beginning of the Permitted Prepayment Period, upon thirty
(30) days' prior written notice to Lender of its intention to prepay,
provided that Borrower pays, at the time of prepayment and in addition
thereto, the amounts required to be paid pursuant to Paragraph 13 of this
Note and all other sums due under this Note and the other Loan Documents.
The date fixed for prepayment in such notice shall become the Maturity
Date, except that for the purpose of calculating the amounts payable
pursuant to Paragraph 13 of this Note, the Maturity Date shall mean the
date set forth in Paragraph 1.9 of this
Note.
|
13.
|
PREPAYMENT
INDEMNIFICATION
.
Borrower
shall indemnify Lender against any loss, damage and expense Lender incurs
if the unpaid Principal Sum is paid prior to the Maturity Date for any
reason except (i) a payment of the entire unpaid Principal Sum, with
accrued and unpaid interest, made within ninety (90) days of the Maturity
Date or (ii) any application by Lender of Insurance Proceeds or Taking
Proceeds to reduction of the Secured Debt pursuant to the other Loan
Documents. Lender and Borrower acknowledge that different
methods could be used to calculate Lender's actual damages if the unpaid
Principal Sum is paid prior to the Maturity Date. To avoid disputes over
which method shall apply, Borrower agrees that the following is a
reasonable method to calculate damages in such case, and Borrower shall
pay to Lender a prepayment premium in an amount equal to the greater
of:
|
|
(b)
|
the Discounted Yield
Maintenance Prepayment Fee, as hereinafter defined. For
purposes of this Paragraph 13, the term “Treasury Security” shall mean the
non-
callable
U.S. Treasury bill, note or bond having a maturity date most closely
equivalent to the Maturity Date. If more than one such
non-
callable
bill, note or bond matures in the same month as the Maturity Date, the
bill, note or bond with a coupon interest rate closest to the Interest
Rate shall be the Treasury Security. For purposes of this
Paragraph 13, the term “Treasury Yield” shall mean the per annum yield to
maturity of the Treasury Security, as published in the Wall Street Journal
on the fifth (5th) business day prior to the date of
prepayment.
|
If the Interest Rate is greater than the Treasury Yield, the difference between the Interest Rate and the Treasury Yield shall be divided by twelve (12) and multiplied by the then unpaid Principal Sum to determine the monthly payment differential. The present value of the series of monthly payment differentials for the number of whole and partial months from the date of prepayment to the Maturity Date shall be calculated using the Treasury Yield as the discount rate, compounded monthly. The resulting sum of all the discounted monthly payment differentials shall be the Discounted Yield Maintenance Prepayment Fee. | ||
If the Interest Rate is equal to or less than the Treasury Yield, the prepayment premium shall be one percent (1%) of the then unpaid Principal Sum. |
14.
|
ACCELERATION
INDEMNIFICATION.
If
the Maturity Date is accelerated by Lender because of the occurrence of an
Event of Default, Lender will sustain damages due to the loss of its
investment. Borrower therefore agrees to pay, at the time of
acceleration, in addition to all other sums due under this Note and the
other Loan Documents, as liquidated damages, an acceleration premium in an
amount equal to the greater
of:
|
|
(a)
|
three
percent (3%) of the then unpaid Principal Sum;
or
|
|
(b)
|
the
Discounted Yield Maintenance Prepayment Fee, as defined in Paragraph 13 of
this Note.
|
15.
|
NONRECOURSE
DEBT.
Borrower
shall be liable upon the indebtedness evidenced by this Note, for all sums
to accrue or to become payable thereon and for performance of all
covenants contained in this Note or in any of the other Loan Documents, to
the extent, but only to the extent, of Lender's security for the same,
including, without limitation, all properties, rights, estates and
interests covered by the Mortgage and the other Loan
Documents. No attachment, execution or other writ or process
shall be sought, issued or levied upon any assets, properties or funds of
Borrower other than the properties, rights, estates and interests
described in the Mortgage and the other Loan Documents. In the
event of foreclosure of such liens, mortgages or security interests, by
private power of sale or otherwise, no judgment for any deficiency upon
such indebtedness, sums and amounts shall be sought or obtained by Lender
against Borrower. Subject to the foregoing, nothing herein contained shall
be construed to prevent Lender from exercising and enforcing any other
remedy relating to the Property allowed at law or in equity or by any
statute or by the terms of any of the Loan
Documents.
|
|
(a)
|
any
damages, losses, liabilities, costs or expenses (including, without
limitation, reasonable attorneys
’
fees) incurred by Lender due to any of the following: (i) any security
deposits of tenants of the Property (not previously applied to remedy
tenant defaults) which have not been paid over to Lender; (ii) any rents
prepaid by any tenant of the Property more than one (1) month in advance;
(iii) any insurance proceeds or condemnation awards received by Borrower
and not applied according to the terms of the Mortgage; (iv) accepting
Lease termination payments without Lender's prior written consent and
direction as to use; (v) repairs to the Property resulting from a casualty
not reimbursed by insurance, to the extent insurance coverage for such
repairs was required by the Loan Documents; (vi) fraud, material
misrepresentation or bad faith on the part of Borrower; (vii) any event or
circumstance for which Borrower is obligated to indemnify Lender under the
provisions of the Mortgage respecting Hazardous Substances, Contamination
or Clean-Up; (viii) waste of the Property by Borrower; (ix) Borrower's
failure to pay real estate taxes or other assessments against the
Property; (x) Borrower
’
s
failure to comply with the Americans with Disabilities Act of 1990, as
amended, or any other Laws; or (xi) any failure of Borrower to obtain, or
cause to be obtained, any certificate of occupancy required by Laws
covering the Property or any portion thereof;
and
|
|
(b)
|
all
rents, issues and profits from the Property collected by Borrower after an
Event of Default has occurred and is continuing or after an event or
circumstance has occurred and is continuing which with the passage of time
or the giving of notice, or both, would constitute an Event of Default,
unless such rents, issues and profits are applied to the normal operating
expenses of the Property or to the Secured
Debt.
|
16.
|
SECURITY.
This
Note is secured by the other Loan Documents and all amendments,
modifications, supplements, substitutions, additions, renewals,
replacements and extensions
thereof.
|
17.
|
COLLECTION.
Any
check, draft, money order or other instrument given in payment of all or
any portion of the Secured Debt may be accepted by Lender and handled by
collection in the customary manner, but the same shall not constitute
payment hereunder or diminish any rights of Lender except to the extent
that actual cash proceeds of such instrument are unconditionally received
by Lender and applied to the Secured Debt in the manner elsewhere herein
provided. Acceptance by Lender of actual cash proceeds of less
than the total amount of the Secured Debt shall not constitute acceptance
of such partial payment in satisfaction of the total amount of the Secured
Debt, including, without limitation, the amounts payable to Lender
pursuant to Paragraph 13 of this
Note.
|
18.
|
ATTORNEYS
’
FEES.
Upon
any Event of Default, Borrower shall pay all costs incurred by Lender in
the course of collection of sums due under this Note or in enforcing any
of
Borrower
’
s
other obligations under the Loan Documents, including, without limitation,
reasonable attorneys’ fees and expenses, whether or not suit is filed by
Lender.
|
19.
|
REGISTRATION.
This
Note shall be deemed to be in registered form at Lender's sole
election. Such election may be made at any time without
endorsement of this Note or any other action by
Borrower. Borrower shall recognize any such election and, upon
request by Lender, shall cooperate with Lender at Lender's expense to
facilitate the consummation of such
election.
|
20.
|
WAIVER
OF
JURY
TRIAL.
BORROWER
AND LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER, ON
OR IN RESPECT OF ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY WAY
CONNECTED WITH, THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, OR THE
RELATIONSHIP OF BORROWER AND LENDER HEREUNDER OR
THEREUNDER.
|
21.
|
CAPTIONS
.
All
paragraph and subparagraph captions are for convenience of reference only
and shall not affect the construction of any provision
herein.
|
WHITESTONE CENTERS LLC, | |
a Texas limited liability company |
|
By:
|
Whitestone REIT
Operating Partnership, L.P., a
Delaware limited partnership, its sole member |
|||
By:
|
Whitestone
REIT, a Maryland real estate
investment
trust, its general partner
|
||||
By:
|
|||||
Name:
|
John
J. Dee
|
||||
Title:
|
Executive
Vice President
|
STATE OF TEXAS | § |
§ | |
COUNTY OF HARRIS | § |
Notary Public, State of Texas | ||
(printed name) | ||
My Commission Expires: | ||
1.
|
DEFINED
TERMS
.
As used in this Promissory Note, the following terms shall have the
following meanings:
|
|
1.13.
|
Lender
’
s
Payment Address:
|
Sun
Life Assurance Company of Canada
|
c/o
Kinghorn Driver Hough & Co.
|
|||
1300
Post Oak Blvd., Suite 1200
|
|||
Houston,
Texas 77056
|
Kempwood | 1 |
2.
|
DEBT
.
For
value received, Borrower promises to pay to the order of Lender, the
Principal Sum with interest on unpaid principal from the Date of
Disbursement at the Interest Rate. Interest shall be calculated on a
360-day year of twelve 30-day
months.
|
3.
|
PAYMENTS
.
Borrower
shall pay the Monthly Payment to Lender commencing on the First Payment
Date and continuing on each monthly anniversary thereof until the Maturity
Date. If a payment date is a non-business day, the Monthly Payment shall
be due on the next business day. On the Interest Only Payment
Date, Borrower shall pay the interest then due and accrued from the Date
of Disbursement.
|
On the Maturity Date, Borrower shall pay to Lender the entire then unpaid balance of principal and interest. Lender shall have no obligation, express or implied, to refinance the “balloon payment” then due. | |
All payments shall be made in lawful money of the United States of
America, in immediately available funds, at Lender’s Payment Address, or
at such other place as Lender may from time to time designate in
writing.
|
4.
|
LATE
CHARGE
AND
ADDITIONAL
INTEREST
.
Borrower
recognizes that if it does not make the Monthly Payments when due, Lender
will incur additional administrative expenses in servicing the loan, will
lose the use of the money due and will be frustrated in meeting its other
financial and loan commitments. Lender and Borrower acknowledge
that different methods could be used to calculate Lender’s actual damages
if the Monthly Payment is not made when due. To avoid disputes over which
method shall apply, Borrower agrees that a late charge equal to four
percent (4%) of each Monthly Payment which is not made when due is a
reasonable method for calculating said damages. Borrower shall
pay such late charge to Lender immediately after the due date for each
Monthly Payment which is not made when due. The payment of such
late charge shall not affect Lender’s other rights and remedies under this
Note and the other Loan
Documents.
All
expenditures by Lender pursuant to the Loan Documents, other than advances
of the Principal Sum, which are not reimbursed by Borrower immediately
upon demand; all amounts remaining due and unpaid after the Maturity Date;
and any amounts due and unpaid after an Event of Default (including late
charges) shall bear interest at the Default Rate until such amounts are
paid to Lender. Such payments shall be in addition to the late charge
described above.
|
5.
|
APPLICATION
OF
PAYMENTS
.
Unless
Lender elects otherwise, all sums received by Lender in payment hereunder
shall be applied first to late charges, costs of collection or
enforcement, all expenditures made by Lender pursuant to the Loan
Documents, and any other similar amounts due, if any, under this Note and
the other Loan Documents, then to amounts due pursuant to Paragraph 13 of
this Note, then to interest which is due and payable under this Note and
the remainder to principal due and payable under this Note. If
an Event of Default has occurred and is continuing, such payments may be
applied to sums due hereunder or under the other Loan Documents in any
order and combination that Lender may, in its sole discretion,
determine.
|
6.
|
WAIVERS
.
Borrower
waives presentment for payment, demand, notice of nonpayment, notice of
intention to accelerate the maturity of this Note, diligence in
collection, commencement of suit against any obligor, notice of protest,
and protest of this Note and all other notices in connection with the
delivery, acceptance, performance, default or enforcement of the payment
of this Note, before or after maturity of this Note, with or without
notice to Borrower, and agrees that Borrower’s liability shall not be in
any manner affected by any indulgence, extension of time, renewal, waiver
or modification granted or consented to by Lender. Borrower
consents to any and all extensions of time, renewals, waivers or
modifications that may be granted by Lender with respect to the payment or
other provisions of this Note, and to any substitution, exchange or
release of the collateral for this Note, or any part thereof, with or
without substitution of said collateral, and agrees to the addition or
release of any guarantor, all whether primarily or secondarily liable,
before or after maturity of this Note, with or without notice to Borrower,
and without affecting Borrower’s liability under this
Note.
|
7.
|
NO USURY.
It
is the intent of Lender and Borrower in the execution of this Note and all
other Loan Documents to contract in strict compliance with applicable
usury law. In furtherance thereof, Lender and Borrower
stipulate and agree that none of the terms and provisions contained in
this Note, or in any other Loan Documents, shall ever be construed to
create a contract to pay for the use, forbearance or detention of money,
interest at a rate in excess of the maximum interest rate permitted to be
charged by applicable law; that neither the Borrower nor any guarantors,
endorsers or other parties now or hereafter becoming liable for payment of
this Note shall ever be obligated or required to pay interest on this Note
at a rate in excess of the maximum interest that may be lawfully charged
under applicable law; and that the provisions of this Paragraph 7 shall
control over all other provisions of this Note and any other Loan
Documents which may be in apparent conflict herewith. Lender
expressly disavows any intention to charge or collect excessive unearned
interest or finance charges in the event the maturity of this Note is
accelerated. If the maturity of this Note shall be accelerated
for any reason or if the principal of this Note is paid prior to the end
of the term of this Note, and as a result thereof the interest received
for the actual period of existence of the loan evidenced by this Note
exceeds the applicable maximum lawful rate, Lender shall, at its option,
either refund to Borrower the amount of such excess or credit the amount
of such excess against the principal balance of this Note then outstanding
and thereby shall render inapplicable any and all penalties of any kind
provided by applicable law as a result of such excess
interest. In the event that Lender shall contract for, charge
or receive any amount or amounts and/or any other thing of value which are
determined to constitute interest which would increase the effective
interest rate on this Note to a rate in excess of that permitted to be
charged by applicable law, an amount equal to interest in excess of the
lawful rate shall, upon such determination, at the option of Lender, be
either immediately returned to Borrower or credited against the principal
balance of this Note then outstanding, in which event any and all
penalties of any kind under applicable law as a result of such excess
interest shall be inapplicable. By execution of this Note,
Borrower acknowledges that it believes the loan evidenced by this Note to
be non-usurious and agrees that if, at any time, Borrower should have
reason to believe that such loan is in fact usurious, it will give Lender
notice of such condition and Borrower agrees that Lender shall have sixty
(60) days in which to make appropriate refund or other adjustment in order
to correct such condition if in fact such exists. The term
“applicable law” as used in this Note shall mean the laws of the
State of Texas or the laws of the United States, whichever laws allow the
greater rate of interest, as such laws now exist or may be changed or
amended or come into effect in the future.
|
8.
|
ACCELERATION AND OTHER REMEDIES.
The
rights and remedies of Lender are set forth in the other Loan Documents
and include, without limitation, the right to declare the Secured Debt,
including the principal balance of this Note and accrued interest,
immediately due and payable in case of an Event of
Default.
|
9.
|
JOINT AND SEVERAL LIABILITY.
If
there is more than one Borrower and/or Guarantor, the obligations and
covenants of each Borrower and/or Guarantor shall be joint and
several.
|
10.
|
AMENDMENTS
.
This
Note may not be changed or amended orally, but only by an agreement in
writing, signed by the party against whom enforcement is
sought.
|
11.
|
GOVERNING LAW
.
This
Note shall be governed by and construed in accordance with the laws of the
state in which the Property is
located.
|
12.
|
PREPAYMENT
.
Borrower
shall have no right to prepay, and Lender shall have no obligation to
accept tendered payments of, any portion of the unpaid Principal Sum
outstanding under this Note prior to the beginning of the Permitted
Prepayment Period. Borrower may prepay the entire unpaid Principal Sum
(but not any lesser amount) (the “Amount Prepaid”), with accrued interest
thereon to the date of prepayment, on any date on which a Monthly Payment
is due after the beginning of the Permitted Prepayment Period, upon thirty
(30) days’ prior written notice to Lender of its intention to prepay,
provided that Borrower pays, at the time of prepayment and in addition
thereto, the amounts required to be paid pursuant to Paragraph 13 of this
Note and all other sums due under this Note and the other Loan Documents.
The date fixed for prepayment in such notice shall become the Maturity
Date, except that for the purpose of calculating the amounts payable
pursuant to Paragraph 13 of this Note, the Maturity Date shall mean the
date set forth in Paragraph 1.9 of this
Note.
|
13.
|
PREPAYMENT
INDEMNIFICATION
.
Borrower
shall indemnify Lender against any loss, damage and expense Lender incurs
if the unpaid Principal Sum is paid prior to the Maturity Date for any
reason except (i) a payment of the entire unpaid Principal Sum, with
accrued and unpaid interest, made within ninety (90) days of the Maturity
Date or (ii) any application by Lender of Insurance Proceeds or Taking
Proceeds to reduction of the Secured Debt pursuant to the other Loan
Documents. Lender and Borrower acknowledge that different
methods could be used to calculate Lender’s actual damages if the unpaid
Principal Sum is paid prior to the Maturity Date. To avoid disputes over
which method shall apply, Borrower agrees that the following is a
reasonable method to calculate damages in such case, and Borrower shall
pay to Lender a prepayment premium in an amount equal to the greater
of:
|
(a) | one percent (1%) of the then unpaid Principal Sum; or | |
|
(b)
|
the
Discounted Yield Maintenance Prepayment Fee, as hereinafter
defined. For purposes of this Paragraph 13, the term “Treasury
Security” shall mean the non-callable U.S. Treasury bill, note or bond
having a maturity date most closely equivalent to the Maturity
Date. If more than one such non-callable bill, note or bond
matures in the same month as the Maturity Date, the bill, note or bond
with a coupon interest rate closest to the Interest Rate shall be the
Treasury Security. For purposes of this Paragraph 13, the term
“Treasury Yield” shall mean the per annum yield to maturity of the
Treasury Security, as published in the Wall Street Journal on the fifth
(5th) business day prior to the date of
prepayment.
|
If the Interest Rate is greater than the Treasury Yield, the
difference between the Interest Rate and the Treasury Yield shall be
divided by twelve (12) and multiplied by the then unpaid Principal Sum to
determine the monthly payment differential. The present value
of the series of monthly payment differentials for the number of whole and
partial months from the date of prepayment to the Maturity Date shall be
calculated using the Treasury Yield as the discount rate, compounded
monthly. The resulting sum of all the discounted monthly
payment differentials shall be the Discounted Yield Maintenance Prepayment
Fee.
If the Interest Rate
is equal to or less than the Treasury Yield, the prepayment premium shall
be one percent (1%) of the then unpaid Principal
Sum.
|
14.
|
ACCELERATION
INDEMNIFICATION.
If
the Maturity Date is accelerated by Lender because of the occurrence of an
Event of Default, Lender will sustain damages due to the loss of its
investment. Borrower therefore agrees to pay, at the time of
acceleration, in addition to all other sums due under this Note and the
other Loan Documents, as liquidated damages, an acceleration premium in an
amount equal to the greater
of:
|
(a) |
three
percent (3%) of the then unpaid Principal Sum; or
|
|
|
(b)
|
the
Discounted Yield Maintenance Prepayment Fee, as defined in Paragraph 13 of
this Note.
|
15.
|
NONRECOURSE
DEBT.
Borrower
shall be liable upon the indebtedness evidenced by this Note, for all sums
to accrue or to become payable thereon and for performance of all
covenants contained in this Note or in any of the other Loan Documents, to
the extent, but only to the extent, of Lender’s security for the same,
including, without limitation, all properties, rights, estates and
interests covered by the Mortgage and the other Loan
Documents. No attachment, execution or other writ or process
shall be sought, issued or levied upon any assets, properties or funds of
Borrower other than the properties, rights, estates and interests
described in the Mortgage and the other Loan Documents. In the
event of foreclosure of such liens, mortgages or security interests, by
private power of sale or otherwise, no judgment for any deficiency upon
such indebtedness, sums and amounts shall be sought or obtained by Lender
against Borrower. Subject to the foregoing, nothing herein contained shall
be construed to prevent Lender from exercising and enforcing any other
remedy relating to the Property allowed at law or in equity or by any
statute or by the terms of any of the Loan
Documents.
|
Notwithstanding the foregoing, Borrower shall be personally liable to Lender for: |
|
(a)
|
any
damages, losses, liabilities, costs or expenses (including, without
limitation, reasonable attorneys’ fees) incurred by Lender due to any of
the following: (i) any security deposits of tenants of the Property (not
previously applied to remedy tenant defaults) which have not been paid
over to Lender; (ii) any rents prepaid by any tenant of the Property more
than one (1) month in advance; (iii) any insurance proceeds or
condemnation awards received by Borrower and not applied according to the
terms of the Mortgage; (iv) accepting Lease termination payments without
Lender’s prior written consent and direction as to use; (v) repairs to the
Property resulting from a casualty not reimbursed by insurance, to the
extent insurance coverage for such repairs was required by the Loan
Documents; (vi) fraud, material misrepresentation or bad faith on the part
of Borrower; (vii) any event or circumstance for which Borrower is
obligated to indemnify Lender under the provisions of the Mortgage
respecting Hazardous Substances, Contamination or Clean-Up; (viii) waste
of the Property by Borrower; (ix) Borrower’s failure to pay real estate
taxes or other assessments against the Property; (x) Borrower’s failure to
comply with the Americans with Disabilities Act of 1990, as amended, or
any other Laws; or (xi) any failure of Borrower to obtain, or cause to be
obtained, any certificate of occupancy required by Laws covering the
Property or any portion thereof;
and
|
|
(b)
|
all
rents, issues and profits from the Property collected by Borrower after an
Event of Default has occurred and is continuing or after an event or
circumstance has occurred and is continuing which with the passage of time
or the giving of notice, or both, would constitute an Event of Default,
unless such rents, issues and profits are applied to the normal operating
expenses of the Property or to the Secured
Debt.
|
16.
|
SECURITY
.
This
Note is secured by the other Loan Documents and all amendments,
modifications, supplements, substitutions, additions, renewals,
replacements and extensions
thereof.
|
17.
|
COLLECTION.
Any
check, draft, money order or other instrument given in payment of all or
any portion of the Secured Debt may be accepted by Lender and handled by
collection in the customary manner, but the same shall not constitute
payment hereunder or diminish any rights of Lender except to the extent
that actual cash proceeds of such instrument are unconditionally received
by Lender and applied to the Secured Debt in the manner elsewhere herein
provided. Acceptance by Lender of actual cash proceeds of less
than the total amount of the Secured Debt shall not constitute acceptance
of such partial payment in satisfaction of the total amount of the Secured
Debt, including, without limitation, the amounts payable to Lender
pursuant to Paragraph 13 of this
Note.
|
18.
|
ATTORNEYS
’
FEES.
Upon
any Event of Default, Borrower shall pay all costs incurred by Lender in
the course of collection of sums due under this Note or in enforcing any
of
Borrower’s
other obligations under the Loan Documents, including, without limitation,
reasonable attorneys’ fees and expenses, whether or not suit is filed by
Lender.
|
19.
|
REGISTRATION
.
This
Note shall be deemed to be in registered form at Lender’s sole
election. Such election may be made at any time without
endorsement of this Note or any other action by
Borrower. Borrower shall recognize any such election and, upon
request by Lender, shall cooperate with Lender at Lender’s expense to
facilitate the consummation of such
election.
|
20.
|
WAIVER
OF
JURY
TRIAL
.
BORROWER
AND LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER, ON
OR IN RESPECT OF ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY WAY
CONNECTED WITH, THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, OR THE
RELATIONSHIP OF BORROWER AND LENDER HEREUNDER OR
THEREUNDER.
|
21.
|
CAPTIONS
.
All
paragraph
and subparagraph captions are for convenience of reference only and shall
not affect the construction of any provision
herein.
|
WHITESTONE CENTERS LLC, | |
a Texas limited liability company |
|
By:
|
Whitestone
REIT Operating Partnership, L.P., a
Delaware limited
partnership,
its sole member |
|||
By:
|
Whitestone
REIT, a Maryland real estate
investment trust, its general partner |
||||
By:
|
|||||
Name:
|
John
J. Dee
|
||||
Title:
|
Executive
Vice President
|
STATE OF TEXAS | § |
§ | |
COUNTY OF HARRIS | § |
Notary Public, State of Texas | ||
(printed name) | ||
My Commission Expires: | ||
1.
|
DEFINED TERMS
.
As
used in this Promissory Note, the following terms shall have the following
meanings:
|
|
1.1. Borrower: Whitestone Centers LLC, a Texas limited liability company, its successors and assigns . | ||
1.2. Lender : Sun Life Assurance Company of Canada, a Canadian corporation, together with other holders from time to time of this Note. | ||
1.3. Guarantor: Whitestone REIT, a Maryland real estate investment trust. | ||
1.4. Principal Sum: $5,500,000.00. | ||
1.5. Monthly Payment: $41,103.72. | ||
1.6. Date of Disbursement: October 1 , 2008. | ||
1 .7. Interest Rate : 6. 53 % per annum. | ||
1.8. Default Rate: the Interest Rate plus five percent (5%) per annum, but in no event greater than the maximum lawful rate of interest. | ||
1.9. Maturity Date: October 1, 20 13. | ||
1.10. Amortization Period: Twenty (20) years from the Interest Only Payment Date. | ||
1 .11. Interest Only Payment Date: October 1, 2008, being the first day of the first month after the Date of Disbursement. | ||
1 .12. First Payment Date : November 1, 2008, being the first day of the second month after the Date of Disbursement. | ||
1.13. Lender’s Payment Address: | Sun Life Assurance Company of Canada | |
c/o
Kinghorn Driver Hough &
Co.
|
||
1300
Post Oak Blvd., Suite
1200
|
||
Houston,
Texas 77056
|
||
1.14. Permitted Prepayment Period: the period commencing on Date of Disbursement and ending on the Maturity Date, subject to and in accordance with the provisions of Pa ragraphs 12 and 13 of this Note. | ||
1.15. Mortgage: a Deed of Trust and Security Agreement of even date with this Note from Borrower to, or for the benefit of, Lender, which secures Borrower's obligations hereunder, and which covers property in Harris County, Texas, and all modifications or amendments thereto or extensions thereof. | ||
1.16. Loan Documents, Insurance Proceeds, Laws, Taking Proceeds, Secured Debt, Property, and Event of Default : shall have the same meanings as in the Mortgage. |
Lion Square | 1 |
2.
|
DEBT
.
For
value received, Borrower promises to pay to the order of Lender, the
Principal Sum with interest on unpaid principal from the Date of
Disbursement at the Interest Rate. Interest shall be calculated on a
360-day year of twelve 30-day
months.
|
3.
|
PAYMENTS
.
Borrower
shall pay the Monthly Payment to Lender commencing on the First Payment
Date and continuing on each monthly anniversary thereof until the Maturity
Date. If a payment date is a non-business day, the Monthly Payment shall
be due on the next business day. On the Interest Only Payment
Date, Borrower shall pay the interest then due and accrued from the Date
of Disbursement.
|
On
the Maturity Date, Borrower shall pay to Lender the entire then unpaid
balance of principal and interest. Lender shall have no
obligation, express or implied, to refinance the “balloon payment” then
due.
|
|
All
payments shall be made in lawful money of the United States of America, in
immediately available funds, at Lender’s Payment Address, or at such other
place as Lender may from time to time designate in
writing.
|
|
4.
|
LATE
CHARGE
AND
ADDITIONAL
INTEREST.
Borrower
recognizes that if it does not make the Monthly Payments when due, Lender
will incur additional administrative expenses in servicing the loan, will
lose the use of the money due and will be frustrated in meeting its other
financial and loan commitments. Lender and Borrower acknowledge
that different methods could be used to calculate Lender’s actual damages
if the Monthly Payment is not made when due. To avoid disputes over which
method shall apply, Borrower agrees that a late charge equal to four
percent (4%) of each Monthly Payment which is not made when due is a
reasonable method for calculating said damages. Borrower shall
pay such late charge to Lender immediately after the due date for each
Monthly Payment which is not made when due. The payment of such
late charge shall not affect Lender’s other rights and remedies under this
Note and the other Loan
Documents.
|
All
expenditures by Lender pursuant to the Loan Documents, other than advances
of the Principal Sum, which are not reimbursed by Borrower immediately
upon demand; all amounts remaining due and unpaid after the Maturity Date;
and any amounts due and unpaid after an Event of Default (including late
charges) shall bear interest at the Default Rate until such amounts are
paid to Lender. Such payments shall be in addition to the late charge
described above.
|
|
5.
|
APPLICATION
OF
PAYMENTS.
Unless
Lender elects otherwise, all sums received by Lender in payment hereunder
shall be applied first to late charges, costs of collection or
enforcement, all expenditures made by Lender pursuant to the Loan
Documents, and any other similar amounts due, if any, under this Note and
the other Loan Documents, then to amounts due pursuant to Paragraph 13 of
this Note, then to interest which is due and payable under this Note and
the remainder to principal due and payable under this Note. If
an Event of Default has occurred and is continuing, such payments may be
applied to sums due hereunder or under the other Loan Documents in any
order and combination that Lender may, in its sole discretion,
determine.
|
6.
|
WAIVERS.
Borrower
waives presentment for payment, demand, notice of nonpayment, notice of
intention to accelerate the maturity of this Note, diligence in
collection, commencement of suit against any obligor, notice of protest,
and protest of this Note and all other notices in connection with the
delivery, acceptance, performance, default or enforcement of the payment
of this Note, before or after maturity of this Note, with or without
notice to Borrower, and agrees that Borrower’s liability shall not be in
any manner affected by any indulgence, extension of time, renewal, waiver
or modification granted or consented to by Lender. Borrower
consents to any and all extensions of time, renewals, waivers or
modifications that may be granted by Lender with respect to the payment or
other provisions of this Note, and to any substitution, exchange or
release of the collateral for this Note, or any part thereof, with or
without substitution of said collateral, and agrees to the addition or
release of any guarantor, all whether primarily or secondarily liable,
before or after maturity of this Note, with or without notice to Borrower,
and without affecting Borrower’s liability under this
Note.
|
7.
|
NO
USURY.
It
is the intent of Lender and Borrower in the execution of this Note and all
other Loan Documents to contract in strict compliance with applicable
usury law. In furtherance thereof, Lender and Borrower
stipulate and agree that none of the terms and provisions contained in
this Note, or in any other Loan Documents, shall ever be construed to
create a contract to pay for the use, forbearance or detention of money,
interest at a rate in excess of the maximum interest rate permitted to be
charged by applicable law; that neither the Borrower nor any guarantors,
endorsers or other parties now or hereafter becoming liable for payment of
this Note shall ever be obligated or required to pay interest on this Note
at a rate in excess of the maximum interest that may be lawfully charged
under applicable law; and that the provisions of this Paragraph 7 shall
control over all other provisions of this Note and any other Loan
Documents which may be in apparent conflict herewith. Lender
expressly disavows any intention to charge or collect excessive unearned
interest or finance charges in the event the maturity of this Note is
accelerated. If the maturity of this Note shall be accelerated
for any reason or if the principal of this Note is paid prior to the end
of the term of this Note, and as a result thereof the interest received
for the actual period of existence of the loan evidenced by this Note
exceeds the applicable maximum lawful rate, Lender shall, at its option,
either refund to Borrower the amount of such excess or credit the amount
of such excess against the principal balance of this Note then outstanding
and thereby shall render inapplicable any and all penalties of any kind
provided by applicable law as a result of such excess
interest. In the event that Lender shall contract for, charge
or receive any amount or amounts and/or any other thing of value which are
determined to constitute interest which would increase the effective
interest rate on this Note to a rate in excess of that permitted to be
charged by applicable law, an amount equal to interest in excess of the
lawful rate shall, upon such determination, at the option of Lender, be
either immediately returned to Borrower or credited against the principal
balance of this Note then outstanding, in which event any and all
penalties of any kind under applicable law as a result of such excess
interest shall be inapplicable. By execution of this Note,
Borrower acknowledges that it believes the loan evidenced by this Note to
be non-usurious and agrees that if, at any time, Borrower should have
reason to believe that such loan is in fact usurious, it will give Lender
notice of such condition and Borrower agrees that Lender shall have sixty
(60) days in which to make appropriate refund or other adjustment in order
to correct such condition if in fact such exists. The term
“applicable law” as used in this Note
shall
mean the laws of the State of Texas or the laws of the United
States, whichever laws allow the greater rate of interest, as such laws
now exist or may be changed or amended or come into effect in the
future.
|
8.
|
ACCELERATION
AND
OTHER
REMEDIES
.
The
rights and remedies of Lender are set forth in the other Loan Documents
and include, without limitation, the right to declare the Secured Debt,
including the principal balance of this Note and accrued interest,
immediately due and payable in case of an Event of
Default.
|
9.
|
JOINT
AND
SEVERAL
LIABILITY.
If
there is more than one Borrower and/or Guarantor, the obligations and
covenants of each Borrower and/or Guarantor shall be joint and
several.
|
10.
|
AMENDMENTS.
This
Note may not be changed or amended orally, but only by an agreement in
writing, signed by the party against whom enforcement is
sought.
|
11.
|
GOVERNING
LAW.
This
Note shall be governed by and construed in accordance with the laws of the
state in which the Property is
located.
|
12.
|
PREPAYMENT.
Borrower
shall have no right to prepay, and Lender shall have no obligation to
accept tendered payments of, any portion of the unpaid Principal Sum
outstanding under this Note prior to the beginning of the Permitted
Prepayment Period. Borrower may prepay the entire unpaid Principal Sum
(but not any lesser amount) (the “Amount Prepaid”), with accrued interest
thereon to the date of prepayment, on any date on which a Monthly Payment
is due after the beginning of the Permitted Prepayment Period, upon thirty
(30) days’ prior written notice to Lender of its intention to prepay,
provided that Borrower pays, at the time of prepayment and in addition
thereto, the amounts required to be paid pursuant to Paragraph 13 of this
Note and all other sums due under this Note and the other Loan Documents.
The date fixed for prepayment in such notice shall become the Maturity
Date, except that for the purpose of calculating the amounts payable
pursuant to Paragraph 13 of this Note, the Maturity Date shall mean the
date set forth in Paragraph 1.9 of this
Note.
|
13.
|
PREPAYMENT
INDEMNIFICATIO
N
.
Borrower
shall indemnify Lender against any loss, damage and expense Lender incurs
if the unpaid Principal Sum is paid prior to the Maturity Date for any
reason except (i) a payment of the entire unpaid Principal Sum, with
accrued and unpaid interest, made within ninety (90) days of the Maturity
Date or (ii) any application by Lender of Insurance Proceeds or Taking
Proceeds to reduction of the Secured Debt pursuant to the other Loan
Documents. Lender and Borrower acknowledge that different
methods could be used to calculate Lender’s actual damages if the unpaid
Principal Sum is paid prior to the Maturity Date. To avoid disputes over
which method shall apply, Borrower agrees that the following is a
reasonable method to calculate damages in such case, and Borrower shall
pay to Lender a prepayment premium in an amount equal to the greater
of:
|
(a) | one percent (1%) of the then unpaid Principal Sum; or |
(b) |
the
Discounted Yield Maintenance Prepayment Fee, as hereinafter
defined. For purposes of this Paragraph 13, the term “Treasury
Security” shall mean the non-
callable U.S.
Treasury bill, note or bond having a maturity date most closely equivalent
to the Maturity Date. If more than one such non-callable bill,
note or bond matures in the same month as the Maturity Date, the bill,
note or bond with a coupon interest rate closest to the Interest Rate
shall be the Treasury Security. For purposes of this Paragraph
13, the term “Treasury Yield” shall mean the per annum yield to maturity
of the Treasury Security, as published in the Wall Street Journal on the
fifth (5th) business day prior to the date of
prepayment.
|
|
If
the Interest Rate is greater than the Treasury Yield, the difference
between the Interest Rate and the Treasury Yield shall be divided by
twelve (12) and multiplied by the then unpaid Principal Sum to determine
the monthly payment differential. The present value of the
series of monthly payment differentials for the number of whole and
partial months from the date of prepayment to the Maturity Date shall be
calculated using the Treasury Yield as the discount rate, compounded
monthly. The resulting sum of all the discounted monthly
payment differentials shall be the Discounted Yield Maintenance Prepayment
Fee.
|
||
If the Interest Rate is equal to or less than the Treasury Yield, the prepayment premium shall be one percent (1%) of the then unpaid Principal Sum. |
14.
|
ACCELERATION
INDEMNIFICATION
.
If
the Maturity Date is accelerated by Lender because of the occurrence of an
Event of Default, Lender will sustain damages due to the loss of its
investment. Borrower therefore agrees to pay, at the time of
acceleration, in addition to all other sums due under this Note and the
other Loan Documents, as liquidated damages, an acceleration premium in an
amount equal to the greater of:
|
|
(a)
|
three
percent (3%) of the then unpaid Principal Sum; or
|
|
(b)
|
the
Discounted Yield Maintenance Prepayment Fee, as defined in Paragraph 13 of
this Note.
|
|
15.
|
NONRECOURSE
DEBT
.
Borrower
shall be liable upon the indebtedness evidenced by this Note, for all sums
to accrue or to become payable thereon and for performance of all
covenants contained in this Note or in any of the other Loan Documents, to
the extent, but only to the extent, of Lender’s security for the same,
including, without limitation, all properties, rights, estates and
interests covered by the Mortgage and the other Loan
Documents. No attachment, execution or other writ or process
shall be sought, issued or levied upon any assets, properties or funds of
Borrower other than the properties, rights, estates and interests
described in the Mortgage and the other Loan Documents. In the
event of foreclosure of such liens, mortgages or security interests, by
private power of sale or otherwise, no judgment for any deficiency upon
such indebtedness, sums and amounts shall be sought or obtained by Lender
against Borrower. Subject to the foregoing, nothing herein contained shall
be construed to prevent Lender from exercising and enforcing any other
remedy relating to the Property allowed at law or in equity or by any
statute or by the terms of any of the Loan
Documents.
|
Notwithstanding the foregoing, Borrower shall be personally liable to Lender for: |
(a)
|
any
damages, losses, liabilities, costs or expenses (including, without
limitation, reasonable attorneys’ fees) incurred by Lender due to any of
the following: (i) any security deposits of tenants of the Property (not
previously applied to remedy tenant defaults) which have not been paid
over to Lender; (ii) any rents prepaid by any tenant of the Property more
than one (1) month in advance; (iii) any insurance proceeds or
condemnation awards received by Borrower and not applied according to the
terms of the Mortgage; (iv) accepting Lease termination payments without
Lender’s prior written consent and direction as to use; (v) repairs to the
Property resulting from a casualty not reimbursed by insurance, to the
extent insurance coverage for such repairs was required by the Loan
Documents; (vi) fraud, material misrepresentation or bad faith on the part
of Borrower; (vii) any event or circumstance for which Borrower is
obligated to indemnify Lender under the provisions of the Mortgage
respecting Hazardous Substances, Contamination or Clean-Up; (viii) waste
of the Property by Borrower; (ix) Borrower’s failure to pay real estate
taxes or other assessments against the Property; (x) Borrower’s failure to
comply with the Americans with Disabilities Act of 1990, as amended, or
any other Laws; or (xi) any failure of Borrower to obtain, or cause to be
obtained, any certificate of occupancy required by Laws covering the
Property or any portion thereof;
and
|
|
(b)
|
all
rents, issues and profits from the Property collected by Borrower after an
Event of Default has occurred and is continuing or after an event or
circumstance has occurred and is continuing which with the passage of time
or the giving of notice, or both, would constitute an Event of Default,
unless such rents, issues and profits are applied to the normal operating
expenses of the Property or to the Secured
Debt.
|
|
Lender
shall not be limited in any way in enforcing the personal liability and
obligations of Borrower under the Loan Documents against Borrower, nor
shall Lender be limited in any way in enforcing the personal liability and
obligations of any guarantor or indemnitor in accordance with the terms of
the instruments creating such liabilities and
obligations.
|
||
16.
|
SECURITY.
This
Note is secured by the other Loan Documents and all amendments,
modifications, supplements, substitutions, additions, renewals,
replacements and extensions
thereof.
|
|
17.
|
COLLECTION
.
Any
check, draft, money order or other instrument given in payment of all or
any portion of the Secured Debt may be accepted by Lender and handled by
collection in the customary manner, but the same shall not constitute
payment hereunder or diminish any rights of Lender except to the extent
that actual cash proceeds of such instrument are unconditionally received
by Lender and applied to the Secured Debt in the manner elsewhere herein
provided. Acceptance by Lender of actual cash proceeds of less
than the total amount of the Secured Debt shall not constitute acceptance
of such partial payment in satisfaction of the total amount of the Secured
Debt, including, without limitation, the amounts payable to Lender
pursuant to Paragraph 13 of this
Note.
|
|
18.
|
ATTORNEYS’ FEES. Upon any Event of Default, Borrower shall pay all costs incurred by Lender in the course of collection of sums due under this Note or in enforcing any of Borrower’s other obligations under the Loan Documents, including, without limitation, reasonable attorneys’ fees and expenses, whether or not suit is filed by Lender. |
19.
|
REGISTRATION.
This
Note shall be deemed to be in registered form at Lender’s sole
election. Such election may be made at any time without
endorsement of this Note or any other action by
Borrower. Borrower shall recognize any such election and, upon
request by Lender, shall cooperate with Lender at Lender’s expense to
facilitate the consummation of such
election.
|
20.
|
WAIVER
OF
JURY
TRIAL
.
BORROWER
AND LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER, ON
OR IN RESPECT OF ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY WAY
CONNECTED WITH, THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, OR THE
RELATIONSHIP OF BORROWER AND LENDER HEREUNDER OR
THEREUNDER.
|
21.
|
CAPTIONS
.
All
paragraph and subparagraph captions are for convenience of reference only
and shall not affect the construction of any provision
herein.
|
WHITESTONE CENTERS LLC, | |
a Texas limited liability company |
|
By:
|
Whitestone REIT
Operating Partnership, L.P., a
Delaware limited partnership, its sole member |
|||
By:
|
Whitestone
REIT, a Maryland real estate
investment trust, its general partner |
||||
By:
|
|||||
Name:
|
John
J. Dee
|
||||
Title:
|
Executive
Vice President
|
STATE OF TEXAS | § |
§ | |
COUNTY OF HARRIS | § |
Notary Public, State of Texas | ||
(printed name) | ||
My Commission Expires: | ||
1.
|
DEFINED TERMS
.
As
used in this Promissory Note, the following terms shall have the following
meanings:
|
|
1.1. Borrower: Whitestone Centers LLC, a Texas limited liability company, its successors and assigns. | ||
1.2. Lender : Sun Life Assurance Company of Canada, a Canadian corporation, together with other holders from time to time of this Note. | ||
1.3. Guarantor: Whitestone REIT, a Maryland real estate investment trust. | ||
1.4. Principal Sum: $3,800,000.00. | ||
1.5. Monthly Payment: $28,398.93. | ||
1.6. Date of Disbursement: October 1 , 2008. | ||
1.7. Interest Rate: 6.53% per annum. | ||
1.8. Default Rate: the Interest Rate plus five percent (5%) per annum, but in no event greater than the maximum lawful rate of interest. | ||
1.9. Maturity Date: October 1, 2013. | ||
1.10. Amortization Period: Twenty (20) years from the Interest Only Payment Date. | ||
1.11. Interest Only Payment Date: October 1, 2008, being the first day of the first month after the Date of Disbursement. | ||
1.12. First Payment Date : November 1, 2008, being the first day of the second month after the Date of Disbursement. | ||
1.13. Lender’s Payment Address: | Sun Life Assurance Company of Canada | |
c/o Kinghorn Driver Hough & Co. | ||
1300
Post Oak Blvd., Suite 1200
|
||
Houston,
Texas 77056
|
1.14. Permitted Prepayment Period: the period commencing on Date of Disbursement and ending on the Maturity Date, subject to and in accordance with the provisions of Paragraphs 12 and 13 of this Note. | |
1.15. Mortgage: a Deed of Trust and Security Agreement of even date with this Note from Borrower to, or for the benefit of, Lender, which secures Borrower’s obligations hereunder, and which covers property in Fort Bend County, Texas, and all modifications or amendments thereto or extensions thereof. | |
1.16. Loan Documents, Insurance Proceeds, Laws, Taking Proceeds, Secured Debt, Property, and Event of Default : shall have the same meanings as in the Mortgage. |
Providence Plaza | 1 |
2.
|
DEBT
.
For
value received, Borrower promises to pay to the order of Lender, the
Principal Sum with interest on unpaid principal from the Date of
Disbursement at the Interest Rate. Interest shall be calculated on a
360-day year of twelve 30-day
months.
|
3.
|
PAYMENTS.
Borrower
shall pay the Monthly Payment to Lender commencing on the First Payment
Date and continuing on each monthly anniversary thereof until the Maturity
Date. If a payment date is a non-business day, the Monthly Payment shall
be due on the next business day. On the Interest Only Payment
Date, Borrower shall pay the interest then due and accrued from the Date
of Disbursement.
|
4.
|
LATE
CHARGE
AND
ADDITIONAL
INTEREST.
Borrower
recognizes that if it does not make the Monthly Payments when due, Lender
will incur additional administrative expenses in servicing the loan, will
lose the use of the money due and will be frustrated in meeting its other
financial and loan commitments. Lender and Borrower acknowledge
that different methods could be used to calculate Lender’s actual damages
if the Monthly Payment is not made when due. To avoid disputes over which
method shall apply, Borrower agrees that a late charge equal to four
percent (4%) of each Monthly Payment which is not made when due is a
reasonable method for calculating said damages. Borrower shall
pay such late charge to Lender immediately after the due date for each
Monthly Payment which is not made when due. The payment of such
late charge shall not affect Lender’s other rights and remedies under this
Note and the other Loan
Documents.
|
5.
|
APPLICATION
OF
PAYMENTS.
Unless
Lender elects otherwise, all sums received by Lender in payment hereunder
shall be applied first to late charges, costs of collection or
enforcement, all expenditures made by Lender pursuant to the Loan
Documents, and any other similar amounts due, if any, under this Note and
the other Loan Documents, then to amounts due pursuant to Paragraph 13 of
this Note, then to interest which is due and payable under this Note and
the remainder to principal due and payable under this Note. If
an Event of Default has occurred and is continuing, such payments may be
applied to sums due hereunder or under the other Loan Documents in any
order and combination that Lender may, in its sole discretion,
determine.
|
6.
|
WAIVERS.
Borrower
waives presentment for payment, demand, notice of nonpayment, notice of
intention to accelerate the maturity of this Note, diligence in
collection, commencement of suit against any obligor, notice of protest,
and protest of this Note and all other notices in connection with the
delivery, acceptance, performance, default or enforcement of the payment
of this Note, before or after maturity of this Note, with or without
notice to Borrower, and agrees that Borrower’s liability shall not be in
any manner affected by any indulgence, extension of time, renewal, waiver
or modification granted or consented to by Lender. Borrower
consents to any and all extensions of time, renewals, waivers or
modifications that may be granted by Lender with respect to the payment or
other provisions of this Note, and to any substitution, exchange or
release of the collateral for this Note, or any part thereof, with or
without substitution of said collateral, and agrees to the addition or
release of any guarantor, all whether primarily or secondarily liable,
before or after maturity of this Note, with or without notice to Borrower,
and without affecting Borrower’s liability under this
Note.
|
7.
|
NO
USURY.
It
is the intent of Lender and Borrower in the execution of this Note and all
other Loan Documents to contract in strict compliance with applicable
usury law. In furtherance thereof, Lender and Borrower
stipulate and agree that none of the terms and provisions contained in
this Note, or in any other Loan Documents, shall ever be construed to
create a contract to pay for the use, forbearance or detention of money,
interest at a rate in excess of the maximum interest rate permitted to be
charged by applicable law; that neither the Borrower nor any guarantors,
endorsers or other parties now or hereafter becoming liable for payment of
this Note shall ever be obligated or required to pay interest on this Note
at a rate in excess of the maximum interest that may be lawfully charged
under applicable law; and that the provisions of this Paragraph 7 shall
control over all other provisions of this Note and any other Loan
Documents which may be in apparent conflict herewith. Lender
expressly disavows any intention to charge or collect excessive unearned
interest or finance charges in the event the maturity of this Note is
accelerated. If the maturity of this Note shall be accelerated
for any reason or if the principal of this Note is paid prior to the end
of the term of this Note, and as a result thereof the interest received
for the actual period of existence of the loan evidenced by this Note
exceeds the applicable maximum lawful rate, Lender shall, at its option,
either refund to Borrower the amount of such excess or credit the amount
of such excess against the principal balance of this Note then outstanding
and thereby shall render inapplicable any and all penalties of any kind
provided by applicable law as a result of such excess
interest. In the event that Lender shall contract for, charge
or receive any amount or amounts and/or any other thing of value which are
determined to constitute interest which would increase the effective
interest rate on this Note to a rate in excess of that permitted to be
charged by applicable law, an amount equal to interest in excess of the
lawful rate shall, upon such determination, at the option of Lender, be
either immediately returned to Borrower or credited against the principal
balance of this Note then outstanding, in which event any and all
penalties of any kind under applicable law as a result of such excess
interest shall be inapplicable. By execution of this Note,
Borrower acknowledges that it believes the loan evidenced by this Note to
be non-usurious and agrees that if, at any time, Borrower should have
reason to believe that such loan is in fact usurious, it will give Lender
notice of such condition and Borrower agrees that Lender shall have sixty
(60) days in which to make appropriate refund or other adjustment in order
to correct such condition if in fact such exists. The term
“applicable law” as used in this Note shall
mean the laws
of the State of Texas or the laws of the United States, whichever laws
allow the greater rate of interest, as such laws now exist or may be
changed or amended or come into effect in the
future.
|
8.
|
ACCELERATION
AND
OTHER
REMEDIES
.
The
rights and remedies of Lender are set forth in the other Loan Documents
and include, without limitation, the right to declare the Secured Debt,
including the principal balance of this Note and accrued interest,
immediately due and payable in case of an Event of
Default.
|
9.
|
JOINT
AND
SEVERAL
LIABILITY.
If
there is more than one Borrower and/or Guarantor, the obligations and
covenants of each Borrower and/or Guarantor shall be joint and
several.
|
10.
|
AMENDMENTS.
This
Note may not be changed or amended orally, but only by an agreement in
writing, signed by the party against whom enforcement is
sought.
|
11.
|
GOVERNING
LAW.
This
Note shall be governed by and construed in accordance with the laws of the
state in which the Property is
located.
|
12.
|
PREPAYMENT.
Borrower
shall have no right to prepay, and Lender shall have no obligation to
accept tendered payments of, any portion of the unpaid Principal Sum
outstanding under this Note prior to the beginning of the Permitted
Prepayment Period. Borrower may prepay the entire unpaid Principal Sum
(but not any lesser amount) (the “Amount Prepaid”), with accrued interest
thereon to the date of prepayment, on any date on which a Monthly Payment
is due after the beginning of the Permitted Prepayment Period, upon thirty
(30) days’ prior written notice to Lender of its intention to prepay,
provided that Borrower pays, at the time of prepayment and in addition
thereto, the amounts required to be paid pursuant to Paragraph 13 of this
Note and all other sums due under this Note and the other Loan Documents.
The date fixed for prepayment in such notice shall become the Maturity
Date, except that for the purpose of calculating the amounts payable
pursuant to Paragraph 13 of this Note, the Maturity Date shall mean the
date set forth in Paragraph 1.9 of this
Note.
|
13.
|
PREPAYMENT
INDEMNIFICATION
.
Borrower
shall indemnify Lender against any loss, damage and expense Lender incurs
if the unpaid Principal Sum is paid prior to the Maturity Date for any
reason except (i) a payment of the entire unpaid Principal Sum, with
accrued and unpaid interest, made within ninety (90) days of the Maturity
Date or (ii) any application by Lender of Insurance Proceeds or Taking
Proceeds to reduction of the Secured Debt pursuant to the other Loan
Documents. Lender and Borrower acknowledge that different
methods could be used to calculate Lender’s actual damages if the unpaid
Principal Sum is paid prior to the Maturity Date. To avoid disputes over
which method shall apply, Borrower agrees that the following is a
reasonable method to calculate damages in such case, and Borrower shall
pay to Lender a prepayment premium in an amount equal to the greater
of:
|
(a) | one percent (1%) of the then unpaid Principal Sum; or |
(b)
|
the
Discounted Yield Maintenance Prepayment Fee, as hereinafter
defined. For purposes of this Paragraph 13, the term “Treasury
Security” shall mean the non-
callable U.S.
Treasury bill, note or bond having a maturity date most closely equivalent
to the Maturity Date. If more than one such non-callable bill,
note or bond matures in the same month as the Maturity Date, the bill,
note or bond with a coupon interest rate closest to the Interest Rate
shall be the Treasury Security. For purposes of this Paragraph
13, the term “Treasury Yield” shall mean the per annum yield to maturity
of the Treasury Security, as published in the Wall Street Journal on the
fifth (5th) business day prior to the date of
prepayment.
|
14.
|
ACCELERATION
INDEMNIFICATION.
If
the Maturity Date is accelerated by Lender because of the occurrence of an
Event of Default, Lender will sustain damages due to the loss of its
investment. Borrower therefore agrees to pay, at the time of
acceleration, in addition to all other sums due under this Note and the
other Loan Documents, as liquidated damages, an acceleration premium in an
amount equal to the greater
of:
|
|
(a)
|
three
percent (3%) of the then unpaid Principal Sum;
or
|
|
(b)
|
the
Discounted Yield Maintenance Prepayment Fee, as defined in Paragraph 13 of
this Note.
|
15.
|
NONRECOURSE
DEBT.
Borrower
shall be liable upon the indebtedness evidenced by this Note, for all sums
to accrue or to become payable thereon and for performance of all
covenants contained in this Note or in any of the other Loan Documents, to
the extent, but only to the extent, of Lender’s security for the same,
including, without limitation, all properties, rights, estates and
interests covered by the Mortgage and the other Loan
Documents. No attachment, execution or other writ or process
shall be sought, issued or levied upon any assets, properties or funds of
Borrower other than the properties, rights, estates and interests
described in the Mortgage and the other Loan Documents. In the
event of foreclosure of such liens, mortgages or security interests, by
private power of sale or otherwise, no judgment for any deficiency upon
such indebtedness, sums and amounts shall be sought or obtained by Lender
against Borrower. Subject to the foregoing, nothing herein contained shall
be construed to prevent Lender from exercising and enforcing any other
remedy relating to the Property allowed at law or in equity or by any
statute or by the terms of any of the Loan
Documents.
|
|
(a)
|
any
damages, losses, liabilities, costs or expenses (including, without
limitation, reasonable attorneys’ fees) incurred by Lender due to any of
the following: (i) any security deposits of tenants of the Property (not
previously applied to remedy tenant defaults) which have not been paid
over to Lender; (ii) any rents prepaid by any tenant of the Property more
than one (1) month in advance; (iii) any insurance proceeds or
condemnation awards received by Borrower and not applied according to the
terms of the Mortgage; (iv) accepting Lease termination payments without
Lender’s prior written consent and direction as to use; (v) repairs to the
Property resulting from a casualty not reimbursed by insurance, to the
extent insurance coverage for such repairs was required by the Loan
Documents; (vi) fraud, material misrepresentation or bad faith on the part
of Borrower; (vii) any event or circumstance for which Borrower is
obligated to indemnify Lender under the provisions of the Mortgage
respecting Hazardous Substances, Contamination or Clean-Up; (viii) waste
of the Property by Borrower; (ix) Borrower’s failure to pay real estate
taxes or other assessments against the Property; (x) Borrower’s failure to
comply with the Americans with Disabilities Act of 1990, as amended, or
any other Laws; or (xi) any failure of Borrower to obtain, or cause to be
obtained, any certificate of occupancy required by Laws covering the
Property or any portion thereof;
and
|
|
(b)
|
all
rents, issues and profits from the Property collected by Borrower after an
Event of Default has occurred and is continuing or after an event or
circumstance has occurred and is continuing which with the passage of time
or the giving of notice, or both, would constitute an Event of Default,
unless such rents, issues and profits are applied to the normal operating
expenses of the Property or to the Secured
Debt.
|
16.
|
SECURITY.
This
Note is secured by the other Loan Documents and all amendments,
modifications, supplements, substitutions, additions, renewals,
replacements and extensions
thereof.
|
17.
|
COLLECTION.
Any
check, draft, money order or other instrument given in payment of all or
any portion of the Secured Debt may be accepted by Lender and handled by
collection in the customary manner, but the same shall not constitute
payment hereunder or diminish any rights of Lender except to the extent
that actual cash proceeds of such instrument are unconditionally received
by Lender and applied to the Secured Debt in the manner elsewhere herein
provided. Acceptance by Lender of actual cash proceeds of less
than the total amount of the Secured Debt shall not constitute acceptance
of such partial payment in satisfaction of the total amount of the Secured
Debt, including, without limitation, the amounts payable to Lender
pursuant to Paragraph 13 of this
Note.
|
18.
|
ATTORNEYS’
FEES.
Upon
any Event of Default, Borrower shall pay all costs incurred by Lender in
the course of collection of sums due under this Note or in enforcing any
of
Borrower’s other obligations under the Loan Documents,
including, without limitation, reasonable attorneys’ fees and expenses,
whether or not suit is filed by
Lender.
|
19.
|
REGISTRATION.
This
Note shall be deemed to be in registered form at Lender’s sole
election. Such election may be made at any time without
endorsement of this Note or any other action by
Borrower. Borrower shall recognize any such election and, upon
request by Lender, shall cooperate with Lender at Lender’s expense to
facilitate the consummation of such
election.
|
20.
|
WAIVER
OF
JURY
TRIAL
.
BORROWER
AND LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER, ON
OR IN RESPECT OF ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY WAY
CONNECTED WITH, THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, OR THE
RELATIONSHIP OF BORROWER AND LENDER HEREUNDER OR
THEREUNDER.
|
21.
|
CAPTIONS
.
All
paragraph and subparagraph captions are for convenience of reference only
and shall not affect the construction of any provision
herein.
|
WHITESTONE CENTERS LLC, | |
a Texas limited liability company |
|
By:
|
Whitestone REIT
Operating Partnership, L.P., a
Delaware limited partnership, its sole member |
|||
By:
|
Whitestone
REIT, a Maryland real estate
investment trust, its general partner |
||||
By:
|
|||||
Name:
|
John
J. Dee
|
||||
Title:
|
Executive
Vice President
|
STATE OF TEXAS | § |
§ | |
COUNTY OF HARRIS | § |
Notary Public, State of Texas | ||
(printed name) | ||
My Commission Expires: | ||
1.
|
DEFINED TERMS
.
As
used in this Promissory Note, the following terms shall have the following
meanings:
|
|
1.1. Borrower : Whitestone Centers LLC, a Texas limited liability company, its successors and assigns. | ||
1.2. Lender : Sun Life Assurance Company of Canada, a Canadian corporation, together with other holders from time to time of this Note. | ||
1.3. Guarantor: Whitestone REIT, a Maryland real estate investment trust. | ||
1.4. Principal Sum: $6,000,000.00. | ||
1.5. Monthly Payment: $44,840.42. | ||
1.6. Date of Disbursement: October 1 , 2008. | ||
1.7. Interest Rate: 6.53% per annum. | ||
1.8. Default Rate: the Interest Rate plus five percent (5%) per annum, but in no event greater than the maximum lawful rate of interest. | ||
1.9. Maturity Date: October 1, 2013. | ||
1.10. Amortization Period: Twenty (20) years from the Interest Only Payment Date. | ||
1.11. Interest Only Payment Date: October 1, 2008, being the first day of the first month after the Date of Disbursement. | ||
1.12.
First
Payment Date
:
November
1, 2008, being the first day of the second month after the Date of
Disbursement.
|
||
1.13. Lender ’ s Payment Address: | Sun Life Assurance Company of Canada | |
c/o
Kinghorn Driver Hough & Co.
|
||
1300
Post Oak Blvd., Suite 1200
|
||
Houston,
Texas 77056
|
1.14. Permitted Prepayment Period: the period commencing on Date of Disbursement and ending on the Maturity Date, subject to and in accordance with the provisions of Paragraphs 12 and 13 of this Note. | |
1.15. Mortgage: a Deed of Trust and Security Agreement of even date with this Note from Borrower to, or for the benefit of, Lender, which secures Borrower ’ s obligations hereunder, and which covers property in Harris County, Texas, and all modifications or amendments thereto or extensions thereof. | |
1.16. Loan Documents, Insurance Proceeds, Laws, Taking Proceeds, Secured Debt, Property, and Event of Default : shall have the same meanings as in the Mortgage. |
Sugar Park | 1 |
2.
|
DEBT
.
For
value received, Borrower promises to pay to the order of Lender, the
Principal Sum with interest on unpaid principal from the Date of
Disbursement at the Interest Rate. Interest shall be calculated on a
360-day year of twelve 30-day
months.
|
3.
|
PAYMENTS
.
Borrower
shall pay the Monthly Payment to Lender commencing on the First Payment
Date and continuing on each monthly anniversary thereof until the Maturity
Date. If a payment date is a non-business day, the Monthly Payment shall
be due on the next business day. On the Interest Only Payment
Date, Borrower shall pay the interest then due and accrued from the Date
of Disbursement.
|
4.
|
LATE
CHARGE
AND
ADDITIONAL
INTEREST.
Borrower
recognizes that if it does not make the Monthly Payments when due, Lender
will incur additional administrative expenses in servicing the loan, will
lose the use of the money due and will be frustrated in meeting its other
financial and loan commitments. Lender and Borrower acknowledge
that different methods could be used to calculate Lender's actual damages
if the Monthly Payment is not made when due. To avoid disputes over which
method shall apply, Borrower agrees that a late charge equal to four
percent (4%) of each Monthly Payment which is not made when due is a
reasonable method for calculating said damages. Borrower shall
pay such late charge to Lender immediately after the due date for each
Monthly Payment which is not made when due. The payment of such
late charge shall not affect Lender's other rights and remedies under this
Note and the other Loan
Documents.
|
5.
|
APPLICATION
OF
PAYMENTS.
Unless
Lender elects otherwise, all sums received by Lender in payment hereunder
shall be applied first to late charges, costs of collection or
enforcement, all expenditures made by Lender pursuant to the Loan
Documents, and any other similar amounts due, if any, under this Note and
the other Loan Documents, then to amounts due pursuant to Paragraph 13 of
this Note, then to interest which is due and payable under this Note and
the remainder to principal due and payable under this Note. If
an Event of Default has occurred and is continuing, such payments may be
applied to sums due hereunder or under the other Loan Documents in any
order and combination that Lender may, in its sole discretion,
determine.
|
6.
|
WAIVERS.
Borrower
waives presentment for payment, demand, notice of nonpayment, notice of
intention to accelerate the maturity of this Note, diligence in
collection, commencement of suit against any obligor, notice of protest,
and protest of this Note and all other notices in connection with the
delivery, acceptance, performance, default or enforcement of the payment
of this Note, before or after maturity of this Note, with or without
notice to Borrower, and agrees that Borrower's liability shall not be in
any manner affected by any indulgence, extension of time, renewal, waiver
or modification granted or consented to by Lender. Borrower
consents to any and all extensions of time, renewals, waivers or
modifications that may be granted by Lender with respect to the payment or
other provisions of this Note, and to any substitution, exchange or
release of the collateral for this Note, or any part thereof, with or
without substitution of said collateral, and agrees to the addition or
release of any guarantor, all whether primarily or secondarily liable,
before or after maturity of this Note, with or without notice to Borrower,
and without affecting Borrower's liability under this
Note.
|
7.
|
NO
USURY.
It
is the intent of Lender and Borrower in the execution of this Note and all
other Loan Documents to contract in strict compliance with applicable
usury law. In furtherance thereof, Lender and Borrower
stipulate and agree that none of the terms and provisions contained in
this Note, or in any other Loan Documents, shall ever be construed to
create a contract to pay for the use, forbearance or detention of money,
interest at a rate in excess of the maximum interest rate permitted to be
charged by applicable law; that neither the Borrower nor any guarantors,
endorsers or other parties now or hereafter becoming liable for payment of
this Note shall ever be obligated or required to pay interest on this Note
at a rate in excess of the maximum interest that may be lawfully charged
under applicable law; and that the provisions of this Paragraph 7 shall
control over all other provisions of this Note and any other Loan
Documents which may be in apparent conflict herewith. Lender
expressly disavows any intention to charge or collect excessive unearned
interest or finance charges in the event the maturity of this Note is
accelerated. If the maturity of this Note shall be accelerated
for any reason or if the principal of this Note is paid prior to the end
of the term of this Note, and as a result thereof the interest received
for the actual period of existence of the loan evidenced by this Note
exceeds the applicable maximum lawful rate, Lender shall, at its option,
either refund to Borrower the amount of such excess or credit the amount
of such excess against the principal balance of this Note then outstanding
and thereby shall render inapplicable any and all penalties of any kind
provided by applicable law as a result of such excess
interest. In the event that Lender shall contract for, charge
or receive any amount or amounts and/or any other thing of value which are
determined to constitute interest which would increase the effective
interest rate on this Note to a rate in excess of that permitted to be
charged by applicable law, an amount equal to interest in excess of the
lawful rate shall, upon such determination, at the option of Lender, be
either immediately returned to Borrower or credited against the principal
balance of this Note then outstanding, in which event any and all
penalties of any kind under applicable law as a result of such excess
interest shall be inapplicable. By execution of this Note,
Borrower acknowledges that it believes the loan evidenced by this Note to
be non-usurious and agrees that if, at any time, Borrower should have
reason to believe that such loan is in fact usurious, it will give Lender
notice of such condition and Borrower agrees that Lender shall have sixty
(60) days in which to make appropriate refund or other adjustment in order
to correct such condition if in fact such exists. The term
“applicable law” as used in this Note shall mean the laws of the State of
Texas or the laws of the United States, whichever laws allow the greater
rate of interest, as such laws now exist or may be changed or amended or
come into effect in the
future.
|
8.
|
ACCELERATION
AND
OTHER
REMEDIES
.
The
rights and remedies of Lender are set forth in the other Loan Documents
and include, without limitation, the right to declare the Secured Debt,
including the principal balance of this Note and accrued interest,
immediately due and payable in case of an Event of
Default.
|
9.
|
JOINT
AND
SEVERAL
LIABILITY
.
If
there is more than one Borrower and/or Guarantor, the obligations and
covenants of each Borrower and/or Guarantor shall be joint and
several.
|
10.
|
AMENDMENTS
.
This
Note may not be changed or amended orally, but only by an agreement in
writing, signed by the party against whom enforcement is
sought.
|
11.
|
GOVERNING
LAW.
This
Note shall be governed by and construed in accordance with the laws of the
state in which the Property is
located.
|
12.
|
PREPAYMENT.
Borrower
shall have no right to prepay, and Lender shall have no obligation to
accept tendered payments of, any portion of the unpaid Principal Sum
outstanding under this Note prior to the beginning of the Permitted
Prepayment Period. Borrower may prepay the entire unpaid Principal Sum
(but not any lesser amount) (the “Amount Prepaid”), with accrued interest
thereon to the date of prepayment, on any date on which a Monthly Payment
is due after the beginning of the Permitted Prepayment Period, upon thirty
(30) days' prior written notice to Lender of its intention to prepay,
provided that Borrower pays, at the time of prepayment and in addition
thereto, the amounts required to be paid pursuant to Paragraph 13 of this
Note and all other sums due under this Note and the other Loan Documents.
The date fixed for prepayment in such notice shall become the Maturity
Date, except that for the purpose of calculating the amounts payable
pursuant to Paragraph 13 of this Note, the Maturity Date shall mean the
date set forth in Paragraph 1.9 of this
Note.
|
13.
|
PREPAYMENT
INDEMNIFICATION
.
Borrower
shall indemnify Lender against any loss, damage and expense Lender incurs
if the unpaid Principal Sum is paid prior to the Maturity Date for any
reason except (i) a payment of the entire unpaid Principal Sum, with
accrued and unpaid interest, made within ninety (90) days of the Maturity
Date or (ii) any application by Lender of Insurance Proceeds or Taking
Proceeds to reduction of the Secured Debt pursuant to the other Loan
Documents. Lender and Borrower acknowledge that different
methods could be used to calculate Lender's actual damages if the unpaid
Principal Sum is paid prior to the Maturity Date. To avoid disputes over
which method shall apply, Borrower agrees that the following is a
reasonable method to calculate damages in such case, and Borrower shall
pay to Lender a prepayment premium in an amount equal to the greater
of:
|
|
(a) | one percent (1%) of the then unpaid Principal Sum; or |
(b)
|
the
Discounted Yield Maintenance Prepayment Fee, as hereinafter
defined. For purposes of this Paragraph 13, the term “Treasury
Security” shall mean the non-
callable U.S.
Treasury bill, note or bond having a maturity date most closely equivalent
to the Maturity Date. If more than one such non-callable bill,
note or bond matures in the same month as the Maturity Date, the bill,
note or bond with a coupon interest rate closest to the Interest Rate
shall be the Treasury Security. For purposes of this Paragraph
13, the term “Treasury Yield” shall mean the per annum yield to maturity
of the Treasury Security, as published in the Wall Street Journal on the
fifth (5th) business day prior to the date of
prepayment.
|
|
If the Interest Rate is greater than the Treasury Yield, the difference between the Interest Rate and the Treasury Yield shall be divided by twelve (12) and multiplied by the then unpaid Principal Sum to determine the monthly payment differential. The present value of the series of monthly payment differentials for the number of whole and partial months from the date of prepayment to the Maturity Date shall be calculated using the Treasury Yield as the discount rate, compounded monthly. The resulting sum of all the discounted monthly payment differentials shall be the Discounted Yield Maintenance Prepayment Fee. | ||
If the Interest Rate is equal to or less than the Treasury Yield, the prepayment premium shall be one percent (1%) of the then unpaid Principal Sum. |
14.
|
ACCELERATION
INDEMNIFICATION.
If
the Maturity Date is accelerated by Lender because of the occurrence of an
Event of Default, Lender will sustain damages due to the loss of its
investment. Borrower therefore agrees to pay, at the time of
acceleration, in addition to all other sums due under this Note and the
other Loan Documents, as liquidated damages, an acceleration premium in an
amount equal to the greater
of:
|
|
(a)
|
three
percent (3%) of the then unpaid Principal Sum;
or
|
|
(b)
|
the
Discounted Yield Maintenance Prepayment Fee, as defined in Paragraph 13 of
this Note.
|
15.
|
NONRECOURSE
DEBT.
Borrower
shall be liable upon the indebtedness evidenced by this Note, for all sums
to accrue or to become payable thereon and for performance of all
covenants contained in this Note or in any of the other Loan Documents, to
the extent, but only to the extent, of Lender's security for the same,
including, without limitation, all properties, rights, estates and
interests covered by the Mortgage and the other Loan
Documents. No attachment, execution or other writ or process
shall be sought, issued or levied upon any assets, properties or funds of
Borrower other than the properties, rights, estates and interests
described in the Mortgage and the other Loan Documents. In the
event of foreclosure of such liens, mortgages or security interests, by
private power of sale or otherwise, no judgment for any deficiency upon
such indebtedness, sums and amounts shall be sought or obtained by Lender
against Borrower. Subject to the foregoing, nothing herein contained shall
be construed to prevent Lender from exercising and enforcing any other
remedy relating to the Property allowed at law or in equity or by any
statute or by the terms of any of the Loan
Documents.
|
|
(a)
|
any
damages, losses, liabilities, costs or expenses (including, without
limitation, reasonable attorneys' fees) incurred by Lender due to any of
the following: (i) any security deposits of tenants of the Property (not
previously applied to remedy tenant defaults) which have not been paid
over to Lender; (ii) any rents prepaid by any tenant of the Property more
than one (1) month in advance; (iii) any insurance proceeds or
condemnation awards received by Borrower and not applied according to the
terms of the Mortgage; (iv) accepting Lease termination payments without
Lender's prior written consent and direction as to use; (v) repairs to the
Property resulting from a casualty not reimbursed by insurance, to the
extent insurance coverage for such repairs was required by the Loan
Documents; (vi) fraud, material misrepresentation or bad faith on the part
of Borrower; (vii) any event or circumstance for which Borrower is
obligated to indemnify Lender under the provisions of the Mortgage
respecting Hazardous Substances, Contamination or Clean-Up; (viii) waste
of the Property by Borrower; (ix) Borrower's failure to pay real estate
taxes or other assessments against the Property; (x) Borrower's failure to
comply with the Americans with Disabilities Act of 1990, as amended, or
any other Laws; (xi) any failure of Borrower to obtain, or cause to be
obtained, any certificate of occupancy required by Laws covering the
Property or any portion thereof or (xii) Borrower’s failure to comply with
the parking requirements set forth in the lease between Stafford Plaza
Venture, as landlord, and Marshalls of Stafford, Tx., Inc., as tenant,
dated February 3, 1983, as amended;
and
|
|
(b)
|
all
rents, issues and profits from the Property collected by Borrower after an
Event of Default has occurred and is continuing or after an event or
circumstance has occurred and is continuing which with the passage of time
or the giving of notice, or both, would constitute an Event of Default,
unless such rents, issues and profits are applied to the normal operating
expenses of the Property or to the Secured
Debt.
|
16.
|
SECURITY.
This
Note is secured by the other Loan Documents and all amendments,
modifications, supplements, substitutions, additions, renewals,
replacements and extensions
thereof.
|
17.
|
COLLECTION
.
Any
check, draft, money order or other instrument given in payment of all or
any portion of the Secured Debt may be accepted by Lender and handled by
collection in the customary manner, but the same shall not constitute
payment hereunder or diminish any rights of Lender except to the extent
that actual cash proceeds of such instrument are unconditionally received
by Lender and applied to the Secured Debt in the manner elsewhere herein
provided. Acceptance by Lender of actual cash proceeds of less
than the total amount of the Secured Debt shall not constitute acceptance
of such partial payment in satisfaction of the total amount of the Secured
Debt, including, without limitation, the amounts payable to Lender
pursuant to Paragraph 13 of this
Note.
|
18.
|
ATTORNEYS
’
FEES.
Upon
any Event of Default, Borrower shall pay all costs incurred by Lender in
the course of collection of sums due under this Note or in enforcing any
of Borrower
’
s
other obligations under the Loan Documents, including, without limitation,
reasonable attorneys
’
fees and expenses, whether or not suit is filed by
Lender.
|
19.
|
REGISTRATION.
This
Note shall be deemed to be in registered form at Lender
’
s
sole election. Such election may be made at any time without
endorsement of this Note or any other action by
Borrower. Borrower shall recognize any such election and, upon
request by Lender, shall cooperate with Lender at Lender's expense to
facilitate the consummation of such
election.
|
20.
|
WAIVER
OF
JURY
TRIAL.
BORROWER
AND LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER, ON
OR IN RESPECT OF ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY WAY
CONNECTED WITH, THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, OR THE
RELATIONSHIP OF BORROWER AND LENDER HEREUNDER OR
THEREUNDER.
|
21.
|
CAPTIONS.
All
paragraph and subparagraph captions are for convenience of reference only
and shall not affect the construction of any provision
herein.
|
WHITESTONE CENTERS LLC, | |
a Texas limited liability company |
|
By:
|
Whitestone REIT
Operating Partnership, L.P., a
Delaware limited partnership, its sole member |
|||
By:
|
Whitestone
REIT, a Maryland real estate
investment
trust, its general partner
|
||||
By:
|
|||||
Name:
|
John
J. Dee
|
||||
Title:
|
Executive
Vice President
|
STATE OF TEXAS | § |
§ | |
COUNTY OF HARRIS | § |
Notary Public, State of Texas | ||
(printed name) | ||
My Commission Expires: | ||
$24,500,000.00 |
October
1, 2008
|
Whitestone
Offices LLC, a Texas limited liability company
|
||||
By Whitestone
REIT Operating Partnership,
L.P.,
a Delaware limited partnership, its sole member
|
||||
By Whitestone
REIT, a Maryland
real
estate investment trust, its general partner
|
||||
By//s//
John J. Dee
|
|
|||
John
J. Dee
|
||||
Executive
Vice President
|
|
Re:
Extension
of Maturity Date
.
|
Very truly yours, | |||
KEYBANK NATIONAL ASSOCIATION, | |||
as Agent and a Lender | |||
|
By:
|
||
Name: | |||
Title: |
RBS CITIZENS, NATIONAL ASSOCIATION, | |||
a Lender | |||
|
By:
|
||
Name: | |||
Title: | |||
TRUSTMARK NATIONAL BANK, | |||
a Lender | |||
|
By:
|
||
Name: | |||
Title: | |||
MERCANTIL COMMERCE BANK, N.A.,
|
|||
a Lender | |||
|
By:
|
||
Name: | |||
Title: | |||
By : |
Whitestone
REIT, a Maryland real estate investment
trust, its sole general partner |
|
By: | ||
James C. Mastandrea, CEO |
By:
|
Whitestone
REIT Operating Partnership III GP LLC,
a Texas limited liability company, its sole general partner |
By:
|
Whitestone
REIT Operating Partnership, LP, a
Delaware limited partnership, its sole member |
By:
|
Whitestone
REIT, a Maryland real
estate investment trust, its sole member |
|||
By: | ||||
James C. Mastandrea, CEO |
WHITESTONE
REIT, a Maryland real estate
|
||||||
investment
trust, a Guarantor
|
||||||
By:
|
||||||
James
C. Mastandrea, CEO
|
||||||
WHITESTONE
REIT OPERATING PARTNERSHIP III GP LLC, a
|
||||||
Texas
limited liability company, a Guarantor
|
||||||
By:
|
Whitestone
REIT Operating Partnership, LP, a Delaware limited
partnership,
its sole member
|
|||||
By:
|
Whitestone
REIT, a Maryland real estate investment
trust,
its sole member
|