Exhibit 10.1


 


Loan No. 05-20308


 


PROMISSORY NOTE


 


	
  $9,895,000.00

  	
   

  	
  June 30, 2005

  



 


FOR VALUE RECEIVED, ROBIN HILL BUSINESS PARK, LLC, a
Delaware limited liability company, as maker, having its principal place of
business at 75 Robin Hill Road, Goleta, California 93117  (“Borrower”), hereby unconditionally promises
to pay to the order of MORGAN STANLEY MORTGAGE CAPITAL INC., a New York
corporation, as payee, having an address at 1221 Avenue of the Americas, 27th
Floor, New York, New York  10020 (“Lender”),
or at such other place as the holder hereof may from time to time designate in
writing, the principal sum of NINE MILLION EIGHT HUNDRED NINETY-FIVE THOUSAND
AND 00/100 DOLLARS ($9,895,000.00), in lawful money of the United States of
America with interest thereon to be computed from the date of this Note at the
Applicable Interest Rate (defined below) in accordance with the terms of this
Note.


 


ARTICLE I



PAYMENT TERMS


 


Borrower agrees to pay sums under this Note in
installments as follows:


 


(a)                                  on
the date hereof, a payment of interest only with respect to the period
commencing on the date hereof and ending on, and including, the last day of the
month in which this Note is executed;


 


(b)                                 a
constant payment of $64,825.63
on the first day of August, 2005 and on the first day of each calendar month
thereafter up to and including the first day of June, 2015 (each, a “Payment
Date”); each of the payments to be applied as follows: (i) first, to the
payment of interest computed at the Applicable Interest Rate; and (ii) the
balance toward the reduction of the principal sum; and


 


(c)                                  the
balance of the principal sum and all interest thereon on the first day of July,
2015 (the “Maturity Date”).


 


ARTICLE II



INTEREST


 


The interest rate on this Note is five and sixty five
hundredths percent (5.65%) per annum (the “Applicable Interest Rate”).  Interest on the principal sum of this Note
shall be


 





















 


calculated by multiplying
(a) the actual number of days elapsed in the period for which the
calculation is being made by (b) a daily rate based on a three hundred
sixty (360) day year (that is, the Applicable Interest Rate or the Default
Rate, as then applicable, divided by 360) by (c) the outstanding principal
balance.


 


ARTICLE III



DEFAULT AND ACCELERATION


 


Borrower covenants and agrees that if (a) any
payment required hereunder (other than the payment due on the Maturity Date) is
not paid prior to the fifth (5th) day after the same is due, or (b) the
entire Debt (defined below) is not paid on or before the Maturity Date or (c) any
other Event of Default (as defined in the Security Instrument (defined below))
shall occur, then at the option of Lender (i) the whole of the principal
sum of this Note, (ii) interest, default interest, late charges and other
sums, as provided in this Note, the Security Instrument or the Other Security
Documents (as defined in the Security Instrument), (iii) all other monies
agreed or provided to be paid by Borrower in this Note, the Security Instrument
or the Other Security Documents, (iv) all sums advanced pursuant to the
Security Instrument to protect and preserve the Property (defined below) and
the lien and the security interest created thereby, and (v) all sums
advanced and costs and expenses incurred by Lender in connection with the Debt
or any part thereof, any renewal, extension, or change of or substitution for
the Debt or any part thereof, or the acquisition or perfection of the security
therefor, whether made or incurred at the request of Borrower or Lender (all
the sums referred to in (i) through (v) above shall collectively be
referred to as the “Debt”) shall without notice become immediately due and
payable.


 


ARTICLE IV



DEFAULT INTEREST


 


Borrower agrees that upon the occurrence of an Event
of Default, Lender shall be entitled to receive and Borrower shall pay interest
on the entire unpaid principal sum at a per annum rate equal to the lesser of (a) five
percent (5%) plus the Applicable Interest Rate or (b) the maximum interest
rate which Borrower may by law pay (the “Default Rate”).  The Default Rate shall be computed from the
occurrence of the default giving rise to such Event of Default (without regard
to any notice or grace period) until the earlier of the date upon which the
Event of Default is cured or the date upon which the Debt is paid in full.  Interest calculated at the Default Rate shall
be deemed part of the Debt and shall be deemed secured by the Security
Instrument.  This clause, however, shall
not be construed as an agreement or privilege to extend the date of the payment
of the Debt, nor as a waiver of any other right or remedy accruing to Lender by
reason of the occurrence of any Event of Default.


 


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ARTICLE V



LATE CHARGE


 


If any monthly installment payable under this Note is
not paid prior to the fifth (5th) day after the applicable Payment Date,
Borrower shall pay to Lender upon demand an amount equal to the lesser of five
percent (5%) of such unpaid sum or the maximum amount permitted by applicable
law to defray the expenses incurred by Lender in handling and processing the
delinquent payment and to compensate Lender for the loss of the use of the
delinquent payment and the amount shall be secured by the Security Instrument
and the Other Security Documents.


 


ARTICLE VI



PREPAYMENT; DEFEASANCE


 


(a)                                  The
principal balance of this Note may not be prepaid in whole or in part except as
expressly permitted pursuant hereto.


 


(b)                                 Subject
to compliance with and satisfaction of the terms and conditions of this Article 6
and provided that no Event of Default exists, Borrower may elect to obtain a
release (the “Release”) of the Property from the lien of the Security
Instrument on any Payment Date after the Lockout Period Expiration Date
(defined below) by delivering to Lender, as security for the payment of all
interest and principal due and to become due pursuant to this Note through the
Maturity Date, plus the principal balance of this Note scheduled to be
outstanding on the Maturity Date, Defeasance Collateral (defined below)
sufficient to generate Scheduled Defeasance Payments (defined below) (the
Release and the delivery of the Defeasance Collateral, a “Defeasance”).


 


(c)                                  As
a condition precedent to a Defeasance, and prior to any Release, Borrower shall
have complied with all of the following:


 


(i)                                     Borrower
shall provide not less than sixty (60) days prior written notice to Lender
specifying a Payment Date upon which it intends to effect a Defeasance
hereunder (the “Defeasance Date”).


 


(ii)                                  All
accrued and unpaid interest on the principal balance of this Note to and
including the Defeasance Date, the scheduled amortization payment due on such
Defeasance Date, and all other sums then due under this Note, the Security
Instrument and the Other Security Documents, shall be paid in full on or prior
to the Defeasance Date.


 


(iii)                               Borrower shall execute
and deliver to Lender any and all certificates, opinions, documents or
instruments reasonably required by Lender in connection with the Defeasance and
Release, including, without limitation, a pledge and security agreement
reasonably satisfactory to Lender creating a first priority lien on the
Defeasance Collateral (a “Defeasance Security Agreement”).  This Note shall thereafter be secured


 


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by the Defeasance Collateral delivered in connection with the
Defeasance.  After Defeasance, this Note
cannot be prepaid in whole or in part or be the subject of any further
Defeasance.


 


(iv)                              Borrower
shall have delivered to Lender an opinion of Borrower’s counsel that would be
satisfactory to a prudent lender stating (A) that the Defeasance
Collateral and the proceeds thereof have been duly and validly assigned and
delivered to Lender and that Lender has a valid, perfected, first priority lien
and security interest in the Defeasance Collateral delivered by Borrower and
the proceeds thereof, (B) that if the holder of this Note shall at the
time of the Release be a REMIC (defined below), (1) the Defeasance
Collateral has been validly assigned to the REMIC Trust which holds this Note
(the “REMIC Trust”), (2) the Defeasance has been effected in accordance
with the requirements of Treasury Regulation 1.860(g)-2(a)(8) (as such
regulation may be amended or substituted from time to time) and will not be
treated as an exchange pursuant to Section 1001 of the IRS Code and (3) the
tax qualification and status of the REMIC Trust as a REMIC will not be
adversely affected or impaired as a result of the Defeasance and (C) that
the delivery of the Defeasance Collateral and the grant of a security interest
therein to Lender shall not constitute an avoidable preference under Section 547
of the U.S. Bankruptcy Code or applicable state law. The term “REMIC” shall
mean a “real estate mortgage investment conduit” within the meaning of Section 860D
of the IRS Code. The term “IRS Code” shall mean the United States Internal
Revenue Code of 1986, as amended, and the related Treasury Department
regulations, including temporary regulations.


 


(v)                                 Borrower
shall have delivered to Lender written confirmation from the Rating Agencies
(defined in the Security Instrument) that such Defeasance will not result in a
withdrawal, downgrade or qualification of the then current ratings by the
applicable Rating Agencies of the Securities or Participations (each as defined
in the Security Instrument).  If required
by the Rating Agencies, Borrower shall, at Borrower’s expense, also deliver or
cause to be delivered a non-consolidation opinion with respect to the
Defeasance Obligor (as defined below), if any, 
in form and substance that would be satisfactory to a prudent lender.


 


(vi)                              Borrower
shall have delivered to Lender a certificate given by Borrower’s independent
certified public accountant certifying that the Defeasance Collateral shall
generate the Scheduled Defeasance Payments.


 


(d)                                 In
connection with any Defeasance hereunder, Borrower may and, if requested by
Lender shall, at Borrower’s expense, establish or designate a successor entity,
which shall be a single purpose, bankruptcy remote entity which is not directly
or indirectly owned by Borrower and which shall be approved by Lender (the “Defeasance
Obligor”) and Borrower shall transfer and assign all obligations, rights and
duties under and to this Note and the Defeasance Security Agreement together
with the pledged Defeasance Collateral to such Defeasance Obligor.  Such Defeasance Obligor shall assume the
obligations under the Note and any Defeasance Security Agreement and shall be
bound by and obligated under Sections 3.1, 
7.2,  7.4(a), 11.2, 11.7 and 14.2
and Articles 13 and 15 of the Security Instrument; provided, however, that all
references therein to “Property” or “Personal Property” shall be deemed to
refer


 


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only to the Defeasance Collateral delivered to Lender, and Borrower
shall be relieved of its obligations under such documents and, except with
respect to any provisions therein which by their terms expressly survive
payment of the Debt in full, the Other Security Documents.  Borrower shall pay $1,000 to any such
Defeasance Obligor as consideration for assuming such obligations.


 


(e)                                  The
following terms shall have the meaning set forth below:


 


(i)                                     The
term “Defeasance Collateral” as used herein shall mean direct, non- callable
and non-redeemable obligations of the United States of America for the payment
of which its full faith and credit is pledged, each of which shall be duly
endorsed by the holder thereof as directed by Lender or accompanied by a
written instrument of transfer in form and substance wholly satisfactory to
Lender (including, without limitation, such instruments as may be required by
the depository institution holding such securities or by the issuer thereof, as
the case may be, to effectuate book-entry transfers and pledges through the
book-entry facilities of such institution) in order to perfect upon the
delivery of the Defeasance Collateral a first priority security interest
therein in favor of the Lender in conformity with all applicable state and
federal laws governing the granting of such security interests.                                                Borrower
shall authorize and direct that the payments received from such obligations
shall be made directly to Lender or Lender’s designee and applied to satisfy
the obligations of Borrower or, if applicable, the Defeasance Obligor, under
this Note.


 


(ii)                                  The
term “Scheduled Defeasance Payments” as used herein shall mean the scheduled
payments of interest and principal in accordance with the terms of the
Defeasance Collateral (without consideration of any reinvestment of interest
therefrom), providing for payments prior, but as close as possible, to all
successive Payment Dates after the Defeasance Date through and including the
Maturity Date, and in amounts equal to or greater than the scheduled payments
of interest and principal due under this Note, including the principal balance
of this Note scheduled to be outstanding on the Maturity Date.


 


(iii)                               The term “Lockout Period
Expiration Date” shall mean the date which is the earlier of (A) the
second anniversary of the date that is the “startup day,” within the meaning of
Section 860G(a) (9) of the IRS Code, of a REMIC that holds this
Note or (B) the fifth anniversary of the first day of the first full
calendar month following the date of this Note.


 


(f)                                    Upon
Borrower’s compliance with all of the conditions to Defeasance and a Release
set forth in this Article 6, Lender shall release the Property from the
lien of the Security Instrument and the Other Security Documents.  All costs and expenses of Lender, third
parties and the Rating Agencies incurred in connection with the Defeasance and
Release, including, without limitation, Lender’s counsel’s fees and expenses,
shall be paid by Borrower simultaneously with the delivery of the Release
documentation.  Any revenue, documentary
stamp or intangible taxes or any other tax or charge due in connection with the
Defeasance shall be paid by Borrower simultaneously with the occurrence of any
Defeasance.


 


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(g)                                 If
a Default Prepayment (defined below) occurs, Borrower shall pay to Lender the
entire Debt, including, without limitation, an amount (the “Default
Consideration”) equal to the greater of (i) the amount (if any) which when
added to the then outstanding principal amount of this Note will be sufficient
to purchase Defeasance Collateral providing the required Scheduled Defeasance
Payments assuming Defeasance would be permitted hereunder, or (ii) one
percent (1%) of the Default Prepayment. 
For purposes of this Note, the term “Default Prepayment” shall mean a
prepayment of the principal amount of this Note made after the occurrence of
any Event of Default or an acceleration of the Maturity Date under any
circumstances, including, without limitation, a prepayment occurring in
connection with reinstatement of the Security Instrument provided by statute
under foreclosure proceedings or exercise of a power of sale, any statutory
right of redemption exercised by Borrower or any other party having a statutory
right to redeem or prevent foreclosure, any sale in foreclosure or under
exercise of a power of sale or otherwise.


 


(h)                                 Notwithstanding
anything to the contrary herein, Borrower may prepay the principal balance of
this Note in whole, without premium or penalty, on any Payment Date during the
twenty-four (24) months prior to the Maturity Date, provided, however,
upon a prepayment of the principal balance of this Note during the period
commencing on August 1, 2013 and ending on July 1, 2014, Borrower
shall pay to Lender, in addition to all amounts then due and owing to Lender
under this Note, the Security Instrument and the Other Security Documents, an
exit fee equal to one percent (1%) of the original principal amount of this
Note.  In addition, Borrower shall prepay
without premium or penalty the principal balance of this Note in an amount
equal to any insurance proceeds or condemnation awards which Lender elects to
have applied to the Debt pursuant to Sections 3.6 and 3.7 of the Security
Instrument or the amount required by Lender due to changes in tax and debt
credit pursuant to Section 7.3 (a) or (b) of the Security
Instrument (provided, however, that in the event any such prepayment pursuant
to this sentence shall be made on a date other than a Payment Date, the amount
so prepaid shall include all interest which would have accrued on such amount
through the next Payment Date).  In each
instance of prepayment permitted under this subparagraph (h), Borrower shall be
required to pay all other sums due hereunder, and no principal amount repaid
may be reborrowed.


 


ARTICLE VII



SECURITY


 


This Note is secured by that certain Deed of Trust and
Security Agreement dated the date hereof in the principal sum of $9,895,000.00
given by Borrower to (or for the benefit of) Lender covering the fee estate of
Borrower in certain premises located in Santa Barbara County, State of
California, and other property, as more particularly described therein
(collectively, the “Property”) and intended to be duly recorded in said County
(the “Security Instrument”), and by the Other Security Documents.


 


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ARTICLE VIII



LOAN CHARGES


 


This Note, the Security Instrument and the Other
Security Documents are subject to the express condition that at no time shall
Borrower be obligated or required to pay interest on the principal balance due
hereunder at a rate which could subject Lender to either civil or criminal
liability as a result of being in excess of the maximum interest rate which
Borrower is permitted by applicable law to contract or agree to pay.  If by the terms of this Note, the Security
Instrument and the Other Security Documents, Borrower is at any time required
or obligated to pay interest on the principal balance due hereunder at a rate
in excess of such maximum rate, the Applicable Interest Rate or the Default
Rate, as the case may be, shall be deemed to be immediately reduced to such
maximum rate and all previous payments in excess of the maximum rate shall be
deemed to have been payments in reduction of principal and not on account of
the interest due hereunder.  All sums
paid or agreed to be paid to Lender for the use, forbearance, or detention of
the Debt, shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Note
until payment in full so that the rate or amount of interest on account of the
Debt does not exceed the maximum lawful rate of interest from time to time in
effect and applicable to the Debt for so long as the Debt is outstanding.


 


ARTICLE IX



WAIVERS


 


Borrower and all others who may become liable for the
payment of all or any part of the Debt do hereby severally waive presentment
and demand for payment, notice of dishonor, protest and notice of protest and
non-payment and all other notices of any kind, except for notices expressly
provided for in this Note, the Security Instrument or the Other Security
Documents.  No release of any security
for the Debt or extension of time for payment of this Note or any installment
hereof, and no alteration, amendment or waiver of any provision of this Note,
the Security Instrument or the Other Security Documents made by agreement
between Lender or any other person or party shall release, modify, amend,
waive, extend, change, discharge, terminate or affect the liability of
Borrower, and any other person or entity who may become liable for the payment
of all or any part of the Debt, under this Note, the Security Instrument or the
Other Security Documents.  No notice to
or demand on Borrower shall be deemed to be a waiver of the obligation of
Borrower or of the right of Lender to take further action without further
notice or demand as provided for in this Note, the Security Instrument or the
Other Security Documents.  If Borrower is
a partnership, corporation or limited liability company, the agreements
contained herein shall remain in full force and effect, notwithstanding any
changes in the individuals or entities comprising the Borrower, and the term “Borrower,”
as used herein, shall include any alternate or successor entity, but any
predecessor entity, and its partners or members, as the case may be, shall not
thereby be released from any liability. (Nothing in the foregoing sentence
shall be construed as a consent to, or a waiver of, any prohibition or
restriction on transfers of interests in Borrower which may be set forth in the
Security Instrument or any Other Security Document.)


 


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ARTICLE X



WAIVER OF TRIAL BY JURY


 


BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR
INDIRECTLY TO THE LOAN EVIDENCED BY THIS NOTE, THE APPLICATION FOR THE LOAN
EVIDENCED BY THIS NOTE, THIS NOTE, THE SECURITY INSTRUMENT OR THE OTHER
SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES,
DIRECTORS OR AGENTS IN CONNECTION THEREWITH.


 


ARTICLE XI



EXCULPATION


 


(a)                                  Notwithstanding
anything to the contrary contained in this Note, the Security Instrument or any
Other Security Document (but subject to the provisions of subsections (b), (c) and
(d) of this Article 11), Lender shall not enforce the liability and
obligation of Borrower to perform and observe the obligations contained in this
Note or the Security Instrument by any action or proceeding wherein a money
judgment or any deficiency judgment or other judgment establishing any personal
liability shall be sought against Borrower or any principal, director, officer,
employee, beneficiary, shareholder, partner, member, trustee, agent or
affiliate of Borrower or any person owning, directly or indirectly, any legal
or beneficial interest in Borrower, or any successors or assigns of any of the
foregoing (collectively, the “Exculpated Parties”), except that Lender may
bring a foreclosure action, action for specific performance or other
appropriate action or proceeding to enable Lender to enforce and realize upon
this Note, the Security Instrument, the Other Security Documents, and the
interest in the Property, the Rents (as defined in the Security Instrument) and
any other collateral given to Lender to secure this Note; provided, however,
subject to the provisions of subsections (b), (c) and (d) of this Article 11,
that any judgment in any such action or proceeding shall be enforceable against
Borrower only to the extent of Borrower’s interest in the Property, in the
Rents and in any other collateral given to Lender to secure this Note.  Lender, by accepting this Note and the
Security Instrument, agrees that it shall not, except as otherwise provided in
this Article 11, sue for, seek or demand any deficiency judgment against
Borrower or any of the Exculpated Parties, in any such action or proceeding,
under or by reason of or under or in connection with this Note, the Security
Instrument or the Other Security Documents. 
The provisions of this Article 11 shall not, however, (i) constitute
a waiver, release or impairment of any obligation evidenced or secured by this
Note, the Security Instrument or the Other Security Documents delivered to
Lender; (ii) impair the right of Lender to name Borrower as a party
defendant in any action or suit for judicial foreclosure and sale under the
Security Instrument; (iii) affect the validity or enforceability of any
indemnity, guaranty, master lease or similar instrument made in connection with
this Note, the Security Instrument, or the Other Security Documents; (iv) impair
the right of Lender to obtain the appointment of a receiver; (v) impair
the


 


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enforcement of the Assignment of Leases and Rents executed in
connection herewith; (vi) impair the right of Lender to enforce the
provisions of Section 12.2 of the Security Instrument or of Section 3.12(e) of
the Security Instrument; or (vii) impair the right of Lender to obtain a
deficiency judgment or other judgment on the Note against Borrower if necessary
to fully realize the security granted by the Security Instrument or to commence
any other appropriate action or proceeding in order for Lender to exercise its
remedies against the Property.


 


(b)                                 Notwithstanding
the provisions of this Article 11 to the contrary, Borrower shall be
personally liable to Lender for the Losses (as defined in the Security
Instrument) Lender incurs due to: (i) fraud or intentional
misrepresentation by Borrower or any of the Exculpated Parties in connection
with the Loan; (ii) the gross negligence or willful misconduct of
Borrower; (iii) the removal or disposal of any portion of the Property
after an Event of Default; (iv) Borrower’s misapplication,
misappropriation or conversion of Rents received by Borrower after the
occurrence of an Event of Default; (v) Borrower’s misapplication,
misappropriation or conversion of tenant security deposits or Rents collected
in advance; (vi) the misapplication, misappropriation or conversion of
insurance proceeds or condemnation awards; (vii) Personal Property (as
defined in the Security Instrument) taken from the Property by or on behalf of
Borrower or any of the Exculpated Parties and not replaced with Personal
Property of the same utility and of the same or greater value; (viii) any
act of arson by Borrower or any of the Exculpated Parties; (ix) any fees
or commissions paid by Borrower after the occurrence of an Event of Default to
any Exculpated Party in violation of the terms of this Note, the Security
Instrument or the Other Security Documents; (x) failure to pay charges for
labor or materials or other charges that can create liens on any portion of the
Property; (xi) any security deposits, advance deposits or any other deposits
collected with respect to the Property not being delivered to Lender upon a
foreclosure of the Property or action in lieu thereof, except to the extent any
such security deposits were applied in accordance with the terms and conditions
of any of the Leases (as defined in the Security Instrument) prior to the
occurrence of the Event of Default that gave rise to such foreclosure or action
in lieu thereof; (xii) any failure by Borrower to permit on-site inspections of
the Property as required by the Security Instrument and/or the Other Security
Documents; (xiii) any failure of Borrower to appoint a new property manager
upon the request of Lender as required by the terms of the Security Instrument
and/or the Other Security Documents; (xiv) Borrower’s breach of, or failure to
comply with, the representations, warranties and covenants contained in
Articles 5.8(b), 5.19 and/or 12 of the Security Instrument; (xv) any failure by
Innovative Micro Technology, Inc. (“Manager”) to deposit all Rents in the
Restricted Account (as defined in the Cash Management Agreement) in accordance
with the terms and conditions of that certain Cash Management Agreement made by
and between Lender, Borrower and Manager, dated as of the date hereof (“Cash
Management Agreement”); and (xvi) 
Borrower’s failure to obtain a permanent, unconditional certificate of
occupancy for the Property.


 


(c)                                  Notwithstanding
the foregoing, the agreement of Lender not to pursue recourse liability as set
forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be
of no further force and effect and the Debt shall be fully recourse to Borrower
in the event that: (i) the first full monthly payment of principal and
interest under this Note is not paid when due; (ii) Borrower fails to
provide financial information to Lender as required by Section 3.12 of the
Security Instrument or fails to comply with any provision of Section 4.2
of the Security Instrument; (iii) Borrower defaults under Article 8
of the Security Instrument;


 


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(iv) Borrower files a voluntary petition under the U.S. Bankruptcy
Code or any other Federal or state bankruptcy or insolvency law; (v) an
affiliate, officer, director or representative which controls Borrower,
directly or indirectly, files, or joins in the filing of, an involuntary
petition against Borrower under the U.S. Bankruptcy Code or any other Federal
or state bankruptcy or insolvency law, or solicits or causes to be solicited
petitioning creditors for any involuntary petition against Borrower from any
person or entity; (vi)  Borrower files an answer consenting to or
otherwise acquiescing in or joining in any involuntary petition filed against
it, by any other person or entity under the U.S. Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law, or solicits or causes to be
solicited petitioning creditors for any involuntary petition from any person or
entity; (vii) any affiliate, officer, director or representative which
controls Borrower consents to or acquiesces in or joins in an application for
the appointment of a custodian, receiver, trustee, or examiner for Borrower or
any portion of the Property; or (viii) Borrower makes an assignment for
the benefit of creditors, or admits, in writing or in any legal proceeding, its
insolvency or inability to pay its debts as they become due.


 


(d)                                 Nothing
herein shall be deemed to be a waiver of any right which Lender may have under Section 506(a),
506(b), 1111(b) or any other provision of the U.S. Bankruptcy Code to file
a claim for the full amount of the indebtedness secured by the Security
Instrument or to require that all collateral shall continue to secure all of
the indebtedness owing to Lender in accordance with this Note, the Security
Instrument and the Other Security Documents.


 


ARTICLE XII



AUTHORITY


 


Borrower (and the undersigned representative of
Borrower, if any) represents that Borrower has full power, authority and legal
right to execute and deliver this Note, the Security Instrument and the Other
Security Documents and that this Note, the Security Instrument and the Other
Security Documents constitute valid and binding obligations of Borrower.


 


ARTICLE XIII



GOVERNING LAW


 


This Note shall be governed, construed, applied and
enforced in accordance with the laws of the state in which the Property is
located.


 


ARTICLE XIV



NOTICES


 


All notices required or permitted hereunder shall be
given as provided in the Security Instrument.


 


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ARTICLE XV



INCORPORATION BY REFERENCE


 


All of the terms, covenants and conditions contained
in the Security Instrument and the Other Security Documents are hereby made
part of this Note to the same extent and with the same force as if they were
fully set forth herein.


 


ARTICLE XVI


 


MISCELLANEOUS


 


(a)                                  Wherever
pursuant to this Note it is provided that Borrower pay any costs and expenses,
such costs and expenses shall include, but not be limited to, reasonable legal
fees and disbursements of Lender, whether with respect to retained firms, the
reimbursement for the expenses of in-house staff, or otherwise.  Borrower shall pay to Lender on demand any
and all expenses, including legal expenses and reasonable attorneys’ fees,
incurred or paid by Lender in enforcing this Note, whether or not any legal
proceeding is commenced hereunder, together with interest thereon at the
Default Rate from the date paid or incurred by Lender until such expenses are
paid by Borrower.


 


(b)                                 This
Note may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by the party against whom enforcement
of any modification, amendment, waiver, extension, change, discharge or
termination is sought.


 


(c)                                  If
Borrower consists of more than one person or party, the obligations and
liabilities of each person or party shall be joint and several.


 


(d)                                 Whenever
used, the singular number shall include the plural, the plural number shall
include the singular, and the words “Lender” and “Borrower” shall include their
respective successors, assigns, heirs, executors and administrators.


 


[NO FURTHER TEXT ON THIS PAGE]


 


11





















 


IN WITNESS WHEREOF, Borrower has duly executed this
Note as of the day and year first above written.


 


	
   

  	
  BORROWER

  
	
   

  	
   

  	
   

  
	
   

  	
  ROBIN HILL
  BUSINESS PARK, LLC, a

  
	
   

  	
  Delaware limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Innovative Micro
  Technology, Inc., a

  
	
   

  	
   

  	
  Delaware
  corporation, its

  
	
   

  	
   

  	
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name: John S.
  Foster

  
	
   

  	
   

  	
   

  	
  Title: President and
  Chief Executive

  
	
   

  	
   

  	
   

  	
   

  	
   Officer