Document:

Exhibit 10.46

 

ASSIGNMENT AND ASSUMPTION

OF

SALE AND PURCHASE AGREEMENT

 

ALLIANCE
COMMERCIAL PARTNERS, LLC, a Colorado limited liability company (“Assignor”)
hereby assigns to TRT ALLIANCE SKOKIE LLC, a Delaware limited liability company  (“Assignee”) all right, title and
interest of Assignor in and to that certain Sale and Purchase Agreement by and
between Assignor and BOULEVARD 40 OFFICE L.L.C., a Maryland limited liability
company, dated effective as of January 5, 2007 (the “Purchase Agreement”).

 

Assignee hereby assumes and agrees to perform
all of Assignor’s obligations under the Purchase Agreement. This Assignment and
Assumption of Sale and Purchase Agreement shall be subject to all the
provisions, terms, covenants and conditions of the Purchase Agreement. Pursuant
to Section 10.01 of the Purchase Agreement, Assignor represents that Assignee
is an entity in which Assignor or an affiliate of Assignor owns an interest and
acts as a manager of Assignee. Notwithstanding the foregoing, Assignor shall
remain liable under the Purchase Agreement.

 

[Remainder
of this page intentionally left blank]

 

 

Executed as of
this          day of January, 2007.

 

 

	
   

  	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ALLIANCE
  COMMERCIAL PARTNERS, LLC,

  
	
   

  	
   

  	
  a
  Colorado limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David E. Ramsay

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David E. Ramsay

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TRT
  ALLIANCE SKOKIE LLC, a Delaware

  
	
   

  	
   

  	
  limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  TRT
  Alliance JV II GP, a Delaware general partnership,

  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  40
  Skokie Associates, LLC, a Colorado limited liability

  company, its managing general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Alliance
  Real Estate Value Fund III, LLC, a Delaware

  limited liability company, its manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  AVF
  Management, LLC, a Colorado limited liability

  company, its managing member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ David E. Ramsay

  	
   

  
	
   

  	
   

  	
   

  	
  Printed
  name:

  	
  David E. Ramsay

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Voting
  Member

  
											

 

2Exhibit 10.47

 

Promissory
Note

 

	
  $9,700,000.00

  	
   

  	
  January 24, 2007

  

 

FOR
VALUE RECEIVED, TRT ALLIANCE SKOKIE LLC, a Delaware limited liability company (“Borrower”),
hereby promises to pay to the order of Bank of America, N.A., a national
banking association (together with any and all of its successors and assigns
and/or any other holder of this Note, “Lender”), without offset, in
immediately available funds in lawful money of the United States of America, at
700 Louisiana Street, 5th Floor, Houston, Texas 77002, the principal
sum of Nine Million Seven Hundred Thousand and No/100 ($9,700,000.00) (or the
unpaid balance of all principal advanced against this Note, if that amount is
less), together with interest on the unpaid principal balance of this Note from
day to day outstanding as hereinafter provided.

 

Section
1.                                            Payment Schedule and Maturity Date. Prior to maturity, accrued and unpaid
interest shall be due and payable in arrears on the first day of each month
commencing on February 1, 2007. The
entire principal balance of this Note then unpaid, together with all accrued
and unpaid interest and all other amounts payable hereunder and under the other
Loan Documents (as hereinafter defined), shall be due and payable in full on January
24, 2010 (the “Maturity Date”),
the final maturity of this Note.

 

Section
1A.                                  Extension Option. Lender shall grant a request by Borrower to
extend the Maturity Date of this Note to January 24, 2011 (the “Extended Maturity Date”),
upon and subject to the following terms and conditions:

 

(a)                                  Basic Conditions. Unless otherwise agreed by Lender in
writing:

 

(i)                                     Borrower shall request the extension, if at
all, by written notice to Lender not less than 45 days prior to the Maturity
Date.

 

(ii)                                  At the time of the request, and at the time
of the extension, there shall not exist any Event of Default, nor any condition
or state of facts which after notice and/or lapse of time would constitute an
Event of Default.

 

(iii)                               Current financial statements regarding
Borrower and Guarantor (as defined in the Loan Agreement) and all other
financial statements and other information as may be required under the Loan
Documents regarding Borrower, Guarantor and the Property, shall have been
submitted promptly to Lender, and there shall not have occurred, in the opinion
of Lender, any material adverse change in the business or financial condition
of Borrower or Guarantor (other than the sale of assets and distribution to its
members in the ordinary course of business) or any tenant of the Property, or
in the Property or in any other state of facts submitted to Lender in
connection with the Loan Documents, from that which existed on the date of this
Note.

 

(iv)                              Whether or not the extension becomes
effective, Borrower shall pay all actual out-of-pocket costs and expenses
incurred by Lender in connection with the proposed extension (pre- and
post-closing), including appraisal fees, environmental audit and reasonable
attorneys’ fees actually incurred by Lender; all such costs and expenses
incurred up to the time of Lender’s written agreement to the extension shall be
due and payable prior to Lender’s execution of that agreement (or if the
proposed extension does not become effective, then upon demand by Lender), and
any future failure to pay such amounts shall constitute a default under the
Loan Documents.

 

1

 

(v)                                 All applicable regulatory requirements,
including appraisal requirements, shall have been satisfied with respect to the
extension.

 

(vii)                           Not later than the Maturity Date, (A) Lender
shall have confirmed that all the basic conditions required for the extension
have been met or satisfied in accordance with this Section 1A and
documented to Lender’s satisfaction by Borrower, Guarantor, Lender, and all
other parties reasonably deemed necessary by Lender (such as any permitted
subordinate lienholders); (B) Lender shall have been provided with an
updated title report and judgment and lien searches, and appropriate title
insurance endorsements shall have been issued as reasonably required by Lender;
and (C) Borrower shall have paid to Lender a non-refundable extension fee an
amount equal to 0.125% of the then outstanding committed amount of the Loan.

 

(viii)                        As of any Determination Date occurring less
than thirty (30) days prior to such extension, Borrower shall satisfy a Debt
Service Coverage Ratio (as hereinafter defined) of at least 1.40to 1.00. As used herein, “Debt Service
Coverage Ratio” means, as of any Determination Date, for the applicable
Calculation Period the ratio, as determined by Lender, of Net Operating Income
to Debt Service. As used herein, the following terms shall have the meanings
indicated below:

 

“Actual Operating Revenue” means, with respect to any period of
time, all income, computed on an annualized basis in accordance with generally
accepted accounting principles, collected from the ownership and operation of
the Property from whatever source (other than any source affiliated with
Borrower or any Guarantor), including Rents (which such Rents shall include
rents and other income under any Lender approved leases that are in full force
and effect, even if tenants thereunder are not yet in occupancy or are not yet
paying rent), utility charges, escalations, forfeited security deposits,
interest on credit accounts, service fees or charges, license fees, parking
fees, and other required pass-throughs, but excluding sales, use and
occupancy or other taxes on receipts required to be accounted for by Borrower
to any Governmental Authority, refunds from tenants, uncollectible accounts,
sales of furniture, fixtures and equipment, interest income, Condemnation
Awards, Insurance Proceeds (other than business interruption or other loss of
income insurance), unforfeited security deposits, utility and other similar
deposits, income from tenants not paying rent, income from tenants in
bankruptcy, and non-recurring or extraordinary income, including lease
termination payments; provided, however, for the purposes of this Section 1A(viii),
any lease termination payments attributable to the applicable Calculation
Period shall be included within the computation of Actual Operating Revenue. Actual
Operating Revenue shall be net of rent concessions and credits.

 

“Assumed Interest Rate” means the annual yield payable on the last
day of the applicable Calculation Period on ten (10) year United States
Treasury obligations in amounts approximating the Net Commitment Amount at the
inception of the Calculation Period plus two hundred  (200) basis points per annum; provided,
however, that the Assumed Interest Rate shall be not less than seven percent (7%)
per annum.

 

“Calculation Period” means the six (6) month period ending on
any Determination Date.

 

“Debt Service” means the higher of (a) the actual principal (if
any) and interest payable under the Loan during the applicable Calculation
Period, or (b) the payments of principal and interest that would have been
payable under a hypothetical loan during the Calculation Period, assuming (i)
an initial loan balance equal to the Net Commitment Amount at the inception of
the Calculation Period, (ii) an interest rate equal to the Assumed Interest
Rate, and (iii) amortization of the aggregate principal indebtedness over
a thirty (30) year amortization period.

 

2

 

“Determination Date” means any date as of which Lender makes a
determination regarding Borrower’s satisfaction or failure to satisfy the Debt
Service Coverage Ratio as described herein.

 

“Net Commitment Amount” means, as of any date, the total
obtained by adding the amount of the outstanding principal balance of the Loan
to the amount of the available undisbursed Loan proceeds.

 

“Net Operating Income” means, with respect to any period of
time, the amount obtained by subtracting Operating Expenses from Actual
Operating Revenue.

 

“Operating Expenses” means, with respect to any period of time,
the total of all expenses actually paid or payable, computed on an annualized
basis in accordance with generally accepted accounting principles, of whatever
kind relating to the ownership, operation, maintenance or management of the
Property, including utilities, ordinary repairs and maintenance, insurance
premiums, ground rents, if any, license fees, Taxes, advertising expenses,
payroll and related taxes, management fees equal to the greater of not less
than three percent (3.0%) of the effective gross income or the management fees
actually paid under any management agreement, operational equipment or other
lease payments as approved by Lender, but specifically excluding
depreciation and amortization, income taxes, debt service on the Loan, and any
item of expense that would otherwise be covered by the provisions hereof but
which is paid by any tenant under such tenant’s Lease or other agreement.

 

If all of
the foregoing conditions are not satisfied strictly in accordance with their
terms, the extension shall not be or become effective. Notwithstanding the
foregoing, in the event all the foregoing conditions are met except for the
Debt Service Coverage Ratio, then Borrower may satisfy the Debt Service
Coverage Ratio by making a voluntary paydown of the Loan in an amount
sufficient to satisfy the Debt Service Coverage Ratio, subject to the
satisfaction of any applicable conditions to prepayment fee(s) or premium(s).

 

(b)                                 Changes in Loan Terms. All terms and conditions of the Loan
Documents shall continue to apply to the extended term except to the extent
changed as indicated below (such changes to be effective on and after the
original Maturity Date, if the extension becomes effective as provided herein):

 

(i)                                     Definition of Maturity Date. The Maturity Date shall mean the Extended
Maturity Date.

 

(ii)                                  Other Changes. None.

 

Section
2.                                            Security; Loan Documents. The security for this Note includes a
Future Advance Mortgage, Assignment, Security Agreement and Fixture Filing (as
the same may from time to time be amended, restated, modified or supplemented,
the “Mortgage”) of even date herewith from Borrower to Lender, conveying
and encumbering certain real and personal property more particularly described
therein (the “Property”). This Note, the Mortgage, the Term Loan
Agreement between Borrower and Lender of even date herewith (as the same may
from time to time be amended, restated, modified or supplemented, the “Loan
Agreement”) and all other documents now or hereafter securing, guaranteeing
or executed in connection with the loan evidenced by this Note (the “Loan”),
as the same may from time to time be amended, restated, modified or
supplemented, are herein sometimes called individually a “Loan Document”
and together the “Loan Documents.”

 

3

 

Section 3.                                            Interest Rate.

 

Section 3.1                                      Interest Rates. The Principal Debt (hereinafter defined) from day to
day outstanding which is not past due shall bear interest at a rate per annum
equal to the following (computed as provided in Section 3.4 hereof) as
applicable:

 

(a)                                  On Base Rate
Principal, on any day, the Base Rate;

 

(b)                                 On
LIBOR Rate Principal, for the applicable Interest Period, the applicable LIBOR
Rate; and

 

(c)                                  On
LIBOR Daily Floating Rate Principal, the LIBOR Daily Floating Rate.

 

Section 3.2                                      Interest Rate Elections.

 

(a)                                  Subject
to the conditions and limitations in this Note, Borrower may by written notice
to Lender in the form specified by Lender (a “Rate Election Notice”):

 

(i)                                     Elect,
for a new advance of funds, that such Principal Debt will be Base Rate
Principal, LIBOR Rate Principal, LIBOR Daily Floating Rate Principal, or a
combination thereof;

 

(ii)                                  Elect
to convert, on a LIBOR Business Day, all or part of Base Rate Principal into
LIBOR Rate Principal, LIBOR Daily Floating Rate Principal, or a combination
thereof;

 

(iii)                               Elect
to convert, on the last day of the Interest Period applicable thereto, all or
part of any LIBOR Rate Principal into Base Rate Principal or LIBOR Daily
Floating Rate Principal;

 

(iv)                              Elect
to convert, on a LIBOR Business Day, all or part of any LIBOR Daily Floating
Rate Principal into Base Rate Principal;

 

(v)                                 Elect
to continue, commencing on the last day of the Interest Period applicable
thereto, any LIBOR Rate Principal; or

 

(vi)                              Elect to continue any
LIBOR Daily Floating Rate Principal.

 

If, for any reason, an effective election is not made in accordance
with the terms and conditions of this Note for any principal advance or for any
LIBOR Rate Principal for which the corresponding Interest Period is expiring,
or to convert Base Rate Principal to LIBOR Rate Principal or LIBOR Daily
Floating Rate Principal, then the sums in question will be Base Rate Principal
until an effective LIBOR Rate Election is thereafter made for such sums.

 

(b)                                 Each
Rate Election Notice must be received by Lender not later than 10:00 a.m. on
the applicable date as follows:

 

(i)                                     With
respect to an advance of or conversion to Base Rate Principal, one (1) Business
Day prior to the proposed date of advance or conversion; and

 

4

 

(ii)                                  With
respect to an advance of, conversion to or continuation of LIBOR Rate Principal
or LIBOR Daily Floating Rate Principal, three (3) LIBOR Business Days prior to
the proposed date of advance, conversion or continuation.

 

Unless otherwise specified herein, no conversion from LIBOR Rate
Principal may be made other than at the end of the corresponding Interest
Period. Each Rate Election Notice shall stipulate: (A) the amount of the
advance or of the Principal Debt to be converted or continued; (B) the nature
of the proposed advance, conversion or continuation, which shall be either Base
Rate Principal, LIBOR Rate Principal, LIBOR Daily Floating Rate Principal, or a
combination thereof, and in the case of a conversion or continuation, the
nature of the Principal Debt to be converted or continued; (C) in the case of
LIBOR Rate Principal, the proposed commencement date and duration of the
Interest Period; and (D) in the case of LIBOR Daily Floating Rate Principal,
the proposed commencement date. All such notices shall be irrevocable once
given, and shall be deemed to have been given only when actually received by
Lender in writing in form specified by Lender.

 

Section 3.3                                General Conditions Precedent to LIBOR
Rate Election. In
addition to any other conditions herein, a LIBOR Rate Election shall not be
permitted if:

 

(a)                                  An Event of Default has occurred and has
not been waived by Lender or a Potential Default has occurred and is
continuing; or

 

(b)                                 After giving effect to the requested
LIBOR Rate Election, the sum of
(i) all LIBOR Rate Principal, plus
(ii) all LIBOR Daily Floating Rate Principal, plus
(iii)all Base Rate Principal would exceed the principal face amount of this
Note; or

 

(c)                                  The requested LIBOR Rate Election would
cause more than three (3) LIBOR Rate Elections by Borrower to be in effect at
any one time; or

 

(d)                                 The amount of LIBOR Rate Principal is
less than $500,000.00; or

 

(e)                                  The requested interest period for the
LIBOR Rate does not conform to the definition of Interest Period herein; or

 

(f)                                    Any of the circumstances referred to in Section
3.5 hereof shall apply with respect to the requested LIBOR Rate Election or
the requested LIBOR Rate Principal or LIBOR Daily Floating Rate Principal.

 

Section 3.4                                      Computations and Determinations. All interest shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed (including
the first day but excluding the last day). Lender shall determine each interest
rate applicable to the Principal Debt in accordance with this Note and its
determination thereof shall be conclusive in the absence of manifest error. The
books and records of Lender shall be conclusive evidence, in the absence of
manifest error, of all sums owing to Lender from time to time under this Note,
but the failure to record any such information shall not limit or affect the
obligations of Borrower under the Loan Documents.

 

Section 3.5                                      Unavailability of Rate. If, with respect to any LIBOR Rate
Election, or any LIBOR Rate Principal or LIBOR Daily Floating Rate Principal
outstanding hereunder, Lender determines that no adequate basis exists for
determining the LIBOR Rate or the LIBOR Daily Floating Rate (as applicable), or
that the LIBOR Rate or the LIBOR Daily Floating Rate (as applicable) will not
adequately and fairly reflect the cost to Lender of funding or maintaining the
applicable LIBOR Rate

 

5

 

Principal for such
Interest Period or LIBOR Daily Floating Rate Principal, or that any applicable
Law, or any request or directive (whether or not having the force of law) of
any Tribunal, or compliance therewith by Lender, prohibits or restricts or
makes impossible the making or maintaining of such LIBOR Rate Election or LIBOR
Rate Principal or LIBOR Daily Floating Rate Principal or the charging of
interest on such LIBOR Rate Principal or LIBOR Daily Floating Rate Principal
(as applicable), and Lender so notifies Borrower, then until Lender notifies
Borrower that the circumstances giving rise to such suspension no longer exist,
(a) the obligation of Lender to permit such LIBOR Rate Election shall be
suspended and (b) (i) all existing affected LIBOR Rate Principal shall
automatically become Base Rate Principal, either (x) on the last day of the
corresponding Interest Period (if Lender determines that it may lawfully
continue to fund and maintain the affected LIBOR Rate Principal to such day);
or (y) immediately (if Lender determines that it may not lawfully continue
to fund and maintain the affected LIBOR Rate Principal to such day); and (ii)
all existing affected LIBOR Daily Floating Rate Principal shall automatically
and immediately become Base Rate Principal; and such case Borrower shall pay to
Lender the Consequential Loss, if any, pursuant to Section 4 hereof.

 

Section 3.6                                      Increased Cost
and Reduced Return. If at any time after the date hereof, Lender
(which shall include, for purposes of this Section 3.6, any corporation
controlling Lender) determines that the adoption or modification of any
applicable Law regarding taxation, Lender’s required levels of reserves,
deposits, insurance or capital (including any allocation of capital
requirements or conditions), or similar requirements, or any interpretation or
administration thereof by any Tribunal or compliance by Lender with any of such
requirements, has or would have the effect of (a) increasing Lender’s
costs related to the Indebtedness, or (b) reducing the yield or rate of
return of Lender on the Indebtedness, to a level below that which Lender could
have achieved but for the adoption or modification of any such requirements,
Borrower shall, within fifteen (15) days of any request by Lender, pay to
Lender such additional amounts as (in Lender’s sole judgment, after good faith
and reasonable computation) will compensate Lender for such increase in costs
or reduction in yield or rate of return of Lender, provided, that Lender shall
notify Borrower of its election to require Borrower to compensate Lender in
accordance with this Section 3.6 promptly upon Lender’s
determination thereof. No failure by Lender to immediately demand payment of
any additional amounts payable hereunder shall constitute a waiver of Lender’s
right to demand payment of any such amounts at any subsequent time. Nothing
herein contained shall be construed or shall so operate as to require Borrower
to pay any interest, fees, costs or charges greater than is permitted by
applicable Law.

 

Section 3.7                                      Past Due Rate. If any amount payable by Borrower under
any Loan Document is not paid when due, and such failure continues uncured for
a period of five (5) days after Notice from Lender to Borrower, such amount shall
thereafter bear interest at the Past Due Rate (as defined below) to the fullest
extent permitted by applicable Law. Accrued and unpaid interest or past due
amounts (including interest on past due interest) shall be due and payable on
demand, at a fluctuating rate per annum (the “Past Due Rate”) equal to
lesser of (i) the maximum non-usurious rate of interest allowed by applicable
law or (ii) the higher of (a) the Prime Rate plus four hundred (400) basis
points, or (b) the Adjusted LIBOR Rate plus four hundred (400) basis points.

 

Section 3.8                                      Additional Defined Terms. In addition to other terms defined
herein, as used herein the following terms shall have the meanings indicated,
unless the context otherwise requires:

 

“Adjusted LIBOR Rate” means the quotient
obtained by dividing (a) the applicable London Interbank Offered Rate by (b)
1.00 minus the LIBOR Reserve Percentage.

 

“Base Rate” means, on any day, a simple rate
per annum equal to the Prime Rate for that day plus the Base Rate Margin. Without
notice to Borrower or anyone else, the Base Rate shall

 

6

 

automatically
fluctuate upward and downward as and in the amount by which the Prime Rate
fluctuates.

 

“Base Rate
Margin” means zero (0) basis points.

 

“Base Rate Principal” means, at any time, the
Principal Debt minus the portion, if any, of such Principal Debt which is LIBOR
Rate Principal or LIBOR Daily Floating Rate Principal.

 

“BBA LIBOR Daily Floating Rate” means a
fluctuating rate of interest per annum equal to the BBA LIBOR as determined for
each Business Day at approximately 11:00 a.m. London time two (2) London
Banking Days prior to the date in question, for U.S. Dollar deposits (for
delivery on the first day of such interest period) with a one month term, as
adjusted from time to time in Lender’s sole discretion for reserve
requirements, deposit insurance assessment rates and other regulatory costs. If
such rate is not available at such time for any reason, then the rate shall be
determined by such alternate method as reasonably selected by Lender.

 

“Business Day” means a day on which Lender is
open for the conduct of substantially all of its banking business at its office
in the city in which this Note is payable (excluding Saturdays and Sundays),
except that in the case of LIBOR Rate Principal or LIBOR Daily Floating Rate
Principal such day must also be a day on which commercial banks are open for
international business (including dealings in U.S. dollar deposits in London,
England).

 

“Indebtedness” means any and all of the
indebtedness to Lender evidenced, governed or secured by or arising under this
Note or any other Loan Document.

 

“Interest Period” means with respect to any
LIBOR Rate Principal, the period commencing on the date such LIBOR Rate Principal
is disbursed or on the date on which the Principal Debt or any portion thereof
is converted into or continued as such LIBOR Rate Principal, and ending on the
date one (1), two (2), or three (3) months thereafter, as elected by Borrower
in the applicable Rate Election Notice; provided that:

 

(a)                                  Each Interest Period
must commence on a LIBOR Business Day;

 

(b)                                 In the case of the
continuation of LIBOR Rate Principal, the Interest Period applicable after the
continuation of such LIBOR Rate Principal shall commence on the last day of the
preceding Interest Period;

 

(c)                                  The last day for each
Interest Period and the actual number of days during the Interest Period shall
be determined by Lender using the practices of the London interbank market; and

 

(d)                                 No Interest Period
shall extend beyond the Maturity Date, and any Interest Period which begins
before the Maturity Date and would otherwise end after the Maturity Date shall
instead end on the Maturity Date.

 

“Laws” means all constitutions, treaties,
statutes, laws, ordinances, regulations, rules, orders, writs, injunctions, or
decrees of the United States of America, any state or commonwealth, any
municipality, any foreign country, any territory or possession, or any
Tribunal.

 

“LIBOR Business Day” means a Business Day
which is also a London Banking

 

7

 

Day.

 

“LIBOR Daily Floating Rate” means for any
LIBOR Daily Floating Rate principal, a fluctuating rate of interest per annum
equal to the sum of the BBA LIBOR
Daily Floating Rate plus the
LIBOR Margin.

 

“LIBOR Daily Floating Rate Principal” means
any portion of the Principal Debt which bears interest at the LIBOR Daily
Floating Rate.

 

“LIBOR Margin” means 1.40% per annum.

 

“LIBOR Rate” means for any applicable Interest
Period for any LIBOR Rate Principal, a simple rate per annum equal to the sum
of the LIBOR Margin plus the
Adjusted LIBOR Rate.

 

“LIBOR Rate Election” means an election by
Borrower of (a) the LIBOR Daily Floating Rate or (b) an applicable LIBOR Rate in
accordance with this Note.

 

“LIBOR Rate Principal” means any portion of
the Principal Debt which bears interest at an applicable LIBOR Rate at the time
in question.

 

“LIBOR Reserve Percentage” means, with respect
to any applicable Interest Period, for any day that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including basic, supplemental, emergency, special
and marginal reserves) generally applicable to financial institutions regulated
by the Federal Reserve Board comparable in size and type to Lender, in respect
of “Eurocurrency liabilities” (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
LIBOR Rate Principal is determined), whether or not Lender has any Eurocurrency
liabilities or such requirement otherwise in fact applies to Lender. The LIBOR
Rate shall be adjusted automatically as of the effective date of each change in
the LIBOR Reserve Percentage.

 

“London Banking Day” means a day on which
banks in London are open for business and dealing in offshore dollars.

 

“London Interbank Offered Rate” means, with
respect to any applicable Interest Period, the rate per annum equal to the
British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by
Reuters (or other commercially available source providing quotations of BBA
LIBOR as selected by Lender from time to time) at approximately 11:00 a.m.
London time two (2) London Banking Days before the commencement of the Interest
Period, for deposits in U.S. Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period. If such rate
is not available at such time for any reason, then the rate for that Interest
Period will be determined by such alternate method as reasonably selected by
Lender.

 

“Note” means this promissory note, and any
renewals, extensions, amendments or supplements hereof.

 

“Potential Default” means any condition or
event which with the giving of notice or lapse of time or both would, unless
cured or waived, become an Event of Default.

 

“Prime Rate” means, on any day, the rate of
interest per annum then most recently 

 

8

 

established by
Lender as its “prime rate,” it being understood and agreed that such rate is
set by Lender as a general reference rate of interest, taking into account such
factors as Lender may deem appropriate, that it is not necessarily the lowest
or best rate actually charged to any customer or a favored rate, that it may
not correspond with future increases or decreases in interest rates charged by
other lenders or market rates in general, and that Lender may make various
business or other loans at rates of interest having no relationship to such
rate. If Lender (including any subsequent holder of this Note) ceases to exist
or to establish or publish a prime rate from which the Prime Rate is then
determined, the applicable variable rate from which the Prime Rate is
determined thereafter shall be instead the prime rate reported in The Wall
Street Journal (or the average prime rate if a high and a low prime rate
are therein reported), and the Prime Rate shall change without notice with each
change in such prime rate as of the date such change is reported.

 

“Principal Debt” means the aggregate unpaid
principal balance of this Note at the time in question.

 

“Rights” means rights, remedies, powers and
privileges.

 

“Taxes” means all taxes, assessments, fees,
levies, imposts, duties, deductions, withholdings, or other charges of any
nature whatsoever from time to time or at any time imposed by any Law or
Tribunal.

 

“Tribunal” means any state, commonwealth,
federal, foreign, territorial or other court or governmental department,
commission, board, bureau, district, authority, agency, central bank, or
instrumentality, or any arbitration authority.

 

Section 4.                                            Prepayment.

 

(a)                                  Borrower may prepay the principal balance of
this Note, in full at any time or in part from time to time, provided that: (i)
no prepayment may be made which in Lender’s judgment would contravene or
prejudice funding under any applicable permanent loan commitment or tri-party
agreement or the like; (ii) Lender shall have actually received from Borrower
prior irrevocable written notice (the “Prepayment Notice”) of Borrower’s
intent to prepay, the amount of principal which will be prepaid (the “Prepaid
Principal”), and the date on which the prepayment will be made; (iii) each
prepayment shall be in the amount of $1,000 or more (unless the prepayment
retires the outstanding balance of this Note in full); and (iv) each prepayment
shall be in the amount of 100% of the Prepaid Principal, plus accrued unpaid interest thereon to
the date of prepayment, plus any
other sums which have become due to Lender under the Loan Documents on or
before the date of prepayment but have not been paid; and (v) no portion of
LIBOR Rate Principal may be prepaid except on the last day of the Interest
Period applicable thereto, unless Borrower pays to Lender any Consequential
Loss as a result thereof, in accordance with Section 4(b) below. If this
Note is prepaid in full, any commitment of Lender for further advances shall
automatically terminate.

 

(b)                                 Within fifteen (15) days after request by
Lender (or at the time of any prepayment), Borrower shall pay to Lender such
amount or amounts as will compensate Lender for any loss, cost, expense,
penalty, claim or liability, including any loss incurred in obtaining,
prepaying, liquidating or employing deposits or other funds from third parties
and any loss of revenue, profit or yield, as determined by Lender in its
judgment reasonably exercised (together, “Consequential Loss”) incurred
by Lender with respect to any LIBOR Rate or LIBOR Daily Floating Rate,
including any LIBOR Rate Election or LIBOR Rate Principal as a result of: (i)
the failure of Borrower to make any payment on the date or in the amount
specified in any Prepayment Notice from Borrower to Lender; (ii) the failure of
Borrower to borrow,

 

9

 

continue or convert into LIBOR
Rate Principal on the date or in the amount specified in any Rate Election
Notice or other notice given by Borrower to Lender; (iii) the early termination
of any Interest Period for any reason (other than application of condemnation
or insurance proceeds to repayment of the debt); or (iv) the payment or
prepayment of any amount on a date other than the date such amount is required
or permitted to be paid or prepaid. Borrower agrees to pay all Consequential
Loss upon any prepayment of LIBOR Rate Principal, whether voluntary or
involuntary, whether effected by a credit bid at foreclosure, or whether by
reason of acceleration upon an Event of Default or upon any transfer or
conveyance of any right, title or interest in the Property giving Lender the
right to accelerate the maturity of this Note as provided in the Mortgage. Notwithstanding
the foregoing, the amount of the Consequential Loss shall never be less than
zero or greater than is permitted by applicable Law. Lender shall provide a
notice to Borrower setting forth Lender’s determination of any Consequential
Loss, which notice shall be conclusive and binding in the absence of manifest
error. Lender reserves the right to provide interim calculations of such
Consequential Loss in any notice of default or notice of sale for information
purposes, but the exact amount of such Consequential Loss shall be calculated
only upon the actual prepayment of LIBOR Rate Principal as described herein. The
Consequential Loss shall be included in the total indebtedness secured by the
Mortgage for all purposes, including in connection with a foreclosure sale. Lender
may include the amount of the Consequential Loss in any credit bid Lender may
make at a foreclosure sale. Lender shall have no obligation to purchase, sell
and/or match funds in connection with the funding or maintaining of the Loan or
any portion thereof. The obligations of Borrower under this Section shall
survive any termination of the Loan Documents and payment of this Note and
shall not be waived by any delay by Lender in seeking such compensation.

 

Section
5.                                            Late Charges. If Borrower shall fail to make any payment
under the terms of this Note (other than the payment due at maturity) within
fifteen (15) days after the date such payment is due, Borrower shall pay to
Lender on demand a late charge equal to four percent (4%) of the amount of such
payment. Such fifteen (15) day period shall not be construed as in any way
extending the due date of any payment. The late charge is imposed for the
purpose of defraying the expenses of Lender incident to handling such
delinquent payment. This charge shall be in addition to, and not in lieu of,
any other amount that Lender may be entitled to receive or action that Lender
may be authorized to take as a result of such late payment.

 

Section
6.                                            Certain Provisions Regarding Payments. All payments made under this Note shall be
applied, to the extent thereof, to late charges, to accrued but unpaid
interest, to unpaid principal, and to any other sums due and unpaid to Lender
under the Loan Documents, in such manner and order as Lender may elect in its
sole discretion, any instructions from Borrower or anyone else to the contrary
notwithstanding. Remittances shall be made without offset, demand,
counterclaim, deduction, or recoupment (each of which is hereby waived) and
shall be accepted subject to the condition that any check or draft may be
handled for collection in accordance with the practice of the collecting bank
or banks. Acceptance by Lender of any payment in an amount less than the amount
then due on any indebtedness shall be deemed an acceptance on account only,
notwithstanding any notation on or accompanying such partial payment to the
contrary, and shall not in any way (a) waive or excuse the existence of an
Event of Default (as hereinafter defined), (b) waive, impair or extinguish any
right or remedy available to Lender hereunder or under the other Loan
Documents, or (c) waive the requirement of punctual payment and performance or
constitute a novation in any respect. Payments received after 2:00 p.m. shall
be deemed to be received on, and shall be posted as of, the following Business
Day. Whenever any payment under this Note or any other Loan Document falls due
on a day which is not a Business Day, such payment may be made on the next
succeeding Business Day.

 

Section
7.                                            Events of Default. The occurrence of any one or more of the following
shall constitute an “Event of Default” under this Note:

 

10

 

(a)                                  Borrower fails to pay when and as due and
payable any amounts payable by Borrower to Lender under the terms of this Note,
and such failure continues uncured for a period of five (5) days after Notice
from Lender to Borrower.

 

(b)                                 Except for those
Obligations described in Article VI of the Loan Agreement to which the
cure periods set forth therein shall apply, any covenant, agreement or condition
in this Note is not fully and timely performed, observed or kept, and such
failure continues uncured for a period of thirty (30) days after Notice from
Lender to Borrower, unless (a) such failure, by its nature, is not capable of
being cured within such period, and (b) within such period, Borrower commences
to cure such failure and thereafter diligently prosecutes the cure thereof, and
(c) Borrower causes such failure to be cured no later than ninety (90) days
after the date of such Notice from Lender.

 

(c)                                  An Event of Default (as therein defined)
occurs under any of the Loan Documents other than this Note (subject to any
applicable grace or cure period).

 

Section
8.                                            Remedies. Upon the occurrence of an Event of Default, Lender may at any time
thereafter exercise any one or more of the following rights, powers and
remedies:

 

(a)                                  Lender may accelerate the Maturity Date and
declare the unpaid principal balance and accrued but unpaid interest on this
Note, and all other amounts payable hereunder and under the other Loan
Documents, at once due and payable, and upon such declaration the same shall at
once be due and payable.

 

(b)                                 Lender may set off the amount due against any
and all accounts, credits, money, securities or other property now or hereafter
on deposit with, held by or in the possession of Lender to the credit or for
the account of Borrower, without notice to or the consent of Borrower.

 

(c)                                  Lender may exercise any of its other rights,
powers and remedies under the Loan Documents or at law or in equity.

 

Section
9.                                            Remedies Cumulative. All of the rights and remedies of Lender
under this Note and the other Loan Documents are cumulative of each other and
of any and all other rights at law or in equity, and the exercise by Lender of
any one or more of such rights and remedies shall not preclude the simultaneous
or later exercise by Lender of any or all such other rights and remedies. No
single or partial exercise of any right or remedy shall exhaust it or preclude
any other or further exercise thereof, and every right and remedy may be
exercised at any time and from time to time. No failure by Lender to exercise,
nor delay in exercising, any right or remedy shall operate as a waiver of such
right or remedy or as a waiver of any Event of Default.

 

Section
10.                                      Costs and Expenses of Enforcement. Borrower agrees to pay to Lender on demand
all costs and expenses incurred by Lender in seeking to collect this Note or to
enforce any of Lender’s rights and remedies under the Loan Documents, including
court costs and reasonable attorneys’ fees and expenses, whether or not suit is
filed hereon, or whether in connection with bankruptcy, insolvency or appeal.

 

Section 11.                                      Service of Process. Borrower hereby
irrevocably designates and appoints Douglas McCormick of AVF Management, LLC,
as Borrower’s authorized agent to accept and acknowledge on Borrower’s behalf
service of any and all process that may be served in any suit, action, or
proceeding instituted in connection with this Note in any state or federal
court sitting in the State of Colorado. If such agent cease so to act, Borrower
shall irrevocably designate and appoint without delay another such agent in

 

11

 

the State of Colorado
satisfactory to Lender and shall promptly deliver to Lender evidence in writing
of such agent’s acceptance of such appointment and its agreement that such
appointment shall be irrevocable.

 

Section
12.                                      Successors and Assigns. The terms of this Note and of the other
Loan Documents shall bind and inure to the benefit of the successors and
assigns of the parties. The foregoing sentence shall not be construed to permit
Borrower to assign the Loan except as otherwise permitted under the Loan
Documents.

 

Section
13.                                      General Provisions. Time is of the essence with respect to
Borrower’s obligations under this Note. If more than one person or entity
executes this Note as Borrower, all of said parties shall be jointly and
severally liable for payment of the indebtedness evidenced hereby. Borrower and
each party executing this Note as Borrower hereby severally (a) waive demand,
presentment for payment, notice of dishonor and of nonpayment, protest, notice
of protest, notice of intent to accelerate, notice of acceleration and all
other notices (except any notices which are specifically required by this Note
or any other Loan Document), filing of suit and diligence in collecting this
Note or enforcing any of the security herefor; (b) agree to any
substitution, subordination, exchange or release of any such security or the
release of any party primarily or secondarily liable hereon; (c) agree that
Lender shall not be required first to institute suit or exhaust its remedies
hereon against Borrower or others liable or to become liable hereon or to
perfect or enforce its rights against them or any security herefor; (d) consent
to any extensions or postponements of time of payment of this Note for any
period or periods of time and to any partial payments, before or after
maturity, and to any other indulgences with respect hereto, without notice
thereof to any of them; and (e) submit (and waive all rights to object) to
non-exclusive personal jurisdiction of any state or federal court sitting in
Colorado for the enforcement of any and all obligations under this Note; (f)
waive the benefit of all homestead and similar exemptions as to this Note; (g)
agree that their liability under this Note shall not be affected or impaired by
any determination that any title, security interest or lien taken by Lender to
secure this Note is invalid or unperfected; and (h) hereby subordinate to the
Loan and the Loan Documents any and all rights against Borrower and any
security for the payment of this Note, whether by subrogation, agreement or
otherwise, until this Note is paid in full. A determination that any provision
of this Note is unenforceable or invalid shall not affect the enforceability or
validity of any other provision and the determination that the application of
any provision of this Note to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances. This Note may not be amended
except in a writing specifically intended for such purpose and executed by the
party against whom enforcement of the amendment is sought. Captions and
headings in this Note are for convenience only and shall be disregarded in
construing it. This Note and its validity, enforcement and interpretation shall
be governed by the laws of the State of Colorado (without regard to any
principles of conflicts of laws) and applicable United States federal law. Whenever
a time of day is referred to herein, unless otherwise specified such time shall
be the local time of the place where payment of this Note is to be made. The
term “Business Day” shall mean a day on which Lender is open for the
conduct of substantially all of its banking business at its office in the city
in which this Note is payable (excluding Saturdays and Sundays). Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Loan Agreement. The words “include” and “including” shall be
interpreted as if followed by the words “without limitation.”

 

Section
14.                                      Notices; Time. All notices,
requests, consents, approvals or demands (collectively, “Notice”)
required or permitted by this Note to be given by any party to any other party
hereunder shall, unless specified otherwise, be in writing (including facsimile
(fax) transmission) and shall be given to such party at its address or fax
number set forth in the notice provisions of the Loan Agreement, or at such
other address or fax number as such party may hereafter specify for the purpose
by Notice to the other party. Each such Notice shall be effective when actually
received by the addressee or when the attempted initial delivery is refused or
when it cannot be made because of a change of address of which the sending
party has

 

12

 

not been notified; provided,
that notices to Lender under Sections 3.1 through 3.8 hereof, inclusive,
and notices of changed address or fax number, shall not be effective until
received.

 

Section 15.                                      No
Usury. It is expressly stipulated and agreed to be the intent of Borrower
and Lender at all times to comply with applicable state law or applicable
United States federal law (to the extent that it permits Lender to contract
for, charge, take, reserve, or receive a greater amount of interest than under
state law) and that this Section shall control every other covenant and
agreement in this Note and the other Loan Documents. If applicable state or
federal law should at any time be judicially interpreted so as to render
usurious any amount called for under this Note or under any of the other Loan
Documents, or contracted for, charged, taken, reserved, or received with
respect to the Loan, or if Lender’s exercise of the option to accelerate the
Maturity Date, or if any prepayment by Borrower results in Borrower having paid
any interest in excess of that permitted by applicable law, then it is Lender’s
express intent that all excess amounts theretofore collected by Lender shall be
credited on the principal balance of this Note and all other indebtedness
secured by the Mortgage, and the provisions of this Note and the other Loan
Documents shall immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity of the
execution of any new documents, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder
or thereunder. All sums paid or agreed to be paid to Lender for the use or
forbearance of the Loan shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Loan until payment in full so that the rate or amount of interest on
account of the Loan does not exceed the maximum lawful rate from time to time
in effect and applicable to the Loan for so long as the Loan is outstanding.

 

Section
16.                                      Non-Recourse. The Loan shall be
recourse to Borrower; provided, however, other than the Obligations of Alliance
Real Estate Value Fund III, LLC under the Guaranty Agreement, the Loan, the
Loan Documents and the Obligations are nonrecourse to the members of Borrower
and their members and their respective managers, partners, shareholders,
officers, directors and employees shall have no personal liability for the
Obligations evidenced by this Note or the other Loan Documents.

 

[Signatures on Following Page]

 

13

 

IN
WITNESS WHEREOF, Borrower has duly executed this Note to be effective as of the
date first above written.

 

	
   

  	
  Borrower:

  
	
   

  	
   

  
	
   

  	
  TRT
  ALLIANCE SKOKIE LLC, a Delaware limited liability
  company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  TRT Alliance
  JV II GP, a Delaware general partnership

  
	
   

  	
  Its:

  	
  Sole member

  
	
   

  
	
   

  	
   

  	
  By:

  	
  40 Skokie
  Associates, LLC, a Colorado limited liability

  
	
   

  	
   

  	
   

  	
  company,

  
	
   

  	
   

  	
  Its:

  	
  Managing
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Alliance
  Real Estate Value Fund III, LLC, a Delaware

  
	
   

  	
   

  	
   

  	
   

  	
  limited
  liability company

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  AVF
  Management, LLC, a Colorado limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  liability
  company,

  
	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
  Managing
  Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  ILLEGIBLE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Printed
  Name:

  	
  [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
  Voting
  Member

  
											

 

 

This is to certify that this is the Note
described in the Mortgage from Borrower to secure Bank of America, N.A., a
national banking association, dated of even date, such Note and Mortgage having
been executed in my presence.

 

	
   

  	
   

  	
   

  
	
  11/22/2010

  	
   

  	
   

  	
  /s/ Mary Ann Miller

  	
  

  
	
  My
  Commission Expires

  	
   

  	
  Notary Public

  
					

 

14

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