Document:

chci-ex1030_76.htm

 

Exhibit 10.30

PROMISSORY NOTE

 

 

	
$5,500,000.00
	
March 27, 2020

 

FOR VALUE RECEIVED, the undersigned, COMSTOCK HOLDING COMPANIES,

INC., a Delaware corporation (the "Maker"), promises to pay to the order of COMSTOCK DEVELOPMENT SERVICES, LC, a Virginia limited liability company  (the  "Lender"),  at 1886 Metro Center Drive, Suite 400, Reston, Virginia 20190, or at such other place as the holder hereof may from time to time designate in writing, the principal sum of Five Million Five Hundred Thousand and No/100 Dollars ($5,500,000.00) (the "Note"), with interest on the unpaid principal balance at the rate and on the terms provided in this Note, including all renewals, extensions or modifications hereof. This Note was issued pursuant to that ce1iain revolving capital line of credit agreement in a maximum outstanding amount of Ten Million dollars ($10,000,000) (the "Capital Line of Credit") and the proceeds of this Note are being utilized to retire that certain  Third  Amended  and Restated Promissory Note owed and payable to Comstock Growth Fund, L.C.

 

1.Interest. As of the date of this Note, the principal balance of this Note outstanding during any calendar month or pmiion thereof  shall  be charged  at  a variable  rate of interest  equal to the sum of (i) the Prime rate as repmied in the Wall Street Journal (the "Prime Rate"),  and  (ii) one percent (1.00%). In order to account for any changes  in the Prime  Rate, the interest  rate shall be adjusted monthly on the first Business Day of each month until the Note is repaid in full, retroactive to the first calendar day of such month through and including the last calendar day of such month.

 

2.Payments/Maturity Date. Principal and interest payments shall be due and payable hereunder as follows:

 

A.This Note shall be due and payable in monthly payments in arrears  of accrued interest only, commencing on April 30, 2020, and continuing on the last day of each month thereafter until fully paid. In any event, all principal and accrued interest, if any, shall be due and payable on April 30, 2023.   (the "Maturity").   If any  payment  comes due on a day  which  is a not a Business Day, such payment shall be due on the next succeeding Business Day, together with interest accruing during such extension.

 

B.The Maker has borrowed the full amount referenced above as  of  the effective date of the Note. The proceeds of this Note were issued pursuant to that certain Capital Line of Credit by and between Maker and Lender made as of March 19, 2020 and are made expressly subject to its terms and conditions.

 

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2020 Capital Line of Credit Note-CGF

 

 

C.All payments of principal and/or interest hereon shall be payable in lawful money of the United States and in immediately available funds. All payments received hereon shall be applied, at the Lender's option, first to accrued interest, if any, then to principal, then to escrow items, if any, then to late charges, if any, then to attorney fees and then to principal. All payments hereunder shall be made without offset, demand, counterclaim, deduction, abatement, defense, or recoupment, each of which Maker hereby waives. If any payment received by Lender under this Note is rescinded, avoided or for any reason retumed by Lender because of any adverse claim or threatened action, the returned payment shall remain payable as an obligation of the Maker as though such payment had not been made.

 

D.Except for normal and recurring payments of principal and interest under this Note, the Note may be pre-paid, in whole or part, provided Maker provides Lender with 10- days' advance written notice that the maker intends to pay this Note in full.

 

3.Late Charges. In the event that any payment of interest is not actually received by the holder hereof within fifteen (15) days of the date such payment is due and payable hereunder, the Maker agrees to pay a late charge equal to four percent (4%) of the late payment.

 

4.Events of Default. An Event of Default under that ce1iain revolving capital line of credit agreement in a maximum outstanding amount of Ten Million dollars ($10,000,000) and/or the failure to pay any principal or interest payment at the times stated herein  shall constitute  an Event of Default hereunder: Upon any such Event of Default, the entire principal balance hereof, all accrued  and unpaid interest  thereon, and all other applicable  fees, costs and charges, if any, shall   at once become due and payable at the option of the holder of this Note. Failure to exercise this option shall not constitute a waiver of the right to the later exercise thereof  or to exercise  the same in the event of any subsequent Event of Default.

 

5.Default Interest. Notwithstanding the ent1y of any decree, order, judgment or other judicial action under, pursuant to, in connection with, or otherwise concerning this Note, upon the occurrence of an Event of Default of this Note (whether by acceleration, declaration, extension or otherwise), the Maker promises to pay to the Lender whenever demanded by the Lender interest on this Note and all other amounts then and thereafter due and payable hereunder at a per annum rate of interest (the "Default Rate") equal to the lesser of (i) five percent (5.0%) per annum in excess of the interest rate set forth in Section 1 above, or (ii) the highest rate allowable by law from the date of such Event of Default for so long as such Event of Default continues until payment in full of the unpaid principal balance of this Note, all accrued and unpaid interest thereon and any and all other amounts due or payable hereunder.

 

6.Waiver of Notice. Each party liable hereon in any capacity, whether as maker, endorser, surety, guarantor or otherwise, (i) waives presentment, demand, protest and notice of presentment, notice of protest and notice of dishonor of this debt and each and every other notice of any kind respecting this Note (except as otherwise expressly provided for herein), (ii) agrees that the holder hereof, at any time or times, without notice to it or its consent, may grant extensions of time, without limit as to the number or the aggregate period of such extensions, for the payment of any principal and/or interest due hereon, and (iii) to the extent not prohibited by law, waives the benefit of any law or rule of law intended for its advantage or protection as an obligor hereunder or providing for its release or discharge from liability hereon, in whole or in part, on account of any facts or circumstances other than full and complete payment of all amounts due hereunder.

 

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2020 Capital Line of Credit Note-CGF

 

 

7.Waiver of Jury Trial. THE LENDER, THE MAKER AND ANY OTHER PARTY LIABLE HEREON IN ANY CAPACITY, WHETHER AS SURETY, GUARANTOR, OR OTHERWISE, EACH WAIVES TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THE LOAN EVIDENCED HEREBY AND/OR THE CONDUCT OF THE RELATIONSHIP BETWEEN THE LENDER, THE MAKER AND/OR ANY OTHER PARTY LIABLE HEREON IN ANY CAPACITY, WHETHER AS SURETY, GUARANTOR, OR OTHERWISE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY MAKER, AND MAKER HEREBY REPRESENTS THAT NO ORAL OR WRITTEN STATEMENTS HAVE BEEN MADE BY ANY PARTY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS STATED EFFECT. MAKER FURTHER REPRESENTS THAT IT HAS BEEN REPRESENTED BY INDEPENDENT COUNSEL OF ITS CHOICE IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIYER WITH SUCH COUNSEL.

 

8.Costs of Collection. The Maker promises to pay all third-party costs and expenses incurred in connection with collection hereof or in the protection or realization of any collateral now or hereafter given as security for the repayment hereof, including reasonable attorneys' fees, upon the occurrence of an Event of Default in the payment of the principal of this Note or interest hereon when due, whether at Maturity, as herein provided, or by reason of acceleration of Maturity under the tenns hereof, whether suit be brought or not.

 

9.Lender's Rights and Remedies. The failure of the Lender to exercise the option for acceleration of Maturity, foreclosing, or either, following any Event of Default as aforesaid or to exercise any other option granted to it hereunder, in any one or more instances, or the acceptance by the Lender of partial payments or partial performance, shall not constitute a waiver of any such Event of Default, but such options shall remain continuously in force. Acceleration of Maturity, once claimed hereunder by the Lender, may at its option be rescinded by written acknowledgment to that effect but the tender and acceptance of partial payment or partial perfonnance alone shall not in any way affect or rescind such acceleration of maturity. The rights, remedies and powers of the Lender, as provided in this Note, are cumulative and concurrent, and may be pursued singly, successively, or together against the Maker, and/or any security given at any time to secure the payment hereof, all at the sole discretion of the Lender.

 

10.Lawful Interest. Notwithstanding anything to the contrary contained herein, the effective rate of interest on the obligation evidenced by this Note shall not exceed the lawful maximum rate of interest permitted to be paid. Without limiting the generality of the foregoing, in the event the interest charged hereunder results in an effective rate of interest higher than that lawfully permitted to be paid, then such charges shall be reduced by the sum sufficient to result in an effective rate of interest permitted by law and any amount which would exceed the highest lawful rate already received and held by the Lender shall be applied to a reduction of principal and not to the payment of interest.

 

11.Partial Invalidity. In the event any one or more of the provisions contained in this Note shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Note, but this Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein.

 

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2020 Capital Line of Credit Note-CGF

 

 

12.Amendment. This Note may not be changed orally, but only by an agreement in writing signed by the parties against whom enforcement of any waiver, change, modification or discharge is sought.

 

13.Patriot Act Notice. To help fight the funding of ten-orism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. For purposes of this section, account shall be understood to include loan accounts.

 

14.Business Purpose. The Maker warrants and represents that the loan evidenced hereby is being made for business or commercial purposes.

 

15.Governing Law. This Note shall be governed in all respects by the laws of the Commonwealth of Virginia and shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. The Maker hereby consents to be sued in an appropriate court in the Commonwealth of Virginia in any action to enforce the provisions of this Note. The Maker waives any objection to the venue of any action filed by the holder of this Note against the Maker in any court in the Commonwealth of Virginia and waives any claim of forum non conveniens or for transfer of any such action to any other court.

 

16.Limitation on Issuance of Debt. The Maker hereby agrees not to, without the prior written consent of the Lender, to issue any new corporate indebtedness of the Maker unless such indebtedness shall be expressly subordinate by its terms to the repayment of this Note; provided however, nothing herein shall limit the Maker from (i) providing its corporate guarantee for indebtedness related to its normal and recun-ing business lines from time to time, or (ii) making payments under its existing corporate indebtedness, or making any modifications thereto that may occur from time to time.

 

17.Notice. Any notice, demand or request under this Note shall be provided in writing and shall be delivered as follows:

 

			
	
To Lender:
	
 
	
Comstock Development Services, LC
1886 Metro Center Drive, Suite 400

	
 
	
 
	
Reston, Virginia 20190 
Attn: Christopher Clemente

	
 
	
 
	
 

	
With a copy to:
	
 
	
Comstock Development Services, LC
1886 Metro Center Drive, Suite 400

	
 
	
 
	
Reston, Virginia 20190
Attn: General Counsel

	
 
	
 
	
 

	
To Maker:
	
 
	
Comstock Holding Companies, Inc.

	
 
	
 
	
1886 Metro Center Drive, Suite 410

Reston, Virginia 20190

Attn: Chief Financial Officer

	
 
	
 
	
 

	
With a copy to:
	
 
	
Comstock Holding Companies, Inc.
1886 Metro Center Drive, Suite 410

	
 
	
 
	
Reston, Virginia 20190 
Attn: General Counsel

 

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2020 Capital Line of Credit Note-CGF

 

 

IN WITNESS WHEREOF, the undersigned has executed, sealed and delivered this Note effective as of the day and year first written above.

 

						
	
 
	
 
	
MAKER:

	
 
	
 
	
 

	
 
	
 
	
COMSTOCK HOLDING COMPANIES, INC.,

	
 
	
 
	
a Delaware cot ration

	
 
	
 
	
 
	
 
	

	

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
By:
	
  

	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

 

		
	
ACKNOWLEDGEMENT OF LENDER:

	
 

	
LENDER:

	
 

	

	
 

 

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2020 Capital Line of Credit Note-CGFchci-ex1031_75.htm

 

Exhibit 10.31

 

	

 

	
SBA Loan #
	
4861957008

	
SBA Loan Name
	
Comstock Holding Companies, Inc.

	
Lender Loan #
	
6010033691

	
Date
	
April 16, 2020

	
Loan Amount
	
1,953,800.00

	
Interest Rate
	
1.00% Fixed Rate

	
Borrower
	
Comstock Holding Companies, Inc.

	
Lender
	
MainStreet Bank

 

	
1.
	
PROMISE TO PAY: This Loan is being made by Lender to Borrower pursuant to the terms of the Paycheck Protection Program authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (“Program”). In return for the Loan, Borrower promises to pay to the order of Lender the amount of $1,953,800.00 , interest on the unpaid principal balance, and all other amounts required by this Note.

	
2.
	
DEFINITIONS:

“Loan” means the loan evidenced by this Note.

“Loan Documents” means the documents related to this Loan signed by Borrower. “SBA” means the Small Business Administration, an Agency of the United States of America.

	
3.
	
Payment Terms: Borrower must make all payments at the place Lender designates.

The interest rate is fixed at 1.00% per annum. The note is interest-only for the initial six (6) month period. Interest will accrue during this period. No payments of principal or interest will be required to be made by the Borrower until the end of the six (6) month period.

Some, or all, of the principal and accrued interest may be forgiven by the SBA under the Paycheck Protection Program. The expected amount to be forgiven is equal to the amount the Borrower will expend on payroll costs, covered mortgage interest, covered rent, and covered utility payments due the eight-week period commencing immediately after the loan proceeds are disbursed. At least 75% of the expected forgiveness amount shall be for payroll costs, with the remaining 25% allocated to other covered expenses.

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After such six-month deferral period and after taking into account any loan forgiveness applicable to the Loan pursuant to the Program, the balance of any remaining principal and accrued and unpaid interest will be due and payable-in-full at the end of the second year. After the initial six (6) month period, the remaining balance of principal and accrued and unpaid interest will fully amortize over the remaining eighteen (18) month period in an amount determined by Lender sufficient to repay the entire balance of principal and accrued and unpaid interest at the interest rate of 1.00% per annum.

Lender will apply each installment payment first to pay interest accrued to the day Lender receives the payment, then to bring principal current, then to pay any late fee, and will apply any remaining balance to reduce principal.

This Note will mature in two (2) years from the date of the Note, at which time a remaining unpaid principal and accrued interest and any other amounts will be due and payable.

The Borrower may prepay the Note in whole or in part at any time without penalty.

If a payment on this Note is more than 10 days late, Lender may charge Borrower a late fee of up to 5.00% of the unpaid portion of the regularly scheduled payment.

	
4.
	
DEFAULT: Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower:

	
 
	
A.
	
Fails to do anything required by this Note and other Loan Documents;

	
 
	
B.
	
Defaults on any other loan with Lender;

	
 
	
C.
	
Does not disclose, or anyone acting on its behalf does not disclose, any material fact to Lender or SBA;
	
 

	
 
	
D.
	
Makes, or anyone acting on its behalf makes, a materially false or misleading representation to Lender or SBA;
	
 

	
 
	
E.
	
Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower’s ability to pay this Note;

	
 
	
F.
	
Fails to pay any taxes when due;

	
 
	
G.
	
Becomes the subject of a proceeding under any bankruptcy or insolvency law;

	
 
	
H.
	
Has a receiver or liquidator appointed for any part of its business or property;

	
 
	
I.
	
Makes an assignment for the benefit of creditors;

	
 
	
J.
	
Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower’s ability to pay this Note;

	
 
	
K.
	
Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender’s prior written consent;

	
 
	
L.
	
Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower’s ability to pay this Note; or

	
 
	
M.
	
For any reason it is determined that the Borrower is not eligible to obtain this Loan under the Program or otherwise violates any term or requirement of the Program.
	
 

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5.
	
LENDER’S RIGHTS IF THERE IS A DEFAULT: Without notice or demand and without giving up any of its rights, upon an event of default by Borrower, Lender may:

	
 
	
A.
	
Declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due, without notice, and then Borrower will pay that amount;

	
 
	
B.
	
Collect all amounts owing from any Borrower; or

	
 
	
C.
	
File suit and obtain judgment.

Upon an event of default under Section 4(G), (H) or (I) the entire unpaid principal balance under this Note and all accrued unpaid interest shall become immediately due, without notice, declaration or other action by Lender, and then Borrower will pay that amount.

	
6.
	
LENDER’S GENERAL POWERS: Without notice and without Borrower’s consent, Lender may:

	
 
	
A.
	
Incur expenses to collect amounts due under this Note and enforce the terms of this Note or any other Loan Document. Among other things, the expenses may include payments for reasonable attorney’s fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance;

	
 
	
B.
	
Release anyone obligated to pay this Note; and

	
 
	
C.
	
Take any action necessary to collect amounts owing on this Note.

	
7.
	
WHEN FEDERAL LAW APPLIES: When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.

	
8.
	
SUCCESSORS AND ASSIGNS: Under this Note, Borrower includes its successors, and Lender includes its successors and assigns.

	
9.
	
GENERAL PROVISIONS:

	
 
	
A.
	
All individuals and entities signing this Note are jointly and severally liable.

	
 
	
B.
	
Borrower waives all suretyship defenses.

	
 
	
C.
	
Borrower must sign all documents necessary at any time to comply with the Loan Documents.

	
 
	
D.
	
Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them.

	
 
	
E.
	
Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.

	
 
	
F.
	
If any part of this Note is unenforceable, all other parts remain in effect.

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G.
	
To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that Lender did not obtain any guarantee; or did not obtain, perfect, or maintain a lien upon Collateral.

	
 
	
H.
	
Borrower agrees to modify this Note if requested by Lender in order to comply with the Program requirements and as necessary to ensure this Note is guaranteed by the SBA under the Program. Further, Borrower agrees that if the SBA or the U.S. Department of Treasury issues a form note or other related loan documentation or otherwise specifies documentation requirements with respect to loans made pursuant to the Program it will immediately execute such note and related loan documentation in such form as required to comply with all Program requirements as requested by Lender. If Borrower refuses to sign any such documentation, it hereby appoints Lender as its attorney-in-fact to sign such documentation on its behalf and such documentation will be enforceable as if signed directly by Borrower.

	
 
	
I.
	
Except as set forth in Section 7, this Note will be governed by the laws of the Commonwealth of Virginia.

	
10.
	
Agreement to Conduct Electronic Transactions: The parties expressly agree that the transactions and interactions they have with one another in relation to this document may be conducted by electronic means. Without limiting the generality of the foregoing, the parties expressly agree that this document, and any other instruments, agreements, documents, and communications related to this document or related to the matters addressed in this document (each, inclusive of this document, a "Covered Document"), may be created, generated, sent, communicated, executed, signed, delivered, transmitted, received, retained, stored, authenticated, or otherwise processed, handled, or used by electronic means or in electronic form. In the event that any party hereto signs a Covered Document (including, without limitation, this document) electronically, such party: (a) expressly states that such party has signed such Covered Document in electronic form using an electronic signature, and that such party intends for such party's electronic signature to be such party's signature to such Covered Document, and that by making such electronic signature, such party intends to sign such Covered Document; (b) agrees to the terms of such Covered Document in all respects, just as if such party had signed a paper or other written or tangible version of such Covered Document using a pen or other tangible writing instrument; and (c) agrees that any such Covered Document will be valid for all legal purposes under all applicable law, including, without limitation and as applicable, under the Uniform Electronic Transactions Act as enacted in the state whose governing law governs such Covered Document, and under the Electronic Signatures in Global and National Commerce Act.

	
11.
	
Borrower's Name(s) and Signature(s) The undersigned, being the authorized signer of the Borrower, do hereby certify to Lender the accuracy of the following:

	
 
	
1.
	
The undersigned is the duly authorized signer of the Borrower;

	
 
	
2.
	
The Borrower is duly organized and in good standing;

	
 
	
3.
	
The undersigned is duly authorized, on behalf of the Borrower, to obtain the Loan from Lender.

	
 
	
4.
	
The undersigned affirms and attests to the accuracy of all of the data provided for the purpose of approving this borrowing, including but not limited to the Borrower Application Form for the Paycheck Protection Program.

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Prior to signing this Note, Borrower read and understood all the provisions of this Note. Borrower agrees to the terms of the Note.

Borrower acknowledges receipt of a completed copy of the Note.

This Note is given under seal and it is intended that this agreement is and shall constitute and have the effect of a sealed instrument according to law

If payment of the indebtedness evidenced by this Note, or any part thereof, shall not be made when due and at maturity, by acceleration or otherwise, the undersigned hereby authorize(s) and empower(s) any attorney of any Court of Record within the United States to appear for the undersigned in any Court, or before any Clerk thereof, and confess judgment against the undersigned either jointly or severally in favor of the holder of this Note for the amount then due thereon, with the interest thereon aforementioned and the cost of suit and attorney’s fees of fifteen percent (15%), hereby waiving and releasing all errors and all rights of exemption, appeal, stay of execution, inquisition and extension upon any levy or real estate or personal property to which the undersigned may otherwise be entitled under the laws of any State or possession of the United States now in force or which may hereafter be passed. If this Note is referred to any attorney for collection, and payment is obtained without the entry of a judgment, then the undersigned shall pay to holder attorney’s fees in the amount aforesaid. If there are more than one undersigned, their liability shall be joint and several, any use of the singular herein may also refer to the plural and vice versa, and the use of any gender shall be applicable to all genders. The Borrower shall pay to the Lender all costs and expenses (including reasonable attorneys’ fees) of the Lender in connection with the Note and the other loan documents and the collection of all sums evidenced by it. The Borrower understands and agrees that upon an event of default, the Lender may incur costs of collection, including attorney’s fees, after the date of any judgment that the Lender may obtain against the Borrower. The Borrower agrees to pay all of such costs and fees. The Borrower further agrees that the Borrower’s obligation to pay such costs and fees, and the Lender’s claim for such costs and fees, which are incurred by the Lender after the date of any judgment obtained by the Bank, shall survive the entry of, and shall not be merged into, any such judgment. Any clause in this document requiring arbitration is not enforceable when SBA is the holder of the Note

	
12.
	
BORROWER’S NAME(S) AND SIGNATURE(S):

By signing below, each individual or entity becomes obligated under this Note as Borrower. 

 

	
Comstock Holding Companies, Inc.

	
 
	
 
	

	
By:
	
 
	
Christopher Clemente

	
Its:
	
 
	
CEO

 

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