Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.5

MAKO SURGICAL CORP.

EMPLOYEE STOCK PURCHASE PLAN

SUBSCRIPTION AGREEMENT

New Election                     

Change of Election                     

1. I,                     , hereby elect to participate in the MAKO Surgical Corp. Employee Stock Purchase Plan
(the “Plan”) for the Offering Period commencing                              , 20        , and subscribe to purchase
shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Plan.
In addition, I acknowledge that, unless I discontinue my participation in the Plan as provided in
Section 16 of the Plan, my election will continue to be effective for each successive Offering
Period.

2. I elect to have contributions in the amount of       % of my Compensation applied to this
purchase. I understand that this amount must not be less than 1% and not more than 10% of my
Compensation during the Offering Period (but in no event more than $25,000 in a year). (Please
note that no fractional percentages are permitted). For purposes of this election, “Compensation”
means my base salary or wage.

3. I hereby authorize payroll deductions from each paycheck during the Offering Period at the
rate stated in Item 2 of this Subscription Agreement. I understand that all payroll deductions
made by me shall be credited to my account under the Plan and that I may not make any additional
payments into such account. I understand that all payments made by me shall be accumulated for the
purchase of shares of Common Stock at the applicable purchase price determined in accordance with
the Plan. I further understand that, except as otherwise set forth in the Plan, shares will be
purchased for me automatically on the Purchase Date of each Offering Period unless I otherwise
withdraw from the Plan by giving written notice to the Company for such purpose.

4. Changing Contributions:

(a) I understand that I may discontinue my Contributions to the Plan by notifying the Company
at least 5 business days prior to the Purchase Date. In this case, I understand that my
Contributions will be discontinued as soon as practicable following the Company’s receipt of my
notice. I also understand that the amount then credited to my account as of the Purchase Date will
be used to purchase shares during the Offering Period after which my participation in the Plan will
be discontinued.

(b) I also understand that I can decrease the rate of my Contributions to not less than 1% of
my Compensation (or $10 if greater) per pay period on only one occasion during any Offering Period
by completing and filing a new Subscription Agreement at least 10 business days prior to the
beginning of the next pay period, with such decrease taking effect as of the beginning of the pay
period following the date of filing of the new Subscription Agreement.

(c) Further, I may increase or decrease the rate of my Contributions for future Offering
Periods by filing a new Subscription Agreement Plan at any time at least 10 business days prior to
the start of the next Offering Period, and any such change will be effective as of the beginning of
the next Offering Period.

 

 

 

5. I have received a copy of the Company’s most recent description of the Plan (the
“Prospectus”), and a copy of the “MAKO Surgical Corp. Employee Stock Purchase Plan” has been made
available to me on the Company’s Intranet website. I understand that my participation in the Plan
is in all respects subject to the terms of the Plan.

6. I understand that the Company may choose to deliver certain statutory materials relating to
the Plan in electronic form. By enrolling in the Plan I agree that the Company may deliver the
Plan prospectus and the Company’s annual report to me in an electronic format. If at any time you
would prefer to receive paper copies of these documents, as you are entitled to, the Company would
be pleased to provide copies. Please contact                      at                      to request paper copies of these
documents.

7. I understand that if I dispose of any shares received by me pursuant to the Plan within 2
years after the Grant Date (the first day of the Offering Period during which I purchased such
shares) or within 1 year after the Purchase Date, I will be treated for federal income tax purposes
as having received ordinary compensation income at the time of such disposition in an amount equal
to the excess of the fair market value of the shares on the Purchase Date over the price which I
paid for the shares, regardless of whether I disposed of the shares at a price less than their fair
market value at the Purchase Date. The remainder of the gain or loss, if any, recognized on such
disposition will be treated as capital gain or loss.

I hereby agree to notify the Company in writing within 30 days after the date of any such
disposition, and I will make adequate provision for federal, state or other tax withholding
obligations, if any which arise upon the disposition of the Common Stock. The Company may, but
will not be obligated to, withhold from my compensation the amount necessary to meet any applicable
withholding obligation including any withholding necessary to make available to the Company any tax
deductions or benefits attributable to the sale or early disposition of Common Stock by me.

I understand that this tax summary is only a summary and is subject to change. I
further understand that I should consult a tax advisor concerning the tax implications of the
purchase and sale of stock under the Plan.

I hereby agree to be bound by the terms of the Plan. The effectiveness of this Subscription
Agreement is dependent upon my eligibility to participate in the Plan.

SIGNATURE:                                                            

SOCIAL SECURITY #:                      
              
       

DATE:       
               
                 
              
               

                                                                    
      
        

(Print name)

 

 

 

BENEFICIARY DESIGNATION FORM FOR

MAKO SURGICAL CORP. EMPLOYEE STOCK PURCHASE PLAN

PARTICIPANT INFORMATION:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Participant Name: (Mr/Ms)	 	 	 	 	 	 	 	 	 
	 	 	 
	 
	 	Last	 	First	 	 	M.I.	 

Social Security Number:                     -                    -                    

	 	 	 
	Address:

	 	 
	 

	 	 
	 
	 	 
	 
	 	 
	 

	 	 

BENEFICIARY DESIGNATION:

Please name at least one beneficiary who will receive any funds accumulated in your account under
the Plan at the time of your death if you should die while participating in the Plan. If more than
one beneficiary is named and no share percentages are indicated, any funds in your account shall be
paid to the surviving beneficiary(ies) in equal shares. If a percentage is indicated and a
beneficiary(ies) does not survive you, the percentage of the beneficiary’s share shall be divided
equally among the surviving beneficiary(ies).

I hereby designate my beneficiary(ies) as follows (please print):

1. Name:                                                Share%:              
        

	 	 	 	 	 	 	 
	 

	 	Relationship:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

           Social Security Number:                   -            -              

2. Name:                                                Share%:              
        

	 	 	 	 	 	 	 
	 

	 	Relationship:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

           Social Security Number:                   -            -              

If none of the foregoing survives me, then I hereby designate my beneficiary(ies) as follows:

1. Name:                                                Share%:              
        

	 	 	 	 	 	 	 
	 

	 	Relationship:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

           Social Security Number:                   -            -              

2. Name:                                                Share%:              
        

	 	 	 	 	 	 	 
	 

	 	Relationship:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

           Social Security Number:                   -            -              

					
	 	 	 	 	 
	SIGNATURE:                                         
	 	DATE:promissory_notecasalinda.htm

    PROMISSORY
NOTE DATE DECEMBER 8, 2006

     

     

     

    Exhibit
10.10

    MS Loan
No. 06-29049

    PROMISSORY
NOTE

    (Fixed —
Defeasance or Yield Maintenance)

    
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              $37,950,000.00

            	 
      	 
      	 
      	
              Dallas,
      Texas

              December
      8, 2006

            

    

     

    FOR VALUE
RECEIVED, AMREIT CASA LINDA, LP, a Texas limited partnership, as maker, having
its principal place of business at 8 Greenway Plaza, Suite 1000, Houston,
Texas 77046 (“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 Thirty-Seven Million Nine Hundred
Fifty Thousand and No/100 Dollars ($37,950,000.00), 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 1: 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) beginning
on the first day of February, 2007, and on the first day of each calendar month
thereafter, up to and including the first day of December, 2013 (each, a
“Payment Date”), payments of interest only based on the Applicable Interest Rate
accrued on the outstanding principal balance; and

     

    (c) the
balance of the principal sum and all interest thereon on the first day of
January 1, 2014 (the “Maturity Date”).

     

    Article 2:
Interest

     

    The
interest rate on this Note is five and forty-eight hundredths percent (5.48%)
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 3: 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 continue to exist after giving effect to all applicable grace periods,
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. Whenever any payment to
be made under this Note, the Security Instrument or under any Other Security
Document shall be stated to be due on a day which is not a Business Day
(hereinafter defined), the due date thereof shall be the Business Day
immediately preceding such day. For purposes hereof, the term “Business Day”
shall mean any day other than a Saturday, Sunday or any other day on which banks
in New York, New York are not open for business.

     

    Article 4: 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.

     

    Article 5: 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.

     

    
      
        
        

      

      
        ~1~

        
          

        

      

      
        
        

      

    

     

    Article 6: Prepayment;
Defeasance or Yield Maintenance

     

    (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 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 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 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 a newly
-created successor entity, which entity shall be a single purpose, bankruptcy
remote entity and which entity shall be designated or established by Lender, at
Lender’s option (the “Defeasance Obligor”). Lender shall also have the right to
purchase on behalf of Borrower, or cause to be purchased on behalf of Borrower,
the pledged Defeasance Collateral. Such rights to designate or establish the
Defeasance Obligor as provided above or to purchase or cause the purchase on
behalf of Borrower of the pledged Defeasance Collateral as provided above may be
exercised by Lender in its sole discretion and shall be retained by Lender named
herein (and any successor or assign of such Lender named herein under a specific
assignment of such retained rights separate and apart from a transfer or
securitization of the Loan in whole or in part), notwithstanding any transfer or
securitization of the Loan in whole or in part. 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 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 five (5) year 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, the cost of establishing
the Defeasance Obligor and 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.

     

    (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)

     (i) Notwithstanding
anything to the contrary set forth in this Article 6, at any time after the
Lockout Period Expiration Date, Borrower may elect, in lieu of a Defeasance, to
prepay the principal balance of this Note in whole, but not in part, upon not
less than sixty (60) days prior written notice to Lender specifying the
date on which prepayment is to be made (the “Prepayment Date”), which date must
be a Payment Date, and upon payment of:

     

    (A) all
accrued interest to and including the Prepayment Date;

     

    (B) all
other sums due under this Note, the Security Instrument and all Other Security
Documents; and

     

    (C) the
Prepayment Consideration (as defined below).

     

    (ii) The
Prepayment Consideration shall equal an amount equal to the greater of
(A) one percent (1%) of the principal balance of this Note being prepaid or
(B) the product of (1) the ratio of the amount of the principal
balance of this Note being prepaid over the outstanding principal balance of
this Note on the Prepayment Date (after subtracting the scheduled principal
payment on such Prepayment Date), multiplied by (2) the present value as of
the Prepayment Date of the remaining scheduled payments of principal and
interest from the Prepayment Date through the Maturity Date (including any
balloon payment) determined by discounting such payments at the Discount Rate
(as hereinafter defined) less the amount of the outstanding principal balance of
this Note on the Prepayment Date. The “Discount Rate” is the rate which, when
compounded monthly, is equivalent to the Treasury Rate (as hereinafter defined),
when compounded semi-annually. The “Treasury Rate” is the yield calculated by
the linear interpolation of the yields, as reported in Federal Reserve
Statistical Release H.15-Selected Interest Rates under the heading U.S.
government securities/Treasury constant maturities for the week ending prior to
the Prepayment Date, of U.S. Treasury constant maturities with maturity dates
(one longer and one shorter) most nearly approximating the Maturity Date. (In
the event Release H.15 is no longer published, Lender shall select a comparable
publication to determine the Treasury Rate.) Lender shall notify Borrower of the
amount and the basis of determination of the required prepayment
consideration.

     

    (iii) If
any notice of prepayment is given under this subparagraph (h), the principal
balance of this Note and the other sums required under this prepayment section
shall be due and payable on the Prepayment Date. Lender shall not be obligated
to accept any prepayment of the principal balance of this Note unless it is
accompanied by all sums due in connection therewith.

     

    (i) 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
three (3) months prior to the Maturity Date. 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.

     

     

    
      
        
        

      

      
        ~2~

        
          

        

      

      
        
        

      

    

     

    Article 7:
Security

     

    This Note
is secured by that certain Deed of Trust and Security Agreement dated the date
hereof in the principal sum of $37,950,000.00 given by Borrower to (or for the
benefit of) Lender
covering the fee simple estate of Borrower in certain premises located in Dallas
County, State of Texas, and other property, as more particularly described
therein (collectively, the “Property”) and intended to be duly recorded in said
Comity (the “Security Instrument”), and by the Other Security
Documents.

     

    Article 8: Loan
Charges

     

    (a) 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, the Default Rate or
any other consideration that constitutes interest under applicable law, 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 (as
defined below) of interest from time to time in effect and applicable to the
Debt for so long as the Debt is outstanding.

     

    (b) It
is expressly stipulated and agreed to be the intent of Borrower and Lender at
all times to comply strictly with the applicable Texas law governing the maximum
rate or amount of interest payable on this Note (or applicable United Stated
federal law to the extent that it permits Lender to contract for, charge, take,
reserve or receive a greater amount of interest than under Texas law). If the
applicable law is ever judicially interpreted so as to render usurious any
amount (i) contracted for, charged, taken, reserved or received pursuant to
this Note, any of the other Loan Documents or any other communications or
writing by or between Borrower and Lender related to the transaction or
transactions that are the subject matter of the Loan Documents,
(ii) contracted for, charged or received by reason of Lender’s exercise of
the option to accelerate the maturity of this Note, or (iii) Borrower will
have paid or Lender will have received by reason of any voluntary prepayment by
Borrower of this Note, then it is Borrower’s and Lender’s express intent that
all amounts charged in excess of the Maximum Lawful Rate shall be automatically
cancelled, ab
initio, and all amounts in excess of the Maximum Lawful Rate theretofore
collected by Lender shall be credited on the principal balance of this Note (or,
if this Note has been or would thereby be paid in full, refunded to Borrower),
and the provisions of this Note and the other Loan Documents immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder and thereunder; provided, however, if this
Note has been paid in full before the end of the stated term of this Note, then
Borrower and Lender agree that Lender shall, with reasonable promptness after
Lender discovers or is advised by Borrower that interest was received in an
amount in excess of the Maximum Lawful Rate, either refund
such excess interest to Borrower and/or credit such excess interest against this
Note then owing by borrower to Lender. In no event shall the provisions of
Chapter 346 of the Texas Finance Code (which regulates certain revolving
credit loan accounts and revolving triparty accounts) apply to this Note,
Notwithstanding anything to the contrary contained herein or in any of the other
Loan Documents, it is not the intention of Lender to accelerate the maturity of
any interest that has not accrued at the time of such acceleration or to collect
unearned interest at the time of such acceleration.

     

    (c) As
used herein, the term “Maximum Lawful Rate”
shall mean the maximum lawful rate of interest which may be contracted for,
charged, taken, received or reserved by Lender in accordance with the applicable
laws of the State of Texas (or applicable United States federal law to the
extent that it permits Lender to contract for, charge, take, receive or reserve
a greater amount of interest than under Texas law), taking into account all
Charges (as herein defined) made in connection with the transaction evidenced by
this Note and the other Loan Documents. As used herein, the term “Charges” shall mean
all fees, charges and/or any other things of value, if any, contracted for,
charged, received, taken or reserved by Lender in connection with the
transactions relating to this Note and the other Loan Documents, which are
treated as interest under applicable law.

     

    (d) To
the extent that Lender is relying on Chapter 303 of the Texas Finance Code
to determine the Maximum Lawful Rate payable on this Note, Lender will utilize
the weekly ceiling from time to time in effect as provided in such
Chapter 303, as amended. To the extent United States federal law permits
Lender to contract for, charge, take, receive or reserve a greater amount of
interest than under Texas law, Lender will rely on United States federal law
instead of such Chapter 303 for the purpose of determining the Maximum
Lawful Rate. Additionally, to the extent permitted by applicable law now or
hereafter in effect, Lender may, at its option and from time to time, utilize
any other method of establishing the Maximum Lawful Rate under such
Chapter 303 or under other applicable law by giving notice, if required, to
Borrower as provided by applicable law now or hereafter in effect.

     

     

    Article 9:
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 Borrower, and the term
“Borrower,” as used herein, shall, to the extent permitted by applicable law,
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 incurred prior to the date of such change. (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.)

     

    Article 10: 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 11:
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
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 more than one (1) month in advance
which are not delivered to Lender for application to the Loan; (vi) the
misapplication, misappropriation or conversion of insurance proceeds or
condemnation awards; (vii) Personal Property of Borrower (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 under leases 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 the applicable 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 material 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) Borrower’s failure to provide
financial information to Lender as required by Section 3.12 of the Security
Instrument; (xvi) any failure by Borrower to comply with any provision of
Section 4.2(a), (f), (h), (i), (j), (k), (1), (n), (o), (p), (q), (r), (s),
(t), (u), (v), (w), (x), (y), (z), (aa), (bb), (cc), (dd), (ee), (ff), (gg),
(hh), (ii), (jj), (kk), (ll) or (mm) of the Security Instrument.
Borrower’s failure to deliver to Lender any Letter of Credit (as defined in that
certain Springing Letter of Credit and Security Agreement, of even date
herewith, given by Borrower in favor of Lender (the “Springing Letter of Credit
Agreement”)) required to be delivered by Borrower to Lender pursuant to the
Springing Letter of Credit and Security Agreement; and/or (xvi) the failure
of any tenant at the Property to obtain a permanent certificate of occupancy
with respect to the space occupied by each such tenant at the Property;
provided, however, that this subsection (xvi) shall be of no further force
and effect upon delivery by Borrower
to Lender of evidence satisfactory to Lender in its reasonable discretion that
each tenant at the Property has obtained a permanent certificate of occupancy
with respect to the space occupied by each such tenant at the
Property.

     

    (c) Notwithstanding
the foregoing, the agreement of Lender not to pursue recourse liability against
Borrower as set forth in subsection (a) above, as to Borrower, 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 interest under Section l(b) of this Note is not paid when due;
(ii) Borrower fails to comply with any provision of Section 4.2(b),
(c), (d), (e), (g) or (m) of the Security Instrument;
(iii) Borrower defaults under Article 8 of the Security Instrument;
(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), 11 11(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.

     

     

    
      
        
        

      

      
        ~3~

        
          

        

      

      
        
        

      

    

     

    Article 12:
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 13: 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 without reference or giving effect
to any choice of law doctrine.

     

    Article 14:
Notices

     

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

     

    Article 15: 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 16:
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.

     

     

    
      
        
        

      

      
        ~4~

        
          

        

      

      
        
        

      

    

    
 

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

     

    
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              BORROWER:

            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              AMREIT
      CASA LINDA, LP,

            	 
      	 
      
	 
      	 
      	
              a
      Texas limited partnership

            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 
      	
              AmREIT
      Casa Linda GP, Inc.,

            
	 
      	 
      	 
      	 
      	
              a
      Texas corporation,

            
	 
      	 
      	 
      	 
      	
              Its
      General Partner

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
              By:

            	 
      	
              /s/
      Chad C. Braun

            	 
      	 
      
	 
      	 
      	 
      	 
      	
              Name:

            	 
      	
              Chad
      C. Braun

            	 
      	 
      
	 
      	 
      	 
      	 
      	
              Title:

            	 
      	
              Vice
      President

            	 
      	 
      

    

     

     

    

    
      
         

      

      
        ~5~

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