EXHIBIT 10.21
FIXED INTEREST NOTE
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TIAA Appl. #CA-3209
M-000459600
TRANCHE B PROMISSORY NOTE
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$88,200,000.00 New York, New York
Dated: As of February 22, 1999
FOR VALUE RECEIVED, PROLOGIS TRUST ("Borrower"), a Maryland real
estate investment trust having its principal place of business at 00000 Xxxx
00xx Xxxxx, Xxxxxx, Xxxxxxxx 00000, promises to pay to TEACHERS INSURANCE AND
ANNUITY ASSOCIATION OF AMERICA ("Lender"), a New York corporation, or order, at
Lender's offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other
place as Lender designates in writing, the principal sum of EIGHTY-EIGHT MILLION
TWO HUNDRED THOUSAND AND 00/100THS DOLLARS ($88,200,000.00) (the principal sum
or so much of the principal sum as may be advanced and outstanding from time to
time, the "Principal"), in lawful money of the United States of America, with
interest on the Principal from the date of this Promissory Note (this "Note")
through and including March 1, 2009 (the "Maturity Date") at the fixed rate of
seven and two-tenths percent (7.2%) per annum (the "Fixed Interest Rate") to be
computed on the basis of a 360 day year. Each monthly payment shall be based on
a 30-day month, with a per diem rate equal to the Fixed Interest Rate divided by
360.
This Note is secured by, among other things, the 5 Tranche B First
Deeds of Trust, Assignment of Leases and Rents, Security Agreements and Fixture
Filing Statements (collectively, the "Tranche B First Deeds of Trust")
encumbering the properties owned by Borrower and identified on Schedule 1 hereto
by their street address or common name and the 7 Tranche B Subordinate Deeds of
Trust encumbering the properties owned by Borrower and identified on Schedule 2
hereto by their street address or common name, all made by Borrower for the
benefit of Lender as security for the Loan.
All capitalized terms not expressly defined in this Note will have the
definitions set forth in the Tranche B First Deeds of Trust.
Section 1. Payments of Principal and Fixed Interest.
(a) Borrower will make monthly installment payments ("Debt Service
Payments") as follows:
(i) On March 1, 1999, a payment of accrued interest on the Principal
at the Fixed Interest Rate;
(ii) On April 1, 1999 and on the first day of each succeeding calendar
month through and including March 1, 2002, payments in the amount the
accrued interest on the Principal at the Fixed Interest Rate, each of which
will be applied to accrued interest on the Principal at the Fixed Interest
Rate; and
(iii) On April 1, 2002 and on the first day of each succeeding
calendar month through and including February 1, 2009, payments in the
amount of SIX HUNDRED THIRTY-FOUR THOUSAND SIX HUNDRED SEVENTY-SEVEN AND
23/100THS DOLLARS ($634,677.23), each of which will be applied first to
accrued interest on the Principal at the Fixed Interest Rate and then to the
Principal.
(b) On the Maturity Date, Borrower will pay the Principal in full
together with accrued interest at the Fixed Interest Rate and all other amounts
due under the Loan Documents.
Section 2. Prepayment Provisions.
(a) The following definitions apply:
"Discount Rate" means (x) the yield on a U.S. Treasury issue selected
by Lender, as published in The Wall Street Journal, two weeks prior to
prepayment, having a maturity date corresponding (or most closely
corresponding, if not identical) to the Maturity Date, and, if applicable,
a coupon rate corresponding (or most closely corresponding, if not
identical) to the Fixed Interest Rate plus (y) 25 basis points.
"Default Discount Rate" means the Discount Rate less 300 basis points.
"Discounted Value" means the Discounted Value of a Note Payment based
on the following formula:
NP
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(1 + R/12)/n/ = Discounted Value
NP = Amount of Note Payment
R = Discount Rate or Default Discount Rate
as the case may be.
n = The number of months between the date
of prepayment and the scheduled date of
the Note Payment being discounted
rounded to the nearest integer.
"Note Payment" means (i) each scheduled Debt Service Payment for the
period from the date of prepayment through the Maturity Date and (ii) the
scheduled repayment of Principal, if any, on the Maturity Date.
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"Prepayment Date Principal" means the Principal on the date of
prepayment.
(b) This Note may not be prepaid in full or in part before February
28, 2001. Commencing on March 1, 2001, provided there is no Event of Default,
Borrower may prepay this Note in full, but not in part, on the first day of any
calendar month, upon 60 days prior notice to Lender and upon payment in full of
the Debt which will include a payment (the "Prepayment Premium") equal to the
greater of (i) an amount equal to the product of 1% times the Prepayment Date
Principal and (ii) the amount by which the sum of the Discounted Value of each
remaining Note Payment, calculated at the Discount Rate, exceeds the Prepayment
Date Principal. Provided there is no Event of Default, this Note may be prepaid
in full without payment of the Prepayment Premium during the last 180 days of
the Term. In addition, the Prepayment Premium shall not apply with respect to
any prepayment due to application by Lender of condemnation or insurance
proceeds. This Note may not be prepaid without simultaneous prepayment in full
of (x) any other notes secured by the Loan Documents and (y) that certain
Tranche A Promissory Note in the amount of $93,800,000 dated the date hereof
from Borrower to Lender.
(c) After an Acceleration or upon any other prepayment not permitted
by the Loan Documents, any tender of payment of the amount necessary to satisfy
the Debt accelerated, any judgment of foreclosure, any statement of the amount
due at the time of foreclosure (including foreclosure by power of sale) and any
tender of payment made during any redemption period after foreclosure, will
include a payment (the "Evasion Premium") equal to the greater of (i) an amount
equal to the product of 1% plus 300 basis points times the Prepayment Date
Principal, and (ii) the amount by which the sum of the Discounted Value of each
remaining Note Payment, calculated at the Default Discount Rate, exceeds the
Prepayment Date Principal.
(d) Borrower acknowledges that:
(i) a prepayment will cause damage to Lender;
(ii) the Evasion Premium is intended to compensate Lender for the loss
of its investment and the expense incurred and time and effort associated
with making the Loan, which will not be fully repaid if the Loan is
prepaid;
(iii) it will be extremely difficult and impractical to ascertain the
extent of Lender's damages caused by a prepayment after an Event of Default
or any other prepayment not permitted by the Loan Documents; and
(iv) the Evasion Premium represents Lender and Borrower's reasonable
estimate of Lender's damages for the prepayment and is not a penalty.
(e) BORROWER HEREBY ACKNOWLEDGES AND AGREES THAT LENDER WOULD NOT LEND
TO BORROWER THE LOAN EVIDENCED BY THIS NOTE WITHOUT (1) BORROWER'S WAIVER OF ANY
RIGHTS IT MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 2954.10 TO PREPAY THIS
NOTE IN WHOLE OR IN PART, WITHOUT
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PENALTY, UPON ACCELERATION OF THE MATURITY DATE OF THIS NOTE, AND (2) BORROWER'S
AGREEMENT, AS SET FORTH ABOVE, TO PAY LENDER A PREPAYMENT PREMIUM UPON THE
SATISFACTION OF ALL OR ANY PORTION OF THE PRINCIPAL INDEBTEDNESS EVIDENCED
FOLLOWING THE ACCELERATION OF THE MATURITY DATE HEREOF BY REASON OF A DEFAULT
HEREUNDER OR UNDER THE TRANCHE B DEEDS OF TRUST INCLUDING, WITHOUT LIMITATION, A
DEFAULT ARISING FROM THE CONVEYANCE OF ANY RIGHT, TITLE OR INTEREST IN THE
PROPERTY ENCUMBERED BY THE TRANCHE B DEEDS OF TRUST AND BORROWER HAS CAUSED
THOSE PERSONS SIGNING THIS NOTE ON BORROWER'S BEHALF TO SEPARATELY EXECUTE THE
AGREEMENT CONTAINED IN THIS PARAGRAPH, IN COMPLIANCE WITH CALIFORNIA CIVIL CODE
SECTION 2954.10, BY PLACING THEIR SIGNATURES BELOW, BORROWER ACKNOWLEDGES THAT
(I) THE GENERAL PARTNERS, PRINCIPALS OR MEMBERS, AS THE CASE MAY BE, OF BORROWER
ARE KNOWLEDGEABLE REAL ESTATE DEVELOPERS OR INVESTORS, (II) BORROWER FULLY
UNDERSTANDS THE EFFECT OF THE ABOVE WAIVER, (III) THE MAKING OF THE LOAN BY
LENDER AT THE RATE SET FORTH ABOVE IS SUFFICIENT CONSIDERATION FOR SUCH WAIVER,
AND (IV) LENDER WOULD NOT MAKE THE LOAN WITHOUT SUCH WAIVER.
PROLOGIS TRUST
By:/s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
Vice President
Section 3. Events of Default:
(a) It is an "Event of Default" under this Note:
(i) if Borrower fails to pay any amount due, as and when required,
under this Note or any other Loan Document and the failure continues
for a period of 5 days; or
(ii) if an Event of Default occurs under any other Loan Document.
(b) If an Event of Default occurs, Lender may declare all or any
portion of the Debt immediately due and payable ("Acceleration") and exercise
any of the other Remedies.
Section 4. Default Rate. Interest on the Principal will accrue at the
Default Interest Rate from the date an Event of Default occurs.
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Section 5. Late Charges.
(a) If Borrower fails to pay any Debt Service Payment when due and the
failure continues for a period of 5 days or more or fails to pay any amount due
under the Loan Documents on the Maturity Date, Borrower agrees to pay to Lender
an amount (a "Late Charge") equal to five cents ($.05) for each one dollar
($1.00) of the delinquent payment.
(b) Borrower acknowledges that:
(i) a delinquent payment will cause damage to Lender;
(ii) the Late Charge is intended to compensate Lender for loss of use
of the delinquent payment and the expense incurred and time and effort
associated with recovering the delinquent payment;
(iii) it will be extremely difficult and impractical to ascertain the
extent of Lender's damages caused by the delinquency; and
(iv) the Late Charge represents Lender and Borrower's reasonable
estimate of Lender's damages from the delinquency and is not a penalty.
Section 6. Limitation of Liability. This Note is subject to the
limitations on liability set forth in the Article of the Tranche B Deeds of
Trust entitled "Limitation of Liability".
Section 7. WAIVERS. IN ADDITION TO THE WAIVERS SET FORTH IN THE
ARTICLE OF THE TRANCHE B DEEDS OF TRUST ENTITLED "WAIVERS", BORROWER WAIVES
PRESENTMENT FOR PAYMENT, DEMAND, DISHONOR AND, EXCEPT AS EXPRESSLY SET FORTH IN
THE LOAN DOCUMENTS, NOTICE OF ANY OF THE FOREGOING. BORROWER FURTHER WAIVES ANY
PROTEST, LACK OF DILIGENCE OR DELAY IN COLLECTION OF THE DEBT OR ENFORCEMENT OF
THE LOAN DOCUMENTS. BORROWER AND ALL INDORSERS, SURETIES AND GUARANTORS OF THE
OBLIGATIONS CONSENT TO ANY EXTENSIONS OF TIME, RENEWALS, WAIVERS AND
MODIFICATIONS THAT LENDER MAY GRANT WITH RESPECT TO THE OBLIGATIONS AND TO THE
RELEASE OF ANY SECURITY FOR THIS NOTE AND AGREE THAT ADDITIONAL MAKERS MAY
BECOME PARTIES TO THIS NOTE AND ADDITIONAL INDORSERS, GUARANTORS OR SURETIES MAY
BE ADDED WITHOUT NOTICE AND WITHOUT AFFECTING THE LIABILITY OF THE ORIGINAL
MAKER OR ANY ORIGINAL INDORSER, SURETY OR GUARANTOR.
Section 8. Commercial Loan. The Loan is made for the purpose of
carrying on a business or commercial activity or acquiring real or personal
property as an investment or carrying on an investment activity and not for
personal or household purposes.
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Section 9. Usury Limitations. Borrower and Lender intend to comply
with all Laws with respect to the charging and receiving of interest. Any
amounts charged or received by Lender for the use or forbearance of the
Principal to the extent permitted by Law, will be amortized and spread
throughout the Term until payment in full so that the rate or amount of interest
charged or received by Lender on account the Principal does not exceed the
Maximum Interest Rate. If any amount charged or received under the Loan
Documents that is deemed to be interest is determined to be in excess of the
amount permitted to be charged or received at the Maximum Interest Rate, the
excess will be deemed to be a prepayment of Principal when paid, without
premium, and any portion of the excess not capable of being so applied will be
refunded to Borrower. If during the Term the Maximum Interest Rate, if any, is
eliminated, then for purposes of the Loan, there will be no Maximum Interest
Rate.
Section 10. Applicable Law. This Note is governed by and will be
construed in accordance with the Laws of the State of New York except with
respect to provisions related to specific properties which shall be construed in
accordance with the laws of the state or commonwealth in which the relevant
property is located, without regard to conflict of law provisions.
Section 11. Time of the Essence. Time is of the essence with respect
to the payment and performance of the Obligations.
Section 12. Cross-Default. A default under any other note now or
hereafter secured by the Loan Documents or under any loan document related to
such other note constitutes a default under this Note and under the other Loan
Documents. When the default under the other note constitutes an Event of
Default under that note or the related loan document, an Event of Default also
will exist under this Note and the other Loan Documents.
Section 13. Construction. Unless expressly provided otherwise in
this Note, this Note will be construed in accordance with the Exhibit attached
to the Tranche B First Deeds of Trust entitled "Rules of Construction".
Section 14. Deed of Trust Provisions Incorporated. To the extent
not otherwise set forth in this Note, the provisions of the Articles of the
Tranche B First Deeds of Trust entitled "Expenses and Duty to Defend",
"Waivers", "Notices", and "Miscellaneous" are applicable to this Note and deemed
incorporated by reference as if set forth at length in this Note.
Section 15. Joint and Several Liability; Successors and Assigns. If
Maker consists of more than one entity, the obligations and liabilities of each
such entity will be joint and several. This Note binds Borrower and successors,
assigns, heirs, administrators, executors, agents and representatives and inures
to the benefit of Lender and its successors, assigns, heirs, administrators,
executors, agents and representatives.
Section 16. Absolute Obligation. Except for the Section of this Note
entitled "Limitation of Liability", no reference in this Note to the other Loan
Documents
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and no other provision of this Note or of the other Loan Documents will impair
or alter the obligation of Borrower, which is absolute and unconditional, to pay
the Principal, interest at the Fixed Interest Rate and any other amounts due and
payable under this Note, as and when required.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note as
of the date first set forth above.
PROLOGIS TRUST, a Maryland real estate investment
trust
By:/s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
Vice President
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Schedule 1
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(Tranche B First Deed of Trust Properties)
Building Name Address City, State, County
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Mid Counties 0000-0000 Xxxxxxx Xxxxxxxxx (#0) Xxxxx Xxxx, XX, Xxxxxx Xxxxxx
Distribution Center 1 and 0000-0000 Xxxxx Xxxxxx (#2)
and 2
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Inland Empire 1 0000 XxXxxxxx Xx. Xxxx Xxxx, XX, Xxxxxxxxx
Xxxxxx
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Inland Empire 2 & 3 5600 and 0000 Xxxxxxx Xxxxxx Xxxxxxx, XX, Xxx Xxxxxxxxxx
Xxxxxx
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Inland Empire 4 0000 Xxxxxxxxxxxx Xxxxxx Xxxxxxx, XX, Xxx Xxxxxxxxxx
Xxxxxx
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Inland Empire 5 0000 X. Xxxxxxx Xxxxxx Xxxxxxx, XX, Xxx Xxxxxxxxxx
Xxxxxx
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Schedule 2
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(Tranche B Subordinate Deed of Trust Properties)
Building Name Address City, State, County
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Freeway Dist. Ctr. #1, 0000-0000 Xxxxxxxxx Xxxx (#0) Xxxxxxxxxx, XX, Los Angeles
#2 and #3 and 0000-0000 Xxxxxxxxx Xxxxxx County
(#2 and #3)
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Mid County Ind. Ctr. #1 00000 Xxxxxxx Xxxxxxxxx Xx Xxxxxx, XX, Los Angeles
County
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Mid County Ind. Ctr. #2 00000-00000 Xxxxxx Xxxxxx Xxxxx Xx Xxxxxxx, XX, Los
Angeles
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Mid County Ind. Ctr. #3 13920 to 00000 Xxxx Xxxxxx Xxxxx Xx Xxxxxxx, XX, Los
and #4 Angeles
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Mid County Ind. Ctr. #5 0000 Xxxxxxxxx Xxxxxxxxx (#0) Xxxxx Xxxx, XX, Xxxxxx Xxxxxx
and #6 and 0000-X Xxxxxxxxx Xxxxxxxxx
(#6)
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North County Dist. Ctr. 000 X. Xxxxxxxxxxxx Xxxxxx (#0) Anaheim, CA, Orange County
#1 and #2 and 000 X. Xxxxxxxxxxxx Xxxxxx
(#2)
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Santa Xxx Distribution 0000 Xxxx Xxxxxx Xxxxx Xxx, XX, Xxxxxx Xxxxxx
Center 1
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