Exhibit 10.61
SECURED PROMISSORY NOTE
LOAN NO. 753820
$33,630,000.00 January 30, 2004
1. FOR VALUE RECEIVED, INLAND WESTERN LARKSPUR, L.L.C., a Delaware limited
liability company, as "Borrower" ("BORROWER" to be construed as "Borrowers" if
the context so requires), hereby promises to pay to the order of PRINCIPAL LIFE
INSURANCE COMPANY, an Iowa corporation (as "LENDER"), having a principal place
of business and post office address at c/o Principal Real Estate Investors, LLC,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other place as Lender
may designate, the principal sum of Thirty Three Million Six Hundred Thirty
Thousand and No/100 Dollars ($33,630,000.00) (the "LOAN AMOUNT") or so much
thereof as shall from time to time have been advanced, together with interest on
the unpaid balance of said sum from January 30, 2004 (the "CLOSING DATE"), at
the rate of four and 45/100 percent (4.45) per annum.
A payment of interest from the Closing Date to and including January 31,
2004 shall be paid on the Closing Date calculated by multiplying the actual
number of days elapsed in the period for which interest is being calculated by a
daily rate based on the foregoing annual interest rate and a 360-day year.
Thereafter, interest shall be computed on the unpaid balance on the basis of a
360-day year composed of twelve 30-day months. Beginning on March 1, 2004,
interest shall be due and payable in installments of One Hundred Twenty Four
Thousand Seven Hundred Eleven and 25/100 Dollars ($124,711.25), with an
installment in a like amount due and payable on the same day of each month
thereafter, except that all remaining principal and interest to and including
the date of payment and other Indebtedness shall be due and payable on February
1, 2009 or such earlier date resulting from the acceleration of the Indebtedness
by ▇▇▇▇▇▇ ("MATURITY DATE"). All principal and interest shall be paid in lawful
money of the United States of America by wire transfer of immediately available
funds to Lender at ▇▇▇▇▇ Fargo Bank, Iowa, N.A., 7th and Walnut Streets, Des
Moines, Iowa 50304, for credit to Principal Life Insurance Company, Account No.
0000014752, RE: Loan No. 753820 with reference to Borrower. In the event
Borrower fails to make any monthly payment under this Note on or before the due
date thereof, ▇▇▇▇▇▇▇▇ agrees to make all subsequent payments by automated
clearing house transfer through such bank or financial institution as shall be
approved in writing by ▇▇▇▇▇▇, shall be made to an account designated by ▇▇▇▇▇▇,
and shall be initiated by Lender or shall be made in such other manner as Lender
may direct from time to time. Any other monthly deposits or payments Borrower is
required to make to Lender under the terms of the Loan Documents shall be made
by the same payment method and on the same date as the installments of interest
due under this Note.
2. No privilege is reserved by Borrower to prepay any principal of this Note
prior to the Maturity Date, except on or after the date hereof, privilege is
reserved, after giving thirty (30) days' prior written notice to ▇▇▇▇▇▇, to
prepay in full, but not in part, all principal and interest to and including the
date on which payment is made, along with all sums, amounts, advances, or
charges due under any instrument or agreement by which this Note is secured,
upon the payment
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of a "MAKE WHOLE PREMIUM." The Make Whole Premium shall be the greater of one
percent (1%) of the principal amount to be prepaid or a premium calculated as
provided in subparagraphs (a) through (c) below:
(a) Determine the "REINVESTMENT YIELD." The Reinvestment Yield will be
equal to the yield on the U.S. Treasury Issue ("PRIMARY ISSUE") *
published one week prior to the date of prepayment and converted to an
equivalent monthly compounded nominal yield.
*At this time there is not a U.S. Treasury Issue for this prepayment
period. At the time of prepayment, Lender shall select in its sole and
absolute discretion a U.S. Treasury Issue with similar remaining time
to maturity as this Note.
(b) Calculate the "PRESENT VALUE OF THE LOAN." The Present Value of the
Loan is the present value of the payments to be made in accordance
with this Note (all installment payments and any remaining payment due
on the Maturity Date) discounted at the Reinvestment Yield for the
number of months remaining from the date of prepayment to the Maturity
Date.
(c) Subtract the amount of the prepaid proceeds from the Present Value of
the Loan as of the date of prepayment. Any resulting positive
differential shall be the premium.
If Borrower has otherwise fully complied with the preceding paragraphs, then,
during the last 90 days prior to the Maturity Date, provided no Event of Default
exists, no Make Whole Premium shall be payable.
3. ▇▇▇▇▇▇▇▇ agrees that if ▇▇▇▇▇▇ accelerates the whole or any part of the
principal sum evidenced hereby, after the occurrence of an Event of Default or
applies any proceeds pursuant to the provisions of the Loan Documents, Borrower
waives any right to prepay said principal sum in whole or in part without
premium and agrees to pay, as yield maintenance protection and not as a penalty,
the Make Whole Premium.
Notwithstanding the above, in the event any proceeds from a casualty or Taking
of the Premises are applied to reduce the principal balance hereof, such
reduction shall be made without a Make Whole Premium, provided no Event of
Default then exists under the Loan Documents.
Borrower by adding its initials to the end of this paragraph, (A) EXPRESSLY
waives any rights it may have under California Civil Code Section 2954.10 to
prepay this Note, in whole or in part, without penalty, upon acceleration of the
Maturity Date of this Note and (B) acknowledges and agrees that Borrower has no
right of prepayment of this Note, except as provided above; and that, if the
maturity of this Note is accelerated by ▇▇▇▇▇▇, Borrower specifically agrees to
pay as a prepayment premium, the applicable sum specified herein as the Make
Whole Premium,
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specifically including but not limited to the case where the holder of this Note
has accelerated the maturity of this note due to Borrower's default of any
provision contained in 2(f) of the Mortgage. By initialing this provision,
Borrower hereby declares that ▇▇▇▇▇▇'s agreement to make the Loan evidenced by
this Note for the interest rate and for the term set forth in this Note
constitutes adequate consideration, given individual weight by Borrower, for
this waiver and agreement.
Initials: DAP
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4. If any payment of principal, interest, Make Whole Premium, or other
Indebtedness is not made when due, damages will be incurred by ▇▇▇▇▇▇, including
additional expense in handling overdue payments, the amount of which is
difficult and impractical to ascertain. ▇▇▇▇▇▇▇▇ therefore agrees to pay, upon
demand, the sum of four cents ($.04) for each one dollar ($1.00) of each said
payment which becomes overdue ("LATE CHARGE") as a reasonable estimate of the
amount of said damages, subject, however, to the limitations contained in
paragraph 6 hereof.
Notwithstanding anything hereinabove to the contrary, the Late Charge assessed
on any amount due on the Maturity Date but not then paid, whether or not by
acceleration, shall not be four cents for each one dollar as described above,
but shall instead be a sum equal to the interest which would have accrued on the
principal balance then outstanding from the date the payment is made to the end
of the month in which the Maturity Date occurs. Such Late Charge shall be in
addition to interest otherwise accruing under this Note.
5. If any Event of Default has occurred and is continuing under the Loan
Documents, the entire principal balance of the Loan, interest then accrued, and
Make Whole Premium, and all other Indebtedness whether or not otherwise then
due, shall at the option of Lender, become immediately due and payable without
demand or notice, and whether or not Lender has exercised said option, interest
shall accrue on the entire principal balance, interest then accrued, Make Whole
Premium and any other Indebtedness then due, at a rate equal to the Default Rate
until fully paid.
6. Notwithstanding anything herein or in any of the other Loan Documents to
the contrary, no provision contained herein or therein which purports to
obligate Borrower to pay any amount of interest or any fees, costs or expenses
which are in excess of the maximum permitted by applicable law, shall be
effective to the extent it calls for the payment of any interest or other amount
in excess of such maximum. All agreements between Borrower and Lender, whether
now existing or hereafter arising and whether written or oral, are hereby
limited so that in no contingency, whether by reason of demand for payment or
acceleration of the maturity hereof or otherwise, shall the interest contracted
for, charged or received by ▇▇▇▇▇▇ exceed the maximum amount permissible under
applicable law. If, from any circumstance whatsoever, interest would
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otherwise be payable to Lender in excess of the maximum lawful amount, the
interest payable to Lender shall be reduced to the maximum amount permitted
under applicable law; and if from any circumstance Lender shall ever receive
anything of value deemed interest by applicable law in excess of the maximum
lawful amount, an amount equal to any excessive interest shall, at the option of
Lender, be refunded to Borrower or be applied to the reduction of the principal
hereof, without a Make Whole Premium and not to the payment of interest or, if
such excessive interest exceeds the unpaid balance of principal hereof such
excess shall be refunded to Borrower. This paragraph shall control all
agreements between Borrower and Lender.
7. Borrower and any endorsers or guarantors waive presentment, protest and
demand, notice of protest, demand and dishonor and nonpayment, and agree the
Maturity Date of this Note or any installment may be extended without affecting
any liability hereunder, and further promise to pay all reasonable costs and
expenses, including but not limited to, reasonable attorney's fees incurred by
Lender in connection with any default or in any proceeding to interpret and/or
enforce any provision of the Loan Documents. No release of Borrower from
liability hereunder shall release any other maker, endorser or guarantor hereof.
8. This Note is secured by the Loan Documents creating among other things
legal and valid encumbrances on and an assignment of all of ▇▇▇▇▇▇▇▇'s interest
in any Leases of the Premises located in the county of Marin, state of
California. Capitalized terms used herein and not otherwise defined shall have
those meanings given to them in the Loan Documents. In no event shall such
documents be construed inconsistently with the terms of this Note, and in the
event of any discrepancy between any such documents and this Note, the terms
hereof shall govern. The proceeds of this Note are to be used for business,
commercial, investment or other similar purposes, and no portion thereof will be
used for any personal, family or household use. This Note shall be governed by
and construed in accordance with the laws of the State where the Premises is
located, without regard to its conflict of law principles.
9. Notwithstanding any provision to the contrary in this Note or the Loan
Documents and except as otherwise provided for below, the liability of Borrower
under the Loan Documents shall be limited to the interest of Borrower in the
Premises and the Rents. In the event of foreclosure of the liens evidenced by
the Loan Documents, no judgment for any deficiency upon the Indebtedness
evidenced by the Loan Documents shall be sought or obtained by ▇▇▇▇▇▇ against
Borrower. Nothing herein shall in any manner limit or impair (i) the lien or
enforcement of the Loan Documents pursuant to the terms thereof or (ii) the
obligations of any indemnitor or guarantor, if any.
Notwithstanding any provision hereinabove to the contrary, Borrower shall
be personally liable to Lender for:
(a) any loss or damage to Lender arising from (i) the sale or forfeiture
of the Premises resulting from ▇▇▇▇▇▇▇▇'s failure to pay any of the
taxes, assessments or charges
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specified in the Loan Documents or (ii) Borrower's failure to insure
the Premises in compliance with the provisions of the Loan Documents;
(b) any event or circumstance for which Borrower indemnifies Lender under
the Environmental Indemnity;
(c) nonpayment of taxes, assessments, insurance premiums and utilities for
the Premises and any penalty or late charge associated with nonpayment
thereof;
(d) material failure to manage, operate, and maintain the Premises in a
commercially reasonable manner for similar property types in the
surrounding geographic area;
(e) any sums expended by ▇▇▇▇▇▇ in fulfilling the obligations of Borrower
as lessor under any Lease of the Premises prior to a sale of the
Premises pursuant to foreclosure or power of sale, a bona fide sale
(permitted by the terms of paragraph 2(f) of the Mortgage (it being
agreed that "Mortgage" as used herein shall be construed to mean
"mortgage" or "deed of trust" or "trust deed" as the context so
requires) or consented to in writing by ▇▇▇▇▇▇) to an unrelated third
party or upon conveyance to Lender of the Premises by a deed
acceptable to Lender in form and content (each of which shall be
referred to as a "Sale" for purposes of this paragraph) or expended by
▇▇▇▇▇▇ after a Sale of the Premises for obligations of Borrower which
arose prior to a Sale of the Premises;
Borrower's personal liability for items specified in (c), (d) and (e)
above shall be limited to the amount of rents, issues, proceeds and
profits from the Premises ("Rents and Profits") received by Borrower
for the twenty-four (24) months preceding an Event of Default and
thereafter; but less any such Rents and Profits applied to (A) payment
of principal, interest and other charges when due under the Loan
Documents, or (B) payment of expenses for the operation, maintenance,
taxes, assessments, utility charges and insurance of the Premises
including sufficient reserves for the same or replacements or renewals
thereof ("Operation Expense(s)") provided that (x) Borrower has
furnished Lender with evidence reasonably satisfactory to Lender of
the Operation Expenses and payment thereof, and (y) any payments to
parties related to Borrower shall be considered an Operation Expense
only to the extent that the amount expended for the Operation Expense
does not exceed the then current market rate for such Operation
Expense.
(f) any rents or other income regardless of type or source of payment or
other considerations in lieu thereof (including, but not limited to,
common area maintenance charges, lease termination payments, refunds
of any type, prepayment of rents, settlements of litigation, or
settlements of past due rents) from the Premises which Borrower has
received or will receive after an Event of Default under the Loan
Documents which are not applied to (A) payment of
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principal, interest and other charges when due under the Loan
Documents or (B) payment of Operation Expenses provided that (x)
Borrower has furnished Lender with evidence reasonably satisfactory to
Lender of the Operation Expenses and payment thereof, and (y) any
payments to parties related to Borrower shall be considered an
Operation Expense only to the extent that the amount expended for the
Operation Expense does not exceed the then current market rate for
such Operation Expense;
(g) any security deposits of tenants not otherwise applied in accordance
with the terms of the Lease(s), together with any interest on such
security deposits required by law or the leases, not turned over to
Lender upon conveyance of the Premises to Lender pursuant to
foreclosure or power of sale or by a deed acceptable to Lender in form
and content;
(h) misapplication or misappropriation of tax reserve accounts, tenant
improvement reserve accounts, security deposits, prepaid rents or
other similar sums paid to or held by Borrower or any other entity or
person in connection with the operation of the Premises;
(i) any insurance or condemnation proceeds or other similar funds or
payments applied by Borrower in a manner other than as expressly
provided in the Loan Documents; and
(j) any loss or damage to Lender arising from any fraud or willful
misrepresentation by or on behalf of Borrower, Interest Owner or any
guarantor regarding the Premises, the making or delivery of any of the
Loan Documents or in any materials or information provided by or on
behalf of Borrower, Interest Owner or guarantor, if any, in connection
with the Loan.
Notwithstanding anything contained in paragraphs 9(a)(i) and 9(c)
hereinabove as it relates solely to taxes, assessments and insurance
premiums, to the extent Lender is impounding for taxes, assessments
and insurance premiums in accordance with the Loan Documents and
Borrower has fully complied with all terms and conditions of the Loan
Documents relating to impounding for the same, then Borrower shall not
be personally liable for ▇▇▇▇▇▇'s failure to apply any of said impound
amounts held by Lender in accordance with the Loan Documents.
Notwithstanding anything to the contrary in the Loan Documents, the
limitation on liability contained in the first paragraph of this
paragraph 9 SHALL BECOME NULL AND VOID and shall be of no further
force and effect in the event of any breach or violation of paragraph
2(f) (due on sale or encumbrance) of the Mortgage, other than (i) the
filing of a nonmaterial mechanic's lien affecting the Premises or a
mechanic's lien affecting the Premises for which ▇▇▇▇▇▇▇▇ has
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complied with the provisions of paragraph 1(e) of the Mortgage, or
(ii) the granting of any utility or other nonmaterial easement or
servitude burdening the Premises, or (iii) any transfer or encumbrance
of a nonmaterial economic interest in the Premises not otherwise set
forth in (i) or (ii).
10. If more than one, all obligations and agreements of Borrower are joint and
several.
11. This Note may not be changed or terminated orally, but only by an agreement
in writing and signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought. All of the rights, privileges and
obligations hereunder shall inure to the benefit of the heirs, successors and
assigns of ▇▇▇▇▇▇ and shall bind the heirs and permitted successors and assigns
of ▇▇▇▇▇▇▇▇.
12. If any provision of this Note shall, for any reason, be held to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof, but this Note shall be construed as if such invalid or
unenforceable provision had never been contained herein.
This Note may be executed in counterparts, each of which shall be deemed an
original; and such counterparts when taken together shall constitute but one
agreement.
REMAINDER OF PAGE INTENTIONALLY BLANK
(Signatures on next page)
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IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has caused this Note to be duly executed and
delivered as of the date first set forth above.
INLAND WESTERN LARKSPUR, L.L.C., a
Delaware limited liability company
By: INLAND WESTERN RETAIL REAL
ESTATE TRUST, INC., a Maryland
corporation, Member
By: /s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
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Title: Asst Secretary
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