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U.S.
$5,625,000
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January 6, 2009
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FOR VALUE RECEIVED, Cole REIT III Operating
Partnership, LP, a Delaware limited partnership (“
Borrower ”), hereby promises to pay to the order of
Series C, LLC, an Arizona limited liability company (“
Lender ”), at the office of Lender located at 2555
East Camelback Road, Suite 400, Phoenix, AZ 85016, the
principal amount of $5,625,000, together with interest on the
principal balance outstanding hereunder, from (and including) the
date of disbursement until (but not including) the date of payment,
at a per annum rate equal to the Stated Interest Rate specified
below or, to the extent applicable, the Default Interest Rate
specified below, in accordance with the following terms and
conditions: !
1. Revolving Line of Credit . The
principal balance of this Note represents a revolving line of
credit all or any part of which may be advanced to Borrower, repaid
by Borrower, and re-advanced to Borrower from time to time, subject
to the other terms hereof and the conditions, if any, contained in
the Loan Documents (as hereinafter defined), and provided that the
principal balance outstanding at any one time shall not exceed the
face amount hereof.
2. Contracted For Rate of Interest
The contracted for rate of interest of the indebtedness evidenced
hereby, without limitation, shall consist of the
following:
(a) The Stated Interest Rate (as
hereinafter defined), as from time to time in effect, calculated
daily on the basis of actual days elapsed over a 360-day year,
applied to the principal balance from time to time outstanding
hereunder;
(b) The Default Interest Rate (as
hereinafter defined), as from time to time in effect, calculated
daily on the basis of actual days elapsed over a 360-day year,
applied to the principal balance from time to time outstanding
hereunder; and
(c) All
Additional Sums (as hereinafter defined), if any.
Borrower agrees
to pay an effective contracted for rate of interest which is the
sum of the Stated Interest Rate referred to in Subsection
2(a) above, plus any additional rate of interest resulting from
the application of the Default Interest Rate referred to in
Subsection 2(b) above, and the Additional Sums, if any,
referred to in Subsection 2(c) above.
3. Stated Interest Rate . Except as
provided in Section 4 below, interest shall accrue on the
principal balance outstanding hereunder during each Interest Period
(as hereinafter defined) at the Stated Interest Rate. The Stated
Interest Rate shall be a rate per annum equal to the 3-month LIBOR
plus 2.5%. “Interest Period” means each period
commencing on the first day of the calendar month and ending on the
first day of the next succeeding calendar month; provided
(i) the first Interest Period shall commence on the date
hereof and (ii) any Interest Period that would otherwise
extend past the maturity date of this Note shall end on the
maturity date of this Note. “LIBOR” means, with respect
to each Interest Period, the rate for U.S. dollar deposits with a
maturity equal to the number of months specified above, as reported
on Telerate page 3750 as of 11:00 a.m., London time, on the
second London business day before such Interest Period begins, or,
in the case of the first Interest Period, the second London
business day before the first day of the calendar month during
which such Interest Period begins (or if not so reported, then as
determined by the Lender from another recognized source or
interbank quotation).
4. Default Interest Rate . The
Default Interest Rate shall be the Stated Interest Rate plus 4.0%
per annum. The principal balance outstanding hereunder from time to
time shall bear interest at the Default Interest Rate from the date
of the occurrence of an Event of Default (as hereinafter defined)
hereunder until the earlier of: (a) the date on which the
principal balance outstanding hereunder, together with all accrued
interest and other amounts payable hereunder, are paid in full; or
(b) the date on which such Event of Default is timely cured in
a manner satisfactory to Lender, (i) if Borrower is
specifically granted a right to cure such Event of Default in any
of the Loan Documents or (ii) if no such right to cure is
specifically granted, then Lender, in its sole and absolute
discretion, permits such Event of Default to be cured.
5. Payment . Accrued interest under
this Note shall be due and payable in arrears on the last day of
each Interest Period. The principal balance outstanding hereunder,
together with all accrued interest and other amounts payable
hereunder, if not sooner paid as provided herein or in any of the
Loan Documents shall be due and payable on January 5,
2010.
6. Application and Place of
Payments . Payments received by Lender with respect to the
indebtedness evidenced hereby shall be applied in such order and
manner as Lender in its sole and absolute discretion may elect.
Unless otherwise elected by Lender, all such payments shall first
be applied to accrued and unpaid interest at the Stated Interest
Rate and, to the extent applicable, the Default Interest Rate, next
to the principal balance then outstanding hereunder, and the
remainder to any Additional Sums or other costs or added charges
provided for herein or in any of the Loan Documents. Payments
hereunder shall be made at the address for Lender first set forth
above, or at such other address as Lender may specify to Borrower
in writing.
7. Prepayments . Payments of
principal hereof may be made at
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