Exhibit 10.10

PROMISSORY NOTE

(Note C – 2016 Term Facility)

 

Loan No. 198676

  

$50,000,000.00

   October 5, 2016

For Value Received, GLADSTONE LAND LIMITED PARTNERSHIP, a Delaware limited
partnership (the “Borrower”), hereby promises to pay to the order of
METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation (together with any
future holder, “Lender”), at 10801 Mastin Blvd., Suite 930, Overland Park,
Kansas 66210, or such other address as the holder of this Note may designate,
the principal sum not to exceed Fifty Million and 00/100 Dollars
($50,000,000.00), together with interest from the date of the advance of funds
hereunder on said principal sum, or the unpaid balance thereof, at the interest
rate or rates set forth below, such principal and interest is to be paid in
lawful money of the United States which shall be legal tender in payment of all
debts and dues, public and private, at the time of payment. The loan evidenced
by this Note (the “Loan”) will be disbursed in multiple disbursements as
provided in and is subject to the terms of the Loan Agreement dated as of
April 30, 2014, as amended by that certain First Amendment to Loan Agreement
dated August 26, 2014, as further amended by that certain Second Amendment to
Loan Agreement dated October 29, 2014, as further amended by that certain Third
Amendment to Loan Agreement dated September 3, 2015 and as amended by that
certain Fourth Amendment to Loan Agreement dated as of even date herewith
between the Borrower and Lender (as amended, the “Loan Agreement”).

1. Interest Rate.

(a) Initial Interest Rate. Subject to adjustment as set forth below, the
outstanding principal balance of this Note shall bear interest from the date of
the initial disbursement of loan proceeds at the initial fixed rate of Three and
16/100 percent (3.16%) per annum, subject to the Default Interest Rate defined
below.

(b) Adjustment of Interest Rate upon Additional Disbursement. The interest rate
on the outstanding balance of this Note shall be subject to adjustment at the
time of and in connection with the subsequent disbursements of the loan proceeds
under the terms of the Loan Agreement (each, an “Additional Disbursement”), as
follows:

(i) If the Additional Disbursement of loan proceeds occurs under the terms of
the Loan Agreement, upon the Additional Disbursement, a fixed interest rate will
be established for such Additional Disbursement by Lender ten (10) days prior to
the scheduled disbursement date based on the Yield (defined below) plus a spread
determined by the holder of this Note applying its then effective standards for
determining an interest rate spread for a loan of equivalent term considering
the amount of the loan, the credit risk, the collateral, the borrower and other
factors normally used in the holder’s determination of an appropriate interest
rate to be

 

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charged to a borrower (the “Disbursement Rate”). The “Yield” shall be the
reported yield rate for 10-Year U.S. Treasury Obligations; provided, however,
that if less than ten (10) years remain between the date of a scheduled
Additional Disbursement and the Interest Adjustment Date, the Yield shall be the
reported yield for the U.S. Treasury Obligation whose maturity date is closest
to the Interest Adjustment Date. Notwithstanding the foregoing, upon Lender’s
notification to Borrower of the Disbursement Rate, Borrower may elect, by notice
to Lender, to delay the establishment of the Yield use in fixing the
Disbursement Rate to the Yield in effect on a day designated by Borrower between
five (5) and ten (10) days prior to the Additional Disbursement.

(ii) The interest rate on the entire outstanding loan balance will then be
established as a weighted average rate, expressed as a decimal (rather than
percentage), equal to (x) plus (y) divided by (z), where:

(x) equals the interest rate in effect under this Note (expressed as a decimal)
immediately prior to the Additional Disbursement multiplied by the principal
balance immediately prior to such Additional Disbursement;

(y) equals the Disbursement Rate (expressed as a decimal) multiplied by the
principal amount of the Additional Disbursement; and

(z) equals the sum of the principal amount of the Additional Disbursement and
the outstanding balance of this Note immediately prior to such Additional
Disbursement.

(iii) The yield of U.S. Treasury obligations shall be determined by Lender in
good faith, based on market quotations reasonably acceptable to Lender, which
determination by Lender shall be conclusive and binding upon the Borrower absent
manifest error.

(c) Adjustment of Interest Rate. The interest rate on the outstanding balance of
this Note shall be subject to adjustment on January 5, 2027 (the “Interest
Adjustment Date”). The adjusted interest rate shall be based on the reported
yield for the U.S. Treasury Obligation whose maturity date is closest to the
Maturity Date, plus a spread determined by the holder of this Note applying its
then effective standards for determining an interest rate spread for a loan of
equivalent term considering the amount of the loan, the credit risk, the
collateral, the borrower and other factors normally used in the holder’s
determination of an appropriate interest rate to be charged to a borrower.

 

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2. Payments. Payments on this Note shall be made as follows:

(a) Borrower shall make semi-annual payments of accrued interest on the
outstanding principal balance of this Note commencing on the fifth (5th) day of
January, 2017, and continuing on the fifth (5th) day of each January and July
thereafter through the Maturity Date (defined below) (each, an “Interest Payment
Date”). Each payment shall be in the amount of the accrued, but unpaid, interest
through the date immediately preceding the date such payment is due.

(b) Commencing on January 5, 2017, and continuing on the fifth (5th) day of each
July and January thereafter through and including July 5, 2018, Borrower shall
make a semi-annual payment of principal in the amount equal to one and 75/100
percent (1.75%) of the outstanding principal balance of the Note on the date the
payment is due. Commencing on January 5, 2019, and continuing on the fifth
(5th) day of each July and January thereafter prior to the Maturity Date,
Borrower shall make a semi-annual payment of principal in the amount equal to
one and 75/100 percent (1.75%) of the outstanding principal balance of the Note
on January 5, 2019, provided that in no event shall the required semi-annual
payment of principal commencing on January 5, 2019 be less than the amount of
any payment required from January 5, 2017 through July 5, 2018.

(c) The entire remaining principal balance and accrued, but unpaid, interest and
any other amounts owed by Borrower under this Note, the Security Instruments
(defined below) or under any of the other loan documents entered into now or in
the future in connection with the loan (the “Loan Documents”) shall be paid in
full on January 5, 2029 (the “Maturity Date”).

This Note will not fully amortize over its term and provides for a balloon
payment that will be due in full on the Maturity Date, and Borrower acknowledges
that no provision or agreement has been made for the refinancing by Lender of
the amount to be paid on such date.

3. Prepayment. The Borrower shall have no right or privilege to prepay all or
any portion of the indebtedness evidenced by this Note except as follows:

(a) Privilege is reserved to Borrower to prepay, on any Interest Payment Date up
to ten percent (10%) of the then outstanding principal balance of this Note (the
“10% Limitation”) in any one calendar year period, without Prepayment Premium.
In determining whether the 10% Limitation has been met for a given calendar
year, the scheduled principal payments set forth in Section 2(b) above for such
year shall be included together with any prepayments for such year.
Notwithstanding anything herein to the contrary, unless and until Borrower has
reached the 10% Limitation for a given calendar year, Borrower may make up to
two (2) prepayments for such calendar year on a non-Interest Payment Date to the
extent such prepayment is tendered in connection with a Partial Release
completed in accordance with the terms of the Loan Agreement.

 

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(b) Borrower may prepay the outstanding principal balance of this Note, in whole
or in part, without premium, on any Interest Adjustment Date or within thirty
(30) days thereafter upon not less than thirty (30) days prior written notice to
Lender, provided Borrower pays all accrued interest owing on this Note on the
Interest Adjustment Date and pays all sums and complies with all the terms,
covenants and provisions of the Loan Documents during such thirty (30) day
period following the Interest Adjustment Date.

(c) Prepayment of this Note in whole or in part in excess of the 10% Limitation
or on any other date, except for the scheduled principal payments or those
principal payments made in accordance with Section 3(a), 3(b), 3(d) or 3(e)
hereof, shall be permitted only upon giving Lender not less than thirty
(30) days’ prior written notice, and by paying, in addition to such principal,
together with any and all accrued interest thereon, a prepayment premium (the
“Prepayment Premium”) equal to the greater of (x) 1% of the principal amount
prepaid, and (y) the excess, if any, of (i) the sum of the present values of
(1) each remaining mandatory principal payment prior to the next Interest
Adjustment Date, if any, or the Maturity Date, as the case may be, (2) the
principal payment due on the Maturity Date (if there is an Interest Adjustment
Date, the entire outstanding principal balance as of such date shall be deemed
due and payable solely for purposes of determining the Prepayment Premium) (each
such mandatory payment and such payment due on the Maturity Date being herein
referred to as a “Payment”) plus (3) the value of all related scheduled interest
payments on this Note to be prepaid during the period from the date of
prepayment to the date of each Payment, over (ii) the then current outstanding
principal balance of the Loan. The present value of each Payment and such
related scheduled interest payments shall be determined by discounting, at the
applicable Treasury Rate, such Payment and such related scheduled interest
payments from the respective scheduled payment dates of such Payment and such
related scheduled interest payments to the date of prepayment. For any partial
prepayment, a pro rata portion of the Prepayment Premium calculated as set forth
above shall be due, where such pro rata portion is the percentage amount of the
then outstanding principal balance of the Loan that is being prepaid. The
Treasury Rate with respect to each Payment and such related scheduled interest
payments is the yield which shall be imputed by linear interpolation, from the
current weekly yield of those United States Treasury Notes having maturities as
close as practicable to the scheduled payment date of the Payment, as published
in the most recent Federal Reserve Statistical Release H.15 (519) or any
successor publication thereto. Except as set forth in this Section 3, no other
prepayment is permitted.

(d) This Note is open to payment without premium during the thirty (30) day
period immediately prior to the Maturity Date.

BORROWER EXPRESSLY (A) WAIVES ANY RIGHTS IT MAY HAVE UNDER CALIFORNIA CIVIL CODE
SECTION 2954.10 TO PREPAY THIS NOTE, IN WHOLE OR IN PART, WITHOUT FEE OR
PENALTY, UPON ACCELERATION OF THE MATURITY DATE OF THIS NOTE, AND (B) AGREES
THAT IF, FOR ANY REASON, A

 

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PREPAYMENT OF THIS NOTE IS MADE, UPON OR FOLLOWING ANY ACCELERATION OF THE
MATURITY DATE OF THIS NOTE BY THE HOLDER THEREOF ON ACCOUNT OF ANY DEFAULT BY
BORROWER UNDER ANY LOAN DOCUMENT, INCLUDING BUT NOT LIMITED TO ANY TRANSFER,
FURTHER ENCUMBRANCE OR DISPOSITION WHICH IS PROHIBITED OR RESTRICTED BY THE
DEEDS OF TRUST, THEN BORROWER SHALL BE OBLIGATED TO PAY CONCURRENTLY THE
PREPAYMENT PREMIUM SPECIFIED IN THIS SECTION 3 (IF APPLICABLE). BY INITIALING
THIS PROVISION IN THE SPACE PROVIDED BELOW, BORROWER AGREES THAT LENDER’S
AGREEMENT TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN
THIS NOTE AND THIS AGREEMENT CONSTITUTES ADEQUATE CONSIDERATION FOR THIS WAIVER
AND AGREEMENT.

INITIALS OF AUTHORIZED SIGNATORY OF BORROWER:     /s/ LP          /s/ JB    

(e) No Prepayment Premium shall be due in connection with a prepayment resulting
from the application by Lender of the proceeds of a casualty or condemnation
affecting the Property.

4. Calculation of Interest/Application of Payments. All interest on any
indebtedness evidenced by this Note shall be calculated on the basis of a three
hundred sixty (360) day year composed of twelve (12) thirty (30) day months.
Interest for partial months shall be calculated by multiplying the principal
balance of this Note by the applicable per annum rate, dividing the product so
obtained by 360, and multiplying the result by the actual number of days
elapsed. Calculating interest for partial months on the basis of a 360-day year
results in more interest than if a 365-day year were used. All payments received
shall, at Lender’s option, be applied to interest, to the reduction of unpaid
principal, or to payment of other sums due under this Note or any instrument
securing this Note. At the Lender’s option, any sums becoming due hereunder or
under any instrument securing this Note may be added to the principal balance
hereunder and shall bear interest as provided herein.

5. Security. As more particularly provided in the Loan Agreement, this Note is
secured by (i) one or more Deeds of Trust, Security Agreement, Assignment of
Rents and Leases and Fixture Filing, (ii) one or more Trust Deeds, Security
Agreement, Assignment of Rents and Leases and Fixture Filing, and (iii) one or
more Mortgages, Security Agreement, Assignment of Rents and Leases and Fixture
Filing (the “Security Instruments”) encumbering certain real and personal
property (the “Property”). In the event the Property or any portion thereof or
any interest therein be sold or conveyed or becomes subject to an agreement to
sell or convey, other than transfers expressly permitted in the Loan Documents,
prior to the time the indebtedness owing on this Note shall have been paid in
full, then in any and all such events the entire indebtedness owing on this Note
shall, at the sole option of Lender, become due and payable together with the
Prepayment Premium. It is agreed that there shall be no additional liens or
deeds of trust on the Property (other than as expressly permitted in the Loan
Documents), without the prior written consent of Lender.

 

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The Security Instruments secure additional loans made to Borrower in the
original aggregate principal amount of up to One Hundred Fifty Million and
00/100 Dollars ($150,000,000.00) (the “Related Loans”).

6. Default Interest. If any part of the principal or interest evidenced hereby
is not paid when due, the unpaid installment or payment shall bear interest
thereafter at an annual rate of sixteen percent (16%) per annum, but in no event
higher than the maximum rate allowed under the law of the State of California
applicable to this loan, if any (the “Default Interest Rate”).

7. Default/Acceleration. It is hereby agreed that (i) if default be made in the
payment of any of the installments of interest or principal due under this Note,
at the time and place when and where the same become due and payable as
aforesaid, (ii) if a default occurs under any of the Related Loans; or (iii) if
default be made in any promise or agreement contained in any other document
executed in connection with or to secure this Note which continues beyond any
applicable grace or cure period (including, without limitation, an Event of
Default under any of the Security Instruments or under the Loan Agreement),
then, at the option of the Lender, the principal sum, together with all accrued
and unpaid interest thereon, shall at once become due and payable at the
designated place of payment, and all amounts then owing shall thereafter bear
interest at the Default Interest Rate. Any forbearance or failure to exercise
this right shall not constitute a waiver of Lender’s right to exercise the right
with respect to any such default and any subsequent default.

8. Recourse. Borrower shall be fully and personally liable for the payment of
the loan evidenced by this Note and the performance of the Loan Documents.

9. Costs and Expenses. In the event of default under this Note, Borrower agrees
to pay all costs and expenses which may be incurred by Lender with respect to
such default, including without limitation all costs and expenses of
investigating the same and circumstances and events surrounding or relating
thereto, reasonable fees charged by and reasonable expenses of professional
consultants and advisers, including outside attorneys and accountants, costs of
searching records, obtaining title reports, title insurance, trustee’s fees, and
all other reasonable expenses incurred by Lender that are necessary at any time
in Lender’s opinion for the protection of its interest and the enforcement of
its rights. Attorneys’ fees shall include reasonable costs and expenses of
outside legal advice with respect to the event of default, rights and remedies,
negotiations with the undersigned and any other parties in interest, such as
guarantors, other encumbrancers, receivers, trustees and the like, and
reasonable attorneys’ fees and expenses with respect to any action which Lender
may commence or in which it might appear, whether for the

 

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purpose of protecting or preserving Lender’s rights or to realize upon the lien
of any security interest upon real or personal property, or both, by foreclosure
or otherwise, and all reasonable attorneys’ fees and expenses in any review of
or appeal from any such action and any other proceeding, including any
bankruptcy or arbitration proceeding.

10. Interest Limitation. In the event the interest provisions hereof or any
exaction provided for herein shall result for any reason and at any time during
the term of this Note in an effective rate of interest which transcends the
limit of the usury or any other law applicable to the loan evidenced hereby, all
sums in excess of those lawfully collectible as interest for the period in
question shall, without further agreement or notice between or by any party
hereto, be applied on principal immediately upon receipt and effect as though
the payor had specifically designated such extra sums to be so applied to
principal, and the holder of this Note shall accept such extra payment or
payments as a premium-free prepayment. If any such amounts are in excess of the
principal then outstanding, such excess shall be paid to Borrower. In no event
shall any agreed-to or actual exaction as consideration for the Loan transcend
the limits imposed or provided by the law applicable to this transaction or
Borrower in the jurisdictions in which the real property collateral or any other
security for payment of this Note is located for the use or detention of money
or for forbearance in seeking its collection.

11. Miscellaneous. All obligations under this Note shall be the joint and
several obligations of each of the individuals and entities comprising the
Borrower, if more than one. This Note shall bind the heirs, personal
representatives, successors and assigns of Borrower. The endorsers, guarantors,
and sureties of this Note and each of them hereby waive diligence, demand,
presentment for payment, notice of nonpayment, protest, and notice of protest,
and specifically consent to and waive notice of any renewals or extensions of
this Note, whether made to or in favor of the makers or any other person or
persons. The pleading of any statute of limitations as a defense to any demand
against endorsers, guarantors, and sureties is expressly waived by each and all
of the said parties. This Note, and the documents executed in connection with
this Note, may be transferred, assigned or hypothecated by Lender without the
prior consent of the undersigned.

12. Severability. If any provision of this Note or the application thereof to
any person or situation shall, to any extent, be held invalid or unenforceable,
the remainder of this Note and the other Loan Documents, and the application of
such provision to persons or situations other than those to which it shall have
been held invalid or unenforceable, shall not be affected thereby, but shall
continue valid and enforceable to the fullest extent permitted by law.

13. Business Purposes. This loan is a loan for business purposes and the
proceeds hereof shall not be used primarily for personal, family or household
purposes.

 

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14. Unused Commitment Fee. Borrower shall pay to Lender an unused commitment fee
payable in arrears with each interest payment payable on an Interest Payment
Date under the terms of this Note, in an amount equal twenty (20) basis points
per annum times the average daily difference between the maximum amount
available to be borrowed under this Note (initially $50,000,000.00, as may be
reduced by any permitted prepayments of principal that may not be reborrowed)
and the actual advanced and outstanding balance of this Note for the immediately
preceding interest accrual period (i.e., the semiannual period). Borrower may
elect in its discretion, and Lender may elect upon the occurrence of an Event of
Default as defined in the Loan Agreement, to cancel any portion of the
commitment to continue to make or draw funds available under this Note. Upon any
such cancellation, the Borrower’s future obligation to pay any unused commitment
fees that have yet to accrue will be relieved. Borrower’s obligation to pay any
Unused Commitment Fees that has not then accrued shall cease upon the expiration
of the Borrower’s ability to request Subsequent Disbursements under this Note,
as established in the Loan Agreement.

(Signature appears on following page.)

 

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This Note is made and executed under, and is in all respects to be governed by,
the laws of the State of California, without regard to its choice of law rules.

 

“BORROWER”

GLADSTONE LAND LIMITED PARTNERSHIP,

a Delaware limited partnership

By:  

Gladstone Land Partners, LLC,

a Delaware limited liability company

its General Partner

 

By:   Gladstone Land Corporation,

        a Maryland corporation

        its Manager

 

By:  /s/Lewis Parrish

 

Name:  Lewis Parrish

 

Title:  Chief Financial Officer

 

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