Exhibit 10.2

 

Loan No. 10749

 

PROMISSORY NOTE

$63,115,000.00 March 21, 2019

FOR VALUE RECEIVED, PLYMOUTH CENTER POINT BUSINESS PARK LLC, a Delaware limited
liability company (“Center Point”), PLYMOUTH LIBERTY BUSINESS PARK LLC, a
Delaware limited liability company (“Liberty”), and PLYMOUTH SALISBURY BUSINESS
PARK LLC, a Delaware limited liability company (“Salisbury”; together with
Center Point and Liberty, collectively, “Borrower” and each individually, an
“Individual Borrower”), promises to pay to the order of ALLIANZ LIFE INSURANCE
COMPANY OF NORTH AMERICA, a Minnesota corporation (together with any subsequent
holder of this Promissory Note, and their respective successors and assigns,
“Lender”) at such address as Lender may from time to time designate in writing,
the principal sum of SIXTY-THREE MILLION ONE HUNDRED FIFTEEN THOUSAND AND 00/100
DOLLARS ($63,115,000.00) together with interest thereon and all other sums due
and/or payable under any Loan Document; such principal and other sums to be
calculated and payable as provided in this Promissory Note (this “Note”). This
Note is being executed and delivered in connection with, and is entitled to the
rights and benefits of, that certain Loan Agreement of even date herewith
between Borrower and Lender (as amended, modified and supplemented and in effect
from time to time, the “Loan Agreement”). Capitalized terms used herein without
definition shall have the meanings ascribed to such terms in the Loan Agreement.

Borrower agrees to pay the principal sum of this Note together with interest
thereon and all other sums due and/or payable under any Loan Document in
accordance with the following terms and conditions:

1.                  Interest Rate. Interest shall accrue on the Principal
Indebtedness at a rate of four and seven hundredths percent (4.07%) per annum
(the “Interest Rate”) commencing on the date of this Note. Interest shall be
calculated and applied on the basis of a 360-day year consisting of twelve
30-day months, except that interest for any partial Interest Accrual Period (as
defined below) shall be calculated and applied on the basis of a 360-day year
and the actual number of days in such partial Interest Accrual Period (as
hereinafter defined).

2.                  Payments. Borrower shall make the following payments to
Lender:

(a)                On the date hereof (unless the date hereof is the same
calendar day as a Payment Date), a payment of interest only for the first
Interest Accrual Period.

(b)               On May 10, 2019 and on the tenth (10th) calendar day of each
calendar month thereafter (each, a “Payment Date”) through and including the
Payment Date occurring in April 2022, Borrower shall pay to Lender (or cause to
be paid) a monthly payment of interest only in the amount of $214,065.04 based
on the Interest Rate and the outstanding Principal Indebtedness. On the Payment
Date occurring in May 2022, and on each subsequent Payment Date thereafter
during the term of the Loan, Borrower shall pay to Lender (or cause to be paid)
a monthly payment in the amount of $303,873.28 which amount is based on the
Interest Rate and a 360-month amortization schedule.

 

Following a Partial Release in accordance with Article 14 of the Loan Agreement,
Lender shall recalculate the required monthly payments based on the reduced
Principal Indebtedness and then remaining amortization schedule.

(c)                The entire outstanding Indebtedness shall be due and payable
on the Payment Date occurring in April 10, 2026 (the “Maturity Date”), or such
earlier date resulting from acceleration of the Indebtedness by Lender.

“Interest Accrual Period” means, initially, the period commencing on the Closing
Date and continuing to and including April 9, 2019, and thereafter each period
running from and including the tenth (10th) day of a calendar month to and
including the ninth (9th) calendar day of the next following month.

For purposes of making payments hereunder, but not for purposes of calculating
Interest Accrual Periods, if the Payment Date of a given month shall not be a
Business Day, then the Payment Date for such month shall be the preceding
Business Day.

3.                  Event of Default; Default Interest; Late Charge. Upon the
occurrence of an Event of Default, the Indebtedness shall (a) become due and
payable as provided in Article 8 of the Loan Agreement, and (b) bear interest at
a per annum interest rate (the “Default Rate”) equal to the lesser of (i) the
Maximum Amount (as defined in Section 8), and (ii) the Interest Rate plus five
percent (5%). If Borrower fails to pay any sums due under the Loan Documents on
the date when the same is due (excluding the amounts due on the Maturity Date),
Borrower shall pay (or cause to be paid to Lender upon demand a late charge on
such sum (a “Late Charge”) in an amount equal to the lesser of (i) five percent
(5%) of such unpaid amount, and (ii) the maximum late charge permitted to be
charged under the laws of the State where the Property is located. Borrower will
also pay to Lender, in addition to the amount due and any Late Charges, all
out-of-pocket costs of collecting, securing, or attempting to collect or secure
this Note or any other Loan Document, including, without limitation, court costs
and reasonable attorneys’ fees (including attorneys’ fees on any appeal by
either Borrower or Lender and in any bankruptcy proceedings). For the avoidance
of doubt, a Late Charge shall not be applied if Borrower fails to pay the
outstanding Indebtedness on the Maturity Date.

4.                  Prepayment.

(a)                This Note may be prepaid in full at any time upon not less
than ten (10) days prior written notice, subject to a “Yield Maintenance
Premium” that may be substantial. Such premium represents consideration to
Lender for loss of yield and reinvestment cost. The “Yield Maintenance Premium”
shall be determined by Lender and shall be an amount equal to the greater of (i)
one percent (1%) of the amount of the Principal Indebtedness being prepaid and
(ii) the difference between (A) the present value at the time of prepayment of
the remaining scheduled monthly payments plus the present value at the time of
prepayment of the final installment of principal and interest due on the
Maturity Date, both discounted on a monthly

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basis at the Index Rate (as defined below), and (B) the unpaid principal balance
of this Note at the time of prepayment, but not less than zero.  The “Index
Rate” is defined as the current yield at the time of prepayment of the Treasury
Constant Maturity (the “TCM”) referenced in the daily Federal Reserve
Statistical Release H 15 (519) for the date which is five (5) Business Days
immediately preceding the date of prepayment of the Loan, with a remaining term
to maturity most closely corresponding to the remaining average life of the
Loan, as appropriately interpolated by Lender. If the TCM ceases to be published
during the term of the Loan, the Index Rate shall be the average of the yield,
for the five (5) Business Days immediately preceding the date of prepayment of
the Loan, of a non-callable US Treasury Note or Bond having a remaining term to
maturity and coupon rate most closely corresponding to the remaining average
life of the Loan and the Interest Rate, respectively.

(b)               If Lender exercises its right to accelerate the Maturity Date
following an Event of Default by Borrower, tender of payment of the amount
necessary to satisfy the entire outstanding indebtedness made thereafter at any
time prior to the completion of transfer of ownership of the Property to Lender
pursuant to a foreclosure sale or deed-in-lieu of foreclosure or similar
transaction, either by Borrower, its successors or assigns, or by anyone on
behalf of Borrower, shall be deemed to be a voluntary prepayment herein and such
prepayment, to the extent permitted by law, shall include the Yield Maintenance
Premium.

(c)                No Yield Maintenance Premium will be payable if prepayment is
scheduled to be and is received during the last one hundred twenty (120) days
prior to the Maturity Date. Additionally, if no Event of Default then exists and
the Loan is prepaid in connection with a Casualty or Taking in accordance with
the provisions of Section 7.6(e) of the Loan Agreement, then no Yield
Maintenance Premium shall be due with respect to such prepayment.

(d)               This Note may be prepaid in part in accordance with the
provisions of Section 14.1 of the Loan Agreement, subject to a “Yield
Maintenance Premium”, which, for the avoidance of doubt, shall be based on the
amount of Principal Indebtedness that is prepaid in accordance with such Partial
Release.

(e)                Borrower agrees that the Yield Maintenance Premium does not
constitute a penalty. Borrower also agrees that the Yield Maintenance Premium
constitutes a negotiated alternative performance of Borrower’s obligations under
this Note. Borrower further agrees that the Yield Maintenance Premium is a
reasonable estimate, agreed to between Borrower and Lender, of a fair
compensation for the loss that may be sustained by Lender due to the unscheduled
prepayment of the Principal Indebtedness prior to the Maturity Date. The Yield
Maintenance Premium shall be paid without prejudice to the right of Lender to
collect any of the amounts owing under this Note or any other Loan Document or
otherwise to enforce any of its rights or remedies arising out of an Event of
Default.

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5.                  Method and Place of Payments; Application of Payments;
Borrower Obligations Absolute.

(a)                Except as otherwise specifically provided herein, all
payments under this Note and the other Loan Documents shall be made to Lender
not later than 2:00 p.m., New York City time, on the date when due, and shall be
made in lawful money of the United States of America in federal or other
immediately available funds to an address specified to Borrower by Lender in
writing, and any funds received by Lender after such time, for all purposes
hereof, shall be deemed to have been paid on the next succeeding Business Day.

(b)               All proceeds of payment, including any payment or recovery on
the Property, shall be applied first, to any amounts (other than principal)
hereafter advanced by Lender under any Loan Document; second, to any Late Charge
or Default Rate interest payable to Lender; third, to fund any required Reserve
Accounts; fourth, to the payment of accrued interest and last to the reduction
of the outstanding Principal Indebtedness; provided, however, that if an Event
of Default exists, any such proceeds of payment shall be applied to the
Indebtedness in such order and in such manner as Lender shall elect in Lender’s
discretion.

(c)                Except as specifically set forth in any Loan Document, all
sums payable by Borrower under any Loan Document shall be paid without notice,
demand, counterclaim (other than mandatory counterclaims), setoff, deduction or
defense and without abatement, suspension, deferment, diminution or reduction.

6.                  Security. The obligations of Borrower under this Note are
secured by, among other things, the Mortgage and Liens of the other Loan
Documents granted in favor of Lender by Borrower and/or encumbering or affecting
the Property.

7.                  Waivers. To the extent permitted under applicable law, with
respect to the amounts due pursuant to this Note or any other Loan Document,
Borrower waives the following: (a) all rights of exemption of property from levy
or sale under execution or other process for the collection of debts under the
Constitution or laws of the United States or any State thereof; (b) demand,
presentment, protest, notice of dishonor, notice of nonpayment, notice of
protest, notice of intent to accelerate, notice of acceleration, suit against
any party, diligence in collection of this Note and in the handling of
securities at any time existing in connection herewith, and all other
requirements necessary to enforce this Note except for notices required by
Governmental Authorities and notices required by the Loan Agreement and/or any
of the other Loan Documents; and (c) any further receipt by Lender or
acknowledgment by Lender of any collateral now or hereafter deposited as
security for the Loan.

8.                  Usury Savings Clause. This Note and the other Loan Documents
are subject to the express condition that at no time shall Borrower be obligated
or required to pay interest on the Indebtedness at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the maximum rate of interest designated by applicable laws relating to payment
of interest and usury (the “Maximum Amount”). If, by the terms of this Note or
the other Loan Documents, Borrower is at any time required or obligated to pay
interest on the Indebtedness at a rate in excess of the Maximum Amount, the
Interest Rate shall be deemed to be immediately reduced to the Maximum Amount
and all previous payments in excess of the Maximum Amount 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 sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Amount from time to time in effect and applicable to the Loan for so long as the
Loan is outstanding.

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9.                  Modifications; Remedies Cumulative; Setoffs. Lender shall
not by any act, delay, omission or otherwise be deemed to have modified,
amended, waived, extended, discharged or terminated any of its rights or
remedies, and no modification, amendment, waiver, extension, discharge or
termination of any kind shall be valid unless in writing and signed by Lender
and Borrower. All rights and remedies of Lender under the terms of this Note and
applicable statutes or rules of law shall be cumulative, and may be exercised
successively or concurrently. Borrower agrees that there are no defenses,
equities or setoffs with respect to the obligations set forth herein as of the
date hereof, and to the extent any such defenses, equities, or setoffs may
exist, the same are hereby expressly released, forgiven, waived and forever
discharged.

10.              Severability. Wherever possible, each provision of this Note
shall be interpreted in such manner as to be effective and valid under
applicable Legal Requirements, but if any provision of this Note shall be
prohibited by or invalid under applicable Legal Requirements, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Note.

11.              Release. Lender may, at its option, release any Property given
to secure the Indebtedness, and no such release shall impair the obligations of
Borrower to Lender.

12.              Governing Law; Venue. This Note and each of the other Loan
Documents shall be governed in accordance with the terms and provisions of
Section 12.3 of the Loan Agreement.

13.              Intentionally Omitted.

14.              Waiver of Jury Trial. BORROWER AND LENDER TO THE FULLEST EXTENT
THAT THEY MAY LAWFULLY DO SO, WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH
RESPECT TO THIS NOTE OR THE OTHER LOAN DOCUMENTS. EACH OF BORROWER AND LENDER
AGREES THAT THE OTHER MAY FILE A COPY OF THIS WAIVER WITH ANY COURT AS WRITTEN
EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED AGREEMENT OF THE OTHER
IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY, AND THAT, TO THE FULLEST EXTENT
THAT IT MAY LAWFULLY DO SO, ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN
BORROWER AND LENDER SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION
BY A JUDGE SITTING WITHOUT A JURY.

15.              Sales and Assignments. Lender may assign, sell, securitize,
participate, pledge and/or otherwise transfer all or any portion of Lender’s
right, title and interest in, to and under this Note and/or the other Loan
Documents in one or more transactions as set forth in the Loan Agreement.

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16.              Due on Sale; Due on Encumbrance. Borrower understands that in
making the Loan, Lender is relying to a material extent upon the business
expertise and/or net worth of Borrower and, if Borrower is also an entity, its
partners, members, officers or principals and upon the continuing interest which
Borrower or its partners, members, officers or principals will have in the
Property and in Borrower, respectively, and that a violation of Section 6.1 of
the Loan Agreement will significantly and materially alter and reduce Lender’s
security for this Note. Accordingly, in the event that a violation of Section
6.1 of the Loan Agreement occurs, then the same shall be deemed to increase the
risk of Lender and Lender may then, or at any time thereafter, declare the
entire Indebtedness immediately due and payable.

17.              Exculpation. Subject to the qualifications below, Lender shall
not enforce the liability and obligation of Borrower to perform and observe the
obligations contained in the Loan Documents by any action or proceeding wherein
a money judgment shall be sought against Borrower or its Affiliates, principals
or shareholders, except that Lender may bring a foreclosure action, an action
for specific performance or any other appropriate action or proceeding to enable
Lender to enforce and realize upon its interest and rights under the Loan
Documents, or in the Property, the Rents, the Insurance Proceeds, the
Condemnation Proceeds or any other collateral given to Lender pursuant to the
Loan Documents; provided, however, that, except as specifically provided herein,
any judgment in any such action or proceeding shall be enforceable against
Borrower only to the extent of Borrower’s interest in the Property, the Rents,
the Insurance Proceeds, the Condemnation Proceeds and any other collateral given
to Lender, and Lender agrees that it shall not sue for, seek or demand any
deficiency judgment against Borrower in any such action or proceeding under or
by reason of or under or in connection with any Loan Document. The provisions of
this Section 17 shall not, however, (a) constitute a waiver, release or
impairment of any obligation evidenced or secured by any Loan Document; (b)
impair the right of Lender to name Borrower as a party defendant in any action
or suit for foreclosure and sale under the Mortgage; (c) affect the validity or
enforceability of any of the Loan Documents or any guaranty or indemnity made in
connection with the Loan or any of the rights and remedies of the Lender
thereunder; (d) impair the right of Lender to obtain the appointment of a
receiver; (e) impair the enforcement of the Mortgage; (f) prohibit Lender from
seeking a deficiency judgment against Borrower in order to fully realize the
security granted by the Mortgage or to commence any other appropriate action or
proceeding in order for Lender to exercise its remedies against all of the
Property; or (g) constitute a waiver of the right of Lender to enforce the
liability and obligation of Borrower by money judgment or otherwise, to the
extent of any Losses incurred by Lender arising out of or in connection with the
following (each, a “Recourse Liability” and collectively, the “Recourse
Liabilities”):

(i)                 any fraud or misrepresentation by Borrower, Guarantor or any
of their respective Affiliates in connection with the Loan;

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(ii)               the misappropriation, conversion or other application in
violation of the Loan Documents by Borrower, Guarantor, or any Affiliate of
either of (A) any Insurance Proceeds paid by reason of any Casualty, (B) any
Condemnation Proceeds received in connection with any Taking or (C) any Rents,
lease termination fees or security deposits;

(iii)             the failure of Borrower to apply all revenues from the
Property to the Loan or to the normal operating expenses of the Property prior
to making distributions to its direct or indirect owners;

(iv)             the failure of Borrower to deliver to Lender, at its request
following a foreclosure or deed in lieu of foreclosure, tenant security deposits
(except to the extent any such security deposits were applied in accordance with
the terms and conditions of any of the Leases) and any tangible personal
property, including records and files relating to the operation of the Property
in Borrower’s possession or which are otherwise reasonably available to
Borrower;

(v)               to the extent net cash flow from the Property is sufficient,
the failure of Borrower to pay when due any insurance deductible, insurance
premiums or other operating expenses relating to the maintenance or operation of
the Property which accrued prior to Lender’s acquisition of the Property by
foreclosure or deed in lieu of foreclosure;

(vi)             any act of intentional waste of the Property or any portion
thereof, or, during the continuance of any Event of Default, the removal or
disposal of any portion of the Property (unless replaced with property of
comparable quality);

(vii)           the failure of Borrower to maintain its status as a Single
Purpose Entity;

(viii)         the failure of Borrower to pay when due any Impositions to the
extent net cash flow from the Property is sufficient and provided that Lender
makes any applicable escrowed funds available to pay same or to maintain the
insurance coverage required under the Loan Documents to the extent that such
insurance coverage is available and provided that Borrower has given Lender
thirty (30) days prior written notice of Borrower’s inability to obtain
insurance coverage in accordance with the Loan Agreement;

(ix)             any defense or judicial intervention by Borrower, Guarantor or
their respective Affiliates which is asserted in bad faith (as determined by a
final, non-appealable order of a court of competent jurisdiction) that delays,
impedes, obstructs, hinders, enjoins or otherwise materially interferes with or
frustrates the efforts of Lender to exercise any rights and remedies available
to Lender as provided in the Loan Documents;

(x)               any and all reasonable third party costs, sale fees, real
estate taxes or other transfer taxes incurred in connection with any foreclosure
or conveyance in lieu thereof;

(xi)             the breach of any representation, warranty, covenant or
indemnification provision in any Loan Document concerning Environmental Laws or
Hazardous Substances, and any indemnification of Lender with respect thereto
contained in any Loan Document; and

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(xii)           arising from or relating to (A) the superseding of a
nonconforming use at any portion of the Property by a conforming use, as a
result of which the Property is required to comply with then-current zoning
laws, rules and/or regulations (including without limitation, parking) and/or
(B) a Casualty pursuant to which Restoration of the Improvements is required to
comply with then-current zoning laws, rules and/or regulations (including,
without limitation, parking requirements), provided that Lender has complied
with the provisions of Section 7.6 of the Loan Agreement regarding the
disbursement of Net Restoration Proceeds.

Notwithstanding anything to the contrary in this Note or any of the Loan
Documents, (A) Lender shall not be deemed to have waived any right which Lender
may have under Section 506(a), 506(b), 1111(b) or any other provisions of the
U.S. Bankruptcy Code to file a claim for the full amount of the Indebtedness or
to require that all collateral shall continue to secure all of the Indebtedness
in accordance with the Loan Documents, and (B) Lender’s agreement not to pursue
personal liability of Borrower as set forth above SHALL BECOME NULL AND VOID and
shall be of no further force and effect, and the Indebtedness shall be fully
recourse to Borrower in the event that one or more of the following occurs
(each, a “Full Recourse Event”): (1) Borrower files a voluntary petition under
the U.S. Bankruptcy Code or any other federal or state bankruptcy or insolvency
law, (2) an involuntary bankruptcy or insolvency proceeding is commenced against
Borrower (other than by Lender) where Borrower or any of its Affiliates have
colluded, consented to or acquiesced to such filing, (3) any material, uncured
failure of Borrower to maintain its status as a Single Purpose Entity is a
material factor in the substantive consolidation of Borrower with any other
Person or (4) a material default occurs under Article 6 of the Loan Agreement.
For purposes hereof, any default under Article 6 of the Loan Agreement shall be
deemed to be material if (i) such Transfer results a change of Control of
Borrower, (ii) such Transfer results in more than forty-nine percent (49%) of
the total direct or indirect Equity Interests in Borrower being owned by Persons
that did not own such Equity Interests as of the Closing Date or (iii) such
Transfer is a Transfer of the fee interest in the Property.

18.              Joint and Several. Each Person constituting Borrower hereunder
shall have joint and several liability for the obligations and liabilities of
Borrower hereunder.

[Signatures on the following page]

 

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IN WITNESS WHEREOF, Borrower has caused this Promissory Note to be properly
executed as of the date first above written and has authorized this Promissory
Note to be dated as of the day and year first above written.

  BORROWER:       PLYMOUTH CENTER POINT BUSINESS PARK LLC,     a Delaware
limited liability company       By: Plymouth Industrial OP, LP, a Delaware
limited
partnership, its Sole Member           By: Plymouth Industrial REIT, Inc., a
Maryland
corporation, its General Partner               By: /s/ Pendleton P. White, Jr.  
      Name:  Pendleton P. White, Jr.         Title:  President

[Signature page to Promissory Note]

 

 

  PLYMOUTH LIBERTY BUSINESS PARK LLC,     a Delaware limited liability company  
    By: Plymouth Industrial OP, LP, a Delaware limited
partnership, its Sole Member           By: Plymouth Industrial REIT, Inc., a
Maryland
corporation, its General Partner               By: /s/ Pendleton P. White, Jr.  
      Name:  Pendleton P. White, Jr.         Title:  President

[Signature page to Promissory Note]

 

 

  PLYMOUTH SALISBURY BUSINESS PARK LLC,     a Delaware limited liability company
      By: Plymouth Industrial OP, LP, a Delaware limited
partnership, its Sole Member           By: Plymouth Industrial REIT, Inc., a
Maryland
corporation, its General Partner               By: /s/ Pendleton P. White, Jr.  
      Name:  Pendleton P. White, Jr.         Title:  President

[Signature page to Promissory Note]