Exhibit 10.174

 

PROMISSORY NOTE

 

DEFINED TERMS

 

Execution Date:   April 20, 2004   City and State of Signing:  
Chicago, Illinois Loan Amount:   $200,000,000.00   Interest Rate: 4.87% per
annum BORROWER: WELLS REIT-CHICAGO CENTER OWNER, LLC, a Delaware limited
liability company Borrower’s Address: 6200 The Corners Parkway, Suite 250,
Norcross, Georgia 30092 Holder: METROPOLITAN LIFE INSURANCE COMPANY, A NEW YORK
CORPORATION

Holder’s Address:

  Metropolitan Life Insurance Company             10 Park Avenue            
Morristown, New Jersey 07962            

Attention: SeniorVice-President

           

         RealEstate Investments

           

                and

            Metropolitan Life Insurance Company             2021 Spring Road,
Suite 100             Oak Brook, IL 60523             Attention: Officer In
Charge         Maturity Date: May 1, 2014   Advance Date: The date funds are
disbursed to Borrower. Interest Only Period: The period from the Advance Date
until the Maturity Date.   Principal and Interest Installment Date: Not
Applicable Monthly Installment: Equal monthly installments of interest at the
Interest Rate each in the amount of $811,666.67.   Permitted Prepayment Period:
During the 90 day period prior to the Maturity Date, Borrower may prepay the
Loan without a Prepayment Fee on 30 days prior written notice. In addition,
commencing on the first day of the 43rd month following the Advance Date,
Borrower may prepay the Loan with a Prepayment Fee on 60 days prior written
notice. Liable Parties: None Addresses of Liable Parties: N/A Late Charge: An
amount equal to four cents ($.04) for each dollar that is overdue. Default Rate:
An annual rate equal to the Interest Rate plus four percent (4%). Note: This
Promissory Note. Mortgage: Mortgage, Security Agreement, and Fixture Filing
dated as of the Execution Date granted by Borrower to Holder. Loan Documents:
This Note, the Mortgage and any other documents related to this Note and/or the
Mortgage and all renewals, amendments, modifications, restatements and
extensions of these documents. Indemnity Agreement: Unsecured Indemnity
Agreement dated as of the Execution Date and executed by Borrower in favor of
Holder. The Indemnity Agreement is not a Loan Document and shall survive
repayment of the Loan or other termination of the Loan Documents but shall not
apply to events arising solely after foreclosure.

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FOR VALUE RECEIVED, Borrower promises to pay to the order of Holder, at Holder’s
Address or such other place as Holder may from time to time designate in
writing, the Loan Amount with interest payable in the manner described below, in
money of the United States of America that at the time of payment shall be legal
tender for payment of all obligations.

 

Capitalized terms which are not defined in this Note shall have the meanings set
forth in the Mortgage.

 

1. Payment of Principal and Interest. Principal and interest under this Note
shall be payable as follows:

 

(a) Interest on the funded portion of the Loan Amount shall accrue from the
Advance Date at the Interest Rate and shall be paid on the first day of the
first calendar month following the Advance Date;

 

(b) Commencing on the first day of the second calendar month following the
Advance Date and on the first day of each calendar month thereafter, to and
including the first day of the calendar month immediately preceding the Maturity
Date, Borrower shall pay the Monthly Installment; and

 

(c) On the Maturity Date, a final payment in the aggregate amount of the unpaid
principal sum evidenced by this Note, all accrued and unpaid interest, and all
other sums evidenced by this Note or secured by the Mortgage and/or any other
Loan Documents as well as any future advances under the Mortgage that may be
made to or on behalf of Borrower by Holder following the Advance Date
(collectively, the “Aggregate Indebtedness”), shall become immediately payable
in full.

 

Borrower acknowledges and agrees that the original Loan Amount shall be
outstanding and due on the Maturity Date.

 

Interest shall be calculated on the basis of a thirty (30) day month and a three
hundred sixty (360) day year, except that (i) if the Advance Date occurs on a
date other than the first day of a calendar month, interest payable for the
period commencing on the Advance Date and ending on the last day of the month in
which the Advance Date occurs shall be calculated on the basis of the actual
number of days elapsed over a 365 day or 366 day year, as applicable, and (ii)
if the Maturity Date occurs on a date other than the last day of the month,
interest payable for the period commencing on the first day of the month in
which the Maturity Date occurs and ending on the Maturity Date shall be
calculated on the basis of the actual number of days elapsed over a 365 day or
366 day year, as applicable.

 

2. Application of Payments. At the election of Holder, and to the extent
permitted by law, all payments shall be applied in the order selected by Holder
to any expenses, prepayment fees, late charges, escrow deposits and other sums
due and payable under the Loan Documents, and to unpaid interest at the Interest
Rate or at the Default Rate, as applicable. The balance of any payments shall be
applied to reduce the then unpaid Loan Amount.

 

3. Security. The covenants of the Mortgage are incorporated by reference into
this Note. This Note shall evidence, and the Mortgage and other Loan Documents
shall secure the Aggregate Indebtedness.

 

4. Late Charge. If any payment of interest, any payment of a Monthly Installment
or any payment of a required escrow deposit is not paid within 7 days of the due
date, Holder shall have the option to charge Borrower the Late Charge. The Late
Charge is for the purpose of defraying the expenses incurred in connection with
handling and processing delinquent payments and is payable in addition to any
other remedy Holder may have. Unpaid Late Charges shall become part of the
Aggregate Indebtedness and shall be added to any subsequent payments due under
the Loan Documents.

 

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5. Acceleration Upon Default. At the option of Holder, if Borrower fails to pay
any sum specified in this Note when due after giving effect to any grace
periods, or if an Event of Default occurs, the Aggregate Indebtedness, and all
other sums evidenced and/or secured by the Loan Documents, including without
limitation any applicable prepayment fees (collectively, the “Accelerated Loan
Amount”) shall become immediately due and payable.

 

6. Interest Upon Default. The Accelerated Loan Amount shall bear interest at the
Default Rate which shall never exceed the maximum rate of interest permitted to
be contracted for under the laws of the State. The Default Rate shall commence
upon the occurrence of an Event of Default and shall continue until all defaults
are cured.

 

7. Limitation on Interest. The agreements made by Borrower with respect to this
Note and the other Loan Documents are expressly limited so that in no event
shall the amount of interest received, charged or contracted for by Holder
exceed the highest lawful amount of interest permissible under the laws
applicable to the Loan. If at any time performance of any provision of this Note
or the other Loan Documents results in the highest lawful rate of interest
permissible under applicable laws being exceeded, then the amount of interest
received, charged or contracted for by Holder shall automatically and without
further action by any party be deemed to have been reduced to the highest lawful
amount of interest then permissible under applicable laws. If Holder shall ever
receive, charge or contract for, as interest, an amount which is unlawful, at
Holder’s election, the amount of unlawful interest shall be refunded to Borrower
(if actually paid) or applied to reduce the then unpaid Loan Amount. To the
fullest extent permitted by applicable laws, any amounts contracted for, charged
or received under the Loan Documents included for the purpose of determining
whether the Interest Rate would exceed the highest lawful rate shall be
calculated by allocating and spreading such interest to and over the full stated
term of this Note.

 

8. Prepayment. Borrower shall not have the right to prepay all or any portion of
the Loan Amount at any time during the term of this Note except as expressly set
forth in the Defined Terms hereof. If Borrower provides notice of its intention
to prepay, the Accelerated Loan Amount shall become due and payable on the date
specified in the prepayment notice.

 

(a) Prepayment Fee. Any tender of payment by Borrower or any other person or
entity of the Aggregate Indebtedness, other than as expressly provided in the
Loan Documents, shall constitute a prohibited prepayment. If a prepayment of all
or any part of the Aggregate Indebtedness is made following (i) an Event of
Default and an acceleration of the Maturity Date, or (ii) in connection with a
purchase of the Property or a repayment of the Aggregate Indebtedness at any
time before, during or after, a judicial or non-judicial foreclosure or sale of
the Property, then to compensate Holder for the loss of the investment, Borrower
shall pay an amount equal to the Prepayment Fee (as hereinafter defined).

 

(b) The “Prepayment Fee” shall be the greater of (A) the Prepayment Ratio (as
hereinafter defined) multiplied by the difference between (x) and (y), where (x)
is the present value of all remaining payments of principal and interest
including the outstanding principal due on the Maturity Date, discounted at the
rate which, when compounded monthly, is equivalent to the Treasury Rate (as
defined below) plus one half of one percent (.5%), compounded semi-annually, and
(y) is the entire amount of the then outstanding principal balance, or (B) one
percent (1%) of the amount of the principal being prepaid.

 

(c) The “Treasury Rate” shall be the annualized yield on securities issued by
the United States Treasury having a maturity equal to the remaining stated term
of the Note, as quoted in the Federal Reserve Statistical Release [H. 15 (519)]
under the heading “U.S. Government Securities - Treasury Constant Maturities”
for the date on which prepayment is being made. If this rate is not available as
of the date of prepayment, the Treasury Rate shall be determined by
interpolating between the yield on securities of the next longer and next
shorter maturity. If the Treasury Rate is no longer published, Holder shall
select a comparable rate. Holder will, upon request, provide an estimate of the
amount of the Prepayment Fee two weeks before the date of the scheduled
prepayment.

 

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(d) The “Prepayment Ratio” shall be a fraction, the numerator of which shall be
the amount of principal being prepaid, and the denominator of which shall be the
principal then outstanding.

 

9. Waiver of Right to Prepay Note Without Prepayment Fee. Borrower acknowledges
that Holder has relied upon the anticipated investment return under this Note in
entering into transactions with, and in making commitments to, third parties and
that the tender of any prohibited prepayment, shall, to the extent permitted by
law, include the Prepayment Fee. Borrower agrees that the Prepayment Fee
represents the reasonable estimate of Holder and Borrower of a fair average
compensation for the loss that may be sustained by Holder as a result of a
prohibited prepayment of the Note and it shall be paid without prejudice to the
right of Holder to collect any other amounts provided to be paid under the Loan
Documents.

 

10. Liability of Borrower. Upon the occurrence of an Event of Default, except as
provided in this Section 11, Holder will look solely to the Property and the
security under the Loan Documents for the repayment of the Loan and will not
enforce a deficiency judgment against Borrower. However, nothing contained in
this section shall limit the rights of Holder to proceed against Borrower and
the general partners of Borrower and/or the Liable Parties, if any, (i) to
enforce any leases entered into by Borrower or its affiliates as tenant,
guarantees, or other agreements entered into by Borrower in a capacity other
than as borrower or under any policies of insurance; (ii) to recover damages for
fraud, material misrepresentation, material breach of warranty or waste; (iii)
to recover any condemnation proceeds or insurance proceeds or other similar
funds which have been misapplied by Borrower or which, under the terms of the
Loan Documents, should have been paid to Holder; (iv) to recover any tenant
security deposits, tenant letters of credit or other deposits or fees paid to
Borrower that are part of the collateral for the Loan or prepaid rents for a
period of more than 30 days which have not been delivered to Holder; (v) to
recover Rents and Profits received by Borrower after the first day of the month
in which an Event of Default occurs and prior to the date Holder acquires title
to the Property which have not been applied to the Loan or in accordance with
the Loan Documents to operating and maintenance expenses of the Property; (vi)
to recover damages, costs and expenses arising from, or in connection with the
provisions of the Mortgage pertaining to hazardous materials or the Indemnity
Agreement; (vii) to recover all amounts due and payable pursuant to Sections
11.06 and 11.07 of the Mortgage and any amount expended by Holder in connection
with the foreclosure of the Mortgage; (viii) to recover damages arising from
Borrower’s failure to comply with the provisions of the Mortgage pertaining to
ERISA; and/or (ix) to recover damages, costs and expenses arising from, or in
connection with Borrower’s failure to pay any Impositions or Premiums.

 

The limitation of liability set forth in this Section 11 shall not apply and the
Loan shall be fully recourse in the event that (a) there is a violation of
Section 10.01 of the Mortgage or Section 10.02 of the Mortgage or (b) prior to
the repayment of the Aggregate Indebtedness, Borrower commences a voluntary
bankruptcy or insolvency proceeding or an involuntary bankruptcy or insolvency
proceeding is commenced against Borrower and is not dismissed within 90 days of
filing. In addition, this agreement shall not waive any rights which Holder
would have under any provisions of the U.S. Bankruptcy Code to file a claim for
the full amount of the Aggregate Indebtedness or to require that the Property
shall continue to secure all of the Aggregate Indebtedness.

 

11. Waiver by Borrower. Borrower and others who may become liable for the
payment of all or any part of the Note, and each of them, waive diligence,
demand, presentment for payment, notice of nonpayment, protest, notice of
dishonor and notice of protest, notice of intent to accelerate and notice of
acceleration and specifically consent to and waive notice of any amendments,
modifications, renewals or extensions of this Note, including the granting of
extension of time for payment, whether made to or in favor of Borrower or any
other person or persons.

 

12. Exercise of Rights. No single or partial exercise by Holder, or delay or
omission in the exercise by Holder, of any right or remedy under the Loan
Documents shall waive or limit the exercise of any such right or remedy. Holder
shall at all times have the right to proceed against any portion of or interest
in the Property in the manner that Holder may deem appropriate, without waiving
any other rights or remedies. The release of any party under this Note shall not
operate to release any other party which is liable under this Note and/or under
the other Loan Documents or under the Indemnity Agreement.

 

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13. Fees and Expenses. If Borrower defaults under this Note, Borrower shall be
personally liable for and shall pay to Holder, in addition to the sums stated
above, the costs and expenses of enforcement and collection, including a
reasonable sum as an attorney’s fee. This obligation is not limited by Section
11.

 

14. No Amendments. This Note may not be modified or amended except in a writing
executed by Borrower and Holder. No waivers shall be effective unless they are
set forth in a writing signed by the party which is waiving a right. This Note
and the other Loan Documents are the final expression of the lending
relationship between Borrower.

 

15. Governing Law. This Note is to be construed and enforced in accordance with
the laws of the State.

 

16. Construction. The words “Borrower” and “Holder” shall be deemed to include
their respective heirs, representatives, successors and assigns, and shall
denote the singular and/or plural, and the masculine and/or feminine, and
natural and/or artificial persons, as appropriate. The provisions of this Note
shall remain in full force and effect notwithstanding any changes in the
shareholders, partners or members of Borrower. If more than one party is
Borrower, the obligations of each party shall be joint and several. The captions
in this Note are inserted only for convenience of reference and do not expand,
limit or define the scope or intent of any section of this Note.

 

17. Notices. All notices, demands, requests and consents permitted or required
under this Note shall be given in the manner prescribed in the Mortgage.

 

18. Time of the Essence. Time shall be of the essence with respect to all of
Borrower’s obligations under this Note.

 

19. Severability. If any provision of this Note should be held unenforceable or
void, then that provision shall be deemed separable from the remaining
provisions and shall not affect the validity of this Note, except that if that
provision relates to the payment of any monetary sum, then Holder may, at its
option, declare the Aggregate Indebtedness (together with the Prepayment Fee)
immediately due and payable.

 

(execution page follows)

 

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IN WITNESS WHEREOF, Borrower has executed this Note as of the Execution Date.

 

BORROWER:

Wells REIT-Chicago Center Owner, LLC,

a Delaware limited liability company

By:

  Wells REIT-Chicago Center, Chicago, LLC, a Delaware limited liability company,
its sole member    

By:

 

Wells Operating Partnership, L.P., a

Delaware limited partnership, its sole

member

       

By:

 

Wells Real Estate Investment

Trust, Inc., its sole general partner

       

By:

 

 

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Name:

 

 

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Its:

 

 

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