Exhibit 10.7

PROMISSORY NOTE

 

$15,583,000.00

         October 11, 2011

FOR VALUE RECEIVED, TNP SRT OSCEOLA VILLAGE, LLC, a Delaware limited liability
company (with its successors and assigns, “Maker”) promises to pay to the order
of AMERICAN NATIONAL INSURANCE COMPANY, a Texas insurance company, its
successors or assigns being hereinafter called “Noteholder”), the sum of FIFTEEN
MILLION FIVE HUNDRED EIGHTY-THREE THOUSAND AND NO/100 DOLLARS ($15,583,000.00),
together with interest from the date hereof at the rate of five and sixty-five
hundredths percent (5.65%) per annum. Interest accruing on the date hereof to
and including October 31, 2011 is payable on the date hereof. Monthly
installments of principal and accrued interest in the amount of NINETY-SEVEN
THOUSAND NINETY FOUR AND 17/100 DOLLARS ($97,094.17) each shall be paid by Maker
to Noteholder on the first day of December, 2011, and on the first day of each
and every month until the entire indebtedness shall have been fully paid;
provided, however, it is expressly agreed that the entire balance remaining
unpaid on this Note shall become due and payable on the first day of November 1,
2016 (the “Scheduled Maturity Date”). As said installments are paid, they are to
be applied first to the payment of interest accrued on the entire amount of said
indebtedness unpaid at the time of said payment, and the balance, if any, shall
be applied to the payment of principal.

Maker understands that the monthly installments of interest and principal
referred to above are based upon a hypothetical twenty-five (25) year
amortization; that such installments will not amortize fully the principal
balance by the Scheduled Maturity Date; that the final installment will be a
“balloon” payment; and that Noteholder has no obligation to refinance such
“balloon” payment.

Both principal and interest are payable at the office of American National
Insurance Company, in the Mortgage and Real Estate Investment Department, One
Moody Plaza, Galveston, Texas, 77550, or at such place as Noteholder may from
time to time designate in writing. Notwithstanding the foregoing, any and all
payments by or on account of any obligation of Maker hereunder or under any of
the other Loan Documents (as defined below) may be made via wire transfer to an
account designated by Noteholder.

This Note is given for a $15,583,000.00 portion of a loan in the aggregate
amount of $19,000,000.00and is secured by a Mortgage, Assignment of Rents,
Security Agreement, Financing Statement and Fixture Filing (the “Mortgage”) of
even date herewith from Maker to Noteholder on certain property (the “Mortgaged
Property”) described in Exhibit “A” of the Mortgage. This Note, that certain
promissory note in the original principal sum of $3,417,000.00 from Maker in
favor of Noteholder (the “Additional Note “), the Mortgage and all other
documents evidencing, securing or relating to this Note or the Additional Note
are sometimes individually referred to as a “Loan Document” and collectively as
the “Loan Documents”.

It is expressly agreed that if any one or more of the following occur
(individually and

 

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collectively, an “Event of Default”): (a) Maker shall be in default in the
payment when due of any principal, interest or installment of principal and
interest or any other sums due and payable pursuant to the terms, conditions,
covenants, agreements, representations and warranties of this Note, the
Additional Note, the Mortgage or any other document (except the Master Lease,
defined below) securing, evidencing or relating to this Note or the Additional
Note; (b) Maker shall be in default under the other terms, conditions,
covenants, agreements, representations or warranties contained in this Note, the
Additional Note, the Mortgage or any other Loan Document(except the Master
Lease), and such default shall continue beyond any applicable cure period
provided herein or therein; or (c) any Maker, or any drawer, acceptor, endorser,
guarantor, surety or accommodation party or other person liable upon or for the
payment of the indebtedness evidenced by this Note and/or for the performance of
the landlord’s obligations pursuant to any lease on any portion of the Mortgaged
Property (each hereinafter called “Other Liable Party” or “Other Liable
Parties”) (i) admits in writing its inability to pay its debts generally as they
become due, (ii) files a petition in bankruptcy as a Debtor or seeking
reorganization or an arrangement or otherwise to take advantage of any state or
federal bankruptcy or insolvency law, (iii) makes an assignment for the benefit
of creditors, (iv) files a petition for or consents to the appointment of a
receiver of any of its assets or a part thereof, (v) without its consent, a
petition in bankruptcy is filed against it, or an order, decree or judgment is
entered by a court of competent jurisdiction appointing a receiver over its
property, or approving a petition filed against it seeking a reorganization or
an arrangement of it under any bankruptcy or insolvency law, and such petition,
order, decree or judgment is not vacated, set aside or stayed within sixty
(60) days from the date of entry, (vi) dissolves, or its existence as a legal
entity terminates, other than any Permitted Transfer, as such term is defined in
the Mortgage, (vii) is a party to any merger or consolidation, other than any
Permitted Transfer, is the subject of any transaction known as or similar to a
leveraged buy-out or is involved in any material corporate restructuring other
than any Permitted Transfer, however designated, then Noteholder, in any of such
events, shall have the right and option, without notice or demand, to accelerate
the maturity of this Note and declare the entire unpaid balance of this Note,
both outstanding principal and accrued but unpaid interest, immediately due and
payable and/or may enforce such other rights as are available to Noteholder
under the terms and conditions of any Loan Document or otherwise available at
law or in equity. If this Note expressly provides for the payment of a
prepayment fee, then upon such acceleration by Noteholder in the event of
default as aforesaid, whether such Event of Default is voluntary or involuntary,
Maker specifically agrees that Noteholder shall be entitled to collect any such
prepayment fee when due as hereafter provided in addition to the balance of
indebtedness due under this Note. All rights and remedies available to
Noteholder shall be cumulative and not exclusive, failure to exercise any of
such rights upon an Event of Default shall not constitute a waiver of the right
to exercise any of them at any time, and the exercise or beginning to exercise
of any one of such rights and remedies shall not preclude the simultaneous or
later exercise of any or all of such rights and remedies.

Maker hereby agrees to pay all expenses incurred, including, but not limited to,
reasonable attorney’s fees if this Note is placed in the hands of an attorney
for collection or if this Note is collected through probate, bankruptcy or other
judicial proceedings.

Prior to an Event of Default hereon, unpaid principal shall bear interest from
the date hereof

 

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at the rate hereinabove provided. From and after any Event of Default and
continuing so long as Noteholder has not agreed in writing to a waiver or cure
of such Event of Default, all unpaid principal (whether or not overdue) and
unpaid interest shall bear interest at the “Maximum Nonusurious Rate” (as
hereinafter defined), or if there is no Maximum Nonusurious Rate, at a per annum
rate equal to eighteen percent (18%) (hereinafter referred to as the “Default
Rate”), whether or not Noteholder has exercised its option to accelerate the
maturity of this Note and to declare the entire unpaid principal indebtedness
and accrued interest due and payable. Provided, however, Noteholder, in its sole
and absolute discretion, may elect to charge a rate of interest or impose a
delinquency charge which is less than the amount which would result from
applying the Default Rate provided for in the preceding sentence, but any such
delinquency charge for any delinquent installment or other amount shall not
exceed five percent (5%) of such delinquent installment or amount, as
applicable. Any such election by Noteholder to charge such lesser amount shall
not constitute a waiver of Noteholder’s right to impose the Default Rate during
the existence of any future defaults.

Maker shall have the option to prepay this Note, in full, but not in part, at
any time, upon not less than thirty (30) days’ prior written notice to
Noteholder, without any prepayment premium.

Except as otherwise expressly provided in the Mortgage with respect to notice of
default, the Maker hereof, and all Other Liable Parties, jointly and severally
waive presentment for payment, protest and demand, notice of non-payment,
protest, notice of protest, notice of acceleration, notice of the intent to
accelerate, the filing of suit, and diligence in collecting this Note or
enforcing any of the security herefor, and agree to the substitution, exchange
or release of any such security or the release of any party primarily or
secondarily liable hereon, and further agree that it will not be necessary for
the holder hereof, in order to enforce payment of this Note by it, to first
institute suit or exhaust its remedies against Maker or any Other Liable Party,
or to enforce its rights against any security herefor, and consent to any one or
more rearrangements, modifications, extensions or postponements of the time,
amount or manner of payment of this Note on any terms or any other indulgences
with respect thereto, without notice thereof to any of them and without
discharging or reducing any of their liability hereunder. The Noteholder may
transfer this Note, and the rights and privileges of Noteholder under this Note
shall inure to the benefit of the Noteholder’s successors, and assigns.

This Note shall be governed by and construed in accordance with Florida law and
applicable federal law. It is the intention of Noteholder and Maker that this
Note and all provisions hereof and of all other Loan Documents conform in all
respects to the laws of the State of Florida and applicable federal law
pertaining to usury. Notwithstanding any provision in this Note or in any other
Loan Documents to the contrary, it is expressly provided that in no case or
event should the aggregate amounts, which by applicable law are deemed to be
interest with respect to this Note or any other Loan Documents ever exceed the
“Maximum Nonusurious Rate” (as defined below). In this connection, it is
expressly stipulated and agreed that it is the intention of Noteholder and the
Maker to contract in strict compliance with applicable usury laws of the State
of Florida and/or of the United States (whichever permits the higher rate of
interest) from time to time in effect. Nothing in this Note or other Loan
Documents shall ever be construed to create a contract to pay, as

 

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consideration for the use, forbearance or detention of money, interest at a rate
in excess of the Maximum Nonusurious Rate. If under any circumstances the
aggregate amounts contracted for, charged or paid with respect to this Note,
whether by fulfillment of any provision hereof or of any mortgage, deed of
trust, loan agreement or other Loan Document now or hereafter securing,
evidencing or relating to the indebtedness evidenced hereby, which by applicable
law are deemed to be interest, would produce an interest rate greater than the
Maximum Nonusurious Rate, the Maker and any other person obligated to pay this
Note, stipulates that the amounts will be deemed to have been paid, charged or
contracted for as a result of an error on the part of Maker, any other person
obligated for the payment of this Note and the Noteholder and upon discovery of
the error or upon notice thereof from the Maker or the party making such
payment, the Noteholder or the party receiving such excess payment shall, at its
option, refund the amount of such excess payment or credit the excess payment
against any other amount due under this Note. In addition, all sums paid or
agreed to be paid to the holder of this Note for the use, forbearance or
detention of monies shall be, to the extent permitted by applicable law,
amortized, prorated, allocated and spread through the full stated term of this
Note so that the amount of interest on account of the indebtedness evidenced
hereby does not exceed the maximum permitted by law. The provisions of this
paragraph shall control all existing and future agreements between Maker and
Noteholder. The “Maximum Nonusurious Rate” shall be the highest permitted rate
permitted by law. If the Maximum Nonusurious Rate is increased or removed by
statute or other governmental action subsequent to the date of this Note, then
the new Maximum Nonusurious Rate, if any, will be applicable to this Note from
the effective date of the new Maximum Nonusurious Rate, unless such application
is precluded by the statute or governmental action or by the general law of the
jurisdiction governing this Note. The Noteholder may, in determining the Maximum
Nonusurious Rate allowed under applicable law, as amended from time to time,
take advantage of: (i) the rate of interest permitted by Florida Statutes,
Chapter 658, by reason of both Section 687.12 Florida Statutes (“Interest rates;
parity among licensed lenders or creditors”) and 12 United States Code, Sections
85 and 86, and (ii) any other law, rule, or regulation on effect from time to
time, available to Noteholder which exempts Noteholder from any limit upon the
rate of interest it may charge or grants to Noteholder the right to charge a
higher rate of interest than that allowed by Florida Statutes, Chapter 687.

The Maker warrants and represents to Noteholder and all holders of the
indebtedness evidenced hereby, that (i) all loans evidenced by this Note shall
be “business loans” as that term is used in the Depository Institutions
Deregulatory and Monetary Control Act of 1980, as amended, (ii) that this
transaction is specifically exempt under Section 226.3(a) of Regulation Z issued
by the Board of Governors of the Federal Reserve System, and Title I and Title V
of the Consumer Credit Protection Act, and (iii) that such loans are for
business, commercial, investment or other similar purposes and not primarily for
personal, family, household or agricultural use.

Except with respect to the Master Lease and Master Lease Guaranty, defined
below, or as otherwise specifically provided below, in the event of a default in
the payment of this Note by Maker, or any other default under any other Loan
Document, Noteholder’s sole recourse shall be against the Mortgaged Property
described in the Mortgage securing this Note, and Noteholder shall not be
entitled to recover any deficiency judgment against Maker if the foreclosure or
recovery of such Mortgaged Property is not sufficient to pay the amount owed by
Maker hereunder.

 

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Notwithstanding the foregoing limitation of liability, Maker shall be fully
liable (a) for fraud or misrepresentation made in or in connection with this
Note or any Loan Document or the apparent purpose of which is to deprive
Noteholder of the security for this Note; (b) for failure to pay taxes,
assessments, charges for labor or materials or any other charges which can
create liens on any portion of the Mortgaged Property except to the extent funds
for payment of said taxes, assessments, charges for labor or materials or any
other charges were placed in escrow with Noteholder; (c) for the misapplication
of (i) proceeds of insurance covering any portion of the Mortgaged Property, or
(ii) proceeds of the sale or condemnation of any portion of the Mortgaged
Property, or (iii) rentals and security deposits received by or on behalf of
Maker subsequent to the date on which Noteholder gives written notice of the
posting of foreclosure notices or the exercise of Noteholder’s assignment of
rents; (d) for failure to maintain, repair or restore the Mortgaged Property in
accordance with any Loan Document; (e) for any act or omission knowingly or
intentionally committed or permitted by Maker which results in the waste, damage
or destruction to the Mortgaged Property, but only to the extent such events are
not covered by insurance proceeds which are received by Noteholder; (f) for the
return to Noteholder of all unearned advance rentals and security deposits paid
by tenants of the Mortgaged Property or any guarantors of the leases of such
tenants which are not rightfully refunded to or which are forfeited by such
tenants or guarantors; (g) for the return of, or reimbursement for, all personal
property taken from the Mortgaged Property by or on behalf of Maker; (h) for any
liability of Maker pursuant to the provision contained in the Mortgage
pertaining to hazardous or toxic materials or substances; (i) for any liability
of Maker pursuant to the Certificate and Indemnity Regarding Hazardous
Substances executed by Maker and delivered to Noteholder in connection with the
indebtedness evidenced by this Note; (j) for failure to maintain or alter the
Mortgaged Property in compliance with the Americans with Disabilities Act of
1990, as it may be amended from time to time; and (k) for all court costs and
reasonable attorneys’ fees incurred in connection with the enforcement of one or
more of the above subparagraphs (a) through (j), inclusive. Nothing in this
paragraph, elsewhere this Note or in any other Loan Document limiting
Noteholder’s recourse against Maker shall alter, waive or otherwise limit any
liability or obligation of TNP SRT Osceola Village Master Lessee, LLC as tenant
under the Master Lease or TNP Strategic Retail Trust, Inc or Thompson National
Properties, LLC as guarantors under the Master Lease Guaranty. The term “Master
Lease” refers to that certain Master Lease dated on or about the date hereof
concerning by and between Maker as landlord and TNP SRT Osceola Village Master
Lessee, LLC, a Delaware limited liability company, as tenant, concerning a
portion of the Mortgaged Property and all renewals, extensions and modifications
of said Master Lease or any portion thereof. The term “Master Lease Guaranty”
shall mean, individually and collectively, (i) that certain Guaranty executed by
TNP Strategic Retail Trust, Inc., a Maryland corporation, on or about the date
hereof in favor of Maker concerning the Master Lease and all renewals,
extensions and modifications of all or any portion thereof; and (ii) that
certain Guaranty executed by Thompson National Properties, LLC, a Delaware
limited liability company, on or about the date hereof in favor of Maker
concerning the Master Lease and all renewals, extensions and modifications of
all or any portion thereof. The Master Lease and Master Lease Guaranty are
independent of this Note and survive the foreclosure of the Mortgage.

Time is of the essence of this Note. This Note shall be interpreted, construed
and enforced in accordance with the internal laws of the State of Florida,
without regard to Florida law with respect

 

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to conflict of laws. Where the context so requires references to any gender
shall include the others and references to the singular shall include the plural
and vice versa. If any term, covenant, condition, agreement, representation or
warranty of the Note or the application thereof to any person or circumstance
shall, to any extent, be invalid or unenforceable, the remainder of this Note,
or the application of such term, covenant, condition, agreement, representation
or warranty to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby and each term, covenant,
condition, agreement, representation or warranty of this Note shall be valid and
enforced to the fullest extent permitted by law.

The Florida documentary stamp tax and intangible tax which is due with respect
to this Note has been paid on the Mortgage.

[Remainder of Page Intentionally Left Blank]

 

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SIGNATURE PAGE TO $15,583,000.00

PROMISSORY NOTE GIVEN BY

TNP SRT OSCEOLA VILLAGE, LLC

TO AMERICAN NATIONAL INSURANCE COMPANY

 

MAKER: TNP SRT OSCEOLA VILLAGE, LLC, a Delaware limited liability company
By:       TNP Strategic Retail Operating Partnership, L.P.,   a Delaware limited
partnership,   its sole member   By:       TNP Strategic Retail Trust, Inc.,    
a Maryland corporation,     its general partner     By:  

/s/ Jack R. Maurer

    Name:  

Jack R. Maurer

    Title:  

Vice Chairman

 

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EXHIBIT “A”

Legal Description

 

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