The loan bears interest at a variable rate per annum equal to the sum of the British Bankers Association LIBOR rate plus 1.60%. As part of the financing transaction, the Pick 'n Save Subsidiary entered into an interest rate swap contract to fix the variable interest rate in order to manage the risk exposed to interest rate fluctuations. As a result, the effective annual interest rate of the loan is 3.54% per annum through the initial maturity date of
The loan requires the Pick 'n Save Subsidiary to make monthly payments of interest only until the initial maturity date, subject to any extensions of the maturity date described above, on which date the outstanding principal balance of the loan plus all accrued and unpaid interest will be due. Subject to certain conditions, as set forth in the loan documents, the Pick 'n Save Subsidiary may prepay all or a portion of the loan and obtain the release of the property and the related obligations under the loan documents. Provided no principal payments are made during the term of the loan and that the entire principal amount is borrowed, approximately
The loan documents contain customary affirmative, negative and financial covenants, agreements, representations, warranties and borrowing conditions, all as set forth in the loan documents, including limitations on the incurrence of unpermitted liens on the properties. The loan documents also contain various customary events of default, including the non-payment of principal or interest, any default in compliance with the covenants contained in the documents evidencing the loan and bankruptcy or other insolvency events. If an event of default occurs under the loan, the lender may declare the debt to be immediately due and payable, and in certain limited cases the loan balance may become immediately due and payable without any action by the lender. In the event of a default, the Pick 'n Save Subsidiary will be required to pay a default interest rate equal to the lessor of 5% per annum above the current rate or the maximum interest rate permitted by applicable law.
The loan is non-recourse to us and the Pick 'n Save Subsidiary, with certain exceptions for borrower bankruptcy. We have guaranteed the obligations or liabilities of the Pick 'n Save Subsidiary to lender for any losses, costs or damages arising out of or in connection with (i) any fraud, intentional misrepresentation or willful misconduct of the Company, the Pick 'n Save Subsidiary or their affiliates; (ii) any physical waste of the property; and (iii) the breach of any representation or warranty concerning environmental laws, among other things. Further, we have guaranteed all construction obligations of the seller in the event of any default by the seller following the commencement of construction in connection with the seller's obligations to complete construction of the additional earnout space as described in our Current Report filed with the
The information set forth above does not purport to be complete in scope and is qualified in its entirety by the full text of the agreements attached to this Current Report as Exhibits 10.1, 10.2, 10.3 and 10.4, which are incorporated into this Item 2.03 by reference.
Item 9.01. Financial Statements and Exhibits.
10.1 Loan Agreement, dated as of
July 31, 2014, between IREIT WEST BEND MAIN, L.L.C., and PNC BANK NATIONAL ASSOCIATION
10.2 Promissory Note, made as of
for the benefit of
PNC BANK NATIONAL ASSOCIATION
10.3 Guaranty of Payment, Recourse Obligations and Completion, dated as of July
31, 2014, by INLAND REAL ESTATE INCOME TRUST, INC. in favor of
PNC BANK NATIONAL ASSOCIATION
10.4 Environmental Indemnity Agreement, dated as of
WEST BEND MAIN, L.L.C. and INLAND REAL ESTATE INCOME TRUST, INC. in favor of