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EXHIBIT 10.17.4.1
REAL ESTATE NOTE A
$3,350,000.00 Atlanta, Georgia
August 14, 1996
FOR VALUE RECEIVED, THE UNDERSIGNED Xxxxxxx Properties Residential, L.P., a
Georgia limited partnership, whose sole general partner is Xxxxxxx Realty
Investors, Inc., a Georgia corporation (the "Maker") promises to pay to the
order of NATIONWIDE LIFE INSURANCE COMPANY, an Ohio corporation, its successors
and assigns (the "Holder") the principal sum of THREE MILLION THREE HUNDRED
FIFTY THOUSAND AND NO/100 DOLLARS ($3,350,000.00), together with interest on the
principal balance of this Real Estate Note A (the "Note"), from time to time
remaining unpaid, from the date of disbursement by the Holder hereof at the
applicable interest rate hereinafter set forth, together with all other sums due
hereunder or under the terms of the Security Deed (as hereinafter defined) in
lawful money of the United States of America which shall be legal tender in
payment of all debts at the time of payment. Both principal and interest and
all other sums due hereunder shall be payable at the office of the Holder at Xxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxx 00000-0000, Attn: Real Estate Investment
Department, or at such other place either within or without the State of Ohio,
as the Holder hereof may from time to time designate. Said principal and
interest shall be paid over a term, at the times, and in the manner set forth
below, to wit:
Payment Provision:
(i) Interest accrued on the unpaid principal balance of this Note, from the
date of disbursement hereof at the rate of 7.10% percent per annum,
shall be due and payable on August 15, 1996.
(ii) Thereafter, principal and interest on the unpaid principal balance of
this Note at the rate of 7.10% percent per annum shall be paid in one
hundred nineteen (119) consecutive monthly installments commencing on
September 15, 1996 and continuing on the fifteenth day of each calendar
month thereafter, with each such installment to be in the sum of Twenty
Two Thousand Five Hundred Thirteen and 07/100 Dollars ($22,513.07).
Maturity:
The unpaid principal balance of this Note and all accrued unpaid interest
thereon, if not sooner paid, shall be due and payable in full on August 15, 2006
(the "Maturity Date").
Application of Payments:
All payments shall be applied first to the payment of accrued unpaid
interest on this Note and the balance, if any, shall be applied to the reduction
of the outstanding principal balance of this Note. Interest due hereunder shall
be calculated on the basis of a 360-day year composed of twelve (12) thirty (30)
day months; provided, in no event shall such calculation cause the interest rate
on this Note to exceed the maximum rate permitted under applicable law.
Late Payment Charge:
The Holder of this Note may collect a late payment charge, prior to the
acceleration of this Note, in an amount equal to five percent (5%) of the
aggregate monthly installment which is not paid on the due date, for the
purposes of covering the extra expenses involved in handling delinquent
installments. Any full payment of principal and/or interest which is postmarked
by the United States Postal Service on or before the due date shall not be
considered delinquent and a late payment charge shall not be assessed.
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Prepayment:
(A) Maker shall have the right to prepay, in full but not in part, the
obligation evidenced by this Note upon giving (i) not less than thirty (30)
days' prior written notice to Holder of Maker's intention to so prepay the Note,
and (ii) payment to Holder of the Prepayment Premium (as hereinafter defined),
if any, then due to Holder as hereinafter provided. As used herein, the term
"Prepayment Premium" shall mean the greater of (x) one percent (1.0%) of the
outstanding principal balance of this Note, or (y) a sum equal to (a) the
present value of the scheduled monthly payments hereunder from the date of
prepayment to the Maturity Date and (b) the present value of the amount of
principal and interest due on the Maturity Date (assuming all scheduled monthly
payments due hereunder prior to the Maturity Date were made when due), minus (c)
the outstanding principal balance hereof as of the date of prepayment. The
present value described in (a) and (b) of the immediately preceding sentence are
to be computed on a monthly basis as of the date of prepayment, discounted at
the yield to maturity of the U.S. Treasury Note or Bond that is closest in
maturity to the Maturity Date as reported in the Wall Street Journal (or if the
Wall Street Journal is no longer published, as reported in such other daily
financial publication of national circulation which shall be designated by
Holder) on the fifth (5th) business day preceding the date of prepayment. Maker
shall be obligated to prepay this Note on the date set forth in the notice to
Holder required hereinabove, after such notice has been delivered to Holder.
Notwithstanding the foregoing or any other provision herein to the contrary, if
the Holder elects to apply insurance proceeds, condemnation awards or any
escrowed amounts, if applicable, to the reduction of the principal balance of
this Note in the manner provided in the Security Deed (as hereinafter defined),
no Prepayment Premium shall be due or payable as a result of such application,
and the monthly installments due and payable hereunder shall be reduced
accordingly.
(B) In the event the Maturity Date of the indebtedness evidenced by this
Note is accelerated by Holder hereof at any time due to a default by Maker in
the terms, covenants or conditions contained in this Note, the Security Deed or
any of the other Loan Document (as hereinafter defined), then a tender of
payment of an amount necessary to satisfy the entire outstanding principal
balance and all accrued unpaid interest of this Note made by Maker, or by anyone
on behalf of Maker, at any time prior to, at, or as a result of, a foreclosure
sale or sale pursuant to power of sale shall constitute a voluntary prepayment
hereunder prior to the contracted Maturity Date of this Note thus requiring
payment to Holder of a Prepayment Premium equal to the applicable Prepayment
Premium as set forth in subparagraph (A) above.
(C) Maker acknowledges that Holder (a) has advanced the amounts evidenced
by this Note with the expectation that such amounts would be outstanding until
the Maturity Date unless prepaid in accordance with the foregoing prepayment
provisions, (b) would not have been willing to advance such amounts on the terms
set forth in this Note for a shorter period of time, (c) in making the loan
evidenced by this Note, is relying on Maker's creditworthiness and its agreement
to pay in strict accordance with the terms set forth in the Note, and (d) would
not make the loan without full and complete assurance by Maker of its agreement
not to prepay all or a part of the principal of this Note except as expressly
permitted herein. Maker acknowledges that if this Note were to be prepaid prior
to the Maturity Date other than in accordance with the foregoing prepayment
provisions, Maker would not receive the benefit of the bargain agreed to by
Maker and Holder. In addition, Maker has been advised and acknowledges that
Xxxxxx is relying on the receipt of payments under this Note to, among other
things, match and support its obligations under contracts entered into by Holder
with third parties and that in the event of a prepayment, Xxxxxx could suffer
loss and additional expenses which are extremely difficult and impractical to
ascertain. The Prepayment Premium is a good faith resolution by Maker and
Holder of the damages Holder would suffer, and it is not intended as a penalty.
(D) Notwithstanding anything in this "Prepayment" section of this Note to
the contrary, Maker may prepay in full, but not in part, the obligation
evidenced by this Note at any time during the last ninety (90) days prior to the
Maturity Date without any prepayment premium.
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BY INITIALING BELOW, MAKER EXPRESSLY ACKNOWLEDGES THAT PURSUANT TO THE
PROVISIONS OF THIS NOTE, MAKER HAS NO RIGHT TO PREPAY THIS NOTE IN WHOLE OR
IN PART WITHOUT PAYMENT OF THE PREPAYMENT PREMIUM EXCEPT AS SET FORTH
ABOVE, AND THAT MAKER SHALL BE LIABLE FOR THE PAYMENT OF THE PREPAYMENT
PREMIUM UPON ANY PAYMENT OF THE OUTSTANDING PRINCIPAL OF THIS NOTE BEFORE
ITS DUE DATE, WHETHER VOLUNTARY OR INVOLUNTARY OR AFTER ACCELERATION OF THE
NOTE WHETHER THE ACCELERATION OF THE MATURITY HEREOF IS DUE TO MAKER'S
DEFAULT OR OTHERWISE. FURTHERMORE, BY INITIALING BELOW, MAKER WAIVES ANY
RIGHTS IT MAY HAVE UNDER ANY APPLICABLE STATE LAWS AS THEY RELATE TO ANY
PREPAYMENT RESTRICTIONS CONTAINED IN THIS PREPAYMENT SECTION OR OTHERWISE
IN THIS NOTE AND EXPRESSLY ACKNOWLEDGES THAT HOLDER HAS MADE THE LOAN IN
RELIANCE UPON SUCH AGREEMENTS AND WAIVER OF MAKER AND THAT HOLDER WOULD NOT
HAVE MADE THE LOAN WITHOUT SUCH AGREEMENTS AND WAIVER OF MAKER. MAKER
ACKNOWLEDGES THAT SPECIFIC WEIGHT HAS BEEN GIVEN TO THE CONSIDERATION GIVEN
FOR SUCH AGREEMENTS, WHICH CONSIDERATION IS THE GRANTING OF THE LOAN.
/s/ CSR
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Borrower's initials
Additional Conditions:
This Note is secured by a Deed to Secure Debt and Security Agreement
(herein referred to as the "Security Deed") and by an Assignment of Leases,
Rents and Profits (herein referred to as the "Assignment") of even date herewith
encumbering certain real property located in Dekalb County, Georgia and other
property as more particularly described in the Security Deed (hereinafter
collectively referred to as the "Property"). The Security Deed and the
Assignment contain terms and provisions which provide grounds for acceleration
of the indebtedness evidenced by this Note, together with additional remedies in
the event of default hereunder or thereunder. Failure on the part of the Holder
hereof to exercise any right granted herein or in the aforesaid Security Deed or
the Assignment shall not constitute a waiver of such right or preclude the
subsequent exercise and enforcement thereof. This Note, the Security Deed, the
Assignment and all other documents and instruments executed as further evidence
of, as additional security for, or executed in connection with the indebtedness
evidenced by this Note are hereinafter collectively referred to as the "Loan
Documents."
Except as otherwise provided, all parties to this Note, including
endorsers, sureties and guarantors, hereby jointly and severally waive
presentment for payment, demand, protest, notice of protest, notice of demand
and of nonpayment or dishonor and of protest, notice of intent to accelerate the
maturity of this Note, notice of acceleration of maturity of this Note, and any
and all other notices and demands whatsoever, and agree to remain bound hereby
until the principal and interest of this Note are paid in full, notwithstanding
any extensions of time for payment which may be granted by Xxxxxx, even though
the period of extension be indefinite, and notwithstanding any inaction by, or
failure to assert any legal rights available to the Holder of this Note.
If the obligations evidenced by this Note, or any part thereof, are placed
in the hands of an attorney for collection, whether by suit or otherwise, at any
time, or from time to time, Maker shall be liable to Holder, in each instance,
for all costs and expenses incurred in connection therewith, including, without
limitation, reasonable attorneys' fees (as hereinafter defined).
Default:
If default shall be made in the payment of principal and/or interest as
stipulated above or in the payment of any other sums due hereunder or under any
of the other Loan Documents, or should any default be made in the performance
of any of the terms, covenants and conditions
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contained herein or in any of the other Loan Documents, then in any or all of
such events, at the option of Holder, the entire outstanding principal balance
of this Note, together with all accrued unpaid interest thereon and all other
sums advanced by Holder on behalf of Maker shall become and be immediately due
and payable then or thereafter as Holder may elect, regardless of the Maturity
Date hereof. All such amounts shall bear interest after the Maturity Date, by
acceleration or otherwise, at the lesser of either (i) the highest rate of
interest then allowed by the laws of the State of Georgia, or, if controlling,
the laws of the United States, or (ii) the then applicable interest rate of this
Note plus five-hundred (500) basis points (five per cent per annum).
During the existence of any default, Holder may apply any sums received,
including but not limited to, insurance proceeds or condemnation awards to any
amount then due and owing hereunder or under the terms of any of the other Loan
Documents as Holder may determine. Neither the right nor the exercise of the
right herein granted unto Holder to apply such proceeds as aforesaid shall
preclude Holder from exercising its option to cause the entire indebtedness
evidenced by this Note to become immediately due and payable by reason of
Maker's default under the terms of this Note, or any of the other Loan
Documents.
Notwithstanding any provisions herein to the contrary, Xxxxxx's right,
power and privilege to accelerate the maturity of the indebtedness evidenced
hereby shall be conditioned upon, (a) with respect to any Monetary Default (as
hereafter defined), Holder giving Maker written notice of such Monetary Default
and a five (5) day period ("Monetary Cure Period") after the date of such
notice within which to cure such Monetary Default; provided, however, that such
Monetary Cure Period shall be limited to once per loan year for the term of the
Loan; and (b) with respect to any Non-Monetary Default (as hereinafter
defined), Holder giving Maker written notice of such Non-Monetary Default and a
thirty (30) day period after the date of such notice within which to cure such
Non-Monetary Default; provided, however, that if such Non-Monetary Default
cannot reasonably be cured within the 30 day period Maker shall have a
reasonable period of time in which to cure the Non-Monetary Default provided
that Maker commences the cure of such default within the 30 day period and
thereafter diligently pursues the cure to completion. Any notice required
hereunder shall be given as provided in the Security Deed. Holder shall have
no obligation to give Maker notice of any Incurable Default (as hereinafter
defined) prior to exercising its right, power and privilege to accelerate the
maturity of the indebtedness evidenced hereby and to declare same to be
immediately due and payable and exercise all other rights and remedies herein
granted or otherwise available to Holder at law or in equity. As used herein,
the term "Monetary Default" shall mean any default which can be cured by the
payment of money including, but not limited to, the payment of principal and
interest due under this Note and the payment of taxes, assessments and
insurance premiums when due as provided in the Security Deed. As used herein,
the term "Non-Monetary Default" shall mean any default which is not a Monetary
Default or an Incurable Default. As used herein, the term "Incurable Default"
shall mean (i) any voluntary or involuntary sale, assignment, encumbering or
transfer in violation of the covenants of Section 30 the Security Deed or (ii)
if Maker or its general partner should make an assignment for the benefit of
creditors, become insolvent, or file a petition in bankruptcy (including but
not limited to, a petition seeking a rearrangement or reorganization).
Savings Clause; Severability:
Notwithstanding any provisions herein or in the Security Deed to the
contrary, the total liability for payments in the nature of interest including
but not limited to Prepayment Premiums, default interest and late fees shall
not exceed the limits imposed by the laws of the State of Georgia or the United
States of America relating to maximum lawful rate of interest. Holder shall
not be entitled to receive, collect or apply, as interest on the indebtedness
evidenced hereby, any amount in excess of the maximum lawful rate of interest
permitted to be charged by applicable law or regulations, as amended or enacted
from time to time. In the event Holder ever receives, collects or applies, as
interest, any such excess, such amount which would be excessive interest shall
be applied to reduce the unpaid principal balance of the indebtedness evidenced
by this Note. If the unpaid principal balance of such indebtedness is paid in
full, any remaining excess shall be forthwith paid to Maker. If any clauses or
provisions herein contained operate or
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prospectively operate to invalidate this Note, then such clauses or provisions
only shall be held for naught, as though not herein contained and the remainder
of this Note shall remain operative and in full force and effect.
Exculpation:
Except as expressly set forth herein, the liability of Maker with respect
to the payment of principal and interest hereunder shall be "non-recourse" and,
accordingly, Xxxxxx's source of satisfaction of said indebtedness and Maker's
other obligations hereunder and under the other Loan Documents shall be limited
to the Property and Xxxxxx's receipt of the rents, issues and profits from the
Property. Holder shall not seek to procure payment out of any other assets of
Maker, or any person or entity comprising Maker, nor to seek judgment (except
as hereinafter provided) for any sums which are or may be payable under this
Note or under any of the other Loan Documents, or for any claim or judgment
(except as hereinafter provided) for any deficiency remaining after foreclosure
of the Security Deed. Notwithstanding the above, nothing herein contained
shall be deemed to be a release or impairment of the indebtedness evidenced by
this Note or the security therefor intended by the other Loan Documents, or be
deemed to preclude Holder from exercising its rights to foreclose, or exercise
the power of sale in, the Security Deed or to enforce any of its other rights
or remedies under the Loan Documents.
Notwithstanding the foregoing, it is expressly understood and agreed that
the aforesaid limitation on liability shall in no way affect or apply to Maker's
continued personal liability for:
(1) fraud or misrepresentation made in or in connection with this Note or
any other Loan Documents;
(2) failure to pay taxes prior to delinquency or to pay assessments prior
to delinquency, or to pay charges for labor, materials or other charges
which can create liens on any portion of the Property;
(3) the misapplication of (i) proceeds of insurance covering any portion of
the Property, or (ii) proceeds of the sale or condemnation of any
portion of the Property or (iii) rentals received by or on behalf of
Maker subsequent to the date on which Xxxxxx makes written demand
therefor pursuant to any of the Loan Documents;
(4) causing or permitting waste to occur on, in or about the Property, and
failure to maintain the Property, excepting ordinary wear and tear;
(5) loss by fire or casualty to the extent not compensated by insurance
proceeds collected by Xxxxxx;
(6) the return to Holder of all unearned advance rentals and security
deposits paid by tenants of the Property and not refunded to or
forfeited by such tenants;
(7) the return to Holder of any and all fees paid to Maker by tenants of
the Property which fees permit tenants to terminate their leases;
(8) the return of, or reimbursement for, all personalty owned by Maker
taken from the Property by or on behalf of Maker, out of the ordinary
course of business, and not replaced by items of equal or greater value
than the original value of the personalty so removed;
(9) all court costs and reasonable attorneys' fees actually incurred which
are provided for in this Note or in any other Loan Document;
(10) (i) the removal of any chemical, material or substance, exposure to
which is prohibited, limited, or regulated by any Federal, State,
County, Regional or Local Authority which may or could pose a hazard to
the health and safety of the occupants of the Property regardless of
the source of origination; (ii) the restoration
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of the Property to comply with all governmental regulations pertaining
to hazardous waste found in, on or under the Property, regardless of
the source of origination; and (iii) any indemnity or other agreement
to hold the Holder harmless from and against any and all losses,
liabilities, damages, injuries, costs and expenses of any and every
kind arising under Paragraph 3 of the Security Deed including, but not
limited to, that certain Environmental Indemnity Agreement from Maker
to Holder of even date herewith. Maker shall not be liable hereunder
if such materials were placed on the Property subsequent to the date of
acquisition of the Property by foreclosure of the Security Deed by
Holder or acceptance of a deed in lieu thereof, or relinquishment of
control of the Property pursuant to a transfer approved in writing by
Xxxxxx; provided that such transferee assumes in writing all
obligations of Maker pertaining to Hazardous Materials (as defined in
the Security Deed) pursuant to the Loan Documents. Liability under
this subparagraph shall extend beyond the repayment of this Note and
compliance with the terms of the Security Deed, unless at such time
Maker provides Holder with an environmental assessment report
acceptable to Holder showing the Property to be free of Hazardous
Materials and not in violation of Hazardous Waste Laws (as defined in
the Security Deed). Maker shall bear the burden of proof in
establishing the date on which any such Hazardous Materials were placed
or appeared in, on or under the Property.
(11) (a) any and all costs incurred in order to cause the Property to comply
with the applicable accessibility provisions of The Fair Housing Act of
1988, as the same may now or hereafter be amended, and any and all
rules and regulations that may now or hereafter be promulgated in
connection with said acts, and (b) any indemnity or other agreement to
hold the Holder harmless from and against any and all losses,
liabilities, damages, injuries, costs and expenses of any and every
kind arising under Paragraph 3 of the Security Deed regarding
accessibility for the disabled or handicapped or under the
Accessibility Indemnity Agreement from Maker to Holder of even date
herewith; provided, however, Maker shall not be liable for compliance
with any accessibility laws that first become effective, or for any
violation of any accessibility laws resulting from alterations or
improvements to the Property that are performed, subsequent to
Holder's actually taking possession of the Property pursuant to
foreclosure of the Security Deed or acceptance of a deed in lieu
thereof, or subsequent to any transfer of ownership of the Property
that has the prior written approval of Holder; provided that such
transferee assumes in writing all obligations of Maker with respect to
compliance with accessibility laws under the Security Deed and
Accessibility Indemnity Agreement.
(12) Obligation of Maker for the face amount of any Letter of Credit held by
Xxxxxx and delivered by Maker in connection with the loan evidenced by
this Note in the event Holder is unable to collect the full amount of
said Letter of Credit for any reason.
The obligations of Maker in subparagraphs (1) through (12) above, except
as provided in subparagraphs (10) and (11), shall survive the repayment and
satisfaction of this Note and compliance with the terms of the Security Deed.
Notwithstanding any provisions herein to the contrary, Maker shall become
personally liable for the entire amount due under this Note (including all
principal, interest and other charges) in the event that Maker (i) violates the
covenants set forth in the Security Deed governing the placing of subordinate
financing on the Property or (ii) violates the covenants set forth in the
Security Deed restricting transfers in the Property or transfers of ownership
interests in Maker.
As used herein, the phrase "reasonable attorneys' fees" shall mean fees
charged by attorneys selected by Holder based upon such attorneys' then
prevailing hourly rates as opposed to any amount or percentage specified by any
statute then in effect in the State of Georgia.
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This Note is one of a series of two notes of even date herewith executed
by the undersigned, both being secured by the Security Deed and other security
instruments in favor of the Holder of this Note. The other such note is
designated Real Estate Note B and has been executed by the undersigned in favor
of West Coast Life Insurance Company and is in the original principal sum of
Seven Hundred Fifty Thousand and No/100 Dollars ($750,000.00). Real Estate
Notes A and B shall be of equal dignity and it is expressly stipulated and
agreed that a default under the terms of either of said Notes shall constitute
an event of default under both of said Notes authorizing the holders of said
Notes to accelerate the maturity of both of said Notes and to exercise all
rights and remedies granted to holders under the Notes, the Security Deed and
any other security instruments securing the payment of the Notes. It is
further stipulated and agreed that notwithstanding the prepayment privilege
contained in this Note, the undersigned shall have no right to prepay this Note
unless the undersigned also elects to prepay Real Estate Note B in accordance
with the prepayment provisions contained therein.
THE PROVISIONS of this Note shall be governed by the laws of the State of
Georgia and the United States and shall be binding upon the Maker, its
successors and assigns and shall inure to the benefit of Holder, its successors
and assigns. Time is of the essence of this contract.
IN WITNESS WHEREOF, the undersigned has executed this Note under seal as
of the day and year first above written.
Xxxxxxx Properties Residential, L.P., a Georgia
limited partnership
By: Xxxxxxx Realty Investors, Inc.,
its sole General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: President
(CORPORATE SEAL)
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