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EXHIBIT 10.5.12
REAL ESTATE NOTE A
$5,670,000.00 Atlanta, Georgia
January 30, 1997
FOR VALUE RECEIVED, THE UNDERSIGNED ▇▇▇▇▇▇▇ Properties Residential,
L.P., a Georgia limited partnership, whose sole general partner is ▇▇▇▇▇▇▇
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 FIVE MILLION SIX
HUNDRED SEVENTY THOUSAND AND NO/100 DOLLARS ($5,670,000.00), 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 ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, 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 7.14%
percent per annum, shall be due and payable on February 15,
1997.
(ii) Thereafter, principal and interest on the unpaid principal
balance of this Note at the rate of 7.14% percent per annum
shall be paid in one hundred nineteen (119) consecutive monthly
installments commencing on March 15, 1997 and continuing on the
fifteenth day of each calendar month thereafter, with each such
installment to be in the sum of Thirty Eight Thousand Two
Hundred Fifty Seven and 27/100 Dollars ($38,257.27).
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
February 15, 2007 (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 ▇▇▇▇▇▇ 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, ▇▇▇▇▇▇ 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.
BY INITIALING BELOW, MAKER EXPRESSLY ACKNOWLEDGES THAT PURSUANT TO THE
PROVISIONS OF THIS NOTE, MAKER HAS NO RIGHT TO PREPAY
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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 Gwinnett 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
▇▇▇▇▇▇, 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 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 ▇▇▇▇▇▇ 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
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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, ▇▇▇▇▇▇'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 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:
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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, ▇▇▇▇▇▇'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 ▇▇▇▇▇▇'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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇;
(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 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
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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 ▇▇▇▇▇▇; 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) obligations of Maker for the face amount of any letter of
credit held by ▇▇▇▇▇▇ 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 any such 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.
Reference is made to that certain Guaranty (the "Guaranty") dated of
even date herewith from ▇▇▇▇▇▇▇ Realty Investors, Inc. in favor of Nationwide
Life Insurance Company and West Coast Life Insurance Company which Guaranty is
being executed and delivered in connection with the loan evidenced by this Note
and Real Estate Note B referenced below in favor of West Coast Life Insurance
Company. Notwithstanding anything in this Note or any other Loan Document to
the contrary, the foregoing provisions of this Exculpation section shall be
inapplicable and of no force and effect until such time as the Guaranty
terminates as provided in paragraph 4.08 of the Guaranty.
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Miscellaneous:
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.
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.
▇▇▇▇▇▇▇ Properties Residential, L.P., a
Georgia limited partnership
By: ▇▇▇▇▇▇▇ Realty Investors, Inc.,
its sole General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
(CORPORATE SEAL)
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