Exhibit 10.4.1
FHLMC Loan No.: 002701324
MULTIFAMILY NOTE
MULTISTATE - FIXED RATE
REVISION DATE 3-17-03
US $10,750,000.00 Effective Date: August 21, 2003
FOR VALUE RECEIVED, the undersigned ("BORROWER") jointly and severally
(if more than one) promises to pay to the order of ▇. ▇. ▇▇▇▇▇▇ & COMPANY, a
Texas corporation, the principal sum of Ten Million Seven Hundred Fifty Thousand
and No/100 Dollars (US $10,750,000.00), with interest on the unpaid principal
balance at the annual rate of five and fifty-four one-hundredths percent
(5.54%).
1. DEFINED TERMS. As used in this Note, (i) the term "LENDER"
means the holder of this Note, and (ii) the term "INDEBTEDNESS" means the
principal of, interest on, and all other amounts due at any time under, this
Note, the Security Instrument or any other Loan Document, including prepayment
premiums, late charges, default interest, and advances to protect the security
of the Security Instrument under Section 12 of the Security Instrument. "EVENT
OF DEFAULT" and other capitalized terms used but not defined in this Note shall
have the meanings given to such terms in the Security Instrument.
2. ADDRESS FOR PAYMENT. All payments due under this Note shall be
payable at P.O. Box 297480, Houston, Texas 77297, or such other place as may be
designated by Notice to Borrower from or on behalf of Lender.
3. PAYMENTS. Payments shall be made in immediately available
funds as follows:
(a) Unless disbursement of principal is made by Lender to Borrower
on the first day of the month, interest for the period beginning on the date of
disbursement and ending on and including the last day of the month in which such
disbursement is made shall be payable simultaneously with the execution of this
Note.
(b) Interest under this Note shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
(c) Consecutive monthly installments of principal and interest,
each in the amount of Sixty-One Thousand Three Hundred Seven and 38/100 Dollars
(US $61,307.38), shall be payable on the first day of each month beginning on
October 1, 2003, until the entire unpaid principal balance evidenced by this
Note is fully paid.
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Exhibit 10.4.1
(d) Any accrued interest remaining past due for 30 days or more
may, at ▇▇▇▇▇▇'s discretion, be added to and become part of the unpaid principal
balance and shall bear interest at the rate or rates specified in this Note, and
any reference below to "accrued interest" shall refer to accrued interest which
has not become part of the unpaid principal balance. Any remaining principal and
interest shall be due and payable on September 1, 2013, or on any earlier date
on which the unpaid principal balance of this Note becomes due and payable, by
acceleration or otherwise (the "MATURITY DATE"). The unpaid principal balance
shall continue to bear interest after the Maturity Date at the Default Rate set
forth in this Note until and including the date on which it is paid in full.
(e) Any regularly scheduled monthly installment payable pursuant
to Section 3(c) that is received by Lender before the date it is due shall be
deemed to have been received on the due date solely for the purpose of
calculating interest due.
4. APPLICATION OF PAYMENTS. If at any time Lender receives, from
Borrower or otherwise, any amount applicable to the Indebtedness which is less
than all amounts due and payable at such time, Lender may apply the amount
received to amounts then due and payable in any manner and in any order
determined by ▇▇▇▇▇▇, in ▇▇▇▇▇▇'s discretion. ▇▇▇▇▇▇▇▇ agrees that neither
▇▇▇▇▇▇'s acceptance of a payment from Borrower in an amount that is less than
all amounts then due and payable nor Lender's application of such payment shall
constitute or be deemed to constitute either a waiver of the unpaid amounts or
an accord and satisfaction.
5. SECURITY. The Indebtedness is secured by, among other things,
a multifamily mortgage, deed to secure debt or deed of trust effective as of the
effective date of this Note (the "SECURITY INSTRUMENT"), and reference is made
to the Security Instrument for other rights of ▇▇▇▇▇▇ as to collateral for the
Indebtedness.
6. ACCELERATION. If an Event of Default has occurred and is
continuing, the entire unpaid principal balance, any accrued interest, the
prepayment premium payable under Section 10, if any, and all other amounts
payable under this Note and any other Loan Document shall at once become due and
payable, at the option of Lender, without any prior notice to Borrower (except
if notice is required by applicable law, then after such notice). Lender may
exercise this option to accelerate regardless of any prior forbearance.
7. LATE CHARGE. If any monthly installment of interest or
principal and interest or other amount payable under this Note or under the
Security Instrument or any other Loan Document is not received in full by Lender
within ten (10) days after the installment or other amount is due, counting from
and including the date such installment or other amount is due (unless
applicable law requires a longer period of time before a late charge may be
imposed, in which event such longer period shall be substituted), Borrower shall
pay to Lender, immediately and without demand by Lender, a late charge equal to
five percent (5%) of such installment or other amount due (unless applicable law
requires a lesser amount be charged, in which event
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Exhibit 10.4.1
such lesser amount shall be substituted). Borrower acknowledges that its failure
to make timely payments will cause Lender to incur additional expenses in
servicing and processing the loan evidenced by this Note (the "LOAN") and that
it is extremely difficult and impractical to determine those additional
expenses. ▇▇▇▇▇▇▇▇ agrees that the late charge payable pursuant to this Section
represents a fair and reasonable estimate, taking into account all circumstances
existing on the date of this Note, of the additional expenses Lender will incur
by reason of such late payment. The late charge is payable in addition to, and
not in lieu of, any interest payable at the Default Rate pursuant to Section 8.
8. DEFAULT RATE. So long as (a) any monthly installment under
this Note remains past due for thirty (30) days or more or (b) any other Event
of Default has occurred and is continuing, interest under this Note shall accrue
on the unpaid principal balance from the earlier of the due date of the first
unpaid monthly installment or the occurrence of such other Event of Default, as
applicable, at a rate (the "DEFAULT RATE") equal to the lesser of four (4)
percentage points above the rate stated in the first paragraph of this Note and
the maximum interest rate which may be collected from Borrower under applicable
law. If the unpaid principal balance and all accrued interest are not paid in
full on the Maturity Date, the unpaid principal balance and all accrued interest
shall bear interest from the Maturity Date at the Default Rate.
Borrower acknowledges that (a) its failure to make timely payments will cause
Lender to incur additional expenses in servicing and processing the Loan, (b)
during the time that any monthly installment under this Note is delinquent for
thirty (30) days or more, Lender will incur additional costs and expenses
arising from its loss of the use of the money due and from the adverse impact on
Lender's ability to meet its other obligations and to take advantage of other
investment opportunities; and (c) it is extremely difficult and impractical to
determine those additional costs and expenses. ▇▇▇▇▇▇▇▇ also acknowledges that,
during the time that any monthly installment under this Note is delinquent for
thirty (30) days or more or any other Event of Default has occurred and is
continuing, ▇▇▇▇▇▇'s risk of nonpayment of this Note will be materially
increased and Lender is entitled to be compensated for such increased risk.
▇▇▇▇▇▇▇▇ agrees that the increase in the rate of interest payable under this
Note to the Default Rate represents a fair and reasonable estimate, taking into
account all circumstances existing on the date of this Note, of the additional
costs and expenses Lender will incur by reason of the Borrower's delinquent
payment and the additional compensation Lender is entitled to receive for the
increased risks of nonpayment associated with a delinquent loan.
9. LIMITS ON PERSONAL LIABILITY.
(a) Except as otherwise provided in this Section 9, Borrower shall
have no personal liability under this Note, the Security Instrument or any other
Loan Document for the repayment of the Indebtedness or for the performance of
any other obligations of Borrower under the Loan Documents and ▇▇▇▇▇▇'s only
recourse for the satisfaction of the Indebtedness and the performance of such
obligations shall be Lender's exercise of its rights and remedies with respect
to the Mortgaged Property and any other collateral held by Lender as security
for the
PAGE 3
Exhibit 10.4.1
Indebtedness. This limitation on Borrower's liability shall not limit or impair
Lender's enforcement of its rights against any guarantor of the Indebtedness or
any guarantor of any other obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the
repayment of a portion of the Indebtedness equal to zero percent (-0-%) of the
original principal balance of this Note (the "BASE RECOURSE"), plus any other
amounts for which Borrower has personal liability under this Section 9.
(c) In addition to the Base Recourse, Borrower shall be personally
liable to Lender for the repayment of a further portion of the Indebtedness
equal to any loss or damage suffered by ▇▇▇▇▇▇ as a result of the occurrence of
any of the following events:
(i) Borrower fails to pay to Lender upon demand after an
Event of Default all Rents to which ▇▇▇▇▇▇ is
entitled under Section 3(a) of the Security
Instrument and the amount of all security deposits
collected by Borrower from tenants then in residence.
However, Borrower will not be personally liable for
any failure described in this subsection (i) if
Borrower is unable to pay to Lender all Rents and
security deposits as required by the Security
Instrument because of a valid order issued in a
bankruptcy, receivership, or similar judicial
proceeding.
(ii) Borrower fails to apply all insurance proceeds and
condemnation proceeds as required by the Security
Instrument. However, ▇▇▇▇▇▇▇▇ will not be personally
liable for any failure described in this subsection
(ii) if Borrower is unable to apply insurance or
condemnation proceeds as required by the Security
Instrument because of a valid order issued in a
bankruptcy, receivership, or similar judicial
proceeding.
(iii) Borrower fails to comply with Section 14(g) or (h) of
the Security Instrument relating to the delivery of
books and records, statements, schedules and reports.
(iv) Borrower fails to pay when due the amount of any item
below marked "Deferred" in accordance with the terms
of the Security Instrument; provided however, that if
no item is marked "Deferred", this Section 9(c)(iv)
shall be of no force or effect.
[Deferred] Hazard Insurance premiums or other
insurance premiums,
[Deferred] Taxes,
[Deferred] water and sewer charges (that could
become a lien on the Mortgaged Property),
[ N/A ] ground rents,
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Exhibit 10.4.1
[Deferred] assessments or other charges (that could
become a lien on the Mortgaged Property)
(d) In addition to the Base Recourse, Borrower shall be personally
liable to Lender for:
(i) the performance of all of Borrower's obligations
under Section 18 of the Security Instrument (relating
to environmental matters);
(ii) the costs of any audit under Section 14(g) of the
Security Instrument; and
(iii) any costs and expenses incurred by Lender in
connection with the collection of any amount for
which ▇▇▇▇▇▇▇▇ is personally liable under this
Section 9, including Attorneys' Fees and Costs and
the costs of conducting any independent audit of
▇▇▇▇▇▇▇▇'s books and records to determine the amount
for which Borrower has personal liability.
(e) All payments made by Borrower with respect to the Indebtedness
and all amounts received by Lender from the enforcement of its rights under the
Security Instrument and the other Loan Documents shall be applied first to the
portion of the Indebtedness for which ▇▇▇▇▇▇▇▇ has no personal liability.
(f) Notwithstanding the Base Recourse, Borrower shall become
personally liable to Lender for the repayment of all of the Indebtedness upon
the occurrence of any of the following Events of Default:
(i) Borrower's ownership of any property or operation of
any business not permitted by Section 33 of the
Security Instrument;
(ii) a Transfer (including, but not limited to, a lien or
encumbrance) that is an Event of Default under
Section 21 of the Security Instrument, other than a
Transfer consisting solely of the involuntary removal
or involuntary withdrawal of a general partner in a
limited partnership or a manager in a limited
liability company; or
(iii) fraud or written material misrepresentation by
Borrower or any officer, director, partner, member or
employee of Borrower in connection with the
application for or creation of the Indebtedness or
any request for any action or consent by ▇▇▇▇▇▇.
(g) To the extent that Borrower has personal liability under this
Section 9, Lender may exercise its rights against ▇▇▇▇▇▇▇▇ personally without
regard to whether ▇▇▇▇▇▇ has exercised any rights against the Mortgaged Property
or any other security, or pursued any rights against any guarantor, or pursued
any other rights available to Lender under this Note, the
PAGE 5
Exhibit 10.4.1
Security Instrument, any other Loan Document or applicable law. To the fullest
extent permitted by applicable law, in any action to enforce Borrower's personal
liability under this Section 9, Borrower waives any right to set off the value
of the Mortgaged Property against such personal liability.
10. VOLUNTARY AND INVOLUNTARY PREPAYMENTS.
(a) A prepayment premium shall be payable in connection with any
prepayment [any receipt by Lender of principal, other than principal required to
be paid in monthly installments pursuant to Section 3(c), prior to the scheduled
Maturity Date set forth in Section 3(d)] under this Note as provided below:
(i) Borrower may voluntarily prepay all of the unpaid
principal balance of this Note on a Business Day
designated as the date for such prepayment in a
Notice from Borrower to Lender given at least 30 days
prior to the date of such prepayment. Such prepayment
shall be made by paying (A) the amount of principal
being prepaid, (B) all accrued interest, (C) all
other sums due to Lender at the time of such
prepayment, and (D) the prepayment premium calculated
pursuant to Section 10(c).
(ii) Upon ▇▇▇▇▇▇'s exercise of any right of acceleration
under this Note, Borrower shall pay to Lender, in
addition to the entire unpaid principal balance of
this Note outstanding at the time of the
acceleration, (A) all accrued interest, (B) all other
sums due Lender, and (C) the prepayment premium
calculated pursuant to Section 10(c), to the extent
such prepayment premium does not exceed the maximum
rate permitted by applicable law.
(iii) Any application by Lender of any proceeds of
collateral or other security to the repayment of any
portion of the unpaid principal balance of this Note
prior to the Maturity Date and in the absence of
acceleration shall be deemed to be a partial
prepayment by Borrower, requiring the payment to
Lender by Borrower of the prepayment premium set
forth in Section 10(c).
(iv) Unless expressly provided for in the Loan Documents,
Borrower shall not have the option to voluntarily
prepay less than all of the unpaid principal balance.
However, if the Loan Documents provide for a partial
prepayment or the Lender accepts a partial prepayment
in ▇▇▇▇▇▇'s discretion, a prepayment premium
calculated pursuant to Section 10(c) shall be due and
payable by Borrower.
(v) For all purposes including the accrual of interest,
but excluding the determination of the "Prepayment
Date" under Section 10(c)(i), below, any
PAGE 6
Exhibit 10.4.1
prepayment received by ▇▇▇▇▇▇ on any day other than
the last calendar day of the month shall be deemed to
have been received on the last calendar day of such
month.
(b) Notwithstanding the provisions of Section 10(a), no prepayment
premium shall be payable with respect to (i) any prepayment made during the -0-
consecutive calendar month period ending with the scheduled Maturity Date (the
"WINDOW PERIOD") or (ii) any prepayment occurring as a result of the application
of any insurance proceeds or condemnation award under the Security Instrument.
(c) Any prepayment premium payable under this Note shall be
computed as follows:
(i) If the prepayment is made between the date of this
Note and the date that is 120 months after the first
day of the first calendar month following the date of
this Note (the "YIELD MAINTENANCE PERIOD"), the
prepayment premium shall be whichever is the greater
of subsections (A) and (B) below:
(A) 1.0% of the amount of principal being
prepaid; or
(B) the product obtained by multiplying:
(1) the amount of principal being
prepaid,
by
(2) the excess (if any) of the Monthly
Note Rate over the Assumed
Reinvestment Rate,
by
(3) the Present Value Factor.
For purposes of subsection (B), the following
definitions shall apply:
MONTHLY NOTE RATE: one-twelfth (1/12) of the annual
interest rate of this Note, expressed as a decimal
calculated to five digits.
PREPAYMENT DATE: in the case of a voluntary
prepayment, the date on which the prepayment is made;
in the case of the application by Lender of
collateral or security to a portion of the principal
balance, the date of such application; and in any
other case, the date on which Lender accelerates the
unpaid principal balance of this Note.
ASSUMED REINVESTMENT RATE: one-twelfth (1/12) of the
yield rate, as of the date 5 Business Days before the
Prepayment Date, on the 4.000% U.S. Treasury Security
due November 15, 2012, as reported in The Wall Street
PAGE 7
Exhibit 10.4.1
Journal, expressed as a decimal calculated to five
digits. In the event that no yield is published on
the applicable date for the Treasury Security used to
determine the Assumed Reinvestment Rate, Lender, in
its discretion, shall select the non-callable
Treasury Security maturing in the same year as the
Treasury Security specified above with the lowest
yield published in The Wall Street Journal as of the
applicable date. If the publication of such yield
rates in The Wall Street Journal is discontinued for
any reason, Lender shall select a security with a
comparable rate and term to the Treasury Security
used to determine the Assumed Reinvestment Rate. The
selection of an alternate security pursuant to this
Section shall be made in ▇▇▇▇▇▇'s discretion.
PRESENT VALUE FACTOR: the factor that discounts to
present value the costs resulting to Lender from the
difference in interest rates during the months
remaining in the Yield Maintenance Period, using the
Assumed Reinvestment Rate as the discount rate, with
monthly compounding, expressed numerically as
follows:
1
1-(-------)(n)
1+ARR
--------------
ARR
n = number of months or partial months remaining in
Yield Maintenance Period
ARR = Assumed Reinvestment Rate
(ii) If the prepayment is made after the expiration of the
Yield Maintenance Period but before the start of the
Window Period, the prepayment premium shall be 1.0%
of the amount of principal being prepaid.
(d) Any permitted or required prepayment of less than the unpaid
principal balance of this Note shall not extend or postpone the due date of any
subsequent monthly installments or change the amount of such installments,
unless ▇▇▇▇▇▇ agrees otherwise in writing.
(e) Borrower recognizes that any prepayment of any of the unpaid
principal balance of this Note, whether voluntary or involuntary or resulting
from an Event of Default by Borrower, will result in ▇▇▇▇▇▇'s incurring loss,
including reinvestment loss, additional expense and frustration or impairment of
▇▇▇▇▇▇'s ability to meet its commitments to third parties. ▇▇▇▇▇▇▇▇ agrees to
pay to ▇▇▇▇▇▇ upon demand damages for the detriment caused by any prepayment,
and agrees that it is extremely difficult and impractical to ascertain the
extent of such damages. ▇▇▇▇▇▇▇▇ therefore acknowledges and agrees that the
formula for calculating
PAGE 8
Exhibit 10.4.1
prepayment premiums set forth in this Note represents a reasonable estimate of
the damages Lender will incur because of a prepayment.
(f) Borrower further acknowledges that the prepayment premium
provisions of this Note are a material part of the consideration for the Loan,
and acknowledges that the terms of this Note are in other respects more
favorable to Borrower as a result of the Borrower's voluntary agreement to the
prepayment premium provisions.
11. COSTS AND EXPENSES. To the fullest extent allowed by
applicable law, Borrower shall pay all expenses and costs, including Attorneys'
Fees and Costs incurred by Lender as a result of any default under this Note or
in connection with efforts to collect any amount due under this Note, or to
enforce the provisions of any of the other Loan Documents, including those
incurred in post-judgment collection efforts and in any bankruptcy proceeding
(including any action for relief from the automatic stay of any bankruptcy
proceeding) or judicial or non-judicial foreclosure proceeding.
12. FORBEARANCE. Any forbearance by ▇▇▇▇▇▇ in exercising any right
or remedy under this Note, the Security Instrument, or any other Loan Document
or otherwise afforded by applicable law, shall not be a waiver of or preclude
the exercise of that or any other right or remedy. The acceptance by Lender of
any payment after the due date of such payment, or in an amount which is less
than the required payment, shall not be a waiver of Lender's right to require
prompt payment when due of all other payments or to exercise any right or remedy
with respect to any failure to make prompt payment. Enforcement by Lender of any
security for Borrower's obligations under this Note shall not constitute an
election by ▇▇▇▇▇▇ of remedies so as to preclude the exercise of any other right
or remedy available to Lender.
13. WAIVERS. Borrower and all endorsers and guarantors of this
Note and all other third party obligors waive presentment, demand, notice of
dishonor, protest, notice of acceleration, notice of intent to demand or
accelerate payment or maturity, presentment for payment, notice of nonpayment,
grace, and diligence in collecting the Indebtedness..
14. LOAN CHARGES. Neither this Note nor any of the other Loan
Documents shall be construed to create a contract for the use, forbearance or
detention of money requiring payment of interest at a rate greater than the
maximum interest rate permitted to be charged under applicable law. If any
applicable law limiting the amount of interest or other charges permitted to be
collected from Borrower in connection with the Loan is interpreted so that any
interest or other charge provided for in any Loan Document, whether considered
separately or together with other charges provided for in any other Loan
Document, violates that law, and ▇▇▇▇▇▇▇▇ is entitled to the benefit of that
law, that interest or charge is hereby reduced to the extent necessary to
eliminate that violation. The amounts, if any, previously paid to Lender in
excess of the permitted amounts shall be applied by Lender to reduce the unpaid
principal balance of this Note. For the purpose of determining whether any
applicable law limiting the amount of interest or other charges permitted to be
collected from Borrower has been violated, all Indebtedness that
PAGE 9
Exhibit 10.4.1
constitutes interest, as well as all other charges made in connection with the
Indebtedness that constitute interest, shall be deemed to be allocated and
spread ratably over the stated term of this Note. Unless otherwise required by
applicable law, such allocation and spreading shall be effected in such a manner
that the rate of interest so computed is uniform throughout the stated term of
this Note.
15. COMMERCIAL PURPOSE. Borrower represents that Borrower is
incurring the Indebtedness solely for the purpose of carrying on a business or
commercial enterprise, and not for personal, family, household, or agricultural
purposes.
16. COUNTING OF DAYS. Except where otherwise specifically
provided, any reference in this Note to a period of "days" means calendar days,
not Business Days.
17. GOVERNING LAW. This Note shall be governed by the law of the
Property Jurisdiction.
18. CAPTIONS. The captions of the Sections of this Note are for
convenience only and shall be disregarded in construing this Note.
19. NOTICES; WRITTEN MODIFICATIONS. All Notices, demands and other
communications required or permitted to be given pursuant to this Note shall be
given in accordance with Section 31 of the Security Instrument. Any modification
or amendment to this Note shall be ineffective unless in writing signed by the
party sought to be charged with such modification or amendment; provided,
however, that in the event of a Transfer under the terms of the Security
Instrument that requires ▇▇▇▇▇▇'s consent, any or some or all of the
Modifications to Multifamily Note set forth in Exhibit A to this Note may be
modified or rendered void by Lender at Lender's option, by Notice to Borrower
and the transferee, as a condition of ▇▇▇▇▇▇'s consent.
20. CONSENT TO JURISDICTION AND VENUE. ▇▇▇▇▇▇▇▇ agrees that any
controversy arising under or in relation to this Note may be litigated in the
Property Jurisdiction. The state and federal courts and authorities with
jurisdiction in the Property Jurisdiction shall have jurisdiction over all
controversies that shall arise under or in relation to this Note. Borrower
irrevocably consents to service, jurisdiction, and venue of such courts for any
such litigation and waives any other venue to which it might be entitled by
virtue of domicile, habitual residence or otherwise. However, nothing in this
Note is intended to limit any right that Lender may have to bring any suit,
action or proceeding relating to matters arising under this Note in any court of
any other jurisdiction.
21. WAIVER OF TRIAL BY JURY. ▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ EACH (A) AGREES
NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE
OR THE RELATIONSHIP BETWEEN THE PARTIES AS ▇▇▇▇▇▇ AND BORROWER THAT IS TRIABLE
OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO
SUCH ISSUE TO
PAGE 10
Exhibit 10.4.1
THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT
TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY
WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
22. COMMUNITY PROPERTY AND STATE-SPECIFIC PROVISIONS.
N/A
ATTACHED EXHIBIT. THE FOLLOWING EXHIBIT IS ATTACHED TO THIS NOTE:
[X] EXHIBIT A MODIFICATIONS TO MULTIFAMILY NOTE
IN WITNESS WHEREOF, and in consideration of the Lender's agreement to
lend Borrower the principal amount set forth above, Borrower has signed and
delivered this Note under seal or has caused this Note to be signed and
delivered under seal by its duly authorized representative. Borrower intends
that this Note shall be deemed to be signed and delivered as a sealed
instrument.
SIGNED, SEALED AND BORROWER:
DELIVERED IN THE
PRESENCE OF: ▇▇▇▇▇▇▇ PROPERTIES RESIDENTIAL, L.P.,
a Georgia limited partnership
By: ▇▇▇▇▇▇▇ Realty Investors, Inc.,
a Georgia corporation
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Its: Sole General Partner
-----------------------------------
Unofficial Witness
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------- -----------------------------------
Notary Public ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
My Commission Expires: Secretary and Treasurer
_______________________________
▇▇-▇▇▇▇▇▇▇
---------------------------------------------
Borrower's Social Security/Employer ID Number
PAGE 11
Exhibit 10.4.1
ALLONGE ENDORSEMENT TO MULTIFAMILY NOTE
This allonge is attached to that certain Multifamily Note dated August
_____, 2003, made by ▇▇▇▇▇▇▇ PROPERTIES RESIDENTIAL, L.P., a Georgia limited
partnership, as Borrower, to the undersigned.
PAY TO THE ORDER OF ______________________________________________________
WITHOUT RECOURSE this ______ day of _____________, 2003.
SIGNED, SEALED AND LENDER:
DELIVERED IN THE
PRESENCE OF: ▇. ▇. ▇▇▇▇▇▇ & COMPANY,
a Texas corporation
/s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Unofficial Witness By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Exec. Vice President & CFO
/s/ ▇▇▇▇▇▇ Ost
----------------------------------
Notary Public
My Commission Expires:
4-17-05
PAGE 12
Exhibit 10.4.1
EXHIBIT A
MODIFICATIONS TO MULTIFAMILY NOTE
The following modifications are made to the text of the Note that precedes this
Exhibit.
1. A new Section 23 is added to the Note as follows:
"23. EXTENSION OF MATURITY DATE. So long as the Maturity
Date has not occurred prior to September 1, 2013 (for the purposes of
this Section 23, the 'INITIAL MATURITY DATE'), the Indebtedness is not
paid in full on the Initial Maturity Date, and no other Event of
Default, or event or circumstances which, with the giving of notice or
passage of time, or both, could constitute an Event of Default, exists
on the Initial Maturity Date, then the date for full payment of the
Indebtedness automatically shall be extended for a period of twelve
(12) months (the 'EXTENSION PERIOD') until September 1, 2014, or any
earlier date on which the unpaid principal balance of this Note becomes
due and payable by acceleration or otherwise (the 'EXTENDED MATURITY
DATE'). Principal and interest shall be payable during the Extension
Period, in immediately available funds, as follows:
(a) On the Initial Maturity Date, Borrower must make the
regularly scheduled monthly payment set forth in Section 3(c).
(b) During the Extension Period, interest will accrue on
the unpaid principal balance of this Note at the 'Adjustable Interest
Rate' (hereinafter defined). Notwithstanding anything in Section 3(b)
that may be to the contrary, during the Extension Period, interest
under this Note shall be computed on the basis of a 360-day year and
the actual number of days in the month for which interest is being
calculated (divide the annual interest by 360, and multiply the
quotient by the number of days in the month for which interest is being
calculated). The amount payable as interest, or allocated to interest,
will vary depending upon the number of days in the month for which
interest is being calculated, in addition to varying as the Adjustable
Interest Rate varies.
(c) During the Extension Period, consecutive monthly
installments of principal and interest shall be payable on the first
day of each month beginning on October 1, 2013, and continuing during
the Extension Period until the Extended Maturity Date. The date on
which a monthly installment of principal and interest is due pursuant
to this Section 23(c) is referred to as that installment's 'INSTALLMENT
DUE DATE'. The amount of the monthly installment of principal and
interest payable on an Installment Due Date, and the portion thereof
attributable to principal and the portion thereof attributable to
interest, shall be calculated so as to equal the monthly payment amount
which would be payable on the Installment Due Date, and allocation
thereof between principal and
PAGE A-1
Exhibit 10.4.1
interest, as if the unpaid principal balance of this Note as of the
first day of the calendar month preceding the Installment Due Date,
together with interest thereon at the Adjustable Interest Rate in
effect on the first day of the calendar month preceding the Installment
Due Date, were to be fully amortized (using an actual/360 method of
computing interest) in equal monthly payments paid on the first day of
each calendar month over an assumed amortization period commencing on
the first day of the calendar month preceding the Installment Due Date
and ending on the first day of the 360th full calendar month following
the date of this Note. Lender shall provide Borrower with Notice of the
amount of each monthly installment due hereunder.
(d) Any accrued interest remaining past due for 30 days
or more may, at ▇▇▇▇▇▇'s discretion, be added to and become part of the
unpaid principal balance and shall bear interest at the rate or rates
specified in this Note, and any reference to `accrued interest' shall
refer to accrued interest which has not become part of the unpaid
principal balance. All unpaid Indebtedness shall be due and payable in
full on the Extended Maturity Date. The unpaid principal balance shall
continue to bear interest after the Extended Maturity Date at the
Default Rate set forth in Section 23(j) until and including the date on
which it is paid in full.
(e) Any regularly scheduled monthly installment payable
pursuant to Section 23(c) that is received by Lender before the
Installment Due Date shall be deemed to have been received on the
Installment Due Date solely for the purpose of calculating interest
due.
(f) If Lender at any time determines that it has
miscalculated the Adjustable Interest Rate, then Lender shall give
Notice to Borrower of the corrected Adjustable Interest Rate. If
Borrower has paid one or more monthly installments calculated at the
incorrect Adjustable Interest Rate and (i) if the corrected Adjustable
Interest Rate results in an increase in the applicable monthly
payment(s), Borrower, within 10 calendar days after receipt of the
Notice from Lender, shall pay to Lender any sums that Borrower would
have otherwise been obligated to pay to Lender under this Note had the
amount of the Adjustable Interest Rate not been miscalculated, or (ii)
if the corrected Adjustable Interest Rate results in an overpayment
having been made by ▇▇▇▇▇▇▇▇, then the amount of the overpayment shall
be credited to the next installment(s) of interest due under this Note
(or, if an Event of Default has occurred and is continuing, such
overpayment shall be credited against any amount owing by Borrower to
Lender).
(g) In accordance with Section 14, interest charged
hereunder cannot exceed the maximum amount of interest allowed by
applicable law. The rate of interest which results in the maximum
amount of interest allowed by applicable law is referred to as the
'Maximum Rate'. If the Applicable Interest Rate at any time exceeds the
Maximum Rate, resulting in the charging of interest hereunder to be
limited to the Maximum Rate,
PAGE A-2
Exhibit 10.4.1
then any subsequent reduction in the Applicable Interest Rate shall not
reduce the rate at which interest under this Note accrues until the
total amount of interest accrued hereunder equals the amount of
interest which would have accrued had the Applicable Interest Rate at
all times been in effect.
(h) During the Extension Period, Borrower may pay the
entire unpaid Indebtedness on any Business Day designated as the date
for such payment in a written notice from Borrower to Lender given at
least 30 days prior to the date of such payment. No prepayment premium
will be payable by Borrower during the Extension Period.
(i) The following defined terms are added to this Note:
(i) 'ADJUSTABLE INTEREST RATE' means the
variable per annum rate at which interest will accrue
on the outstanding principal balance of this Note.
The Adjustable Interest Rate applicable during any
Interest Adjustment Period will equal the Index Rate,
truncated at the fifth (5th) decimal place if
necessary, for such Interest Adjustment Period, plus
the Margin.
(ii) 'MARGIN' means two and one-half (2.5)
percentage points.
(iii) 'INDEX RATE' means, for any Interest
Adjustment Period, the Reference Bill(R) Index Rate
for such Interest Adjustment Period. However, if
Freddie Mac has not conducted a Reference Bill
auction within the 60-calendar day period prior to
the first day of an Interest Adjustment Period, the
Index Rate for such Interest Adjustment Period will
be the LIBOR Index Rate for such Interest Adjustment
Period minus one-tenth of one percentage point.
(iv) 'INTEREST ADJUSTMENT PERIOD' means each
successive one calendar month beginning on the
Initial Maturity Date and continuing until the entire
Indebtedness is paid in full.
(v) 'LIBOR INDEX' means the British Bankers
Association's (BBA) one month LIBOR Rate for United
States Dollar (may be displayed as `USD') deposits,
as displayed on the LIBOR Index Page used to
establish the LIBOR Index Rate, as more fully set
forth below.
(vi) 'LIBOR INDEX RATE' means, for any Interest
Adjustment Period after the first Interest Adjustment
Period, the British Bankers Association's (BBA) LIBOR
Rate for the LIBOR Index, as of 11:00 a.m. (London
time) on the second London Banking Day preceding the
first day of such Interest
PAGE A-3
Exhibit 10.4.1
Adjustment Period, as such LIBOR Rate is displayed on
the LIBOR Index Page. The LIBOR Index Rate for the
first Interest Adjustment Period means the British
Bankers Association's (BBA) LIBOR Rate for the LIBOR
Index, as of 11:00 a.m. (London time) on the second
London Banking Day preceding the first day of the
month in which the first Interest Adjustment Period
begins, as such LIBOR Rate is displayed on the LIBOR
Index Page. The 'LIBOR INDEX PAGE' is the Bloomberg
L.P., page 'BBAM', or such other page for the LIBOR
Index as may replace page BBAM on that service, or at
the option of Lender (i) the applicable page for the
LIBOR Index on another service which electronically
transmits or displays BBA LIBOR Rates, or (ii) any
publication of LIBOR rates available from the BBA. In
the event the BBA ceases to set or publish a LIBOR
rate/interest settlement rate for the LIBOR Index,
Lender will designate an alternative index, and such
alternative index shall constitute the LIBOR Index
Rate. A 'LONDON BANKING DAY' is any day on which
banks are open for dealing in interbank deposits in
London.
(vii) 'REFERENCE BILLS(R)' means the unsecured
general obligations of Freddie Mac designated by
Freddie Mac as 'Reference Bills(R)' and having
original maturities most comparable to the term of
the Reference Bill Index, and issued by Freddie Mac
at regularly scheduled auctions. In the event Freddie
Mac shall at any time cease to designate any
unsecured general obligations of Freddie Mac as
'Reference Bills', then at the option of Lender (i)
Lender may select from time to time another unsecured
general obligation of Freddie Mac having original
duration to maturity most comparable to the term of
the Reference Bill Index and issued by Freddie Mac at
regularly scheduled auctions, and the term 'Reference
Bills' as used in this Note shall mean such other
unsecured general obligations as selected by Lender;
or (ii) for any one or more Interest Adjustment
Periods, Lender may use the applicable LIBOR Index
Rate as the Index Rate for such Interest Adjustment
Period(s).
(viii) 'REFERENCE BILL INDEX' means the one-month
Reference Bills. One-month Reference Bills have
maturities of approximately 30 days.
(ix) 'REFERENCE BILL INDEX RATE' means, for any
Interest Adjustment Period after the first Interest
Adjustment Period, the Money Market Yield for the
Reference Bills as established by the Reference Bill
auction conducted by Freddie Mac most recently
preceding the first day of such Interest Adjustment
Period, as displayed on the Reference Bill Index
Page. The Reference Bill Index Rate for the first
Interest Adjustment Period means the Money Market
Yield for the Reference Bills as established by
PAGE A-4
Exhibit 10.4.1
the Reference Bill auction conducted by Freddie Mac
most recently preceding the first day of the month in
which the first Interest Adjustment Period begins, as
displayed on the Reference Bill Index Page. The
'REFERENCE BILL INDEX PAGE' is the Freddie Mac Debt
Securities Web Page (accessed via the Freddie Mac
internet site at ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇), or at the
option of Lender, any publication of Reference Bills
auction results available from Freddie Mac.
(j) Notwithstanding anything in Section 8, during the
Extension Period and thereafter, the Default Rate will equal the
Default Rate provided for in Section 8 or four (4) percentage points
above the Adjustable Interest Rate, whichever is greater, but in no
event more than the Maximum Rate.
(k) Notwithstanding anything in Section 10 that may be
deemed to be to the contrary, there is no Window Period for this Note,
and the Yield Maintenance Period expires on the Initial Maturity Date.
(l) If the Extension Period becomes effective, during the
Extension Period and thereafter, any references to the 'Maturity Date'
of the Note in any other Loan Document shall be deemed to mean the
Extended Maturity Date.
(m) Anything in Section 21 of the Security Instrument to
the contrary notwithstanding, Borrower will not request that Lender
consent to, and ▇▇▇▇▇▇ will not consent to, a Transfer during the
Extension Period."
PAGE A-5
