EXHIBIT 4.17
MULTIFAMILY NOTE
US $8,525,000.00 June 20, 2001
FOR VALUE RECEIVED, the undersigned ("Borrower") jointly and severally
(if more than one) promises to pay to the order of ARCS Commercial Mortgage Co.,
L.P., a California limited partnership, the principal sum of Eight Million Five
Hundred Twenty Five Thoursand Dollars and 0/100's (US $8,525,000.00), with
interest on the unpaid principal balance at the annual rate of Seven and
099/1000's percent (7.099%).
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, or any 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, Key Principal and other capitalized terms used but not defined in this
Note shall have the meanings given to such terms in the Security Instrument (as
defined in Paragraph 5).
2. Address for Payment. All payments due under this Note shall be
payable at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or such other
place as may be designated by written notice to Borrower from or on behalf of
Lender.
3. Payment of Principal and Interest. Principal and interest shall be
paid 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. Interest under this Note shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.
(b) Consecutive monthly installments of principal and interest, each in
the amount of Fifty Seven Thousand Two Hundred Eighty Four Dollars and
98/100's(US $57,284.98), shall be payable on the first day of each month
beginning on August 1, 2001, until the entire unpaid principal balance evidenced
by this Note is fully paid. Any accrued interest remaining past due for 30 days
or more shall 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 July 1, 2011 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.
(c) Any regularly scheduled monthly installment of principal and
interest 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.
Page 1
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 that payment 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, among other things, by a
Multifamily Deed of Trust, Assignment of Rents and Security Agreement and
Fixture Filing dated as of the date of this Note (the "Security Instrument"),
and reference is made to the Security Instrument for other rights of Lender
concerning the 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 Paragraph 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. Lender may exercise
this option to accelerate regardless of any prior forbearance.
7. Late Charge. If any monthly amount payable under this Note or under
the Security Instrument or any other Loan Document is not received by Lender
within 10 days after the amount is due, Borrower shall pay to Lender,
immediately and without demand by ▇▇▇▇▇▇, a late charge equal to 5 percent of
such amount. 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 Paragraph 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 Paragraph 8.
8. Default Rate. So long as any monthly installment or any other
payment due under this Note remains past due for 30 days or more, 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 other payment due, as
applicable, at a rate (the "Default Rate") equal to the lesser of 4 percentage
points above the rate stated in the first paragraph of this Note or 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 also acknowledges
that its failure to make timely payments will cause Lender to incur additional
expenses in servicing and processing the Loan, that, during the time that any
monthly installment or other payment under this Note is delinquent for more than
30 days, 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 that it is extremely difficult and impractical to determine
those additional costs and expenses. ▇▇▇▇▇▇▇▇ also acknowledges that, during the
time that any monthly installment or other payment due under this Note is
delinquent for more than 30 days, ▇▇▇▇▇▇'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.
Page 2
9. Limits on Personal Liability.
(a) Except as otherwise provided in this Paragraph 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 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 obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the repayment of
a portion of the Indebtedness equal to any loss or damage suffered by Lender as
a result of (1) failure of Borrower to pay to Lender upon demand after an Event
of Default, all Rents to which Lender 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; (2) failure of Borrower to apply all
insurance proceeds and condemnation proceeds as required by the Security
Instrument; (3) failure of Borrower to comply with Section 14(d) or (e) of the
Security Instrument relating to the delivery of books and records, statements,
schedules and reports; (4) fraud or written material misrepresentation by
▇▇▇▇▇▇▇▇, Key Principal 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 Lender; or (5) failure to apply
Rents, first, to the payment of reasonable operating expenses (other than
Property management fees that are not currently payable pursuant to the terms of
an Assignment of Management Agreement or any other agreement with Lender
executed in connection with the Loan) and then to amounts ("Debt Service
Amounts") payable under this Note, the Security Instrument or any other Loan
Document (except that Borrower will not be personally liable (i) to the extent
that Borrower lacks the legal right to direct the disbursement of such sums
because of a bankruptcy, receivership or similar judicial proceeding, or (ii)
with respect to Rents that are distributed in any calendar year if Borrower has
paid all operating expenses and Debt Service Amounts for that calendar year).
(c) ▇▇▇▇▇▇▇▇ 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: (1) Borrower's acquisition of any property or operation of any business
not permitted by Section 33 of the Security Instrument; or (2) a Transfer that
is an Event of Default under Section 21 of the Security Instrument.
(d) To the extent that Borrower has personal liability under this
Paragraph 9, Lender may exercise its rights against Borrower 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 Security Instrument,
any other Loan Document or applicable law. For purposes of this Paragraph 9, the
term "Mortgaged Property" shall not include any funds that (1) have been applied
by Borrower as required or permitted by the Security Instrument prior to the
occurrence of an Event of Default, or (2) Borrower was unable to apply as
required or permitted by the Security Instrument because of a bankruptcy,
receivership, or similar judicial proceeding.
10. Voluntary and Involuntary Prepayments.
(a) A prepayment premium shall be payable in connection with any
prepayment made under this Note as provided below:
Page 3
(1) Borrower may voluntarily prepay all (but not less than all) of the
unpaid principal balance of this Note on the last Business Day of a calendar
month if Borrower has given Lender at least 30 days prior notice of its
intention to make 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 Lender at the time of such prepayment, and (D) the prepayment premium
calculated pursuant to Schedule A. For all purposes, including the accrual of
interest, any prepayment received by Lender 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. For purposes of this Note, a "Business Day" means
any day other than a Saturday, Sunday or any other day on which Lender is not
open for business.
(2) 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 and all other sums due Lender under this Note and the other
Loan Documents, and (B) the prepayment premium calculated pursuant to Schedule
A.
(3) Any application by Lender of any 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 a
prepayment premium. The amount of any such partial prepayment shall be computed
so as to provide to Lender a prepayment premium computed pursuant to Schedule A
without Borrower having to pay out-of-pocket any additional amounts.
(b) Notwithstanding the provisions of Paragraph 10(a), no prepayment
premium shall be payable with respect to (A) any prepayment made no more than 90
days before the Maturity Date, or (B) any prepayment occurring as a result of
the application of any insurance proceeds or condemnation award under the
Security Instrument.
(c) Schedule A is hereby incorporated by reference into this Note.
(d) Any 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 the unpaid principal
balance of this Note, whether voluntary or involuntary or resulting from a
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 prepayment premiums set forth on Schedule A 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. Borrower shall pay on demand all expenses and
costs, including fees and out-of-pocket expenses of attorneys and expert
witnesses and costs of investigation, incurred by ▇▇▇▇▇▇ 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
Page 4
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. 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 are waived by ▇▇▇▇▇▇▇▇, Key Principal, and all
endorsers and guarantors of this Note and all other third party obligors.
14. Loan Charges. Borrower and ▇▇▇▇▇▇ intend at all times to comply
with the law of the State of Texas governing the maximum rate or amount of
interest payable on or in connection with this Note and the Indebtedness (or
applicable United States federal law to the extent that it permits Lender to
contract for, charge, take, reserve or receive a greater amount of interest than
under Texas law). If the applicable law is ever judicially interpreted so as to
render usurious any amount payable under this Note or under any other Loan
Document, or contracted for, charged, taken, reserved or received with respect
to the Indebtedness, or of acceleration of the maturity of this Note, or if any
prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by any applicable law, then Borrower and Lender expressly intend
that all excess amounts collected by Lender shall be applied to reduce the
unpaid principal balance of this Note (or, if this Note has been or would
thereby be paid in full, shall be refunded to Borrower), and the provisions of
this Note, the Security Instrument and any other Loan Documents immediately
shall be deemed reformed and the amounts thereafter collectible under this Note
or any other Loan Document reduced, without the necessity of the execution of
any new documents, so at to comply with any applicable law, but so as to permit
the recovery of the fullest amount otherwise payable under this Note or any
other Loan Document. The right to accelerate the maturity of this Note does not
include the right to accelerate any interest which has not otherwise accrued on
the date of such acceleration, and Lender does not intend to collect any
unearned interest in the event of acceleration. All sums paid or agreed to be
paid to Lender for the use, forbearance or detention of the Indebtedness shall,
to the extent permitted by any applicable law, be amortized, prorated, allocated
and spread throughout the full term of the Indebtedness until payment in full so
that the rate or amount of interest on account of the Indebtedness does not
exceed the applicable usury ceiling. Notwithstanding any provision contained in
this Note, the Security Instrument or any other Loan Document that permits the
compounding of interest, including any provision by which any accrued interest
is added to the principal amount of this Note, the total amount of interest that
Borrower is obligated to pay and Lender is entitled to receive with respect to
the Indebtedness shall not exceed the amount calculated on a simple (i.e.
----
noncompounded) interest basis at the maximum rate on principal amounts actually
advanced to or for the account of Borrower, including all current and prior
advances and any advances made pursuant to the Security Instrument or other Loan
Documents (such as for the payment of taxes, insurance premiums and similar
expenses or costs).
15. Commercial Purpose. Borrower represents that the Indebtedness is
being incurred by Borrower solely for the purpose of carrying on a business or
commercial enterprise, and not for personal, family or household purposes.
Page 5
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
jurisdiction in which the Land is located.
18. Captions. The captions of the paragraphs of this Note are for
convenience only and shall be disregarded in construing this Note.
19. Notices. All notices, demands and other communications required or
permitted to be given by ▇▇▇▇▇▇ to Borrower pursuant to this Note shall be given
in accordance with Section 31 of the Security Instrument.
20. Consent to Jurisdiction and Venue. Borrower and Key Principal each
agrees that any controversy arising under or in relation to this Note shall be
litigated exclusively in the jurisdiction in which the Land is located (the
"Property Jurisdiction"). The state and federal courts and authorities with
jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over
all controversies which shall arise under or in relation to this Note. Borrower
and Key Principal 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.
21. WAIVER OF TRIAL BY JURY. ▇▇▇▇▇▇▇▇, KEY PRINCIPAL AND LENDER 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 LENDER, KEY PRINCIPAL 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 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.
ATTACHED SCHEDULES. The following Schedules are attached to this Note:
[X] Schedule A Prepayment Premium (required)
[X] Schedule B Modifications to Multifamily Note
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has signed and delivered this Note or has
caused this Note to be signed and delivered by its duly authorized
representative.
BORROWER
CAC IV Limited Partnership
a Virginia limited Partnership
By: CAC IV Special General, Inc.
Page 6
a Virginia corporation
Its: General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Its: Vice President
▇▇▇▇▇▇▇▇'s Social Security/Employer ID Number ▇▇-▇▇▇▇▇▇▇
PAY TO THE ORDER OF
WITHOUT RECOURSE
LENDER:
ARCS Commercial Mortgage Co., L.P.,
a California limited partnership
By: ACMC Realty, Inc.,
a California corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Vice President
ARCS Loan # 226833
▇▇▇▇▇▇ ▇▇▇ # 383925
Page 7
ACKNOWLEDGMENT AND AGREEMENT OF KEY PRINCIPAL TO
PERSONAL LIABILITY FOR EXCEPTIONS TO NON-RECOURSE LIABILITY
Key Principal, who has an economic interest in Borrower or who will
otherwise obtain a material financial benefit from the Loan, hereby absolutely,
unconditionally and irrevocably agrees to pay to Lender, or its assigns, on
demand, all amounts for which Borrower is personally liable under Paragraph 9 of
the Multifamily Note to which this Acknowledgment is attached (the "Note"). The
obligations of Key Principal shall survive any foreclosure proceeding, any
foreclosure sale, any delivery of any deed in lieu of foreclosure, and any
release of record of the Security Instrument. Lender may pursue its remedies
against Key Principal without first exhausting its remedies against the Borrower
or the Mortgaged Property. All capitalized terms used but not defined in this
Acknowledgment shall have the meanings given to such terms in the Note.
The obligations of Key Principal shall be performed without demand by
Lender and shall be unconditional irrespective of the genuineness, validity, or
enforceability of the Note, or any other Loan Document, and without regard to
any other circumstance which might otherwise constitute a legal or equitable
discharge of a surety or a guarantor. Key Principal hereby waives the benefit of
all principles or provisions of law, which are or might be in conflict with the
terms of this Acknowledgment, and agrees that Key Principal's obligations shall
not be affected by any circumstances which might otherwise constitute a legal or
equitable discharge of a surety or a guarantor. Key Principal hereby waives the
benefits of any right of discharge and all other rights under any and all
statutes or other laws relating to guarantors or sureties, to the fullest extent
permitted by law, diligence in collecting the Indebtedness, presentment, demand
for payment, protest, all notices with respect to the Note including this
Acknowledgment, which may be required by statute, rule of law or otherwise to
preserve ▇▇▇▇▇▇'s rights against Key Principal under this Acknowledgment,
including notice of acceptance, notice of any amendment of the Loan Documents,
notice of the occurrence of any default or Event of Default, notice of intent to
accelerate, notice of acceleration, notice of dishonor, notice of foreclosure,
notice of protest, notice of the incurring by Borrower of any obligation or
indebtedness and all rights to require Lender to (a) proceed against Borrower,
(b) proceed against any general partner of Borrower, (c) proceed against or
exhaust any collateral held by ▇▇▇▇▇▇ to secure the repayment of the
Indebtedness, or (d) if Borrower is a partnership, pursue any other remedy it
may have against ▇▇▇▇▇▇▇▇, or any general partner of ▇▇▇▇▇▇▇▇. In addition, Key
Principal waives the benefit of any right to discharge under Chapter 34 of the
Texas Business and Commerce Code and all other rights of sureties and guarantors
thereunder.
At any time without notice to Key Principal, and without affecting the
liability of Key Principal hereunder, (a) the time for payment of the principal
of or interest on the Indebtedness may be extended or the Indebtedness may be
renewed in whole or in part; (b) the time for Borrower's performance of or
compliance with any covenant or agreement contained in the Note, or any other
Loan Document, whether presently existing or hereinafter entered into, may be
extended or such performance or compliance may be waived; (c) the maturity of
the Indebtedness may be accelerated as provided in the Note or any other Loan
Document; (d) the Note or any other Loan Document may be modified or amended by
▇▇▇▇▇▇ and Borrower in any respect, including an increase in the principal
amount; and (e) any security for the Indebtedness may be modified, exchanged,
surrendered or otherwise dealt with or additional security may be pledged or
mortgaged for the Indebtedness.
Key Principal acknowledges that Key Principal has received a copy of
the Note and all other Loan Documents. Neither this Acknowledgment nor any of
its provisions may be waived, modified, amended, discharged, or terminated
except by an agreement in writing signed by the party against which the
enforcement of the waiver, modification, amendment, discharge, or termination is
sought, and then only to the extent set forth in that agreement. Key Principal
agrees to notify ▇▇▇▇▇▇ (in the manner for
Page 8
giving notices provided in Section 31 of the Security Instrument) of any change
of Key Principal's address within 10 Business Days after such change of address
occurs. Any notices to Key Principal shall be given in the manner provided in
Section 31 of the Security Instrument. Key Principal agrees to be bound by
Paragraphs 20 and 21 of the Note.
THIS ACKNOWLEDGMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
THIS ACKNOWLEDGMENT IS AN INSTRUMENT SEPARATE FROM, AND NOT A PART OF,
THE NOTE. BY SIGNING THIS ACKNOWLEDGMENT, KEY PRINCIPAL DOES NOT INTEND TO
BECOME AN ACCOMMODATION PARTY TO, OR AN ENDORSER OF, THE NOTE.
IN WITNESS WHEREOF, Key Principal has signed and delivered this
Acknowledgment or has caused this Acknowledgment to be signed and delivered by
its duly authorized representative.
KEY PRINCIPAL
Cornerstone Realty Income Trust, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
------------------------------
Its: Vice President
------------------------------
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Social Security/Employer ID No.: ▇▇-▇▇▇▇▇▇▇
Page 9
SCHEDULE A
PREPAYMENT PREMIUM
Any prepayment premium payable under Paragraph 10 of this Note shall
be computed as follows:
(a) If the prepayment is made during the first 9.5 years beginning
on the date of the Note (the "Yield Maintenance Period"), the
prepayment premium shall be the greater of:
(i) 1% of the unpaid principal balance of this Note; or
(ii) The product obtained by multiplying:
(A) the amount of principal being prepaid,
by
(B) the difference obtained by subtracting from
the interest rate on this Note the yield rate
(the "Yield Rate") on the 5% U.S. Treasury
Security due February, 2011 (the "Specified
U.S. Treasury as the Yield Rate is reported
on the fifth Business Day preceding (x) the
date notice of prepayment is given to Lender
where prepayment is voluntary, or (y) the
date Lender accelerates the Loan,
by
(C) the present value factor calculated
using the following formula:
1 - (1 + r)/-n/
---------------
r
[r = Yield Rate
n = the number of
365-day years (or 366-day
years, if applicable), and
any fraction thereof,
remaining between the
Prepayment Date and the
expiration of the Yield
Maintenance Period]
Page A-1
In the event that no Yield Rate is
published for the Specified U.S.
Treasury Security, then the nearest
equivalent U.S. Treasury Security
shall be selected at ▇▇▇▇▇▇'s
discretion. If the publication of
such Yield Rates in The Wall Street
Journal is discontinued, Lender
shall determine such Yield Rates
from another source selected by
Lender.
For purposes of subparagraph
(ii)(C), the "Prepayment Date" shall
be (x) in the case of a voluntary
prepayment, the date on which the
prepayment is made, and (y) in any
other case, the date on which Lender
accelerates the unpaid principal
balance of this Note.
(b) If the prepayment is made after the expiration of the Yield
Maintenance Period but more than 90 days before the Maturity
Date, the prepayment premium shall be 1% of the unpaid
principal balance of this Note.
Initial(s) /s/ SJO
---------------------
Page A-2
SCHEDULE B
MODIFICATIONS TO MULTIFAMILY NOTE
The Multifamily Note dated June 20, 2001, in the original principal
amount of $8,525,000.00 (the "Note") issued by CAC IV Limited Partnership, a
Virginia limited partnership ("Borrower") and payable to the order of ARCS
Commercial Mortgage Co., L.P., a California limited partnership ("Lender") is
hereby amended as follows:
1. The last sentence of Paragraph 3(a) of the Note is hereby deleted
and the following new sentence is inserted in lieu thereof:
"Interest shall be computed on basis of a 360-day year."
2. The following sentence is hereby added at the end of Paragraph 3(b)
of the Note:
"The amount of each monthly payment by Borrower pursuant to
this Paragraph 3(b) that is allocated to interest will be based on the
actual number of calendar days during such month and shall be
calculated by multiplying the unpaid principal balance of this Note by
the per annum interest rate, dividing the product by 360 and
multiplying the quotient by the actual number of days elapsed during
the month. Borrower understands that the amount allocated to interest
for each month will vary depending on the actual number of calendar
days during such month."
/s/ SJO
--------------------------
INITIALS
