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PROMISSORY NOTE
$8,100,000.00 June 23, 1998
Loan No. 6 102 830
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇ PROPERTIES RESIDENTIAL, L.P., a Georgia
limited partnership ("BORROWER") promises to pay to the order of THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("LENDER", which shall
also mean successors and assigns who become holders of this Note), at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, the principal sum of
Eight Million One Hundred Thousand and No/100 U.S. Dollars ($8,100,000.00),
with interest on the unpaid balance ("BALANCE") at the rate of six and
sixty-two hundredths percent (6.62%) per annum ("NOTE RATE") from the date of
the first disbursement of Loan proceeds under this Note ("FUNDING DATE") until
Maturity (defined below). Capitalized terms used without definition shall have
the meanings ascribed to them in the Instrument (defined below).
1. Regular Payments. Principal and interest shall be payable as follows:
(a) Interest from the Funding Date through July 15, 1998 shall be due and
payable on August 15, 1998, together with the first regularly-scheduled payment
due under 1(b) below.
(b) Principal and interest shall be paid in one hundred twenty (120)
monthly installments of fifty-one thousand eight hundred thirty-eight and
forty-one/100 Dollars ($51,838.41) each commencing on August 15, 1998 and
continuing on the fifteenth (15th) day of each succeeding month to and
including July 15, 2008. Each payment due date is referred to as a "DUE DATE".
(c) The entire Obligations (as defined in the Instrument (defined below))
shall be due and payable on July 15, 2008 ("MATURITY DATE"). "MATURITY" shall
mean the Maturity Date or earlier date that the Obligations may be due and
payable by acceleration by ▇▇▇▇▇▇ as provided in the Documents.
(d) Interest on the Balance for any full month shall be calculated on the
basis of a three hundred sixty (360) day year consisting of twelve (12) months
of thirty (30) days each. For nay partial month, interest shall be due in an
amount equal to (i) the Note Rate divided by 360 multiplied by (ii) the number
of days any Balance is outstanding through and including the day of payment.
2. Late Payment and Default Interest
(a) Late Charge. If any payment due under the Documents is not fully
paid by its Due Date, a late charge of $100.00 per day (the "DAILY CHARGE")
shall be assessed for each day that elapses until payment in full is made
(including the date payment is made); provided, however, that if any such
payments, together with all accrued Daily Charges, are not fully paid by the
fourteenth (14th) day following their Due Date, a late charge equal to four
percent (4%) of such payments (the "LATE CHARGE") shall be assessed and be
immediately
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due and payable. The Late Charge shall be payable in lieu of Daily Charges that
shall have accrued. The Late Charge may be assessed only once on each overdue
payment. These charges shall be paid to defray the expenses incurred by ▇▇▇▇▇▇
in handling and processing such delinquent payment(s) and to compensate Lender
for the loss of the use of such funds. The Daily Charge and Late Charge shall
be secured by the Documents. The imposition of the Daily Charge, Late Charge,
and/or requirement that interest be paid at the Default Rate (defined below)
shall not be construed in any way to (i) excuse Borrower from its obligation
to make each payment under this Note promptly when due or (ii) preclude Lender
from exercising any rights or remedies available under the Documents upon an
Event of Default.
(b) Acceleration. Upon an Event of Default, including a breach of Section
5.01 of the Instrument, ▇▇▇▇▇▇ may declare the Balance, unpaid accrued
interest, the Prepayment Premium (defined below) and all other Obligations
immediately due and payable in full.
(c) Default Rate. Upon an Event of Default or at Maturity, whether by
acceleration (due to a voluntary or involuntary default) or otherwise, the
entire Obligations (excluding accrued but unpaid interest if prohibited by law)
shall bear interest at the Default Rate. The "DEFAULT RATE" shall be the lesser
of (i) the maximum rate allowed by the law or (ii) the greater of (A) the Note
Rate plus five percent (5%) or (B) five percent (5%) plus the prime rate (for
corporate loans at large United States money center commercial banks) published
in the Wall Street Journal on the first Business Day (defined below) of the
month in which the Event of Default or Maturity occurs or continues. The term
"BUSINESS DAY" shall mean a day which commercial banks are not authorized or
required by law to close in the Property State or in the State where payments
made by Borrower are received.
3. Application of Payments. Before an Event of Default, all payments received
under this Note shall be applied in the following order: (a) to unpaid Daily
Charges, Late Charges and costs of collection; (b) to any Prepayment Premium
due; (c) to interest on the Balance; and (d) then to the Balance. After an
Event of Default, all payments shall be applied in any order determined by
Lender in its sole discretion.
4. Prepayment. This Note may be prepaid, in whole or in part, upon at least
thirty (30) days' prior written notice to Lender and upon payment of all
accrued interest (and other Obligations due under the Documents) and a
prepayment premium ("PREPAYMENT PREMIUM") equal to the greater of (a) one
percent (1%) of the principal amount being prepaid multiplied by the quotient
of the number of full months remaining until the Maturity Date divided by the
number of full months comprising the term of this Note, or (b) the Present
Value of the Loan (defined below) less the amount of principal and accrued
interest (if any) being prepaid, calculated as of the prepayment date. The
Prepayment Premium shall be due and payable, except as provided in the
Instrument or as limited by law, upon any prepayment of this Note, whether
voluntary or involuntary, and Lender shall not be obligated to accept any
prepayment of the Note unless it is accompanied by the Prepayment Premium, all
accrued interest and all other Obligations due under the Documents. Unless
prepayment occurs on a Due Date, the actual number of days until the next Due
Date will be used to discount during that partial month. ▇▇▇▇▇▇ shall notify
Borrower of the amount and calculation of the Prepayment Premium. ▇▇▇▇▇▇▇▇
agrees that (a) Lender shall not be obligated to actually reinvest the amount
prepaid in any Treasury obligation and (b) the Prepayment Premium is directly
related to the damages that Lender will suffer as a result of the prepayment.
The "PRESENT VALUE OF THE LOAN" shall be determined by discounting all scheduled
payments remaining to the Maturity Date attributable to the amount being prepaid
at the Discount Rate (defined below).
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The "DISCOUNT RATE" is the rate which, when compounded monthly, is equivalent
to the Treasury Rate (defined below), when compounded semi-annually. The
"TREASURY RATE" is the semi-annual yield on the Treasury Constant Maturity
Series with maturity equal to the remaining weighted average life of the Loan
(defined below), for the week prior to the prepayment date, as reported in
Federal Reserve Statistical Release H.15 - Selected Interest Rates,
conclusively determined by ▇▇▇▇▇▇ (absent a clear mathematical calculation
error) on the prepayment date. The rate will be determined by linear
interpolation between the yields reported in Release H.15, if necessary. If
Release H.15 is no longer published, Lender shall select a comparable
publication to determine the Treasury Rate. Notwithstanding the foregoing, no
Prepayment Premium shall be due if the Note is prepaid during the last thirty
(30) days prior to the Maturity Date.
5. No Usury. Under no circumstances shall the aggregate amount paid or to be
paid as interest under this Note exceed the highest lawful rate permitted under
applicable usury law ("MAXIMUM RATE"). If under any circumstances the aggregate
amounts paid on this Note shall include interest payments which would exceed
the Maximum Rate, Borrower stipulates that payment and collection of interest
in excess of the Maximum Rate ("EXCESS AMOUNT") shall be deemed the result of a
mistake by both Borrower and Lender and Lender shall promptly credit the Excess
Amount against the Balance or refund to Borrower any portion of the Excess
Amount which cannot be so credited.
6. Security and Documents Incorporated. This Note is the Note referred to and
secured by the Deed to Secure Debt and Security Agreement of even date herewith
between Borrower and Lender (the "INSTRUMENT") and is secured by the Property.
▇▇▇▇▇▇▇▇ shall observe and perform all of the terms and conditions in the
Documents. The Documents are incorporated into this Note as if fully set forth
in this Note.
7. Treatment of Payments. All payments under this Note shall be made, without
offset or deduction, (a) in lawful money of the United States of America at the
office of Lender or at the place (and in the manner) Lender may specify by
written notice to ▇▇▇▇▇▇▇▇, (b) in immediately available federal funds, and (c)
if received by Lender prior to 2:00 p.m. local time at such place, shall be
credited on that day or else, at Lender's option, shall be credited on the next
Business Day. Initially (unless waived by Lender), and until Lender shall
direct Borrower otherwise, Borrower shall make all payments due under this Note
in the manner set forth in Section 3.13 of the Instrument. If any Due Date
falls on a day which is not a Business Day, then the payment shall be deemed to
have fallen on the next succeeding Business Day.
8. Limited Recourse Liability. Except to the extent set forth in Paragraph 8
and Paragraph 9 of this Note, neither the Borrower nor any general partner(s) of
Borrower (singularly or collectively, the "Exculpated Parties") shall have any
personal liability for the Obligations. Notwithstanding the preceding sentence,
Lender may bring a foreclosure action or other appropriate action to enforce
the Documents or realize upon and protect the Property (including, without
limitation, naming the Exculpated Parties in the actions) and in addition THE
EXCULPATED PARTIES SHALL HAVE PERSONAL LIABILITY FOR:
(a) any indemnity, guaranty, master lease or similar instrument furnished
in connection with the Loan (including, without limitation, the provisions of
Section 8.03, 8.04, 8.05, 8.06 and 8.07 of the Instrument);
(b) any assessments and taxes (accrued and/or payable) with respect to
the Property which are not paid and applicable to Borrower's period of
ownership;
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(c) any security deposits of tenants (i) not turned over to Lender upon
foreclosure, sale (pursuant to power of sale), or conveyance in lieu thereof,
or (ii) not turned over to a receiver or trustee for the Property after
appointment;
(d) any insurance proceeds or condemnation awards neither turned over to
Lender nor used in compliance with Section 3.07 and 3.08 of the Instrument;
(e) waste of the Property;
(f) any rents or other income from the Property received by any of the
Exculpated Parties after a default under the Documents and not otherwise
applied to the Obligations evidenced by this Note or to the current (not
deferred) operating expenses of the Property; PROVIDED, HOWEVER, THAT THE
EXCULPATED PARTIES SHALL HAVE PERSONAL LIABILITY for amounts paid as expenses
to a person or entity related to or affiliated with any of the Exculpated
Parties unless the payments are expressly permitted in the Documents;
(g) ▇▇▇▇▇▇▇▇'s failure to maintain any letter of credit required under
the Documents; and
(h) all actual legal fees, including the allocated costs of ▇▇▇▇▇▇'s
staff attorneys, and other expenses incurred by ▇▇▇▇▇▇ in enforcing the
Documents if Borrower contests, delays, or otherwise hinders or opposes
(including, without limitation, the filing of a bankruptcy) any of Lender's
enforcement actions.
9. Full Recourse Liability. Notwithstanding the provisions of Paragraph 8 of
this Note, the EXCULPATED PARTIES SHALL HAVE PERSONAL LIABILITY for the
Obligations if:
(a) there shall be any breach or violation of Article V of the Instrument
(the amount of such personal liability under this Paragraph 9(a), however,
shall be limited to the actual losses suffered by Lender because of such
breach); or
(b) there shall be any actual, but not constructive, fraud in connection
with the Loan by any of the Exculpated Parties in connection with the Property,
the Documents, the Loan application, or any other aspect of the Loan; or
(c) the Property shall become an asset in (i) a voluntary bankruptcy or
insolvency proceeding or (ii) an involuntary bankruptcy or insolvency proceeding
which is not dismissed within ninety (90) days of filing (which Borrower has
participated in causing to be filed or respecting which Borrower has colluded
with a creditor or a principal in Borrower to cause such involuntary proceeding
to be filed); provided, however, that this Paragraph 9(c) shall not apply if an
involuntary bankruptcy is filed by ▇▇▇▇▇▇.
10. Joint and Several Liability. This Note shall be the joint and several
obligation of all makers, endorsers, guarantors and sureties, and shall be
binding upon them and their respective successors and assigns and shall inure
to the benefit of Lender and its successors and assigns.
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11. WAIVER OF TRIAL BY JURY. ▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM FILED BY EITHER PARTY, WHETHER IN CONTRACT, TORT OR OTHERWISE,
RELATING DIRECTLY OR INDIRECTLY TO THE LOAN, THE DOCUMENTS, OR ANY ACTS OR
OMISSIONS OF LENDER OR BORROWER IN CONNECTION THEREWITH.
IN WITNESS WHEREOF, this Note has been executed by ▇▇▇▇▇▇▇▇ as of the date
first set forth above.
BORROWER:
▇▇▇▇▇▇▇ PROPERTIES RESIDENTIAL, L.P.
a Georgia limited partnership
BY: ▇▇▇▇▇▇▇ Realty Investors, Inc., a Georgia
corporation, its sole general partner
BY: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
[CORPORATE SEAL]
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