MULTIFAMILY NOTE
US $15,084,000.00 New York, New York
March 14, 1997
FOR VALUE RECEIVED, GR-Properties III Limited Partnership, Foxwoodburg,
L.P., Grove-Westfield Associates Limited Partnership, Grove-West Springfield
Associates Limited Partnership, and GR-Westwynd Associates Limited Partnership
(collectively, "Makers"), jointly and severally, promise to pay Citicorp Real
Estate, Inc. ("Lender"), or order, the principal sum of Fifteen Million Eighty
Four Thousand and 00/100 Dollars ($15,084,000.00), with interest ("Interest") on
the unpaid principal balance from March 14, 1997, until paid, at the Effective
Interest Rate (hereinafter defined). The principal and Interest shall be payable
at c/o Citibank, N.A., Xxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxx 0, Xxxx Xxxxxx Xxxx,
XX 00000, Attn: Xxxx Xxxxxx, or such other place as Lender may designate in
writing in accordance with the provisions set forth below, until the entire
indebtedness evidenced hereby is fully paid, except that any remaining
indebtedness, together with any accrued and unpaid Interest, if not sooner paid,
shall be due and payable on April 1, 2007 (the "Maturity Date").
For purposes of calculating the interest rate and the payment of
Interest hereunder, the following terms shall have the meanings set forth below,
with such definitions to be applicable equally to the singular and the plural
forms:
"Base LIBOR Rate" shall mean, with respect to each Interest Accrual
Period (other than the First Interest Accrual Period), the rate of interest per
annum (rounded upwards, if necessary, to the nearest 1/10,000 of 1%) determined
as follows (such determination to be conclusive, absent manifest error):
(i) On the LIBOR Determination Date immediately
preceding an Interest Accrual Period, Lender will determine the
offered rate for one month U.S. dollar deposits as of10:00 a.m.
(London time) that appears on Telerate Page 3750. Such offered rate
shall be the Base LIBOR Rate; or
(ii) If for any reason such offered rate does not so appear,
or if the relevant page and the replacement page is unavailable, on the
LIBOR Determination Date immediately preceding an Interest Accrual
Period, the Base LIBOR Rate for such Interest Accrual Period shall be
the rate of interest per annum (determined on a 360 day, actual days
elapse basis) offered by the principal office of Citibank, N.A. in
London to prime banks in the London interbank market at 10:00 a.m.
(London time) two (2) LIBOR Business Days immediately preceding the
LIBOR Determination Date which commences such Interest Accrual Period
as the rate per annum at which such principal office of Citibank, N.A.
in London would be willing to accept a deposit from such prime banks in
an amount equal to $1,000,000.
If no amount can be established for the Base LIBOR Rate pursuant to
clause (i) or (ii) above on a LIBOR Determination Date, the Base LIBOR Rate for
the Interest Accrual Period shall be the Base LIBOR Rate in effect for the last
preceding Interest Accrual Period.
"Closing Date" shall mean as of March 13, 1997.
"Effective Interest Rate" shall mean the rate of interest on this Note
which is equal to (a) 6.58% per annum for the First Interest Accrual Period and
(b) thereafter, the Base LIBOR Rate in effect for each Interest Accrual Period
plus 1.14% per annum.
"First Interest Accrual Period" shall mean the period commencing on
(and including) March 14, 1997 and ending on (but not including) April 1, 1997.
"Interest Accrual Period" shall mean the period commencing on (and
including) the first day of each calendar month and ending on (but not
including) the first day of the next calendar month.
"LIBOR Business Day" shall mean a day upon which U.S. dollar deposits
may be dealt in on the London interbank market and commercial banks and foreign
exchange markets are open in London, but excluding a Saturday, a Sunday or other
day on which Lender is not open for business.
"LIBOR Determination Date" shall mean February 27, 1997 and the
twenty-seventh (27th) day of each successive calendar month thereafter;
provided, however, that such day is a LIBOR Business Day. If such day is not a
LIBOR Business Day, LIBOR Determination Date shall be the first day preceding
such day that is a LIBOR Business Day.
"Payment Date" shall mean May 1, 1997, and the first day of each
calendar month thereafter, unless such day is not a LIBOR Business Day, in which
event it shall be the following LIBOR Business Day.
"Telerate Page 3750" shall mean the display designated as "Page 3750"
on the Associated Press-Dow Xxxxx Telerate Service (or such other page as may
replace Page 3750 on the Associated Press-Dow Xxxxx Telerate Service or such
other service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Banker's Association
interest settlement rates for U.S. Dollar deposits). Any Base LIBOR Rate
determined on the basis of the rate displayed on Telerate Page 3750 in
accordance with the provisions of this Note shall be subject to corrections, if
any, made in such rate and displayed by the Associated Press-Dow Xxxxx Telerate
Service within one (1) hour of the time when such rate is displayed by such
service.
This Note shall bear Interest during each Interest Accrual Period at
the Effective Interest Rate in effect for such Interest Accrual Period.
Throughout the term of this Note, Interest shall be calculated based on
a 360-day year consisting of twelve (12) thirty (30) day Interest Accrual
Periods. If any payment of Interest to be made by Makers shall become due on a
day other than a LIBOR Business Day, such payment shall be made on the next
succeeding LIBOR Business Day.
Makers shall pay Lender, in advance, on the date hereof, interest only
on the outstanding principal balance of this Note, at the Effective Interest
Rate for the First Interest Accrual Period, from the date hereof to and
excluding April 1, 1997.
Makers shall make payments of Interest to Lender monthly in arrears on
each Payment Date, commencing on May 1, 1997, in an amount equal to Interest
accrued during the Interest Accrual Period which expired on such Payment Date at
the Effective Interest Rate in effect for such Interest Accrual Period.
Lender shall furnish to Makers, two (2) days after each LIBOR
Determination Date, a statement showing Interest to accrue during the Interest
Accrual Period immediately succeeding the Interest Accrual Period in which such
LIBOR Determination Date occurs, and the Effective Interest Rate in effect for
such succeeding Interest Accrual Period and the payment of Interest to be due
for such Interest Accrual Period (the "Lender's Statement"). Failure of Lender
to timely furnish the Lender's Statement shall not waive Xxxxxx's right to
subsequently furnish such statement.
If the Lender's Statement shall be furnished to Makers after the
expiration of the Interest Accrual Period to which it relates, then until the
Lender's Statement is delivered for such Interest Accrual Period, Makers shall
make the monthly payment of Interest based upon Interest as set forth in the
Lender's Statement then in effect and Makers, shall, within five (5) days after
the Lender's Statement is furnished to Makers, pay to Lender an amount equal to
any underpayment theretofore paid by Makers for such Interest Accrual Period,
and in the event of an overpayment by Makers, Lender shall permit Makers to
credit against subsequent payments of Interest the amount of such overpayment.
If any payment of Interest under this Note is not paid when due, at the
option of Xxxxxx, the entire principal amount outstanding hereunder and all
accrued and unpaid Interest thereon and all other sums due hereunder shall at
once become due and payable. Lender may exercise this option to accelerate
during any default by any of Makers regardless of any prior forbearance. In the
event of any default by any of Makers in the payment of this Note or any other
payment due under the Instrument or any other Loan Document (as such terms are
hereinafter defined), and if the same is referred to an attorney at law for
collection or any action at law or in equity is brought with respect hereto,
Makers, shall pay Lender all expenses and costs, including, but not limited to,
reasonable attorney's fees and applicable statutory costs.
If any payment of Interest under this Note is not received by Lender
within ten (10) calendar days after such payment is due, Makers shall pay to
Lender a late charge of the greater of (a) US$250.00 or (b) five (5%) percent of
such payment, such late charge to be immediately due and payable without demand
by Lender. If any payment of Interest under this Note or any other monetary
payment due under this Note, the Instrument or any other Loan Document remains
past due for ten (10) calendar days or more, the outstanding principal balance
of this Note shall bear interest during the period such default exists at the
Effective Interest Rate plus five percent (5%) per annum, or if there shall
exist any non-monetary default by any of Makers under this Note, the Instrument
or any other Loan Document which remains uncured for the later of (i) ten (10)
calendar days or (ii) the expiration of any applicable grace or cure period
specifically provided in the Instrument, the outstanding principal balance of
this Note shall bear interest during the period any of Makers is in default at
the Effective Interest Rate plus two percent (2%) per annum, or, if such
increased rate of interest may not be collected from any of Makers under
applicable law, then at the maximum increased rate of interest, if any, which
may be collected from any of Makers under applicable law.
From time to time, without affecting the joint and several obligations
of Makers or the successors or assigns of Makers to pay the outstanding
principal balance of this Note and observe the covenants of Makers contained
herein in the Instrument or in any other Loan Document, without affecting the
guaranty of any person, corporation, partnership or other entity for payment of
the outstanding principal balance of this Note, without giving notice to or
obtaining the consent of any of Makers, the successors or assigns of Makers or
guarantors, and without liability on the part of Lender, Lender may, at the
option of Lender, extend the time for payment of said outstanding principal
balance or any part thereof, reduce the payments thereon, release anyone liable
on any of said outstanding principal balance, accept a renewal of this Note,
agree in writing with Makers to modify the terms and time of payment of said
outstanding principal balance, join in any extension or subordination agreement,
release any security given herefor, take or release other or additional
security, and agree in writing with Makers to modify the rate of Interest or
period of amortization of this Note or change the amount of the monthly payments
of Interest payable hereunder.
Presentment, notice of dishonor, and protest are hereby waived by
Makers, sureties, guarantors and endorsers hereof. This Note shall be the joint
and several obligation of Makers, sureties, guarantors and endorsers, and shall
be binding upon them and their successors and assigns.
The indebtedness evidenced by this Note is secured by among other
things, those certain eight (8) Multifamily Mortgages, Assignment of Rents and
Security Agreements, dated of even date herewith, each of which is executed by
one of the Makers (collectively, the "Instrument"), encumbering the real
properties more particularly described therein and set forth on Schedule 1
attached hereto (collectively, the "Property"), and reference is made thereto
for rights as to acceleration of the indebtedness evidenced by this Note. This
Note shall be governed by the law of the State of New York.
Prior to and through March 31, 2000, this Note may not be prepaid in
whole or (except as hereinafter provided) in part. Commencing April 1, 2000 and
continuing through and including the day immediately prior to the Maturity Date,
this Note may only be prepaid (whether voluntarily or involuntarily, except as
hereinafter provided, and including any acceleration by Xxxxxx) in whole, upon
not less than five (5) days written notice by Makers to Lender prior to the next
applicable LIBOR Determination Date and the simultaneous payment by Makers to
Lender of the then unpaid principal balance of this Note together with (i) all
accrued and unpaid Interest through and including the last day of the calendar
month in which such prepayment is made and (ii) any other sums then due under
this Note, the Instrument or any other Loan Document.
Notwithstanding anything to the contrary contained herein, commencing
April 1, 2000 and continuing through and including the day immediately prior to
the Maturity Date, a permitted partial prepayment of this Note may only be made
in connection with a release of any of the Property (the "Released Property") by
Lender pursuant to Article 37 of the Instrument by prepayment of a portion of
the outstanding principal balance of this Note equal to one hundred twenty-five
percent (125%) of that portion of the then unpaid principal balance of this Note
allocated to the Released Property in accordance with the allocation percentage
set forth in Schedule 2 attached hereto (the "Allocated Principal") together
with one hundred percent (100%) of any other sums then due and unpaid under this
Note, the Instrument or any other Loan Document, including, but not limited to,
accrued and unpaid Interest. In the event of such partial prepayment of this
Note, the total unpaid principal balance of this Note shall be reduced by the
principal portion of such partial prepayment, provided, however, that the
Maturity Date under this Note shall remain unchanged.
Subject to the qualifications below in this paragraph, Makers, shall,
jointly and severally, be liable for payment and performance of all of the
obligations, covenants and agreements of Makers under this Note, the Instrument,
the Assignment of Leases and Rents (herein so called), dated of even date
herewith, and executed by Makers to Lender, the Environmental Indemnity
Agreement (herein so called), dated of even date herewith, and executed by
Makers and Lender, and all other instruments and documents evidencing, securing
or governing the terms of the loan (the "Loan") evidenced by this Note
(collectively, the "Loan Documents"), to the full extent (but only to the
extent) of all of the Property and any other items, property or amounts which
are collateral or security for the Loan pursuant to any Loan Document. If a
default occurs in the timely and proper payment of any portion of such
indebtedness or in the timely performance of any obligations, agreements or
covenants under any of the Loan Documents, except as set forth below in this
paragraph, neither Makers, nor any partner of Makers, nor any partner,
stockholder, director or officer of any partner of Makers, shall be personally
liable for the repayment of any of the principal of, interest on, or prepayment
fees or late charges, or other charges or fees, due in connection with, the
Loan, the performance of any covenants of Makers under this Note, the Instrument
or any of the other Loan Documents or for any deficiency judgment which Lender
may obtain after default by any of Makers. Notwithstanding the foregoing
provisions of this paragraph or any other agreement, Makers shall, jointly and
severally, be fully and personally liable for any and all: (1) liabilities,
costs, losses, damages, expenses or claims (including, without limitation, any
reduction in the value of the Property or any other items, property or amounts
which are collateral or security for the Loan) suffered or incurred by Lender by
reason of or in connection with (a) any fraud or misrepresentation by any of
Makers in connection with the Loan, including but not limited to any
misrepresentation of any of Makers contained in any Loan Document, (b) any
failure to pay taxes, insurance premiums (except to the extent that such taxes
and insurance premiums are then held by Lender), assessments (but only to the
extent such failure results from the misapplication of the rentals or other
income derived from the Property), charges for labor or materials or other
charges that can create liens on any portion of the Property, (c) any
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, (d) any rentals, income, profits, issues and products received by or
on behalf of any of Makers subsequent to the date on which Lender gives written
notice that a default has occurred under the Loan and not applied to the payment
of principal or Interest due under this Note or the payment of operating
expenses (excluding any operator's, manager's, or developer's fee payable to any
of Makers or any affiliate of any of Makers) of the
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Property, (e) any failure to maintain, repair or restore the Property in
accordance with any Loan Document, to the extent not covered by insurance
proceeds made available to Lender, (f) any failure by any of Makers to deliver
to Lender all unearned advance rentals and security deposits paid by tenants of
the Property received by or on behalf of any of Makers, and not refunded to or
forfeited by such tenants, (g) any failure by any of Makers to return to, or
reimburse Lender for, all personalty taken from the Property by or on behalf of
any of Makers, except in accordance with the provisions of the Instrument, and
(h) any and all indemnities given by any of Makers to Lender set forth in the
Environmental Indemnity Agreement or any other Loan Document in connection with
any environmental matter relating to the Property; and (2) court costs and all
attorneys' fees provided for in any Loan Document. Furthermore, no limitation of
liability or recourse provided above in this paragraph shall (x) apply to the
extent that Xxxxxx's rights of recourse to the Property are suspended, reduced
or impaired by or as a result of any act, omission or misrepresentation of any
of Makers or any other party now or hereafter liable for any part of the Loan
and accrued interest thereon, or by or as a result of any case, action, suit or
proceeding to which any of Makers or any such other party, voluntarily becomes a
party; or (y) constitute a waiver, forfeiture, abrogation or limitation of or on
any right accorded by any law establishing a debtor relief proceeding,
including, but not limited to, Title 11, U.S. Code, which right provides for the
assertion in such debtor relief proceeding of a deficiency arising by reason of
the insufficiency of collateral notwithstanding an agreement of Lender not to
assert such deficiency.
This Note shall be governed by and construed in accordance with the law
of the State of New York and applicable federal law. The parties hereto intend
to conform strictly to the applicable usury laws. In no event, whether by reason
of demand for payment, prepayment, acceleration of the maturity hereof or
otherwise, shall the Interest contracted for, charged or received by Lender
hereunder or otherwise exceed the maximum amount permissible under applicable
law. If from any circumstance whatsoever Interest would otherwise be payable to
Lender in excess of the maximum lawful amount, the Interest payable to Lender
shall be reduced automatically to the maximum amount permitted by applicable
law. If Lender shall ever receive anything of value deemed Interest under
applicable law which would apart from this provision be in excess of the maximum
lawful amount, an amount equal to any amount which would have been excessive
Interest shall be applied to the reduction of the principal amount owing
hereunder in the inverse order of its maturity and not to the payment of
interest, or if such amount which would have been excessive Interest exceeds the
unpaid balance of principal hereof, such excess shall be refunded to Makers. All
Interest paid or agreed to be paid to Lender shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term (including any renewal or extension) of such indebtedness so
that the amount of Interest on account of such indebtedness does not exceed the
maximum permitted by applicable law. The provisions of this paragraph shall
control all existing and future agreements between Makers and Lender.
MAKERS, HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT
MAKERS MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONJUNCTION WITH THIS NOTE, THE INSTRUMENT, ANY
OTHER LOAN DOCUMENT, ANY OTHER AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.
Lender shall have the right to assign, in whole or in part, this Note,
the Instrument and any other Loan Document andall of its rights hereunder and
thereunder, and all of the provisions herein and therein shall continue to apply
to the Loan. Lendershall have the right to participate the Loan with other
parties.
Makers warrant and represent to Lender that the proceeds of the Loan
evidenced by this Note will not be used for personal, family or household
purposes.
Executed under seal on the day and year first above written.
Signed and sealed in the presence of:
GR-PROPERTIES III LIMITED PARTNERSHIP
/s/ Xxxxx Xxxx
Name: Xxxxx Xxxx By: Grove Investment Group, Inc.,
Its General Partner
By: /s/ Xxxxxx X. XxXxxxxx
/s/ Xxxxxx Xxxxxxxxxxxx Xxxxxx X. XxXxxxxx
Name: Xxxxxx Xxxxxxxxxxxx Its Treasurer
Signed and sealed in the presence of:
FOXWOODBURG, L.P.
/s/ Xxxxx Xxxx
Name: Xxxxx Xxxx By: FWB, Inc.,
Its General Partner
By: /s/ Xxxxxx X. XxXxxxxx
/s/ Xxxxxx Xxxxxxxxxxxx Xxxxxx X. XxXxxxxx
Name: Xxxxxx Xxxxxxxxxxxx Its Treasurer
Signed and sealed in the presence of:
GROVE-WESTFIELD ASSOCIATES
/s Xxxxx Xxxx LIMITED PARTNERSHIP
Name: Xxxxx Xxxx
By: Grove Investment Group, Inc.,
Its General Partner
By: /s/ Xxxxxx X. XxXxxxxx
/s/ Xxxxxx Xxxxxxxxxxxx Xxxxxx X. XxXxxxxx
Name: Xxxxxx Xxxxxxxxxxxx Its Treasurer
Signed and sealed in the presence of:
NF34138.9
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GROVE-WEST SPRINGFIELD ASSOCIATES
/s/ Xxxxx Xxxx LIMITED PARTNERSHIP
Name:Xxxxx Xxxx
By: Grove Investment Group, Inc.,
Its General Partner
By: /s/ Xxxxxx X. XxXxxxxx
/s/ Xxxxxx Xxxxxxxxxxxx Xxxxxx X. XxXxxxxx
Name: Xxxxxx Xxxxxxxxxxxx Its Treasurer
Signed and sealed in the presence of:
GR-WESTWYND ASSOCIATES
/s/ Xxxxx Xxxx LIMITED PARTNERSHIP
Name: Xxxxx Xxxx
By: Grove Xxxx Corporation,
Its General Partner
By: /s/ Xxxxxx X. XxXxxxxx
/s/ Xxxxxx Xxxxxxxxxxxx Xxxxxx X. XxXxxxxx
Name: Xxxxxx Xxxxxxxxxxxx Its Treasurer
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Schedule 1
Property Location
1. Westwynd West Hartford, CT
2. Xxxxxx Manor West Hartford, CT
3. Woodbridge Apartments Newington, CT
4. Burgundy Studios Middletown, CT
5. Fox Hill Commons Vernon, CT
6. Bradford Commons Newington, CT
7. Van Deene West Springfield, MA
8. Security Manor Westfield, MA
Schedule 2
Property Allocated Debt
1. Westwynd Apartments $1,215,000
Xxxx Avenue (or 8% of outstanding
West Hartford, CT principal balance)
2. Xxxxxx Manor Apartments $1,650,000
00 Xxxxxx Xxxxx (or 11% of outstanding
West Hartford, CT principal balance)
3. Woodbridge Apartments $2,220,000
00 Xxxx Xxxxxx (or 15% of outstanding
Newington, CT principal balance)
4. Burgundy Studios $1,650,000
104 Meeting House Lane (or 11% of outstanding
Middletown, CT principal balance)
5. Fox Hill Commons $2,100,000
00-000 Xxxxx Xxxxxx (or 14% of outstanding
Vernon, CT principal balance)
6. Bradford Commons $1,860,000
0000 Xxxxxxx Xxxxxx (or 12% of outstanding
Newington, CT principal balance)
7. Van Xxxxx Xxxxx $3,000,000
00 Xxx Xxxx Xxxxxx (or 20% of outstanding
West Springfield, MA principal balance)
8. Security Manor Apartments $1,389,000
00 Xxxxx Xxxxxx (or 9% of outstanding
Westfield, MA principal balance)
$15,084,000
