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EXHIBIT 10.7.4
PROMISSORY NOTE
$11,900,000.00 September 29, 1998
Loan No. 6 102 639
FOR VALUE RECEIVED, XXXXXXX 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 Two
Xxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000-0000, the principal sum of
Eleven Million Nine Hundred Thousand and No/100 U.S. Dollars ($11,900,000.00),
with interest on the unpaid balance ("BALANCE") at the rate of seven and nine
hundredths percent (7.09%) 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 October 15, 1998 shall be due
and payable on November 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 Seventy-Nine Thousand Eight Hundred Ninety-One and
58/100 Dollars ($79,891.58) each commencing on November 15, 1998 and continuing
on the fifteenth (15th) day of each succeeding month to and including October
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 October 15, 2008 ("MATURITY DATE"). "MATURITY" shall
mean the Maturity Date or earlier date that the Obligations may be due and
payable by acceleration by Xxxxxx 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 any 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 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
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overdue payment. These charges shall be paid to defray the expenses incurred by
Xxxxxx 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, Xxxxxx 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. Lender shall notify Borrower of the amount and calculation of the
Prepayment Premium. Xxxxxxxx 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).
The "DISCOUNT RATE" is the rate which, when compounded monthly, is
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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 Xxxxxx (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.
Xxxxxxxx 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 Xxxxxxxx, (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);
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(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;
(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) Xxxxxxxx's failure to maintain any letter of credit required under
the Documents; and
(h) all actual legal fees, including the allocated costs of Xxxxxx's
staff attorneys, and other expenses incurred by Xxxxxx 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 Xxxxxx.
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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.
11. WAIVER OF TRIAL BY JURY. XXXXXXXX AND XXXXXX XXXXXX XXXXX, 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 Xxxxxxxx as of the date
first set forth above.
BORROWER:
XXXXXXX PROPERTIES RESIDENTIAL,
L.P., a Georgia limited partnership
BY: Xxxxxxx Realty Investors, Inc., a Georgia
corporation, its sole general partner
By: /S/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, President
[CORPORATE SEAL]
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