<PAGE> 1
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U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to __________
Commission file number 0-28048
ROBERTS REALTY INVESTORS, INC.
(Exact name of small business issuer as specified in its charter)
GEORGIA 58-2122873
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
8010 ROSWELL ROAD, SUITE 120, ATLANTA, GEORGIA 30350
(Address of principal executive offices)
(770) 394-6000
Issuer's telephone number
________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by court. Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: Common Stock - 4,186,329
shares
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
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QUARTERLY REPORT ON FORM 10-QSB
For the Quarter Ended June 30, 1996
ROBERTS REALTY INVESTORS, INC.
INDEX
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Page
----
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of June 30, 1996
and December 31, 1995....................................... 1
Consolidated Statements of Operations for the three and
six months ended June 30, 1996 and 1995..................... 2
Consolidated Statement of Shareholders' Equity ............. 4
Consolidated Statements of Cash Flows for the six months
ended June 30, 1996 and 1995................................ 5
Notes to the Consolidated Financial Statements.............. 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION... 10
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ........................... 14
SIGNATURES.................................................. 16
<PAGE> 3
ITEM 1. FINANCIAL STATEMENTS.
ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
---------- ------------
ASSETS (UNAUDITED)
<S> <C> <C>
REAL ESTATE ASSETS - At cost:
Land $ 16,864 $13,170
Buildings and improvements 74,142 54,422
Furniture, fixtures, and equipment 9,350 6,651
-------- -------
100,356 74,243
Less accumulated depreciation (6,099) (3,940)
-------- -------
Operating real estate assets 94,257 70,303
Construction-in-progress and real estate under development 9,133 4,083
-------- -------
Net real estate assets 103,390 74,386
CASH AND CASH EQUIVALENTS 8,152 1,404
RESTRICTED CASH 703 392
DEFERRED FINANCING COSTS - Net of accumulated amortization of
$530 and $513 at June 30, 1996 and December 31, 1995, respectively 466 511
OTHER ASSETS - Net 394 631
-------- -------
$113,105 $77,324
======== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Mortgage notes payable $59,216 $44,019
Accounts payable and accrued expenses 1,503 524
Dividends and distributions payable 826
Due to affiliates (including retainage payable of $66 and $246 at
June 30, 1996 and December 31, 1995, respectively) 712 808
Security deposits and prepaid rents 479 372
-------- -------
Total liabilities 62,736 45,723
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST OF THE UNITHOLDERS
IN THE OPERATING PARTNERSHIP 20,148 13,873
SHAREHOLDERS' EQUITY:
Preferred shares, $.01 par value, 20,000,000 shares authorized, no shares
issued and outstanding
Common shares, $.01 par value, 100,000,000 shares authorized, 4,172,601 and
2,676,381 shares issued and outstanding at June 30, 1996 and December 31, 1995, respectively 42 26
Additional paid-in capital 30,824 18,240
Accumulated deficit (645) (538)
-------- -------
Total shareholders' equity 30,221 17,728
-------- -------
$113,105 $77,324
======== =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
1
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ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
1996 1995
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
OPERATING REVENUES:
Rental operations $ 3,570 $ 1,322
Other operating income 130 70
---------- ----------
Total operating revenues 3,700 1,392
---------- ----------
OPERATING EXPENSES:
Personnel 314 151
Utilities 226 83
Repairs, maintenance, and landscaping 223 59
Real estate taxes 315 118
Marketing, management fees, and other 344 119
General and administrative expenses 183 74
Depreciation of real estate assets 1,163 385
---------- ----------
Total operating expenses 2,768 989
---------- ----------
INCOME FROM OPERATIONS 932 403
---------- ----------
OTHER INCOME (EXPENSES):
Interest income 131 49
Interest expense (912) (374)
Amortization of deferred financing costs (41) (40)
Other amortization expense (19) (22)
---------- ----------
Total other income (expenses) (841) (387)
---------- ----------
INCOME BEFORE MINORITY INTEREST 91 16
MINORITY INTEREST OF THE UNITHOLDERS
IN THE OPERATING PARTNERSHIP (31) (7)
---------- ----------
NET INCOME $ 60 $ 9
========== ==========
PER SHARE DATA:
Net income $ 0.01 $ 0.00
========== ==========
Dividends declared $ 0.12 $ 0.00
========== ==========
Weighted average common shares 4,023,861 1,820,011
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE> 5
ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
1996 1995
----------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
OPERATING REVENUES:
Rental operations $ 6,659 $ 2,220
Other operating income 229 105
--------- ---------
Total operating revenues 6,888 2,325
--------- ---------
OPERATING EXPENSES:
Personnel 595 220
Utilities 417 132
Repairs, maintenance, and landscaping 415 97
Real estate taxes 615 199
Marketing, management fees, and other 651 186
General and administrative expenses 330 141
Depreciation of real estate assets 2,159 613
--------- ---------
Total operating expenses 5,182 1,588
--------- ---------
INCOME FROM OPERATIONS 1,706 737
--------- ---------
OTHER INCOME (EXPENSES):
Interest income 160 67
Interest expense (1,745) (587)
Amortization of deferred financing costs (86) (69)
Other amortization expense (44) (32)
--------- ---------
Total other income (expenses) (1,715) (621)
--------- ---------
INCOME (LOSS) BEFORE MINORITY INTEREST
AND EXTRAORDINARY ITEM (9) 116
MINORITY INTEREST OF THE UNITHOLDERS
IN THE OPERATING PARTNERSHIP 3 (53)
--------- ---------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (6) 63
EXTRAORDINARY ITEM - Early extinguishment of debt, net of
minority interest of unitholders in the Operating Partnership (101)
--------- ---------
NET INCOME (LOSS) $ (107) $ 63
========= =========
PER SHARE DATA:
Income (loss) before extraordinary item $ (0.00) $ 0.04
========= =========
Net income (loss) $ (0.03) $ 0.04
========= =========
Dividends declared $ 0.24 $ 0.00
========= =========
Weighted average common shares 3,406,470 1,542,010
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 6
ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED STATEMENT OF
SHAREHOLDERS' EQUITY
(Dollars in Thousands)
<TABLE>
<CAPTION>
COMMON SHARES
-------------------------- ADDITIONAL TOTAL
NUMBER PAID-IN ACCUMULATED SHAREHOLDERS'
OF SHARES AMOUNT CAPITAL DEFICIT EQUITY
<S> <C> <C> <C> <C> <C>
SHAREHOLDERS' EQUITY,
DECEMBER 31, 1995 2,676,381 $ 26 $ 18,240 $ (538) $ 17,728
Proceeds of share offering, net 699,175 7 6,045 6,052
Conversion of units to shares 52,105 1 1
Issuance of common shares in the
acquisition 744,940 8 7,068 7,076
of partnerships
Dividends and distributions payable (1,392) (1,392)
Adjustment for minority interest in the
Operating Partnership 863 863
Net loss (107) (107)
SHAREHOLDERS' EQUITY, ------------------------------------------------------------------
JUNE 30, 1996 (UNAUDITED) 4,172,601 $ 42 $ 30,824 $ (645) $ 30,221
==================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 7
ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
1996 1995
--------- ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ ( 107) $ 63
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Minority interest of unitholders in the Operating Partnership (3) 53
Depreciation and amortization 2,261 714
Early extinguishment of debt 101
Change in assets and liabilities net of amounts acquired:
Increase in restricted cash (87) (67)
Decrease in other assets 214 5
Increase in accounts payable and
accrued expenses relating to operations 609 182
Increase (decrease) in due to affiliates relating to operations (171) 51
Increase in security deposits and prepaid rent 12 34
--------- ---------
Net cash provided by operating activities 2,829 1,035
--------- ---------
INVESTING ACTIVITIES:
Acquisition and construction of real estate assets (5,099) (6,699)
Purchase of furniture, fixtures and equipment (42) (781)
Cash acquired in mergers 164 1,988
--------- ---------
Net cash used in investing activities (4,977) (5,492)
--------- ---------
FINANCING ACTIVITIES:
Proceeds from mortgage notes payable 13,178 6,774
Principal reductions on mortgage notes payable (8,137) (87)
Payment of note payable to affiliate (1,403)
Payment of loan costs (202) (182)
Proceeds from issuance of shares 6,589
Payment of share and unit issuance costs (563) (118)
Payment of dividend (566)
--------- ---------
Net cash provided by financing activities 8,896 6,387
--------- ---------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 6,748 1,930
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 1,404 1,008
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,152 $ 2,938
========= =========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid for interest, net of capitalized interest $ 1,742 $ 808
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE> 8
ROBERTS REALTY INVESTORS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION OF THE COMPANY AND RECENT DEVELOPMENTS
Roberts Realty Investors, Inc. (the "Company"), a Georgia corporation,
was formed July 22, 1994 to serve as a vehicle for investments in, and
ownership of, a professionally managed real estate portfolio of
multifamily apartment communities. The Company owns and operates
multifamily residential properties as a self-administered real estate
investment trust (a "REIT"). Approximately 85% of the Company's
apartment homes are located in the Atlanta metropolitan area. The
Company conducts its business through Robert Properties Residential,
L.P. (the "Operating Partnership") of which the Company is the sole
general partner and in which the Company owns a 60% interest.
On November 1, 1995, the Company commenced an offering of up to
631,580 Shares ("Cash Offering") at a price of $9.50 per Share. On
April 19, 1996, the Company increased the size of the Cash Offering
from 631,580 Shares to 736,850 Shares after the original Cash Offering
was fully subscribed, and extended the termination date of the Cash
Offering to May 10, 1996. Upon the initial closing of the Cash
Offering on March 29, 1996 at which 443,675 Shares were issued, the
Operating Partnership purchased 22.5 acres of land for $1,628,000 from
an affiliate of Mr. Charles S. Roberts, the President and Chief
Executive Officer of the Company ("Mr. Roberts"), for the development
and construction of a 180-unit apartment community. Development costs
are anticipated to be approximately $12,268,000 and include the
purchase of the land, entering into a fixed price construction
contract with an affiliate of Mr. Roberts in the amount of $8,829,000
and other contracts with Roberts Properties, Inc. related to design,
development, and construction administration in the aggregate amount
of $735,000.
Upon the final closing of the Cash Offering on May 7, 1996, the
Company issued 255,500 Shares and received additional net proceeds of
$2,257,000 which will be used for general corporate purposes at the
discretion of the Company's Board of Directors.
On February 20, 1996, the Company's Board of Directors declared a
distribution in the amount of $0.11875 per common share and unit paid
on April 15, 1996 to shareholders of the Company and unitholders of
the Operating Partnership of record on March 19, 1996.
On March 21, 1996, the Company acquired the assets and liabilities of
Roberts Properties Bentley Place, L.P. ("Bentley Place, L.P.") in
exchange for 744,940 Shares valued at $9.50 per Share or $7,076,930 in
the aggregate to the partners of Bentley Place, L.P. Bentley Place is
a 117-unit apartment community located in DeKalb County, Georgia.
On May 21, 1996, the Company's Board of Directors declared a
distribution in the amount of $0.11875 per common share and unit paid
on July 15, 1996 to shareholders of the Company and unitholders of the
Operating Partnership of record on June 28, 1996.
On June 26, 1996, the Company acquired the assets and liabilities of
The Crestmark Club, L.P. ("Crestmark, L.P.") in exchange for 746,715
units of partnership interest ("Units") in the Operating Partnership
valued at $9.75 per Unit or $7,280,471 in the aggregate to the
partners of Crestmark, L.P. Crestmark's assets include a 248-unit
apartment community and 8.8 acres of
6
<PAGE> 9
adjoining land located in Douglas County, Georgia for the development
of an 86-unit second phase to the Crestmark community. The second
phase is currently under construction.
2. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared by
the Company's management in accordance with generally accepted
accounting principles for interim financial information and in
conformity with the rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring
adjustments) considered necessary for a fair presentation have been
included. The results of operations for the six months ended June 30,
1996 are not necessarily indicative of the results that may be
expected for the full year. These financial statements should be read
in conjunction with the Company's December 31, 1995 audited financial
statements, as restated, and notes thereto included in the Company's
Registration Statement on Form 10-SB.
3. MORTGAGE NOTES PAYABLE
On January 23, 1996, the Company received a commitment to refinance
the existing loan secured by the River Oaks community for $9,250,000
at a fixed interest rate of 7.15% for a term of seven years.
Management expects the refinancing to close by October 31, 1996.
On January 31, 1996, the Company completed the refinancing of the
mortgage note secured by the Highland Park community. The new
mortgage note is in the amount of $8,178,000 at a fixed interest rate
of 7.30% payable in monthly installments of $56,066 based on a 30-year
amortization schedule. The note matures on February 15, 2003.
On February 27, 1996, the Company received a commitment to provide
financing in the amount of $6,420,000 secured by the Holcomb Bridge
community. Holcomb Bridge is under construction and was unencumbered
at December 31, 1995. The terms of the financing include a fixed
interest rate of 7.14% with a ten year term. Management expects the
financing to close on or before January 31, 1997.
On March 28, 1996, the Company completed the financing of the
Laurelwood community. The new mortgage note is in the amount of
$5,000,000 at a fixed interest rate of 7.13% payable in monthly
installments of $35,739 based on a 25-year amortization schedule. The
note matures on April 15, 2006.
On April 2, 1996, the Company received a commitment to provide
financing in the amount of $4,100,000 secured by the Bentley Place
community. The Bentley Place community was unencumbered at December
31, 1995. The terms of the financing include a fixed interest rate of
7.10% with a ten year term. Management expects the financing to close
on or before September 30, 1996.
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<PAGE> 10
4. EXTRAORDINARY ITEMS
The 1996 extraordinary item resulted from the write-off of unamortized
deferred financing costs associated with the January 31, 1996
refinancing of the mortgage note secured by the Highland Park
community. The extraordinary item is net of $62,000 which was
allocated to the minority interest of the unitholders in the Operating
Partnership, calculated on the weighted average number of Units
outstanding during 1996.
5. MINORITY INTEREST
The Company, as the general partner of the Operating Partnership, does
not hold any limited partner interests in the Operating Partnership.
The Company's general partner interest was 56.1% and 60% at December
31, 1995 and June 30, 1996, respectively. Units held by the minority
interest as a percentage of total Units and Shares outstanding was
43.9% and 40% at December 31, 1995 and June 30, 1996, respectively.
The minority interest of the unitholders in the Operating Partnership
was $13,873,000 and $20,148,000 at December 31, 1995 and June 30,
1996, respectively. Subject to certain conditions, Units will become
exchangeable for cash, or at the option of the Company, for Shares on
a one-for-one basis. The minority interest of the unitholders in the
Operating Partnership is calculated based on the minority interest
ownership percentage multiplied by the Operating Partnership's net
assets (total assets less total liabilities). The minority interest
percentage reflects the number of Shares and Units outstanding and
changes as additional Shares and Units are issued.
6. EARNINGS PER SHARE
Income (loss) before extraordinary item and net income (loss) per
common share for the six months ended June 30, 1996 and 1995 has been
computed by dividing income (loss) before extraordinary item and net
income (loss) by the weighted average number of Shares outstanding
during the periods of 3,406,470 and 1,542,010, respectively. The
weighted average number of Shares outstanding during the three months
ended June 30, 1996 and 1995 was 4,023,861 and 1,820,011,
respectively.
7. SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash investing and financing activities for the six months ended
June 30, 1996 were as follows:
A. The Company issued 744,940 Shares in exchange for the assets
and liabilities of Bentley Place, L.P. valued at $7,076,930
including cash of $165,000. No mortgage debt was assumed in
connection with this acquisition.
B. The Operating Partnership issued 746,715 Units in exchange for
the assets and liabilities of Crestmark, L.P. valued at
$7,280,471 including cash of $117,000. Mortgage debt of
$10,184,000 and a note payable to Mr. Roberts in the amount of
$1,403,000 were assumed in connection with this acquisition.
8
<PAGE> 11
8. PRO FORMA FINANCIAL INFORMATION
Following is a summary of certain operating results presented
on a pro forma basis as if the partnerships purchased by the Operating
Partnership in 1995 and 1996 had been acquired as of the beginning of
the periods presented:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------------------
1996 1995
<S> <C> <C>
Operating revenues $8,006,000 $5,245,000
Income (loss) before extraordinary item $(79,000) $20,000
Net income (loss) $(177,000) $20,000
Net income (loss) per share $(0.04) $0.01
</TABLE>
9
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
OVERVIEW
The Operating Partnership presently owns 11 multifamily apartment
communities containing a total of 2,194 apartment homes, 670 of which are under
construction, development, or redevelopment. The existing communities of River
Oaks, Rosewood Plantation, Plantation Trace, Preston Oaks, Highland Park,
Windsong, Bentley Place, and Crestmark, containing a total of 1,524 apartment
units, are stabilized; the 207-unit Laurelwood community is under
redevelopment; and the 146-unit Holcomb Bridge community, the 180-unit Howell
Ferry community, a 51-unit second phase of Plantation Trace, and an 86-unit
second phase of Crestmark are now under construction or development. With the
exception of Windsong, all of the Communities are located in the Atlanta
metropolitan area. The 232-unit Windsong Community is located on St. Simons
Island approximately 10 miles east of Brunswick, Georgia.
The following discussion should be read in conjunction with the
consolidated and combined financial statements of the Company and its
Predecessors, as restated (Roberts Properties River Oaks, L.P., Roberts
Properties Rosewood Plantation, L.P., Roberts Properties Preston Oaks, L.P. and
Roberts Properties Highland Park, L.P.) and the notes thereto included in the
Company's Registration Statement on Form 10-SB.
RESULTS OF OPERATIONS
The Company and its Predecessors have historically experienced net
losses due to the effects of depreciation and amortization, which are non-cash
expenses. The Company expects to continue to record net losses in future
periods due to the continued effects of these expenses.
Comparison of Three and Six Months Ended June 30, 1996 to Three and
Six Months Ended June 30, 1995. For the three months ended June 30, 1996, the
Company had income of $91,000 (before minority interest) compared to income of
$16,000 (before minority interest) for the three months ended June 30, 1995.
Interest income increased by $82,000 due to the closing of an offering of
699,175 Shares of common stock ("Cash Offering") which led to the Company
maintaining higher cash balances during the period. For the six months ended
June 30, 1996, the Company experienced a loss of $9,000 (before minority
interest and extraordinary item) compared to a profit of $116,000 (before
minority interest) for the six months ended June 30, 1995. While income from
operations increased $969,000 or 131%, the net loss was primarily due to a
$1,158,000 increase in interest expense. The increase in interest expense is
due primarily to the following: (1) an increase in debt associated with the
completion of the Preston Oaks and Highland Park Communities as they progressed
from the construction phase (where interest is capitalized) to the operating
phase (where interest is expensed), (2) the closing of the $5,000,000 loan
secured by the Laurelwood Community which was previously unencumbered, and (3)
the acquisition of the Plantation Trace, Windsong and Crestmark Communities.
Rental income increased $2,248,000 or 170% from $1,322,000 to
$3,570,000 for the three months ended June 30, 1996 compared to the three
months ended June 30, 1995. Rental income increased $4,439,000 or 200% from
$2,220,000 to $6,659,000 for the six months ended June 30, 1996 compared to the
six months ended June 30, 1995. These increases are due primarily to the
following: (1) the completion of the construction and lease-up phases at the
Preston Oaks and Highland Park Communities, (2) the acquisition of the
Plantation Trace, Windsong, Bentley Place and Crestmark Communities in May
1995, September 1995, March 1996, and June 1996, respectively, and (3) the
acquisition of the Laurelwood Community from an independent third party in
December 1995. Property operating expenses (excluding depreciation and general
and administrative expenses) increased $892,000 or 168% and $1,859,000 or 223%
for the three and six months ended June 30, 1996 in comparison with the same
periods in 1995. Depreciation expense increased $778,000 or 202% and
$1,546,000 or 252% for the three and six months ended June 30, 1996 in
comparison with the same periods of 1995. These increases in both property
operating expenses and depreciation expense are due primarily to the completion
of the
10
<PAGE> 13
Preston Oaks and Highland Park Communities and the acquisition of the
Plantation Trace, Windsong, Laurelwood, Bentley Place and Crestmark
Communities. General and administrative expenses increased $109,000 or 147%
and $189,000 or 134% for the three and six months ended June 30, 1996 in
comparison with the same periods of 1995. These expenses include legal and
accounting fees, marketing and printing fees, salaries, director fees and
certain other costs. The Company expects that as it continues to grow, such
expenses will decline as a percentage of operating revenues, even though
general and administrative expenses will increase in absolute terms. When
comparing the three and six months ended June 30, 1996 to the three and six
months ended June 30, 1995, general and administrative expenses as a percentage
of operating revenues declined from 5.3% to 4.9% and from 6.1% to 4.8%,
respectively.
LIQUIDITY AND CAPITAL RESOURCES
Comparison of Six Months Ended June 30, 1996 to Six Months Ended June
30, 1995. Cash and cash equivalents increased $6,748,000 during the six months
ended June 30, 1996 from $1,404,000 at December 31, 1995 to $8,152,000 at June
30, 1996. This increase is due to the excess of cash flow provided by
operating and financing activities over cash used in investing activities.
A primary source of liquidity to the Company is cash flow from
operations. Operating cash flows have historically been determined by the
number of apartment homes, rental rates, and operating expenses with respect to
such apartment homes. Net cash provided by operating activities increased
$1,794,000 from $1,035,000 to $2,829,000 due primarily to the acquisition of
the Plantation Trace, Windsong, Bentley Place and Crestmark apartment home
communities. The effects of revenue and expense accruals are not material in
understanding the Company's cash flow from operations. Generally, depreciation
and amortization expenses are the most significant adjustments to net income
(loss) in arriving at cash provided by operating activities.
Net cash used in investing activities decreased $515,000 or 9.4% from
$5,492,000 to $4,977,000. Investing activities in 1996 included: (1) the
acquisition of 22.5 acres of undeveloped land to be used for the development
and construction of a 180-unit apartment home community (Howell Ferry), (2) the
ongoing costs of construction at Holcomb Bridge, (3) the renovation work at
Plantation Trace and River Oaks, and (4) the redevelopment of Laurelwood.
Net cash provided by financing activities increased $2,509,000 from
$6,387,000 to $8,896,000, due primarily to an increase in borrowings associated
with the financing of the Laurelwood Community and from the net proceeds of the
closing of the Cash Offering during the period.
The Company anticipates that each Community's rental and other
operating revenues after completion of redevelopment or construction will be
adequate to provide short-term liquidity for the payment of direct rental
operating expenses, interest and amortization of principal on related mortgage
notes payable, and capital expenditures.
The Company expects to meet its other short-term liquidity
requirements (consisting primarily of general and administrative expenses,
quarterly distributions, completion of development in process, and the funding
of possible acquisitions or pursuit of new development opportunities) through
the following: (a) working capital provided by operations, (b) proceeds from
mortgage notes payable (related to the development and construction of Holcomb
Bridge and Howell Ferry and the financing of Laurelwood and Bentley Place), and
(c) net proceeds from the issuance of Shares in the Cash Offering. Management
expects that the development and construction of Holcomb Bridge will be funded
by working capital until the funding of a $6,420,000 permanent loan upon the
completion of construction of the Community, for which the Company has received
a commitment from Nationwide Life Insurance Company. Construction of the
second phase of Plantation Trace will be funded from a portion of the proceeds
of the $5,000,000 permanent loan with Nationwide Life Insurance Company that
closed on March 28, 1996 and is secured by Laurelwood. The planned development
of Howell Ferry is anticipated to be funded with the net
11
<PAGE> 14
proceeds of the Cash Offering and an $8,454,000 loan. The development and
construction of the second phase of Crestmark is anticipated to be funded from
the proceeds of the Bentley Place loan and working capital provided by
operations.
The Company, through the Operating Partnership, obtained a $1,000,000
unsecured revolving line of credit from First Union National Bank of Georgia in
1995. The Company elected not to renew the line of credit upon its expiration
in May 1996.
On January 23, 1996, the Company received a commitment from Nationwide
Life Insurance Company for a $9,250,000 permanent loan to refinance the
existing debt on the River Oaks Community, which matures with a principal
balance of $8,827,000 in November 1996. The commitment is for a loan with a
term of seven years with monthly payments of principal and interest based on a
30-year amortization schedule and a fixed interest rate of 7.15% per annum.
On February 27, 1996, the Company received a commitment from
Nationwide Life Insurance Company for a permanent loan to be secured by Holcomb
Bridge to be funded on or before January 31, 1997 at the completion of
construction. The principal amount of the note will be $6,420,000 and will
bear interest at a fixed interest rate of 7.14% per annum for a 10-year term.
On April 2, 1996, the Company received a commitment from Nationwide
Life Insurance Company for a $4,100,000 permanent loan to be secured by Bentley
Place. The loan will have a fixed interest rate of 7.10% per annum for a ten-
year term. The closing is expected to occur not later than September 30, 1996.
On May 7, 1996 the Company closed the Cash Offering in which it sold
699,175 Shares in the aggregate for $9.50 per Share. Upon the initial closing
of the offering on March 29, 1996 at which 443,675 Shares were issued, the
Operating Partnership paid Roberts Properties, Inc. $1,628,000 to purchase
approximately 22.5 acres of land for the development and construction of the
180-unit Howell Ferry Community on such property. Additional net offering
proceeds of approximately $2,186,000, along with an $8,454,000 mortgage loan
(for which the Company has not yet obtained a commitment), will be used to
develop and construct Howell Ferry. The remaining $2,240,000 in net proceeds
of the offering will be used for one or more of the following purposes at the
discretion of the Company's Board of Directors: (a) reducing the amount of debt
that would otherwise be obtained to finance Howell Ferry; (b) funding the
acquisition of an additional multifamily apartment community or other real
estate assets; and (c) providing funds for general corporate purposes.
The Company's existing mortgage indebtedness and the indebtedness it
expects to obtain pursuant to the commitments described above will require
balloon payments coming due over the years 2000 to 2006 as summarized below:
<TABLE>
<S> <C>
1997 $0
1998 $0
1999 $0
2000 $11,254,000
2001 $15,238,000
2002 $7,954,000
2003 $15,928,000
2004 $0
2005 $0
2006 $13,078,000
-----------
Total $63,452,000
===========
</TABLE>
12
<PAGE> 15
Because the Company anticipates that only a small portion of the
principal of such indebtedness will be repaid prior to maturity and that the
Company may not have funds on hand sufficient to repay such indebtedness, it
will be necessary for the Company to refinance such debt through (a) debt
financing collateralized by mortgages on individual Communities or groups of
Communities or uncollateralized private or public debt offerings, and/or (b)
additional equity offerings.
Management believes that these sources of debt financing, equity
capital, operating cash flow and working capital of the Company, coupled with
the $2,240,000 in additional net proceeds of the Cash Offering, will provide
the liquidity and adequate capital resources to begin and complete its planned
development and construction activities. The Company expects liquidity and
capital resources for additional acquisition and development to be provided by
a combination of secured long-term borrowing and issuance of equity securities.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of. Such adoption had no
material effect on the financial statements.
INFLATION
Substantially all apartment leases are for an initial term of not more
than 12 months and thus may enable the Company to seek increases in rents after
the expiration of each lease. Additionally, the construction contracts for the
Holcomb Bridge and Howell Ferry Communities and for the second phase of
Plantation Trace and Crestmark will be at fixed prices and equal substantially
all of the anticipated construction costs. The short-term nature of these
leases and the fixed price construction contracts serve to reduce the risk to
the Company of the adverse effects of inflation.
13
<PAGE> 16
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The exhibits required by Item 601 of Regulation SB are described in
the following Index to Exhibits and are filed as part of this report on Form
10-QSB.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
4.2.5 Certificate of Merger filed with the Georgia Secretary of State on
March 21, 1996, merging Roberts Properties Bentley Place, L.P. with
and into Roberts Properties Residential, L.P. (Bentley Place
Merger).
4.2.6 Certificate of Merger filed with the Georgia Secretary of State on
June 26, 1996, merging The Crestmark Club, L.P. with and into
Roberts Properties Residential, L.P. (Crestmark Merger).
10.14.1 Amendment to Dealer Agreement among Roberts Realty Investors, Inc.,
Spalding & Company, and Roberts Properties Residential, L.P. (as to
Section 7 only), dated April 19, 1996 (1995-1996 Cash Offering).
10.14.2 Amendment to Escrow Agreement among Roberts Realty Investors, Inc.,
Spalding & Company and First Union National Bank of Georgia, dated
April 19, 1996 (1995-1996 Cash Offering).
10.14.3 Sales Contract between Roberts Properties, Inc., as Seller, and
Roberts Properties Residential, L.P., as Purchaser, dated March 15,
1996 (for Howell Ferry Property) (1995-1996 Cash Offering).
10.14.4 Design Agreement between Roberts Properties Residential, L.P. and
Roberts Properties, Inc., dated March 29, 1996 (1995-1996 Cash
Offering).
10.14.5 Development Agreement between Roberts Properties Residential, L.P.
and Roberts Properties, Inc., dated March 29, 1996 (1995-1996 Cash
Offering).
10.14.6 Finish Selection and Interior Design Agreement between Roberts
Properties Residential, L.P. and Roberts Properties, Inc., dated
March 29, 1996 (1995-1996 Cash Offering).
10.14.7 Construction Administration Agreement between Roberts Properties
Residential, L.P. and Roberts Properties, Inc., dated March 29, 1996
(1995-1996 Cash Offering).
10.17.1 Merger Agreement and Plan of Merger by and among Roberts Realty
Investors, Inc., Roberts Properties Residential, L.P., Roberts
Properties Bentley Place, L.P., and Charles S. Roberts, dated March
21, 1996 (Bentley Place Merger).
</TABLE>
14
<PAGE> 17
<TABLE>
<S> <C>
10.17.2 Consulting Agreement by and between Roberts Properties Group, Inc.
and Roberts Properties Bentley Place, L.P., dated July 31, 1992
(Bentley Place Syndication).
10.17.2.1 Amendment #1 to Consulting Agreement regarding Bentley Place dated
March 21, 1996 (Bentley Place Merger).
10.17.3 Property Management Agreement between Roberts Properties Bentley
Place, L.P. and Roberts Properties Management, Inc., dated July 31,
1992 (Bentley Place Syndication).
10.17.3.1 Amendment #1 to Property Management Agreement regarding Bentley
Place, dated March 21, 1996 (Bentley Place Merger).
10.17.4 Application/Contract for Mortgage Loan between Roberts Properties
Residential, L.P. and Nationwide Life Insurance Company, dated April
2, 1996 (Bentley Place).
10.19.1 Real Estate Note A executed by Roberts Properties Residential, L.P.
in favor of Nationwide Life Insurance Company, dated March 28, 1996,
in the original principal amount of $4,250,000.00 (Laurelwood).
10.19.2 Real Estate Note B executed by Roberts Properties Residential, L.P.
in favor of West Coast Life Insurance Company, dated March 28, 1996,
in the original principal amount of $750,000.00 (Laurelwood).
10.19.3 Deed to Secure Debt and Security Agreement executed by Roberts
Properties Residential, L.P. in favor of Nationwide Life Insurance
Company and West Coast Life Insurance Company, dated March 28, 1996,
and related collateral documents (Laurelwood).
10.22.1 Solicitation Agreement by and among Spalding & Company, Roberts
Realty Investors, Inc., Roberts Properties Residential, L.P., The
Crestmark Club, L.P., and Charles S. Roberts, dated May 8, 1996
(Crestmark Merger).
10.22.2 Merger Agreement and Plan of Merger by and among Roberts Realty
Investors, Inc., Roberts Properties Residential, L.P., The Crestmark
Club, L.P., Charles S. Roberts, James M. and Penelope H. Goodrich,
and Norman A. Goldman, dated June 26, 1996 (Crestmark Merger).
10.22.3 Property Management Agreement between The Crestmark Club, L.P. and
Roberts Properties Management, Inc., dated January 11, 1991
(Crestmark Syndication).
10.22.3.1 Amendment #1 to Property Management Agreement regarding Crestmark,
dated June 26, 1996 (Crestmark Merger).
10.22.3.2 Amendment #2 to Property Management Agreement regarding Crestmark,
dated June 26, 1996 (Crestmark Merger).
10.22.4 Consulting Agreement regarding Crestmark by and between Roberts
Properties Residential, L.P. and Roberts Properties, Inc., dated
June 26, 1996 (Crestmark Merger).
10.22.5 Assumption and Modification Agreement by and among The Crestmark
Club, L.P., Roberts Properties Residential, L.P., and Federal Home
Loan Mortgage Corporation dated as of June 26, 1996 (Crestmark
Merger).
10.23.1 Amended and Restated Consulting Agreement between Roberts Properties
Residential, L.P. and Roberts Properties, Inc., dated June 26, 1996.
</TABLE>
15
<PAGE> 18
<TABLE>
<S> <C>
10.23.2 Amended and Restated Consulting Agreement between Roberts Properties
Residential, L.P. and Roberts Properties Group, Inc., dated June 26,
1996.
10.23.3 Amended and Restated Consulting Agreement between Roberts Properties
Residential, L.P. and Roberts Properties Management, L.L.C., dated
June 26, 1996.
27 Financial Data Schedule. (For SEC Use Only)
</TABLE>
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
quarter for which this report on Form 10-QSB is filed.
SIGNATURES
In accordance with Section 12 of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ROBERTS REALTY INVESTORS, INC.
Date: August 12, 1996 By: /s/ Charles S. Roberts
------------------------------------
Charles S. Roberts, Chairman of the
Board, Chief Executive Officer, and
President
Date: August 12, 1996 By: /s/ Charles R. Elliott
-----------------------------------
Chief Financial Officer
16
<PAGE> 1
EXHIBIT 4.2.5
CERTIFICATE OF MERGER
OF
ROBERTS PROPERTIES BENTLEY PLACE, L.P.
WITH AND INTO
ROBERTS PROPERTIES RESIDENTIAL, L.P.
1.
The name and state of domicile of each of the constituent entities is as
follows:
Roberts Properties Bentley Place, L.P. - Georgia (limited partnership);
and
Roberts Properties Residential, L.P. - Georgia (limited partnership).
2.
An agreement of merger has been approved by the requisite action by each
of the constituent entities named above.
3.
The name of the surviving entity is Roberts Properties Residential, L.P.;
the surviving entity is a Georgia limited partnership.
4.
The merger shall become effective on the date of filing of this
Certificate of Merger; provided, however, that to the extent permitted by law
the merger shall be effective as of and from and after the first day of the
calendar month in which this Certificate of Merger is filed.
IN WITNESS WHEREOF, the parties hereto have caused this Certificate of
Merger to be duly executed as of the 21st day of March, 1996.
<TABLE>
<S> <C>
Signed, sealed and delivered ROBERTS PROPERTIES RESIDENTIAL,
in the presence of: L.P., a Georgia limited partnership
/s/ Anthony Shurtz
- ------------------- By: Roberts Realty Investors, Inc., its sole
Unofficial Witness general partner
/s/ Michelle M. Ellingson By: /s/ Charles S. Roberts
- -------------------------- --------------------------
Notary Public Charles S. Roberts, President
(NOTARY SEAL) (CORPORATE SEAL)
</TABLE>
[EXECUTIONS CONTINUE ON NEXT PAGE.]
<PAGE> 2
<TABLE>
<S> <C>
Signed, sealed and delivered in ROBERTS PROPERTIES BENTLEY PLACE, L.P., a
the presence of: Georgia limited partnership
/s/ Anthony Shurtz
- -------------------------------
Unofficial Witness By: /s/ Charles S. Roberts
-----------------------------------
Charles S. Roberts, General Partner
/s/ Michelle M. Ellingson
- -------------------------------
Notary Public
(NOTARY SEAL)
</TABLE>
<PAGE> 1
EXHIBIT 4.2.6
CERTIFICATE OF MERGER
OF
THE CRESTMARK CLUB, L.P.
WITH AND INTO
ROBERTS PROPERTIES RESIDENTIAL, L.P.
1.
The name and state of domicile of each of the constituent entities is as
follows:
The Crestmark Club, L.P. - Georgia (limited partnership); and
Roberts Properties Residential, L.P. - Georgia (limited partnership).
2.
An agreement of merger has been approved by the requisite action by each
of the constituent entities named above.
3.
The name of the surviving entity is Roberts Properties Residential, L.P.;
the surviving entity is a Georgia limited partnership.
4.
The merger shall become effective on the date of filing of this
Certificate of Merger; provided, however, that to the extent permitted by law
the merger shall be effective as of and from and after the first day of the
calendar month in which this Certificate of Merger is filed.
IN WITNESS WHEREOF, the parties hereto have caused this Certificate of
Merger to be duly executed as of the 26th day of June, 1996.
Signed, sealed and delivered ROBERTS PROPERTIES RESIDENTIAL, ROBERTS
in the presence of: PROPERTIES RESIDENTIAL, L.P., a Georgia limited
partnership
/s/ Charles R. Elliott
- ----------------------- By: Roberts Realty Investors, Inc., its sole
Unofficial Witness general partner
/s/ Leslie A. Camp By: /s/ Charles S. Roberts
- ----------------------- -----------------------------
Notary Public Charles S. Roberts, President
(NOTARY SEAL) (CORPORATE SEAL)
[EXECUTIONS CONTINUE ON NEXT PAGE.]
<PAGE> 2
Signed, sealed and delivered THE CRESTMARK CLUB, L.P., a Georgia limited
in the presence of: partnership
/s/ Charles R. Elliott
- -----------------------------
Unofficial Witness By: /s/ Charles S. Roberts
-----------------------------------
/s/ Leslie A. Camp Charles S. Roberts, General Partner
- -----------------------------
Notary Public
(NOTARY SEAL)
2
<PAGE> 1
EXHIBIT 10.14.1
ROBERTS REALTY INVESTORS, INC.
AMENDMENT TO
DEALER AGREEMENT
DATED
NOVEMBER 1, 1995
April 19, 1996
Spalding & Company
Two Ravinia Drive
Suite 380
Atlanta, Georgia 30346
Ladies and Gentlemen:
The undersigned, Roberts Realty Investors, Inc., a corporation formed
pursuant to the laws of the State of Georgia (the "Company"), hereby confirms
its agreement with you as follows:
1. INTRODUCTION.
A. The parties hereto entered into that certain Dealer Agreement dated
November 1, 1995 (the "Agreement"), pursuant to which the Company has offered
for sale a total of 631,580 shares of its Common Stock, $.01 par value (the
"Shares"), through you, a member of the National Association of Securities
Dealers, Inc. (the "NASD"). (All defined terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Agreement.) The
offering is being made in accordance with the Prospectus of the Company dated
November 1, 1995, as supplemented (the "Prospectus").
B. Subscriptions for all 631,580 Shares have been deposited into escrow,
the Initial Closing of the offering has occurred, and the Company desires to
increase the number of shares offered to a total of 736,850 Shares and extend
the termination date of the offering from April 30, 1996 to May 10, 1996.
C. Spalding & Company and the Company desire to evidence their agreement
that Spalding & Company will continue to participate in the offering and sell
the additional 105,270 Shares to be offered in the offering.
2. AGREEMENT.
A. The Company and Spalding & Company agree and acknowledge that the
minimum 442,200 Shares have been sold in the offering and that the Initial
Closing occurred on March 29, 1996.
<PAGE> 2
B. Spalding & Company and the Company agree that Spalding & Company shall
sell the additional 105,270 Shares to be offered in the offering pursuant to
the terms of the Agreement, which shall remain in full force and effect except
as modified hereby (a) to increase the number of Shares offered from 631,580
Shares to 736,850 Shares; and (b) to replace all references to "April 30, 1996"
with "May 10, 1996."
If the foregoing correctly sets forth our understanding, please so
indicate in the space below for that purpose and return this Amendment to the
Company at 8010 Roswell Road, Suite 120, Atlanta, Georgia 30350, and, upon
approval and acceptance by the Company, this letter shall constitute a binding
agreement among us.
Very truly yours,
ROBERTS REALTY INVESTORS, INC.,
a Georgia corporation
By: /s/ Charles S. Roberts
----------------------------------------
Charles S. Roberts, Chairman of the Board
of Directors, Chief Executive Officer, and
President
Agreed and Accepted:
SPALDING & COMPANY
By: /s/ Madeline D. Salter
--------------------------------------
Madeline D. Salter, President
Agreed and Accepted, for purposes of Section
7 of the Agreement only:
ROBERTS PROPERTIES RESIDENTIAL, L.P.,
By: Roberts Realty Investors, Inc., Its
General Partner
By: /s/ Charles S. Roberts
---------------------------------------
Charles S. Roberts, Chairman of the Board
of Directors, Chief Executive Officer,
and President
2
<PAGE> 1
EXHIBIT 10.14.2
ROBERTS REALTY INVESTORS, INC.
AMENDMENT TO
ESCROW AGREEMENT
THIS AMENDMENT TO ESCROW AGREEMENT (the "Amendment"), entered into this
19th day of April, 1996, by and among ROBERTS REALTY INVESTORS, INC., a Georgia
corporation (the "Company"); SPALDING & COMPANY, a Georgia corporation
("Spalding & Company"); and FIRST UNION NATIONAL BANK OF GEORGIA, as escrow
agent (the "Escrow Agent"),
WITNESSETH:
WHEREAS, the parties hereto entered into that certain Escrow Agreement
dated November 1, 1995 (the "Agreement"); and
WHEREAS, Spalding & Company, on behalf of the Company, has solicited
subscriptions for 631,580 shares of the Company's Common Stock (the "Shares")
by means of a Prospectus dated November 1, 1995, as supplemented (the
"Prospectus"); and
WHEREAS, subscriptions for the total 631,580 Shares have been deposited
into escrow, and the Initial Closing contemplated in Section 2 of the Agreement
occurred on March 29, 1996; and
WHEREAS, the Company desires to increase the offering from 631,580 Shares
to a total of 736,850 Shares on the same terms as applied to the initial
offering of 631,580 Shares (provided that the termination date of the offering
shall be changed from April 30, 1996 to May 10, 1996); and
WHEREAS, the additional Shares will be offered for sale exclusively by
Spalding & Company;
NOW, THEREFORE, the parties hereto agree as follows:
1. The Escrow Agent hereby agrees to continue to hold and disburse funds
deposited under the Agreement in accordance with the terms and conditions
thereof and for the uses and purposes therein set forth, provided that (a) the
total number of Shares being offered shall be increased from 631,580 Shares to
736,850 Shares; and (b) the second paragraph of Section 2 of the Agreement (the
first full paragraph on page 2) shall be amended by deleting "April 30" from
the first line thereof and replacing it with "May 10."
2. Except as provided in this Amendment, the provisions of the Agreement
shall remain in full force and effect.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective representatives, thereunto duly authorized, as of
the day and year first above written.
SPALDING & COMPANY, ROBERTS REALTY INVESTORS, INC.,
a Georgia corporation a Georgia corporation
By: /s/ Madeline D. Salter By: /s/ Charles S. Roberts
----------------------------- ------------------------------------
Madeline D. Salter, President Charles S. Roberts, Chairman of the Board
of Directors, Chief Executive Officer, and
President
FIRST UNION NATIONAL BANK
OF GEORGIA
By: /s/ R. Douglas Milner
-----------------------------------------
Title: Assistant Vice President
2
<PAGE> 1
EXHIBIT 10.14.3
SALES CONTRACT
between
ROBERTS PROPERTIES, INC.,
a Georgia corporation, as Seller
and
ROBERTS PROPERTIES RESIDENTIAL, L.P.,
a Georgia limited partnership, as Purchaser
Dated: March 15, 1996
Property consisting of approximately 22.5 acres of unimproved
real property fronting on Peachtree Industrial Boulevard
and Howell Ferry Road, Gwinnett County, Georgia
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I -- PROPERTY TO BE CONVEYED . . . . . . . . . . . . . . . . . . 1
ARTICLE II -- PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE III -- ITEMS TO BE DELIVERED BY SELLER AT CLOSING . . . . . . . . 2
ARTICLE IV -- ITEMS TO BE DELIVERED BY PURCHASER AT CLOSING . . . . . . . 3
ARTICLE V -- TIME AND PLACE OF CLOSING AND CLOSING COSTS . . . . . . . . 3
ARTICLE VI -- APPORTIONMENTS . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE VII -- PURCHASER'S CONDITIONS PRECEDENT . . . . . . . . . . . . . 4
ARTICLE VIII -- EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IX -- SELLER'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 5
ARTICLE X -- DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . 6
ARTICLE XI -- NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE XII -- SETTLEMENT ITEMS . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE XIII -- ACCESS . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE XIV -- BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE XV -- MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
<PAGE> 3
SALES CONTRACT
THIS AGREEMENT is made and entered into this 15th day of March,
1996 by and between ROBERTS PROPERTIES, INC., a Georgia corporation
(hereinafter referred to as the "Seller") and ROBERTS PROPERTIES RESIDENTIAL,
L.P., a Georgia limited partnership (hereinafter referred to as the
"Purchaser").
ARTICLE I -- PROPERTY TO BE CONVEYED
A. Seller shall sell to Purchaser, and Purchaser shall
purchase from Seller, upon the terms and conditions hereinafter set forth, that
certain parcel of land (hereinafter referred to as the "Land") described on
Exhibit A attached hereto with the buildings and improvements, if any, on the
Land (hereinafter referred to as the "Improvements") and the machinery and
equipment, attached thereto, if any (all of the foregoing real and personal
property is hereinafter collectively referred to as the "Property").
B. The Property shall include all right, title and
interest, if any, of Seller in and to any land lying in the bed of any street,
road, highway or avenue, open or proposed, in front of or adjoining all or any
part of the Land and in all strips, gores or rights-of-way, riparian rights and
easements, and all right, title and interest of Seller, if any, in and to any
award or payment made or to be made (i) for any taking in condemnation or
eminent domain of land lying in the bed of any street, road, highway or avenue,
open or proposed, in front of or adjoining all or any part of the Land, (ii)
for damage to the Property or any part thereof by reason of change of grade or
closing of any such street, road, highway or avenue, (iii) for any taking in
condemnation or eminent domain of any part of the Property.
C. The Property consists of approximately 22.5 acres of
unimproved real property fronting on Peachtree Industrial Boulevard and Howell
Ferry Road, Gwinnett County, Georgia.
ARTICLE II -- PURCHASE PRICE
The purchase price (hereinafter referred to as the "Purchase
Price") for the Property shall be One Million Six Hundred Twenty-Eight Thousand
and No/100 Dollars ($1,628,000.00), and subject to all prorations and
adjustments provided herein, shall be paid as follows:
A. Concurrently with the execution of this Agreement,
Purchaser shall pay to Seller $100.00 (the "Deposit") by check subject to
collection or by wire transfer, such amount to be deposited in a non-interest
bearing account. The Deposit shall be applied toward the Purchase Price due at
Closing (as hereinafter defined) only if the Closing contemplated hereby is
<PAGE> 4
consummated as herein provided, or shall otherwise be applied as elsewhere
provided in this Agreement.
B. The amount (which amount includes the amount of the
Deposit) of $1,628,000.00 shall be paid by Purchaser at Closing by certified,
cashier or federal funds check drawn to the order of Seller or by wire-transfer
of immediately available cash to Seller out of which Seller will pay off in
full at Closing any and all loans secured by the Property.
C. Purchaser and Seller hereby expressly acknowledge and
agree that Purchaser is to acquire the Property in an "as-is" condition and
that Seller shall have no obligation or liability whatsoever to Purchaser in
respect to the quality, integrity, nature or condition of construction or
merchantability or habitability of the Improvements or any particular use which
may be made thereof. The substance of this Section II C shall survive the
consummation of the transaction contemplated herein and shall be included in
the Special Stipulations to the Closing Statement to be executed by Purchaser
and Seller at Closing.
ARTICLE III -- ITEMS TO BE DELIVERED BY SELLER AT CLOSING
At Closing Seller agrees to deliver the following items to
Purchaser. Drafts of all documents to be delivered at Closing as specified in
this Agreement shall be prepared by Seller's counsel.
A. Title to the Land shall be conveyed by a limited
warranty deed (herein called the "Deed") which will (i) contain a limited
warranty of title to the effect that Seller will warrant title to the Purchaser
as against any claim by any person owning, holding or claiming by, through or
under Seller, but not otherwise, and (ii) be subject only to those title
exceptions contained on Exhibit B attached hereto and made a part hereof
(herein called the "Permitted Exceptions").
B. A Title Affidavit of a corporate officer of Seller (in
a form customarily utilized in Atlanta, Georgia) showing that all debts for
labor and materials in respect of the Property have been paid in full and that
there are no outstanding claims, suits, debts, liens or judgments against the
Property, except for the Permitted Exceptions.
C. A FIRPTA Affidavit and an Affidavit of Seller's
Residence as respects O.C.G.A. Section 48-7-128.
D. An IRS form 1099, and a Designation of Reporting Agent
and Transferor Identification form.
E. Such evidence as is required by the title insurance
company (the "Title Company") insuring the title to the Property for Purchaser
as is required by the Title Company to delete any and all security deeds
encumbering the Property from the title insurance commitment to be marked at
Closing.
- 2 -
<PAGE> 5
F. Such evidence as is required by the Title Company as to
the authority of those acting on behalf of the Seller in connection with the
transaction contemplated in this Agreement, which such evidence shall include a
current certificate of existence from the Secretary of State of Georgia and a
corporate resolution and incumbency certificate.
G. Any other documents referred to or specified in this
Agreement.
ARTICLE IV -- ITEMS TO BE DELIVERED BY PURCHASER AT CLOSING
At Closing, Purchaser agrees to deliver the following items to
Seller:
A. The Purchase Price as required by and in the manner
specified in Section II B hereof.
B. Any other documents referred to or specified in this
Agreement.
ARTICLE V -- TIME AND PLACE OF CLOSING AND CLOSING COSTS
A. The consummation of the transaction contemplated herein
shall take place on any business day on or before March 31, 1996 selected by
Purchaser upon one (1) day's prior notice to Seller (the date such consummation
occurs being herein referred to as the "Closing" or "Closing Date") at the
offices of Holt, Ney, Zatcoff & Wasserman, Atlanta, Georgia commencing at 10:00
A.M.
B. At Closing, Purchaser shall pay the transfer tax and
recording fees incident to the Deed, and all other closing expenses with
respect to the closing of the transaction contemplated herein, including,
without limitation, survey costs, recording fees, the premium incident to any
title insurance policy to be issued to Purchaser, except that Seller and
Purchaser will each pay their own attorney's fees.
C. Possession of the Property will be delivered by Seller
to Purchaser on the Closing Date.
ARTICLE VI -- APPORTIONMENTS
The following items shall be apportioned at Closing and as of
the Closing Date:
A. All real property taxes, including the current
installment for any assessment (special, bond, or otherwise), and personal
property ad valorem taxes, if any. Seller shall be entitled to receive a return
of all utility deposits placed with any utility company, and Purchaser shall be
responsible to place its own deposit with any such utility company. Seller
shall be
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<PAGE> 6
entitled to receive all income in respect of the Property and shall be
obligated to pay all expenses, including utility charges, in respect of the
Property for all time periods prior to and including the day prior to the
Closing Date. Purchaser shall be entitled to receive all such income and shall
be obligated to pay all such expenses, including utility charges, for all time
periods commencing with the Closing Date. In the event that any income or any
expense item relating to the period prior to the Closing Date is received or
appears after the Closing, such item(s) shall be adjusted between the Seller
and the Purchaser within ten (10) days after such is discovered. This Section
VI A shall survive the Closing of the transaction contemplated herein, but only
for a period of thirty (30) days after which all prorations and adjustments
shall be final as between Seller and Purchaser, except that the proration for
real property taxes in respect of the Property shall be based on 1995 taxes
because the 1996 tax bill will not be available at Closing and such proration
shall be final and there shall be no reproration between Seller and Purchaser
in the event there is any difference in the 1995 amount of real property taxes
with respect to the Property and the 1996 amount of such taxes when the 1996
tax bill is available.
ARTICLE VII -- PURCHASER'S CONDITIONS PRECEDENT
Purchaser shall not be required to purchase the Property unless
the following conditions precedent have been satisfied:
A. The physical condition of the Property shall be
substantially the same on the Closing Date as on the date of full execution
hereof, normal wear and tear excepted.
B. As of the Closing Date there shall be no administrative
agency action, litigation or other governmental proceeding of any kind pending
or threatened against the Seller or the Property which after the Closing would
materially, adversely affect the value of the Property.
ARTICLE VIII -- EMINENT DOMAIN
A. If, prior to the Closing Date, all of the Property is
taken by condemnation or eminent domain or same is pending, this Agreement
shall terminate as of the day title to the Property or possession thereof vests
in the condemning authority, the Deposit shall be returned by Seller to
Purchaser, and upon such return this Agreement shall terminate and be null and
void and of no further force or effect and neither Purchaser nor Seller shall
have any further rights, remedies, duties, liabilities or obligations to the
other hereunder. If, prior to the Closing Date, there shall be any
condemnation or eminent domain proceedings instituted or pending against less
than all of the Property, and same would interfere with Purchaser's ability to
develop the Property for Purchaser's intended use, then Purchaser may elect to
terminate this Agreement by written notice given to Seller within three (3)
days after Purchaser has received notice from Seller of such proceedings. Upon
such notice to Seller the Deposit shall immediately be returned to Purchaser by
Seller, and upon such return this Agreement shall terminate and be null and
void and of no further force or effect and neither Purchaser nor Seller shall
have any further rights,
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<PAGE> 7
remedies, duties or obligations to the other hereunder. Failure of the
Purchaser to so notify Seller within said three (3) days that Purchaser has
elected to terminate this Agreement shall be deemed to mean that Purchaser has
elected not to terminate this Agreement. If Purchaser does not so elect to
terminate this Agreement, then the Closing shall take place as provided herein
without abatement of the Purchase Price, and there shall be assigned to the
Purchaser at the Closing, all interest of the Seller in and to any condemnation
awards which may be payable to the Seller on account of such occurrence.
ARTICLE IX -- SELLER'S REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Purchaser that:
A. Seller has all requisite power and authority to execute
this Agreement, the closing documents listed in Article III hereof, and any
other documents required to be delivered by the Seller.
B. To the best of Seller's knowledge, the conveyance of
the Property to Purchaser pursuant to this Agreement will not be a violation by
Seller of any applicable statute, ordinance, governmental restriction, or
regulation, or any private restriction or agreement.
C. To the best of Seller's knowledge, as of the date of
full execution hereof, there is no administrative agency action, litigation or
other governmental proceeding of any kind pending or threatened against the
Seller or the Property which after the Closing would materially, adversely
affect the value of the Property.
D. To the best of Seller's knowledge, no special
assessments of any kind (special, bond or otherwise) are levied against the
Property which are outstanding and unpaid.
E. Seller has no knowledge of any pending or contemplated
condemnation proceedings affecting the Property or any part thereof. Seller
will not sell, assign or convey any right, title or interest whatever in or to
the Property or create or permit to exist any lien, encumbrance, or charge
thereon without promptly discharging the same, except as otherwise expressly
provided for herein.
F. Seller will not willfully take any action, or willfully
omit to take any action, which action or omission would have the effect of
violating any of its representations, warranties, covenants and agreements
contained herein.
Seller's warranties and representations contained in this
Agreement shall not survive the Closing and shall be merged into the Deed and
other documents to be executed and delivered in connection with the transaction
contemplated herein.
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<PAGE> 8
ARTICLE X -- DEFAULT AND REMEDIES
A. In the event that the transaction contemplated herein
is not closed and consummated because of Purchaser's failure or breach to
perform its obligations hereunder, Seller shall retain the Deposit as
agreed-upon liquidated damages and not a penalty, it being otherwise difficult
or impossible to estimate Seller's actual damages, and which liquidated damages
shall be in lieu of any other damages or the right to specific performance,
and, upon such event, this Agreement shall terminate and be null and void and
of no further force or effect, and neither Seller nor Purchaser shall have any
further rights, remedies, duties, liabilities or obligations to the other
hereunder. Seller hereby waives any right to specific performance, injunctive
relief or any other relief to cause Purchaser to perform its obligations under
this Agreement, and Seller hereby waives any right to damages in excess of said
liquidated damages occasioned by Purchaser's breach of this Agreement. Seller
and Purchaser acknowledge that it is impossible to estimate the actual damages
Seller would suffer from Purchaser's breach hereof, but that the liquidated
damages provided herein represent a reasonable pre-estimate of such damages and
Seller and Purchaser therefor intend to provide for liquidated damages as
herein specified, and that the agreed-upon liquidated damages are not punitive
or penalties and are just, fair and reasonable, all in accordance with O.C.G.A.
Section 13-6-7.
B. In the event that the transaction contemplated herein
is not closed and consummated because of Seller's failure or breach to perform
its obligations hereunder or because of a breach by Seller of any of the
representations and warranties made herein by Seller, Purchaser shall have the
right only (i) to terminate this Agreement by giving notice thereof to Seller,
and upon receipt of such notice Seller shall return the Deposit to Purchaser
and thereafter this Agreement shall terminate and be null and void and of no
further force or effect, and neither Seller nor Purchaser shall have any
further rights, remedies, duties, liabilities or obligations to the others
hereunder, or (ii) to sue Seller for specific performance of its obligations
under this Agreement; which remedies specified in (i) and (ii) shall be in lieu
of any other rights or remedies for Purchaser, including, without limitation,
any right or claim for damages. If Purchaser consummates the transaction
contemplated in this Agreement it shall be conclusively deemed to have waived
any breach by Seller of any covenant, representation or warranty under this
Agreement (but not under any of the documents executed at Closing which shall
continue in accordance with their terms) which the Purchaser knew or should
have known existed prior to the Closing.
ARTICLE XI -- NOTICES
Whenever any notice, demand, or request is required or permitted
hereunder, such notice, demand or request shall be in writing and shall be
hand-delivered in person or sent by United States mail, registered, certified
or Express Mail, postage prepaid, or by Federal Express or similar expedited
delivery service, to the addresses set forth below:
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<PAGE> 9
To Seller:
Roberts Properties, Inc.
8010 Roswell Road
Suite 120
Atlanta, Georgia 30350
To Purchaser:
Roberts Properties Residential, L.P.
c/o Roberts Properties, Inc.
8010 Roswell Road
Suite 120
Atlanta, Georgia 30350
With a Copy to:
Sanford H. Zatcoff, Esq.
Holt, Ney, Zatcoff & Wasserman
100 Galleria Parkway
Suite 600
Atlanta, Georgia 30339
Any notice, demand, or request which shall be served upon any of the parties in
the manner aforesaid shall be deemed sufficiently given for all purposes
hereunder (i) at the time such notice, demand or request is hand-delivered in
person, or (ii) on the day such notices, demands or requests are deposited in
the United States Mail or with such expedited delivery service in accordance
with the preceding portion of this Article XI. Either Purchaser or Seller
shall have the right from time to time to designate by written notice to the
other such other person or persons and at such other places in the United
States as Purchaser or Seller desires written notices, demands, or requests to
be delivered or sent in accordance herewith; provided, however, at no time
shall either party be required to send more than an original and two (2) copies
of any such notice, demand or request required or permitted hereunder.
ARTICLE XII -- SETTLEMENT ITEMS
In addition to the items specifically mentioned in this
Agreement to be delivered at the Closing, Seller shall deliver the following
items to Purchaser at the Closing: any sewer, water and other utility bills and
assessment bills any part of which is to be paid by Purchaser; and a complete
and accurate statement setting forth the necessary information upon which any
adjustment shall be made at the Closing.
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<PAGE> 10
ARTICLE XIII -- ACCESS
Purchaser and its agents and representatives shall have the
right to enter upon the Property at any reasonable time prior to the Closing
Date, for any lawful purpose, including, without limitation, investigations,
tests and studies, structural inspection, and survey purposes; provided,
however, Purchaser shall pay for all such work performed on the Property and
shall not permit the creation of any lien in favor of any contractor,
subcontractor, materialman, mechanic, surveyor, architect or laborer, and
Purchaser hereby expressly agrees to indemnify and hold Seller harmless with
respect thereto; and provided further, however, that Purchaser hereby expressly
agrees to indemnify and hold Seller harmless against any claim, damage or
injury to either persons or property arising out of Purchaser's or its agent's,
employees' or representatives' actions under this Article XIII. This Article
XIII shall survive the Closing of the transaction contemplated herein or any
other termination of this Agreement.
ARTICLE XIV -- BROKERS
A. Purchaser and Seller hereby represent to each other
that no real estate broker or agent was involved in negotiating the transaction
contemplated herein. In the event any claim(s) for real estate commissions,
fees or compensation arise in connection with this Agreement and the
transaction contemplated herein, the party so incurring or causing such
claim(s) shall indemnify, defend and hold harmless the other party from any
loss, claim or damage which the other party suffers because of said claim(s).
ARTICLE XV -- MISCELLANEOUS
A. This Agreement constitutes the entire agreement between
the parties hereto and cannot be changed or modified other than by a written
agreement executed by both Purchaser and Seller.
B. There shall also be executed and delivered at Closing
all other documents and instruments reasonably required or necessary to effect
the transaction contemplated herein.
C. Irrespective of the place of execution or performance,
this Agreement shall be governed by and construed in accordance with the laws
of the State of Georgia. This Agreement shall be construed without regard to
any presumption or other rule requiring construction against the party causing
this Agreement to be drafted. If any words or phrases in this Agreement shall
have been stricken out or otherwise eliminated, whether or not any other words
or phrases have been added, this Agreement shall be construed as if the words
or phrases so stricken out or otherwise eliminated were never included in this
Agreement and no implication or inference shall be drawn from the fact that
said words or phrases were so stricken out or otherwise eliminated. All terms
and words used in this Agreement regardless
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<PAGE> 11
of the number or gender in which they are used, shall be deemed to include any
other number and any other gender as the context may require.
D. This Agreement may be executed in more than one
counterpart, each of which shall be deemed an original.
E. The captions of this Agreement are inserted for
convenience or reference only and do not define, describe or limit the scope or
intent of this Agreement or any of the terms hereof.
F. Time is of the essence of this Agreement and each term
and provision hereof.
G. If any term, covenant or condition of this Agreement or
the application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement and the application
of such terms, covenants and conditions to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby and each term, covenant and condition of this Agreement shall be valid
and be enforced to the fullest extent permitted by law.
H. All rights, powers and privileges conferred hereunder
upon the parties unless otherwise provided shall be cumulative and not
restricted to those given by law.
I. No failure of any party to exercise any power given
such party hereunder or to insist upon strict compliance by any other party to
its obligations hereunder, and no custom or practice of the parties in variance
with the terms hereof, shall constitute a waiver of any party's right to demand
exact compliance with the terms hereof.
J. Purchaser shall have the right to waive any condition
or contingency herein in Purchaser's favor and Seller shall have the right to
waive any condition or contingency herein in Seller's favor.
K. Anything contained in this Agreement to the contrary
notwithstanding, (i) except as specifically set forth in this Agreement to the
contrary, the terms and provisions of this Agreement shall not survive Closing
and shall be merged into the Deed; and (ii) except as specifically set forth in
this Agreement to the contrary, Seller does not make any warranties or
representations of any kind or character, expressed or implied, with respect to
the Property, its physical condition, income to be derived therefrom or
expenses to be incurred with respect thereto, or any other matter or thing
relating to or affecting the Property, and there are no oral or written
agreements, warranties or representations with respect to the Property, except
as otherwise expressly set forth in this Agreement.
L. The provisions of this Agreement shall extend to, bind
and inure to the benefit of the parties hereto and their respective successors,
assigns and the legal representatives of their estates.
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<PAGE> 12
M. This Agreement may be assigned by Purchaser only if (i)
together therewith, Purchaser assigns all of its right, title and interest in
and to the Deposit, (ii) prompt written notification of the Assignment signed
by both the assignor and the assignee is given to Seller, and (iii) the
assignee is either a corporation of which Charles S. Roberts owns a majority
interest, or a limited partnership of which Charles S. Roberts is a general
partner.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, sealed and delivered the day and year first
above written.
SELLER:
ROBERTS PROPERTIES, INC., a Georgia
corporation
By: /s/ Charles S. Roberts
---------------------------------
Charles S. Roberts
President
(CORPORATE SEAL)
PURCHASER:
ROBERTS PROPERTIES RESIDENTIAL,
L.P., a Georgia limited partnership
By: Roberts Realty Investors, Inc.,
a Georgia corporation, its
sole general partner
By: /s/ Charles S. Roberts
-----------------------------
Charles S. Roberts, President
(CORPORATE SEAL)
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<PAGE> 13
EXHIBIT A
ALL THAT TRACT of land in Land Lot 296 of the 6th District, Gwinnett County,
Georgia, described as follows:
TO FIND THE TRUE POINT OF BEGINNING, commence at a point on the south
right-of-way line of Howell Ferry Road (100 foot right-of-way) at the mitered
intersection of the south right-of-way line of Howell Ferry Road with the east
right-of-way line of Peachtree Industrial Boulevard (right-of-way varies);
running thence along the south right-of-way line of Howell Ferry Road North 69
degrees 49 minutes 18 seconds East 264.28 feet to a 1/2-inch rebar set at the
TRUE POINT OF BEGINNING; from the TRUE POINT OF BEGINNING as thus established,
continuing thence along the south right-of-way line of Howell Ferry Road North
69 degrees 49 minutes 18 seconds East 139.03 feet to a 1/2-inch rebar found;
thence, leaving said right-of-way line, South 20 degrees 08 minutes 58 seconds
East 481.69 feet to a 1/2-inch rebar found; thence South 20 degrees 08 minutes
58 seconds East 38.72 feet to a point in the centerline of a creek; thence,
along said centerline (the property line being the centerline of said creek),
the following courses and distances: (1) South 88 degrees 21 minutes 40 seconds
West 33.50 feet to a point, (2) North 73 degrees 33 minutes 01 second West
68.10 feet to a point, (3) North 37 degrees 09 minutes 32 seconds West 15.73
feet to a point, (4) North 51 degrees 19 minutes 49 seconds West 44.78 feet to
a point, (5) North 66 degrees 46 minutes 31 seconds West 47.83 feet to a point,
(6) North 88 degrees 27 minutes 29 seconds West 47.03 feet to a point, and (7)
South 77 degrees 13 minutes 50 seconds West 31.39 feet to a point; thence
leaving said centerline and running along the original centerline of the creek,
as currently identifiable, prior to the new channel taken by the creek as a
result of the installation of the 132 inch corregated metal pipe shown on the
survey hereinafter referred to, the following courses and distances: (1) South
23 degrees 42 minutes 08 seconds East 42.45 feet to a point, (2) North 88
degrees 26 minutes 54 seconds East 30.35 feet to a point, (3) South 15 degrees
06 minutes 32 seconds East 33.53 feet to a point, and (4) South 26 degrees 44
minutes 05 seconds West 61.60 feet to a point in the centerline of a creek;
thence along said centerline (the property line being the centerline of said
creek) the following courses and distances: (1) South 31 degrees 28 minutes 13
seconds East 26.41 feet to a point, (2) South 78 degrees 24 minutes 14 seconds
East 80.25 feet to a point, (3) South 01 degree 11 minutes 32 seconds West
52.57 feet to a point, (4) South 67 degrees 15 minutes 21 seconds East 64.79
feet to a point, (5) South 42 degrees 02 minutes 18 seconds East 85.35 feet to
a point, (6) North 60 degrees 00 minutes 52 seconds East 34.18 feet to a point,
(7) South 34 degrees 52 minutes 46 seconds East 45.08 feet to a point, (8)
South 38 degrees 45 minutes 21 seconds West 42.79 feet to a point, (9) South 00
degrees 49 minutes 33 seconds West 16.81 feet to a point, (10) North 77 degrees
37 minutes 26 seconds East 30.94 feet to a point, (11) North 86 degrees 44
minutes 50 seconds East 69.12 feet to a point, (12) South 51 degrees 25 minutes
34 seconds East 35.82 feet to a point, (13) South 28 degrees 43 minutes 27
seconds West 35.61 feet to a point, (14) South 06 degrees 48 minutes 23 seconds
East 15.85 feet to a point, (15) South 38 degrees 44 minutes 37 seconds East
31.48 feet to a point, (16) North 64 degrees 56 minutes 13 seconds East 52.84
feet to a point, (17) South 28 degrees 49 minutes 50 seconds East 26.19 feet to
a point, (18) North 63 degrees 43 minutes 54 seconds East 21.50 feet to a
point, (19) South 02 degrees 50 minutes 39 seconds East 86.92 feet to a point,
(20) South 04 degrees 21 minutes 36 seconds West 30.31 feet to a point, (21)
South 10 degrees 14 minutes 54 seconds East 58.28 feet to a point, (22) South
00 degrees 03 minutes 47 seconds West 95.91 feet to a point, (23) South 00
degrees 09 minutes 35 seconds East 218.72 feet to a point, (24) South 09
degrees 34 minutes 46 seconds West 122.27 feet to a point, (25) South 29
degrees 19 minutes 11 seconds East 101.50 feet to a point, (26) South 64
degrees 25 minutes 39 seconds East 37.01 feet to a point, and (27) South 40
degrees 10 minutes 19 seconds East 52.97 feet to a point on the land lot line
common to Land Lots 291 and 296 of the 6th District, Gwinnett County, Georgia;
thence, leaving the centerline of said creek and running along said common land
lot line, the following courses and distances: (1) South 59 degrees 08 minutes
30 seconds West 59.00 feet to a 1/2-inch rebar set, (2) South 59 degrees 08
minutes 30 seconds West 1,112.19 feet to a 1/2-inch rebar found on the
southeast right-of-way line of said Peachtree Industrial Boulevard; thence,
along said right-of-way line, the following courses and distances: (1) North 18
degrees 00 minutes 14 seconds East 267.00 feet to a point, (2) along the arc of
a curve to the left (which arc is subtended by a chord having a bearing and
distance of North 17 degrees 44 minutes 35 seconds East 34.60 feet and a radius
of 2,939.30 feet) 34.60 feet to a concrete monument found, (3) South 72 degrees
35 minutes 39 seconds East 84.88 feet to a point, (4) North 18 degrees 04
minutes 49 seconds East 63.23 feet to a concrete monument found, (5) North 73
degrees 47 minutes 30 seconds West 86.29 feet to a concrete monument found, and
(6) along the arc of a curve to the left (which arc is subtended by a chord
having a bearing and distance of North 04 degrees 14 minutes 37 seconds East
1,218.70 feet and a radius of 2,939.30 feet) 1,227.60 feet to a 1/2-inch rebar
set; thence, leaving said right-of-way line, North 82 degrees 12 minutes 40
seconds East
<PAGE> 14
199.79 feet to a 1/2-inch rebar set; thence North 13 degrees 42 minutes 16
seconds West 286.75 feet to a 1/2-inch rebar set; thence North 65 degrees 03
minutes 28 seconds East 78.49 feet to a 1/2-inch rebar set; thence, along the
arc of a curve to the left (which arc is subtended by a chord having a bearing
and distance of North 20 degrees 03 minutes 28 seconds East 127.28 feet and a
radius of 90.00 feet) 141.37 feet to a 1/2-inch rebar set; thence North 30
degrees 17 minutes 08 seconds West 80.48 feet to a 1/2-inch rebar set; thence
North 20 degrees 10 minutes 42 seconds West 90.00 feet to the TRUE POINT OF
BEGINNING, said tract containing approximately 22.500 acres as shown on plat of
Survey for Roberts Properties, Inc., First Union National Bank of Georgia and
Chicago Title Insurance Company prepared by Rochester & Associates, Inc.,
bearing the seal and certification of James C. Jones, Georgia Registered Land
Surveyor No. 2298, dated July 11, 1994, last revised December 14, 1994.
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<PAGE> 15
EXHIBIT B
<TABLE>
<S> <C>
1. Taxes and assessments for the year 1996 and subsequent years, a lien
not yet due and payable.
2. All matters disclosed by plat of survey for Roberts Properties, Inc.,
First Union National Bank of Georgia & Chicago Title Insurance Company,
prepared by Rochester & Associates, Inc., dated July 11, 1994, last
revised December 14, 1994, bearing the seal of James C. Jones, Georgia
Registered Land Surveyor No. 2298, including those matters disclosed by
Final Plat for Howell Station Commercial Center, Unit Four, dated July
15, 1988, revised September 15, 1993, filed for record September 29,
1993, and recorded in Plat Book 60, page 78, Gwinnett County, Georgia
records, and re-recorded December 14, 1994, in Plat Book 64, page 285,
aforesaid records.
3. Rights of upper and lower riparian owners in and to the waters of
rivers, creeks or branches crossing or adjoining the subject property,
and the natural flow thereof, free from diminution or pollution.
4. Any adverse claim based upon the assertion that (a) some portion of the
subject property has been created by artificial means, or has accreted
to such portion so created; or (b) some portion of the subject property
has been brought within the boundaries thereof by an avulsive movement
of the creek adjacent to the subject property, or has been formed by
accretion to any such portion.
5. Easement from Mrs. C.W. Summerour to Georgia Power Company, dated
September 9, 1940, filed for record September 19, 1940, and recorded in
Deed Book 69, page 125, aforesaid records.
6. Easement from Mrs. C.W. Summerour to Georgia Power Company, dated
October 28, 1948, filed for record November 3, 1948, and recorded in
Deed Book 90, page 249, aforesaid records.
7. Sanitary Sewer Easement from Partridge Greene, Inc. to Tempo Station
Associates, a limited partnership, dated June 11, 1984, filed for
record June 18, 1984, and recorded in Deed Book 2808, page 597,
aforesaid records.
8. Easement from Partridge Greene, Inc. to Howell Station Associates, a
Georgia general partnership, dated October 16, 1984, filed for record
November 9, 1984, and recorded in Deed Book 2913, page 413, aforesaid
records.
9. Easement from Partridge Greene, Inc. to Tempo Station Associates, dated
October 31, 1984, filed for record April 22, 1985, and recorded in Deed
Book 3026, page 399, aforesaid records.
</TABLE>
<PAGE> 16
<TABLE>
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10. Use covenant contained in Limited Warranty Deed from Dallas
Development, Inc. to Roberts Properties, Inc., dated December 15, 1994,
recorded in Deed Book 10943, page 224, aforesaid records.
</TABLE>
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<PAGE> 1
EXHIBIT 10.14.4
DESIGN AGREEMENT
This Agreement, made as of this 29th day of March, 1996, by and between
ROBERTS PROPERTIES RESIDENTIAL, L.P., a Georgia limited partnership (the
"Operating Partnership"), and ROBERTS PROPERTIES, INC., a Georgia corporation
("Roberts Properties"),
WITNESSETH:
WHEREAS, the Operating Partnership has acquired approximately 22.5 acres
near the southeast corner of Peachtree Industrial Boulevard and Howell Ferry
Road in Duluth, Georgia (the "Property") as described in the Prospectus of
Roberts Realty Investors, Inc. (the "Company") dated November 1, 1995 (as
supplemented, the "Prospectus"), and plans to construct on such property a
180-unit apartment community ("Howell Ferry"); and
WHEREAS, the Operating Partnership desires that Roberts Properties perform
certain services relating to the design of Howell Ferry;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1.
Services
Roberts Properties shall create the exterior design and develop floor
plans for Howell Ferry.
2.
Compensation
For the above services, Roberts Properties shall be paid a total of Two
Hundred Thousand Dollars ($200,000), payable on the date hereof (which is the
date of the initial closing of the offering described in the Prospectus).
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date first above written.
<TABLE>
<S> <C>
ROBERTS PROPERTIES RESIDENTIAL, ROBERTS PROPERTIES, INC., a
L.P., a Georgia limited partnership Georgia corporation
By: Roberts Realty Investors, Inc.,
its General Partner By: /s/ Charles S. Roberts
----------------------------
Charles S. Roberts, President
By: /s/ Charles S. Roberts
----------------------------------
Charles S. Roberts, Chief Executive
Officer and President
</TABLE>
<PAGE> 1
EXHIBIT 10.14.5
DEVELOPMENT AGREEMENT
This Agreement, made as of this 29th day of March, 1996, by and between
ROBERTS PROPERTIES RESIDENTIAL, L.P., a Georgia limited partnership (the
"Operating Partnership"), and ROBERTS PROPERTIES, INC., a Georgia corporation
("Roberts Properties"),
W I T N E S S E T H:
WHEREAS, the Operating Partnership has acquired approximately 22.5 acres
near the southeast corner of Peachtree Industrial Boulevard and Howell Ferry
Road in Duluth, Georgia (the "Property") as described in the Prospectus of
Roberts Realty Investors, Inc. (the "Company") dated November 1, 1995 (as
supplemented, the "Prospectus"), and plans to construct on such property a
180-unit apartment community ("Howell Ferry"); and
WHEREAS, the Operating Partnership desires that Roberts Properties perform
certain services relating to the development of Howell Ferry;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1.
Services
Roberts Properties shall site plan the Property for Howell Ferry and
design its amenities.
2.
Compensation
For the above services, Roberts Properties shall be paid a total of Two
Hundred Ten Thousand Dollars ($210,000), payable on the date hereof (which is
the date of the initial closing of the offering described in the Prospectus).
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date first above written.
<TABLE>
<S> <C>
ROBERTS PROPERTIES RESIDENTIAL, ROBERTS PROPERTIES, INC., a
L.P., a Georgia limited partnership Georgia corporation
By: Roberts Realty Investors, Inc.,
its General Partner By: /s/ Charles S. Roberts
-----------------------------
Charles S. Roberts, President
By: /s/ Charles S. Roberts
-----------------------------------
Charles S. Roberts, Chief Executive
Officer and President
</TABLE>
<PAGE> 1
EXHIBIT 10.14.6
FINISH SELECTION AND INTERIOR DESIGN AGREEMENT
This Agreement, made as of this 29th day of March, 1996, by and between
ROBERTS PROPERTIES RESIDENTIAL, L.P., a Georgia limited partnership (the
"Operating Partnership"), and ROBERTS PROPERTIES, INC., a Georgia corporation
("Roberts Properties"),
W I T N E S S E T H:
WHEREAS, the Operating Partnership has acquired approximately 22.5 acres
near the southeast corner of Peachtree Industrial Boulevard and Howell Ferry
Road in Duluth, Georgia (the "Property") as described in the Prospectus of
Roberts Realty Investors, Inc. (the "Company") dated November 1, 1996 (as
supplemented, the "Prospectus"), and plans to construct on such property a
180-unit apartment community ("Howell Ferry"); and
WHEREAS, the Operating Partnership desires that Roberts Properties perform
certain advisory and supervisory services relating to the Operating
Partnership's interior design activities;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1.
Services
Roberts Properties shall manage the design team involved in developing the
interior design and models of the Community, including selection of materials,
finishes, features and colors.
2.
Compensation
For the above services, Roberts Properties shall be paid a total of One
Hundred Thousand Dollars ($100,000), payable on the date hereof (which is the
date of the initial closing of the offering described in the Prospectus).
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date first above written.
<TABLE>
<S> <C>
ROBERTS PROPERTIES RESIDENTIAL, ROBERTS PROPERTIES, INC., a
L.P., a Georgia limited partnership Georgia corporation
By: Roberts Realty Investors, Inc.,
its General Partner By: /s/ Charles S. Roberts
-------------------------------
Charles S. Roberts, President
By: /s/ Charles S. Roberts
-----------------------------------
Charles S. Roberts, Chief Executive
Officer and President
</TABLE>
<PAGE> 1
EXHIBIT 10.14.7
CONSTRUCTION ADMINISTRATION AGREEMENT
This Agreement, made as of this 29th day of March, 1996, by and between
ROBERTS PROPERTIES RESIDENTIAL, L.P., a Georgia limited partnership (the
"Operating Partnership"), and ROBERTS PROPERTIES, INC., a Georgia corporation
("Roberts Properties"),
W I T N E S S E T H:
WHEREAS, the Operating Partnership has acquired approximately 22.5 acres
near the southeast corner of Peachtree Industrial Boulevard and Howell Ferry
Road in Duluth, Georgia (the "Property") as described in the Prospectus of
Roberts Realty Investors, Inc. (the "Company") dated November 1, 1995 (as
supplemented, the "Prospectus"), and plans to construct on such property a
180-unit apartment community ("Howell Ferry"); and
WHEREAS, the Operating Partnership desires that Roberts Properties perform
certain administrative services relating to the construction of Howell Ferry;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1.
Services
Roberts Properties shall provide supervisory services to the Operating
Partnership for a 12-month period to ensure that Howell Ferry is built in
accordance with the plans and specifications provided.
2.
Compensation
For the above services, Roberts Properties shall be paid a total of Two
Hundred Twenty-five Thousand Dollars ($225,000), payable on the date hereof
(which is the date of the initial closing of the offering described in the
Prospectus).
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date first above written.
<TABLE>
<S> <C>
ROBERTS PROPERTIES RESIDENTIAL, ROBERTS PROPERTIES, INC., a
L.P., a Georgia limited partnership Georgia corporation
By: Roberts Realty Investors, Inc.,
its General Partner By: /s/ Charles S. Roberts
----------------------------
Charles S. Roberts, President
By: /s/ Charles S. Roberts
----------------------------------
Charles S. Roberts, Chief Executive
Officer and President
</TABLE>
<PAGE> 1
EXHIBIT 10.17.1
MERGER AGREEMENT AND PLAN OF MERGER
This Merger Agreement and Plan of Merger (this "Agreement") is by and
among Roberts Properties Residential, L.P., a Georgia limited partnership (the
"Operating Partnership"), Roberts Realty Investors, Inc., a Georgia corporation
(the "Company"), Roberts Properties Bentley Place, L.P., a Georgia limited
partnership (the "Partnership"), and Charles S. Roberts (the "General
Partner").
ARTICLE I
THE TRANSACTIONS AND CERTAIN EFFECTS
SECTION 1.1. VALUES. The parties hereby agree as follows as respects
relevant values immediately prior to the time (the "Closing Time") of
consummation of the Transactions (as hereinafter defined), assuming in all
cases that the relevant businesses and activities of the parties shall be
carried on and continued as contemplated.
(a) The value of a share of common stock in the Company (the "Share
Value") will be Nine and One-Half Dollars ($9.50).
(b) The value of the assets of the Partnership, net of the liabilities of
the Partnership (the "Partnership Value"), will be Seven Million, Seventy-seven
Thousand, Four Hundred Twenty-six Dollars ($7,077,426.00).
SECTION 1.2. THE TRANSACTIONS. At the Closing Time, the following
transactions (individually a "Transaction" and collectively the "Transactions")
shall be effected, subject to and in accordance with the provisions of this
Agreement.
(a) The Partnership will transfer all of its assets to the Company, in
exchange for which the Company will (i) assume all of the liabilities of the
Partnership and (ii) subject to subsections (d) and (f), issue to the
Partnership the number of shares in the Company equal to the mathematical
quotient of the Partnership Value divided by the Share Value.
(b) The Company will transfer to the Operating Partnership all of the
assets received by the Company pursuant to subsection (a), in exchange for
which the Operating Partnership will (i) assume all of the liabilities assumed
by the Company pursuant to subsection (a) and (ii) issue to the Company a
number of units in the Operating Partnership equal to the number of shares
issued by the Company pursuant to subsections (a), (d) and (f).
(c) The Partnership will liquidate, and in connection therewith the
Partnership will distribute the shares so received to its partners, with its
general partner receiving 17,464 shares for his general partner interest and
its limited partners collectively receiving (subject to subsections (d) and
(f)) the balance of such shares, to be divided among them in proportion to
their respective "ownership percentages" in the Partnership, as that term is
employed within the partnership agreement of the Partnership.
<PAGE> 2
(d) No fractional shares will be issued in connection with the
Transactions described in the preceding subsections. If, in connection with
the liquidation described in subsection (c), a partner in the Partnership
would, but for this subsection (d), receive a fractional share, then (i) if
such fraction is less than one-half, such fractional share shall be
disregarded, (ii) if such fraction is greater than one-half, such partner shall
be issued a whole share instead of such fractional share, or (iii) if such
fraction is equal to one-half, such fractional share shall be disregarded or
replaced by a whole share so as to produce an even number of shares issuable in
the aggregate to such partner in connection with such liquidation. The number
of shares to be issued in connection with the transfer described in subsection
(a) shall equal the number of shares to be distributed in the liquidation
described in subsection (c), as adjusted pursuant to this subsection (d) and
subsection (f).
(e) Any reference herein to an assumption of liabilities shall mean, in
the case of a nonrecourse liability, the taking of such property as is pledged
or otherwise legally available for payment of such liability subject to such
liability without imposition of responsibility beyond such property.
(f) Notwithstanding any provision hereof to the contrary, in the case of a
partner in the Partnership who or which is not a bona fide resident of the
State of Georgia, (i) such partner shall not receive any shares in the Company,
but instead such partner shall receive cash in the amount of the aggregate
value (determined by reference to the values described in section 1.1) of the
shares which such partner would receive but for this subsection (f), (ii) the
cash to be received by such partner shall be supplied by the General Partner,
and (iii) the General Partner shall receive the shares which such partner would
receive but for this subsection (f).
SECTION 1.3. IMPLEMENTATION. As a convenience to the parties and their
respective partners, and to minimize transaction costs, the Transactions shall
be effected by: (a) a statutory merger of the Partnership with and into the
Operating Partnership, pursuant to which (i) the Operating Partnership shall
survive and succeed to the assets and liabilities of the Partnership, (ii) each
of the former partners in the Partnership shall receive the number of shares in
the Company (or cash) to which he is entitled pursuant to section 1.2, and
(iii) the General Partner shall deliver such cash (if any) as may be required
of him, and shall receive the number of shares (if any) to which he is
entitled, pursuant to subsection 1.2(f). The merger described in this section
1.3 is hereinafter referred to as the "Merger."
SECTION 1.4. CERTAIN EFFECTS. When the Merger shall have become
effective, the separate existence of the Partnership shall cease and it shall
be merged into the Operating Partnership, which shall possess all of its former
rights, privileges, powers and franchises of a public as well as of a private
nature, and shall continue to be subject to all of its former restrictions,
disabilities and duties; and all property, real, personal and mixed, and all
debts due to the Partnership on whatever account, as well as all other things
in action or belonging to the Partnership, shall be vested in the Operating
Partnership; and the title to any real estate vested by deed or otherwise,
under the laws of Georgia or any other jurisdiction, in the
2
<PAGE> 3
Partnership shall not revert or be in any way impaired by reason of the Merger,
but all rights of creditors and all liens upon any property of the Partnership
shall be preserved unimpaired, and all debts, liabilities and duties of the
Partnership shall thenceforth attach to the Operating Partnership and may be
enforced against the Operating Partnership to the same extent as if said debts,
liabilities and duties had been incurred or contracted by the Operating
Partnership.
SECTION 1.5. APPROVALS. The Partnership shall, at the Operating
Partnership's expense, seek the requisite approval of its limited partners as
to the ratification, confirmation, adoption and performance of this Agreement
and the authorization of the filing of all appropriate documents.
SECTION 1.6. FURTHER ASSURANCES. At any time and from time to time prior
to and at the Closing Time, the parties shall execute and deliver all such
proper deeds, assignments and other instruments and take or cause to be taken
all such further or other action necessary or desirable to effect the purposes
of this Agreement. At any time and from time to time after the Closing Time,
the last general partner of the Partnership may in the name of the Partnership
execute and deliver all such proper deeds, assignments and other instruments
and take or cause to be taken all such further or other action necessary or
desirable in order to vest, perfect or confirm in the Operating Partnership
title to, and possession of, all of the property, rights, privileges, powers,
franchises, immunities, and interests of the Partnership, and otherwise to
carry out the purposes of this Agreement.
SECTION 1.7. FOUNDATION DOCUMENTS. The partnership agreement of the
Operating Partnership shall be unaffected by the Merger. Nothing contained
herein shall be construed as precluding any amendment to such document at any
time after the Closing Time.
SECTION 1.8. TAX CHARACTERIZATION. It is the intention of the parties
hereto that the Transactions will be considered, for federal income tax
purposes, as (a) taxable purchases by the General Partner of the interests in
the Partnership of persons who are not bona fide residents of the State of
Georgia, (b) taxable purchases by the Company of all interests in the
Partnership (including the interests purchased by the General Partner as
described in subsection (a)), (c) a tax-deferred transaction described in
section 721 of the Internal Revenue Code of 1986, as amended (the "Code") in
which the Company contributes to the Operating Partnership, in exchange for
units in the Operating Partnership, all interests in the Partnership purchased
by the Company as described in subsection (b), and (d) a liquidation of the
Partnership into the Operating Partnership described in section 731 of the
Code.
SECTION 1.9. EFFECTIVE TIME. To the extent permitted by law, the
Transactions will be deemed to have been consummated as of the beginning of the
month in which the Closing Time occurs.
3
<PAGE> 4
ARTICLE II
CONDITIONS
SECTION 2.1. CONDITIONS. Notwithstanding any other provision of this
Agreement, each of the following shall be a condition to the obligation of each
party to consummate the Transactions:
(a) The Transactions shall have been validly approved by the requisite
vote or written consent of the limited partners in the Partnership;
(b) All requisite approvals shall have been obtained from all courts,
governmental agencies, authorities, bureaus, offices and other bodies, and all
applicable waiting periods in connection therewith shall have expired;
(c) No preliminary or permanent injunction or other order by any federal
or state court which prevents the consummation of the Transactions shall have
been issued and shall remain in effect;
(d) There shall not have been instituted or be pending any action or
proceeding by any person challenging or seeking to restrain or prohibit the
consummation of the Transactions or seeking material damages in connection with
the Transactions; and
(e) Each other party shall be ready, willing and able to consummate the
Transactions, and all of the Transactions involving each other party shall have
been consummated or shall simultaneously be consummated.
ARTICLE III
TERMINATION, AMENDMENT AND WAIVER
SECTION 3.1. TERMINATION. This Agreement may be terminated at any time
prior to the Closing Time, whether before or after approval by the limited
partners in the Partnership, by the giving of notice by any party to all other
parties.
SECTION 3.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided above, this Agreement shall forthwith become
prospectively void and there shall be no liability hereunder on the part of any
person or its respective officers or directors, except that (a) the provisions
of sections 1.5 and 4.1 shall continue in effect, and (b) any pre-termination
breach hereof shall be actionable by the non-breaching party or parties.
SECTION 3.3. AMENDMENT. This Agreement may be amended, modified or
supplemented by the parties hereto at any time prior to the Closing Time,
before or after approval hereof by the limited partners in the Partnership, but
after such approval no
4
<PAGE> 5
amendment, modification or supplement shall be made which materially adversely
affects the rights of the limited partners in the Partnership without the
further approval of the requisite collection of such limited partners. This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
SECTION 3.4. WAIVER. At any time prior to the Closing Time, any party
may waive satisfaction of the condition described in subsection 2.1(d). Any
agreement on the part of a party hereto to any such waiver shall be valid if
and only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE IV
GENERAL PROVISIONS
SECTION 4.1. EXPENSES. Whether or not the Transactions are consummated,
the Operating Partnership shall pay all of the legal and other costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including but not limited to all expenses incurred in
seeking the requisite consents of the limited partners of the Partnership.
SECTION 4.2. CLOSING. The closing of the transactions contemplated by
this Agreement shall take place: (a) (i) as soon as practicable after the
requisite approvals of the limited partners in the Partnership have been
obtained (ii) at the offices of Holt, Ney, Zatcoff & Wasserman, Suite 600, 100
Galleria Parkway, Atlanta, Georgia 30339, provided that each of the conditions
set forth in section 2.1 shall have been satisfied or waived; or (b) at such
other time and place as the parties shall have unanimously agreed upon.
SECTION 4.3. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed sufficiently given if delivered
personally, transmitted by facsimile which the sender's facsimile machine
indicates has been sent (in the case of an addressee whose facsimile number is
supplied), sent by Federal Express or similar courier, or mailed by registered
or certified mail (return receipt requested), charges or postage prepaid, to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to the Operating Partnership, to:
Roberts Properties Residential, L.P.
Attention: Charles S. Roberts
8010 Roswell Road, Suite 120
Atlanta, Georgia 30350
Fax: 770-396-0706
5
<PAGE> 6
(b) if to the Company, to:
Roberts Realty Investors, Inc.
Attention: Charles S. Roberts
8010 Roswell Road, Suite 120
Atlanta, Georgia 30350
Fax: 770-396-0706
(c) if to the Partnership, to:
Roberts Properties Bentley Place, L.P.
Attention: Charles S. Roberts
8010 Roswell Road, Suite 120
Atlanta, Georgia 30350
Fax: 770-396-0706
(d) if to General Partner to:
Charles S. Roberts
8010 Roswell Road, Suite 120
Atlanta, Georgia 30350
Fax: 770-396-0706
Unless otherwise provided, notices shall be effective on the earlier of (x)
actual delivery, (y) the date of transmission, if by facsimile, or (z) as
applicable, either (i) the first business day following the date of deposit
with a qualified courier service or (ii) the third business day following the
date of deposit with the United States Post Office or in a regularly maintained
receptacle for the deposit of United States Mail. Any refusal to accept
delivery of any such communication shall be considered successful delivery
thereof.
SECTION 4.4. HEADINGS. The descriptive headings of the several articles
and sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
SECTION 4.5. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
SECTION 4.6. ASSIGNMENT. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of all
6
<PAGE> 7
other parties hereto. This Agreement (inclusive of the attachments hereto)
supersedes all prior agreements and understandings between the parties with
respect to its subject matter.
SECTION 4.7. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which (consisting of one set of textual pages and one or
more signature pages, each signed by one or more parties and collectively
exhibiting the signatures of all parties), shall be deemed an original and all
of which shall constitute one agreement, and the signatures of any party to any
counterpart shall be deemed to be a signature to, and may be appended to, any
other counterpart.
SECTION 4.8. REMEDIES. In addition to any other remedies specifically
provided in this Agreement, the parties may seek such other remedies as may
generally be available at law or in equity. All remedies provided in this
Agreement or by law or equity shall be cumulative.
SECTION 4.9. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Georgia (regardless of the laws that might be applicable under
principles of conflicts of law) as to all matters, including, but not limited
to, matters of validity, construction, effect and performance.
SECTION 4.10. INTEREST. Any damages for breach hereof shall bear and be
considered to include interest from the date of such breach until satisfaction
at the rate of twelve percent (12%) per annum, compounded monthly.
SECTION 4.11. EFFECTIVE DATE. This Agreement shall be effective upon its
execution by the last signing party.
DULY EXECUTED by the parties hereto on the dates indicated.
Signed, sealed and delivered in the Roberts Properties Residential, L.P. (SEAL)
presence of:
By: Roberts Realty Investors, Inc., its
sole general partner
/s/ Anthony Shurtz
- -------------------------------
Unofficial Witness
/s/ Michelle M. Ellingson By: /s/ Charles S. Roberts
- ------------------------------- -----------------------------
Notary Public Charles S. Roberts, President
(NOTARY SEAL)
Date: March 21, 1996
[Executions continue on next page.]
7
<PAGE> 8
Signed, sealed and delivered Roberts Properties Bentley Place, L.P. (SEAL)
in the presence of:
By: /s/ Charles S. Roberts
/s/ Anthony Shurtz -----------------------------------
- ------------------------------ Charles S. Roberts, General Partner
Unofficial Witness
/s/ Michelle M. Ellingson
- ------------------------------
Notary Public Date: March 21, 1996
(NOTARY SEAL)
Signed, sealed and delivered Roberts Realty Investors, Inc. (SEAL)
in the presence of:
By: /s/ Charles S. Roberts
/s/ Anthony Shurtz -----------------------------------
- ------------------------------ Charles S. Roberts, President
Unofficial Witness
/s/ Michelle M. Ellingson
- ------------------------------ Date: March 21, 1996
Notary Public
(NOTARY SEAL)
Signed, sealed and delivered
in the presence of: /s/ Charles S. Roberts (SEAL)
---------------------------------------
Charles S. Roberts
/s/ Anthony Shurtz
- -----------------------------
Unofficial Witness
Date: March 21, 1996
/s/ Michelle M. Ellingson
- -----------------------------
Notary Public
(NOTARY SEAL)
8
<PAGE> 1
EXHIBIT 10.17.2
CONSULTING AGREEMENT
THIS AGREEMENT, made and entered into this 31st day of July, 1992, by and
between ROBERTS PROPERTIES BENTLEY PLACE, L.P., a Georgia limited partnership
(the "Partnership") and ROBERTS PROPERTIES GROUP, INC., a Georgia corporation
(the "Holding Company"),
W I T N E S S E T H:
WHEREAS, the Partnership has acquired certain real property (the
"Property") described in the Partnership's Prospectus dated January 20, 1992
(the "Prospectus"), and the Partnership intends to develop, own and operate a
117-unit condominium community (the "Community") on the Property; and
WHEREAS, the Partnership desires that the Holding Company perform certain
consulting services for the Partnership;
NOW, THEREFORE, the parties hereto hereby agree as follows:
If the Partnership elects to sell the Community or any portion thereof,
the Holding Company shall be entitled to select a licensed real estate
brokerage firm, including itself if so licensed or any company affiliated
with the Holding Company, to have an exclusive listing of the Community at a
sales price to be determined by the Partnership, at a commission rate not to
exceed three percent (3%) of the property sold, to be paid upon closing. The
listing granted herein shall be for a period of three (3) years following the
giving of notice by the Partnership to the Holding Company of its intention
to sell the Community, or the applicable portion thereof. In lieu of the
foregoing, the Holding Company or its affiliate may render consulting
services in connection with the sale of the Community or any portion thereof
and receive a consulting fee upon such sale not to exceed three percent (3%)
of the property sold, to be paid upon closing.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date first above written.
ROBERTS PROPERTIES BENTLEY PLACE, L.P.,
A Georgia Limited Partnership
By: /s/ Charles S. Roberts
-----------------------------------------
Charles S. Roberts, General Partner
ROBERTS PROPERTIES GROUP, INC.,
a Georgia Corporation
By: /s/ Charles S. Roberts
-----------------------------------------
Charles S. Roberts, President
<PAGE> 1
EXHIBIT 10.17.2.1
AMENDMENT #1 TO
CONSULTING AGREEMENT
REGARDING BENTLEY PLACE
This Amendment, by and between Roberts Properties Residential, L.P. (the
"Partnership") and Roberts Properties Group, Inc. (the "Holding Company"),
W I T N E S S E T H:
WHEREAS, the Holding Company and Roberts Properties Bentley Place, L.P.
are the parties to a certain Consulting Agreement dated July 31, 1992 (the
"Agreement");
WHEREAS, Roberts Properties Residential, L.P. has succeeded to the rights
and duties of Roberts Properties Bentley Place, L.P. as respects the Agreement;
and
WHEREAS, the parties desire to modify the Agreement as more particularly
provided hereinafter;
NOW, THEREFORE, the parties do hereby agree as follows.
A. AMENDMENT. The Agreement is hereby amended by adding the following
paragraph at the end thereof:
If, prior to any amount being payable pursuant to the previous paragraph,
there occurs a change in control (as hereinafter defined), the Holding
Company shall be entitled to a consulting fee, payable at the time of
such change in control, equal to three percent (3%) of the fair market
value of the Project at such time, upon payment of which this agreement
shall terminate, so that no amount shall then or thereafter be due
pursuant to the preceding paragraph, nor shall any further amount be due
pursuant to this paragraph. For purposes of this paragraph, a "change in
control" means (a) any transaction, whether by merger, consolidation,
asset sale or otherwise, which results in the acquisition of beneficial
ownership by any person or group of fifty percent or more of the
outstanding shares of common stock of the Partnership's general partner
(the "Company") or of the outstanding units of the Partnership, (b) any
sale of all or substantially all of the assets of the Company or the
Partnership, or (c) liquidation of the Company or the Partnership, except
that no "change in control" shall be considered to have occurred in the
event of the sale of the Partnership's assets to the Company or the merger
of the Partnership into the Company if no change in control of the Company
occurs as a result.
B. EFFECTIVE DATE. The Amendment made by division A hereof shall be
effective as of March 21, 1996, provided that to the extent permitted by law,
this Amendment shall be effective as of and from and after the first day of
March 1996.
C. REAFFIRMATION. Except as hereby modified, the Agreement remains and
shall remain in full force and effect.
D. COUNTERPARTS. This Amendment may be executed in multiple
counterparts, each of which (consisting of one set of textual pages and one or
more signature pages, each signed by one or more parties and collectively
exhibiting the signatures of all parties), shall be deemed an original and all
of which shall constitute one agreement, and the signatures of any party to any
counterpart shall be deemed to be a signature to, and may be appended to, any
other counterpart.
<PAGE> 2
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed on the dates indicated, but as of the effective date hereinbefore
specified.
Date: March 21, 1996 Roberts Properties Residential, L.P.
By: Roberts Realty Investors, Inc.
By: /s/ Charles S. Roberts
---------------------------------
Charles S. Roberts, President and
Chief Executive Officer
Date: March 21, 1996 Roberts Properties Group, Inc.
By: /s/ Charles S. Roberts
---------------------------------------
Charles S. Roberts, President
2
<PAGE> 1
EXHIBIT 10.17.3
PROPERTY MANAGEMENT AGREEMENT
THIS AGREEMENT, made and entered into this 31st day of July, 1992, by
and between ROBERTS PROPERTIES BENTLEY PLACE, L.P., a Georgia limited
partnership (hereinafter referred to as "Owner") and ROBERTS PROPERTIES
MANAGEMENT, INC., a Georgia corporation (hereinafter referred to as
"Manager"),
W I T N E S S E T H:
WHEREAS, Owner is the owner of a 117-unit condominium community that
shall contain approximately 102,650 net rentable square feet on approximately
4.6 acres of land located at the intersection of Pleasantdale and
Tucker-Norcross Roads in DeKalb County, Georgia (hereinafter referred to as
the "Community"), and desires to obtain the benefit of Manager's expertise in
the operation and management of the Community; and
WHEREAS, Manager desires to make its services available to Owner upon
the terms and conditions set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the premises and mutual
promises and covenants herein contained, Owner and Manager agree as follows:
ARTICLE I
DEFINITIONS
1.1 Community. That certain real property described in Exhibit "A"
attached hereto, and hereby incorporated by reference, the grounds,
improvements, parking areas and appurtenances incidental thereto and
connected therewith.
1.2 Management Fee. Shall be in an amount and shall be paid in
accordance with the provisions of Article IV hereof.
1.3 Operation Year. A full year of operation of the Community under
this Agreement coinciding with Owner's fiscal year adopted for accounting
purposes. If the commencement date of this Agreement does not coincide with
the commencement date of Owner's fiscal year, then the term "Partial
Operating Year" shall refer to the partial year that precedes the first full
fiscal year.
1.4 Gross Revenues. All revenues and receipts of every kind received or
derived from the operation of the Community.
1.5 Executive Staff. The manager and other executives of Manager in
charge of or responsible for the operation of the Community. For purposes of
Section 4.2 hereof, the term Executive Staff shall not include those persons
employed by Manager on the Community site.
<PAGE> 2
ARTICLE II
TERM
The term of this Agreement shall be for an initial period, commencing on
the date hereof, and continuing through December 31, 1998 and shall
thereafter be automatically renewed for successive one (1) year terms unless
terminated in accordance with the provisions of Article VII hereof.
ARTICLE III
DUTIES, RESPONSIBILITIES AND AUTHORITY OF MANAGER
During the term of this Agreement, Owner hereby grants to Manager the
sole and exclusive authority, for and on behalf of Owner, to manage and
operate the Community as agent of Owner. Without limiting the generality of
the foregoing, Owner grants to Manager the sole and exclusive authority to
do, and Manager agrees to do for and on behalf of Owner, the following:
3.1 To supervise and direct the operation and management of the
Community so as to provide such services as are customarily provided by
condominium communities of comparable class and standing consistent with the
facilities of the Community, and to consult with Owner and to keep Owner
advised as to all major policy matters affecting the Community. In this
connection, Manager shall have all reasonable discretion in the direction and
supervision of the operation and management of the Community.
3.2 To submit within thirty (30) days prior to each Operating Year, a
budget for expenditures in reasonable detail for each such Operating Year,
which shall include a schedule of anticipated repairs and maintenance
projects and capital replacements. Such budget shall, in general, form the
basis on which expenditures for the Community shall be made, it being
understood that Manager may deviate from such budget if, in Manager's
reasonable judgment, a deviation is necessary or desirable for the efficient
operation of the Community. The budget items are intended as reasonable
estimates only.
3.3 To maintain full and accurate books reflecting the operation and
management of the Community, showing all receipts and expenditures, assets
and liabilities, profits and losses, and all other records necessary for
recording the business and affairs of the operation and management of the
Community. All funds received by Manager as a result of the operation and
management of the Community shall be deposited in the name of Owner in such
checking and savings accounts or time certificates as shall be designated by
Owner. Withdrawals therefrom shall be made upon the signature of an
authorized representative of Manager or Owner.
3.4 To negotiate and enter into contracts for the furnishing to the
Community of telephone, cleaning (including window cleaning where necessary),
vermin exterminators, boiler maintenance, air conditioning maintenance and
other utilities and services which are provided in connection with the
management and operation of the Community in accordance with standards
comparable to those prevailing in other such condominium communities.
2
<PAGE> 3
3.5 To supervise and direct the making or installation of all necessary
or desirable repairs, decorations, renewals and alterations in and to the
Community and the furnishings and equipment.
3.6 To apply for, obtain and maintain on behalf and in the name of
Owner, all licenses and permits required of Owner in connection with the
management and operation of a condominium community for lease. Owner agrees
to execute and deliver any and all applications and other documents and to
otherwise cooperate to the fullest extent with Manager in applying for,
obtaining and maintaining such licenses and permits.
3.7 To direct and supervise the payment by Owner of all costs and
expenses incurred in managing and operating the Community, including the
following:
(a) All costs and expenses of advertising or business promotion
relating to the Community;
(b) All expenditures, which are of an ordinary nature, or which have
been covered in the budget, for repairs and maintenance or capital
improvements;
(c) Premiums for insurance maintained in connection with the Community
and the operation and management thereof;
(d) Legal and accounting fees;
(e) The Management Fee due Manager pursuant to this Agreement,
including reimbursable expenses;
(f) Cost and expense of utilities and services of the Community and any
and all other expenditures provided for in this Agreement; and
(g) Any other charge, item or expense which Owner directs to be paid.
3.8 Manager and Owner shall meet when requested by Owner to review the
results of operation of the Community. All statistical and operating
information required for such meetings shall be furnished by the Executive
Staff from the books and records of the Community.
3.9 In the performance of its duties hereunder, Manager shall act solely
on behalf of and as agent for Owner and not in its own behalf; therefore, all
debts, obligations and other liabilities incurred by Manager pursuant to
subparagraphs 3.8(a) and 3.8(g) hereof shall be incurred on behalf of Owner,
and Manager shall not be liable or responsible for the payment of any such
debts, obligations or other liabilities. If any such debts or obligations
are paid by Manager, it shall be entitled to reimbursement therefor.
3
<PAGE> 4
ARTICLE IV
MANAGEMENT FEES
As compensation for the services to be rendered by Manager during the
term of this Agreement, Owner shall pay to Manager the Property Management
Fee and the Incentive Management Fee as hereinafter set forth, and shall pay
to Manager the reimbursement expenses as hereinafter set forth, at such place
as Manager may designate:
4.1 Owner shall pay to Manager a Property Management Fee in an amount
equal to five percent (5%) of the Gross Revenues of the Community for each
month that this Agreement shall be in effect, with each such monthly payment
to be made not later than the 25th day of the following month.
4.2 Owner shall pay to Manager, on an annual basis beginning on January
1, 1994 payable not later than January 31 of the following year, an Incentive
Management Fee in an amount equal to fifteen percent (15%) of the amount by
which actual net operating income exceeds the amount forecasted for such year
in the Financial Forecast attached as Exhibit "F" to the Partnership's
Prospectus pursuant to which units of limited partnership interest in the
Partnership were offered to investors.
4.3 Manager shall be entitled to reimbursement on a monthly basis of
out-of-pocket expenses incurred by it in the proper performance of its duties
under Article III hereof; provided, however, Manager shall not be entitled to
reimbursement for its internal general administrative expenses including, but
not limited to, employee payroll and federal withholding taxes for its
Executive Staff.
4.4 Owner shall pay any leasing commissions or fees to outside real
estate agents.
ARTICLE V
GENERAL
5.1 Manager shall supervise and direct the keeping of books of account
and such other records reflecting the results of operation of the Community.
5.2 Nothing contained in this Agreement shall constitute or be construed
to constitute or to create a partnership or joint venture between Owner and
Manager. Owner shall be solely liable for all the costs, expenses and other
liabilities incurred in maintaining and operating the Community, and Owner
shall receive all the revenues derived therefrom. Manager shall only be
entitled to the Management Fee and reimbursable expenses, and Manager shall
have no liability or responsibility for any of the costs, expenses or other
liabilities incurred in the maintenance and operation of the Community.
5.3 Owner takes cognizance that the supervision and direction of
operation and management, including the direction and supervision of the
Executive Staff and the formulation of policies for the operation of the
Community, must emanate from one source of authority. Therefore, Owner
delegates to Manager the sole right to direct and supervise the operations
and the management of the Community, including the Executive Staff, without
4
<PAGE> 5
interference from Owner. Nothing herein is intended to limit or restrict
Owner's complete access to the Community and the books and records of the
Community for any purpose which Owner in its discretion may deem advisable.
All major policy decisions affecting the Community shall be the prerogative
of Owner, but Owner shall accord to Manager the right to enter into
discussions relative to such major policy decisions and the announcement
and/or implementation of such decisions shall be made by Manager.
5.4 In the performance of this Agreement, Manager shall not be liable to
Owner or to any other person for any act or omission of any officer, agent or
employee of Owner, and Owner agrees to hold harmless and indemnify Manager
against any claims of third persons arising from such acts of Owner's
officers, agents or employees. Manager shall not be liable to Owner for any
act or omission of Manager, its officers, agents and employees in the
performance of its duties hereunder, except such as result from fraud or
gross negligence.
ARTICLE VI
NOTICES
Any formal notice by either party to the other shall be in writing and
shall be given, and be deemed to have been duly given, if either delivered
personally or mailed in a registered or certified postpaid envelope addressed
to the address of either party hereinafter set forth or, if the address for
notice of either party shall be duly changed as hereinafter provided,
delivered or mailed as aforesaid to such party at such changed address.
Either party may at any time change the address for notices to such party by
the delivery or mailing, as aforesaid, of a notice stating the change and
setting forth the changed address.
Owner:
Roberts Properties Bentley Place, L.P.
8010 Roswell Road
Suite 120
Atlanta, Georgia 30350
Attention: Mr. Charles S. Roberts, General Partner
Manager:
Roberts Properties Management, Inc.
8010 Roswell Road
Suite 120
Atlanta, Georgia 30350
Attention: Mr. Charles S. Roberts, President
ARTICLE VII
TERMINATION OF AGREEMENT
7.1 This Agreement may be terminated by Owner, and except as to
liabilities or claims which shall have occurred or arisen between the parties
prior to such termination, all
5
<PAGE> 6
obligations hereunder of one party to the other shall cease upon the
happening of any of the following events:
(a) If Manager shall become in default in the performance of any term,
covenant or condition which this Agreement requires it to perform, and shall
fail to cure or to diligently commence to cure such default within thirty
(30) days after receipt of written notice from Owner specifying such default;
or
(b) If Manager shall make any assignment of its property for the
benefit of creditors; or
(c) If Manager files a petition for adjudication as a bankrupt, for
reorganization or for an arrangement under any bankruptcy or insolvency law,
or if any involuntary petition under any such law is filed against Manager
and not dismissed within sixty (60) days thereafter;
then, so long as any such event is continuing, Owner may, by notice in
writing to Manager, terminate this Agreement forthwith.
7.2 This Agreement may be terminated by Manager, and except as to
liabilities or claims which shall have occurred or arisen between the parties
prior to such termination and except as otherwise provided herein, all
obligations hereunder of one party to the other shall cease upon the
happening of any of the following events:
(a) If Owner shall become in default of the due performance of any
term, covenant or condition which this Agreement requires it to perform, and
shall fail to cure, correct or remedy such default within the period of time
specified in the provisions relating to such term, covenant or condition of, if
there shall be none, then within thirty (30) days after written notice from
Manager specifying such default, then so long as any such event is continuing,
Manager may by notice in writing to Owner terminate this Agreement forthwith;
(b) If the Community shall be taken or condemned in any eminent domain,
condemnation or like proceeding by any competent authority, or if such a
portion thereof shall be taken or condemned as to make in imprudent or
unreasonable, in Manager's reasonable opinion, to use the remaining portion
as a condominium community of the type and class immediately preceding such
taking or condemnation, then in either event this Agreement shall cease and
terminate as of the date upon which Owner shall be required to surrender
possession;
(c) The failure of Owner:
(i) To make payment of any sum due Manager hereunder with ten
(10) days of written notice;
(ii) To make payment of any uncontested debt, obligation or
liability incurred in the operation and management of the Community as
described above within ten (10) days from written notice from Manager;
6
<PAGE> 7
(iii) To remedy a condition or to take any action requested by
Manager within ten (10) days from written notice from Manager, which results in
a decrease of essential services necessary to the proper operation and
management of the Community;
(iv) The repeated failure or refusal of Owner to observe Manager's
right of noninterference as provided in Article V hereof after having received
written notice from Manager to cease and desist such action;
(v) Any provision of the foregoing to the contrary
notwithstanding, this Agreement shall be automatically terminated upon the
failure of Owner to pay when due any amount owed to the holder of any mortgage
note or other obligation secured by a first lien on the Community.
7.3 This Agreement may be terminated by either party, and except as to
liabilities or claims which shall have occurred or arisen between the parties
prior to such termination and except as otherwise provided herein, all
obligations of one party to the other shall cease upon the giving of sixty
(60) days written notice of such intent to terminate this Agreement to the
other party.
ARTICLE VIII
PROHIBITION OF ASSIGNMENT
Manager shall not assign this Agreement or any of its rights hereunder;
nor shall this Agreement or any of the rights or obligations of Manager
hereunder be transferable except by merger or consolidation of Manager with
another corporation if the operating personnel of such corporation at the
time of such merger or consolidation shall be substantially the same as the
operating personnel of Manager and if such corporation shall be actively
engaged in the business of supervising and directing the management and
operation of condominium communities. Neither party shall have the right to
make any assignment of this Agreement or any interest therein without the
written consent of the other.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 This Agreement cannot be changed or modified except by another
agreement in writing signed by the party sought to be charged therewith or by
its duly authorized agent.
9.2 This Agreement constitutes all of the understandings and agreements
of whatsoever nature or kind existing between the parties with respect to
Manager's supervision and direction of the management and operation of the
Community. Manager makes no guarantee, warranty or representation that
there will be profits or losses accruing to Owner as a result of the
services rendered hereunder by Manager.
9.3 Whenever under any provisions of this Agreement the approval or
consent of either party is required, the decisions thereon shall be promptly
given and such approval or consent shall not be unreasonably withheld. It is
further understood that whenever under any provisions of this Agreement
approval or consent is required, the approval or consent is given
7
<PAGE> 8
by the person executing this Agreement or any one of the persons, as the case
may be, designated in a notification signed by or in behalf of a party. For
all purposes under this Agreement, Manager shall determine solely from the
latest such notification received by it the person or persons authorized to
give such approval or consent. Manager may rely exclusively and conclusively
on the designation set forth in such notification, notwithstanding any
knowledge to the contrary.
9.4 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the parties have executed, or caused to be executed,
this Agreement as of the day and year first above written.
OWNER:
ROBERTS PROPERTIES BENTLEY PLACE, L.P.,
A Georgia Limited Partnership
By: /s/ Charles S. Roberts
----------------------------------------
Charles S. Roberts, General Partner
MANAGER:
ROBERTS PROPERTIES MANAGEMENT, INC.,
a Georgia Corporation
By: /s/ Charles S. Roberts
----------------------------------------
Charles S. Roberts, President
8
<PAGE> 9
EXHIBIT A
All that tract of land in Land Lot 288 of the 18th District, DeKalb County,
Georgia, described as follows:
BEGINNING at a 5/8-inch reinforcing rod found on the northwest right-of-way
line of Tucker-Norcross Road (variable right-of-way) which 5/8-inch reinforcing
rod found is located South 40 degrees 27 minutes 21 seconds West 312.28 feet
along the northwest right-of-way line of Tucker-Norcross Road from the
intersection of the northwest right-of-way line of Tucker-Norcross Road with
the centerline of Spring Meadow Road; running thence along the northwest
right-of-way line of Tucker-Norcross Road the following courses and distances:
(1) South 40 degrees 27 minutes 21 seconds West 155.40 feet to an iron pin
placed, (2) South 45 degrees 57 minutes 16 seconds West 52.10 feet to an iron
pin placed, (3) South 40 degrees 02 minutes 32 seconds West 29.67 feet to an
iron pin placed, (4) South 41 degrees 49 minutes 33 seconds West 51.21 feet to
an iron pin placed, and (5) South 33 degrees 05 minutes 10 seconds West 18.48
feet to an 5/8-inch reinforcing rod found; thence, leaving said right-of-way
line, North 49 degrees 45 minutes 34 seconds West 185.51 feet to a 5/8-inch
reinforcing rod found; thence South 36 degrees 59 minutes 48 seconds West
164.36 feet to a 5/8-inch reinforcing rod found on the northeast right-of-way
line of Pleasantdale Road (100 foot right-of-way); thence, along said northeast
right-of-way line, the following courses and distances: (1) along the arc of a
curve to the left (which arc is subtended by a chord having a bearing and
distance of North 58 degrees 36 minutes 56 seconds West 224.26 feet and a
radius of 1,004.930 feet) 224.73 feet to a concrete monument found, (2) North
65 degrees 29 minutes 02 seconds West 252.69 feet to a concrete monument found,
and (3) along the arc of a curve to the right (which arc is subtended by a
chord having a bearing and distance of North 61 degrees 50 minutes 53 seconds
West 216.47 feet and a radius of 1859.859 feet) 216.60 feet to a concrete
monument found; thence, leaving said right-of-way line, South 89 degrees 20
minutes 14 seconds East 89.02 feet along the south line of Block B of Unit 1,
Spring Meadow Subdivision to a 1/2-inch reinforcing rod found; thence North 00
degrees 55 minutes 12 seconds West 50.08 feet to a 1/2-inch reinforcing rod
found on the South right-of-way line of Spring Meadow Court (60 foot
right-of-way); thence along said south right-of-way line, South 88 degrees 42
minutes 01 second East 59.95 feet to an iron pin placed; thence, leaving said
right-of-way line, South 00 degrees 52 minutes 03 seconds East 50.16 feet to a
1/2-inch reinforcing rod found; thence along the south line of Block A of Unit
1, Spring Meadow Subdivision the following courses and distances: (1) South 89
degrees 32 minutes 05 seconds East 620.15 feet to a 1/2-inch open top pipe
found, (2) North 00 degrees 45 minutes 28 seconds West 50.20 feet to a 1/2-inch
reinforcing rod found, and (3) South 89 degrees 46 minutes 48 seconds East
139.63 feet to a 1/2-inch reinforcing rod found; thence South 49 degrees 33
minutes 23 seconds East 192.26 feet to the POINT OF BEGINNING, said tract
containing approximately 4.5959 acres as shown on plat of Survey for Roberts
Properties Bentley Place, L.P. and Chicago Title Insurance Company, prepared by
Watts & Browning Engineers, Inc., bearing the seal and certification of G.M.
Gillespie, Georgia Registered Professional Land Surveyor No. 2121, dated July
8, 1992, last revised July 17, 1992.
<PAGE> 1
EXHIBIT 10.17.3.1
AMENDMENT #1 TO
PROPERTY MANAGEMENT AGREEMENT
REGARDING BENTLEY PLACE
This Amendment, by and between Roberts Properties Residential, L.P.
("Owner") and Multifamily Management, Inc. (f/k/a Roberts Properties
Management, Inc.) ("Manager"),
W I T N E S S E T H:
WHEREAS, Roberts Properties Management, Inc. has entered into a Property
Management Agreement (the "Agreement") with Roberts Properties Bentley Place,
L.P. (the "Predecessor");
WHEREAS, Owner has succeeded to the rights and duties of the Predecessor
as respects the Agreement; and
WHEREAS, the parties desire to modify the Agreement as more particularly
provided hereinafter;
NOW, THEREFORE, the parties do hereby agree as follows.
A. AMENDMENTS.
1. Article II of the Agreement is hereby amended by deleting it in
its entirety and substituting in lieu thereof the following: "This
Agreement, as amended, shall have a term of five (5) years, commencing as
of March 21, 1996 and continuing through the fifth anniversary thereof,
and shall thereafter be automatically renewed for successive one (1) year
terms unless earlier terminated in accordance with the provisions of
Article VII hereof."
2. Article III of the Agreement is hereby amended by deleting the
first paragraph thereof in its entirety and replacing it with the
following:
"Subject to Section 3.10 hereof, during the term of this Agreement,
Owner hereby grants to Manager the sole and exclusive authority, for and
on behalf of Owner, to manage and operate the Project as agent of Owner,
and, without limiting the generality of the foregoing, Owner grants to
Manager the sole and exclusive authority to do, and Manager agrees to do
for and on behalf of Owner, the following:"
3. Article III of the Agreement is hereby further amended by
adding thereto the following:
"3.10 Owner shall in no event provide to any tenant any
Non-Qualified Services (as hereinafter defined). In the event that any
Non-Qualified Services are provided to a tenant, such Services must be
provided by an independent contractor from whom Owner does not derive or
receive any income (within the meaning of section 856(d) of the Internal
Revenue Code and all applicable regulations and other authorities
thereunder), and in no way shall such Services be construed as being
provided by Owner. Such independent contractor shall bear the cost of
providing any such Non-Qualified Service to any tenant and shall make a
separate charge to such tenant for any such Service so provided. The
independent contractor shall retain the charges and all other income for
any such Non-Qualified Services. Owner shall in no event derive or
receive any income from such Non-Qualified Services or from such
independent contractor. For purposes hereof, "Non-Qualified Services"
are services which, if provided by Owner (other than through an
independent contractor as contemplated by the preceding sentences of this
paragraph), would cause the rents payable by any tenant to fail to
qualify as rents from
<PAGE> 2
real property, within the meaning of section 856(d) of the Internal
Revenue Code and all applicable regulations and other authorities
thereunder."
4. Article IV is hereby amended by deleting the reference to the
Incentive Management Fee from the first paragraph thereof.
5. Section 4.2 of the Agreement is hereby deleted in its entirety
and marked "[Intentionally Omitted]."
6. Article VI of the Agreement is hereby amended by deleting the
name and address of the Owner specified therein, and replacing it with
the following:
"Roberts Properties Residential, L.P.
8010 Roswell Road
Suite 120
Atlanta, Georgia 30350
Attention: Mr. Charles S. Roberts, President
Roberts Realty Investors, Inc."
and is hereby further amended by deleting the name and address of the
Manager specified therein, and replacing it with the following:
"Multifamily Management, Inc.
8010 Roswell Road
Suite 120
Atlanta, Georgia 30350
Attention: Mr. Charles S. Roberts"
B. EFFECTIVE DATE. The Amendment made by division A hereof shall be
effective as of March 21, 1996, provided that to the extent permitted by law,
this Amendment shall be effective as of and from and after the first day of
March 1996.
C. REAFFIRMATION. Except as hereby modified, the Agreement remains and
shall remain in full force and effect.
D. COUNTERPARTS. This Amendment may be executed in multiple
counterparts, each of which (consisting of one set of textual pages and one or
more signature pages, each signed by one or more parties and collectively
exhibiting the signatures of all parties), shall be deemed an original and all
of which shall constitute one agreement, and the signatures of any party to any
counterpart shall be deemed to be a signature to, and may be appended to, any
other counterpart.
[EXECUTIONS COMMENCE ON NEXT PAGE.]
2
<PAGE> 3
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed on the dates indicated, but as of the effective date hereinbefore
specified.
Date: March 21, 1996 Roberts Properties Residential, L.P.
By: Roberts Realty Investors, Inc.
By: /s/ Charles S. Roberts
-----------------------------------
Charles S. Roberts, President and
Chief Executive Officer
Date: March 21, 1996 Multifamily Management, Inc.
By: /s/ Charles S. Roberts
----------------------------------------
Charles S. Roberts, President
3
<PAGE> 1
EXHIBIT 10.17.4
[LOGO] NATIONWIDE INSURANCE
HOME OFFICE: ONE NATIONWIDE PLAZA Nationwide is on your side
COLUMBUS, OH 43215-2220
April 2, 1996
Roberts Properties Residential, L.P.
c/o Mr. John J. Farrell
Shoptaw-James, Inc.
5871 Glenridge Drive, Suite 200
Atlanta, GA 10328
Re: Bentley Place Apartments
Dekalb County, Georgia
Gentlemen:
Nationwide hereby approves your Application/Contract For Mortgage Loan on the
above-referenced property dated January 24, 1996, subject to the following
modifications:
1. IN PART I, PARAGRAPH 9:
(b) Change the Interest Rate to "7.10%"
(d) Change the Monthly Payment to "$27,553.31"
2. IN PART I PARAQRAPH 11, change the Closing Date to "or before June 27,
1996" and insert at the end of the paragraph the following:
"Notwithstandinq the foregoing Borrower may extend the expiration date
for no more than three consecutive 30-day periods, provided however, that
in any event. The Closing Date of the Application/Contract shall be no
later than September 30, 1996. As a condition to each 30-day extension,
the Borrower will pay to Nationwide prior to the expiration of the
Closing Date or extended Closing Date a non-refundable extension-fee in an
amount equal to the following: The loan amount times the difference
between the current Application/Contract interest rate and the then
current corresponding 30-day U.S. Treasury Bill Rate as published in the
Wall Street Journal on the fifth business day preceding the closing Date
for the applicable extension divided by 12. For example, if the 30-day
U.S. Treasury Bill Rate is 5.30%, then the non-refundable extension fee
for a 30-day period is calculated as follows: ($4,100,000 times (7.10%
less 5.30%) divided by 12 = $6,150). Borrower must give Nationwide
written notice of its intention to exercise each extension option at least
seven business days prior to expiration of the Closing Date or extended
Closing Date."
3. IN PART I, PARAGRAPH 15, add at the end of the second paragraph the
following:
"It is understood and agreed that Nationwide's above-mentioned approval of
the environmental report shall include, but not be limited to, approval
of:
(1) the determination of the magnitude and extent of the contamination of
the security property due to the existing contamination of
the adjacent Fina Service Station site
(2) a Corrective Action Plan (CAP) submitted to and approved by the
Georgia EPD
(3) a definitive time schedule and cost estimate to implement the approved
CAP and complete remediation of the subject property and the Fina
site.
<PAGE> 2
Bentley Place Apartments
Paqe 2
April 2, 1996
Above are the only chanqes to your Application/Contract For Mortgaqe Loan and
will become effective upon your signing in the space provided below and
returning this document along with the Commitment Fee consisting of a Letter of
Credit with an expiration date no earlier than six months after the expiration
date of the Application/Contract For Mortgage Loan as outlined in Paragraph 15
of the Application/Contract For Mortgage Loan to Timothy M. McCarthy, Real
Estate Analyst, at the letterhead address within seven (7) days of the date
hereof.
Very truly yours,
NATIONWIDE LIFE INSURANCE COMPANY
/s/ Robert H. McNaghten
Robert H. McNaghten
Vice President
Real Estate Investments
RHM/TMM/sac
Accepted by Borrower this 11th day of April, 1996
/s/ Charles R. Elliott CFO
- --------------------------
Charles R. Elliott
<PAGE> 3
[LOGO] NATIONWIDE INSURANCE
NATIONWIDE IS ON YOUR SIDE
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE; ONE NATIONWIDE PLAZA - COLUMBUS, 43216
DO NOT MAKE ANY MODIFICATIONS IN THE BODY OF
THIS APPLICATION/CONTRACT. ANY MODIFICATIONS
ARE TO BE ENUMERATED IN EXHIBIT "B" ATTACHED
HERETO.
PART I
APPLICATION/CONTRACT FOR MORTGAGE LOAN WITH
NATIONWIDE LIFE INSURANCE COMPANY
1. APPLICATION/CONTRACT: This application is an offer made by Applicant (as
defined in Section 3 below) to Nationwide Life Insurance Company
(hereinafter "Nationwide") to enter into a contract for the mortgage loan
described herein (hereinafter "Mortgage Loan"). This Application/Contract
for Mortgage Loan (hereinafter "Application/Contract") is collectively
comprised of PART I, PART II, Exhibit A, and Exhibit B. PART II, Exhibit
A, and Exhibit B are attached hereto and incorporated herein by reference.
Upon Nationwide's written acceptance hereof, or upon Applicant's written
acceptance of any counteroffer made by Nationwide in response hereto, this
Application/Contract together with any accepted counteroffer, will
constitute a Contract for Mortgage Loan, whereby Nationwide agrees to loan
to Borrower (as defined in Section 4 below) upon Applicant/Borrower's full
and timely compliance with the terms and conditions of this
Application/Contract, and whereby Borrower agrees to accept the Mortgage
Loan from Nationwide.
2. LOAN CORRESPONDENT: This Application/Contract is issued through
Shoptaw-James, Inc., (hereinafter "Loan Correspondent"). Applicant agrees
to deal with the Loan Correspondent on any matter arising from issuance of
this Application/Contract, or in respect to the loan closing.
Applicant/Borrower and its legal counsel will be receiving specific
closing instructions from the Loan Correspondent, Nationwide, and/or
Nationwide's legal counsel.
3. APPLICANT: State the name(s) of the person(s) or entity(ies) applying for
the Mortgage Loan (hereinafter "Applicant"):
Roberts Properties Residential, L.P.
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4. BORROWER: State the name of the borrowing entity as it will appear on the
record of title (hereinafter "Borrower"); and (a) if Borrower is a
partnership, list the partners and percentage of ownership interest of
each partner; (b) if a corporation, list the state of incorporation and
the principal shareholders; or (c) a trust, list the beneficiaries and
trustees. Please also list all underlying entities of the Borrower. any of
the general partners or beneficiaries of Borrower are general
partnerships, list the partners of these general partnerships also.
Roberts Properties Residential, L.P.
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Nationwide is to receive from the Applicant/Borrower for its review and
approval copies of all partnership and/or trust agreements, and copies of
articles of incorporation, corporate bylaws, and certificates of good
standing (from the state of incorporation and from the state where the
Security Property, as herein defined, is located) as,well as copies of the
same for all underlying entities of the Borrower.
Page 1 of 19
<PAGE> 4
5. RESPONSIBLE INDIVIDUALS: State the name(s) of that (those) individual(s)
who will be assuming personal liability for those items enumerated in
the "Exculpation" section of this Application/Contract and who will be
signing the indemnifications called for in the "ENVIRONMENTAL AUDIT AND
INDEMNIFICATION" and "ACCESSIBILITY INSPECTION AND INDEMNIFICATION"
sections of the Application/Contract (hereinafter "Responsible
Individuals"):
Roberts Realty Investors, Inc.
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6. GUARANTORS: If a guarantee of the Mortgage Loan is required under
Paragraph b, of Exhibit "A" of this Application/Contract, or is
required pursuant to other provisions of this Application/Contract,
state below those individuals who will unconditionally, jointly, and
severally guarantee the Mortgage Loan (hereinafter "Guarantors"):
Roberts Realty investors, Inc.
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7. MAJOR TENANTS: State below the major tenants that occupy space in or
adjacent to the Security Property (hereinafter "Major Tenants"):
N/A
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8. FINANCIAL STATEMENTS: Please attach hereto current financial statements,
which have been signed and dated, for the Applicant, for the Borrower, for
all principals of the Borrower, for any Guarantors of the Mortgage Loan
required pursuant to the terms of this Application/Contract, and for all
Responsible Individuals. Current financial statements shall include a
balance sheet, income tax returns, and cash flow statements for all real
estate projects owned by the aforementioned individuals and/or entities.
9. LOAN TERMS:
(a) Maximum Loan Amount: $ 4,100,000.
(b) Interest Rate: 6.97% percent per annum.
(c) Term and Amortization: The Mortgage Loan will be for a 10-year
term, with any unpaid principal balance due at the end of the
term. Payments are to be based upon a 30-year amortization
schedule.
(d) Monthly Payment: $27,194.85 due by the 15th day of each month
(hereinafter "Due Date").
Monthly payments shall be calculated on the basis of a 360-day
year composed of twelve 30-day months.
Page 2 of 19
<PAGE> 5
10. DESCRIPTION OF SECURITY: Describe the property that will secure the
Mortgage Loan (hereinafter "Security Property"): (Please complete all
parts of this section.)
<TABLE>
<S> <C>
Bentley Place Apartments
-------------------------------------------------------------------------------
Name of Property
Apartments 215 Bentley Place
---------------------------------------- ---------------------------------
Type of Property Street and Number
(office, retail, apt., industrial, etc.)
Tucker DeKalb GA 30084
------------- ------------- ------------- -------------------
City County State Zip Code
4.6 acres 117 units/5 bldgs 108,328 s/f
------------------ --------------------- ------------------------------------
Land (acres/sq. ft) Building Improvements On-site (hereinafter "Improvements")
219
--------------
Parking Spaces
* (Gross building area, net rentable area, number units/rooms, etc.)
Pleasantdale Road and
Tucker-Norcross Road Fee Simple Existing
------------------------- ----------------------- -------------------
* Abutting dedicated ways Fee Improvements
simple/leasehold estate Existing/Proposed
</TABLE>
* (PUBLIC OR PRIVATE ROADWAYS WHICH PROVIDE ACCESS TO THE
SECURITY PROPERTY. IF ROADWAYS ARE PRIVATE, ANY AGREEMENTS
SETTING FORTH USE AND MAINTENANCE OF SUCH ROADWAYS ARE SUBJECT
TO THE REVIEW AND APPROVAL OF NATIONWIDE)
Is the Security Property a separate parcel and does it comply with all
applicable subdivision ordinances and plat acts?
X
--------------------------- ------------------------
YES NO
If NO, please explain what is being done to plat the Security Property or
to bring the Security Property into compliance:
------------------------------------------------------------------------
------------------------------------------------------------------------
11. CLOSING DATE AND FUNDING REQUIREMENTS: The loan disbursement shall take
place at the closing on or before May 31, 1996 (hereinafter "Closing
Date"), upon completion of the Improvements in accordance with the
approved final plans, specifications, and soils report and in compliance
with the terms and conditions of this Application/Contract. This
Application/Contract shall expire on the Closing Date and thereafter
Nationwide shall have no further obligation to fund the Mortgage Loan.
Nationwide may, in its sole discretion, unilaterally extend the Closing
Date. Time is of the essence with respect to this Application/Contract.
Exhibit "A" attached hereto outlines any other conditions or specific
requirements that must be satisfied for funding to occur.
12. SITE INSPECTION: Nationwide will make a site inspection of the Security
Property to substantiate the loan amount and project feasibility.
Applicant/Borrower will pay to Nationwide $2,500 to defray its cost of
making such inspection (hereinafter "Site Inspection Fee"). This Site
Inspection Fee is to be paid at the time this Application/Contract is
submitted to Nationwide for its review. Under no circumstances will the
Site Inspection Fee be refunded by Nationwide.
13. LETTER OF CREDIT: Any letter of credit required by this
Application/Contract shall mean an irrevocable and unconditional letter
of credit issued by a commercial bank acceptable to Nationwide having
minimum total assets of $500,000,000, and tangible capital and surplus
equal to no less than six (6) percent of total assets (hereinafter
"Letter of Credit"). Borrower, any Guarantors, and the Responsible
Individuals shall personally, jointly, severally, and unconditionally
guarantee payment of any Letter of Credit and any renewals and/or
replacements thereof, in the event the bank issuing the Letter of
Credit becomes insolvent, files, or has filed against it, any bankruptcy
or similar proceeding, is closed (either temporarily or permanently),
placed in receivership, conservatorship, or liquidation by the Federal
Deposit Insurance Corporation, the Resolution Trust Corporation, or any
other local, state, or federal governmental agency, or if the bank
refuses or fails to honor the Letter of Credit when presented by
Nationwide. In addition, in the event any of the aforementioned events
take place, Nationwide, in its sole discretion, may require that Borrower
obtain a replacement Letter of Credit from a bank or other financial
institution acceptable to Nationwide, in its sole discretion, or that
Borrower pledge other security acceptable to Nationwide, in its sole
discretion, with respect to the obligation secured by the Letter of
Credit.
Page 3 of 19
<PAGE> 6
14. APPLICATION DEPOSIT: Applicant/Borrower shall deposit with Nationwide
the sum of $41,000 as an application deposit (hereinafter
"Application Deposit") in connection with this Application/Contract.
Nationwide may deposit this Application Deposit into its bank account.
The deposit by Nationwide of such Application Deposit shall not
constitute acceptance or approval of the Application/Contract. In the
event Nationwide denies the Application/Contract, the Application
Deposit shall be refunded to the Applicant without interest.
Conversely, if the Application/Contract is approved by Nationwide, the
Application Deposit shall be credited to the Commitment Fee required
under the COMMITMENT FEE section herein and shall be retained by
Nationwide or returned to Applicant in accordance with this COMMITMENT
FEE section.
15. COMMITMENT FEE: As partial consideration for Nationwide's agreement to
loan funds in the amounts and on the terms set forth herein,
Applicant/Borrower shall deliver to Nationwide upon Nationwide's
acceptance of this Application/Contract $41,000 in cash and a
Letter of Credit in the amount of $82,000 with an expiration date of
no earlier than six (6) months after the Closing Date of this
Application/Contract (the cash and Letter of Credit are collectively
hereinafter referred to as the "Commitment Fee"). The Commitment Fee
shall be returned to Applicant/Borrower after the Mortgage Loan has
closed in accordance with the terms and conditions of this
Application/Contract and Nationwide has received the original executed
note; but should the Mortgage Loan not close as provided for in this
Application/Contract due to a failure of the Borrower to fulfill the
terms and conditions of this Application/Contract, or if this
Application/Contract shall be cancelled as set forth in sub-paragraphs
(a) through (c) of the FINANCIAL RESPONSIBILITY paragraph herein, in
each case strictly according to the terms thereof, then Nationwide shall
have the option, without giving prior notice to Applicant/Borrower and
without incurring liability of any kind, to cancel this
Application/Contract and terminate all Nationwide's obligations
hereunder. Upon cancellation of this Application/Contract, Nationwide
shall have the right to retain the Commitment Fee in full and in
addition, to pursue all legal and equitable remedies available to
Nationwide, including without limitation, suit to collect provable
damages (including loss of bargain) in excess of the Commitment Fee.
In the event, however, that the Mortgage Loan does not close because
Nationwide has not approved the inspecting architect's report, the
soils report, the plans and specifications, the environmental report,
the leases, or the Security Property, or because one of the events
outlined in sub-paragraphs (d) or (e) of the FINANCIAL RESPONSIBILITY
section herein has occurred, then the Commitment Fee, less Nationwide's
out-of-pocket expenses, shall be refunded to the Applicant/Borrower,
provided, however, that Applicant/Borrower shall use its best efforts
to correct any deficiencies in such reports, leases or the Security
Property. If Applicant/Borrower does not use its best efforts to
correct any such deficiencies to Nationwide's satisfaction, then
Nationwide may cancel this Application/Contract and terminate all
Nationwide's obligations hereunder. Upon cancellation of this
Application/Contract, Nationwide shall have the right to retain the
Commitment Fee and, in addition, to pursue all legal and equitable
remedies available to Nationwide, including without limitation, suit to
collect provable damages (including loss of bargain) in excess of the
Commitment Fee.
Election of any remedy by Nationwide shall not be deemed a waiver of any
alternative remedy set forth herein or available to Nationwide at law or
equity.
16. SUBMISSION INFORMATION: Upon delivery of this Application/Contract or
shortly thereafter, Applicant and/or the Loan Correspondent shall
provide Nationwide with any documentation and information requested by
Nationwide that is reasonably necessary for Nationwide to evaluate the
feasibility of the Mortgage Loan, including, but not limited to, such
items as an appraisal, site plan (showing the location of Improvements,
parking, means of ingress and egress and other easements), operating
statements, leasing information, a current rent roll, leases, plans and
specifications for the building(s), surveys, legal description of the
Security Property, copies of restrictive covenants and easements
affecting the Security Property, credit reports, bank references,
information about pending litigation affecting the Security Property,
the Borrower, Guarantors, or Responsible Individuals, and partnership
agreements, trust agreements, articles of incorporation, or other
organizational documents.
17. MODIFICATIONS: This Application/Contract shall be deemed to contain
all the terms, conditions, and understandings between Nationwide
and Applicant/Borrower with respect to the Mortgage Loan and shall
supersede any and all prior understandings and agreements, written or
oral, relating thereto. The terms and conditions of this
Application/Contract shall be waived or modified only by written
instrument signed by the parties hereto except (flat extensions for the
period for acceptance of the Application/Contract or for extension of
the Closing Date may be executed by Nationwide unilaterally. Any
modifications made to this Application/Contract are not to be made in
the body of the Application/Contract but are to be enumerated in Exhibit
B attached hereto. Modifications should specifically reference that
section of the Application/Contract that is being modified.
18. APPLICANT/BORROWER: This Application/Contract is made by the
undersigned Applicant. Applicant shall be obligated to form Borrower
(if Borrower has not yet been formed as a legal entity) and shall cause
the Borrower to perform its obligations under this
Application/Contract. Upon its legal formation, Borrower shall be
deemed to be bound and liable hereunder to the same degree as
Applicant.
19. ASSIGNMENT: This Application/Contract, the proceeds of the Mortgage
Loan, and any rights hereunder shall not be assignable by Applicant or
Borrower without Nationwide's prior written consent. Any attempted
assignment without such prior written consent shall be null and void
and, at Nationwide's option, shall constitute a default hereunder and
shall result in this Application/Contract being terminated and of no
further force and effect. Further, no third party shall rely upon the
existence of this Application/Contract without written confirmation from
Nationwide that the Application/Contract remains unchanged, that it has
not been terminated, and that the Applicant/Borrower is not in default
hereunder. Nationwide, at its option, may assign all or a portion of
the Mortgage Loan to an affiliated company or companies. If a portion
of the Mortgage Loan is so assigned, Borrower shall be asked to execute
more than one promissory note secured by one security instrument. All
legal documentation for the Mortgage Loan shall show both Nationwide
and its affiliate(s), as the lender. All ancillary documents,
including, but not limited to, the survey, environmental report, hazard
insurance, and title insurance, must be certified to and show the
insured as both Nationwide and its affiliate(s).
Page 4 of 19
<PAGE> 7
Applicant has reviewed this Application/Contract, and understands that this
Application/Contract is subject to the conditions of PART I, PART II,
Exhibit A, and Exhibit B of this Application/Contract, unless amended in
writing and signed by both Applicant and Nationwide.
Roberts Properties Residential, L.P.
- --------------------------------------------------------------------------------
Name of Applicant By: Roberts Realty Investors,.Inc., its general partner
Charles R. Elliott, Chief Financial Officer
/s/ Charles R. Elliot
- --------------------------------------------
Signature(s)
PLEASE USE A PEN WITH OTHER THAN BLACK INK TO SIGN THIS APPLICATION/CONTRACT
AND DO NOT FORGET TO FILL IN THE DATE OF SIGNATURE BELOW.
APPLICANT'S MAILING ADDRESS:
Roberts Properties Residential, L.P.
8010 Roswell Road
Suite 120
Atlanta, GA 30350
(Date of Signature:) January 24, 1996
NATIONWIDE HEREBY ACCEPTS THE ABOVE APPLICATION/CONTRACT FOR
MORTGAGE LOAN SUBJECT TO NATIONWIDE'S LETTER DATED APRIL 2, 1996
NATIONWIDE LIFE INSURANCE COMPANY
BY: /s/ Robert M. McNaghten DATE: April 2, 1996
--------------------------
NAME Robert M. McNaghten
VICE PRESIDENT
--------------------------
TITLE
Page 5 of 19
<PAGE> 8
THIS PAGE INTENTIONALLY LEFT BLANK
Page 6 of 19
<PAGE> 9
[NATIONWIDE LIFE INSURANCE COMPANY LETTERHEAD]
PART II
STANDARD TERMS AND CONDITIONS
APPLICATION/CONTRACT FOR MORTGAGE LOAN WITH
NATIONWIDE LIFE INSURANCE COMPANY
1. SECURITY: The Mortgage Loan shall be evidenced by a promissory note
(hereinafter "Note") and shall be secured by:
(a) A duly recorded mortgage or deed of trust and security
agreement (hereinafter "Mortgage or Deed of Trust") which
constitutes a valid first lien upon the fee simple estate (or
leasehold estate, if applicable) of the Security Property as
identified in PART I of this Application Contract and the
Improvements located (or to be constructed) thereon.
(b) A first lien on all of the Borrower's furnishings, fixtures, and
equipment located on or used in the operation of the Security
Property (hereinafter the "Personal Property") as evidenced
by a security agreement and UCC-l financing statements in recordable
form. Borrower may not sell, lease, or otherwise transfer the
Personal Property without Nationwide's prior written consent.
(C) An unconditional present assignment to Nationwide of all
present and future leases for space in the Security Property, and
all rents, issues, and profits arising from the leasing of the
Security Property. Such assignment shall include an assignment of
any fees that permit the tenant to terminate its lease which fees
are payable to the landlord under the terms and conditions of any of
the Security Property's leases.
(d) Such other documentation evidencing and securing the Mortgage Loan
as may be required by Nationwide or Nationwide's counsel.
2. PREPAYMENT PRIVILEGE:
(a) VOLUNTARY: During the term of the Mortgage Loan, full prepayment
of the Note shall be permitted upon the Borrower delivering to
Nationwide thirty (30) days prior written notice of the Borrower's
intent to prepay the Mortgage Loan in full, together with a premium
equal to the greater of
(i) The sum of (a) the present value of the scheduled monthly
payments on the Mortgage Loan from the date of prepayment to
the maturity date and (b) the present value of the amount of
principal and interest due on the maturity date of the Mortgage
Loan (assuming all scheduled monthly payments due prior to the
maturity date were made when due); minus (c) the outstanding
principal balance of the Mortgage Loan as of the date of
prepayment. The present values described in (a) and (b) are to
be computed on a monthly basis as of the date of prepayment,
discounted at the yield to maturity of the U.S. Treasury Note
or Bond that is closest in maturity to the maturity date of the
Mortgage Loan as reported in the Wall Street Journal on the
fifth business day preceding the date of prepayment; or
(ii) One percent of the outstanding principal balance of the
Mortgage Loan.
(b) INVOLUNTARY: In the event the Mortgage Loan is declared due and
payable in full due to a default in the repayment of the Note, or in
the event the Mortgage Loan is declared due and payable due to a
default in any of the terms, covenants and conditions contained in
the Mortgage or Deed of Trust or in any of the other loan documents
executed as evidence of or as further security for the Mortgage Loan,
there shall be paid therewith an involuntary prepayment premium
equal to the voluntary prepayment premium then payable.
(c) APPLICATION OF INSURANCE PROCEEDS OR CONDEMNATION AWARDS: The
application of any insurance proceeds or condemnation awards to the
reduction of the outstanding principal balance of the Mortgage Loan
shall be at par with no prepayment premium due and payable and the
monthly payment shall be reduced accordingly.
(d) PREPAYMENT DURING LAST NINETY DAYS: During the last ninety (90) days
of the term of the Mortgage Loan, the Borrower may prepay at par the
full outstanding principal balance of the Mortgage Loan.
Page 7 of 19
<PAGE> 10
3. ADDITIONAL LOAN TERMS:
(a) DEFAULT INTEREST RATE: The lesser of (i) the highest rate
of interest allowable under the laws of the state in which the
Security Property is located, or (ii) the then applicable rate of
interest of the Note plus five (5) percent per annum. The default
rate of interest shall apply only if the entire outstanding
principal balance of the Mortgage Loan shall become due and payable,
whether at maturity, by acceleration or otherwise.
(b) LATE PAYMENT CHARGE: Prior to acceleration, a late payment
charge of live cents ($.05) for each dollar of principal
and/or interest not paid by the Due Date shall accrue to the benefit
of Nationwide each month the payment is delinquent as reimbursement
for additional administrative costs incurred by Nationwide as a
result of the late payment. A payment of principal and/or interest
shall be deemed to have been paid on the Due Date if the envelope
bearing said payment is postmarked by the U.S. Postal Service on or
before said Due Date, is correctly addressed, and bears adequate
first-class postage.
(c) TAX AND INSURANCE ESCROW: On the Closing Date, a tax and
insurance escrow shall be established and adequate funds shall
be deposited with Nationwide to bring the tax and insurance escrow
into balance at that time. Thereafter, in addition to and concurrent
with each monthly installment of principal and interest, a tax and
insurance escrow deposit shall be made by Borrower. The amount of
the escrow deposit shall be set by Nationwide based upon the latest
available data and the funds shall be deposited with Nationwide so
that the tax and insurance escrow account equals an amount
sufficient to pay one year's taxes and one year's insurance premiums
at least thirty (30) days prior to the due dates for the payment of
taxes and insurance premiums.
(d) LOAN YEAR: A "Loan Year" shall mean each twelve (12)-month period
beginning with the first full monthly installment of principal
and/or interest due under the terms of the Note and each anniversary
thereof.
(e) CURE PERIODS: Borrower shall have no period in which to cure
a monetary default. A non-monetary default is any default which is
not a monetary or an incurable default as defined in the Note.
Borrower shall have thirty (30) days after written notice thereof
from Nationwide to cure a non-monetary default, unless the non-
monetary default cannot be cured within said thirty (30) day period
in which event Borrower shall have a reasonable period of time to
complete cure, provided that action to cure such non-monetary
default is commenced within said thirty (30) day period and Borrower
is, in Nationwide's sole judgment, diligently pursuing a cure to
completion.
4. PLANS, SPECIFICATIONS, AND SOILS REPORT: Applicant/Borrower shall
submit to Nationwide within thirty (30) days of Nationwide's acceptance
of this Application/Contract a complete set of final (or "as-built" if the
Improvements are completed as of the date of this Application/Contract
plans and specifications for the Improvements constructed or to be
constructed on the Security Property (hereinafter "Plans and
Specifications"); each sheet of said plans is to be dated and signed by
the project architect and bear his seal. Nationwide shall also receive a
copy of the professional soils engineer's report on the site along with
his recommendations (hereinafter "Soils Report"). Tile Plans and
Specifications and the Soils Report are subject to the review and approval
of Nationwide.
5. INSPECTING ARCHITECT: Nationwide shall appoint an architect of its
choice (hereinafter "Inspecting Architect") to review, at
Applicant/Borrower's expense, the Plans and Specifications, and the
Soils Report. If the Improvements are under construction, the Inspecting
Architect shall make monthly inspections of the Improvements being
constructed on the Security Property during the construction period and
shall issue written reports to Nationwide indicating that the Improvements
are being constructed in accordance with the final Plans and
Specifications and in accordance with the recommendations of the Soils
Report. If the Improvements are complete as of the date of this
Application/Contract, the Inspecting Architect shall inspect the Security
Property and shall issue a written report stating that the Improvements
were, to the best of his/her knowledge, completed in accordance with the
Plans and Specifications submitted to Nationwide and in accordance with
the recommendations of the Soils Report. The Inspecting Architect shall
also comment on the structural and operational integrity of the
Improvements, specifically referencing the construction detail, the HVAC
system, and the roofing system. Any deficiencies disclosed by any of the
Inspecting Architect's reports must be corrected to Nationwide's
satisfaction prior to the Closing Date of the Mortgage Loan.
6. ENVIRONMENTAL AUDIT AND INDEMNIFICATION: Prior to the Closing Date of
the Mortgage Loan, an environmental engineer, satisfactory to Nationwide.
shall perform, at Applicant/Borrower's expense, an environmental audit of
the Security Property, which audit shall be subject to the review and
approval of Nationwide. The environmental audit shall be addressed to
nationwide and shall include reports and investigations of any current or
past use of the Security Property, as well as of other properties
contiguous to the Security Property, and shall demonstrate that the
Security Property (including the ground water of the Security Property)
(a) is in compliance with all laws, rules, and regulations of any
federal, state, county, or local governmental authority relating
to environmental matters within the jurisdiction of such
governmental authority, and
(b) does not contain any chemical, material, or substance in
excess of legal limits exposure to which is prohibited,
limited, or regulated by any federal, state, county, or local
governmental authority, or which is known to pose a hazard to the
health and safety of the occupants of the Security Property, and
(c) does not contain asbestos in any form, and
(d) does not contain an underground storage tank of any kind, and
(e) has not been used, and is not currently being used for
any activities involving, directly or indirectly, the use,
generation, treatment, storage, or disposal of any hazardous or
toxic chemical, material, substance or waste.
Page 8 of 19
<PAGE> 11
Nationwide reserves the right to retain, also at Applicant/Borrower's
expense, a consultant to review any report prepared by the environmental
engineer and/or to conduct its own investigation of the Security Property.
If any hazardous or toxic chemical, material substance or waste is
revealed in such audit, Applicant/Borrower shall remove same or otherwise
adequately dispose of same and restore the Security Property to a
condition acceptable to Nationwide, in its sole discretion, prior to the
Closing Date.
Further, the Borrower and the Responsible Individuals shall indemnify and
hold Nationwide harmless from and against any and all losses, liabilities,
damages, injuries, costs, expenses, and claims of any and every kind
whatsoever, incurred or suffered by, or asserted against Nationwide with
respect to, or as a direct or indirect result of, the presence on, under,
or about the Security Property, or the escape, seepage, leakage, spillage,
discharge, emission, or release from, the Security Property of any
hazardous materials, including, without limitation any losses,
liabilities, damages, injuries, costs, expenses, or claims asserted or
arising under any hazardous waste laws, regardless of whether or not
caused by, or within the control of Borrower. The indemnification shall
survive the repayment and satisfaction of the Mortgage Loan unless at such
time Borrower provides Nationwide an environmental report acceptable to
Nationwide showing the Security Property to be free of hazardous
materials and not in violation of hazardous waste laws; however, The
Borrower shall not be liable under the indemnity if the Secutity Property
becomes contaminated subsequent to Nationwide's acquisition of the
Security Property by foreclosure or by acceptance of a deed in lieu
thereof, or subsequent to any transfer of ownership which was approved or
authorized by nationwide. The burden of proof under this subparagraph
with regard to establishing the date upon which such chemical, material or
substance was placed or appeared in, on, or under the Security Property
shall be upon Borrower.
7. ACCESSIBILITY INSPECTION AND INDEMNIFICATION: The Inspecting
Architect shall also provide a written opinion as to whether the
Improvements are in compliance with all provisions governing accessibility
for the disabled under The Fair Housing Act of 1988, The Americans With
Disabilities Act and any amendments thereto or any other accessibility
laws. Further, the Borrower and the Responsible Individuals shall
indemnify and hold Nationwide harmless from and against any and all
losses, liabilities, damages, injuries, costs, expenses, and claims of
any and every kind whatsoever, incurred or suffered by, or asserted
against Nationwide with respect to, or as a direct or Indirect result of,
noncompliance with the foregoing laws, as amended, or any other similar,
present or future laws applicable to the Security Property. The
indemnification shall survive the repayment and satisfaction of the
Mortgage Loan; provided, however, Borrower shall not be liable for
compliance with any accessibility laws that first become effective, or for
any violation of any accessibility laws resulting from alterations or
improvements to the Security Property that are performed, subsequent to
Nationwide's actually acquiring title to the Security Property pursuant to
foreclosure or acceptance of deed in lieu thereof, or subsequent to any
transfer of ownership of the Security Property that has the prior written
approval of Nationwide; provided that such transferee assumes in writing
all obligations of Borrower with respect to compliance with accessibility
laws under the Deed of Trust/Mortgage and Accessibility Indemnity
Agreement.
8. COMMENCEMENT OF CONSTRUCTION: If the Improvements are to be
constructed, this Application/Contract may be cancelled at Nationwide's
option and all fees retained it construction of the Improvements has not
commenced within ninety (90) days of the date that this
Application/Contract is accepted by Nationwide.
9. LEASES: All existing leases, or any other leases hereinafter created,
shall be subject to the review and approval of Nationwide, shall be for
a minimum term of three (3) years (not applicable if Security Property is
an apaitinent project) and shall be assigned, in form and content
acceptable to Nationwide, as additional security for the Mortgage Loan. At
Nationwide's option, any line may be made superior or subordinate to the
Mortgage or Deed of Trust.
As an accommodation to the Borrower, Nationwide will approve a standard
lease form. Notwithstanding the approval of a standard lease form,
Nationwide specifically reserves the right to approve each lease wherein
the tenant occupies more than ten (10) percent of the net leasable area of
the Improvements, or the lease term, excluding renewal options, exceeds
five (5) years; said review shall include a review of the prospective
tenant's current financial statements and the most recent Dun & Bradstreet
credit report on said tenant, all to be provided through
Applicant/Borrower. Borrower may deal with smaller tenants (those taking
3,000 square feet of space or less) in the ordinary course of business
without Nationwide's consent.
10. TENANT FINISH AND CONSTRUCTION ESCROW ACCOUNT: There shall be an escrow
account established on the Closing Date in an amount equal to one
hundred twenty-five (125) percent of the total estimated cost of
completing all unleased, unoccupied, and unfinished leasable space in the
Improvements and the cost of completing any other construction items,
including, but not limited to, landscaping and paving. The Inspecting
Architect shall estimate the costs of completion in writing within ten
days prior to the Closing Date. The funds shall be placed in an
interest-bearing escrow account, with interest earned payable to the
Borrower, and will be made available to the Borrower as the construction
is completed and the unfinished leasable space is actually finished and
occupied by tenants under leases approved by Nationwide without default of
either party. The space shall be deemed "actually finished and occupied
by tenant(s)" when the tenant(s) has(have) provided Nationwide with
estoppel certificate(s), acceptable to Nationwide in its sole discretion,
the Inspecting Architect has inspected the finished space and provided
Nationwide with a written report stating that the tenant finish has been
completed, the governmental entity having jurisdiction over the Security
Property has issued unconditional Certificates of Occupancy for the
subject space, and Nationwide has received a title update showing no new
liens of record. Any funds escrowed for tenant finish and other
construction work which are not disbursed within twelve (12) months of the
Closing Date shall be applied at par against the then outstanding
principal balance of the Mortgage Loan, and the monthly payment shall be
reduced accordingly. Nationwide, at its option, may unilaterally extend
the expiration date for Vic completion of the space and the completion of
other construction items and for the release of escrowed funds.
Page 9 of 19
<PAGE> 12
11. MORTGAGE OR DEED OF TRUST COVENANTS: The Mortgage or Deed of Trust shall
contain those items customarily found in such documents including, but not
limited to, the following provisions:
(a) TRANSFER: The entire outstanding principal balance of the Mortgage
Loan, together with accrued unpaid interest and other sums required
by the loan documents, shall become immediately due and payable upon
the Borrower selling, assigning, mortgaging, or otherwise conveying
any interest in the Security Property, or if there is a change in the
controlling interest of Borrower, without the prior written consent
of Nationwide. Notwithstanding the above, if Nationwide approves a
transfer of the Security Property or a change in the controlling
Interest in the Borrower, Nationwide reserves the right to charge an
assumption fee and/or to change the monthly payment to reflect a
change in the Mortgage Loan's interest rate, an initiation of
amortization or a modification of the existing amortization schedule.
Notwithstanding the foregoing, there will be no change in the
maturity date of the Note.
If a transfer of the Security Property or a controlling interest in
Borrower is approved by Nationwide, Nationwide must receive, for its
review and approval, copies of all transfer and other related
documents, such transferee must assume in writing all obligations of
the Borrower under the loan documents, and Borrower must pay all
costs and expenses in connection with such transfer and assumption,
including, without limitation, all fees and expenses incurred by
Nationwide.
(b) INSURANCE: Borrower shall furnish insurance policies to Nationwide
evidencing the following coverages and amounts, property assigned to
Nationwide by a standard mortgagee clause:
(i) Fire, extended coverage, and other hazards as requested from
time to time by Nationwide, covering all Improvements for
their full replacement cost, less excavating and foundation
costs, provided, however, in no case shall the amount of
insurance be less than the difference between the amount of
the Mortgage Loan and eighty (80) percent of appraised land
value of the Security Property.
(ii) Rent loss insurance, without a coinsurance provision, in an
amount equal to not less than twelve (12) months of scheduled
rental income from the Security Property; or, if applicable,
business interruption insurance in an amount sufficient to pay
debt service, operating expenses, taxes, and insurance for the
Security Property for a period of twelve (12) months.
(iii) Comprehensive public liability insurance in an adequate
amount, taking into consideration the property type being
insured and the corresponding liability exposure. The amount
of liability insurance shall be subject to the approval of
Nationwide.
(iv) Flood insurance, if the Security Property lies within a
Special Flood Hazard Area as designated on the Department of
Housing and Urban Development's Maps, or another flood prone
area. 11 the Security Property is not in a Special Flood
Hazard Area, Nationwide must receive a certification from a
registered land surveyor or a licensed engineer to this effect.
(v) Any other insurance coverage deemed necessary by Nationwide.
(c) INSURANCE PROCEEDS: Borrower shall assign all insurance proceeds
relating to damage or destruction of the Security Property to
Nationwide. Nationwide shall release the insurance proceeds to the
Borrower as restoration progresses, if the loss or damage from fire
or other casualty is in an amount less than fifty (50) percent of the
outstanding principal balance of the Mortgage Loan, subject to the
following conditions:
(i) Borrower is not in default under the terms, covenants, and
conditions of the loan documents or any other agreements
between Borrower and Nationwide.
(ii) The Improvements shall be at least eighty (80) percent leased
after restoration pursuant to leases approved in writing by
Nationwide.
(iii) Nationwide approves in writing the plans and specifications for
restoration.
(iv) There are sufficient funds on deposit at all times with
Nationwide to complete the rebuilding, as certified by an
architect approved by Nationwide.
(v) Borrower provides suitable completion, payment and performance
bonds, and builder's all risk insurance in form and amount
acceptable to Nationwide.
(vi) The insurer does not assert any defense to payment under such
policies against the Borrower or any tenant of the Security
Property pursuant to the insurance policy covering the
Improvements of the Security Property.
(vii) Nationwide shall have the option of applying, at par, any
surplus insurance proceeds which remain after rebuilding to
the reduction of the outstanding principal balance of the
Mortgage Loan.
(viii) Funds shall be disbursed not more often than once each month
and in not more than five (5) increments of not less than
$50,000 each, except for the last disbursement.
(ix) Prior to any disbursement, an inspecting engineer/architect of
Nationwide's choice, whose fees shall be paid by Borrower,
shall certify completion of work in place in accordance with
approved plans and specifications, and in accordance with all
applicable building codes, zoning ordinances, and all other
local or federal governmental regulations.
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<PAGE> 13
(x) Such other conditions as would customarily be required by a
local construction lenders or are otherwise reasonable.
In the event of loss or damage by fire or other casualty in an amount
greater than fifty (50) percent of the outstanding principal balance
of the Mortgage Loan, Nationwide, at its sole option, may require the
Borrower to use any insurance proceeds to either immediately rebuild
any portion or all of the Improvements or Nationwide shall apply the
insurance proceeds to the outstanding principal balance of the
Mortgage Loan. Any reduction of the outstanding principal balance of
the Mortgage Loan as a result of the application of the casualty
insurance proceeds shall be at par and the monthly payment shall be
reduced accordingly.
(d) ADDITIONAL INSURANCE REQUIREMENTS: All policies required of
Applicant/Borrower shall be written with companies which have a
rating as published in the current issue of Best's Key Rating Guide
of at least A:VIII, shall be in forms satisfactory to Nationwide,
shall cite Nationwide's interest as mortgagee in standard non-
contributory mortgagee clauses effective as of the Closing Date,
shall be maintained throughout the term of the Mortgage Loan without
cost to Nationwide, shall be deposited with Nationwide, and shall
contain such provisions as Nationwide deems necessary or desirable to
protect its interest, including, without limitation, a provision for
thirty (30) days prior written notice to Nationwide of the insurance
company's intent to cancel the policy. Said insurance requirements
shall specifically be set forth in the Mortgage or Deed of Trust. If
a blanket policy is issued, a certified copy of said policy shall be
furnished together with an Evidence of Insurance (Acord Form 27) for
property insurance and a Certificate of Insurance (Acord Form 25-S)
for liability insurance indicating that Nationwide is the insured
under said policies with regard to the Security Property and that
coverages with respect thereto are in the required amounts.
(e) CONDEMNATION: Nationwide shall receive an assignment of all claims,
awards, proceeds, or rights of action in connection with any
condemnation of or eminent domain proceeding affecting the Security
Property. Nationwide reserves the right, at its sole option, to
apply any condemnation awards to the reduction of the outstanding
principal balance of the Mortgage Loan at par or to hold the awards
in an escrow account to be used for the cost of restoring the
Security Property. Notwithstanding the above, if any part of the
Improvements shall be condemned by any governmental authority having
jurisdiction over the Security Property or if so much of the Security
Property shall be condemned by any governmental authority having
jurisdictions over the Security Property that the Security Property
is in violation of applicable parking, zoning, platting or other
ordinances, or fails to comply with the terms of the Major Tenant
leases, in each case, Nationwide shall be entitled to apply all
condemnation proceeds to the repayment of the outstanding principal
balance of the Mortgage Loan, at par, and Nationwide shall have the
further right to call the Mortgage Loan due and payable in full
without the imposition of a prepayment premium.
(f) MANAGEMENT AND LEASING RESTRICTION: During the term of the Mortgage
Loan, Borrower, or its designee who shall be approved by Nationwide,
shall be the exclusive manager and leasing agent of the Security
Property. Any management or leasing agreement shall be subordinate
to the Mortgage or Deed of Trust and shall be subject to the review
and approval of Nationwide. If there is no formal management
agreement, Borrower shall provide Nationwide with a letter so stating
and further stating the name of the person or entity charged with the
responsibility of managing the Security Property.
(g) SECONDARY FINANCING: There shall be no secondary financing of the
Security Property.
(h) MAINTENANCE OF THE SECURITY PROPERTY: Borrower shall not commit,
suffer, or permit any waste or deterioration of the Security Property
in any respect nor alter the Improvements nor erect any additional
improvements or make additions to the existing Improvements on the
Security Property without the prior written consent of Nationwide.
The foregoing restriction shall not apply to erection or removal of
non-load-bearing interior walls or alterations required by the terms
of tenant leases which have been approved by Nationwide. Borrower
shall cause the Security Property to comply at all times with all
applicable federal, state, and local laws related thereto. Borrower
shall not use, generate, treat, store, or dispose of any hazardous
chemical, material, substance, or waste on the Security Property, nor
will Borrower knowingly allow any tenant of the Security Property to
use, generate, treat, store, or dispose of any hazardous chemical,
material, substance, or waste on the Security Property. Nationwide
shall have the right to Inspect the Security Property at any time
during normal business hours.
(i) ANNUAL STATEMENTS: Borrower shall furnish to Nationwide, within one
hundred twenty (120) days of the end of the Borrower's fiscal year,
annual statements (income statements and balance sheets) for the
Borrower and the Security Property. These statements shall be in
form acceptable to Nationwide and shall be prepared in accordance
with generally accepted accounting principles and shall include a
rent roll certified as true and correct by the Borrower and current
annual sales figures for all Major Tenants if required under their
respective leases or otherwise available. If the Mortgage Loan is in
default at any time, for any reason, Nationwide shall have the right
to require that these financial statements be audited and certified
by a certified public accountant approved by Nationwide, the cost of
which shall be paid by the Borrower. In addition, Nationwide may,
upon prior notice, inspect and make copies of all books and records
relating to the Security Property during normal business hours. A
charge of $200 per month for administrative expenses shall be
assessed for each successive month that financial statements are not
delivered to Nationwide after the expiration of the one hundred
twenty (120)-day period.
(j) LEASES: The Borrower agrees to keep and perform all terms,
conditions, and covenants of all leases affecting the Security
Property on its part to be kept and performed.
Page 11 of 19
<PAGE> 14
(k) EXCULPATION: The liability of Borrower with respect to the payment of
principal and interest under the Note shall be "non-recourse", and
Nationwide's source of satisfaction of said indebtedness and
Borrower's other obligations under the Note and under any of the
other loan documents shall be limited to the Security Property and
Nationwide's receipt of the rents, issues, and profits from the
Security Property. Nationwide shall not seek to procure payment out
of other assets of the Borrower or any person or entity comprising
the Borrower, or to seek any judgment (except as hereinafter
provided) for any sums which are or may be payable under the Note,
Mortgage/Deed of Trust, or any of the other loan documents, as well
as any claim or judgment (except as hereinafter provided) for any
deficiency remaining after foreclosure of the Mortgage/Deed of
Trust. Notwithstanding the foregoing, nothing herein contained shall
be deemed to be a release or impairment of the indebtedness
evidenced by the Note or the security therefor intended by the other
loan documents or be deemed to preclude Nationwide from exercising
its rights to foreclose the Mortgage/Deed of Trust or to enforce any
of its other rights or remedies under the loan documents. It is
expressly understood and agreed that the aforementioned limitation on
liability shall in no way affect or apply to Borrower's or
Responsible Individuals' continued liability for the following items:
(i) fraud or misrepresentation made in connection with the Note or
any of the other loan documents governing, securing, or
pertaining to the payment thereof;
(ii) failure to pay taxes prior to delinquency or to pay
assessments, charges for labor or materials, or any other
charges which may create liens on any portion of the Security
Property;
(iii) the misapplication of (a) proceeds of insurance covering any
portion of the Security Property, or (b) proceeds of the sale
or condemnation of any portion of the Security Property, or
(c) rentals received by or on behalf of the Borrower
subsequent to the date on which Nationwide makes written
demand therefor pursuant to any instrument governing,
securing, or pertaining to the payment of the Note;
(iv) causing or permitting waste to occur in, on, or about the
Security Property and failure to maintain the Security
Property, excepting ordinary wear and tear,
(v) the return to Nationwide of all unearned advance rentals and
security deposits paid by tenants of the Security Property and
not refunded to or forfeited by such tenants;
(vi) the return to Nationwide of any and all fees paid to Borrower
by tenants of the Security Property which fees permit tenants
to terminate their leases;
(vii) loss by fire or casualty to the extent not compensated by
insurance proceeds collected by Nationwide;
(viii) the return of, or reimbursement for all Personal Property
owned by the Borrower taken from the Security Property by or
on behalf of the Borrower, out of the ordinary course of
business, and not replaced by items of equal or greater value
than the original value of the Personal Property so removed;
(ix) all court costs and reasonable attorneys' fees actually
incurred which are provided for in the Note or in any other
loan documents governing, securing, or pertaining to the
payment of the Note;
(x) (a) removal of any chemical, material, or substance in excess
of legal limits to which exposure is prohibited, limited, or
regulated by any federal, state, county, or local authority
which may or could pose a hazard to the health and safety of
the occupants of the Security Property, regardless of the
source of origination, (b) the restoration of the Security
Property to comply with all governmental regulations
pertaining to hazardous waste found in, on, or under the
Security Property, regardless of the source of origination,
and (c) any indemnity or other agreement to hold Nationwide
harmless from and against any and all losses, liabilities,
damages, injuries, costs, and expenses of any and every kind
arising as a result of the existence and/or removal of
hazardous materials, toxic substances, or hazardous waste and
from the violation of hazardous waste laws. The Borrower
shall not be liable hereunder if the Security Property became
contaminated subsequent to Nationwide's acquisition of the
Security Property by foreclosure or acceptance of a deed in
lieu thereof or subsequent to any transfer of ownership of the
Security Property which was approved or authorized by
Nationwide; provided that such transferee assumes in writing
all obligations of Borrower with respect to compliance with
environmental laws under the Deed of Trust/Mortgage and
Environmental Indemnity. Liability under this section shall
extend beyond repayment of the Note and compliance with the
terms of the Mortgage or Deed of Trust unless at such time
Borrower provides Nationwide an environmental assessment
report acceptable to Nationwide showing the Security Property
to be free of hazardous materials and not in violation of
hazardous waste laws. The burden of proof under this
subparagraph with regard to establishing the date upon which
such chemical, material, or substance was placed or appeared
in, on, or under the Security Property shall be upon
Borrower,
(xi) (a) any and all costs incurred in order to cause the
Improvements to comply with the accessibility provisions of
The Fair Housing Act of 1988, The Americans With Disabilities
Act, and any other accessibility laws, and (b) any indemnity
or other agreement to hold Nationwide harmless from and
against any and all losses, liabilities, damages, injuries,
costs, or expenses of any kind arising as a result of
non-compliance with any accessibility laws; provided, however,
Borrower shall not be liable for compliance with any
accessibility laws that first become effective, or for any
violation of any accessibility laws resulting from alterations
or improvements to the Security Property that are performed,
subsequent to Nationwide's actually taking possession of the
Security Property pursuant to foreclosure of the
Mortgage/Deed of Trust or acceptance of deed in lieu thereof,
or subsequent to any transfer of ownership of the Security
Property that has the prior written approval of Nationwide;
provided that such transferee assumes in writing all
obligations of Borrower with respect to compliance with
accessibility laws under the Deed of Trust/Mortgage and
Accessibility Indemnity Agreement.
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<PAGE> 15
(xii) Obligations under any Letter(s) of Credit held by Nationwide
as outlined in the LETTER OF CREDIT section of this
Application/Contract;
The Responsible Individuals will be required to execute a separate
indemnity agreement wherein they agree to personally, jointly,
severally, and unconditionally indemnify Nationwide for all sums due
Nationwide under items (i) though (xii) above. Moreover, the
Borrower and said Responsible Individuals shall become personally
liable, jointly and severally, for the entire amount of the Mortgage
Loan (including all principal, interest, and other charges) in the
event that the Borrower (1) violates the covenant governing the
placing of subordinate financing on the Security Property or (2)
violates the covenant restricting transfers of interest in the
Security Property or transfers of ownership interests in the Borrower.
The obligations of the Borrower the subparagraphs (i) through (xii)
above, except as provided herein, shall survive the repayment and
satisfaction of the Mortgage Loan.
So long as a guaranty with respect to repayment of principal and
interest is in force and effect, the "non-recourse" nature of the
Mortgage Loan as to repayment of principal and interest as expressed
above shall be suspended and of no force or effect.
12. FINANCIAL RESPONSIBILITY: Nationwide may terminate this
Application/Contract and retain the Commitment Fee and pursue other
remethes reserved herein if at any time prior to the Closing Date, any of
the following events occur
(a) Borrower, any Guarantor, or any of the Responsible Individuals has
made a general assignment for the benefit of creditors, or there is
filed by or against the Borrower, any Guarantor or any of the
Responsible Individuals, a petition in bankruptcy or for the
appointment of a receiver, or there commences under any bankruptcy or
insolvency law, proceedings for the Borrowers' Guarantor's, or any of
the Responsible Individual's relief, or for the compromise,
extension, arrangement, or adjustment of the Responsible Individual's
obligations, or there is an outstanding money judgment against the
Borrower, Guarantor, or any of the Responsible Individuals.
(b) There has been more than a ten (10) percent decline in Borrower's,
Guarantees, or any of the Responsible Individual's tangible net worth
from that represented to Nationwide in the financial statements
provided to Nationwide at the time this Application/Contract was
submitted to Nationwide. Current financial statements shall be
presented to Nationwide no later than ten (10) days prior to the
Closing Date.
(C) There is filed by or against the Borrower, any general partner of
Borrower, any Guarantor, or any of the Responsible Individuals
pending litigation which, in Nationwide's sole discretion, would have
a materially adverse impact on the financial condition of any of the
aforementioned parties or their ability to repay the loan. Any such
litigation must be disclosed in writing to Nationwide which
disclosure must include the nature and status of the litigation.
(d) There has been a material adverse change in the financial condition
and/or operating results of any of the Major Tenants. Current
financial statements for the latest period available showing balance
sheets and operating results shall be presented to Nationwide no
later than ten (10) days prior to the Closing Date.
(e) Any of the Major Tenants makes a general assignment for the benefit
of creditors, or there is filed by or against any such Major Tenants
a petition in bankruptcy or for the appointment of a receiver, or
there commences under any bankruptcy or insolvency law proceedings
for the Major Tenant's relief, or for the compromise, extension,
arrangement, rearrangement, reorganization, or adjustment of any of
the Major Tenants obligations.
CLOSING:
(a) At least thirty (30) days prior written notice shall be given by
Applicant/Borrower to Nationwide of Applicant's/Borrower's readiness
to close the Mortgage Loan. Nationwide and Nationwide's counsel
shall have the full thirty (30)-day period to review and/or prepare
all legal documents and all other documents required under the terms
of this Application/Contract. The burden of assembling and presenting
all materials and of curing all matters determined to be objections
or title defects is the responsibility of the Applicant/Borrower.
Federal Reserve Funds for the closing will be wired to the entity
charged with closing the Mortgage Loan and disbursing funds on the
Closing Date, provided that Nationwide receives at least twenty-four
(24) hours notice thereof. The Closing Date shall not be on a Friday
or the last business day of the month unless the Borrower agrees in
writing to assume responsibility for the payment of interest on the
Mortgage Loan in the event of a delay in the receipt of funds caused
by a delay within the Federal Reserve System or the receiving bank.
Interest shall accrue from the date of witting.
The following shall be furnished to Nationwide prior to the Closing
Date and any subsequent disbursements, if any:
(i) Photographs of the completed Improvements.
(ii) Certificates of occupancy and all necessary licenses from
appropriate governmental authorities and evidence satisfactory
to Nationwide that all utilities necessary for the operation
of the Security Property have been installed and the
installation fees have been paid.
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<PAGE> 16
(iii) Legal opinions dated as of the Closing Date, in form and
substance satisfactory to Nationwide, from Borrower's counsel
who shall be licensed to practice law in the state in which
the Security Property is located, and to the extent Nationwide
requests, from Nationwide's outside counsel, which Nationwide
deems necessary or appropriate in a project of this kind,
including, but not limited to, the following: that all
documents evidencing and securing the Mortgage Loan
contemplated hereby have been duly authorized, executed, and
delivered by the Borrower and are legal, valid, binding
obligations of the Borrower enforceable in accordance with
their respective terms; that the partnership/corporation/trust
(as the case may be) and all entities comprising the
Borrower are duly organized, validly existing, and in good
standing, pursuant to all applicable laws and are authorized
to do business in the state in which the Security Property is
located; that the partnership/corporation/trust (as the case
may be) has the authority to borrow money and to own the
Security Property and to carry on its operations as conducted
and as proposed to be conducted; that the Mortgage Loan does
not violate the usury laws of the state where the Security
Property is located; that there is no action, suit, or legal
proceeding pending, or to the knowledge of such counsel,
after due inquiry of Borrower, threatened against or affecting
the partnership/corporation/trust, its partners, officers, or
trustees (as the case may be) any Guarantor or any Responsible
Individual or the Security Property before or by any court,
administrative agency or other governmental authority or any
arbitrator, that neither the execution nor the delivery of
this Application/Contract or the documents evidencing and
securing the Mortgage Loan, nor compliance with the
provisions of the loan documents will conflict with or result
in a breach of any of the provisions of, or constitute a
default under the partnership agreement/corporate by-laws,
articles of incorporation, and regulations/trust indenture (as
the case may be) or of any applicable law, judgment, order,
writ, injunction, decree, rule, or regulation of any court,
administrative agency, or other governmental authority, or any
determination or award of any arbitrator, or of any agreement
or other instrument to which the Borrower is a party or by
which the Borrower is bound; that no reports have come to the
attention of such counsel indicating that the Security
Property is in violation of any environmental laws, rules or
regulations enacted by federal, state, or local authorities
having jurisdiction over the Security Property; and as to such
other matters incidental to the transaction herein
contemplated as Nationwide may reasonably request. If the
borrowing entity has been formed in a state other than the
state in which the Security Property is located, Nationwide
shall require a legal opinion from an attorney licensed to
practice law in the state of formation opining to the
Borrower's due formation and good standing within the state of
formation.
(iv) Copy of all title company closing statements.
(v) AIA Certificate of Substantial Completion executed by the
Borrower, the project general contractor, and the project
architect indicating that the Improvements have been
completed in accordance with the final plans and
specifications, including any grading, seeding, landscaping,
paving, and all other on-site and off-site improvements
impacting the operation of the Security Property.
(vi) Estoppel certificates executed by each tenant occupying any
portion of the Security Property in the form currently
required by Nationwide (not applicable if the Security
Property is an apartment project).
(vii) A rent roll that is certified as true and complete by the
Borrower and showing all tenants in occupancy, the address or
suite number (or apartment number for apartments) taken by
each tenant, the square footage being occupied by each tenant
(except on apartment projects), the date of lease expiration
for each tenant, and the minimum annual rent (or monthly rent
for apartments) paid by each tenant.
(viii) Borrower's certificate executed by the Borrower on the
Closing Date stating that no part of the Security Property has
been damaged and not repaired to Nationwide's satisfaction,
nor taken in condemnation or other similar proceeding, nor
that such proceeding is pending, or to the best of the
Borrower's knowledge, threatened; that direct connections have
been made to abutting public water, sewer, gas, electrical,
and telephone facilities and that the Improvements are ready
for occupancy; that the original building permit and an
unconditional certificate of occupancy or other unconditional
certificates of appropriate governmental authorities
evidencing compliance with all zoning, building, and other
applicable regulations, have been issued. The Borrower's
certificate shall also state that there are no lawsuits
pending, or, to the best of the Borrower's knowledge,
threatened against the Borrower, the Guarantors, any of the
Responsible Individuals or the Security Property, nor are
there any judgments outstanding against the Borrower, the
Guarantors, or any of the Responsible Individuals. Borrower
shall also represent and warrant to Nationwide that Borrower
is not engaged, and has not at any time since Borrower's
acquisition of the Security Property, engaged in a "pattern
of racketeering activity" within the meaning of 18 U.S.C.
Section 1961, as amended, or within the meaning of any similar
local, state, or federal law, nor has Borrower committed any
other act or engaged in any other pattern of actions, the
potential results of which might include forfeiture of
Borrower's interest in the Security Property.
(ix) Mortgagee's title insurance policy with mechanic's lien
protection and without survey exception issued by a title
company acceptable to Nationwide. Said policy shall also
include ALTA Form 3.1 zoning and ALTA Form 9 comprehensive
endorsements, or their equivalents if permissible by state
law, and such other endorsements as required by Nationwide or
Nationwide's counsel. If a 3.1 zoning endorsement or similar
endorsement is not available under state law, Nationwide shall
be furnished with other documentary evidence satisfactory to
Nationwide that the Security Property complies with all
applicable zoning requirements. Furthermore, Nationwide shall
require evidence satisfactory to Nationwide that the Security
Property currently compares and, upon foreclosure, will comply
with all applicable subdivision ordinances and plat acts.
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<PAGE> 17
(x) A current certified as-built survey of the property disclosing
all improvements, encroachments, easements and rights-of-way,
abutting streets, and the number of parking spaces (including
those reserved for the handicapped). The survey must meet the
minimum standard detail requirements as adopted in 1992 by The
American Land Title Association and American Congress On
Surveying & Mapping (and any subsequent requirements), must
show a state of facts acceptable to Nationwide and the title
company issuing the required title policy, be prepared and
certified by a duly registered land surveyor or licensed
engineer, and be revised and recertified upon completion of
construction at least two (2) weeks prior to the Closing Date
showing the Improvements as constructed on the site. The
legal description of the Security Property shall be shown on
the face of the survey and a flood hazard certification
attached if applicable. The certification must also state
whether abutting streets and other means of ingress and egress
have been publicly dedicated and accepted for maintenance by
the local governmental authority having jurisdiction over the
Security Property. If abutting streets or other means of
ingress and egress are privately owned, the certification must
specifically state this fact and an agreement for maintenance
and repair must be provided to Nationwide for its review and
approval.
(xi) Certification by Borrower of the total cost of construction of
the Security Property. If said costs are less than the loan
amount, the loan amount shall be reduced to an amount no
greater than this total certified cost. (Applicable only if
Improvements have been completed within the last thirty-six
(36) months.) For purposes of this paragraph, the date of
completion of construction of the Security Property shall be
N/A.
(b) Whether or not a closing occurs, Applicant/Borrower agrees to pay or
reimburse Nationwide for all fees and expenses incidental to the
Mortgage Loan herein contemplated, including, but not limited to,
legal fees, Commitment Fee, Inspecting Architect fee, survey fee,
Site Inspection Fee, title fee, environmental engineer and/or
consultant fee, and closing costs.
(c) The Mortgage Loan shall also be subject to all legal requirements
Nationwide's counsel may reasonably assert in order to assure that
Nationwide's lien constitutes a valid first priority encumbrance
against the Security Property. Further, the Mortgage Loan shall be
subject to evidence satisfactory to Nationwide and Nationwide's
counsel, in their sole discretion, that the Security Property
complies in all respects with all federal, state, county, or
municipal laws, ordinances, rules and regulations applicable thereto.
In addition, the Mortgage Loan is further subject to the Borrower
providing Nationwide or Nationwide's counsel with such additional
documentation as Nationwide's counsel may reasonably require or which
is customarily required by institutional mortgage lenders.
14. PARTNERSHIP AGREEMENT/TRUST INDENTURE/ARTICLES OF INCORPORATION: The
partnership agreement/trust indenture/articles of incorporation (as the
case may be) establishing and governing the operation of Borrower and the
same for all underlying entities comprising Borrower and for the
Guarantors and/or Responsible Individuals (if Guarantors and/or
Responsible Individuals are not individuals) shall be subject to review
and approval by Nationwide.
15. ADVERTISING: Applicant/Borrower hereby authorizes Nationwide to publicize,
without divulging the specific terms thereof, in advertising, press
releases, or other material the fact that Nationwide has provided the
permanent financing for the Security Property. Subject to local code
requirements, Nationwide is authorized to display a sign on the Security
Property during the construction period (only applicable if Improvements
are to be built) referring to Nationwide as the provider of permanent
financing.
16. LIMITATION OF INTEREST: In no event shall Nationwide be entitled to
receive, nor shall Borrower be obligated to pay, or contract to pay any
amount as interest or as a charge for the use of money which exceeds the
maximum rate of interest that may be charged or contracted for under the
laws of the state in which the Security Property is located. If
Nationwide receives or contracts to receive an amount which exceeds such
maximum rate, said amount shall be applied to reduce the outstanding
principal balance of the Mortgage Loan, or otherwise credited to the
Borrower and not computed or received by Nationwide as interest. This
provision shall prevail in any agreement between Nationwide and
Applicant/Borrower.
17. SEPARATE AGREEMENT: A separate agreement executed by the appropriate
parties, providing for the maintenance and operation of all common access
ways, parking facilities, and other common areas or facilities, including
a party wall agreement between parties in interest in contiguous
buildings, shall be executed and placed of record prior to the recording
of the loan documents. Any such agreement shall be subject to
Nationwide's prior review and approval.
If there are outparcels that are not part of the Security Property or that
may be released from the Security Property after the Closing Date, said
outparcels shall be legally subdivided from the balance of the Security
Property and the subdivision map shall be in appropriate form for
recording with the county clerk's office. This replat shall comply with
all applicable requirements, and said replat shall be executed and
acknowledged by the appropriate governmental entities. Covenants
governing the outparcel(s) shall include cross easements for ingress,
egress, and parking, and restrictions limiting the height and square
footage of any improvements constructed or to be constructed on the
outparcel(s).
Said covenants shall (i) comply with all provisions in the leases for
space in the Security Property; (ii) be subject to Nationwide's prior
written approval; (iii) comply with all zoning ordinances of record; and
(iv) be filed of record.
18. SURVIVAL OF TERMS: All the terms and conditions of this
Application/Contract not expressly set fulfill in the loan documents or
other instruments executed and delivered by the Borrower with respect to
the Mortgage Loan shall survive the closing of the Mortgage Loan and shall
remain in full force and effect. If there is a conflict between the terms
of this Application/Contract and the loan documents, the loan documents
shall govern.
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Page 16 of 19
<PAGE> 19
EXHIBIT "A"
The funding of the Mortgage Loan is further conditioned upon the following:
a. The following leases (which are subject to the review and approval by
Nationwide) are to be in full force and effect as of the Closing Date of
the Mortgage Loan and the tenant(s) shall be in occupancy, open for
business, and paying rent in accordance with the terms of their lease,
without default of either party:
DATE OF AREA TERM MINIMUM
TENANT LEASE (ST. FT.) (YRS.) ANNUAL RENT
See attached Rent Roll dated January 16, 1996.
No sooner than April 30, 1996, but prior to closing, Borrower will submit a
certified Rent Roll showing occupancy of at least 82% with average in-place
rents of at least $703 per unit ($0.76 per sq. ft.). A debt coverage ratio in
excess of 1.25 will result using expenses of $3,555 per unit and giving credit
of $15 per month per unit for Other Income.
b. Execution of a guarantee (hereinafter called "Guarantee") by the Borrower
and Guarantors whereby the Mortgage Loan as to both payment and
performance is unconditionally, jointly, and severally guaranteed for the
full amount of the Mortgage Joan. This Guarantee shall be in full force
and effect on the Closing Date. The Guarantee shall be released when the
Net Operating Income generated by the Security Property is at least equal
to ____ times the annual debt,service payments due under the terms of the
loan documents ("Guarantee Coverage Test") for a period of at least three
consecutive months. For purposes of this paragraph, "Net Operating
Income" shall mean the annualized rents and expense reimbursements to be
received from tenants pursuant to leases approved by Nationwide where the
tenants are paying tent (i.e., any free rent periods must have expired),
are in occupancy and open for business, minus Operating Expenses, all of
which are to be calculated as of the time of the requested release of the
Guarantee. Operating Expenses for purposes hereof shall be the annualized
expenses of the Security Property, including, but not limited to, a
management fee equal to __ percent of the annualized rental income and
also including other operating expenses of $___ per _____ provided,
however, that annualized Operating Expenses for purposes hereof shall not
be less than $____ Property tax expenses shall be calculated assuming the
completed Improvements are fully assessed and using the most recent tax
rate available (whether certified or not).
c. Borrower shall deliver to Nationwide a Letter of Credit with an
expiration date of no earlier than __ months after the Closing Date in
form and substance satisfactory to Nationwide in an amount equal to ____
times the annualized deficit that exists at closing between the Net
Operating Income being generated by the Security Property and ____ times
the annual debt service payments due under the terms of the loan
documents. For purposes of this paragraph, "Net Operating Income" shall
mean the annualized tents and expense reimbursements to be received home
tenants of the Security Property pursuant to leases approved by Nationwide
where the tenants are paying rent (i.e., any free rent periods must have
expired), are in occupancy, and open for business, minus Operating
Expenses, all of which are to be calculated as of the Closing Date,
Operating Expenses for purposes hereof shall be the annualized expenses of
the Security Property, including, but not limited to, a management fee
equal to __ percent of the annualized rental income and other operating
expenses of $___ per ____ provided; however, that annualized Operating
Expenses for purposes hereof shall not be less than $___. Property tax
expenses shall be calculated assuming the completed Improvements are
fully assessed and using the most recent tax rate available (whether
certified or not). This Letter of Credit shall be released by Nationwide
when Net Operating Income achieved is at least ____ times ("Shortfall
Coverage Test") as great as the annual debt service on the Mortgage Loan
for a period of three consecutive months. If the Shortfall Coverage Test
is not satisfied within __ months of the Closing Date or, if at any time
during the existence of the Letter of Credit, there is a default by the
Borrower under the terms of the loan documents, Nationwide may redeem the
Letter of Credit and apply the cash proceeds therefrom to the reduction of
the outstanding principal balance of the Mortgage Loan at par, or to the
payment of any other amounts owed by Borrower to Nationwide under the
terms of the loan documents. In the event Nationwide is unable to collect
the full amount of said Letter of Credit for any reason, the Borrower, any
Guarantors, and the Responsible Individuals shall remain unconditionally
liable for the face amount of said Letter of Credit.
d. To determine whether Borrower qualifies for a release of the Guarantee
and/or Letter of Credit, Borrower shall deliver to Nationwide such
information as Nationwide may reasonably request including, without
limitation (i) a current rent toll certified to be true and correct by
Borrower, (ii) a true and complete copy of all fully executed leases
entered into which are being used to satisfy the criteria for release,
(iii) unconditional certificates of occupancy for the completed tenant
spaces, (iv) an unqualified estoppel certificate on Nationwide's standard
form (or such other form as may be acceptable to Nationwide) from each
tenant whose lease is being used to satisfy the criteria for release, and
(v) actual operating statements for the Security Property which will
identify all operating expenses associated with the Security Property.
(Estoppel certificates are not necessary for apartment projects.) Rental
income from any Major Tenant shall not be included in these calculations
if such Major Tenant makes a general assignment for the benefit of
creditors, or there is filed by or against any such Major Tenant a
petition in bankruptcy or for the appointment of a receiver, or there
commences under any bankruptcy or insolvency law proceedings for the Major
Tenant's relief, or for the compromise, extension, arrangement,
rearrangement, reorganization, or adjustment of any of the Major Tenant's
obligations.
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Page 18 of 19
<PAGE> 21
EXHIBIT "B"
Below are the only modifications made to the Application/Contract. If
there are no modifications, so state.
SEE ATTACHED EXHIBIT "B"
Page 19 of 19
<PAGE> 22
EXHIBIT "B"
Below are the only modifications made to the Application/Contract by and
Between Roberts Properties Residential, L.P. and Nationwide on Bentley Place
Apartments.
1. In Part II, Paragraph 3(e), add the following at the end of the paragraph:
"For a monetary default, Nationwide will give notice and a five day
right-to-cure (defined as a "Monetary Cure Period"). Such Monetary Cure
Period shall be limited to one per loan year for the term of the loan. It
is understood and agreed a monetary default does not waive Nationwide's
right to the late payment charge described in Part 11, Paragraph 3(b)."
2. In Part II, Paragraph 3(c), add the following: "Notwithstanding the
foregoing, Nationwide will waive the above requirements by separate letter
so long as title to the Security Properly remains with Borrower or with an
affiliate or subsidiary of Borrower, there is no default under the
Mortgage/Deed of Trust, the Standard Lease form has not changed, and paid
tax receipts and evidence of payment of insurance premiums, prior to their
applicable due dates, are received by Nationwide in a timely manner."
3. In Part II, Paragraph 5, delete the last sentence and replace with the
following sentence, "In the event Nationwide does not approve Inspecting
Architect's report, Borrower may terminate this Application/Contract and
the Commitment Fee less Nationwide's out of pocket expenses shall be
refunded to the Borrower".
4. In Part II, Paragraph 9, insert the following after the words "hereinafter
created" in the first line: "and not on the standard lease form approved
by Nationwide".
5. In Part II, Paragraph 10 should be deleted in its entirely.
6. In Part II, Paragraph 11(a), add the following to the end of the first
paragraph: "Notwithstanding the foregoing, Borrower shall have the one
time right to transfer the Security Property to another party, provided
the transferee is acceptable to Nationwide, in its sole discretion,
without a change in the loan terms, so long as Borrower pays Nationwide a
cash assumption fee equal to 1% of the outstanding principal balance of
the loan. This onetime right of transfer shall apply only to Borrower and
not to any subsequent transferee. It is understood and agreed that upon
such transfer, Borrower shall be relieved from all liability under the
loan documents for events occurring subsequent to the date of the approved
transfer.
It is also understood and agreed that Nationwide will allow the transfer
of the Security Property without Nationwide's consent and without change
in the loan terms or payment of a transfer fee provided (i) the transfer
is made to the general partner of the Borrower; (ii) there is no change in
the ownership interests of the general partner of the Borrower other than
in the ordinary course of business; and (iii) Nationwide shall be given
prompt notice and documentation of such transfer, and Borrower shall pay
all of Nationwide's out-of-pocket expenses associated with such transfer."
7. In Part II, Paragraph 11 (b), Subsection (v), insert the word "reasonably"
before the word "deemed."
8. In Part II, Paragraph 11 (c), Subparagraph (ii) should be deleted.
9. In Part II, Paragraph 11(d), in the fourth line, before the words "shall
be deposited with Nationwide" insert "a certified copy of which."
10. In Part II, Paragraph 11 (f), insert the following: "Nationwide
acknowledges that Roberts Properties Management, Inc. is an approved
manager and leasing agent subject to Nationwide's review and approval of
the management and leasing agreements."
<PAGE> 23
11. In Part II, Paragraph 13(ix), insert the following at the end of the
paragraph: "Notwithstanding the foregoing, Nationwide will waive the
aforementioned zoning endorsement provided it receives satisfactory
evidence and assurances regarding zoning compliance from the local
municipality."
12. In Part II, Paragraph 11 (i), insert the following: "Nationwide
acknowledges that the Borrower is Roberts Properties Residential, L.P.
which is the entity through which the Company, Roberts Realty Investors,
Inc., conducts business and owns all of its real estate assets. As the
sole general partner of Roberts Properties Residential, L.P., the Company
controls the Borrower. Therefore, the audited financial statements to be
furnished to Nationwide are those of the Company, Roberts Realty
Investors, Inc. It is understood that the Borrower will furnish the
Security Property's operating statements to Nationwide within 120 days of
each calendar year end."
13. In Part I, Paragraph 15, second paragraph, second line, after the words
"Security Property", insert the following: "including without limitations,
all title and survey matters relating to the Security Property."
14. Exhibit "A", Subparagraphs (b), (c), and (d): Delete in their entirety.
<PAGE> 1
EXHIBIT 10.19.1
REAL ESTATE NOTE A
$4,250,000.00 Atlanta, Georgia
March 28, 1996
FOR VALUE RECEIVED, THE UNDERSIGNED Roberts Properties Residential, L.P.,
a Georgia limited partnership, whose sole general partner is Roberts Realty
Investors, Inc., a Georgia corporation (the "Maker") promises to pay to the
order of NATIONWIDE LIFE INSURANCE COMPANY, an Ohio corporation, its successors
and assigns (the "Holder") the principal sum of FOUR MILLION TWO HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($4,250,000.00), together with interest on the
principal balance of this Real Estate Note A (the "Note"), from time to time
remaining unpaid, from the date of disbursement by the Holder hereof at the
applicable interest rate hereinafter set forth, together with all other sums
due hereunder or under the terms of the Security Deed (as hereinafter defined)
in lawful money of the United States of America which shall be legal tender in
payment of all debts at the time of payment. Both principal and interest and
all other sums due hereunder shall be payable at the office of the Holder at
One Nationwide Plaza, Columbus, Ohio 43216, Attn: Real Estate Investment
Department, or at such other place either within or without the State of Ohio,
as the Holder hereof may from time to time designate. Said principal and
interest shall be paid over a term, at the times, and in the manner set forth
below, to wit:
Payment Provision:
(i) Interest accrued on the unpaid principal balance of this Note,
from the date of disbursement hereof at the rate of 7.125% percent
per annum, shall be due and payable on April 15, 1996.
(ii) Thereafter, principal and interest on the unpaid principal
balance of this Note at the rate of 7.125% percent per annum shall be
paid in one hundred nineteen consecutive monthly installments
commencing on May 15, 1996 and continuing on the fifteenth day of
each calendar month thereafter, with each such installment to be in
the sum of Thirty Thousand Three Hundred Seventy-seven and 86/100
Dollars ($30,377.86).
Maturity:
The unpaid principal balance of this Note and all accrued unpaid interest
thereon, if not sooner paid, shall be due and payable in full on April 15, 2006
(the "Maturity Date").
Application of Payments:
All payments shall be applied first to the payment of accrued unpaid
interest on this Note and the balance, if any, shall be applied to the
reduction of the outstanding principal balance of this Note. Interest due
hereunder shall be calculated on the basis of a 360-day year composed of twelve
(12) thirty (30) day months; provided, in no event shall such calculation cause
the interest rate on this Note to exceed the maximum rate permitted under
applicable law.
Late Payment Charge:
The Holder of this Note may collect a late payment charge, prior to the
acceleration of this Note, in an amount equal to five percent (5%) of the
aggregate monthly installment which is not paid on the due date, for the
purposes of covering the extra expenses involved in handling delinquent
installments. Any full payment of principal and/or interest which is
postmarked by the United States Postal Service on or before the due date shall
not be considered delinquent and a late payment charge shall not be assessed.
<PAGE> 2
Prepayment:
(A) Maker shall have the right to prepay, in full but not in part, the
obligation evidenced by this Note upon giving (i) not less than thirty (30)
days' prior written notice to Holder of Maker's intention to so prepay the
Note, and (ii) payment to Holder of the Prepayment Premium (as hereinafter
defined), if any, then due to Holder as hereinafter provided. As used herein,
the term "Prepayment Premium" shall mean the greater of (x) one percent (1.0%)
of the outstanding principal balance of this Note, or (y) a sum equal to (a)
the present value of the scheduled monthly payments hereunder from the date of
prepayment to the Maturity Date and (b) the present value of the amount of
principal and interest due on the Maturity Date (assuming all scheduled monthly
payments due hereunder prior to the Maturity Date were made when due), minus
(c) the outstanding principal balance hereof as of the date of prepayment. The
present value described in (a) and (b) of the immediately preceding sentence
are to be computed on a monthly basis as of the date of prepayment, discounted
at the yield to maturity of the U.S. Treasury Note or Bond that is closest in
maturity to the Maturity Date as reported in the Wall Street Journal (or if the
Wall Street Journal is no longer published, as reported in such other daily
financial publication of national circulation which shall be designated by
Holder) on the fifth (5th) business day preceding the date of prepayment.
Maker shall be obligated to prepay this Note on the date set forth in the
notice to Holder required hereinabove, after such notice has been delivered to
Holder. Notwithstanding the foregoing or any other provision herein to the
contrary, if the Holder elects to apply insurance proceeds, condemnation awards
or any escrowed amounts, if applicable, to the reduction of the principal
balance of this Note in the manner provided in the Security Deed (as
hereinafter defined), no Prepayment Premium shall be due or payable as a result
of such application, and the monthly installments due and payable hereunder
shall be reduced accordingly.
(B) In the event the Maturity Date of the indebtedness evidenced by this
Note is accelerated by Holder hereof at any time due to a default by Maker in
the terms, covenants or conditions contained in this Note, the Security Deed or
any of the other Loan Document (as hereinafter defined), then a tender of
payment of an amount necessary to satisfy the entire outstanding principal
balance and all accrued unpaid interest of this Note made by Maker, or by
anyone on behalf of Maker, at any time prior to, at, or as a result of, a
foreclosure sale or sale pursuant to power of sale shall constitute a voluntary
prepayment hereunder prior to the contracted Maturity Date of this Note thus
requiring payment to Holder of a Prepayment Premium equal to the applicable
Prepayment Premium as set forth in subparagraph (A) above.
(C) Maker acknowledges that Holder (a) has advanced the amounts evidenced
by this Note with the expectation that such amounts would be outstanding until
the Maturity Date unless prepaid in accordance with the foregoing prepayment
provisions, (b) would not have been willing to advance such amounts on the
terms set forth in this Note for a shorter period of time, (c) in making the
loan evidenced by this Note, is relying on Maker's creditworthiness and its
agreement to pay in strict accordance with the terms set forth in the Note, and
(d) would not make the loan without full and complete assurance by Maker of its
agreement not to prepay all or a part of the principal of this Note except as
expressly permitted herein. Maker acknowledges that if this Note were to be
prepaid prior to the Maturity Date other than in accordance with the foregoing
prepayment provisions, Maker would not receive the benefit of the bargain
agreed to by Maker and Holder. In addition, Maker has been advised and
acknowledges that Holder is relying on the receipt of payments under this Note
to, among other things, match and support its obligations under contracts
entered into by Holder with third parties and that in the event of a
prepayment, Holder could suffer loss and additional expenses which are
extremely difficult and impractical to ascertain. The Prepayment Premium is a
good faith resolution by Maker and Holder of the damages Holder would suffer,
and it is not intended as a penalty.
(D) Notwithstanding anything in this "Prepayment" section of this Note to
the contrary, Maker may prepay in full, but not in part, the obligation
evidenced by this Note at any time during the last ninety (90) days prior to
the Maturity Date without any prepayment premium.
BY INITIALING BELOW, MAKER EXPRESSLY ACKNOWLEDGES THAT PURSUANT TO THE
PROVISIONS OF THIS NOTE, MAKER HAS NO RIGHT TO PREPAY
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<PAGE> 3
THIS NOTE IN WHOLE OR IN PART WITHOUT PAYMENT OF THE PREPAYMENT PREMIUM EXCEPT
AS SET FORTH ABOVE, AND THAT MAKER SHALL BE LIABLE FOR THE PAYMENT OF THE
PREPAYMENT PREMIUM UPON ANY PAYMENT OF THE OUTSTANDING PRINCIPAL OF THIS NOTE
BEFORE ITS DUE DATE, WHETHER VOLUNTARY OR INVOLUNTARY OR AFTER ACCELERATION OF
THE NOTE WHETHER THE ACCELERATION OF THE MATURITY HEREOF IS DUE TO MAKER'S
DEFAULT OR OTHERWISE. FURTHERMORE, BY INITIALING BELOW, MAKER WAIVES ANY
RIGHTS IT MAY HAVE UNDER ANY APPLICABLE STATE LAWS AS THEY RELATE TO ANY
PREPAYMENT RESTRICTIONS CONTAINED IN THIS PREPAYMENT SECTION OR OTHERWISE IN
THIS NOTE AND EXPRESSLY ACKNOWLEDGES THAT HOLDER HAS MADE THE LOAN IN RELIANCE
UPON SUCH AGREEMENTS AND WAIVER OF MAKER AND THAT HOLDER WOULD NOT HAVE MADE
THE LOAN WITHOUT SUCH AGREEMENTS AND WAIVER OF MAKER. MAKER ACKNOWLEDGES THAT
SPECIFIC WEIGHT HAS BEEN GIVEN TO THE CONSIDERATION GIVEN FOR SUCH AGREEMENTS,
WHICH CONSIDERATION IS THE GRANTING OF THE LOAN.
/s/ CSR
------------------
Borrower's initials
Additional Conditions:
This Note is secured by a Deed to Secure Debt and Security Agreement
(herein referred to as the "Security Deed") and by an Assignment of Leases,
Rents and Profits (herein referred to as the "Assignment") of even date
herewith encumbering certain real property located in Cobb County, Georgia and
other property as more particularly described in the Security Deed (hereinafter
collectively referred to as the "Property"). The Security Deed and the
Assignment contain terms and provisions which provide grounds for acceleration
of the indebtedness evidenced by this Note, together with additional remedies
in the event of default hereunder or thereunder. Failure on the part of the
Holder hereof to exercise any right granted herein or in the aforesaid Security
Deed or the Assignment shall not constitute a waiver of such right or preclude
the subsequent exercise and enforcement thereof. This Note, the Security Deed,
the Assignment and all other documents and instruments executed as further
evidence of, as additional security for, or executed in connection with the
indebtedness evidenced by this Note are hereinafter collectively referred to as
the "Loan Documents."
Except as otherwise provided, all parties to this Note, including
endorsers, sureties and guarantors, hereby jointly and severally waive
presentment for payment, demand, protest, notice of protest, notice of demand
and of nonpayment or dishonor and of protest, notice of intent to accelerate
the maturity of this Note, notice of acceleration of maturity of this Note, and
any and all other notices and demands whatsoever, and agree to remain bound
hereby until the principal and interest of this Note are paid in full,
notwithstanding any extensions of time for payment which may be granted by
Holder, even though the period of extension be indefinite, and notwithstanding
any inaction by, or failure to assert any legal rights available to the Holder
of this Note.
If the obligations evidenced by this Note, or any part thereof, are placed
in the hands of an attorney for collection, whether by suit or otherwise, at
any time, or from time to time, Maker shall be liable to Holder, in each
instance, for all costs and expenses incurred in connection therewith,
including, without limitation, reasonable attorneys' fees (as hereinafter
defined).
Default:
If default shall be made in the payment of principal and/or interest as
stipulated above or in the payment of any other sums due hereunder or under any
of the other Loan Documents, or should any default be made in the performance
of any of the terms, covenants and conditions contained herein or in any of the
other Loan Documents, then in any or all of such events, at the option of
Holder, the entire outstanding principal balance of this Note, together with
all accrued unpaid interest thereon and all other sums advanced by Holder on
behalf of Maker shall become and be immediately due and payable then or
thereafter as Holder may elect, regardless of the Maturity Date hereof. All
such amounts shall bear interest after the Maturity Date, by
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<PAGE> 4
acceleration or otherwise, at the lesser of either (i) the highest rate of
interest then allowed by the laws of the State of Georgia, or, if controlling,
the laws of the United States, or (ii) the then applicable interest rate of
this Note plus five-hundred (500) basis points (five per cent per annum).
During the existence of any default, Holder may apply any sums received,
including but not limited to, insurance proceeds or condemnation awards to any
amount then due and owing hereunder or under the terms of any of the other Loan
Documents as Holder may determine. Neither the right nor the exercise of the
right herein granted unto Holder to apply such proceeds as aforesaid shall
preclude Holder from exercising its option to cause the entire indebtedness
evidenced by this Note to become immediately due and payable by reason of
Maker's default under the terms of this Note, or any of the other Loan
Documents.
Notwithstanding any provisions herein to the contrary, Holder's right,
power and privilege to accelerate the maturity of the indebtedness evidenced
hereby shall be conditioned upon, (a) with respect to any Monetary Default (as
hereafter defined), Holder giving Maker written notice of such Monetary Default
and a five (5) day period ("Monetary Cure Period") after the date of such
notice within which to cure such Monetary Default; provided, however, that such
Monetary Cure Period shall be limited to once per loan year for the term of the
Loan; and (b) with respect to any Non-Monetary Default (as hereinafter
defined), Holder giving Maker written notice of such Non-Monetary Default and a
thirty (30) day period after the date of such notice within which to cure such
Non-Monetary Default; provided, however, that if such Non-Monetary Default
cannot reasonably be cured within the 30 day period Maker shall have a
reasonable period of time in which to cure the Non-Monetary Default provided
that Maker commences the cure of such default within the 30 day period and
thereafter diligently pursues the cure to completion. Any notice required
hereunder shall be given as provided in the Security Deed. Holder shall have
no obligation to give Maker notice of any Incurable Default (as hereinafter
defined) prior to exercising its right, power and privilege to accelerate the
maturity of the indebtedness evidenced hereby and to declare same to be
immediately due and payable and exercise all other rights and remedies herein
granted or otherwise available to Holder at law or in equity. As used herein,
the term "Monetary Default" shall mean any default which can be cured by the
payment of money including, but not limited to, the payment of principal and
interest due under this Note and the payment of taxes, assessments and
insurance premiums when due as provided in the Security Deed. As used herein,
the term "Non-Monetary Default" shall mean any default which is not a Monetary
Default or an Incurable Default. As used herein, the term "Incurable Default"
shall mean (i) any voluntary or involuntary sale, assignment, encumbering or
transfer in violation of the covenants of Section 30 the Security Deed or (ii)
if Maker or its general partner should make an assignment for the benefit of
creditors, become insolvent, or file a petition in bankruptcy (including but
not limited to, a petition seeking a rearrangement or reorganization).
Savings Clause; Severability:
Notwithstanding any provisions herein or in the Security Deed to the
contrary, the total liability for payments in the nature of interest including
but not limited to Prepayment Premiums, default interest and late fees shall
not exceed the limits imposed by the laws of the State of Georgia or the United
States of America relating to maximum lawful rate of interest. Holder shall
not be entitled to receive, collect or apply, as interest on the indebtedness
evidenced hereby, any amount in excess of the maximum lawful rate of interest
permitted to be charged by applicable law or regulations, as amended or enacted
from time to time. In the event Holder ever receives, collects or applies, as
interest, any such excess, such amount which would be excessive interest shall
be applied to reduce the unpaid principal balance of the indebtedness evidenced
by this Note. If the unpaid principal balance of such indebtedness is paid in
full, any remaining excess shall be forthwith paid to Maker. If any clauses or
provisions herein contained operate or prospectively operate to invalidate this
Note, then such clauses or provisions only shall be held for naught, as though
not herein contained and the remainder of this Note shall remain operative and
in full force and effect.
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<PAGE> 5
Exculpation:
Except as expressly set forth herein, the liability of Maker with respect
to the payment of principal and interest hereunder shall be "non-recourse" and,
accordingly, Holder's source of satisfaction of said indebtedness and Maker's
other obligations hereunder and under the other Loan Documents shall be limited
to the Property and Holder's receipt of the rents, issues and profits from the
Property. Holder shall not seek to procure payment out of any other assets of
Maker, or any person or entity comprising Maker, nor to seek judgment (except
as hereinafter provided) for any sums which are or may be payable under this
Note or under any of the other Loan Documents, or for any claim or judgment
(except as hereinafter provided) for any deficiency remaining after foreclosure
of the Security Deed. Notwithstanding the above, nothing herein contained
shall be deemed to be a release or impairment of the indebtedness evidenced by
this Note or the security therefor intended by the other Loan Documents, or be
deemed to preclude Holder from exercising its rights to foreclose, or exercise
the power of sale in, the Security Deed or to enforce any of its other rights
or remedies under the Loan Documents.
Notwithstanding the foregoing, it is expressly understood and agreed that
the aforesaid limitation on liability shall in no way affect or apply to
Maker's continued personal liability for:
(1) fraud or misrepresentation made in or in connection with this
Note or any other Loan Documents;
(2) failure to pay taxes prior to delinquency or to pay assessments
prior to delinquency, or to pay charges for labor, materials or other
charges which can create liens on any portion of the Property;
(3) the 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 or (iii) rentals received by or on
behalf of Maker subsequent to the date on which Holder makes written
demand therefor pursuant to any of the Loan Documents;
(4) causing or permitting waste to occur on, in or about the
Property, and failure to maintain the Property, excepting ordinary
wear and tear;
(5) loss by fire or casualty to the extent not compensated by
insurance proceeds collected by Holder;
(6) the return to Holder of all unearned advance rentals and
security deposits paid by tenants of the Property and not refunded to
or forfeited by such tenants;
(7) the return to Holder of any and all fees paid to Maker by
tenants of the Property which fees permit tenants to terminate their
leases;
(8) the return of, or reimbursement for, all personalty owned by
Maker taken from the Property by or on behalf of Maker, out of the
ordinary course of business, and not replaced by items of equal or
greater value than the original value of the personalty so removed;
(9) all court costs and reasonable attorneys' fees actually
incurred which are provided for in this Note or in any other Loan
Document;
(10) (i) the removal of any chemical, material or substance,
exposure to which is prohibited, limited, or regulated by any
Federal, State, County, Regional or Local Authority which may or
could pose a hazard to the health and safety of the occupants of the
Property regardless of the source of origination; (ii) the
restoration of the Property to comply with all governmental
regulations pertaining to hazardous waste found in, on or under the
Property, regardless of the source of origination; and (iii) any
indemnity or other agreement to hold the Holder
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<PAGE> 6
harmless from and against any and all losses, liabilities,
damages, injuries, costs and expenses of any and every kind arising
under Paragraph 3 of the Security Deed including, but not limited to,
that certain Environmental Indemnity Agreement from Maker to Holder
of even date herewith. Maker shall not be liable hereunder if such
materials were placed on the Property subsequent to the date of
acquisition of the Property by foreclosure of the Security Deed by
Holder or acceptance of a deed in lieu thereof, or relinquishment of
control of the Property pursuant to a transfer approved in writing by
Holder; provided that such transferee assumes in writing all
obligations of Maker pertaining to Hazardous Materials (as defined in
the Security Deed) pursuant to the Loan Documents. Liability under
this subparagraph shall extend beyond the repayment of this Note and
compliance with the terms of the Security Deed, unless at such time
Maker provides Holder with an environmental assessment report
acceptable to Holder showing the Property to be free of Hazardous
Materials and not in violation of Hazardous Waste Laws (as defined in
the Security Deed). Maker shall bear the burden of proof in
establishing the date on which any such Hazardous Materials were
placed or appeared in, on or under the Property.
(11) (a) any and all costs incurred in order to cause the Property
to comply with the applicable accessibility provisions of The Fair
Housing Act of 1988, as the same may now or hereafter be amended, and
any and all rules and regulations that may now or hereafter be
promulgated in connection with said acts, and (b) any indemnity or
other agreement to hold the Holder harmless from and against any and
all losses, liabilities, damages, injuries, costs and expenses of any
and every kind arising under Paragraph 3 of the Security Deed
regarding accessibility for the disabled or handicapped or under the
Accessibility Indemnity Agreement from Maker to Holder of even date
herewith; provided, however, Maker shall not be liable for compliance
with any accessibility laws that first become effective, or for any
violation of any accessibility laws resulting from alterations or
improvements to the Property that are performed, subsequent to
Holder's actually taking possession of the Property pursuant to
foreclosure of the Security Deed or acceptance of a deed in lieu
thereof, or subsequent to any transfer of ownership of the Property
that has the prior written approval of Holder; provided that such
transferee assumes in writing all obligations of Maker with respect
to compliance with accessibility laws under the Security Deed and
Accessibility Indemnity Agreement.
(12) Obligation of Maker for the face amount of any Letter of Credit held
by Holder and delivered by Maker in connection with the loan
evidenced by this Note in the event Holder is unable to collect the
full amount of said Letter of Credit for any reason.
The obligations of Maker in subparagraphs (1) through (12) above, except
as provided in subparagraphs (10) and (11), shall survive the repayment and
satisfaction of this Note and compliance with the terms of the Security Deed.
Notwithstanding any provisions herein to the contrary, Maker shall become
personally liable for the entire amount due under this Note (including all
principal, interest and other charges) in the event that Maker (i) violates the
covenants set forth in the Security Deed governing the placing of subordinate
financing on the Property or (ii) violates the covenants set forth in the
Security Deed restricting transfers in the Property or transfers of ownership
interests in Maker.
As used herein, the phrase "reasonable attorneys' fees" shall mean fees
charged by attorneys selected by Holder based upon such attorneys' then
prevailing hourly rates as opposed to any amount or percentage specified by any
statute then in effect in the State of Georgia.
This Note is one of a series of two notes of even date herewith executed
by the undersigned, both being secured by the Security Deed and other security
instruments in favor of the Holder of this Note. The other such note is
designated Real Estate Note B and has been
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<PAGE> 7
executed by the undersigned in favor of West Coast Life Insurance Company and
is in the original principal sum of Seven Hundred Fifty Thousand and No/100
Dollars ($750,000.00). Real Estate Notes A and B shall be of equal dignity and
it is expressly stipulated and agreed that a default under the terms of either
of said Notes shall constitute an event of default under both of said Notes
authorizing the holders of said Notes to accelerate the maturity of both of
said Notes and to exercise all rights and remedies granted to holders under the
Notes, the Security Deed and any other security instruments securing the
payment of the Notes. It is further stipulated and agreed that notwithstanding
the prepayment privilege contained in this Note, the undersigned shall have no
right to prepay this Note unless the undersigned also elects to prepay Real
Estate Note B in accordance with the prepayment provisions contained therein.
THE PROVISIONS of this Note shall be governed by the laws of the State of
Georgia and the United States and shall be binding upon the Maker, its
successors and assigns and shall inure to the benefit of Holder, its
successors and assigns. Time is of the essence of this contract.
IN WITNESS WHEREOF, the undersigned has executed this Note under seal as of the
day and year first above written.
Roberts Properties Residential, L.P., a
Georgia limited partnership
By: Roberts Realty Investors, Inc., its sole
General Partner
By: /s/ Charles S. Roberts
----------------------------
Name: Charles S. Roberts
Title: President
(CORPORATE SEAL)
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<PAGE> 1
EXHIBIT 10.19.2
REAL ESTATE NOTE B
$750,000.00 Atlanta, Georgia
March 28, 1996
FOR VALUE RECEIVED, THE UNDERSIGNED Roberts Properties Residential, L.P.,
a Georgia limited partnership, whose sole general partner is Roberts Realty
Investors, Inc., a Georgia corporation (the "Maker") promises to pay to the
order of WEST COAST LIFE INSURANCE COMPANY, a California corporation, its
successors and assigns (the "Holder") the principal sum of SEVEN HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($750,000.00), together with interest on the
principal balance of this Real Estate Note (the "Note"), from time to time
remaining unpaid, from the date of disbursement by the Holder hereof at the
applicable interest rate hereinafter set forth, together with all other sums
due hereunder or under the terms of the Security Deed (as hereinafter defined)
in lawful money of the United States of America which shall be legal tender in
payment of all debts at the time of payment. Both principal and interest and
all other sums due hereunder shall be payable at the office of the Holder c/o
Nationwide Life Insurance Company, at One Nationwide Plaza, Columbus, Ohio
43216, Attn: Real Estate Investment Department, or at such other place either
within or without the State of Ohio, as the Holder hereof may from time to time
designate. Said principal and interest shall be paid over a term, at the
times, and in the manner set forth below, to wit:
Payment Provision:
(i) Interest accrued on the unpaid principal balance of this Note,
from the date of disbursement hereof at the rate of 7.125% percent
per annum, shall be due and payable on April 15, 1996.
(ii) Thereafter, principal and interest on the unpaid principal balance
of this Note at the rate of 7.125% percent per annum shall be paid
in one hundred nineteen (119) consecutive monthly installments
commencing on May 15, 1996 and continuing on the fifteenth day of
each calendar month thereafter, with each such installment to be in
the sum of Five Thousand Three Hundred Sixty and 80/100 Dollars
($5,360.80).
Maturity:
The unpaid principal balance of this Note and all accrued unpaid interest
thereon, if not sooner paid, shall be due and payable in full on April 15,
2006 (the "Maturity Date").
Application of Payments:
All payments shall be applied first to the payment of accrued unpaid
interest on this Note and the balance, if any, shall be applied to the
reduction of the outstanding principal balance of this Note. Interest due
hereunder shall be calculated on the basis of a 360-day year composed of twelve
(12) thirty (30) day months; provided, in no event shall such calculation cause
the interest rate on this Note to exceed the maximum rate permitted under
applicable law.
Late Payment Charge:
The Holder of this Note may collect a late payment charge, prior to the
acceleration of this Note, in an amount equal to five percent (5%) of the
aggregate monthly installment which is not paid on the due date, for the
purposes of covering the extra expenses involved in handling delinquent
installments. Any full payment of principal and/or interest which is
postmarked by the United States Postal Service on or before the due date shall
not be considered delinquent and a late payment charge shall not be assessed.
<PAGE> 2
Prepayment:
(A) Maker shall have the right to prepay, in full but not in part, the
obligation evidenced by this Note upon giving (i) not less than thirty (30)
days' prior written notice to Holder of Maker's intention to so prepay the
Note, and (ii) payment to Holder of the Prepayment Premium (as hereinafter
defined), if any, then due to Holder as hereinafter provided. As used herein,
the term "Prepayment Premium" shall mean the greater of (x) one percent (1.0%)
of the outstanding principal balance of this Note, or (y) a sum equal to (a)
the present value of the scheduled monthly payments hereunder from the date of
prepayment to the Maturity Date and (b) the present value of the amount of
principal and interest due on the Maturity Date (assuming all scheduled monthly
payments due hereunder prior to the Maturity Date were made when due), minus
(c) the outstanding principal balance hereof as of the date of prepayment. The
present value described in (a) and (b) of the immediately preceding sentence
are to be computed on a monthly basis as of the date of prepayment, discounted
at the yield to maturity of the U.S. Treasury Note or Bond that is closest in
maturity to the Maturity Date as reported in the Wall Street Journal (or if the
Wall Street Journal is no longer published, as reported in such other daily
financial publication of national circulation which shall be designated by
Holder) on the fifth (5th) business day preceding the date of prepayment.
Maker shall be obligated to prepay this Note on the date set forth in the
notice to Holder required hereinabove, after such notice has been delivered to
Holder. Notwithstanding the foregoing or any other provision herein to the
contrary, if the Holder elects to apply insurance proceeds, condemnation awards
or any escrowed amounts, if applicable, to the reduction of the principal
balance of this Note in the manner provided in the Security Deed (as
hereinafter defined), no Prepayment Premium shall be due or payable as a result
of such application, and the monthly installments due and payable hereunder
shall be reduced accordingly.
(B) In the event the Maturity Date of the indebtedness evidenced by this
Note is accelerated by Holder hereof at any time due to a default by Maker in
the terms, covenants or conditions contained in this Note, the Security Deed or
any of the other Loan Document (as hereinafter defined), then a tender of
payment of an amount necessary to satisfy the entire outstanding principal
balance and all accrued unpaid interest of this Note made by Maker, or by
anyone on behalf of Maker, at any time prior to, at, or as a result of, a
foreclosure sale or sale pursuant to power of sale shall constitute a voluntary
prepayment hereunder prior to the contracted Maturity Date of this Note thus
requiring payment to Holder of a Prepayment Premium equal to the applicable
Prepayment Premium as set forth in subparagraph (A) above.
(C) Maker acknowledges that Holder (a) has advanced the amounts evidenced
by this Note with the expectation that such amounts would be outstanding until
the Maturity Date unless prepaid in accordance with the foregoing prepayment
provisions, (b) would not have been willing to advance such amounts on the
terms set forth in this Note for a shorter period of time, (c) in making the
loan evidenced by this Note, is relying on Maker's creditworthiness and its
agreement to pay in strict accordance with the terms set forth in the Note, and
(d) would not make the loan without full and complete assurance by Maker of its
agreement not to prepay all or a part of the principal of this Note except as
expressly permitted herein. Maker acknowledges that if this Note were to be
prepaid prior to the Maturity Date other than in accordance with the foregoing
prepayment provisions, Maker would not receive the benefit of the bargain
agreed to by Maker and Holder. In addition, Maker has been advised and
acknowledges that Holder is relying on the receipt of payments under this Note
to, among other things, match and support its obligations under contracts
entered into by Holder with third parties and that in the event of a
prepayment, Holder could suffer loss and additional expenses which are
extremely difficult and impractical to ascertain. The Prepayment Premium is a
good faith resolution by Maker and Holder of the damages Holder would suffer,
and it is not intended as a penalty.
(D) Notwithstanding anything in this "Prepayment" section of this Note to
the contrary, Maker may prepay in full, but not in part, the obligation
evidenced by this Note at any time during the last ninety (90) days prior to
the Maturity Date without any prepayment premium.
BY INITIALING BELOW, MAKER EXPRESSLY ACKNOWLEDGES THAT PURSUANT TO THE
PROVISIONS OF THIS NOTE, MAKER HAS NO RIGHT TO PREPAY
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<PAGE> 3
THIS NOTE IN WHOLE OR IN PART WITHOUT PAYMENT OF THE PREPAYMENT PREMIUM EXCEPT
AS SET FORTH ABOVE, AND THAT MAKER SHALL BE LIABLE FOR THE PAYMENT OF THE
PREPAYMENT PREMIUM UPON ANY PAYMENT OF THE OUTSTANDING PRINCIPAL OF THIS NOTE
BEFORE ITS DUE DATE, WHETHER VOLUNTARY OR INVOLUNTARY OR AFTER ACCELERATION OF
THE NOTE WHETHER THE ACCELERATION OF THE MATURITY HEREOF IS DUE TO MAKER'S
DEFAULT OR OTHERWISE. FURTHERMORE, BY INITIALING BELOW, MAKER WAIVES ANY
RIGHTS IT MAY HAVE UNDER ANY APPLICABLE STATE LAWS AS THEY RELATE TO ANY
PREPAYMENT RESTRICTIONS CONTAINED IN THIS PREPAYMENT SECTION OR OTHERWISE IN
THIS NOTE AND EXPRESSLY ACKNOWLEDGES THAT HOLDER HAS MADE THE LOAN IN RELIANCE
UPON SUCH AGREEMENTS AND WAIVER OF MAKER AND THAT HOLDER WOULD NOT HAVE MADE
THE LOAN WITHOUT SUCH AGREEMENTS AND WAIVER OF MAKER. MAKER ACKNOWLEDGES THAT
SPECIFIC WEIGHT HAS BEEN GIVEN TO THE CONSIDERATION GIVEN FOR SUCH AGREEMENTS,
WHICH CONSIDERATION IS THE GRANTING OF THE LOAN.
/s/ CSR
-------------------
Borrower's initials
Additional Conditions:
This Note is secured by a Deed to Secure Debt and Security Agreement
(herein referred to as the "Security Deed") and by an Assignment of Leases,
Rents and Profits (herein referred to as the "Assignment") of even date
herewith encumbering certain real property located in Cobb County, Georgia and
other property as more particularly described in the Security Deed (hereinafter
collectively referred to as the "Property"). The Security Deed and the
Assignment contain terms and provisions which provide grounds for acceleration
of the indebtedness evidenced by this Note, together with additional remedies
in the event of default hereunder or thereunder. Failure on the part of the
Holder hereof to exercise any right granted herein or in the aforesaid Security
Deed or the Assignment shall not constitute a waiver of such right or preclude
the subsequent exercise and enforcement thereof. This Note, the Security Deed,
the Assignment and all other documents and instruments executed as further
evidence of, as additional security for, or executed in connection with the
indebtedness evidenced by this Note are hereinafter collectively referred to as
the "Loan Documents."
Except as otherwise provided, all parties to this Note, including
endorsers, sureties and guarantors, hereby jointly and severally waive
presentment for payment, demand, protest, notice of protest, notice of demand
and of nonpayment or dishonor and of protest, notice of intent to accelerate
the maturity of this Note, notice of acceleration of maturity of this Note, and
any and all other notices and demands whatsoever, and agree to remain bound
hereby until the principal and interest of this Note are paid in full,
notwithstanding any extensions of time for payment which may be granted by
Holder, even though the period of extension be indefinite, and notwithstanding
any inaction by, or failure to assert any legal rights available to the Holder
of this Note.
If the obligations evidenced by this Note, or any part thereof, are placed
in the hands of an attorney for collection, whether by suit or otherwise, at
any time, or from time to time, Maker shall be liable to Holder, in each
instance, for all costs and expenses incurred in connection therewith,
including, without limitation, reasonable attorneys' fees (as hereinafter
defined).
Default:
If default shall be made in the payment of principal and/or interest as
stipulated above or in the payment of any other sums due hereunder or under any
of the other Loan Documents, or should any default be made in the performance
of any of the terms, covenants and conditions contained herein or in any of the
other Loan Documents, then in any or all of such events, at the option of
Holder, the entire outstanding principal balance of this Note, together with
all accrued unpaid interest thereon and all other sums advanced by Holder on
behalf of Maker shall become and be immediately due and payable then or
thereafter as Holder may elect, regardless of the
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<PAGE> 4
Maturity Date hereof. All such amounts shall bear interest after the Maturity
Date, by acceleration or otherwise, at the lesser of either (i) the highest
rate of interest then allowed by the laws of the State of Georgia, or, if
controlling, the laws of the United States, or (ii) the then applicable
interest rate of this Note plus five-hundred (500) basis points (five per cent
per annum).
During the existence of any default, Holder may apply any sums received,
including but not limited to, insurance proceeds or condemnation awards to any
amount then due and owing hereunder or under the terms of any of the other Loan
Documents as Holder may determine. Neither the right nor the exercise of the
right herein granted unto Holder to apply such proceeds as aforesaid shall
preclude Holder from exercising its option to cause the entire indebtedness
evidenced by this Note to become immediately due and payable by reason of
Maker's default under the terms of this Note, or any of the other Loan
Documents.
Notwithstanding any provisions herein to the contrary, Holder's right,
power and privilege to accelerate the maturity of the indebtedness evidenced
hereby shall be conditioned upon, (a) with respect to any Monetary Default (as
hereafter defined), Holder giving Maker written notice of such Monetary Default
and a five (5) day period ("Monetary Cure Period") after the date of such
notice within which to cure such Monetary Default; provided, however, that such
Monetary Cure Period shall be limited to once per loan year for the term of the
Loan; and (b) with respect to any Non-Monetary Default (as hereinafter
defined), Holder giving Maker written notice of such Non-Monetary Default and a
thirty (30) day period after the date of such notice within which to cure such
Non-Monetary Default; provided, however, that if such Non-Monetary Default
cannot reasonably be cured within the 30 day period Maker shall have a
reasonable period of time in which to cure the Non-Monetary Default provided
that Maker commences the cure of such default within the 30 day period and
thereafter diligently pursues the cure to completion. Any notice required
hereunder shall be given as provided in the Security Deed. Holder shall have
no obligation to give Maker notice of any Incurable Default (as hereinafter
defined) prior to exercising its right, power and privilege to accelerate the
maturity of the indebtedness evidenced hereby and to declare same to be
immediately due and payable and exercise all other rights and remedies herein
granted or otherwise available to Holder at law or in equity. As used herein,
the term "Monetary Default" shall mean any default which can be cured by the
payment of money including, but not limited to, the payment of principal and
interest due under this Note and the payment of taxes, assessments and
insurance premiums when due as provided in the Security Deed. As used herein,
the term "Non-Monetary Default" shall mean any default which is not a Monetary
Default or an Incurable Default. As used herein, the term "Incurable Default"
shall mean (i) any voluntary or involuntary sale, assignment, encumbering or
transfer in violation of the covenants of Section 30 the Security Deed or (ii)
if Maker or its general partner should make an assignment for the benefit of
creditors, become insolvent, or file a petition in bankruptcy (including but
not limited to, a petition seeking a rearrangement or reorganization).
Savings Clause; Severability:
Notwithstanding any provisions herein or in the Security Deed to the
contrary, the total liability for payments in the nature of interest including
but not limited to Prepayment Premiums, default interest and late fees shall
not exceed the limits imposed by the laws of the State of Georgia or the United
States of America relating to maximum lawful rate of interest. Holder shall
not be entitled to receive, collect or apply, as interest on the indebtedness
evidenced hereby, any amount in excess of the maximum lawful rate of interest
permitted to be charged by applicable law or regulations, as amended or enacted
from time to time. In the event Holder ever receives, collects or applies, as
interest, any such excess, such amount which would be excessive interest shall
be applied to reduce the unpaid principal balance of the indebtedness evidenced
by this Note. If the unpaid principal balance of such indebtedness is paid in
full, any remaining excess shall be forthwith paid to Maker. If any clauses or
provisions herein contained operate or prospectively operate to invalidate this
Note, then such clauses or provisions only shall be held for naught, as though
not herein contained and the remainder of this Note shall remain operative and
in full force and effect.
Exculpation:
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<PAGE> 5
Except as expressly set forth herein, the liability of Maker with respect
to the payment of principal and interest hereunder shall be "non-recourse" and,
accordingly, Holder's source of satisfaction of said indebtedness and Maker's
other obligations hereunder and under the other Loan Documents shall be limited
to the Property and Holder's receipt of the rents, issues and profits from the
Property. Holder shall not seek to procure payment out of any other assets of
Maker, or any person or entity comprising Maker, nor to seek judgment (except
as hereinafter provided) for any sums which are or may be payable under this
Note or under any of the other Loan Documents, or for any claim or judgment
(except as hereinafter provided) for any deficiency remaining after foreclosure
of the Security Deed. Notwithstanding the above, nothing herein contained
shall be deemed to be a release or impairment of the indebtedness evidenced by
this Note or the security therefor intended by the other Loan Documents, or be
deemed to preclude Holder from exercising its rights to foreclose, or exercise
the power of sale in, the Security Deed or to enforce any of its other rights
or remedies under the Loan Documents.
Notwithstanding the foregoing, it is expressly understood and agreed that
the aforesaid limitation on liability shall in no way affect or apply to
Maker's continued personal liability for:
(1) fraud or misrepresentation made in or in connection with this Note or
any other Loan Documents;
(2) failure to pay taxes prior to delinquency or to pay assessments prior
to delinquency, or to pay charges for labor, materials or other
charges which can create liens on any portion of the Property;
(3) the 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 or (iii) rentals received by or on behalf of
Maker subsequent to the date on which Holder makes written demand
therefor pursuant to any of the Loan Documents;
(4) causing or permitting waste to occur on, in or about the Property,
and failure to maintain the Property, excepting ordinary wear and
tear;
(5) loss by fire or casualty to the extent not compensated by insurance
proceeds collected by Holder;
(6) the return to Holder of all unearned advance rentals and security
deposits paid by tenants of the Property and not refunded to or
forfeited by such tenants;
(7) the return to Holder of any and all fees paid to Maker by tenants of
the Property which fees permit tenants to terminate their leases;
(8) the return of, or reimbursement for, all personalty owned by Maker
taken from the Property by or on behalf of Maker, out of the ordinary
course of business, and not replaced by items of equal or greater
value than the original value of the personalty so removed;
(9) all court costs and reasonable attorneys' fees actually incurred
which are provided for in this Note or in any other Loan Document;
(10) (i) the removal of any chemical, material or substance, exposure to
which is prohibited, limited, or regulated by any Federal, State,
County, Regional or Local Authority which may or could pose a hazard
to the health and safety of the occupants of the Property regardless
of the source of origination; (ii) the restoration of the Property to
comply with all governmental regulations pertaining to hazardous
waste found in, on or under the Property, regardless of the source of
origination; and (iii) any indemnity or other agreement to hold the
Holder harmless from and against any and all losses, liabilities,
damages, injuries, costs
- 5 -
<PAGE> 6
and expenses of any and every kind arising under Paragraph 3 of the
Security Deed including, but not limited to, that certain
Environmental Indemnity Agreement from Maker to Holder of even date
herewith. Maker shall not be liable hereunder if such materials
were placed on the Property subsequent to the date of acquisition of
the Property by foreclosure of the Security Deed by Holder or
acceptance of a deed in lieu thereof, or relinquishment of control
of the Property pursuant to a transfer approved in writing by
Holder; provided that such transferee assumes in writing all
obligations of Maker pertaining to Hazardous Materials (as defined
in the Security Deed) pursuant to the Loan Documents. Liability
under this subparagraph shall extend beyond the repayment of this
Note and compliance with the terms of the Security Deed, unless at
such time Maker provides Holder with an environmental assessment
report acceptable to Holder showing the Property to be free of
Hazardous Materials and not in violation of Hazardous Waste Laws (as
defined in the Security Deed). Maker shall bear the burden of proof
in establishing the date on which any such Hazardous Materials were
placed or appeared in, on or under the Property.
(11) (a) any and all costs incurred in order to cause the Property
to comply with the applicable accessibility provisions of The Fair
Housing Act of 1988, as the same may now or hereafter be amended, and
any and all rules and regulations that may now or hereafter be
promulgated in connection with said acts, and (b) any indemnity or
other agreement to hold the Holder harmless from and against any and
all losses, liabilities, damages, injuries, costs and expenses of any
and every kind arising under Paragraph 3 of the Security Deed
regarding accessibility for the disabled or handicapped or under the
Accessibility Indemnity Agreement from Maker to Holder of even date
herewith; provided, however, Maker shall not be liable for compliance
with any accessibility laws that first become effective, or for any
violation of any accessibility laws resulting from alterations or
improvements to the Property that are performed, subsequent to
Holder's actually taking possession of the Property pursuant to
foreclosure of the Security Deed or acceptance of a deed in lieu
thereof, or subsequent to any transfer of ownership of the Property
that has the prior written approval of Holder; provided that such
transferee assumes in writing all obligations of Maker with respect
to compliance with accessibility laws under the Security Deed and
Accessibility Indemnity Agreement.
(12) Obligation of Maker for the face amount of any Letter of Credit held
by Holder and delivered by Maker in connection with the loan
evidenced by this Note in the event Holder is unable to collect the
full amount of said Letter of Credit for any reason.
The obligations of Maker in subparagraphs (1) through (12) above, except
as provided in subparagraphs (10) and (11), shall survive the repayment and
satisfaction of this Note and compliance with the terms of the Security Deed.
Notwithstanding any provisions herein to the contrary, Maker shall become
personally liable for the entire amount due under this Note (including all
principal, interest and other charges) in the event that Maker (i) violates the
covenants set forth in the Security Deed governing the placing of subordinate
financing on the Property or (ii) violates the covenants set forth in the
Security Deed restricting transfers in the Property or transfers of ownership
interests in Maker.
As used herein, the phrase "reasonable attorneys' fees" shall mean fees
charged by attorneys selected by Holder based upon such attorneys' then
prevailing hourly rates as opposed to any amount or percentage specified by any
statute then in effect in the State of Georgia.
THE PROVISIONS of this Note shall be governed by the laws of the State of
Georgia and the United States and shall be binding upon the Maker, its
successors and assigns and shall
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<PAGE> 7
inure to the benefit of Holder, its successors and assigns. Time is of the
essence of this contract.
This Note is one of a series of two notes of even date herewith executed
by the undersigned, both being secured by the Security Deed and other security
instruments in favor of the Holder of this Note. The other such note is
designated Real Estate Note A and has been executed by the undersigned in favor
of Nationwide Life Insurance Company and is in the original principal sum of
Four Million Two Hundred Fifty Thousand and No/100 Dollars ($4,250,000.00).
Real Estate Notes A and B shall be of equal dignity and it is expressly
stipulated and agreed that a default under the terms of either of said Notes
shall constitute an event of default under both of said Notes authorizing the
holders of said Notes to accelerate the maturity of both of said Notes and to
exercise all rights and remedies granted to holders under the Notes, the
Security Deed and any other security instruments securing the payment of the
Notes. It is further stipulated and agreed that notwithstanding the prepayment
privilege contained in this Note, the undersigned shall have no right to prepay
this Note unless the undersigned also elects to prepay Real Estate Note A in
accordance with the prepayment provisions contained therein.
IN WITNESS WHEREOF, the undersigned has executed this Note under seal as
of the day and year first above written.
Roberts Properties Residential, L.P., a Georgia
limited partnership
By: Roberts Realty Investors, Inc., its sole
General Partner
By: /s/ Charles S. Roberts
--------------------------------
Name: Charles S. Roberts
Title: President
(CORPORATE SEAL)
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<PAGE> 1
EXHIBIT 10.19.3
Return to:
Charles A. Brake, Jr., Esq.
Alston & Bird
One Atlantic Center
1201 West Peachtree St.
Atlanta, Georgia 30309-3424
DEED TO SECURE DEBT AND SECURITY AGREEMENT
THIS DEED TO SECURE DEBT AND SECURITY AGREEMENT (the "Security Deed"),
executed this 28th day of March, 1996, by ROBERTS PROPERTIES RESIDENTIAL, L.P.,
a Georgia limited partnership (the "Borrower"), having its principal office at
8010 Roswell Road, Suite 120, Atlanta, Georgia 30350. Said Security Deed is
being given to secure the payment of two notes of even date herewith one of
which is payable to the order of NATIONWIDE LIFE INSURANCE COMPANY, an Ohio
corporation, having its principal office at One Nationwide Plaza, Columbus,
Ohio 43216 or at such other place either within or without the State of Ohio,
as Lender may from time to time designate and the other of which is payable to
the order of WEST COAST LIFE INSURANCE COMPANY, a California corporation, whose
address is c/o Nationwide Life Insurance Company, One Nationwide Plaza,
Columbus, Ohio 43216 or at such other place either within or without the State
of Ohio, as Lender may from time to time designate, and any subsequent
holder(s) hereof, (collectively the "Lender").
W I T N E S S E T H
WHEREAS, the Borrower is justly indebted to the Lender in the aggregate
sum of FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00), with interest thereon,
as set forth in a certain Real Estate Note A of even date herewith in the sum
of FOUR MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($4,250,000.00)
payable to Nationwide Life Insurance Company and a certain Real Estate Note B
of even date herewith in the sum of SEVEN HUNDRED FIFTY THOUSAND AND NO/100
DOLLARS ($750,000.00) payable to West Coast Life Insurance Company (said Real
Estate Notes A and Note B are hereinafter collectively referred to as the
"Note"), which Note shall be due and payable on or before April 15, 2006 ; and
WHEREAS, the Lender, as a condition precedent to the extension of credit
and the making of the loan evidenced by the Note, has required that the
Borrower provide Lender with security for the repayment of the indebtedness
evidenced by the Note as well as for the performance, observance and discharge
by the Borrower of the various covenants, conditions and agreements made by the
Borrower to, with, in favor of and for the benefit of Lender with respect to
said indebtedness and such security;
NOW THEREFORE, in consideration of and in order to secure the repayment of
the indebtedness evidenced and represented by the Note, together with interest
on such indebtedness, as well as the payment of all other sums of money secured
hereby, as hereinafter provided; and to secure the observance, performance and
discharge by the Borrower of all covenants, conditions and agreements set forth
in the Note, this Security Deed and in all other documents and instruments
executed and delivered by the Borrower to and in favor of Lender for the
purpose of further securing the repayment of the indebtedness evidenced and
represented by the Note; and in order to charge the properties, interests and
rights hereinafter described with such payment, observance, performance and
discharge; and in consideration of the sum of one dollar paid by Lender to
Borrower and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the Borrower does hereby grant,
bargain, sell, alien, remise, release, convey, assign, transfer, pledge,
deliver, set over, hypothecate, warrant and confirm unto Lender, its successors
and assigns forever, all of Borrower's right, title and interest in and to the
following described properties, rights and interests and all replacements of,
substitutions for, and additions thereto (all of which are hereinafter together
referred to as the "Property"), to wit:
ALL THAT certain piece, parcel or tract of land or real property of which
the Borrower is now seized and in actual or constructive possession, situate in
Cobb County, Georgia more particularly described on Exhibit "A" attached hereto
and by this reference made a part hereof (hereinafter referred to as the "Real
Property");
TOGETHER WITH all buildings, structures and other improvements of any
kind, nature or description now or hereafter erected, constructed, placed or
located upon said Real Property (which
<PAGE> 2
buildings, structures and other improvements are hereinafter sometimes together
referred to as the "Improvements"), including, without limitation, any and all
additions to, substitutions for or replacements of such Improvements;
TOGETHER WITH all minerals, royalties, gas rights, water, water rights,
water stock, flowers, shrubs, lawn plants, crops, trees, timber and other
emblements now or hereafter located on, under or above all or any part of the
Real Property;
TOGETHER WITH all and singular, the tenements, hereditaments, strips and
gores, rights-of-way, easements, privileges and other appurtenances now or
hereafter belonging or in any way appertaining to the Real Property, including,
without limitation, all right, title and interest of the Borrower in any
after-acquired right, title, interest, remainder or reversion, in and to the
beds of any ways, streets, avenues, roads, alleys, passages and public places,
open or proposed, in front of, running through, adjoining or adjacent to said
Real Property (hereinafter sometimes together referred to as "Appurtenances");
TOGETHER WITH any and all leases, contracts, rents, royalties, issues,
revenues, profits, proceeds, income and other benefits, including accounts
receivable, of, accruing to or derived from said Real Property, Improvements
and Appurtenances and any business or enterprise presently situated or
hereafter operated thereon and therewith (hereinafter sometimes together
referred to as the "Rents");
TOGETHER WITH, any and all awards or payments, including interest thereon,
and the right to receive the same, as a result of (a) the exercise of the right
of eminent domain, (b) the alteration of the grade of any street, or (c) any
other injury to, taking of, or decrease in the value of, the Property to the
extent of all amounts which may be secured by this Security Deed at the date of
any such award or payment including but not limited to Reasonable Attorneys'
Fees (as hereinafter defined), costs and disbursements incurred by the Lender
in connection with the collection of such award or payment;
AS WELL AS all of the right, title and interest of Borrower in and to all
fixtures, goods, chattels, construction materials, furniture, furnishings,
equipment, machinery, apparatus, appliances, and other items of personal
property, whether tangible or intangible, of any kind, nature or description,
whether now owned or hereafter acquired by the Borrower, including, without
limitation, improvements including furnaces, steam boilers, hot-water boilers,
oil burners, pipes, radiators, air-conditioning and sprinkler systems, gas and
electric fixtures, carpets, rugs, shades, awnings, screens, elevators, motors,
dynamos, cabinets, and all other furnishings, tools, equipment and machinery,
appliances, building supplies, materials, general intangibles, contract rights,
accounts receivable, business records, fittings and fixtures of every kind,
which is, are or shall hereafter be located upon, attached, affixed to or used
or useful, either directly or indirectly, in connection with the complete and
comfortable use, occupancy and operation of said Real Property and Improvements
as an apartment complex, or any other business, enterprise or operation as may
hereafter be conducted upon or with said Real Property, Improvements and
Appurtenances, including, without limitation, any and all licenses, permits or
franchises, used or required in connection with such use, occupancy or
operation, as well as the proceeds thereof or therefrom regardless of form
(hereinafter sometimes together referred to as "Fixtures and Personal
Property," which term expressly excludes any toxic waste or substances deemed
hazardous under federal, state or local laws). The Borrower hereby expressly
grants to Lender a present security interest in and a lien and encumbrance upon
the Fixtures and Personal Property;
TO HAVE AND HOLD the foregoing Property, and the rights hereby granted for
the use and benefit of the Lender and its successors and assigns in fee simple
forever;
AND the Borrower covenants and warrants with and to the Lender that the
Borrower is indefeasibly seized of the Property and has good right, full power,
and lawful authority to convey and encumber all of the same as aforesaid; that
the Borrower hereby fully warrants the title to the Property and will defend
the same and the validity and priority of the lien and encumbrance of this
Security Deed against the lawful claims of all persons whomsoever, subject only
to the Permitted Exceptions; and the Borrower further warrants that the
Property is free and clear of all liens and encumbrances of any kind, nature or
description, save and except only (with respect to said Real Property,
Improvements and Appurtenances and Fixtures and Personal Property) for real
property taxes for years subsequent to 1995 and those matters set forth in
Exhibit "B" attached hereto and by this reference made a part hereof
(hereinafter referred to as the "Permitted Exceptions").
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<PAGE> 3
PROVIDED ALWAYS, however, that if the Borrower shall pay unto the Lender
the indebtedness evidenced by the Note, and if the Borrower shall duly,
promptly and fully perform, discharge, execute, effect, complete and comply
with and abide by each and every one of the agreements, conditions and
covenants of the Note, this Security Deed and all other documents and
instruments executed as further evidence of or as security for the indebtedness
secured hereby, then this Security Deed and the estates and interests hereby
granted and created shall cease, terminate and be null and void, and shall be
discharged of record at the expense of Borrower, which expense Borrower agrees
to pay.
This conveyance is intended (i) to constitute a security agreement as
required under the Uniform Commercial Code of Georgia and (ii) to operate and
is to be construed as a deed passing the title to the Property to the Lender
and is made under those provisions of the existing laws of the State of Georgia
relating to deeds to secure debt, and not as a mortgage, and is given to secure
(a) the debt evidenced by the Note (which is incorporated herein by reference
and to which reference is made for all purposes, and which Borrower
acknowledges evidences an indebtedness arising from a business loan from Lender
to Borrower for the sole purpose of permitting Borrower to carry on its
business) in the aggregate principal face amount of Five Million and No/100
Dollars ($5,000,000.00), or so much thereof as may have been advanced and
remain outstanding from time to time, with interest at the rate of 7.125%
percent per annum; (b) any and all renewals and extensions of the Note; (c)
each and every covenant, obligation and undertaking of the Borrower in this
Security Deed or in that certain Assignment of Leases, Rents and Profits of
even date herewith from Borrower to Lender; and (d) any and all other
indebtedness which may hereafter be owing by the Borrower to the Lender which
is incurred or created by advances made by the Lender to or on behalf of or for
the account of the Borrower in accordance with the provisions of this Security
Deed or otherwise permitted by the provisions of this Security Deed. Principal
and interest shall be payable in installments the last of which shall, unless
the maturity thereof is accelerated by the holder of the Note or the principal
amount of the Note is prepaid, be due and payable on April 15, 2006.
The Borrower, for the benefit of the Lender, and is successors and
assigns, does hereby expressly covenant and agree:
1. PAYMENT OF PRINCIPAL AND INTEREST. To pay the principal of the
indebtedness evidenced by the Note, together with all interest thereon, in
accordance with the terms of the Note, promptly at the times, at the place and
in the manner that said principal and interest shall become due, and to
promptly and punctually pay all other sums required to be paid by the Borrower
pursuant to the terms of the Note, this Security Deed and all other documents
and instruments executed as further evidence of, as additional security for or
in connection with the indebtedness evidenced by the Note and secured by this
Security Deed (hereinafter together referred to as the "Loan Documents").
2. PERFORMANCE OF OTHER OBLIGATIONS. To perform, comply with and abide by
each and every one of the covenants, agreements and conditions contained and
set forth in the Note, this Security Deed and the other Loan Documents and to
comply with all laws, ordinances, rules, regulations and orders of governmental
authorities now or hereafter affecting the Property or requiring any
alterations or improvements to be made thereon, and perform all of its
obligations under any covenant, condition, restriction or agreement of record
affecting the Property and to insure that at all times the Property constitutes
one or more legal lots capable of being conveyed without violation of any
subdivision or platting laws, ordinances, rules or regulations, or other laws
relating to the division or separation of real property.
3. PRESERVATION AND MAINTENANCE OF PROPERTY; ACCESSIBILITY; HAZARDOUS
WASTE. To keep all Improvements now existing or hereafter erected on the Real
Property in good order and repair and not to do or permit any waste, impairment
or deterioration thereof or thereon, nor to alter, remove or demolish any of
the Improvements or any Fixtures or Personal Property attached or appertaining
thereto, without the prior written consent of the Lender, nor to initiate, join
in or consent to any change in any private restrictive covenant, zoning
ordinance or other public or private restrictions limiting or defining the uses
which may be made of the Property or any part thereof, nor to do or permit any
other act whereby the Property shall become less valuable, be used for purposes
contrary to applicable law or be used in any manner which will increase the
premium for or result in a termination or cancellation of the insurance
hereinafter required to be kept and maintained on the Property. In furtherance
of, and not by way of limitation upon the foregoing covenant, Borrower shall
effect such repairs as the Lender may reasonably require, and from time to time
make all needful and proper replacements so that said Improvements,
Appurtenances, Fixtures and Personal Property will, at
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<PAGE> 4
all times, be in good condition, fit and proper for the respective purposes for
which they were originally erected or installed. Borrower at all times shall
maintain the Property in full compliance with all applicable provisions of all
federal, state or municipal laws, ordinances, rules and regulations currently
in existence or hereafter enacted or rendered governing accessibility for the
disabled, including but not limited to The Architectural Barriers Act of 1988,
The Rehabilitation Act of 1973, The Fair Housing Act of 1988 and The Americans
With Disabilities Act of 1990 (hereinafter, collectively the "Accessibility
Laws"). Borrower at all times shall keep the Property and ground water of the
Property free of "Hazardous Materials" (as hereinafter defined); provided,
however, that Borrower shall not be obligated to remove, repair, clean up,
and/or detoxify any Hazardous Materials identified in that certain Phase I
Environmental Site Assessment and Limited Environmental Sampling prepared by
Law Engineering dated March 16, 1996, unless the same are determined to be in
violation of any Hazardous Waste Laws. Borrower shall not permit its tenants
or any third party requiring the consent of Borrower to enter the Property, to
use, generate, manufacture, store, release, threaten release, or dispose of
Hazardous Materials in, on or about the Property or the ground water of the
Property in violation of any federal, state or municipal law, decision,
statute, rule, ordinance or regulation currently in evidence or hereinafter
enacted or rendered ("Hazardous Waste Laws"). Borrower shall give Lender
prompt written notice of any claim by any person, entity, or governmental
agency that a significant release or disposal of Hazardous Materials has
occurred on the Property. The Borrower, through its professional engineers and
at its cost, shall promptly and thoroughly investigate suspected Hazardous
Materials contamination of the Property. Borrower shall forthwith remove,
repair, clean up, and/or detoxify any Hazardous Materials from the Property or
the ground water of the Property whether or not such actions are required by
law, and whether or not Borrower was responsible for the existence of the
Hazardous Materials in, on or about the Property or the ground water of the
Property; provided, however, that Borrower shall not be obligated to remove,
repair, clean up, and/or detoxify any Hazardous Materials identified in that
certain Phase I Environmental Site Assessment and Limited Environmental
Sampling prepared by Law Engineering dated March 16, 1996, unless the same are
determined to be in violation of any Hazardous Waste Laws. "Hazardous
Materials" shall include but not be limited to substances defined as "hazardous
substances," "hazardous materials," or "toxic substances," in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sec. 9601, et. seq.; the Hazardous Materials Transportation Act, 49
U.S.C. 1801 et. seq.; the Resources Conservation and Recovery Act, 42 U.S.C.
Sec. 6901 et. seq.; the Toxic Substances Control Act, 15 U.S.C. Sec. 2601 et.
seq.; the Clean Air Act, 42 U.S.C. Sec. 7401 et. seq.; and the Clean Water Act,
33 U.S.C. Sec. 1251 et. seq.
Borrower hereby agrees to indemnify Lender and hold Lender harmless from
and against any and all losses, liabilities, damages, injuries, costs, expenses
and claims of any and every kind whatsoever paid, incurred or suffered by or
asserted against Lender for, with respect to, or as a direct or indirect result
of the non-compliance of the Property with the Accessibility Laws and/or the
presence on, under or about the Property, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or release from, the Property of any
Hazardous Materials (including, without limitation, any losses, liabilities,
damages, injuries, costs, expenses or claims asserted or arising under any
Hazardous Waste Laws, regardless of whether or not caused by, or within the
control of, Borrower).
Lender, and/or its agents, shall have the right and shall be permitted,
but shall not be required, at all reasonable times, to enter upon and inspect
the Property to insure compliance with the foregoing covenants and any and all
other covenants, agreements and conditions set forth in this Security Deed.
Liability under this Paragraph of this Security Deed shall extend beyond
repayment of the Note and compliance with the terms of this Security Deed;
provided, however, Borrower shall have no liability under this Paragraph 3 as
to Hazardous Materials: (a) if the Property becomes contaminated subsequent to
Lender's acquisition of the Property by foreclosure, acceptance by Lender of a
deed in lieu thereof, or subsequent to any transfer of ownership of the
Property which was approved or authorized by Lender in writing, provided that
such transferee assumes all obligations of Borrower with respect to Hazardous
Materials pursuant to this Security Deed; or (b) at such time Borrower provides
Lender an environmental assessment report acceptable to Lender showing the
Property to be free of Hazardous Materials and not in violation of Hazardous
Waste Laws. The burden of proof under this Paragraph with regard to
establishing the date upon which Hazardous Material was placed or appeared in,
on or under the Property shall be upon Borrower.
4. PAYMENT OF TAXES, ASSESSMENTS AND OTHER CHARGES. To pay all and
singular such taxes, assessments and public charges as are already levied or
assessed or that may be
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<PAGE> 5
hereafter levied or assessed upon or against the Property, when the same shall
become due and payable according to law, before the same become delinquent, and
before any interest or penalty shall attach thereto, and to deliver official
receipts evidencing the payment of the same to the Lender not later than thirty
(30) days following the payment of the same. Borrower shall have the right to
contest, in good faith, the proposed assessment of ad valorem taxes or special
assessments by governmental authorities having jurisdiction of the Property;
provided, however, the Borrower shall give written notice thereof to Lender and
Lender may, in its sole discretion, require Borrower to post a bond or other
collateral satisfactory to Lender in connection with any such action by
Borrower; provided further, however, that so long as there is no default
hereunder (which is not cured within any applicable cure period, if any) Lender
agrees not to require Borrower to post a bond or other collateral if (i)
Borrower is appealing ad valorem taxes in the normal course of Borrower's
business and (ii) no action is taken to commence foreclosure procedures on the
Property or any portion thereof and (iii) the collateral pledged to Lender to
secure the loan evidenced by the Note and this Security Deed is not otherwise
jeopardized in Lender's sole opinion.
5. PAYMENT OF LIENS, CHARGES AND ENCUMBRANCES. To immediately pay and
discharge from time to time when the same shall become due all lawful claims
and demands of mechanics, materialmen, laborers and others which, if unpaid,
might result in, or permit the creation of, a lien, charge or encumbrance upon
the Property or any part thereof, or on the rents, issues, income, revenues,
profits and proceeds arising therefrom and, in general, to do or cause to be
done everything necessary so that the lien of this Security Deed shall be fully
preserved at the cost of the Borrower, without expense to the Lender. Borrower
shall have the right to contest, in good faith and in accordance with
applicable laws and procedures, mechanic's and materialmen's liens filed
against the Property; provided, however, that Borrower shall give written
notice thereof to Lender, and Lender may at its sole option require Borrower to
post a bond or other collateral satisfactory to Lender (and acceptable to the
title company insuring the Security Deed) in connection with any such action by
Borrower.
6. PAYMENT OF JUNIOR ENCUMBRANCES. To permit no default or delinquency
under any other lien, imposition, charge or encumbrance against the Property,
even though junior and inferior to the lien of this Security Deed; provided,
however, the foregoing shall not be construed to permit any other lien or
encumbrance against the Property.
7. PAYMENT OF MORTGAGE TAXES. To pay any and all taxes which may be
levied or assessed directly or indirectly upon the Note and this Security Deed
(except for income taxes payable by the Lender) or the debt secured hereby,
without regard to any law which may be hereafter enacted imposing payment of
the whole or any part thereof upon the Lender, its successors or assigns. Upon
violation of this agreement to pay such taxes levied or assessed upon the Note
and this Security Deed, or upon the rendering by any court of competent
jurisdiction of a decision that such an agreement by the Borrower is legally
inoperative, or if any court of competent jurisdiction shall render a decision
that the rate of said tax when added to the rate of interest provided for in
the Note exceeds the then maximum rate of interest allowed by law, then, and in
any such event, the debt hereby secured shall, at the option of the Lender, its
successors or assigns, become immediately due and payable, anything contained
in this Security Deed or in the Note secured hereby notwithstanding, without
the imposition of a Prepayment Premium (as defined in the Note). The
additional amounts which may become due and payable hereunder shall be part of
the debt secured by this Security Deed.
8. HAZARD INSURANCE. To continuously, during the term hereof, keep the
Improvements and the Fixtures and Personal Property now or hereafter existing,
erected, installed and located in or upon the Real Property insured with
extended coverage insurance against loss or damage resulting from fire,
windstorm, flood (but only if any of the Improvements are located in a flood
plain), sinkhole and such other hazards, casualties, contingencies and perils,
including, without limitation, other risks insured against by persons operating
like properties in the locality of the Property, on such forms as may be
required by Lender, covering the Property in the amount of the full replacement
cost thereof (provided that Borrower provides a replacement cost endorsement
satisfactory to Lender; otherwise, the amount of such insurance shall not be
less than the difference between the outstanding balance of the Note and eighty
(80%) percent of the then appraised value of the Land and Improvements as
determined by Lender in its sole discretion), and covering all loss or
abatement of rental or other income without provision for co-insurance in an
amount equal to the scheduled rental income of the Property for a period of
twelve (12) months, or if applicable, business interruption insurance in an
amount sufficient to pay debt service, operating expenses, taxes and insurance
for the Property for twelve (12) months, and
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<PAGE> 6
covering loss by flood (if the Property lies in a specified Flood Hazard Area
as designated on the Department of Housing and Urban Development Maps, or other
flood prone designation) in an amount equal to the outstanding principal
balance of the indebtedness secured hereby or such other amount of coverage as
approved by Lender. All such insurance shall be carried with such company or
companies as may be acceptable to the Lender, which company or companies shall
have a current rating equivalent to at least A:VIII as shown in Best's Key
Rating Guide, and the original policy or policies and renewals thereof (or
duplicate originals or certified copies thereof), together with receipts
evidencing payment of the premium therefor, shall be deposited with, held by
and are hereby assigned to Lender as additional security for the indebtedness
secured hereby. Each such policy of insurance shall contain a non-contributing
loss payable clause in favor of and in form acceptable to Lender and shall
provide for not less than thirty (30) days' prior written notice to Lender of
intent to modify, cancel or terminate or the expiration of such policies of
insurance. Not less than fifteen (15) days prior to the expiration dates of
each policy required of the Borrower hereunder, Borrower will deliver to Lender
a renewal policy or policies or a certified copy thereof marked "premium paid"
or accompanied by other evidence of payment and renewal satisfactory to Lender
(Lender agrees that a binder for a renewal policy accompanied by a copy of an
invoice for the premium associated therewith (which may show that the premium
can be paid in quarterly installments) shall be satisfactory evidence of
payment and renewal provided that Borrower delivers to Lender evidence of the
payment of such premium on or before the date the premium (or installments
thereof, if applicable) is due); and in the event of foreclosure of or exercise
of the power of sale in this Security Deed, any purchaser or purchasers of the
Property shall succeed to all rights of the Borrower, including any rights to
unearned premiums, in and to all insurance policies assigned and delivered to
Lender pursuant to the provisions of this Paragraph 8.
In the event of loss by reason of hazards, casualties, contingencies or
perils for which insurance has been required by the Lender hereunder, the
Borrower shall give immediate notice thereof to the Lender, and the Lender is
hereby irrevocably appointed attorney-in-fact coupled with an interest, for the
Borrower to, at Lender's option, make proof of loss if not made promptly by the
Borrower, and each insurance company concerned is hereby notified, authorized
and directed to make payment for such loss directly to the Lender, instead of
to the Borrower and Lender jointly, and Borrower hereby authorizes Lender to
adjust and compromise any losses for which insurance proceeds are payable under
any of the aforesaid insurance policies and, after deducting the costs of
collection, to apply the proceeds of such insurance, at its option, as follows:
(a) to the restoration or repair of the insured Improvements, Fixtures and
Personal Property, provided that, in the opinion and sole discretion of the
Lender, such restoration or repair is reasonably practical and, provided
further, that, in the opinion and sole discretion of the Lender, either: (i)
the insurance proceeds so collected are sufficient to cover the cost of such
restoration or repair of the damage or destruction with respect to which such
proceeds were paid, or (ii) the insurance proceeds so collected are not
sufficient alone to cover the cost of such restoration or repair, but are
sufficient therefor when taken together with funds provided and made available
by the Borrower from other sources; in which event the Lender shall make such
insurance proceeds available to the Borrower for the purpose of effecting such
restoration or repair; but Lender shall not be obligated to see to the proper
application of such insurance proceeds nor shall the amount of funds so
released or used be deemed to be payment of or on account of the indebtedness
secured hereby, or (b) to the reduction of the outstanding principal
indebtedness secured hereby, notwithstanding the fact that the amount owing
thereon may not then be due and payable or that said indebtedness is otherwise
adequately secured, in which event such proceeds shall be applied at par
against the indebtedness secured hereby and the monthly payment due on account
of such indebtedness shall be adjusted accordingly. None of such actions taken
by the Lender shall be deemed to be or result in a waiver or impairment of any
equity, lien or right of the Lender under and by virtue of this Security Deed,
nor will the application of such insurance proceeds to the reduction of the
indebtedness serve to cure any default in the payment thereof. In the event of
foreclosure of this Security Deed or other transfer of title to the Property in
extinguishment of the indebtedness secured hereby, all right, title and
interest of the Borrower in and to any insurance policies then in force and
insurance proceeds then payable shall pass to the purchaser or grantee.
In case of Borrower's failure to keep the Property so insured, Lender or
its assigns, may, at its option (but shall not be required to) effect such
insurance at Borrower's expense.
Notwithstanding anything set forth in this Paragraph 8 to the contrary, in
the event of loss or damage to the Property by fire or other casualty for which
insurance has been required by Lender and provided by Borrower, and the amount
of such loss or damage does not exceed fifty percent (50%) of the
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<PAGE> 7
outstanding principal balance of the Note, the Lender hereby agrees to allow
the proceeds of insurance to be used for restoration of the Property and to
release such insurance proceeds to Borrower as such restoration progresses,
provided:
(a) Borrower is not in default under any of the terms,
covenants and conditions of this Security Deed, the Note or any
of the Loan Documents evidencing or securing the Note;
(b) [intentionally omitted]
(c) The plans and specifications for restoration of the
Property are approved in writing by the Lender;
(d) At all times during such restoration, Borrower has
deposited with Lender funds which, when added to such insurance
proceeds, are sufficient to complete the restoration of the
Property as certified by an architect approved by Lender in
accordance with the approved plans and specifications and all
applicable building codes and zoning ordinances and regulations,
and further, that the sufficiency of such funds is certified to
Lender by Lender's inspecting architect/engineer;
(e) Borrower provides payment and performance bonds and
builder's all risk insurance for such restoration in form and
amount acceptable to Lender;
(f) The insurer under such policies of fire or other
casualty insurance does not assert any defense to payment under
such policies against Lender, Borrower or any tenant of the
Property;
(g) The insurance proceeds held by Lender shall be
disbursed no more often than once per month and in not more than
five (5) increments of amounts of not less than FIFTY THOUSAND
AND NO/100 DOLLARS ($50,000.00) each (except the final
disbursement of such proceeds which may be in an amount less
than FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00). Lender's
obligation to make any such disbursement shall be conditioned
upon Lender's receipt of a written certification from the
Lender's inspecting architect/engineer that all construction and
work for which such disbursement is requested has been completed
in accordance with the approved plans and specifications and all
applicable building codes, zoning ordinances and all other local
or federal governmental regulations and, further, that Borrower
has deposited with Lender sufficient funds to complete such
restoration in accordance with subparagraph (d) above;
(h) Lender shall have the option, upon the completion of
such restoration of the Property, to apply any surplus insurance
proceeds remaining after the completion of such restoration, at
par, to the reduction of the indebtedness secured by this
Security Deed; notwithstanding the fact that the amount owing
thereon may not then be due and payable or that said
indebtedness is otherwise adequately secured; and
(i) Lender shall be entitled to require and to impose
such other conditions to the release of such insurance proceeds
for restoration of the Property as would be customarily or
reasonably required and imposed by a construction lender for a
project of similar nature and cost.
9. LIABILITY INSURANCE. To carry and maintain such comprehensive general
liability insurance as may from time to time be required by Lender, taking into
consideration the type of property insured and the corresponding liability
exposure, on forms, in amounts and with such company or companies as may be
acceptable to Lender. All such comprehensive general liability insurance shall
be carried with a company or companies as may be acceptable to Lender, which
company or companies shall have a current rating equivalent to at least A:VIII
as shown in Best's Key Rating Guide. Such policy or policies of insurance
shall name Lender as an additional insured and shall provide for not less than
thirty (30) days' prior written notice to Lender of modification, cancellation,
termination or
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<PAGE> 8
expiration of such policy or policies of insurance. Not less than fifteen (15)
days prior to the expiration dates of such policy or policies, Borrower will
deliver to Lender a renewal policy or policies or a certified copy thereof
marked "premium paid" or accompanied by other evidence of payment and renewal
satisfactory to Lender (Lender agrees that a binder for a renewal policy
accompanied by a copy of an invoice for the premium associated therewith (which
may show that the premium can be paid in quarterly installments) shall be
satisfactory evidence of payment and renewal provided that Borrower delivers to
Lender evidence of the payment of such premium on or before the date the
premium (or installments thereof, if applicable) is due). The original policy
or policies and all renewals thereof (or duplicate originals or certified
copies thereof), together with receipts evidencing payment of the premium
therefor, shall be deposited with, held by and are hereby assigned to Lender as
additional security for the indebtedness secured hereby.
10. COMPLIANCE WITH LAWS. To observe, abide by and comply with all
statutes ordinances, laws, orders, requirements or decrees relating to the
Property enacted, promulgated or issued by any federal, state, county or
municipal authority or any agency or subdivision thereof having jurisdiction
over the Borrower or the Property, and to observe and comply with all
conditions and requirements necessary to preserve and extend any and all
rights, licenses, permits (including, but not limited to, zoning variances,
special exceptions and nonconforming uses), privileges, franchises and
concessions which are applicable to the Property or which have been granted to
or contracted for by Borrower in connection with any existing, presently
contemplated or future use of the Property.
11. MAINTENANCE OF PERMITS. To obtain, keep and constantly maintain in
full force and effect during the entire term of this Security Deed, all
certificates, licenses and permits necessary to keep the Property operating as
an apartment complex project, and, except as specifically provided for in this
mortgage, not to assign, transfer or in any manner change such certificates,
licenses or permits without first receiving the written consent of the Lender.
12. OBLIGATIONS OF BORROWER AS LESSOR. To perform every obligation of the
Borrower (as the lessor) and enforce every obligation of the lessee in any and
every lease or other occupancy agreement affecting the Property or any part
thereof (hereinafter referred to as the "Occupancy Leases"), and not to modify,
alter, waive or cancel any such Occupancy Leases or any part thereof, nor
collect for more than thirty (30) days in advance any rents that may be
collectible under any such Occupancy Leases and, except as provided for in this
Security Deed, not to assign any such Occupancy Lease or any such rents to any
party other than Lender, without the prior written consent of the Lender. In
the event of default under any such Occupancy Lease by reason of failure of the
Borrower to keep or perform one or more of the covenants, agreements or
conditions thereof, the Lender is hereby authorized and empowered, and may, at
its sole option, remedy, remove or cure any such default, and further, Lender
may, at its sole option and in its sole discretion, but without obligation to
do so, pay any sum of money deemed necessary by it for the performance of said
covenants, agreements and conditions, or for the curing or removal of any such
default, and incur all expenses and obligations which it may consider necessary
or reasonable in connection therewith, and Borrower shall repay on demand all
such sums so paid or advanced by Lender together with interest thereon until
paid at the lesser of either (i) the highest rate then allowed by the laws of
the State of Georgia, or, if controlling, the laws of the United States, or
(ii) the then-applicable interest rate of the Note plus five hundred (500)
basis points; all of such sums, if unpaid, shall be added to and become part of
the indebtedness secured hereby. All such Occupancy Leases hereafter made
shall be subject to the approval of Lender and (a) shall be at competitive
market rental rates then prevailing in the geographic area for apartment
complexes comparable to the Property and (b) at Lender's option shall be
superior or subordinate in all respects to the lien of this Security Deed.
Provided, however, that the Lender shall not require approval in advance of any
Occupancy Leases which conform to the Borrower's Form Lease (as hereinafter
defined) as previously approved by Lender, except as set forth below. Neither
the right nor the exercise of the right herein granted unto Lender to keep or
perform any such covenants, agreements, or conditions as aforesaid shall
preclude Lender from exercising its option to cause the whole indebtedness
secured hereby to become immediately, but subject to the notice and cure period
in Paragraph 23, due and payable by reason of Borrower's default in keeping or
performing any such covenants, agreements or conditions as hereinabove
required.
Lender has heretofore approved a form of Occupancy Lease to be used by
Borrower in connection with the Property (hereinafter referred to as the "Form
Lease"). Borrower shall not, without the prior written consent of the Lender,
modify or alter the Form Lease in any material respect. In addition
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Borrower shall not, without the prior written consent of Lender, surrender or
terminate (except in the ordinary course of business), either orally or in
writing, any Occupancy Lease now existing or hereafter made for all or part of
the Property, permit an assignment or sublease of any such Occupancy Lease, or
request or consent to the subordination of any Occupancy Lease to any lien
subordinate to this Security Deed. Upon request, the Borrower shall furnish
the Lender with copies of all executed Occupancy Leases of all or any part of
the Property now existing or hereafter made, and Borrower shall assign to the
Lender (which assignment shall be in form and content acceptable to Lender), as
additional security for the Note, all Occupancy Leases now existing or
hereafter made of all or any part of the Property.
13. MAINTENANCE OF PARKING AND ACCESS; PROHIBITION AGAINST ALTERATION. To
construct, keep and constantly maintain, as the case may be, all curbs, drives,
parking areas and the number of parking spaces heretofore approved by the
Lender or heretofore or hereafter required by any governmental body, agency or
authority having jurisdiction over the Borrower or the Property, and not to
alter, erect, build or construct upon any portion of the Property, any building
or structure of any kind whatsoever, the erection, building or construction of
which has not been previously approved by Lender in writing, which approval
shall be at the sole discretion of Lender. To the extent any alterations or
improvements are required to be approved by any tenants of the Property, no
such alterations or improvements shall be made unless and until such consent
has been obtained in writing and a copy thereof furnished to Lender.
14. EXECUTION OF ADDITIONAL DOCUMENTS. To do, execute, acknowledge and
deliver all and every such further acts, deeds, conveyances, mortgages, deeds
to secure debt, assignments, notices of assignments, transfers, assurances and
other instruments, including security agreements and financing statements, as
the Lender shall from time to time require for the purpose of better assuring,
conveying, assigning, transferring and confirming unto the Lender the Property
and rights hereby encumbered, created, conveyed, assigned or intended now or
hereafter so to be encumbered, created, conveyed or assigned or which the
Borrower may now be or may hereafter become bound to encumber, create, convey,
or assign to the Lender, or for the purpose of carrying out the intention or
facilitating the performance of the terms of this Security Deed, or for filing,
registering or recording this Security Deed, and to pay all filing,
registration or recording fees and all taxes, costs and other expenses,
including Reasonable Attorneys' Fees (as defined in Paragraph 47), incident to
the preparation, execution, acknowledgment, delivery, and recordation of any of
the same.
15. AFTER-ACQUIRED PROPERTY SECURED. It is understood and agreed that all
right, title and interest of the Borrower in and to all extensions,
improvements, betterments, renewals, substitutions and replacements of, and all
additions and appurtenances to, the Property hereinabove described, hereafter
acquired by or released to the Borrower, or constructed, assembled or placed by
the Borrower on the Real Property, and all conversions of the security
constituted thereby, immediately upon such acquisition, release, construction,
assembling, placement or conversion, as the case may be, and in each such case,
without any further mortgage, encumbrance, conveyance, assignment or other act
by the Borrower, shall become subject to the lien and security title of this
Security Deed as fully and completely and with the same effect as though now
owned by the Borrower and specifically described herein, but at any and all
times the Borrower will execute and deliver to the Lender any and all such
further assurances, mortgages, deeds to secure debt, conveyances, or
assignments thereof or security interests therein as the Lender may reasonably
require for the purpose of expressly and specifically subjecting the same to
the lien of this Security Deed.
16. PAYMENTS BY LENDER ON BEHALF OF BORROWER. Should the Borrower fail to
make payment of any taxes, assessments or public charges on or with respect to
the Property before the same shall become delinquent, or shall fail to make
payment of any insurance premiums or other charges, impositions or liens herein
or elsewhere required to be paid by the Borrower, then the Lender, at its sole
option, but without obligation to do so, may make payment or payments of the
same and also may redeem the Property from tax sale without any obligation to
inquire into the validity of such taxes, assessments and tax sales. In the
case of any such payment by the Lender, the Borrower agrees to reimburse the
Lender, upon demand therefor, the amount of such payment and of any fees and
expenses attendant in making the same, together with interest thereon at the
lesser of either (i) the highest rate then allowed by the laws of the State of
Georgia, or if controlling, the laws of the United States, or (ii) the then
applicable interest rate of the Note plus five hundred (500) basis points; and
until paid, such amounts and interest shall be added to and become part of the
debt secured hereby to the same extent that this Security Deed secures the
repayment of the indebtedness evidenced by the Note. In making
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<PAGE> 10
payments hereby authorized by the provisions of this Paragraph 16; the Lender
may do so whenever, in its sole judgment and discretion, such advance or
advances are necessary or desirable to protect the full security intended to be
afforded by this instrument. Neither the right nor the exercise of the right
herein granted unto the Lender to make any such payments as aforesaid shall
preclude the Lender from exercising its option to cause the whole indebtedness
secured hereby to become immediately due and payable by reason of the
Borrower's default in making such payments as hereinabove required.
17. FUNDS HELD BY LENDER FOR TAXES, INSURANCE PREMIUMS, ASSESSMENTS AND
OTHER CHARGES. In order to more fully protect the security of this Security
Deed, Borrower shall deposit with the Lender, together with and in addition to
each monthly payment due on account of the indebtedness evidenced by the Note,
an amount equal to one-twelfth (1/12) of the annual total of such taxes,
insurance premiums, assessments and charges (all as estimated by the Lender in
its sole discretion) so that, at least thirty (30) days prior to the due date
thereof, Lender shall be able to pay in full all such taxes, insurance
premiums, assessments and other charges as the same shall become due, and the
Lender may hold without paying interest and commingle with its general funds
the sums so deposited and apply the same to the payment of said taxes,
insurance premiums, assessments or other charges as they become due and
payable. If at any time the funds so held by Lender are insufficient to pay
such taxes, insurance premiums, assessments or other charges as they become due
and payable the Borrower shall immediately, upon notice and demand by Lender,
deposit with Lender the amount of such deficiency, and the failure on the part
of the Borrower to do so shall entitle the Lender, at its sole option, to make
such payments in accordance with its rights and pursuant to the conditions
elsewhere provided in this Security Deed. Notwithstanding any default under
this Security Deed, Lender agrees to apply any funds deposited by Borrower and
being held by Lender pursuant to this paragraph for the payment of taxes toward
the payment of taxes which are then a lien on the Property. Thereafter, at its
sole option, Lender may apply any funds so held by it pursuant to this
Paragraph 17 toward the payment of the indebtedness secured hereby,
notwithstanding the fact that the amount owing thereon may not then be due and
payable or that said indebtedness is otherwise adequately secured in such order
and manner of application as Lender may elect.
18. CONDEMNATION; EMINENT DOMAIN. All awards and other compensation
heretofore or hereafter made to Borrower and all subsequent owners of the
Property in any taking by eminent domain or recovery for inverse condemnation,
either permanent or temporary, of all or any part of the Property or any
easement or any appurtenance thereto, including severance and consequential
damages and change in grade of any street, are hereby assigned to Lender, and
Borrower hereby irrevocably appoints Lender as its attorney-in-fact, coupled
with an interest, and authorizes, directs and empowers such attorney, at the
option of said attorney, on behalf of Borrower, its successors and assigns, to
adjust or compromise the claim for any such award and alone to collect and
receive the proceeds thereof, to give proper receipts and acquittances therefor
and, after deducting any expenses of collection, at its sole option:
(i) to apply the net proceeds as a credit upon the outstanding
principal balance of the indebtedness secured hereby, as selected by
Lender, notwithstanding the fact that the amount owing thereon may not
then be due and payable or that the indebtedness is otherwise
adequately secured. In the event Lender applies such awards to the
reduction of the outstanding indebtedness evidenced by the Note, such
proceeds shall be applied at par and the monthly installments due and
payable under the Note shall be adjusted accordingly; however no such
application shall serve to cure an existing default in the payment of
the Note; or
(ii) to hold said proceeds without any allowance of interest and make
the same available for restoration or rebuilding the Property. In the
event that Lender elects to make said proceeds available to reimburse
Borrower for the cost of the restoration or rebuilding of the
buildings or improvements on the Property, such proceeds shall be made
available in the manner and under the conditions that Lender may
require as provided under Paragraph 8 hereof. If the proceeds are
made available by Lender to reimburse Borrower for the cost of said
restoration or rebuilding, any surplus which may remain out of said
award after payment of such cost of restoration or rebuilding shall be
applied on account of the indebtedness secured hereby at par
notwithstanding the fact that the amount owing thereon may not then be
due and payable or that said indebtedness is otherwise adequately
secured.
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<PAGE> 11
Borrower further covenants and agrees to give Lender immediate notice of
the actual or threatened commencement of any proceedings under eminent domain
and to deliver to Lender copies of any and all papers served in connection with
any proceedings. Borrower further covenants and agrees to make, execute and
deliver to Lender, at any time or times, upon request, free, clear and
discharged of any encumbrance of any kind whatsoever, any and all further
assignments and/or other instruments deemed necessary by Lender for the purpose
of validly and sufficiently assigning all such awards and other compensation
heretofore or hereafter made to Lender (including the assignment of any award
from the United States government at any time after the allowance of the claim
therefor, the ascertainment of the amount thereof and the issuance of the
warrant for payment thereof).
It shall be a default hereunder if any part of any of the Improvements
situated on the Property shall be condemned by any governmental authority
having jurisdiction, or if lands constituting a portion of the Property shall
be condemned by any governmental authority having jurisdiction, such that the
Property is in violation of applicable parking, zoning or other ordinances, or
fails to comply with the terms of the Occupancy Leases, and in either of said
events, Lender shall be entitled to exercise any or all remedies provided or
referenced in this Security Deed.
19. COSTS OF COLLECTION. In the event that the Note secured hereby is
placed in the hands of an attorney for collection, or in the event that the
Lender shall become a party either as plaintiff or as defendant, in any action,
suit, appeal or legal proceeding (including, without limitation, foreclosure,
condemnation, bankruptcy, administrative proceedings or any proceeding wherein
proof of claim is by law required to be filed), hearing, motion or application
before any court or administrative body in relation to the Property or the lien
and security interest granted or created hereby or herein, or for the recovery
or protection of said indebtedness or the Property, or for the foreclosure of
this Security Deed, the Borrower shall save and hold the Lender harmless from
and against any and all costs and expenses incurred by the Lender on account
thereof, including, but not limited to, Reasonable Attorneys' Fees, title
searches and abstract and survey charges, at all trial and appellate levels,
and the Borrower shall repay, on demand, all such costs and expenses, together
with interest thereon until paid at the lesser of either (i) the highest rate
then allowed by the laws of the State of Georgia, or, if controlling, the laws
of the United States, or (ii) the applicable rate of interest of the Note plus
five hundred (500) basis point; all of which sums, if unpaid, shall be added to
and become a part of the indebtedness secured hereby.
20. DEFAULT RATE. If the entire outstanding balance of the Note is due,
whether at maturity, by acceleration or otherwise, the total amount due,
whether principal, interest or money owing for advancements pursuant to the
terms of this Security Deed or any other Loan Document, shall bear interest
until paid at the lesser of (i) the highest rate then allowed by the laws of
the State of Georgia, or, if controlling, the laws of the United States, or
(ii) the then applicable rate of interest of the Note plus five hundred (500)
basis points (five percent per annum); all of which sums shall be added to and
become a part of the indebtedness secured hereby.
21. SAVINGS CLAUSE; SEVERABILITY. Notwithstanding any provisions in the
Note or in this Security Deed to the contrary, the total liability for payments
in the nature of interest including but not limited to Prepayment Premiums,
default interest and late fees shall not exceed the limits imposed by laws of
the State of Georgia or the United States of America relating to maximum
allowable charges of interest. Lender shall not be entitled to receive,
collect or apply, as interest on the indebtedness evidenced by the Note, any
amount in excess of the maximum lawful rate of interest permitted to be charged
by applicable law. In the event Lender ever receives, collects or applies as
interest any such excess, such amount which would be excessive interest shall
be applied to reduce the unpaid principal balance of the indebtedness evidenced
by the note. If the unpaid principal balance of such indebtedness is paid in
full any remaining excess shall be paid forthwith to the Borrower. If any
clauses or provisions herein contained operate or would prospectively operate
to invalidate this Security Deed, then such clauses or provisions only shall be
held for naught, as though not herein contained, and the remainder of this
Security Deed shall remain operative and in full force and effect.
22. BANKRUPTCY, REORGANIZATION OR ASSIGNMENT. It shall be a default
hereunder if the Borrower or any general partner of Borrower shall: (a)
consent to the appointment of a receiver, trustee or liquidator of all or a
substantial part of Borrower's assets, or (b) be adjudicated a bankrupt or
insolvent, or file a voluntary petition in bankruptcy, or admit in writing its
inability to pay its debts as they become due, or (c) make a general assignment
for the benefit of creditors, or (d) file a petition under or take advantage of
any insolvency law, or (e) file an answer admitting the material
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<PAGE> 12
allegations of a petition filed against the Borrower or any general partner of
Borrower in any bankruptcy, reorganization or insolvency proceeding or fail to
cause the dismissal of such petition within sixty (60) days after the filing of
said petition, or (f) take action for the purpose of effecting any of the
foregoing, or (g) if any order, judgment or decree shall be entered upon an
application of a creditor of Borrower or any general partner of Borrower by a
court of competent jurisdiction approving a petition seeking appointment of a
receiver or trustee of all or a substantial part of the Borrower's assets or
any of Borrower's general partner's assets and such order, judgment or decree
shall continue unstayed and in effect for a period of sixty (60) days.
23. TIME IS OF THE ESSENCE; MONETARY AND NON-MONETARY DEFAULTS. It is
understood by Borrower that time is of the essence hereof in connection with
all obligations of Borrower herein, in the Note, the Assignment (as defined in
Paragraph 34) and any of the other Loan Documents.
If default be made in the payment of any installment of the Note, whether
of principal or interest, or in the payment of any other sums of money referred
to herein or in the Note, promptly and fully when the same shall be due and
such Monetary Default (as hereinafter defined) remains uncured after the
Monetary Cure Period (as hereinafter defined), if applicable (if the Monetary
Cure Period is not applicable, no notice or demand from Lender to Borrower
shall be required), or in the event a breach or default be made by the Borrower
in any one of the agreements, conditions and covenants of said Note, this
Security Deed, the Assignment or any Loan Documents evidencing or securing the
Note, or in the event that each and every one of said agreements, conditions
and covenants are not otherwise duly, promptly and fully discharged or
performed, and any such Non-Monetary Default (as hereinafter defined) remains
uncured for a period of thirty (30) days after written notice thereof from the
Lender to the Borrower has been delivered in the manner prescribed in Paragraph
41 hereof (except that if such Non-Monetary Default cannot reasonably be cured
within the 30 day period Borrower shall have a reasonable period of time to
cure such default provided that Borrower commences the cure of such default
within the 30 day period and thereafter diligently pursues the cure to
completion), Lender at its sole option may thereupon or thereafter declare the
indebtedness evidenced by the Note, as well as all other monies secured hereby,
including, without limitation, all Prepayment Premiums and late payment
charges, to be forthwith due and payable, whereupon the principal of and the
interest accrued on the indebtedness evidenced by the Note and all other sums
secured by this Security Deed at the option of Lender shall immediately become
due and payable as if all of said sums of money were originally stipulated to
be paid on such day, and thereupon, the Lender may avail itself of all rights
and remedies provided by law and may prosecute a suit at law or in equity as if
all monies secured hereby had matured prior to its institution, anything in
this Security Deed or in the Note to the contrary notwithstanding. Lender
shall give Borrower notice in the manner described in Paragraph 41 hereof of,
and a 5 day right-to-cure period ("Monetary Cure Period") to cure, any Monetary
Default (as hereinafter defined); provided, however such Monetary Cure Period
shall be limited to once per loan year for the term of the Note. Lender shall
have no obligation to give Borrower notice of any Incurable Default (as
hereinafter defined) prior to exercising its right, power and privilege to
accelerate the maturity of the indebtedness secured hereby.
As used herein, the term "Monetary Default" shall mean any default which
can be cured by the payment of money such as, but not limited to, the payment
of principal and interest due under the Note, the payment of taxes, assessments
and insurance premiums when due as provided in this Security Deed. As used
herein, the term "Non-Monetary Default" shall mean any default which is not a
Monetary Default or an Incurable Default. As used herein, the term "Incurable
Default" shall mean (i) any voluntary or involuntary sale, assignment,
mortgaging, encumbering or transfer in violation of the covenants contained in
Paragraph 30 hereof; or (ii) if Borrower, or its general partner, should make
an assignment for the benefit of creditors, become insolvent, or file a
petition in bankruptcy (including but not limited to, a petition seeking a
rearrangement or reorganization).
If a default shall occur hereunder and is not timely cured as herein
provided, and, as a result thereof, the indebtedness secured hereby is
accelerated and is due and payable in full, the Lender, at its option, may sell
the Property or any part of the Property at public sale or sales before the
door of the courthouse of the County in which the Property or any part of the
Property is situated, to the highest bidder for cash, in order to pay the
indebtedness secured hereby and accrued interest thereon and insurance
premiums, liens, assessments, taxes and charges, including utility charges, if
any, with accrued interest thereon, and all expenses of the sale and of all
proceedings in connection therewith, including Reasonable Attorney's Fees after
advertising the time, place and terms of sale once a week for four (4)
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<PAGE> 13
weeks immediately preceding such sale (but without regard to the number of
days) in a newspaper in which Sheriff's sales are advertised in said County.
The foregoing notwithstanding, the Lender may sell, or cause to be sold, any
tangible or intangible personal property, or any part thereof, and which
constitute a part of the security hereunder, in the foregoing manner, or as may
otherwise be provided by law. The Lender may bid and purchase at any such sale
and, if Lender should be the successful bidder at such sale, may satisfy the
Lender's obligation to purchase pursuant to the Lender's bid by canceling an
equivalent portion of any indebtedness then outstanding and secured hereby. At
any such sale, the Lender may execute and deliver to the purchaser a conveyance
of the Property or any part of the Property in fee simple with full warranties
of title and to this end, the Borrower hereby constitutes and appoints the
Lender the agent and attorney in fact of the Borrower to make such sale and
conveyance, and thereby to divest the Borrower of all right, title and equity
that the Borrower may have in and to the Property and to vest the same in the
purchaser or purchasers at such sale or sales, and all the acts and doings of
said agent and attorney in fact are hereby ratified and confirmed and any
recitals in said conveyance or conveyances as to facts essential to a valid
sale shall be binding on the Borrower. The aforesaid power of sale and agency
hereby granted are coupled with an interest and are irrevocable by death or
otherwise, are granted as cumulative of the other remedies provided by law for
collection of the indebtedness secured hereby and shall not be exhausted by one
exercise thereof but may be exercised until full payment of all sums secured
hereby. Upon any such sale pursuant to the aforementioned power of sale and
agency, the proceeds of said sale shall be applied first to payment of the
indebtedness secured hereby and accrued interest and late charges thereon, then
to said insurance premiums, liens, assessments, taxes and charges including
utility charges with accrued interest thereon and then to the reasonable
expenses of such sale and of all proceedings in connection therewith, including
reasonable attorney's fees, and finally, the remainder, if any, shall be paid
to the party legally entitled to same.
In the event of any such public sale pursuant to the aforesaid power of
sale and agency, the Borrower shall be deemed a tenant holding over and shall
forthwith deliver possession of the Property to the purchaser or purchasers at
such sale or be summarily dispossessed according to provisions of law
applicable to tenants holding over.
The failure or omission on the part of the Lender to exercise the option
for acceleration of maturity and to foreclose or exercise the power of sale in
this Security Deed following any default as aforesaid or to exercise any other
option or remedy granted hereunder to Lender when entitled to do so in any one
or more instances, or the acceptance by Lender of partial payment of the
indebtedness secured hereby, whether before or subsequent to Borrower's
defaults hereunder, shall not constitute a waiver of any such default or the
right to exercise any such option or remedy, but such option or remedy shall
remain continuously in force. Acceleration of maturity, once claimed hereunder
by Lender, at the option of Lender, may be rescinded by written acknowledgment
to that effect by Lender, but the tender and acceptance of partial payments
alone shall not in any way affect or rescind such acceleration of maturity.
In case Lender shall have proceeded to enforce any right, power or
remedy under this Security Deed by foreclosure, entry or otherwise, or in the
event Lender commences advertising of the intended exercise of the sale under
power provided hereunder and such proceeding or advertisement shall have been
withdrawn, discontinued or abandoned for any reason, or shall have been
determined adversely to Lender, then in every such case (i) Borrower and
Lender shall be restored to their former positions and rights, (ii) all
rights, powers and remedies of Lender shall continue as if no such proceeding
had been taken, (iii) each and every Default declared or occurring prior or
subsequent to such withdrawal, discontinuance or abandonment shall be and
shall be deemed to be a continuing Default, and (iv) neither this Security
Deed, nor the Note, nor any other instrument concerned therewith, shall be or
shall be deemed to have been reinstated or otherwise affected by such
withdrawal, discontinuance or abandonment, and Borrower hereby expressly
waives the benefit of any statute or rule of law now provided, or which may
hereafter be provided, which would produce a result contrary to or in conflict
with the above.
24. PROTECTION OF LENDER'S SECURITY. At any time after default hereunder,
the Lender is authorized, without notice and in its sole discretion, to enter
upon and take possession of the Property or any part thereof and to perform any
acts which the Lender deems necessary or proper to conserve the security herein
intended to be provided by the Property, to operate any business or businesses
conducted thereon and to collect and receive all rents, issues and profits
thereof and therefrom, including those past due as well as those accruing
thereafter.
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<PAGE> 14
25. APPOINTMENT OF RECEIVER. If, at any time after a default hereunder,
in the sole discretion of the Lender, a receivership may be necessary to
protect the Property or its rents, issues, revenue, profits or proceeds,
whether before or after maturity of the indebtedness secured hereby and whether
before or at the time of or after the institution of suit to collect such
indebtedness, or to enforce this Security Deed, the Lender, as a matter of
strict right and regardless of the value of the Property or the amounts due
hereunder or secured hereby, or of the solvency of any party bound for the
payment of such indebtedness, shall have the right, upon ex parte application
and without notice to anyone, and by any court having jurisdiction, to the
appointment of a receiver to take charge of, manage, preserve, protect and
operate the Property, to collect the rents, issues, revenues, profits, proceeds
and income thereof, to make all necessary and needful repairs, and to pay all
taxes, assessments and charges against the Property and all premiums for
insurance thereon, and to do such other acts as may by such court be authorized
and directed, and after payment of the expenses of the receivership and the
management of the Property, to apply the net proceeds of such receivership in
reduction of the indebtedness secured hereby or in such other manner as the
said court shall direct, notwithstanding the fact that the amount owing thereon
may not then be due and payable or the said indebtedness is otherwise
adequately secured. Such receivership shall, at the option of Lender, continue
until full payment of all sums hereby secured or until title to the Property
shall have passed by sale under this Security Deed. Borrower hereby
specifically waives its right to object to the appointment of a receiver as
aforesaid and hereby expressly agrees that such appointment shall be made as an
admitted equity and as a matter of absolute right to the Lender.
26. RIGHTS AND REMEDIES CUMULATIVE; FORBEARANCE NOT A WAIVER. The rights
and remedies herein provided are cumulative and Lender, as the holder of the
Note and of every other obligation secured hereby, may recover judgment
thereon, issue execution therefor and resort to every other right or remedy
available at law or in equity, without first exhausting any right or remedy
available to Lender and without affecting or impairing the security of any
right or remedy afforded hereby, and no enumeration of special rights or powers
by any provisions hereof shall be construed to limit any grant of general
rights or powers, or to take away or limit any and all rights granted to or
vested in Lender by law, and Borrower further agrees that no delay or omission
on the part of the Lender to exercise any rights or powers accruing to it
hereunder shall impair any such right or power or shall be construed to be a
waiver of any such event of default hereunder or any acquiescence therein; and
every right, power and remedy granted herein or by law to the Lender may be
exercised from time to time as often as may be deemed expedient by the Lender.
27. MODIFICATION NOT AN IMPAIRMENT OF SECURITY. Lender, without notice
and without regard to the consideration, if any, paid therefor, and
notwithstanding the existence at the time of any inferior mortgages, deeds to
secure debt, or other liens thereon, may release any part of the security
described herein or may release any person or entity liable for any
indebtedness secured hereby without in any way affecting the priority of this
Security Deed, to the full extent of the indebtedness remaining unpaid
hereunder, upon any part of the security not expressly released. Lender may,
at its option and within its sole discretion, also agree with any party
obligated on said indebtedness, or having any interest in the security
described herein, to extend the time for payment of any part or all of the
indebtedness secured hereby, and such agreement shall not, in any way, release
or impair this Security Deed, but shall extend the same as against the title of
all parties having any interest in said security, which interest is subject to
this Security Deed.
28. PROPERTY MANAGER. The exclusive manager of the Property shall be the
Borrower or such other manager as may be first approved in writing by Lender.
The exclusive leasing agent of the Property, if other than the foregoing party,
shall be first approved in writing by the Lender. The governing management and
leasing contracts shall be subordinate to this Security Deed and satisfactory
to and subject to the written approval of Lender throughout the term of the
indebtedness secured hereby. Upon default in either of these requirements,
then the whole of the indebtedness hereby secured shall, at the election of the
Lender, become immediately (subject to the cure period for a Non-Monetary
Default) due and payable, together with any default premium and late payment
charges required by the Note, and the Lender shall be entitled to exercise any
or all remedies provided or referenced in this Security Deed.
29. MODIFICATION NOT A WAIVER. In the event Lender: (a) releases, as
aforesaid any part of the security described herein or any person or entity
liable for any indebtedness secured hereby, or (b) grants an extension of time
for the payment of the Note, or (c) takes other or additional security for the
payment of the Note, or (d) waives or fails to exercise any rights granted
herein, in the Note, or
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<PAGE> 15
any of the other Loan Documents, any said act or omission shall not release
Borrower, subsequent purchasers of the Property or any part thereof, or makers,
sureties, endorsers or guarantors of the Note, if any, from any obligation or
any covenant of this Security Deed, the Note, or any of the other Loan
Documents, nor preclude Lender from exercising any right, power or privilege
herein granted or intended to be granted in the event of any other default then
made, or any subsequent default.
30. TRANSFER OF PROPERTY OR CONTROLLING INTEREST IN BORROWER; ASSUMPTION.
Except as hereafter provided, without the prior written consent of the Lender,
the sale, transfer, assignment, or conveyance of all or any portion of the
Property, or a transfer, assignment, or conveyance of a "controlling interest"
in Borrower whether voluntarily or by operation of law, without the prior
written consent of Lender, shall constitute a default under the terms of this
Security Deed and entitle the Lender, at its sole option, to accelerate all
sums due on the Note together with any Prepayment Premiums, late payment
charges, or any other amounts secured hereby. As used herein the term
"controlling interest" means, in the case of a partnership, greater than a 50%
interest in the partnership or votes greater than 50% of the votes required to
approve any major decisions (as opposed to day-to-day or ministerial decisions)
of the partnership, and in the case of a corporation, greater than 50% of the
outstanding voting shares of stock of the corporation. (Notwithstanding the
foregoing sentence, a transfer of partnership interests or partnership units in
the ordinary course of business of Borrower as an "up-REIT" real estate
investment trust structure shall be permitted and shall not constitute a
conveyance of a "controlling interest" in Borrower.) Lender, may, however,
elect to waive the option to accelerate granted hereunder if, prior to any such
sale, transfer, assignment or conveyance of the Property, the following
conditions shall be fully satisfied: (a) the Lender acknowledges in writing
that, in its sole discretion, the creditworthiness of the proposed transferee
and the ability and experience of the proposed transferee to operate the
Property are satisfactory to Lender, and (b) Lender and the proposed transferee
shall enter into an agreement in writing that (i) the interest payable on the
indebtedness secured hereby shall be at such rate as Lender shall determine,
(ii) the repayment schedule as set forth in the Note shall be modified by the
Lender in its sole discretion to amortize the then unpaid principal balance
secured hereby over a period determined by Lender in its sole discretion
without a change in the maturity date of the Note, (iii) an assumption fee to
be determined by Lender may be charged by the Lender in its sole discretion,
and (iv) the proposed transferee shall assume in writing all obligations of
Borrower under the Note, this Security Deed and the other Loan Documents. In
the event the ownership of the Property, or any part thereof, shall become
vested in a person or entity other than the Borrower, whether with or without
the prior written consent of the Lender, the Lender may, without notice to the
Borrower, deal with such successor or successors in interest with reference to
the Property, this Security Deed and the Note in the same manner and to the
same extent as with the Borrower without in any way vitiating or discharging
the Borrower's liability hereunder or under the Note. No sale, transfer or
conveyance of the Property, no forbearance on the part of the Lender and no
extension of time for the payment of the debt hereby secured given by the
Lender shall operate to release, discharge, modify, change or affect the
original liability of the Borrower, either in whole or in part, unless
expressly set forth in writing executed by the Lender. Notwithstanding
anything contained herein to the contrary, Borrower hereby waives any right it
now has or may hereafter have to require Lender to prove an impairment of its
security as a condition to exercise the Lender's rights under this Paragraph
30. If a transfer of the Property, or a portion thereof, or a transfer of a
"controlling interest" in Borrower is approved by Lender: (a) Lender must
receive for its review and approval copies of all transfer documents, (b) the
approved transferee must assume in writing all obligations under the Note, this
Security Deed and any other Loan Documents, and (c) Borrower or the approved
transferee must pay all costs and expenses in connection with such transfer and
assumption, including without limitation, all fees and expenses incurred by
Lender.
Lender acknowledges that Borrower's general partner, Roberts Realty
Investors, Inc. ("RRII"), is a real estate investment trust and that it is
contemplated that Borrower may convey its interest in the Property to RRII.
Therefore, notwithstanding anything contained in this Paragraph 30 to the
contrary, the prior written consent of the Lender shall not be required and
Lender shall not be entitled to accelerate the indebtedness evidenced by the
Note or change the Loan terms upon a transfer so long as (i) the transfer is
made to RRII; (ii) there is no change in the ownership interest of RRII except
for transfers of shares of the real estate investment trust in the ordinary
course of business; and (iii) Lender shall be given prompt notice and
documentation of such transfer, and Borrower shall pay all of Lender's
out-of-pocket expenses associated with such transfer; provided, however, that
Borrower shall notify Lender in writing of any such transfer not less than
thirty (30) days prior to the effective date of such transfer. In addition to
the foregoing, Lender shall permit one (1) bona fide, arm's length transfer of
the Property to
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<PAGE> 16
any transferee without change in the loan terms; provided, however, that no
such transfer shall be valid or permitted hereunder unless: (i) Lender
receives prior written notice of such proposed transfer, (ii) such proposed
transferee has been approved in writing by the Lender (taking into account such
factors as transferee's creditworthiness, business experience and managerial
capabilities) such approval not to be unreasonably withheld, (iii) Lender is
paid a transfer fee in the amount of one percent (1%) of the then outstanding
principal balance of the Note, (iv) Borrower or the approved transferee pays
all fees and expenses incurred by Lender in connection with such transfer and
assumption, including, without limitation, inspection and investigation fees
and Reasonable Attorneys' Fees (as hereinafter defined), and (v) there is no
existing default hereunder or event which with the passage of time would
constitute a default hereunder. Any transfer of all or any portion of the
Property which does not strictly comply with the terms and conditions of the
foregoing shall be a default hereunder and shall entitle the Lender to exercise
all rights and remedies provided in this Security Deed.
31. FURTHER ENCUMBRANCE PROHIBITED; SUBROGATION. So long as the Note
secured hereby remains unpaid, the Borrower shall neither voluntarily nor
involuntarily permit the Property or any part thereof to become subject to any
secondary or other junior lien, mortgage, security interest or encumbrance of
any kind whatsoever other than taxes for the current year and the Permitted
Exceptions, without the prior written consent of the Lender, and the imposition
of any such secondary lien, mortgage, security interest or encumbrance shall
constitute an event of default hereunder and entitle the Lender, at its sole
option, to declare all sums due on account of the Note to be and become
immediately due and payable. In the event that Lender shall hereafter give its
written consent to the imposition of any such secondary lien, mortgage,
security interest or other encumbrance upon the Property, the Lender, at its
sole option, shall be entitled to accelerate the maturity of the Note and
exercise any and all remedies provided and available to Lender hereunder in the
event that the holder of any such secondary lien or encumbrance shall institute
foreclosure or other proceedings to enforce the same; it being understood and
agreed that a default under any instrument or document evidencing, securing or
secured by any such secondary lien or encumbrance shall be and constitute an
event of default hereunder. In the event all or any portion of the proceeds of
the loan secured hereby are used for the purpose of retiring debt or debts
secured by prior liens on the Property, the Lender shall be subrogated to the
rights and lien priority of the holder of the lien so discharged.
32. CONVEYANCE OF MINERAL RIGHTS PROHIBITED. Borrower agrees that the
making of any oil, gas or mineral lease or the sale or conveyance of any
mineral interest or right to explore for minerals under, through or upon the
Property would impair the value of the Property securing the Note, and that the
Borrower shall have no right, power or authority to lease the Property, or any
part thereof, for oil, gas or other mineral purposes, or to grant, assign or
convey any mineral interest of any nature, or the right to explore for oil, gas
and other minerals, without first obtaining from the Lender express written
permission therefor, which permission shall not be valid until recorded among
the Public Records of Cobb County, Georgia. The Borrower further agrees that
if the Borrower shall make, execute or enter into any such lease or attempt to
grant any such mineral rights without such prior written permission of the
Lender, then the Lender shall have the option, without notice, to declare the
same to be a default hereunder and to declare the indebtedness hereby secured
immediately due and payable. Whether or not the Lender shall consent to such
lease or grant of mineral rights, the Lender shall receive the entire
consideration to be paid for such lease or grant of mineral rights, with the
same to be applied to the indebtedness hereby secured notwithstanding the fact
that the amount owing thereon may not then be due and payable or the said
indebtedness is otherwise adequately secured; provided, however, that the
acceptance of such consideration shall in no way impair the lien of this
Security Deed on the Property.
33. ESTOPPEL CERTIFICATION BY BORROWER. Borrower, upon request therefor
made either personally or by mail, shall certify in writing to Lender (or any
party designated by Lender) in form satisfactory to Lender the amount of
principal and interest then outstanding under the terms of the Note and any
other sums due and owing under this Security Deed or any of the other Loan
Documents and whether any offsets or defenses exist against the mortgage debt.
Such certification shall be made by Borrower within ten (10) days if the
request is made personally, or within twenty (20) days if the request is made
by mail.
34. CROSS-DEFAULT. The Note is also secured by the terms, conditions and
provisions of an Assignment of Leases, Rents and Profits (hereinafter referred
to as the "Assignment") recorded among the Public Records of Cobb County,
Georgia and, additionally, may be secured by contracts or
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<PAGE> 17
agreements of guaranty or other security instruments. The terms, conditions
and provisions of each security instrument shall be considered a part hereof as
fully as if set forth herein verbatim. Any default under this Security Deed or
the Note secured hereby shall constitute an event of default under the
Assignment or any of the other Loan Documents, and any default under the
Assignment or other Loan Documents shall likewise constitute a default
hereunder and under the Note. Notwithstanding the foregoing, the enforcement
or attempted enforcement of this Security Deed or any of the other Loan
Documents now or hereafter held by Lender shall not prejudice or in any manner
affect the right of Lender to enforce any other Loan Document; it being
understood and agreed that the Lender shall be entitled to enforce this
Security Deed and any of the other Loan Documents now or hereafter held by it
in such order and manner as Lender, in its sole discretion, shall determine.
35. EXAMINATION OF BORROWER'S RECORDS. Borrower will maintain complete
and accurate books and records showing in detail the income and expenses of the
Property, and will permit upon no less than two (2) days notice the Lender and
its representatives to examine said books and records and all supporting
vouchers and data during normal business hours and from time to time upon
request by the Lender, in such place as such books and records are customarily
kept, and will furnish to the Lender, within one hundred twenty (120) days
after the close of each calendar year, audited financial statements of each
general partner of Borrower and statements of operations of the Property
certified by the general partner of the Borrower to be true and correct and
showing in detail all income derived from and expenses incurred in connection
with the ownership of the Property. All such statements shall be in form
acceptable to Lender and shall be prepared in accordance with generally
accepted accounting principles and shall include an annual rent schedule. In
the event the Borrower fails to provide such statements to the Lender within
the time prescribed above, the Borrower shall pay the Lender the sum of TWO
HUNDRED AND NO/100 DOLLARS ($200.00) for each successive month for which
statements are delinquent. In the event of default hereunder, Lender shall
have the right to require that said financial statements of the Property be
audited and certified by a certified public accountant acceptable to the
Lender, all at the sole cost and expense of the Borrower.
36. ALTERATION, REMOVAL AND CHANGE IN USE OF PROPERTY PROHIBITED.
Borrower covenants and agrees to permit or suffer none of the following without
the prior written consent of the Lender:
(a) Any structural alteration of, or addition to, the Improvements now
or hereafter situated upon the Real Property or the addition of any new
buildings or other structure(s) thereto other than erection or removal of
non-load bearing interior walls; or
(b) The removal, transfer, sale or lease of the Property, except that
the renewal, replacement or substitution of fixtures, equipment, machinery,
apparatus and articles of personal property (replacement or substituted
items must be of like or better quality than the removed items in their
original condition) encumbered hereby may be made in the normal course of
business; or
(c) The use of any of the Improvements now or hereafter situated on
the Real Property for any purpose other than as an apartment complex
project and related facilities.
37. FUTURE ADVANCES SECURED. This Security Deed shall secure not only
existing indebtedness, but also such future advances, whether such advances are
obligatory or to be made at the option of the Lender. Upon request of
Borrower, and at Lender's option prior to release of this Security Deed, Lender
may make future advances to Borrower. All future advances with interest
thereon shall be secured by this Security Deed to the same extent as if such
future advances were made on the date of the execution of this Security Deed
unless the parties shall agree otherwise in writing, but the total secured
indebtedness shall not exceed at any one time a maximum principal amount equal
to double the face amount of the Note plus interest, and costs of collection
including court costs and Reasonable Attorneys' Fees. Any advances or
disbursements made for the benefit or protection of or the payment of taxes,
assessments, levies or insurance upon the Property, with interest on such
disbursements as provided herein, shall be added to the principal balance of
the Note and collected as a part thereof. To the extent that this Security
Deed may secure more than one note, a default in the payment of any note shall
constitute a default in the payment of all such notes.
38. EFFECT OF SECURITY AGREEMENT. Borrower does hereby grant and this
Security Deed is and shall be deemed to create, grant, give and convey a
mortgage of, a lien and encumbrance
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<PAGE> 18
upon, and a present security interest in both real and personal property,
including all improvements, goods, chattels, furniture, furnishings, fixtures,
equipment, apparatus, appliances and other items of tangible or intangible
personal property, hereinabove particularly or generally described and
conveyed, whether now or hereafter affixed to, located upon, necessary for or
used or useful, either directly or indirectly, in connection with the operation
of the Property as an apartment complex project, and this Security Deed shall
also serve as a "security agreement" within the meaning of that term as used in
the Uniform Commercial Code as adopted and in force from time to time in the
State of Georgia, and shall be operative and effective as a security agreement
in addition to, and not in substitution for, any other security agreement
executed by the Borrower in connection with the extension of credit or loan
transaction secured hereby. Upon the occurrence of a default hereunder or
Borrower's breach of any other covenants or agreements between the parties
entered into in conjunction herewith, Lender shall have the remedies (i) as
prescribed herein, or (ii) as prescribed by general law, or (iii) as prescribed
by the specific statutory consequences now or hereafter enacted and specified
in said Uniform Commercial Code, all at Lender's sole election. Borrower and
Lender agree that the filing of any such financing statement or statements in
the records normally having to do with personal property shall not in any way
affect the agreement of Borrower and Lender that everything used in connection
with the production of income from the Property or adapted for use therein or
which is described or reflected in this Security Deed, is, and at all times and
for all purposes and in all proceedings, both legal or equitable, shall be,
regarded as part of the real estate conveyed hereby regardless of whether (i)
any such item is physically attached to the improvements, (ii) serial numbers
are used for the better identification of certain items capable of being thus
identified in an exhibit to this Security Deed or elsewhere, or (iii) any such
item is referred to or reflected in any such financing statement or statements
so filed at any time. Similarly, the mention in any such financing statement
or statements of the rights in and to (i) the proceeds of any fire and hazard
insurance policy, or (ii) any award in eminent domain proceedings for a taking
or for loss of value, or (iii) Borrower's interest as lessor or landlord in any
present or future lease or rights to income growing out of the use and
occupancy of the Property, whether pursuant to lease or otherwise, shall not in
any way alter any of the rights of Lender as determined by this Security Deed
or affect the priority of Lender's security interest granted hereby or by any
other recorded document, it being understood and agreed that such mention in
such financing statement or statements is solely for the protection of Lender
in the event any court shall at any time hold, with respect to the foregoing
clauses (i), (ii) or (iii) of this sentence, that notice of Lender's priority
of interest, to be effective against a particular class of persons, must be
filed in the Uniform Commercial Code records. Borrower warrants that (i)
Borrower's (that is, "Debtor's") name, identity and residence or principal
place of business are as set forth in Exhibit C attached hereto and made a part
hereof; (ii) Borrower (that is, "Debtor") has been using or operating under
said name and identity without change for the time period set forth in Exhibit
C; and (iii) the location of the collateral is upon the Property. Borrower
covenants and agrees that Borrower will furnish Lender with notice of any
change in the matters addressed by clauses (i) or (iii) of this paragraph
within thirty (30) days of the effective date of any such change and Borrower
will promptly execute any financing statements or other instruments deemed
necessary by Lender to prevent any filed financing statement from becoming
misleading or losing its perfected status. If Borrower fails to promptly
execute any such financing statements or other instruments, Lender may make,
execute, record, file, re-record, and re-file any and all such financing
statements or other instruments for and in the name of Borrower, and Borrower
hereby irrevocably appoints Lender the agent and attorney-in-fact of Borrower
so to do. This appointment of Lender as Borrower's attorney-in-fact is coupled
with an interest and is irrevocable by death or otherwise. The information
contained in this paragraph is provided in order that this Security Deed shall
comply with the requirements of the Uniform Commercial Code, as enacted in the
State of Georgia, for instruments to be filed as financing statements. The
names of the "Debtor" and the "Secured Party," the identity and residence or
principal place of business of "Debtor," the time period for which "Debtor" has
been using or operating under said name and identity without change are as set
forth in Schedule 1 of Exhibit C; the mailing address of the "Secured Party"
from which information concerning the security interest may be obtained, and
the mailing address of "Debtor," are as set forth in Schedule 2 of said Exhibit
C; and a statement indicating the types, or describing the items, of collateral
is set forth hereinabove.
The Borrower agrees to and shall, upon the request of Lender, execute and
deliver to Lender, in form and content satisfactory to Lender, such financing
statements, descriptions of property and such further assurances as Lender, in
its sole discretion, may from time to time consider necessary to create,
perfect, continue and preserve the lien and encumbrances hereof and the
security interest granted herein upon and in such real and personal property
and fixtures described herein, including all buildings, improvements, goods,
chattels, furniture, furnishings, fixtures, equipment, apparatus, appliances
and
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<PAGE> 19
other items of tangible and intangible personal property herein specifically or
generally described and intended to be the subject of the security interest,
lien and encumbrance hereby created, granted and conveyed. Without the prior
written consent of Lender, Borrower shall not create or suffer to be created,
pursuant to the Uniform Commercial Code, any other security interest in such
real and personal property and fixtures described herein. The Lender, at the
expense of the Borrower, may or shall cause such statements, descriptions and
assurances, as herein provided in this Paragraph 38, and this Security Deed to
be recorded and re-recorded, filed and refiled, at such times and in such
places as may be required or permitted by law to so create, perfect and
preserve the lien and encumbrance hereof upon all of the Property.
39. TERMS OF CONTRACT SURVIVE CLOSING. The terms and provisions of the
application/contract between Lender and Borrower are incorporated herein by
reference, said application/contract being dated December 11, 1995, and any
subsequent amendment thereto (hereinafter referred to as the "Contract"). All
terms and conditions of the Contract not expressly set forth in this Security
Deed, the Note and any other Loan Documents shall survive the closing hereof
and remain in full force and effect. In the event any conflict exists between
the terms, conditions and provisions of the Contract and the Loan Documents,
the terms, conditions and provisions of the Loan Documents shall prevail.
40. SUCCESSORS AND ASSIGNS; TERMINOLOGY. The provisions hereof shall be
binding upon the Borrower and the successors and assigns of the Borrower, and
inure to the benefit of Lender and its successors and assigns. Where more than
one Borrower is named herein, the obligations and liabilities of said Borrower
shall be joint and several. Wherever used in this Security Deed, unless the
context clearly indicates a contrary intent or unless otherwise specifically
provided herein, the word "Borrower" shall mean Borrower and/or any subsequent
owner or owners of the Property, the word "Lender" shall mean Lender or any
subsequent holder or holders of this Security Deed, the word "Note" shall mean
Note(s) secured by this Security Deed, and the word "person" shall mean an
individual, trustee, trust, corporation, partnership or unincorporated
association.
41. NOTICES. All notices hereunder shall be deemed to have been duly
given if mailed by United States registered or certified mail, with return
receipt requested, postage prepaid, or if deposited with a nationally
recognized overnight courier such as Federal Express, to the parties at the
following addresses (or at such other addresses as shall be given in writing by
any party to the others), and shall be deemed complete upon receipt (which, in
the case of delivery by certified mail, shall be as evidenced by the return
receipt, and, in the case of delivery by a nationally recognized overnight
courier, shall be as evidenced by the confirmation of delivery received by the
courier) or refusal to accept receipt:
<TABLE>
<S> <C>
To Borrower: Roberts Properties Residential, L.P.
8010 Roswell Road
Suite 120
Atlanta, Georgia 30350
Attn: Charles S. Roberts
To Lender: West Coast Life Insurance Company
c/o Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, Ohio 43216
Attn: Real Estate Investments
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, Ohio 43216
Attn: Real Estate Investments
</TABLE>
42. GOVERNING LAW. This Security Deed is to be governed by and construed
in accordance with the laws of the State of Georgia, and, if controlling, by
the laws of the United States.
43. RIGHTS OF LENDER CUMULATIVE. The rights of the Lender arising under
the clauses and covenants contained in this Security Deed shall be separate,
distinct and cumulative and
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<PAGE> 20
none of them shall be in exclusion of the others; and no act of the Lender
shall be construed as an election to proceed under any one provision herein to
the exclusion of any other provisions, anything herein or otherwise to the
contrary notwithstanding.
44. MODIFICATIONS. This Security Deed cannot be changed, altered, amended
or modified except by an agreement in writing and in recordable form, executed
by both Borrower and Lender.
45. EXCULPATION. Subject to the last sentence of this Paragraph 45, the
liability of Borrower with respect to the payment of principal and interest
under the Note shall be "non-recourse" and, accordingly, Lender's source of
satisfaction of said indebtedness and Borrower's other obligations hereunder
and under the other Loan Documents shall be limited to the Property and
Lender's receipt of the rents, issues and profits from the Property and Lender
shall not seek to procure payment out of any other assets of Borrower or any
person or entity comprising Borrower, or to seek any judgment (except as
hereinafter provided) for any sums which are or may be payable under the Note,
this Security Deed or any of the other Loan Documents, or for any claim or
judgment (except as hereafter provided) for any deficiency remaining after
foreclosure of this Security Deed. Notwithstanding the above, nothing herein
contained shall be deemed to be a release or impairment of the Note or the
security therefor intended by this Security Deed and the other Loan Documents,
or be deemed to preclude Lender from exercising its rights to foreclose this
Security Deed or to enforce any of its other rights or remedies under the Loan
Documents.
Notwithstanding the foregoing, it is expressly understood and agreed that
the aforesaid limitation on liability shall in no way affect or apply to the
Borrower's continued personal liability for:
(1) fraud or intentional misrepresentation made in or in connection
with the Note or any of the other Loan Documents governing, securing
or pertaining to the payment thereof;
(2) failure to pay taxes prior to delinquency or to pay assessments
prior to delinquency, or to pay charges for labor, materials or other
charges which can create liens on any portion of the Property;
(3) the 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, or (iii) rentals received by or on
behalf of Borrower subsequent to the date on which Lender gives
written notice of the commencement of foreclosure proceedings;
(4) causing or permitting waste to occur on, in or about the
Property, and failure to maintain the Property, excepting ordinary
wear and tear;
(5) loss by fire or casualty to the extent not compensated by
insurance proceeds collected by Lender;
(6) the return to Lender of all unearned advance rentals and security
deposits paid by tenants of the Property and not refunded to or
forfeited by such tenants;
(7) the return to Borrower of any and all fees paid to Borrower by
tenants of the Property which fees permit tenants to terminate their
leases;
(8) the return of, or reimbursement for, all personalty owned by
Borrower taken from the Property by or on behalf of Borrower, out of
the ordinary course of business, and not replaced by items of equal or
greater value than the original value of the personalty so removed;
(9) all court costs and Reasonable Attorneys' Fees actually incurred
which are provided for in the Note or in any other Loan Document
governing, securing or pertaining to the payment of the Note; and
(10) (i) the removal of any chemical, material or substance, exposure
to which is prohibited, limited or regulated by any Federal, State,
County, Regional or Local Authority which may or could pose a hazard
to the health and safety of the occupants of the Property, regardless
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<PAGE> 21
of the source of origination; and (ii) the restoration of the Property
to comply with all governmental regulations pertaining to hazardous
waste found in, on or under the Property, regardless of the source of
origination; and (iii) any indemnity or other agreement to hold the
Lender harmless from and against any and all losses, liabilities,
damages, injuries, costs, expenses of any and every kind arising under
Paragraph 3 of this Security Deed or under the Environmental
Indemnity Agreement. Borrower shall not be liable for removal of any
of the foregoing materials from the Property if such materials were
placed on the Property subsequent to the date of foreclosure of this
Security Deed or acceptance of a deed in lieu thereof, or
relinquishment of control of the Property pursuant to a transfer
approved in writing by Lender; provided, that such transferee assumes
in writing all obligations of Borrower pertaining to Hazardous
Materials pursuant to the Loan Documents. Liability under this
subparagraph shall extend beyond repayment of the Note and compliance
with the terms of this Security Deed unless at such time Borrower
provides Lender an environmental assessment report acceptable to
Lender showing the Property to be free of Hazardous Materials and not
in violation of Hazardous Waste Laws. Borrower shall bear the burden
of proof in establishing the date on which any such Hazardous
Materials were placed on the Property.
(11) (a) any and all costs incurred in order to cause the Property to
comply with the applicable accessibility provisions of The Fair
Housing Act of 1988, as the same may now or hereafter be amended, and
The Americans With Disabilities Act of 1990, as the same may now or
hereafter be amended, and any and all rules and regulations that may
now or hereafter be promulgated in connection with said acts, and (b)
any indemnity or other agreement to hold the Lender harmless from and
against any and all losses, liabilities, damages, injuries, costs and
expenses of any and every kind arising under Paragraph 3 of this
Security Deed regarding accessibility for the disabled or handicapped
or under the Accessibility Indemnity Agreement from Borrower to Lender
of even date herewith; provided, however, Borrower shall not be liable
for compliance with any accessibility laws that first become
effective, or for any violation of any accessibility laws resulting
from alterations or improvements to the Property that are performed,
subsequent to Lender's actually taking possession of the Property
pursuant to foreclosure of this Security Deed or acceptance of a deed
in lieu thereof, or subsequent to any transfer of ownership of the
Property that has the prior written approval of Lender; provided that
such transferee assumes in writing all obligations of Borrower with
respect to compliance with accessibility laws under this Security Deed
and the Accessibility Indemnity Agreement.
(12) Obligation of Borrower for the face amount of any Letter of Credit
held by Lender and delivered by Borrower in connection with the loan
evidenced by the Notes in the event Lender is unable to collect the
full amount of said Letter of Credit for any reason.
The obligations of Borrower in subparagraphs 1-12 above, except as provided
in subparagraphs 10 and 11, shall survive the repayment and satisfaction of
the Note and compliance with the terms of this Security Deed.
Notwithstanding any provisions herein to the contrary, Borrower shall
become personally liable for the entire amount due under the Note (including
all principal, interest and other charges) in the event that Borrower (i)
violates the covenants set forth in this Security Deed governing the placing of
subordinate financing on the Property or (ii) violates the covenants set forth
in this Security Deed restricting transfers in the Property or transfers of
ownership interests in Borrower.
46. CAPTIONS. The captions set forth at the beginning of the various
paragraphs of this Security Deed are for convenience only and shall not be used
to interpret or construe the provisions of this Security Deed.
47. REASONABLE ATTORNEYS' FEES. As used herein, the phrase "Reasonable
Attorney's Fees" shall mean fees charged by attorneys selected by Lender based
upon such attorney's then prevailing hourly rates, as opposed to any amount or
percentage specified by any statute then in effect in the State of Georgia.
- 21 -
<PAGE> 22
IN WITNESS WHEREOF, the said Borrower has caused these presents to be
executed under seal by persons duly authorized thereunto as of the day and year
first above written.
<TABLE>
<S> <C>
Signed, sealed and delivered Roberts Properties Residential, L.P., a
in the presence of: Georgia limited partnership
/s/ Charles R. Elliott By: Roberts Realty Investors, Inc.,
----------------------------
Unofficial Witness its sole General Partner
By: /s/ Charles S. Roberts
---------------------------------------
/s/ Leslie A. Camp Name: Charles S. Roberts
----------------------------
Notary Public Title: President
My Commission Expires: (CORPORATE SEAL)
</TABLE>
(NOTARY SEAL)
- 22 -
<PAGE> 23
EXHIBIT A
ALL THAT TRACT of land in Land Lots 800 and 856 of the 17th District, 2nd
Section, Cobb County, Georgia, described as follows:
BEGINNING at an iron pin found at the land lot corner common to Land Lots 799,
800, 856 and 857 of the 17th District, 2nd Section, Cobb County, Georgia;
running thence along the land lot line common to said Land Lots 856 and 857
North 89 degrees 56 minutes 47 seconds East 792.61 feet to an iron pin set on
the southwest right-of-way line of Bentley Road (60 foot right-of-way); thence
along said southwest right-of-way line, the following courses and distances:
(1) South 15 degrees 36 minutes 26 seconds East 550.74 feet to a point, and (2)
along the arc of a curve to the left (which arc is subtended by a chord having
a bearing and distance of South 17 degrees 36 minutes 26 seconds East 40.92
feet and a radius of 586.28 feet) 40.93 feet to an iron pin set; thence,
leaving said right-of-way line, South 03 degrees 24 minutes 08 seconds West
56.35 feet to a point; thence South 54 degrees 00 minutes 25 seconds West 95.79
feet to a point; thence South 63 degrees 02 minutes 08 seconds West 82.15 feet
to a point; thence South 72 degrees 51 minutes 23 seconds West 82.54 feet to a
point; thence South 53 degrees 13 minutes 16 seconds West 17.05 feet to an iron
pin set; thence South 83 degrees 41 minutes 54 seconds West 111.10 feet to a
point; thence South 20 degrees 36 minutes 23 seconds West 111.22 feet to a
point; thence South 35 degrees 00 minutes 04 seconds East 49.06 feet to a
point; thence South 24 degrees 16 minutes 46 seconds West 166.13 feet to a
point; thence North 70 degrees 35 minutes 32 seconds West 271.51 feet to a
point; thence North 5 degrees 13 minutes 19 seconds East 83.56 feet to a point;
thence North 87 degrees 39 minutes 46 seconds West 128.36 feet to a point;
thence North 51 degrees 05 minutes 15 seconds West 193.21 feet to a point on
the land lot line common to said Land Lots 800 and 856; thence, along said
common land lot line, North 0 degrees 45 minutes 20 seconds East 387.97 feet to
an iron pin set; thence, leaving said common land lot line, North 47 degrees 50
minutes 29 seconds East 227.23 feet to an iron pin found; thence North 62
degrees 09 minutes 30 seconds West 215.00 feet to an iron pin set; thence North
00 degrees 45 minutes 21 seconds East 120.00 feet to an iron pin found on the
land lot line common to said Land Lots 799 and 800; thence, along said common
land lot line, North 89 degrees 55 minutes 18 seconds East 25.0 feet to the
POINT OF BEGINNING, said tract containing approximately 17.31 acres as shown on
plat of As-Built Survey for: Roberts Properties Residential, L.P., Nationwide
Life Insurance Company, West Coast Life Insurance Company and Commonwealth Land
Title Insurance Company prepared by Construction Engineering Associates,
bearing the seal and certification of Milton R. Lemon, Georgia Registered
Professional Land Surveyor No. 1439, dated March 6, 1972, last revised March
21, 1996.
<PAGE> 24
EXHIBIT B
1. General and special taxes and assessments for the year 1996 and
subsequent years, not yet due and payable; and the lien of additional real
property taxes by reason of increased or amended assessments.
2. The following matters disclosed by plat of As-Built Survey for Roberts
Properties Residential, L.P., Nationwide Life Insurance Company, West
Coast Life Insurance Company and Commonwealth Land Title Insurance
Company, dated March 6, 1972, last revised March 21, 1996, prepared by
Construction Engineering Associates, bearing the seal and certification of
Milton Robert Lemon, Georgia Registered Professional Land Surveyor No.
1439:
(a) 20-foot storm sewer easement and 30-foot construction
easement located in the northern portion of the subject property;
(b) Sanitary sewer lines and manholes located throughout the
subject property;
(c) Storm drainage lines and storm drainage facilities located
throughout the subject property;
(d) Sanitary sewer lines and manhole, and storm drainage line and
storm drainage facility cross the southeastern and southern boundary
lines of the subject property;
(e) Fire hydrants and water meter located on the subject
property;
(f) Power lines and power boxes located throughout the subject
property;
(g) Southern Bell easement located on the subject property along
Bentley Road;
(h) Southern Bell boxes located throughout the subject property;
(i) Slope easement on the subject property along Bentley Road;
and
(j) Buildings 4, 12 and 13 encroach over the building setback
lines.
<TABLE>
<S> <C>
- - Rights of tenants in possession, as tenants only under unrecorded leases.
- - Rights of upper and lower riparian owners in and to the waters of rivers,
creeks or branches, crossing or adjoining the property encumbered by the
easements insured hereunder, and the natural flow thereof, free from
diminution or pollution.
- - Distribution Line Permit from Candler & Griffith to Board of Lights and
Water, dated December 23, 1970, filed for record December 31, 1970, and
recorded in Deed Book 1197, page 119, Cobb County, Georgia records.
- - Distribution Line Permit from Life Investors Realty to Board of Lights and
Water, dated May 6, 1982, filed for record May 11, 1982, and recorded in
Deed Book 2516, page 233, aforesaid records.
- - Easement for necessary drainage contained in Right of Way Deed from Asa G.
Candler, V, and Robert S. Griffith to Cobb County of Georgia, dated
October 1, 1970, filed for record October 7, 1970, and recorded in Deed
Book 1182, page 147, aforesaid records.
- - Easement from Life Investors Realty Co. to Cobb-Bentley Associates, Ltd.,
a Georgia limited partnership, dated March 8, 1984, filed for record April
6, 1984, and recorded in Deed Book 3079, page 200, aforesaid records.
- - Right of Way Easement from John Hancock Realty Equities, Inc. to Southern
Bell Telephone and Telegraph Company, dated January 7, 1988, filed for
record June 13, 1988, and recorded in Deed Book 4957, page 192, aforesaid
records.
- - Memorandum of Lease between The Luesing Group, Inc. d/b/a Laurelwood
Apartments and Web Service Co., dated November 2, 1985, filed for record
February 11, 1986, and recorded in Deed Book 3819, page 477, aforesaid
records.
</TABLE>
<PAGE> 25
EXHIBIT C
Schedule 1
(Description of "Debtor" and "Secured Party")
A. Debtor:
1. Name and Identity or Corporate Structure: Roberts Properties
Residential, L.P., a Georgia limited partnership.
2. The principal place of business of Debtor in the State of Georgia
is located at 8010 Roswell Road, Suite 120, Atlanta, Georgia 30350.
3. Debtor has been using or operating without change under the name
and identity indicated in item 1 above for the following time period:
Since July 22, 1994.
B. Secured Party:
Nationwide Life Insurance Company
West Coast Life Insurance Company
Schedule 2
(Notice Mailing Address of "Debtor" and "Secured Party")
A. The mailing address of Debtor is:
Roberts Properties Residential, L.P.
8010 Roswell Road
Suite 120
Atlanta, Georgia 30350
B. The mailing address of Secured Party is:
West Coast Life Insurance Company
c/o Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, Ohio 43216
Attn: Real Estate Investments
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, Ohio 43216
Attn: Real Estate Investments
<PAGE> 26
ASSIGNMENT OF LEASES, RENTS, AND PROFITS
THIS ASSIGNMENT OF LEASES, RENTS AND PROFITS (hereinafter referred to as
"Assignment") is executed and delivered this 28th day of March, 1996, by
Roberts Properties Residential, L.P., a Georgia limited partnership
(hereinafter referred to as "Assignor"), to and in favor of NATIONWIDE LIFE
INSURANCE COMPANY, an Ohio corporation, its successors or assigns, having its
principal office at One Nationwide Plaza, Columbus, Ohio 43216 Attention: Real
Estate Investments and WEST COAST LIFE INSURANCE COMPANY, a California
corporation whose address is c/o Nationwide Life Insurance Company, One
Nationwide Plaza, Columbus, Ohio 43216, Attention: Real Estate
Investments,(hereinafter collectively referred to as the "Assignee");
W I T N E S S E T H:
WHEREAS, Assignor is the present owner in fee simple of certain real
property located in Cobb County, Georgia more particularly described on Exhibit
"A" attached hereto and by this reference made a part hereof (hereinafter
referred to as the "Real Property"); and
WHEREAS, Assignee is the owner and holder of a Deed to Secure Debt and
Security Agreement of even date herewith (hereinafter referred to as the
"Security Deed") encumbering the Real Property and other Property more
specifically described in the Security Deed (all of which property is referred
to herein and in the Security Deed as the "Property"), which Deed secures the
payment of a Real Estate Note A and Real Estate Note B of even date herewith in
the aggregate amount of FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) made by
Assignor as Maker to and in favor of Assignee as Holder (hereinafter
collectively referred to as the "Note");
WHEREAS, Assignee, as a condition to making the aforesaid loan and to
obtain additional security therefor, has required the execution of this
Assignment by Assignor; and
NOW THEREFORE, in order further to secure the payment of the indebtedness
of Assignor to Assignee evidenced by the Note, and secured by the Security
Deed, and in further consideration of the sum of TEN AND NO/100 DOLLARS
($10.00) in hand paid by Assignee to Assignor, the receipt and sufficiency of
which are hereby acknowledged, Assignor does hereby sell, assign, transfer and
set over unto Assignee all of the leases (and guarantees thereof), rents,
issues, profits and income of, from or pertaining to the Property, including,
but not limited to any fees that permit the tenant to terminate its lease which
fees are payable to the landlord under the terms and conditions of any of the
Property's leases. This Assignment shall include any and all leases or rental
agreements and guarantees thereof that may now be in effect specifically
including without limitation those leases and guarantees set forth in Exhibit B
attached hereto and by this reference made a part hereof, as well as any future
or additional leases or rental agreements and guarantees thereof, and any
renewals or extensions of the same, that may be entered into by Assignor.
Assignor hereby agrees to execute and deliver such further assignments of said
leases or rental agreements or guarantees thereof as Assignee may from time to
time request.
This Assignment is absolute and effective immediately and without
possession. Notwithstanding the foregoing, Assignor shall have a license to
receive, collect and enjoy the rents, issues, profits and income accruing from
the Property until a default has occurred under the Note, the Security Deed or
any other instrument evidencing or securing the Note. Upon the occurrence of a
default, the license shall cease automatically, without need of notice,
possession, foreclosure or any other act or procedure, and all leases, rents,
issues, profits and income assigned hereby shall thereafter be payable to
Assignee.
PROVIDED, ALWAYS that if the Assignor shall pay unto the Assignee the
indebtedness evidenced by the Note, and if the Assignor shall duly, promptly
and fully perform, discharge, execute, effect, complete, comply with and abide
by each and every one of the agreements, conditions and covenants of the Note,
the Security Deed, this Assignment and all other instruments executed by
Assignor to and in favor of Assignee as further evidence of or as additional
security for the indebtedness (hereinafter together referred to as the "Loan
Documents"), then this Assignment and the estates and interests hereby granted
and created shall terminate.
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<PAGE> 27
REPRESENTATIONS AND WARRANTIES OF ASSIGNOR
1. In furtherance of the foregoing assignment, Assignor:
A. Represents and warrants that it is the owner in fee simple of the
Property and has good title to the leases, rents, income, issues and
profits hereby assigned and good right to assign the same, and that, no
other person, entity, firm or corporation has any right, title or interest
therein; that Assignor has not previously sold, assigned, transferred,
mortgaged or pledged said rents, issues, profits, income and leases of the
Property; and that payment of any of the same has not otherwise been
anticipated, waived, released, discounted, set off or otherwise discharged
or compromised.
B. Agrees and warrants that, without the prior written consent of the
Assignee, except for matters normally occurring in connection with the
operation of a garden apartment community, the terms of any and all leases
will not be amended, altered, modified or changed in any manner whatsoever,
nor will they be surrendered or canceled, nor will any proceedings for
dispossession or eviction of any lessee under said leases be instituted by
Assignor.
C. Agrees and warrants that no request will be made of any lessee to
pay any rent, and no rent will be accepted by Assignor, for more than one
month in advance of the date such rent becomes due and payable under the
terms of any and all leases, it being agreed between Assignor and Assignee
that rent shall be paid as provided in said leases and not otherwise. The
foregoing shall not prevent Assignor from charging and collecting security
deposits from each tenant leasing space on the Real Property.
D. Authorizes Assignee, by and through its employees or agents or a
duly appointed receiver, at its option, after the occurrence of a default
under this Assignment, the Note, the Security Deed or any of the Loan
Documents, to enter upon the Property and to collect, in the name of
Assignor, as its lawful attorney, or in its own name as assignee, any
rents, income or profits accrued but unpaid and/or in arrears at the date
of such default, as well as the rents, income or profits thereafter
accruing and becoming payable during the period of the continuation of the
said default or any other default. To this end, Assignor further agrees
that it will cooperate with and facilitate, in all reasonable ways,
Assignee's collection of said rents, income or profits and will, upon
request by Assignee, execute a written notice to each tenant, occupant or
licensee directing said tenant, occupant or licensee to pay directly to
Assignee all income, rents and profits due and payable under said leases;
provided, however, that Assignee may notify said tenant, occupant or
licensee of the effectiveness of this Assignment without giving notice to
Assignor or requesting Assignor to give such notice or join in such notice.
E. Authorizes Assignee, upon such entry as specified in "D." above, at
its option, to take over and assume the management, operation and
maintenance of the Property and to perform all acts necessary and proper,
and to expend such sums out of the income of the Property as in Assignee's
sole discretion may be reasonable or necessary in connection therewith, in
the same manner and to the same extent as Assignor theretofore might do.
Assignor hereby releases all claims against Assignee arising out of such
management, operation and maintenance.
F. Agrees to execute, upon the request of the Assignee, any and all
other instruments requested by the Assignee to effectuate this Assignment
or to accomplish any other purpose deemed by the Assignee to be necessary
or appropriate in connection with, this Assignment.
G. Agrees and acknowledges that nothing in this Assignment shall be
construed to limit or restrict in any way the rights and powers granted to
Assignee in the Note, the Security Deed or any of the other Loan Documents.
The collection and application of the rents, issues and profits as
described herein shall not constitute a waiver of any default which might
at the time of application or thereafter exist under the Note, the Security
Deed or any of the other Loan Documents, and the exercise by Assignee of
the rights herein provided shall not prevent Assignee's exercise of any
rights provided under the Note, the Security Deed or any of the other Loan
Documents.
ASSIGNEE'S RIGHTS FOLLOWING DEFAULT BY ASSIGNOR
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<PAGE> 28
2. Assignee may, after the occurrence of a default as hereinabove
provided, from time to time, appoint and dismiss such agents or employees as
shall be necessary or reasonable for the collection of the rents, issues and
profits derived from the Property and for the proper care and operation of the
Property, and Assignor hereby grants to Assignee the authority to give such
agents or employees so appointed full and irrevocable authority on Assignor's
behalf to manage the Property and to do all acts relating to such management,
including, without limitation, the entry into and execution of new leases in
the name of the Assignor or otherwise, the alteration or amendment of existing
leases, the authorization to repair or replace any items necessary in order to
maintain the building or buildings and chattels incidental thereto in good and
tenantable condition, and the effectuation of such alterations or improvements
as in the judgment of the Assignee may be reasonable or necessary to maintain
or increase the income from the Property. Assignee shall have the sole control
of such agents or employees, whose remuneration shall be paid out of the rents,
issues and profits as hereinabove provided, at the rate of compensation
accepted in the community wherein the Property is situated.
APPLICATION BY ASSIGNEE OF NET INCOME FROM THE PROPERTY
3. Assignee shall, after payment of all charges and expenses enumerated
under Paragraph 2 above, and after retaining sufficient sums to meet taxes,
assessments, utilities and insurance coverages in requisite amounts (including
liability, fire and extended coverage), credit the net income received by
Assignee from the Property, by virtue of this Assignment, to any amounts due
and owing to Assignee by Assignor under and pursuant to the terms of the Note
and the Security Deed, but the manner of the application of such net income
shall be determined in the sole discretion of Assignee. Assignee shall make a
reasonable effort to collect rents, income and profits, reserving, however,
within its sole discretion, the right to determine the method of collection and
the extent to which enforcement of the collection of delinquent rents, income
and profits shall be prosecuted. Notwithstanding the foregoing, no such credit
shall be given by Assignee for any sum or sums received from the rents, issues
and profits of the Property until the sums collected are actually received by
Assignee at its principal office as stated above (or at such other place as
Assignee shall designate in writing), and no credit shall be given for any
uncollected rents or other uncollected amounts or bills, nor shall credit be
given for any rents, issues and profits derived from the Property under any
order of court or by operation of law until such amounts are actually received
by Assignee at its principal offices stated above. The net amount of income
received by Assignee hereunder applied by Assignee to the amounts due and owing
by the Assignor shall not serve to cure any default under the Note, the
Security Deed or any of the Loan Documents, nor shall any amounts received by
Assignee hereunder be in full satisfaction of the indebtedness evidenced by the
Note unless such amounts are sufficient to pay such indebtedness in full
(including any prepayment premiums, late payment charges, and advancements) in
accordance with the terms of the Note, the Security Deed and the other Loan
Documents.
LIMITATION OF ASSIGNEE'S LIABILITY
4. Assignee shall not be obligated to perform or discharge any obligation
under the leases hereby assigned or under or by reason of this Assignment, and
Assignor hereby agrees to indemnify and hold Assignee harmless against any and
all liability, loss or damage which Assignee might incur under the leases or
under or by reason of this Assignment and of and from any and all claims and
demands whatsoever which may be asserted against Assignee by reason of any
alleged obligation or undertaking on Assignee's part to perform or discharge
any of the terms of such leases, except for claims and demands arising by
reason of Assignee's gross negligence or willful misconduct.
REINSTATEMENT AFTER DEFAULT
5. In the event that Assignor shall, with the consent of Assignee,
reinstate the indebtedness evidenced by the Note completely in good standing,
having complied with all the terms, covenants and conditions of the Note,
Security Deed, this Assignment and all of the other Loan Documents, then, in
such event, Assignee shall return possession of the Property to Assignor, and
Assignor shall remain in possession of the Property unless and until another
default occurs under the Note, the Security Deed, this Assignment or any of the
other Loan Documents, at which time Assignee may, at its option, again take
possession of the Property under authority of and pursuant to the terms and
provisions of this Assignment.
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<PAGE> 29
TENANT'S NOTIFICATION OF ASSIGNMENT
6. Upon request by Assignee, at any time, Assignor will deliver a written
notice to each of the tenants and lessees of the Property, which notice shall
inform such tenants and lessees of this Assignment and instruct them that upon
receipt of notice by them from Assignee of the existence of a default by
Assignor under the Note, the Security Deed or any of the other Loan Document,
all rent due thereafter shall be paid directly to Assignee.
SATISFACTION OF SECURITY DEED; SATISFACTION OF ASSIGNMENT
7. This Assignment shall remain in full force and effect as long as the
indebtedness evidenced by the Note and secured by the Security Deed remain
unpaid in whole or in part. It is understood and agreed that a complete
release or satisfaction of the aforesaid Security Deed shall operate as a
complete release or satisfaction of all of Assignee's rights and interest
hereunder, and that satisfaction of the Security Deed shall operate to satisfy
this Assignment.
EXCULPATION
8. The liability of Assignor with respect to the payment of principal and
interest under the Note shall be "non-recourse" and, accordingly, Assignee's
source of satisfaction of said indebtedness and Assignor's other obligations
hereunder and under the other Loan Documents shall be limited to the Property
and Assignee's receipt of the rents, issues and profits from the Property, and
Assignee shall not seek to procure payment out of any other assets of Assignor
or any person or entity comprising Assignor, nor to seek judgment (except as
hereinafter provided) for any sums which are or may be payable under the Note
or under any of the other Loan Documents, as well as any claim or judgment
(except as hereafter provided) for any deficiency remaining after foreclosure
of the Security Deed. Notwithstanding the above, nothing herein contained
shall be deemed to be a release or impairment of the indebtedness evidenced by
the Note or the security therefor intended by the other Loan Documents or be
deemed to preclude Assignee from exercising its rights to foreclose, or to
exercise the power of sale contained in, the Security Deed or to enforce any of
its other rights or remedies under the Loan Documents.
Notwithstanding the foregoing, it is expressly understood and agreed that
the aforesaid limitation on liability shall in no way affect or apply to
Assignor's continued personal liability for:
(A) fraud or intentional misrepresentation made in or in connection
with the Note or any of the other Loan Documents governing, securing
or pertaining to the payment thereof;
(B) failure to pay taxes prior to delinquency or to pay assessments
prior to delinquency or to pay charges for labor, materials or other
charges which can create liens on any portion of the Property;
(C) the 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, or (iii) rentals held or received by
or on behalf of Assignor subsequent to the date on which Assignee
gives written notice of the commencement of foreclosure proceedings;
(D) causing or permitting waste to occur on, in or about the
Property, and failure to maintain the Property, excepting ordinary
wear and tear;
(E) loss by fire or casualty to the extent not compensated by
insurance proceeds collected by Assignee;
(F) the return to Assignee of all unearned advance rentals and
security deposits paid by tenants of the Property and not refunded to
or forfeited by such tenants;
(G) the return to Assignor of any and all fees paid to Assignee by
tenants of the Property which fees permit tenants to terminate their
leases;
- 29 -
<PAGE> 30
(H) the return of, or reimbursement for, all personalty owned by
Assignor taken from the Property by or on behalf of Assignor out of
the ordinary course of business, and not replaced by personalty of
equal or greater value than the original value of the personalty so
removed;
(I) all court costs and Reasonable Attorneys' Fees actually incurred
which are provided for in the Note or in any other Loan Document
governing, securing or pertaining to the payment of the Note;
(J) (i) the removal of any chemical, material or substance, exposure
to which is prohibited, limited or regulated by any Federal, State,
County, Regional or Local Authority which may or could pose a hazard
to the health and safety of the occupants of the Property; and (ii)
the restoration of the Property to comply with all governmental
regulations pertaining to hazardous waste found in, on or under the
Property regardless of the source of origination; and (iii) any
indemnity or other agreement to hold the Assignee harmless from and
against any and all losses, liabilities, damages, injuries, costs,
expenses of any and every kind arising under Paragraph 3 of the
Security Deed or under that certain Environmental Indemnity Agreement
from Assignor to Assignee of even date herewith. Assignor shall not
be liable hereunder if such materials were placed on the Property
subsequent to the date of foreclosure of the Security Deed by Assignee
or acceptance of a deed in lieu thereof, or relinquishment of control
of the Property pursuant to a transfer approved in writing by
Assignee; provided such transferee assumes in writing all obligations
of Maker pertaining to the Loan Documents. Liability under this
subparagraph shall extend beyond repayment of the Note and compliance
with the terms of the Security Deed, unless at such time Assignor
provides Assignee with an environmental assessment report acceptable
to Assignee showing the Property to be free of Hazardous Materials and
not in violation of Hazardous Waste Laws (as defined in the Security
Deed). Assignor shall bear the burden of proof in establishing the
date on which any such Hazardous Materials were placed or appeared in,
on or under the Property.
(K) (a) any and all costs incurred in order to cause the Property to
comply with the applicable accessibility provisions of The Fair
Housing Act of 1988, as the same may now or hereafter be amended, and
any and all rules and regulations that may now or hereafter be
promulgated in connection with said acts, and (b) any indemnity or
other agreement to hold the Assignee harmless from and against any and
all losses, liabilities, damages, injuries, costs and expenses of any
and every kind arising under Paragraph 3 of the Security Deed
regarding accessibility for the disabled or handicapped or under the
Accessibility Indemnity Agreement from Assignor to Assignee of even
date herewith; provided, however, Assignor shall not be liable for
compliance with any accessibility laws that first become effective, or
for any violation of any accessibility laws resulting from alterations
or improvements to the Property that are performed, subsequent to
Assignee's actually taking possession of the Property pursuant to
foreclosure of the Security Deed or acceptance of a deed in lieu
thereof, or subsequent to any transfer of ownership of the Property
that has the prior written approval of Assignee; provided that such
transferee assumes in writing all obligations of Assignor with respect
to compliance with accessibility laws under the Security Deed and
Accessibility Indemnity Agreement.
The obligations of Assignor in subparagraphs (A) through (K) above, except
as provided in (J) and (K), shall survive the repayment and satisfaction of the
Note and compliance with the terms of the Security Deed.
GOVERNING LAWS
9. This Assignment is executed and delivered as additional Security for a
loan transaction negotiated and consummated in Cobb County, Georgia and is to
be construed according to the laws of the State of Georgia, and the laws of the
United States.
REASONABLE ATTORNEYS' FEES
- 30 -
<PAGE> 31
10. As used herein, the phrase "Reasonable Attorneys' Fees" shall mean
fees charged by attorneys selected by Assignee based upon such attorneys
then-prevailing hourly rates as opposed to any amount or percentage specified
by any statute then in effect in the State of Georgia.
SUCCESSORS AND ASSIGNS
11. The provisions of this Agreement shall inure to the benefit of
Assignee and its successors and assigns and shall be binding upon Assignor, its
personal representatives, successors and assigns. The creation of rights and
powers under this Agreement in favor of or available to Assignee shall, in no
way whatsoever, be construed to impose concomitant duties or obligations on
Assignee in favor of Assignor except as expressly set forth herein.
IN WITNESS WHEREOF, the undersigned has caused this Assignment of Leases,
Rents and Profits to be executed under seal by persons duly authorized
thereunto as of the day and year first above written.
Signed, sealed and delivered ROBERTS PROPERTIES RESIDENTIAL,
in the presence of: L.P., a Georgia limited partnership
/s/ Charles R. Elliott
- ----------------------------
Unofficial Witness By: Roberts Realty Investors, Inc., its
sole General Partner
/s/ Leslie A. Camp By:/s/ Charles S. Roberts
- ---------------------------- -----------------------------------
Notary Public Name: Charles S. Roberts
Title: President
My Commission Expires:
- ---------------------------- (Corporate Seal)
(NOTARY SEAL)
- 31 -
<PAGE> 32
EXHIBIT A
ALL THAT TRACT of land in Land Lots 800 and 856 of the 17th District, 2nd
Section, Cobb County, Georgia, described as follows:
BEGINNING at an iron pin found at the land lot corner common to Land Lots 799,
800, 856 and 857 of the 17th District, 2nd Section, Cobb County, Georgia;
running thence along the land lot line common to said Land Lots 856 and 857
North 89 degrees 56 minutes 47 seconds East 792.61 feet to an iron pin set on
the southwest right-of-way line of Bentley Road (60 foot right-of-way); thence
along said southwest right-of-way line, the following courses and distances:
(1) South 15 degrees 36 minutes 26 seconds East 550.74 feet to a point, and (2)
along the arc of a curve to the left (which arc is subtended by a chord having
a bearing and distance of South 17 degrees 36 minutes 26 seconds East 40.92
feet and a radius of 586.28 feet) 40.93 feet to an iron pin set; thence,
leaving said right-of-way line, South 03 degrees 24 minutes 08 seconds West
56.35 feet to a point; thence South 54 degrees 00 minutes 25 seconds West 95.79
feet to a point; thence South 63 degrees 02 minutes 08 seconds West 82.15 feet
to a point; thence South 72 degrees 51 minutes 23 seconds West 82.54 feet to a
point; thence South 53 degrees 13 minutes 16 seconds West 17.05 feet to an iron
pin set; thence South 83 degrees 41 minutes 54 seconds West 111.10 feet to a
point; thence South 20 degrees 36 minutes 23 seconds West 111.22 feet to a
point; thence South 35 degrees 00 minutes 04 seconds East 49.06 feet to a
point; thence South 24 degrees 16 minutes 46 seconds West 166.13 feet to a
point; thence North 70 degrees 35 minutes 32 seconds West 271.51 feet to a
point; thence North 5 degrees 13 minutes 19 seconds East 83.56 feet to a point;
thence North 87 degrees 39 minutes 46 seconds West 128.36 feet to a point;
thence North 51 degrees 05 minutes 15 seconds West 193.21 feet to a point on
the land lot line common to said Land Lots 800 and 856; thence, along said
common land lot line, North 0 degrees 45 minutes 20 seconds East 387.97 feet to
an iron pin set; thence, leaving said common land lot line, North 47 degrees 50
minutes 29 seconds East 227.23 feet to an iron pin found; thence North 62
degrees 09 minutes 30 seconds West 215.00 feet to an iron pin set; thence North
00 degrees 45 minutes 21 seconds East 120.00 feet to an iron pin found on the
land lot line common to said Land Lots 799 and 800; thence, along said common
land lot line, North 89 degrees 55 minutes 18 seconds East 25.0 feet to the
POINT OF BEGINNING, said tract containing approximately 17.31 acres as shown on
plat of As-Built Survey for: Roberts Properties Residential, L.P., Nationwide
Life Insurance Company, West Coast Life Insurance Company and Commonwealth Land
Title Insurance Company prepared by Construction Engineering Associates,
bearing the seal and certification of Milton R. Lemon, Georgia Registered
Professional Land Surveyor No. 1439, dated March 6, 1972, last revised March
21, 1996.
<PAGE> 33
EXHIBIT B
[Rent Roll for Laurelwood - Intentionally Omitted]
<PAGE> 1
EXHIBIT 10.22.1
ROBERTS REALTY INVESTORS, INC.
SOLICITATION AGREEMENT
May 8, 1996
Spalding & Company
Two Ravinia Drive
Suite 380
Atlanta, Georgia 30346
Ladies and Gentlemen:
The undersigned, Roberts Realty Investors, Inc., a Georgia corporation
(the "Company"); Roberts Properties Residential, L.P., a Georgia limited
partnership (the "Operating Partnership"); The Crestmark Club, L.P., a Georgia
limited partnership (the "Partnership"); and Charles S. Roberts (the "General
Partner"), hereby confirm their agreement with you as follows (the Company and
the Operating Partnership are hereinafter together referred to as the "REIT"):
1. INTRODUCTION.
A. The Operating Partnership, with the approval of the General Partner, is
proposing that the Partnership be merged into the Operating Partnership
pursuant to that certain Prospectus/Consent Solicitation Statement (the
"Prospectus") dated of even date herewith. As described in the Prospectus, the
merger will be effectuated if and only if a majority in interest of the Limited
Partners of the Partnership approves the merger on the terms described in the
Prospectus. The undersigned desire to retain you as the exclusive soliciting
agent for the consents of the Limited Partners required for the merger.
B. If you desire to participate in the solicitation of the consents of the
Limited Partners in the Partnership as described in the Prospectus (the
"Solicitation"), you should execute and return this Agreement to the REIT at
8010 Roswell Road, Suite 120, Atlanta, Georgia 30350. Upon approval and
acceptance of this Agreement by the REIT, this Agreement will take effect.
2. REPRESENTATIONS AND WARRANTIES OF THE REIT AND YOU.
A. The REIT represents and warrants to you that:
(i) The REIT has delivered to you the Prospectus (including all
exhibits and supplements thereto), which contains all the information
authorized by the REIT to be used in connection with the Solicitation.
(ii) The Company has been duly organized and is validly existing as a
corporation under the laws of the State of Georgia. The Company has the
requisite authority to own its properties and conduct its business as described
in the Prospectus, and the Company has the requisite power, authority,
authorization, approvals and orders to enter into this Agreement and to carry
out the provisions and conditions hereof.
(iii) The Operating Partnership has been duly organized and is validly
existing as a limited partnership under the laws of the State of Georgia. The
Operating Partnership has the requisite authority to own its properties and
conduct its business as described in the Prospectus, and the Operating
Partnership has the requisite power, authority, authorization, approvals and
orders to enter into this Agreement and to carry out the provisions and
conditions hereof.
<PAGE> 2
(iv) The Company is not in violation of its Articles of Incorporation
or By-Laws. Neither the execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, nor compliance with the
terms and conditions hereof will conflict with, or result in a breach of, any
of the terms, provisions or conditions of the Articles of Incorporation or
By-Laws of the Company, or of any agreement or instrument to which the Company
is a party or by which it is bound.
(v) The Operating Partnership is not in violation of its Agreement of
Limited Partnership. Neither the execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, nor compliance with the
terms and provisions hereof will conflict with, or result in a breach of, any
of the terms, provisions or conditions of such Agreement of Limited Partnership
or any agreement or instrument to which the Operating Partnership is a party or
by which it is bound.
(vi) The Units (as such term is defined in the Prospectus), upon the
issuance thereof in the merger, will conform to all statements in relation
thereto contained in the Prospectus, will be duly and validly authorized and
issued and fully paid, and will subject the holders thereof to no liability as
such holders except as set forth in the Prospectus; the REIT, upon such
issuance, will have an authorized and issued capitalization as set forth in the
Prospectus.
B. You represent and warrant to the REIT that:
(i) You have been duly organized and are validly existing as a
corporation under the laws of the State of Georgia. You have all such power,
authority, authorizations, approvals and orders to enter into this Agreement
and to carry out the provisions and conditions hereof.
(ii) You are, and will remain while this Agreement remains in effect,
and until all obligations hereunder to you or on your behalf have been
satisfied, a member in good standing of the NASD, and duly licensed as a
broker-dealer in any state in which you are required to be so licensed in order
to conduct the Solicitation in compliance with the terms of the Prospectus.
(iii) You have not made, and will not make, any representations in
connection with the Solicitation other than those set forth in the Prospectus
or any amendment thereof or supplement thereto, as approved by the REIT, to any
person.
(iv) You will deliver a Prospectus to each Limited Partner at the
time you solicit such Limited Partner's consent.
(v) You will offer and/or sell the Units pursuant to the
Solicitation only to bona fide residents of the State of Georgia, provided
that you may contact and deliver Prospectuses to Limited Partners who no longer
reside in the State of Georgia to obtain their consent to the merger described
in the Prospectus with the express understanding that such Limited Partners will
receive in the merger only cash as described in the Prospectus rather than
Units.
(vi) All information furnished to the REIT with respect to you is true
and correct and does not omit any material fact required to make such
information not misleading.
(vii) All actions, direct or indirect, by you and your agents,
employees and affiliates in connection with the offer and sale of the Units
pursuant to this Agreement will conform to Section 3(a)(11) of the Securities
Act of 1933, as amended (the "Act"), to Rule 147 of the Regulations promulgated
under the Act, and to all applicable state securities laws and regulations.
2
<PAGE> 3
(viii) You do not have and will not have any authority to execute a
transaction in a discretionary account.
3. COMPENSATION.
A. On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Operating Partnership hereby retains you as exclusive sales agent to conduct
the Solicitation, and you agree to use your best efforts to effect such
Solicitation. As compensation for such services as solicitation agent, the
Operating Partnership agrees to pay you a fee of Fifty Thousand Dollars
($50,000) for your services as described in this Agreement, such fee to be paid
whether or not any particular Limited Partner votes affirmatively or negatively
on the proposed merger, but only if a majority in interest of the Limited
Partners of the Partnership approves the proposed merger.
B. The foregoing fee shall be paid to you upon the latter of (a) the
closing of the merger, or (b) the date on which properly executed ballots from
all Limited Partners have been received by the Partnership, provided that if
the merger does not receive the requisite approval of the Limited Partners or
for any other reason is not closed as contemplated in the Prospectus, such fee
shall not be paid and reimbursed, respectively, to you.
C. The Operating Partnership agrees to pay the costs of the Solicitation,
provided that the fee shall be payable to Spalding & Company by the Operating
Partnership only as provided above in this Section 3. In no event shall the
Partnership or its Limited Partners be required to pay the fee to Spalding &
Company or the other expenses of the Solicitation.
4. SOLICITATION. On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth, you
shall conduct the Solicitation pursuant to, and upon the terms and conditions
set forth in, the Prospectus.
5. COVENANTS OF THE REIT AND YOU.
A. The REIT covenants and agrees that:
(i) The REIT will deliver to you such number of copies of the
Prospectus or any amendment or supplement thereto approved by the General
Partner, with all supplements and exhibits, as you may reasonably request for
the purposes contemplated by the Act.
(ii) If at any time any event occurs as a result of which, in the
opinion of the REIT, the Prospectus would include an untrue statement of
material fact or, in view of the circumstances under which they were made, omit
to state any material fact necessary to make the statements therein not
misleading, the REIT will notify you thereof (unless the information shall have
been received from you) and will effect the preparation of an amended
Prospectus or supplement thereto that will correct such statement or omission.
The REIT will deliver to you as many copies of such amended Prospectus or
supplement thereto as you may reasonably request, and you will distribute same.
B. You covenant and agree that you and all of your agents, representatives
and employees will:
(i) comply with all requirements imposed upon you by the Act, by the
Regulations thereunder, and by the securities laws and regulations of the State
of Georgia, to permit the continuance of the Solicitation, in accordance with
the provisions hereof and the Prospectus;
3
<PAGE> 4
(ii) comply in all respects with Section 3(a)(11) of the Act, Rule 147
promulgated by the Securities and Exchange Commission under the Act, and all
applicable state and federal laws and regulations in connection with the offer
and sale of the Units pursuant to this Agreement;
(iii) make offers of Units, pursuant to the terms of the merger as
described in the Prospectus, only to bona fide residents of the State of
Georgia;
(iv) comply in all respects with all provisions of subsections 4 and
5 of Section 34 of Article III of the Rules of Fair Practice of the NASD, and in
that regard you and all of your agents, representatives and employees will:
(1) prior to your participation in the Solicitation, review the
Prospectus and all other information and materials sufficient for you to
conclude that all material facts are adequately and accurately disclosed and
provide a basis for evaluating whether to consent to the merger;
(2) review and discuss with the General Partner certain items
regarding the adequacy of disclosure in the Prospectus, including but not
limited to
(a) items of compensation;
(b) physical properties;
(c) tax aspects;
(d) financial stability and experience of the General
Partner;
(e) the conflicts and risk factors in consenting to the
merger; and
(f) appraisals and other pertinent reports; and
(3) prior to receiving a consent, inform the Limited Partner of
all pertinent facts relating to the liquidity and marketability of the Units.
6. INDEMNIFICATION.
A. The Operating Partnership will indemnify you, your officers, directors,
agents, employees and attorneys (collectively, the "Spalding Parties") and hold
the Spalding Parties and each of them harmless against any losses, claims,
damages or liabilities that the Spalding Parties or any of them may suffer
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Prospectus or any amendment
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statement therein in light of the circumstances under which they were
made not misleading; and will reimburse the Spalding Parties for any legal or
other expenses reasonably incurred by the Spalding Parties or any of them in
connection with investigating or defending any such action or claim; provided,
however, that the Operating Partnership shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any misrepresentation or breach of warranty by you hereunder or an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Prospectus or any amendment thereto in reliance upon and in
conformity with information furnished by you.
B. You agree to indemnify the Operating Partnership, the Partnership, the
Company, the General Partner, and their officers, directors, agents, employees
and attorneys (collectively, the "Roberts Parties") and hold the Roberts
Parties and each of them harmless against any losses,
4
<PAGE> 5
claims, damages or liabilities to which the Roberts Parties or any of them may
become subject, under (i) the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Prospectus or any amendment thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
in light of the circumstances under which they were made not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Prospectus or any amendment thereto in reliance upon and in conformity with the
information furnished to us by you; or (ii) under the Act or otherwise, for any
breach of any of the provisions of paragraph 2(B); or (iii) under the Act or
otherwise, for any unauthorized oral or written representations made by you,
your agents, employees or affiliates in connection with the Solicitation; or
(iv) any actions, direct or indirect, in connection with the Solicitation by
you, your agents, employees or affiliates in violation of Section 3(a)(11) of
the Act, Rule 147 issued thereunder, or any applicable state securities laws;
and to reimburse the Roberts Parties for any legal or other expenses reasonably
incurred by the Roberts Parties in connection with the investigation or defense
of any such action or claim.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE MERGER AND PAYMENT. Except
as the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements at the date of closing of the merger; and such
representations, warranties and agreements shall remain operative and in full
force and effect regardless of any investigation made by you or on your behalf,
or any controlling person, or by or on behalf of the Roberts Parties or any
controlling person, and shall survive the sale of, and payment for, the Units.
8. TERMINATION OF THIS AGREEMENT. The Operating Partnership shall have the
right to withdraw the Solicitation and to terminate this Agreement as provided
in the Prospectus, in which event you shall not be paid the fee as provided in
Section 3 above.
9. NOTICES. All notices provided for by this Agreement shall be made in
writing either (i) by actual delivery of the notice into the hands of the
parties thereunto entitled, or (ii) by the mailing of the notice in the United
States mails to the address, as stated below (or at such other address as may
have been designated by written notice), of the party entitled thereto, by
certified or registered mail, return receipt requested. The notice shall be
deemed to be received in case (i) on the date of its actual receipt by the
party entitled thereto; and, in case (ii), two business days after the date of
deposit in the United States mails.
All communications hereunder, except as herein otherwise specifically
provided, shall be in writing and, if sent to you, shall be mailed or delivered
to you at:
Spalding & Company
Two Ravinia Drive, Suite 380
Atlanta, Georgia 30346
Attention: Ms. Madeline D. Salter
and if sent to the Operating Partnership, the Partnership, the Company, the
General Partner, or Roberts shall be mailed or delivered to:
Roberts Properties Residential, L.P.
c/o Charles S. Roberts
8010 Roswell Road
Suite 120
Atlanta, Georgia 30350
5
<PAGE> 6
10. CONSTRUCTION. This Agreement shall be governed by, subject to, and
construed in accordance with the laws of the State of Georgia.
11. SEVERABILITY. If any portion of this Agreement shall be held invalid
or inoperative, then, so far as is reasonable and possible, (i) the remainder
of this Agreement shall be considered valid and operative, and (ii) effect
shall be given to the intent manifested by the portion held invalid or
inoperative.
12. MULTIPLE COUNTERPARTS. This Agreement may be executed in a number of
identical counterparts, each of which shall be deemed to be an original, but
all of which constitute, collectively, one and the same agreement; but in
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart.
13. MODIFICATION OR AMENDMENT. This Agreement may not be modified or
amended except by written agreement executed by the parties hereto.
14. NUMBER AND GENDER OF WORDS. Whenever the context so requires, the
masculine shall include the feminine and neuter, and the singular shall include
the plural, and conversely.
15. OTHER INSTRUMENTS. The parties hereto covenant and agree that they
will execute such other and further instruments and documents as are or may
become necessary or convenient to effectuate and carry out this Agreement.
16. CAPTIONS. The captions used in this Agreement are for convenience
only
and shall not be construed in interpreting this Agreement.
17. PARTIES. This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto, the controlling persons referred to in Section 7
hereof, and their respective successors, legal representatives and assigns, and
no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Agreement or
any provision herein contained.
18. ENTIRE AGREEMENT. This Agreement contains the entire understanding
among the parties and supersedes any prior understandings or written or oral
agreements among them respecting the subject matter hereof.
If the foregoing correctly sets forth our understanding, please so
indicate in the space below for that purpose and return this Agreement to the
Operating Partnership at 8010 Roswell Road, Suite 120, Atlanta, Georgia 30350,
and, upon approval and acceptance by the REIT and the General Partner, this
letter shall constitute a binding agreement among us.
Very truly yours,
ROBERTS PROPERTIES RESIDENTIAL, L.P.,
a Georgia Limited Partnership
By: Roberts Realty Investors, Inc.,
its General Partner
By: /s/ Charles S. Roberts
-----------------------------
Charles S. Roberts, President
[CORPORATE SEAL]
[Executions continue on next page.]
6
<PAGE> 7
ROBERTS REALTY INVESTORS, INC., a
Georgia corporation
By: /s/ Charles S. Roberts
-----------------------------------
Charles S. Roberts, President
[CORPORATE SEAL]
THE CRESTMARK CLUB, L.P., a Georgia
limited partnership
By: /s/ Charles S. Roberts
-----------------------------------
Charles S. Roberts, General Partner
Agreed and Accepted:
SPALDING & COMPANY
By: /s/ Madeline D. Salter
-----------------------------
Madeline D. Salter, President
7
<PAGE> 1
EXHIBIT 10.22.2
MERGER AGREEMENT AND PLAN OF MERGER
This Merger Agreement and Plan of Merger (this "Agreement") is by and
among Roberts Realty Investors, Inc., a Georgia corporation (the "Company"),
Roberts Properties Residential, L.P., a Georgia limited partnership (the
"Operating Partnership"), The Crestmark Club, L.P., a Georgia limited
partnership (the "Partnership"), Charles S. Roberts, a resident of Georgia
("CSR"), James M. and Penelope H. Goodrich, both residents of Georgia
(collectively "Goodrich"), and Norman A. Goldman, a resident of Georgia
("Goldman," CSR, Goodrich and Goldman being collectively referred to
hereinafter as the "Cash Suppliers").
ARTICLE I
THE TRANSACTIONS AND CERTAIN EFFECTS
SECTION 1.1. VALUES. The parties hereby agree as follows as respects
relevant values immediately prior to the time (the "Closing Time") of
consummation of the Transactions (as hereinafter defined), assuming in all
cases that the relevant businesses and activities of the parties shall be
carried on and continued as contemplated.
(a) The value of a unit of interest in the Operating Partnership (the
"Unit Value") will be Nine and Three-Quarters Dollars ($9.75).
(b) The value of the assets of the Partnership, net of the liabilities of
the Partnership (the "Partnership Value"), will be Seven Million, Two Hundred
Seventy-Nine Thousand, Eight Hundred Thirty-One Dollars ($7,279,831).
SECTION 1.2. THE TRANSACTIONS. At the Closing Time, the following
transactions (individually a "Transaction" and collectively the "Transactions")
shall be effected, subject to and in accordance with the provisions of this
Agreement.
(a) The Partnership will transfer all of its assets to the Operating
Partnership, in exchange for which the Operating Partnership will (i) assume
all of the liabilities of the Partnership and (ii) subject to subsection (c),
issue to the Partnership the number of units in the Operating Partnership equal
to the mathematical quotient of the Partnership Value divided by the Unit
Value.
(b) The Partnership will liquidate, and in connection therewith the
Partnership will distribute the units so received to its partners, with its
general partner receiving 44,509 units for his general partner interest and its
limited partners collectively receiving the balance of such units, to be
divided among them in proportion to their respective "ownership percentages" in
the Partnership, as that term is employed within the partnership agreement of
the Partnership.
<PAGE> 2
(c) No fractional units will be issued in connection with the Transactions
described in the preceding subsections. If, in connection with the liquidation
described in subsection (b), a partner in the Partnership would, but for this
subsection (c), receive a fractional unit, then (i) if such fraction is less
than one-half, such fractional unit shall be disregarded, (ii) if such fraction
is greater than one-half, such partner shall be issued a whole unit instead of
such fractional unit, or (iii) if such fraction is equal to one-half, such
fractional unit shall be disregarded or replaced by a whole unit so as to
produce an even number of units issuable in the aggregate to such partner in
connection with such liquidation. The number of units to be issued in
connection with the transfer described in subsection (a) shall equal the number
of units to be distributed in the liquidation described in subsection (b), as
adjusted pursuant to this subsection (c).
(d) Any reference herein to an assumption of liabilities shall mean, in
the case of a nonrecourse liability, the taking of such property as is pledged
or otherwise legally available for payment of such liability subject to such
liability without imposition of responsibility beyond such property.
(e) Notwithstanding any provision hereof to the contrary, in the case of a
partner in the Partnership who or which is not a bona fide resident of the
State of Georgia, (i) such partner shall not receive any units in the Operating
Partnership, but instead such partner shall receive cash in the amount of the
mathematical product of (x) Nine and One-Quarter Dollars ($9.25) and (y) the
number of units which such partner would receive but for this subsection (e),
(ii) the Cash Suppliers shall, as more particularly provided in subsection (f),
supply the cash to be received by such partner, and (iii) the Cash Suppliers
shall, as more particularly provided in subsection (f), receive the units which
such partner would receive but for this subsection (e).
(f) Of the cash required by subsection (e) with respect to all partners in
the Partnership who or which are not bona fide residents of Georgia in the
aggregate: (i) Goodrich shall supply Two Hundred Thousand, Three and One-Half
Dollars ($200,003.50); (ii) Goldman shall supply One Hundred Thousand, One and
Three-Quarters Dollars ($100,001.75); and (iii) CSR shall supply the balance.
Of the units of interest in the Operating Partnership which, but for subsection
(e), all partners in the Partnership who or which are not bona fide residents
of Georgia would receive in the aggregate: (x) Goodrich shall receive
Twenty-One Thousand, Six Hundred Twenty-Two (21,622); (y) Goldman shall receive
Ten Thousand, Eight Hundred Eleven (10,811); and (z) CSR shall receive the
balance.
SECTION 1.3. IMPLEMENTATION. As a convenience to the parties and their
respective partners and shareholders, and to minimize transaction costs, the
Transactions shall be effected by a statutory merger of the Partnership with
and into the Operating Partnership, pursuant to which (a) the Operating
Partnership shall survive and succeed to the assets and liabilities of the
Partnership, (b) each of the former partners in the Partnership shall receive
-2-
<PAGE> 3
the number of units in the Operating Partnership (or cash) to which he is
entitled pursuant to subsections 1.2(b) and (c) or 1.2(e), as applicable, and
(c) each of the Cash Suppliers shall deliver such cash as may be required of
him or them, and shall receive the number of units (if any) to which he is or
they are entitled, pursuant to subsections 1.2(e) and (f). The merger
described in this section 1.3 is hereinafter referred to as the "Merger."
SECTION 1.4. CERTAIN EFFECTS. When the Merger shall have become
effective, the separate existence of the Partnership shall cease and it shall
be merged into the Operating Partnership, which shall possess all of its former
rights, privileges, powers and franchises of a public as well as of a private
nature, and shall continue to be subject to all of its former restrictions,
disabilities and duties; and all property, real, personal and mixed, and all
debts due to the Partnership on whatever account, as well as all other things
in action or belonging to the Partnership, shall be vested in the Operating
Partnership; and the title to any real estate vested by deed or otherwise,
under the laws of Georgia or any other jurisdiction, in the Partnership shall
not revert or be in any way impaired by reason of the Merger, but all rights of
creditors and all liens upon any property of the Partnership shall be preserved
unimpaired, and all debts, liabilities and duties of the Partnership shall
thenceforth attach to the Operating Partnership and may be enforced against the
Operating Partnership to the same extent as if said debts, liabilities and
duties had been incurred or contracted by the Operating Partnership.
SECTION 1.5. APPROVALS. The Partnership shall, at the Operating
Partnership's expense, seek the requisite approval of its limited partners as
to the ratification, confirmation, adoption and performance of this Agreement
and the authorization of the filing of all appropriate documents.
SECTION 1.6. FURTHER ASSURANCES. At any time and from time to time prior
to and at the Closing Time, the parties shall execute and deliver all such
proper deeds, assignments and other instruments and take or cause to be taken
all such further or other action necessary or desirable to effect the purposes
of this Agreement. At any time and from time to time after the Closing Time,
the last general partner of the Partnership or the officers of the Company may
in the names of the Partnership execute and deliver all such proper deeds,
assignments and other instruments and take or cause to be taken all such
further or other action necessary or desirable in order to vest, perfect or
confirm in the Operating Partnership title to, and possession of, all of the
property, rights, privileges, powers, franchises, immunities, and interests of
the Partnership, as the case may be, and otherwise to carry out the purposes of
this Agreement.
SECTION 1.7. FOUNDATION DOCUMENTS. The articles of incorporation and
bylaws of the Company, and the partnership agreement of the Operating
Partnership, shall be unaffected by the Merger. Nothing contained herein shall
be construed as precluding any amendment to any such document at any time after
the Closing Time.
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<PAGE> 4
SECTION 1.8. BOARD OF DIRECTORS AND OFFICERS. Upon consummation of the
Merger, the Board of Directors of the Company in office as of the Closing Time
shall continue to be the Board of Directors of the Company, shall continue to
act as such and shall hold office until their successors are elected and shall
have been duly qualified. The officers of the Company in office as of the
Closing Time shall continue to be the officers of the Company, shall continue
to act as such and shall hold office until their successors are elected in
accordance with the bylaws of the Company and shall have been duly qualified.
If, at or after the Closing Time, a vacancy shall exist in the Board of
Directors or in any of the offices of the Company by reason of death, inability
to act, or any other reason, such vacancy may be filled in the manner provided
in the bylaws of the Company. Nothing contained herein shall be construed as
precluding any change in directors or officers of the Company at any time after
the Closing Time.
SECTION 1.9. TAX CHARACTERIZATION. It is the intention of the parties
hereto that the Transactions will be considered, for federal income tax
purposes, as (a) taxable purchases by the Cash Suppliers of the interests in
the Partnership of persons who are not bona fide residents of the State of
Georgia, and (b) a tax-deferred transaction described in section 721 of the
Code in which the Partnership contributes assets to the Operating Partnership
in exchange for units in the Operating Partnership, coupled with a liquidation
of the Partnership described in section 731 of the Code.
SECTION 1.10. EFFECTIVE TIME. To the extent permitted by law, the
Transactions will be deemed to have been consummated as of the beginning of the
month in which the Closing Time occurs.
ARTICLE II
CONDITIONS
SECTION 2.1. CONDITIONS. Notwithstanding any other provision of this
Agreement, each of the following shall be a condition to the obligation of each
party to consummate the Transactions:
(a) The Transactions shall have been validly approved by the requisite
vote or written consent of the limited partners in the Partnership;
(b) All requisite approvals shall have been obtained from all courts,
governmental agencies, authorities, bureaus, offices and other bodies, and all
applicable waiting periods in connection therewith shall have expired;
(c) No preliminary or permanent injunction or other order by any federal
or state court which prevents the consummation of the Transactions shall have
been issued and shall remain in effect;
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<PAGE> 5
(d) There shall not have been instituted or be pending any action or
proceeding by any person challenging or seeking to restrain or prohibit the
consummation of the Transactions or seeking material damages in connection with
the Transactions; and
(e) Each other party shall be ready, willing and able to consummate the
Transactions, and all of the Transactions involving each other party shall have
been consummated or shall simultaneously be consummated.
ARTICLE III
TERMINATION, AMENDMENT AND WAIVER
SECTION 3.1. TERMINATION. This Agreement may be terminated at any time
prior to the Closing Time, whether before or after approval by the limited
partners in the Partnership, by the giving of notice by any party to all other
parties.
SECTION 3.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided above, this Agreement shall forthwith become
prospectively void and there shall be no liability hereunder on the part of any
person or its respective officers or directors, except that (a) the provisions
of section 4.1 shall continue in effect, and (b) any pre-termination breach
hereof shall be actionable by the non-breaching party or parties.
SECTION 3.3. AMENDMENT. This Agreement may be amended, modified or
supplemented by the parties hereto at any time prior to the Closing Time,
before or after approval hereof by the limited partners in the Partnership, but
after such approval no amendment, modification or supplement shall be made
which materially adversely affects the rights of the limited partners in the
Partnership without the further approval of the requisite collection of such
limited partners. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
SECTION 3.4. WAIVER. At any time prior to the Closing Time, any party
may waive satisfaction of the condition described in subsection 2.1(d). Any
agreement on the part of a party hereto to any such waiver shall be valid if
and only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE IV
GENERAL PROVISIONS
SECTION 4.1. EXPENSES. Whether or not the Transactions are consummated,
all legal and other costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby, including but not limited
to all expenses incurred in seeking the requisite consents of the limited
partners of the Partnership, shall be paid by the Operating Partnership.
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SECTION 4.2. CLOSING. The closing of the transactions contemplated by
this Agreement shall take place: (a) (i) as soon as practicable after the
requisite approvals of the limited partners in the Partnership have been
obtained (ii) at the offices of Holt, Ney, Zatcoff & Wasserman, Suite 600, 100
Galleria Parkway, Atlanta, Georgia 30339, provided that each of the conditions
set forth in section 2.1 shall have been satisfied or waived; or (b) at such
other time and place as the parties shall have unanimously agreed upon.
SECTION 4.3. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed sufficiently given if delivered
personally, transmitted by facsimile which the sender's facsimile machine
indicates has been sent (in the case of an addressee whose facsimile number is
supplied), sent by Federal Express or similar courier, or mailed by registered
or certified mail (return receipt requested), charges or postage prepaid, to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to the Company, to:
Roberts Realty Investors, Inc.
Attention: Charles S. Roberts
8010 Roswell Road, Suite 120
Atlanta, Georgia 30350
Fax: 770-396-0706
(b) if to the Operating Partnership, to:
Roberts Properties Residential, L.P.
Attention: Charles S. Roberts
8010 Roswell Road, Suite 120
Atlanta, Georgia 30350
Fax: 770-396-0706
(c) if to the Partnership, to:
The Crestmark Club, L.P.
Attention: Charles S. Roberts
8010 Roswell Road, Suite 120
Atlanta, Georgia 30350
Fax: 770-396-0706
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(d) if to CSR, to:
Charles S. Roberts
8010 Roswell Road, Suite 120
Atlanta, Georgia 30350
Fax: 770-396-0706
(e) if to Goodrich, to:
James M. and Penelope H. Goodrich
524 Manor Ridge Drive
Atlanta, Georgia 30305
Fax 404-352-1640
(f) if to Goldman, to:
Norman A. Goldman
c/o Digitec
14 Seventeenth St., N.E.
Atlanta, Georgia 30309
Fax 404-881-9804
Unless otherwise provided, notices shall be effective on the earlier of (x)
actual delivery, (y) the date of transmission, if by facsimile, or (z) as
applicable, either (i) the first business day following the date of deposit
with a qualified courier service or (ii) the third business day following the
date of deposit with the United States Post Office or in a regularly maintained
receptacle for the deposit of United States Mail. Any refusal to accept
delivery of any such communication shall be considered successful delivery
thereof.
SECTION 4.4. HEADINGS. The descriptive headings of the several articles
and sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
SECTION 4.5. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
SECTION 4.6. ASSIGNMENT. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of all other parties
hereto. This Agreement (inclusive of the
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<PAGE> 8
attachments hereto) supersedes all prior agreements and understandings between
the parties with respect to its subject matter.
SECTION 4.7. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which (consisting of one set of textual pages and one or
more signature pages, each signed by one or more parties and collectively
exhibiting the signatures of all parties), shall be deemed an original and all
of which shall constitute one agreement, and the signatures of any party to any
counterpart shall be deemed to be a signature to, and may be appended to, any
other counterpart.
SECTION 4.8. REMEDIES. In addition to any other remedies specifically
provided in this Agreement, the parties may seek such other remedies as may
generally be available at law or in equity. All remedies provided in this
Agreement or by law or equity shall be cumulative.
SECTION 4.9. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Georgia (regardless of the laws that might be applicable under
principles of conflicts of law) as to all matters, including, but not limited
to, matters of validity, construction, effect and performance.
SECTION 4.10. INTEREST. Any damages for breach hereof shall bear and be
considered to include interest from the date of such breach until satisfaction
at the rate of twelve percent (12%) per annum, compounded monthly.
SECTION 4.11. EFFECTIVE DATE. This Agreement shall be effective upon its
execution by the last signing party.
DULY EXECUTED by the parties hereto on the dates indicated.
Signed, sealed and delivered in the Roberts Realty Investors, Inc.
presence of:
By:/s/ Charles S. Roberts
/s/ Charles R. Elliott -----------------------------
- ------------------------------------- Charles S. Roberts, President
Unofficial Witness
/s/ Leslie A. Camp (CORPORATE SEAL)
- -------------------------------------
Notary Public Date: June 22, 1996
(NOTARY SEAL)
(signatures continue next page)
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<PAGE> 9
<TABLE>
<S> <C>
Signed, sealed and delivered in Roberts Properties Residential, L.P.
the presence of: By: Roberts Realty Investors, Inc., its sole
/s/ Charles S. Elliott general partner
- -------------------------------
Unofficial Witness
/s/ Leslie A. Camp By:/s/ Charles S. Roberts
- ------------------------------- --------------------------
Notary Public Charles S. Roberts, President
(NOTARY SEAL) (CORPORATE SEAL)
Date: June 22, 1996
Signed, sealed and delivered in The Crestmark Club, L.P.
the presence of:
By:/s/ Charles S. Roberts (SEAL)
------------------------------------
/s/ Charles R. Elliott Charles S. Roberts, General Partner
- -------------------------------
Unofficial Witness
/s/ Leslie A. Camp Date: June 22, 1996
- -------------------------------
Notary Public
(NOTARY SEAL)
Signed, sealed and delivered in
the presence of:
/s/ Charles R. Elliott /s/ Charles S. Roberts (SEAL)
- ------------------------------- -------------------------------------
Unofficial Witness Charles S. Roberts
/s/ Leslie A. Camp
- ------------------------------- Date: June 22, 1996
Notary Public
(NOTARY SEAL)
Signed, sealed and delivered in
the presence of:
/s/ Charles R. Elliott /s/ James M. Goodrich (SEAL)
- ------------------------------- ------------------------------------
Unofficial Witness James M. Goodrich
/s/ Leslie A. Camp Date: June 25, 1996
- -------------------------------
Notary Public
(NOTARY SEAL)
</TABLE>
(signatures continue next page)
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<PAGE> 10
Signed, sealed and delivered in the
presence of:
/s/ Charles R. Elliott /s/ Penelope H. Goodrich (SEAL)
- ----------------------- -----------------------------------
Unofficial Witness Penelope H. Goodrich
/s/ Leslie A. Camp Date: June 25, 1996
- -----------------------
Notary Public
(NOTARY SEAL)
Signed, sealed and delivered in the
presence of:
/s/ Valencia Dudley /s/ Norman A. Goldman (SEAL)
- ----------------------- -----------------------------------
Unofficial Witness Norman A. Goldman
/s/ Carol S. Davis
- -----------------------
Notary Public Date: June 21, 1996
(NOTARY SEAL)
10
<PAGE> 1
EXHIBIT 10.22.3
PROPERTY MANAGEMENT AGREEMENT
THIS AGREEMENT, made and entered into this 11th day of January, 1991, by
and between THE CRESTMARK CLUB, L.P., a Georgia limited partnership
(hereinafter referred to as "Owner") and ROBERTS PROPERTIES MANAGEMENT, INC., a
Georgia corporation (hereinafter referred to as "Manager"),
W I T N E S S E T H:
WHEREAS, Owner is the owner of a 246-unit extended stay suites inn that
shall contain approximately 245,700 net rentable square feet on approximately
23.41 acres of land located near Thornton Road in Douglas County, Georgia
(hereinafter referred to as the "Project"), and desires to obtain the benefit
of Manager's expertise in the operation and management of the Project; and
WHEREAS, Manager desires to make its services available to Owner upon the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the premises and mutual
promises and covenants herein contained, Owner and Manager agree as follows:
ARTICLE I
DEFINITIONS
1.1 Project. That certain real property described in Exhibit "A"
attached hereto, and hereby incorporated by reference, the grounds,
improvements, parking areas and appurtenances incidental thereto and connected
therewith.
1.2 Management Fee. Shall be in an amount and shall be paid in
accordance with the provisions of Article IV hereof.
1.3 Operating Year. A full year of operation of the Project under this
Agreement coinciding with Owner's fiscal year adopted for accounting purposes.
If the commencement date of this Agreement does not coincide with the
commencement date of Owner's fiscal year, then the term "Partial Operating
Year" shall refer to the partial year that precedes the first full fiscal year.
1.4 Gross Revenues. All revenues and receipts of every kind received or
derived from the operation of the Project.
<PAGE> 2
1.5 Executive Staff. The manager and other executives of Manager in
charge of or responsible for the operation of the Project. For purposes of
Section 4.2 hereof, the term Executive Staff shall not include those persons
employed by Manager on the Project site.
ARTICLE II
TERM
The term of this Agreement shall be for an initial period, commencing on
the date hereof, and continuing through December 31, 1995 and shall thereafter
be automatically renewed for successive one (1) year terms unless terminated in
accordance with the provisions of Article VII hereof.
ARTICLE III
DUTIES, RESPONSIBILITIES AND
AUTHORITY OF MANAGER
During the term of this Agreement, Owner hereby grants to Manager the sole
and exclusive authority, for and on behalf of Owner, to manage and operate the
Project as agent of Owner. Without limiting the generality of the foregoing,
Owner grants to Manager the sole and exclusive authority to do, and Manager
agrees to do for and on behalf of Owner, the following:
3.1 To supervise and direct the operation and management of the Project
so as to provide such services as are customarily provided by extended stay
suites inns of comparable class and standing consistent with the facilities of
the Project, and to consult with Owner and to keep Owner advised as to all
major policy matters affecting the Project. In this connection, Manager shall
have all reasonable discretion in the direction and supervision of the
operation and management of the Project.
3.2 To submit within thirty (30) days prior to each Operating Year, a
budget for expenditures in reasonable detail for each such Operating Year,
which shall include a schedule of anticipated repairs and maintenance projects
and capital replacements. Such budget shall, in general, form the basis on
which expenditures for the Project shall be made, it being understood that
Manager may deviate from such budget if, in Manager's reasonable judgment, a
deviation is necessary or desirable for the efficient operation of the Project.
The budget items are intended as reasonable estimates only.
3.3 To maintain full and accurate books reflecting the operation and
management of the Project, showing all receipts and expenditures, assets and
liabilities, profits and losses, and all other records necessary for recording
the business and affairs of the operation and management of the Project. All
funds
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<PAGE> 3
received by Manager as a result of the operation and management of the Project
shall be deposited in the name of Owner in such checking and savings accounts
or time certificates as shall be designated by Owner. Withdrawals therefrom
shall be made upon the signature of an authorized representative of Manager or
Owner.
3.4 To negotiate and enter into contracts for the furnishing to the
Project of telephone, cleaning (including window cleaning where necessary),
vermin exterminators, boiler maintenance, air conditioning maintenance and
other utilities and services which are provided in connection with the
management and operation of the Project in accordance with standards comparable
to those prevailing in other such extended stay suites inns.
3.5 To supervise and direct the making or installation of all necessary
or desirable repairs, decorations, renewals and alternations in and to the
Project and the furnishings and equipment.
3.6 To apply for, obtain and maintain on behalf and in the name of Owner,
all licenses and permits required of Owner in connection with the management
and operation of an extended stay suites inn. Owner agrees to execute and
deliver any and all applications and other documents and to otherwise cooperate
to the fullest extent with Manager in applying for, obtaining and maintaining
such licenses and permits.
3.7 To direct and supervise the payment by Owner of all costs and
expenses incurred in managing and operating the Project, including the
following:
(a) All costs and expenses of advertising or business promotion
relating to the Project;
(b) All expenditures, which are of an ordinary nature, or which
have been covered in the budget, for repairs and maintenance or capital
improvements;
(c) Premiums for insurance maintained in connection with the
Project and the operation and management thereof;
(d) Legal and accounting fees;
(e) The Management Fee due Manager pursuant to this Agreement,
including reimbursable expenses;
(f) Cost and expense of utilities and services of the Project and
any and all other expenditures provided for in this Agreement; and
(g) Any other charge, item or expense which Owner directs to be paid.
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<PAGE> 4
3.8 Manager and Owner shall meet when requested by Owner to review the
results of operation of the Project. All statistical and operating information
required for such meetings shall be furnished by the Executive Staff from the
books and records of the Project.
3.9 In the performance of its duties hereunder, Manager shall act solely
on behalf of and as agent for Owner and not in its own behalf; therefore, all
debts, obligations and other liabilities incurred by Manager pursuant to
subparagraphs 3.8(a) and 3.8(g) hereof shall be incurred on behalf of Owner,
and Manager shall not be liable or responsible for the payment of any such
debts, obligations or other liabilities. If any such debts or obligations are
paid by Manager, it shall be entitled to reimbursement therefor.
ARTICLE IV
MANAGEMENT FEE
As compensation for the services to be rendered by Manager during the term
of this Agreement, Owner shall pay to Manager the Management Fee as hereinafter
set forth, and shall pay to Manager the reimbursement expenses as hereinafter
set forth, at such place as Manager may designate:
4.1 Owner shall pay to Manager an amount equal to six percent (6%) of the
Gross Revenues of the Project for each month that this Agreement shall be in
effect, with each such monthly payment to be made not later than the 25th day
of the following month.
4.2 Manager shall be entitled to reimbursement on a monthly basis of
out-of-pocket expenses incurred by it in the proper performance of its duties
under Article III hereof; provided, however, Manager shall not be entitled to
reimbursement for its internal general administrative expenses including, but
not limited to, employee payroll and federal withholding taxes for its
Executive Staff.
4.3 In no event shall the Management Fee due hereunder be paid by Owner
to Manager if Owner should be in default under the terms of any mortgage note
or other obligation secured by the Project.
4.4 Should Owner elect to sell the Project during the term of this
Agreement, Manager shall be entitled to select a licensed real estate
brokerage firm, including itself if so licensed or any company affiliated
with Manager, to have an exclusive listing of the Project at a sales price to
be determined by Owner, at a commission rate not to exceed five percent (5%)
of the property sold, to be paid upon closing. The listing granted herein
shall be for a period of three (3) years following the giving of notice by
Owner to Manager of its intention to sell. In lieu of the foregoing, Manager
or its affiliate may render consulting services in
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<PAGE> 5
connection with the sale of the Project and receive a consulting fee upon such
sale not to exceed five percent (5%) of the property sold, to be paid upon
closing.
4.5 Owner shall pay any leasing commissions or fees to outside real
estate agents.
ARTICLE V
GENERAL
5.1 Manager shall supervise and direct the keeping of books of account
and such other records reflecting the results of operation of the Project.
5.2 Nothing contained in this Agreement shall constitute or be construed
to constitute or to create a partnership or joint venture between Owner and
Manager. Owner shall be solely liable for all the costs, expenses and other
liabilities incurred in maintaining and operating the Project, and Owner shall
receive all the revenues derived therefrom. Manager shall only be entitled to
the Management Fee and reimbursable expenses, and Manager shall have no
liability or responsibility for any of the costs, expenses or other liabilities
incurred in the maintenance and operation of the Project.
5.3 Owner takes cognizance that the supervision and direction of
operation and management, including the direction and supervision of the
Executive Staff and the formulation of policies for the operation of the
Project, must emanate from one source of authority. Therefore, Owner delegates
to Manager the sole right to direct and supervise the operations and the
management of the Project, including the Executive Staff, without interference
from Owner. Nothing herein is intended to limit or restrict Owner's complete
access to the Project and the books and records of the Project for any purpose
which Owner in its discretion may deem advisable. All major policy decisions
affecting the Project shall be the prerogative of Owner, but Owner shall accord
to Manager the right to enter into discussions relative to such major policy
decisions and the announcement and/or implementation of such decisions shall be
made by Manager.
5.4 In the performance of this Agreement, Manager shall not be liable to
Owner or to any other person for any act or omission of any officer, agent or
employee of Owner, and Owner agrees to hold harmless and indemnify Manager
against any claims of third persons arising from such acts of Owner's officers,
agents or employees. Manager shall not be liable to Owner for any act or
omission of Manager, its officers, agents and employees in the performance of
its duties hereunder, except such as result from fraud or gross negligence.
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<PAGE> 6
ARTICLE VI
NOTICES
Any formal notice by either party to the other shall be in writing and
shall be given, and be deemed to have been duly given, if either delivered
personally or mailed in a registered or certified postpaid envelope addressed
to the address of either party hereinafter set forth or, if the address for
notice of either party shall be duly changed as hereinafter provided, delivered
or mailed as aforesaid to such party at such changed address. Either party may
at any time change the address for notices to such party by the delivery or
mailing, as aforesaid, of a notice stating the change and setting forth the
changed address.
Owner:
The Crestmark Club, L.P.
7000 Central Parkway
Suite 900
Atlanta, Georgia 30328
Attention: Mr. Charles S. Roberts, General Partner
Manager:
Roberts Properties Management, Inc.
7000 Central Parkway
Suite 900
Atlanta, Georgia 30328
Attention: Mr. Charles S. Roberts, President
ARTICLE VII
TERMINATION OF AGREEMENT
7.1 This Agreement may be terminated by Owner, and except as to
liabilities or claims which shall have occurred or arisen between the parties
prior to such termination, all obligations hereunder of one party to the other
shall cease upon the happening of any of the following events:
(a) If Manager shall become in default in the performance of any
term, covenant or condition which this Agreement requires it to perform, and
shall fail to cure or to diligently commence to cure such default within thirty
(30) days after receipt of written notice from Owner specifying such default;
or
(b) If Manager shall make any assignment of its property for the
benefit of creditors; or
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<PAGE> 7
(c) If Manager files a petition for adjudication as a bankrupt, for
reorganization or for an arrangement under any bankruptcy or insolvency law, or
if any involuntary petition under any such law is filed against Manager and not
dismissed within sixty (60) days thereafter;
then, so long as any such event is continuing, Owner may, by notice in writing
to Manager, terminate this Agreement forthwith.
7.2 This Agreement may be terminated by Manager, and except as to
liabilities or claims which shall have occurred or arisen between the parties
prior to such termination and except as otherwise provided herein, all
obligations hereunder of one party to the other shall cease upon the happening
of any of the following events:
(a) If Owner shall become in default of the due performance of any
term, covenant or condition which this Agreement requires it to perform, and
shall fail to cure, correct or remedy such default within the period of time
specified in the provisions relating to such term, covenant or condition of, if
there shall be none, then within thirty (30) days after written notice from
Manager specifying such default, then so long as any such event is continuing,
Manager may by notice in writing to Owner terminate this Agreement forthwith;
(b) If the Project shall be taken or condemned in any eminent domain,
condemnation or like proceeding by any competent authority, or if such a
portion thereof shall be taken or condemned as to make in imprudent or
unreasonable, in Manager's reasonable opinion, to use the remaining portion as
an extended stay suites inn of the type and class immediately preceding such
taking or condemnation, then in either event this Agreement shall cease and
terminate as of the date upon which Owner shall be required to surrender
possession;
(c) The failure of Owner:
(i) To make payment of any sum due Manager hereunder with
ten (10) days of written notice;
(ii) To make payment of any uncontested debt, obligation or
liability incurred in the operation and management of the Project as described
above within ten (10) days from written notice from Manager;
(iii) To remedy a condition or to take any action requested
by Manager within ten (10) days from written notice from Manager, which results
in a decrease of essential services necessary to the proper operation and
management of the Project;
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<PAGE> 8
(iv) The repeated failure or refusal of Owner to observe
Manager's right of noninterference as provided in Article V hereof after having
received written notice from Manager to cease and desist such action;
(v) Any provision of the foregoing to the contrary
notwithstanding, this Agreement shall be automatically terminated upon the
failure of Owner to pay when due any amount owed to the holder of any mortgage
note or other obligation secured by a first lien on the Project.
7.3 This Agreement may be terminated by either party, and except as to
liabilities or claims which shall have occurred or arisen between the parties
prior to such termination and except as otherwise provided herein, all
obligations of one party to the other shall cease upon the giving of sixty (60)
days written notice of such intent to terminate this Agreement to the other
party.
ARTICLE VIII
PROHIBITION OF ASSIGNMENT
Manager shall not assign this Agreement or any of its rights hereunder;
nor shall this Agreement or any of the rights or obligations of Manager
hereunder be transferable except by merger or consolidation of Manager with
another corporation if the operating personnel of such corporation at the time
of such merger or consolidation shall be substantially the same as the
operating personnel of Manager and if such corporation shall be actively
engaged in the business of supervising and directing the management and
operation of extended stay suites inns. Neither party shall have the right to
make any assignment of this Agreement or any interest therein without the
written consent of the other.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 This Agreement cannot be changed or modified except by another
agreement in writing signed by the party sought to be charged therewith or by
its duly authorized agent.
9.2 This Agreement constitutes all of the understandings and agreements
of whatsoever nature or kind existing between the parties with respect to
Manager's supervision and direction of the management and operation of the
Project. Manager makes no guarantee, warranty or representation that there
will be profits or losses accruing to Owner as a result of the services
rendered hereunder by Manager.
9.3 Whenever under any provisions of this Agreement the approval or
consent of either party is required, the decisions thereon shall be promptly
given and such
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<PAGE> 9
approval or consent shall not be unreasonably withheld. It is further
understood that whenever under any provisions of this Agreement approval or
consent is required, the approval or consent is given by the person executing
this Agreement or any one of the persons, as the case may be, designated in a
notification signed by or in behalf of a party. For all purposes under this
Agreement, Manager shall determine solely from the latest such notification
received by it the person or persons authorized to give such approval or
consent. Manager may rely exclusively and conclusively on the designation set
forth in such notification, notwithstanding any knowledge to the contrary.
9.4 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the parties have executed, or caused to be executed,
this Agreement as of the day and year first above written.
OWNER:
THE CRESTMARK CLUB, L.P.,
A Georgia Limited Partnership
By: /s/ Charles S. Roberts
-----------------------------
Charles S. Roberts,
General Partner
MANAGER:
ROBERTS PROPERTIES MANAGEMENT,
INC., a Georgia Corporation
By: /s/ Charles S. Roberts
-----------------------------
Charles S. Roberts
President
9
<PAGE> 10
EXHIBIT "A"
Property Description
TRACT 1:
ALL THAT TRACT of land in Land Lot 521 of the 18th District, 2nd Section,
Douglas County, Georgia, described as follows:
BEGINNING at a point on the southeast right-of-way line of Blairs Way (an
apparent 50 foot right-of-way), which point is located South 17 degrees 03
minutes 51 seconds West 389.65 feet along the southeast right-of-way line of
Blairs Way from a 1/2 inch rebar set at the intersection of the southeast
right-of-way line of Blairs Way with the southwest right-of-way line of Skyview
Road (80 foot right-of-way); thence, leaving said right-of-way line, running
South 88 degrees 28 minutes 43 seconds East 236.67 feet to a point; thence
South 88 degrees 28 minutes 43 seconds East 147.34 feet to a point on the east
land lot line of said Land Lot 521; thence, along said east land lot line,
South 01 degree 31 minutes 17 seconds West 300.00 feet to a 1-1/2 inch iron pin
found; thence leaving said land lot line, North 88 degrees 56 minutes 22
seconds West 339.63 feet to a 1/2 inch rebar set on the northeast right-of-way
line of said Blairs Way; thence, along the northeast, east and southeast
right-of-way line of Blairs Way, the following courses and distances: (1) North
49 degrees 26 minutes 31 seconds West 48.65 feet to a point, (2) along the arc
of a curve to the right (which arc is subtended by a chord having a bearing and
distance of North 27 degrees 07 minutes 28 seconds West 84.29 feet and a radius
of 110.98 feet) 86.46 feet to a point, (3) along the arc of a curve to the
right (which arc is subtended by a chord having a bearing and distance of North
06 degrees 07 minutes 45 seconds East 108.15 feet and a radius of 285.07 feet)
108.81 feet to a point, and (4) North 17 degrees 03 minutes 51 seconds East
93.75 feet to the POINT OF BEGINNING, said tract containing 2.782 acres as
shown on that certain plat of Boundary Survey for Roberts Properties/Thornton
Road, L.P. and Chicago Title Insurance Company, prepared by Fister/Poole
Engineers & Surveyors, Inc., bearing the seal and certification of James Robert
Fister, Georgia Registered Land Surveyor No. 1821, dated August 10, 1990, last
revised August 30, 1990.
TRACT 2:
ALL THAT TRACT of land in Land Lots 520 and 521 of the 18th District, 2nd
Section, Douglas County, Georgia, described as follows:
TO FIND THE TRUE POINT OF BEGINNING, commence at the intersection of the south
right-of-way line of Skyview Road (110 foot right-of-way) with the southwest
right-of-way line of Westpark Drive (60 foot right-of-way); running thence,
along the south right-of-way line of Skyview Road, the following courses
<PAGE> 11
and distances: (1) South 84 degrees 21 minutes 31 seconds West 118.40 feet to a
point, and (2) along the arc of a curve to the right (which arc is subtended by
a chord having a bearing and distance of North 87 degrees 58 minutes 02 seconds
West 204.63 feet and a radius of 766.20 feet) 205.24 feet to a point on the
land lot line common to said Land Lots 520 and 521; thence, leaving said
right-of-way line and continuing along said common land lot line, South 01
degree 31 minutes 17 seconds West 567.35 feet to the TRUE POINT OF BEGINNING,
from said TRUE POINT OF BEGINNING, as thus established, running thence South 42
degrees 30 minutes 56 seconds East 136.20 feet to a point; thence South 52
degrees 15 minutes 24 seconds West 201.33 feet to a point on the northeast
right-of-way line of Blairs Way (60 foot right-of-way); thence, along the
northeast right-of-way line of Blairs Way, the following courses and distances:
(1) along the arc of a curve to the left (which arc is subtended by a chord
having a bearing and distance of North 42 degrees 16 minutes 26 seconds West
53.76 feet and a radius of 194.00 feet) 53.93 feet to a point, and (2) North 50
degrees 14 minutes 22 seconds West 297.05 feet to a point; thence, leaving said
right-of-way line, South 88 degrees 56 minutes 20 seconds East 331.72 feet to
the TRUE POINT OF BEGINNING, said tract containing approximately 1.1428 acres.
TRACT 3:
All that tract of land in Land Lot 521 of the 18th District, 2nd Section,
Douglas County, Georgia, described as follows:
BEGINNING at the intersection of the west right-of-way line Blairs Way (60 foot
right-of-way) with the land lot line common to Land Lots 521 and 580 of the
18th District, 2nd Section, Douglas County, Georgia; thence, running along said
common land lot line, North 89 degrees 01 minute 47 seconds West 1257.32 feet
to the land lot corner common to Land Lots 521, 522, 579 and 580, 18th
District, 2nd Section, Douglas County, Georgia; thence, along the line common
to said Land Lots 521 and 522, North 01 degree 19 minutes 58 seconds East
711.97 feet to a point; thence, leaving said common land lot line, South 88
degrees 56 minutes 20 seconds East 919.02 feet to a point on the southwest
right-of-way line of said Blairs Way; thence, along the southwest and west
right-of-way line of Blairs Way, the following courses and distances: (1) South
50 degrees 14 minutes 22 seconds West 371.94 feet to a point, (2) along the arc
of a curve to the right (which arc is subtended by a chord having a bearing and
distance of South 24 degrees 09 minutes 31 seconds East 117.82 feet and a
radius of 134.00 feet) 121.99 feet to a point, and (3) South 01 degree 55
minutes 20 seconds West 370.86 feet to the TRUE POINT OF BEGINNING, said tract
containing approximately 19.4813 acres.
2
<PAGE> 1
EXHIBIT 10.22.3.1
AMENDMENT #1 TO
PROPERTY MANAGEMENT AGREEMENT
REGARDING CRESTMARK
THIS AMENDMENT, made and entered into on June 26, 1996 but effective from
and as of the 11th day of January, 1991, by and between THE CRESTMARK CLUB,
L.P., a Georgia limited partnership (the "Partnership") and MULTIFAMILY
MANAGEMENT, INC., (a Georgia corporation formerly known as ROBERTS PROPERTIES
MANAGEMENT, INC., and referred to herein as "RPM"),
W I T N E S S E T H:
WHEREAS, the Partnership offered limited partnership interests through
that certain Offering Circular dated September 27, 1990, as amended by
Supplement No. 1 dated November 15, 1990, and as further amended by Supplement
No. 2 dated November 21, 1990 (as so amended, the "Circular"); and
WHEREAS, at the closing of the sale of limited partnership interests in
the Partnership on January 11, 1991, the Partnership and RPM entered into a
Property Management Agreement regarding Crestmark (the "Agreement") that
provided for certain consulting services to be performed by RPM; and
WHEREAS, each of the Partnership and RPM acknowledges that the inclusion
in the Agreement of a provision calling for consulting services to be performed
by RPM was done in error and that each of them intended that the Partnership
enter into the agreements described in the Circular, including without
limitation a separate consulting agreement between the Partnership and Roberts
Properties, Inc. providing for such consulting services to be performed by RPI
rather than RPM;
WHEREAS, the Partnership and RPM have agreed to amend the Agreement as
provided herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
The Agreement shall be and hereby is amended to delete Section 4.4 thereof
and replace it with the following: "[Intentionally deleted.]".
[Signatures begin on following page.]
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date first above written.
The Crestmark Club, L.P.
Date: June 26, 1996 By: /s/ Charles S. Roberts
-------------------------------------------
Charles S. Roberts, General Partner
Multifamily Management, Inc. (formerly known as
Roberts Properties Management, Inc.)
Date: June 26, 1996 By: /s/ Charles S. Roberts
-------------------------------------------
Charles S. Roberts, President
- 2 -
<PAGE> 1
EXHIBIT 10.22.3.2
AMENDMENT #2 TO
PROPERTY MANAGEMENT AGREEMENT
REGARDING CRESTMARK
This Amendment, by and between Roberts Properties Residential, L.P.
("Owner") and Roberts Properties Management, L.L.C. ("Manager"),
W I T N E S S E T H:
WHEREAS, pursuant to a certain Asset Purchase Agreement dated February 29,
1996 by and between Manager and Multifamily Management, Inc. (f/k/a Roberts
Properties Management, Inc.), Manager has been assigned and has assumed that
certain Property Management Agreement dated January 11, 1991 (as amended by
that certain Amendment #1 thereto effective as of January 11, 1991, the
"Agreement") between Roberts Properties Management, Inc. and The Crestmark
Club, L.P. (the "Predecessor");
WHEREAS, Owner has succeeded to the rights and duties of the Predecessor
as respects the Agreement; and
WHEREAS, the parties desire to modify the Agreement as more particularly
provided hereinafter;
NOW, THEREFORE, the parties do hereby agree as follows.
A. AMENDMENT.
1. Article II of the Agreement is hereby deleted in its entirety
and replaced with the following: "This Agreement, as amended, shall have
a term of five (5) years, commencing as of June 26, 1996 and continuing
through the fifth anniversary thereof, and shall thereafter be
automatically renewed for successive one (1) year terms unless earlier
terminated in accordance with the provisions of Article VII hereof."
2. Article III of the Agreement is hereby amended by deleting the
first paragraph thereof in its entirety and replacing it with the
following:
"Subject to Section 3.10 hereof, during the term of this Agreement,
Owner hereby grants to Manager the sole and exclusive authority, for and
on behalf of Owner, to manage and operate the Project as agent of Owner,
and, without limiting the generality of the foregoing, Owner grants to
Manager the sole and exclusive authority to do, and Manager agrees to do
for and on behalf of Owner, the following:"
3. Article III of the Agreement is hereby further amended by
adding thereto the following:
<PAGE> 2
"3.10 Owner shall in no event provide to any tenant any
Non-Qualified Services (as hereinafter defined). In the event that any
Non-Qualified Services are provided to a tenant, such Services must be
provided by an independent contractor from whom Owner does not derive or
receive any income (within the meaning of section 856(d) of the Internal
Revenue Code and all applicable regulations and other authorities
thereunder), and in no way shall such Services be construed as being
provided by Owner. Such independent contractor shall bear the cost of
providing any such Non-Qualified Service to any tenant and shall make a
separate charge to such tenant for any such Service so provided. The
independent contractor shall retain the charges and all other income for
any such Non-Qualified Services. Owner shall in no event derive or
receive any income from such Non-Qualified Services or from such
independent contractor. For purposes hereof, "Non-Qualified Services"
are services which, if provided by Owner (other than through an
independent contractor as contemplated by the preceding sentences of this
paragraph), would cause the rents payable by any tenant to fail to
qualify as rents from real property, within the meaning of section 856(d)
of the Internal Revenue Code and all applicable regulations and other
authorities thereunder."
4. Section 4.1 of the Agreement is hereby amended by reducing the
amount of the management fee from six percent (6%) of gross income from
property operations to five percent (5%) of gross income from property
operations.
5. Article VI of the Agreement is hereby deleted in its entirety
and replaced with the following:
"Any formal notice by either party to the other shall be in writing and
shall be given, and be deemed to have been duly given, if either
delivered personally or mailed in a registered or certified postpaid
envelope addressed to the address of either party hereinafter set forth
or, if the address for notice of either party shall be duly changed as
hereinafter provided, delivered or mailed as aforesaid to such party at
such changed address. Either party may at any time change the address
for notices to such party by the delivery or mailing, as aforesaid, of
a notice stating the change and setting forth the changed address.
Owner:
Roberts Properties Residential, L.P.
8010 Roswell Road
Suite 120
Atlanta, Georgia 30350
Attention: Mr. Charles S. Roberts, President
Roberts Realty Investors, Inc.
2
<PAGE> 3
Manager:
Roberts Properties Management, L.L.C.
8010 Roswell Road
Suite 280
Atlanta, Georgia 30350
Attention: Mr. Charles S. Roberts
B. EFFECTIVE DATE. The Amendment made by division A hereof shall be
effective as of June 26, 1996, provided that to the extent permitted by law,
this Amendment shall be effective as of and from and after the first day of
June 1996.
C. REAFFIRMATION. Except as hereby modified, the Agreement remains and
shall remain in full force and effect.
D. COUNTERPARTS. This Amendment may be executed in multiple
counterparts, each of which (consisting of one set of textual pages and one or
more signature pages, each signed by one or more parties and collectively
exhibiting the signatures of all parties), shall be deemed an original and all
of which shall constitute one agreement, and the signatures of any party to any
counterpart shall be deemed to be a signature to, and may be appended to, any
other counterpart.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed on the dates indicated, but as of the effective date hereinbefore
specified.
Date: 6-26-96 Roberts Properties Residential, L.P.,
a Georgia limited partnership
By: Roberts Realty Investors, Inc.,
its sole general partner
By: /s/ Charles S. Roberts
---------------------------------------
Charles S. Roberts, President and
Chief Executive Officer
Date: 6-26-96 Roberts Properties Management, L.L.C.
By: /s/ Charles S. Roberts
---------------------------------------
Charles S. Roberts
3
<PAGE> 1
EXHIBIT 10.22.4
CONSULTING AGREEMENT
REGARDING CRESTMARK
THIS AGREEMENT (the "Agreement") is made and entered into on June 26,
1996, by and between ROBERTS PROPERTIES RESIDENTIAL, L.P., a Georgia limited
partnership (the "Partnership") and ROBERTS PROPERTIES, INC., a Georgia
corporation ("RPI"),
W I T N E S S E T H:
WHEREAS, the Partnership has as of this date acquired Crestmark, a
248-unit multifamily apartment community (the "Community") and 8.8 acres of
undeveloped property (the "Land") upon which the Partnership intends to
construct an 86-unit second phase of Crestmark; and
WHEREAS, the acquisition of the Community and the Land was accomplished
after (i) the Partnership obtained the consent of a majority in interest of the
limited partners of The Crestmark Club, L.P. pursuant to a Prospectus/Consent
Solicitation Statement dated May 8, 1996, as supplemented by Supplement No. 1
dated June 14, 1996 (the "Prospectus"), and (ii) the Board of Directors of the
Partnership's general partner, Roberts Realty Investors, Inc., approved the
transactions described in the Prospectus; and
WHEREAS, the Prospectus specifies (a) that the consulting agreement
between The Crestmark Club, L.P. and RPI would be assumed by the Partnership
pursuant to the merger of The Crestmark Club, L.P. into the Partnership (the
"Merger"), (b) that a consulting fee of 5% would be paid upon a sale of any
property of The Crestmark Club, L.P., (c) that no consulting fee would be paid
upon the Merger, and (d) that the consulting agreement would be amended upon
the merger to provide for the payment of a consulting fee not only upon a sale
of property but also upon a "change in control" as defined therein; and
WHEREAS, the Partnership and RPI desire to enter into this Agreement to
evidence the consulting fee arrangements specified in the Prospectus;
NOW, THEREFORE, for and in consideration of the premises, Ten and No/100
Dollars ($10.00) in hand paid by each party hereto to the other party hereto,
and other good and valuable consideration, the receipt, adequacy and
sufficiency of which is hereby acknowledged by the parties hereto prior to the
execution, sealing and delivery of this Agreement, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. The foregoing recital of facts is hereby incorporated herein to the
same extent as if hereinafter fully set forth.
2. The parties hereto agree that no consulting fee shall be paid to RPI in
connection with the Merger.
3. If the Partnership sells the Community or any part thereof or the Land,
RPI (or its affiliate) shall be entitled to render consulting services in
connection with any such sale, and the Partnership shall at the time of the
closing of any such sale pay to RPI (or its affiliate), a consulting fee in an
amount equal to five percent (5%) of the gross sales proceeds of the property
<PAGE> 2
sold; provided, however, that the consulting fee to be paid as respects any
sale of the Land shall be $86,775, which is equal to 5% of the $1,735,500
current value of the Land as of the date of this Agreement, regardless of any
improvements then constructed on the Land and regardless of any change in value
of the Land.
4. If there occurs a "change in control" (as hereinafter defined), at a
time when the Partnership or the Partnership's general partner (the "Company")
owns the Community or the Land, the Partnership shall pay RPI (or its
affiliate) a consulting fee, at the time of such change in control, in an
amount equal to five percent (5%) of the fair market value of the Community (if
the Community is then owned by the Partnership or the Company) plus the
aforesaid $86,775 as respects the Land (if the Land is then owned by the
Partnership or the Company and regardless of any improvements then constructed
on the Land and regardless of any change in the value of the Land) at the time
of the change in control, upon payment of which the requirement to make any
further payments pursuant to this Agreement shall terminate, so that no amount
shall then or thereafter be due pursuant to either paragraph 3 or this
paragraph 4. For purposes of this paragraph 4, a "change in control" means (a)
any transaction, whether by merger, consolidation, asset sale or otherwise,
which results in the acquisition of beneficial ownership by any person or group
of fifty percent or more of the outstanding shares of common stock of the
Company or of the outstanding units of the Partnership, (b) any sale of all or
substantially all of the assets of the Company or the Partnership, or (c) the
liquidation of the Company or the Partnership, except that no "change in
control" shall be considered to have occurred in the event of the sale of the
Partnership's assets to the Company or the merger of the Partnership into the
Company if no change in control of the Company occurs as a result.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed, sealed and delivered as of the date first above written.
ROBERTS PROPERTIES RESIDENTIAL, L.P.,
a Georgia limited partnership
By: Roberts Realty Investors, Inc.,
its sole general partner
By: /s/ Charles S. Roberts
---------------------------------
Charles S. Roberts, President and
Chief Executive Officer
(CORPORATE SEAL)
ROBERTS PROPERTIES, INC.,
a Georgia corporation
By: /s/ Charles S. Roberts
-------------------------------------
Charles S. Roberts, President
(CORPORATE SEAL)
- 2 -
<PAGE> 1
EXHIBIT 10.22.5
Prepared by and return to:
Timothy A. Burleigh
P.O. Box 59
Jacksonville, FL 32201
FHLMC Loan Number: 734079214
ASSUMPTION AND MODIFICATION AGREEMENT
THIS ASSUMPTION AND MODIFICATION AGREEMENT is made effective as of the
26th day of June, 1996, by and among THE CRESTMARK CLUB, L.P., a Georgia
limited partnership ("Borrower"); ROBERTS PROPERTIES RESIDENTIAL, L.P., a
Georgia limited partnership ("New Borrower"); and FEDERAL HOME LOAN MORTGAGE
CORPORATION ("Noteholder").
RECITALS
A. Borrower obtained a loan (the "Loan") from COMMONWEALTH OF
PENNSYLVANIA STATE EMPLOYEES' RETIREMENT BOARD, an independent administrative
board of the Commonwealth of Pennsylvania, transacting business as the
Commonwealth of Pennsylvania State Employees' Retirement System ("Lender"),
which loan is secured by certain real property and improvements thereon (the
"Property") known as Crestmark Apartments, located in Lithia Springs, Douglas
County, Georgia, as more particularly described in Exhibit A, attached to and
made a part of this Agreement by this reference.
B. Borrower executed a Note evidencing the Loan dated April 27,
1994, in the original principal amount of $10,100,000.00, payable to Lender.
C. To secure repayment of the Loan, Borrower executed and
delivered to Lender a Deed to Secure Debt and Security Agreement (the
"Security Instrument") of even date with the Note, naming Lender as Grantee,
which is recorded in Book 879, page 444, in the
Page 1 of 7
<PAGE> 2
Records of the Clerk of the Superior Court of Douglas County, Georgia.
D. Lender sold the Note and assigned the Security Instrument to
Noteholder, which is now the owner and holder of the Note.
E. The Note, Security Instrument, and every other document
executed by Borrower in connection with the Note and Security Instrument are
referred to collectively in this Agreement as the "Loan Documents."
F. Borrower transferred all of its right, title, and
interest in and to the Property to New Borrower by the merger of
Borrower with and into the New Borrower pursuant to the Georgia Revised
Uniform Limited Partnership Act as evidenced by the Articles of Merger filed
with the Secretary of State of Georgia (the "Partnership Merger"); a
Certificate of Merger is being recorded in the Records of the Clerk of the
Superior Court of Douglas County, Georgia, contemporaneously with the recording
of this Agreement. By virtue of the Partnership Merger, Borrower ceases to
exist and all assets of Borrower have become the property of New Borrower, and
all liabilities of Borrower are now the liabilities of New Borrower, including
without limitation the liabilities evidenced by the Loan Documents.
G. New Borrower desires to assume all of Borrower's rights,
obligations, and liabilities created or arising under the Loan Documents, with
certain modifications, as set forth in this Agreement.
H. Borrower desires to be released by Noteholder from any and all
obligations and liabilities under the terms and provisions of the Loan
Documents.
I. Subject to the full satisfaction of all conditions set forth
below, Noteholder has agreed to consent to New Borrower's assumption of the
Loan and to release Borrower from further liability (except as provided in this
Agreement), all as set forth below.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Assumption of Obligations; Rights of Noteholder. New Borrower
covenants, promises, and agrees that New Borrower shall unconditionally assume
and be bound by all terms, provisions, and covenants of the Loan Documents as
if New Borrower had been the original maker of the Note and Security
Instrument, and New Borrower shall pay all sums to be paid and otherwise
perform each and every obligation to be performed by Borrower in accordance
Page 2 of 7
<PAGE> 3
with the terms and conditions of the Loan Documents, subject to the
non-recourse provisions contained therein.
2. Affirmation of New Borrower. New Borrower agrees that the
Loan Documents are and shall be and remain in full force and effect,
enforceable in accordance with their terms. The Property shall remain subject
to the security title, lien, charge, and encumbrance of the Security
Instrument, and nothing contained in this Agreement or done pursuant to this
Agreement shall affect or be construed to affect the security title, lien,
charge, and encumbrance of the Security Instrument or the priority of the
Security Instrument over other liens, charges, and encumbrances, or to release
or affect the liability of any party or parties who may now or hereafter be
liable under or on account of the Note and the Security Instrument, except as
expressly provided in this Agreement.
3. Subordination of Rights of Borrower and New Borrower. Any
indebtedness of Borrower to New Borrower, or of New Borrower to Borrower, now
or hereafter existing, together with any interest thereon, is hereby
subordinated to any indebtedness of Borrower or New Borrower to the Noteholder
under the Loan Documents, any collection or receipts with respect to any such
indebtedness of Borrower to New Borrower, or of New Borrower to Borrower shall
be collected, enforced and received by New Borrower or Borrower (as applicable)
in trust for the benefit of the Noteholder, and shall be paid over to the
Noteholder on account of the indebtedness of Borrower and New Borrower to the
Noteholder, but without impairing or affecting in any manner the liability of
the Borrower or New Borrower under the other provisions of the Loan Documents
and this Assumption Agreement.
4. Modification of Note and Security Instrument. Noteholder and
New Borrower agree that the provisions of the Note and Security Instrument are
hereby modified by deleting subparagraph (v) of the penultimate paragraph of
paragraph 4 of Schedule 3 (Further Stipulations) of Exhibit C to the Security
Instrument, as amended by that certain First Amendment to Deed to Secure Debt
and Security Agreement recorded in Book 899, page 214, in the Records of the
Clerk of the Superior Court of Douglas County, Georgia, so that Roberts (as
defined in the Security Instrument) does not and is not required to personally
guarantee the payment of the Note or the performance of either Borrower or New
Borrower in respect to the Security Instrument or the Loan.
5. Representations. Borrower hereby represents and warrants to
Noteholder:
a. As of the date hereof, the amount of the unpaid
indebtedness under the Note is Nine Million Eight Hundred Sixty Thousand Six
Hundred Sixty-eight and 86/100 Dollars ($9,860,668.86).
Page 3 of 7
<PAGE> 4
b. Interest at the rate set forth in the Note has been paid to
Noteholder in full through and until May 31, 1996.
c. All of the representations and warranties in the Loan
Documents are true as of the date on which Borrower executes this Agreement.
d. No event of default (or event which, with the giving of notice
or the passage of time or both, would be an event of default) has occurred or
is continuing under the Loan Documents.
e. Borrower has no claims, offsets, defenses, or counterclaims of
any kind to its performance under, or Noteholder's enforcement of, the Note and
the other Loan Documents; and to the extent any such counterclaims, setoffs,
defenses, or other causes of action may exist, whether known or unknown,
Borrower waives all such items. Borrower acknowledges that all of Noteholder's
actions in connection with the Loan have been in compliance with the terms of
the applicable Loan Documents, and Borrower acknowledges and agrees that
Noteholder has not breached or failed to perform any duty or obligation that
Noteholder may owe Borrower.
f. There are no suits or actions threatened or pending which
affect the enforcement or validity of the Note, the Security Instrument, and
the Loan Documents, or any of them.
6. Additional obligations. New Borrower shall execute, acknowledge,
and deliver UCC-3 Statements of Change and such other documents as Noteholder
may reasonably require to document the transaction described in this Agreement.
The failure of New Borrower to comply with the foregoing additional obligations
shall constitute a default under the Loan Documents, and Noteholder shall be
entitled to exercise all remedies available to it under the terms of the Loan
Documents.
7. Release of Borrower. In reliance upon Borrower's and New
Borrower's representations and warranties in this Agreement, Noteholder hereby
releases Borrower and Roberts, in his capacity as general partner of Borrower,
from any and all obligations under the terms and provisions of the Loan
Documents; provided, however, that Borrower is not released from any liability
pursuant to paragraph 1.16 of the Security Instrument. If any material element
of such representations and warranties is false, then this release will be
cancelled as of the date of this Agreement and Borrower will remain obligated
under the Loan Documents as though there has been no release.
8. Expenses. New Borrower's execution of this Agreement shall
constitute New Borrower's agreement to pay all expenses incurred by the
Noteholder in connection with this assumption, including without limitation the
payment of any title endorsement costs, attorneys' fees, and assumption fees
required by
Page 4 of 7
<PAGE> 5
Noteholder.
9. Miscellaneous.
a. This Agreement shall be binding upon and shall inure
to the benefit of the parties to the Agreement and their respective heirs,
successors, and permitted assigns.
b. Except as expressly modified by this Agreement, the
Note, the Security Instrument, and all other Loan Documents shall be unchanged
and remain in full force and effect, and are hereby expressly approved,
ratified, and confirmed. No provision of this Agreement that is held to be
inoperative, unenforceable, or invalid shall affect the remaining provisions,
and to this end all provisions hereof are hereby declared to the severable.
c. Time is of the essence in this Agreement.
d. This Agreement may not be changed orally, but only by
an agreement in writing, signed by the party against whom enforcement of any
waiver, change, modification, or discharge is sought.
e. This Agreement shall be construed in accordance with
the laws of the jurisdiction in which the Property is located.
f. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same document.
g. All notices given pursuant to this Agreement or any
of the Loan Documents must be in writing and will be effectively given if
personally delivered or if mailed, postage prepaid, certified or registered
mail, return receipt requested, to the addresses of the parties set forth below
or to such other address as any party subsequently may designate in writing.
h. An executed original of this Agreement shall be (i)
attached permanently to the Note as an amendment thereto and (ii) recorded in
the Records of the Clerk of the Superior Court of Douglas County, Georgia, as a
modification to the Security Instrument.
Page 5 of 7
<PAGE> 6
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date written above.
BORROWER
Signed and sealed in the THE CRESTMARK CLUB, L.P.,
presence of: a Georgia limited partnership
/s/ Brian L. Sullivan By /s/ Charles S. Roberts
- --------------------------- -----------------------------
Unofficial Witness Charles S. Roberts, its
Print /s/ Brian L. Sullivan sole general partner
---------------------
/s/ Cydney L. Troope Address for Notice to Borrower:
- --------------------------- 8010 Roswell Road, Suite 120
Notary Public Atlanta, Georgia 30350
Print /s/ Cydney L. Troope
----------------------
My commission expires:
(NOTARIAL SEAL)
(NOTARIAL STAMP) NEW BORROWER
ROBERTS PROPERTIES RESIDENTIAL,
L.P., a Georgia limited
partnership
Signed and sealed in the By Roberts Realty Investors, Inc.
presence of: a Georgia corporation
its sole general partner
/s/ Brian L. Sullivan
- --------------------------- By /s/ Charles S. Roberts
Unofficial Witness -------------------------------
Print /s/ Brian L. Sullivan Charles S. Roberts,
--------------------- Its President
---------------------------
/s/ Cydney L. Troope
- --------------------------- Address for Notice to Borrower:
Notary Public 8010 Roswell Road, Suite 120
Print /s/ Cydney L. Troope Atlanta, Georgia 30350
----------------------
My commission expires:
(Notarial Seal)
(Notarial Stamp)
Page 6 of 7
<PAGE> 7
CONSENTED TO BY NOTEHOLDER:
Signed and sealed in the FEDERAL HOME LOAN MORTGAGE
presence of: CORPORATION
/s/ Joan C. Price By /s/ Rebecca Wallach
- ----------------------- -------------------------
Unofficial Witness Print Rebecca Wallach
Print Joan C. Price Its Assistant Treasurer
/s/ Mitsuo S. Aoyama
- ----------------------- Address for Notice to Noteholder:
Notary Public c/o Legg Mason Real Estate Services
Print Mitsuo S. Aoyama South, Inc.
------------------ 15280 N.W. 79th Court
My commission expires: Suites 101 & 102
Miami Lakes, FL 33016-5852
(Notarial Seal)
Page 7 of 7
<PAGE> 1
EXHIBIT 10.23.1
AMENDED AND RESTATED
CONSULTING AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into on June 26,
1996, by and between ROBERTS PROPERTIES RESIDENTIAL, L.P., a Georgia limited
partnership (the "Partnership") and ROBERTS PROPERTIES, INC., a Georgia
corporation ("RPI").
RECITALS:
A. During the period from October 1, 1994 through the date hereof, the
Partnership has acquired, among others, the following multifamily apartment
communities (the "Communities"): River Oaks -- 216 units; Highland Park -- 188
units; Holcomb Bridge -- 146 units; Crestmark -- 248 units; and Windsong -- 232
units. Each Community was owned by a separate limited partnership, and the
limited partnership that owned the Crestmark Community also owned 8.8 acres of
undeveloped property (the "Land") upon which the Partnership intends to
construct an 86-unit second phase of Crestmark. Each acquisition was
accomplished by a merger of the applicable limited partnership into the
Partnership upon receipt of the approval of a majority in interest of the
limited partners of the applicable partnership. Each such approval was
obtained pursuant to a prospectus/consent solicitation statement that in each
case specified that the Partnership would, by virtue of the merger, assume a
consulting agreement between the applicable partnership and RPI. The
Partnership's sole general partner is Roberts Realty Investors, Inc. (the
"Company").
B. The terms of the consulting agreements were described in each of the
successive prospectus/consent solicitation statements and in the Company's Form
10-SB filed on March 22, 1996, and Form 10-SB/A No. 1 filed on May 7, 1996, in
each case filed with the Securities and Exchange Commission (as amended, the
"Form 10-SB").
C. The Partnership and RPI desire to amend and restate the consulting
agreements in the form of this Agreement to avoid a multiplicity of documents
and conform to the parties' understanding of the agreements as described in
each of the successive prospectus/consent solicitation statements and the Form
10-SB.
NOW, THEREFORE, for and in consideration of the premises, Ten and No/100
Dollars ($10.00) in hand paid by each party hereto to the other party hereto,
and other good and valuable consideration, the receipt, adequacy and
sufficiency of which is hereby acknowledged by the parties hereto prior to the
execution, sealing and delivery of this Agreement, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. The foregoing recitals of facts are hereby incorporated herein to the
same extent as if hereinafter fully set forth.
2. The parties hereto acknowledge and agree that no consulting fee has
been or shall be paid to RPI in connection with any of the prior mergers
referenced in Recital A.
3. If the Partnership sells a Community or the Land, RPI shall be entitled
to render consulting services in connection with such sale, and the Partnership
shall at the time of the
<PAGE> 2
closing of such sale pay to RPI a consulting fee in an amount equal to the
applicable percentage specified below (the "Applicable Percentage") of the
gross sales proceeds of the property sold.
If there occurs a "change in control" (as hereinafter defined), at a time
when the Partnership or the Company owns one or more Communities and/or the
Land, the Partnership shall pay RPI a consulting fee, at the time of such
change in control, in an amount equal to the Applicable Percentage of the fair
market value of each Community and/or the Land then owned by the Partnership or
the Company, upon payment of which the requirement to make any further payments
pursuant to this Agreement shall terminate, so that no amount shall then or
thereafter be due pursuant to this Agreement. For purposes of this Agreement,
a "change in control" means (a) any transaction, whether by merger,
consolidation, asset sale or otherwise, which results in the acquisition of
beneficial ownership by any person or group of fifty percent (50%) or more of
the outstanding shares of common stock of the Company or of the outstanding
units of the Partnership, (b) any sale of all or substantially all of the
assets of the Company or the Partnership, or (c) the liquidation of the Company
or the Partnership, except that no "change in control" shall be considered to
have occurred in the event of the sale of the Partnership's assets to the
Company or the merger of the Partnership into the Company if no change in
control of the Company occurs as a result.
<TABLE>
<CAPTION>
CONSULTANT COMMUNITY APPLICABLE PERCENTAGE
---------- --------- ---------------------
<S> <C> <C>
RPI River Oaks five percent (5%)
RPI Highland Park five percent (5%)
RPI Holcomb Bridge five percent (5%)
RPI Crestmark five percent (5%)
RPI Windsong three percent (3%)
</TABLE>
Notwithstanding the foregoing, the consulting fee to be paid as respects
any sale by the Company or the Partnership of the Land shall be $86,775, which
is equal to 5% of the $1,735,500 current value of the Land as of the date of
this Agreement, regardless of any improvements then constructed on the Land and
regardless of any change in value of the Land. Further, if there occurs a
change in control at a time when the Partnership or the Company owns the Land,
the Partnership shall pay RPI a consulting fee, at the time of such change in
control, in an amount equal to $86,775 as respects the Land, regardless of any
improvements then constructed on the Land and regardless of any change in the
value of the Land.
4. The parties hereto agree and acknowledge that the Partnership is not
and has never been obligated to pay a consulting fee in connection with a sale
or change in control with respect to the Shoppes of River Oaks, the planned
51-unit second phase of Plantation Trace, the Laurelwood Community, or the
Howell Ferry Community.
5. The parties hereto agree that this Agreement amends, restates, and
entirely supersedes all consulting agreements between RPI on one hand and the
Partnership on the other hand. All of such consulting agreements are replaced
by this Agreement and are void and of no further force or effect.
- 2 -
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed, sealed and delivered as of the date first above written.
ROBERTS PROPERTIES RESIDENTIAL, L.P.,
a Georgia limited partnership
By: Roberts Realty Investors, Inc.,
its sole general partner
By: /s/ Charles S. Roberts
---------------------------------
Charles S. Roberts, President and
Chief Executive Officer
(CORPORATE SEAL)
ROBERTS PROPERTIES, INC.,
a Georgia corporation
By: /s/ Charles S. Roberts
--------------------------------------
Charles S. Roberts, President
(CORPORATE SEAL)
- 3 -
<PAGE> 1
EXHIBIT 10.23.2
AMENDED AND RESTATED
CONSULTING AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into on June 26,
1996, by and between ROBERTS PROPERTIES RESIDENTIAL, L.P., a Georgia limited
partnership (the "Partnership") and ROBERTS PROPERTIES GROUP, INC., a Georgia
corporation ("RPG").
RECITALS:
A. During the period from October 1, 1994 through the date hereof, the
Partnership has acquired, among others, the following multifamily apartment
communities (the "Communities"): Rosewood Plantation -- 152 units; Preston
Oaks -- 189 units; and Bentley Place -- 117 units. Each Community was owned by
a separate limited partnership. Each acquisition was accomplished by a merger
of the applicable limited partnership into the Partnership upon receipt of the
approval of a majority in interest of the limited partners of the applicable
partnership. Each such approval was obtained pursuant to a prospectus/consent
solicitation statement that in each case specified that the Partnership would,
by virtue of the merger, assume a consulting agreement between the applicable
partnership and RPG. The sole general partner of the Partnership is Roberts
Realty Investors, Inc. (the "Company").
B. The terms of the consulting agreements were described in each of the
successive prospectus/consent solicitation statements and in the Company's Form
10-SB filed on March 22, 1996, and Form 10-SB/A No. 1 filed on May 7, 1996, in
each case filed with the Securities and Exchange Commission (as amended, the
"Form 10-SB").
C. The Partnership and RPG desire to amend and restate the consulting
agreements in the form of this Agreement to avoid a multiplicity of documents
and conform to the parties' understanding of the agreements as described in
each of the successive prospectus/consent solicitation statements and the Form
10-SB.
NOW, THEREFORE, for and in consideration of the premises, Ten and No/100
Dollars ($10.00) in hand paid by each party hereto to the other party hereto,
and other good and valuable consideration, the receipt, adequacy and
sufficiency of which is hereby acknowledged by the parties hereto prior to the
execution, sealing and delivery of this Agreement, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. The foregoing recitals of facts are hereby incorporated herein to the
same extent as if hereinafter fully set forth.
2. The parties hereto acknowledge and agree that no consulting fee has
been or shall be paid to RPG in connection with any of the prior mergers
referenced in Recital A.
3. If the Partnership sells a Community, RPG shall be entitled to render
consulting services in connection with such sale, and the Partnership shall at
the time of the closing of such sale pay to RPG a consulting fee in an amount
equal to the applicable percentage specified below (the "Applicable
Percentage") of the gross sales proceeds of the property sold.
<PAGE> 2
If there occurs a "change in control" (as hereinafter defined), at a time
when the Partnership or the Company owns one or more Communities, the
Partnership shall pay RPG a consulting fee, at the time of such change in
control, in an amount equal to the Applicable Percentage of the fair market
value of each Community then owned by the Partnership or the Company, upon
payment of which the requirement to make any further payments pursuant to this
Agreement shall terminate, so that no amount shall then or thereafter be due
pursuant to this Agreement. For purposes of this Agreement, a "change in
control" means (a) any transaction, whether by merger, consolidation, asset
sale or otherwise, which results in the acquisition of beneficial ownership by
any person or group of fifty percent (50%) or more of the outstanding shares of
common stock of the Company or of the outstanding units of the Partnership, (b)
any sale of all or substantially all of the assets of the Company or the
Partnership, or (c) the liquidation of the Company or the Partnership, except
that no "change in control" shall be considered to have occurred in the event
of the sale of the Partnership's assets to the Company or the merger of the
Partnership into the Company if no change in control of the Company occurs as a
result.
<TABLE>
<CAPTION>
CONSULTANT COMMUNITY APPLICABLE PERCENTAGE
---------- --------- ---------------------
<S> <C> <C>
RPG Rosewood Plantation five percent (5%)
RPG Preston Oaks five percent (5%)
RPG Bentley Place three percent (3%)
</TABLE>
4. The parties hereto agree and acknowledge that the Partnership is not
and has never been obligated to pay a consulting fee in connection with a sale
or change in control with respect to the Shoppes of River Oaks, the planned
51-unit second phase of Plantation Trace, the Laurelwood Community, or the
Howell Ferry Community.
5. The parties hereto agree that this Agreement amends, restates, and
entirely supersedes all consulting agreements between RPG on one hand and the
Partnership on the other hand. All of such consulting agreements are replaced
by this Agreement and are void and of no further force or effect.
[Signatures begin on following page.]
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed, sealed and delivered as of the date first above written.
ROBERTS PROPERTIES RESIDENTIAL, L.P.,
a Georgia limited partnership
By: Roberts Realty Investors, Inc.,
its sole general partner
By: /s/ Charles S. Roberts
-------------------------------------
Charles S. Roberts, President and
Chief Executive Officer
(CORPORATE SEAL)
ROBERTS PROPERTIES GROUP, INC.,
a Georgia corporation
By: /s/ Charles S. Roberts
-------------------------------------
Charles S. Roberts, President
(CORPORATE SEAL)
-3-
<PAGE> 1
EXHIBIT 10.23.3
AMENDED AND RESTATED
CONSULTING AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into on June 26,
1996, by and between ROBERTS PROPERTIES RESIDENTIAL, L.P., a Georgia limited
partnership (the "Partnership") and ROBERTS PROPERTIES MANAGEMENT, L.L.C., a
Georgia limited liability company ("RPM").
RECITALS:
A. During the period from October 1, 1994 through the date hereof, the
Partnership has acquired, among others, the Plantation Trace multifamily
apartment community (the "Community"), which was owned by Roberts Properties
Plantation Trace, L.P. ("Plantation Trace, L.P."), which also owned the Shoppes
of Plantation (the "Shoppes"). The Partnership's acquisition of the Community
and the Shoppes was accomplished by a merger of Plantation Trace, L.P. into the
Partnership upon receipt of the approval of a majority in interest of the
limited partners of Plantation Trace, L.P. Such approval was obtained pursuant
to a prospectus/consent solicitation statement that specified that the
Partnership would, by virtue of the merger, assume a consulting agreement
between Plantation Trace, L.P. and Roberts Properties Management, Inc. With
the permission of the Partnership, Roberts Properties Management, Inc.
subsequently assigned the consulting agreement to RPM. The sole general
partner of the Partnership is Roberts Realty Investors, Inc. (the "Company").
B. The terms of the consulting agreement were described in each of the
successive prospectus/consent solicitation statements and in the Company's Form
10-SB filed on March 22, 1996, and Form 10-SB/A No. 1 filed on May 7, 1996, in
each case filed with the Securities and Exchange Commission (as amended, the
"Form 10-SB").
C. The Partnership and RPM desire to amend and restate the consulting
agreement in the form of this Agreement to avoid a multiplicity of documents
and conform to the parties' understanding of the consulting agreement as
described in each of the successive prospectus/consent solicitation statements
and the Form 10-SB.
NOW, THEREFORE, for and in consideration of the premises, Ten and No/100
Dollars ($10.00) in hand paid by each party hereto to the other party hereto,
and other good and valuable consideration, the receipt, adequacy and
sufficiency of which is hereby acknowledged by the parties hereto prior to the
execution, sealing and delivery of this Agreement, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. The foregoing recitals of facts are hereby incorporated herein to the
same extent as if hereinafter fully set forth.
2. The parties hereto acknowledge and agree that no consulting fee has
been or shall be paid to RPM in connection with the prior merger referenced in
Recital A.
3. If the Partnership sells the Community or the Shoppes, RPM shall be
entitled to render consulting services in connection with such sale, and the
Partnership shall at the time of
<PAGE> 2
the closing of such sale pay to RPM a consulting fee in an amount equal to six
percent (6%) of the gross sales proceeds of the property sold.
If there occurs a "change in control" (as hereinafter defined), at a time
when the Partnership or the Company owns the Community and/or the Shoppes, the
Partnership shall pay RPM a consulting fee, at the time of such change in
control, in an amount equal to six percent (6%) of the fair market value of the
Community and/or the Shoppes then owned by the Partnership or the Company, upon
payment of which the requirement to make any further payments pursuant to this
Agreement shall terminate, so that no amount shall then or thereafter be due
pursuant to this Agreement. For purposes of this Agreement, a "change in
control" means (a) any transaction, whether by merger, consolidation, asset
sale or otherwise, which results in the acquisition of beneficial ownership by
any person or group of fifty percent (50%) or more of the outstanding shares of
common stock of the Company or of the outstanding units of the Partnership, (b)
any sale of all or substantially all of the assets of the Company or the
Partnership, or (c) the liquidation of the Company or the Partnership, except
that no "change in control" shall be considered to have occurred in the event
of the sale of the Partnership's assets to the Company or the merger of the
Partnership into the Company if no change in control of the Company occurs as a
result.
4. The parties hereto agree and acknowledge that the Partnership is not
and has never been obligated to pay a consulting fee in connection with a sale
or change in control with respect to the Shoppes of River Oaks, the planned
51-unit second phase of Plantation Trace, the Laurelwood Community, or the
Howell Ferry Community.
5. The parties hereto agree that this Agreement amends, restates, and
entirely supersedes all consulting agreements between RPM on one hand and the
Partnership on the other hand. All of such consulting agreements are replaced
by this Agreement and are void and of no further force or effect.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed, sealed and delivered as of the date first above written.
ROBERTS PROPERTIES RESIDENTIAL, L.P.,
a Georgia limited partnership
By: Roberts Realty Investors, Inc.,
its sole general partner
By: /s/ Charles S. Roberts
---------------------------------
Charles S. Roberts, President and
Chief Executive Officer
(CORPORATE SEAL)
[Signatures continue on following page.]
<PAGE> 3
ROBERTS PROPERTIES MANAGEMENT,
L.L.C., a Georgia limited liability company
By: /s/ Charles S. Roberts
-----------------------------
Charles S. Roberts, member
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 8,855
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 109,489
<DEPRECIATION> 6,099
<TOTAL-ASSETS> 113,105
<CURRENT-LIABILITIES> 0
<BONDS> 59,216
0
0
<COMMON> 42
<OTHER-SE> 30,179
<TOTAL-LIABILITY-AND-EQUITY> 113,105
<SALES> 0
<TOTAL-REVENUES> 6,888
<CGS> 0
<TOTAL-COSTS> 5,182
<OTHER-EXPENSES> 130
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,745
<INCOME-PRETAX> (6)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6)
<DISCONTINUED> 0
<EXTRAORDINARY> (101)
<CHANGES> 0
<NET-INCOME> (107)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
