<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 September 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 SEPTEMBER 30, 1996
ROBERTS REALTY INVESTORS, INC.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 1996
and December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Statements of Operations for the three and
nine months ended September 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statement of Shareholders' Equity . . . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows for the nine months
ended September 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis or Plan of Operation . . . . . . . . . . . . . . 12
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . 21
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
ASSETS (UNAUDITED)
<S> <C> <C>
REAL ESTATE ASSETS - At cost:
Land $ 16,865 $ 13,170
Buildings and improvements 75,325 54,422
Furniture, fixtures, and equipment 9,370 6,651
--------- ---------
101,560 74,243
Less accumulated depreciation (7,394) (3,940)
--------- ---------
Operating real estate assets 94,166 70,303
Construction-in-progress and real estate under development 14,586 4,083
--------- ---------
Net real estate assets 108,752 74,386
CASH AND CASH EQUIVALENTS 8,580 1,404
RESTRICTED CASH 750 392
DEFERRED FINANCING COSTS - Net of accumulated amortization of
$414 and $513 at September 30, 1996 and December 31, 1995, respectively 538 511
OTHER ASSETS - Net 505 631
--------- ---------
$ 119,125 $ 77,324
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Mortgage notes payable $ 63,120 $ 44,019
Accounts payable and accrued expenses 1,340 524
Dividends and distributions payable 826
Due to affiliates (including retainage payable of $205 and $246 at
September 30, 1996 and December 31, 1995, respectively) 3,774 808
Security deposits and prepaid rents 456 372
--------- ---------
Total liabilities 69,516 45,723
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST OF THE UNITHOLDERS
IN THE OPERATING PARTNERSHIP 19,744 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, 4,186,329 and 2,676,381 shares
issued and outstanding at September 30, 1996 and December 31, 1995, respectively 42 26
Additional paid-in capital 30,427 18,240
Accumulated deficit (604) (538)
--------- ---------
Total shareholders' equity 29,865 17,728
--------- ---------
$ 119,125 $ 77,324
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
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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
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
OPERATING REVENUES:
Rental operations $ 3,980 $ 1,946
Other operating income 155 87
--------- ---------
Total operating revenues 4,135 2,033
--------- ---------
OPERATING EXPENSES:
Personnel 370 204
Utilities 260 121
Repairs, maintenance, and landscaping 274 109
Real estate taxes 303 141
Marketing, management fees, and other 368 182
General and administrative expenses 286 101
Depreciation of real estate assets 1,294 630
--------- ---------
Total operating expenses 3,155 1,488
--------- ---------
INCOME FROM OPERATIONS 980 545
--------- ---------
OTHER INCOME (EXPENSES):
Interest income 120 96
Interest expense (988) (613)
Amortization of deferred financing costs (42) (54)
Other amortization expense (5) (16)
--------- ---------
Total other income (expenses) (915) (587)
--------- ---------
INCOME BEFORE MINORITY INTEREST
AND EXTRAORDINARY ITEM 65 (42)
MINORITY INTEREST OF THE UNITHOLDERS
IN THE OPERATING PARTNERSHIP (26) 17
--------- ---------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM 39 (25)
EXTRAORDINARY ITEM - Early extinguishment of debt, net of
minority interest of unitholders in the Operating Partnership 0 (107)
--------- ---------
NET INCOME (LOSS) $ 39 $ (132)
========= =========
PER SHARE DATA:
Income (loss) before extraordinary item $ 0.01 $ (.01)
========= =========
Net income (loss) $ 0.01 $ (.06)
========= =========
Dividends declared (rounded) $ 0.12 $ 0.00
========= =========
Weighted average common shares 4,186,180 2,359,012
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
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ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C>
OPERATING REVENUES:
Rental operations $ 10,639 $ 4,166
Other operating income 384 192
--------- ---------
Total operating revenues 11,023 4,358
--------- ---------
OPERATING EXPENSES:
Personnel 965 424
Utilities 680 253
Repairs, maintenance, and landscaping 688 206
Real estate taxes 918 340
Marketing, management fees, and other 1,018 368
General and administrative expenses 616 242
Depreciation of real estate assets 3,453 1,243
--------- ---------
Total operating expenses 8,338 3,076
--------- ---------
INCOME FROM OPERATIONS 2,685 1,282
--------- ---------
OTHER INCOME (EXPENSES):
Interest income 280 163
Interest expense (2,733) (1,200)
Amortization of deferred financing costs (119) (116)
Other amortization expense (57) (55)
--------- ---------
Total other income (expenses) (2,629) (1,208)
--------- ---------
INCOME (LOSS) BEFORE MINORITY INTEREST
AND EXTRAORDINARY ITEM 56 74
MINORITY INTEREST OF THE UNITHOLDERS
IN THE OPERATING PARTNERSHIP (22) (32)
--------- ---------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM 34 42
EXTRAORDINARY ITEM - Early extinguishment of debt, net of
minority interest of unitholders in the Operating Partnership (100) (103)
--------- ---------
NET INCOME (LOSS) $ (66) $ (61)
========= =========
PER SHARE DATA:
Income (loss) before extraordinary item $ 0.01 $ 0.02
========= =========
Net income (loss) $ (0.02) $ (0.03)
========= =========
Dividends declared (rounded) $ 0.36 $ 0.00
========= =========
Weighted average common shares 3,669,229 1,817,336
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
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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 65,833 1 1
Issuance of common shares in the
acquisition of partnerships 744,940 8 7,068 7,076
Dividends and distributions payable (2,218) (2,218)
Adjustment for minority interest in the
Operating Partnership 1,292 1,292
Net loss (66) (66)
------------------------------------------------------------
SHAREHOLDERS' EQUITY,
SEPTEMBER 30, 1996 (UNAUDITED) 4,186,329 $42 $30,427 ($604) $29,865
============================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
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ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ (66) $ (61)
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Minority interest of unitholders in the Operating Partnership 22 32
Depreciation and amortization 3,589 1,409
Early extinguishment of debt 100 103
Change in assets and liabilities net of amounts acquired:
Increase in restricted cash (133) (74)
Decrease (increase) in other assets 93 (101)
Increase in accounts payable and
accrued expenses relating to operations 635 132
(Decrease) increase in due to affiliates relating to operations (205) 243
(Decrease) increase in security deposits and prepaid rent (11) 108
---------- ----------
Net cash provided by operating activities 4,024 1,791
---------- ----------
INVESTING ACTIVITIES:
Acquisition and construction of real estate assets (8,785) (12,544)
Purchase of furniture, fixtures and equipment (57) (1,585)
Cash acquired in mergers 164 2,490
---------- ----------
Net cash used in investing activities (8,678) (11,639)
---------- ----------
FINANCING ACTIVITIES:
Proceeds from mortgage notes payable 17,278 20,808
Principal reductions on mortgage notes payable (8,320) (8,699)
Payment of note payable to affiliate (1,403)
Payment of loan costs (309) (166)
Proceeds from issuance of shares 6,589 6,586
Payment of share and unit issuance costs (613) (702)
Payment of dividend (1,392)
Capital distribution to predecessors (95)
---------- ----------
Net cash provided by financing activities 11,830 17,732
---------- ----------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 7,176 7,884
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 1,404 1,008
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,580 $ 8,892
========== ==========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid for interest, net of capitalized interest $3,026,543 $1,333,684
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
6
<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 90% of the Company's
apartment homes are located in the Atlanta metropolitan area. The
Company conducts its business through Roberts 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 ("Cash
Offering") of up to 631,580 shares of its common stock ("Shares") 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
7
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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 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.
On September 18, 1996, the Company's Board of Directors declared a
distribution in the amount of $0.11875 per common share and unit paid
on October 15, 1996 to shareholders of the Company and unitholders of
the Operating Partnership of record on September 18, 1996.
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 nine months ended
September 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. The
financing closed on October 17, 1996. The new
8
<PAGE> 10
mortgage note is payable in monthly installments of $62,475 based on a
30-year amortization schedule.
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 Ivey Brook
community. Ivey Brook 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 30, 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. The financing closed on August 14, 1996.
The new mortgage note is payable in monthly installments of $27,553
based on a 30-year amortization schedule.
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 $63,000 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 60.2% at December
31, 1995 and September 30, 1996, respectively. Units held by the
minority interest as a percentage of total Units and Shares
outstanding was 43.9% and 39.8% at December 31, 1995 and September 30,
9
<PAGE> 11
1996, respectively. The minority interest of the unitholders in the
Operating Partnership was $13,873,000 and $19,744,000 at December 31,
1995 and September 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 nine months ended September 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 3,669,229 and 1,817,336, respectively. The
weighted average number of Shares outstanding during the three months
ended September 30, 1996 and 1995 was 4,186,180 and 2,359,012,
respectively.
7. SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash investing and financing activities for the nine months ended
September 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.
10
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8. PRO FORMA FINANCIAL INFORMATION
Following is a summary of certain operating results presented on a pro
forma basis as if the partnerships purchased in 1995 and 1996 had been
acquired as of the beginning of the periods presented:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------------
1996 1995
---- ----
<S> <C> <C>
Operating revenues $12,141,000 $8,318,000
Income (loss) before extraordinary item $(62,000) $38,000
Net income (loss) $(157,000) $(68,000)
Net income (loss) per share $(0.04) $(0.02)
</TABLE>
11
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Overview
The Operating Partnership presently owns 11 multifamily apartment communities
consisting of 2,194 apartment homes, 463 of which are under construction or
development. The existing communities of River Oaks, Rosewood Plantation,
Plantation Trace, Preston Oaks, Highland Park, Windsong, Bentley Place,
Crestmark and Laurelwood, consisting of 1,731 apartment homes, are stabilized
(the Company considers a community to have achieved stabilized occupancy on the
earlier of (a) attainment of 95% occupancy as of the first day of any month, or
(b) one year after completion of construction, provided that any community
under redevelopment is not considered to be stabilized during its redevelopment
but is considered stabilized upon completion of redevelopment). The 146-unit
Ivey Brook Community (referred to in previous reports as the Holcomb Bridge
Community), the 180-unit Howell Ferry Community, an 86-unit second phase of
Crestmark and a 51-unit second phase of Plantation Trace 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 accompanying
financial statements and the notes thereto and is based primarily on the
consolidated financial statements of the Company for the three and nine month
periods ended September 30, 1996 and September 30, 1995.
Results of Operations
Comparison of Three Months Ended September 30, 1996 to Three Months Ended
September 30, 1995 - For the three months ended September 30, 1996, the Company
posted net income of $39,000 or $0.01 per share (after minority interest and
extraordinary item) compared to a loss of $132,000 or $0.06 per share (after
minority interest and extraordinary item) for the three months ended September
30, 1995.
Rental income increased $2,034,000 or 104% from $1,946,000 for the quarter
ended September 30, 1995 to $3,980,000 for the quarter ended September 30,
1996. This increase is due primarily to the following: (1) the completion of
the construction and lease-up phases at the Preston Oaks and Highland Park
Communities ($553,000), (2) the acquisition of the Windsong, Laurelwood,
Bentley Place and Crestmark Communities in September 1995, December 1995, March
1996 and June 1996, respectively ($1,434,000), and (3) higher rental income
from Plantation Trace, River Oaks and Rosewood Plantation (the three
Communities included in the Company's portfolio for both the third quarter of
1995 and the third quarter of 1996) as leases were renewed at the higher
current market rents.
12
<PAGE> 14
Property operating expenses (excluding depreciation and general and
administrative expenses) increased $818,000 or 108%. This increase is due
primarily to the acquisition of the Windsong, Laurelwood, Bentley Place and
Crestmark Communities and the completion of construction of the Preston Oaks
and Highland Park Communities. Property operating expenses as a percentage of
operating revenues increased from 37.2% for the quarter ended September 30,
1995 to 38.1% for the quarter ended September 30, 1996. This increase in
operating expenses as a percent of operating revenues is due primarily to the
Company's accounting policy of expensing all expenditures for carpet,
appliances, HVAC units, water heaters and pool furniture which increased from
$12,850 for the three months ended September 30, 1995 to $45,656 for the three
months ended September 30, 1996.
Depreciation expense increased $664,000 or 105% from $630,000 to $1,294,000.
This increase is due primarily to the following: (1) the completion of the
Highland Park Community in the first quarter of 1996 because depreciation
expense is recorded as rental units are completed and available for occupancy
($122,000), and (2) the acquisition of the Windsong, Laurelwood, Bentley Place
and Crestmark Communities ($507,000).
General and administrative expenses increased $185,000 or 183% from $101,000 to
$286,000 and includes legal and accounting fees, marketing and printing fees,
salaries, director fees and other costs. The majority of the increase of
$185,000 was due to higher salaries expense, professional services and legal
and accounting fees associated with the Company's filing of its Form 10-SB
registration statement with the Securities and Exchange Commission. 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. General and administrative expenses
as a percentage of operating revenues increased from 5.0% for the three months
ended September 30, 1995 to 6.9% for the three months ended September 30, 1996.
Interest income increased $24,000 or 25% from $96,000 to $120,000. This
increase is due to higher cash equivalent investment balances during the third
quarter of 1996 resulting from the proceeds of the Company's offering of
699,175 Shares for cash that was concluded in May 1996.
Interest expense increased $375,000 or 61% from $613,000 to $988,000. This
increase 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 debt assumed in the
acquisition of the Windsong and Crestmark Communities, and (3) the $5,000,000
loan secured by Laurelwood that was closed in March 1996 and the $4,100,000
loan secured by Bentley Place that was closed in August 1996.
The mortgage note secured by the Preston Oaks Community was refinanced in
September 1995 prior to its contractual maturity. The unamortized loan costs
related to this mortgage note payable at the time of its refinancing were
charged to expense as an extraordinary item. The
13
<PAGE> 15
extraordinary item (early extinguishment of a debt) for the three months ended
September 30, 1995 was $183,000 (including minority interests' share of
$76,000).
Operating results for the three communities that were fully stabilized
throughout both the 1996 period and the 1995 period (the River Oaks, Rosewood
Plantation and Plantation Trace Communities) are summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED %
SEPT 30, 1995 SEPT 30, 1996 CHANGE
------------- ------------- ------
<S> <C> <C> <C>
Rental income $1,334,000 $1,386,000 3.9%
Total operating revenues $1,387,000 $1,386,000 3.2%
Property operating expenses(1) $ 518,000 $ 523,000 1.0%
Net operating income $ 869,000 $ 909,000 4.6%
Average stabilized occupancy(2) 99.4% 99.4%
Operating expense ratio(3) 37.3% 36.5% (0.8%)
Average monthly rent per unit $ 821 $ 854 4.0%
</TABLE>
- -----------------------------------
(1) Property operating expenses include personnel, utilities, real estate
taxes, insurance, maintenance, landscaping, marketing, management and
other fees.
(2) Represents the average physical occupancy calculated by dividing the
total number of vacant days by the total possible number of vacant
days for each period and then subtracting the resulting number from
100%. The calculation includes only the River Oaks, Rosewood
Plantation and Plantation Trace Communities that were owned by the
Company during both the third quarter of 1995 and the third quarter of
1996.
(3) Represents the total of property operating expenses divided by
property operating revenues expressed as a percentage.
Comparison of Nine Months Ended September 30, 1996 to Nine Months Ended
September 30, 1995 - At September 30, 1996, the Company owned nine completed
and operating apartment home communities, with one apartment home community and
a second phase of another under construction. The changes in operating results
for the nine months ended September 30, 1996 compared to the nine months ended
September 30, 1995 are primarily the result of increases in the number of
apartment homes owned due to (1) the completion of the Preston Oaks and
Highland Park Communities during 1995, and (2) the acquisition of the
Plantation Trace, Windsong, Laurelwood, Bentley Place and Crestmark Communities
in May 1995, September 1995, December 1995, March 1996 and June 1996,
respectively. For the nine months ended September 30, 1996, the Company posted
a net loss of $66,000 or $0.02 per share (after minority interest and
extraordinary item) compared to a net loss of $61,000 or $0.03 per share (after
minority interest and extraordinary item) for the nine months ended September
30, 1995.
Rental income increased $6,473,000 or 155% from $4,166,000 to $10,639,000.
This increase is due primarily to the following: (1) the completion of the
construction and lease-up phases at
14
<PAGE> 16
the Preston Oaks and Highland Park Communities ($2,308,000), (2) the
acquisition of the Plantation Trace, Windsong, Laurelwood, Bentley Place and
Crestmark Communities ($4,038,000), and (3) higher rental income from River
Oaks and Rosewood Plantation (the two Communities included in the Company's
portfolio for both periods) as leases are renewed at the higher current market
rents.
Property operating expenses (excluding depreciation and general and
administrative expenses) increased $2,678,000 or 168% from $1,591,000 to
$4,269,000. This increase is due primarily to the acquisition of the
Plantation Trace, Windsong, Laurelwood, Bentley Place and Crestmark Communities
and the completion of construction of the Preston Oaks and Highland Park
Communities. Property operating expenses as a percentage of operating revenues
increased from 36.5% for the nine months ended September 30, 1995 to 38.7% for
the nine months ended September 30, 1996. This increase in operating expenses
as a percent of operating revenues is due primarily to the Company's accounting
policy of expensing all expenditures for carpet, appliances, HVAC units, water
heaters and pool furniture which increased from $12,916 for the nine months
ended September 30, 1995 to $121,243 for the nine months ended September 30,
1996.
Depreciation expense increased $2,210,000 or 178% from $1,243,000 to
$3,453,000. This increase is due primarily to the following: (1) the
completion of the Preston Oaks and Highland Park Communities because
depreciation expense is recorded as rental units are completed and available
for occupancy ($728,000), and (2) the acquisition of the Plantation Trace,
Windsong, Laurelwood, Bentley Place and Crestmark Communities ($1,506,000).
General and administrative expenses increased $374,000 or 155% from $242,000 to
$616,000 and includes legal and accounting fees, marketing and printing fees,
salaries, director fees and other costs. The increase of $374,000 was due
primarily to higher salaries expense and legal and accounting fees associated
with the Company's filing of its Form 10-SB registration statement with the
Securities and Exchange Commission. 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.
General and administrative expenses as a percentage of operating revenues
remained unchanged at 5.6% for the nine months ended September 30, 1995 and
September 30, 1996.
Interest income increased $117,000 or 72% from $163,000 to $280,000. This
increase is due to higher cash equivalent investment balances resulting from
the proceeds of the Company's offering of 699,175 Shares for cash that was
concluded in May 1996.
Interest expense increased $1,533,000 or 128% from $1,200,000 to $2,733,000.
This increase 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 debt
assumed in the acquisition of the Plantation Trace, Windsong and Crestmark
Communities, and
15
<PAGE> 17
(3) the $5,000,000 loan on Laurelwood that was closed in March 1996 and the
$4,100,000 loan on Bentley Place that was closed in August 1996.
Mortgage notes payable secured by Preston Oaks and Highland Park were
refinanced in 1995 and 1996, respectively, in each case prior to its
contractual maturity. The unamortized loan costs related to these mortgage
notes payable at the time of their refinancing were charged to expense as an
extraordinary item. The extraordinary item (early extinguishment of a debt)
for the nine months ended September 30, 1996 was $163,000 (including the
minority interests' share of $63,000) compared to the extraordinary item of
$183,000 (including the minority interests' share of $80,000) for the nine
months ended September 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
Comparison of Nine Months Ended September 30, 1996 to Nine Months Ended
September 30, 1995 - Cash and cash equivalents increased $7,176,000 during the
nine months ended September 30, 1996 compared to an increase of $7,884,000 for
the nine months ended September 30, 1995. This increase in cash and cash
equivalents for both periods 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
$2,233,000 from $1,791,000 to $4,024,000 due primarily to the acquisition of
the Plantation Trace, Windsong, Laurelwood, Bentley Place and Crestmark
Communities and the completion of the construction and lease-up phases of the
Preston Oaks and Highland Park 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 $2,961,000 from $11,639,000 to
$8,678,000 due primarily to increased construction activity during the nine
months ended September 30, 1995 with the construction of the Preston Oaks and
Highland Park Communities (a total of 377 apartment homes) compared to the
construction of Ivey Brook and the second phase of Crestmark (a total of 232
apartment homes) during the nine months ended September 30, 1996.
Net cash provided by financing activities decreased $5,902,000 from $17,732,000
to $11,830,000 due primarily to the following: (1) an increase in borrowings
during the nine months ended September 30, 1995 associated with the financing
of the construction of the Preston Oaks and Highland Park Communities, (2)
payment to an affiliate of a note payable assumed in the acquisition of the
Crestmark Community in June 1996, and (3) payment of quarterly distributions
on Shares and Units for the first and second quarters of 1996.
16
<PAGE> 18
The Operating Partnership acquired the fully operating Plantation Trace and
Windsong Communities in 1995 by issuing Units. Similarly, the Operating
Partnership acquired the Crestmark Community and its 8.8 acres of adjacent
undeveloped property in June 1996 by issuing Units. The Company issued Shares:
(1) in March 1995 to acquire the Ivey Brook Community, which is under
construction, (2) in March 1996 to acquire the existing Bentley Place
Community, and (3) in March 1996 in the Cash Offering to acquire the land for
and fund the development of the Howell Ferry Community and for other corporate
purposes. The Operating Partnership is also constructing a second phase to the
existing Crestmark Community as well as developing a second phase of Plantation
Trace. The Company anticipates that each Community's rental and other
operating revenues after completion of 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 and construction 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 Ivey Brook and Howell Ferry), and (c) the net proceeds from
the issuance of Shares in the Cash Offering that was completed May 7, 1996.
Management expects that the construction of Ivey Brook 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 written 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
proceeds of the Cash Offering and an $8,454,000 loan for which the Company is
seeking a commitment.
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. At
December 31, 1995, no borrowings were outstanding, although $163,000 of the
line of credit had been reserved for the letter of credit issued in connection
with the refinancing of Highland Park. The Company elected not to renew the
line of credit upon its expiration in May 1996.
On August 10, 1995, the Company received a commitment from Nationwide Life
Insurance Company to refinance the existing loan secured by Highland Park for
$8,178,000 at a fixed interest rate of 7.30% per annum for a seven-year term.
The refinancing was completed on January 31, 1996. Based on a 30-year
amortization schedule, the monthly payment of principal and interest on the
loan is $56,066.
17
<PAGE> 19
On September 20, 1995, the Company refinanced the $8,711,000 loan secured by
Preston Oaks with a new loan from Nationwide Life Insurance Company at a fixed
interest rate of 7.21% per annum for a seven year term. Based on a 30-year
amortization schedule, the monthly payment of principal and interest on the
loan is $59,188.
The Operating Partnership sold The Shoppes of Crestmark on December 8, 1995 for
a price of $940,000, and the net proceeds of such sale will be used to acquire
or develop additional multifamily communities.
On December 15, 1995, the Company, through the Operating Partnership, acquired
the Laurelwood Community from an independent third party for $7,775,000 in
cash. The Company funded the purchase price from current working capital. On
March 28, 1996, the Company closed a $5,000,000 permanent loan with Nationwide
Life Insurance Company that is secured by the Laurelwood Community. The loan
has a ten year term with monthly payments of principal and interest in the
amount of $35,739 based on a 25-year amortization schedule and a fixed interest
rate of 7.125% per annum.
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 refinancing was completed on October 17,
1996. The loan has a seven year term with monthly payments of principal and
interest in the amount of $62,475 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 Ivey Brook to be funded
on or before January 30, 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 ten 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 financing was completed on August 14, 1996. The loan has a ten
year term with monthly payments of principal and interest in the amount of
$27,553 based on a 30-year amortization schedule and a fixed interest rate of
7.10% per annum.
On May 7, 1996 the Company closed an "intrastate" offering (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
18
<PAGE> 20
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 $11,253,000
2001 $15,238,000
2002 $ 7,954,000
2003 $15,928,000
2004 $ 0
2005 $ 0
2006 $13,106,000
-----------
Total $63,479,000
===========
</TABLE>
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.
FUNDS FROM OPERATIONS
The Company considers Funds From Operations ("FFO") to be an important measure
of its operating performance. While FFO does not represent cash flows from
operating, investing or financing activities as defined by generally accepted
accounting principles ("GAAP"), FFO does provide investors with additional
information with which to evaluate the ability of a REIT to meet required debt
service payments, fund capital expenditures and pay dividends and
distributions. The Company believes that in order to gain a clear
understanding of its operating
19
<PAGE> 21
results, FFO should be evaluated in conjunction with net income (determined in
accordance with GAAP). Based on published recommendations of a task force of
the National Association of Real Estate Investment Trusts ("NAREIT") during the
first quarter of 1995, the Company defines FFO as net income (loss) computed in
accordance with GAAP, excluding non-recurring costs and net realized gains,
plus depreciation of real property and minority interest of Unitholders in the
Operating Partnership. Funds From Operations should not be considered as an
alternative to net income (determined in accordance with GAAP) as an indication
of the Company's financial performance, or to cash flow from operating
activities (determined in accordance with GAAP) as a measure of liquidity. The
following table reconciles net income to FFO (dollars in thousands).
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ------------------------
1996 1995 1996 1995
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Net income (loss) $ 39 $ (132) $ (66) $ (61)
Add: Minority interest of Unitholders 26 (17) 22 32
Add: Extraordinary item 107 100 103
Add: Other amortization expense 5 16 57 55
Add: Depreciation expense 1,294 630 3,453 1,243
------ ------ ------ ------
Funds From Operations $1,364 $ 604 $3,566 $1,372
====== ====== ====== ======
Weighted average shares and units
outstanding during the period 6,959,759 4,041,127 6,003,478 3,229,232
</TABLE>
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
Ivey Brook and Howell Ferry Communities and for the second phases 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.
20
<PAGE> 22
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its Annual Meeting of Shareholders on September 3, 1996. The
shareholders voted to elect Dennis H. James and Wm. Jarell Jones to serve as
directors of the Company for a full three year term through the Annual Meeting
in 1999. A total of 2,732,788 votes were cast for, and 1,400 were withheld
from, the election of Dennis H. James. A total of 2,730,191 votes were cast
for, and 3,997 were withheld from, the election of Wm. Jarell Jones. The terms
of office of directors Charles S. Roberts and James M. Goodrich expire at the
Annual Meeting in 1997, and the terms of office of directors Ben A. Spalding
and George W. Wray, Jr. expire at the Annual Meeting in 1998.
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.
Exhibit
No. Description
- --------- -----------
10.5.8 Standard Form of Agreement between Owner and Contractor
between Roberts Properties Holcomb Bridge, L.P. and Roberts
Properties Construction, Inc., dated as of January 2, 1995
(Holcomb Bridge Syndication - the Holcomb Bridge community is
now referred to as Ivey Brook).
10.17.4.1 Real Estate Note A executed by Roberts Properties Residential,
L.P. in favor of Nationwide Life Insurance Company, dated
August 14, 1996, in the original principal amount of
$3,350,000.00 (Bentley Place).
10.17.4.2 Real Estate Note B executed by Roberts Properties Residential,
L.P. in favor of West Coast Life Insurance Company, dated
August 14, 1996, in the original principal amount of
$750,000.00 (Bentley Place).
10.17.4.3 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
August 14, 1996, and related collateral documents (Bentley
Place).
10.22.6 Standard Form of Agreement between Owner and Contractor
between Roberts Properties Residential, L.P. and Roberts
Properties Construction, Inc., dated as of June 15, 1996
(Crestmark Merger).
21
<PAGE> 23
27 Financial Data Schedule (for SEC use only).
(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: November 12, 1996 By: /s/ Charles S. Roberts
------------------------------------
Charles S. Roberts, Chairman of the
Board, Chief Executive Officer, and
President
Date: November 12, 1996 By: /s/ Charles R. Elliott
------------------------------------
Charles R. Elliott
Chief Financial Officer
22
<PAGE> 1
EXHIBIT 10.5.8
[THE AMERICA INSTITUTE OF ARCHITECTS LETTERHEAD]
===============================================================================
AIA Document A101
STANDARD FORM OF AGREEMENT BETWEEN
OWNER AND CONTRACTOR
where the basis of payment is a
STIPULATED SUM
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH
AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.
The 1987 Edition of AIA Document A201, General Conditions of the Contract for
Construction, is adopted in this document by reference. Do not use with other
general conditions unless this document is modified. This document has been
approved and endorsed by The Associate General Contractors of America.
================================================================================
AGREEMENT
made as of the Second day of January in the year of
Nineteen Hundred and Ninety Five
BETWEEN the Owner: Roberts Properties Residential, L.P.
(Name and address) 8010 Roswell Rd., Suite #120
Atlanta, Georgia 30350
and the Contractor: Roberts Properties Construction, Inc.
(Name and Address) 8010 Roswell Rd., Suite #120
Atlanta, Georgia 30350
The Project is: Holcomb Bridge Road
(Name and location) Holcomb Bridge Rd. and Peachtree Corners Circle
Gwinnett County, Georgia
The Architect is:
(Name and address)
The Owner and Contractor agree as set forth below.
- -------------------------------------------------------------------------------
Copyright 1915, 1918, 1925, 1937, 1958, 1961, 1963, 1967, 1974, 1977, (c)
1987 by The American Institute of Architects, 1735 New York Avenue, N.W.
Washington, D.C. 20006. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the
AIA violates the copyright laws of the United States and will be subject
to legal prosecution.
- --------------------------------------------------------------------------------
1
<PAGE> 2
ARTICLE 1
---------
THE CONTRACT DOCUMENTS
The Contract Documents consist of this Agreement, Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications,
Addenda issued prior to execution of this Agreement, other documents listed
in this Agreement and Modifications issued after execution of this Agreement;
these form the Contract, and are as fully a part of the Contract as if
attached to this Agreement or repeated herein. The Contract represents
the entire and integrated agreement between the parties hereto and supersedes
prior negotiations, representations or agreements, either written or oral. An
enumeration of the Contract Documents, other than Modifications, appears in
Article 9.
ARTICLE 2
---------
THE WORK OF THIS CONTRACT
The Contractor shall execute the entire Work described in the Contract
Documents, except to the extent specifically indicated in the Contract
Documents to be the responsibility of others, or as follows:
All site clearing, grading, utilities, paving, landscaping, etc. including 146
multi-family units in 12 buildings and including a 4,000 sq. ft.
Clubhouse/Leasing center, swimming pool, car wash.
ARTICLE 3
---------
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
3.1 The date of commencement is the date from which the Contract Time of
Paragraph 3.2 is measured, and shall be the date of this Agreement, as first
written above, unless a different date is stated below or provision is made for
the date to be fixed in a notice to proceed issued by the Owner.
(Insert the date of commencement, if it differs from the date of this Agreement
or, if applicable, state that the date will be fixed in a notice to proceed.)
Unless the date of commencement is established by a notice to proceed issued
by the Owner, the Contractor shall notify the Owner in writing not less than
five days before commencing the Work to permit the timely filing of mortgages,
mechanic's liens and other security interests.
3.2 The Contractor shall achieve Substantial Completion of the entire Work not
later than December 2, 1996
(Insert the calendar date or number of calendar days after the date of
commencement. Also insert any requirements for earlier Substantial Completion
of certain portions of the Work, if not stated elsewhere in the Contract
Documents.)
, subject to adjustments of this Contract Time as provided in the Contract
Documents.
(Insert provisions, if any, for liquidated damages relating to failure to
complete on time.)
2
<PAGE> 3
ARTICLE 4
---------
CONTRACT SUM
4.1 The Owner shall pay the Contractor in current funds for the Contractor's
performance of the Contract the Contract Sum of Six Million, Four Hundred
Twenty Thousand -------------------------------- Dollars ($6,420,000.00),
subject to additions and deductions as provided in the Contract Documents.
4.2 The Contract Sum is based upon the following allowances if any, which are
described in the Contract Documents and are hereby accepted by the Owner:
(State the numbers or other identification of accepted alternates. If
decisions on other alternates are to be made by the Owner subsequent to the
execution of this Agreement, attach a schedule of such other alternates showing
the amount for each and the date until which that amount is valid.)
Design, Engineering $ 26,280.00
Landscape, Irrigation, Design 147,660.00
Pool Deck Improvements 68,750.00
Site Signage/Entry Feature 25,000.00
Clubhouse/Leasing Center 290,000.00
Adverse soil conditions 39,600.00
Yard drains 7,500.00
Sidewalks 24,000.00
4.3 Unit prices, if any, are as follows:
N/A
3
<PAGE> 4
ARTICLE 5
---------
PROGRESS PAYMENTS
5.1 Based upon Applications for Payment submitted to the Lender by the
Contractor and Certificates for Payment issued by the Architect, the Owner
shall make progress payments on account of the Contract Sum to the Contractor
as provided below and elsewhere in the Contract Documents.
5.2 The period covered by each Application for Payment shall be one calendar
month ending on the last day of the month, or as follows:
5.3 Provided an Application for Payment is received by the Lender not later
than the 1st day of a month, the Owner shall make payment to the Contractor not
later than the 10th day of the same month. If an Application for Payment is
received by the Architect after the application date fixed above, payment shall
be made by the Owner not later than days after the Lender receives the
Application for Payment.
5.4 Each Application for Payment shall be based upon the Schedule of Values
submitted by the Contractor in accordance with the Contract Documents. The
Schedule of Values shall allocate the entire Contract Sum among the various
portions of the Work and be prepared in such form and supported by such data to
substantiate its accuracy as the Architect may require. This Schedule, unless
objected to by the Architect, shall be used as a basis for reviewing the
Contractor's Applications for Payment.
5.5 Applications for Payment shall indicate the percentage of completion of
each portion of the Work as of the end of the period covered by the Application
for Payment.
5.6 Subject to the provisions of the Contract Documents, the amount of each
progress payment shall be computed as follows:
5.6.1 Take that portion of the Contract Sum properly allocable to completed
Work as determined by multiplying the percentage completion of each portion of
the Work by the share of the total Contract Sum allocated to that portion of
the Work in the Schedule of Values, less retainage of ten on specified labor
categories percent (10%). Pending final determination of cost to the Owner of
changes in the Work, amounts not in dispute may be included as provided in
Subparagraph 7.3.7 of the General Conditions even though the Contract Sum has
not yet been adjusted by Change Order;
5.6.2 Add that portion of the Contract Sum properly allocable to materials and
equipment delivered and suitably stored at the site for subsequent
incorporation in the completed construction (or, if approved in advance by the
Owner, suitably stored off the site at a location agreed upon in writing), less
retainage of ten percent (10%).
5.6.3 Subtract the aggregate of previous payments made by the Owner; and paid
in full
5.6.4 Subtract amounts, if any, for which the Architect has withheld or
nullified a Certificate for Payment as provided in Paragraph 9.5 of the General
Conditions.
5.7 The progress payment amount determined in accordance with Paragraph 5.6
shall be further modified under the following circumstances;
5.7.1 Add, upon Substantial Completion of the Work, a sum sufficient to
increase the total payments to One Hundred percent (100 %) of the Contract Sum,
less such amounts as the Architect shall determine for incomplete Work and
unsettled claims, and
5.7.2 Add, if final completion of the Work is thereafter materially delayed
through no fault of the Contractor, any additional amounts payable in
accordance with Subparagraph 9.10.3 of the General Conditions.
5.8 Reduction or limitation of retainage, if any, shall be as follows:
(If it is intended, prior to Substantial Completion of the entire Work, to
reduce or limit the retainage resulting from the percentages inserted in
Subparagraphs 5.6.1 and 5.6.2 above, and this is not explained elsewhere in the
Contract Documents, insert here provisions for such reduction or limitation.)
Retainage shall not be held on that portion of the work in the schedule of
values that is allowable to project overhead, permits and county fees,
supervision and hourly labor or materials. An "A" has been placed beside all
items in the schedule of values that no retainage will be held on.
4
<PAGE> 5
ARTICLE 6
---------
FINAL PAYMENT
Final payment, constituting the entire unpaid balance of the Contract Sum,
shall be made by the Owner to the Contractor when (1) the Contract has been
fully performed by the Contractor except for the Contractor's responsibility to
correct nonconforming Work as provided in Subparagraph 12.2.2 of the General
Conditions and to satisfy other requirements, if any, which necessarily survive
final payment; and (2) a final Certificate for Payment has been issued by the
Architect; such final payment shall be made by the Owner not more than 30 days
after the issuance of the Architect's final Certificate for Payment, or as
follows:
Retainage will be released on the unmarked categories on the 1st of the month
following 60 days after the county Certificate of Occupancy is issued. The
retainage will be released on a building by building basis.
ARTICLE 7
---------
MISCELLANEOUS PROVISIONS
7.1 Where reference is made in this Agreement to a provision of the General
Conditions or another Contract Document, the reference refers to that
provision as amended or supplemented by other provisions of the Contract
Documents.
7.2 Payments due and unpaid under the Contract shall bear interest from the
date payment is due at the rate stated below, or in the absence thereof, at the
legal rate prevailing from time to time at the place where the Project is
located.
(Insert rate of interest agreed upon, if any.)
(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations at the Owner's and
Contractor's principal places of business, the location of the Project and
elsewhere may affect the validity of this provision. Legal advice should be
obtained with respect to deletions or modifications, and also regarding
requirements such as written disclosures or waivers.)
7.3 Other provisions:
ARTICLE 8
---------
TERMINATION OR SUSPENSION
8.1 The Contract may be terminated by the Owner or the Contractor as provided
in Article 14 of the General Conditions.
8.2 The Work may be suspended by the Owner as provided in Article 14 of the
General Conditions.
5
<PAGE> 6
ARTICLE 9
---------
ENUMERATION OF CONTRACT DOCUMENTS
9.1 The Contract Documents, except for Modifications issued after execution of
this Agreement, are enumerated as follows:
9.1.1 The Agreement is this executed Standard Form of Agreement Between Owner
and Contractor, AIA Document A101, 1987 Edition.
9.1.2 The General Conditions are the General Conditions of the Contract for
Construction, AIA Document A201, 1987 Edition.
9.1.3 The Supplementary and other Conditions of the Contract are those
contained in the Project Manual dated , and are as
follows:
DOCUMENT TITLE PAGES
N/A
9.1.4 The Specifications are those contained in the Project Manual dated as in
Subparagraph 9.1.3, and are as follows:
(Either list the Specifications here or refer to an exhibit attached to this
Agreement.)
SECTION TITLE PAGES
N/A
6
<PAGE> 7
9.1.5 The Drawings are as follows, and are dated unless a different
date is shown below:
(Either list the Drawings here or refer to an exhibt attached to this
Agreement.)
NUMBER TITLE DATE
N/A
9.1.6 The Addenda, if any, are as follows:
NUMBER DATE PAGES
N/A
Portions of Addenda relating to bidding requirements are not part of the
Contract Documents unless the bidding requirements are also enumerated in this
Article 9.
7
<PAGE> 8
9.1.7 Other documents, if any, forming part of the Contract Documents are as
follows:
(List here any additional documents which are intended to form part of the
Contract Documents. The General Conditions provide the bidding requirements
such as advertisement or invitation to bid, Instructions to Bidders, sample
forms and the Contractor's bid are not part of the Contract Documents unless
enumerated in this Agreement. They should be listed here only if intended to
be part of the Contract Documents.)
This Agreement is entered into as of the day and year first written above and
is executed in at least three original copies of which one is to be delivered
to the Contractor, one to the Architect for use in the administration of the
Contract, and the remainder to the Owner.
OWNER CONTRACTOR
Roberts Properties Residential, L.P. Roberts Properties Construction, Inc.
By: Roberts Realty Investors, Inc. /s/ Mike Stringfellow
- ------------------------------------- -------------------------------------
(SIGNATURE) Its Sole General Partner (SIGNATURE)
By: By: Mike Stringfellow
/s/ Charles S. Roberts Sr. Vice President, Construction
- ------------------------------------- -------------------------------------
(Printed name and title) (Printed name and title)
Charles S. Roberts, President
8
<PAGE> 9
HOLCOMB BRIDGE APARTMENTS
EXHIBIT "A"
Item # 5.8 Retainage shall not be held on the following items.
All General Condition Items
Erosion Control
Asphalt Paving & Striping Material
Site Walls Material
Curb & Gutter Material
Landscape Design
Landscape and Irrigation Material
Stone Material
Metal Pan Stairs and Handrail Material
Carpentry Material
Roofing and Gutter Materials
Door, Window and Interior Trim Material
Insulation, Drywall, Painting, Ceramic Tile, Flooring and Wallpaper Material
Appliances, Cabinet Material
Mini Blinds and Shelving Material
HVAC, Plubing, Fire Sprinkler, Electrical Materials and Light Fixtures
Clubhouse Materials
Entrance wall, Mailbox Materials
Pool, Pool Deck and Fencing Material
<PAGE> 1
EXHIBIT 10.17.4.1
REAL ESTATE NOTE A
$3,350,000.00 Atlanta, Georgia
August 14, 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 THREE MILLION THREE HUNDRED
FIFTY THOUSAND AND NO/100 DOLLARS ($3,350,000.00), 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 43215-2220, 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 7.10% percent per annum,
shall be due and payable on August 15, 1996.
(ii) Thereafter, principal and interest on the unpaid principal balance of
this Note at the rate of 7.10% percent per annum shall be paid in one
hundred nineteen (119) consecutive monthly installments commencing on
September 15, 1996 and continuing on the fifteenth day of each calendar
month thereafter, with each such installment to be in the sum of Twenty
Two Thousand Five Hundred Thirteen and 07/100 Dollars ($22,513.07).
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 August 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.
- 2 -
<PAGE> 3
BY INITIALING BELOW, MAKER EXPRESSLY ACKNOWLEDGES THAT PURSUANT TO THE
PROVISIONS OF THIS NOTE, MAKER HAS NO RIGHT TO PREPAY 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 Dekalb 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
- 3 -
<PAGE> 4
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
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
- 4 -
<PAGE> 5
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:
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
- 5 -
<PAGE> 6
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 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.
- 6 -
<PAGE> 7
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 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)
- 7 -
<PAGE> 1
EXHIBIT 10.17.4.2
REAL ESTATE NOTE B
$750,000.00 Atlanta, Georgia
August 14, 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
43215-2220, 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 7.10% percent per annum,
shall be due and payable on August 15, 1996.
(ii) Thereafter, principal and interest on the unpaid principal balance of
this Note at the rate of 7.10% percent per annum shall be paid in one
hundred nineteen (119) consecutive monthly installments commencing on
September 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 Forty and 24/100 Dollars ($5,040.24).
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 August 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.
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<PAGE> 3
BY INITIALING BELOW, MAKER EXPRESSLY ACKNOWLEDGES THAT PURSUANT TO THE
PROVISIONS OF THIS NOTE, MAKER HAS NO RIGHT TO PREPAY 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 Dekalb 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
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<PAGE> 4
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 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
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<PAGE> 5
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:
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
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<PAGE> 6
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 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.
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<PAGE> 7
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 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
Three Million Three Hundred Fifty Thousand and No/100 Dollars ($3,350,000.00).
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
Return to:
Charles A. Brake, Jr., Esq.
Alston & Bird
One Atlantic Center
1201 West Peachtree St.
Atlanta, Georgia 30309-3424
EXHIBIT 10.17.4.3
DEED TO SECURE DEBT AND SECURITY AGREEMENT
THIS DEED TO SECURE DEBT AND SECURITY AGREEMENT (the "Security Deed"),
executed this 14th day of August 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
43215-2220 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 43215-2220 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 FOUR MILLION ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($4,100,000.00),
with interest thereon, as set forth in a certain Real Estate Note A of even date
herewith in the sum of THREE MILLION THREE HUNDRED FIFTY THOUSAND AND NO/100
DOLLARS ($3,350,000.00) 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 August 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
DeKalb 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");
<PAGE> 2
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 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
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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").
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 Four Million One Hundred Thousand and No/100
Dollars ($4,100,000.00), or so much thereof as may have been advanced and remain
outstanding from time to time, with interest at the rate of 7.10% 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 August 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.
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<PAGE> 4
3. PRESERVATION AND MAINTENANCE OF PROPERTY; ACCESSIBILITY; HAZARDOUS
WASTE. (a) 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 all times,
be in good condition, fit and proper for the respective purposes for which they
were originally erected or installed.
(b) Borrower at all times shall maintain the Property in full compliance
with 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").
(c) Borrower at all times shall keep the Property and ground water of the
Property free of "Hazardous Materials" (as hereinafter defined). 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. "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. Specifically, and without
limitation, the term "Hazardous Materials" shall also include, but not be
limited to, petroleum, petroleum products, petroleum by-products, petroleum
components, the breakdown components of petroleum resulting from degradation of
petroleum in the environment, gasoline, diesel fuel, lubricating oils, motor
oil, mineral spirits, kerosene, or any other petroleum based product, and any
compound, element, additive or other material which is added to or combined with
petroleum in any form to create gasoline, diesel fuel, lubricating oils, motor
oil, mineral spirits, kerosene, or any other petroleum based product.
(d) Notwithstanding the foregoing provisions of subparagraph (c), Borrower
has made Lender aware of a certain release or releases on or under the Real
Property of petroleum, petroleum products, petroleum by-products, and/or the
components of petroleum products that originated at, on or beneath the property
known as Fina Site #6706 located at 3155 Pleasantdale Road, Tucker, DeKalb
County, Georgia (such release or releases, and the extent thereof, as disclosed
to and known by Lender as of the date hereof being hereafter referred to as the
"Fina Release"). By acceptance hereof, Lender agrees that Borrower shall not be
in default of the first, second or third sentences of subparagraph (c) as a
result of the Fina Release. Furthermore, by
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<PAGE> 5
acceptance hereof Lender agrees that, except as provided in the last two
sentences of this subparagraph (d), Borrower shall not be required to further
investigate the Fina Release pursuant to the fourth sentence of subparagraph (c)
unless Lender obtains any additional adverse information concerning the Fina
Release and there is any adverse change in the facts and circumstances in
existence as of the date hereof and of which Lender is aware and Borrower is
then requested to do so in writing by Lender. With respect to the fifth
sentence of subparagraph (c), based upon the information that Lender has as of
the date hereof regarding the Fina Release and based upon all facts and
circumstances (and not just limited to facts and circumstances relating to the
physical condition of the Property and the contamination thereof as a result of
the Fina Release) which exist and of which Lender is aware as of the date hereof
Lender will not require Borrower to remove, repair, clean up and/or detoxify any
Hazardous Materials from the Property or the ground water of the Property
resulting from the Fina Release. However, if, subsequent to the date hereof,
Lender obtains any additional adverse information concerning the Fina Release,
or if there is any adverse change in the facts and circumstances in existence as
of the date hereof and of which Lender is aware, and as a result of such
additional adverse information or such adverse change in facts or circumstances,
Lender determines in its sole discretion to require Borrower to remove, repair,
clean up, and/or detoxify any Hazardous Materials from the Property or the
ground water of the Property resulting from the Fina Release, Lender reserves
the right to require Borrower to do so and Borrower agrees to do so. If
Borrower fails to do so, such failure shall be a Non-Monetary Default (as
defined in Paragraph 23) hereunder. Lender acknowledges that Borrower may file
suit against Fina Oil and Chemical Company and/or its affiliates, successors,
assigns and successors-in-title with regard to the Fina Release and Lender
agrees that such a suit will not constitute an adverse change in facts or
circumstances that would entitle Lender to require Borrower to remove, repair,
clean up and/or detoxify Hazardous Materials from the Property or the ground
water of the Property resulting from the Fina Release. Borrower agrees to keep
itself apprised of steps being taken by Fina Oil and Chemical Company to address
the Fina Release and shall keep Lender informed as to such steps. Without
limiting the generality of the foregoing, Borrower specifically agrees to
provide Lender with copies of any and all studies, reports and/or correspondence
that Borrower may receive in connection with the Fina Release. Except as
otherwise provided in this subparagraph (d), Borrower's obligations under
subparagraph (c) and Borrower's other obligations under this paragraph 3 shall
remain in full force and effect with regard to the Fina Release.
(e) 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). Without limiting the foregoing, this agreement to
indemnify Lender and hold Lender harmless shall specifically include any and all
losses, liabilities, damages, injuries, costs, expenses and claims for, with
respect to, or as a direct or indirect result of the Fina Release.
(f) 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
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<PAGE> 6
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 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
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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 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
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<PAGE> 8
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 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
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<PAGE> 9
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 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
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<PAGE> 10
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 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
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<PAGE> 11
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 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
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<PAGE> 12
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.
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,
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<PAGE> 13
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 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
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<PAGE> 14
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) 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,
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<PAGE> 15
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.
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
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<PAGE> 16
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 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
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<PAGE> 17
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 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
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<PAGE> 18
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 DeKalb 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 DeKalb County,
Georgia and, additionally, may be secured by contracts or 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
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<PAGE> 19
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 upon, and a present security interest in
both real and personal property, including
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<PAGE> 20
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
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<PAGE> 21
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 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 January 24, 1996, 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:
To Borrower: Roberts Properties Residential, L.P.
8010 Roswell Road
Suite 120
Atlanta, Georgia 30350
Attn: Charles S. Roberts
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<PAGE> 22
To Lender: West Coast Life Insurance Company
c/o Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, Ohio 43215-2220
Attn: Real Estate Investments
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, Ohio 43215-2220
Attn: Real Estate Investments
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 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;
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<PAGE> 23
(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 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
- 23 -
<PAGE> 24
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 anddelivered 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.
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.
Signed, sealed and delivered in the Roberts Properties Residential, L.P., a
presence of: Georgia limited partnership
/s/ Charles R. Elliott By: Roberts Realty Investors, Inc., its
- ---------------------- sole General Partner
Unofficial Witness
/s/ Leslie A. Camp By: /s/ Charles S. Roberts
- ------------------- --------------------------
Notary Public Name: Charles S. Roberts
Title: President
My Commission Expires:
(CORPORATE SEAL)
(NOTARY SEAL)
- 24 -
<PAGE> 25
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 a point, (2)
South 45 degrees 57 minutes 16 seconds West 52.10 feet to a point, (3) South 40
degrees 02 minutes 32 seconds West 29.67 feet to a point, (4) South 41 degrees
49 minutes 33 seconds West 51.21 feet to a point, and (5) South 33 degrees 05
minutes 10 seconds West 18.48 feet to a 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 1/2-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 point, 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 point; thence North 00 degrees 55
minutes 12 seconds West 50.08 feet to a point on the south terminus of Spring
Meadow Court (60 foot right-of-way); thence along the southern terminus of
Spring Meadow Court, South 88 degrees 42 minutes 01 second East 59.95 feet to a
point; thence 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 reinforcing rod
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 4.59589 acres as shown on plat of ALTA/ACSM Land Title
Survey for Nationwide Life Insurance Company, West Coast Life Insurance
Company, Roberts Properties Residential, L.P. and Commonwealth Land Title
Insurance Company, prepared by Watts & Browning Engineers, Inc., bearing the
seal and certification of V.T. Hammond, Georgia Registered Professional Land
Surveyor No. 2554, dated June 24, 1996, last revised July 22, 1996.
<PAGE> 26
EXHIBIT B
1. General and special taxes and assessments for the year 1996 and subsequent
years, not yet due and payable.
2. The following matters disclosed by plat of ALTA/ACSM Land Title Survey for
Nationwide Life Insurance Company, West Coast Life Insurance Company,
Roberts Properties Residential, L.P. and Commonwealth Land Title Insurance
Company, dated June 24, 1996, last revised July 22, 1996, prepared by Watts
& Browning Engineers, Inc., bearing the seal and certification of V.T.
Hammond, Georgia Registered Land Surveyor No. 2554:
a) sanitary sewer lines and manholes located throughout the subject
property;
b) storm drainage lines and storm drainage facilities located throughout
the subject property;
c) power and telephone lines extending from Tucker-Norcross Road to
power poles located along the southwestern boundary line of the
subject property, and guy wire extending therefrom over said boundary
line;
d) power boxes, power meters and light poles located on the subject
property;
e) guy wires extending over the northern and southwestern boundary lines
of the subject property;
f) concrete dumpster pad and curb encroach over the southwestern
boundary line of the subject property;
g) telephone facilities located on the subject property;
h) cable television facilities located on the subject property;
i) fence encroaches over the northern boundary line of the subject
property;
j) fence encroaches over the southwestern boundary line of the subject
property into the right-of-way of Pleasantdale Road;
k) fence encroaches over the northeastern boundary line of the subject
property;
l) gas facilities located along the southwestern boundary line of the
subject property along Pleasantdale Road and in the central portion
of the subject property;
m) water meter vault located along the southwestern boundary line of the
subject property along Pleasantdale Road;
n) fire department connections located along the southwestern boundary
line of the subject property;
o) water valve located in the central portion of the subject property;
and
p) detention ponds located in the eastern and western portions of the
subject property.
3. Rights of tenants in possession, as tenants only under unrecorded leases.
4. Easement from Winnie Leavell to Georgia Power Company, dated December 2,
1960, filed for record July 28, 1961, and recorded in Deed Book 1593, page
223, DeKalb County, Georgia records.
5. Easement from Winnie Leavell to Georgia Power Company, dated June 19,
1961, filed for record July 11, 1961, and recorded in Deed Book 1587, page
474, aforesaid records.
6. Easement from Winnie Leavell to Southern Bell Telephone and Telegraph
Company, dated April 18, 1962, and recorded in Deed Book 1659, page 631,
aforesaid records.
7. Easements contained in Right of Way Deed from Winnie Leavell to DeKalb
County, dated April 10, 1968, and recorded in Deed Book 2300, page 78,
aforesaid records.
8. Easements contained in Right of Way Deed from Winnie League Leavell to
DeKalb County, dated August 16, 1960, filed for record August 17, 1960,
and recorded in Deed Book 1525, page 392, aforesaid records.
9. Easements contained in Department of Transportation Right-of-Way Deed from
Roberts Properties-Tucker Norcross, Ltd. to The County of DeKalb, filed
for record July 1, 1987, and recorded in Deed Book 5880, page 622,
aforesaid records.
<PAGE> 27
10. Easements contained in Department of Transportation Right-of-Way Deed from
Roberts Properties-Tucker Norcross, Ltd. to The County of DeKalb, undated,
filed for record July 1, 1987, and recorded in Deed Book 5880, page 618,
aforesaid records.
11. Drainage easement contained in Temporary Construction Easement for
Construction or Improvement of Roads from Roberts Properties-Tucker
Norcross, Ltd. and Roberts Properties-Pleasantdale, Ltd. to DeKalb County,
Georgia, dated June 25, 1987, filed for record July 1, 1987, and recorded
in Deed Book 5880, page 616, aforesaid records.
12. Drainage easement contained in Right-of-Way Deed from Roberts
Properties-Pleasantdale, Ltd. to DeKalb County, undated, filed for record
July 11, 1988, and recorded in Deed Book 6181, page 777, aforesaid records.
13. Declaration of Restrictive Covenants by Roberts Properties, Inc., dated as
of November 26, 1991, filed for record February 6, 1992, and recorded in
Deed Book 7172, page 20, aforesaid records.
14. Easement from Roberts Properties Bentley Place, L.P. to Georgia Power
Company, dated October 28, 1992, filed for record December 17, 1992, and
recorded in Deed Book 7507, page 474, aforesaid records
<PAGE> 28
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 43215-2220
Attn: Real Estate Investments
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, Ohio 43215-2220
Attn: Real Estate Investments
<PAGE> 29
Return to:
Charles A. Brake, Jr., Esq.
Alston & Bird
One Atlantic Center
1201 West Peachtree St.
Atlanta, Georgia 30309-3424
ASSIGNMENT OF LEASES, RENTS, AND PROFITS
THIS ASSIGNMENT OF LEASES, RENTS AND PROFITS (hereinafter referred to as
"Assignment") is executed and delivered this 14th day of August, 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 43215-2220 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 43215-2220, 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 DeKalb 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 FOUR MILLION ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($4,100,000.00) 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.
<PAGE> 30
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.
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, except
for a mortgage loan being paid off concurrently with the execution hereof,
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
- 2 -
<PAGE> 31
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
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
- 3 -
<PAGE> 32
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.
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;
- 4 -
<PAGE> 33
(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;
(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
- 5 -
<PAGE> 34
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.
(L) Obligations of Assignor for the face amount of any Letter of Credit
held by Assignee and delivered by Assignor in connection with the loan evidenced
by the Note in the event Assignor is unable to collect the full amount of said
Letter of Credit for any reason.
The obligations of Assignor in subparagraphs (A) through (L) 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.
Notwithstanding anything in this Paragraph 8 to the contrary, this Paragraph 8
shall not be applicable, and Assignor shall be fully liable for Assignor's
obligations hereunder, as well as under the Note, the Security Deed and the
other Loan Documents, in the event there is a default by Assignor under Section
30 or Section 31 of the Security Deed.
GOVERNING LAWS
9. This Assignment is executed and delivered as additional Security for a
loan transaction negotiated and consummated in DeKalb 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
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)
- 6 -
<PAGE> 35
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 a point, (2)
South 45 degrees 57 minutes 16 seconds West 52.10 feet to a point, (3) South 40
degrees 02 minutes 32 seconds West 29.67 feet to a point, (4) South 41 degrees
49 minutes 33 seconds West 51.21 feet to a point, and (5) South 33 degrees 05
minutes 10 seconds West 18.48 feet to a 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 1/2-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 point, 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 point; thence North 00 degrees 55
minutes 12 seconds West 50.08 feet to a point on the south terminus of Spring
Meadow Court (60 foot right-of-way); thence along the southern terminus of
Spring Meadow Court, South 88 degrees 42 minutes 01 second East 59.95 feet to a
point; thence 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 reinforcing rod
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 4.59589 acres as shown on plat of ALTA/ACSM Land Title
Survey for Nationwide Life Insurance Company, West Coast Life Insurance
Company, Roberts Properties Residential, L.P. and Commonwealth Land Title
Insurance Company, prepared by Watts & Browning Engineers, Inc., bearing the
seal and certification of V.T. Hammond, Georgia Registered Professional Land
Surveyor No. 2554, dated June 24, 1996, last revised July 22, 1996.
<PAGE> 1
EXHIBIT 10.22.6
[THE AMERICAN INSTITUTE OF ARCHITECTS LETTERHEAD]
- --------------------------------------------------------------------------------
AIA DOCUMENT A101
STANDARD FORM OF AGREEMENT BETWEEN
OWNER AND CONTRACTOR
WHERE THE BASIS OF PAYMENT IS A
Stipulated Sum
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY
IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. The 1987 Edition
of AIA Document A201, General Conditions of the Contract for Construction, is
adopted in this document by reference. Do not use with other general
conditions unless this document is modified. This document has been approved
and endorsed by The Associated General Contractors of America.
- --------------------------------------------------------------------------------
AGREEMENT
made as of the 15th day of June in the year of
Nineteen Hundred and 1996
BETWEEN the Owner: Roberts Properties Residential, L.P.
(Name and address) 8010 Roswell Road, Suite 120
Atlanta, GA 30350
and the Contractor:
(Name and address) Roberts Properties Construction, Inc.
8010 Roswell Road, Suite 120
Atlanta, GA 30350
The Project is:
(Name and location) Crestmark Apartments - Phase II
945 Crestmark Blvd.
Lithia Springs, GA 30057
The Architect is:
(Name and address) Geheber Lewis Associates
445 Plasmour Drive NE #3
Atlanta, GA 30324
The Owner and Contractor agree as set forth below.
- --------------------------------------------------------------------------------
Copyright 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977 c
1987 by The American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006. Reproduction of the material herein or substantial
quotation of its provision without written permission of the AIA violates the
copyright laws of the United States and will be subject to legal prosecution.
1
<PAGE> 2
ARTICLE 1
---------
THE CONTRACT DOCUMENTS
The Contract Documents consist of this Agreement, Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications,
Addenda issued prior to execution of this Agreement, other documents listed in
this Agreement and Modifications issued after execution of this Agreement;
these form the Contract, and are as fully a part of the Contract as if
attached to this Agreement or repeated herein. The Contract represents the
entire and integrated agreement between the parties hereto and supersedes
prior negotiations, representations or agreements, either written or oral. An
enumeration of the Contract Documents, other than Modifications, appears in
Article 9.
ARTICLE 2
---------
THE WORK OF THIS CONTRACT
The Contractor shall execute the entire Work described in the Contract
Documents, except to the extent specifically indicated in the Contract
Documents to be the responsibility of others, or as follows:
All site clearing, grading, utilities, paving, etc including 86 multi-family
units in 7 buildings. This will consist of 19 one bedroom standard units w/901
sq. ft., 21 two bedroom standards w/1223 sq. ft., 22 2 bedroom roommate w/1285
sq. ft. and 24 three bedrooms w/1430 sq. ft. for a total of 86 units and
105,392 sq. ft.
The architectural style will be similar to Highland.
ARTICLE 3
---------
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
3.1 The date of commencement is the date from which the Contract Time of
Paragraph 3.2 is measured, and shall be the date of this Agreement, as first
written above, unless a different date is stated below or provision is made for
the date to be fixed in a notice to proceed issued by the Owner. (Insert the
date of commencement if it differs from the date of this Agreement or, if
applicable, state that the date will be fixed in a notice to proceed).
July 1996
Unless the date of commencement is established by a notice to proceed issued by
the Owner, the Contractor shall notify the Owner in writing not less than five
days before commencing the Work to permit the timely filing of mortgages,
mechanic's liens and other security interests.
3.2 The Contractor shall achieve Substantial Completion of the entire Work not
later than (Insert the calendar date or number of calendar days after the date
of commencement. Also insert any requirements for earlier Substantial
Completion of certain portions of the Work, if not stated elsewhere in the
Contract Documents).
See Exhibit "A" - Completion Dates
See Exhibit "B" - Inspection and Acceptance Agreement
, subject to adjustments of this Contract Time as provided in the Contract
Documents.
(Insert provisions, if any, for liquidated damages relating to
failure to complete on time.)
Not Applicable
2
<PAGE> 3
ARTICLE 4
---------
CONTRACT SUM
4.1 The Owner shall pay the Contractor in current funds for the Contractor's
performance of the Contract
the Contract Sum of Three Million Seven Hundred Ninety Five and Fifteen Dollars
and no/100 ($3,795,015.00), subject to additions and deductions as provided in
the Contract Documents.
4.2 The Contract Sum is based upon the following allowances, if any, which are
described in the Contract Documents and are hereby accepted by the Owner:
(State the numbers or other identification of accepted alternates. If
decisions on other alternates are to be made by the Owner subsequent to the
execution of this Agreement, attach a schedule of such other alternates showing
the amount for each and the date until which that amount is valid.)
See Exhibit "D"
4.3 Unit prices, if any, are as follows:
N/A
3
<PAGE> 4
ARTICLE 5
---------
PROGRESS PAYMENTS
5.1 Based upon Applications for Payment submitted to the Architect by the
Contractor and Certificates for Payment issued by the Architect, the Owner
shall make progress payments on account of the Contract Sum to the Contractor
as provided below and elsewhere in the Contractor Documents.
5.2 The period covered by each Application for Payment shall be one calendar
month ending on the last day of the month, or as follows: Payment shall be
made on the 10th of the month. Draw will be submitted for approval by the
30th.
5.3 Provided an Application for Payment is received by the Architect not
later than the 30th day of a month, the Owner shall make payment to the
Contractor not later than the 10th day of the month. If an Application
for Payment is received by the Architect after the application date fixed above,
payment shall be made by the Owner not later than days after the
Architect receives the Application for Payment.
5.4 Each Application for Payment shall be based upon the Schedule of Values
submitted by the Contractor in accordance with the Contract Documents. The
Schedule of Values shall allocate the entire Contract Sum among the various
portions of the Work and be prepared in such form and supported by such data to
substantiate its accuracy as the Architect may require. This Schedule, unless
objected to by the Architect, shall be used as a basis for reviewing the
Contractor's Applications for Payment.
5.5 Applications for Payment shall indicate the percentage of completion of
each portion of the Work as of the end of the period covered by the Application
for Payment.
5.6 Subject to the provisions of the Contract Documents, the amount of each
progress payment shall be computed as follows:
5.6.1 Take that portion of the Contract Sum properly allocable to completed
Work as determined by multiplying the percentage completion of each portion of
the Work by the share of the total Contract Sum allocated to that portion of
the Work in the Schedule of Values, less retainage of ten percent (10%).
Pending final determination of cost to the Owner of changes in the Work,
amounts not in dispute may be included as provided in Subparagraph 7.3.7 of the
General Conditions even though the Contract Sum has not yet been adjusted by
Change Order;
5.6.2 Add that portion of the Contract Sum properly allocable to materials and
equipment delivered and suitably stored at the site for subsequent
incorporation in the completed construction (or, if approved in advance by the
Owner, suitably stored off the site at a location agreed upon in writing), less
retainage of percent ( %);
5.6.3 Subtract the aggregate of previous payments made by the Owner; and
5.6.4 Subtract amounts, if any, for which the Architect has withheld or
nullified a Certificate for Payment as provided in Paragraph 9.5 of the General
Conditions.
5.7 The progress payment amount determined in accordance with Paragraph 5.6
shall be further modified under the following circumstances:
5.7.1 Add, upon Substantial Completion of the Work, a sum sufficient to
increase the total payments to percent ( %) of the Contract Sum,
less such amounts as the Architect shall determine for incomplete Work and
unsettled claims; and
5.7.2 Add, if final completion of the Work is thereafter materially delayed
through no fault of the Contractor, any additional amounts payable in
accordance with Subparagraph 9.10.3 of the General Conditions.
5.8 Reduction or limitation of retainage, if any, shall be as follows:
(If it is intended prior to Substantial Completion of the entire Work to reduce
or limit the retainage resulting from the percentages inserted in Subparagraphs
5.6.1 and 5.6.2 above, and this is not explained elsewhere in the Contract
Documents, insert here provisions for such reduction or limitation.)
4
<PAGE> 5
ARTICLE 6
---------
FINAL PAYMENT
Final payment, constituting the entire unpaid balance of the Contract Sum, shall
be made by the Owner to the Contractor when (1) the Contract has been fully
performed by the Contractor except for the Contractor's responsibility to
correct nonconforming Work as provided in Subparagraph 12.2.2 of the General
Conditions and to satisfy other requirements, if any, which necessarily survive
final payment; and (2) a final Certificate for Payment has been issued by the
Architect; such final payment shall be made by the Owner not more than 30 days
after the issuance of the Architect's final Certificate for Payment, or as
follows:
Sixty (60) days after acceptance by Owner.
ARTICLE 7
---------
MISCELLANEOUS PROVISIONS
7.1 Where reference is made in this Agreement to a provision of the General
Conditions or another Contract Document, the reference refers to that provision
as amended or supplemented by other provisions of the Contract Documents.
7.2 Payments due and unpaid under the Contract shall bear interest from the
date payment is due at the rate stated below, or in the absence thereof, at the
legal rate prevailing from time to time at the place where the Project is
located.
(Insert rate of interest agreed upon, if any.)
(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations at the Owner's and
Contractor's principal places of business, the location of the Project and
elsewhere may affect the validity of this provision. Legal advice should be
obtained with respect to deletions or modifications, and also regarding
requirements such as written disclosures or waivers.)
7.3 Other provisions:
ARTICLE 8
---------
TERMINATION OR SUSPENSION
8.1 The Contract may be terminated by the Owner or the Contractor as provided
in Article 14 of the General Conditions.
8.2 The Work may be suspended by the Owner as provided in Article 14 of the
General Conditions.
5
<PAGE> 6
ARTICLE 9
---------
ENUMERATION OF CONTRACT DOCUMENTS
9.1 The Contract Documents, except for Modifications issued after execution of
this Agreement, are enumerated as follows:
9.1.1 The Agreement is this executed Standard Form of Agreement Between Owner
and Contractor, AIA Document A101, 1987 Edition.
9.1.2 The General Conditions are the General Conditions of the Contract for
Construction, AIA Document A201, 1987 Edition.
9.1.3 The Supplementary and other Conditions of the Contract are those
contained in the Project Manual dated , and are as follows:
Document Title Pages
9.1.4 The Specifications are those contained in the Project Manual dated as in
Subparagraph 9.1.3, and are as follows: (Either list the Specifications here
or refer to an exhibit attached to this Agreement.)
Section Title Pages
Finish specifications to be determined.
6
<PAGE> 7
9.1.5 The Drawings are as follows, and are dated unless a different
date is shown below:
(Either list the Drawings here or refer to an exhibit attached to this
Agreement.)
Number Title Date
See exhibit "H" pages 1 thru 3
9.1.6 The Addenda, if any, are as follows:
Number Date Pages
Portions of Addenda relating to bidding requirements are not part of the
Contract Documents unless the bidding requirements are also enumerated in this
Article 9.
7
<PAGE> 8
9.17 OTHER DOCUMENTS, IF ANY, FORMING PART OF THE CONTRACT DOCUMENTS ARE AS
FOLLOWS: (LIST HERE ANY ADDITIONAL DOCUMENTS WHICH ARE INTENDED TO FORM PART OF
THE CONTRACT DOCUMENTS. THE GENERAL CONDITIONS PROVIDE THAT BIDDING
REQUIREMENTS SUCH AS ADVERTISEMENT OR INVITATION TO BID, INSTRUCTIONS TO
BIDDERS, SAMPLE FORMS AND THE CONTRACTOR'S BID ARE NOT PART OF THE CONTRACT
DOCUMENTS UNLESS ENUMERATED IN THIS AGREEMENT. THEY SHOULD BE LISTED HERE ONLY
IF INTENDED TO BE PART OF THE CONTRACT DOCUMENTS.)
See Exhibit "E" Draw Schedule
See Exhibit "I" Soils report prepared by Environment Corporation of America,
Pages 1 through 31.
This Agreement is entered into as of the day and year first written above and
is executed in at least three original copies of which one is to be delivered
to the Contractor, one to the Architect for use in the administration of the
Contract, and the remainder to the Owner.
OWNER CONTRACTOR
Roberts Properties Residential, L.P. Roberts Properties Construction, Inc.
By: Roberts Realy Investors, Inc.,
/s/ Joanne M. Roberts
- -------------------------------------- -------------------------------------
(Signature) (Signature)
Charles S. Roberts, Pres. Joanne M. Roberts, V.P., Controller
- -------------------------------------- --------------------------------------
(Printed name and title) (Printed name and title)
/s/ Charles S. Roberts
- --------------------------------------------------------------------------------
AIA DOCUMENT A101* OWNER-CONTRACTOR AGREEMENT*TWELFTH EDITION*AIA* C 1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006
8
<PAGE> 9
CRESTMARK APARTMENTS - PHASE II
SUPPLEMENT TO AIA DOCUMENT A101
COMPLETION DATES
EXHIBIT "A"
This Exhibit "A" is to be added to AIA Document A101 under Subparagraph 3.2:
Building # Completion Date
- ---------- ---------------
1 ------------
2 ------------
3 ------------
4 ------------
5 ------------
6 ------------
7 ------------
Total Project April 1997
<PAGE> 10
CRESTMARK APARTMENTS - PHASE II
SUPPLEMENT TO AIA DOCUMENT A101
INSPECTION & ACCEPTANCE AGREEMENT
EXHIBIT "B"
This Exhibit "B" is to be added to AIA Document A101 under Subparagraph 3.2:
1. Contractor presents completed units for inspection by Owner's
representative,
2. Owner's representative has two (2) days to present Contractor with list of
items necessary to achieve substantial completion of inspected units.
3. Contractor presents units for reinspection by Owner's representative.
4. Owner's representative inspects units within a twenty-four (24) hour
period and accepts or prepares list of items necessary to achieve
acceptance.
5. The deadline for achieving substantial completion is a signed approval
from the Owner's representative that the units have been inspected, all
punch list items have been corrected and that portion of the work is
complete.
<PAGE> 11
CRESTMARK APARTMENTS - PHASE II
SUPPLEMENT TO AIA DOCUMENT A101
UNIT PRICES/ALLOWANCES
EXHIBIT "D"
This Exhibit "D" is to be added to AIA Document A101 under Subparagraph 4.3:
<TABLE>
<CAPTION>
Unit Prices/Allowances Value
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Civil Engineering - Preparation of topographic and boundary $.00
surveys and the civil construction plans are not part of this
fixed price contract. The construction staking and asbuilts are included.
2. Water Meter & Sewer Tap Fees are not included. Original plans called for $.00
connecting Phase II into the existing 8" water master meter.
3. Property Fence in not included in this fixed price contract. $.00
4. Detention Facility. Any facility other than the existing detention pond $.00
will not be included in this fixed price contract. Clean out of the
existing system is also included.
5. Site Rails are not included in this fixed price contract. $.00
6. Exterior finish of the buildings is based on using stone and vinyl siding $198,700
as we did at Highland Park. The fixed price contract has an allowance of:
7. Landscape Design Allowance $ 60/unit $ 5.160
Landscaping Allowance based on $900/unit $ 77,400
8. Irrigation System is not included in fixed price contract $ .00
9. Walks, Ramps, Steps - Allowance $ 12,000
10. Appliances - General Electric Almond @ 1996 rates $ 81,053
11. Site Property Signage - Allowance $ 1,000
</TABLE>
<PAGE> 12
12. Entrance Feature - not included in fixed price contract
13. Mail kiosk - Fixed price contract contains the cost of the mailboxes
to be located in Phase I with the other 248 boxes
14. Gutters and downspouts are budgeted for 5"
15. Controlled Assess Entry system is not included
16. Pool, Pool Deck, lighting and fencing are not included in the fixed price
contract.
17. A cabana is not included in the fixed price contract
18. Maintenance and Carwash Building is not included in contract
19. Trash compactor is not included in fixed price contract
20. Cabinet budget is based on the standard pickle finish previously
installed.
21. Garages and storage units are not included in fixed price contract
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET DATED AS OF SEPTEMBER 30, 1996 AND THE STATEMENT OF OPERATIONS FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 9,330
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 116,146
<DEPRECIATION> 7,394
<TOTAL-ASSETS> 119,125
<CURRENT-LIABILITIES> 0
<BONDS> 63,120
0
0
<COMMON> 42
<OTHER-SE> 29,823
<TOTAL-LIABILITY-AND-EQUITY> 119,125
<SALES> 0
<TOTAL-REVENUES> 11,023
<CGS> 0
<TOTAL-COSTS> 8,338
<OTHER-EXPENSES> 176
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,733
<INCOME-PRETAX> 34
<INCOME-TAX> 0
<INCOME-CONTINUING> 34
<DISCONTINUED> 0
<EXTRAORDINARY> (100)
<CHANGES> 0
<NET-INCOME> (66)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
