UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 1, 2005
ANGELES INCOME PROPERTIES, LTD. II
(Exact name of Registrant as specified in its charter)
California 0-11767 95-3793526
State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Registrant's telephone number)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
On September 1, 2005, Angeles Income Properties, Ltd. II (the "Registrant")
obtained a second mortgage in the amount of $3,800,000, on one of its investment
properties, Deer Creek Apartments, located in Plainsboro, New Jersey. The
Registrant received net proceeds of approximately $3,709,000 after payment of
costs and fees associated with obtaining the second mortgage. The second
mortgage consists of a stated fixed interest rate of 5.32% and requires monthly
payments of principal and interest of approximately $21,000 beginning on October
1, 2005 until the loan matures September 1, 2015, with a balloon payment of
approximately $3,128,000 due at maturity. The Registrant has the option of
extending the maturity date for one additional year, to September 1, 2016,
during which period the second mortgage would require monthly payments of
principal and interest, consisting of an interest rate equal to the average of
the one month LIBOR plus 250 basis points. The Registrant may prepay the second
mortgage without penalty during the period from September 2, 2015 through
September 1, 2016. However, if the Registrant prepays the second mortgage loan
prior to September 1, 2015, a prepayment penalty as defined in the loan
agreement will apply.
In accordance with the terms of the loan agreement relating to the second
mortgage financing, payment of the note may be accelerated at the option of the
lender if an event of default, as defined in the loan agreement, occurs. Events
of default include, but are not limited to: failure to pay or deposit any amount
due under the loan agreement when due; failure to make the final payment or pay
the prepayment premium due under the note; and breach or default in the
performance of any of the covenants or agreements made by the Registrant.
In connection with the new financing, the Registrant agreed to certain
modifications of the existing mortgage loan encumbering Deer Creek Apartments.
The modification of terms consisted of a fixed interest rate of 7.68%, monthly
payments of approximately $88,000, commencing October 1, 2005 through its
maturity of September 1, 2015, with a balloon payment of approximately
$10,755,000 due at maturity. The Registrant has the option of extending the
maturity date for one additional year, to September 1, 2016, during which period
the mortgage would require monthly payments of principal and interest,
consisting of an interest rate equal to the average of the one month LIBOR plus
250 basis points. The previous terms consisted of monthly payments of
approximately $110,000 with a stated fixed interest rate of 7.43% through its
maturity of July 1, 2021, at which time the loan was scheduled to be fully
amortized.
The foregoing description is qualified in its entirety to the Loan Agreement and
Amended Loan Agreement, copies of which are filed as exhibits 10.31 and 10.32 to
this report.
In accordance with the Partnership Agreement, the Registrant's general partner
is currently evaluating the cash requirements of the Registrant to determine
what portion of the net proceeds, if any, would be available to distribute to
the Registrant's partners.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
The following exhibits are filed with this report:
10.31 Loan Agreement dated September 1, 2005 between Angeles
Income Properties, Ltd. II, a California limited partnership and
GMAC Commercial Mortgage Bank.*
10.32 Amended and Restated Loan Agreement dated September 1,
2005 between Angeles Income Properties, Ltd. II, a California
limited partnership and Federal Home Loan Mortgage Corporation.*
*Schedules and supplemental materials to the exhibit have been omitted but will
be provided to the Securities and Exchange Commission upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ANGELES INCOME PROPERTIES, LTD. II
By: Angeles Realty Corporation II
Managing General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: September 8, 2005
Exhibit 10.31
FHLMC Loan No. 968692303
Deer Creek Apartments
MULTIFAMILY NOTE
MULTISTATE - FIXED TO FLOAT
(REVISION DATE 10-01-2004)
US $3,800,000.00 Effective Date: As of September 1,
2005
FOR VALUE RECEIVED, the undersigned (together with such party's or
parties' successors and assigns, "Borrower"), jointly and severally (if more
than one) promises to pay to the order of GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial bank, the principal sum of Three Million Eight Hundred Thousand and
00/100 Dollars (US $3,800,000.00), with interest on the unpaid principal
balance, as hereinafter provided.
1. Defined Terms.
(a) As used in this Note:
"Adjustable Interest Rate" means the variable annual interest rate
calculated for each Interest Adjustment Period so as to equal the
Index Rate for such Interest Adjustment Period (truncated at the
fifth (5th) decimal place if necessary) plus the Margin.
"Amortization Period" means a period of 360 full consecutive
calendar months.
"Base Recourse" means a portion of the Indebtedness equal to zero
percent (0%) of the original principal balance of this Note.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which Lender is not open for business.
"Default Rate" means (i) during the Fixed Rate Period, an annual
interest rate equal to four (4) percentage points above the Fixed
Interest Rate; and (ii) during the Extension Period, a variable
annual interest rate equal to four (4) percentage points above the
Adjustable Interest Rate in effect from time to time. However, at no
time will the Default Rate exceed the Maximum Interest Rate.
"Extended Maturity Date" means, if the Extension Period becomes
effective pursuant to this Note, the earlier of (i) September 1,
2016, and (ii) the date on which the unpaid principal balance of
this Note becomes due and payable by acceleration or otherwise
pursuant to the Loan Documents or the exercise by Lender of any
right or remedy thereunder.
"Extension Period" means the twelve (12) consecutive calendar months
period commencing on the Scheduled Initial Maturity Date.
"Fixed Interest Rate" means the annual interest rate of five and
three hundred twenty thousandths percent (5.320%).
"Fixed Rate Period" means the period beginning on the date of this
Note and continuing through August 31, 2015.
"Index Rate" means, for any Interest Adjustment Period, the
Reference Bill(R) Index Rate for such Interest Adjustment Period.
"Initial Maturity Date" means the earlier of (i) September 1, 2015
(the "Scheduled Initial Maturity Date"), and (ii) the date on which
the unpaid principal balance of this Note becomes due and payable by
acceleration or otherwise pursuant to the Loan Documents or the
exercise by Lender of any right or remedy thereunder.
"Installment Due Date" means, for any monthly installment of
interest only or principal and interest, the date on which such
monthly installment is due and payable pursuant to Section 3 of this
Note. The "First Installment Due Date" under this Note is October 1,
2005.
"Interest Adjustment Period" means each successive one calendar
month period during the Extension Period and until the entire
Indebtedness is paid in full.
"Lender" means the holder from time to time of this Note.
"LIBOR Index" means the British Bankers Association's (BBA) one (1)
month LIBOR Rate for United States Dollar deposits, as displayed on
the LIBOR Index Page used to establish the LIBOR Index Rate.
"LIBOR Index Rate" means, for any Interest Adjustment Period after
the first Interest Adjustment Period, the BBA's LIBOR Rate for the
LIBOR Index released by the BBA most recently preceding the first
day of such Interest Adjustment Period, as such LIBOR Rate is
displayed on the LIBOR Index Page. The LIBOR Index Rate for the
first Interest Adjustment Period means the British Bankers
Association's (BBA) LIBOR Rate for the LIBOR Index released by the
BBA most recently preceding the first day of the month in which the
first Interest Adjustment Period begins, as such LIBOR Rate is
displayed on the LIBOR Index Page. "LIBOR Index Page" is the
Bloomberg L.P., page "BBAM", or such other page for the LIBOR Index
as may replace page BBAM on that service, or at the option of Lender
(i) the applicable page for the LIBOR Index on another service which
electronically transmits or displays BBA LIBOR Rates, or (ii) any
publication of LIBOR rates available from the BBA. In the event the
BBA ceases to set or publish a LIBOR rate/interest settlement rate
for the LIBOR Index, Lender will designate an alternative index, and
such alternative index shall constitute the LIBOR Index Rate.
"Loan" means the loan evidenced by this Note.
"Margin" means two and one-half (2.5) percentage points (250 basis
points).
"Maturity Date" means the Extended Maturity Date unless pursuant to
Section 3(f) of this Note the Extension Period does not or cannot
become effective, in which case the Maturity Date means the Initial
Maturity Date.
"Maximum Interest Rate" means the rate of interest that results in
the maximum amount of interest allowed by applicable law.
"Prepayment Premium Period" means the period during which, if a
prepayment of principal occurs, a prepayment premium will be payable
by Borrower to Lender. The Prepayment Premium Period is the period
from and including the date of this Note until but not including the
first day of the Window Period. For this Note, the Prepayment
Premium Period equals the Yield Maintenance Period.
"Reference Bills(R)" means the unsecured general obligations of the
Federal Home Loan Mortgage Corporation ("Freddie Mac") designated by
Freddie Mac as "Reference Bills(R) Securities" and having original
durations to maturity most comparable to the term of the Reference
Bill Index, and issued by Freddie Mac at regularly scheduled
auctions. In the event Freddie Mac shall at any time cease to
designate any unsecured general obligations of Freddie Mac as
"Reference Bills Securities", then at the option of Lender (i)
Lender may select from time to time another unsecured general
obligation of Freddie Mac having original durations to maturity most
comparable to the term of the Reference Bill Index and issued by
Freddie Mac at regularly scheduled auctions, and the term "Reference
Bills" as used in this Note shall mean such other unsecured general
obligations as selected by Lender; or (ii) for any one or more
Interest Adjustment Periods, Lender may use the applicable LIBOR
Index Rate as the Index Rate for such Interest Adjustment Period(s).
"Reference Bill Index" means the one-month Reference Bills.
One-month reference bills have original durations to maturity of
approximately 30 days.
"Reference Bill Index Rate" means, for any Interest Adjustment
Period after the first Interest Adjustment Period, the Money Market
Yield for the Reference Bills as established by the Reference Bill
auction conducted by Freddie Mac most recently preceding the first
day of such Interest Adjustment Period, as displayed on the
Reference Bill Index Page. The Reference Bill Index Rate for the
first Interest Adjustment Period means the Money Market Yield for
the Reference Bills as established by the Reference Bill auction
conducted by Freddie Mac most recently preceding the first day of
the month in which the first Interest Adjustment Period begins, as
displayed on the Reference Bill Index Page. The "Reference Bill
Index Page" is the Freddie Mac Debt Securities Web Page (accessed
via the Freddie Mac internet site at www.freddiemac.com), or at the
option of Lender, any publication of Reference Bills auction results
available from Freddie Mac. However, if Freddie Mac has not
conducted a Reference Bill auction within the 60-calendar day period
prior to the first day of an Interest Adjustment Period, the
Reference Bill Index Rate for such Interest Adjustment Period will
be the LIBOR Index Rate for such Interest Adjustment Period.
"Remaining Amortization Period" means, at any point in time, the
number of consecutive calendar months equal to the number of months
in the Amortization Period minus the number of scheduled monthly
installments of principal and interest that have elapsed since the
date of this Note.
"Security Instrument" means the multifamily mortgage, deed to secure
debt or deed of trust effective as of the effective date of this
Note, from Borrower to or for the benefit of Lender and securing
this Note.
"Treasury Security" means the 9.875% U.S. Treasury Security due
November 15, 2015.
"Window Period" means the Extension Period.
"Yield Maintenance Period" means the period from and including the
date of this Note until but not including the Scheduled Initial
Maturity Date.
(b) Other capitalized terms used but not defined in this Note
shall have the meanings given to such terms in the Security
Instrument.
2. Address for Payment. All payments due under this Note shall be
payable at GMAC Commercial Mortgage Corporation, 200 Witmer
Road, Post Office Box 809, Horsham, Pennsylvania 19044,
Attention: Servicing - Account Manager, or such other place as
may be designated by Notice to Borrower from or on behalf of
Lender.
3. Payments.
(a) During the Fixed Rate Period, interest will accrue on the
outstanding principal balance of this Note at the Fixed
Interest Rate, subject to the provisions of Section 8 of this
Note. During the Extension Period, interest will accrue on the
outstanding principal balance of this Note at the Adjustable
Interest Rate, subject to the provisions of Section 8 of this
Note.
(b) Interest under this Note shall be computed, payable and
allocated on the basis of an actual/360 interest calculation
schedule (interest is payable for the actual number of days in
each month, and each month's interest is calculated by
multiplying the unpaid principal amount of this Note as of the
first day of the month for which interest is being calculated
by the Fixed Interest Rate (during the Fixed Rate Period) or
the applicable Adjustable Interest Rate (during the Extension
Period), dividing the product by 360, and multiplying the
quotient by the number of days in the month for which interest
is being calculated). For convenience in determining the
amount of a monthly installment of principal and interest
under this Note, Lender will use a 30/360 interest calculation
payment schedule (each year is treated as consisting of twelve
30-day months). However, as provided above, the portion of the
monthly installment actually payable as and allocated to
interest will be based upon an actual/360 interest calculation
schedule, and the amount of each installment attributable to
principal and the amount attributable to interest will vary
based upon the number of days in the month for which such
installment is paid. Each monthly payment of principal and
interest will first be applied to pay in full interest due,
and the balance of the monthly payment paid by Borrower will
be credited to principal.
(c) Unless disbursement of principal is made by Lender to Borrower
on the first day of a calendar month, interest for the period
beginning on the date of disbursement and ending on and
including the last day of such calendar month shall be payable
by Borrower simultaneously with the execution of this Note. If
disbursement of principal is made by Lender to Borrower on the
first day of a calendar month, then no payment will be due
from Borrower at the time of the execution of this Note. The
Installment Due Date for the first monthly installment payment
under Section 3(d) of interest only or principal and interest,
as applicable, will be the First Installment Due Date set
forth in Section 1(a) of this Note. Except as provided in this
Section 3(c) and in Section 10, accrued interest will be
payable in arrears.
(d) Beginning on the First Installment Due Date, and continuing
until and including the monthly installment due on the Initial
Maturity Date, principal and accrued interest shall be payable
by Borrower in consecutive monthly installments due and
payable on the first day of each calendar month. The amount of
the monthly installment of principal and interest payable
pursuant to this Section 3(d) on an Installment Due Date shall
be Twenty One Thousand One Hundred Forty Eight and 80/100
Dollars ($21,148.80).
(e) Except as otherwise provided in this Section 3(e), all
remaining Indebtedness, including all principal and interest,
shall be due and payable by Borrower on the Initial Maturity
Date. However, so long as (i) the Initial Maturity Date has
not occurred prior to the Scheduled Initial Maturity Date, and
(ii) no Event of Default or event or circumstance which, with
the giving of notice or passage of time or both, could
constitute an Event of Default exists on the Scheduled Initial
Maturity Date, then the Extension Period automatically will
become effective and the date for full payment of the
Indebtedness automatically shall be extended until the
Extended Maturity Date. If the Extension Period becomes
effective, monthly installments of principal and interest or
interest only will be payable during the Extension Period as
provided in Section 3(f). Anything in Section 21 of the
Security Instrument to the contrary notwithstanding, during
the Extension Period, Borrower will not request that Lender
consent to, and Lender will not consent to, a Transfer that,
absent such consent, would constitute an Event of Default.
(f) If the Extension Period becomes effective, beginning on
September 1, 2015, and continuing until and including the
monthly installment due on the Extended Maturity Date,
principal and accrued interest shall be payable by Borrower in
consecutive monthly installments due and payable on the first
day of each calendar month. The amount of the monthly
installment of principal and interest payable pursuant to this
Section 3(f) on an Installment Due Date shall be calculated so
as to equal the monthly payment amount which would be payable
on the Installment Due Date as if the unpaid principal balance
of this Note as of the first day of the Interest Adjustment
Period immediately preceding the Installment Due Date was to
be fully amortized, together with interest thereon at the
Adjustable Interest Rate in effect for such Interest
Adjustment Period, in equal consecutive monthly payments paid
on the first day of each calendar month over the Remaining
Amortization Period.
(g) During the Extension Period, Lender shall provide Borrower
with Notice, given in the manner specified in the Security
Instrument, of the amount of each monthly installment due
under this Note. However, if Lender has not provided Borrower
with prior notice of the monthly payment due on any
Installment Due Date, then Borrower shall pay on that
Installment Due Date an amount equal to the monthly
installment payment for which Borrower last received notice.
If Lender at any time determines that Borrower has paid one or
more monthly installments in an incorrect amount because of
the operation of the preceding sentence, or because Lender has
miscalculated the Adjustable Interest Rate or has otherwise
miscalculated the amount of any monthly installment, then
Lender shall give notice to Borrower of such determination. If
such determination discloses that Borrower has paid less than
the full amount due for the period for which the determination
was made, Borrower, within 30 calendar days after receipt of
the notice from Lender, shall pay to Lender the full amount of
the deficiency. If such determination discloses that Borrower
has paid more than the full amount due for the period for
which the determination was made, then the amount of the
overpayment shall be credited to the next installment(s) of
interest only or principal and interest, as applicable, due
under this Note (or, if an Event of Default has occurred and
is continuing, such overpayment shall be credited against any
amount owing by Borrower to Lender).
(h) All payments under this Note shall be made in immediately
available U.S. funds.
(i) Any regularly scheduled monthly installment of interest only
or principal and interest payable pursuant to this Section 3
that is received by Lender before the date it is due shall be
deemed to have been received on the due date for the purpose
of calculating interest due.
(j) Any accrued interest remaining past due for 30 days or more,
at Lender's discretion, may be added to and become part of the
unpaid principal balance of this Note and any reference to
"accrued interest" shall refer to accrued interest which has
not become part of the unpaid principal balance. Any amount
added to principal pursuant to the Loan Documents shall bear
interest at the applicable rate or rates specified in this
Note and shall be payable with such interest upon demand by
Lender and absent such demand, as provided in this Note for
the payment of principal and interest.
(k) In accordance with Section 14, interest charged under this
Note cannot exceed the Maximum Interest Rate. If the
Adjustable Interest Rate at any time exceeds the Maximum
Interest Rate, resulting in the charging of interest hereunder
to be limited to the Maximum Interest Rate, then any
subsequent reduction in the Adjustable Interest Rate shall not
reduce the rate at which interest under this Note accrues
below the Maximum Interest Rate until the total amount of
interest accrued hereunder equals the amount of interest which
would have accrued had the Adjustable Interest Rate at all
times been in effect.
4. Application of Payments. If at any time Lender receives, from
Borrower or otherwise, any amount applicable to the
Indebtedness which is less than all amounts due and payable at
such time, Lender may apply the amount received to amounts
then due and payable in any manner and in any order determined
by Lender, in Lender's discretion. Borrower agrees that
neither Lender's acceptance of a payment from Borrower in an
amount that is less than all amounts then due and payable nor
Lender's application of such payment shall constitute or be
deemed to constitute either a waiver of the unpaid amounts or
an accord and satisfaction.
5. Security. The Indebtedness is secured by, among other things,
the Security Instrument, and reference is made to the Security
Instrument for other rights of Lender as to collateral for the
Indebtedness.
6. Acceleration. If an Event of Default has occurred and is
continuing, the entire unpaid principal balance, any accrued
interest, any prepayment premium payable under Section 10, and
all other amounts payable under this Note and any other Loan
Document, shall at once become due and payable, at the option
of Lender, without any prior notice to Borrower (except if
notice is required by applicable law, then after such notice).
Lender may exercise this option to accelerate regardless of
any prior forbearance. For purposes of exercising such option,
Lender shall calculate the prepayment premium as if prepayment
occurred on the date of acceleration. If prepayment occurs
thereafter, lender shall recalculate the prepayment premium as
of the actual prepayment date.
7. Late Charge.
(a) If any monthly installment of interest or principal and
interest or other amount payable under this Note or under the
Security Instrument or any other Loan Document is not received
in full by Lender (i) during the Fixed Rate Period, within ten
(10) days after the installment or other amount is due, or
(ii) during the Extension Period, within five (5) days after
the installment or other amount is due, counting from and
including the date such installment or other amount is due
(unless applicable law requires a longer period of time before
a late charge may be imposed, in which event such longer
period shall be substituted), Borrower shall pay to Lender,
immediately and without demand by Lender, a late charge equal
to five percent (5%) of such installment or other amount due
(unless applicable law requires a lesser amount be charged, in
which event such lesser amount shall be substituted).
(b) Borrower acknowledges that its failure to make timely payments
will cause Lender to incur additional expenses in servicing
and processing the Loan and that it is extremely difficult and
impractical to determine those additional expenses. Borrower
agrees that the late charge payable pursuant to this Section
represents a fair and reasonable estimate, taking into account
all circumstances existing on the date of this Note, of the
additional expenses Lender will incur by reason of such late
payment. The late charge is payable in addition to, and not in
lieu of, any interest payable at the Default Rate pursuant to
Section 8.
8. Default Rate.
(a) So long as (i) any monthly installment under this Note remains
past due for thirty (30) days or more or (ii) any other Event
of Default has occurred and is continuing, then
notwithstanding anything in Section 3 of this Note to the
contrary, interest under this Note shall accrue on the unpaid
principal balance from the Installment Due Date of the first
such unpaid monthly installment or the occurrence of such
other Event of Default, as applicable, at the Default Rate.
(b) From and after the Maturity Date, the unpaid principal balance
shall continue to bear interest at the Default Rate until and
including the date on which the entire principal balance is
paid in full.
(c) Borrower acknowledges that (i) its failure to make timely
payments will cause Lender to incur additional expenses in
servicing and processing the Loan, (ii) during the time that
any monthly installment under this Note is delinquent for
thirty (30) days or more, Lender will incur additional costs
and expenses arising from its loss of the use of the money due
and from the adverse impact on Lender's ability to meet its
other obligations and to take advantage of other investment
opportunities; and (iii) it is extremely difficult and
impractical to determine those additional costs and expenses.
Borrower also acknowledges that, during the time that any
monthly installment under this Note is delinquent for thirty
(30) days or more or any other Event of Default has occurred
and is continuing, Lender's risk of nonpayment of this Note
will be materially increased and Lender is entitled to be
compensated for such increased risk. Borrower agrees that the
increase in the rate of interest payable under this Note to
the Default Rate represents a fair and reasonable estimate,
taking into account all circumstances existing on the date of
this Note, of the additional costs and expenses Lender will
incur by reason of the Borrower's delinquent payment and the
additional compensation Lender is entitled to receive for the
increased risks of nonpayment associated with a delinquent
loan.
9. Limits on Personal Liability.
(a) Except as otherwise provided in this Section 9, Borrower shall
have no personal liability under this Note, the Security
Instrument or any other Loan Document for the repayment of the
Indebtedness or for the performance of any other obligations
of Borrower under the Loan Documents and Lender's only
recourse for the satisfaction of the Indebtedness and the
performance of such obligations shall be Lender's exercise of
its rights and remedies with respect to the Mortgaged Property
and to any other collateral held by Lender as security for the
Indebtedness. This limitation on Borrower's liability shall
not limit or impair Lender's enforcement of its rights against
any guarantor of the Indebtedness or any guarantor of any
other obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the amount
of the Base Recourse, plus any other amounts for which
Borrower has personal liability under this Section 9.
(c) In addition to the Base Recourse, Borrower shall be personally
liable to Lender for the repayment of a further portion of the
Indebtedness equal to any loss or damage suffered by Lender as
a result of the occurrence of any of the following events:
(i) Borrower fails to pay to Lender upon demand after an Event of Default all
Rents to which Lender is entitled under Section 3(a) of the Security
Instrument and the amount of all security deposits collected by Borrower
from tenants then in residence. However, Borrower will not be personally
liable for any failure described in this subsection (i) if Borrower is
unable to pay to Lender all Rents and security deposits as required by the
Security Instrument because of a valid order issued in a bankruptcy,
receivership, or similar judicial proceeding.
(ii) Borrower fails to apply all insurance proceeds and
condemnation proceeds as required by the Security Instrument.
However, Borrower will not be personally liable for any
failure described in this subsection (ii) if Borrower is
unable to apply insurance or condemnation proceeds as required
by the Security Instrument because of a valid order issued in
a bankruptcy, receivership, or similar judicial proceeding.
(iii) Borrower fails to comply with Section 14(g) or (h) of the
Security Instrument relating to the delivery of books and
records, statements, schedules and reports.
(iv) Borrower fails to pay when due in accordance with the terms of
the Security Instrument the amount of any item below marked
"Deferred"; provided however, that if no item is marked
"Deferred", this Section 9(c)(iv) shall be of no force or
effect.
[Deferred] Hazard Insurance premiums or other insurance
premiums,
[Deferred] Taxes,
[Deferred] water and sewer charges (that could become a lien
on the Mortgaged Property),
[ N/A ] ground rents,
[Deferred] assessments or other charges (that could become a
lien on the Mortgaged Property)
(d) In addition to the Base Recourse, Borrower shall be personally liable to
Lender for:
(i) the performance of all of Borrower's obligations under Section
18 of the Security Instrument (relating to environmental
matters);
(ii) the costs of any audit under Section 14(g) of the Security
Instrument; and
(iii) any costs and expenses incurred by Lender in connection with
the collection of any amount for which Borrower is personally
liable under this Section 9, including Attorneys' Fees and
Costs and the costs of conducting any independent audit of
Borrower's books and records to determine the amount for which
Borrower has personal liability.
(e) All payments made by Borrower with respect to the Indebtedness
and all amounts received by Lender from the enforcement of its
rights under the Security Instrument and the other Loan
Documents shall be applied first to the portion of the
Indebtedness for which Borrower has no personal liability.
(f) Notwithstanding the Base Recourse, Borrower shall become
personally liable to Lender for the repayment of all of the
Indebtedness upon the occurrence of any of the following
Events of Default:
(i) Borrower's ownership of any property or operation of any
business not permitted by Section 33 of the Security
Instrument;
(ii) a Transfer (including, but not limited to, a lien or
encumbrance) that is an Event of Default under Section 21 of
the Security Instrument, other than a Transfer consisting
solely of the involuntary removal or involuntary withdrawal of
a general partner in a limited partnership or a manager in a
limited liability company; or
(iii) fraud or written material misrepresentation by Borrower or any
officer, director, partner, member or employee of Borrower in
connection with the application for or creation of the
Indebtedness or any request for any action or consent by
Lender.
(g) To the extent that Borrower has personal liability under this
Section 9, Lender may exercise its rights against Borrower
personally without regard to whether Lender has exercised any
rights against the Mortgaged Property or any other security,
or pursued any rights against any guarantor, or pursued any
other rights available to Lender under this Note, the Security
Instrument, any other Loan Document or applicable law. To the
fullest extent permitted by applicable law, in any action to
enforce Borrower's personal liability under this Section 9,
Borrower waives any right to set off the value of the
Mortgaged Property against such personal liability.
10. Voluntary and Involuntary Prepayments.
(a) Any receipt by Lender of principal due under this Note prior
to the Maturity Date, other than principal required to be paid
in monthly installments pursuant to Section 3, constitutes a
prepayment of principal under this Note. Without limiting the
foregoing, any application by Lender, prior to the Maturity
Date, of any proceeds of collateral or other security to the
repayment of any portion of the unpaid principal balance of
this Note constitutes a prepayment under this Note.
(b) Borrower may voluntarily prepay all of the unpaid principal
balance of this Note on a Business Day designated as the date
for such prepayment in a Notice from Borrower to Lender given
at least 30 days prior to the date of such prepayment. Unless
otherwise expressly provided in the Loan Documents, Borrower
may not voluntarily prepay less than all of the unpaid
principal balance of this Note.
(c) Borrower acknowledges that Lender has agreed that principal
may be prepaid other than on the last calendar day of a month
only because, for the purposes of the accrual of interest, any
prepayment received by Lender on any day other than the last
calendar day of the month shall be deemed to have been
received on the last calendar day of the month in which the
prepayment occurs.
(d) In order to voluntarily prepay all or any part of the
principal of this Note, Borrower must also pay to Lender,
together with the amount of principal being prepaid, (i) all
accrued and unpaid interest due under this Note, plus (ii) all
other sums due to Lender at the time of such prepayment, plus
(iii) any prepayment premium calculated pursuant to Section
10(e).
(e) Except as provided in Section 10(f), a prepayment premium
shall be due and payable by Borrower in connection with any
prepayment of principal under this Note during the Prepayment
Premium Period. The prepayment premium shall be whichever is
the greater of subsections (A) and (B) below:
(A) 1.0% of the amount of principal being prepaid; or
(B) the product obtained by multiplying:
(1) the amount of principal being prepaid or accelerated,
by
(2) the excess (if any) of the Monthly Note Rate over
the Assumed Reinvestment Rate,
by
(3) the Present Value Factor.
For purposes of subsection (B), the following definitions
shall apply:
Monthly Note Rate: one-twelfth (1/12) of the Fixed
Interest Rate, expressed as a decimal calculated to five
digits.
Prepayment Date: in the case of a voluntary
prepayment, the date on which the prepayment is made; in
the case of the application by Lender of collateral or
security to a portion of the principal balance, the date of
such application.
Assumed Reinvestment Rate: one-twelfth (1/12) of the
yield rate, as of the date 5 Business Days before the
Prepayment Date, on the Treasury Security, as reported in The
Wall Street Journal, expressed as a decimal calculated to five
digits. In the event that no yield is published on the
applicable date for the Treasury Security, Lender, in its
discretion, shall select the non-callable Treasury Security
maturing in the same year as the Treasury Security with the
lowest yield published in The Wall Street Journal as of the
applicable date. If the publication of such yield rates in The
Wall Street Journal is discontinued for any reason, Lender
shall select a security with a comparable rate and term to the
Treasury Security. The selection of an alternate security
pursuant to this Section shall be made in Lender's discretion.
Present Value Factor: the factor that discounts to
present value the costs resulting to Lender from the
difference in interest rates during the months remaining in
the Yield Maintenance Period, using the Assumed Reinvestment
Rate as the discount rate, with monthly compounding, expressed
numerically as follows:
[OBJECT OMITTED]
n = number of months or partial months remaining in
Yield Maintenance Period
ARR = Assumed Reinvestment Rate
(f) Notwithstanding any other provision of this Section 10, no prepayment
premium shall be payable with respect to (i) any prepayment made during the
Window Period, or (ii) any prepayment occurring as a result of the application
of any insurance proceeds or condemnation award under the Security Instrument.
(g) Unless Lender agrees otherwise in writing, a permitted or required
prepayment of less than the unpaid principal balance of this Note shall not
extend or postpone the due date of any subsequent monthly installments or change
the amount of such installments.
(h) Borrower recognizes that any prepayment of any of the unpaid principal
balance of this Note, whether voluntary or involuntary or resulting from an
Event of Default by Borrower, will result in Lender's incurring loss, including
reinvestment loss, additional expense and frustration or impairment of Lender's
ability to meet its commitments to third parties. Borrower agrees to pay to
Lender upon demand damages for the detriment caused by any prepayment, and
agrees that it is extremely difficult and impractical to ascertain the extent of
such damages. Borrower therefore acknowledges and agrees that the formula for
calculating prepayment premiums set forth in this Note represents a reasonable
estimate of the damages Lender will incur because of a prepayment. Borrower
further acknowledges that any lockout and the prepayment premium provisions of
this Note are a material part of the consideration for the Loan, and that the
terms of this Note are in other respects more favorable to Borrower as a result
of the Borrower's voluntary agreement to the lockout and prepayment premium
provisions.
11. Costs and Expenses. To the fullest extent allowed by applicable law,
Borrower shall pay all expenses and costs, including Attorneys' Fees and Costs
incurred by Lender as a result of any default under this Note or in connection
with efforts to collect any amount due under this Note, or to enforce the
provisions of any of the other Loan Documents, including those incurred in
post-judgment collection efforts and in any bankruptcy proceeding (including any
action for relief from the automatic stay of any bankruptcy proceeding) or
judicial or non-judicial foreclosure proceeding.
12. Forbearance. Any forbearance by Lender in exercising any right or remedy
under this Note, the Security Instrument, or any other Loan Document or
otherwise afforded by applicable law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy. The acceptance by Lender of any
payment after the due date of such payment, or in an amount which is less than
the required payment, shall not be a waiver of Lender's right to require prompt
payment when due of all other payments or to exercise any right or remedy with
respect to any failure to make prompt payment. Enforcement by Lender of any
security for Borrower's obligations under this Note shall not constitute an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.
13. Waivers. Borrower and all endorsers and guarantors of this Note and all
other third party obligors waive presentment, demand, notice of dishonor,
protest, notice of acceleration, notice of intent to demand or accelerate
payment or maturity, presentment for payment, notice of nonpayment, grace, and
diligence in collecting the Indebtedness.
14. Loan Charges. Neither this Note nor any of the other Loan Documents shall be
construed to create a contract for the use, forbearance or detention of money
requiring payment of interest at a rate greater than the Maximum Interest Rate.
If any applicable law limiting the amount of interest or other charges permitted
to be collected from Borrower in connection with the Loan is interpreted so that
any interest or other charge provided for in any Loan Document, whether
considered separately or together with other charges provided for in any other
Loan Document, violates that law, and Borrower is entitled to the benefit of
that law, that interest or charge is hereby reduced to the extent necessary to
eliminate that violation. The amounts, if any, previously paid to Lender in
excess of the permitted amounts shall be applied by Lender to reduce the unpaid
principal balance of this Note. For the purpose of determining whether any
applicable law limiting the amount of interest or other charges permitted to be
collected from Borrower has been violated, all Indebtedness that constitutes
interest, as well as all other charges made in connection with the Indebtedness
that constitute interest, shall be deemed to be allocated and spread ratably
over the stated term of this Note. Unless otherwise required by applicable law,
such allocation and spreading shall be effected in such a manner that the rate
of interest so computed is uniform throughout the stated term of this Note.
15. Commercial Purpose. Borrower represents that Borrower is incurring the
Indebtedness solely for the purpose of carrying on a business or commercial
enterprise, and not for personal, family, household, or agricultural purposes.
16. Counting of Days. Except where otherwise specifically provided, any
reference in this Note to a period of "days" means calendar days, not Business
Days.
17. Governing Law. This Note shall be governed by the law of the Property
Jurisdiction.
18. Captions. The captions of the Sections of this Note are for convenience only
and shall be disregarded in construing this Note.
19. Notices; Written Modifications.
(a) All Notices, demands and other communications required or permitted to be
given pursuant to this Note shall be given in accordance with Section 31 of the
Security Instrument.
(b) Any modification or amendment to this Note shall be ineffective unless in
writing signed by the party sought to be charged with such modification or
amendment; provided, however, that in the event of a Transfer under the terms of
the Security Instrument that requires Lender's consent, any or some or all of
the Modifications to Multifamily Note set forth in Exhibit A to this Note may be
modified or rendered void by Lender at Lender's option, by Notice to Borrower
and the transferee, as a condition of Lender's consent.
20. Consent to Jurisdiction and Venue. Borrower agrees that any controversy
arising under or in relation to this Note may be litigated in the Property
Jurisdiction. The state and federal courts and authorities with jurisdiction in
the Property Jurisdiction shall have jurisdiction over all controversies that
shall arise under or in relation to this Note. Borrower irrevocably consents to
service, jurisdiction, and venue of such courts for any such litigation and
waives any other venue to which it might be entitled by virtue of domicile,
habitual residence or otherwise. However, nothing in this Note is intended to
limit any right that Lender may have to bring any suit, action or proceeding
relating to matters arising under this Note in any court of any other
jurisdiction.
21. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES NOT TO ELECT A
TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE
RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT
BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
22. State-Specific Provisions. N/A.
ATTACHED EXHIBIT. The Exhibit noted below, if marked with an "X" in the
space provided, is attached to this Note:
-----
X Exhibit A Modifications to Multifamily Note
-----
IN WITNESS WHEREOF, and in consideration of the Lender's agreement to lend
Borrower the principal amount set forth above, Borrower has signed and delivered
this Note under seal or has caused this Note to be signed and delivered under
seal by its duly authorized representative.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
ANGELES INCOME PROPERTIES, LTD. II, a California limited partnership, doing
business in New Jersey as Angeles Income Properties, Ltd. II Limited
Partnership
By: Angeles Realty Corporation II, a
California corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and
Treasurer
95-3793526
Borrower's Social Security/Employer ID
Number
PAY TO THE ORDER OF FEDERAL HOME LOAN
MORTGAGE CORPORATION, WITHOUT RECOURSE.
GMAC COMMERCIAL MORTGAGE BANK, a
Utah industrial bank
By:/s/Max W. Foore
Max W. Foore
Limited Signer
FHLMC Loan No. 968692303
EXHIBIT A
MODIFICATIONS TO MULTIFAMILY NOTE
The following modifications are made to the text of the Note that precedes this
Exhibit.
1. The definition of "Default Rate" set forth in Section 1(a) of this Note is
deleted and replaced with the following:
"Default Rate" means (i) during the Fixed Rate Period, an annual
interest rate equal to the greater of (A) three (3) percentage
points above the Fixed Interest Rate or (B) four percentage (4)
points above the then-prevailing Prime Rate; and (ii) during the
Extension Period, a variable annual interest rate equal to four (4)
percentage points above the Adjustable Interest Rate in effect from
time to time. However, at no time will the Default Rate exceed the
Maximum Interest Rate."
2. The following definition is added to Section 1(a) of this Note:
"Prime Rate" means the rate of interest announced by The Wall Street
Journal from time to time as the "Prime Rate".
3. The second sentence of Section 9(c)(i) is deleted and replaced with the
following:
However, Borrower will not be personally liable for any failure
described in this subsection (i) if Borrower is unable to pay to
Lender all Rents and security deposits as required by the Security
Instrument (a) because of a valid order issued in a bankruptcy,
receivership, or similar judicial proceeding, or (b) if such funds
have been applied by Borrower as required or permitted by the
Security Instrument prior to the occurrence of an Event of Default.
4. Section 19(b) of this Note is modified by deleting: "provided, however,
in the event of a Transfer under the terms of the Security
Instrument that requires Lender's consent, any or some or all of the
Modifications to Multifamily Note set forth in Exhibit A to this
Note may be modified or rendered void by Lender at Lender's option,
by Notice to Borrower and the transferee, as a condition of Lender's
consent" in the last sentence of the Section; and by adding the
following new sentence:
The Modifications to Multifamily Note set forth in this Exhibit A shall be
null and void unless title to the Mortgaged Property is vested in an
entity whose Controlling Interest(s) are directly or indirectly held by
AIMCO REIT or AIMCO OP. The capitalized terms used in this Section are
defined in the Security Instrument.
5. Section 20 of this Note is deleted and replaced with the following:
"20. Consent to Jurisdiction and Venue. Borrower agrees that any
controversy arising under or in relation to this Note shall be litigated
exclusively in the jurisdiction in which the Land is located (the
"Property Jurisdiction"). The state and federal courts and authorities
with jurisdiction in the Property Jurisdiction shall have exclusive
jurisdiction over all controversies which shall arise under or in relation
to this Note. Borrower irrevocably consents to service, jurisdiction, and
venue of such courts for any such litigation and waives any other venue to
which it might be entitled by virtue of domicile, habitual residence or
otherwise."
Exhibit 10.32
Old FHLMC Loan No. 002772809
New FHLMC Loan No. 968692281
Deer Creek Apartments
AMENDED AND RESTATED MULTIFAMILY NOTE
(Recast Transaction)
THIS AMENDED AND RESTATED MULTIFAMILY NOTE ("Amended and Restated Note")
is made effective as of the 1st day of September, 2005, by ANGELES INCOME
PROPERTIES, LTD. II, a California limited partnership, doing business in New
Jersey as Angeles Income Properties, Ltd. II Limited Partnership ("Borrower");
and the FEDERAL HOME LOAN MORTGAGE CORPORATION ("Lender")
RECITALS
A. Borrower is the maker of a Multifamily Note (the "Note"), dated as of June
27, 2001, in the original principal amount of Thirteen Million Seven Hundred
Fifty Thousand and 00/100 Dollars ($13,750,000.00), evidencing a loan (the
"Loan") to Borrower in such amount from GMAC Commercial Mortgage Corporation, a
California corporation (the "Original Lender").
B. The Note is secured by that certain Multifamily Mortgage, Assignment of
Rents, and Security Agreement dated as of June 27, 2001, from Borrower, as
mortgagor, to Original Lender, as mortgagee, recorded in the land records of
Middlesex County, New Jersey (the "Land Records") in Deed Book 6723, Page 224
(the "Instrument"). The Instrument encumbers, among other things, Borrower's
interest in the land described in Exhibit A to the Instrument and to this
Amended and Restated Instrument.
C. Pursuant to a Limited Guaranty dated as of June 27, 2001, AIMCO Properties,
L.P., a Delaware limited partnership, guaranteed some or all of Borrower's
obligations under the terms of the Note and the Instrument.
D. Original Lender (i) endorsed the Note to Lender and (ii) assigned the
Instrument to Lender by Assignment of Security Instrument dated as of June 27,
2001 and recorded in the Land Records in Assignment Book 840, Page 897.
E. Borrower has confirmed to Lender that Borrower has no defenses or offsets of
any kind against any of the indebtedness due under the Note.
F. Borrower and Lender have now agreed to amend and restate the Note so as to,
among other things, (i) reflect a current unpaid balance of Twelve Million Three
Hundred Twenty One Thousand Three Hundred Sixty One and 00/100 Dollars
($12,321,361.00), (ii) amend the terms of payment, and (iii) change the Maturity
Date of the Note from July 1, 2021 to an Initial Maturity Date of September 1,
2015.
NOW, THEREFORE, in consideration of these premises, and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the parties agree that the Note is amended and restated in its entirety in the
form attached hereto and made a part hereof.
FHLMC Loan No. 968692281
Deer Creek Apartments
MULTIFAMILY NOTE
MULTISTATE - FIXED TO FLOAT
(REVISION DATE 10-01-2004)
US $12,321,361.00 Effective Date: As of September 1,
2005
FOR VALUE RECEIVED, the undersigned (together with such party's or
parties' successors and assigns, "Borrower"), jointly and severally (if more
than one) promises to pay to the order of FEDERAL HOME LOAN MORTGAGE
CORPORATION, the principal sum of Twelve Million Three Hundred Twenty One
Thousand Three Hundred Sixty One and 00/100 Dollars (US $12,321,361.00), with
interest on the unpaid principal balance, as hereinafter provided.
1. Defined Terms.
(a) As used in this Note:
"Adjustable Interest Rate" means the variable annual interest rate
calculated for each Interest Adjustment Period so as to equal the
Index Rate for such Interest Adjustment Period (truncated at the
fifth (5th) decimal place if necessary) plus the Margin.
"Amortization Period" means a period of 360 full consecutive
calendar months.
"Base Recourse" means a portion of the Indebtedness equal to zero
percent (0%) of the original principal balance of this Note.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which Lender is not open for business.
"Default Rate" means (i) during the Fixed Rate Period, an annual
interest rate equal to four (4) percentage points above the Fixed
Interest Rate; and (ii) during the Extension Period, a variable
annual interest rate equal to four (4) percentage points above the
Adjustable Interest Rate in effect from time to time. However, at no
time will the Default Rate exceed the Maximum Interest Rate.
"Extended Maturity Date" means, if the Extension Period becomes
effective pursuant to this Note, the earlier of (i) September 1,
2016, and (ii) the date on which the unpaid principal balance of
this Note becomes due and payable by acceleration or otherwise
pursuant to the Loan Documents or the exercise by Lender of any
right or remedy thereunder.
"Extension Period" means the twelve (12) consecutive calendar months
period commencing on the Scheduled Initial Maturity Date.
"Fixed Interest Rate" means the annual interest rate of seven and
six hundred eighty thousandths percent (7.680%).
"Fixed Rate Period" means the period beginning on the date of this
Note and continuing through August 31, 2015.
"Index Rate" means, for any Interest Adjustment Period, the
Reference Bill(R) Index Rate for such Interest Adjustment Period.
"Initial Maturity Date" means the earlier of (i) September 1, 2015
(the "Scheduled Initial Maturity Date"), and (ii) the date on which
the unpaid principal balance of this Note becomes due and payable by
acceleration or otherwise pursuant to the Loan Documents or the
exercise by Lender of any right or remedy thereunder.
"Installment Due Date" means, for any monthly installment of
interest only or principal and interest, the date on which such
monthly installment is due and payable pursuant to Section 3 of this
Note. The "First Installment Due Date" under this Note is October 1,
2005.
"Interest Adjustment Period" means each successive one calendar
month period during the Extension Period and until the entire
Indebtedness is paid in full.
"Lender" means the holder from time to time of this Note.
"LIBOR Index" means the British Bankers Association's (BBA) one (1)
month LIBOR Rate for United States Dollar deposits, as displayed on
the LIBOR Index Page used to establish the LIBOR Index Rate.
"LIBOR Index Rate" means, for any Interest Adjustment Period after
the first Interest Adjustment Period, the BBA's LIBOR Rate for the
LIBOR Index released by the BBA most recently preceding the first
day of such Interest Adjustment Period, as such LIBOR Rate is
displayed on the LIBOR Index Page. The LIBOR Index Rate for the
first Interest Adjustment Period means the British Bankers
Association's (BBA) LIBOR Rate for the LIBOR Index released by the
BBA most recently preceding the first day of the month in which the
first Interest Adjustment Period begins, as such LIBOR Rate is
displayed on the LIBOR Index Page. "LIBOR Index Page" is the
Bloomberg L.P., page "BBAM", or such other page for the LIBOR Index
as may replace page BBAM on that service, or at the option of Lender
(i) the applicable page for the LIBOR Index on another service which
electronically transmits or displays BBA LIBOR Rates, or (ii) any
publication of LIBOR rates available from the BBA. In the event the
BBA ceases to set or publish a LIBOR rate/interest settlement rate
for the LIBOR Index, Lender will designate an alternative index, and
such alternative index shall constitute the LIBOR Index Rate.
"Loan" means the loan evidenced by this Note.
"Margin" means two and one-half (2.5) percentage points (250 basis
points).
"Maturity Date" means the Extended Maturity Date unless pursuant to
Section 3(f) of this Note the Extension Period does not or cannot
become effective, in which case the Maturity Date means the Initial
Maturity Date.
"Maximum Interest Rate" means the rate of interest that results in
the maximum amount of interest allowed by applicable law.
"Prepayment Premium Period" means the period during which, if a
prepayment of principal occurs, a prepayment premium will be payable
by Borrower to Lender. The Prepayment Premium Period is the period
from and including the date of this Note until but not including the
first day of the Window Period. For this Note, the Prepayment
Premium Period equals the Yield Maintenance Period.
"Reference Bills(R)" means the unsecured general obligations of the
Federal Home Loan Mortgage Corporation ("Freddie Mac") designated by
Freddie Mac as "Reference Bills(R) Securities" and having original
durations to maturity most comparable to the term of the Reference
Bill Index, and issued by Freddie Mac at regularly scheduled
auctions. In the event Freddie Mac shall at any time cease to
designate any unsecured general obligations of Freddie Mac as
"Reference Bills Securities", then at the option of Lender (i)
Lender may select from time to time another unsecured general
obligation of Freddie Mac having original durations to maturity most
comparable to the term of the Reference Bill Index and issued by
Freddie Mac at regularly scheduled auctions, and the term "Reference
Bills" as used in this Note shall mean such other unsecured general
obligations as selected by Lender; or (ii) for any one or more
Interest Adjustment Periods, Lender may use the applicable LIBOR
Index Rate as the Index Rate for such Interest Adjustment Period(s).
"Reference Bill Index" means the one-month Reference Bills.
One-month reference bills have original durations to maturity of
approximately 30 days.
"Reference Bill Index Rate" means, for any Interest Adjustment
Period after the first Interest Adjustment Period, the Money Market
Yield for the Reference Bills as established by the Reference Bill
auction conducted by Freddie Mac most recently preceding the first
day of such Interest Adjustment Period, as displayed on the
Reference Bill Index Page. The Reference Bill Index Rate for the
first Interest Adjustment Period means the Money Market Yield for
the Reference Bills as established by the Reference Bill auction
conducted by Freddie Mac most recently preceding the first day of
the month in which the first Interest Adjustment Period begins, as
displayed on the Reference Bill Index Page. The "Reference Bill
Index Page" is the Freddie Mac Debt Securities Web Page (accessed
via the Freddie Mac internet site at www.freddiemac.com), or at the
option of Lender, any publication of Reference Bills auction results
available from Freddie Mac. However, if Freddie Mac has not
conducted a Reference Bill auction within the 60-calendar day period
prior to the first day of an Interest Adjustment Period, the
Reference Bill Index Rate for such Interest Adjustment Period will
be the LIBOR Index Rate for such Interest Adjustment Period.
"Remaining Amortization Period" means, at any point in time, the
number of consecutive calendar months equal to the number of months
in the Amortization Period minus the number of scheduled monthly
installments of principal and interest that have elapsed since the
date of this Note.
"Security Instrument" means the multifamily mortgage, deed to secure
debt or deed of trust effective as of the effective date of this
Note, from Borrower to or for the benefit of Lender and securing
this Note.
"Treasury Security" means the 9.875% U.S. Treasury Security due
November 15, 2015.
"Window Period" means the Extension Period.
"Yield Maintenance Period" means the period from and including the
date of this Note until but not including the Scheduled Initial
Maturity Date.
(b) Other capitalized terms used but not defined in this Note
shall have the meanings given to such terms in the Security
Instrument.
2. Address for Payment. All payments due under this Note shall be
payable at GMAC Commercial Mortgage Corporation, 200 Witmer
Road, Post Office Box 809, Horsham, Pennsylvania 19044,
Attention: Servicing - Account Manager, or such other place as
may be designated by Notice to Borrower from or on behalf of
Lender.
3. Payments.
(a) During the Fixed Rate Period, interest will accrue on the
outstanding principal balance of this Note at the Fixed
Interest Rate, subject to the provisions of Section 8 of this
Note. During the Extension Period, interest will accrue on the
outstanding principal balance of this Note at the Adjustable
Interest Rate, subject to the provisions of Section 8 of this
Note.
(b) Interest under this Note shall be computed, payable and
allocated on the basis of an actual/360 interest calculation
schedule (interest is payable for the actual number of days in
each month, and each month's interest is calculated by
multiplying the unpaid principal amount of this Note as of the
first day of the month for which interest is being calculated
by the Fixed Interest Rate (during the Fixed Rate Period) or
the applicable Adjustable Interest Rate (during the Extension
Period), dividing the product by 360, and multiplying the
quotient by the number of days in the month for which interest
is being calculated). For convenience in determining the
amount of a monthly installment of principal and interest
under this Note, Lender will use a 30/360 interest calculation
payment schedule (each year is treated as consisting of twelve
30-day months). However, as provided above, the portion of the
monthly installment actually payable as and allocated to
interest will be based upon an actual/360 interest calculation
schedule, and the amount of each installment attributable to
principal and the amount attributable to interest will vary
based upon the number of days in the month for which such
installment is paid. Each monthly payment of principal and
interest will first be applied to pay in full interest due,
and the balance of the monthly payment paid by Borrower will
be credited to principal.
(c) Unless disbursement of principal is made by Lender to Borrower
on the first day of a calendar month, interest for the period
beginning on the date of disbursement and ending on and
including the last day of such calendar month shall be payable
by Borrower simultaneously with the execution of this Note. If
disbursement of principal is made by Lender to Borrower on the
first day of a calendar month, then no payment will be due
from Borrower at the time of the execution of this Note. The
Installment Due Date for the first monthly installment payment
under Section 3(d) of interest only or principal and interest,
as applicable, will be the First Installment Due Date set
forth in Section 1(a) of this Note. Except as provided in this
Section 3(c) and in Section 10, accrued interest will be
payable in arrears.
(d) Beginning on the First Installment Due Date, and continuing
until and including the monthly installment due on the Initial
Maturity Date, principal and accrued interest shall be payable
by Borrower in consecutive monthly installments due and
payable on the first day of each calendar month. The amount of
the monthly installment of principal and interest payable
pursuant to this Section 3(d) on an Installment Due Date shall
be Eighty Seven Thousand Six Hundred Seventy Six and 47/100
Dollars ($87,676.47).
(e) Except as otherwise provided in this Section 3(e), all
remaining Indebtedness, including all principal and interest,
shall be due and payable by Borrower on the Initial Maturity
Date. However, so long as (i) the Initial Maturity Date has
not occurred prior to the Scheduled Initial Maturity Date, and
(ii) no Event of Default or event or circumstance which, with
the giving of notice or passage of time or both, could
constitute an Event of Default exists on the Scheduled Initial
Maturity Date, then the Extension Period automatically will
become effective and the date for full payment of the
Indebtedness automatically shall be extended until the
Extended Maturity Date. If the Extension Period becomes
effective, monthly installments of principal and interest or
interest only will be payable during the Extension Period as
provided in Section 3(f). Anything in Section 21 of the
Security Instrument to the contrary notwithstanding, during
the Extension Period, Borrower will not request that Lender
consent to, and Lender will not consent to, a Transfer that,
absent such consent, would constitute an Event of Default.
(f) If the Extension Period becomes effective, beginning on
September 1, 2015, and continuing until and including the
monthly installment due on the Extended Maturity Date,
principal and accrued interest shall be payable by Borrower in
consecutive monthly installments due and payable on the first
day of each calendar month. The amount of the monthly
installment of principal and interest payable pursuant to this
Section 3(f) on an Installment Due Date shall be calculated so
as to equal the monthly payment amount which would be payable
on the Installment Due Date as if the unpaid principal balance
of this Note as of the first day of the Interest Adjustment
Period immediately preceding the Installment Due Date was to
be fully amortized, together with interest thereon at the
Adjustable Interest Rate in effect for such Interest
Adjustment Period, in equal consecutive monthly payments paid
on the first day of each calendar month over the Remaining
Amortization Period.
(g) During the Extension Period, Lender shall provide Borrower
with Notice, given in the manner specified in the Security
Instrument, of the amount of each monthly installment due
under this Note. However, if Lender has not provided Borrower
with prior notice of the monthly payment due on any
Installment Due Date, then Borrower shall pay on that
Installment Due Date an amount equal to the monthly
installment payment for which Borrower last received notice.
If Lender at any time determines that Borrower has paid one or
more monthly installments in an incorrect amount because of
the operation of the preceding sentence, or because Lender has
miscalculated the Adjustable Interest Rate or has otherwise
miscalculated the amount of any monthly installment, then
Lender shall give notice to Borrower of such determination. If
such determination discloses that Borrower has paid less than
the full amount due for the period for which the determination
was made, Borrower, within 30 calendar days after receipt of
the notice from Lender, shall pay to Lender the full amount of
the deficiency. If such determination discloses that Borrower
has paid more than the full amount due for the period for
which the determination was made, then the amount of the
overpayment shall be credited to the next installment(s) of
interest only or principal and interest, as applicable, due
under this Note (or, if an Event of Default has occurred and
is continuing, such overpayment shall be credited against any
amount owing by Borrower to Lender).
(h) All payments under this Note shall be made in immediately
available U.S. funds.
(i) Any regularly scheduled monthly installment of interest only
or principal and interest payable pursuant to this Section 3
that is received by Lender before the date it is due shall be
deemed to have been received on the due date for the purpose
of calculating interest due.
(j) Any accrued interest remaining past due for 30 days or more,
at Lender's discretion, may be added to and become part of the
unpaid principal balance of this Note and any reference to
"accrued interest" shall refer to accrued interest which has
not become part of the unpaid principal balance. Any amount
added to principal pursuant to the Loan Documents shall bear
interest at the applicable rate or rates specified in this
Note and shall be payable with such interest upon demand by
Lender and absent such demand, as provided in this Note for
the payment of principal and interest.
(k) In accordance with Section 14, interest charged under this
Note cannot exceed the Maximum Interest Rate. If the
Adjustable Interest Rate at any time exceeds the Maximum
Interest Rate, resulting in the charging of interest hereunder
to be limited to the Maximum Interest Rate, then any
subsequent reduction in the Adjustable Interest Rate shall not
reduce the rate at which interest under this Note accrues
below the Maximum Interest Rate until the total amount of
interest accrued hereunder equals the amount of interest which
would have accrued had the Adjustable Interest Rate at all
times been in effect.
4. Application of Payments. If at any time Lender receives, from
Borrower or otherwise, any amount applicable to the
Indebtedness which is less than all amounts due and payable at
such time, Lender may apply the amount received to amounts
then due and payable in any manner and in any order determined
by Lender, in Lender's discretion. Borrower agrees that
neither Lender's acceptance of a payment from Borrower in an
amount that is less than all amounts then due and payable nor
Lender's application of such payment shall constitute or be
deemed to constitute either a waiver of the unpaid amounts or
an accord and satisfaction.
5. Security. The Indebtedness is secured by, among other things,
the Security Instrument, and reference is made to the Security
Instrument for other rights of Lender as to collateral for the
Indebtedness.
6. Acceleration. If an Event of Default has occurred and is
continuing, the entire unpaid principal balance, any accrued
interest, any prepayment premium payable under Section 10, and
all other amounts payable under this Note and any other Loan
Document, shall at once become due and payable, at the option
of Lender, without any prior notice to Borrower (except if
notice is required by applicable law, then after such notice).
Lender may exercise this option to accelerate regardless of
any prior forbearance. For purposes of exercising such option,
Lender shall calculate the prepayment premium as if prepayment
occurred on the date of acceleration. If prepayment occurs
thereafter, lender shall recalculate the prepayment premium as
of the actual prepayment date.
7. Late Charge.
(a) If any monthly installment of interest or principal and
interest or other amount payable under this Note or under the
Security Instrument or any other Loan Document is not received
in full by Lender (i) during the Fixed Rate Period, within ten
(10) days after the installment or other amount is due, or
(ii) during the Extension Period, within five (5) days after
the installment or other amount is due, counting from and
including the date such installment or other amount is due
(unless applicable law requires a longer period of time before
a late charge may be imposed, in which event such longer
period shall be substituted), Borrower shall pay to Lender,
immediately and without demand by Lender, a late charge equal
to five percent (5%) of such installment or other amount due
(unless applicable law requires a lesser amount be charged, in
which event such lesser amount shall be substituted).
(b) Borrower acknowledges that its failure to make timely payments
will cause Lender to incur additional expenses in servicing
and processing the Loan and that it is extremely difficult and
impractical to determine those additional expenses. Borrower
agrees that the late charge payable pursuant to this Section
represents a fair and reasonable estimate, taking into account
all circumstances existing on the date of this Note, of the
additional expenses Lender will incur by reason of such late
payment. The late charge is payable in addition to, and not in
lieu of, any interest payable at the Default Rate pursuant to
Section 8.
8. Default Rate.
(a) So long as (i) any monthly installment under this Note remains
past due for thirty (30) days or more or (ii) any other Event
of Default has occurred and is continuing, then
notwithstanding anything in Section 3 of this Note to the
contrary, interest under this Note shall accrue on the unpaid
principal balance from the Installment Due Date of the first
such unpaid monthly installment or the occurrence of such
other Event of Default, as applicable, at the Default Rate.
(b) From and after the Maturity Date, the unpaid principal balance
shall continue to bear interest at the Default Rate until and
including the date on which the entire principal balance is
paid in full.
(c) Borrower acknowledges that (i) its failure to make timely
payments will cause Lender to incur additional expenses in
servicing and processing the Loan, (ii) during the time that
any monthly installment under this Note is delinquent for
thirty (30) days or more, Lender will incur additional costs
and expenses arising from its loss of the use of the money due
and from the adverse impact on Lender's ability to meet its
other obligations and to take advantage of other investment
opportunities; and (iii) it is extremely difficult and
impractical to determine those additional costs and expenses.
Borrower also acknowledges that, during the time that any
monthly installment under this Note is delinquent for thirty
(30) days or more or any other Event of Default has occurred
and is continuing, Lender's risk of nonpayment of this Note
will be materially increased and Lender is entitled to be
compensated for such increased risk. Borrower agrees that the
increase in the rate of interest payable under this Note to
the Default Rate represents a fair and reasonable estimate,
taking into account all circumstances existing on the date of
this Note, of the additional costs and expenses Lender will
incur by reason of the Borrower's delinquent payment and the
additional compensation Lender is entitled to receive for the
increased risks of nonpayment associated with a delinquent
loan.
9. Limits on Personal Liability.
(a) Except as otherwise provided in this Section 9, Borrower shall
have no personal liability under this Note, the Security
Instrument or any other Loan Document for the repayment of the
Indebtedness or for the performance of any other obligations
of Borrower under the Loan Documents and Lender's only
recourse for the satisfaction of the Indebtedness and the
performance of such obligations shall be Lender's exercise of
its rights and remedies with respect to the Mortgaged Property
and to any other collateral held by Lender as security for the
Indebtedness. This limitation on Borrower's liability shall
not limit or impair Lender's enforcement of its rights against
any guarantor of the Indebtedness or any guarantor of any
other obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the amount
of the Base Recourse, plus any other amounts for which
Borrower has personal liability under this Section 9.
(c) In addition to the Base Recourse, Borrower shall be personally
liable to Lender for the repayment of a further portion of the
Indebtedness equal to any loss or damage suffered by Lender as
a result of the occurrence of any of the following events:
(i) Borrower fails to pay to Lender upon demand after an Event of Default all
Rents to which Lender is entitled under Section 3(a) of the Security
Instrument and the amount of all security deposits collected by Borrower
from tenants then in residence. However, Borrower will not be personally
liable for any failure described in this subsection (i) if Borrower is
unable to pay to Lender all Rents and security deposits as required by the
Security Instrument because of a valid order issued in a bankruptcy,
receivership, or similar judicial proceeding.
(ii) Borrower fails to apply all insurance proceeds and
condemnation proceeds as required by the Security Instrument.
However, Borrower will not be personally liable for any
failure described in this subsection (ii) if Borrower is
unable to apply insurance or condemnation proceeds as required
by the Security Instrument because of a valid order issued in
a bankruptcy, receivership, or similar judicial proceeding.
(iii) Borrower fails to comply with Section 14(g) or (h) of the
Security Instrument relating to the delivery of books and
records, statements, schedules and reports.
(iv) Borrower fails to pay when due in accordance with the terms of
the Security Instrument the amount of any item below marked
"Deferred"; provided however, that if no item is marked
"Deferred", this Section 9(c)(iv) shall be of no force or
effect.
[Deferred] Hazard Insurance premiums or other insurance
premiums,
[Deferred] Taxes,
[Deferred] water and sewer charges (that could become a lien
on the Mortgaged Property),
[ N/A ] ground rents,
[Deferred] assessments or other charges (that could become a
lien on the Mortgaged Property)
(d) In addition to the Base Recourse, Borrower shall be personally liable to
Lender for:
(i) the performance of all of Borrower's obligations under Section
18 of the Security Instrument (relating to environmental
matters);
(ii) the costs of any audit under Section 14(g) of the Security
Instrument; and
(iii) any costs and expenses incurred by Lender in connection with
the collection of any amount for which Borrower is personally
liable under this Section 9, including Attorneys' Fees and
Costs and the costs of conducting any independent audit of
Borrower's books and records to determine the amount for which
Borrower has personal liability.
(e) All payments made by Borrower with respect to the Indebtedness
and all amounts received by Lender from the enforcement of its
rights under the Security Instrument and the other Loan
Documents shall be applied first to the portion of the
Indebtedness for which Borrower has no personal liability.
(f) Notwithstanding the Base Recourse, Borrower shall become
personally liable to Lender for the repayment of all of the
Indebtedness upon the occurrence of any of the following
Events of Default:
(i) Borrower's ownership of any property or operation of any
business not permitted by Section 33 of the Security
Instrument;
(ii) a Transfer (including, but not limited to, a lien or
encumbrance) that is an Event of Default under Section 21 of
the Security Instrument, other than a Transfer consisting
solely of the involuntary removal or involuntary withdrawal of
a general partner in a limited partnership or a manager in a
limited liability company; or
(iii) fraud or written material misrepresentation by Borrower or any
officer, director, partner, member or employee of Borrower in
connection with the application for or creation of the
Indebtedness or any request for any action or consent by
Lender.
(g) To the extent that Borrower has personal liability under this
Section 9, Lender may exercise its rights against Borrower
personally without regard to whether Lender has exercised any
rights against the Mortgaged Property or any other security,
or pursued any rights against any guarantor, or pursued any
other rights available to Lender under this Note, the Security
Instrument, any other Loan Document or applicable law. To the
fullest extent permitted by applicable law, in any action to
enforce Borrower's personal liability under this Section 9,
Borrower waives any right to set off the value of the
Mortgaged Property against such personal liability.
10. Voluntary and Involuntary Prepayments.
(a) Any receipt by Lender of principal due under this Note prior
to the Maturity Date, other than principal required to be paid
in monthly installments pursuant to Section 3, constitutes a
prepayment of principal under this Note. Without limiting the
foregoing, any application by Lender, prior to the Maturity
Date, of any proceeds of collateral or other security to the
repayment of any portion of the unpaid principal balance of
this Note constitutes a prepayment under this Note.
(b) Borrower may voluntarily prepay all of the unpaid principal
balance of this Note on a Business Day designated as the date
for such prepayment in a Notice from Borrower to Lender given
at least 30 days prior to the date of such prepayment. Unless
otherwise expressly provided in the Loan Documents, Borrower
may not voluntarily prepay less than all of the unpaid
principal balance of this Note.
(c) Borrower acknowledges that Lender has agreed that principal
may be prepaid other than on the last calendar day of a month
only because, for the purposes of the accrual of interest, any
prepayment received by Lender on any day other than the last
calendar day of the month shall be deemed to have been
received on the last calendar day of the month in which the
prepayment occurs.
(d) In order to voluntarily prepay all or any part of the
principal of this Note, Borrower must also pay to Lender,
together with the amount of principal being prepaid, (i) all
accrued and unpaid interest due under this Note, plus (ii) all
other sums due to Lender at the time of such prepayment, plus
(iii) any prepayment premium calculated pursuant to Section
10(e).
(e) Except as provided in Section 10(f), a prepayment premium
shall be due and payable by Borrower in connection with any
prepayment of principal under this Note during the Prepayment
Premium Period. The prepayment premium shall be whichever is
the greater of subsections (A) and (B) below:
(A) 1.0% of the amount of principal being prepaid; or
(B) the product obtained by multiplying:
(1) the amount of principal being prepaid or accelerated,
by
(2) the excess (if any) of the Monthly Note Rate over
the Assumed Reinvestment Rate,
by
(3) the Present Value Factor.
For purposes of subsection (B), the following definitions
shall apply:
Monthly Note Rate: one-twelfth (1/12) of the Fixed
Interest Rate, expressed as a decimal calculated to five
digits.
Prepayment Date: in the case of a voluntary
prepayment, the date on which the prepayment is made; in
the case of the application by Lender of collateral or
security to a portion of the principal balance, the date of
such application.
Assumed Reinvestment Rate: one-twelfth (1/12) of the
yield rate, as of the date 5 Business Days before the
Prepayment Date, on the Treasury Security, as reported in The
Wall Street Journal, expressed as a decimal calculated to five
digits. In the event that no yield is published on the
applicable date for the Treasury Security, Lender, in its
discretion, shall select the non-callable Treasury Security
maturing in the same year as the Treasury Security with the
lowest yield published in The Wall Street Journal as of the
applicable date. If the publication of such yield rates in The
Wall Street Journal is discontinued for any reason, Lender
shall select a security with a comparable rate and term to the
Treasury Security. The selection of an alternate security
pursuant to this Section shall be made in Lender's discretion.
Present Value Factor: the factor that discounts to
present value the costs resulting to Lender from the
difference in interest rates during the months remaining in
the Yield Maintenance Period, using the Assumed Reinvestment
Rate as the discount rate, with monthly compounding, expressed
numerically as follows:
[OBJECT OMITTED]
n = number of months or partial months remaining in
Yield Maintenance Period
ARR = Assumed Reinvestment Rate
(f) Notwithstanding any other provision of this Section 10, no prepayment
premium shall be payable with respect to (i) any prepayment made during the
Window Period, or (ii) any prepayment occurring as a result of the application
of any insurance proceeds or condemnation award under the Security Instrument.
(g) Unless Lender agrees otherwise in writing, a permitted or required
prepayment of less than the unpaid principal balance of this Note shall not
extend or postpone the due date of any subsequent monthly installments or change
the amount of such installments.
(h) Borrower recognizes that any prepayment of any of the unpaid principal
balance of this Note, whether voluntary or involuntary or resulting from an
Event of Default by Borrower, will result in Lender's incurring loss, including
reinvestment loss, additional expense and frustration or impairment of Lender's
ability to meet its commitments to third parties. Borrower agrees to pay to
Lender upon demand damages for the detriment caused by any prepayment, and
agrees that it is extremely difficult and impractical to ascertain the extent of
such damages. Borrower therefore acknowledges and agrees that the formula for
calculating prepayment premiums set forth in this Note represents a reasonable
estimate of the damages Lender will incur because of a prepayment. Borrower
further acknowledges that any lockout and the prepayment premium provisions of
this Note are a material part of the consideration for the Loan, and that the
terms of this Note are in other respects more favorable to Borrower as a result
of the Borrower's voluntary agreement to the lockout and prepayment premium
provisions.
11. Costs and Expenses. To the fullest extent allowed by applicable law,
Borrower shall pay all expenses and costs, including Attorneys' Fees and Costs
incurred by Lender as a result of any default under this Note or in connection
with efforts to collect any amount due under this Note, or to enforce the
provisions of any of the other Loan Documents, including those incurred in
post-judgment collection efforts and in any bankruptcy proceeding (including any
action for relief from the automatic stay of any bankruptcy proceeding) or
judicial or non-judicial foreclosure proceeding.
12. Forbearance. Any forbearance by Lender in exercising any right or remedy
under this Note, the Security Instrument, or any other Loan Document or
otherwise afforded by applicable law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy. The acceptance by Lender of any
payment after the due date of such payment, or in an amount which is less than
the required payment, shall not be a waiver of Lender's right to require prompt
payment when due of all other payments or to exercise any right or remedy with
respect to any failure to make prompt payment. Enforcement by Lender of any
security for Borrower's obligations under this Note shall not constitute an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.
13. Waivers. Borrower and all endorsers and guarantors of this Note and all
other third party obligors waive presentment, demand, notice of dishonor,
protest, notice of acceleration, notice of intent to demand or accelerate
payment or maturity, presentment for payment, notice of nonpayment, grace, and
diligence in collecting the Indebtedness.
14. Loan Charges. Neither this Note nor any of the other Loan Documents shall be
construed to create a contract for the use, forbearance or detention of money
requiring payment of interest at a rate greater than the Maximum Interest Rate.
If any applicable law limiting the amount of interest or other charges permitted
to be collected from Borrower in connection with the Loan is interpreted so that
any interest or other charge provided for in any Loan Document, whether
considered separately or together with other charges provided for in any other
Loan Document, violates that law, and Borrower is entitled to the benefit of
that law, that interest or charge is hereby reduced to the extent necessary to
eliminate that violation. The amounts, if any, previously paid to Lender in
excess of the permitted amounts shall be applied by Lender to reduce the unpaid
principal balance of this Note. For the purpose of determining whether any
applicable law limiting the amount of interest or other charges permitted to be
collected from Borrower has been violated, all Indebtedness that constitutes
interest, as well as all other charges made in connection with the Indebtedness
that constitute interest, shall be deemed to be allocated and spread ratably
over the stated term of this Note. Unless otherwise required by applicable law,
such allocation and spreading shall be effected in such a manner that the rate
of interest so computed is uniform throughout the stated term of this Note.
15. Commercial Purpose. Borrower represents that Borrower is incurring the
Indebtedness solely for the purpose of carrying on a business or commercial
enterprise, and not for personal, family, household, or agricultural purposes.
16. Counting of Days. Except where otherwise specifically provided, any
reference in this Note to a period of "days" means calendar days, not Business
Days.
17. Governing Law. This Note shall be governed by the law of the Property
Jurisdiction.
18. Captions. The captions of the Sections of this Note are for convenience only
and shall be disregarded in construing this Note.
19. Notices; Written Modifications.
(a) All Notices, demands and other communications required or permitted to be
given pursuant to this Note shall be given in accordance with Section 31 of the
Security Instrument.
(b) Any modification or amendment to this Note shall be ineffective unless in
writing signed by the party sought to be charged with such modification or
amendment; provided, however, that in the event of a Transfer under the terms of
the Security Instrument that requires Lender's consent, any or some or all of
the Modifications to Multifamily Note set forth in Exhibit A to this Note may be
modified or rendered void by Lender at Lender's option, by Notice to Borrower
and the transferee, as a condition of Lender's consent.
20. Consent to Jurisdiction and Venue. Borrower agrees that any controversy
arising under or in relation to this Note may be litigated in the Property
Jurisdiction. The state and federal courts and authorities with jurisdiction in
the Property Jurisdiction shall have jurisdiction over all controversies that
shall arise under or in relation to this Note. Borrower irrevocably consents to
service, jurisdiction, and venue of such courts for any such litigation and
waives any other venue to which it might be entitled by virtue of domicile,
habitual residence or otherwise. However, nothing in this Note is intended to
limit any right that Lender may have to bring any suit, action or proceeding
relating to matters arising under this Note in any court of any other
jurisdiction.
21. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES NOT TO ELECT A
TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE
RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT
BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
22. State-Specific Provisions. N/A.
ATTACHED EXHIBIT. The Exhibit noted below, if marked with an "X" in the
space provided, is attached to this Note:
-----
X Exhibit A Modifications to Multifamily Note
-----
IN WITNESS WHEREOF, and in consideration of the Lender's agreement to lend
Borrower the principal amount set forth above, Borrower has signed and delivered
this Note under seal or has caused this Note to be signed and delivered under
seal by its duly authorized representative.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
ANGELES INCOME PROPERTIES. LTD. II, a
California limited partnership, doing
business in New Jersey as Angeles
Income Properties, Ltd. II Limited
Partnership
By: Angeles Realty Corporation II, a
California corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and
Treasurer
95-3793526
Borrower's Social Security/Employer ID
Number
EXHIBIT A
MODIFICATIONS TO MULTIFAMILY NOTE
The following modifications are made to the text of the Note that precedes this
Exhibit.
1. The definition of "Default Rate" set forth in Section 1(a) of this Note is
deleted and replaced with the following:
"Default Rate" means (i) during the Fixed Rate Period, an annual
interest rate equal to the greater of (A) three (3) percentage
points above the Fixed Interest Rate or (B) four percentage (4)
points above the then-prevailing Prime Rate; and (ii) during the
Extension Period, a variable annual interest rate equal to four (4)
percentage points above the Adjustable Interest Rate in effect from
time to time. However, at no time will the Default Rate exceed the
Maximum Interest Rate."
2. The following definition is added to Section 1(a) of this Note:
"Prime Rate" means the rate of interest announced by The Wall Street
Journal from time to time as the "Prime Rate".
3. The second sentence of Section 9(c)(i) is deleted and replaced with the
following:
However, Borrower will not be personally liable for any failure
described in this subsection (i) if Borrower is unable to pay to
Lender all Rents and security deposits as required by the Security
Instrument (a) because of a valid order issued in a bankruptcy,
receivership, or similar judicial proceeding, or (b) if such funds
have been applied by Borrower as required or permitted by the
Security Instrument prior to the occurrence of an Event of Default.
4. Section 19(b) of this Note is modified by deleting: "provided, however,
in the event of a Transfer under the terms of the Security
Instrument that requires Lender's consent, any or some or all of the
Modifications to Multifamily Note set forth in Exhibit A to this
Note may be modified or rendered void by Lender at Lender's option,
by Notice to Borrower and the transferee, as a condition of Lender's
consent" in the last sentence of the Section; and by adding the
following new sentence:
The Modifications to Multifamily Note set forth in this Exhibit A shall be
null and void unless title to the Mortgaged Property is vested in an
entity whose Controlling Interest(s) are directly or indirectly held by
AIMCO REIT or AIMCO OP. The capitalized terms used in this Section are
defined in the Security Instrument.
5. Section 20 of this Note is deleted and replaced with the following:
"20. Consent to Jurisdiction and Venue. Borrower agrees that any
controversy arising under or in relation to this Note shall be litigated
exclusively in the jurisdiction in which the Land is located (the
"Property Jurisdiction"). The state and federal courts and authorities
with jurisdiction in the Property Jurisdiction shall have exclusive
jurisdiction over all controversies which shall arise under or in relation
to this Note. Borrower irrevocably consents to service, jurisdiction, and
venue of such courts for any such litigation and waives any other venue to
which it might be entitled by virtue of domicile, habitual residence or
otherwise."
In Witness Whereof, the undersigned have executed this Amended and Restated Note
as of the effective date provided for herein.
BORROWER:
ANGELES INCOME PROPERTIES, LTD. II, a
California limited partnership, doing
business in New Jersey as Angeles
Income Properties, Ltd. II Limited
Partnership
By: Angeles Realty Corporation II, a
California corporation, its general
partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and
Treasurer
LENDER:
FEDERAL HOME LOAN MORTGAGE CORPORATION
By: /s/Michael F. McRoberts
Name: Michael F. McRoberts
Title: Managing Regional Director
SEEN AND AGREED:
GUARANTOR:
AIMCO PROPERTIES, L.P., a Delaware
limited partnership
By: AIMCO-GP, Inc., a Delaware
corporation, its general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and
Treasurer