EX-10.3






Exhibit 10.3




 FIXED FACILITY NOTE 

(Standard Maturity)




			
	 	 	 
	US $91,000,000.00
	 	February 27, 2009






     FOR VALUE RECEIVED, the undersigned (individually and collectively, “Borrower”)
jointly and severally (if more than one) promises to pay to the order of PNC ARCS LLC, a Delaware
limited liability company (“Lender”) the principal sum of NINETY-ONE MILLION AND NO/100
DOLLARS (US $91,000,000.00), with interest accruing on the unpaid principal balance from the
Disbursement Date until fully paid at the Interest Rate.



     This Note is executed and delivered by Borrower pursuant to that certain Master Credit
Facility Agreement, dated as of February 27, 2009, by and between Borrower and Lender (as amended,
restated or otherwise modified from time to time, the “Master Agreement”), to evidence the
obligation of Borrower to repay a Fixed Advance made by Lender to Borrower in accordance with the
terms of the Master Agreement. This Note is entitled to the benefit and security of the Loan
Documents provided for in the Master Agreement, to which reference is hereby made for a statement
of all of the terms and conditions under which the Fixed Advance evidenced hereby is made.



     1. Defined Terms. In addition to defined terms found elsewhere in this Note, as used in this
Note, the following definitions shall apply:




Advance: The advance evidenced by this Note.




Advance Term: 120 months.




Amortization Period: N/A




Business Day: Any day other than a Saturday, Sunday or any other day on which
Lender is not open for business.




Debt Service Amounts: Amounts payable under this Note, the Security Instrument or
any other Loan Document.




Default Rate: A rate equal to the lesser of 4 percentage points above the Interest
Rate or the maximum interest rate which may be collected from Borrower under
applicable law.




Disbursement Date: The date of disbursement of Advance proceeds hereunder.




First Payment Date: The first day of April, 2009.




Indebtedness: The principal of, interest on, or any other amounts due at any time
under, this Note, the Security Instrument or any other Loan Document, including
prepayment premiums, late charges, default interest, and advances to protect the
security of the Security Instrument under Section 12 of the Security Instrument.



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Interest Rate: The annual rate of five and ninety-six one-hundredths percent
(5.96%).




Lender: The holder of this Note.




Maturity Date: The first day of March, 2019, or any earlier date on which the
unpaid principal balance of this Note becomes due and payable by acceleration or
otherwise.




Security Instrument: Individually and collectively, various multifamily mortgages,
deeds to secure debt or deeds of trust described in the Master Agreement.




Yield Maintenance Period Term or Prepayment Premium Period Term: 114 months.




Yield Maintenance Period End Date or Prepayment Premium Period End Date: The last
day of August, 2018.


Event of Default and other capitalized terms used but not defined in this Note shall have the
meanings given to such terms in the Master Agreement or, if not defined in the Master Agreement, as
defined in the Security Instrument.




     2. Address for Payment. All payments due under this Note shall be payable at
PNC ARCS LLC, 26901 Agoura Road, Suite 200, Calabasas Hills, California 91301, or such other place
as may be designated by written notice to Borrower from or on behalf of Lender.



     3. Payment of Principal and Interest. Principal and interest shall be paid as follows:



     (a) Short Month Interest. If disbursement of principal is made by Lender to Borrower on any
day other than the first day of the month, interest for the period beginning on the Disbursement
Date and ending on and including the last day of the month in which such disbursement is made shall
be payable simultaneously with the execution of this Note.



     (b) Interest Computation. Interest under this Note shall be computed on the basis of (check
one only):




	 	o	 	30/360. A 360-day year consisting of twelve 30-day months.
	 
	 	þ	 	Actual/360. A 360-day year. The amount of each monthly payment made by
Borrower pursuant to Paragraph 3(c) below will be based on the actual number of
calendar days during such month and
shall be calculated by multiplying the unpaid principal balance of this Note by
the per annum Interest Rate, dividing the product by three hundred sixty (360)
and multiplying the quotient by the actual number of days elapsed during the
month. Borrower understands that the amount of interest for each month




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	 	 	 	will vary depending on the actual number of calendar days during such
month.





     (c) Monthly Installments (check one only):




	 	o	 	30/360. [Select only if 30/360 is selected in Paragraph 3(b) above.] If
interest accrues based on a 30/360 interest computation, then consecutive
monthly installments of interest only, each in the amount of
                                                            
Dollars (US $                                         ), shall be payable on the First Payment
Date and on the first day of every month thereafter, until the entire unpaid
principal balance evidenced by this Note is fully paid. The entire principal
balance and accrued but unpaid interest shall be due and payable on the Maturity
Date. The unpaid principal balance shall continue to bear interest after the
Maturity Date at the Default Rate set forth in this Note until and including the
date on which it is paid in full.
	 
	 	þ	 	Actual/360. [Select only if Actual/360 is selected in Paragraph 3(b)
above.] If interest accrues based on an Actual/360 interest computation, the
amount of Four Hundred Fifty-One Thousand Nine Hundred Sixty-Six and 67/100
Dollars (US $451,966.67) shall be payable on the First Payment Date and
thereafter consecutive monthly installments of interest only, shall be payable
as follows:






	 	(1)	 	Four Hundred Twenty-One Thousand Eight Hundred Thirty-Five and 56/100
Dollars (US $421,835.56), shall be payable on the first day of each month
during the term hereof which follows a 28-day month;
	 
	 	(2)	 	Four Hundred Thirty-Six Thousand Nine Hundred One and 11/100 Dollars
(US $436,901.11), shall be payable on the first day of each month during
the term hereof which follows a 29-day month,
	 
	 	(3)	 	Four Hundred Fifty-One Thousand Nine Hundred Sixty-Six and 67/100
Dollars (US $451,966.67), shall be payable on the first day of each month
during the term hereof which follows a 30-day month, or
	 
	 	(4)	 	Four Hundred Sixty-Seven Thousand Thirty-Two and 22/100 Dollars (US
$467,032.22), shall be payable on the first day of each month during the
term hereof which follows a 31-day month,






	 	 	 	until the entire unpaid principal balance evidenced by this Note is fully
paid. The entire principal balance and accrued but unpaid interest shall
be due and payable on the Maturity Date. The unpaid principal balance
shall





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	 	 	 	continue to bear interest after the Maturity Date at the Default Rate set
forth in this Note until and including the date on which it is paid in
full.





     (d) Payments Before Due Date. Any regularly scheduled monthly installment of interest that is
received by Lender before the date it is due shall be deemed to have been received on the due date
solely for the purpose of calculating interest due.



     (e) Accrued Interest. Any accrued interest remaining past due for thirty (30) days or more
shall be added to and become part of the unpaid principal balance and shall bear interest at the
rate or rates specified in this Note. Any reference herein 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.



     4. Application of Payments. If at any time Lender receives, from Borrower or otherwise, any
amount applicable to the Indebtedness that is less than all amounts due and payable at such time,
Lender may apply that payment 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, among other things, by the Security Instrument, and
reference is made to the Security Instrument for other rights of Lender concerning the collateral
for the Indebtedness.



     6. Acceleration. If an Event of Default has occurred and is continuing, the entire unpaid
principal balance, any accrued interest, the prepayment premium payable under Paragraph 10, if any,
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. Lender may exercise
this option to accelerate regardless of any prior forbearance.



     7. Late Charge. If any monthly installment due hereunder is not received by Lender on or
before the 10th day of each month or if any other amount payable under this Note or under the
Security Instrument or any other Loan Document is not received by Lender within 10 days after the
date such amount is due, counting from and including the date such amount is due, Borrower shall
pay to Lender, immediately and without demand by Lender, a late charge equal to 5 percent of such
monthly installment or other amount due. Borrower acknowledges that its failure to make timely
payments will cause Lender to incur additional expenses in servicing and processing the Advance and
that it is extremely difficult and impractical to determine those additional expenses. Borrower
agrees that the late charge payable pursuant to this Paragraph 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 Paragraph 8.



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     8. Default Rate. So long as any monthly installment or any other payment due under this Note
remains past due for thirty (30) days or more, interest under this Note shall accrue on the unpaid
principal balance from the earlier of the due date of the first unpaid monthly installment or other
payment due, as applicable, at the Default Rate. If the unpaid principal balance and all accrued
interest are not paid in full on the Maturity Date, the unpaid principal balance and all accrued
interest shall bear interest from the Maturity Date at the Default Rate. Borrower also acknowledges
that its failure to make timely payments will cause Lender to incur additional expenses in
servicing and processing the Advance, that, during the time that any monthly installment or payment
under this Note is delinquent for more than thirty (30) days, 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 that it is extremely difficult and impractical to determine those additional
costs and expenses. Borrower also acknowledges that, during the time that any monthly installment
or other payment due under this Note is delinquent for more than thirty (30) days, 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 Borrower’s delinquent payment and the additional compensation Lender is entitled
to receive for the increased risks of nonpayment associated with a delinquent advance.



     9. Limits on Personal Liability. The provisions of Article 14 of the Master
Agreement (entitled “Limits on Personal Liability”) are hereby incorporated into this Note by this
reference to the fullest extent as if the text of such Article were set forth in its entirety
herein.



     10. Voluntary and Involuntary Prepayments.



     (a) A prepayment premium shall be payable in connection with any prepayment made under this
Note as provided below:




     (1) Subject to the terms of the Master Agreement, Borrower may voluntarily prepay all (or a
portion) of the unpaid principal balance of this Note only on the last calendar day of a calendar
month (the “Last Day of the Month”) and only if Borrower has complied with all of the
following:




	 	(i)	 	Borrower must give Lender at least thirty (30) days (if given via U.S.
Postal Service) or twenty (20) days (if given via facsimile, email or
overnight courier), but not more than sixty (60) days, prior written
notice of Borrower’s intention to make a prepayment (the “Prepayment
Notice”). The Prepayment Notice
shall be given in writing (via facsimile, email, U.S. Postal Service or
overnight courier) and addressed to Lender. The Prepayment Notice shall
include, at a minimum, the Business Day upon which Borrower intends to
make the prepayment (the “Intended Prepayment Date”).





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	 	(ii)	 	Borrower acknowledges that the Lender is not required to accept any
voluntary prepayment of this Note on any day other than the Last Day of
the Month even if Borrower has given a Prepayment Notice with an Intended
Prepayment Date other than the Last Day of the Month or if the Last Day of
the Month is not a Business Day. Therefore, even if Lender accepts a
voluntary prepayment on any day other than the Last Day of the Month, for
all purposes (including the accrual of interest and the calculation of the
prepayment premium), any prepayment received by Lender on any day other
than the Last Day of the Month shall be deemed to have been received by
Lender on the Last Day of the Month and any prepayment calculation will
include interest to and including the Last Day of the Month in which such
prepayment occurs. If the
Last Day of the Month is not a Business Day, then Borrower must
make the payment on the Business Day immediately preceding the
Last Day of the Month.
	 
	 	(iii)	 	Any prepayment shall be made by paying (A) the amount of principal
being prepaid, (B) all accrued interest (calculated to the Last Day of the
Month), (C) all other sums due Lender at the time of such prepayment, and
(D) the prepayment premium calculated pursuant to Schedule A.
	 
	 	(iv)	 	If, for any reason, Borrower fails to prepay this Note (A) within
five (5) Business Days after the Intended Prepayment Date or (B) if the
prepayment occurs in a month other than the month stated in the original
Prepayment Notice, then Lender shall have the right, but not the
obligation, to recalculate the prepayment premium based upon the date that
Borrower actually prepays this Note and to make such calculation as
described in Schedule A attached hereto. For purposes of such
recalculation, such new prepayment date shall be deemed the “Intended
Prepayment Date.”






     (2) Upon Lender’s exercise of any right of acceleration under this Note, Borrower
shall pay to Lender, in addition to the entire unpaid principal balance of this Note
outstanding at the time of the acceleration, (i) all accrued interest and all other sums
due Lender under this Note and the other Loan Documents, and (ii) the prepayment premium
calculated pursuant to Schedule A.




     (3) Any application by Lender of any collateral or other security to the repayment of
any portion of the unpaid principal balance of this Note prior to the Maturity Date and in
the absence of acceleration shall be deemed to be a partial prepayment by Borrower,
requiring the payment to Lender by Borrower of a prepayment premium.



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     (b) Notwithstanding the provisions of Paragraph 10(a), no prepayment premium shall be payable
(1) with respect to any prepayment occurring as a result of the application of any insurance
proceeds or condemnation award under the Security Instrument, or (2) as provided in subparagraph
(c) of Schedule A.



     (c) Schedule A is hereby incorporated by reference into this Note.



     (d) Any required prepayment of less than the entire 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, unless Lender agrees otherwise in writing.



     (e) Borrower recognizes that any prepayment of the unpaid principal balance of this Note,
whether voluntary or involuntary or resulting from a 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 on Schedule A represents
a reasonable estimate of the damages Lender will incur because of a prepayment.



     (f) Borrower further acknowledges that the prepayment premium provisions of this Note are a
material part of the consideration for the Advance evidenced by this Note, and acknowledges that
the terms of this Note are in other respects more favorable to Borrower as a result of Borrower’s
voluntary agreement to the prepayment premium provisions.



     11. Costs and Expenses. Borrower shall pay on demand all expenses and costs, including fees
and out-of-pocket expenses of attorneys and expert witnesses and costs of investigation, 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. Except as expressly provided in the Master Agreement, 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



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diligence in collecting the Indebtedness are waived by Borrower and all endorsers and guarantors of
this Note and all other third party obligors.



     14. Advance Charges. Borrower agrees to pay an effective rate of interest equal to the sum of
the Interest Rate provided for in this Note and any additional rate of interest resulting from any
other charges of interest or in the nature of interest paid or to be paid in connection with the
Advance evidenced by this Note and any other fees or amounts to be paid by Borrower pursuant to any
of the other Loan Documents. 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 permitted to be charged under applicable
law. If any applicable law limiting the amount of interest or other charges permitted to be
collected from Borrower in connection with the Advance 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 the 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 the Note.



     15. Commercial Purpose. Borrower represents that the Indebtedness is being incurred by
Borrower solely for the purpose of carrying on a business or commercial enterprise, and not for
personal, family or household 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; Consent to Jurisdiction; Waiver of Jury Trial. The provisions of Section
15.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury
Trial”) are hereby incorporated into this Note by this reference to the fullest extent as if
the text of such Section were set forth in its entirety herein.



     18. Captions. The captions of the paragraphs of this Note are for convenience only and shall
be disregarded in construing this Note.



     19. Notices. All notices, demands and other communications required or permitted to be given
by Lender to Borrower pursuant to this Note shall be given in accordance with Section 15.08 of the
Master Agreement.



     20. Security for this Note. The indebtedness evidenced by this Note is secured by other
Security Documents executed by Borrower or its Affiliates. Reference is made hereby to the Master
Agreement and the Security Documents for additional rights and remedies of Lender



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relating to the Indebtedness evidenced by this Note. Each Security Document shall be released in
accordance with the provisions of the Master Agreement and the Security Documents.



     21. No Reborrowing. Advances borrowed under this Note may not be reborrowed.



     22. Fixed Advance. This Note is issued to evidence a Fixed Advance made in accordance with
the terms of the Master Agreement.



     23. Cross-Default with Master Agreement. The occurrence of an Event of Default under the
Master Agreement shall constitute an “Event of Default” under this Note, and, accordingly, upon the
occurrence of an Event of Default under the Master Agreement, the entire principal amount
outstanding hereunder and accrued interest thereon shall at once become due and payable, at the
option of the holder hereof.



[Remainder of page intentionally left blank.]




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     IN WITNESS WHEREOF, 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. Borrower intends
that this Note shall be deemed to be signed and delivered as a sealed instrument.



	 	 	 	    	 	    	 	 	 	 	 
	 

	 	BORROWER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CMF 15 Portfolio
LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Realty Limited Partnership, a	 	 
	 	 	 	 	Delaware limited partnership	 	 
	 	 	Its:	 	Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Colonial Properties Trust, an	 	 
	 	 	 	 	 	 	Alabama real estate investment trust	 	 
	 	 	 	 	Its:	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:

Name:
	 	/s/ Jerry A. Brewer
 

Jerry A. Brewer
	 	     
	 

	 	 	 	 	 	Title:
	 	Executive Vice President	 	 






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     Pay
to the order of
                                                            , without recourse.




	 	 	 	 	 
	 	LENDER:


PNC ARCS LLC, a Delaware limited liability
company

 	 
	 	By:  	/s/  Tim White
 	 
	 	Name:  Tim White 	 
	 	Title:    President 	 
	 




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ATTACHED SCHEDULES. The following Schedules are attached to this Note:




	 	 	 	 	 
	þ

	 	Schedule A
	 	Prepayment Premium (required)
	 
	o

	 	Schedule B
	 	Modifications to Multifamily Note






 









 






SCHEDULE A




PREPAYMENT PREMIUM




[FOR STANDARD YIELD MAINTENANCE —

OTHER PREPAYMENT OPTIONS MAY BE AVAILABLE FOR A FEE]



Any prepayment premium payable under Paragraph 10 of this Note shall be computed as follows:





	 	(a)	 	If the prepayment is made at any time after the date of this Note and before the Yield
Maintenance Period End Date, the prepayment premium shall be the greater of:






	 	(i)	 	one percent (1%) of the amount of principal being prepaid; or
	 
	 	(ii)	 	The product obtained by multiplying:






	 	(A)	 	the amount of principal being prepaid,






	 	 	 	by






	 	(B)	 	the difference obtained by subtracting from the Interest Rate on this
Note the yield rate (the “Yield Rate”) on the 3.75% U.S. Treasury Security
due November 2018 (the “Specified U.S. Treasury Security”), on the
twenty-fifth (25th) Business Day preceding (x) the Intended Prepayment
Date, or (y) the date Lender accelerates the Advance or otherwise accepts
a prepayment pursuant to Paragraph 10(a)(3) of this Note, as the Yield
Rate is reported in The Wall Street Journal,






	 	 	 	by






	 	(C)	 	the present value factor calculated using the following formula:
	 
	 	 	 	






	 	 	 	[r = Yield Rate 



n = the number of months remaining between (1)
either of the following: (x) in the case of a voluntary
prepayment, the Last Day of the Month during which the prepayment
is made, or (y) in any other case, the date on which Lender
accelerates the unpaid principal balance of this Note and (2) the
Yield Maintenance Period End Date]




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	 	 	 	In the event that no Yield Rate is published for the Specified
U.S. Treasury Security, then the nearest equivalent non-callable
U.S. Treasury Security having a maturity date closest to the Yield
Maintenance Period End Date of this Note shall be selected at
Lender’s discretion. If the publication of such Yield Rates in The
Wall Street Journal is discontinued, Lender shall determine such
Yield Rates from another source selected by Lender.






	 	(b)	 	If the prepayment is made on or after the Yield Maintenance Period End Date but before
the last calendar day of the fourth (4th) month prior to the month in which the Maturity
Date occurs, the prepayment premium shall be one percent (1%) of the amount of principal
being prepaid.
	 
	 	(c)	 	Notwithstanding the provisions of Paragraph 10(a) of this Note, no prepayment premium
shall be payable with respect to any prepayment made on or after the last calendar day of
the fourth (4th) month prior to the month in which the Maturity Date occurs.





[Remainder of page intentionally left blank.]




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[Initial Page to Schedule A to Fixed Facility Note (Standard Maturity)]




	 	 	 	 	 
	 

	 	JAB	 	 
	 

	 	 

	 	 
	 

	 	INITIALS	 	 







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