Document:

ex10w.htm

    Exhibit
10-w

    

    TRUSTMARK
CORPORATION

    FORM
OF

    BONUS
RESTRICTED STOCK AGREEMENT

    
      
        

      

    

    
      Granted
<<date>> 

      
        

      

    

    

    This
Bonus Restricted Stock Agreement (“Agreement”) is entered into as of
<<date>> pursuant to the 2005 Stock and Incentive Compensation Plan
(the “Plan”) of Trustmark Corporation (the “Company”) and evidences the grant of
Restricted Stock (as defined in the Plan), and the terms, conditions and
restrictions pertaining thereto, to <<name>> (the
“Associate”).

    

    WHEREAS,
the Company maintains the Plan under which the Committee (as defined in the
Plan) may, among other things, award shares of the Company’s common stock
(“Stock”) to such key associates of the Company and its Subsidiaries as the
Committee may determine, subject to terms, conditions and restrictions as it may
deem appropriate; and

    

    WHEREAS,
pursuant to the Plan, the Company, upon action by the Committee, has granted to
the Associate a restricted stock award conditioned upon the execution by the
Company and the Associate of a Bonus Restricted Stock Agreement setting forth
all the terms and conditions applicable to such award;

    

    NOW
THEREFORE, in consideration of the benefits which the Company has derived from
the services rendered to it and its Subsidiaries by the Associate and of the
covenants contained herein, the parties hereby agree as follows:

    

    1. 
Award of
Shares.  Under the terms of the Plan, the Company awarded to
the Associate a restricted stock award (the “Award”) effective on
<<date>> (the “Award Date”), covering <<shares>>
shares of the Company’s Stock (the “Award Shares”) subject to the terms,
conditions, and restrictions set forth in this
Agreement.  

    

    2. 
Period of
Restriction and
Vesting in the Award Shares. 

    

    
      	
               
      (a)   

            	
              The period of
      restriction (the “Period of
      Restriction”) applicable to the
      Award Shares is the period from the
      Award Date through the last day of the TARP Period.  The “TARP
      Period” ends on the day all Company obligations arising from
      financial assistance provided to the Company under
      the Troubled Asset Relief Program Capital Purchase Program (the
      “CPP”) created by the U.S. Department of the Treasury (the “Treasury
      Department”) pursuant to authority granted under the Emergency Economic
      Stabilization Act of 2008, as amended (the “EESA”), are satisfied as described in
      Section 111(b)(3)(D)(i) of the EESA, excluding
      any period in which the Treasury Department only holds warrants to
      purchase common stock as provided in Section 111(a)(5) of the
      EESA.

            

    

    

    
      	
               (b)
       

            	
              The
      Award Shares may not be sold, transferred, pledged, assigned, or otherwise
      alienated or hypothecated, otherwise than by will or by the laws of
      descent and distribution, during the Period of
      Restriction.  

            

    

    

    
      	
               
      (c)   

            	
              The
      restrictions applicable to the Award Shares shall automatically
      terminate, the Award Shares shall be fully vested and the Award
      Shares shall be free of restrictions and freely transferable on the last
      day of the TARP Period.  

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3. 
Stock
Certificates.  

    

    
      	
               
      (a)   

            	
              The
      Company shall issue the Award Shares either: (i) in certificate form as
      provided in Paragraph 3(b) below; or (ii) in book entry form, registered
      in the name of the Associate with notations regarding the applicable
      restrictions on transfer imposed under this
  Agreement.

            

    

    

    
      	
               
      (b)   

            	
              Any
      certificates representing Award Shares shall be held by the Company until
      such time as the restrictions hereunder lapse and such Award Shares become
      transferable, or are forfeited hereunder.  Such certificates
      shall bear the following legend:

            

    

    

    The sale
or other transfer of the Shares of Stock represented by this certificate,
whether voluntary, involuntary, or by operation of law, is subject to certain
restrictions on transfer set forth in the Trustmark Corporation 2005 Stock and
Incentive Compensation Plan, in the rules and administrative procedures adopted
pursuant to such Plan, and in a Bonus Restricted Stock Agreement dated
<<date>>.  A copy of the Plan, such rules and procedures,
and such Bonus Restricted Stock Agreement may be obtained from the Secretary of
Trustmark Corporation.

    

    
      	
               
      (c)   

            	
              Promptly
      after the lapse of the restrictions with respect to any of the Award
      Shares, the Company shall, as applicable, either remove the notations on
      any of the Award Shares issued in book entry form as to which the
      restrictions have lapsed or deliver to the Associate a certificate or
      certificates evidencing the number of Award Shares as to which the
      restrictions have lapsed.

            

    

    

    
      	
               
      (d)   

            	
              The
      Committee may require, concurrently with the execution and delivery of
      this Agreement, the Associate to deliver to the Company an executed stock
      power, in blank, with respect to the Award Shares.  The
      Associate, by acceptance of the Award, shall be deemed to appoint, and
      does so appoint by execution of this Agreement, the Company and each of
      its authorized representatives as the Associate’s attorney(s) in fact to
      effect any transfer of forfeited shares (or shares otherwise reacquired or
      withheld by the Company hereunder), or any adjustment to the number of
      Award Shares pursuant to Paragraph 13 below, to the Company as may be
      required pursuant to the Plan or this Agreement and to execute such
      documents as the Company or such representatives deem necessary or
      advisable in connection with any such
transfer.

            

    

    

    4. 
Voting
Rights.  During the Period of Restriction, the Associate may
exercise full voting rights with respect to the Award Shares. 

    

    5. 
Dividends and Other
Distributions.  During the Period of Restriction, all dividends
and other distributions paid with respect to the Award Shares in cash or
property other than shares of the Company’s Stock shall be payable to the
Associate at the same time and under the same conditions as payable to other
shareholders of the Company generally.  During the Period of
Restriction, all dividends and other distributions paid with respect to the
Award Shares in shares of the Company’s Stock shall be registered in the name of
the Associate, held by the Company until payable or forfeited pursuant hereto,
shall be subject to the same restrictions on transferability and vesting as the
Award Shares with respect to which they were paid and shall, to the extent
vested, be paid when and to the extent the underlying Award Shares are vested
and freed of restrictions.

    

    6. 
Forfeiture
of Award
Shares.  If the Period of Restriction applicable to the Award
Shares does not end within ten (10) years after the Award Date, then the Award
Shares shall be automatically forfeited to the Company. 

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    7. 
Withholding
Taxes.  The Company, or any of its Subsidiaries, shall have the
right to retain and withhold the amount of taxes required by any government to
be withheld or otherwise deducted and paid with respect to the Award
Shares.  The Committee may require the Associate or any successor in
interest to pay or reimburse the Company, or any of its Subsidiaries, for any
such taxes required to be withheld by the Company, or any of its Subsidiaries,
and to withhold any distribution in whole or in part until the Company, or any
of its Subsidiaries, is so paid or reimbursed.  In lieu thereof, the
Company, or any of its Subsidiaries, shall have the right to withhold from any
other cash amounts due or to become due from the Company, or any of its
Subsidiaries, to or with respect to the Associate an amount equal to such taxes
required to be withheld by the Company, or any of its Subsidiaries, to pay or
reimburse the Company, or any of its Subsidiaries, for any such taxes or to
retain and withhold a number of shares of the Company’s Stock having a market
value not less than the amount of such taxes and cancel any such shares so
withheld in order to pay or reimburse the Company, or any of its Subsidiaries,
for any such taxes.  The Associate or any successor in interest is
authorized to deliver shares of the Company’s Stock in satisfaction of minimum
statutorily required tax withholding obligations (whether or not such shares
have been held for more than six months and including shares acquired pursuant
to this Award if the restrictions thereon have lapsed).

    

    8. 
Administration of
Plan.  The Plan is administered by the Committee appointed by
the Company’s Board of Directors.  The Committee has the authority to
construe and interpret the Plan, to make rules of general application relating
to the Plan, to amend outstanding awards pursuant to the Plan, and to require of
any person receiving an award, at the time of such receipt or lapse of
restrictions, the execution of any paper or the making of any representation or
the giving of any commitment that the Committee shall, in its discretion, deem
necessary or advisable by reason of the securities laws of the United States or
any State, or the execution of any paper or the payment of any sum of money in
respect of taxes or the undertaking to pay or have paid any such sum that the
Committee shall, in its discretion, deem necessary by reason of the Internal
Revenue Code or any rule or regulation thereunder, or by reason of the tax laws
of any State. 

    

    9. 
Plan and
Prospectus.  This Award is granted pursuant to the Plan and is
subject to the terms thereof (including all applicable vesting, forfeiture,
settlement and other provisions).  A copy of the Plan, as well as a
prospectus for the Plan, has been provided to the Associate, and the Associate
acknowledges receipt thereof.  

    

    10. 
Notices.  Any
notice to the Company required under or relating to this Agreement shall be in
writing and addressed to: 

     

    
      
        	 	 Trustmark
      Corporation	 	  Mailing
      Address 
	 	 248 E. Capitol
      Street	 	 P.O. Box
      291
	 	 Jackson,
      MS 39201	 	 Jackson,
      MS 39205
	 	 	 	 
	 	 Attention:  Secretary	 	 

      

       

    

    Any
notice to the Associate required under or relating to this Agreement shall be in
writing and addressed to the Associate at his or her address as it appears on
the records of the Company. 

    

    11. 
Construction.  This
Agreement shall be administered, interpreted and construed in accordance with
the applicable provisions of the Plan.  In addition, this Agreement is
intended to provide and evidence a grant of long term restricted stock which
does not fully vest during the period in which any obligation arising from
financial assistance provided to the Company remains outstanding as described in
Section 111(b)(3)(D)(i) of the EESA, excluding any period in
which the Treasury Department only holds warrants to purchase
common stock
as provided in Section 111(a)(5) of the EESA, and shall be interpreted
and administered as such.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    12. 
Compliance with
Section 409A of
the Internal Revenue Code. 

    

    
      	
               
      (a)   

            	
              It
      is intended that any right or benefit which is provided pursuant to or in
      connection with this Award which is considered to be nonqualified deferred
      compensation subject to Section 409A (“Section 409A”) of the Internal
      Revenue Code (a “409A benefit”) shall be provided and paid in a manner,
      and at such time (i.e., at the applicable event
      described herein if a Section 409A payment event or otherwise at the first
      Section 409A payment event thereafter consisting of a fixed
      time,
      if any,
      a Section 409A disability, a Section 409A separation from service (as
      described below), or a Section 409A change with respect to the
      Associate in the ownership or
      effective control of the Company or in the ownership of a substantial
      portion of its assets of the Company and including, in the discretion
      of the Committee or its delegate, any applicable
      Section 409A de minimis limited cashout
      payment
      rule permitted under
      Treasury Reg. Section 1.409A-3(j)(4)(v)) and in such
      form, as complies with the applicable requirements of Section 409A to
      avoid the unfavorable tax consequences provided therein for
      non-compliance.  Consequently, this Agreement is intended to be
      administered, interpreted and construed in accordance with the applicable
      requirements of Section 409A.  Notwithstanding the foregoing,
      the Associate and his or her successor in interest shall be solely
      responsible and liable for the satisfaction of all taxes and penalties
      that may be imposed on the Associate or his or her successor in interest
      in connection with this Agreement (including any taxes and penalties under
      Section 409A); and neither the Company nor any of its affiliates shall
      have any obligation to indemnify or otherwise hold the Associate or his or
      her successor in interest harmless from any or all of such taxes or
      penalties.

            

    

    

    
      	
               
      (b)   

            	
              Except
      as permitted under Section 409A, any 409A benefit payable to the Associate
      or for his or her benefit with respect to the Award may not be reduced by,
      or offset against, any amount owing by the Associate to the Company or any
      of its affiliates.

            

    

    

    
      	
               
      (c)   

            	
              To
      the extent that entitlement to payment of any 409A benefit occurs due to
      termination or cessation of employment, termination or cessation of
      employment shall be read to mean “separation from service” (within the
      meaning of Section 409A and as applicable to the Company and its
      affiliates).  Where entitlement to payment occurs by reason of
      such termination or cessation of employment and the Associate is a
      “specified employee” (within the meaning of Section 409A, as applicable to
      the Company and its affiliates and using the identification methodology
      selected by the Company from time to time in accordance with Section 409A)
      on the date of his or her “separation from service”, then payment of such
      409A benefit shall be delayed (without interest) until the first business
      day after the end of the six month delay period required under Section
      409A or, if earlier, after the Associate’s death.  In
      determining separation from service, separation from service is determined
      based on the “Separation from Service” definition in the Trustmark
      Corporation Deferred Compensation Plan (as in effect on December 31,
      2008), which provides, in part, that in determining separation from
      service as an employee, separation from service occurs when it is
      reasonably anticipated that no further services would be performed after
      that date or that the level of services the Associate would perform after
      that date (whether as an employee or independent contractor) would
      permanently decrease to less than 50% of the average level of bona fide
      services performed over the immediately preceding thirty-six (36) month
      period.

            

    

    

    13.  CPP Limitations.  The
Company has participated in the CPP; and the Company is required to comply with
the requirements of Section 111(b) of the EESA, as amended from time to time,
and the CPP with respect to the compensation of certain current and future
employees of the Company (as determined for purposes of the EESA and the
guidance and regulations issued by the Treasury Department with respect to the
CPP (the “CPP Requirements”)), in accordance with the CPP
Requirements.  The Associate acknowledges and understands that this
Agreement shall be administered, interpreted and construed and, if and where
applicable, benefits provided hereunder shall be limited, deferred and/or
subject to repayment to the Company in accordance with the CPP 

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    Requirements
and Section 111(b) of the EESA, as amended from time to time, to the extent
legally applicable with respect to the Associate, as determined by the Committee
in its discretion.  The Committee shall have the right unilaterally to
amend this Agreement to effect or document any changes or additions which in its
view are necessary or appropriate to comply with the CPP Requirements and
Section 111 of the EESA, as amended from time to time.

    

    To
evidence their agreement to the terms, conditions and restrictions hereof, the
Company and the Associate have signed this Agreement as of the date first above
written.

     

    
       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      	COMPANY:
	 	 	 
	TRUSTMARK
      CORPORATION
	 	 	 
	 By:	
                                                               

                                                            	 
	 Its:	 	 
	 	 	 
	ASSOCIATE:	 
	 	 	 
	 By:	
                                                               

                                                            	 
	 	      
      <<name>>	 

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

       

       

       

       

       

       

       

       

       

      
        
          -5-4100

                                                                                                                             
Exhibit 10 CCC

MULTIFAMILY NOTE

 

	
US $1,500,000
	
as of March 31,
2009

 

 

           
FOR VALUE RECEIVED, the
undersigned ("Borrower") jointly and severally (if more than one)
promises to pay to the order of KeyCorp Real Estate Capital Markets,
Inc., an Ohio
corporation, the principal sum of One Million Five Hundred Thousand and
No/100ths Dollars (US $1,500,000), with interest accruing at the Interest
Rate on the unpaid principal balance from the Disbursement Date until fully
paid.

 

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

 

Amortization
Period:  360 months.

 

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 Loan proceeds hereunder.

 

First
Payment Date:  The first day of May 1, 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.

 

Interest
Rate:  The annual rate of five and two-thirds percent (5.67%).

 

Lender: 
The holder of this Note.

 

Loan: 
The loan evidenced by this Note.

 

Loan
Term:  82 months.

 

Maturity
Date:  The first day of February 1, 2016, or any earlier date on
which the unpaid principal balance of this Note becomes due and payable by
acceleration or otherwise.

 

Property
Jurisdiction:  The jurisdiction in which the Land is located.

 

Security
Instrument:  A Multifamily Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing dated as of the date of this Note.

 

Yield
Maintenance Period Term or Prepayment Premium Period Term:  76
months.  

 

Yield
Maintenance Period End Date or Prepayment Premium Period End Date:  The
last day of July, 2015.  

 

Event
of Default, Key Principal and 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 KeyBank
Real Estate Capital, P.O. Box 145404, Cincinnati, Ohio 45250, 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):

 

        30/360. 
A 360-day year consisting of twelve 30-day months.

 

       
Actual/360.  A 360-day year.  The amount of each monthlypayment made by Borrower pursuant to Paragraph
3(c) below that is allocated to interest 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 360 and multiplying the quotient by the actual number of days
elapsed during the month.  Borrower understands that the amount allocated
to interest for each month will vary depending on the actual number of calendar
days during such month.

 

           
(c)        Monthly Installments. 
Consecutive monthly installments of principal and interest, each in the amount
of Eight Thousand Six Hundred Seventy-Seven and 51/100ths Dollars (US
$8,677.51), 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.  Any remaining principal and 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. 

 

(d)       
Payments Before Due Date.  Any regularly scheduled monthly
installment of principal and 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 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 which 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 Loan 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.

 

           
8.         Default Rate.  So
long as any monthly installment or any other payment due under this Note remains
past due for 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 Loan, that,
during the time that any monthly installment or payment under this Note is
delinquent for more than 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 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 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 Paragraph 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 (as such term
is defined in the Security Instrument) and 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 obligations of Borrower.

 

           
(b)        Borrower shall be personally
liable to Lender for the repayment of a portion of the Indebtedness equal to any
loss or damage suffered by Lender as a result of:

 

(1)       
failure of Borrower 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; 

 

(2)       
failure of Borrower to apply all insurance proceeds and condemnation proceeds as
required by the Security Instrument; 

 

(3)       
failure of Borrower to comply with Section 14(d) or (e) of the Security
Instrument relating to the delivery of books and records, statements, schedules
and reports;

 

(4)       
fraud or written material misrepresentation by Borrower, Key Principal 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; or 

 

(5)       
failure to apply Rents, first, to the payment of reasonable operating expenses
(other than Property management fees that are not currently payable pursuant to
the terms of an Assignment of Management Agreement or any other agreement with
Lender executed in connection with the Loan) and then to Debt Service Amounts,
except that Borrower will not be personally liable (i) to the extent that
Borrower lacks the legal right to direct the disbursement of such sums because
of a bankruptcy, receivership or similar judicial proceeding, or (ii) with
respect to Rents that are distributed in any calendar year if Borrower has paid
all operating expenses and Debt Service Amounts for that calendar year.

 

           
(c)        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: 

 

(1)       
Borrower's acquisition of any property or operation of any business not
permitted by Section 33 of the Security Instrument; or 

 

(2)       
a Transfer that is an Event of Default under Section 21 of the Security
Instrument.

 

           
(d)        To the extent that Borrower has
personal liability under this Paragraph 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. For purposes of this Paragraph 9, the term "Mortgaged Property" shall not
include any funds that (1) have been applied by Borrower as required or
permitted by the Security Instrument prior to the occurrence of an Event of
Default, or (2) Borrower was unable to apply as required or permitted by the
Security Instrument because of a bankruptcy, receivership, or similar judicial
proceeding.

 

           
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)        Borrower may voluntarily prepay
all (but not less than all) 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 30 days (if given via U.S. Postal
Service) or 20 days (if given via facsimile, email or overnight courier), but
not more than 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").  

 

(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 (A) if Borrower has given a Prepayment Notice with an Intended
Prepayment Date other than the Last Day of the Month or (B) 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 the 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.  

 

           
(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 loan evidenced by this Note, and acknowledges 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 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.  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 are waived by
Borrower, Key Principal, and all endorsers and guarantors of this Note and all
other third party obligors.

 

           
14.       Loan Charges.  Borrower and
Lender intend at all times to comply with the law of the State of Texas
governing the maximum rate or amount of interest payable on or in connection
with this Note and the Indebtedness (or applicable United States federal law to
the extent that it permits Lender to contract for, charge, take, reserve or
receive a greater amount of interest than under Texas law).  If the
applicable law is ever judicially interpreted so as to render usurious any
amount payable under this Note or under any other Loan Document, or contracted
for, charged, taken, reserved or received with respect to the Indebtedness, or
of acceleration of the maturity of this Note, or if any prepayment by Borrower
results in Borrower having paid any interest in excess of that permitted by any
applicable law, then Borrower and Lender expressly intend that all excess
amounts collected by Lender shall be applied to reduce the unpaid principal
balance of this Note (or, if this Note has been or would thereby be paid in
full, shall be refunded to Borrower), and the provisions of this Note, the
Security Instrument and any other Loan Documents immediately shall be deemed
reformed and the amounts thereafter collectible under this Note or any other
Loan Document reduced, without the necessity of the execution of any new
documents, so at to comply with any applicable law, but so as to permit the
recovery of the fullest amount otherwise payable under this Note or any other
Loan Document.  The right to accelerate the maturity of this Note does not
include the right to accelerate any interest which has not otherwise accrued on
the date of such acceleration, and Lender does not intend to collect any
unearned interest in the event of acceleration.  All sums paid or agreed to
be paid to Lender for the use, forbearance or detention of the Indebtedness
shall, to the extent permitted by any applicable law, be amortized, prorated,
allocated and spread throughout the full term of the Indebtedness until payment
in full so that the rate or amount of interest on account of the Indebtedness
does not exceed the applicable usury ceiling.  Notwithstanding any
provision contained in this Note, the Security Instrument or any other Loan
Document that permits the compounding of interest, including any provision by
which any accrued interest is added to the principal amount of this Note, the
total amount of interest that Borrower is obligated to pay and Lender is
entitled to receive with respect to the Indebtedness shall not exceed the amount
calculated on a simple (i.e. noncompounded) interest basis at the maximum rate
on principal amounts actually advanced to or for the account of Borrower,
including all current and prior advances and any advances made pursuant to the
Security Instrument or other Loan Documents (such as for the payment of taxes,
insurance premiums and similar expenses or costs).

 

           
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.  This Note shall
be governed by the law of the jurisdiction in which the Land is located.

 

           
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 31 of the
Security Instrument.

 

           
20.       Consent to Jurisdiction and
Venue.   Borrower and Key Principal each agrees that any
controversy arising under or in relation to this Note shall be litigated
exclusively in 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 and Key Principal each 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.

 

           
21.       WAIVER OF TRIAL BY JURY.  BORROWER,
KEY PRINCIPAL 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, KEY PRINCIPAL 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. 

 

           

 

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

 

           
          Schedule A
   Prepayment Premium (required) 

 

           
       
  Schedule B-I
            Modifications
to Multifamily Note (Bankruptcy)

 

       
  Schedule
B-II           Modifications
to Multifamily Note

 

[DOCUMENT EXECUTION OCCURS ON THE FOLLOWING PAGE]

           
IN WITNESS WHEREOF, Borrower has signed and delivered this Note or has
caused this Note to be signed and delivered by its duly authorized
representative.

 

 

 

BORROWER:

 

AIMCO
COVINGTON POINTE, L.P.,

a
Delaware limited partnership

 

By:      
DAVIDSON GP, L.L.C.,

           
a South Carolina limited liability company,

           
its General Partner

 

By:      
Davidson Income Real Estate, L.P.,

                       
a Delaware limited partnership,

                       
its Sole Member

 

           
By:       Davidson Diversified Properties,
Inc.,

                                   
a Tennessee corporation,

                                   
its Managing General Partner

 

 

 

                                   
By:       /s/Patti K. Fielding

                                   
Patti K. Fielding

                                   
Executive Vice President and 

                                   
Treasurer

 

SCHEDULE A

 

PREPAYMENT PREMIUM

 

 

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)        
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 4.5% U.S. Treasury Security due
November 2015 (the "Specified U.S. Treasury Security"), on the
twenty-fifth Business Day preceding (x) the Intended Prepayment Date, or (y) the
date Lender accelerates the Loan 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:

 

1 - (1 + r)-n/12

r

 

[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]

 

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 4th month prior to the month in which the
Maturity Date occurs, the prepayment premium shall be 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 4th month prior to the month in which the Maturity Date
occurs.

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