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downpayment and gave Mariners Cove promissory notes and
indentures totaling $1,550,000, with Mariners Cove retaining a
security interest in the 40 acres.
Loans From AMI
In May 1985, Associated Mortgage Investors (AMI), a
Massachusetts real estate trust, sent Towers Development a
commitment letter evidencing AMI’s intent to provide a $2.7
million construction line of credit and a $1.5 million
acquisition and development loan. The commitment letter states
that the loan will be disbursed in accordance with the terms of a
line of credit construction loan agreement.14
On May 31, 1985, Towers Development executed various
documents, including a real estate note and a mortgage and
security agreement, evidencing the $2.7 million construction line
of credit from AMI (the line of credit). The real estate note
states that Towers Development agrees to pay to AMI, with
interest, the principal sum of $2.7 million “or as much thereof
as may be disbursed from time to time.” The mortgage and
security agreement gives AMI a first priority security interest
in the phase I land and any improvements “now or hereafter”
located on the land. The mortgage and security agreement states
that in the event of default by Towers Development, AMI may take
14 The record does not contain the line of credit
construction loan agreement or otherwise establish its terms.
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