Form 8-K - CURRENT REPORT
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) December 22, 2000
Winthrop Growth Investors I Limited Partnership
(Exact name of registrant as specified in its charter)
Massachusetts 2-84760 04-2839837
(State or other jurisdiction (Commission (I.R.S. Employer
incorporation) File Number) Identification Number)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(Registrant's telephone number)
(864) 239-1000
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events.
On December 22, 2000, the Registrant refinanced the mortgage note payable
with ARCS Commercial Mortgage Co., L.P. on Meadow Wood Apartments. The new
mortgage was for $6,070,000 at a rate of 7.310%.
The Registrant is currently evaluating the cash requirements of the Partnership
to determine what portion of the net proceeds, if any, would be available to
distribute to the partners in the near future.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information.
The required pro forma financial information will be provided in the
Registrant's quarterly report on Form 10-KSB for the quarter ended December 31,
2000.
(c) Exhibits
18(a) Multifamily Mortgage, assignment of rents, and security agreement
for refinancing of Meadow Wood Apartments.
18(b) Financing Statement - Exhibit B for Meadow Wood Associates.
18(c) Multifamily Note - Exhibit C for Meadow Wood Associates.
18(d) Limited Guaranty - Meadow Wood Associates.
18(e) Consolidation, Extension and Modification Agreement - Meadow Wood
Associates.
18(f) Replacement Reserve Agreement.
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.
Winthrop Growth Investors I Limited Partnership
By: Two Winthrop Properties, Inc.
Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
Date: January 31, 2001
EXHIBIT 18(A)
THIS INSTRUMENT PREPARED BY, RECORDED
AND RETURN TO: FHLMC# 002689235
(Print Name of Attorney)
Cassin Cassin & Joseph LLP
300 East 42nd Street
New York, New York 10017
Attn: Carol M. Joseph, Esq.
(Reserved)
Duval County, Florida
MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
(FLORIDA - REVISION DATE 11-01-2000)
Ashton Ridge Apartments
5959 Ft. Caroline Road
Jacksonville, Florida
MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
(FLORIDA - REVISION DATE 11-01-2000)
THIS MULTIFAMILY MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the
"Instrument") is made as of the 15th day of December, 2000, between MEADOW WOOD
ASSOCIATES, a general partnership organized and existing under the laws of
Florida, whose address is c/o AIMCO, 2000 South Colorado Blvd., Suite 2-1000,
Denver, Colorado 80222, as mortgagor ("Borrower"), and ARCS COMMERCIAL MORTGAGE
CO., L.P., a limited partnership organized and existing under the laws of
California, whose address is 26901 Agoura Road, Suite 200, Calabasas Hills,
California 91301, as mortgagee ("Lender").
Borrower is indebted to Lender in the principal amount of $1,998,962.18,
as evidenced by Borrower's Multifamily Note payable to Lender dated as of the
date of this Instrument, and maturing on January 1, 2021.
TO SECURE TO LENDER the repayment of the Indebtedness, and all renewals,
extensions and modifications of the Indebtedness, and the performance of the
covenants and agreements of Borrower contained in the Loan Documents, Borrower
mortgages, warrants, grants, conveys and assigns to Lender the Mortgaged
Property, including the Land located in Duval County, State of Florida and
described in Exhibit A attached to this Instrument.
Borrower represents and warrants that Borrower is lawfully seized of the
Mortgaged Property and has the right, power and authority to mortgage, grant,
convey, bargain, sell, transfer and assign the Mortgaged Property, and that the
Mortgaged Property is unencumbered. Borrower covenants that Borrower will
warrant and defend generally the title to the Mortgaged Property against all
claims and demands, subject to any easements and restrictions listed in a
schedule of exceptions to coverage in any title insurance policy issued to
Lender contemporaneously with the execution and recordation of this Instrument
and insuring Lender's interest in the Mortgaged Property.
Covenants. Borrower and Lender covenant and agree as follows:
1. DEFINITIONS. The following terms, when used in this Instrument
(including when used in the above recitals), shall have the following
meanings:
(a) "Borrower" means all persons or entities identified as "Borrower" in
the first paragraph of this Instrument, together with their successors and
assigns.
(b) "Collateral Agreement" means any separate agreement between Borrower
and Lender for the purpose of establishing replacement reserves for the
Mortgaged Property, establishing a fund to assure the completion of repairs or
improvements specified in that agreement, or assuring reduction of the
outstanding principal balance of the Indebtedness if the occupancy of or income
from the Mortgaged Property does not increase to a level specified in that
agreement, or any other agreement or agreements between Borrower and Lender
which provide for the establishment of any other fund, reserve or account.
(c) "Controlling Entity" means an entity which owns, directly or
indirectly through one or more intermediaries, (A) a general partnership
interest or more than 50% of the limited partnership interests in Borrower (if
Borrower is a partnership or joint venture), (B) a manager's interest in
Borrower or more than 50% of the ownership or membership interests in Borrower
(if Borrower is a limited liability company), or (C) more than 50% of any class
of voting stock of Borrower (if Borrower is a corporation).
(d) "Environmental Permit" means any permit, license, or other
authorization issued under any Hazardous Materials Law with respect to any
activities or businesses conducted on or in relation to the Mortgaged Property.
(e) "Event of Default" means the occurrence of any event listed in
Section 22.
(f) "Fixtures" means all property which is so attached to the Land or the
Improvements as to constitute a fixture under applicable law, including:
machinery, equipment, engines, boilers, incinerators, installed building
materials; systems and equipment for the purpose of supplying or distributing
heating, cooling, electricity, gas, water, air, or light; antennas, cable,
wiring and conduits used in connection with radio, television, security, fire
prevention, or fire detection or otherwise used to carry electronic signals;
telephone systems and equipment; elevators and related machinery and equipment;
fire detection, prevention and extinguishing systems and apparatus; security and
access control systems and apparatus; plumbing systems; water heaters, ranges,
stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers,
dryers and other appliances; light fixtures, awnings, storm windows and storm
doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors;
cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants;
swimming pools; and exercise equipment.
(g) "Governmental Authority" means any board, commission, department or
body of any municipal, county, state or federal governmental unit, or any
subdivision of any of them, that has or acquires jurisdiction over the Mortgaged
Property or the use, operation or improvement of the Mortgaged Property.
(h) "Hazardous Materials" means petroleum and petroleum products and
compounds containing them, including gasoline, diesel fuel and oil; explosives;
flammable materials; radioactive materials; polychlorinated biphenyls ("PCBs")
and compounds containing them; lead and lead-based paint; asbestos or
asbestos-containing materials in any form that is or could become friable;
underground or above-ground storage tanks, whether empty or containing any
substance; any substance the presence of which on the Mortgaged Property is
prohibited by any federal, state or local authority; any substance that requires
special handling; and any other material or substance now or in the future
defined as a "hazardous substance," "hazardous material," "hazardous waste,"
"toxic substance," "toxic pollutant," "contaminant," or "pollutant" within the
meaning of any Hazardous Materials Law.
(i) "Hazardous Materials Laws" means all federal, state, and local laws,
ordinances and regulations and standards, rules, policies and other governmental
requirements, administrative rulings and court judgments and decrees in effect
now or in the future and including all amendments, that relate to Hazardous
Materials and apply to Borrower or to the Mortgaged Property. Hazardous
Materials Laws include, but are not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., the
Toxic Substance Control Act, 15 U.S.C. Section 2601, et seq., the Clean Water
Act, 33 U.S.C. Section 1251, et seq., and the Hazardous Materials Transportation
Act, 49 U.S.C. Section 5101, and their state analogs.
(j) "Impositions" and "Imposition Deposits" are defined in
Section 7(a).
(k) "Improvements" means the buildings, structures, improvements, and
alterations now constructed or at any time in the future constructed or placed
upon the Land, including any future replacements and additions.
(l) "Indebtedness" means the principal of, interest on, and all other
amounts due at any time under, the Note, this Instrument or any other Loan
Document, including prepayment premiums, late charges, default interest, and
advances as provided in Section 12 to protect the security of this Instrument.
(m) "Initial Owners" means, with respect to Borrower or any other entity,
the persons or entities who on the date of the Note own in the aggregate 100% of
the ownership interests in Borrower or that entity.
(n) "Land" means the land described in Exhibit A.
(o) "Leases" means all present and future leases, subleases, licenses,
concessions or grants or other possessory interests now or hereafter in force,
whether oral or written, covering or affecting the Mortgaged Property, or any
portion of the Mortgaged Property (including proprietary leases or occupancy
agreements if Borrower is a cooperative housing corporation), and all
modifications, extensions or renewals.
(p) "Lender" means the entity identified as "Lender" in the first
paragraph of this Instrument, or any subsequent holder of the Note.
(q) "Loan Documents" means the Note, this Instrument, all guaranties, all
indemnity agreements, all Collateral Agreements, O&M Programs, and any other
documents now or in the future executed by Borrower, any guarantor or any other
person in connection with the loan evidenced by the Note, as such documents may
be amended from time to time.
(r) "Loan Servicer" means the entity that from time to time is designated
by Lender to collect payments and deposits and receive notices under the Note,
this Instrument and any other Loan Document, and otherwise to service the loan
evidenced by the Note for the benefit of Lender. Unless Borrower receives notice
to the contrary, the Loan Servicer is the entity identified as "Lender" in the
first paragraph of this Instrument.
(s) "Mortgaged Property" means all of Borrower's present and future right,
title and interest in and to all of the following:
(1) the Land;
(2) the Improvements;
(3) the Fixtures;
(4) the Personalty;
(5) all current and future rights, including air rights,
development rights, zoning rights and other similar rights or
interests, easements, tenements, rights-of-way, strips and
gores of land, streets, alleys, roads, sewer rights, waters,
watercourses, and appurtenances related to or benefitting the
Land or the Improvements, or both, and all rights-of-way,
streets, alleys and roads which may have been or may in the
future be vacated;
(6) all proceeds paid or to be paid by any insurer of the Land,
the Improvements, the Fixtures, the Personalty or any other
part of the Mortgaged Property, whether or not Borrower
obtained the insurance pursuant to Lender's requirement;
(7) all awards, payments and other compensation made or to be made
by any municipal, state or federal authority with respect to
the Land, the Improvements, the Fixtures, the Personalty or
any other part of the Mortgaged Property, including any awards
or settlements resulting from condemnation proceedings or the
total or partial taking of the Land, the Improvements, the
Fixtures, the Personalty or any other part of the Mortgaged
Property under the power of eminent domain or otherwise and
including any conveyance in lieu thereof;
(8) all contracts, options and other agreements for the sale of
the Land, the Improvements, the Fixtures, the Personalty or
any other part of the Mortgaged Property entered into by
Borrower now or in the future, including cash or securities
deposited to secure performance by parties of their
obligations;
(9) all proceeds from the conversion, voluntary or involuntary, of
any of the above into cash or liquidated claims, and the right
to collect such proceeds;
(10) all Rents and Leases;
(11) all earnings, royalties, accounts receivable, issues and
profits from the Land, the Improvements or any other part of
the Mortgaged Property, and all undisbursed proceeds of the
loan secured by this Instrument and, if Borrower is a
cooperative housing corporation, maintenance charges or
assessments payable by shareholders or residents;
(12) all Imposition Deposits;
(13) all refunds or rebates of Impositions by any municipal, state
or federal authority or insurance company (other than refunds
applicable to periods before the real property tax year in
which this Instrument is dated);
(14) all tenant security deposits which have not been forfeited
by any tenant under any Lease; and
(15) all names under or by which any of the above Mortgaged
Property may be operated or known, and all trademarks, trade
names, and goodwill relating to any of the Mortgaged Property.
(t) "Note" means the Multifamily Note described on page 1 of this
Instrument, including all schedules, riders, allonges and addenda, as such
Multifamily Note may be amended from time to time.
(u) "O&M Program" is defined in Section 18(a).
(v) "Personalty" means all furniture, furnishings, equipment, machinery,
building materials, appliances, goods, supplies, tools, books, records (whether
in written or electronic form), computer equipment (hardware and software) and
other tangible personal property (other than Fixtures) which are used now or in
the future in connection with the ownership, management or operation of the Land
or the Improvements or are located on the Land or in the Improvements, and any
operating agreements relating to the Land or the Improvements, and any surveys,
plans and specifications and contracts for architectural, engineering and
construction services relating to the Land or the Improvements and all other
intangible property and rights relating to the operation of, or used in
connection with, the Land or the Improvements, including all governmental
permits relating to any activities on the Land.
(w) "Property Jurisdiction" is defined in Section 30(a).
(x) "Rents" means all rents (whether from residential or non-residential
space), revenues and other income of the Land or the Improvements, including
parking fees, laundry and vending machine income and fees and charges for food,
health care and other services provided at the Mortgaged Property, whether now
due, past due, or to become due, and deposits forfeited by tenants.
(y) "Taxes" means all taxes, assessments, vault rentals and other charges,
if any, general, special or otherwise, including all assessments for schools,
public betterments and general or local improvements, which are levied, assessed
or imposed by any public authority or quasi-public authority, and which, if not
paid, will become a lien, on the Land or the Improvements.
(z) "Transfer" means (A) a sale, assignment, transfer or other disposition
(whether voluntary, involuntary or by operation of law); (B) the granting,
creating or attachment of a lien, encumbrance or security interest (whether
voluntary, involuntary or by operation of law); (C) the issuance or other
creation of an ownership interest in a legal entity, including a partnership
interest, interest in a limited liability company or corporate stock; (D) the
withdrawal, retirement, removal or involuntary resignation of a partner in a
partnership or a member or manager in a limited liability company; or (E) the
merger, dissolution, liquidation, or consolidation of a legal entity or the
reconstitution of one type of legal entity into another type of legal entity.
"Transfer" does not include (i) a conveyance of the Mortgaged Property at a
judicial or non-judicial foreclosure sale under this Instrument or (ii) the
Mortgaged Property becoming part of a bankruptcy estate by operation of law
under the United States Bankruptcy Code. For purposes of defining the term
"Transfer," the term "partnership" shall mean a general partnership, a limited
partnership, a joint venture and a limited liability partnership, and the term
"partner" shall mean a general partner, a limited partner and a joint venturer.
2. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. This Instrument is also a
security agreement under the Uniform Commercial Code for any of the Mortgaged
Property which, under applicable law, may be subject to a security interest
under the Uniform Commercial Code, whether acquired now or in the future, and
all products and cash and non-cash proceeds thereof (collectively, "UCC
Collateral"), and Borrower hereby grants to Lender a security interest in the
UCC Collateral. Borrower shall execute and deliver to Lender, upon Lender's
request, financing statements, continuation statements and amendments, in such
form as Lender may require to perfect or continue the perfection of this
security interest. Borrower shall pay all filing costs and all costs and
expenses of any record searches for financing statements that Lender may
require. Without the prior written consent of Lender, Borrower shall not create
or permit to exist any other lien or security interest in any of the UCC
Collateral. If an Event of Default has occurred and is continuing, Lender shall
have the remedies of a secured party under the Uniform Commercial Code, in
addition to all remedies provided by this Instrument or existing under
applicable law. In exercising any remedies, Lender may exercise its remedies
against the UCC Collateral separately or together, and in any order, without in
any way affecting the availability of Lender's other remedies. This Instrument
constitutes a financing statement with respect to any part of the Mortgaged
Property which is or may become a Fixture.
3. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN
POSSESSION.
(a) As part of the consideration for the Indebtedness, Borrower absolutely
and unconditionally assigns and transfers to Lender all Rents. It is the
intention of Borrower to establish a present, absolute and irrevocable transfer
and assignment to Lender of all Rents and to authorize and empower Lender to
collect and receive all Rents without the necessity of further action on the
part of Borrower. Promptly upon request by Lender, Borrower agrees to execute
and deliver such further assignments as Lender may from time to time require.
Borrower and Lender intend this assignment of Rents to be immediately effective
and to constitute an absolute present assignment and not an assignment for
additional security only. For purposes of giving effect to this absolute
assignment of Rents, and for no other purpose, Rents shall not be deemed to be a
part of the "Mortgaged Property" as that term is defined in Section 1(s).
However, if this present, absolute and unconditional assignment of Rents is not
enforceable by its terms under the laws of the Property Jurisdiction, then the
Rents shall be included as a part of the Mortgaged Property and it is the
intention of the Borrower that in this circumstance this Instrument create and
perfect a lien on Rents in favor of Lender, which lien shall be effective as of
the date of this Instrument.
(b) After the occurrence of an Event of Default, Borrower authorizes
Lender to collect, sue for and compromise Rents and directs each tenant of the
Mortgaged Property to pay all Rents to, or as directed by, Lender. However,
until the occurrence of an Event of Default, Lender hereby grants to Borrower a
revocable license to collect and receive all Rents, to hold all Rents in trust
for the benefit of Lender and to apply all Rents to pay the installments of
interest and principal then due and payable under the Note and the other amounts
then due and payable under the other Loan Documents, including Imposition
Deposits, and to pay the current costs and expenses of managing, operating and
maintaining the Mortgaged Property, including utilities, Taxes and insurance
premiums (to the extent not included in Imposition Deposits), tenant
improvements and other capital expenditures. So long as no Event of Default has
occurred and is continuing, the Rents remaining after application pursuant to
the preceding sentence may be retained by Borrower free and clear of, and
released from, Lender's rights with respect to Rents under this Instrument. From
and after the occurrence of an Event of Default, and without the necessity of
Lender entering upon and taking and maintaining control of the Mortgaged
Property directly, or by a receiver, Borrower's license to collect Rents shall
automatically terminate and Lender shall without notice be entitled to all Rents
as they become due and payable, including Rents then due and unpaid. Borrower
shall pay to Lender upon demand all Rents to which Lender is entitled. At any
time on or after the date of Lender's demand for Rents, Lender may give, and
Borrower hereby irrevocably authorizes Lender to give, notice to all tenants of
the Mortgaged Property instructing them to pay all Rents to Lender, no tenant
shall be obligated to inquire further as to the occurrence or continuance of an
Event of Default, and no tenant shall be obligated to pay to Borrower any
amounts which are actually paid to Lender in response to such a notice. Any such
notice by Lender shall be delivered to each tenant personally, by mail or by
delivering such demand to each rental unit. Borrower shall not interfere with
and shall cooperate with Lender's collection of such Rents.
(c) Borrower represents and warrants to Lender that Borrower has not
executed any prior assignment of Rents (other than an assignment of Rents
securing indebtedness that will be paid off and discharged with the proceeds of
the loan evidenced by the Note), that Borrower has not performed, and Borrower
covenants and agrees that it will not perform, any acts and has not executed,
and shall not execute, any instrument which would prevent Lender from exercising
its rights under this Section 3, and that at the time of execution of this
Instrument there has been no anticipation or prepayment of any Rents for more
than two months prior to the due dates of such Rents. Borrower shall not collect
or accept payment of any Rents more than two months prior to the due dates of
such Rents.
(d) If an Event of Default has occurred and is continuing, Lender may,
regardless of the adequacy of Lender's security or the solvency of Borrower and
even in the absence of waste, enter upon and take and maintain full control of
the Mortgaged Property in order to perform all acts that Lender in its
discretion determines to be necessary or desirable for the operation and
maintenance of the Mortgaged Property, including the execution, cancellation or
modification of Leases, the collection of all Rents, the making of repairs to
the Mortgaged Property and the execution or termination of contracts providing
for the management, operation or maintenance of the Mortgaged Property, for the
purposes of enforcing the assignment of Rents pursuant to Section 3(a),
protecting the Mortgaged Property or the security of this Instrument, or for
such other purposes as Lender in its discretion may deem necessary or desirable.
Alternatively, if an Event of Default has occurred and is continuing, regardless
of the adequacy of Lender's security, without regard to Borrower's solvency and
without the necessity of giving prior notice (oral or written) to Borrower,
Lender may apply to any court having jurisdiction for the appointment of a
receiver for the Mortgaged Property to take any or all of the actions set forth
in the preceding sentence. If Lender elects to seek the appointment of a
receiver for the Mortgaged Property at any time after an Event of Default has
occurred and is continuing, Borrower, by its execution of this Instrument,
expressly consents to the appointment of such receiver, including the
appointment of a receiver ex parte if permitted by applicable law. Lender or the
receiver, as the case may be, shall be entitled to receive a reasonable fee for
managing the Mortgaged Property. Immediately upon appointment of a receiver or
immediately upon the Lender's entering upon and taking possession and control of
the Mortgaged Property, Borrower shall surrender possession of the Mortgaged
Property to Lender or the receiver, as the case may be, and shall deliver to
Lender or the receiver, as the case may be, all documents, records (including
records on electronic or magnetic media), accounts, surveys, plans, and
specifications relating to the Mortgaged Property and all security deposits and
prepaid Rents. In the event Lender takes possession and control of the Mortgaged
Property, Lender may exclude Borrower and its representatives from the Mortgaged
Property. Borrower acknowledges and agrees that the exercise by Lender of any of
the rights conferred under this Section 3 shall not be construed to make Lender
a mortgagee-in-possession of the Mortgaged Property so long as Lender has not
itself entered into actual possession of the Land and Improvements.
(e) If Lender enters the Mortgaged Property, Lender shall be liable to
account only to Borrower and only for those Rents actually received. Lender
shall not be liable to Borrower, anyone claiming under or through Borrower or
anyone having an interest in the Mortgaged Property, by reason of any act or
omission of Lender under this Section 3, and Borrower hereby releases and
discharges Lender from any such liability to the fullest extent permitted by
law.
(f) If the Rents are not sufficient to meet the costs of taking control of
and managing the Mortgaged Property and collecting the Rents, any funds expended
by Lender for such purposes shall become an additional part of the Indebtedness
as provided in Section 12.
(g) Any entering upon and taking of control of the Mortgaged Property by
Lender or the receiver, as the case may be, and any application of Rents as
provided in this Instrument shall not cure or waive any Event of Default or
invalidate any other right or remedy of Lender under applicable law or provided
for in this Instrument.
4. ASSIGNMENT OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY.
(a) As part of the consideration for the Indebtedness, Borrower absolutely
and unconditionally assigns and transfers to Lender all of Borrower's right,
title and interest in, to and under the Leases, including Borrower's right,
power and authority to modify the terms of any such Lease, or extend or
terminate any such Lease. It is the intention of Borrower to establish a
present, absolute and irrevocable transfer and assignment to Lender of all of
Borrower's right, title and interest in, to and under the Leases. Borrower and
Lender intend this assignment of the Leases to be immediately effective and to
constitute an absolute present assignment and not an assignment for additional
security only. For purposes of giving effect to this absolute assignment of the
Leases, and for no other purpose, the Leases shall not be deemed to be a part of
the "Mortgaged Property" as that term is defined in Section 1(s). However, if
this present, absolute and unconditional assignment of the Leases is not
enforceable by its terms under the laws of the Property Jurisdiction, then the
Leases shall be included as a part of the Mortgaged Property and it is the
intention of the Borrower that in this circumstance this Instrument create and
perfect a lien on the Leases in favor of Lender, which lien shall be effective
as of the date of this Instrument.
(b) Until Lender gives notice to Borrower of Lender's exercise of its
rights under this Section 4, Borrower shall have all rights, power and authority
granted to Borrower under any Lease (except as otherwise limited by this Section
or any other provision of this Instrument), including the right, power and
authority to modify the terms of any Lease or extend or terminate any Lease.
Upon the occurrence of an Event of Default, the permission given to Borrower
pursuant to the preceding sentence to exercise all rights, power and authority
under Leases shall automatically terminate. Borrower shall comply with and
observe Borrower's obligations under all Leases, including Borrower's
obligations pertaining to the maintenance and disposition of tenant security
deposits.
(c) Borrower acknowledges and agrees that the exercise by Lender, either
directly or by a receiver, of any of the rights conferred under this Section 4
shall not be construed to make Lender a mortgagee-in-possession of the Mortgaged
Property so long as Lender has not itself entered into actual possession of the
Land and the Improvements. The acceptance by Lender of the assignment of the
Leases pursuant to Section 4(a) shall not at any time or in any event obligate
Lender to take any action under this Instrument or to expend any money or to
incur any expenses. Lender shall not be liable in any way for any injury or
damage to person or property sustained by any person or persons, firm or
corporation in or about the Mortgaged Property. Prior to Lender's actual entry
into and taking possession of the Mortgaged Property, Lender shall not (i) be
obligated to perform any of the terms, covenants and conditions contained in any
Lease (or otherwise have any obligation with respect to any Lease); (ii) be
obligated to appear in or defend any action or proceeding relating to the Lease
or the Mortgaged Property; or (iii) be responsible for the operation, control,
care, management or repair of the Mortgaged Property or any portion of the
Mortgaged Property. The execution of this Instrument by Borrower shall
constitute conclusive evidence that all responsibility for the operation,
control, care, management and repair of the Mortgaged Property is and shall be
that of Borrower, prior to such actual entry and taking of possession.
(d) Upon delivery of notice by Lender to Borrower of Lender's exercise of
Lender's rights under this Section 4 at any time after the occurrence of an
Event of Default, and without the necessity of Lender entering upon and taking
and maintaining control of the Mortgaged Property directly, by a receiver, or by
any other manner or proceeding permitted by the laws of the Property
Jurisdiction, Lender immediately shall have all rights, powers and authority
granted to Borrower under any Lease, including the right, power and authority to
modify the terms of any such Lease, or extend or terminate any such Lease.
(e) Borrower shall, promptly upon Lender's request, deliver to Lender an
executed copy of each residential Lease then in effect. All Leases for
residential dwelling units shall be on forms approved by Lender, shall be for
initial terms of at least six months and not more than two years, and shall not
include options to purchase.
(f) Borrower shall not lease any portion of the Mortgaged Property for
non-residential use except with the prior written consent of Lender and Lender's
prior written approval of the Lease agreement. Borrower shall not modify the
terms of, or extend or terminate, any Lease for non-residential use (including
any Lease in existence on the date of this Instrument) without the prior written
consent of Lender. Borrower shall, without request by Lender, deliver an
executed copy of each non-residential Lease to Lender promptly after such Lease
is signed. All non-residential Leases, including renewals or extensions of
existing Leases, shall specifically provide that (1) such Leases are subordinate
to the lien of this Instrument; (2) the tenant shall attorn to Lender and any
purchaser at a foreclosure sale, such attornment to be self-executing and
effective upon acquisition of title to the Mortgaged Property by any purchaser
at a foreclosure sale or by Lender in any manner; (3) the tenant agrees to
execute such further evidences of attornment as Lender or any purchaser at a
foreclosure sale may from time to time request; (4) the Lease shall not be
terminated by foreclosure or any other transfer of the Mortgaged Property; (5)
after a foreclosure sale of the Mortgaged Property, Lender or any other
purchaser at such foreclosure sale may, at Lender's or such purchaser's option,
accept or terminate such Lease; and (6) the tenant shall, upon receipt after the
occurrence of an Event of Default of a written request from Lender, pay all
Rents payable under the Lease to Lender.
(g) Borrower shall not receive or accept Rent under any Lease (whether
residential or non-residential) for more than two months in advance.
5. PAYMENT OF INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS; PREPAYMENT
PREMIUM. Borrower shall pay the Indebtedness when due in accordance with the
terms of the Note and the other Loan Documents and shall perform, observe and
comply with all other provisions of the Note and the other Loan Documents.
Borrower shall pay a prepayment premium in connection with certain prepayments
of the Indebtedness, including a payment made after Lender's exercise of any
right of acceleration of the Indebtedness, as provided in the Note.
6. EXCULPATION. Borrower's personal liability for payment of the
Indebtedness and for performance of the other obligations to be performed by
it under this Instrument is limited in the manner, and to the extent,
provided in the Note.
7. DEPOSITS FOR TAXES, INSURANCE AND OTHER CHARGES.
(a) Borrower shall deposit with Lender on the day monthly installments of
principal or interest, or both, are due under the Note (or on another day
designated in writing by Lender), until the Indebtedness is paid in full, an
additional amount sufficient to accumulate with Lender the entire sum required
to pay, when due (1) any water and sewer charges which, if not paid, may result
in a lien on all or any part of the Mortgaged Property, (2) the premiums for
fire and other hazard insurance, rent loss insurance and such other insurance as
Lender may require under Section 19, (3) Taxes, and (4) amounts for other
charges and expenses which Lender at any time reasonably deems necessary to
protect the Mortgaged Property, to prevent the imposition of liens on the
Mortgaged Property, or otherwise to protect Lender's interests, all as
reasonably estimated from time to time by Lender, plus one-sixth of such
estimate. The amounts deposited under the preceding sentence are collectively
referred to in this Instrument as the "Imposition Deposits". The obligations of
Borrower for which the Imposition Deposits are required are collectively
referred to in this Instrument as "Impositions". The amount of the Imposition
Deposits shall be sufficient to enable Lender to pay each Imposition before the
last date upon which such payment may be made without any penalty or interest
charge being added. Lender shall maintain records indicating how much of the
monthly Imposition Deposits and how much of the aggregate Imposition Deposits
held by Lender are held for the purpose of paying Taxes, insurance premiums and
each other obligation of Borrower for which Imposition Deposits are required.
Any waiver by Lender of the requirement that Borrower remit Imposition Deposits
to Lender may be revoked by Lender, in Lender's discretion, at any time upon
notice to Borrower.
(b) Imposition Deposits shall be held in an institution (which may be
Lender, if Lender is such an institution) whose deposits or accounts are insured
or guaranteed by a federal agency. Lender shall not be obligated to open
additional accounts or deposit Imposition Deposits in additional institutions
when the amount of the Imposition Deposits exceeds the maximum amount of the
federal deposit insurance or guaranty. Lender shall apply the Imposition
Deposits to pay Impositions so long as no Event of Default has occurred and is
continuing. Unless applicable law requires, Lender shall not be required to pay
Borrower any interest, earnings or profits on the Imposition Deposits. Borrower
hereby pledges and grants to Lender a security interest in the Imposition
Deposits as additional security for all of Borrower's obligations under this
Instrument and the other Loan Documents. Any amounts deposited with Lender under
this Section 7 shall not be trust funds, nor shall they operate to reduce the
Indebtedness, unless applied by Lender for that purpose under Section 7(e).
(c) If Lender receives a bill or invoice for an Imposition, Lender shall
pay the Imposition from the Imposition Deposits held by Lender. Lender shall
have no obligation to pay any Imposition to the extent it exceeds Imposition
Deposits then held by Lender. Lender may pay an Imposition according to any
bill, statement or estimate from the appropriate public office or insurance
company without inquiring into the accuracy of the bill, statement or estimate
or into the validity of the Imposition.
(d) If at any time the amount of the Imposition Deposits held by Lender
for payment of a specific Imposition exceeds the amount reasonably deemed
necessary by Lender plus one-sixth of such estimate, the excess shall be
credited against future installments of Imposition Deposits. If at any time the
amount of the Imposition Deposits held by Lender for payment of a specific
Imposition is less than the amount reasonably estimated by Lender to be
necessary plus one-sixth of such estimate, Borrower shall pay to Lender the
amount of the deficiency within 15 days after notice from Lender.
(e) If an Event of Default has occurred and is continuing, Lender may
apply any Imposition Deposits, in any amounts and in any order as Lender
determines, in Lender's discretion, to pay any Impositions or as a credit
against the Indebtedness. Upon payment in full of the Indebtedness, Lender shall
refund to Borrower any Imposition Deposits held by Lender.
8. COLLATERAL AGREEMENTS. Borrower shall deposit with Lender such
amounts as may be required by any Collateral Agreement and shall perform all
other obligations of Borrower under each Collateral Agreement.
9. 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, then 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. Neither Lender's acceptance of an amount which
is less than all amounts then due and payable nor Lender's application of such
payment in the manner authorized shall constitute or be deemed to constitute
either a waiver of the unpaid amounts or an accord and satisfaction.
Notwithstanding the application of any such amount to the Indebtedness,
Borrower's obligations under this Instrument and the Note shall remain
unchanged.
10. COMPLIANCE WITH LAWS. Borrower shall comply with all laws, ordinances,
regulations and requirements of any Governmental Authority and all recorded
lawful covenants and agreements relating to or affecting the Mortgaged Property,
including all laws, ordinances, regulations, requirements and covenants
pertaining to health and safety, construction of improvements on the Mortgaged
Property, fair housing, zoning and land use, and Leases. Borrower also shall
comply with all applicable laws that pertain to the maintenance and disposition
of tenant security deposits. Borrower shall at all times maintain records
sufficient to demonstrate compliance with the provisions of this Section 10.
Borrower shall take appropriate measures to prevent, and shall not engage in or
knowingly permit, any illegal activities at the Mortgaged Property that could
endanger tenants or visitors, result in damage to the Mortgaged Property, result
in forfeiture of the Mortgaged Property, or otherwise materially impair the lien
created by this Instrument or Lender's interest in the Mortgaged Property.
Borrower represents and warrants to Lender that no portion of the Mortgaged
Property has been or will be purchased with the proceeds of any illegal
activity.
11. USE OF PROPERTY. Unless required by applicable law, Borrower shall not
(a) except for any change in use approved by Lender, allow changes in the use
for which all or any part of the Mortgaged Property is being used at the time
this Instrument was executed, (b) convert any individual dwelling units or
common areas to commercial use, (c) initiate or acquiesce in a change in the
zoning classification of the Mortgaged Property, or (d) establish any
condominium or cooperative regime with respect to the Mortgaged Property.
12. PROTECTION OF LENDER'S SECURITY.
(a) If Borrower fails to perform any of its obligations under this
Instrument or any other Loan Document, or if any action or proceeding is
commenced which purports to affect the Mortgaged Property, Lender's security or
Lender's rights under this Instrument, including eminent domain, insolvency,
code enforcement, civil or criminal forfeiture, enforcement of Hazardous
Materials Laws, fraudulent conveyance or reorganizations or proceedings
involving a bankrupt or decedent, then Lender at Lender's option may make such
appearances, disburse such sums and take such actions as Lender reasonably deems
necessary to perform such obligations of Borrower and to protect Lender's
interest, including (1) payment of fees and out of pocket expenses of attorneys,
accountants, inspectors and consultants, (2) entry upon the Mortgaged Property
to make repairs or secure the Mortgaged Property, (3) procurement of the
insurance required by Section 19, and (4) payment of amounts which Borrower has
failed to pay under Sections 15 and 17.
(b) Any amounts disbursed by Lender under this Section 12, or under any
other provision of this Instrument that treats such disbursement as being made
under this Section 12, shall be added to, and become part of, the principal
component of the Indebtedness, shall be immediately due and payable and shall
bear interest from the date of disbursement until paid at the "Default Rate", as
defined in the Note.
(c) Nothing in this Section 12 shall require Lender to incur any expense
or take any action.
13. INSPECTION. Lender, its agents, representatives, and designees
may make or cause to be made entries upon and inspections of the Mortgaged
Property (including environmental inspections and tests) during normal
business hours, or at any other reasonable time.
14. BOOKS AND RECORDS; FINANCIAL REPORTING.
(a) Borrower shall keep and maintain at all times at the Mortgaged
Property or the management agent's offices, and upon Lender's request shall make
available at the Mortgaged Property, complete and accurate books of account and
records (including copies of supporting bills and invoices) adequate to reflect
correctly the operation of the Mortgaged Property, and copies of all written
contracts, Leases, and other instruments which affect the Mortgaged Property.
The books, records, contracts, Leases and other instruments shall be subject to
examination and inspection at any reasonable time by Lender.
(b) Borrower shall furnish to Lender all of the following:
(1) within 120 days after the end of each fiscal year of Borrower,
a statement of income and expenses for Borrower's operation of
the Mortgaged Property for that fiscal year, a statement of
changes in financial position of Borrower relating to the
Mortgaged Property for that fiscal year and, when requested by
Lender, a balance sheet showing all assets and liabilities of
Borrower relating to the Mortgaged Property as of the end of
that fiscal year;
(2) within 120 days after the end of each fiscal year of Borrower,
and at any other time upon Lender's request, a rent schedule
for the Mortgaged Property showing the name of each tenant,
and for each tenant, the space occupied, the lease expiration
date, the rent payable for the current month, the date through
which rent has been paid, and any related information
requested by Lender;
(3) within 120 days after the end of each fiscal year of Borrower,
and at any other time upon Lender's request, an accounting of
all security deposits held pursuant to all Leases, including
the name of the institution (if any) and the names and
identification numbers of the accounts (if any) in which such
security deposits are held and the name of the person to
contact at such financial institution, along with any
authority or release necessary for Lender to access
information regarding such accounts;
(4) within 120 days after the end of each fiscal year of Borrower,
and at any other time upon Lender's request, a statement that
identifies all owners of any interest in Borrower and any
Controlling Entity and the interest held by each, if Borrower
or a Controlling Entity is a corporation, all officers and
directors of Borrower and the Controlling Entity, and if
Borrower or a Controlling Entity is a limited liability
company, all managers who are not members;
(5) upon Lender's request, quarterly income and expense
statements for the Mortgaged Property;
(6) upon Lender's request at any time when an Event of Default has
occurred and is continuing, monthly income and expense
statements for the Mortgaged Property;
(7) upon Lender's request, a monthly property management report
for the Mortgaged Property, showing the number of inquiries
made and rental applications received from tenants or
prospective tenants and deposits received from tenants and any
other information requested by Lender; and
(8) upon Lender's request, a balance sheet, a statement of income
and expenses for Borrower and a statement of changes in
financial position of Borrower for Borrower's most recent
fiscal year.
(c) Each of the statements, schedules and reports required by Section
14(b) shall be certified to be complete and accurate by an individual having
authority to bind Borrower, and shall be in such form and contain such detail as
Lender may reasonably require. Lender also may require that any statements,
schedules or reports be audited at Borrower's expense by independent certified
public accountants acceptable to Lender.
(d) If Borrower fails to provide in a timely manner the statements,
schedules and reports required by Section 14(b), Lender shall have the right to
have Borrower's books and records audited, at Borrower's expense, by independent
certified public accountants selected by Lender in order to obtain such
statements, schedules and reports, and all related costs and expenses of Lender
shall become immediately due and payable and shall become an additional part of
the Indebtedness as provided in Section 12.
(e) If an Event of Default has occurred and is continuing, Borrower shall
deliver to Lender upon written demand all books and records relating to the
Mortgaged Property or its operation.
(f) Borrower authorizes Lender to obtain a credit report on Borrower
at any time.
15. TAXES; OPERATING EXPENSES.
(a) Subject to the provisions of Section 15(c) and Section 15(d), Borrower
shall pay, or cause to be paid, all Taxes when due and before the addition of
any interest, fine, penalty or cost for nonpayment.
(b) Subject to the provisions of Section 15(c), Borrower shall pay the
expenses of operating, managing, maintaining and repairing the Mortgaged
Property (including insurance premiums, utilities, repairs and replacements)
before the last date upon which each such payment may be made without any
penalty or interest charge being added.
(c) As long as no Event of Default exists and Borrower has timely
delivered to Lender any bills or premium notices that it has received, Borrower
shall not be obligated to pay Taxes, insurance premiums or any other individual
Imposition to the extent that sufficient Imposition Deposits are held by Lender
for the purpose of paying that specific Imposition. If an Event of Default
exists, Lender may exercise any rights Lender may have with respect to
Imposition Deposits without regard to whether Impositions are then due and
payable. Lender shall have no liability to Borrower for failing to pay any
Impositions to the extent that any Event of Default has occurred and is
continuing, insufficient Imposition Deposits are held by Lender at the time an
Imposition becomes due and payable or Borrower has failed to provide Lender with
bills and premium notices as provided above.
(d) Borrower, at its own expense, may contest by appropriate legal
proceedings, conducted diligently and in good faith, the amount or validity of
any Imposition other than insurance premiums, if (1) Borrower notifies Lender of
the commencement or expected commencement of such proceedings, (2) the Mortgaged
Property is not in danger of being sold or forfeited, (3) Borrower deposits with
Lender reserves sufficient to pay the contested Imposition, if requested by
Lender, and (4) Borrower furnishes whatever additional security is required in
the proceedings or is reasonably requested by Lender, which may include the
delivery to Lender of the reserves established by Borrower to pay the contested
Imposition.
(e) Borrower shall promptly deliver to Lender a copy of all notices of,
and invoices for, Impositions, and if Borrower pays any Imposition directly,
Borrower shall promptly furnish to Lender receipts evidencing such payments.
16. LIENS; ENCUMBRANCES. Borrower acknowledges that, to the extent
provided in Section 21, the grant, creation or existence of any mortgage, deed
of trust, deed to secure debt, security interest or other lien or encumbrance (a
"Lien") on the Mortgaged Property (other than the lien of this Instrument) or on
certain ownership interests in Borrower, whether voluntary, involuntary or by
operation of law, and whether or not such Lien has priority over the lien of
this Instrument, is a "Transfer" which constitutes an Event of Default and
subjects Borrower to personal liability under the Note.
17. PRESERVATION, MANAGEMENT AND MAINTENANCE OF MORTGAGED PROPERTY.
Borrower (a) shall not commit waste or permit impairment or deterioration of the
Mortgaged Property, (b) shall not abandon the Mortgaged Property, (c) shall
restore or repair promptly, in a good and workmanlike manner, any damaged part
of the Mortgaged Property to the equivalent of its original condition, or such
other condition as Lender may approve in writing, whether or not insurance
proceeds or condemnation awards are available to cover any costs of such
restoration or repair, (d) shall keep the Mortgaged Property in good repair,
including the replacement of Personalty and Fixtures with items of equal or
better function and quality, (e) shall provide for professional management of
the Mortgaged Property by a residential rental property manager satisfactory to
Lender under a contract approved by Lender in writing, and (f) shall give notice
to Lender of and, unless otherwise directed in writing by Lender, shall appear
in and defend any action or proceeding purporting to affect the Mortgaged
Property, Lender's security or Lender's rights under this Instrument. Borrower
shall not (and shall not permit any tenant or other person to) remove, demolish
or alter the Mortgaged Property or any part of the Mortgaged Property except in
connection with the replacement of tangible Personalty.
18. ENVIRONMENTAL HAZARDS.
(a) Except for matters covered by a written program of operations and
maintenance approved in writing by Lender (an "O&M Program") or matters
described in Section 18(b), Borrower shall not cause or permit any of the
following:
(1) the presence, use, generation, release, treatment, processing,
storage (including storage in above ground and underground
storage tanks), handling, or disposal of any Hazardous
Materials on or under the Mortgaged Property or any other
property of Borrower that is adjacent to the Mortgaged
Property;
(2) the transportation of any Hazardous Materials to, from, or
across the Mortgaged Property;
(3) any occurrence or condition on the Mortgaged Property or any
other property of Borrower that is adjacent to the Mortgaged
Property, which occurrence or condition is or may be in
violation of Hazardous Materials Laws; or
(4) any violation of or noncompliance with the terms of any
Environmental Permit with respect to the Mortgaged Property or
any property of Borrower that is adjacent to the Mortgaged
Property.
The matters described in clauses (1) through (4) above are referred to
collectively in this Section 18 as "Prohibited Activities or Conditions".
(b) Prohibited Activities and Conditions shall not include the safe and
lawful use and storage of quantities of (1) pre-packaged supplies, cleaning
materials and petroleum products customarily used in the operation and
maintenance of comparable multifamily properties, (2) cleaning materials,
personal grooming items and other items sold in pre-packaged containers for
consumer use and used by tenants and occupants of residential dwelling units in
the Mortgaged Property; and (3) petroleum products used in the operation and
maintenance of motor vehicles from time to time located on the Mortgaged
Property's parking areas, so long as all of the foregoing are used, stored,
handled, transported and disposed of in compliance with Hazardous Materials
Laws.
(c) Borrower shall take all commercially reasonable actions (including the
inclusion of appropriate provisions in any Leases executed after the date of
this Instrument) to prevent its employees, agents, and contractors, and all
tenants and other occupants from causing or permitting any Prohibited Activities
or Conditions. Borrower shall not lease or allow the sublease or use of all or
any portion of the Mortgaged Property to any tenant or subtenant for
nonresidential use by any user that, in the ordinary course of its business,
would cause or permit any Prohibited Activity or Condition.
(d) If an O&M Program has been established with respect to Hazardous
Materials, Borrower shall comply in a timely manner with, and cause all
employees, agents, and contractors of Borrower and any other persons present on
the Mortgaged Property to comply with the O&M Program. All costs of performance
of Borrower's obligations under any O&M Program shall be paid by Borrower, and
Lender's out-of-pocket costs incurred in connection with the monitoring and
review of the O&M Program and Borrower's performance shall be paid by Borrower
upon demand by Lender. Any such out-of-pocket costs of Lender which Borrower
fails to pay promptly shall become an additional part of the Indebtedness as
provided in Section 12.
(e) Borrower represents and warrants to Lender that, except as previously
disclosed by Borrower to Lender in writing:
(1) Borrower has not at any time engaged in, caused or
permitted any Prohibited Activities or Conditions;
(2) to the best of Borrower's knowledge after reasonable and
diligent inquiry, no Prohibited Activities or Conditions
exist or have existed;
(3) except to the extent previously disclosed by Borrower to
Lender in writing, the Mortgaged Property does not now contain
any underground storage tanks, and, to the best of Borrower's
knowledge after reasonable and diligent inquiry, the Mortgaged
Property has not contained any underground storage tanks in
the past. If there is an underground storage tank located on
the Property which has been previously disclosed by Borrower
to Lender in writing, that tank complies with all requirements
of Hazardous Materials Laws;
(4) Borrower has complied with all Hazardous Materials Laws,
including all requirements for notification regarding releases
of Hazardous Materials. Without limiting the generality of the
foregoing, Borrower has obtained all Environmental Permits
required for the operation of the Mortgaged Property in
accordance with Hazardous Materials Laws now in effect and all
such Environmental Permits are in full force and effect;
(5) no event has occurred with respect to the Mortgaged Property
that constitutes, or with the passing of time or the giving of
notice would constitute, noncompliance with the terms of any
Environmental Permit;
(6) there are no actions, suits, claims or proceedings pending or,
to the best of Borrower's knowledge after reasonable and
diligent inquiry, threatened that involve the Mortgaged
Property and allege, arise out of, or relate to any Prohibited
Activity or Condition; and
(7) Borrower has not received any complaint, order, notice of
violation or other communication from any Governmental
Authority with regard to air emissions, water discharges,
noise emissions or Hazardous Materials, or any other
environmental, health or safety matters affecting the
Mortgaged Property or any other property of Borrower that is
adjacent to the Mortgaged Property.
The representations and warranties in this Section 18 shall be continuing
representations and warranties that shall be deemed to be made by Borrower
throughout the term of the loan evidenced by the Note, until the Indebtedness
has been paid in full.
(f) Borrower shall promptly notify Lender in writing upon the occurrence
of any of the following events:
(1) Borrower's discovery of any Prohibited Activity or
Condition;
(2) Borrower's receipt of or knowledge of any complaint, order,
notice of violation or other communication from any
Governmental Authority or other person with regard to present
or future alleged Prohibited Activities or Conditions or any
other environmental, health or safety matters affecting the
Mortgaged Property or any other property of Borrower that is
adjacent to the Mortgaged Property; and
(3) any representation or warranty in this Section 18 becomes
untrue after the date of this Agreement.
Any such notice given by Borrower shall not relieve Borrower of, or result in a
waiver of, any obligation under this Instrument, the Note, or any other Loan
Document.
(g) Borrower shall pay promptly the costs of any environmental
inspections, tests or audits ("Environmental Inspections") required by Lender in
connection with any foreclosure or deed in lieu of foreclosure, or as a
condition of Lender's consent to any Transfer under Section 21, or required by
Lender following a reasonable determination by Lender that Prohibited Activities
or Conditions may exist. Any such costs incurred by Lender (including the fees
and out-of-pocket costs of attorneys and technical consultants whether incurred
in connection with any judicial or administrative process or otherwise) which
Borrower fails to pay promptly shall become an additional part of the
Indebtedness as provided in Section 12. The results of all Environmental
Inspections made by Lender shall at all times remain the property of Lender and
Lender shall have no obligation to disclose or otherwise make available to
Borrower or any other party such results or any other information obtained by
Lender in connection with its Environmental Inspections. Lender hereby reserves
the right, and Borrower hereby expressly authorizes Lender, to make available to
any party, including any prospective bidder at a foreclosure sale of the
Mortgaged Property, the results of any Environmental Inspections made by Lender
with respect to the Mortgaged Property. Borrower consents to Lender notifying
any party (either as part of a notice of sale or otherwise) of the results of
any of Lender's Environmental Inspections. Borrower acknowledges that Lender
cannot control or otherwise assure the truthfulness or accuracy of the results
of any of its Environmental Inspections and that the release of such results to
prospective bidders at a foreclosure sale of the Mortgaged Property may have a
material and adverse effect upon the amount which a party may bid at such sale.
Borrower agrees that Lender shall have no liability whatsoever as a result of
delivering the results of any of its Environmental Inspections to any third
party, and Borrower hereby releases and forever discharges Lender from any and
all claims, damages, or causes of action, arising out of, connected with or
incidental to the results of, the delivery of any of Lender's Environmental
Inspections.
(h) If any investigation, site monitoring, containment, clean-up,
restoration or other remedial work ("Remedial Work") is necessary to comply with
any Hazardous Materials Law or order of any Governmental Authority that has or
acquires jurisdiction over the Mortgaged Property or the use, operation or
improvement of the Mortgaged Property under any Hazardous Materials Law,
Borrower shall, by the earlier of (1) the applicable deadline required by
Hazardous Materials Law or (2) 30 days after notice from Lender demanding such
action, begin performing the Remedial Work, and thereafter diligently prosecute
it to completion, and shall in any event complete the work by the time required
by applicable Hazardous Materials Law. If Borrower fails to begin on a timely
basis or diligently prosecute any required Remedial Work, Lender may, at its
option, cause the Remedial Work to be completed, in which case Borrower shall
reimburse Lender on demand for the cost of doing so. Any reimbursement due from
Borrower to Lender shall become part of the Indebtedness as provided in Section
12.
(i) Borrower shall cooperate with any inquiry by any Governmental
Authority and shall comply with any governmental or judicial order which arises
from any alleged Prohibited Activity or Condition.
(j) Borrower shall indemnify, hold harmless and defend (i) Lender, (ii)
any prior owner or holder of the Note, (iii) the Loan Servicer, (iv) any prior
Loan Servicer, (v) the officers, directors, shareholders, partners, employees
and trustees of any of the foregoing, and (vi) the heirs, legal representatives,
successors and assigns of each of the foregoing (collectively, the
"Indemnitees") from and against all proceedings, claims, damages, penalties and
costs (whether initiated or sought by Governmental Authorities or private
parties), including fees and out of pocket expenses of attorneys and expert
witnesses, investigatory fees, and remediation costs, whether incurred in
connection with any judicial or administrative process or otherwise, arising
directly or indirectly from any of the following:
(1) any breach of any representation or warranty of Borrower in
this Section 18;
(2) any failure by Borrower to perform any of its obligations
under this Section 18;
(3) the existence or alleged existence of any Prohibited
Activity or Condition;
(4) the presence or alleged presence of Hazardous Materials on or
under the Mortgaged Property or any property of Borrower that
is adjacent to the Mortgaged Property; and
(5) the actual or alleged violation of any Hazardous Materials
Law.
(k) Counsel selected by Borrower to defend Indemnitees shall be subject to
the approval of those Indemnitees. However, any Indemnitee may elect to defend
any claim or legal or administrative proceeding at the Borrower's expense.
(l) Borrower shall not, without the prior written consent of those
Indemnitees who are named as parties to a claim or legal or administrative
proceeding (a "Claim"), settle or compromise the Claim if the settlement (1)
results in the entry of any judgment that does not include as an unconditional
term the delivery by the claimant or plaintiff to Lender of a written release of
those Indemnitees, satisfactory in form and substance to Lender; or (2) may
materially and adversely affect Lender, as determined by Lender in its
discretion.
(m) Borrower's obligation to indemnify the Indemnitees shall not be
limited or impaired by any of the following, or by any failure of Borrower or
any guarantor to receive notice of or consideration for any of the following:
(1) any amendment or modification of any Loan Document;
(2) any extensions of time for performance required by any Loan
Document;
(3) any provision in any of the Loan Documents limiting Lender's
recourse to property securing the Indebtedness, or limiting
the personal liability of Borrower or any other party for
payment of all or any part of the Indebtedness;
(4) the accuracy or inaccuracy of any representations and
warranties made by Borrower under this Instrument or any
other Loan Document;
(5) the release of Borrower or any other person, by Lender or by
operation of law, from performance of any obligation under any
Loan Document;
(6) the release or substitution in whole or in part of any
security for the Indebtedness; and
(7) Lender's failure to properly perfect any lien or security
interest given as security for the Indebtedness.
(n) Borrower shall, at its own cost and expense, do all of the
following:
(1) pay or satisfy any judgment or decree that may be entered
against any Indemnitee or Indemnitees in any legal or
administrative proceeding incident to any matters against
which Indemnitees are entitled to be indemnified under this
Section 18;
(2) reimburse Indemnitees for any expenses paid or incurred in
connection with any matters against which Indemnitees are
entitled to be indemnified under this Section 18; and
(3) reimburse Indemnitees for any and all expenses, including fees
and out of pocket expenses of attorneys and expert witnesses,
paid or incurred in connection with the enforcement by
Indemnitees of their rights under this Section 18, or in
monitoring and participating in any legal or administrative
proceeding.
(o) In any circumstances in which the indemnity under this Section 18
applies, Lender may employ its own legal counsel and consultants to prosecute,
defend or negotiate any claim or legal or administrative proceeding and Lender,
with the prior written consent of Borrower (which shall not be unreasonably
withheld, delayed or conditioned) may settle or compromise any action or legal
or administrative proceeding. Borrower shall reimburse Lender upon demand for
all costs and expenses incurred by Lender, including all costs of settlements
entered into in good faith, and the fees and out of pocket expenses of such
attorneys and consultants.
(p) The provisions of this Section 18 shall be in addition to any and all
other obligations and liabilities that Borrower may have under applicable law or
under other Loan Documents, and each Indemnitee shall be entitled to
indemnification under this Section 18 without regard to whether Lender or that
Indemnitee has exercised any rights against the Mortgaged Property or any other
security, pursued any rights against any guarantor, or pursued any other rights
available under the Loan Documents or applicable law. If Borrower consists of
more than one person or entity, the obligation of those persons or entities to
indemnify the Indemnitees under this Section 18 shall be joint and several. The
obligation of Borrower to indemnify the Indemnitees under this Section 18 shall
survive any repayment or discharge of the Indebtedness, any foreclosure
proceeding, any foreclosure sale, any delivery of any deed in lieu of
foreclosure, and any release of record of the lien of this Instrument.
19. PROPERTY AND LIABILITY INSURANCE.
(a) Borrower shall keep the Improvements insured at all times against such
hazards as Lender may from time to time require, which insurance shall include
but not be limited to coverage against loss by fire and allied perils, general
boiler and machinery coverage, and business income coverage. Lender's insurance
requirements may change from time to time throughout the term of the
Indebtedness. If Lender so requires, such insurance shall also include sinkhole
insurance, mine subsidence insurance, earthquake insurance, and, if the
Mortgaged Property does not conform to applicable zoning or land use laws,
building ordinance or law coverage. If any of the Improvements is located in an
area identified by the Federal Emergency Management Agency (or any successor to
that agency) as an area having special flood hazards, and if flood insurance is
available in that area, Borrower shall insure such Improvements against loss by
flood.
(b) All premiums on insurance policies required under Section 19(a) shall
be paid in the manner provided in Section 7, unless Lender has designated in
writing another method of payment. All such policies shall also be in a form
approved by Lender. All policies of property damage insurance shall include a
non-contributing, non-reporting mortgage clause in favor of, and in a form
approved by, Lender. Lender shall have the right to hold the original policies
or duplicate original policies of all insurance required by Section 19(a).
Borrower shall promptly deliver to Lender a copy of all renewal and other
notices received by Borrower with respect to the policies and all receipts for
paid premiums. At least 30 days prior to the expiration date of a policy,
Borrower shall deliver to Lender the original (or a duplicate original) of a
renewal policy in form satisfactory to Lender.
(c) Borrower shall maintain at all times commercial general liability
insurance, workers' compensation insurance and such other liability, errors and
omissions and fidelity insurance coverages as Lender may from time to time
require.
(d) All insurance policies and renewals of insurance policies required by
this Section 19 shall be in such amounts and for such periods as Lender may from
time to time require, and shall be issued by insurance companies satisfactory to
Lender.
(e) Borrower shall comply with all insurance requirements and shall not
permit any condition to exist on the Mortgaged Property that would invalidate
any part of any insurance coverage that this Instrument requires Borrower to
maintain.
(f) In the event of loss, Borrower shall give immediate written notice to
the insurance carrier and to Lender. Borrower hereby authorizes and appoints
Lender as attorney-in-fact for Borrower to make proof of loss, to adjust and
compromise any claims under policies of property damage insurance, to appear in
and prosecute any action arising from such property damage insurance policies,
to collect and receive the proceeds of property damage insurance, and to deduct
from such proceeds Lender's expenses incurred in the collection of such
proceeds. This power of attorney is coupled with an interest and therefore is
irrevocable. However, nothing contained in this Section 19 shall require Lender
to incur any expense or take any action. Lender may, at Lender's option, (1)
hold the balance of such proceeds to be used to reimburse Borrower for the cost
of restoring and repairing the Mortgaged Property to the equivalent of its
original condition or to a condition approved by Lender (the "Restoration"), or
(2) apply the balance of such proceeds to the payment of the Indebtedness,
whether or not then due. To the extent Lender determines to apply insurance
proceeds to Restoration, Lender shall do so in accordance with Lender's
then-current policies relating to the restoration of casualty damage on similar
multifamily properties.
(g) Lender shall not exercise its option to apply insurance proceeds to
the payment of the Indebtedness if all of the following conditions are met: (1)
no Event of Default (or any event which, with the giving of notice or the
passage of time, or both, would constitute an Event of Default) has occurred and
is continuing; (2) Lender determines, in its discretion, that there will be
sufficient funds to complete the Restoration; (3) Lender determines, in its
discretion, that the rental income from the Mortgaged Property after completion
of the Restoration will be sufficient to meet all operating costs and other
expenses, Imposition Deposits, deposits to reserves and loan repayment
obligations relating to the Mortgaged Property; and (4) Lender determines, in
its discretion, that the Restoration will be completed before the earlier of (A)
one year before the maturity date of the Note or (B) one year after the date of
the loss or casualty.
(h) If the Mortgaged Property is sold at a foreclosure sale or Lender
acquires title to the Mortgaged Property, Lender shall automatically succeed to
all rights of Borrower in and to any insurance policies and unearned insurance
premiums and in and to the proceeds resulting from any damage to the Mortgaged
Property prior to such sale or acquisition.
20. CONDEMNATION.
(a) Borrower shall promptly notify Lender of any action or proceeding
relating to any condemnation or other taking, or conveyance in lieu thereof, of
all or any part of the Mortgaged Property, whether direct or indirect (a
"Condemnation"). Borrower shall appear in and prosecute or defend any action or
proceeding relating to any Condemnation unless otherwise directed by Lender in
writing. Borrower authorizes and appoints Lender as attorney-in-fact for
Borrower to commence, appear in and prosecute, in Lender's or Borrower's name,
any action or proceeding relating to any Condemnation and to settle or
compromise any claim in connection with any Condemnation. This power of attorney
is coupled with an interest and therefore is irrevocable. However, nothing
contained in this Section 20 shall require Lender to incur any expense or take
any action. Borrower hereby transfers and assigns to Lender all right, title and
interest of Borrower in and to any award or payment with respect to (i) any
Condemnation, or any conveyance in lieu of Condemnation, and (ii) any damage to
the Mortgaged Property caused by governmental action that does not result in a
Condemnation.
(b) Lender may apply such awards or proceeds, after the deduction of
Lender's expenses incurred in the collection of such amounts, at Lender's
option, to the restoration or repair of the Mortgaged Property or to the payment
of the Indebtedness, with the balance, if any, to Borrower. Unless Lender
otherwise agrees in writing, any application of any awards or proceeds to the
Indebtedness shall not extend or postpone the due date of any monthly
installments referred to in the Note, Section 7 of this Instrument or any
Collateral Agreement, or change the amount of such installments. Borrower agrees
to execute such further evidence of assignment of any awards or proceeds as
Lender may require.
21. TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.
[RIGHT TO UNLIMITED TRANSFERS -- WITH LENDER APPROVAL].
(a) The occurrence of any of the following events shall constitute an
Event of Default under this Instrument:
(1) a Transfer of all or any part of the Mortgaged Property or
any interest in the Mortgaged Property;
(2) if Borrower is a limited partnership, a Transfer of (A) any
general partnership interest, or (B) limited partnership
interests in Borrower that would cause the Initial Owners of
Borrower to own less than 51% of all limited partnership
interests in Borrower;
(3) if Borrower is a general partnership or a joint venture, a
Transfer of any general partnership or joint venture
interest in Borrower;
(4) if Borrower is a limited liability company, a Transfer of (A)
any membership interest in Borrower which would cause the
Initial Owners to own less than 51% of all the membership
interests in Borrower, or (B) any membership or other interest
of a manager in Borrower;
(5) if Borrower is a corporation, (A) the Transfer of any voting
stock in Borrower which would cause the Initial Owners to own
less than 51% of any class of voting stock in Borrower or (B)
if the outstanding voting stock in Borrower is held by 100 or
more shareholders, one or more transfers by a single
transferor within a 12-month period affecting an aggregate of
5% or more of that stock;
(6) if Borrower is a trust, (A) a Transfer of any beneficial
interest in Borrower which would cause the Initial Owners to
own less than 51% of all the beneficial interests in Borrower,
or (B) the termination or revocation of the trust, or (C) the
removal, appointment or substitution of a trustee of Borrower;
and
(7) a Transfer of any interest in a Controlling Entity which, if
such Controlling Entity were Borrower, would result in an
Event of Default under any of Sections 21(a)(1) through (6)
above.
Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default in order to exercise any of its
remedies with respect to an Event of Default under this Section 21.
(b) The occurrence of any of the following events shall not constitute an
Event of Default under this Instrument, notwithstanding any provision of Section
21(a) to the contrary:
(1) a Transfer to which Lender has consented;
(2) a Transfer that occurs by devise, descent, or by operation
of law upon the death of a natural person;
(3) the grant of a leasehold interest in an individual dwelling
unit for a term of two years or less not containing an
option to purchase;
(4) a Transfer of obsolete or worn out Personalty or Fixtures that
are contemporaneously replaced by items of equal or better
function and quality, which are free of liens, encumbrances
and security interests other than those created by the Loan
Documents or consented to by Lender;
(5) the grant of an easement, if before the grant Lender
determines that the easement will not materially affect the
operation or value of the Mortgaged Property or Lender's
interest in the Mortgaged Property, and Borrower pays to
Lender, upon demand, all costs and expenses incurred by Lender
in connection with reviewing Borrower's request; and
(6) the creation of a mechanic's, materialman's, or judgment lien
against the Mortgaged Property which is released of record or
otherwise remedied to Lender's satisfaction within 30 days of
the date of creation.
(c) Lender shall consent, without any adjustment to the rate at which the
Indebtedness secured by this Instrument bears interest or to any other economic
terms of the Indebtedness, to a Transfer that would otherwise violate this
Section 21 if, prior to the Transfer, Borrower has satisfied each of the
following requirements:
(1) the submission to Lender of all information required by
Lender to make the determination required by this Section
21(c);
(2) the absence of any Event of Default;
(3) the transferee meets all of the eligibility, credit,
management and other standards (including but not limited to
any standards with respect to previous relationships between
Lender and the transferee and the organization of the
transferee) customarily applied by Lender at the time of the
proposed Transfer to the approval of borrowers in connection
with the origination or purchase of similar mortgages on
multifamily properties;
(4) the Mortgaged Property, at the time of the proposed Transfer,
meets all standards as to its physical condition that are
customarily applied by Lender at the time of the proposed
Transfer to the approval of properties in connection with the
origination or purchase of similar mortgages on multifamily
properties;
(5) in the case of a Transfer of all or any part of the Mortgaged
Property, (A) the execution by the transferee of an assumption
agreement that is acceptable to Lender and that, among other
things, requires the transferee to perform all obligations of
Borrower set forth in the Note, this Instrument and any other
Loan Documents, and may require that the transferee comply
with any provisions of this Instrument or any other Loan
Document which previously may have been waived by Lender, and
(B) if a guaranty has been executed and delivered in
connection with the Note, this Instrument or any of the other
Loan Documents, the transferee causes one or more individuals
or entities acceptable to Lender to execute and deliver to
Lender a guaranty in a form acceptable to Lender;
(6) in the case of a Transfer of any interest in a Controlling
Entity, if a guaranty has been executed and delivered in
connection with the Note, this Instrument or any of the
other Loan Documents, the Borrower causes one or more
individuals or entities acceptable to Lender to execute and
deliver to Lender a guaranty in a form acceptable to
Lender; and
(7) Lender's receipt of all of the following:
(A) a review fee in the amount of $2,000.00;
(B) a transfer fee in an amount equal to 1% of the unpaid
principal balance of the Indebtedness immediately before
the applicable Transfer; and
(C) the amount of Lender's out-of-pocket costs (including
reasonable attorneys' fees) incurred in reviewing the
Transfer request.
22. EVENTS OF DEFAULT. The occurrence of any one or more of the
following shall constitute an Event of Default under this Instrument:
(a) any failure by Borrower to pay or deposit when due any amount
required by the Note, this Instrument or any other Loan Document;
(b) any failure by Borrower to maintain the insurance coverage
required by Section 19;
(c) any failure by Borrower to comply with the provisions of
Section 33;
(d) fraud or material misrepresentation or material omission by Borrower,
any of its officers, directors, trustees, general partners or managers or any
guarantor in connection with (A) the application for or creation of the
Indebtedness, (B) any financial statement, rent roll, or other report or
information provided to Lender during the term of the Indebtedness, or (C) any
request for Lender's consent to any proposed action, including a request for
disbursement of funds under any Collateral Agreement;
(e) any Event of Default under Section 21;
(f) the commencement of a forfeiture action or proceeding, whether civil
or criminal, which, in Lender's reasonable judgment, could result in a
forfeiture of the Mortgaged Property or otherwise materially impair the lien
created by this Instrument or Lender's interest in the Mortgaged Property;
(g) any failure by Borrower to perform any of its obligations under this
Instrument (other than those specified in Sections 22(a) through (f)), as and
when required, which continues for a period of 30 days after notice of such
failure by Lender to Borrower. However, no such notice or grace period shall
apply in the case of any such failure which could, in Lender's judgment, absent
immediate exercise by Lender of a right or remedy under this Instrument, result
in harm to Lender, impairment of the Note or this Instrument or any other
security given under any other Loan Document;
(h) any failure by Borrower to perform any of its obligations as and when
required under any Loan Document other than this Instrument which continues
beyond the applicable cure period, if any, specified in that Loan Document;
(i) any exercise by the holder of any debt instrument secured by a
mortgage, deed of trust or deed to secure debt on the Mortgaged Property of a
right to declare all amounts due under that debt instrument immediately due and
payable; and
(j) Borrower voluntarily files for bankruptcy protection under the United
States Bankruptcy Code or voluntarily becomes subject to any reorganization,
receivership, insolvency proceeding or other similar proceeding pursuant to any
other federal or state law affecting debtor and creditor rights, or an
involuntary case is commenced against Borrower by any creditor (other than
Lender) of Borrower pursuant to the United States Bankruptcy Code or other
federal or state law affecting debtor and creditor rights and is not dismissed
or discharged within 60 days after filing.
23. REMEDIES CUMULATIVE. Each right and remedy provided in this Instrument
is distinct from all other rights or remedies under this Instrument or any other
Loan Document or afforded by applicable law, and each shall be cumulative and
may be exercised concurrently, independently, or successively, in any order.
24. FORBEARANCE.
(a) Lender may (but shall not be obligated to) agree with Borrower, from
time to time, and without giving notice to, or obtaining the consent of, or
having any effect upon the obligations of, any guarantor or other third party
obligor, to take any of the following actions: extend the time for payment of
all or any part of the Indebtedness; reduce the payments due under this
Instrument, the Note, or any other Loan Document; release anyone liable for the
payment of any amounts under this Instrument, the Note, or any other Loan
Document; accept a renewal of the Note; modify the terms and time of payment of
the Indebtedness; join in any extension or subordination agreement; release any
Mortgaged Property; take or release other or additional security; modify the
rate of interest or period of amortization of the Note or change the amount of
the monthly installments payable under the Note; and otherwise modify this
Instrument, the Note, or any other Loan Document.
(b) Any forbearance by Lender in exercising any right or remedy under the
Note, this Instrument, or any other Loan Document or otherwise afforded by
applicable law, shall not be a waiver of or preclude the exercise of any right
or remedy. The acceptance by Lender of payment of all or any part of the
Indebtedness 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 on account of the Indebtedness or
to exercise any remedies for any failure to make prompt payment. Enforcement by
Lender of any security for the Indebtedness shall not constitute an election by
Lender of remedies so as to preclude the exercise of any other right available
to Lender. Lender's receipt of any awards or proceeds under Sections 19 and 20
shall not operate to cure or waive any Event of Default.
25. LOAN CHARGES. If any applicable law limiting the amount of interest or
other charges permitted to be collected from Borrower is interpreted so that any
charge provided for in any Loan Document, whether considered separately or
together with other charges levied in connection with any other Loan Document,
violates that law, and Borrower is entitled to the benefit of that law, that
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 principal of the Indebtedness.
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 which constitutes interest, as well as all other
charges levied in connection with the Indebtedness which constitute interest,
shall be deemed to be allocated and spread 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.
26. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby waives the
right to assert any statute of limitations as a bar to the enforcement of the
lien of this Instrument or to any action brought to enforce any Loan Document.
27. WAIVER OF MARSHALLING. Notwithstanding the existence of any other
security interests in the Mortgaged Property held by Lender or by any other
party, Lender shall have the right to determine the order in which any or all of
the Mortgaged Property shall be subjected to the remedies provided in this
Instrument, the Note, any other Loan Document or applicable law. Lender shall
have the right to determine the order in which any or all portions of the
Indebtedness are satisfied from the proceeds realized upon the exercise of such
remedies. Borrower and any party who now or in the future acquires a security
interest in the Mortgaged Property and who has actual or constructive notice of
this Instrument waives any and all right to require the marshalling of assets or
to require that any of the Mortgaged Property be sold in the inverse order of
alienation or that any of the Mortgaged Property be sold in parcels or as an
entirety in connection with the exercise of any of the remedies permitted by
applicable law or provided in this Instrument.
28. FURTHER ASSURANCES. Borrower shall execute, acknowledge, and deliver,
at its sole cost and expense, all further acts, deeds, conveyances, assignments,
estoppel certificates, financing statements, transfers and assurances as Lender
may require from time to time in order to better assure, grant, and convey to
Lender the rights intended to be granted, now or in the future, to Lender under
this Instrument and the Loan Documents.
29. ESTOPPEL CERTIFICATE. Within 10 days after a request from Lender,
Borrower shall deliver to Lender a written statement, signed and acknowledged by
Borrower, certifying to Lender or any person designated by Lender, as of the
date of such statement, (i) that the Loan Documents are unmodified and in full
force and effect (or, if there have been modifications, that the Loan Documents
are in full force and effect as modified and setting forth such modifications);
(ii) the unpaid principal balance of the Note; (iii) the date to which interest
under the Note has been paid; (iv) that Borrower is not in default in paying the
Indebtedness or in performing or observing any of the covenants or agreements
contained in this Instrument or any of the other Loan Documents (or, if the
Borrower is in default, describing such default in reasonable detail); (v)
whether or not there are then existing any setoffs or defenses known to Borrower
against the enforcement of any right or remedy of Lender under the Loan
Documents; and (vi) any additional facts requested by Lender.
30. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.
(a) This Instrument, and any Loan Document which does not itself expressly
identify the law that is to apply to it, shall be governed by the laws of the
jurisdiction in which the Land is located (the "Property Jurisdiction").
(b) Borrower agrees that any controversy arising under or in relation to
the Note, this Instrument, or any other Loan Document 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
the Note, any security for the Indebtedness, or any other Loan Document.
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.
31. NOTICE.
(a) All notices, demands and other communications ("notice") under or
concerning this Instrument shall be in writing. Each notice shall be addressed
to the intended recipient at its address set forth in this Instrument, and shall
be deemed given on the earliest to occur of (1) the date when the notice is
received by the addressee; (2) the first Business Day after the notice is
delivered to a recognized overnight courier service, with arrangements made for
payment of charges for next Business Day delivery; or (3) the third Business Day
after the notice is deposited in the United States mail with postage prepaid,
certified mail, return receipt requested. As used in this Section 31, the term
"Business Day" means any day other than a Saturday, a Sunday or any other day on
which Lender is not open for business.
(b) Any party to this Instrument may change the address to which notices
intended for it are to be directed by means of notice given to the other party
in accordance with this Section 31. Each party agrees that it will not refuse or
reject delivery of any notice given in accordance with this Section 31, that it
will acknowledge, in writing, the receipt of any notice upon request by the
other party and that any notice rejected or refused by it shall be deemed for
purposes of this Section 31 to have been received by the rejecting party on the
date so refused or rejected, as conclusively established by the records of the
U.S. Postal Service or the courier service.
(c) Any notice under the Note and any other Loan Document which does not
specify how notices are to be given shall be given in accordance with this
Section 31.
32. SALE OF NOTE; CHANGE IN SERVICER. The Note or a partial interest in
the Note (together with this Instrument and the other Loan Documents) may be
sold one or more times without prior notice to Borrower. A sale may result in a
change of the Loan Servicer. There also may be one or more changes of the Loan
Servicer unrelated to a sale of the Note. If there is a change of the Loan
Servicer, Borrower will be given notice of the change.
33. SINGLE ASSET BORROWER. Until the Indebtedness is paid in full,
Borrower (a) shall not acquire any real or personal property other than the
Mortgaged Property and personal property related to the operation and
maintenance of the Mortgaged Property; (b) shall not operate any business other
than the management and operation of the Mortgaged Property; and (c) shall not
maintain its assets in a way difficult to segregate and identify.
34. SUCCESSORS AND ASSIGNS BOUND. This Instrument shall bind, and
the rights granted by this Instrument shall inure to, the respective
successors and assigns of Lender and Borrower. However, a Transfer not
permitted by Section 21 shall be an Event of Default.
35. JOINT AND SEVERAL LIABILITY. If more than one person or entity
signs this Instrument as Borrower, the obligations of such persons and
entities shall be joint and several.
36. RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARY.
(a) The relationship between Lender and Borrower shall be solely that of
creditor and debtor, respectively, and nothing contained in this Instrument
shall create any other relationship between Lender and Borrower.
(b) No creditor of any party to this Instrument and no other person shall
be a third party beneficiary of this Instrument or any other Loan Document.
Without limiting the generality of the preceding sentence, (1) any arrangement
(a "Servicing Arrangement") between the Lender and any Loan Servicer for loss
sharing or interim advancement of funds shall constitute a contractual
obligation of such Loan Servicer that is independent of the obligation of
Borrower for the payment of the Indebtedness, (2) Borrower shall not be a third
party beneficiary of any Servicing Arrangement, and (3) no payment by the Loan
Servicer under any Servicing Arrangement will reduce the amount of the
Indebtedness.
37. SEVERABILITY; AMENDMENTS. The invalidity or unenforceability of any
provision of this Instrument shall not affect the validity or enforceability of
any other provision, and all other provisions shall remain in full force and
effect. This Instrument contains the entire agreement among the parties as to
the rights granted and the obligations assumed in this Instrument. This
Instrument may not be amended or modified except by a writing signed by the
party against whom enforcement is sought; provided, however, that in the event
of a Transfer, any or some or all of the Modifications to Instrument set forth
in Exhibit B (if any) may be modified or rendered void by Lender at Lender's
option by notice to Borrower/transferee.
38. CONSTRUCTION. The captions and headings of the sections of this
Instrument are for convenience only and shall be disregarded in construing this
Instrument. Any reference in this Instrument to an "Exhibit" or a "Section"
shall, unless otherwise explicitly provided, be construed as referring,
respectively, to an Exhibit attached to this Instrument or to a Section of this
Instrument. All Exhibits attached to or referred to in this Instrument are
incorporated by reference into this Instrument. Any reference in this Instrument
to a statute or regulation shall be construed as referring to that statute or
regulation as amended from time to time. Use of the singular in this Agreement
includes the plural and use of the plural includes the singular. As used in this
Instrument, the term "including" means "including, but not limited to."
39. LOAN SERVICING. All actions regarding the servicing of the loan
evidenced by the Note, including the collection of payments, the giving and
receipt of notice, inspections of the Property, inspections of books and
records, and the granting of consents and approvals, may be taken by the Loan
Servicer unless Borrower receives notice to the contrary. If Borrower receives
conflicting notices regarding the identity of the Loan Servicer or any other
subject, any such notice from Lender shall govern.
40. DISCLOSURE OF INFORMATION. Lender may furnish information regarding
Borrower or the Mortgaged Property to third parties with an existing or
prospective interest in the servicing, enforcement, evaluation, performance,
purchase or securitization of the Indebtedness, including but not limited to
trustees, master servicers, special servicers, rating agencies, and
organizations maintaining databases on the underwriting and performance of
multifamily mortgage loans. Borrower irrevocably waives any and all rights it
may have under applicable law to prohibit such disclosure, including but not
limited to any right of privacy.
41. NO CHANGE IN FACTS OR CIRCUMSTANCES. All information in the
application for the loan submitted to Lender (the "Loan Application") and in all
financial statements, rent rolls, reports, certificates and other documents
submitted in connection with the Loan Application are complete and accurate in
all material respects. There has been no material adverse change in any fact or
circumstance that would make any such information incomplete or inaccurate.
42. SUBROGATION. If, and to the extent that, the proceeds of the loan
evidenced by the Note are used to pay, satisfy or discharge any obligation of
Borrower for the payment of money that is secured by a pre-existing mortgage,
deed of trust or other lien encumbering the Mortgaged Property (a "Prior Lien"),
such loan proceeds shall be deemed to have been advanced by Lender at Borrower's
request, and Lender shall automatically, and without further action on its part,
be subrogated to the rights, including lien priority, of the owner or holder of
the obligation secured by the Prior Lien, whether or not the Prior Lien is
released.
43. ACCELERATION; REMEDIES; WAIVER OF PERMISSIVE COUNTERCLAIMS. At any
time during the existence of an Event of Default, Lender, at Lender's option,
may declare the Indebtedness to be immediately due and payable without further
demand, and may foreclose this Instrument by judicial proceeding and may invoke
any other remedies permitted by Florida law or provided in this Instrument or in
any other Loan Document. Lender shall be entitled to collect all costs and
expenses incurred in pursuing such remedies, including attorneys' fees, costs of
documentary evidence, abstracts and title reports. Borrower waives any and all
rights to file or pursue permissive counterclaims in connection with any legal
action brought by Lender under this Instrument, the Note or any other Loan
Document.
44. RELEASE. Upon payment of the Indebtedness, Lender shall release
this Instrument. Borrower shall pay Lender's reasonable costs incurred in
releasing this Instrument.
45. FUTURE ADVANCES. Lender may from time to time, in Lender's discretion,
make optional future or additional advances (collectively, "Future Advances") to
Borrower, except that at no time shall the unpaid principal balance of all
indebtedness secured by the lien of this Instrument, including Future Advances,
be greater than an amount equal to two hundred percent (200%) of the original
principal amount of this Note as set forth on the first page of this Instrument
plus accrued interest and amounts disbursed by Lender under Section 12 or any
other provision of this Instrument that treats a disbursement by Lender as being
made under Section 12. All Future Advances shall be made, if at all, within
twenty (20) years after the date of this Instrument, or within such lesser
period that may in the future be provided by law as a prerequisite for the
sufficiency of actual or record notice of Future Advances as against the rights
of creditors or subsequent purchasers for value. Borrower shall, immediately
upon request by Lender, execute and deliver to Lender a promissory note
evidencing each Future Advance together with a notice of such Future Advance in
recordable form. All promissory notes evidencing Future Advances shall be
secured, pari passu, by the lien of this Instrument, and each reference in this
Instrument to the Note shall be deemed to be a reference to all promissory notes
evidencing Future Advances.
46. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) COVENANTS AND
AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF
THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER
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 EXHIBITS. The following Exhibits are attached to this
Instrument:
|X| Exhibit A Description of the Land (required).
| | Exhibit B Modifications to Instrument
[NO FURTHER TEXT ON THIS PAGE]
IN WITNESS WHEREOF, Borrower has signed and delivered this Instrument or
has caused this Instrument to be signed and delivered by its duly authorized
representative.
MEADOW WOOD ASSOCIATES, a
Florida general partnership
By: WINTHROP GROWTH INVESTORS I LIMITED
PARTNERSHIP, a Massachusetts limited
partnership,
a general partner
By: TWO WINTHROP PROPERTIES, INC., a
Massachusetts corporation, a
general partner
By:
Name: Patti K. Fielding
Title: Vice President-Residential
STATE OF COLORADO
COUNTY OF DENVER
The foregoing instrument was acknowledged before me this _____ day of
December, 2000, by PATTI K. FIELDING, the VICE PRESIDENT-RESIDENTIAL of TWO
WINTHROP PROPERTIES, INC., a Massachusetts corporation, which is a General
Partner of WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP, a Massachusetts
limited partnership, which is a General Partner of MEADOW WOOD ASSOCIATES, a
Florida general partnership.
(signature of person taking acknowledgment)
(title or rank)
(serial number, if any)
00139682;1
PAGE A-1
EXHIBIT A
[DESCRIPTION OF THE LAND]
EXHIBIT 18(B)
FHLMC# 002689235
Financing Statement
Exhibit B
(Revision Date 11-01-2000)
All of Debtor's present and future right, title and interest in and to all of
the following:
(1) All of the following which are used now or in the future in connection
with the ownership, management or operation of the real property described
in Exhibit A and/or the improvements on such real property (the
"Property"): machinery, equipment, engines, boilers, incinerators,
installed building materials; systems and equipment for the purpose of
supplying or distributing heating, cooling, electricity, gas, water, air,
or light; antennas, cable, wiring and conduits used in connection with
radio, television, security, fire prevention, or fire detection or
otherwise used to carry electronic signals; telephone systems and
equipment; elevators and related machinery and equipment; fire detection,
prevention and extinguishing systems and apparatus; security and access
control systems and apparatus; plumbing systems; water heaters, ranges,
stoves, microwave ovens, refrigerators, dishwashers, garbage disposers,
washers, dryers and other appliances; light fixtures, awnings, storm
windows and storm doors; pictures, screens, blinds, shades, curtains and
curtain rods; mirrors; cabinets, paneling, rugs and floor and wall
coverings; fences, trees and plants; swimming pools; and exercise
equipment (any of the foregoing that are so attached to the Property as to
constitute fixtures under applicable law are referred to below as the
"Fixtures");
(2) All furniture, furnishings, equipment, machinery, building materials,
appliances, goods, supplies, tools, books, records (whether in written or
electronic form), computer equipment (hardware and software) and other
tangible personal property (other than Fixtures) which are used now or in
the future in connection with the ownership, management or operation of
the Property or are located on the Property, and any operating agreements
relating to the Property, and any surveys, plans and specifications and
contracts for architectural, engineering and construction services
relating to the Property and all other intangible property and rights
relating to the operation of, or used in connection with, the Property,
including all governmental permits relating to any activities on the
Property (the "Personalty");
(3) All current and future rights, including air rights, development rights,
zoning rights and other similar rights or interests, easements, tenements,
rights-of-way, strips and gores of land, streets, alleys, roads, sewer
rights, waters, watercourses, and appurtenances related to or benefiting
the Property, and all rights-of-way, streets, alleys and roads which may
have been or may in the future be vacated;
(4) All proceeds paid or to be paid by any insurer of the Property, the
Fixtures, the Personalty or any other item listed in this Exhibit B;
(5) All awards, payments and other compensation made or to be made by any
municipal, state or federal authority with respect to the Property, the
Fixtures, the Personalty or any other item listed in this Exhibit B,
including any awards or settlements resulting from condemnation
proceedings or the total or partial taking of the Property, the Fixtures,
the Personalty or any other item listed in this Exhibit B under the power
of eminent domain or otherwise and including any conveyance in lieu
thereof;
(6) All contracts, options and other agreements for the sale of the Property,
the Fixtures, the Personalty or any other item listed in this Exhibit B
entered into by Debtor now or in the future, including cash or securities
deposited to secure performance by parties of their obligations;
(7) All present and future leases, subleases, licenses, concessions or grants
or other possessory interests now or hereafter in force, whether oral or
written, covering or affecting the Property, or any portion of the
Property (including proprietary leases or occupancy agreements if Debtor
is a cooperative housing corporation), and all modifications, extensions
or renewals (the "Leases");
(8) All earnings, royalties, accounts receivable (including accounts
receivable for all rents, revenues and other income of the Property,
including parking fees, charges for food, health care and other services),
issues and profits from the Property, or any other item listed in this
Exhibit B, and all undisbursed proceeds of the loan secured by the
security interests to which this financing statement relates and, if
Debtor is a cooperative housing corporation, maintenance charges or
assessments payable by shareholders or residents;
(9) All refunds (other than real property tax refunds applicable to periods
before the real property tax year in which the loan secured by the
security interests to which this financing statement relates was made) or
rebates of (a) water and sewer charges, (b) premiums for fire and other
hazard insurance, rent loss insurance and any other insurance required by
Secured Party, (c) taxes, assessments, vault rentals, and (d) other
charges or expenses required by Secured Party to protect the Property, to
prevent the imposition of liens on the Property, or otherwise to protect
Secured Party's interests (collectively, the "Impositions") by any
municipal, state or federal authority or insurance company;
(10) All tenant security deposits which have not been forfeited by any
tenant under any Lease;
(11) All names under or by which the Property or any part of it may be operated
or known, and all trademarks, trade names, and goodwill relating to any of
the Property or any part of it; and
(12) All proceeds from the conversion, voluntary or involuntary, of any of the
above into cash or liquidated claims, and the right to collect such
proceeds.
SIGNATURE PAGE TO UCC FINANCING STATEMENT
DEBTOR:
MEADOW WOOD ASSOCIATES, a
Florida general partnership
By: WINTHROP GROWTH INVESTORS I LIMITED
PARTNERSHIP, a Massachusetts limited
partnership,
a general partner
By: TWO WINTHROP PROPERTIES, INC., a
Massachusetts corporation, a
general partner
By:
Name: Patti K. Fielding
Title:Vice President-Residential
SIGNATURE PAGE TO UCC FINANCING STATEMENT
SECURED PARTY:
ARCS COMMERCIAL MORTGAGE CO., L.P.,
a California limited partnership
By: ACMC REALTY, INC., a
California corporation,
Its General Partner
By:
Name: Steven D. Heller
Title:Senior Vice President
EXHIBIT 18(C)
FHLMC# 002689235
EXHIBIT "C"
MULTIFAMILY NOTE
(MULTISTATE - REVISION DATE 11-01-2000)
US $6,070,000.00 As of December 15, 2000
FOR VALUE RECEIVED, the undersigned ("Borrower") jointly and severally (if
more than one) promises to pay to the order of ARCS COMMERCIAL MORTGAGE CO.,
L.P., the principal sum of SIX MILLION SEVENTY THOUSAND AND 00/100 Dollars (US
$6,070,000.00), with interest on the unpaid principal balance at the annual rate
of Seven and 310/1000 percent (7.310%).
1. Defined Terms. As used in this Note, (i) the term "Lender" means the
holder of this Note, and (ii) the term "Indebtedness" means the principal of,
interest on, and 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. "Event of
Default" 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 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) Unless disbursement of principal is made by Lender to Borrower on the
first day of the month, interest for the period beginning on the date of
disbursement 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. Interest under this Note shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.
(b) Consecutive monthly installments of principal and interest, each in
the amount of FORTY-EIGHT THOUSAND ONE HUNDRED NINETY-SIX AND 74/100 Dollars (US
$48,196.74), shall be payable on the first day of each month beginning on
February 1, 2001, until the entire unpaid principal balance evidenced by this
Note is fully paid.
(c) Any accrued interest remaining past due for 30 days or more may, at
Lender's discretion, be added to and become part of the unpaid principal balance
and shall bear interest at the rate or rates specified in this Note, and any
reference below to "accrued interest" shall refer to accrued interest which has
not become part of the unpaid principal balance. Any remaining principal and
interest shall be due and payable on January 1, 2021 or on any earlier date on
which the unpaid principal balance of this Note becomes due and payable, by
acceleration or otherwise (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) 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.
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 a
multifamily mortgage, deed to secure debt or deed of trust dated as of the date
of this Note (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, 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 (except if notice is
required by applicable law, then after such notice). Lender may exercise this
option to accelerate regardless of any prior forbearance.
7. Late Charge. If any monthly amount payable under this Note or under the
Security Instrument or any other Loan Document is not received by Lender within
ten (10) days after the 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
amount (unless applicable law requires a lesser amount be charged, in which
event such lesser amount shall be substituted). Borrower acknowledges that its
failure to make timely payments will cause Lender to incur additional expenses
in servicing and processing the loan evidenced by this Note (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 (a) any monthly installment under this Note
remains past due for thirty (30) days or more, or (b) any other Event of Default
has occurred and is continuing, 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 the occurrence of such other Event of Default, as
applicable, at a rate (the "Default Rate") equal to the lesser of four (4)
percentage points above the rate stated in the first paragraph of this Note and
the maximum interest rate which may be collected from Borrower under applicable
law. 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 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 under this Note is delinquent for more than
thirty (30) days 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 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 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 ZERO percent (0%) of the ORIGINAL principal
balance of this Note, plus any other amounts for which Borrower has personal
liability under this Paragraph 9.
(c) In addition to Borrower's personal liability under Paragraph 9(b),
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 (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; or
(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.
(d) For purposes of determining Borrower's personal liability under
Paragraph 9(b) and Paragraph 9(c), all payments made by Borrower or any
guarantor of this Note with respect to the Indebtedness and all amounts received
by Lender from the enforcement of its rights under the Security Instrument shall
be applied first to the portion of the Indebtedness for which Borrower has no
personal liability.
(e) 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; (2) 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 (3) 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.
(f) In addition to any personal liability for the Indebtedness, Borrower
shall be personally liable to Lender for (1) the performance of all of
Borrower's obligations under Section 18 of the Security Instrument (relating to
environmental matters); (2) the costs of any audit under Section 14(d) of the
Security Instrument; and (3) any costs and expenses incurred by Lender in
connection with the collection of any amount for which Borrower is personally
liable under this Paragraph 9, including fees and out of pocket expenses of
attorneys and expert witnesses and the costs of conducting any independent audit
of Borrower's books and records to determine the amount for which Borrower has
personal liability.
(g) 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. To the fullest extent permitted by applicable law, in any action to
enforce Borrower's personal liability under this Paragraph 9, Borrower waives
any right to set off the value of the Mortgaged Property against such personal
liability.
10. Voluntary and Involuntary Prepayments.
(a) A prepayment premium shall be payable in connection with any
prepayment (any receipt by Lender of principal, other than principal required to
be paid in monthly installments pursuant to Paragraph 3(b), prior to the
scheduled Maturity Date set forth in Paragraph 3(c)) under this Note as provided
below:
(1) 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 written notice from Borrower to Lender given at least 30 days
prior to the date of such prepayment. Such prepayment shall be made by paying
(A) the amount of principal being prepaid, (B) all accrued interest, (C) all
other sums due Lender at the time of such prepayment, and (D) the prepayment
premium calculated pursuant to Paragraph 10(c). For all purposes including 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 such month. For purposes of this Note, a "Business Day" means
any day other than a Saturday, Sunday or any other day on which Lender is not
open for business. Unless expressly provided for in the Loan Documents, Borrower
shall not have the option to voluntarily prepay less than all of the unpaid
principal balance. However, if a partial prepayment is provided for in the Loan
Documents or is accepted by Lender in Lender's discretion, a prepayment premium
calculated pursuant to Paragraph 10(c) shall be due and payable by Borrower.
(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, (A) all
accrued interest and all other sums due Lender, and (B) the prepayment premium
calculated pursuant to Paragraph 10(c).
(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 with respect to (A) any prepayment made during the
period from Ninety (90) days before the scheduled Maturity Date to the scheduled
Maturity Date, or (B) any prepayment occurring as a result of the application of
any insurance proceeds or condemnation award under the Security Instrument.
(c) Any prepayment premium payable under this Note shall be computed as
follows:
(1) If the prepayment is made between the date of this Note and the
date that is ONE HUNDRED EIGHTY (180) months after the first day of the first
calendar month following the date of this Note (the "Yield Maintenance Period"),
the prepayment premium shall be whichever is the greater of subparagraphs (i)
and (ii) below:
(i) 1.0% of the unpaid principal balance of this Note; or
(ii) the product obtained by multiplying:
(A) the amount of principal being prepaid, by (B) the excess
(if any) of the Monthly Note Rate over the
Assumed
Reinvestment Rate,
by
(C) the Present Value Factor.
For purposes of subparagraph (ii), the following definitions shall
apply:
Monthly Note Rate: one-twelfth (1/12) of the annual interest rate
of this Note, 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; and in any other case, the
date on which Lender accelerates the unpaid principal balance of
this Note.
Assumed Reinvestment Rate: one-twelfth (1/12) of the yield rate as
of the date 5 Business Days before the Prepayment Date, on the
9.250% U.S. Treasury Security due February, 2016, 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 used to determine the Assumed
Reinvestment Rate, Lender, in its discretion, shall select the
non-callable Treasury Security maturing in the same year as the
Treasury Security specified above 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 used to determine
the Assumed Reinvestment Rate. The selection of an alternate
security pursuant to this Paragraph 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:
[GRAPHIC OMITTED]
n = number of months remaining in Yield Maintenance Period
ARR = Assumed Reinvestment Rate
(2) If the prepayment is made after the expiration of the Yield
Maintenance Period but before the period set forth in Paragraph 10(b)(A) above,
the prepayment premium shall be 1.0% of the unpaid principal balance of this
Note.
(d) Any 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, 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 in this Note 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, 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. To the fullest extent allowed by applicable law,
Borrower shall pay all expenses and costs, including fees and out-of-pocket
expenses of attorneys (including Lender's in-house 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 and all endorsers and
guarantors of this Note and all other third party obligors.
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 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 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 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, 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
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; Written Modifications. 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. 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, any or some or all of the
Modification to Multifamily Note may be modified or rendered void by Lender at
Lender's option by notice to Borrower/transferee.
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.
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.
ATTACHED EXHIBIT. The following Exhibit is attached to this Note:
| X | Exhibit A Modifications to Multifamily Note
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.
MEADOW WOOD ASSOCIATES, a
Florida general partnership
By: WINTHROP GROWTH INVESTORS I LIMITED
PARTNERSHIP, a Massachusetts limited
partnership, a general partner
By: TWO WINTHROP PROPERTIES, INC., a
Massachusetts corporation, a
general partner
By:
Name: Patti K. Fielding
Title:Vice President-Residential
04-2845083
Borrower's Social Security/Employer ID Number
EXHIBIT A
MODIFICATIONS TO MULTIFAMILY NOTE
1. The first sentence of Paragraph 8 of the Note ("Default Rate") is hereby
deleted and replaced with the following:
So long as (a) any monthly installment under this Note remains past due
for more than thirty (30) days or (b) any other event of Default has
occurred and is continuing, 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 the occurrence of such other Event of
Default, as applicable, at a rate (the "Default Rate") equal to the lesser
of (1) the maximum interest rate which may be collected from Borrower
under applicable law or (2) the greater of (i) three percent (3%) above
the Interest Rate or (ii) four percent (4.0%) above the then-prevailing
Prime Rate. As used herein, the term "Prime Rate" shall mean the rate of
interest announced by The Wall Street Journal from time to time as the
"Prime Rate".
2. Paragraph 9(c) of the Note is amended to add the following subparagraph
(4):
(4) failure by Borrower to pay the amount of the water and sewer charges,
taxes, fire, hazard or other insurance premiums, ground rents, assessments
or other charges in accordance with the terms of the Security Instrument.
3. Paragraph 19 is modified by deleting: "; provided, however, that in the event
of a Transfer under the terms of the Security Instrument, any or some or all of
the Modifications to Multifamily Note may be modified or rendered void by Lender
at Lender's option by notice to Borrower/transferee" in last sentence of the
Paragraph; 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 paragraph are
defined in the Security Instrument.
EXHIBIT 18(D)
FHLMC# 002689235
LIMITED GUARANTY
(MULTISTATE - REVISION DATE 11-01-2000)
This Limited Guaranty ("Guaranty") is entered into as of the 15th day of
December, 2000, by the undersigned person(s) (the "Guarantor" whether one or
more), for the benefit of AIMCO PROPERTIES, L.P., a Delaware limited partnership
and any subsequent holder of the Note (the "Lender").
RECITALS
A. MEADOW WOOD ASSOCIATES, a Florida general partnership (the "Borrower")
has requested that Lender make a loan to Borrower in the amount of $6,070,000.00
(the "Loan"). The Loan will be evidenced by a Multifamily Note from Borrower to
Lender dated as of the date of this Guaranty (the "Note"). The Note will be
secured by a Multifamily Mortgage, Deed of Trust, or Deed to Secure Debt dated
the same date as the Note (the "Security Instrument"), encumbering the real
property described in the Security Instrument (the "Property").
B. As a condition to making the Loan to Borrower, Lender requires
that the Guarantor execute this Guaranty.
C. Guarantor represents to Lender that Guarantor has a direct or indirect
ownership in Borrower and/or will otherwise derive a material financial benefit
from the making of the Loan.
NOW, THEREFORE, in order to induce Lender to make the Loan to Borrower,
and in consideration thereof, Guarantor agrees as follows:
1. "Indebtedness" and other capitalized terms used but not defined in this
Guaranty shall have the meanings assigned to them in the Security Instrument.
2. Guarantor hereby absolutely, unconditionally and irrevocably guarantees
to Lender the full and prompt payment when due, whether at maturity or earlier,
by reason of acceleration or otherwise, and at all times thereafter, and the
full and prompt performance when due, of all of the following:
(a) A portion of the Indebtedness equal to Zero percent (0%) of the
Original principal balance of the Note (the "Base Guaranty").
(b) In addition to the Base Guaranty, all other amounts for which
Borrower is personally liable under Paragraphs 9(c) through 9(f) of
the Note.
(c) The payment and performance of all of Borrower's obligations under
Section 18 of the Security Instrument.
(d) The entire Indebtedness, in the event that (i) Borrower becomes
subject to any bankruptcy, reorganization, receivership, insolvency
or other similar proceeding (other than a proceeding initiated by
Lender) pursuant to any federal or state law affecting debtor and
creditor rights, or (ii) an order for relief is entered against
Borrower in any such proceeding (other than in a proceeding
initiated by Lender).
(e) All costs and expenses, including reasonable fees and out of pocket
expenses of attorneys and expert witnesses, incurred by Lender in
enforcing its rights under this Guaranty.
(f) If the Base Guaranty is stated in Paragraph 2(a) to be 100% of
the original or unpaid principal balance of the Note, then: (i)
the Base Guaranty shall mean and include the full and complete
guaranty of payment and performance of the entire Indebtedness
and of all Borrower's obligations under the Loan Documents; and
(ii) for so long as the Base Guaranty remains in effect (there
shall be no limit to the duration of the Base Guaranty unless
otherwise expressly provided in this Guaranty), the obligations
guaranteed pursuant to Paragraphs 2(b), 2(c) and 2(d) shall be
part of, and not in addition to or in limitation of, the Base
Guaranty. If this Guaranty is titled as a "Limited" Guaranty,
such title shall not affect the interpretation or application of
this Paragraph 2(f). If the Base Guaranty is stated in Paragraph
2(a) to be other than 100% of the original or unpaid principal
balance of the Note, then this Paragraph 2(f) shall be completely
inapplicable and shall be treated as if not a part of this
Guaranty.
If Guarantor is not liable for the entire Indebtedness, then for purposes of
determining Guarantor's liability under this Guaranty, 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 shall be
applied first to the portion of the Indebtedness for which neither Borrower nor
Guarantor has personal liability.
3. The obligations of Guarantor under this Guaranty shall survive any
foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu
of foreclosure, and any release of record of the Security Instrument, and, in
addition, the obligations of Guarantor relating to Borrower's obligations under
Section 18 of the Security Instrument shall survive any repayment or discharge
of the Indebtedness.
4. Guarantor's obligations under this Guaranty constitute an unconditional
guaranty of payment and performance and not merely a guaranty of collection.
5. The obligations of Guarantor under this Guaranty shall be performed
without demand by Lender and shall be unconditional irrespective of the
genuineness, validity, regularity or enforceability of the Note, the Security
Instrument, or any other Loan Document, and without regard to any other
circumstance which might otherwise constitute a legal or equitable discharge of
a surety, a guarantor, a borrower or a mortgagor. Guarantor hereby waives the
benefit of all principles or provisions of law, statutory or otherwise, which
are or might be in conflict with the terms of this Guaranty and agrees that
Guarantor's obligations shall not be affected by any circumstances, whether or
not referred to in this Guaranty, which might otherwise constitute a legal or
equitable discharge of a surety, a guarantor, a borrower or a mortgagor.
Guarantor hereby waives the benefits of any right of discharge under any and all
statutes or other laws relating to a guarantor, a surety, a borrower or a
mortgagor, and any other rights of a surety, a guarantor, a borrower or a
mortgagor thereunder. Without limiting the generality of the foregoing,
Guarantor hereby waives, to the fullest extent permitted by law, diligence in
collecting the Indebtedness, presentment, demand for payment, protest, all
notices with respect to the Note and this Guaranty which may be required by
statute, rule of law or otherwise to preserve Lender's rights against Guarantor
under this Guaranty, including, but not limited to, notice of acceptance, notice
of any amendment of the Loan Documents, notice of the occurrence of any default
or Event of Default, notice of intent to accelerate, notice of acceleration,
notice of dishonor, notice of foreclosure, notice of protest, and notice of the
incurring by Borrower of any obligation or indebtedness. Guarantor also waives,
to the fullest extent permitted by law, all rights to require Lender to (a)
proceed against Borrower or any other guarantor of Borrower's payment or
performance with respect to the Indebtedness (an "Other Guarantor") (b) if
Borrower or any Other Guarantor is a partnership, proceed against any general
partner of Borrower or the Other Guarantor, (c) proceed against or exhaust any
collateral held by Lender to secure the repayment of the Indebtedness, or (d)
pursue any other remedy it may now or hereafter have against Borrower, or, if
Borrower is a partnership, any general partner of Borrower. Guarantor further
waives, to the fullest extent permitted by applicable law, any right to revoke
this Guaranty as to any future advances by Lender under the Security Instrument
to protect Lender's interest in the Property.
6. At any time or from time to time and any number of times, without
notice to Guarantor and without affecting the liability of Guarantor, (a) the
time for payment of the principal of or interest on the Indebtedness may be
extended or the Indebtedness may be renewed in whole or in part; (b) the time
for Borrower's performance of or compliance with any covenant or agreement
contained in the Note, the Security Instrument or any other Loan Document,
whether presently existing or hereinafter entered into, may be extended or such
performance or compliance may be waived; (c) the maturity of the Indebtedness
may be accelerated as provided in the Note, the Security Instrument, or any
other Loan Document; (d) the Note, the Security Instrument, or any other Loan
Document may be modified or amended by Lender and Borrower in any respect,
including, but not limited to, an increase in the principal amount; and (e) any
security for the Indebtedness may be modified, exchanged, surrendered or
otherwise dealt with or additional security may be pledged or mortgaged for the
Indebtedness.
7. If more than one person executes this Guaranty, the obligations of
those persons under this Guaranty shall be joint and several. Lender, in its
sole and absolute discretion, may (a) bring suit against Guarantor, or any one
or more of the persons constituting Guarantor, and any Other Guarantor, jointly
and severally, or against any one or more of them; (b) compromise or settle with
any one or more of the persons constituting Guarantor for such consideration as
Lender may deem proper; (c) release one or more of the persons constituting
Guarantor, or any Other Guarantor, from liability; and (d) otherwise deal with
Guarantor and any Other Guarantor, or any one or more of them, in any manner,
and no such action shall impair the rights of Lender to collect from Guarantor
any amount guaranteed by Guarantor under this Guaranty. Nothing contained in
this paragraph shall in any way affect or impair the rights or obligations of
Guarantor with respect to any Other Guarantor.
8. Any indebtedness of Borrower held by Guarantor now or in the future is
and shall be subordinated to the Indebtedness and any such indebtedness of
Borrower shall be collected, enforced and received by Guarantor, as trustee for
Lender, but without reducing or affecting in any manner the liability of
Guarantor under the other provisions of this Guaranty.
9. Guarantor shall have no right of, and hereby waives any claim for,
subrogation or reimbursement against Borrower or any general partner of Borrower
by reason of any payment by Guarantor under this Guaranty, whether such right or
claim arises at law or in equity or under any contract or statute, until the
Indebtedness has been paid in full and there has expired the maximum possible
period thereafter during which any payment made by Borrower to Lender with
respect to the Indebtedness could be deemed a preference under the United States
Bankruptcy Code.
10. If any payment by Borrower is held to constitute a preference under
any applicable bankruptcy, insolvency, or similar laws, or if for any other
reason Lender is required to refund any sums to Borrower, such refund shall not
constitute a release of any liability of Guarantor under this Guaranty. It is
the intention of Lender and Guarantor that Guarantor's obligations under this
Guaranty shall not be discharged except by Guarantor's performance of such
obligations and then only to the extent of such performance.
11. Guarantor shall from time to time, upon request by Lender, deliver to
Lender such financial statements as Lender may reasonably require.
12. Lender may assign its rights under this Guaranty in whole or in part
and upon any such assignment, all the terms and provisions of this Guaranty
shall inure to the benefit of such assignee to the extent so assigned. The terms
used to designate any of the parties herein shall be deemed to include the
heirs, legal representatives, successors and assigns of such parties; and the
term "Lender" shall include, in addition to Lender, any lawful owner, holder or
pledgee of the Note. Reference herein to "person" or "persons" shall be deemed
to include individuals and entities.
13. This Guaranty and the other Loan Documents represent the final
agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements. There are no unwritten oral
agreements between the parties. All prior or contemporaneous agreements,
understandings, representations, and statements, oral or written, are merged
into this Guaranty and the other Loan Documents. Guarantor acknowledges that
Guarantor has received copies of the Note and all other Loan Documents. Neither
this Guaranty nor any of its provisions may be waived, modified, amended,
discharged, or terminated except by an agreement in writing signed by the party
against which the enforcement of the waiver, modification, amendment, discharge,
or termination is sought, and then only to the extent set forth in that
agreement.
14. Guarantor agrees that any controversy arising under or in relation to
this Guaranty shall be litigated exclusively in the jurisdiction where 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 Guaranty, the Note, the Security Instrument or any other Loan Document.
Guarantor 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.
15. GUARANTOR AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH
RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN
THE PARTIES AS GUARANTOR AND LENDER 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 EXHIBIT. The following Exhibit is attached to this Guaranty:
|X| Exhibit A Modifications to Guaranty
[NO FURTHER TEXT ON THIS PAGE]
IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under
seal or has caused this Guaranty to be signed and delivered under seal by its
duly authorized representative. Guarantor intends that this Guaranty shall be
deemed to be signed and delivered as a sealed instrument.
AIMCO PROPERTIES, L.P., a
Delaware limited partnership
By: AIMCO-GP, INC., a
Delaware corporation, Its General
Partner
By:
Name: Patti K. Fielding
Title: Vice President
STATE OF COLORADO
COUNTY OF DENVER
The foregoing instrument was acknowledged before me this ___ day of
December, 2000, by PATTI K. FIELDING, the VICE PRESIDENT of AIMCO-GP, INC., a
Delaware corporation, which is the General Partner of AIMCO PROPERTIES, L.P.,
a Delaware limited partnership.
(signature of person taking acknowledgment)
(title or rank)
(serial number, if any)
EXHIBIT A
MODIFICATIONS TO GUARANTY
The following modifications are made to the text of the Guaranty that precedes
this Exhibit:
1. Lender may assign its rights under this Guaranty pursuant to Section 12 of
this Guaranty only to a purchaser or other transferee of the Loan.
2. Paragraph 2(a) of this Guaranty is deleted in its entirety; and paragraph
2(b) of this Guaranty is modified to read as follows:
(b) All amounts for which Borrower is personally liable under Paragraphs
9(c) through 9(f) of the Note.
EXHIBIT 18(E)
RECORD AND RETURN TO:
Cassin Cassin & Joseph LLP
300 East 42nd Street
New York, New York 10017
Attn: Carol M. Joseph, Esq.
FHLMC#002689235
County: Duval
[Space Above This Line For Recording Data]
CONSOLIDATION, EXTENSION AND MODIFICATION AGREEMENT
(Multiple Instruments - Multifamily - Revision Date 11-01-2000)
THIS CONSOLIDATION, EXTENSION AND MODIFICATION AGREEMENT (this "Agreement")
is made as of the 15th day of December, 2000, between MEADOW WOOD ASSOCIATES, a
Florida general partnership (the "Borrower") and ARCS COMMERCIAL MORTGAGE CO.,
L.P., a limited partnership organized and existing under the laws of California
(the "Lender"). Borrower's address is c/o AIMCO, 2000 South Colorado Blvd.,
Suite 2-1000, Denver, Colorado 80222, and Lender's address is 26901 Agoura Road,
Suite 200, Calabasas Hills, California 91301.
RECITALS
A. Borrower is indebted to Lender in the principal sum of SIX MILLION SEVENTY
THOUSAND AND 00/100 Dollars ($6,070,000.00) and Borrower and Lender desire
to consolidate, extend and modify (1) the repayment of that indebtedness,
with interest, and all renewals, extensions and modifications of such
indebtedness, and (2) the performance of all of Borrower's obligations,
covenants and agreements stated in and consolidated by this Agreement.
B. Borrower has a fee estate in the real property whose address is Ashton
Ridge Apartments, 5959 Ft. Caroline Road, Jacksonville, Florida and which
is located in the County of Duval, State of Florida, as more particularly
described in Exhibit A to this Agreement (the "Property").
AGREEMENT
Borrower covenants and agrees with Lender as follows:
1. ASSUMPTION OF OBLIGATIONS UNDER NOTES AND MORTGAGES.
Borrower assumes all of the obligations and agreements under the notes (the
"Notes") listed on Exhibit B-1 and the mortgages, deeds of trust or other
security instruments (the "Mortgages") listed on Exhibit B-2 to this
Agreement. The Notes evidence the outstanding principal indebtedness
described above and the Mortgages are liens on the Property securing the
Notes. Borrower also assumes all of the obligations in all agreements,
whether or not listed on Exhibit B-1 or B-2, which consolidate, modify or
extend such Notes and Mortgages, as such obligations are modified by this
Agreement. Borrower shall keep the agreements and perform the obligations
in the Notes and the Mortgages and under all other agreements listed on
Exhibit B-1 and B-2, even if Borrower is not the person or entity that was
originally obligated under such agreements.
2. AGREEMENT TO CONSOLIDATE NOTES AND MORTGAGES.
The rights and obligations under the Notes and Mortgages (and under all
other agreements which consolidated, modified or extended rights and
obligations under the Notes or Mortgages) are consolidated, and Lender's
rights in the Property are combined so that Lender has one real estate
security interest (the "Consolidated Mortgage") securing one note (the
"Consolidated Note") evidencing Borrower's indebtedness to Lender. The
covenants and agreements of the Consolidated Mortgage and the Consolidated
Note are as provided in this Agreement.
3. TERMS OF CONSOLIDATED NOTE.
The terms of the Consolidated Note are restated to be the terms of the
note, including any riders to that note, attached as Exhibit C to this
Agreement.
4. TERMS OF CONSOLIDATED MORTGAGE.
The terms of this Consolidated Mortgage are restated to be the terms of the
security instrument, including any riders to that security instrument,
which is Exhibit D to this Agreement. For purposes of this Consolidated
Mortgage, the Borrower's and Lender's addresses shall be the addresses for
each party set forth above. The maximum principal amount which is or under
any contingency may be secured by this Consolidated Mortgage is SIX MILLION
SEVENTY THOUSAND AND 00/100 Dollars ($6,070,000.00).
5. BORROWER'S COVENANTS.
Borrower covenants that (a) Borrower is lawfully seised of a fee estate in
the Property and has the right to consolidate, modify and extend the Notes
and Mortgages; (b) if the Borrower's estate is a leasehold estate, that the
ground lease is in full force and effect without modification, except as
noted in Exhibit E to this Agreement, and there is no default on the part
of either lessor or lessee under such ground lease, nor is there any
present event or condition that, with the passage of time, the giving of
notice or both, would constitute a default under such ground lease; and (c)
Borrower will defend generally the title to the Property against all claims
and demands, liens or encumbrances, subject to any easements, restrictions
and encumbrances listed in a schedule of exceptions to coverage in any
title insurance policy insuring Lender's interest in the Property.
Borrower also covenants and warrants that there are no offsets,
counterclaims or defenses against the indebtedness now unpaid or against
the Consolidated Note or the Consolidated Mortgage.
6. TERMINATION; CHANGES; AMENDMENTS.
This Agreement may not be terminated, changed or amended except by a
written agreement signed by Borrower and Lender.
7. INCORPORATION OF EXHIBITS.
The following Exhibits, if checked below, are referenced in this Agreement
and are incorporated into and made a part of this Agreement by this
provision:
[X ] Exhibit A Legal Description of the Property (required) [X ] Exhibit
B-1 List of Notes Consolidated (required) [X ] Exhibit B-2 List of
Mortgages, Deeds of Trust or other
Security Instruments Consolidated (required)
[X ] Exhibit C Terms of Consolidated Note (required)
[X ] Exhibit D Terms of Consolidated Mortgage (required)
[ ] Exhibit E Modifications to Ground Lease
[NO FURTHER TEXT ON THIS PAGE]
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement or
caused this Agreement to be executed by their duly authorized representatives as
of the date set forth above.
BORROWER:
WITNESS/ATTEST:
MEADOW WOOD ASSOCIATES, a
Florida general partnership
By: WINTHROP GROWTH INVESTORS I LIMITED
PARTNERSHIP, a Massachusetts limited
partnership, a general partner
By: TWO WINTHROP PROPERTIES, INC.,
a Massachusetts corporation, a
general partner
By:
Name: Patti K. Fielding
Title:Vice President-Residential
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
LENDER:
WITNESS/ATTEST:
ARCS COMMERCIAL MORTGAGE CO., L.P.,
a California limited partnership
By: ACMC REALTY, INC., a
California corporation,
Its General Partner
By:
Name: Steven D. Heller
Title: Senior Vice President
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the ____ day of December, in the year 2000, before me, the
undersigned personally appeared STEVEN D. HELLER, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.
Signature and Office of individual
taking acknowledgment
STATE OF COLORADO
COUNTY OF DENVER
The foregoing instrument was acknowledged before me this _____ day of
December, 2000, by PATTI K. FIELDING, the VICE PRESIDENT-RESIDENTIAL of TWO
WINTHROP PROPERTIES, INC., a Massachusetts corporation, which is a General
Partner of WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP, a Massachusetts
limited partnership, which is a General Partner of MEADOW WOOD ASSOCIATES, a
Florida general partnership.
(signature of person taking acknowledgment)
(title or rank)
(serial number, if any)
EXHIBIT A
Legal Description
EXHIBIT B-1
List of Notes Consolidated
Multifamily Note made by MEADOW WOOD ASSOCIATES to ARCS MORTGAGE, INC. in the
principal amount of $4,300,000.00, dated November 19, 1990;
2. Multifamily Note made by MEADOW WOOD ASSOCIATES to ARCS COMMERCIAL
MORTGAGE CO., L.P. in the principal amount of $1,998,962.18, dated as
of December 15, 2000.
00139289;1
PAGE B/2-1
EXHIBIT B-2
List of Mortgages, Deeds of Trust, or Other Security Instruments Consolidated
1. Multifamily Mortgage, Assignment of Rents and Security Agreement made by
MEADOW WOOD ASSOCIATES to ARCS MORTGAGE, INC. in the principal amount of
$4,300,000.00, dated November 19, 1990 and recorded November 19, 1990 in
Volume 6999, page 1300 in the Office of the County Clerk, County of
Duval, State of Florida;
Which mortgage was assigned by Assignment of Mortgage by ARCS MORTGAGE,
INC. to FEDERAL NATIONAL MORTGAGE ASSOCIATION, dated November 19, 1990
and recorded November 19, 1990 in Volume 6999, page 1316 in the Office
of said County Clerk;
Which mortgage was further assigned by Assignment of Mortgage by FANNIE
MAE f/k/a/ FEDERAL NATIONAL MORTGAGE ASSOCIATION to ARCS COMMERCIAL
MORTGAGE CO., L.P., dated December 15, 2000 and to be recorded
simultaneously herewith in the office of said Clerk, said mortgage as
assigned having an outstanding principal balance of $4,071,037.82;
3. Multifamily Mortgage, Assignment of Rents and Security Agreement made
by MEADOW WOOD ASSOCIATES to ARCS COMMERCIAL MORTGAGE CO., L.P. in the
principal amount of $1,998,962.18, dated as of December 15, 2000 and to
be recorded simultaneously herewith in the Office of said Clerk;
Which above two (2) mortgages were consolidated by Consolidation,
Extension and Modification Agreement by and between MEADOW WOOD
ASSOCIATES and ARCS COMMERCIAL MORTGAGE CO., L.P., dated as of December
15, 2000 and intended to be recorded in the Office of said Clerk to form
a single lien in the amount of $$6,070,000.00.
EXHIBIT C
Terms of Consolidated Note
EXHIBIT D
Terms of Consolidated Mortgage
FHLMC# 002689235
CONSOLIDATION, EXTENSION
AND
MODIFICATION AGREEMENT
Between MEADOW WOOD ASSOCIATES,
a Florida general partnership
and
ARCS COMMERCIAL MORTGAGE CO., L.P., a
California limited partnership
dated
As of December 15, 2000
Tax Map Designation:
County: Duval
When Recorded, Return To:
Cassin Cassin & Joseph LLP
300 East 42nd Street
New York, New York 10017
Attn: Carol M. Joseph, Esq.
EXHIBIT 18(F)
FHLMC# 002689235
REPLACEMENT RESERVE AGREEMENT
(REVISION DATE 11-01-2000)
This REPLACEMENT RESERVE AGREEMENT ("Agreement") is made and entered into
as of the 15th day of December, 2000, by and between MEADOW WOOD ASSOCIATES, a
Florida general partnership ("Borrower"), and ARCS COMMERCIAL MORTGAGE CO.,
L.P., a California limited partnership ("Lender") and its successors and
assigns.
W I T N E S S E T H:
WHEREAS, Lender has agreed to make and Borrower has agreed to accept the
Loan, which is to be evidenced by the Note and secured by the Security
Instrument encumbering the Property described on Exhibit "A" attached to, and
incorporated into, this Agreement by reference;
WHEREAS, as a condition to the closing of the Loan, Lender has required
Borrower to establish the Replacement Reserve Fund at the time of closing for
the funding of Capital Replacements throughout the Loan term; and
WHEREAS, Lender and Borrower are desirous of reducing to writing all of
their agreements regarding the Replacement Reserve Fund.
NOW, THEREFORE, for and in consideration of the Loan, the mutual promises
and covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lender and Borrower
agree as follows:
1. Definitions. The following terms used in this Agreement shall have the
meanings set forth below in this Paragraph 1:
(a) "Capital Replacement" means the replacement of those items listed on
Exhibit "B" of this Agreement and such other replacements as may be
approved in writing or required by Lender.
(b) "Disbursement Period" means the interval between disbursements from
the Replacement Reserve Fund, which interval shall be no shorter
than once a [select applicable period and initial beside selected
period]
Lender and Borrower initials:
month /
X quarter. /
(c) "Jurisdiction" means the State in which the Property is located.
(d) "Loan" means the loan from Lender to Borrower in the original
principal amount of SIX MILLION SEVENTY THOUSAND AND 00/100 Dollars
($6,070,000.00), as evidenced by the Note and secured by the
Security Instrument.
(e) "Loan Documents" means, collectively, the Note, Security Instrument
and all other instruments and documents executed in connection with
the Loan.
(f) "Minimum Disbursement Request Amount" means FIVE THOUSAND AND 00/100
Dollars ($5,000.00).
(g) "Note" means the promissory note from Borrower to Lender
evidencing the Loan.
(h) "Property" means the real property described on Exhibit "A" of
this Agreement.
(i) "Replacement Reserve Deposit" means the initial deposit in the
amount of Zero Dollars ($0.00) made as of the date of this
Agreement, together with the sum of Eight Thousand Six Hundred Three
and 33/100 Dollars ($8,603.33) per month to be deposited into the
Replacement Reserve Fund, as such monthly deposit amount may
increase from time to time in accordance with the schedule attached
to this Agreement as Exhibit "C".
(j) "Replacement Reserve Fund" means the account established pursuant to
this Agreement to defray the costs of Capital Replacements.
(k) "Security Instrument" means the mortgage, deed of trust, deed to
secure debt, or other similar security instrument encumbering the
Property and securing Borrower's performance of its Loan
obligations.
2. Replacement Reserve Fund.
(a) Establishment; Funding. Upon the closing of the Loan, the
parties shall establish the Replacement Reserve Fund and, if
required by Lender, Borrower shall pay to Lender for deposit into
the Replacement Reserve Fund, the amount of the initial
Replacement Reserve Deposit. Commencing on the date the first
installment of principal and/or interest is due under the Note
and continuing on the same day of each successive month during
the Loan term, Borrower shall pay to Lender for deposit into the
Replacement Reserve Fund the monthly Replacement Reserve Deposit,
together with its regular monthly payments of principal and
interest as required by the Note and Security Instrument. The
Replacement Reserve Fund shall be maintained and governed in
accordance with this Agreement.
(b) Investment of Deposits. Borrower and Lender agree that all
moneys deposited into the Replacement Reserve Fund shall be held
by Lender in an interest bearing account, and any interest earned
on such moneys shall be added to the principal balance of the
Replacement Reserve Fund and disbursed in accordance with the
provisions of this Agreement. Lender shall not be responsible
for any losses resulting from investment of moneys in the
Replacement Reserve Fund or for obtaining any specific level or
percentage of earnings on such investment. Lender shall be
entitled to deduct from the Replacement Reserve Fund a one time
fee for establishing the Replacement Reserve Fund in an amount
not to exceed $-0-.
(c) Use. Subject to the pledge and security interest and other rights of
Lender set forth in this Agreement, the Replacement Reserve Fund
shall be maintained for the payment of the costs of the Capital
Replacements identified on Exhibit B attached to this Agreement.
4. Deferral of Deposits. Notwithstanding subsections 2(a) through (c) above,
Lender defers its right to require Borrower to make the monthly
Replacement Reserve Deposit. Lender, however, reserves the right to
require, in its reasonable discretion and upon written notice to Borrower,
at any time and from time to time, that Borrower begin making the monthly
Replacement Reserve Deposit upon the occurrence of any of the following
events:
(1) Borrower's default under the Note, Security Instrument, or any
other document delivered in connection with the Loan, or (2) the
occurrence of a Transfer which is prohibited under the terms of the
Security Instrument or which requires Lender's consent, or (3)
Borrower's failure to maintain the Property in a satisfactory manner
and/or in accordance with the requirements of the Security
Instrument.
3. Disbursements.
(a) Requests for Disbursement. Lender shall disburse funds from the
Replacement Reserve Fund, in its sole discretion, as follows:
(i) Borrower's Request. If Borrower determines, at any time or
from time to time, that a Capital Replacement is necessary
or desirable, Borrower shall perform such Capital
Replacement and request from Lender, in writing,
reimbursement for such Capital Replacement. Borrower's
request for reimbursement shall include (A) a detailed
description of the Capital Replacement performed, together
with evidence, satisfactory to Lender, that the cost of
such Capital Replacement has been paid and (B) lien waivers
from each contractor and material supplier supplying labor
or materials for such Capital Replacement, if required by
Lender.
(ii) Lender's Request. If Lender shall determine, at any time or
from time to time, that Capital Replacements are necessary or
desirable, it shall so notify Borrower, in writing, requesting
that Borrower obtain and submit to Lender bids for all labor
and materials required in connection with such Capital
Replacement. Borrower shall submit such bids and a time
schedule for completing each Capital Replacement to Lender
within thirty (30) days after Borrower's receipt of Lender's
notice.
(b) Conditions Precedent. Disbursement from the Replacement Reserve Fund
shall be made no more frequently than once every Disbursement Period
and, except for the final disbursement, no disbursement shall be
made in an amount less than the Minimum Disbursement Request Amount.
Disbursements shall be made only if the following conditions
precedent have been satisfied, as reasonably determined by Lender:
(i) Payment for Capital Replacement. The Capital Replacement
has been performed and/or installed on the Property in a
good and workmanlike manner with suitable materials (or in
the case of a partial disbursement, performed and/or
installed on the Property to an acceptable stage) and paid
for by Borrower as evidenced by copies of all applicable
paid invoices or bills submitted to Lender by Borrower at
the time Borrower requests disbursement from the
Replacement Reserve Fund.
(ii) No Default. There shall exist no condition, event or act which
would constitute a default (with or without notice and/or
lapse of time) under this Agreement or any other Loan
Document.
(iii) Representations and Warranties. All representations and
warranties of Borrower set forth in this Agreement and in
the Loan Documents are true.
(iv) Continuing Compliance. Borrower shall be in full
compliance with the provisions of this Agreement, the other
Loan Documents and any request or demand by Lender
permitted hereby.
(v) No Lien Claim. No lien or claim based on furnishing labor or
materials has been filed or asserted against the Property or
the Improvements, unless Borrower has properly provided bond
or other security against loss in accordance with applicable
law.
(vi) Approvals. All licenses, permits, and approvals of
governmental authorities required for the Capital Replacement
as completed to the applicable stage have been obtained.
(vii) Legal Compliance. The Capital Replacement as completed to
the applicable stage does not violate any laws, ordinance,
rules or regulations, or building lines or restrictions
applicable to the Property.
4. Right to Complete Capital Replacements. If Borrower abandons or fails
to proceed diligently with and complete any Capital Replacement in a
timely fashion or is otherwise in default under this Agreement, Lender
shall have the right (but not the obligation) to enter upon the
Property and take over and cause the completion of such Capital
Replacement. Any contracts entered into or indebtedness incurred upon
the exercise of such right may be in the name of Borrower, and Lender
is hereby irrevocably appointed the attorney in fact of Borrower, such
appointment being coupled with an interest, to enter into such
contracts, incur such obligations, enforce any contracts or agreements
made by or on behalf of Borrower (including the prosecution and defense
of all actions and proceedings in connection with the Capital
Replacement and the payment, settlement or compromise of all bills and
claims for materials and work performed in connection with the Capital
Replacement) and do any and all things necessary or proper to complete
any Capital Replacement including signing Borrower's name to any
contracts and documents as may be deemed necessary by Lender. In no
event shall Lender be required to expend its own funds to complete any
Capital Replacement, but Lender may, in its sole discretion, advance
such funds. Any funds advanced shall be added to the outstanding
balance of the Loan, secured by the Security Instrument and payable to
Lender by Borrower in accordance with the provisions of the Security
Instrument pertaining to the protection of Lender's security and
advances made by Lender. Borrower waives any and all claims it may
have against Lender for materials used, work performed or resultant
damage to the Property.
5. Inspection. Lender or any representative of Lender may periodically
inspect any Capital Replacement in process and upon completion during
normal business hours or at any other reasonable time. Lender shall be
entitled to deduct from the Replacement Reserve Fund reasonable fees
for performing any such inspection, which fee shall not exceed $250.00
per inspection. If Lender, in its sole discretion, retains a
professional inspection engineer or other qualified third party to
inspect any Capital Replacement, Lender also shall be entitled to
deduct from the Replacement Reserve Fund an amount sufficient to pay
all reasonable fees and expenses charged by such third party inspector.
6. Insufficient Account. If Borrower requests disbursement from the
Replacement Reserve Fund for a Capital Replacement in accordance with this
Agreement in an amount which exceeds the amount on deposit in the
Replacement Reserve Fund, Lender shall disburse to Borrower only the
amount on deposit in the Replacement Reserve Fund. All additional amounts
required in connection with any such Capital Replacement shall be paid by
Borrower from Borrower's own funds.
7. Security Agreement. Borrower hereby conveys, pledges, transfers and grants
to Lender a security interest pursuant to the Uniform Commercial Code of
the Jurisdiction or any other applicable law in and to all money in the
Replacement Reserve Fund, as same may increase or decrease from time to
time, for the purpose of securing Borrower's obligations under this
Agreement and to further secure Borrower's obligations under the Note,
Security Instrument and other Loan Documents.
8. Post Default. If Borrower defaults in the performance of its
obligations under this Agreement or under the Note, Security Instrument
or any other Loan Document, Lender and its successors and assigns shall
have all remedies available to them under Article 9 of the Uniform
Commercial Code of the Jurisdiction and under any other applicable law
and, in addition, may retain all money in the Replacement Reserve Fund,
including interest, and in Lender's discretion, may apply such amounts,
without restriction and without any specific order of priority, to the
payment of any and all indebtedness or obligations of Borrower set
forth in the Note, Security Instrument or any other Loan Document,
including, but not limited to, principal, interest, taxes, insurance,
reasonable attorneys' fees actually incurred and/or repairs to the
Property.
9. Termination. If not sooner terminated by written concurrence of the
parties, this Agreement shall terminate upon the payment in full of the
Loan and all indebtedness incurred in connection therewith and upon such
termination, Lender shall pay to Borrower all funds remaining in the
Replacement Reserve Fund.
10. No Amendment. Nothing contained in this Agreement shall be construed to
amend, modify, alter, change or supersede the terms and provisions of the
Note, Security Instrument or any other Loan Document; and, if there is a
conflict between the terms and provisions of this Agreement and those of
the Note, Security Instrument, or any other Loan Document then the terms
and provisions of the Note, Security Instrument or such other Loan
Document shall control.
11. Release; Indemnity.
(a) Release. Borrower covenants and agrees that, in performing any of
its duties under this Agreement, neither Lender nor its successors
and assigns shall be liable for any losses, costs or damages which
may be incurred by any of them as a result of such performance,
except for any losses, costs or damages arising out of the willful
misconduct or gross negligence of such party.
(b) Indemnity. Borrower hereby agrees to indemnify and hold harmless
Lender and its successors and assigns from and against any and all
losses, claims, damages, liabilities and expenses including, without
limitation, reasonable attorneys' fees and disbursements, which may
be imposed or incurred by any of them in connection with this
Agreement.
12. Choice of Law. This Agreement shall be construed and enforced in
accordance with the laws of the Jurisdiction.
13. Successors and Assigns. Borrower acknowledges and agrees that Lender,
at its option, may assign or otherwise transfer the Loan and any or all
Loan Documents including, but not limited to, this Agreement, to other
parties subsequent to the execution of this Agreement. This Agreement
shall be binding upon the respective successors and assigns of Borrower
and Lender. Borrower may not assign its rights, interests or
obligations under this Agreement without first obtaining Lender's prior
written consent.
14. Attorneys' Fees. In the event that Lender or its successors or assigns
shall engage the services of an attorney at law to enforce the provisions
of this Agreement against Borrower, then Borrower shall pay all costs of
such enforcement, including any reasonable attorneys' fees actually
incurred.
15. Compliance with Laws; Insurance Requirements.
(a) Compliance with Laws. All Capital Replacements shall comply with all
applicable laws, ordinances, rules and regulations of all
governmental authorities having jurisdiction over the Property and
applicable insurance requirements including, without limitation,
applicable building codes, special use permits, environmental
regulations, and requirements of insurance underwriters.
(b) Insurance Requirements. In addition to any insurance required
under the Loan Documents, Borrower shall provide or cause to be
provided workers' compensation, builder's risk (if required by
Lender), and public liability insurance and other insurance
required under applicable law in connection with any of the
Capital Replacements. All such policies which can be endorsed
with standard mortgage clauses making losses payable to Lender or
its assigns shall be so endorsed. The originals of such policies
shall be deposited with Lender.
16. Remedies Cumulative. In the event of Borrower's default under this
Agreement, Lender may exercise all or any one or more of its rights and
remedies available under this Agreement, at law or in equity. Such
rights and remedies shall be cumulative and concurrent, and may be
enforced separately, successively or together, and Lender's exercise of
any particular right or remedy shall not in any way prevent Lender from
exercising any other right or remedy available to Lender. Lender may
exercise any such remedies from time to time as often as may be deemed
necessary by Lender.
17. Determinations by Lender. In any instance where the consent or
approval of Lender may be given or is required, or where any
determination, judgment or decision is to be rendered by Lender under
this Agreement, the granting, withholding or denial of such consent or
approval and the rendering of such determination, judgment or decision
shall be made or exercised by Lender (or its designated representative)
at its sole and exclusive option and in its sole and absolute
discretion.
18. Completion of Capital Replacements. Lender's disbursement of moneys
from the Replacement Reserve Fund or other acknowledgment of completion
of any Capital Replacement in a manner satisfactory to Lender shall not
be deemed a certification by Lender that the Capital Replacement has
been completed in accordance with applicable building, zoning or other
codes, ordinances, statutes, laws, regulations or requirements of any
governmental authority or agency. Borrower shall at all times have the
sole responsibility for insuring that all Capital Replacements are
completed in accordance with all such governmental requirements.
19. No Agency or Partnership. Nothing contained in this Agreement shall
constitute Lender as a joint venturer, partner or agent of Borrower, or
render Lender liable for any debts, obligations, acts, omissions,
representations or contracts of Borrower.
20. Entire Agreement. This writing, together with references to this
Agreement contained in the Security Instrument, constitutes the entire
agreement of the parties relative to the Replacement Reserve Fund. Any
modification or amendment of this Agreement shall be ineffective unless
in writing and signed by Lender and Borrower; provided, however, that
in the event of a Transfer under the terms of the Security Instrument,
any or some or all of the Modifications to Agreement set forth in
Exhibit D (if any) may be modified or rendered void by Lender at
Lender's option by notice to Borrower/transferee.
ATTACHED EXHIBITS. The following Exhibits are attached to this
Agreement:
|X | Exhibit A Property Description (required)
|X | Exhibit B Capital Replacements (required)
|X | Exhibit C Replacement Reserve Deposit (required)
| | Exhibit D Modifications to Agreement
[NO FURTHER TEXT ON THIS PAGE]
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
BORROWER:
Borrower's Social Security
or Taxpayer Identification No. MEADOW WOOD ASSOCIATES, a
04-2845084 Florida general partnership
By: WINTHROP GROWTH INVESTORS I LIMITED
PARTNERSHIP, a Massachusetts limited
partnership, a general partner
By: TWO WINTHROP PROPERTIES, INC., a
Massachusetts corporation, a general
partner
By:
Name: Patti K. Fielding
Title: Vice President-Residential
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
LENDER:
ARCS COMMERCIAL MORTGAGE CO., L.P.,
a California limited partnership
By: ACMC REALTY, INC., a
California corporation,
Its General Partner
By:
Name: Steven D. Heller
Title: Senior Vice President
EXHIBIT A
Property Description
EXHIBIT B
Capital Replacements
Items to be reserved for are:
Carpet/vinyl flooring, window treatments, roofs, furnaces/boilers, air
conditioners, ovens/ranges, refrigerators, dishwashers, water heaters, garbage
disposals, stripe parking lots, fence repairs/replacements, wood stairwell
repairs, patio/balcony and swimming pools..
EXHIBIT C
Replacement Reserve Deposit
The following amounts shall be paid to Lender by Borrower each month in
accordance with the provisions of Paragraph 2(a) for deposit into the
Replacement Reserve Fund subject to the provisions of Paragraph 2(d):
From: February 1, 2001 to January 1, 2021 $8,603.33.
[complete the following only if the amount of the Replacement Reserve Deposit
will change during the loan term]
From: _______________________ to ______________________ $_______________.
From: _______________________ to ______________________ $_______________.
From: _______________________ to ______________________ $_______________.
From: _______________________ to ______________________ $_______________.
EXHIBIT D
Modifications to Agreement