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) May 17, 2005
CENTURY PROPERTIES FUND XIX
(Exact name of Registrant as specified in its charter)
California 0-11935 94-2887133
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
On May 17, 2005, Century Properties Fund XIX (the "Registrant") refinanced the
mortgage encumbering one of its investment properties, Greenspoint Apartments,
located in Phoenix, Arizona. The new mortgage, in the principal amount of
$11,000,000, replaced the existing mortgage, which had an outstanding balance of
approximately $7,981,000. The new mortgage is amortized over 25 years and
requires monthly payments of principal and interest of $66,307, beginning on
July 1, 2005. The loan matures June 1, 2030. The lender can exercise a call
option on the mortgage on May 1, 2012 and every fifth anniversary thereafter.
The interest rate is fixed at 5.31% for the life of the mortgage. Subject to
prior notice and the payment of a prepayment premium, the Registrant may prepay
the mortgage in full at any time beginning October 1, 2005.
In accordance with the terms of the loan agreement for the new mortgage, payment
of the note may be accelerated at the option of the lender if an Event of
Default, as defined in the loan agreement, occurs. Events of Default include,
but are not limited to: nonpayment of monthly principal and interest within 10
days after the due date; nonpayment of any payments due to the lender under
another existing loan document; the occurrence of any breach or default under
another existing loan document.
The mortgage is secured by the deed granting the lender a lien or interest on
the property.
The foregoing description is qualified in its entirety by reference to the
Promissory Note and Deed of Trust, Security Agreement, Financing Statement and
Fixture Filing, copies of which are filed as exhibits 10.26 and 10.27 to this
report.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
The following exhibits are filed with this report:
10.26 Promissory Note dated May 17, 2005 between Century Properties Fund
XIX, a California limited partnership and ING USA Annuity and Life
Insurance Company.
10.27 Deed of Trust, Security Agreement, Financing Statement and Fixture
Filing, dated May 17, 2005 between Century Properties Fund XIX, a
California limited partnership and ING USA Annuity and Life
Insurance Company.*
*Schedules and supplemental materials to the exhibit have been omitted but will
be provided to the Securities and Exchange Commission upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENTURY PROPERTIES FUND XIX
By: Fox Partners II
Managing General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: May 19, 2005
Exhibit 10.26
PROMISSORY NOTE
AIMCO Century Properties (AZ)
19806-00-0725
May 17, 2005
$11,000,000
FOR VALUE RECEIVED, the undersigned, CENTURY PROPERTIES FUND XIX, a
California limited partnership ("Maker"), hereby promises to pay to the order of
ING LIFE INSURANCE AND ANNUITY COMPANY, a Connecticut corporation, or any
subsequent holder hereof ("Payee"), at the office of Payee, c/o ING Investment
Management LLC, 5780 Powers Ferry Road, NW, Suite 300, Atlanta, Georgia
30327-4349, or at such other place as Payee may from time to time designate in
writing, the principal sum of ELEVEN MILLION DOLLARS ($11,000,000) and interest
thereon from and after the date of disbursement hereunder at five and thirty-one
hundredths percent (5.31%) per annum ("Note Rate"), both principal and interest
to be paid in lawful money of the United States of America, as follows:
(i) Interest only from and including the date of disbursement of the
loan proceeds through and including the last day of the month, shall be
paid on the first day of the month following the date hereof or, at the
option of Payee, on the date hereof; and
(ii) Payments of principal and interest shall be made in 300
successive monthly installments commencing on the first day of July, 2005,
and continuing on the first day of each and every calendar month
thereafter up to and including June 1, 2030 (the "Maturity Date") or, upon
exercise of Payee's right under the following paragraph, the Call Date as
to which Payee has exercised its right, all but the final installment
thereof to be in the amount of Sixty-Six Thousand Three Hundred Seven and
20/100 Dollars ($66,307.20), and the final installment payable on the
Maturity Date, or, if earlier, the exercised Call Date to be in the full
amount of outstanding principal of this Promissory Note ("Note"), interest
and all other sums remaining unpaid hereunder and under the Deed of Trust
(as hereinafter defined).
Notwithstanding any provisions of this Note to the contrary, the Payee
reserves the right (the "Call Option") to declare the entire amount of
outstanding principal of this Note, interest and all other sums remaining unpaid
hereunder and under the Deed of Trust (defined below) to be due and payable on
any of the following dates (each referred to as a "Call Date"):
(i) the first day of May, 2012;
(ii) the first day of May, 2017;
(iii) the first day of May, 2022; or
(iv) the first day of May, 2027.
Such Call Option shall be exercised by Payee, in its sole and absolute
discretion, by giving written notice to Maker at least six (6) months prior to
the Call Date as to which Payee is electing, which notice shall refer to this
Note and state the Call Date elected by Payee. The exercise of such right by
Payee shall not relieve Maker of its obligation to make scheduled payments
hereunder, or to pay any other sums due and owing hereunder, between the date of
such notice and the elected Call Date. The exercise of such right by Payee will
result in the original principal amount of this Note not having been fully
amortized by the payment of the monthly installments hereunder prior to the
exercised Call Date, and Maker shall be obligated to make a payment of the
entire amount of outstanding principal of this Note and interest and all other
sums remaining unpaid hereunder and under the Deed of Trust on the Call Date.
Notwithstanding the foregoing Call Option, Maker shall have the option to
extend the term of this Note and to convert the Note Rate to a variable interest
rate as provided in, and subject to the terms and conditions of the Loan
Agreement dated today between Maker and Payee.
All payments on account of the Indebtedness (as hereinafter defined) shall
be applied: (i) first, to further advances, if any, made by the Payee as
provided in the Loan Documents (as hereinafter defined); (ii) next, to any Late
Charge (as hereinafter defined); (iii) next, to interest at the Default Rate (as
hereinafter defined), if applicable; (iv) next, to the Prepayment Premium (as
hereinafter defined), if applicable; (v) next, to interest at the Note Rate on
the unpaid principal balance of this Note unless interest at the Default Rate is
applicable; and (vi) last, to reduce the unpaid principal balance of this Note.
Interest shall be calculated on the basis of a year consisting of 360 days and
with twelve thirty-day months, except that interest due and payable for less
than a full month shall be calculated by multiplying the actual number of days
elapsed in such period by a daily interest rate based on a 360-day year. As used
herein, the term "Indebtedness" shall mean the aggregate of the unpaid principal
amount of this Note, accrued interest, all Late Charges, any Prepayment Premium,
and advances made by Payee under the Loan Documents.
In the event any installment of principal or interest due hereunder, or
any escrow fund payment for real estate taxes, assessments, other similar
charges or insurance premiums due under the Deed of Trust shall be more than ten
(10) days overdue, Maker shall pay to the holder hereof a late charge ("Late
Charge") of four cents ($.04) for each dollar so overdue or, if less, the
maximum amount permitted under applicable law, in order to defray part of the
cost of collection and of handling delinquent payments. The Late Charge shall
not apply, however, to the accelerated balance of the Loan at any Call Date.
The terms of this Note are expressly limited so that in no event
whatsoever shall the amount paid or agreed to be paid to the Payee exceed the
highest lawful rate of interest permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision hereof or any other
documents securing the Indebtedness at the time performance of such provision
shall be due, shall involve the payment of interest exceeding the highest rate
of interest permitted by law which a court of competent jurisdiction may deem
applicable hereto, then, ipso facto, the obligation to be fulfilled shall be
reduced to the highest lawful rate of interest permissible under applicable law;
and if for any reason whatsoever Payee shall ever receive as interest an amount
which would be deemed unlawful, such interest shall be applied to the payment of
the last maturing installment or installments of the principal portion of the
Indebtedness (whether or not then due and payable) and not to the payment of
interest.
Payment of this Note is secured by a Deed of Trust, Security Agreement,
Financing Statement and Fixture Filing (the "Deed of Trust") dated on or about
this same date by Maker, as Trustor, for the benefit of Payee, as Beneficiary,
encumbering certain real estate and other property interests situated in
Maricopa County, Arizona and more particularly described in the Deed of Trust
(the "Premises"). This Note, the Deed of Trust, and all other instruments now or
hereafter evidencing, securing or guarantying the loan evidenced hereby are
sometimes collectively referred to as the "Loan Documents". The Deed of Trust
contains "due on sale or further encumbrance" provisions which, together with
all other terms of the Deed of Trust, are incorporated herein by this reference.
No prepayment of the principal of this Note shall be allowed prior to the
first day of October, 2005 (the "Lock Out Period"). Commencing October 1, 2005,
the principal of this Note may be prepaid in whole, but not in part, on any
regular scheduled payment date, provided that: (1) not later than sixty (60)
days prior to such prepayment, Maker delivers written notice to Payee that Maker
intends to prepay this Note in full on the date specified in such notice; and,
(2) Maker pays to Payee at the time of such prepayment, a sum (the "Prepayment
Premium") equal to the greater of the following calculations:
(i) The sum of (a) the present value of the scheduled monthly
payments set forth above in this Note from the date of prepayment to the
Maturity Date or the next applicable Call Date, whichever is the next to
occur, and (b) the present value of the amount of principal and interest
due on the Maturity Date or the next applicable Call Date, whichever is
the next to occur (assuming all scheduled monthly payments due prior to
such date were made when due); minus the outstanding principal balance of
this Note as of the date of prepayment. The present values described in
clauses (a) and (b) above shall be computed on a monthly basis as of the
date of prepayment discounted at an interest rate equal to the yield of
actively traded U.S. Treasury obligations having the same maturity as the
Maturity Date or the next applicable Call Date, whichever is the next to
occur, as published in the Federal Reserve Statistical Release H.15 (519)
Selected Interest Rates listed under the U.S. Government Securities,
Treasury Constant Maturities, plus twenty (20) basis points ("Treasury
Rate"). The Treasury Rate so used shall be the "week ending" yield for the
week immediately preceding the date of such prepayment. If no Treasury
Constant Maturities, are published for the specific length of time from
the date of prepayment of this Note to the Maturity Date or the next
applicable Call Date, whichever is the next to occur, the Treasury Rate
that shall be used shall be computed based on a linearly interpolated
interest rate yield between the two Treasury Constant Maturities, that (i)
most closely correspond with the Maturity Date or the next applicable Call
Date, whichever is the next to occur, as of the date of such prepayment
and (ii) bracket in time the Maturity Date or the next applicable Call
Date, whichever is the next to occur, one being before the Maturity Date
or the next applicable Call Date and the other being after the Maturity
Date or the next applicable Call Date. If for any reason Treasury Constant
Maturities, is no longer published in the Federal Reserve Statistical
Release H. 15 (519) Selected Interest Rates, the Treasury Rate shall be
based on the yields reported in another publication of comparable
reliability and institutional acceptance as selected by the Payee in its
sole and absolute discretion that most closely approximates yields in
percent per annum of actively traded U.S. Treasury obligations of varying
maturities. The sum calculated in accordance with this subparagraph (i) is
intended to be the sum that, together with the principal amount prepaid,
shall be sufficient to enable Payee to invest in U.S. Treasury obligations
for the remaining original term of this Note or until the next applicable
Call Date, whichever is next to occur, to produce, as nearly as possible,
the same effective yield to the Maturity Date or the next applicable Call
Date, whichever is next to occur, as would have been produced under this
Note, adjusted, however, for the addition of twenty (20) basis points to
the discount rate as set forth in the second sentence of this subparagraph
(i).
(ii) One percent (1%) of the then outstanding principal balance of
this Note.
Except as provided in the next sentence, in no event shall the amount
prepaid be less than the total amount of the then outstanding principal and
accrued and unpaid interest thereon plus one percent (1%) of the then
outstanding principal balance of this Note. Notwithstanding the foregoing Lock
Out Period, no Prepayment Premium shall be payable with respect to a prepayment
that (a) results from application of proceeds of casualty insurance with respect
to insured property damage or compensation received in respect of condemnation
or other governmental taking of all or part of the Premises, in either case when
no Event of Default exists, or (b) is made within ninety (90) days prior to the
Maturity Date or any Call Date, regardless of whether Payee has exercised its
option to call this Note. In the event the Prepayment Premium were to be
construed by a court having jurisdiction thereof to be an interest payment, in
no event shall the Prepayment Premium exceed an amount equal to the excess, if
any, of (i) interest calculated at the highest applicable rate permitted by
applicable law, as construed by courts having jurisdiction hereof, on the
principal balance of this Note from time to time outstanding from the date
thereof to the date of such acceleration, less (ii) interest theretofore paid
and accrued on this Note.
If the maturity of the Indebtedness is accelerated by Payee as a
consequence of the occurrence of an Event of Default, or in the event the right
to foreclose the Deed of Trust shall otherwise accrue to Payee, the Maker agrees
that an amount equal to the Prepayment Premium (determined as if prepayment were
made on the date of acceleration, and if during the Lock Out Period the
Prepayment Premium shall be payable) shall be added to the balance of unpaid
principal and interest then outstanding, and that the Indebtedness shall not be
discharged except: (i) by payment of such Prepayment Premium, together with the
balance of principal and interest and all other sums then outstanding, if the
Maker tenders payment of the Indebtedness prior to completion of a non-judicial
foreclosure sale (if applicable in Arizona), judicial order or judgment of
foreclosure sale; or (ii) by inclusion of such Prepayment Premium as a part of
the Indebtedness in any such completion of a non-judicial foreclosure sale (if
applicable in Arizona), judicial order or judgment of foreclosure.
It is hereby expressly agreed by Maker that time is of the essence in the
performance of this Note and that each of the following occurrences shall
constitute a default ("Event of Default") under this Note:
(i) The failure of the Maker to:
(a) make any payment of principal or interest under this Note
within ten (10) days after the same shall fall due, or
(b) comply with any of the other terms of this Note within
thirty (30) days after written notice of such failure has been
given by Payee to Maker or within such longer period of time,
not to exceed an additional thirty (30) days, as may be
reasonably necessary to cure such non-compliance if Maker is
diligently and with continuity of effort pursuing such cure
and the failure is susceptible of cure within such additional
thirty-day period.
(ii) The failure of Maker to make payment of any amount due the
Payee under any Loan Document other than this Note, on the date the same
shall fall due (including any applicable grace period).
(iii) The occurrence of any breach, default, event of default or
failure of performance (however denominated) under any Loan Document other
than this Note, and the expiration of any applicable cure period without
the same having been cured.
Notwithstanding the foregoing, no Event of Default shall arise under
subparagraph (i)(a) above and no Late Charge shall be due with respect to any
such payment unless Payee shall provide written notice of such failure and
permit Maker to cure such failure within ten (10) days after the giving of such
notice; provided, however, that in no event shall Payee be required to provide
such notice and allow such opportunity to cure more than one (1) time during any
calendar year.
From and after the date of the occurrence of any Event of Default and
continuing until such Event of Default is fully cured (if Maker is entitled
under this Note to cure such default) or until this Note is paid in full, the
Maker promises to pay interest on the principal balance of this Note then
outstanding at the rate (the "Default Rate") equal to the Note Rate plus five
percentage points per annum or, if less, the maximum rate permitted under
applicable law. Interest at the Default Rate shall accrue on the amount of any
judgment rendered hereon or in connection with any foreclosure of the Deed of
Trust. The Maker agrees that such additional interest which has accrued shall be
paid at the time of and as a condition precedent to the curing of such Event of
Default. During the existence of any such Event of Default Payee may apply
payments received on any amounts due hereunder or under the terms of any of the
Loan Documents as Payee shall determine.
Payee shall have the following rights, powers, privileges, options and
remedies whenever any Event of Default shall occur under this Note:
(i) To foreclose, or exercise any power of sale under, the Deed of
Trust.
(ii) To accelerate the maturity of the Indebtedness and declare the
entire unpaid principal balance of, and any unpaid interest then accrued
on, this Note, together with any Prepayment Premium, without demand or
notice of any kind to the Maker or any other person, to be immediately due
and payable.
(iii) To exercise any and all rights, powers, privileges, options
and remedies available at law or in equity and as provided in any of the
Loan Documents.
Upon the occurrence of an Event of Default, the Maker expressly agrees to
pay all costs of collection and enforcement of every kind, including without
limitation, all reasonable attorneys' fees and expenses, court costs, costs of
title evidence and insurance, inspection and appraisal costs and expenses of
every kind incurred by Payee in connection with the protection or realization of
any or all of the security for this Note, whether or not any lawsuit is filed
with respect thereto, including, but not limited to, any post judgment fees, and
costs or expenses incurred on any appeal, in collection of any judgment or in
appearing and/or enforcing any claim in any bankruptcy proceeding. The
occurrence of an Event of Default under this Note shall constitute a default
under each and all of the other Loan Documents.
The rights, powers, privileges, options and remedies of Payee, as provided
in this Note, in any of the Loan Documents, or otherwise available at law or in
equity shall be cumulative and concurrent, and may be pursued singly,
successively or together at the sole discretion of Payee, and may be exercised
as often as occasion therefor shall occur. No delay or discontinuance in the
exercise of any right, power, privilege, option or remedy hereunder shall be
deemed a waiver of such right, power, privilege, option or remedy, nor shall the
exercise of any right, power, privilege, option or remedy be deemed an election
of remedies or a waiver of any other right, power, privilege, option or remedy.
Without limiting the generality of the foregoing, the failure of the Payee after
the occurrence of any Event of Default to exercise Payee's right to declare the
Indebtedness remaining unmatured hereunder to be immediately due and payable
shall not constitute a waiver of such right in connection with any future Event
of Default. Acceleration of maturity, once elected by Payee, may be, in Payee's
sole and absolute discretion rescinded by Payee's written acknowledgment to that
effect, but without limiting the foregoing, the tender and acceptance of partial
payment or partial performance shall not, by itself, in any way affect or
rescind such acceleration.
Maker waives presentment for payment, demand, notice of nonpayment, notice
of dishonor, protest of any dishonor, notice of protest, notice of intent to
accelerate, notice of acceleration of maturity, and all other notices in
connection with the delivery, acceptance, performance, default or enforcement of
the payment of this Note, except as otherwise provided herein, and agrees that
if more than one the liability of each of them hereunder shall be joint, several
and unconditional without regard to the liability of any other party and shall
not be in any manner affected by any indulgence, extension of time, renewal,
waiver or modification granted or consented to by Payee; and Maker consents to
any and all extensions of time, renewals, waivers or modifications that may be
granted by Payee with respect to the payment or other provisions of this Note,
and to the release of any collateral given to secure the payment hereof, or any
part thereof, with or without substitution, and agrees that additional makers or
guarantors may become parties hereto without notice to any of them or affecting
any of their liability hereunder.
Payee shall not by any acts of omission or commission be deemed to have
waived any rights or remedies hereunder unless such waiver is in writing and
signed by Payee, and then only to the extent specifically set forth therein; a
waiver in respect of one event shall not be construed as continuing or as a bar
to the exercise or waiver of such right or remedy in respect of a subsequent
event.
All notices, demands, requests, and other communications desired or
required to be given hereunder ("Notices") shall be in writing and shall be
given by: (i) hand delivery to the address for Notices; (ii) delivery by
overnight courier service to the address for Notices; or (iii) sending the same
by United States mail, postage prepaid, certified mail, return receipt
requested, addressed to the address for Notices.
All Notices shall be deemed given and effective upon the earliest to occur
of: (x) the hand delivery of such Notice to the address for Notices; (y) one
business day after the deposit of such Notice with an overnight courier service
by the time deadline for next day delivery addressed to the address for Notices;
or (z) three business days after depositing the Notice in the United States mail
as set forth in (iii) above. All Notices shall be addressed to the following
addresses:
Maker: Century Properties Fund XIX
c/o AIMCO Properties, L.P.
4582 S. Ulster Street, Suite 1100
Denver, Colorado 80237
Attn: Jeff Ogden
With a copy to: Bryan Cave LLP
3500 One Kansas City Place
1200 Main Street
Kansas City, Missouri 64105
Attn: Jonathan Lautt
Payee: ING Life Insurance and Annuity
c/o ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Mortgage Loan Servicing Department
and
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Real Estate Law Department
With a copy to: Nyemaster, Goode, West,
Hansell & O'Brien, P.C.
700 Walnut, Suite 1600
Des Moines, Iowa 50309
or to such other persons or at such other place as any party hereto may by
Notice designate as a place for service of Notice. Provided, that the "copy to"
Notice to be given as set forth above is a courtesy copy only; and a Notice
given to such person is not sufficient to effect giving a Notice to the
principal party, nor does a failure to give such a courtesy copy of a Notice
constitute a failure to give Notice to the principal party.
This Note shall be governed by and construed in accordance with the laws
(excluding conflicts of laws rules) of Arizona.
Subject to the terms of the next succeeding paragraph and notwithstanding
anything to the contrary otherwise contained in this Note, but without in any
way releasing, impairing or otherwise affecting this Note or any of the other
Loan Documents (including without limitation any guaranties or indemnification
agreements) or the certain Environmental Indemnification Agreement to which
Maker is a party, or the validity hereof or thereof, or the lien of the Deed of
Trust, it is agreed that Payee's source of satisfaction of the Indebtedness and
Maker's other obligations hereunder and under the Loan Documents other than any
separate guaranty agreement or the Environmental Indemnification Agreement is
limited to (a) the Premises and proceeds thereof, (b) rents, income, issues,
proceeds and profits arising out of the Premises, and (c) any separate guaranty
or indemnification agreements guarantying or indemnifying Payee with respect to
the payment of any amounts due hereunder and under the Loan Documents and/or
Maker's performance hereunder and under the Loan Documents; provided, however,
that nothing herein contained shall be deemed to be a release or impairment of
said Indebtedness or the security therefor intended by the Deed of Trust, or be
deemed to preclude Payee from foreclosing the Deed of Trust or from enforcing
any of Payee's rights or remedies in law or in equity thereunder, or in any way
or manner affecting Payee's rights and privileges under any of the Loan
Documents or any separate guaranty or indemnification agreements guarantying
Maker's payment and/or performance hereunder and/or under the Loan Documents.
PROVIDED, HOWEVER, NOTWITHSTANDING ANYTHING IN THIS NOTE TO THE CONTRARY, MAKER
SHALL PAY, AND THERE SHALL AT NO TIME BE ANY LIMITATION ON MAKER'S PERSONAL
LIABILITY FOR THE PAYMENT TO PAYEE OF:
(i) the application of rents, security deposits, or other income,
issues, profits, and revenues derived from the Premises after the
occurrence of an Event of Default to the extent applied to anything other
than (a) normal and necessary operating expenses of the Premises or (b)
the Indebtedness evidenced by the Note. It is understood that any rents
collected more than one month in advance as of the time of the Event of
Default shall be considered to have been collected after the Event of
Default;
(ii) any loss, cost or damages arising out of or in connection with
fraud or material misrepresentations to Payee by Maker (or by any of its
general partners, officers, shareholders, members, or their agents, if
applicable);
(iii) any loss, cost or damages arising out of or in connection with
Maker's use or misapplication of (a) any proceeds paid under any insurance
policies by reason of damage, loss or destruction to any portion of the
Premises, or (b) proceeds or awards resulting from the condemnation or
other taking in lieu of condemnation of any portion of the Premises, for
purposes other than those set forth in the Deed of Trust;
(iv) any loss, cost or damages arising out of or in connection with
any waste of the Premises or any portion thereof and all reasonable costs
incurred by Payee in order to protect the Premises;
(v) any taxes, assessments and insurance premiums for which Maker is
liable under the Note, the Deed of Trust or any of the other Loan
Documents and which are paid by Payee (but not the proportionate amount of
any such taxes, assessments and insurance premiums which accrue following
the date of foreclosure [plus any applicable redemption period] or
acceptance of a deed in lieu of foreclosure);
(vi) any loss, cost or damages arising out of or in connection with
the covenants, obligations, and liabilities under the Environmental
Indemnification Agreement;
(vii) any loss, cost or damages to Payee arising out of or in
connection with any construction lien, mechanic's lien, materialman's lien
or similar lien against the Premises arising out of acts or omissions of
Maker;
(viii) any loss, cost or damages arising out of or incurred in order
to cause the Improvements to comply with the accessibility provisions of
The Americans with Disabilities Act and each of the regulations
promulgated thereunder, as the same may be amended from time to time which
are required by any governmental authority;
(ix) the total Indebtedness in the event that (a) Payee is prevented
from acquiring title to the Premises after an Event of Default because of
failure of Maker's title to the Premises under federal, state or local
laws, less any recovery received by Payee from any title insurance policy
it holds in connection with the Premises, or (b) Maker voluntarily files a
petition in bankruptcy or commences a case or insolvency proceeding under
any provision or chapter of the Federal Bankruptcy Code;
(x) any loss, cost, damages, expense and liability, including, but
not limited to, reasonable attorneys' fees and costs, resulting from any
act of Maker or its general partners, members, shareholders, officers,
directors, beneficiaries, members and/or trustees, as the case may be, to
obstruct, delay or impede Payee from exercising any of its rights or
remedies under the Loan Documents;
(xi) the entire Indebtedness in the event that (a) Maker makes a
transfer of an interest in Maker or Premises in a manner which is not
permitted by the terms of Paragraph 30 of the Deed of Trust without the
prior written approval of Payee, or (b) Maker encumbers the Premises with
a mortgage or other security instrument in a manner which is not permitted
by the terms of Paragraph 30 of the Deed of trust without the prior
written approval of Payee;
(xii) all reasonable third party costs and fees, including without
limitation reasonable attorney fees, incurred by Payee in the enforcement
of subparagraphs (i) through (xi) above.
With the exception of those items of liability specifically set forth in items
(i) through (xii) above, the lien of any judgment against Maker in any
proceeding instituted on, under or in connection with this Note shall not extend
to any property now or hereafter owned by Maker other than the interest of the
Maker in the Premises and the other security for the payment of this Note.
This Note, together with the other Loan Documents and the certain
Environmental Indemnification Agreement executed by Maker, constitute the entire
agreement between the parties hereto pertaining to the subject matters hereof
and thereof and supersede all negotiations, preliminary agreements and all prior
or contemporaneous discussions and understandings of the parties hereto in
connection with the subject matters hereof and thereof.
All fees, including attorneys' fees, charges, goods, things in action, or
any other sums or things of value or other contractual obligations
(collectively, the "Additional Sums") paid by Maker to the Payee or other holder
of this Note, whether pursuant to this Note or otherwise with respect to the
Indebtedness evidenced hereby, or with respect to the Deed of Trust securing
this Note, or any other document or instrument in any way pertaining to such
Indebtedness, which, under the law of the State of Arizona may be deemed to be
interest with respect to such Indebtedness, shall, for the purpose of any laws
of the State of Arizona which may limit the maximum rate of interest to be
charged with respect to such Indebtedness, be payable by Maker as, and shall be
deemed to be, interest, and for such purposes only, Maker agrees to an effective
contracted for rate of interest equal to the rate of interest resulting from the
payment of any Additional Sums. Maker understands and believes that this
transaction complies with the usury laws of Arizona; however, if any interest or
other charges are ever deemed to exceed the maximum amount permitted by law,
then: (a) the amount of interest or charges payable hereunder by Maker shall be
reduced to the maximum amount permitted by law; and (b) any excess amount
previously collected from Maker which exceed the maximum amount permitted by law
will be credited against the outstanding principal Indebtedness. If the
principal Indebtedness has already been paid, the excess amount paid will be
refunded to Maker.
THE PARTIES HERETO, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO
CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY
IN ANY LITIGATION BASED ON OR ARISING OUT OF THIS AGREEMENT OR INSTRUMENT, OR
ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS, WHETHER ORAL OR WRITTEN,
OR ACTION OF ANY PARTY HERETO. NO PARTY SHALL SEEK TO CONSOLIDATE BY
COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL
PARTIES.
Maker acknowledges receipt of a copy of this instrument at the time it was
signed.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Maker has executed and delivered this Promissory
Note as of the date first above written.
Century Properties Fund XIX, a California
limited partnership,
By: Fox Partners II, a California
general partnership, its General
Partner,
By: Fox Capital Management
Corporation, a California
corporation, its Managing
Partner
By: /s/Patti K. Fielding
Patti K. Fielding,
Executive Vice
President and Treasurer
[SIGNATURE PAGE TO PROMISSORY NOTE]
Exhibit 10.27
Instrument Prepared By, And
When Recorded Return To:
Nyemaster, Goode, West,
Hansell & O'Brien, P.C.
700 Walnut, Suite 1600
Des Moines, Iowa 50309
Attention: James C. Wine
AIMCO Century Properties (AZ)
19806-00-0725
DEED OF TRUST, SECURITY AGREEMENT, FINANCING
STATEMENT AND FIXTURE FILING
THIS DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT AND FIXTURE FILING
("Deed of Trust") is made as of May 17, 2005, by CENTURY PROPERTIES FUND XIX, a
California limited partnership ("Trustor"), with the mailing address of c/o
AIMCO Properties, L.P., 4582 S. Ulster Street, Suite 1100, Denver, Colorado
80237, to Stewart Title & Trust of Phoenix, Inc., a Delaware corporation, with
the mailing address of 244 West Osborn Road, Phoenix, AZ 85013, as Trustee
("Trustee") for the benefit of ING LIFE INSURANCE AND ANNUITY COMPANY, a
Connecticut corporation ("Beneficiary") with the mailing address of c/o ING
Investment Management LLC, 5780 Powers Ferry Road, NW, Suite 300, Atlanta,
Georgia 30327-4349.
W I T N E S S E T H:
WHEREAS, Trustor has executed and delivered to Beneficiary a Promissory
Note dated on or about this same date in the principal amount of ELEVEN MILLION
DOLLARS ($11,000,000), (which Promissory Note, together with all notes issued
and accepted in substitution or exchange therefor, and as any of the foregoing
may from time to time be modified, extended, renewed, consolidated, restated or
replaced, is hereinafter sometimes referred to as the "Note"), which Note
provides, among other things, for final payment of principal and interest under
the Note, if not sooner paid or payable as provided therein, to be due on or
before the first day of June, 2030, the Note by this reference thereto being
incorporated herein; and
WHEREAS, Beneficiary is desirous of securing the prompt payment of the
Note together with interest, charges and prepayment fees, if any, thereon in
accordance with the terms of the Note, and any additional indebtedness accruing
to Beneficiary on account of any future payments, advances or expenditures made
by Beneficiary pursuant to the Note or this Deed of Trust and any additional
sums with interest thereon which may be loaned to Trustor by Beneficiary or
advanced under the Loan Documents (as hereinafter defined) (all hereinafter
sometimes collectively referred to as the "Indebtedness").
NOW, THEREFORE, Trustor, to secure payment of the Indebtedness and the
performance of the covenants and agreements herein contained to be performed by
Trustor, for good and valuable consideration in hand paid, the receipt and
sufficiency whereof are hereby acknowledged, and intending to be legally bound,
hereby agrees and covenants as follows:
1. Granting Clauses. Trustor hereby irrevocably and absolutely does by
these presents GRANT AND CONVEY, WARRANT, SET OVER, TRANSFER, ASSIGN, BARGAIN
AND SELL to Trustee, Trustee's heirs, and its successors and assigns, for the
benefit of Beneficiary, its successors and assigns, with all POWERS OF SALE and
all statutory rights under the laws of Arizona, and grants to Trustee, for the
benefit of Beneficiary, a security interest in, all of Trustor's present and
hereafter acquired estate, right, title and interest in, to and under the
following (collectively referred to herein as the "Premises"):
(a) That certain real property situated in Maricopa County, Arizona, and
more particularly described in Exhibit "A" attached hereto and incorporated
herein by this reference (the "Land"), together with all buildings, structures
and improvements now or hereafter erected on the Land, together with all
fixtures and items that are to become fixtures thereto (collectively, the
"Improvements");
(b) All and singular the easements, rights-of-way, licenses, permits,
rights of use or occupancy, privileges, tenements, appendages, hereditaments and
appurtenances and other rights and privileges attached or belonging to the Land
or Improvements or in anyway appertaining thereto, whether now or in the future,
and all the rents, issues and profits from the Land or Improvements;
(c) The land lying within any street, alley, avenue, roadway or
right-of-way open or proposed or hereafter vacated in front of or adjoining the
Land; and all right, title and interest, if any, of Trustor in and to any strips
and gores adjoining the Land;
(d) All machinery, apparatus, equipment, goods, systems, building
materials, carpeting, furnishings, fixtures and property of every kind and
nature whatsoever, now or hereafter located in or upon or affixed to the Land or
Improvements, or any part thereof, or used or usable in connection with any
construction on or any present or future operation of the Land or Improvements,
now owned or hereafter acquired by Trustor, including, but without limitation of
the generality of the foregoing: all heating, lighting, refrigerating,
ventilating, air-conditioning, air-cooling, fire extinguishing, plumbing,
cleaning, telephone, communications and power equipment, systems and apparatus;
and all elevators, switchboards, motors, pumps, screens, awnings, floor
coverings, cabinets, partitions, conduits, ducts and compressors; and all cranes
and craneways, oil storage, sprinkler/fire protection and water service
equipment; and also including any of such property stored on the Land or
Improvements or in warehouses and intended to be used in connection with or
incorporated into the Land or Improvements or for the pursuit of any other
activity in which Trustor may be engaged on the Land or Improvements, and
including without limitation all tools, musical instruments and systems, audio
or video equipment, cabinets, awnings, window shades, venetian blinds, drapes
and drapery rods and brackets, screens, carpeting and other window and floor
coverings, decorative fixtures, plants, cleaning apparatus, and cleaning
equipment, refrigeration equipment, cables, computers and computer equipment,
software, books, supplies, kitchen equipment, appliances, tractors, lawn mowers,
ground sweepers and tools, swimming pools, whirlpools, recreational or play
equipment together with all substitutions, accessions, repairs, additions and
replacements to any of the foregoing; it being understood and agreed that all
such machinery, equipment, apparatus, goods, systems, fixtures, and property are
a part of the Improvements and are declared to be a portion of the security for
the Indebtedness (whether in single units or centrally controlled, and whether
physically attached to said real estate or not), excluding, however, personal
property owned by tenants of the Land or Improvements; and
(e) Any and all awards, payments or insurance proceeds, including interest
thereon, and the right to receive the same, which may be paid or payable with
respect to the Land or Improvements or other properties described above as a
result of: (1) the exercise of the right of eminent domain or action in lieu
thereof; or (2) the alteration of the grade of any street; or (3) any fire,
casualty, accident, damage or other injury to or decrease in the value of the
Land or Improvements or other properties described above, to the extent of all
amounts which may be secured by this Deed of Trust at the date of receipt of any
such award or payment by Trustor or Beneficiary, and of the reasonable counsel
fees, costs and disbursements incurred by Trustor or Beneficiary in connection
with the collection of such award or payment. Trustor agrees to execute and
deliver, from time to time, such further instruments as may be requested by
Beneficiary to confirm such assignment to Beneficiary of any such award or
payment.
(f) All accounts receivable and any right of Trustor to payment for goods
sold or leased or for services rendered, whether or not yet earned by
performance, and whether or not evidenced by an instrument or chattel paper,
arising from the operation of the Premises, now existing or hereafter created,
substitutions therefor, proceeds thereof (whether cash or noncash, movable or
immovable, tangible or intangible) received upon the sale, exchange, transfer,
collection or other disposition or substitution thereof and any or all of the
foregoing and proceeds therefrom (collectively, the "Accounts");
(g) All authorizations, licenses, permits, contracts, management
agreements, franchise agreements, and occupancy and other certificates
concerning the ownership, use and operation of the Premises;
(h) All monies on deposit for the payment of real estate taxes or special
assessments against the Premises or for the payment of premiums on policies of
fire and other hazard insurance covering the Premises; all proceeds paid for
damage done to the Premises; all proceeds of any award or claim for damages for
the Premises taken or damaged under the power of eminent domain or by
condemnation; all rents, issues and leases of the Premises; and all tenants' or
security deposits held by Trustor in respect of the Premises;
(i) All names under or by which the Premises or any Improvements thereon
may at any time be operated or known, and all rights to carry on business under
any such names or any variant thereof, and all trademarks, trade names, patents,
patents pending and goodwill with respect to the Premises;
(j) All shares of stock or partnership interest or other evidence of
ownership of any part of the Premises that is owned by Trustor in common with
others, including all water stock relating to the Premises, if any, and all
documents of membership in any owners' or members' association or similar group
having responsibility for managing or operating any part of the Premises and any
management agreements;
(k) All plans and specifications prepared for construction of Improvements
on the Premises and all studies, data and drawings related thereto; and all
contracts and agreements of Trustor relating to the aforesaid plans and
specifications or to the aforesaid studies, data and drawings, or to the
construction of Improvements on the Premises;
(l) All of Trustor's right, title and interest in, to and under any and
all reserve, deposit or escrow accounts made pursuant to any loan document made
between Trustor and Beneficiary with respect to the Premises, together with all
income, profits, benefits and advantages arising therefrom;
(m) All goods, Accounts, general intangibles, chattel paper, instruments,
documents, consumer goods, equipment and inventory (as defined in the Arizona
Uniform Commercial Code ("UCC")) located on and used in the operation of the
Premises;
(n) All substitutions, accessions, additions and replacements to any of
the foregoing; and
(o) All products and proceeds of any of the foregoing, or with respect to
the Premises, including without limitation, insurance proceeds, proceeds of any
voluntary or involuntary disposition or diminution in value of any of the
foregoing or of the Premises, and any claim respecting any thereof (pursuant to
judgment, condemnation award or otherwise) and all goods, accounts, general
intangibles, chattel paper, instruments, documents, consumer goods, equipment
and inventory, wherever located, acquired with the proceeds of any of the
foregoing or proceeds thereof. For purposes of this Deed of Trust, the term
"proceeds" means whatever is received when any of the foregoing or the proceeds
thereof (including, without limitation, cash proceeds) is sold, exchanged or
otherwise disposed of (including involuntary dispositions or destruction and
claims for damages thereto), including without limitation cash proceeds,
insurance proceeds, condemnation proceeds, and any other rights or property
arising under or receivable upon any such disposition.
The parties intend the definition of Premises to be broadly construed and
in the case of doubt as to whether a particular item is to be included in the
definition of Premises, the doubt should be resolved in favor of inclusion.
TO HAVE AND TO HOLD the Premises with all rights, privileges and
appurtenances thereunto belonging, and all income, rents, royalties, revenues,
issues, profits and proceeds therefrom, unto Beneficiary, its successors and
assigns, forever, for the uses and purposes herein expressed.
THIS DEED OF TRUST IS GIVEN TO SECURE: Payment of the Indebtedness;
payment of such additional sums with interest thereon which may hereafter be
loaned to Trustor by Beneficiary pursuant to the Note or Deed of Trust or
otherwise advanced under the Loan Documents (the "Loan), including without
limitation advances made by Beneficiary to protect the Premises or the lien of
this Deed of Trust or to pay taxes, assessments, insurance premiums, and all
other amounts that Trustor has agreed to pay pursuant to the provisions hereof
or that Beneficiary has incurred by reason of the occurrence of an Event of
Default (as hereinafter defined), including without limitation, advances made to
enable the completion of the Improvements or any restoration thereof, even
though the aggregate amount outstanding at any time may exceed the original
principal balance stated herein and in the Note; and the due, prompt and
complete performance of each and every covenant, condition and agreement
contained in this Deed of Trust, the Note, and every other agreement, document
and instrument to which reference is expressly made in this Deed of Trust or
which at any time evidences or secures the Indebtedness evidenced by the Note
(this Deed of Trust, the Note and all such other agreements, documents and
instruments evidencing, securing and otherwise relating to the Note, but
excluding the certain Environmental Indemnification Agreement executed by
Trustor, are hereinafter sometimes collectively referred to as the "Loan
Documents"). Trustor hereby warrants that Trustor has good and marketable title
to the Premises, is lawfully seized and possessed of the Premises and every part
thereof, and has the right to convey same; that Trustor will forever warrant and
defend the title to the Premises unto Beneficiary against the claims of all
persons whomsoever; and that the Premises are unencumbered except as set forth
on Beneficiary's title insurance policy dated on or about even date herewith
regarding the Premises.
2. Maintenance, Repair and Restoration of Improvements, Payment of Prior
Liens, etc. Trustor shall: (a) promptly repair, restore or rebuild any
Improvements now or hereafter on the Premises which may become damaged or be
destroyed (except to the extent Beneficiary receives insurance proceeds
resulting from such damage or destruction which Beneficiary does not make
available to Trustor for such repair, restoration or rebuilding), such
Improvements to be of at least equal value and substantially the same character
as prior to such damage or destruction; (b) keep the Premises in good condition
and repair, without waste, and free from mechanics' liens or other liens or
claims for lien (except the lien of current general taxes duly levied and
assessed but not yet due and payable); (c) subject to Paragraph 3(b) below,
immediately pay when due or within any applicable grace period any indebtedness
which may be secured by a lien or charge on the Premises (no such lien, except
for current general taxes duly levied and assessed but not yet payable, to be
permitted hereunder), and upon request exhibit satisfactory evidence to
Beneficiary of the discharge of such lien; (d) complete within a reasonable time
any Improvements now or at any time in process of erection upon the Land; (e)
comply with all requirements of law (including, without limitation, pollution
control and environmental protection laws and laws relating to the accommodation
of persons with disabilities), ordinance or other governmental regulation in
effect from time to time affecting the Premises and the use thereof, and
covenants, easements and restrictions of record with respect to the Premises and
the use thereof; (f) make no material alterations in the Premises (except for
changes which may be necessary to comply with the Americans with Disabilities
Act and other nonstructural changes to the Improvements which do not reduce or
otherwise materially alter the size of the Improvements, provided that, no party
making such alterations to the Improvements shall be entitled to claims for
labor, materials and supplies or otherwise, which if unpaid, might become a Lien
or charge upon the Premises or any part thereof which could have priority over
the lien of this Deed of Trust or any other security instrument held by
Beneficiary; (g) suffer or permit no material change in the general nature of
the use of the Premises, without Beneficiary's written consent (which consent
shall not be unreasonably withheld or delayed); (h) initiate or acquiesce in no
zoning reclassification or variance with respect to the Premises without
Beneficiary's written consent; and (i) pay each item of Indebtedness when due
according to the terms hereof or of the Note.
3. Payment of Taxes; Contest of Impositions.
(a) Trustor shall pay thirty (30) days before any delinquency or any
penalty or interest attaches all general taxes, special taxes, special
assessments, water charges, sewer service charges, and all other charges against
the Premises of any nature whatsoever when due, and shall, upon written request,
furnish to Beneficiary duplicate receipts therefor.
(b) Notwithstanding anything contained herein to the contrary, Trustor
shall not be required to pay or discharge any taxes, assessments or other
charges of the nature referred to in Paragraph 2 above and this Paragraph 3 so
long as the Trustor shall in good faith contest the same or the validity thereof
by appropriate legal proceedings which shall operate to prevent the collection
of the levy, lien or imposition so contested and the sale of the Premises, or
any part thereof, to satisfy any obligation arising therefrom, provided that the
Trustor shall give such security and in such amounts as may be reasonably
demanded by the Beneficiary to insure such payments and prevent any sale or
forfeiture of the Premises by reason of such nonpayment, failure of performance
or contest by Trustor. Any such contest shall be prosecuted with due diligence
and the Trustor shall promptly after final determination thereof pay the amount
of any levy, lien or imposition so determined, together with all interest and
penalties, which may be payable in connection therewith. Notwithstanding the
provisions of this Paragraph 3, Trustor shall (and if Trustor shall fail so to
do, Beneficiary may but shall not be required to) pay any such levy, lien or
imposition notwithstanding such contest if in the reasonable opinion of the
Beneficiary, the Premises shall be in jeopardy or in danger of being forfeited
or foreclosed.
4. Tax Deposits. Except as may otherwise be agreed by Beneficiary in
writing, Trustor covenants and agrees to deposit with such depositary as the
Beneficiary from time to time may in writing appoint, and in the absence of such
appointment, then at the office of Beneficiary, c/o ING Investment Management
LLC, 5780 Powers Ferry Road, NW, Suite 300, Atlanta, Georgia 30327-4349,
Attention: Mortgage Loan Servicing Department, commencing on the date of
disbursement of the loan secured hereby and on the first day of each month
following the month in which said disbursement occurred until the Indebtedness
is fully paid, a sum equal to one-twelfth (1/12th) of the last total annual
taxes and assessments for the last ascertainable year (if the current year's
taxes and assessments are not yet ascertainable) (general and special) on the
Premises (unless said taxes are based upon assessments which exclude the
Improvements or any part thereof now constructed or to be constructed, in which
event the amount of such deposits shall be based upon the Beneficiary's
reasonable estimate as to the amount of taxes and assessments to be levied and
assessed). Such deposits are to be held without any allowance of interest
(unless local law requires otherwise) and are to be used for the payment of
taxes and assessments (general and special) on the Premises next due and payable
when they become due. Upon demand by such depositary, Trustor shall deliver and
pay over to such depositary from time to time such additional sums or such
additional security as are necessary to make up any deficiency in the amount
necessary to enable such depositary to fully pay any of the items hereinabove
mentioned as they become payable. If the funds so deposited exceed the amount
required to pay such items hereinabove mentioned for any year, the excess shall
be applied on a subsequent deposit or deposits. Said deposits need not be kept
separate and apart from any other funds of Beneficiary or such depositary.
If any such taxes or assessments (general or special) shall be levied,
charged, assessed or imposed upon or for the Premises, or any portion thereof,
and if such taxes or assessments shall also be a levy, charge, assessment or
imposition upon or for any other property not covered by the lien of this Deed
of Trust, then the computation of any amount to be deposited under this
Paragraph 4 shall be based upon the entire amount of such taxes or assessments,
and Trustor shall not have the right to apportion the amount of any such taxes
or assessments for the purposes of such computation.
5. Beneficiary's Interest In and Use of Deposits. Upon the occurrence of
an Event of Default, Beneficiary may at its option, without being required to do
so, apply any monies at the time on deposit pursuant to Paragraphs 4 and 7
hereof, on any of Trustor's obligations herein or in the Note or any of the Loan
Documents contained, in such order and manner as the Beneficiary may elect. When
the Indebtedness has been fully paid, any remaining deposits shall be paid to
Trustor or to the then owner or owners of the Premises. A security interest
within the meaning of the Arizona Uniform Commercial Code ("UCC") is hereby
granted to the Beneficiary in and to any monies at any time on deposit pursuant
to Paragraphs 4 and 7 hereof and such monies and all of Trustor's right, title
and interest therein are hereby assigned to Beneficiary, all as additional
security for the Indebtedness and shall in the absence of the occurrence of an
Event of Default be applied by the depositary for the purposes for which made
hereunder and shall not be subject to the direction or control of Trustor;
provided, however, that neither Beneficiary nor said depositary shall be liable
for any failure to apply to the payment of taxes and assessments and insurance
premiums any amount so deposited. Neither Beneficiary nor any depositary
hereunder shall be liable for any act or omission taken in good faith or
pursuant to the instruction of any party but only for its willful misconduct.
Trustor agrees to cooperate with Beneficiary in executing a control agreement,
if necessary, with the depositary chosen to manage the deposit account
envisioned by Paragraphs 4 and 7 for the purpose of perfecting the security
interest in said account.
6. Insurance.
(a) Until the Indebtedness is fully paid, the Improvements and all
fixtures, equipment and property therein contained or installed shall be kept
unceasingly insured against loss and damage by such hazards, casualties and
contingencies in such amounts and for such periods as may from time to time be
required by Beneficiary. All insurance shall be written in policies and by
insurance companies approved by Beneficiary which approval shall not be
unreasonably withheld so long as a Best Class rating of at least A X is
maintained and the policy otherwise conforms to the terms hereof. All policies
of insurance and renewals thereof shall contain standard noncontributory
mortgagee loss payable clauses to Beneficiary and shall provide for at least
thirty (30) days prior written notice of cancellation to Beneficiary as well as
a waiver of subrogation endorsement, all as required by Beneficiary, in form and
content acceptable to Beneficiary. All policies (or duplicate certified copies
or certificates thereof) shall, with all premiums fully paid, be delivered to
Beneficiary as issued at least thirty (30) days before the expiration of
existing policies and shall be held by Beneficiary until all sums hereby secured
are fully paid. Upon request by Beneficiary, Trustor shall furnish Beneficiary
evidence of the replacement cost of the Improvements. In case of sale pursuant
to a foreclosure of this Deed of Trust or other transfer of title to the
Premises and extinguishment of the Indebtedness, complete title to all policies,
other than liability insurance policies, held by Beneficiary and all prepaid or
unearned premiums thereon shall pass to and vest in the purchaser or grantee.
Beneficiary shall not by reason of accepting, rejecting, approving or obtaining
insurance incur any liability for payment of losses.
(b) Without in any way limiting the generality of the foregoing, Trustor
covenants and agrees to maintain insurance coverage on the Premises which shall
include: (i) all risk coverage property insurance (insuring against special
causes of loss) for an amount equal to one hundred percent (100%) of the full
replacement cost of the Improvements, written on a replacement cost basis and
with a Replacement Cost Endorsement (without depreciation), an Increased Cost of
Construction Endorsement with an Agreed Amount Endorsement (pertaining to the
co-insurance clause), and containing a mortgagee clause in Beneficiary's favor;
and if at any time a dispute arises with respect to replacement cost, Trustor
agrees to provide at Trustor's expense, an insurance appraisal prepared by an
insurance appraiser approved by Beneficiary, establishing the full replacement
cost in a manner satisfactory to the insurance carrier ("full replacement cost"
shall mean the cost of replacing the Improvements and personal property without
deduction for physical depreciation); (ii) rent loss insurance insuring against
loss arising out of the perils insured against in the policy or policies
referred to in clause (i) above, in an amount equal to not less than gross
revenue from the Premises for twelve (12) months from the operation and rental
of all Improvements now or hereafter forming part of the Premises, based upon
one hundred percent (100%) occupancy of such Improvements, less any allocable
charges and expenses which do not continue during the period of restoration and
naming Beneficiary in a standard mortgagee loss payable clause thereunder; (iii)
commercial general liability insurance with a broad form coverage endorsement
for an amount as required from time to time by the Beneficiary but not less than
an aggregate amount of Three Million and No/100 Dollars ($3,000,000.00) with a
single occurrence limit of not less than Three Million and No/100 Dollars
($3,000,000.00) for claims arising from any one (1) accident or occurrence in or
upon the Premises and naming Beneficiary as an additional insured thereunder;
(iv) flood insurance whenever in Beneficiary's judgment such protection is
necessary and is available and in such case in an amount acceptable to
Beneficiary and naming Beneficiary as the loss payee thereunder; (v) insurance
covering pressure vessels, pressure piping and machinery, if any, and all major
components of any centralized heating or air-conditioning systems located in the
Improvements, in an amount satisfactory to Beneficiary, such policies also to
insure against physical damage to such buildings and improvements arising out of
peril covered thereunder; and (vi) such other insurance that may be reasonably
required from time to time by Beneficiary.
(c) Trustor shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained hereunder.
7. Insurance Premium Deposits. Except as may otherwise been agreed by
Beneficiary in writing, Trustor further covenants and agrees that for the
purpose of providing funds with which to pay the premiums as the same become due
on the policies of insurance as herein covenanted to be furnished by the
Trustor, Trustor shall deposit with Beneficiary or the depositary referred to in
Paragraph 4 hereof on the date of disbursement of the proceeds of the Loan
secured hereby and on the first day of each month following the month in which
said disbursement occurred, an amount equal to the annual premiums that will
next become due and payable on such policies less any amount then on deposit
with the Beneficiary or such depositary, divided by the number of months to
elapse thirty (30) days prior to the date when such premiums become delinquent.
No interest shall be allowed to Trustor on account of any deposit or deposits
made hereunder and said deposits need not be kept separate and apart from any
other funds of Beneficiary or such depositary.
8. Adjustment of Losses with Insurer and Application of Proceeds of
Insurance.
(a) In case of loss or damage by fire or other casualty, Trustor shall
immediately give Beneficiary and the insurance companies that have insured
against such risks written notice of such occurrence.
(b) In case of loss or damage by fire or other casualty, Trustor shall, if
no Event of Default then exists hereunder, have the sole and exclusive right to
settle, compromise or adjust any claim under, and receive, for the purpose of
rebuilding and restoration, the proceeds arising from, any and all losses
payable under insurance policies to the extent the amount thereof does not
exceed One Hundred Thousand and No/100 Dollars ($100,000), and all claims for
losses in excess of said amount shall be settled, compromised or adjusted only
with the mutual agreement of Trustor and Beneficiary and the proceeds paid as
hereinafter provided. In the event insurance proceeds in excess of One Hundred
Thousand and No/100 Dollars ($100,000) are payable or if an Event of Default
exists hereunder, then in either of such events, Beneficiary is authorized to
collect and receipt for any insurance proceeds. Insurance proceeds collected by
Beneficiary as aforesaid, after deducting therefrom any expenses incurred in the
collection thereof, shall, if requested by Trustor in writing within thirty (30)
days after the proceeds of insurance covering such damage or destruction become
available, be made available to Trustor for the purpose of paying the cost of
rebuilding or restoring of the Improvements if (i) the Premises, in
Beneficiary's sole and absolute discretion is capable of being restored to that
condition which existed immediately prior to the damage or loss, (ii) the
insurance proceeds, together with all other funds which are to be provided by
Trustor, are sufficient to restore the Premises, (iii) Beneficiary determines
that income from the Premises shall not be materially affected following the
completion of the restoration or rebuilding; and (iv) no Event of Default then
exists hereunder or under any other Loan Document, and no circumstance or
condition exists that would constitute an Event of Default upon the giving of
notice or the passage of time, or both. In the event that Beneficiary makes said
proceeds available to Trustor to pay the cost of rebuilding or restoring of the
Improvements, such proceeds shall be made available in the manner and under the
conditions that the Beneficiary may reasonably require to assure proper
application of such proceeds. In the event such insurance proceeds are made
available by the Beneficiary, the Trustor shall pay all costs incurred by
Beneficiary in connection with the application of such insurance proceeds
(including but not limited to reasonable costs incurred by Beneficiary, and a
title company or agent approved by Beneficiary in overseeing the disbursement of
such insurance proceeds). Except to the extent Beneficiary receives insurance
proceeds resulting from loss or damage by fire or casualty which Beneficiary
does not make available to Trustor in the manner provided in this paragraph for
such restoration or rebuilding, the Improvements shall be restored or rebuilt so
as to be of at least equal value and substantially the same character as prior
to such damage or destruction. If the projected cost of rebuilding, repairing or
restoring of the Improvements exceeds the sum of One Hundred Thousand and No/100
Dollars ($100,000), then insurance proceeds shall not be made available to
Trustor unless and until Beneficiary has approved plans and specifications for
the proposed rebuilding and restoration, which approval shall not be
unreasonably withheld. If the proceeds are to be made available by Beneficiary
to Trustor to pay the cost of said rebuilding or restoration, any surplus which
may remain out of said insurance proceeds after payment of the costs of
rebuilding or restoring the Premises shall, at the option of the Beneficiary, be
applied on account of the Indebtedness or be paid to any party entitled thereto
under such conditions as Beneficiary may reasonably require. No interest shall
be allowed to Trustor on any proceeds of insurance held by Beneficiary.
(c) In the event proceeds of insurance are not made available to Trustor
for the purpose of paying the cost of the rebuilding or restoring of the
Improvements, Beneficiary, after deducting the costs of any collection,
adjustment and compromise, shall apply such insurance proceeds in accordance
with terms of the Note upon the Indebtedness, provided that any amount so
applied by Beneficiary in reduction of the outstanding principal balance of the
Note shall be credited to installments of principal in the inverse order of
their maturity but no such application shall delay or postpone any installment
payment of principal and interest under the Note.
9. Stamp Tax. If, by the laws of the United States of America, or of any
state having jurisdiction over Trustor, any tax is due or becomes due in respect
of the issuance of the Note hereby secured and this Deed of Trust, Trustor
covenants and agrees to pay such tax in the manner required by any such law.
Trustor further covenants to reimburse Beneficiary for any sums which
Beneficiary reasonably expends by reason of the imposition of any tax on the
issuance of the Note secured hereby and this Deed of Trust.
10. Observance of Lease Assignment.
(a) As additional security for the payment of the Note secured hereby and
for the faithful performance of the terms and conditions contained herein,
Trustor, as landlord, has assigned to Beneficiary, by that certain Assignment of
Rents and Leases dated on or about this same date (the "Assignment of Rents"),
all of Trustor's right, title and interest as landlord in and to all leases or
other rights of use and or occupancy of any part of the Premises, both present
and future (hereinafter collectively referred to as the "Leases") and all of the
rents, issues, profits, royalties, revenues and proceeds arising in connection
with the ownership, use or operation of the Premises, including without
limitation rents, issues and profits from the Leases or guaranties thereof
(hereinafter collectively referred to as the "Rents").
(b) All Leases entered into after the date hereof are subject to the
approval of Beneficiary as to form and content, which approval shall not be
unreasonably withheld, and Trustor will not, without Beneficiary's prior written
consent, make any Lease except in the ordinary course for actual occupancy by
the tenant thereunder pursuant to a standard lease form approved by Beneficiary.
As of the date hereof, Trustor has submitted to Beneficiary, and Beneficiary has
approved, Trustor's standard lease form, and as long as such approved form is
used by Trustor, no further approval of Beneficiary is required; provided,
however, that (i) no lease shall have a term of more than twenty-four (24)
months, and (ii) no Lease shall contain an option to purchase the Premises or
any part thereof; and (iii) Beneficiary may, in the exercise of its reasonable
discretion, require such modifications of or additions to such approved form at
any time during the term of this Deed of Trust as it reasonably determines to be
required to maintain the security intended to be afforded by the Assignment of
Rents.
(c) Trustor will not, without Beneficiary's prior written consent: (i)
execute an assignment or pledge of any Rents and/or any Leases; or (ii) accept
any prepayment of any installment of any Rents more than thirty (30) days before
the due date of such installment, and in any event no more than thirty (30) days
in advance of the then current month.
(d) Trustor at its sole cost and expense will: (i) at all times promptly
and faithfully abide by, discharge and perform all material covenants,
conditions and agreements contained in all Leases, on the part of the landlord
thereunder to be kept and performed; (ii) enforce or secure the performance of
all material covenants, conditions and agreements of the Leases on the part of
the lessees to be kept and performed, but except in the ordinary course of
business Trustor shall not modify, amend, renew, extend, cancel, terminate or
accept surrender of any Lease without the prior written consent of Beneficiary;
(iii) appear in and defend any material action or proceeding arising under,
growing out of or in any manner connected with the Leases or material
obligations, duties or liabilities of landlord or of the lessees thereunder;
(iv) upon written request of Beneficiary, transfer and assign to Beneficiary,
any Lease or Leases heretofore or hereafter entered into, and make, execute and
deliver to Beneficiary upon demand, any and all instruments required to
effectuate said assignment; (v) furnish Beneficiary, within twenty (20) days
after a request by Beneficiary so to do, a written statement containing the
names of all lessees, terms of all Leases, including the spaces occupied and the
rentals payable thereunder; and (vi) exercise within five (5) days of any demand
therefor by Beneficiary any right to request from the lessee under any Lease a
certificate with respect to the status thereof.
(e) Nothing in this Deed of Trust or in any other documents relating to
the loan secured hereby shall be construed to obligate Beneficiary, expressly or
by implication, to perform any of the covenants of Trustor as landlord under any
of the Leases assigned to Beneficiary or to pay any sum of money or damages
therein provided to be paid by the landlord, each and all of which covenants and
payments Trustor agrees to perform and pay.
(f) Trustor will not permit any Lease or any part thereof to become
subordinate to any lien other than the lien hereof.
(g) Beneficiary shall have the option to declare this Deed of Trust in
default because of a default of landlord in any Lease of the Premises unless
such default is cured by Trustor pursuant to the terms of the Lease and within
any applicable cure period or unless such default would not permit the tenant to
terminate the Lease. It is covenanted and agreed that an Event of Default under
the Assignment of Rents shall constitute an Event of Default hereunder on
account of which the whole of the Indebtedness shall at once, at the option of
the Beneficiary, become immediately due and payable without notice to the
Trustor.
(h) Trustor shall not, and shall not permit any tenant to, conduct any
on-site dry cleaning operations on the Premises.
11. Effect of Extension of Time. If the payment of the Indebtedness, or
any part thereof, is extended or varied, or if any part of any security for the
payment of the Indebtedness is released, or if any person or entity liable for
the payment of the Indebtedness is released, or if Beneficiary takes other or
additional security for the payment of the Indebtedness, or if Beneficiary
waives or fails to exercise any right granted herein, or in the Note secured
hereby, or in any other instrument given to secure the payment hereof, then all
persons now or at any time hereafter liable for the payment of the Indebtedness,
or any part thereof, or interested in the Premises shall be held to assent to
such extension, variation, release, waiver, failure to exercise or the taking of
additional security, and their liability and the lien and all provisions hereof
shall continue in full force, the right of recourse against all such persons
being expressly reserved by Beneficiary (subject to the non-recourse provisions
of the Loan Documents), notwithstanding such extension, variation, release,
waiver, failure to exercise, or the taking of additional security.
12. Effect of Changes in Laws Regarding Taxation. In the event of the
enactment after this date of any law of the state in which the Premises are
located deducting from the value of the Premises for the purpose of taxation any
lien thereon, or imposing upon the Beneficiary the payment of the whole or any
part of the taxes or assessments or charges or liens herein required to be paid
by Trustor, or changing in any way the laws relating to the taxation of
mortgages or debts secured by mortgages or Beneficiary's interest in the
Premises, or the manner of collection of taxes, so as to affect this Deed of
Trust or the debt secured hereby or the holders thereof, then, and in any such
event, Trustor, upon demand by Beneficiary, shall pay such taxes or assessments,
or reimburse Beneficiary therefor if Beneficiary pays such taxes and submits
proof of payment to Trustor; provided, however, that if in the opinion of
counsel for Beneficiary: (a) it might be unlawful to require Trustor to make
such payment, or (b) the making of such payment might result in the imposition
of interest beyond the maximum amount permitted by law; then and in such event,
Beneficiary may elect, by notice in writing given to Trustor, to declare all of
the Indebtedness to be and become due and payable sixty (60) days from the
giving of such notice, without the applicable Prepayment Premium (as defined in
the Note).
13. Beneficiary's Performance of Defaulted Acts. Upon the occurrence of an
Event of Default herein, Beneficiary may, but need not, and whether electing to
declare the whole of the Indebtedness due and payable or not, and without waiver
of any other remedy, make any payment or perform any act herein required of
Trustor in any form and manner deemed expedient, and may, but need not, make
full or partial payments of principal or interest on prior encumbrances, if any,
and purchase, discharge, compromise or settle any tax lien or other prior lien
or title or claim thereof, or redeem from any tax sale or forfeiture affecting
the Premises or contest any tax or assessment or cure any default of Trustor as
landlord in any Lease. All monies paid for any of the purposes herein authorized
and all expenses paid or incurred in connection therewith, including attorneys'
fees, and any other monies advanced by Beneficiary in regard to any tax referred
to in Paragraphs 9 and 12 hereof or to protect the Premises or the lien hereof,
shall be additional Indebtedness and shall become immediately due and payable
within ten (10) days of Trustor's receipt of a written demand therefore, and if
not paid in such ten (10) day period, shall become additional Indebtedness with
interest thereon at the Default Rate of interest set forth in the Note. Inaction
of Beneficiary shall never be considered as a waiver of any right accruing to it
on account of any Event of Default on the part of Trustor.
14. Beneficiary's Reliance on Tax Bills, Etc. Beneficiary in making any
payment hereby authorized: (a) relating to taxes and assessments, may do so
according to any bill, statement or estimate procured from the appropriate
public office without inquiry into the accuracy of such bill, statement or
estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien
or title or claim thereof; or (b) relating to insurance premiums, may do so
according to any bill or statement procured from the appropriate company without
inquiry into the accuracy of such bill or statement; or (c) for the purchase,
discharge, compromise or settlement of any other prior lien, may do so without
inquiry as to the validity or amount of any claim for lien which may be
asserted.
15. Acceleration of Indebtedness in Event of Default. It is expressly
agreed by Trustor that time is of the essence hereof and that the whole of the
Indebtedness shall become immediately due and payable without notice to Trustor
at the option of the Beneficiary upon the occurrence of one or more of the
following events (hereinbefore and hereinafter collectively referred to as
"Events of Default" and individually referred to as an "Event of Default"),
together with a prepayment premium in the amount, if any, required to be paid
pursuant to the terms of the Note in the event of a prepayment:
(a) nonpayment of any monetary sum due hereunder within ten (10) days
after the same shall become due; or
(b) default shall be made in the due observance or performance of the
terms and conditions of Paragraph 6 hereof (Insurance) or Paragraph 30 hereof
(Due on Sale or Further Encumbrance); or
(c) default shall be made in the due observance or performance of any of
the other covenants, agreements or conditions hereinbefore or hereinafter
contained, required to be kept or performed or observed by the Trustor which
does not relate to the nonpayment of any monetary sum, and such default is not
cured within thirty (30) days following written notice thereof by Beneficiary to
Trustor or within such longer period of time, not exceeding an additional thirty
(30) days, as may be reasonably necessary to cure such non-compliance if Trustor
is diligently and with continuity of effort pursuing such cure and the failure
is susceptible of cure within an additional period of thirty (30) days; or
(d) the entry of a decree or order for relief by a court having
jurisdiction in respect of Trustor, a general partner of Trustor if Trustor is a
partnership, the beneficiary or beneficiaries of Trustor if Trustor is a trust,
a managing member of Trustor if Trustor is a limited liability company, or any
guarantor of the Note secured hereby (any of the foregoing parties being
referred to herein as a "Key Party"), in any involuntary case under the federal
bankruptcy laws now or hereafter constituted, or any other applicable federal or
state bankruptcy, insolvency or other similar law, or for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) for any Key Party or any substantial part of the property of
any such Key Party, or for the winding up or liquidation of the affairs of any
Key Party and the continuance of any such decree or order unstayed and in effect
for a period of sixty (60) consecutive days; or
(e) the commencement by any Key Party, of a voluntary case under federal
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or any other similar laws or
the consent by any such Key Party to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of any Key Party, or of any substantial part of the property
of any such person or entity, or the making by any such Key Party of an
assignment for the benefit of creditors or the failure of any such Key Party
generally to pay the debts of any such Key Party as such debts become due, or
the taking of action by any such Key Party in furtherance of any of the
foregoing; or
(f) the death of any guarantor of the Note secured hereby, unless a
substitute guarantor or guarantors having a net worth or an aggregate net worth,
as the case may be, equal to or greater than the net worth of the decedent upon
the date hereof shall become liable by assumption under the guaranty within
thirty (30) days of the death of such guarantor; or
(g) any warranty, representation, certification, financial statement, or
other information furnished or to be furnished to Beneficiary by or on behalf of
Trustor or any guarantor of the Note to induce Beneficiary to loan the money
evidenced by the Note proves to have been inaccurate or false in any material
respect when made; or
(h) any breach, default, event of default or failure of performance
(however denominated) under the Note or any of the other Loan Documents and the
expiration of any applicable cure period without the same having been cured; or
(i) Trustor shall be in default of, or in violation of, beyond any
applicable grace period, any conditions, covenants or restrictions which benefit
or burden the Premises.
Notwithstanding the foregoing, no Event of Default shall arise under
subparagraph 14(a) (although Trustor shall be liable for any applicable Late
Charge (as defined in the Note)) unless Beneficiary shall provide written notice
of such failure and permit Trustor to cure such failure within ten (10) days
after the giving of such notice, provided, however, that in no event shall
Beneficiary be required to provide such notice and allow such opportunity to
cure more than one (1) time during any calendar year.
If, while any insurance proceeds or condemnation awards are being held by
Beneficiary to reimburse Trustor for the cost of rebuilding or restoration of
buildings or improvements on the Premises, Beneficiary shall accelerate the
Indebtedness, then and in such event, the Beneficiary shall be entitled to apply
all such insurance proceeds and condemnation awards then held by it in reduction
of the Indebtedness and any excess held by it over the amount of Indebtedness
then due hereunder shall be returned to Trustor or any other party entitled
thereto without interest.
16. Acceleration of Indebtedness; Remedies.
(a) Primary Remedies. If an Event of Default shall occur, Beneficiary may:
declare the Indebtedness to be and the same shall be, immediately due and
payable without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived and without regard to the value of the property held
as security for the Indebtedness or the solvency of any person liable for the
payment of such Indebtedness; and/or exercise any other right, power or remedy
available to it at law or in equity, hereunder or under any other Loan Document
without demand, protest or notice of any kind, all of which are hereby expressly
waived, except such as is expressly required hereby or by such other Loan
Document. Without limiting the generality of the foregoing, Beneficiary may:
(i) Enter and take possession of the Premises or any part thereof,
exclude Trustor and all persons claiming under Trustor wholly or partly
therefrom, and operate, use, manage and control the same, or cause the
same to be operated by a person selected by Beneficiary, either in the
name of Trustor or otherwise, and upon such entry, from time to time, at
the expense of Trustor and of the Premises, make all such repairs,
replacements, alterations, additions or improvements thereto as
Beneficiary may deem proper, and to lease the Premises or any part thereof
at such rental and to such persons as it may deem proper and collect and
receive the rents, revenues, issues, profits, royalties, income and
benefits thereof including, without limitation, those past due and those
thereafter accruing, with the right of Beneficiary to terminate, cancel or
otherwise enforce any Lease or sublease for any default that would entitle
Trustor to terminate, cancel or enforce same and apply the same to the
payment of all expenses which Beneficiary may be authorized to incur under
the provisions of this Deed of Trust and applicable laws, the remainder to
be applied to the payment, performance and discharge of the Indebtedness
in such order as Beneficiary may determine until the same have been paid
in full.
(ii) Institute an action for the foreclosure of this Deed of Trust
and the sale of the Premises pursuant to the judgment or decree of a court
of competent jurisdiction.
(iii) Sell the Premises, pursuant to the power of sale granted
herein, to the highest bidder or bidders at public auction at a sale or
sales held at such place or places and time or times and upon such notice
and otherwise in such manner as may be required by law, or in the absence
of any such requirement, as Beneficiary may deem appropriate, and from
time to time adjourn such sale by announcement at the time and place
specified for such sale or for such adjourned sale or sales without
further notice except such as may be required by law.
(iv) Take all action to protect and enforce the rights of
Beneficiary under this Deed of Trust by suit for specific performance of
any covenant herein contained, or in aid of the execution of any power
herein granted or for the enforcement of any other rights.
(v) Exercise any or all of the rights and remedies available to a
secured party under the UCC, including the right to (A) enter the Premises
and take possession of any personal property without demand or notice and
without prior judicial hearing or legal proceedings, which Trustor hereby
expressly waives, (B) require Trustor to assemble any personal property,
or any portion thereof, and make it available to Beneficiary at a place or
places designated by Beneficiary and reasonably convenient to both parties
and (C) sell all or any portion of the personal property at public or
private sale, without prior notice to Trustor except as otherwise required
by law (and if notice is required by law, after ten days' prior written
notice), at such place or places and at such time or times and in such
manner and upon such terms, whether for cash or on credit, as Beneficiary
in its sole discretion may determine. As to any property subject to
Article 9 of the UCC included in the Premises, Beneficiary may proceed
under the UCC or proceed as to both real and personal property in
accordance with the provisions of this Deed of Trust and the rights and
remedies that Beneficiary may have at law or in equity, in respect of real
property, and treat both the real and personal property included in the
Premises as one parcel or package of security. Trustor shall have the
burden of proving that any such sale pursuant to the UCC was conducted in
a commercially unreasonable manner.
(vi) Terminate any management agreements, contracts, or
agents/managers responsible for the property management of the Premises,
if in the sole discretion of Beneficiary such property management is
unsatisfactory in any respect.
(vii) Foreclose this Deed of Trust, at Beneficiary's option, by
judicial or non-judicial foreclosure, for the entire unpaid amount of the
Indebtedness, or only as to the sum past due, with interest and costs
without injury to this Deed of Trust or the displacement or impairment of
the remainder of the lien thereof, and at such foreclosure sale the
Premises shall be sold subject to all remaining items of the Indebtedness
and Beneficiary may again foreclose, in the same manner, as often as there
may be any sum past due. In case of sale in any action or proceeding to
foreclose this Deed of Trust, the Beneficiary shall have the right to sell
the Premises covered hereby in parts or as an entirety. It is intended
hereby to give to the Beneficiary the widest possible discretion permitted
by law with respect to all aspects of any such sale or sales.
(viii) If an Event of Default occurs due to the nonpayment of the
Indebtedness, or any part thereof, as an alternative to the right of
foreclosure for the full Indebtedness after acceleration thereof,
Beneficiary shall have the right to institute proceedings, either judicial
or non-judicial, at Beneficiary's option, for partial foreclosure with
respect to the portion of said Indebtedness so in default, as if under a
full foreclosure, and without declaring the entire Indebtedness due (such
proceedings being hereinafter referred to as "Partial Foreclosure"), and
provided that if a foreclosure sale is made because of an Event of Default
in the payment of a part of the Indebtedness, such sale may be made
subject to the continuing lien of this Deed of Trust for the unmatured
part of the Indebtedness; and it is agreed that such sale pursuant to a
Partial Foreclosure, if so made, shall not in any manner affect the
unmatured part of the Indebtedness, but as to such unmatured part, this
Deed of Trust and the lien thereof shall remain in full force and effect
just as though no foreclosure sale had been made under the provisions of
this Paragraph. Notwithstanding any Partial Foreclosure, Beneficiary may
elect, at any time prior to sale pursuant to such Partial Foreclosure, to
discontinue such Partial Foreclosure and to accelerate the Indebtedness by
reason of any Event of Default upon which such Partial Foreclosure was
predicated or by reason of any other further Event of Default, and proceed
with full foreclosure proceedings. It is further agreed that several
foreclosures may be made pursuant to Partial Foreclosure without
exhausting the right of full or Partial Foreclosure sale for any unmatured
part of the Indebtedness, it being the purpose to provide for a Partial
Foreclosure sale of the Indebtedness hereby without exhausting the power
to foreclose and to sell the Premises pursuant to any such Partial
Foreclosure for any other part of the Indebtedness, whether matured at the
time or subsequently maturing, and without exhausting any right of
acceleration and full foreclosure.
(b) Receiver. If an Event of Default shall occur, Beneficiary shall be
entitled as a matter of right to the appointment of a receiver of the Premises
and the rents, revenues, issues, profits, royalties, income and benefits
thereof, without notice or demand, and without regard to the adequacy of the
security for the Indebtedness, the value of the Premises or the solvency of
Trustor, either before or after any sale, and, Beneficiary may be appointed as
such receiver. Such receiver shall have the power: (i) to collect the rents,
issues and profits of the Premises during the pendency of any foreclosure
proceedings whether by judicial or non-judicial foreclosure, and, in case of a
sale and a deficiency, for such time when Trustor, except for the intervention
of such receiver, would be entitled to collect such rents, issues and profits,
to the maximum time and extent permitted by law; (ii) to extend or modify any
then existing Leases and to make new leases, which extensions, modifications and
new leases may provide for terms to expire, or for options to leases to extend
or renew terms to expire, beyond the maturity date of the Note and beyond the
date of the issuance of a deed or deeds to a purchaser or purchasers at a
foreclosure sale, it being understood and agreed that any such leases, and the
options or other such provisions to be contained therein, shall be binding upon
Trustor and all persons whose interests in the Premises are subject to the lien
hereof and upon the purchaser or purchasers at any foreclosure sale,
notwithstanding any redemption from sale, discharge of the secured obligations,
satisfaction of any foreclosure decree, or issuance of any certificate of sale
or deed to any purchaser; and (iii) all other powers which may be necessary or
are usual in such case for the protection, possession, control, management, and
operation of the Premises during the whole of said period. The court from time
to time may authorize the receiver to apply the net income in the receiver's
hands in payment in whole or in part of: (i) the Indebtedness and all
obligations hereunder, or by any decree foreclosing this Deed of Trust, or in
accordance with applicable non-judicial foreclosure provisions, any tax, special
assessment or other lien which may be or become superior to the lien hereof or
of such decree; and (ii) if this is a leasehold mortgage, all rents due or which
may become due under the underlying lease.
(c) Sales by Parcels. In any sale made under or by virtue of this Deed of
Trust or pursuant to any judgment or decree of court, the Premises may be sold
in one or more parts or parcels or as an entirety and in such order as
Beneficiary may elect, without regard to the right of Trustor, or any person
claiming under it, to the marshaling of assets. To the full extent permitted by
law, Trustor waives the marshaling of assets.
(d) Effect of Sale. The purchaser at any sale made under or by virtue of
this Deed of Trust or pursuant to any judgment or decree of court shall take
title to the Premises or the part thereof so sold free and discharged of the
estate of Trustor therein, the purchaser being hereby discharged from all
liability to see to the application of the purchase money. Any person, including
Beneficiary, may purchase at any such sale. Beneficiary is hereby irrevocably
appointed the attorney-in-fact of Trustor in its name and stead to make all
appropriate transfers and deliveries of the Premises or any portions thereof so
sold and, for this purpose, Beneficiary may execute all appropriate instruments
of transfer, and may substitute one or more persons with like power, Trustor
hereby ratifying and confirming all that its said attorneys or such substitute
or substitutes shall lawfully do by virtue hereof. Nevertheless, promptly upon
Beneficiary's written request, Trustor shall ratify and confirm, or cause to be
ratified and confirmed, any such sale or sales by executing and delivering, or
by causing to be executed and delivered, to Beneficiary or to such purchaser or
purchasers all such instruments as may be advisable, in the judgment of
Beneficiary, for the purpose, and as may be designated, in such request. Any
sale or sales made under or by virtue of this Deed of Trust, to the extent not
prohibited by law, shall operate to divest all the estate, right, title,
interest, property, claim and demand whatsoever, whether at law or in equity, of
Trustor in, to and under the Premises, or any portions thereof so sold, and
shall be a perpetual bar both at law and in equity against Trustor, its
successors and assigns, and against any and all persons claiming or who may
claim the same, or any part thereof, by, through or under Trustor, or its
successors or assigns. The powers and agency herein granted are coupled with an
interest and are irrevocable.
(e) Eviction of Trustor After Sale. If Trustor fails or refuses to
surrender possession of the Premises after any sale thereof, Trustor shall be
deemed a tenant at sufferance, subject to eviction by means of forcible entry
and detainer proceedings, provided, that this remedy is not exclusive or in
derogation of any other right or remedy available to Beneficiary or any
purchaser of the Premises under any provision of this Deed of Trust or pursuant
to any judgment or decree of court.
(f) Insurance Policies. In the event of a foreclosure sale pursuant to
this Deed of Trust or other transfer of title or assignment of the Premises in
extinguishment, in whole or in part, of the Indebtedness, all right, title and
interest of Trustor in and to all policies of insurance required under the
provisions of this Deed of Trust shall inure to the benefit of and pass to the
successor in interest of Trustor or the purchaser or grantee of the Premises or
any part thereof so transferred.
(g) Foreclosure; Expense of Litigation. When the Indebtedness hereby
secured, or any part thereof shall become due, whether by acceleration or
otherwise, Beneficiary shall have the right to foreclose the lien hereof for
such Indebtedness or part thereof. In any suit to foreclose the lien hereof,
there shall be allowed and included as additional Indebtedness in the decree for
sale all expenditures and expenses which may be paid or incurred by or on behalf
of Beneficiary for reasonable attorneys' fees, appraiser's fees, actual costs of
environmental reviews or audits, outlays for documentary and expert evidence,
stenographers' charges, publication costs, and costs (which may be estimated as
to items to be expended after entry of the decree) of procuring all such
abstracts of title, title searches and examinations, title insurance policies,
and similar data and assurances with respect to the title as Beneficiary may
deem reasonably necessary either to prosecute such action or to evidence to
bidders at any sale which may be had pursuant to such decree the true condition
of the title to or the value of the Premises. All expenditures and expenses of
the nature in this Paragraph mentioned and such expenses and fees as may be
incurred in the protection of the Premises and the maintenance of the lien of
this Deed of Trust, including the reasonable fees of any attorneys employed by
Beneficiary in any litigation or proceeding affecting this Deed of Trust, the
Note or the Premises, including appellate, probate and bankruptcy proceedings,
or in preparations for the commencement or defense of any proceedings or
threatened suit or proceeding shall be immediately due and payable by Trustor,
with interest thereon at the Default Rate of interest as set forth in the Note
and shall be secured by this Deed of Trust.
17. Application of Proceeds. The proceeds of any sale made either under
the power of sale hereby given or under a judgment, order or decree made in any
action to foreclose or to enforce this Deed of Trust, shall be applied:
(a) first to the payment of (i) all costs and expenses of such sale,
including reasonable attorneys' fees, environmental site assessors fees and
costs, appraisers' fees and costs of procuring title searches, title insurance
policies and similar items and (ii) all charges, expenses and advances incurred
or made by Beneficiary in order to protect the lien or estate created by this
Deed of Trust or the security afforded hereby including any expenses of
entering, taking possession of and operating the Premises;
(b) then to the payment of any other Indebtedness in such order as
Beneficiary may determine until the same have been paid in full; and
(c) any balance thereof shall be paid to Trustor, or to whosoever shall be
legally entitled thereto, or as a court of competent jurisdiction may direct.
18. Rights and Remedies Cumulative. Each right, power and remedy herein
conferred upon Beneficiary is cumulative and in addition to every other right,
power or remedy, express or implied, given now or hereafter existing, at law or
in equity, and each and every right, power and remedy herein set forth or
otherwise so existing may be exercised from time to time as often and in such
order as may be deemed expedient by Beneficiary, and the exercise or the
beginning of the exercise of one right, power or remedy shall not be a waiver of
the right to exercise at the same time or thereafter any other right, power or
remedy and no delay or omission of Beneficiary in the exercise of any right,
power or remedy accruing hereunder or arising otherwise shall impair any such
right, power or remedy, or be construed to be a waiver of any Event of Default
or acquiescence therein.
19. Beneficiary's Right of Inspection. Beneficiary shall, upon reasonable
notice to Trustor, have the right to inspect the Premises at all reasonable
times and access thereto shall be permitted for that purpose.
20. Condemnation. The Beneficiary may, at its option, in its own name (a)
appear or proceed in any condemnation proceeding, and (b) make any compromise or
settlement thereof, provided that so long as the Trustor promptly prosecutes any
compromise or settlement thereof, the Trustor shall control any compromise or
settlement proceeding with the result thereof being subject to the Beneficiary's
approval. The Trustor shall give the Beneficiary immediate notice of the
initiation of any condemnation proceeding, and a copy of every pleading, notice
and other items served in any condemnation proceeding. Trustor hereby assigns,
transfers and sets over unto the Beneficiary the entire proceeds of any award or
any claim for damages for any of the Premises taken or damaged under the power
of eminent domain or by condemnation. Beneficiary may elect to apply the
proceeds of the award upon or in reduction of the Indebtedness, whether due or
not, or make said proceeds available for restoration or rebuilding of the
Premises. In the event that Beneficiary elects, in Beneficiary's sole and
absolute discretion, to make said proceeds available to reimburse Trustor for
the cost of the rebuilding or restoration of the Improvements, such proceeds
shall be made available in the manner and under the conditions that Beneficiary
may require. Except to the extent Beneficiary receives condemnation proceeds
resulting from such taking under the power of eminent domain or condemnation
which Beneficiary does not make available to Trustor for such restoration or
rebuilding, the Improvements shall be restored or rebuilt in accordance with
plans and specifications to be submitted to and approved by Beneficiary prior to
commencement of any building or restoration. If the proceeds are made available
by Beneficiary to reimburse Trustor for the cost of said rebuilding or
restoration, any surplus which may remain out of said award after payment of
such cost of rebuilding or restoration shall at the option of Beneficiary be
applied on account of the Indebtedness or be paid to any party entitled thereto.
No interest shall be allowed to Trustor on the proceeds of any award held by the
Beneficiary.
21. Release Upon Payment and Discharge of Trustor's Obligations.
Beneficiary shall release this Deed of Trust and the lien thereof by proper
instrument upon payment and discharge of all Indebtedness including any
prepayment premium provided for herein or in the Note secured hereby.
22. Giving of Notice. (a) All notices, demands, requests, and other
communications desired or required to be given hereunder ("Notices"), shall be
in writing and shall be given by: (i) hand delivery to the address for Notices;
(ii) delivery by overnight courier service to the address for Notices; or (iii)
sending the same by United States mail, postage prepaid, certified mail, return
receipt requested, addressed to the address for Notices. Any Notice to be given
by Trustor or Beneficiary hereunder may be given on behalf of such party by the
legal counsel of such party.
(b) All Notices shall be deemed given and effective upon the earlier to
occur of: (i) the hand delivery of such Notice to the address for Notices; (ii)
one business day after the deposit of such Notice with an overnight courier
service by the time deadline for next day delivery addressed to the address for
Notices; or (iii) three business days after depositing the Notice in the United
States mail as set forth in (a)(iii) above. All Notices shall be addressed to
the following addresses:
Trustor: Century Properties Fund XIX
c/o AIMCO Properties, L.P.
4582 S. Ulster Street, Suite 1100
Denver, Colorado 80237
Attn: Jeff Ogden
With a copy to: Bryan Cave LLP
3500 One Kansas City Place
1200 Main Street
Kansas City, Missouri 64105
Attn: Jonathan Lautt
Beneficiary: ING Life Insurance and Annuity
c/o ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia, 30327-4349
Attention: Mortgage Loan Servicing Department
and
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia, 30327-4349
Attention: Real Estate Law Department
With a copy to: Nyemaster, Goode, West,
Hansell & O'Brien, P.C.
700 Walnut, Suite 1600
Des Moines, Iowa 50309
Attn: James C. Wine
or to such other persons or at such other place as any party hereto may by
Notice designate as a place for service of Notice. Provided, that the "copy to"
Notice to be given as set forth above is a courtesy copy only; and a Notice
given to such person is not sufficient to effect giving a Notice to the
principal party, nor does a failure to give such a courtesy copy of a Notice
constitute a failure to give Notice to the principal party.
23. Waiver of Defense. No action for the enforcement of the lien or of any
provision hereof shall be subject to any defense which would not be good and
available to the party interposing same in an action at law or in equity upon
the Note hereby secured.
24. Waiver of Statutory Rights. Trustor shall not, and will not, apply for
or avail itself of any homestead, appraisement, valuation, stay, extension or
exemption laws, or any so-called "Moratorium Laws", now existing or hereafter
enacted, in order to prevent or hinder the enforcement or foreclosure of this
Deed of Trust, but to the extent lawfully allowed hereby waives the benefit of
such laws. Trustor, for itself and all who may claim through or under it, waives
any and all right to have the property and estates comprising the Premises
marshaled upon any foreclosure of the lien hereof and agrees that any court
having jurisdiction to foreclose such lien may order the Premises sold as an
entirety. To the extent permitted by law, Trustor does hereby expressly waive
any and all rights of redemption from sale under any order or decree of
foreclosure of this Deed of Trust on behalf of Trustor, the trust estate and all
persons beneficially interested therein and each and every person, acquiring any
interest in or title to the Premises subsequent to the date of this Deed of
Trust.
25. Furnishing of Financial Statements to Beneficiary. (a) Trustor
covenants and agrees that it will keep and maintain books and records of
account, or cause books and records of account to be kept and maintained in
which full, true and correct entries shall be made of all dealings and
transactions relative to the Premises, which books and records of account shall,
at reasonable times during business hours and on reasonable notice, be open to
inspection by Beneficiary and Beneficiary's accountants and other duly
authorized representatives. Such books of record and account shall be kept and
maintained on a cash basis.
(b) Trustor covenants and agrees to furnish, or cause to be furnished to
Beneficiary, annually, within one hundred twenty (120) days following the end of
each fiscal year of Trustor a copy of a report of the operations of the
Premises, including a balance sheet and supporting schedules and containing a
detailed statement of income and expenses for the previous year and a current
rent roll of the Premises. Trustor shall simultaneously deliver to Beneficiary a
financial statement of Trustor, and each of its general partners if Trustor is a
partnership, prepared in accordance with the accounting requirements set forth
above, certified by Trustor, or an officer, manager or a general partner of any
corporate, limited liability company or partnership. Each report or statement
shall be certified as true, correct and complete by the individual managing
general partner or chief financial officer of the party whom the request
concerns. Notwithstanding the foregoing, Beneficiary, during the term of the
Loan, shall have the right to require Trustor to provide quarterly income and
expense statements which shall include current cash flow and up-to-date payables
and receivables for the Premises, and to require Trustor to provide periodic
updates on the rent roll so as to reflect current leasing of the Premises.
(c) If Trustor omits to deliver as required any report or statement
required by this Paragraph 25, and said omission is not cured by Trustor within
thirty (30) days after written notice of such omission has been given by
Beneficiary to Trustor, Beneficiary may elect, in addition to exercising any
remedy for an Event of Default as provided for in this Deed of Trust, to make an
audit of all books and records of Trustor including its bank accounts which in
any way pertain to the Premises and to prepare the statement or statements which
Trustor failed to procure and deliver. Such audit shall be made and such
statement or statements shall be prepared by an independent certified public
accountant to be selected by Beneficiary. Trustor shall pay all reasonable
expenses of the audit and other services, which expenses shall be secured hereby
as additional Indebtedness and shall be immediately due and payable with
interest thereon at the Default Rate of interest as set forth in the Note and
shall be secured by this Deed of Trust.
26. Filing and Recording Fees. Trustor will pay all filing, registration
or recording fees and all reasonable expenses incident to the execution and
acknowledgment of this Deed of Trust and all federal, state, county and
municipal taxes and other taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution and delivery of said Note and
this Deed of Trust.
27. Business Purpose. Trustor represents, covenants and agrees that all of
the proceeds of the Note secured by this Deed of Trust will be used solely for
business purposes and in furtherance of the regular business affairs of Trustor.
28. Exculpatory. The liability of the Trustor personally to pay the Note
or any interest that may accrue thereon, or any Indebtedness or obligation
accruing or arising hereunder is limited to the extent set forth in the Note.
29. Security Agreement. Trustor and Beneficiary agree that this Deed of
Trust shall constitute a security agreement within the meaning of the UCC with
respect to all sums on deposit with the Beneficiary with respect to insurance
proceeds or condemnation proceeds ("Deposits") and with respect to any personal
property and fixtures included in the definition herein of the word "Premises",
which property may not be deemed to form a part of the real estate described in
Exhibit "A" or may not constitute a "fixture" within the meaning of the UCC, and
all replacements of such property, substitutions and additions thereto and the
proceeds thereof, all such property being sometimes hereinafter collectively
referred to as the "Collateral", and that a security interest in and to the
Collateral and the Deposits is hereby granted to Beneficiary and the Deposits
and all of Trustor's right, title and interest therein are hereby assigned to
Beneficiary, all to secure payment of the Indebtedness and to secure performance
by Trustor of the terms, covenants and provisions hereof. Upon the occurrence of
an Event of Default under this Deed of Trust, Beneficiary, pursuant to the
appropriate provisions of the UCC, shall have the option of proceeding with
respect to the Collateral in accordance with its rights and remedies with
respect to the real property, in which event the default provisions of the UCC
shall not apply. The parties agree that, in the event Beneficiary shall elect to
proceed with respect to the Collateral separately from the real property, ten
(10) days' notice of the sale of the Collateral shall be reasonable notice. The
reasonable expenses of retaking, holding, preparing for sale, selling and the
like incurred by Beneficiary shall include, but not be limited to, reasonable
attorneys' fees and legal expenses incurred by Beneficiary. Trustor agrees that,
without the written consent of Beneficiary, which consent shall not be
unreasonably withheld or delayed, Trustor will not remove or permit to be
removed from the Premises any of the Collateral except that so long as the
Trustor is not in default hereunder, Trustor shall be permitted to sell or
otherwise dispose of the Collateral, when obsolete, worn out, inadequate,
unserviceable or unnecessary for use in the operation of the Premises, upon
replacing the same or substituting for the same other Collateral at least equal
in value to the initial value to that disposed of and in such a manner so that
said Collateral shall be subject to the security interest created hereby, and so
that the security interest of Beneficiary shall be first in priority, it being
expressly understood and agreed that all replacements of the Collateral and any
additions to the Collateral shall be and become immediately subject to the
security interest of this Deed of Trust and covered hereby. Trustor shall, from
time to time, on request of Beneficiary, deliver to Beneficiary an inventory of
the Collateral in reasonable detail. Trustor covenants and represents that all
Collateral, and all replacements thereof, substitutions therefor or additions
thereto, unless Beneficiary otherwise consents, now are and will be free and
clear of liens (other than the lien of taxes not yet due or payable),
encumbrances or security interests of others. Trustor shall, upon demand execute
and deliver to Beneficiary such financing statements and other documents in form
satisfactory to Beneficiary, and will do all such acts and things as Beneficiary
may at anytime, or from time to time, reasonably request or as may be necessary
or appropriate to establish and maintain a first perfected security interest in
the Deposits and Collateral, subject to no liens (other than the lien of taxes
not yet due or payable), encumbrances, or security interests of others.
This Deed of Trust also constitutes a financing statement for the purpose
of the UCC and shall constitute a "fixture filing" under such statutes and shall
be filed in the real estate records of the County in which the Land is located.
The Trustor hereby authorizes the Beneficiary to file all financing statements
evidencing the security interest granted to the Beneficiary in the Collateral
with all appropriate filing jurisdictions. For such purpose information
concerning the debtor and the secured party is set forth below:
Name of Debtor: Century Properties Fund XIX
Debtor's Mailing
Address: Street Address of Borrower
Debtor's Taxpayer
Identification Number: Taxpayer ID Number
Debtor is an organization, being a limited partnership organized under the
laws of California.
Debtor's Organization Number: 198418201472
Address of Property: 4202 East Cactus Road, Phoenix, Maricopa
County, Arizona
Name of Secured Party: ING Life Insurance and Annuity
Address of Secured Party: c/o ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Real Estate Law Department
This financing statement covers the Collateral. Some of the items or types of
property comprising the Collateral are or are to become fixtures on the real
property described in this Deed of Trust. Trustor is the record owner of the
real property described herein upon which the foregoing fixtures and other items
and types of property are located.
Trustor hereby represents and warrants to Beneficiary, and covenants and agrees
with Beneficiary as follows:
(a) Trustor shall not merge or consolidate into, or transfer any of the
Collateral to, any other entity or person without the prior written consent of
the Beneficiary.
(b) Trustor shall not change its name unless it has given Beneficiary
sixty (60) days prior written notice thereof and executed and authorized at the
request of Beneficiary, such additional financing statements to be filed in such
jurisdiction as the Beneficiary may deem necessary or desirable in its sole
discretion.
(c) It shall be an Event of Default hereunder if any amendment to or
termination of a financing statement naming the Trustor as debtor and the
Beneficiary as secured party, or any correction statement with respect thereto,
is filed in any jurisdiction by any party other than the Beneficiary or its
counsel without the prior written consent of the Beneficiary.
(d) Trustor hereby authorizes the Beneficiary, its counsel or its
representative, at any time and from time to time, to file financing statements
and amendments that describe the collateral covered by such financing statements
in such jurisdictions as the Beneficiary may deem necessary or desirable in
order to perfect the security interest granted by the Trustor under this
security agreement.
30. Due on Sale or Further Encumbrance. (a) If, without the Beneficiary's
prior written consent, (i) the Premises or any part thereof or any interest in
the Premises or the Trustor is sold or conveyed; (ii) title to the Premises or
any interest therein is divested; (iii) the Premises or any ownership interest
in the Trustor is further encumbered or pledged; (iv) any lease which gives the
lessee any option to purchase the Premises or any part thereof is entered into,
or, (v) without limiting the generality of clause (i) above, the ownership of
shares of the Trustor, if a corporation, or of any corporate general partner of
Trustor, if a partnership, or the general partnership interests in any
partnership which is a general partner of Trustor, or any membership interest in
a Trustor which is a limited liability company, or any beneficial or fiduciary
interest in any Trustor which is a trust or trustee, is sold or conveyed, the
Beneficiary shall at its sole discretion be entitled to accelerate the
Indebtedness and declare the then unpaid principal balance and all accrued
interests and other sums due and payable under the Note due and payable and
exercise all remedies available to Beneficiary under the Loan Documents. The
Trustor understands that the present ownership of the Premises and Improvements
will be a material inducement to Beneficiary in the making of the loan secured
by this Deed of Trust. Any consent by Beneficiary to a change in ownership or to
a change in the composition of the Trustor may be conditioned upon payment of a
transfer fee equal to one percent (1%) of the then outstanding Indebtedness for
processing such request for consent, upon an increase in the rate of interest on
the unpaid balance of the Indebtedness to a then-current market rate, and/or
other terms and conditions as Beneficiary may impose in its sole discretion.
Beneficiary's prior written consent shall not be required, however, for the
transfer set forth in Section (d) below.
(b) Notwithstanding the foregoing Section 30(a), Beneficiary will permit
one transfer of the Premises, provided: (i) the transferee has a financial and
credit standing and management expertise reasonably acceptable to Beneficiary;
(ii) assumption documents in form and substance satisfactory to Beneficiary are
executed by the transferee; (iii) Beneficiary is paid a transfer fee equal to
one percent (1%) of the then outstanding Indebtedness and Trustor reimburses
Beneficiary all fees and expenses associated with the transfer including legal
fees; (iv) Beneficiary receives an endorsement to the Beneficiary's title
policy, in form and substance acceptable to Beneficiary; and (v) at
Beneficiary's option, Beneficiary receives opinions of counsel, and Trustor and
transferee authorization documents, in form and substance acceptable to
Beneficiary. Further, Beneficiary, in its sole judgment and discretion, may
require individuals specifically named by Beneficiary to deliver to Beneficiary
an Environmental Indemnification Agreement on Beneficiary's standard form. The
rights granted to Trustor in this subparagraph (b) are personal to Trustor,
shall be extinguished after the exercise thereof, and shall not inure to the
benefit of any subsequent transferee. Such transfer and assumption will release
the Trustor or any guarantors from any liability to the Beneficiary effective
upon the closing of such transfer and assumption, subject to the prior written
consent of Beneficiary, which consent may be conditioned upon, without
limitation, the execution of new guaranties from principals of the transferee as
Beneficiary deems necessary, execution by the principals of the transferee of
Beneficiary's standard Environmental Indemnification Agreement and such other
requirements as Beneficiary may deem appropriate in its discretion.
(c) Notwithstanding the foregoing Section 30(a) above, Beneficiary will
permit the following transfers of ownership interests in Trustor without the 1%
fee or any change in the loan terms provided that: (i) no Event of Default shall
have occurred or be continuing hereunder or under the Loan Documents or any
separate documents guaranteeing Trustor's payment and the performance of the
Loan; (ii) Beneficiary is promptly notified of such proposed transfer and
provided with such documentation evidencing the transfer and identity of the
transferee as reasonably requested by Beneficiary; (iii) assumption documents,
if deemed necessary by the Beneficiary, in a form that is acceptable to
Beneficiary are executed by the transferee; and (iv) Trustor reimburses
Beneficiary for all fees and expenses including reasonable attorneys' fees
associated with Beneficiary's review and documentation of the transfer:
(i) Any ownership interest in the Trustor may be transferred upon
the death of the owner of said interest but only by will or intestacy.
(ii) Any ownership interest in the Trustor may be voluntarily sold,
transferred, conveyed or assigned for estate planning purposes to
immediate family members or to a family trust, provided that AIMCO or an
AIMCO related entity has, at all times during the term of the Lease a
minimum of 30% ownership and control of the Premises and the Trustor.
"Immediate family members" shall mean the spouse, children, grandchildren,
siblings, and the siblings' children, of each holder of an ownership
interest in Trustor, as of the date hereof, or a trust for the benefit of
one or more of any such persons. "AIMCO" means Apartment Investment and
Management Company, a real estate investment trust.
(d) Notwithstanding the foregoing Section 30(a) above, Beneficiary will
permit the following transfers of ownership within the Trustor entity, Leases of
the Premises or transfers of personalty without the 1% fee or change in the Loan
terms and without the Beneficiary's prior consent:
(i) The grant of a leasehold interest in an individual apartment
unit for a term of two (2) years or less provided that such Lease contains
no options to purchase the Premises, any portion of the Premises or any
apartment unit;
(ii) a transfer of obsolete or worn out Personalty or fixtures or
equipment that are contemporaneously replaced by items of equal or better
function, quality and value which are free of liens, encumbrances and
security interests other than those created by the Loan Documents or
expressly consented to by Beneficiary in writing (no such consent being
implied hereby);
(iii) any membership interest in the Trustor entity may be
voluntarily sold, transferred, conveyed or assigned to another entity (or
an affiliate of such entity) owning a membership interest in the Trustor
as of the date of this Deed of Trust (for purposes of this subsection
(iii) the term "affiliate" shall mean an entity under common ownership and
control as Trustor).
(e) Notwithstanding the foregoing Section 30(a), Trustor may encumber the
Premises with a sole additional deed of trust, subordinate in every respect to
the lien and interest of this Deed of Trust, for the purpose of securing
secondary indebtedness (the "Subordinate Financing") to another lender (the
"Subordinate Lender"), provided that:
(i) The Subordinate Lender, the documentation for the Subordinate
Financing, and the form and terms of the Subordinate Financing are
satisfactory in all respects to Beneficiary.
(ii) All such documentation as Beneficiary may reasonably require
shall be submitted to Beneficiary including, but not limited to, operating
statements of the Premises for the previous three (3) Loan Years (a "Loan
Year" is a period of twelve consecutive months commencing on the date
hereof if it is the first of the month and otherwise commencing on the
first day of the month immediately following the date hereof, and the
first Loan Year shall include the period, if any, between the date hereof
and the commencement date of the first Loan Year) and a pro forma
operating statement for the current Loan Year, and a then - current MAI
appraisal of the Premises, provided at Trustor's expense, by an appraiser
approved by Beneficiary.
(iii) The Net Operating Income (for the purpose of this
subparagraph, Net Operating Income shall mean gross cash operating
receipts from the Premises less normal and customary operating expenses
incurred in the operation, management, and maintenance of the Premises)
shall not be less than one hundred thirty percent (130%) of the combined
aggregate of the Indebtedness and Subordinate Financing debt service
payments, and the Subordinate Financing must begin amortizing upon
funding.
(iv) The total of the outstanding principal balance of the
Indebtedness and the Subordinate Financing does not exceed seventy-five
percent (75%) of the value of the Premises as established by a
then-current MAI appraisal.
(v) The Subordinate Lender shall expressly acknowledge the priority
of the debt, liens and security interests of Beneficiary and agree to
provide Beneficiary with written notice of any default under the
Subordinate Financing in a subordination agreement in form and substance
satisfactory to Beneficiary.
(vi) Any default under the Subordinate Financing (beyond applicable
grace, notice or cure periods in the Subordinate Financing documents)
shall, at Beneficiary's option, constitute an Event of Default under this
Deed of Trust and the other Loan Documents.
(vii) If previously waived, Beneficiary shall have the right to
reinstate escrow payments for taxes and insurance premiums under this Deed
of Trust.
(viii) No Event of Default shall exist under the Loan Documents.
(ix) Trustor shall pay any fees, costs or expenses, including
reasonable attorneys' fees, incurred by Beneficiary in connection with the
Subordinate Financing.
31. Substitution of Loan. Notwithstanding the provisions of Sections 30(a)
above, Trustor may request that Beneficiary permit Trustor to prepay the Loan in
full at par from the proceeds of a substitute first mortgage loan ("Substitute
Loan") to be funded by Beneficiary to Trustor and secured by a substitute
property owned in fee simple as provided below (which was not previously another
property in the Loan) ("Substitute Property") and to obtain a release of the
Premises from the lien created by any of the Loan Documents (a "Substitution")
upon and subject to the following terms and conditions:
(a) Trustor must submit a written request ("Substitution Request") to
Beneficiary for the proposed Substitute Loan identifying the proposed Substitute
Property at least ninety (90) days prior to the proposed closing date for the
Substitution. Beneficiary shall evaluate the request for the proposed Substitute
Loan and the proposed Substitute Property in its sole discretion pursuant to its
then customary underwriting and pricing criteria. The amount of the Substitute
Loan requested must be at least the amount of the unpaid principal balance of
the Loan. Beneficiary may review such items as it may require in its sole
discretion, including, but not limited to, location, occupancy, lease terms,
rollover, tenant exposure, tenant's credit.
(b) The owner of the Substitute Property (and borrower under the
Substitute Loan) must be either (1) the Trustor (such that the Substitute
Property is owned 100% by the same borrower entity as owned the Premises at the
time immediately prior to closing of the Substitution), or (2) a single asset
affiliate of Trustor having the identical beneficial ownership structure and
management control as the Trustor. In the event that the Substitute Property is
wholly owned by a single-asset affiliate of Trustor, the original Trustor will
be released from all liabilities that are assumed by the owner of the Substitute
Property effective upon the closing of the Substitute Loan.
(c) The Substitute Property must be of the same nature and character as
the Premises, which must be an apartment complex. Under no circumstances shall
Beneficiary permit any special purpose properties (for example, hotels, motels,
mobile home parks, health or senior care facilities). The Substitute Property
must be located in the continental United States.
(d) Beneficiary in its sole discretion shall acknowledge within ten (10)
business days of the Beneficiary's receipt of the Substitution Request whether
the proposed Substitute Property appears to be acceptable to permit the
Substitution. If in the Beneficiary's sole discretion it is determined that the
proposed Substitute Property is equal to or greater in quality than the
Premises, then Beneficiary, through its loan correspondent, Johnson Capital
Group, will process the Trustor's formal request to make the Substitute Loan.
The proposal will be reviewed by and presented to Beneficiary's and ING
Investment Management LLC's investment review committee pursuant to each of
their then current commercial mortgage loan policies, practices, standards and
procedures for approval in their sole and absolute discretion. If the investment
review committee approves the formal request for Substitute Loan and Substitute
Property, the Substitution will be subject to the other conditions outlined
herein.
(e) No more than three (3) Substitution Requests shall be considered and
no more than one (1) closed during the entire term of the Loan or the Substitute
Loan.
(f) Trustor shall pay a processing fee to Beneficiary equal to $25,000
("Processing Fee") at closing of an approved Substitution. A "Substitution
Deposit" of $5,000 shall be required with submission of the Substitution
Request, which deposit shall be applied to the Processing Fee at closing of the
Substitution. The Substitution Deposit and Processing Fee contemplated by this
subsection are in addition to outside counsel attorneys' fees and expenses
incurred in the preparation, negotiation, documentation, due diligence review
and closing of such Substitution.
(g) All improvements on the Substitute Property shall have been completed
in a good and workmanlike manner and in compliance, in all material respects,
with all applicable governmental requirements prior to closing of the
Substitution. The Substitute Property must be lien free and all land,
improvements and personal property paid for in full (except for common area
laundry facility personalty and equipment and personal property in the common
areas).
(h) The appraised fair market "As Is" value of the Substitute Property
shall be equal to or greater than the greater of (1) the then appraised fair
market value, or gross sales proceeds, as the case may be, of the Premises and
(2) the original appraised value of the Premises as set forth in the appraisal
delivered to Beneficiary in connection with the closing of this Loan. The fair
market "As Is" value of the Premises and Substitute Property shall be determined
by a firm of appraisers selected by Johnson Capital Group and approved by the
Beneficiary, based on an MAI appraisal satisfactory to Beneficiary, dated not
more than ninety (90) days prior to the closing of the Substitute Loan. All
costs of such appraisals shall be paid by the Trustor on or prior to the closing
of the Substitute Loan.
(i) The actual net operating income relating to the Substitute Property
(based upon the trailing twelve (12) month financial results or such shorter
period, as Beneficiary deems appropriate, for a Substitute Property opened for
less than one year) shall equal or exceed the actual net operating income
relating (based upon the trailing twelve (12) month financial results or such
shorter period, as Beneficiary deems appropriate, for the Substitute Property
owned for less than one year) to the Premises.
(j) Beneficiary's outside counsel shall prepare and Trustor (or a single
asset affiliate as set forth in (b) above) shall execute a new note, mortgage,
assignment of rents and leases, loan agreement, environmental indemnities, tax
and insurance escrows, borrower's certificate, and all other loan documents
Beneficiary shall deem appropriate, including, but not limited to, modification
of the existing Loan Documents (all of which shall be substantially in the form
of the applicable documents executed in connection with the Loan with such
changes thereto as Beneficiary reasonably deems appropriate to reflect the terms
and circumstances of the Substitute Loan and Substitute Property) (collectively,
the "Substitute Loan Documents").
(k) Trustor shall be required to supply for Beneficiary's review and
approval due diligence materials prior to closing of the Substitute Loan
including those items contained in this Application Letter as a requirement for
closing of this Loan, and such other materials as may then be customarily
required as part of its then current commercial loan closing policies,
procedures, standards and practices for properties of similar type and in
similar locations as the Substitute Property, including, without limitation, a
current as-built ALTA survey, proof of adequate insurance, title insurance in
conformance with Beneficiary's usual and customary requirements, proof of
compliance with governmental regulations, tenant estoppel certificates, and
subordination, non-disturbance and attornment agreements. At the Trustor's sole
cost and expenses, Beneficiary shall receive for review and approval all
additional due diligence materials in any way relating to the Substitute
Property, including but not limited to, an MAI appraisal, hazardous substance
report, engineer report and seismic report as required by Beneficiary in its
sole discretion. The items listed in this section are not exhaustive.
(l) The Substitute Loan Documents, financing statements and other
instruments required to perfect the liens in the Substitute Property and all
collateral under such documents shall have been recorded, registered and filed
(as applicable) in such manner as may be required by law to create a valid,
perfected lien and security interest with respect to the Substitute Property and
the personal property related thereto. The liens created by the Substitute Loan
Documents shall be first liens and security interests on the Substitute Property
and the personal property related thereto, subject only to such exceptions as
Beneficiary shall approve in its sole discretion. At closing of the Substitute
Loan, the Trustor (or other new borrower permitted under (b) above) shall have
good and marketable title to the Substituted Property and good and valid title
to any personal property located thereon or used in connection therewith, in
each case satisfactory to the Beneficiary.
(m) Beneficiary shall have received (1) a consent to the Substitution by
any "Carve-Out" or other guarantors or indemnitors on the Loan in addition to
Trustor and (2) such other instruments and agreements and such certificates and
opinions of counsel, in form and substance satisfactory to the Beneficiary in
connection with such Substitution as it may reasonably request.
(n) Trustor shall consider all implications for documentary stamp and
intangibles taxes on the Substitute Loan that shall arise in connection with
such Substitution. Beneficiary shall require payment of all such documentary
stamp and intangible taxes required by law and authorities having jurisdiction
as a condition of closing this Substitute Loan in the jurisdiction where the
Substitute Property is located regardless of whether the taxing authority
imposes taxes duplicative of those incurred at the original closing of the Loan
where the original Premises is located.
(o) No default or Event of Default shall have occurred and be continuing
hereunder or under any other Loan Documents on the date of Substitution Request
or at closing of the Substitute Loan.
(p) Beneficiary shall be satisfied that no material adverse change in the
financial condition, operations or prospects of Trustor and its managers and
other major principals has occurred after closing of this Loan. Beneficiary
shall be entitled to request copies of financial statements and such other
financial information as it shall reasonably require in order to assess the
financial status of the Trustor (or new borrower permitted pursuant to (b)
above) and to determine and/or estimate the solvency of such entity prior to and
following the closing of the Substitution. Beneficiary shall not be required to
close a proposed Substitution in the event it reasonably determines that the
Trustor (or new borrower under (b) above) is or, upon completion of the
Substitution, may become insolvent within the meaning of the term under the
federal bankruptcy code.
(q) The Trustor shall pay all reasonable out-of-pocket costs and expenses
incurred in connection with any such Substitution and the reasonable
out-of-pocket fees and expenses incurred by Beneficiary, its outside counsel and
its loan correspondent and loan servicer in connection therewith. Without
limiting the generality of the foregoing, the Trustor shall, in connection with,
and as a condition to, each Substitution, pay the reasonable fees and expenses
of Beneficiary's counsel, the reasonable fees and expenses of Beneficiary's
engineers, appraisers, construction consultants, insurance consultants and other
due diligence consultants and contractors, recording charges, title insurance
charges, and stamp and/or mortgage or similar taxes, transfer taxes.
32. Environmental Matters; Notice; Indemnity. Trustor covenants and agrees
as follows:
(a) For purposes of this Deed of Trust, the following definitions shall
apply:
(i) The term "Environmental Law" means and includes any federal,
state or local law, statute, regulation or ordinance pertaining to health,
industrial hygiene or the environmental or ecological conditions on, under
or about the Premises, including without limitation each of the following
(and their respective successor provisions): the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. sections 9601 et seq. ("CERCLA"); the Resource
Conservation and Recovery Act of 1976, as amended, 42 U.S.C. sections 6901
et seq. ("RCRA"); the Federal Hazardous Materials Transportation Act, as
amended, 49 U.S.C. sections 1801 et seq.; the Toxic Substance Control Act,
as amended, 15 U.S.C. sections 2601 et seq.; the Clean Air Act, as
amended, 42 U.S.C. sections 1857 et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. sections 1251 et seq.; and the rules,
regulations and ordinances of the U.S. Environmental Protection Agency and
of all other federal, state, county and municipal agencies, boards,
commissions and other governmental bodies and officers having jurisdiction
over the Premises or the use or operation of the Premises.
(ii) The term "Hazardous Substance" means and includes: (1) those
substances included within the definitions of "hazardous substances",
"hazardous materials", "hazardous waste", "pollutants", "toxic substances"
or "solid waste" in any Environmental Law; (2) those substances listed in
the U.S. Department of Transportation Table or amendments thereto (49 CFR
172.101) or by the U.S. Environmental Protection Agency (or any successor
agency) as hazardous substances (40 CFR Part 302 and any amendments
thereto); (3) those other substances, materials and wastes which are or
become, regulated under any applicable federal, state or local law,
regulation or ordinance or by any federal, state or local governmental
agency, board, commission or other governmental body, or which are or
become classified as hazardous or toxic by any such law, regulation or
ordinance; and (4) any material, waste or substance which is any of the
following: (A) asbestos; (B) polychlorinated biphenyl; (C) designated or
listed as a "hazardous substance" pursuant to section 311 or section 307
of the Clean Water Act (33 U.S.C. sections 1251 et seq.); (D) explosive;
(E) radioactive; (F) a petroleum product; (G) infectious waste; or (H)
mold or mycotoxins. As used herein the term "mold or mycotoxins" shall
mean and include mycotoxin producing molds in amounts sufficient to create
a health risk to humans. Notwithstanding anything to the contrary herein,
the term "Hazardous Substance" shall not include commercially sold
products otherwise within the definition of the term "Hazardous
Substance," but (X) which are used or disposed of by Trustor or used or
sold by tenants of the Premises in the ordinary course of their respective
businesses, (Y) the presence of which product is not prohibited by
applicable Environmental Law, and (Z) the use and disposal of which are in
all respects in accordance with applicable Environmental Law.
(iii) The term "Enforcement or Remedial Action" means and includes
any action taken by any person or entity in an attempt or asserted attempt
to enforce, to achieve compliance with, or to collect or impose
assessments, penalties, fines, or other sanctions provided by, any
Environmental Law.
(iv) The term "Environmental Liability" means and includes any
claim, demand, obligation, cause of action, accusation, allegation, order,
violation, damage (including consequential damage), injury, judgment,
assessment, penalty, fine, cost of Enforcement or Remedial Action, or any
other cost or expense whatsoever, including actual, reasonable attorneys'
fees and disbursements, resulting from or arising out of the violation or
alleged violation of any Environmental Law, any Enforcement or Remedial
Action, or any alleged exposure of any person or property to any Hazardous
Substance.
(b) Trustor, its successors and assigns, after reasonable inquiry,
covenants, warrants and represents that, to the best of its knowledge, except as
set forth in the ASTM E - 1527 - 00 Phase I Environmental Site Assessment, dated
October 22, 2004, prepared by Connor Environmental Services and Engineering
Assessments, that:
(i) No Hazardous Substances have been or shall be discharged,
disbursed, released, stored, treated, generated, disposed of, or allowed
to escape or migrate, or shall threaten to be injected, emptied, poured,
leached, or spilled (collectively referred to as a "release") on or from
the Premises.
(ii) No asbestos or asbestos-containing materials have been or will
be installed, used, incorporated into, placed on, or disposed of on the
Premises.
(iii) No polychlorinated biphenyls ("PCBs") are or will be located
on or in the Premises, in the form of electrical transformers, fluorescent
light fixtures with ballasts, cooling oils, or any other device.
(iv) No underground storage tanks are or will be located on the
Premises or were located on the Premises and subsequently removed or
filled.
(v) No investigation, administrative order, consent order and
agreement, litigation, settlement, lien or encumbrance with respect to
Hazardous Substances is proposed, threatened, anticipated or in existence
with respect to the Premises.
(vi) The Premises and Trustor's operations at the Premises are in
compliance with all applicable Environmental Laws including without
limitation any, state and local statutes, laws and regulations. No notice
has been served on Trustor, or any subsidiary of Trustor, from any entity,
government body, or individual claiming any violation of any law,
regulation, ordinance or code, or requiring compliance with any law,
regulation, ordinance or code, or demanding payment or contribution for
environmental damage or injury to natural resources. Copies of any such
notices received subsequent to the date hereof shall be forwarded to
Beneficiary within three (3) days of their receipt.
(vii) The Trustor has no knowledge of the release or threat of
release of any Hazardous Substances from any property adjoining or in the
immediate vicinity of the Premises.
(viii) No portion of the Premises is a wetland or other water of the
United States subject to jurisdiction under Section 404 of the Clean Water
Act (33 U.S.C. ss. 1344) or any comparable state statute or local
ordinance or regulation defining or protecting wetlands or other special
aquatic areas.
(ix) There are no concentrations of radon or other radioactive gases
or materials in any buildings or structures on the Premises that exceed
background ambient air levels.
(x) To the best of Trustor's knowledge, there have been no
complaints of illness or sickness alleged to result from conditions inside
any buildings or structures on the Premises.
(c) Trustor will give prompt written notice to Beneficiary of:
(i) any proceeding, known investigation or inquiry commenced by any
governmental authority with respect to the presence of any Hazardous
Substance on, under or about the Premises or the migration thereof to or
from adjoining property;
(ii) all claims made or threatened by any individual or entity
against Trustor or the Premises relating to any loss or injury allegedly
resulting from any Hazardous Substance; and
(iii) the discovery by Trustor of any occurrence or condition on any
real property adjoining or in the vicinity of the Premises which might
cause the Premises or any part thereof to be subject to any restriction on
the ownership, occupancy, transferability or use of the Premises under any
Environmental Law.
(d) Beneficiary shall have the right and privilege to: (i) join in and
participate in, as a party if it so elects, any one or more legal proceedings or
actions initiated with respect to the Premises; and to (ii) have all costs and
expenses thereof (including without limitation Beneficiary's reasonable
attorneys' fees and costs) paid by Trustor.
(e) Trustor agrees to protect, defend, indemnify and hold harmless
Beneficiary, its directors, officers, employees, agents, contractors,
sub-contractors, licensees, invitees, participants, successors and assigns, from
and against any Environmental Liability and any and all claims, demands,
judgments, settlements, damages, actions, causes of action, injuries,
administrative orders, consent agreements and orders, liabilities, losses,
penalties, costs, including but not limited to any cleanup costs, remediation
costs and response costs, and all expenses of any kind whatsoever including
reasonable attorneys' fees and expenses, including but not limited to those
arising out of loss of life, injury to persons, property or business or damage
to natural resources in connection with the activities of Trustor, its
predecessors in interest, third parties who have trespassed on the Premises, or
parties in a contractual relationship with Trustor, and any of them, the
foregoing being collectively referred to as "Claims", which:
(i) arise out of the actual, alleged or threatened migration, spill,
leaching, pouring, emptying, injection, discharge, dispersal, release,
storage, treatment, generation, disposal or escape of any Hazardous
Substances onto or from the Premises; or
(ii) actually or allegedly arise out of, in connection with the
Premises, the use, specification or inclusion of any product, material or
process containing Hazardous Substances, the failure to detect the
existence or proportion of Hazardous Substances in the soil, air, surface
water or ground water, or the performance of or failure to perform the
abatement of any Hazardous Substances source or the replacement or removal
of any soil, water, surface water or ground water containing any Hazardous
Substances; or
(iii) arise out of the breach of any covenant, warranty or
representation contained in any statement or other information given by
Trustor to Beneficiary relating to environmental matters; or
(iv) arise out of any Enforcement or Remedial Action or any judicial
or administrative action brought pursuant to any Environmental Law.
Trustor, its successors and assigns, shall bear, pay and discharge when
and as the same become due and payable, any and all such judgments or claims for
damages, penalties or otherwise against Beneficiary described in this
subparagraph (e), shall hold Beneficiary harmless for those judgments or claims,
and shall assume the burden and expense of defending all suits, administrative
proceedings, and negotiations of any description with any and all persons,
political subdivisions or government agencies arising out of any of the
occurrences set forth in this subparagraph (e).
Trustor's indemnifications and representations made herein shall survive
any termination or expiration of the documents evidencing or securing the Loan
and/or the repayment of the indebtedness evidenced by the Note, including, but
not limited to, any foreclosure on this Deed of Trust or acceptance of a deed in
lieu of foreclosure. Notwithstanding the foregoing, Trustor's indemnifications
and representations shall not extend to Hazardous Substances which first
originate on the Premises subsequent to Beneficiary's succession to title by
virtue of a foreclosure or acceptance of a deed in lieu of foreclosure. Upon a
transfer and assumption of the Loan in accordance with Section 30(b) of this
Deed of Trust, the Trustor shall be released from liability under Section 32 of
this Deed of Trust and under the Environmental Indemnification Agreement for
events, actions of third parties unrelated to Borrower, and Hazardous Substances
first arising or occurring with respect to the Premises after the date of
closing of the transfer of the Premises and assumption of the Loan, provided
that the transferee and such principals of transferee as determined by Lender
execute such guaranties and Lender's standard Environmental Indemnification
Agreement as may be required pursuant to Section 30(b) of this Deed of Trust
effective upon closing of the transfer and assumption.
(f) If any investigation, site monitoring, containment, cleanup, removal,
restoration or other remedial work of any kind or nature (the "Remedial Work")
is reasonably desirable (in the case of an operation and maintenance program or
similar monitoring or preventative programs) or necessary, as determined by an
independent environmental consultant selected by Beneficiary under any
applicable federal, state or local law, regulation or ordinance, or under any
judicial or administrative order or judgment, or by any governmental person,
board, commission or agency, because of or in connection with the current or
future presence, suspected presence, release or suspected release of a Hazardous
Substance into the air, soil, groundwater, or surface water at, on, about, under
or within the Premises or any portion thereof, Trustor shall within thirty (30)
days after written demand by Beneficiary for the performance (or within such
shorter time as may be required under applicable law, regulation, ordinance,
order or agreement), commence and thereafter diligently prosecute to completion
all such Remedial Work to the extent required by law. All Remedial Work shall be
performed by contractors approved in advance by Beneficiary (which approval in
each case shall not be unreasonably withheld or delayed) and under the
supervision of a consulting engineer approved in advance by Beneficiary. All
costs and expenses of such Remedial Work (including without limitation the
reasonable fees and expenses of Beneficiary's counsel) incurred in connection
with monitoring or review of the Remedial Work shall be paid by Trustor. If
Trustor shall fail or neglect to timely commence or cause to be commenced, or
shall fail to diligently prosecute to completion, such Remedial Work,
Beneficiary may (but shall not be required to) cause such Remedial Work to be
performed; and all costs and expenses thereof, or incurred in connection
therewith (including, without limitation, the reasonable fees and expenses of
Beneficiary's counsel), shall be paid by Trustor to Beneficiary forthwith after
demand and shall be a part of the Indebtedness.
(g) If recommended by any environmental report, assessment or audit of the
Premises, Trustor shall establish and comply with an operations and maintenance
program with respect to the Premises, in form and substance reasonably
acceptable to Beneficiary, prepared by an environmental consultant reasonably
acceptable to Beneficiary, which program shall address any asbestos containing
material or lead based paint that may now or in the future be detected at or on
the Premises. Without limiting the generality of the preceding sentence,
Beneficiary may require (i) periodic notices or reports to Beneficiary in form,
substance and at such intervals as Beneficiary may specify, (ii) an amendment to
such operations and maintenance program to address changing circumstances, laws
or other matters, (iii) at Beneficiary's sole expense, supplemental examination
of the Premises by consultants specified by Beneficiary, (iv) access to the
Premises by Beneficiary, its agents or servicer, to review and assess the
environmental condition of the Premises and Trustor's compliance with any
operations and maintenance program, and (v) variation of the operations and
maintenance program in response to the reports provided by any such consultants.
33. Captions. The captions or headings preceding the text of the
paragraphs or subparagraphs of this Deed of Trust are inserted only for
convenience of reference and shall not constitute a part of this Deed of Trust,
nor shall they in any way affect its meaning, construction or effect.
34. No Waiver; Modifications in Writing. No failure or delay on the part
of Beneficiary in exercising any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to any
party at law or in equity or otherwise. No amendment, modification, supplement,
termination or waiver of or to any provision of this Deed of Trust, nor consent
to any departure therefrom, shall be effective unless the same shall be in
writing and signed by or on behalf of the party to be charged with the
enforcement thereof. Any amendment, modification or supplement of or to any
provision of this Deed of Trust, any waiver of any provision of this Deed of
Trust, and any consent to any departure from the terms of any provision of this
Deed of Trust, shall be effective only in the specific instance and for the
specific purpose for which made or given.
35. Relationship. Beneficiary is only a lender under the Loan Documents,
and nothing contained in this Deed of Trust or the other Loan Documents and no
action taken by the parties pursuant hereto shall be deemed to constitute the
Beneficiary and any other of the parties to any of the Loan Documents a
partnership, an association, a joint venture or other entity, nor constitute
Beneficiary as a fiduciary for any of the parties.
36. Governing Law. This Deed of Trust shall be governed by the laws
(excluding conflicts of laws rules) of Arizona.
37. Time of Essence. Time is of the essence in the performance by the
parties of this Deed of Trust.
38. Construction. Trustor has been represented by its own counsel in this
transaction, and this Deed of Trust shall not be construed more strongly against
any party regardless of who was more responsible for its preparation.
39. Gender; Number; Terms. Words and phrases herein shall be construed as
in the singular or plural number and as masculine, feminine or neuter gender,
according to the context. The use of the words "herein," "hereof," "hereunder"
and other similar compounds of the word "here" shall refer to this entire Deed
of Trust and not to any particular section, paragraph or provision. The term
"person" and words importing persons as used in this Deed of Trust shall include
firms, associations, partnerships (including limited partnerships), joint
ventures, trusts, corporations, limited liability companies, and other legal
entities, including public or governmental bodies, agencies or
instrumentalities, as well as natural persons.
40. Integration. This Deed of Trust, together with the other Loan
Documents and the certain Environmental Indemnification Agreement executed by
Trustor, constitute the entire agreement between the parties hereto pertaining
to the subject matters hereof and thereof and supersede all negotiations,
preliminary agreements and all prior or contemporaneous discussions and
understandings of the parties hereto in connection with the subject matters
hereof and thereof.
41. Substitute Trustee. If, for any reason, Beneficiary prefers to appoint
a substitute Trustee hereunder, Beneficiary may, from time to time, by written
instrument, appoint one or more substitute Trustees, who shall succeed to all
the estate, rights, powers, and duties of the original Trustee named herein.
Such appointment may be executed by anyone acting in a representative capacity,
and such appointment shall be conclusively presumed to have been executed with
appropriate authority.
42. Indemnification of Trustee. Except for willful misconduct, Trustee
shall not be liable for any act or omission or error of judgment. Trustee may
rely on any document believed by Trustee in good faith to be genuine. All money
received by Trustee shall, until used or applied as herein provided, be held in
trust, but need not be segregated (except to the extent required by law), and
Trustee shall not be liable for interest thereon. Trustor hereby indemnifies
Trustee against all liability and expenses that Trustee may incur in the
performance of Trustee's duties hereunder.
43. General Indemnification. (a) Trustor shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties (defined below) from and against any and all Losses (defined below)
imposed upon or incurred by or asserted against any Indemnified Parties and
directly or indirectly arising out of or in any way relating to any one or more
of the following: (i) any accident, injury to or death of persons or loss of or
damage to property occurring in, on or about the Premises or any part thereof or
on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (ii) any use, nonuse or condition in, on or about the Premises
or any part thereof or on the adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (iii) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Premises or any part thereof; (iv) any failure of the Premises to be in
compliance with any applicable laws; (v) any and all claims, demands or
undertakings on its part to perform or discharge any of the terms, covenants, or
agreements contained in any Lease; or (vi) the payment of any commission, charge
or brokerage fee to anyone which may be payable in connection with the funding
of the Loan evidenced by the Note and secured by this Deed of Trust.
Notwithstanding anything herein to the contrary in this Paragraph 42, Trustor's
indemnification obligations herein shall not extend to and Trustor shall not be
liable to indemnify Beneficiary for losses arising from the willful misconduct
or gross negligence of Deed of Trust. Any amounts payable to Beneficiary by
reason of the application of this Paragraph shall become immediately due and
payable and shall bear interest at the Default Rate (as defined in the Note)
from the date loss or damage is sustained by Beneficiary until paid. The term
"Losses" shall mean any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, fines, penalties, charges, fees, judgments,
awards, amounts paid in settlement of whatever kind or nature (including but not
limited to attorneys' fees and other costs of defense). The term "Indemnified
Parties" shall mean (i) Beneficiary, (ii) any prior owner or holder of the Note,
(iii) any servicer or prior servicer of the Loan, (iv) any participant or any
prior participant in any portion of the Loan, (v) any trustees, custodians or
other fiduciaries who hold or who have held a full or partial interest in the
Loan for the benefit of any participant or other third party, (vi) any receiver
or other fiduciary appointed in a foreclosure or other collection proceeding,
(vii) any officers, directors, shareholders, partners, members, employees,
agents, servants, representatives, contractors, subcontractors, affiliates or
subsidiaries of any and all of the foregoing, and (viii) the heirs, legal
representatives, successors and assigns of any and all of the foregoing
(including, without limitation, any successors by merger, consolidation or
acquisition of all or a substantial portion of the Indemnified Parties' assets
and business), in all cases whether during the term of the Loan or as part of or
following a foreclosure of the Loan.
(b) Upon written request by any Indemnified Party, Trustor shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties; provided, however, if such attorney(s) or any other
professional(s) retained by Trustor for such Indemnified Party's defense fails
to promptly undertake and then remain actively engaged in the defense of such
Indemnified Party, or if such Indemnified Party determines in its reasonable
judgment that a conflict exists between Trustor and such Indemnified Party, then
such Indemnified Party may, in its reasonable discretion, engage its own
attorney(s) and other professional(s) for its defense or assistance, and, at the
option of such Indemnified Parties, its attorney(s) shall control the resolution
of any claim or proceeding. Upon demand, Trustor shall pay or, in the sole
discretion of the Indemnified Parties, reimburse, the Indemnified Parties for
the payment of reasonable fees and disbursements of attorneys, engineers,
environmental consultants, laboratories and other professionals in connection
therewith.
(c) Trustor shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless the Indemnified Parties from and against
any and all Losses imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out of or in any way
relating to any tax on the making and/or recording of this Deed of Trust, the
Note or any of the other Loan Documents.
44. Miscellaneous.
(a) This Deed of Trust and all provisions hereof shall extend to and be
binding upon Trustor and its heirs, successors, grantees and assigns, any
subsequent owner or owners of the Premises and all persons claiming under or
through Trustor (but this clause shall not be construed as constituting the
consent by Beneficiary to the transfer of any interest in the Premises), and the
word "Trustor" when used herein shall include any such person and all persons
liable for the payment of the Indebtedness or any part thereof, whether or not
such persons shall have executed said Note or this Deed of Trust. The word
"Beneficiary", when used herein, shall include the successors and assigns of
Beneficiary, and the holder or holders, from time to time, of the Note secured
hereby. In addition, in the event Trustor is a land trust or similar entity, the
term "Trustor" as used herein shall include the beneficiary or beneficiaries of
such land trust or similar entity.
(b) In the event one or more of the provisions contained in this Deed of
Trust or the Note secured hereby, or in any other security documents given to
secure the payment of the Note secured hereby, shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall, at the option of Beneficiary, not affect any other
provision of this Deed of Trust, and this Deed of Trust shall be construed as if
such invalid, illegal or unenforceable provision had never been contained herein
or therein.
(c) The Trustor will, from time to time, upon ten (10) business days'
prior written request from Beneficiary, make, execute, acknowledge and deliver
to Beneficiary such supplemental mortgages, certificates and other documents,
including without limitation UCC financing statements, as may be necessary for
better assuring and confirming unto Beneficiary any of the Premises, or for more
particularly identifying and describing the Premises, or to preserve or protect
the priority of this Deed of Trust lien, and generally do and perform such other
acts and things and execute and deliver such other instruments and documents as
may reasonably be deemed necessary or advisable by Beneficiary to carry out the
intentions of this Deed of Trust.
(d) Trustor shall not by act or omission permit any building or other
improvement on any premises not subject to the lien of this Deed of Trust to
rely on the Premises or any part thereof or any interest therein to fulfill any
municipal or governmental requirement, and Trustor hereby assigns to Beneficiary
any and all rights to give consent for all or any portion of the Premises or any
interest therein to be so used. Similarly, no building or other Improvement on
the Premises shall rely on any premises not subject to the lien of this Deed of
Trust or any interest therein to fulfill any governmental or municipal
requirement. Trustor shall not by act or omission impair the integrity of the
Premises as a single zoning lot separate and apart from all other premises. Any
act or omission by Trustor which would result in a violation of any of the
provisions of this paragraph shall be void.
(e) Trustor will, from time to time, upon ten (10) business days' prior
written request by Beneficiary, execute, acknowledge and deliver to Beneficiary,
a certificate stating that this Deed of Trust is unmodified and in full force
and effect (or, if there have been modifications, that this Deed of Trust is in
full force and effect as modified and setting forth such modifications) and
stating, to the extent Beneficiary has provided such information to Trustor, the
principal amount secured hereby and the interest accrued to date on such
principal amount. The estoppel certificate from Trustor shall also state to the
best knowledge of Trustor whether any offsets or defenses to the Indebtedness
exist and if so shall identify them.
(f) The Note secured hereby includes provisions for the assessment of a
Late Charge, as defined therein. Said Late Charge shall be secured hereby as
Indebtedness, as that term is used herein.
(g) Beneficiary shall have the right and option to exercise power of sale
or to commence a civil action to foreclose this Deed of Trust and to obtain a
decree of foreclosure. The failure to join any tenant or tenants as party
defendant or defendants in any such civil action or the failure of any decree of
foreclosure and sale to foreclose their rights shall not be asserted by Trustor
as a defense in any civil action instituted to collect the Indebtedness, or any
part thereof, or any deficiency remaining unpaid after foreclosure and sale of
the Premises, any statute or rule of law at any time existing to the contrary
notwithstanding.
(h) At the option of Beneficiary, this Deed of Trust shall become, subject
and subordinate, in whole or in part (but not with respect to priority of
entitlement to insurance proceeds or any award in condemnation) to any one or
more, or to all, Leases upon the execution by Beneficiary and recording or
registration thereof, at any time hereafter, in the Office of the Recorder in
and for the county wherein the Premises are situated, or such other office as
determined by Beneficiary, of a unilateral declaration to that effect.
(i) In the event that maturity of the Indebtedness is accelerated by
Beneficiary because of the occurrence of an Event of Default hereunder and a
tender of payment is made by or on behalf of Trustor in the amount necessary to
satisfy the Indebtedness at any time prior to judicial confirmation or other
conclusion if confirmation is not required, of a foreclosure sale or sale under
a power of sale, then such tender shall constitute a prepayment under the Note
and shall, to the extent specified in the Note, require payment of the
prepayment premium provided for in the Note.
(j) All agreements between Trustor and Beneficiary (including, without
limitation, those contained in this Deed of Trust and the Note) are expressly
limited so that in no event whatsoever shall the amount paid or agreed to be
paid to the Beneficiary exceed the highest lawful rate of interest permissible
under the laws of Arizona. If, from any circumstances whatsoever, fulfillment of
any provision hereof or the Note or any other documents securing the
Indebtedness at the time performance of such provision shall be due, shall
involve the payment of interest exceeding the highest rate of interest permitted
by law which a court of competent jurisdiction may deem applicable hereto, then,
ipso facto, the obligation to be fulfilled shall be reduced to the highest
lawful rate of interest permissible under the laws of Arizona; and if for any
reason whatsoever Beneficiary shall ever receive as interest an amount which
would be deemed unlawful, such interest shall be applied to the payment of the
last maturing installment or installments of the principal Indebtedness (whether
or not then due and payable) and not to the payment of interest.
(k) Trustor covenants and agrees that it shall constitute an Event of
Default hereunder if any of the proceeds of the loan for which the Note is given
will be used, or were used, as the case may be, for the purpose (whether
immediate, incidental or ultimate) of purchasing or "carrying" any "margin
stock" as such terms are defined in Regulation U of the Board of Governors of
the Federal Reserve System (12 CFR Part 221) or for the purpose of reducing or
retiring any indebtedness which was originally incurred for any such purpose.
(l) Trustor shall exert its best efforts to include a "no lien" provision
in any property management agreement hereafter entered into by Trustor or its
beneficiary with a property manager for the Premises, whereby the property
manager waives and releases any and all mechanics' lien rights that he, or
anyone claiming through or under such manager, may have. Such property
management agreement containing such "no lien" provision or a short form thereof
shall, at Beneficiary's request, be recorded in the office of the Recorder in
and for the County wherein the Premises is situated, or such other office as
reasonably requested by Beneficiary.
45. State Law Provisions, Waivers and Agreements. (a) Beneficiary and
Trustee shall have all rights, benefits and remedies conferred or contemplated
by the A.R.S. ss.ss. 33--801 through 821 (the "Deed of Trust Act").
Notwithstanding the foregoing, Beneficiary may, at its option in its sole
discretion, elect to foreclose this Deed of Trust judicially as authorized by
A.R.S. ss. 33-807.
(b) In addition to, and not in limitation of, any other remedy provided in
or available under this Deed of Trust, Beneficiary shall have all the rights set
forth in A.R.S. ss. 33-702B (as amended, supplemented or supplanted) regarding
enforcement of the assignment of rents contained herein, or in any separate
assignment of rents from Trustor to Beneficiary.
(c) It is Trustor's intention that the obligations of Trustor to pay and
perform each and all of the obligations secured by this Deed of Trust (for
purposes of this subsection, the "Secured Obligations") be governed according to
the express, bargained-for terms hereof and of the other Loan Documents. The
interest rate and terms applicable to the Note and the other Loan Documents have
been negotiated and agreed to by Beneficiary upon that basis. Therefore, to the
full extent allowable under Arizona law, Trustor hereby expressly waives all
provisions of Arizona law (including without limitation those specifically
referenced below) which might otherwise be construed, contrary to the terms of
the Loan Documents, to limit the liability of Trustor with respect to the
Secured Obligations, and hereby expressly agrees that no such provision of law
shall be applicable to such obligations. To that end, Trustor expressly:
(i) agrees that the amount of any unpaid or unperformed Secured
Obligations remaining following any sale of collateral (herein referred to
as the "Deficiency") shall be determined solely by the purchase price
(whether cash, credit bid, or otherwise, and net of all costs and expenses
of and relating to the sale) actually received for such collateral, and
waives all provisions of A.R.S. ss.ss. 12-1566, 33-725, 33-727 and 33-814
which might otherwise determine the Deficiency by the "fair market value"
of the collateral sold or by any other valuation in excess of such actual
net purchase price;
(ii) waives all provisions of A.R.S. ss. 33-814 which purport to
limit the time within which an action upon a Deficiency may be commenced,
or to eliminate any Deficiency if such an action is not commenced within
such time limited, and agrees that such provisions shall not apply to any
Deficiency following a trustee's sale under this Deed of Trust;
(iii) agrees that if, notwithstanding the foregoing express
intention and agreement of Trustor to the contrary, the provisions of
A.R.S. ss. 33-814 are held by a court to be applicable, then:
(A) for purposes of A.R.S. ss. 33-814(B), the ninety-day
period within which an action for a deficiency judgment may be
brought shall not begin until the date of the last trustee's sale or
other nonjudicial or judicial foreclosure sale of any real or
personal property collateral under any of the Deeds of Trust which
secure the Note, whether such collateral is located within or
outside of Arizona;
(B) the phrase "full satisfaction of the obligation" in A.R.S.
ss. 33-814(D) shall be construed to refer solely to the obligation
of Trustor to repay the site-specific monetary indebtedness
evidenced by the Note, and not to any separate and independent
obligations (1) of Trustor which are created by this Deed of Trust
(including, without limitation, any covenants, agreements or
indemnities which are expressly stated to survive any foreclosure
hereof) or which are created under or evidenced or secured by any
other Loan Document executed in connection herewith, regardless of
whether such separate and independent obligations are secured hereby
by virtue of any cross-collateralization or cross-default provisions
or otherwise, or (2) of any other person which is directly,
indirectly or contingently liable with respect to the Secured
Obligations (all such separate and independent obligations being
referred to herein as the "Separate Obligations"); and
(C) notwithstanding any application of A.R.S. ss. 33-814(D) to
limit or bar any action against Trustor with respect to the monetary
indebtedness evidenced by the Note following a trustee's sale or
sales of the entire trust estate such section shall not be
applicable to, or in any way limit or impede, any action with
respect to, such Separate Obligations or any collateral which might
now or hereafter be given by Trustor as security therefor;
(iv) waives all rights of reinstatement following acceleration of
the obligations secured by this Deed of Trust, including any which might
otherwise be available under A.R.S. ss. 33-813, it being agreed that
Trustor has bargained for the notice and cure rights given to Trustor,
pursuant to Paragraph 15 hereof and under the other Loan Documents; that
such rights provide Trustor with sufficient opportunity to prevent
acceleration following a breach or default which could become an Event of
Default; and that Trustor has agreed in return to waive any further right
of reinstatement following acceleration should no cure be timely made;
(v) waives all rights of redemption Trustor might otherwise have
under Arizona law with respect to the Premises or any other collateral,
whether by statute, by subrogation, or otherwise, including without
limitation any rights under A.R.S. ss.ss. 12-1281 through 12-1283;
(vi) waives and agrees not to assert any and all rights, benefits
and defenses which might otherwise be available under the provision of
A.R.S. ss.ss. 12-1641, 12-1642, 44-141, 44-142 or 47-3605, or Arizona
Rules of Civil Procedure Rule 17(f); and
(vii) agrees to be and remain liable for the Secured Obligations,
and agrees (including as contemplated by A.R.S. ss.ss. 12-1566(E) and
33-814(C) with respect to a guaranty) that this Deed of Trust may be
enforced (and sale had hereunder or judgment given hereon) at any time and
independent of any other action or judgment, all regardless of whether, or
when, a trustee's or foreclosure sale of any collateral given by Trustor
or any other person is held or any other nonjudicial or judicial action to
realize upon collateral, or against Trustor or any other person obligated
with respect to the Secured Obligations, is commenced, maintained,
concluded, continued or discontinued.
(d) The statutes referred to the above in this Paragraph shall include any
further statutes amending, supplementing or supplanting same. The waivers and
agreements contained in this Paragraph and elsewhere in this Deed of Trust are
given by Trustor knowingly, intelligently and voluntarily, upon advice of
counsel, to induce Beneficiary to accept a lower interest rate on the Notes and
other Loan Document terms more favorable to Trustor than would be acceptable to
Beneficiary in the absence thereof, and accordingly are intended to be broadly
and liberally construed in favor of Beneficiary.
46. Waiver of Co-Tenancy Rights. Trustor, and each party comprising
Trustor, hereby waive all of their co-tenancy rights provided at law or in
equity for tenants in common between, among or against each other, including,
without limitation, any right to partition the Premises.
47. ERISA Trustor hereby represents, warrants and agrees that as of the
date hereof, none of the investors in or owners of the Trustor is an employee
benefit plan as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 as amended, a plan as defined in Section 4975(e)(1) of the
Internal Revenue Code of 1986 as amended, nor an entity the assets of which are
deemed to include plan assets pursuant to Department of Labor regulation Section
2510.3-101 (the "Plan Asset Regulation"). Trustor further represents, warrants
and agrees that at all times during the term of the Loan the Trustor shall
satisfy an exception to the Plan Asset Regulation, such that the assets of the
Trustor shall not be deemed to include plan assets. If at any time during the
entire term of the Loan any of the investors in or owners of the Trustor shall
include a plan or entity described in the first sentence of this Paragraph,
Trustor shall as soon as reasonably possible following an investment by such a
plan or entity, provide Beneficiary with an opinion of counsel reasonably
satisfactory to Beneficiary indicating that the assets of the Trustor are not
deemed to include plan assets pursuant to the Plan Asset Regulation. In lieu of
such an opinion, the Beneficiary may in its sole discretion accept such other
assurances from the Trustor as are necessary to satisfy Beneficiary in its sole
discretion that the assets of the Trustor are not deemed to include plan assets
pursuant to the Plan Asset Regulation. Trustor understands that the
representations and warranties herein are a material inducement to Beneficiary
in the making of the Loan, without which Beneficiary would have been unwilling
to proceed with the closing of the Loan.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. TRUSTOR
ACKNOWLEDGES AND AGREES THAT THERE ARE NO OTHER TERMS OR ORAL PROMISES NOT
CONTAINED IN THIS WRITTEN CONTRACT AND NO SUCH OTHER TERMS AND PROVISIONS MAY
BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY
ANOTHER WRITTEN AGREEMENT.
Trustor acknowledges receipt of a copy of this instrument at the time of
execution hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Trustor has executed this instrument the day and
year first above written.
Century Properties Fund XIX, a California
limited partnership,
By: Fox Partners II, a California
general partnership, its General
Partner,
By: Fox Capital Management
Corporation, a California
corporation, its Managing
Partner
By: /s/Patti K. Fielding
Patti K. Fielding,
Executive Vice
President and Treasurer
STATE OF Colorado
COUNTY OF Denver
On this 27 day of April, 2005, before me, the undersigned, a notary
public, personally appeared Patti K. Fielding, to me personally known, who being
by me duly sworn did say that the person is the Executive Vice President and
Treasurer of Fox Capital Management Corporation, the Managing Partner of Fox
Partners II, the general partner of CENTURY PROPERTIES FUND XIX, a California
limited partnership, a limited partnership, executing the foregoing instrument;
that no seal has been procured by the corporation; that the instrument was
signed on behalf of the corporation as general partner of Century Properties
Fund XIX, by authority of the corporation's Board of Directors; and such officer
acknowledged execution of the instrument to be the voluntary act and deed of the
corporation on behalf of the limited partnership, by it and by the officer
voluntarily executed.
/s/Gail D. Coalson
Name: Gail D. Coalson
Notary Public
[SIGNATURE PAGE TO DEED OF TRUST]