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) June 1, 2005
NATIONAL PROPERTY INVESTORS 5
(Exact name of Registrant as specified in its charter)
California 0-11095 22-2385051
(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 June 1, 2005, National Property Investors 5 (the "Partnership") obtained a
second mortgage loan on one of its investment properties, Oakwood Village
Apartments, located in Winter Park, Florida. The second mortgage in the
principal amount of $2,150,000, requires monthly payments of interest beginning
July 1, 2005 until the loan matures June 1, 2008. Interest is variable and is
equal to the one-month LIBOR rate plus 300 basis points. In addition, the
Partnership is required to deposit approximately $7,000 each month into a
replacement reserve fund to be used for capital improvements at the investment
property.
In connection with the new financing, the Partnership agreed to certain
modifications on the existing mortgage loan encumbering Oakwood Village
Apartments. The modification of terms consists of an interest rate of 7.48%, and
monthly payments of principal and interest of approximately $43,000, commencing
July 1, 2005 through the maturity of July 1, 2015, at which time a balloon
payment of approximately $5,395,000 is due. The previous terms consisted of
monthly payments of principal and interest of approximately $55,000 with a
stated interest rate of 7.18% through the maturity date of March 1, 2021, at
which time the mortgage loan was scheduled to be fully amortized.
In accordance with the terms of the loan agreement for the new mortgage loan,
payment of the note may be accelerated at the option of the lender if an Event
of Default, as defined in the mortgage agreement, occurs. Events of Default
include, but are not limited to: nonpayment of monthly amounts due and failure
to maintain insurance coverage on the investment property.
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
Multifamily Note, Allonge and Amendment to Multifamily Note, Replacement Reserve
Agreement and Multifamily Mortgage, Assignment of Rents and Security Agreement,
copies of which are filed as exhibits 10.20, 10.21, 10.22 and 10.23 to this
report.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
The following exhibits are filed with this report:
10.20 Multifamily Note dated June 1, 2005 between National Property
Investors 5, a California limited partnership, and GMAC Commercial
Mortgage Bank. *
10.21 Allonge and Amendment to Multifamily Note dated June 1, 2005 between
National Property Investors 5, a California limited partnership, and
GMAC Commercial Mortgage Bank.
10.22 Replacement Reserve Agreement dated June 1, 2005 between National
Property Investors 5, a California limited partnership, and GMAC
Commercial Mortgage Bank. *
10.23 Multifamily Mortgage, Assignment of Rents and Security Agreement,
dated June 1, 2005 between National Property Investors 5, a
California limited partnership, and GMAC Commercial Mortgage Bank. *
*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.
National Property Investors 5
By: NPI Equity Investments, Inc.
Managing General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: June 7, 2005
Exhibit 10.20
FHLMC Loan No. 002718308
Oakwood Village on Lake Nan Apartments
MULTIFAMILY NOTE
MULTISTATE - ADJUSTABLE RATE
REVISION DATE 3-25-04
US $2,150,000.00 Effective Date: as of June 1, 2005
FOR VALUE RECEIVED, the undersigned (together with such party's or
parties' successors and assigns, "Borrower"), jointly and severally (if more
than one) promises to pay to the order of GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial bank the principal sum of Two Million One Hundred Fifty Thousand and
00/100 Dollars (US $2,150,000.00), with interest on the unpaid principal balance
as hereinafter provided.
1. Defined Terms.
(a) As used in this Note:
"Adjustable Interest Rate" means the variable annual interest rate
calculated for each Interest Adjustment Period so as to equal the
Index Rate for such Interest Adjustment Period (truncated at the
fifth (5th) decimal place if necessary) plus the Margin. However, in
no event will the Adjustable Interest Rate exceed the Capped
Interest Rate.
"Amortization Period" means a period of -0- full consecutive
calendar months.
"Base Recourse" means a portion of the Indebtedness equal to zero
percent (0%) of the original principal balance of this Note.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which Lender is not open for business.
"Capped Interest Rate" is not applicable, there is no Capped
Interest Rate for the Loan.
"Default Rate" means a variable annual interest rate equal to four
(4) percentage points above the Adjustable Interest Rate in effect
from time to time. However, at no time will the Default Rate exceed
the Maximum Interest Rate.
"Index Rate" means, for any Interest Adjustment Period, the
Reference Bill(R) Index Rate for such Interest Adjustment Period.
"Installment Due Date" means, for any monthly installment of
interest only or principal and interest, the date on which such
monthly installment is due and payable pursuant to Section 3 of this
Note. The "First Installment Due Date" under this Note is July 1,
2005.
"Interest Adjustment Period" means each successive one (1) calendar
month period until the entire Indebtedness is paid in full, except
that the first Interest Adjustment Period is the period from the
date of this Note through June 30, 2005. Therefore, the second
Interest Adjustment Period shall be the period from July 1, 2005
through July 31, 2005, and so on until the entire Indebtedness is
paid in full.
"Lender" means the holder from time to time of this Note.
"LIBOR Index" means the British Bankers Association's (BBA) one (1)
month LIBOR Rate for United States Dollar deposits, as displayed on
the LIBOR Index Page used to establish the LIBOR Index Rate.
"LIBOR Index Rate" means, for any Interest Adjustment Period after
the first Interest Adjustment Period, the BBA's LIBOR Rate for the
LIBOR Index released by the BBA most recently preceding the first
day of such Interest Adjustment Period, as such LIBOR Rate is
displayed on the LIBOR Index Page. The LIBOR Index Rate for the
first Interest Adjustment Period means the British Bankers
Association's (BBA) LIBOR Rate for the LIBOR Index released by the
BBA most recently preceding the first day of the month in which the
first Interest Adjustment Period begins, as such LIBOR Rate is
displayed on the LIBOR Index Page. "LIBOR Index Page" is the
Bloomberg L.P., page "BBAM", or such other page for the LIBOR Index
as may replace page BBAM on that service, or at the option of Lender
(i) the applicable page for the LIBOR Index on another service which
electronically transmits or displays BBA LIBOR Rates, or (ii) any
publication of LIBOR rates available from the BBA. In the event the
BBA ceases to set or publish a LIBOR rate/interest settlement rate
for the LIBOR Index, Lender will designate an alternative index, and
such alternative index shall constitute the LIBOR Index Rate.
"Loan" means the loan evidenced by this Note.
"Lockout Period" is not applicable, there is no Lockout Period under
this Note.
"Margin" means three (3) percentage points (300 basis points).
"Maturity Date" means the earlier of (i) June 1, 2008 (the
"Scheduled Maturity Date"), and (ii) the date on which the unpaid
principal balance of this Note becomes due and payable by
acceleration or otherwise pursuant to the Loan Documents or the
exercise by Lender of any right or remedy under any Loan Document.
"Maximum Interest Rate" means the rate of interest that results in
the maximum amount of interest allowed by applicable law.
"Reference Bills(R)" means the unsecured general obligations of the
Federal Home Loan Mortgage Corporation ("Freddie Mac") designated by
Freddie Mac as "Reference Bills(R)" and having original durations to
maturity most comparable to the term of the Reference Bill Index,
and issued by Freddie Mac at regularly scheduled auctions. In the
event Freddie Mac shall at any time cease to designate any unsecured
general obligations of Freddie Mac as "Reference Bills", then at the
option of Lender (i) Lender may select from time to time another
unsecured general obligation of Freddie Mac having original
durations to maturity most comparable to the term of the Reference
Bill Index and issued by Freddie Mac at regularly scheduled
auctions, and the term "Reference Bills" as used in this Note shall
mean such other unsecured general obligations as selected by Lender;
or (ii) for any one or more Interest Adjustment Periods, Lender may
use the applicable LIBOR Index Rate as the Index Rate for such
Interest Adjustment Period(s).
"Reference Bill Index" means the one month Reference Bills.
One-month reference bills have original durations to maturity of
approximately 30 days.
"Reference Bill Index Rate" means, for any Interest Adjustment
Period after the first Interest Adjustment Period, the Money Market
Yield for the Reference Bills as established by the Reference Bill
auction conducted by Freddie Mac most recently preceding the first
day of such Interest Adjustment Period, as displayed on the
Reference Bill Index Page. The Reference Bill Index Rate for the
first Interest Adjustment Period means the Money Market Yield for
the Reference Bills as established by the Reference Bill auction
conducted by Freddie Mac most recently preceding the first day of
the month in which the first Interest Adjustment Period begins, as
displayed on the Reference Bill Index Page. The "Reference Bill
Index Page" is the Freddie Mac Debt Securities Web Page (accessed
via the Freddie Mac internet site at www.freddiemac.com), or at the
option of Lender, any publication of Reference Bills auction results
available from Freddie Mac. However, if Freddie Mac has not
conducted a Reference Bill auction within the 60-calendar day period
prior to the first day of an Interest Adjustment Period, the
Reference Bill Index Rate for such Interest Adjustment Period will
be the LIBOR Index Rate for such Interest Adjustment Period.
"Remaining Amortization Period" means, at any point in time, the
number of consecutive calendar months equal to the number of months
in the Amortization Period minus the number of scheduled monthly
installments of principal and interest that have elapsed since the
date of this Note.
"Security Instrument" means the multifamily mortgage, deed to secure
debt or deed of trust effective as of the effective date of this
Note, from Borrower to or for the benefit of Lender and securing
this Note.
"Window Period" means the three (3) consecutive calendar month
period prior to the Scheduled Maturity Date.
"Yield Maintenance Period" means the period from and including the
day following the expiration of the Lockout Period (or if there is
no Lockout Period, from and including the date of this Note) until
but not including N/A.
(b) Other capitalized terms used but not defined in this Note
shall have the meanings given to such terms in the Security
Instrument.
2. Address for Payment. All payments due under this Note shall be
payable at c/o GMAC Commercial Mortgage Corporation, 200
Witmer Road, P.O. Box 809, Horsham, Pennsylvania 19044, Attn:
Servicing-Account Manager, or such other place as may be
designated by Notice to Borrower from or on behalf of Lender.
3. Payments.
(a) Interest will accrue on the outstanding principal balance of
this Note at the Adjustable Interest Rate, subject to the
provisions of Section 8 of this Note.
(b) Interest under this Note shall be computed, payable and
allocated on the basis of an actual/360 interest calculation
schedule (interest is payable for the actual number of days in
each month, and each month's interest is calculated by
multiplying the unpaid principal amount of this Note as of the
first day of the month for which interest in being calculated
by the applicable Adjustable Interest Rate, dividing the
product by 360, and multiplying the quotient by the number of
days in the month for which interest is being calculated). For
convenience in determining the amount of a monthly installment
of principal and interest under this Note, Lender will use a
30/360 interest calculation payment schedule (each year is
treated as consisting of twelve 30-day months). However, as
provided above, the portion of the monthly installment
actually payable as and allocated to interest will be based
upon an actual/360 interest calculation schedule, and the
amount of each installment attributable to principal and the
amount attributable to interest will vary based upon the
number of days in the month for which such installment is
paid. Each monthly payment of principal and interest will
first be applied to pay in full interest due, and the balance
of the monthly payment paid by Borrower will be credited to
principal.
(c) Unless disbursement of principal is made by Lender to Borrower
on the first day of a calendar month, interest for the period
beginning on the date of disbursement and ending on and
including the last day of such calendar month shall be payable
by Borrower simultaneously with the execution of this Note. If
disbursement of principal is made by Lender to Borrower on the
first day of a calendar month, then no payment will be due
from Borrower at the time of the execution of this Note. The
Installment Due Date for the first monthly installment payment
under Section 3(d) of interest only or principal and interest,
as applicable, will be the First Installment Due Date set
forth in Section 1(a) of this Note. Except as provided in this
Section 3(c) and in Section 10, accrued interest will be
payable in arrears.
(d) Beginning on the First Installment Due Date, and continuing
until and including the monthly installment due on the
Maturity Date, accrued interest only shall be payable by
Borrower in consecutive monthly installments due and payable
on the first day of each calendar month. The amount of the
monthly installment of interest only payable pursuant to this
Section 3(d) on an Installment Due Date shall equal the
product of (i) annual interest on the unpaid principal balance
of this Note as of the first day of the Interest Adjustment
Period immediately preceding the Installment Due Date at the
Adjustable Interest Rate in effect for such Interest
Adjustment Period, divided by 360, multiplied by (ii) the
number of days in such Interest Adjustment Period.
(e) All remaining Indebtedness, including all principal and
interest, shall be due and payable by Borrower on the Maturity
Date.
(f) Lender shall provide Borrower with notice, given in the manner
specified in the Security Instrument, of the amount of each
monthly installment due under this Note. However, if Lender
has not provided Borrower with prior notice of the monthly
payment due on any Installment Due Date, then Borrower shall
pay on that Installment Due Date an amount equal to the
monthly installment payment for which Borrower last received
notice. If Lender at any time determines that Borrower has
paid one or more monthly installments in an incorrect amount
because of the operation of the preceding sentence, or because
Lender has miscalculated the Adjustable Interest Rate or has
otherwise miscalculated the amount of any monthly installment,
then Lender shall give notice to Borrower of such
determination. If such determination discloses that Borrower
has paid less than the full amount due for the period for
which the determination was made, Borrower, within 30 calendar
days after receipt of the notice from Lender, shall pay to
Lender the full amount of the deficiency. If such
determination discloses that Borrower has paid more than the
full amount due for the period for which the determination was
made, then the amount of the overpayment shall be credited to
the next installment(s) of interest only or principal and
interest, as applicable, due under this Note (or, if an Event
of Default has occurred and is continuing, such overpayment
shall be credited against any amount owing by Borrower to
Lender).
(g) All payments under this Note shall be made in immediately
available U.S. funds.
(h) Any regularly scheduled monthly installment of interest only
or principal and interest payable pursuant to this Section 3
that is received by Lender before the date it is due shall be
deemed to have been received on the due date for the purpose
of calculating interest due.
(i) Any accrued interest remaining past due for 30 days or more,
at Lender's discretion, may be added to and become part of the
unpaid principal balance of this Note and any reference to
"accrued interest" shall refer to accrued interest which has
not become part of the unpaid principal balance. Any amount
added to principal pursuant to the Loan Documents shall bear
interest at the applicable rate or rates specified in this
Note and shall be payable with such interest upon demand by
Lender and absent such demand, as provided in this Note for
the payment of principal and interest.
(j) In accordance with Section 14, interest charged under this
Note cannot exceed the Maximum Interest Rate. If the
Adjustable Interest Rate at any time exceeds the Maximum
Interest Rate, resulting in the charging of interest hereunder
to be limited to the Maximum Interest Rate, then any
subsequent reduction in the Adjustable Interest Rate shall not
reduce the rate at which interest under this Note accrues
below the Maximum Interest Rate until the total amount of
interest accrued hereunder equals the amount of interest which
would have accrued had the Adjustable Interest Rate at all
times been in effect.
4. Application of Payments. If at any time Lender receives, from
Borrower or otherwise, any amount applicable to the
Indebtedness which is less than all amounts due and payable at
such time, Lender may apply the amount received to amounts
then due and payable in any manner and in any order determined
by Lender, in Lender's discretion. Borrower agrees that
neither Lender's acceptance of a payment from Borrower in an
amount that is less than all amounts then due and payable nor
Lender's application of such payment shall constitute or be
deemed to constitute either a waiver of the unpaid amounts or
an accord and satisfaction.
5. Security. The Indebtedness is secured by, among other things,
the Security Instrument, and reference is made to the Security
Instrument for other rights of Lender as to collateral for the
Indebtedness.
6. Acceleration. If an Event of Default has occurred and is
continuing, the entire unpaid principal balance, any accrued
interest, any prepayment premium payable under Section 10, and
all other amounts payable under this Note and any other Loan
Document, shall at once become due and payable, at the option
of Lender, without any prior notice to Borrower (except if
notice is required by applicable law, then after such notice).
Lender may exercise this option to accelerate regardless of
any prior forbearance. For purposes of exercising such option,
Lender shall calculate the prepayment premium as if prepayment
occurred on the date of acceleration. If prepayment occurs
thereafter, lender shall recalculate the prepayment premium as
of the actual prepayment date.
7. Late Charge.
(a) If any monthly installment of interest or principal and
interest or other amount payable under this Note or under the
Security Instrument or any other Loan Document is not received
in full by Lender within five (5) days after the installment
or other amount is due, counting from and including the date
such installment or other amount is due (unless applicable law
requires a longer period of time before a late charge may be
imposed, in which event such longer period shall be
substituted), Borrower shall pay to Lender, immediately and
without demand by Lender, a late charge equal to five percent
(5%) of such installment or other amount due (unless
applicable law requires a lesser amount be charged, in which
event such lesser amount shall be substituted).
(b) Borrower acknowledges that its failure to make timely payments
will cause Lender to incur additional expenses in servicing
and processing the Loan and that it is extremely difficult and
impractical to determine those additional expenses. Borrower
agrees that the late charge payable pursuant to this Section
represents a fair and reasonable estimate, taking into account
all circumstances existing on the date of this Note, of the
additional expenses Lender will incur by reason of such late
payment. The late charge is payable in addition to, and not in
lieu of, any interest payable at the Default Rate pursuant to
Section 8.
8. Default Rate.
(a) So long as (i) any monthly installment under this Note remains
past due for thirty (30) days or more or (ii) any other Event
of Default has occurred and is continuing, then
notwithstanding anything in Section 3 of this Note to the
contrary, interest under this Note shall accrue on the unpaid
principal balance from the Installment Due Date of the first
such unpaid monthly installment or the occurrence of such
other Event of Default, as applicable, at the Default Rate.
(b) From and after the Maturity Date, the unpaid principal balance
shall continue to bear interest at the Default Rate until and
including the date on which the entire principal balance is
paid in full.
(c) Borrower acknowledges that (i) its failure to make timely
payments will cause Lender to incur additional expenses in
servicing and processing the Loan, (ii) during the time that
any monthly installment under this Note is delinquent for
thirty (30) days or more, Lender will incur additional costs
and expenses arising from its loss of the use of the money due
and from the adverse impact on Lender's ability to meet its
other obligations and to take advantage of other investment
opportunities; and (iii) it is extremely difficult and
impractical to determine those additional costs and expenses.
Borrower also acknowledges that, during the time that any
monthly installment under this Note is delinquent for thirty
(30) days or more or any other Event of Default has occurred
and is continuing, Lender's risk of nonpayment of this Note
will be materially increased and Lender is entitled to be
compensated for such increased risk. Borrower agrees that the
increase in the rate of interest payable under this Note to
the Default Rate represents a fair and reasonable estimate,
taking into account all circumstances existing on the date of
this Note, of the additional costs and expenses Lender will
incur by reason of the Borrower's delinquent payment and the
additional compensation Lender is entitled to receive for the
increased risks of nonpayment associated with a delinquent
loan.
9. Limits on Personal Liability.
(a) Except as otherwise provided in this Section 9, Borrower shall
have no personal liability under this Note, the Security
Instrument or any other Loan Document for the repayment of the
Indebtedness or for the performance of any other obligations
of Borrower under the Loan Documents and Lender's only
recourse for the satisfaction of the Indebtedness and the
performance of such obligations shall be Lender's exercise of
its rights and remedies with respect to the Mortgaged Property
and to any other collateral held by Lender as security for the
Indebtedness. This limitation on Borrower's liability shall
not limit or impair Lender's enforcement of its rights against
any guarantor of the Indebtedness or any guarantor of any
other obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the amount
of the Base Recourse, plus any other amounts for which
Borrower has personal liability under this Section 9.
(c) In addition to the Base Recourse, Borrower shall be personally
liable to Lender for the repayment of a further portion of the
Indebtedness equal to any loss or damage suffered by Lender as
a result of the occurrence of any of the following events:
(i) Borrower fails to pay to Lender upon demand after an Event of Default all
Rents to which Lender is entitled under Section 3(a) of the Security
Instrument and the amount of all security deposits collected by Borrower
from tenants then in residence. However, Borrower will not be personally
liable for any failure described in this subsection (i) if Borrower is
unable to pay to Lender all Rents and security deposits as required by the
Security Instrument because of a valid order issued in a bankruptcy,
receivership, or similar judicial proceeding.
(ii) Borrower fails to apply all insurance proceeds and
condemnation proceeds as required by the Security Instrument.
However, Borrower will not be personally liable for any
failure described in this subsection (ii) if Borrower is
unable to apply insurance or condemnation proceeds as required
by the Security Instrument because of a valid order issued in
a bankruptcy, receivership, or similar judicial proceeding.
(iii) Borrower fails to comply with Section 14(g) or (h) of the
Security Instrument relating to the delivery of books and
records, statements, schedules and reports.
(iv) Borrower fails to pay when due in accordance with the terms of
the Security Instrument the amount of any item below marked
"Deferred"; provided however, that if no item is marked
"Deferred", this Section 9(c)(iv) shall be of no force or
effect
[Deferred] Insurance premiums or other insurance premiums,
[Collect] Taxes,
[Deferred] water and sewer charges (that could become a lien
on the Mortgaged Property),
[N/A] ground rents,
[Deferred] assessments or other charges (that could become a
lien on the Mortgaged Property)
(d) In addition to the Base Recourse, Borrower shall be personally liable to
Lender for:
(i) the performance of all of Borrower's obligations under Section
18 of the Security Instrument (relating to environmental
matters);
(ii) the costs of any audit under Section 14(g) of the Security
Instrument; and
(iii) any costs and expenses incurred by Lender in connection with
the collection of any amount for which Borrower is personally
liable under this Section 9, including Attorneys' Fees and
Costs and the costs of conducting any independent audit of
Borrower's books and records to determine the amount for which
Borrower has personal liability.
(e) All payments made by Borrower with respect to the Indebtedness
and all amounts received by Lender from the enforcement of its
rights under the Security Instrument and the other Loan
Documents shall be applied first to the portion of the
Indebtedness for which Borrower has no personal liability.
(f) Notwithstanding the Base Recourse, Borrower shall become
personally liable to Lender for the repayment of all of the
Indebtedness upon the occurrence of any of the following
Events of Default:
(i) Borrower's ownership of any property or operation of any
business not permitted by Section 33 of the Security
Instrument;
(ii) a Transfer (including, but not limited to, a lien or
encumbrance) that is an Event of Default under Section 21 of
the Security Instrument, other than a Transfer consisting
solely of the involuntary removal or involuntary withdrawal of
a general partner in a limited partnership or a manager in a
limited liability company; or
(iii) fraud or written material misrepresentation by Borrower or any
officer, director, partner, member or employee of Borrower in
connection with the application for or creation of the
Indebtedness or any request for any action or consent by
Lender.
(g) To the extent that Borrower has personal liability under this
Section 9, Lender may exercise its rights against Borrower
personally without regard to whether Lender has exercised any
rights against the Mortgaged Property or any other security,
or pursued any rights against any guarantor, or pursued any
other rights available to Lender under this Note, the Security
Instrument, any other Loan Document or applicable law. To the
fullest extent permitted by applicable law, in any action to
enforce Borrower's personal liability under this Section 9,
Borrower waives any right to set off the value of the
Mortgaged Property against such personal liability.
10. Voluntary and Involuntary Prepayments.
(a) Any receipt by Lender of principal due under this Note prior
to the Scheduled Maturity Date, other than principal required
to be paid in monthly installments pursuant to Section 3,
constitutes a prepayment of principal under this Note. Without
limiting the foregoing, any application by Lender, prior to
the Scheduled Maturity Date, of any proceeds of collateral or
other security to the repayment of any portion of the unpaid
principal balance of this Note constitutes a prepayment under
this Note.
(b) Borrower may not voluntarily prepay any portion of the
principal balance of this Note during the Lockout Period, if a
Lockout Period is applicable to this Note. However, if any
portion of the principal balance of this Note is prepaid
during the Lockout Period by reason of the application by
Lender of any proceeds of collateral or other security to any
portion of the unpaid principal balance of this Note or
following a determination that the prohibition on voluntary
prepayments during the Lockout Period is in contravention of
applicable law, then Borrower must also pay to Lender upon
demand by Lender, a prepayment premium equal to five percent
(5.0%) of the amount of principal being prepaid.
(c) Following the end of the Lockout Period, Borrower may
voluntarily prepay all of the unpaid principal balance of this
Note on a Business Day designated as the date for such
prepayment in a Notice from Borrower to Lender given at least
30 days prior to the date of such prepayment. Unless otherwise
expressly provided in the Loan Documents, Borrower may not
voluntarily prepay less than all of the unpaid principal
balance of this Note.
(d) Borrower acknowledges that Lender has agreed that principal
may be prepaid other than on the last calendar day of a month
only because, for the purposes of the accrual of interest, any
prepayment received by Lender on any day other than the last
calendar day of the month shall be deemed to have been
received on the last calendar day of the month in which the
prepayment occurs.
(e) In order to voluntarily prepay all or any part of the
principal of this Note, Borrower must also pay to Lender,
together with the amount of principal being prepaid, (i) all
accrued and unpaid interest due under this Note, plus (ii) all
other sums due to Lender at the time of such prepayment, plus
(ii) any prepayment premium calculated pursuant to Section
10(f).
(f) Except as provided in Section 10(g), a prepayment premium
shall be due and payable by Borrower in connection with any
prepayment of principal under this Note during the Yield
Maintenance Period. The prepayment premium shall be 1.0% of
the amount of principal being prepaid.
(g) Notwithstanding any other provision of this Section 10, no
prepayment premium shall be payable with respect to (i) any
prepayment made during the Window Period, or (ii) any
prepayment occurring as a result of the application of any
insurance proceeds or condemnation award under the Security
Instrument, or (iii) any prepayment of the entire principal
balance of this Note that occurs on or after the N/A (N/A)
Installment Due Date under this Note with the proceeds of a
fixed interest rate or fixed-to-float interest rate mortgage
loan that is the subject of a binding commitment for purchase
between the Freddie Mac and a Freddie Mac-approved Program
Plus(R) Seller/Servicer.
(h) Unless Lender agrees otherwise in writing, a permitted or
required prepayment of less than the unpaid principal balance
of this Note shall not extend or postpone the due date of any
subsequent monthly installments or change the amount of such
installments.
(i) Borrower recognizes that any prepayment of any of the unpaid
principal balance of this Note, whether voluntary or
involuntary or resulting from an Event of Default by Borrower,
will result in Lender's incurring loss, including reinvestment
loss, additional expense and frustration or impairment of
Lender's ability to meet its commitments to third parties.
Borrower agrees to pay to Lender upon demand damages for the
detriment caused by any prepayment, and agrees that it is
extremely difficult and impractical to ascertain the extent of
such damages. Borrower therefore acknowledges and agrees that
the formula for calculating prepayment premiums set forth in
this Note represents a reasonable estimate of the damages
Lender will incur because of a prepayment. Borrower further
acknowledges that any lockout and the prepayment premium
provisions of this Note are a material part of the
consideration for the Loan, and that the terms of this Note
are in other respects more favorable to Borrower as a result
of the Borrower's voluntary agreement to the lockout and
prepayment premium provisions.
11. Costs and Expenses. To the fullest extent allowed by
applicable law, Borrower shall pay all expenses and costs,
including Attorneys' Fees and Costs incurred by Lender as a
result of any default under this Note or in connection with
efforts to collect any amount due under this Note, or to
enforce the provisions of any of the other Loan Documents,
including those incurred in post-judgment collection efforts
and in any bankruptcy proceeding (including any action for
relief from the automatic stay of any bankruptcy proceeding)
or judicial or non-judicial foreclosure proceeding.
12. Forbearance. Any forbearance by Lender in exercising any right
or remedy under this Note, the Security Instrument, or any
other Loan Document or otherwise afforded by applicable law,
shall not be a waiver of or preclude the exercise of that or
any other right or remedy. The acceptance by Lender of any
payment after the due date of such payment, or in an amount
which is less than the required payment, shall not be a waiver
of Lender's right to require prompt payment when due of all
other payments or to exercise any right or remedy with respect
to any failure to make prompt payment. Enforcement by Lender
of any security for Borrower's obligations under this Note
shall not constitute an election by Lender of remedies so as
to preclude the exercise of any other right or remedy
available to Lender.
13. Waivers. Borrower and all endorsers and guarantors of this
Note and all other third party obligors waive presentment,
demand, notice of dishonor, protest, notice of acceleration,
notice of intent to demand or accelerate payment or maturity,
presentment for payment, notice of nonpayment, grace, and
diligence in collecting the Indebtedness.
14. Loan Charges. Neither this Note nor any of the other Loan
Documents shall be construed to create a contract for the use,
forbearance or detention of money requiring payment of
interest at a rate greater than the Maximum Interest Rate. If
any applicable law limiting the amount of interest or other
charges permitted to be collected from Borrower in connection
with the Loan is interpreted so that any interest or other
charge provided for in any Loan Document, whether considered
separately or together with other charges provided for in any
other Loan Document, violates that law, and Borrower is
entitled to the benefit of that law, that interest or charge
is hereby reduced to the extent necessary to eliminate that
violation. The amounts, if any, previously paid to Lender in
excess of the permitted amounts shall be applied by Lender to
reduce the unpaid principal balance of this Note. For the
purpose of determining whether any applicable law limiting the
amount of interest or other charges permitted to be collected
from Borrower has been violated, all Indebtedness that
constitutes interest, as well as all other charges made in
connection with the Indebtedness that constitute interest,
shall be deemed to be allocated and spread ratably over the
stated term of this Note. Unless otherwise required by
applicable law, such allocation and spreading shall be
effected in such a manner that the rate of interest so
computed is uniform throughout the stated term of this Note.
15. Commercial Purpose. Borrower represents that Borrower is
incurring the Indebtedness solely for the purpose of carrying
on a business or commercial enterprise, and not for personal,
family, household, or agricultural purposes.
16. Counting of Days. Except where otherwise specifically
provided, any reference in this Note to a period of "days"
means calendar days, not Business Days.
17. Governing Law. This Note shall be governed by the law of the
Property Jurisdiction.
18. Captions. The captions of the Sections of this Note are for
convenience only and shall be disregarded in construing this
Note.
19. Notices; Written Modifications.
(a) All Notices, demands and other communications required or
permitted to be given pursuant to this Note shall be given in
accordance with Section 31 of the Security Instrument.
(b) Any modification or amendment to this Note shall be
ineffective unless in writing signed by the party sought to be
charged with such modification or amendment; provided,
however, that in the event of a Transfer under the terms of
the Security Instrument that requires Lender's consent, any or
some or all of the Modifications to Multifamily Note set forth
in Exhibit A to this Note may be modified or rendered void by
Lender at Lender's option, by Notice to Borrower and the
transferee, as a condition of Lender's consent.
20. Consent to Jurisdiction and Venue. Borrower agrees that any
controversy arising under or in relation to this Note may be
litigated in the Property Jurisdiction. The state and federal
courts and authorities with jurisdiction in the Property
Jurisdiction shall have jurisdiction over all controversies
that shall arise under or in relation to this Note. Borrower
irrevocably consents to service, jurisdiction, and venue of
such courts for any such litigation and waives any other venue
to which it might be entitled by virtue of domicile, habitual
residence or otherwise. However, nothing in this Note is
intended to limit any right that Lender may have to bring any
suit, action or proceeding relating to matters arising under
this Note in any court of any other jurisdiction.
21. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES
NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING
OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS
LENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (B)
WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY
EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF
COMPETENT LEGAL COUNSEL.
22. State-Specific Provisions. N/A
ATTACHED EXHIBIT. The Exhibit noted below, if marked with an "X" in
the space provided, is attached to this Note:
-----
X Exhibit A Modifications to Multifamily Note
-----
IN WITNESS WHEREOF, and in consideration of the Lender's agreement to lend
Borrower the principal amount set forth above, Borrower has signed and delivered
this Note under seal or has caused this Note to be signed and delivered under
seal by its duly authorized representative.
NATIONAL PROPERTY INVESTORS 5, a California
limited partnership, doing business in
Florida as National Property Investors 5
Ltd.
By: NPI Equity Investments, Inc., a
Florida corporation, its general
partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and Treasurer
22-2385051
Borrower's Social Security/Employer ID
Number
PAY TO THE ORDER OF FEDERAL HOME LOAN
MORTGAGE CORPORATION, WITHOUT RECOURSE.
GMAC COMMERCIAL MORTGAGE BANK, a
Utah industrial bank
By: /s/Max W. Moore
Name: Max W. Moore
Title: Limited Signer
FHLMC Loan No. 002718308
Exhibit 10.21
Old Freddie Mac Loan Number: 002682354
New Freddie Mac Loan Number: 002718103
Oakwood Village Apartments
ALLONGE AND AMENDMENT TO MULTIFAMILY NOTE
(Oakwood Village Apartments)
ALLONGE AND AMENDMENT dated effective as of June 1, 2005 (this "Allonge"),
to the Multifamily Note dated as of February 13, 2001 (the "Note"), in the
original principal amount of Seven Million and 00/100 Dollars ($7,000,000.00),
executed by NATIONAL PROPERTY INVESTORS 5, a California limited partnership,
doing business in Florida as National Property Investors 5 Ltd., as "Borrower",
to the order of GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation
("Original Lender"), and assigned by Original Lender to and currently held by
the FEDERAL HOME LOAN MORTGAGE CORPORATION as "Lender".
For valuable consideration, the receipt and sufficiency are hereby acknowledged,
Borrower and Lender hereby amend the Note as follows:
1. From and after the effective date of this Allonge until the Initial Maturity
Date, interest will accrue on the outstanding principal amount of the Note at
the annual rate of seven and forty-eight hundredths percent (7.48%);
2. Paragraph 3(b) of the Note is modified to provide that beginning July 1,
2005, and on the first day of each consecutive and successive month thereafter
until the Maturity Date, Borrower will pay monthly installment of principal and
interest under the Note in the amount of Forty-Three Thousand Three Hundred
Ninety-Six and 86/100 Dollars (US $43,396.86).
3. The "Maturity Date" provided for in Paragraph 3(c) of the Note is revised to
July 1, 2015, subject to the provisions of new Paragraph 22 of the Note set
forth below.
4. Paragraph 10(b) of the Note is revised by deleting "one hundred eighty (180)
days" and substituting "zero (0) days".
5. Subparagraph 10(c)(1) of the Note is revised to provide that the Yield
Maintenance Period will end on July 1, 2015.
6. For the purposes of computing the Assumed Reinvestment Rate under Paragraph
10 of the Note, the applicable U.S. Treasury Security is revised to the 10.625%
U.S. Treasury Security due August 15, 2015.
7. A new Paragraph 22 is added to the Note as follows:
22. Extension of Maturity Date. So long as the Maturity Date has not
occurred prior to July 1, 2015 (for the purposes of this Paragraph 22, the
"Initial Maturity Date"), the Indebtedness is not paid in full on the
Initial Maturity Date, and no other Event of Default, or event or
circumstances which, with the giving of notice or passage of time, or
both, could constitute an Event of Default, exists on the Initial Maturity
Date, then the date for full payment of the Indebtedness automatically
shall be extended for a period of twelve (12) months (the "Extension
Period") until July 1, 2016, or any earlier date on which the unpaid
principal balance of this Note becomes due and payable by acceleration or
otherwise (the "Extended Maturity Date"). Principal and interest shall be
payable during the Extension Period, in immediately available funds, as
follows:
(a) On the Initial Maturity Date, Borrower must make the regularly
scheduled monthly payment set forth in Paragraph 3(b).
(b) During the Extension Period, interest will accrue on the unpaid
principal balance of this Note at the "Adjustable Interest Rate"
(hereinafter defined). Notwithstanding anything in this Note that may be
to the contrary, during the Extension Period, interest under this Note
shall be computed, due and payable on the basis of a 360-day year and the
actual number of days in the month for which interest is being calculated
(divide the annual interest by 360, and multiply the quotient by the
number of days in the month for which interest is being calculated),
notwithstanding that the amount of any monthly payment of principal and
interest may be calculated on a "30/360" basis. The amount payable as
interest, or allocated to interest, will vary depending upon the number of
days in the month for which interest is being calculated, in addition to
varying as the Adjustable Interest Rate varies.
(c) During the Extension Period, consecutive monthly installments of
principal and interest shall be payable on the first day of each month
beginning on July 1, 2015, and continuing during the Extension Period
until the Extended Maturity Date. The date on which a monthly installment
of principal and interest is due pursuant to this Section 23(c) is
referred to as that installment's "Installment Due Date". The amount of
the monthly installment of principal and interest payable on an
Installment Due Date, and the portion thereof attributable to principal
and the portion thereof attributable to interest, shall be calculated so
as to equal the monthly payment amount which would be payable on the
Installment Due Date, and allocation thereof between principal and
interest, as if the unpaid principal balance of this Note as of the first
day of the calendar month preceding the Installment Due Date, together
with interest thereon at the Adjustable Interest Rate in effect on the
first day of the calendar month preceding the Installment Due Date, were
to be fully amortized (using an actual/360 method of computing interest)
in equal monthly payments paid on the first day of each calendar month
over an assumed amortization period commencing on the first day of the
calendar month preceding the Installment Due Date and ending on the first
day of the 360th full calendar month following the date of this Note.
Alternatively, Lender may calculate the monthly installment amount on a
"30/360" basis but allocate first to interest the amount due using an
actual/360 method of computing interest and the balance to principal.
Lender shall provide Borrower with Notice of the amount of each monthly
installment due hereunder.
(d) Any accrued interest remaining past due for 30 days or more may,
at Lender's discretion, be added to and become part of the unpaid
principal balance and shall bear interest at the rate or rates specified
in this Note, and any reference to "accrued interest" shall refer to
accrued interest which has not become part of the unpaid principal
balance. All unpaid Indebtedness shall be due and payable in full on the
Extended Maturity Date. The unpaid principal balance shall continue to
bear interest after the Extended Maturity Date at the Default Rate set
forth in Paragraph 22(j) until and including the date on which it is paid
in full.
(e) Any regularly scheduled monthly installment payable pursuant to
Paragraph 22(c) that is received by Lender before the Installment Due Date
shall be deemed to have been received on the Installment Due Date solely
for the purpose of calculating interest due.
(f) If Lender at any time determines that it has miscalculated the
Adjustable Interest Rate or the amount of any monthly installment, then
Lender shall give Notice to Borrower of the corrected Adjustable Interest
Rate and corrected installments. If Borrower has paid one or more monthly
installments calculated at the incorrect Adjustable Interest Rate or
calculated incorrectly and (i) if the corrected Adjustable Interest Rate
or corrected installment results in an increase in the applicable monthly
payment(s), Borrower, within 10 calendar days after receipt of the Notice
from Lender, shall pay to Lender any sums that Borrower would have
otherwise been obligated to pay to Lender under this Note had the amount
of the Adjustable Interest Rate or monthly installment not been
miscalculated, or (ii) if the corrected Adjustable Interest Rate or
monthly installment results in an overpayment having been made by
Borrower, then the amount of the overpayment shall be credited to the next
installment(s) of principal and interest due under this Note (or, if an
Event of Default has occurred and is continuing, such overpayment shall be
credited against any amount owing by Borrower to Lender).
(g) In accordance with this Note, interest charged hereunder cannot
exceed the maximum amount of interest allowed by applicable law. The rate
of interest which results in the maximum amount of interest allowed by
applicable law is referred to as the "Maximum Rate". If the Applicable
Interest Rate at any time exceeds the Maximum Rate, resulting in the
charging of interest hereunder to be limited to the Maximum Rate, then any
subsequent reduction in the Applicable Interest Rate shall not reduce the
rate at which interest under this Note accrues until the total amount of
interest accrued hereunder equals the amount of interest which would have
accrued had the Applicable Interest Rate at all times been in effect.
(h) During the Extension Period, Borrower may pay the entire unpaid
Indebtedness on any Business Day designated as the date for such payment
in a written notice from Borrower to Lender given at least 30 days prior
to the date of such payment. No prepayment premium will be payable by
Borrower during the Extension Period.
(i) The following defined terms are added to this Note:
(i) "Adjustable Interest Rate" means the variable per annum
rate at which interest will accrue on the outstanding
principal balance of this Note. The Adjustable Interest Rate
applicable during any Interest Adjustment Period will equal
the Index Rate, truncated at the fifth (5th) decimal place if
necessary, for such Interest Adjustment Period, plus the
Margin.
(ii) "Margin" means two and one-half (2.5) percentage points
(250 basis points).
(iii) "Index Rate" means, for any Interest Adjustment Period,
the Reference Bill(R) Index Rate for such Interest Adjustment
Period. However, if Freddie Mac has not conducted a Reference
Bill auction within the 60-calendar day period prior to the
first day of an Interest Adjustment Period, the Index Rate for
such Interest Adjustment Period will be the LIBOR Index Rate
for such Interest Adjustment Period minus one-tenth of one
percentage point.
(iv) "Interest Adjustment Period" means each successive one
calendar month beginning on the Initial Maturity Date and
continuing until the entire Indebtedness is paid in full.
(v) "LIBOR Index" means the British Bankers Association's
(BBA) one month LIBOR Rate for United States Dollar (may be
displayed as "USD") deposits, as displayed on the LIBOR Index
Page used to establish the LIBOR Index Rate, as more fully set
forth below.
(vi) "LIBOR Index Rate" means, for any Interest Adjustment
Period after the first Interest Adjustment Period, the British
Bankers Association's (BBA) LIBOR Rate for the LIBOR Index, as
of 11:00 a.m. (London time) on the second London Banking Day
preceding the first day of such Interest Adjustment Period, as
such LIBOR Rate is displayed on the LIBOR Index Page. The
LIBOR Index Rate for the first Interest Adjustment Period
means the British Bankers Association's (BBA) LIBOR Rate for
the LIBOR Index, as of 11:00 a.m. (London time) on the second
London Banking Day preceding the first day of the month in
which the first Interest Adjustment Period begins, as such
LIBOR Rate is displayed on the LIBOR Index Page. The "LIBOR
Index Page" is the Bloomberg L.P., page "BBAM", or such other
page for the LIBOR Index as may replace page BBAM on that
service, or at the option of Lender (i) the applicable page
for the LIBOR Index on another service which electronically
transmits or displays BBA LIBOR Rates, or (ii) any publication
of LIBOR rates available from the BBA. In the event the BBA
ceases to set or publish a LIBOR rate/interest settlement rate
for the LIBOR Index, Lender will designate an alternative
index, and such alternative index shall constitute the LIBOR
Index Rate. A "London Banking Day" is any day on which banks
are open for dealing in interbank deposits in London.
(vii) "Reference Bills(R)" means the unsecured general
obligations of Freddie Mac designated by Freddie Mac as
"Reference Bills(R)" and having original duration to maturity
most comparable to the term of the Reference Bill Index, and
issued by Freddie Mac at regularly scheduled auctions. In the
event Freddie Mac shall at any time cease to designate any
unsecured general obligations of Freddie Mac as "Reference
Bills", then at the option of Lender (i) Lender may select
from time to time another unsecured general obligation of
Freddie Mac having original duration to maturity most
comparable to the term of the Reference Bill Index and issued
by Freddie Mac at regularly scheduled auctions, and the term
"Reference Bills" as used in this Note shall mean such other
unsecured general obligations as selected by Lender; or (ii)
for any one or more Interest Adjustment Periods, Lender may
use the applicable LIBOR Index Rate as the Index Rate for such
Interest Adjustment Period(s).
(viii) "Reference Bill Index" means the one-month Reference
Bills. One-month Reference Bills have maturities of
approximately 30 days.
(ix) "Reference Bill Index Rate" means, for any Interest
Adjustment Period after the first Interest Adjustment Period,
the Money Market Yield for the Reference Bills as established
by the Reference Bill auction conducted by Freddie Mac most
recently preceding the first day of such Interest Adjustment
Period, as displayed on the Reference Bill Index Page. The
Reference Bill Index Rate for the first Interest Adjustment
Period means the Money Market Yield for the Reference Bills as
established by the Reference Bill auction conducted by Freddie
Mac most recently preceding the first day of the month in
which the first Interest Adjustment Period begins, as
displayed on the Reference Bill Index Page. The "Reference
Bill Index Page" is the Freddie Mac Debt Securities Web Page
(accessed via the Freddie Mac internet site at
www.freddiemac.com), or at the option of Lender, any
publication of Reference Bills auction results available from
Freddie Mac.
(j) Notwithstanding anything else in this Note to the contrary,
during the Extension Period and thereafter, the Default Rate will equal
the greater of the amount calculated pursuant to Paragraph 8 and four (4)
percentage points above the Adjustable Interest Rate, but in no event more
than the Maximum Rate.
(k) Notwithstanding anything in Paragraph 10 that may be deemed to
be to the contrary, the Yield Maintenance Period expires on the Initial
Maturity Date and any prepayment of principal prior to the Initial
Maturity Date must be accompanied by the applicable prepayment premium.
(l) If the Extension Period becomes effective, during the Extension
Period and thereafter, any references to the "Maturity Date" of the Note
in any other Loan Document shall be deemed to mean the Extended Maturity
Date.
(m) Anything in Section 21 of the Security Instrument to the
contrary notwithstanding, Borrower will not request that Lender consent
to, and Lender will not consent to, a Transfer during the Extension
Period.
8. From and after the effective date of this Allonge: (i) references in the Note
and the other Loan Documents to the "Security Instrument" mean the Security
Instrument dated as of the date of the Note, as amended by the First Amendment
to Security Instrument dated as of the date of this Allonge, and (ii) references
in the Loan Documents to the "Note" mean the Note as amended by this Allonge.
9. The Note remains in full force and effect and, except as amended hereby,
unmodified. This Allonge is not intended as a discharge, substitution or
novation of the indebtedness of the Note. Borrower hereby confirms that it has
no defenses or offsets of any kind against any of the indebtedness due under the
Note as modified and amended by this Allonge.
10. Guarantor has signed this Allonge to confirm that its Guaranty remains in
full force and effect and extends to the Note as amended by this Allonge and to
the Security Instrument as amended. Borrower and Guarantor acknowledge that the
request that Lender accept and execute this Allonge is within the scope of
Paragraph 9(e)(3) of the Note.
11. This Allonge is intended to be executed on multiple counterpart signature
pages. Signature Pages Follow
In Witness Whereof, the undersigned have executed this Allonge and Amendment to
Multifamily Note as of the effective date provided for therein.
BORROWER:
NATIONAL PROPERTY INVESTORS 5, a California
limited partnership, doing business in
Florida as National Property Investors 5
Ltd.
By: NPI Equity Investments, Inc., a
Florida corporation, its general
partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and Treasurer
In Witness Whereof, the undersigned has executed this Allonge and Amendment to
Multifamily Note as of the effective date provided for therein.
LENDER:
FEDERAL HOME LOAN MORTGAGE CORPORATION
By: /s/Mike McRoberts
Name: Mike McRoberts
Title:Managing Director
SEEN AND AGREED:
GUARANTOR:
AIMCO PROPERTIES, L.P., a Delaware
limited partnership
By: AIMCO-GP, Inc., a Delaware
corporation, its general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and
Treasurer
Exhibit 10.22
FHLMC Loan No. 002718308
Oakwood Village on Lake Nan Apartments
REPLACEMENT RESERVE AGREEMENT
(REVISION DATE 01-31-2003)
This REPLACEMENT RESERVE AGREEMENT ("Agreement") is made and entered into,
to be effective as of June 1, 2005, by and between NATIONAL PROPERTY INVESTORS
5, a California limited partnership, doing business in Florida as National
Property Investors 5 Ltd. ("Borrower"), and GMAC COMMERCIAL MORTGAGE BANK, a
Utah industrial bank ("Lender") and its successors and assigns.
W I T N E S S E T H:
WHEREAS, Lender has agreed to make and Borrower has agreed to accept the
Loan, which is to be evidenced by the Note and secured by the Security
Instrument encumbering the Land and the Improvements. The Land is described on
Exhibit "A" attached to this Agreement; and
WHEREAS, as a condition of making the Loan, Lender is requiring Borrower
to establish the Replacement Reserve Fund for the funding of Capital
Replacements throughout the Loan term.
NOW, THEREFORE, for and in consideration of the Loan, the mutual promises
and covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lender and Borrower
agree as follows:
1. Definitions. The following terms used in this Agreement shall have the
meanings set forth below in this Section 1. Any term used in this
Agreement and not defined shall have the meaning given to that term in the
Security Instrument.
(a) "Capital Replacement" means the replacement of those items listed on
Exhibit "B" of this Agreement and such other replacements of equipment,
major components or capital systems related to the Improvements as may be
approved in writing or required by Lender.
(b) "Disbursement Period" means the interval between disbursements from the
Replacement Reserve Fund, which interval shall be no shorter than once a
quarter.
(c) "Improvements" means the buildings, Personal Property and improvements
situated upon the Land, currently constituting a multifamily apartment
project known as Oakwood Village on Lake Nan Apartments.
(d) "Initial Deposit" means the amount of Zero Dollars ($0.00) made as of the
date of this Agreement.
(e) "Inspection Fee" means a fee for performing any inspection required by
this Agreement in an amount not to exceed Three Hundred and 00/100 Dollars
($300.00) per inspection.
(f) "Investment Fee" means a one time fee for establishing the Replacement
Reserve Fund in the amount of Fifty and 00/100 Dollars ($50.00).
(g) "Loan" means the loan from Lender to Borrower in the original principal
amount of Two Million One Hundred Fifty Thousand and 00/100 Dollars
($2,150,000.00), as evidenced by the Note and secured by the Security
Instrument.
(h) "Minimum Disbursement Request Amount" means Two Thousand Five Hundred and
00/100 Dollars ($2,500.00).
(i) "Monthly Deposit" means the amount of Six Thousand Nine Hundred Fifty and
00/100 Dollars ($6,950.00) per month to be deposited into the Replacement
Reserve Fund in accordance with this Agreement.
(j) "Property" means the Land and Improvements.
(k) "Replacement Reserve Deposit" means the Initial Deposit, the Monthly
Deposit and/or the Revised Monthly Deposit, as appropriate.
(l) "Replacement Reserve Fund" means the account established pursuant to this
Agreement to defray the costs of Capital Replacements.
(m) "Review Period" means the period ending 36 months after the first monthly
payment date.
(n) "Revised Monthly Deposit" means the amount per month that Lender
determines Borrower must deposit in the Replacement Reserve Fund during
any Subsequent Review Period.
(o) "Security Instrument" means the mortgage, deed of trust, deed to secure
debt, or other similar security instrument encumbering the Property and
securing Borrower's performance of its Loan obligations.
(p) "Subsequent Review Period" means the period of N/A months commencing
either (i) at the termination of the Review Period or (ii) at the
termination of a prior Subsequent Review Period. There may be more than
one Subsequent Review Period.
2. Replacement Reserve Fund.
(a) Establishment; Funding.
(i) Upon the closing of the Loan, the parties shall establish the Replacement
Reserve Fund and, if required by Lender, Borrower shall pay the Initial
Deposit to Lender for deposit into the Replacement Reserve Fund.
(ii) Commencing on the date the first installment of principal and/or interest
is due under the Note and continuing on the same day of each successive
month until the end of the Review Period, Borrower shall pay the Monthly
Deposit to Lender for deposit into the Replacement Reserve Fund, together
with its regular monthly payments of principal and interest as required by
the Note and Security Instrument.
(iii) Prior to the end of the Review Period, Lender will assess the physical
condition of the Property. Lender may adjust the Monthly Deposit at the
termination of the Review Period to reflect Lender's determination of the
condition of the Property. Upon written notice from Lender or Loan
Servicer, Borrower shall begin paying the Revised Monthly Deposit on the
first monthly payment date of the Subsequent Review Period and shall
continue paying the Revised Monthly Deposit until Lender further adjusts
the Replacement Reserve Deposit during a Subsequent Review Period, if
applicable. If Lender does not provide Borrower with written notice of a
Revised Monthly Deposit, Borrower shall continue to pay the Monthly
Deposit or the Revised Monthly Deposit then in effect.
(b) Investment of Deposits. Borrower and Lender agree that Lender shall
hold all moneys deposited into the Replacement Reserve Fund in an
interest bearing account, and any interest earned on such moneys
shall be added to the principal balance of the Replacement
Reserve Fund and disbursed in accordance with the provisions of
this Agreement. Borrower acknowledges and agrees that it shall
not have the right to direct Lender as to any specific investment
of moneys in the Replacement Reserve Fund. Lender shall not be
responsible for any losses resulting from investment of moneys in
the Replacement Reserve Fund or for obtaining any specific level
or percentage of earnings on such investment. Lender shall be
entitled to deduct the Investment Fee from the Replacement
Reserve Fund for establishing the Replacement Reserve Fund.
(c) Use. Subject to the pledge and security interest and other rights of
Lender set forth in this Agreement, the Replacement Reserve Fund shall be
maintained for the payment of the costs of the Capital Replacements
identified on Exhibit "B".
3. Performance of Capital Replacements; Disbursements.
(a) Requests for Disbursement. Lender shall disburse funds from the
Replacement Reserve Fund, in its sole discretion, as follows:
(i) Borrower's Request. If Borrower determines, at any time or from time
to time, that a Capital Replacement is necessary or
desirable, Borrower shall perform such Capital Replacement
and request from Lender, in writing, reimbursement for such
Capital Replacement. Borrower's request for reimbursement
shall include (A) a detailed description of the Capital
Replacement performed, together with evidence, satisfactory
to Lender, that the cost of such Capital Replacement has
been paid and (B) lien waivers from each contractor and
material supplier supplying labor or materials for such
Capital Replacement, if required by Lender.
(ii) Lender's Request. If Lender shall reasonably determine at any time or from
time to time, that a Capital Replacement is necessary for the proper
maintenance of the Property, it shall so notify Borrower, in writing,
requesting that Borrower obtain and submit to Lender bids for all labor
and materials required in connection with such Capital Replacement.
Borrower shall submit such bids and a time schedule for completing each
Capital Replacement to Lender within thirty (30) days after Borrower's
receipt of Lender's written notice. Borrower shall perform such Capital
Replacement and request from Lender, in writing, reimbursement for such
Capital Replacement. Borrower's request for reimbursement shall include
(A) a detailed description of the Capital Replacement performed, together
with evidence, satisfactory to Lender, that the cost of such Capital
Replacement has been paid and (B) lien waivers from each contractor and
material supplier supplying labor or materials for such Capital
Replacement, if required by Lender.
(b) Conditions Precedent. Disbursement from the Replacement Reserve Fund shall
be made no more frequently than once every Disbursement Period and, except
for the final disbursement, no disbursement shall be made in an amount
less than the Minimum Disbursement Request Amount. Disbursements shall be
made only if the following conditions precedent have been satisfied, as
reasonably determined by Lender:
(i) Payment for Capital Replacement. The Capital Replacement has been
performed and/or installed on the Property in a good and
workmanlike manner with suitable materials (or in the case
of a partial disbursement, performed and/or installed on
the Property to an acceptable stage) and paid for by
Borrower as evidenced by copies of all applicable paid
invoices or bills submitted to Lender by Borrower at the
time Borrower requests disbursement from the Replacement
Reserve Fund.
(ii) No Default. There is no condition, event or act that would constitute a
default (with or without notice and/or lapse of time) under this Agreement
or any other Loan Document.
(iii) Representations and Warranties. All representations and warranties of
Borrower set forth in this Agreement and in the Loan Documents are true in
all material respects.
(iv) Continuing Compliance. Borrower is in full compliance with the provisions
of this Agreement, the other Loan Documents and any request or demand by
Lender permitted hereby.
(v) No Lien Claim. No lien or claim based on furnishing labor or materials has
been filed or asserted against the Property, unless Borrower has properly
provided bond or other security against loss in accordance with applicable
law.
(vi) Approvals. All licenses, permits, and approvals of governmental
authorities required for the Capital Replacement as completed to the
applicable stage have been obtained.
(vii) Legal Compliance. The Capital Replacement as completed to the applicable
stage does not violate any laws, ordinance, rules or regulations, or
building lines or restrictions applicable to the Property.
4. Right to Complete Capital Replacements. If Borrower abandons or fails
to proceed diligently to undertake and/or complete any Capital
Replacement in a timely fashion or is otherwise in default under this
Agreement for 30 days after written notice of such failure by Lender to
Borrower, Lender shall have the right (but not the obligation) to enter
upon the Property and take over and cause the completion of such
Capital Replacement. However, no such notice or grace period shall
apply in the case of such failure which could, in Lender's judgment,
absent immediate exercise by Lender of a right or remedy under this
Agreement, result in harm to Lender or impairment of the security given
under the Security Instrument or any other Loan Document. Any
contracts entered into or indebtedness incurred upon the exercise of
such right may be in the name of Borrower, and Lender is hereby
irrevocably appointed the attorney in fact of Borrower, such
appointment being coupled with an interest, to enter into such
contracts, incur such obligations, enforce any contracts or agreements
made by or on behalf of Borrower (including the prosecution and defense
of all actions and proceedings in connection with the Capital
Replacement and the payment, settlement or compromise of all bills and
claims for materials and work performed in connection with the Capital
Replacement) and do any and all things necessary or proper to complete
any Capital Replacement including signing Borrower's name to any
contracts and documents as may be deemed necessary by Lender. In no
event shall Lender be required to expend its own funds to complete any
Capital Replacement, but Lender may, in its sole discretion, advance
such funds. Any funds advanced shall be added to the outstanding
balance of the Loan, secured by the Security Instrument and payable to
Lender by Borrower in accordance with the provisions of the Security
Instrument pertaining to the protection of Lender's security and
advances made by Lender. Borrower waives any and all claims it may
have against Lender for materials used, work performed or resultant
damage to the Property.
5. Inspection. Lender or any representative of Lender may periodically
inspect any Capital Replacement in process and upon completion during
normal business hours or at any other reasonable time upon reasonable
prior written notice to Borrower (except in an emergency, as determined
by Lender in its discretion or after an Event of Default, in which
event no such prior notice shall be required). Lender shall be
entitled to deduct the Inspection Fee from the Replacement Reserve Fund
for performing any such inspection. If Lender, in its sole discretion,
retains a professional inspection engineer or other qualified third
party to inspect any Capital Replacement, Lender also shall be entitled
to deduct from the Replacement Reserve Fund an amount sufficient to pay
all reasonable fees and expenses charged by such third party inspector.
6. Insufficient Account. If Borrower requests disbursement from the
Replacement Reserve Fund for a Capital Replacement in accordance with this
Agreement in an amount which exceeds the amount on deposit in the
Replacement Reserve Fund, Lender shall disburse to Borrower only the
amount on deposit in the Replacement Reserve Fund. Borrower shall pay all
additional amounts required in connection with any such Capital
Replacement from Borrower's own funds.
7. Security Agreement. To secure Borrower's obligations under this
Agreement and to further secure Borrower's obligations under the Note,
Security Instrument and other Loan Documents, Borrower hereby conveys,
pledges, transfers and grants to Lender a security interest pursuant to
the Uniform Commercial Code of the Property Jurisdiction or any other
applicable law in and to all money in the Replacement Reserve Fund, as
same may increase or decrease from time to time, all interest and
dividends thereon and all proceeds thereof.
8. Post Default. If Borrower defaults in the performance of its
obligations under this Agreement or under the Note, Security Instrument
or any other Loan Document, after the expiration of any applicable
notice or cure period, Lender shall have all remedies available to them
under Article 9 of the Uniform Commercial Code of the Property
Jurisdiction and under any other applicable law. In addition, Lender
may retain all money in the Replacement Reserve Fund, including
interest, and in Lender's discretion, may apply such amounts, without
restriction and without any specific order of priority, to the payment
of any and all indebtedness or obligations of Borrower set forth in the
Note, Security Instrument or any other Loan Document, including, but
not limited to, principal, interest, taxes, insurance, reasonable
attorneys' fees and costs (including those of Lender's in-house
counsel) and disbursements actually incurred and/or repairs to the
Property.
9. Termination. If not sooner terminated by written concurrence of the
parties, this Agreement shall terminate upon the payment in full of the
Loan and all indebtedness incurred in connection therewith and upon such
termination, Lender shall pay to Borrower all funds remaining in the
Replacement Reserve Fund.
10. No Amendment. Nothing contained in this Agreement shall be construed to
amend, modify, alter, change or supersede the terms and provisions of the
Note, Security Instrument or any other Loan Document; and, if there is a
conflict between the terms and provisions of this Agreement and those of
the Note, Security Instrument, or any other Loan Document then the terms
and provisions of the Note, Security Instrument or such other Loan
Document shall control.
11. Release; Indemnity.
(a) Release. Borrower covenants and agrees that, in performing any of its
duties under this Agreement, none of Lender, any Loan Servicer,
or any of their respective agents or employees shall be liable
for any losses, claims, damages, liabilities and expenses that
may be incurred by any of them as a result of such performance,
except that no such party will be released from liability for any
losses, claims, damages, liabilities or expenses arising out of
the willful misconduct or gross negligence of such party.
(b) Indemnity. Borrower hereby agrees to indemnify and hold harmless
Lender, Loan Servicer and their respective agents and employees
against any and all losses, claims, damages, liabilities and
expenses including, without limitation, reasonable attorneys'
fees and costs (including those of Lender's in-house counsel) and
disbursements, which may be imposed or incurred by any of them in
connection with this Agreement except that no such party will be
indemnified from liability for any losses, claims, damages,
liabilities or expenses arising out of the willful misconduct or
gross negligence of such party.
12. Choice of Law. This Agreement shall be construed and enforced in
accordance with the laws of the Property Jurisdiction.
13. Successors and Assigns. Lender may assign its rights and interests
under this Agreement in whole or in part and upon any such assignment,
all the terms and provisions of this Agreement shall inure to the
benefit of such assignee to the extent so assigned. The terms used to
designate any of the parties herein shall be deemed to include the
heirs, legal representatives, successors and assigns of such parties;
and the term "Lender" shall also include any lawful owner, holder or
pledgee of the Note. Reference herein to "person" or "persons" shall
be deemed to include individuals and entities. Borrower may not assign
or delegate its rights, interests, or obligations under this Agreement
without first obtaining Lender's prior written consent.
14. Attorneys' Fees. In the event that Lender engages the services of an
attorney at law to enforce the provisions of this Agreement against
Borrower, then Borrower shall pay all costs of such enforcement, including
any reasonable attorneys' fees and costs (including those of Lender's
in-house counsel) and disbursements actually incurred.
15. Compliance with Laws; Insurance Requirements.
(a) Compliance with Laws. Borrower shall ensure that all Capital Replacements
comply with all applicable laws, ordinances, rules and regulations of all
governmental authorities having jurisdiction over the Property and
applicable insurance requirements including, without limitation,
applicable building codes, special use permits, environmental regulations,
and requirements of insurance underwriters.
(b) Insurance Requirements. In addition to any insurance required under
the Loan Documents, Borrower shall provide or cause to be
provided workers' compensation, builder's risk (if required by
Lender), and public liability insurance and other insurance
required under applicable law in connection with any of the
Capital Replacements. All such policies that can be endorsed
with standard mortgage clauses making losses payable to Lender or
its assigns shall be so endorsed. The originals of such policies
shall be deposited with Loan Servicer.
16. Remedies Cumulative. In the event of Borrower's default under this
Agreement, Lender may exercise all or any one or more of its rights and
remedies available under this Agreement, at law or in equity. Such
rights and remedies shall be cumulative and concurrent, and may be
enforced separately, successively or together, and Lender's exercise of
any particular right or remedy shall not in any way prevent Lender from
exercising any other right or remedy available to Lender. Lender may
exercise any such remedies from time to time as often as Lender chooses.
17. Determinations by Lender. Unless otherwise provided in this Agreement,
in any instance where the consent or approval of Lender may be given or
is required, or where any determination, judgment or decision is to be
rendered by Lender under this Agreement, the granting, withholding or
denial of such consent or approval and the rendering of such
determination, judgment or decision shall be made or exercised by
Lender (or its designated representative) at its sole and exclusive
option and in its sole and absolute discretion.
18. Completion of Capital Replacements. Lender's disbursement of moneys
from the Replacement Reserve Fund or other acknowledgment of completion
of any Capital Replacement in a manner satisfactory to Lender shall not
be deemed a certification by Lender that the Capital Replacement has
been completed in accordance with applicable building, zoning or other
codes, ordinances, statutes, laws, regulations or requirements of any
governmental authority or agency. Borrower shall at all times have the
sole responsibility for ensuring that all Capital Replacements are
completed in accordance with all such governmental requirements.
19. No Agency or Partnership. Nothing contained in this Agreement shall
constitute Lender as a joint venturer, partner or agent of Borrower, or
render Lender liable for any debts, obligations, acts, omissions,
representations or contracts of Borrower.
20. Entire Agreement. This Agreement and the other Loan Documents
represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral
agreements. There are no oral agreements between the parties. All
prior or contemporaneous agreements, understandings, representations
and statements, oral or written, are merged into this Agreement and the
other Loan Documents. Neither this Agreement nor any of its provisions
may be waived, modified, amended, discharged or terminated except in
writing signed by the party against which the enforcement of the
waiver, modification, amendment, discharge or termination is sought,
and then only to the extent set forth in writing; provided, however,
that in the event of a Transfer requiring Lender's consent under the
terms of the Security Instrument, one or more or all of the
Modifications to Agreement set forth in Exhibit C (if any) may be
modified or rendered void by Lender at Lender's option by notice to
Borrower/transferee.
21. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original document and all of which
together shall constitute one agreement.
ATTACHED EXHIBITS. The following Exhibits are attached to this
Agreement:
------
X Exhibit A Legal Description of the Land (required)
------
------
X Exhibit B Capital Replacements (required)
------
------
Exhibit C Modifications to Agreement
------
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
BORROWER:
NATIONAL PROPERTY INVESTORS 5, a California
Carolina limited partnership, doing
business in Florida as National
Property
Investors 5 Ltd.
Borrower's Social Security or
Taxpayer Identification No. By: NPI Equity Investments, Inc., a Florida
22-2385051 corporation, its general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and
Treasurer
LENDER:
GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial bank
By: /s/Max W. Moore
Name: Max W. Moore
Title: Limited Signer
SECURITY INSTRUMENT (FREDDIE MAC) -- FLORIDA
SIFLFR01.DOC
SECURITY INSTRUMENT (FREDDIE MAC) -- FLORIDA
SIFLFR01.DOC
Exhibit 10.23
THIS INSTRUMENT PREPARED BY, RECORDED
AND RETURN TO:
Bernice H. Cilley, Esquire
Troutman Sanders LLP
P.O. Box 1122 Richmond, Virginia 23218-1122
(Reserved)
MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
(FLORIDA - REVISION DATE 11-01-2000)
FHLMC Loan No. 002718308
Oakwood Village on Lake Nan Apartments
MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
(FLORIDA - REVISION DATE 11-01-2000)
THIS MULTIFAMILY MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the
"Instrument") is made as of this 1st day of June, 2005, between NATIONAL
PROPERTY INVESTORS 5, a limited partnership, organized and existing under the
laws of California, doing business in Florida as National Property Investors 5
Ltd., whose address is c/o AIMCO, Stanford Place 3, 4582 S. Ulster St. Parkway,
Suite 1100, Denver, Colorado 80237, as mortgagor ("Borrower"), and GMAC
COMMERCIAL MORTGAGE BANK, an industrial bank organized and existing under the
laws of Utah, whose address is 6955 Union Park Center, Suite 330, Midvale, Utah
84047, with a copy to GMAC Commercial Mortgage Corporation, 200 Witmer Road,
Post Office Box 809, Horsham, Pennsylvania 19044, Attn: Servicing - Executive
Vice President, as mortgagee ("Lender").
Borrower is indebted to Lender in the principal amount of $2,150,000.00,
as evidenced by Borrower's Multifamily Note payable to Lender dated as of the
date of this Instrument, and maturing on June 1, 2008.
TO SECURE TO LENDER the repayment of the Indebtedness, and all renewals,
extensions and modifications of the Indebtedness, and the performance of the
covenants and agreements of Borrower contained in the Loan Documents, Borrower
mortgages, warrants, grants, conveys and assigns to Lender the Mortgaged
Property, including the Land located in Alachua County, State of Florida and
described in Exhibit A attached to this Instrument.
Borrower represents and warrants that Borrower is lawfully seized of the
Mortgaged Property and has the right, power and authority to mortgage, grant,
convey, bargain, sell, transfer and assign the Mortgaged Property, and that the
Mortgaged Property is unencumbered. Borrower covenants that Borrower will
warrant and defend generally the title to the Mortgaged Property against all
claims and demands, subject to any easements and restrictions listed in a
schedule of exceptions to coverage in any title insurance policy issued to
Lender contemporaneously with the execution and recordation of this Instrument
and insuring Lender's interest in the Mortgaged Property.
Covenants. Borrower and Lender covenant and agree as follows:
1. DEFINITIONS. The following terms, when used in this Instrument
(including when used in the above recitals), shall have the following meanings:
(a) "Borrower" means all persons or entities identified as "Borrower" in
the first paragraph of this Instrument, together with their successors and
assigns.
(b) "Collateral Agreement" means any separate agreement between Borrower
and Lender for the purpose of establishing replacement reserves for the
Mortgaged Property, establishing a fund to assure the completion of repairs or
improvements specified in that agreement, or assuring reduction of the
outstanding principal balance of the Indebtedness if the occupancy of or income
from the Mortgaged Property does not increase to a level specified in that
agreement, or any other agreement or agreements between Borrower and Lender
which provide for the establishment of any other fund, reserve or account.
(c) "Controlling Entity" means an entity which owns, directly or
indirectly through one or more intermediaries, (A) a general partnership
interest or more than 50% of the limited partnership interests in Borrower (if
Borrower is a partnership or joint venture), (B) a manager's interest in
Borrower or more than 50% of the ownership or membership interests in Borrower
(if Borrower is a limited liability company), or (C) more than 50% of any class
of voting stock of Borrower (if Borrower is a corporation).
(d) "Environmental Permit" means any permit, license, or other
authorization issued under any Hazardous Materials Law with respect to any
activities or businesses conducted on or in relation to the Mortgaged Property.
(e) "Event of Default" means the occurrence of any event listed in Section
22.
(f) "Fixtures" means all property which is so attached to the Land or the
Improvements as to constitute a fixture under applicable law, including:
machinery, equipment, engines, boilers, incinerators, installed building
materials; systems and equipment for the purpose of supplying or distributing
heating, cooling, electricity, gas, water, air, or light; antennas, cable,
wiring and conduits used in connection with radio, television, security, fire
prevention, or fire detection or otherwise used to carry electronic signals;
telephone systems and equipment; elevators and related machinery and equipment;
fire detection, prevention and extinguishing systems and apparatus; security and
access control systems and apparatus; plumbing systems; water heaters, ranges,
stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers,
dryers and other appliances; light fixtures, awnings, storm windows and storm
doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors;
cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants;
swimming pools; and exercise equipment.
(g) "Governmental Authority" means any board, commission, department or
body of any municipal, county, state or federal governmental unit, or any
subdivision of any of them, that has or acquires jurisdiction over the Mortgaged
Property or the use, operation or improvement of the Mortgaged Property.
(h) "Hazardous Materials" means petroleum and petroleum products and
compounds containing them, including gasoline, diesel fuel and oil; explosives;
flammable materials; radioactive materials; polychlorinated biphenyls ("PCBs")
and compounds containing them; lead and lead-based paint; asbestos or
asbestos-containing materials in any form that is or could become friable;
underground or above-ground storage tanks, whether empty or containing any
substance; any substance the presence of which on the Mortgaged Property is
prohibited by any federal, state or local authority; any substance that requires
special handling; and any other material or substance now or in the future
defined as a "hazardous substance," "hazardous material," "hazardous waste,"
"toxic substance," "toxic pollutant," "contaminant," or "pollutant" within the
meaning of any Hazardous Materials Law.
(i) "Hazardous Materials Laws" means all federal, state, and local laws,
ordinances and regulations and standards, rules, policies and other governmental
requirements, administrative rulings and court judgments and decrees in effect
now or in the future and including all amendments, that relate to Hazardous
Materials and apply to Borrower or to the Mortgaged Property. Hazardous
Materials Laws include, but are not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., the
Toxic Substance Control Act, 15 U.S.C. Section 2601, et seq., the Clean Water
Act, 33 U.S.C. Section 1251, et seq., and the Hazardous Materials Transportation
Act, 49 U.S.C. Section 5101, and their state analogs.
(j) "Impositions" and "Imposition Deposits" are defined in Section 7(a).
(k) "Improvements" means the buildings, structures, improvements, and
alterations now constructed or at any time in the future constructed or placed
upon the Land, including any future replacements and additions.
(l) "Indebtedness" means the principal of, interest on, and all other
amounts due at any time under, the Note, this Instrument or any other Loan
Document, including prepayment premiums, late charges, default interest, and
advances as provided in Section 12 to protect the security of this Instrument.
(m) "Initial Owners" means, with respect to Borrower or any other entity,
the persons or entities who on the date of the Note own in the aggregate 100% of
the ownership interests in Borrower or that entity.
(n) "Land" means the land described in Exhibit A.
(o) "Leases" means all present and future leases, subleases, licenses,
concessions or grants or other possessory interests now or hereafter in force,
whether oral or written, covering or affecting the Mortgaged Property, or any
portion of the Mortgaged Property (including proprietary leases or occupancy
agreements if Borrower is a cooperative housing corporation), and all
modifications, extensions or renewals.
(p) "Lender" means the entity identified as "Lender" in the first
paragraph of this Instrument, or any subsequent holder of the Note.
(q) "Loan Documents" means the Note, this Instrument, all guaranties, all
indemnity agreements, all Collateral Agreements, O&M Programs, and any other
documents now or in the future executed by Borrower, any guarantor or any other
person in connection with the loan evidenced by the Note, as such documents may
be amended from time to time.
(r) "Loan Servicer" means the entity that from time to time is designated
by Lender to collect payments and deposits and receive notices under the Note,
this Instrument and any other Loan Document, and otherwise to service the loan
evidenced by the Note for the benefit of Lender. Unless Borrower receives notice
to the contrary, the Loan Servicer is the entity identified as "Lender" in the
first paragraph of this Instrument.
(s) "Mortgaged Property" means all of Borrower's present and future right,
title and interest in and to all of the following:
(1) the Land;
(2) the Improvements;
(3) the Fixtures;
(4) the Personalty;
(5) all current and future rights, including air rights,
development rights, zoning rights and other similar rights or
interests, easements, tenements, rights-of-way, strips and
gores of land, streets, alleys, roads, sewer rights, waters,
watercourses, and appurtenances related to or benefitting the
Land or the Improvements, or both, and all rights-of-way,
streets, alleys and roads which may have been or may in the
future be vacated;
(6) all proceeds paid or to be paid by any insurer of the Land,
the Improvements, the Fixtures, the Personalty or any other
part of the Mortgaged Property, whether or not Borrower
obtained the insurance pursuant to Lender's requirement;
(7) all awards, payments and other compensation made or to be made
by any municipal, state or federal authority with respect to
the Land, the Improvements, the Fixtures, the Personalty or
any other part of the Mortgaged Property, including any awards
or settlements resulting from condemnation proceedings or the
total or partial taking of the Land, the Improvements, the
Fixtures, the Personalty or any other part of the Mortgaged
Property under the power of eminent domain or otherwise and
including any conveyance in lieu thereof;
(8) all contracts, options and other agreements for the sale of
the Land, the Improvements, the Fixtures, the Personalty or
any other part of the Mortgaged Property entered into by
Borrower now or in the future, including cash or securities
deposited to secure performance by parties of their
obligations;
(9) all proceeds from the conversion, voluntary or involuntary, of
any of the above into cash or liquidated claims, and the right
to collect such proceeds;
(10) all Rents and Leases;
(11) all earnings, royalties, accounts receivable, issues and
profits from the Land, the Improvements or any other part of
the Mortgaged Property, and all undisbursed proceeds of the
loan secured by this Instrument and, if Borrower is a
cooperative housing corporation, maintenance charges or
assessments payable by shareholders or residents;
(12) all Imposition Deposits;
(13) all refunds or rebates of Impositions by any municipal, state
or federal authority or insurance company (other than refunds
applicable to periods before the real property tax year in
which this Instrument is dated);
(14) all tenant security deposits which have not been forfeited by
any tenant under any Lease; and
(15) all names under or by which any of the above Mortgaged
Property may be operated or known, and all trademarks, trade
names, and goodwill relating to any of the Mortgaged Property.
(t) "Note" means the Multifamily Note described on page 1 of this
Instrument, including all schedules, riders, allonges and addenda, as such
Multifamily Note may be amended from time to time.
(u) "O&M Program" is defined in Section 18(a).
(v) "Personalty" means all furniture, furnishings, equipment, machinery,
building materials, appliances, goods, supplies, tools, books, records (whether
in written or electronic form), computer equipment (hardware and software) and
other tangible personal property (other than Fixtures) which are used now or in
the future in connection with the ownership, management or operation of the Land
or the Improvements or are located on the Land or in the Improvements, and any
operating agreements relating to the Land or the Improvements, and any surveys,
plans and specifications and contracts for architectural, engineering and
construction services relating to the Land or the Improvements and all other
intangible property and rights relating to the operation of, or used in
connection with, the Land or the Improvements, including all governmental
permits relating to any activities on the Land.
(w) "Property Jurisdiction" is defined in Section 30(a).
(x) "Rents" means all rents (whether from residential or non-residential
space), revenues and other income of the Land or the Improvements, including
parking fees, laundry and vending machine income and fees and charges for food,
health care and other services provided at the Mortgaged Property, whether now
due, past due, or to become due, and deposits forfeited by tenants.
(y) "Taxes" means all taxes, assessments, vault rentals and other charges,
if any, general, special or otherwise, including all assessments for schools,
public betterments and general or local improvements, which are levied, assessed
or imposed by any public authority or quasi-public authority, and which, if not
paid, will become a lien, on the Land or the Improvements.
(z) "Transfer" means (A) a sale, assignment, transfer or other disposition
(whether voluntary, involuntary or by operation of law); (B) the granting,
creating or attachment of a lien, encumbrance or security interest (whether
voluntary, involuntary or by operation of law); (C) the issuance or other
creation of an ownership interest in a legal entity, including a partnership
interest, interest in a limited liability company or corporate stock; (D) the
withdrawal, retirement, removal or involuntary resignation of a partner in a
partnership or a member or manager in a limited liability company; or (E) the
merger, dissolution, liquidation, or consolidation of a legal entity or the
reconstitution of one type of legal entity into another type of legal entity.
"Transfer" does not include (i) a conveyance of the Mortgaged Property at a
judicial or non-judicial foreclosure sale under this Instrument or (ii) the
Mortgaged Property becoming part of a bankruptcy estate by operation of law
under the United States Bankruptcy Code. For purposes of defining the term
"Transfer," the term "partnership" shall mean a general partnership, a limited
partnership, a joint venture and a limited liability partnership, and the term
"partner" shall mean a general partner, a limited partner and a joint venturer.
2. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. This Instrument is also a
security agreement under the Uniform Commercial Code for any of the Mortgaged
Property which, under applicable law, may be subject to a security interest
under the Uniform Commercial Code, whether acquired now or in the future, and
all products and cash and non-cash proceeds thereof (collectively, "UCC
Collateral"), and Borrower hereby grants to Lender a security interest in the
UCC Collateral. Borrower shall execute and deliver to Lender, upon Lender's
request, financing statements, continuation statements and amendments, in such
form as Lender may require to perfect or continue the perfection of this
security interest. Borrower shall pay all filing costs and all costs and
expenses of any record searches for financing statements that Lender may
require. Without the prior written consent of Lender, Borrower shall not create
or permit to exist any other lien or security interest in any of the UCC
Collateral. If an Event of Default has occurred and is continuing, Lender shall
have the remedies of a secured party under the Uniform Commercial Code, in
addition to all remedies provided by this Instrument or existing under
applicable law. In exercising any remedies, Lender may exercise its remedies
against the UCC Collateral separately or together, and in any order, without in
any way affecting the availability of Lender's other remedies. This Instrument
constitutes a financing statement with respect to any part of the Mortgaged
Property which is or may become a Fixture.
3. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION.
(a) As part of the consideration for the Indebtedness, Borrower absolutely
and unconditionally assigns and transfers to Lender all Rents. It is the
intention of Borrower to establish a present, absolute and irrevocable transfer
and assignment to Lender of all Rents and to authorize and empower Lender to
collect and receive all Rents without the necessity of further action on the
part of Borrower. Promptly upon request by Lender, Borrower agrees to execute
and deliver such further assignments as Lender may from time to time require.
Borrower and Lender intend this assignment of Rents to be immediately effective
and to constitute an absolute present assignment and not an assignment for
additional security only. For purposes of giving effect to this absolute
assignment of Rents, and for no other purpose, Rents shall not be deemed to be a
part of the "Mortgaged Property" as that term is defined in Section 1(s).
However, if this present, absolute and unconditional assignment of Rents is not
enforceable by its terms under the laws of the Property Jurisdiction, then the
Rents shall be included as a part of the Mortgaged Property and it is the
intention of the Borrower that in this circumstance this Instrument create and
perfect a lien on Rents in favor of Lender, which lien shall be effective as of
the date of this Instrument.
(b) After the occurrence of an Event of Default, Borrower authorizes
Lender to collect, sue for and compromise Rents and directs each tenant of the
Mortgaged Property to pay all Rents to, or as directed by, Lender. However,
until the occurrence of an Event of Default, Lender hereby grants to Borrower a
revocable license to collect and receive all Rents, to hold all Rents in trust
for the benefit of Lender and to apply all Rents to pay the installments of
interest and principal then due and payable under the Note and the other amounts
then due and payable under the other Loan Documents, including Imposition
Deposits, and to pay the current costs and expenses of managing, operating and
maintaining the Mortgaged Property, including utilities, Taxes and insurance
premiums (to the extent not included in Imposition Deposits), tenant
improvements and other capital expenditures. So long as no Event of Default has
occurred and is continuing, the Rents remaining after application pursuant to
the preceding sentence may be retained by Borrower free and clear of, and
released from, Lender's rights with respect to Rents under this Instrument. From
and after the occurrence of an Event of Default, and without the necessity of
Lender entering upon and taking and maintaining control of the Mortgaged
Property directly, or by a receiver, Borrower's license to collect Rents shall
automatically terminate and Lender shall without notice be entitled to all Rents
as they become due and payable, including Rents then due and unpaid. Borrower
shall pay to Lender upon demand all Rents to which Lender is entitled. At any
time on or after the date of Lender's demand for Rents, Lender may give, and
Borrower hereby irrevocably authorizes Lender to give, notice to all tenants of
the Mortgaged Property instructing them to pay all Rents to Lender, no tenant
shall be obligated to inquire further as to the occurrence or continuance of an
Event of Default, and no tenant shall be obligated to pay to Borrower any
amounts which are actually paid to Lender in response to such a notice. Any such
notice by Lender shall be delivered to each tenant personally, by mail or by
delivering such demand to each rental unit. Borrower shall not interfere with
and shall cooperate with Lender's collection of such Rents.
(c) Borrower represents and warrants to Lender that Borrower has not
executed any prior assignment of Rents (other than an assignment of Rents
securing indebtedness that will be paid off and discharged with the proceeds of
the loan evidenced by the Note), that Borrower has not performed, and Borrower
covenants and agrees that it will not perform, any acts and has not executed,
and shall not execute, any instrument which would prevent Lender from exercising
its rights under this Section 3, and that at the time of execution of this
Instrument there has been no anticipation or prepayment of any Rents for more
than two months prior to the due dates of such Rents. Borrower shall not collect
or accept payment of any Rents more than two months prior to the due dates of
such Rents.
(d) If an Event of Default has occurred and is continuing, Lender may,
regardless of the adequacy of Lender's security or the solvency of Borrower and
even in the absence of waste, enter upon and take and maintain full control of
the Mortgaged Property in order to perform all acts that Lender in its
discretion determines to be necessary or desirable for the operation and
maintenance of the Mortgaged Property, including the execution, cancellation or
modification of Leases, the collection of all Rents, the making of repairs to
the Mortgaged Property and the execution or termination of contracts providing
for the management, operation or maintenance of the Mortgaged Property, for the
purposes of enforcing the assignment of Rents pursuant to Section 3(a),
protecting the Mortgaged Property or the security of this Instrument, or for
such other purposes as Lender in its discretion may deem necessary or desirable.
Alternatively, if an Event of Default has occurred and is continuing, regardless
of the adequacy of Lender's security, without regard to Borrower's solvency and
without the necessity of giving prior notice (oral or written) to Borrower,
Lender may apply to any court having jurisdiction for the appointment of a
receiver for the Mortgaged Property to take any or all of the actions set forth
in the preceding sentence. If Lender elects to seek the appointment of a
receiver for the Mortgaged Property at any time after an Event of Default has
occurred and is continuing, Borrower, by its execution of this Instrument,
expressly consents to the appointment of such receiver, including the
appointment of a receiver ex parte if permitted by applicable law. Lender or the
receiver, as the case may be, shall be entitled to receive a reasonable fee for
managing the Mortgaged Property. Immediately upon appointment of a receiver or
immediately upon the Lender's entering upon and taking possession and control of
the Mortgaged Property, Borrower shall surrender possession of the Mortgaged
Property to Lender or the receiver, as the case may be, and shall deliver to
Lender or the receiver, as the case may be, all documents, records (including
records on electronic or magnetic media), accounts, surveys, plans, and
specifications relating to the Mortgaged Property and all security deposits and
prepaid Rents. In the event Lender takes possession and control of the Mortgaged
Property, Lender may exclude Borrower and its representatives from the Mortgaged
Property. Borrower acknowledges and agrees that the exercise by Lender of any of
the rights conferred under this Section 3 shall not be construed to make Lender
a mortgagee-in-possession of the Mortgaged Property so long as Lender has not
itself entered into actual possession of the Land and Improvements.
(e) If Lender enters the Mortgaged Property, Lender shall be liable to
account only to Borrower and only for those Rents actually received. Lender
shall not be liable to Borrower, anyone claiming under or through Borrower or
anyone having an interest in the Mortgaged Property, by reason of any act or
omission of Lender under this Section 3, and Borrower hereby releases and
discharges Lender from any such liability to the fullest extent permitted by
law.
(f) If the Rents are not sufficient to meet the costs of taking control of
and managing the Mortgaged Property and collecting the Rents, any funds expended
by Lender for such purposes shall become an additional part of the Indebtedness
as provided in Section 12.
(g) Any entering upon and taking of control of the Mortgaged Property by
Lender or the receiver, as the case may be, and any application of Rents as
provided in this Instrument shall not cure or waive any Event of Default or
invalidate any other right or remedy of Lender under applicable law or provided
for in this Instrument.
4. ASSIGNMENT OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY.
(a) As part of the consideration for the Indebtedness, Borrower absolutely
and unconditionally assigns and transfers to Lender all of Borrower's right,
title and interest in, to and under the Leases, including Borrower's right,
power and authority to modify the terms of any such Lease, or extend or
terminate any such Lease. It is the intention of Borrower to establish a
present, absolute and irrevocable transfer and assignment to Lender of all of
Borrower's right, title and interest in, to and under the Leases. Borrower and
Lender intend this assignment of the Leases to be immediately effective and to
constitute an absolute present assignment and not an assignment for additional
security only. For purposes of giving effect to this absolute assignment of the
Leases, and for no other purpose, the Leases shall not be deemed to be a part of
the "Mortgaged Property" as that term is defined in Section 1(s). However, if
this present, absolute and unconditional assignment of the Leases is not
enforceable by its terms under the laws of the Property Jurisdiction, then the
Leases shall be included as a part of the Mortgaged Property and it is the
intention of the Borrower that in this circumstance this Instrument create and
perfect a lien on the Leases in favor of Lender, which lien shall be effective
as of the date of this Instrument.
(b) Until Lender gives notice to Borrower of Lender's exercise of its
rights under this Section 4, Borrower shall have all rights, power and authority
granted to Borrower under any Lease (except as otherwise limited by this Section
or any other provision of this Instrument), including the right, power and
authority to modify the terms of any Lease or extend or terminate any Lease.
Upon the occurrence of an Event of Default, the permission given to Borrower
pursuant to the preceding sentence to exercise all rights, power and authority
under Leases shall automatically terminate. Borrower shall comply with and
observe Borrower's obligations under all Leases, including Borrower's
obligations pertaining to the maintenance and disposition of tenant security
deposits.
(c) Borrower acknowledges and agrees that the exercise by Lender, either
directly or by a receiver, of any of the rights conferred under this Section 4
shall not be construed to make Lender a mortgagee-in-possession of the Mortgaged
Property so long as Lender has not itself entered into actual possession of the
Land and the Improvements. The acceptance by Lender of the assignment of the
Leases pursuant to Section 4(a) shall not at any time or in any event obligate
Lender to take any action under this Instrument or to expend any money or to
incur any expenses. Lender shall not be liable in any way for any injury or
damage to person or property sustained by any person or persons, firm or
corporation in or about the Mortgaged Property. Prior to Lender's actual entry
into and taking possession of the Mortgaged Property, Lender shall not (i) be
obligated to perform any of the terms, covenants and conditions contained in any
Lease (or otherwise have any obligation with respect to any Lease); (ii) be
obligated to appear in or defend any action or proceeding relating to the Lease
or the Mortgaged Property; or (iii) be responsible for the operation, control,
care, management or repair of the Mortgaged Property or any portion of the
Mortgaged Property. The execution of this Instrument by Borrower shall
constitute conclusive evidence that all responsibility for the operation,
control, care, management and repair of the Mortgaged Property is and shall be
that of Borrower, prior to such actual entry and taking of possession.
(d) Upon delivery of notice by Lender to Borrower of Lender's exercise of
Lender's rights under this Section 4 at any time after the occurrence of an
Event of Default, and without the necessity of Lender entering upon and taking
and maintaining control of the Mortgaged Property directly, by a receiver, or by
any other manner or proceeding permitted by the laws of the Property
Jurisdiction, Lender immediately shall have all rights, powers and authority
granted to Borrower under any Lease, including the right, power and authority to
modify the terms of any such Lease, or extend or terminate any such Lease.
(e) Borrower shall, promptly upon Lender's request, deliver to Lender an
executed copy of each residential Lease then in effect. All Leases for
residential dwelling units shall be on forms approved by Lender, shall be for
initial terms of at least six months and not more than two years, and shall not
include options to purchase.
(f) Borrower shall not lease any portion of the Mortgaged Property for
non-residential use except with the prior written consent of Lender and Lender's
prior written approval of the Lease agreement. Borrower shall not modify the
terms of, or extend or terminate, any Lease for non-residential use (including
any Lease in existence on the date of this Instrument) without the prior written
consent of Lender. Borrower shall, without request by Lender, deliver an
executed copy of each non-residential Lease to Lender promptly after such Lease
is signed. All non-residential Leases, including renewals or extensions of
existing Leases, shall specifically provide that (1) such Leases are subordinate
to the lien of this Instrument; (2) the tenant shall attorn to Lender and any
purchaser at a foreclosure sale, such attornment to be self-executing and
effective upon acquisition of title to the Mortgaged Property by any purchaser
at a foreclosure sale or by Lender in any manner; (3) the tenant agrees to
execute such further evidences of attornment as Lender or any purchaser at a
foreclosure sale may from time to time request; (4) the Lease shall not be
terminated by foreclosure or any other transfer of the Mortgaged Property; (5)
after a foreclosure sale of the Mortgaged Property, Lender or any other
purchaser at such foreclosure sale may, at Lender's or such purchaser's option,
accept or terminate such Lease; and (6) the tenant shall, upon receipt after the
occurrence of an Event of Default of a written request from Lender, pay all
Rents payable under the Lease to Lender.
(g) Borrower shall not receive or accept Rent under any Lease (whether
residential or non-residential) for more than two months in advance.
5. PAYMENT OF INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS; PREPAYMENT
PREMIUM. Borrower shall pay the Indebtedness when due in accordance with the
terms of the Note and the other Loan Documents and shall perform, observe and
comply with all other provisions of the Note and the other Loan Documents.
Borrower shall pay a prepayment premium in connection with certain prepayments
of the Indebtedness, including a payment made after Lender's exercise of any
right of acceleration of the Indebtedness, as provided in the Note.
6. EXCULPATION. Borrower's personal liability for payment of the
Indebtedness and for performance of the other obligations to be performed by it
under this Instrument is limited in the manner, and to the extent, provided in
the Note.
7. DEPOSITS FOR TAXES, INSURANCE AND OTHER CHARGES.
(a) Borrower shall deposit with Lender on the day monthly installments of
principal or interest, or both, are due under the Note (or on another day
designated in writing by Lender), until the Indebtedness is paid in full, an
additional amount sufficient to accumulate with Lender the entire sum required
to pay, when due (1) any water and sewer charges which, if not paid, may result
in a lien on all or any part of the Mortgaged Property, (2) the premiums for
fire and other hazard insurance, rent loss insurance and such other insurance as
Lender may require under Section 19, (3) Taxes, and (4) amounts for other
charges and expenses which Lender at any time reasonably deems necessary to
protect the Mortgaged Property, to prevent the imposition of liens on the
Mortgaged Property, or otherwise to protect Lender's interests, all as
reasonably estimated from time to time by Lender, plus one-sixth of such
estimate. The amounts deposited under the preceding sentence are collectively
referred to in this Instrument as the "Imposition Deposits". The obligations of
Borrower for which the Imposition Deposits are required are collectively
referred to in this Instrument as "Impositions". The amount of the Imposition
Deposits shall be sufficient to enable Lender to pay each Imposition before the
last date upon which such payment may be made without any penalty or interest
charge being added. Lender shall maintain records indicating how much of the
monthly Imposition Deposits and how much of the aggregate Imposition Deposits
held by Lender are held for the purpose of paying Taxes, insurance premiums and
each other obligation of Borrower for which Imposition Deposits are required.
Any waiver by Lender of the requirement that Borrower remit Imposition Deposits
to Lender may be revoked by Lender, in Lender's discretion, at any time upon
notice to Borrower.
(b) Imposition Deposits shall be held in an institution (which may be
Lender, if Lender is such an institution) whose deposits or accounts are insured
or guaranteed by a federal agency. Lender shall not be obligated to open
additional accounts or deposit Imposition Deposits in additional institutions
when the amount of the Imposition Deposits exceeds the maximum amount of the
federal deposit insurance or guaranty. Lender shall apply the Imposition
Deposits to pay Impositions so long as no Event of Default has occurred and is
continuing. Unless applicable law requires, Lender shall not be required to pay
Borrower any interest, earnings or profits on the Imposition Deposits. Borrower
hereby pledges and grants to Lender a security interest in the Imposition
Deposits as additional security for all of Borrower's obligations under this
Instrument and the other Loan Documents. Any amounts deposited with Lender under
this Section 7 shall not be trust funds, nor shall they operate to reduce the
Indebtedness, unless applied by Lender for that purpose under Section 7(e).
(c) If Lender receives a bill or invoice for an Imposition, Lender shall
pay the Imposition from the Imposition Deposits held by Lender. Lender shall
have no obligation to pay any Imposition to the extent it exceeds Imposition
Deposits then held by Lender. Lender may pay an Imposition according to any
bill, statement or estimate from the appropriate public office or insurance
company without inquiring into the accuracy of the bill, statement or estimate
or into the validity of the Imposition.
(d) If at any time the amount of the Imposition Deposits held by Lender
for payment of a specific Imposition exceeds the amount reasonably deemed
necessary by Lender plus one-sixth of such estimate, the excess shall be
credited against future installments of Imposition Deposits. If at any time the
amount of the Imposition Deposits held by Lender for payment of a specific
Imposition is less than the amount reasonably estimated by Lender to be
necessary plus one-sixth of such estimate, Borrower shall pay to Lender the
amount of the deficiency within 15 days after notice from Lender.
(e) If an Event of Default has occurred and is continuing, Lender may
apply any Imposition Deposits, in any amounts and in any order as Lender
determines, in Lender's discretion, to pay any Impositions or as a credit
against the Indebtedness. Upon payment in full of the Indebtedness, Lender shall
refund to Borrower any Imposition Deposits held by Lender.
8. COLLATERAL AGREEMENTS. Borrower shall deposit with Lender such amounts
as may be required by any Collateral Agreement and shall perform all other
obligations of Borrower under each Collateral Agreement.
9. APPLICATION OF PAYMENTS. If at any time Lender receives, from Borrower
or otherwise, any amount applicable to the Indebtedness which is less than all
amounts due and payable at such time, then Lender may apply that payment to
amounts then due and payable in any manner and in any order determined by
Lender, in Lender's discretion. Neither Lender's acceptance of an amount which
is less than all amounts then due and payable nor Lender's application of such
payment in the manner authorized shall constitute or be deemed to constitute
either a waiver of the unpaid amounts or an accord and satisfaction.
Notwithstanding the application of any such amount to the Indebtedness,
Borrower's obligations under this Instrument and the Note shall remain
unchanged.
10. COMPLIANCE WITH LAWS. Borrower shall comply with all laws, ordinances,
regulations and requirements of any Governmental Authority and all recorded
lawful covenants and agreements relating to or affecting the Mortgaged Property,
including all laws, ordinances, regulations, requirements and covenants
pertaining to health and safety, construction of improvements on the Mortgaged
Property, fair housing, zoning and land use, and Leases. Borrower also shall
comply with all applicable laws that pertain to the maintenance and disposition
of tenant security deposits. Borrower shall at all times maintain records
sufficient to demonstrate compliance with the provisions of this Section 10.
Borrower shall take appropriate measures to prevent, and shall not engage in or
knowingly permit, any illegal activities at the Mortgaged Property that could
endanger tenants or visitors, result in damage to the Mortgaged Property, result
in forfeiture of the Mortgaged Property, or otherwise materially impair the lien
created by this Instrument or Lender's interest in the Mortgaged Property.
Borrower represents and warrants to Lender that no portion of the Mortgaged
Property has been or will be purchased with the proceeds of any illegal
activity.
11. USE OF PROPERTY. Unless required by applicable law, Borrower shall not
(a) except for any change in use approved by Lender, allow changes in the use
for which all or any part of the Mortgaged Property is being used at the time
this Instrument was executed, (b) convert any individual dwelling units or
common areas to commercial use, (c) initiate or acquiesce in a change in the
zoning classification of the Mortgaged Property, or (d) establish any
condominium or cooperative regime with respect to the Mortgaged Property.
12. PROTECTION OF LENDER'S SECURITY.
(a) If Borrower fails to perform any of its obligations under this
Instrument or any other Loan Document, or if any action or proceeding is
commenced which purports to affect the Mortgaged Property, Lender's security or
Lender's rights under this Instrument, including eminent domain, insolvency,
code enforcement, civil or criminal forfeiture, enforcement of Hazardous
Materials Laws, fraudulent conveyance or reorganizations or proceedings
involving a bankrupt or decedent, then Lender at Lender's option may make such
appearances, disburse such sums and take such actions as Lender reasonably deems
necessary to perform such obligations of Borrower and to protect Lender's
interest, including (1) payment of fees and out of pocket expenses of attorneys,
accountants, inspectors and consultants, (2) entry upon the Mortgaged Property
to make repairs or secure the Mortgaged Property, (3) procurement of the
insurance required by Section 19, and (4) payment of amounts which Borrower has
failed to pay under Sections 15 and 17.
(b) Any amounts disbursed by Lender under this Section 12, or under any
other provision of this Instrument that treats such disbursement as being made
under this Section 12, shall be added to, and become part of, the principal
component of the Indebtedness, shall be immediately due and payable and shall
bear interest from the date of disbursement until paid at the "Default Rate", as
defined in the Note.
(c) Nothing in this Section 12 shall require Lender to incur any expense
or take any action.
13. INSPECTION. Lender, its agents, representatives, and designees may
make or cause to be made entries upon and inspections of the Mortgaged Property
(including environmental inspections and tests) during normal business hours, or
at any other reasonable time.
14. BOOKS AND RECORDS; FINANCIAL REPORTING.
(a) Borrower shall keep and maintain at all times at the Mortgaged
Property or the management agent's offices, and upon Lender's request shall make
available at the Mortgaged Property, complete and accurate books of account and
records (including copies of supporting bills and invoices) adequate to reflect
correctly the operation of the Mortgaged Property, and copies of all written
contracts, Leases, and other instruments which affect the Mortgaged Property.
The books, records, contracts, Leases and other instruments shall be subject to
examination and inspection at any reasonable time by Lender.
(b) Borrower shall furnish to Lender all of the following:
(1) within 120 days after the end of each fiscal year of Borrower,
a statement of income and expenses for Borrower's operation of
the Mortgaged Property for that fiscal year, a statement of
changes in financial position of Borrower relating to the
Mortgaged Property for that fiscal year and, when requested by
Lender, a balance sheet showing all assets and liabilities of
Borrower relating to the Mortgaged Property as of the end of
that fiscal year;
(2) within 120 days after the end of each fiscal year of Borrower,
and at any other time upon Lender's request, a rent schedule
for the Mortgaged Property showing the name of each tenant,
and for each tenant, the space occupied, the lease expiration
date, the rent payable for the current month, the date through
which rent has been paid, and any related information
requested by Lender;
(3) within 120 days after the end of each fiscal year of Borrower,
and at any other time upon Lender's request, an accounting of
all security deposits held pursuant to all Leases, including
the name of the institution (if any) and the names and
identification numbers of the accounts (if any) in which such
security deposits are held and the name of the person to
contact at such financial institution, along with any
authority or release necessary for Lender to access
information regarding such accounts;
(4) within 120 days after the end of each fiscal year of Borrower,
and at any other time upon Lender's request, a statement that
identifies all owners of any interest in Borrower and any
Controlling Entity and the interest held by each, if Borrower
or a Controlling Entity is a corporation, all officers and
directors of Borrower and the Controlling Entity, and if
Borrower or a Controlling Entity is a limited liability
company, all managers who are not members;
(5) upon Lender's request, quarterly income and expense statements
for the Mortgaged Property;
(6) upon Lender's request at any time when an Event of Default has
occurred and is continuing, monthly income and expense
statements for the Mortgaged Property;
(7) upon Lender's request, a monthly property management report
for the Mortgaged Property, showing the number of inquiries
made and rental applications received from tenants or
prospective tenants and deposits received from tenants and any
other information requested by Lender; and
(8) upon Lender's request, a balance sheet, a statement of income
and expenses for Borrower and a statement of changes in
financial position of Borrower for Borrower's most recent
fiscal year.
(c) Each of the statements, schedules and reports required by Section
14(b) shall be certified to be complete and accurate by an individual having
authority to bind Borrower, and shall be in such form and contain such detail as
Lender may reasonably require. Lender also may require that any statements,
schedules or reports be audited at Borrower's expense by independent certified
public accountants acceptable to Lender.
(d) If Borrower fails to provide in a timely manner the statements,
schedules and reports required by Section 14(b), Lender shall have the right to
have Borrower's books and records audited, at Borrower's expense, by independent
certified public accountants selected by Lender in order to obtain such
statements, schedules and reports, and all related costs and expenses of Lender
shall become immediately due and payable and shall become an additional part of
the Indebtedness as provided in Section 12.
(e) If an Event of Default has occurred and is continuing, Borrower shall
deliver to Lender upon written demand all books and records relating to the
Mortgaged Property or its operation.
(f) Borrower authorizes Lender to obtain a credit report on Borrower at
any time.
15. TAXES; OPERATING EXPENSES.
(a) Subject to the provisions of Section 15(c) and Section 15(d), Borrower
shall pay, or cause to be paid, all Taxes when due and before the addition of
any interest, fine, penalty or cost for nonpayment.
(b) Subject to the provisions of Section 15(c), Borrower shall pay the
expenses of operating, managing, maintaining and repairing the Mortgaged
Property (including insurance premiums, utilities, repairs and replacements)
before the last date upon which each such payment may be made without any
penalty or interest charge being added.
(c) As long as no Event of Default exists and Borrower has timely
delivered to Lender any bills or premium notices that it has received, Borrower
shall not be obligated to pay Taxes, insurance premiums or any other individual
Imposition to the extent that sufficient Imposition Deposits are held by Lender
for the purpose of paying that specific Imposition. If an Event of Default
exists, Lender may exercise any rights Lender may have with respect to
Imposition Deposits without regard to whether Impositions are then due and
payable. Lender shall have no liability to Borrower for failing to pay any
Impositions to the extent that any Event of Default has occurred and is
continuing, insufficient Imposition Deposits are held by Lender at the time an
Imposition becomes due and payable or Borrower has failed to provide Lender with
bills and premium notices as provided above.
(d) Borrower, at its own expense, may contest by appropriate legal
proceedings, conducted diligently and in good faith, the amount or validity of
any Imposition other than insurance premiums, if (1) Borrower notifies Lender of
the commencement or expected commencement of such proceedings, (2) the Mortgaged
Property is not in danger of being sold or forfeited, (3) Borrower deposits with
Lender reserves sufficient to pay the contested Imposition, if requested by
Lender, and (4) Borrower furnishes whatever additional security is required in
the proceedings or is reasonably requested by Lender, which may include the
delivery to Lender of the reserves established by Borrower to pay the contested
Imposition.
(e) Borrower shall promptly deliver to Lender a copy of all notices of,
and invoices for, Impositions, and if Borrower pays any Imposition directly,
Borrower shall promptly furnish to Lender receipts evidencing such payments.
16. LIENS; ENCUMBRANCES. Borrower acknowledges that, to the extent
provided in Section 21, the grant, creation or existence of any mortgage, deed
of trust, deed to secure debt, security interest or other lien or encumbrance (a
"Lien") on the Mortgaged Property (other than the lien of this Instrument) or on
certain ownership interests in Borrower, whether voluntary, involuntary or by
operation of law, and whether or not such Lien has priority over the lien of
this Instrument, is a "Transfer" which constitutes an Event of Default and
subjects Borrower to personal liability under the Note.
17. PRESERVATION, MANAGEMENT AND MAINTENANCE OF MORTGAGED PROPERTY.
Borrower (a) shall not commit waste or permit impairment or deterioration of the
Mortgaged Property, (b) shall not abandon the Mortgaged Property, (c) shall
restore or repair promptly, in a good and workmanlike manner, any damaged part
of the Mortgaged Property to the equivalent of its original condition, or such
other condition as Lender may approve in writing, whether or not insurance
proceeds or condemnation awards are available to cover any costs of such
restoration or repair, (d) shall keep the Mortgaged Property in good repair,
including the replacement of Personalty and Fixtures with items of equal or
better function and quality, (e) shall provide for professional management of
the Mortgaged Property by a residential rental property manager satisfactory to
Lender under a contract approved by Lender in writing, and (f) shall give notice
to Lender of and, unless otherwise directed in writing by Lender, shall appear
in and defend any action or proceeding purporting to affect the Mortgaged
Property, Lender's security or Lender's rights under this Instrument. Borrower
shall not (and shall not permit any tenant or other person to) remove, demolish
or alter the Mortgaged Property or any part of the Mortgaged Property except in
connection with the replacement of tangible Personalty.
18. ENVIRONMENTAL HAZARDS.
(a) Except for matters covered by a written program of operations and
maintenance approved in writing by Lender (an "O&M Program") or matters
described in Section 18(b), Borrower shall not cause or permit any of the
following:
(1) the presence, use, generation, release, treatment, processing,
storage (including storage in above ground and underground
storage tanks), handling, or disposal of any Hazardous
Materials on or under the Mortgaged Property or any other
property of Borrower that is adjacent to the Mortgaged
Property;
(2) the transportation of any Hazardous Materials to, from, or
across the Mortgaged Property;
(3) any occurrence or condition on the Mortgaged Property or any
other property of Borrower that is adjacent to the Mortgaged
Property, which occurrence or condition is or may be in
violation of Hazardous Materials Laws; or
(4) any violation of or noncompliance with the terms of any
Environmental Permit with respect to the Mortgaged Property or
any property of Borrower that is adjacent to the Mortgaged
Property.
The matters described in clauses (1) through (4) above are referred to
collectively in this Section 18 as "Prohibited Activities or Conditions".
(b) Prohibited Activities and Conditions shall not include the safe and
lawful use and storage of quantities of (1) pre-packaged supplies, cleaning
materials and petroleum products customarily used in the operation and
maintenance of comparable multifamily properties, (2) cleaning materials,
personal grooming items and other items sold in pre-packaged containers for
consumer use and used by tenants and occupants of residential dwelling units in
the Mortgaged Property; and (3) petroleum products used in the operation and
maintenance of motor vehicles from time to time located on the Mortgaged
Property's parking areas, so long as all of the foregoing are used, stored,
handled, transported and disposed of in compliance with Hazardous Materials
Laws.
(c) Borrower shall take all commercially reasonable actions (including the
inclusion of appropriate provisions in any Leases executed after the date of
this Instrument) to prevent its employees, agents, and contractors, and all
tenants and other occupants from causing or permitting any Prohibited Activities
or Conditions. Borrower shall not lease or allow the sublease or use of all or
any portion of the Mortgaged Property to any tenant or subtenant for
nonresidential use by any user that, in the ordinary course of its business,
would cause or permit any Prohibited Activity or Condition.
(d) If an O&M Program has been established with respect to Hazardous
Materials, Borrower shall comply in a timely manner with, and cause all
employees, agents, and contractors of Borrower and any other persons present on
the Mortgaged Property to comply with the O&M Program. All costs of performance
of Borrower's obligations under any O&M Program shall be paid by Borrower, and
Lender's out-of-pocket costs incurred in connection with the monitoring and
review of the O&M Program and Borrower's performance shall be paid by Borrower
upon demand by Lender. Any such out-of-pocket costs of Lender which Borrower
fails to pay promptly shall become an additional part of the Indebtedness as
provided in Section 12.
(e) Borrower represents and warrants to Lender that, except as previously
disclosed by Borrower to Lender in writing:
(1) Borrower has not at any time engaged in, caused or permitted
any Prohibited Activities or Conditions;
(2) to the best of Borrower's knowledge after reasonable and
diligent inquiry, no Prohibited Activities or Conditions exist
or have existed;
(3) except to the extent previously disclosed by Borrower to
Lender in writing, the Mortgaged Property does not now contain
any underground storage tanks, and, to the best of Borrower's
knowledge after reasonable and diligent inquiry, the Mortgaged
Property has not contained any underground storage tanks in
the past. If there is an underground storage tank located on
the Property which has been previously disclosed by Borrower
to Lender in writing, that tank complies with all requirements
of Hazardous Materials Laws;
(4) Borrower has complied with all Hazardous Materials Laws,
including all requirements for notification regarding releases
of Hazardous Materials. Without limiting the generality of the
foregoing, Borrower has obtained all Environmental Permits
required for the operation of the Mortgaged Property in
accordance with Hazardous Materials Laws now in effect and all
such Environmental Permits are in full force and effect;
(5) no event has occurred with respect to the Mortgaged Property
that constitutes, or with the passing of time or the giving of
notice would constitute, noncompliance with the terms of any
Environmental Permit;
(6) there are no actions, suits, claims or proceedings pending or,
to the best of Borrower's knowledge after reasonable and
diligent inquiry, threatened that involve the Mortgaged
Property and allege, arise out of, or relate to any Prohibited
Activity or Condition; and
(7) Borrower has not received any complaint, order, notice of
violation or other communication from any Governmental
Authority with regard to air emissions, water discharges,
noise emissions or Hazardous Materials, or any other
environmental, health or safety matters affecting the
Mortgaged Property or any other property of Borrower that is
adjacent to the Mortgaged Property.
The representations and warranties in this Section 18 shall be continuing
representations and warranties that shall be deemed to be made by Borrower
throughout the term of the loan evidenced by the Note, until the Indebtedness
has been paid in full.
(f) Borrower shall promptly notify Lender in writing upon the occurrence
of any of the following events:
(1) Borrower's discovery of any Prohibited Activity or Condition;
(2) Borrower's receipt of or knowledge of any complaint, order,
notice of violation or other communication from any
Governmental Authority or other person with regard to present
or future alleged Prohibited Activities or Conditions or any
other environmental, health or safety matters affecting the
Mortgaged Property or any other property of Borrower that is
adjacent to the Mortgaged Property; and
(3) any representation or warranty in this Section 18 becomes
untrue after the date of this Agreement.
Any such notice given by Borrower shall not relieve Borrower of, or result in a
waiver of, any obligation under this Instrument, the Note, or any other Loan
Document.
(g) Borrower shall pay promptly the costs of any environmental
inspections, tests or audits ("Environmental Inspections") required by Lender in
connection with any foreclosure or deed in lieu of foreclosure, or as a
condition of Lender's consent to any Transfer under Section 21, or required by
Lender following a reasonable determination by Lender that Prohibited Activities
or Conditions may exist. Any such costs incurred by Lender (including the fees
and out-of-pocket costs of attorneys and technical consultants whether incurred
in connection with any judicial or administrative process or otherwise) which
Borrower fails to pay promptly shall become an additional part of the
Indebtedness as provided in Section 12. The results of all Environmental
Inspections made by Lender shall at all times remain the property of Lender and
Lender shall have no obligation to disclose or otherwise make available to
Borrower or any other party such results or any other information obtained by
Lender in connection with its Environmental Inspections. Lender hereby reserves
the right, and Borrower hereby expressly authorizes Lender, to make available to
any party, including any prospective bidder at a foreclosure sale of the
Mortgaged Property, the results of any Environmental Inspections made by Lender
with respect to the Mortgaged Property. Borrower consents to Lender notifying
any party (either as part of a notice of sale or otherwise) of the results of
any of Lender's Environmental Inspections. Borrower acknowledges that Lender
cannot control or otherwise assure the truthfulness or accuracy of the results
of any of its Environmental Inspections and that the release of such results to
prospective bidders at a foreclosure sale of the Mortgaged Property may have a
material and adverse effect upon the amount which a party may bid at such sale.
Borrower agrees that Lender shall have no liability whatsoever as a result of
delivering the results of any of its Environmental Inspections to any third
party, and Borrower hereby releases and forever discharges Lender from any and
all claims, damages, or causes of action, arising out of, connected with or
incidental to the results of, the delivery of any of Lender's Environmental
Inspections.
(h) If any investigation, site monitoring, containment, clean-up,
restoration or other remedial work ("Remedial Work") is necessary to comply with
any Hazardous Materials Law or order of any Governmental Authority that has or
acquires jurisdiction over the Mortgaged Property or the use, operation or
improvement of the Mortgaged Property under any Hazardous Materials Law,
Borrower shall, by the earlier of (1) the applicable deadline required by
Hazardous Materials Law or (2) 30 days after notice from Lender demanding such
action, begin performing the Remedial Work, and thereafter diligently prosecute
it to completion, and shall in any event complete the work by the time required
by applicable Hazardous Materials Law. If Borrower fails to begin on a timely
basis or diligently prosecute any required Remedial Work, Lender may, at its
option, cause the Remedial Work to be completed, in which case Borrower shall
reimburse Lender on demand for the cost of doing so. Any reimbursement due from
Borrower to Lender shall become part of the Indebtedness as provided in Section
12.
(i) Borrower shall cooperate with any inquiry by any Governmental
Authority and shall comply with any governmental or judicial order which arises
from any alleged Prohibited Activity or Condition.
(j) Borrower shall indemnify, hold harmless and defend (i) Lender, (ii)
any prior owner or holder of the Note, (iii) the Loan Servicer, (iv) any prior
Loan Servicer, (v) the officers, directors, shareholders, partners, employees
and trustees of any of the foregoing, and (vi) the heirs, legal representatives,
successors and assigns of each of the foregoing (collectively, the
"Indemnitees") from and against all proceedings, claims, damages, penalties and
costs (whether initiated or sought by Governmental Authorities or private
parties), including fees and out of pocket expenses of attorneys and expert
witnesses, investigatory fees, and remediation costs, whether incurred in
connection with any judicial or administrative process or otherwise, arising
directly or indirectly from any of the following:
(1) any breach of any representation or warranty of Borrower in
this Section 18;
(2) any failure by Borrower to perform any of its obligations
under this Section 18;
(3) the existence or alleged existence of any Prohibited Activity
or Condition;
(4) the presence or alleged presence of Hazardous Materials on or
under the Mortgaged Property or any property of Borrower that
is adjacent to the Mortgaged Property; and
(5) the actual or alleged violation of any Hazardous Materials
Law.
(k) Counsel selected by Borrower to defend Indemnitees shall be subject to
the approval of those Indemnitees. However, any Indemnitee may elect to defend
any claim or legal or administrative proceeding at the Borrower's expense.
(l) Borrower shall not, without the prior written consent of those
Indemnitees who are named as parties to a claim or legal or administrative
proceeding (a "Claim"), settle or compromise the Claim if the settlement (1)
results in the entry of any judgment that does not include as an unconditional
term the delivery by the claimant or plaintiff to Lender of a written release of
those Indemnitees, satisfactory in form and substance to Lender; or (2) may
materially and adversely affect Lender, as determined by Lender in its
discretion.
(m) Borrower's obligation to indemnify the Indemnitees shall not be
limited or impaired by any of the following, or by any failure of Borrower or
any guarantor to receive notice of or consideration for any of the following:
(1) any amendment or modification of any Loan Document;
(2) any extensions of time for performance required by any Loan
Document;
(3) any provision in any of the Loan Documents limiting Lender's
recourse to property securing the Indebtedness, or limiting
the personal liability of Borrower or any other party for
payment of all or any part of the Indebtedness;
(4) the accuracy or inaccuracy of any representations and
warranties made by Borrower under this Instrument or any other
Loan Document;
(5) the release of Borrower or any other person, by Lender or by
operation of law, from performance of any obligation under any
Loan Document;
(6) the release or substitution in whole or in part of any
security for the Indebtedness; and
(7) Lender's failure to properly perfect any lien or security
interest given as security for the Indebtedness.
(n) Borrower shall, at its own cost and expense, do all of the following:
(1) pay or satisfy any judgment or decree that may be entered
against any Indemnitee or Indemnitees in any legal or
administrative proceeding incident to any matters against
which Indemnitees are entitled to be indemnified under this
Section 18;
(2) reimburse Indemnitees for any expenses paid or incurred in
connection with any matters against which Indemnitees are
entitled to be indemnified under this Section 18; and
(3) reimburse Indemnitees for any and all expenses, including fees
and out of pocket expenses of attorneys and expert witnesses,
paid or incurred in connection with the enforcement by
Indemnitees of their rights under this Section 18, or in
monitoring and participating in any legal or administrative
proceeding.
(o) In any circumstances in which the indemnity under this Section 18
applies, Lender may employ its own legal counsel and consultants to prosecute,
defend or negotiate any claim or legal or administrative proceeding and Lender,
with the prior written consent of Borrower (which shall not be unreasonably
withheld, delayed or conditioned) may settle or compromise any action or legal
or administrative proceeding. Borrower shall reimburse Lender upon demand for
all costs and expenses incurred by Lender, including all costs of settlements
entered into in good faith, and the fees and out of pocket expenses of such
attorneys and consultants.
(p) The provisions of this Section 18 shall be in addition to any and all
other obligations and liabilities that Borrower may have under applicable law or
under other Loan Documents, and each Indemnitee shall be entitled to
indemnification under this Section 18 without regard to whether Lender or that
Indemnitee has exercised any rights against the Mortgaged Property or any other
security, pursued any rights against any guarantor, or pursued any other rights
available under the Loan Documents or applicable law. If Borrower consists of
more than one person or entity, the obligation of those persons or entities to
indemnify the Indemnitees under this Section 18 shall be joint and several. The
obligation of Borrower to indemnify the Indemnitees under this Section 18 shall
survive any repayment or discharge of the Indebtedness, any foreclosure
proceeding, any foreclosure sale, any delivery of any deed in lieu of
foreclosure, and any release of record of the lien of this Instrument.
19. PROPERTY AND LIABILITY INSURANCE.
(a) Borrower shall keep the Improvements insured at all times against such
hazards as Lender may from time to time require, which insurance shall include
but not be limited to coverage against loss by fire and allied perils, general
boiler and machinery coverage, and business income coverage. Lender's insurance
requirements may change from time to time throughout the term of the
Indebtedness. If Lender so requires, such insurance shall also include sinkhole
insurance, mine subsidence insurance, earthquake insurance, and, if the
Mortgaged Property does not conform to applicable zoning or land use laws,
building ordinance or law coverage. If any of the Improvements is located in an
area identified by the Federal Emergency Management Agency (or any successor to
that agency) as an area having special flood hazards, and if flood insurance is
available in that area, Borrower shall insure such Improvements against loss by
flood.
(b) All premiums on insurance policies required under Section 19(a) shall
be paid in the manner provided in Section 7, unless Lender has designated in
writing another method of payment. All such policies shall also be in a form
approved by Lender. All policies of property damage insurance shall include a
non-contributing, non-reporting mortgage clause in favor of, and in a form
approved by, Lender. Lender shall have the right to hold the original policies
or duplicate original policies of all insurance required by Section 19(a).
Borrower shall promptly deliver to Lender a copy of all renewal and other
notices received by Borrower with respect to the policies and all receipts for
paid premiums. At least 30 days prior to the expiration date of a policy,
Borrower shall deliver to Lender the original (or a duplicate original) of a
renewal policy in form satisfactory to Lender.
(c) Borrower shall maintain at all times commercial general liability
insurance, workers' compensation insurance and such other liability, errors and
omissions and fidelity insurance coverages as Lender may from time to time
require.
(d) All insurance policies and renewals of insurance policies required by
this Section 19 shall be in such amounts and for such periods as Lender may from
time to time require, and shall be issued by insurance companies satisfactory to
Lender.
(e) Borrower shall comply with all insurance requirements and shall not
permit any condition to exist on the Mortgaged Property that would invalidate
any part of any insurance coverage that this Instrument requires Borrower to
maintain.
(f) In the event of loss, Borrower shall give immediate written notice to
the insurance carrier and to Lender. Borrower hereby authorizes and appoints
Lender as attorney-in-fact for Borrower to make proof of loss, to adjust and
compromise any claims under policies of property damage insurance, to appear in
and prosecute any action arising from such property damage insurance policies,
to collect and receive the proceeds of property damage insurance, and to deduct
from such proceeds Lender's expenses incurred in the collection of such
proceeds. This power of attorney is coupled with an interest and therefore is
irrevocable. However, nothing contained in this Section 19 shall require Lender
to incur any expense or take any action. Lender may, at Lender's option, (1)
hold the balance of such proceeds to be used to reimburse Borrower for the cost
of restoring and repairing the Mortgaged Property to the equivalent of its
original condition or to a condition approved by Lender (the "Restoration"), or
(2) apply the balance of such proceeds to the payment of the Indebtedness,
whether or not then due. To the extent Lender determines to apply insurance
proceeds to Restoration, Lender shall do so in accordance with Lender's
then-current policies relating to the restoration of casualty damage on similar
multifamily properties.
(g) Lender shall not exercise its option to apply insurance proceeds to
the payment of the Indebtedness if all of the following conditions are met: (1)
no Event of Default (or any event which, with the giving of notice or the
passage of time, or both, would constitute an Event of Default) has occurred and
is continuing; (2) Lender determines, in its discretion, that there will be
sufficient funds to complete the Restoration; (3) Lender determines, in its
discretion, that the rental income from the Mortgaged Property after completion
of the Restoration will be sufficient to meet all operating costs and other
expenses, Imposition Deposits, deposits to reserves and loan repayment
obligations relating to the Mortgaged Property; and (4) Lender determines, in
its discretion, that the Restoration will be completed before the earlier of (A)
one year before the maturity date of the Note or (B) one year after the date of
the loss or casualty.
(h) If the Mortgaged Property is sold at a foreclosure sale or Lender
acquires title to the Mortgaged Property, Lender shall automatically succeed to
all rights of Borrower in and to any insurance policies and unearned insurance
premiums and in and to the proceeds resulting from any damage to the Mortgaged
Property prior to such sale or acquisition.
20. CONDEMNATION.
(a) Borrower shall promptly notify Lender of any action or proceeding
relating to any condemnation or other taking, or conveyance in lieu thereof, of
all or any part of the Mortgaged Property, whether direct or indirect (a
"Condemnation"). Borrower shall appear in and prosecute or defend any action or
proceeding relating to any Condemnation unless otherwise directed by Lender in
writing. Borrower authorizes and appoints Lender as attorney-in-fact for
Borrower to commence, appear in and prosecute, in Lender's or Borrower's name,
any action or proceeding relating to any Condemnation and to settle or
compromise any claim in connection with any Condemnation. This power of attorney
is coupled with an interest and therefore is irrevocable. However, nothing
contained in this Section 20 shall require Lender to incur any expense or take
any action. Borrower hereby transfers and assigns to Lender all right, title and
interest of Borrower in and to any award or payment with respect to (i) any
Condemnation, or any conveyance in lieu of Condemnation, and (ii) any damage to
the Mortgaged Property caused by governmental action that does not result in a
Condemnation.
(b) Lender may apply such awards or proceeds, after the deduction of
Lender's expenses incurred in the collection of such amounts, at Lender's
option, to the restoration or repair of the Mortgaged Property or to the payment
of the Indebtedness, with the balance, if any, to Borrower. Unless Lender
otherwise agrees in writing, any application of any awards or proceeds to the
Indebtedness shall not extend or postpone the due date of any monthly
installments referred to in the Note, Section 7 of this Instrument or any
Collateral Agreement, or change the amount of such installments. Borrower agrees
to execute such further evidence of assignment of any awards or proceeds as
Lender may require.
21. TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER. [NO
RIGHT TO TRANSFER].
(a) The occurrence of any of the following events shall constitute an
Event of Default under this Instrument:
(1) a Transfer of all or any part of the Mortgaged Property or any
interest in the Mortgaged Property;
(2) if Borrower is a limited partnership, a Transfer of (A) any
general partnership interest, or (B) limited partnership
interests in Borrower that would cause the Initial Owners of
Borrower to own less than 51% of all limited partnership
interests in Borrower;
(3) if Borrower is a general partnership or a joint venture, a
Transfer of any general partnership or joint venture interest
in Borrower;
(4) if Borrower is a limited liability company, a Transfer of (A)
any membership interest in Borrower which would cause the
Initial Owners to own less than 51% of all the membership
interests in Borrower, or (B) any membership or other interest
of a manager in Borrower;
(5) if Borrower is a corporation, (A) the Transfer of any voting
stock in Borrower which would cause the Initial Owners to own
less than 51% of any class of voting stock in Borrower or (B)
if the outstanding voting stock in Borrower is held by 100 or
more shareholders, one or more transfers by a single
transferor within a 12-month period affecting an aggregate of
5% or more of that stock;
(6) if Borrower is a trust, (A) a Transfer of any beneficial
interest in Borrower which would cause the Initial Owners to
own less than 51% of all the beneficial interests in Borrower,
or (B) the termination or revocation of the trust, or (C) the
removal, appointment or substitution of a trustee of Borrower;
and
(7) a Transfer of any interest in a Controlling Entity which, if
such Controlling Entity were Borrower, would result in an
Event of Default under any of Sections 21(a)(1) through (6)
above.
Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default in order to exercise any of its
remedies with respect to an Event of Default under this Section 21.
(b) The occurrence of any of the following events shall not constitute an
Event of Default under this Instrument, notwithstanding any provision of Section
21(a) to the contrary:
(1) a Transfer to which Lender has consented;
(2) a Transfer that occurs by devise, descent, or by operation of
law upon the death of a natural person;
(3) the grant of a leasehold interest in an individual dwelling
unit for a term of two years or less not containing an option
to purchase;
(4) a Transfer of obsolete or worn out Personalty or Fixtures that
are contemporaneously replaced by items of equal or better
function and quality, which are free of liens, encumbrances
and security interests other than those created by the Loan
Documents or consented to by Lender;
(5) the grant of an easement, if before the grant Lender
determines that the easement will not materially affect the
operation or value of the Mortgaged Property or Lender's
interest in the Mortgaged Property, and Borrower pays to
Lender, upon demand, all costs and expenses incurred by Lender
in connection with reviewing Borrower's request; and
(6) the creation of a mechanic's, materialman's, or judgment lien
against the Mortgaged Property which is released of record or
otherwise remedied to Lender's satisfaction within 30 days of
the date of creation.
(c) Lender may consent, in its discretion, to a Transfer that would
otherwise violate this Section 21 if, prior to the Transfer, Borrower has
satisfied each of the following requirements:
(1) the submission to Lender of all information required by Lender
to make the determination required by this Section 21(c);
(2) the Mortgaged Property and the transferee meet all of the
eligibility, credit, management and other standards (including
but not limited to any standards with respect to previous
relationships between Lender and the transferee and the
organization of the transferee) customarily applied by Lender
to the approval of borrowers and properties in connection with
the origination or purchase of similar mortgages on
multifamily properties;
(3) the absence of any Event of Default;
(4) the execution of an assumption agreement that is acceptable to
Lender and that, among other things, requires the transferee
to perform all obligations of Borrower set forth in the Note,
this Instrument and any other Loan Documents, and may require
that the transferee comply with any provisions of this
Instrument or any other Loan Document which previously may
have been waived by Lender; and
(5) Lender's receipt of all of the following:
(A) a review fee in the amount of $3,000.00;
(B) a transfer fee in an amount equal to 1% of the unpaid
principal balance of the Indebtedness immediately before
the Transfer; and
(C) the amount of Lender's out-of-pocket costs (including
reasonable attorneys' fees) incurred in reviewing the
Transfer request.
22. EVENTS OF DEFAULT. The occurrence of any one or more of the following
shall constitute an Event of Default under this Instrument:
(a) any failure by Borrower to pay or deposit when due any amount required
by the Note, this Instrument or any other Loan Document;
(b) any failure by Borrower to maintain the insurance coverage required by
Section 19;
(c) any failure by Borrower to comply with the provisions of Section 33;
(d) fraud or material misrepresentation or material omission by Borrower,
any of its officers, directors, trustees, general partners or managers or any
guarantor in connection with (A) the application for or creation of the
Indebtedness, (B) any financial statement, rent roll, or other report or
information provided to Lender during the term of the Indebtedness, or (C) any
request for Lender's consent to any proposed action, including a request for
disbursement of funds under any Collateral Agreement;
(e) any Event of Default under Section 21;
(f) the commencement of a forfeiture action or proceeding, whether civil
or criminal, which, in Lender's reasonable judgment, could result in a
forfeiture of the Mortgaged Property or otherwise materially impair the lien
created by this Instrument or Lender's interest in the Mortgaged Property;
(g) any failure by Borrower to perform any of its obligations under this
Instrument (other than those specified in Sections 22(a) through (f)), as and
when required, which continues for a period of 30 days after notice of such
failure by Lender to Borrower. However, no such notice or grace period shall
apply in the case of any such failure which could, in Lender's judgment, absent
immediate exercise by Lender of a right or remedy under this Instrument, result
in harm to Lender, impairment of the Note or this Instrument or any other
security given under any other Loan Document;
(h) any failure by Borrower to perform any of its obligations as and when
required under any Loan Document other than this Instrument which continues
beyond the applicable cure period, if any, specified in that Loan Document;
(i) any exercise by the holder of any debt instrument secured by a
mortgage, deed of trust or deed to secure debt on the Mortgaged Property of a
right to declare all amounts due under that debt instrument immediately due and
payable; and
(j) Borrower voluntarily files for bankruptcy protection under the United
States Bankruptcy Code or voluntarily becomes subject to any reorganization,
receivership, insolvency proceeding or other similar proceeding pursuant to any
other federal or state law affecting debtor and creditor rights, or an
involuntary case is commenced against Borrower by any creditor (other than
Lender) of Borrower pursuant to the United States Bankruptcy Code or other
federal or state law affecting debtor and creditor rights and is not dismissed
or discharged within 60 days after filing.
23. REMEDIES CUMULATIVE. Each right and remedy provided in this Instrument
is distinct from all other rights or remedies under this Instrument or any other
Loan Document or afforded by applicable law, and each shall be cumulative and
may be exercised concurrently, independently, or successively, in any order.
24. FORBEARANCE.
(a) Lender may (but shall not be obligated to) agree with Borrower, from
time to time, and without giving notice to, or obtaining the consent of, or
having any effect upon the obligations of, any guarantor or other third party
obligor, to take any of the following actions: extend the time for payment of
all or any part of the Indebtedness; reduce the payments due under this
Instrument, the Note, or any other Loan Document; release anyone liable for the
payment of any amounts under this Instrument, the Note, or any other Loan
Document; accept a renewal of the Note; modify the terms and time of payment of
the Indebtedness; join in any extension or subordination agreement; release any
Mortgaged Property; take or release other or additional security; modify the
rate of interest or period of amortization of the Note or change the amount of
the monthly installments payable under the Note; and otherwise modify this
Instrument, the Note, or any other Loan Document.
(b) Any forbearance by Lender in exercising any right or remedy under the
Note, this Instrument, or any other Loan Document or otherwise afforded by
applicable law, shall not be a waiver of or preclude the exercise of any right
or remedy. The acceptance by Lender of payment of all or any part of the
Indebtedness after the due date of such payment, or in an amount which is less
than the required payment, shall not be a waiver of Lender's right to require
prompt payment when due of all other payments on account of the Indebtedness or
to exercise any remedies for any failure to make prompt payment. Enforcement by
Lender of any security for the Indebtedness shall not constitute an election by
Lender of remedies so as to preclude the exercise of any other right available
to Lender. Lender's receipt of any awards or proceeds under Sections 19 and 20
shall not operate to cure or waive any Event of Default.
25. LOAN CHARGES. If any applicable law limiting the amount of interest or
other charges permitted to be collected from Borrower is interpreted so that any
charge provided for in any Loan Document, whether considered separately or
together with other charges levied in connection with any other Loan Document,
violates that law, and Borrower is entitled to the benefit of that law, that
charge is hereby reduced to the extent necessary to eliminate that violation.
The amounts, if any, previously paid to Lender in excess of the permitted
amounts shall be applied by Lender to reduce the principal of the Indebtedness.
For the purpose of determining whether any applicable law limiting the amount of
interest or other charges permitted to be collected from Borrower has been
violated, all Indebtedness which constitutes interest, as well as all other
charges levied in connection with the Indebtedness which constitute interest,
shall be deemed to be allocated and spread over the stated term of the Note.
Unless otherwise required by applicable law, such allocation and spreading shall
be effected in such a manner that the rate of interest so computed is uniform
throughout the stated term of the Note.
26. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby waives the right to
assert any statute of limitations as a bar to the enforcement of the lien of
this Instrument or to any action brought to enforce any Loan Document.
27. WAIVER OF MARSHALLING. Notwithstanding the existence of any other
security interests in the Mortgaged Property held by Lender or by any other
party, Lender shall have the right to determine the order in which any or all of
the Mortgaged Property shall be subjected to the remedies provided in this
Instrument, the Note, any other Loan Document or applicable law. Lender shall
have the right to determine the order in which any or all portions of the
Indebtedness are satisfied from the proceeds realized upon the exercise of such
remedies. Borrower and any party who now or in the future acquires a security
interest in the Mortgaged Property and who has actual or constructive notice of
this Instrument waives any and all right to require the marshalling of assets or
to require that any of the Mortgaged Property be sold in the inverse order of
alienation or that any of the Mortgaged Property be sold in parcels or as an
entirety in connection with the exercise of any of the remedies permitted by
applicable law or provided in this Instrument.
28. FURTHER ASSURANCES. Borrower shall execute, acknowledge, and deliver,
at its sole cost and expense, all further acts, deeds, conveyances, assignments,
estoppel certificates, financing statements, transfers and assurances as Lender
may require from time to time in order to better assure, grant, and convey to
Lender the rights intended to be granted, now or in the future, to Lender under
this Instrument and the Loan Documents.
29. ESTOPPEL CERTIFICATE. Within 10 days after a request from Lender,
Borrower shall deliver to Lender a written statement, signed and acknowledged by
Borrower, certifying to Lender or any person designated by Lender, as of the
date of such statement, (i) that the Loan Documents are unmodified and in full
force and effect (or, if there have been modifications, that the Loan Documents
are in full force and effect as modified and setting forth such modifications);
(ii) the unpaid principal balance of the Note; (iii) the date to which interest
under the Note has been paid; (iv) that Borrower is not in default in paying the
Indebtedness or in performing or observing any of the covenants or agreements
contained in this Instrument or any of the other Loan Documents (or, if the
Borrower is in default, describing such default in reasonable detail); (v)
whether or not there are then existing any setoffs or defenses known to Borrower
against the enforcement of any right or remedy of Lender under the Loan
Documents; and (vi) any additional facts requested by Lender.
30. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.
(a) This Instrument, and any Loan Document which does not itself expressly
identify the law that is to apply to it, shall be governed by the laws of the
jurisdiction in which the Land is located (the "Property Jurisdiction").
(b) Borrower agrees that any controversy arising under or in relation to
the Note, this Instrument, or any other Loan Document shall be litigated
exclusively in the Property Jurisdiction. The state and federal courts and
authorities with jurisdiction in the Property Jurisdiction shall have exclusive
jurisdiction over all controversies which shall arise under or in relation to
the Note, any security for the Indebtedness, or any other Loan Document.
Borrower irrevocably consents to service, jurisdiction, and venue of such courts
for any such litigation and waives any other venue to which it might be entitled
by virtue of domicile, habitual residence or otherwise.
31. NOTICE.
(a) All notices, demands and other communications ("notice") under or
concerning this Instrument shall be in writing. Each notice shall be addressed
to the intended recipient at its address set forth in this Instrument, and shall
be deemed given on the earliest to occur of (1) the date when the notice is
received by the addressee; (2) the first Business Day after the notice is
delivered to a recognized overnight courier service, with arrangements made for
payment of charges for next Business Day delivery; or (3) the third Business Day
after the notice is deposited in the United States mail with postage prepaid,
certified mail, return receipt requested. As used in this Section 31, the term
"Business Day" means any day other than a Saturday, a Sunday or any other day on
which Lender is not open for business.
(b) Any party to this Instrument may change the address to which notices
intended for it are to be directed by means of notice given to the other party
in accordance with this Section 31. Each party agrees that it will not refuse or
reject delivery of any notice given in accordance with this Section 31, that it
will acknowledge, in writing, the receipt of any notice upon request by the
other party and that any notice rejected or refused by it shall be deemed for
purposes of this Section 31 to have been received by the rejecting party on the
date so refused or rejected, as conclusively established by the records of the
U.S. Postal Service or the courier service.
(c) Any notice under the Note and any other Loan Document which does not
specify how notices are to be given shall be given in accordance with this
Section 31.
32. SALE OF NOTE; CHANGE IN SERVICER. The Note or a partial interest in
the Note (together with this Instrument and the other Loan Documents) may be
sold one or more times without prior notice to Borrower. A sale may result in a
change of the Loan Servicer. There also may be one or more changes of the Loan
Servicer unrelated to a sale of the Note. If there is a change of the Loan
Servicer, Borrower will be given notice of the change.
33. SINGLE ASSET BORROWER. Until the Indebtedness is paid in full,
Borrower (a) shall not acquire any real or personal property other than the
Mortgaged Property and personal property related to the operation and
maintenance of the Mortgaged Property; (b) shall not operate any business other
than the management and operation of the Mortgaged Property; and (c) shall not
maintain its assets in a way difficult to segregate and identify.
34. SUCCESSORS AND ASSIGNS BOUND. This Instrument shall bind, and the
rights granted by this Instrument shall inure to, the respective successors and
assigns of Lender and Borrower. However, a Transfer not permitted by Section 21
shall be an Event of Default.
35. JOINT AND SEVERAL LIABILITY. If more than one person or entity signs
this Instrument as Borrower, the obligations of such persons and entities shall
be joint and several.
36. RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARY.
(a) The relationship between Lender and Borrower shall be solely that of
creditor and debtor, respectively, and nothing contained in this Instrument
shall create any other relationship between Lender and Borrower.
(b) No creditor of any party to this Instrument and no other person shall
be a third party beneficiary of this Instrument or any other Loan Document.
Without limiting the generality of the preceding sentence, (1) any arrangement
(a "Servicing Arrangement") between the Lender and any Loan Servicer for loss
sharing or interim advancement of funds shall constitute a contractual
obligation of such Loan Servicer that is independent of the obligation of
Borrower for the payment of the Indebtedness, (2) Borrower shall not be a third
party beneficiary of any Servicing Arrangement, and (3) no payment by the Loan
Servicer under any Servicing Arrangement will reduce the amount of the
Indebtedness.
37. SEVERABILITY; AMENDMENTS. The invalidity or
unenforceability of any provision of this Instrument shall not affect the
validity or enforceability of any other provision, and all other provisions
shall remain in full force and effect. This Instrument contains the entire
agreement among the parties as to the rights granted and the obligations
assumed in this Instrument. This Instrument may not be amended or modified
except by a writing signed by the party against whom enforcement is sought;
provided, however, that in the event of a Transfer, any or some or all of the
Modifications to Instrument set forth in Exhibit B (if any) may be modified or
rendered void by Lender at Lender's option by notice to Borrower/transferee.
38. CONSTRUCTION. The captions and headings of the sections of this
Instrument are for convenience only and shall be disregarded in construing this
Instrument. Any reference in this Instrument to an "Exhibit" or a "Section"
shall, unless otherwise explicitly provided, be construed as referring,
respectively, to an Exhibit attached to this Instrument or to a Section of this
Instrument. All Exhibits attached to or referred to in this Instrument are
incorporated by reference into this Instrument. Any reference in this Instrument
to a statute or regulation shall be construed as referring to that statute or
regulation as amended from time to time. Use of the singular in this Agreement
includes the plural and use of the plural includes the singular. As used in this
Instrument, the term "including" means "including, but not limited to."
39. LOAN SERVICING. All actions regarding the servicing of the loan
evidenced by the Note, including the collection of payments, the giving and
receipt of notice, inspections of the Property, inspections of books and
records, and the granting of consents and approvals, may be taken by the Loan
Servicer unless Borrower receives notice to the contrary. If Borrower receives
conflicting notices regarding the identity of the Loan Servicer or any other
subject, any such notice from Lender shall govern.
40. DISCLOSURE OF INFORMATION. Lender may furnish information regarding
Borrower or the Mortgaged Property to third parties with an existing or
prospective interest in the servicing, enforcement, evaluation, performance,
purchase or securitization of the Indebtedness, including but not limited to
trustees, master servicers, special servicers, rating agencies, and
organizations maintaining databases on the underwriting and performance of
multifamily mortgage loans. Borrower irrevocably waives any and all rights it
may have under applicable law to prohibit such disclosure, including but not
limited to any right of privacy.
41. NO CHANGE IN FACTS OR CIRCUMSTANCES. All information in the
application for the loan submitted to Lender (the "Loan Application") and in all
financial statements, rent rolls, reports, certificates and other documents
submitted in connection with the Loan Application are complete and accurate in
all material respects. There has been no material adverse change in any fact or
circumstance that would make any such information incomplete or inaccurate.
42. SUBROGATION. If, and to the extent that, the proceeds of the loan
evidenced by the Note are used to pay, satisfy or discharge any obligation of
Borrower for the payment of money that is secured by a pre-existing mortgage,
deed of trust or other lien encumbering the Mortgaged Property (a "Prior Lien"),
such loan proceeds shall be deemed to have been advanced by Lender at Borrower's
request, and Lender shall automatically, and without further action on its part,
be subrogated to the rights, including lien priority, of the owner or holder of
the obligation secured by the Prior Lien, whether or not the Prior Lien is
released.
43. ACCELERATION; REMEDIES; WAIVER OF PERMISSIVE COUNTERCLAIMS. At any
time during the existence of an Event of Default, Lender, at Lender's option,
may declare the Indebtedness to be immediately due and payable without further
demand, and may foreclose this Instrument by judicial proceeding and may invoke
any other remedies permitted by Florida law or provided in this Instrument or in
any other Loan Document. Lender shall be entitled to collect all costs and
expenses incurred in pursuing such remedies, including attorneys' fees, costs of
documentary evidence, abstracts and title reports. Borrower waives any and all
rights to file or pursue permissive counterclaims in connection with any legal
action brought by Lender under this Instrument, the Note or any other Loan
Document.
44. RELEASE. Upon payment of the Indebtedness, Lender shall release this
Instrument. Borrower shall pay Lender's reasonable costs incurred in releasing
this Instrument.
45. FUTURE ADVANCES. Lender may from time to time, in Lender's discretion,
make optional future or additional advances (collectively, "Future Advances") to
Borrower, except that at no time shall the unpaid principal balance of all
indebtedness secured by the lien of this Instrument, including Future Advances,
be greater than an amount equal to two hundred percent (200%) of the original
principal amount of this Note as set forth on the first page of this Instrument
plus accrued interest and amounts disbursed by Lender under Section 12 or any
other provision of this Instrument that treats a disbursement by Lender as being
made under Section 12. All Future Advances shall be made, if at all, within
twenty (20) years after the date of this Instrument, or within such lesser
period that may in the future be provided by law as a prerequisite for the
sufficiency of actual or record notice of Future Advances as against the rights
of creditors or subsequent purchasers for value. Borrower shall, immediately
upon request by Lender, execute and deliver to Lender a promissory note
evidencing each Future Advance together with a notice of such Future Advance in
recordable form. All promissory notes evidencing Future Advances shall be
secured, pari passu, by the lien of this Instrument, and each reference in this
Instrument to the Note shall be deemed to be a reference to all promissory notes
evidencing Future Advances.
46. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) COVENANTS AND
AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF
THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER
THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY
WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN
THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH
PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
ATTACHED EXHIBITS. The following Exhibits are attached to this
Instrument:
----
X Exhibit A Description of the Land (required).
----
----
X Exhibit B Modifications to Instrument
----
IN WITNESS WHEREOF, Borrower has signed and delivered this Instrument or
has caused this Instrument to be signed and delivered by its duly authorized
representative.
NATIONAL PROPERTY INVESTORS 5, a California
limited partnership, doing business in
Florida as National Property Investors 5
Ltd.
By: NPI Equity Investments, Inc., a
Florida corporation, its general
partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and Treasurer
STATE OF COLORADO
CITY OF DENVER, ss:
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the state aforesaid and in the county aforesaid to take
acknowledgments, personally appeared Patti K. Fielding, to me known to be the
person described in and who executed the foregoing instrument as the Executive
Vice President and Treasurer of NPI Equity Investments, Inc., a Florida
corporation, general partner of National Property Investors 5, a California
limited partnership, doing business in Florida as National Property Investors 5
Ltd., and acknowledged to me that she as such officer of the general partner,
being authorized to do so, executed the foregoing instrument for the purposes
therein contained in the name of such limited partnership by herself as
Executive Vice President and Treasurer of the general partner.
Witness my hand and official seal in the county and state aforesaid,
this 27th day of May, 2005.
/s/Gail D. Coalman
Gail D. Coalman
Notary Public
My Commission Expires: 02/17/08