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) August 31, 2005
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
(Exact name of Registrant as specified in its charter)
California 0-10831 94-2744492
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
(Registrant'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.
Consolidated Capital Institutional Properties (the "Registrant") owns a 100%
interest in CCIP Loft, LLC, a Delaware limited liability company (the
"Partnership"). On August 31, 2005, the Partnership obtained a mortgage loan in
the principal amount of $4,600,000 on its investment property, The Lofts
Apartments, located in Raleigh, North Carolina. The existing mortgage loan with
an outstanding principal amount of approximately $3,948,000 was repaid with
proceeds from the new mortgage loan. The new mortgage requires monthly payments
of principal and interest beginning on October 10, 2005 until the loan matures
September 10, 2012, with a fixed interest rate of 5.04% and a balloon payment of
approximately $4,049,000 due at maturity. The Partnership may not prepay the new
mortgage loan prior to October 10, 2007. On or after this date the Partnership
may prepay the outstanding principal balance provided that the Partnership
provides at least sixty days prior written notice and pays a prepayment penalty
as defined in the loan agreement. As a condition to making the new mortgage
loan, the lender required AIMCO Properties, L.P., an affiliate of the
Registrant, to guarantee the obligations and liabilities of the Registrant with
respect to the new mortgage.
In accordance with the terms of the loan agreement relating to the new mortgage,
the payment of the mortgage may be accelerated at the option of the lender if an
Event of Default, as defined in the loan agreement occurs. Events of Default
include, but are not limited to nonpayment of monthly interest and reserve
requirements and nonpayment of amounts outstanding on or before the maturity
date.
The foregoing description is qualified in its entirety by reference to the Deed
of Trust, Assignment of Leases and Rents and Security Agreement, Promissory Note
and Guaranty, copies of which are filed as exhibits 10.38, 10.39 and 10.40 to
this report.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
The following exhibits are filed with this report:
10.38 Deed of Trust, Assignment of Leases and Rents and Security Agreement
dated August 31, 2005 between CCIP Loft, LLC, a Delaware limited
liability company and New York Life Insurance Company.*
10.39 Promissory Note dated August 31, 2005 between CCIP Loft, LLC, a
Delaware limited liability company and New York Life Insurance
Company.*
10.40 Guaranty dated August 31, 2005 between AIMCO Properties, L.P., for
the benefit of New York Life Insurance Company.*
*Schedules and supplemental materials to the exhibits 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.
CONSOLIDATED CAPITAL INSTITUTIONAL
PROPERTIES
By: CONCAP EQUITIES, INC.
General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: September 7, 2005
EXHIBIT 10.38
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS
AND SECURITY AGREEMENT
CCIP LOFT, L.L.C.,
Grantor
to
STEWART TITLE OF NORTH CAROLINA, INC., TRUSTEE,
for the benefit of
NEW YORK LIFE INSURANCE COMPANY,
Beneficiary
Dated as of: August 31, 2005
Premises: The Loft
214 Loft Lane
Raleigh, North Carolina
Prepared By, Record And Return To:
Kelley Drye & Warren LLP
200 Kimball Drive
Parsippany, New Jersey 07054
Attention: Paul A. Keenan, Esq.
TABLE OF CONTENTS
Page
1.01 Payment, Performance and Security................................9
1.02 Payment of Taxes, Assessments, etc...............................9
1.03 Insurance.......................................................10
1.04 Escrow Payments.................................................17
1.05 Care and Use of the Premises....................................17
1.06 Financial Information...........................................22
1.07 Condemnation....................................................22
1.08 Leases..........................................................24
1.09 Assignment of Leases, Rents, Income, Profits and Cash
Collateral......................................................26
1.10 Further Assurances..............................................28
1.11 Transfer or Further Encumbrances................................32
1.12 Expenses........................................................33
1.13 Single Asset Covenants..........................................34
1.14 Intentionally Omitted...........................................34
1.15 Additional Guarantor; Replacement Guarantees....................34
2.01 Warranty of Title...............................................35
2.02 Ownership of Additional or Replacement Improvements and
Personal Property...............................................35
2.03 No Pending Material Litigation or Proceeding; No Hazardous
Materials.......................................................35
2.04 Valid Organization, Good Standing and Qualification of
Grantor; Other Organizational Information.......................36
2.05 Authorization; No Legal Restrictions on Performance.............37
2.06 Compliance With Laws............................................37
2.07 Tax Status......................................................37
2.08 Absence of Foreign or Enemy Status; Foreign Corrupt
Practices Act...................................................37
2.09 Federal Reserve Board Regulations...............................38
2.10 Investment Company Act and Public Utility Holding Company
Act.............................................................38
2.11 Exempt Status of Transactions Under Securities Act and
Representations Relating Thereto................................38
2.12 ERISA Compliance................................................39
3.01 Events of Default...............................................39
4.01 Acceleration, Foreclosure, etc..................................41
4.02 No Election of Remedies.........................................44
4.03 Beneficiary's Right to Release, etc.............................44
4.04 Beneficiary's Right to Remedy Defaults, etc.....................44
4.05 Waivers.........................................................44
4.06 Prepayment......................................................46
5.01 Non-Waiver......................................................47
5.02 Sole Discretion of Beneficiary..................................47
5.03 Legal Tender....................................................48
5.04 No Merger or Termination........................................48
5.05 Discontinuance of Actions.......................................48
5.06 Headings........................................................48
5.07 Notice to Parties...............................................48
5.08 Successors and Assigns Included In Parties......................49
5.09 Changes and Modifications.......................................49
5.10 Applicable Law..................................................49
5.11 Invalid Provisions to Affect No Others..........................49
5.12 Usury Savings Clause............................................49
5.13 No Statute of Limitations.......................................50
5.14 Late Charges....................................................50
5.15 Waiver of Jury Trial............................................50
5.16 Continuing Effectiveness........................................50
5.17 Time of Essence.................................................50
5.18 Non-Recourse....................................................50
5.19 Non-Business Days...............................................52
5.20 Substitution of Trustee.........................................52
5.21 No Liability of Trustee.........................................52
5.22 Employment of Agents............................................53
5.23 Release of Deed of Trust........................................53
5.24 Acknowledgement of Receipt......................................53
6.01 Principles of Construction......................................53
6.02 Power of Sale...................................................53
6.03 Maturity Date...................................................53
6.04 Reasonable Attorneys Fees.......................................53
6.05 Trustee Compensation............................................54
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS
AND SECURITY AGREEMENT
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT
("Deed of Trust"), dated as of August 31, 2005, from CCIP LOFT, L.L.C.
("Grantor"), a Delaware limited liability company, having an office c/o AIMCO,
4582 South Ulster Parkway, Suite 1100, Denver, Colorado 80237, to STEWART TITLE
OF NORTH CAROLINA, INC., TRUSTEE, with an address of 9 S. Pack Square, SW, Suite
301, Asheville, North Carolina 28801 ("Trustee"), for the benefit of NEW YORK
LIFE INSURANCE COMPANY ("Beneficiary"), a New York mutual insurance company,
having an office at 51 Madison Avenue, New York, New York 10010-1603.
Grantor has executed and delivered to Beneficiary a Promissory Note
("Note"), dated as of the date hereof, payable to the order of Beneficiary in
the original principal sum of Four Million Six Hundred Thousand and 00/100
Dollars ($4,600,000.00), lawful money of the United States of America, which
Note matures on September 10, 2012. The Note is secured by this Deed of Trust
and the terms, covenants and conditions of the Note are hereby incorporated
herein and made a part hereof.
In consideration of the sum of Ten Dollars ($10.00) paid and other good
and lawful consideration, the receipt and sufficiency of which are hereby
acknowledged and in order to secure the Obligations (as hereinafter defined),
Grantor hereby grants, conveys, assigns, releases, transfers, pledges and sets
over to Trustee the following property:
GRANTING CLAUSE ONE
All that tract or parcel of land ("Land") more particularly described in
Schedule A hereto.
GRANTING CLAUSE TWO
All buildings, structures and improvements (collectively, "Improvements")
now or hereafter located on the Land, including all machinery, apparatus,
equipment and fixtures attached to, or used or procured for use in connection
with the operation or maintenance of, any Improvement, all refrigerators,
shades, awnings, venetian blinds, screens, screen doors, storm doors, storm
windows, stoves, ranges, curtain fixtures, partitions, attached floor coverings
and fixtures, apparatus, equipment or articles used to supply sprinkler
protection and waste removal, laundry equipment, furniture, furnishings,
appliances, office equipment, elevators, escalators, tanks, dynamos, motors,
generators, switchboards, communication equipment, electrical equipment,
television and radio systems, heating, plumbing, lifting and ventilating
apparatus, air-cooling and air conditioning apparatus, gas and electric
fixtures, fittings and machinery and all other personal property and equipment
of every kind and description, excluding trade fixtures and personal property of
any Lessee (as hereinafter defined), unless such trade fixtures or personal
property become the property of Grantor upon expiration or termination of the
term of the Lease in question, and all accessions, renewals and replacements
thereof and all articles in substitution therefor. Whether or not any of the
foregoing are attached to the Land or any of the Improvements in any manner, all
such items shall be deemed to be fixtures, part of the real estate and security
for the Obligations. The Land and Improvements are herein collectively called
"Premises". To the extent any of the Improvements are not deemed real estate
under the laws of the State, they shall be deemed personal property and this
grant shall include all of Grantor's right, title and interest in, under and to
such personal property and all other personal property now or hereafter attached
to or located upon the Premises or used or useable in the management,
maintenance or operation of the Improvements or the activities conducted on the
Premises, including all computer hardware and software, but excluding trade
fixtures and personal property of any Lessee, unless such personal property
becomes the property of Grantor upon expiration or termination of the Lease in
question, and all accessions, renewals and replacements thereof and all articles
in substitution therefor (collectively, "Personal Property").
GRANTING CLAUSE THREE
All now or hereafter existing easements and rights-of-way and all right,
title and interest of Grantor, in and to any land lying within the right-of-way
of any street, opened or proposed, adjoining the Premises, any and all
sidewalks, alleys and strips and gores of land, streets, ways, passages, sewer
rights, waters, water courses, water rights and powers, estates, rights, titles,
interests, privileges, liberties, tenements, hereditaments, air rights,
development rights, covenants, conditions, restrictions, credits and
appurtenances of any nature whatsoever, in any way belonging, relating or
pertaining to, or above or below the Premises, whether now or hereafter
existing.
GRANTING CLAUSE FOUR
All intangible rights, interests and properties of Grantor relating to the
Premises or any part thereof, and necessary or desirable for the continued
ownership, use, operation, leasing or management thereof, whether now or
hereafter existing, including any trademarks, servicemarks, logos or trade names
relating to the Premises or by which the Premises or any part thereof may be
known and any other franchises or other agreements relating to services in
connection with the use, occupancy, or maintenance of the Premises, instruments,
actions or rights in action and all intangible property and rights relating to
the Premises.
GRANTING CLAUSE FIVE
All accounts receivable, insurance policies, contract rights, interests,
rights under all oil, gas and mineral leases and agreements and all benefits
arising therefrom, and all other claims, both at law and in equity, relating to
the Premises, which Grantor now has or may hereafter acquire.
GRANTING CLAUSE SIX
All estate, interest, right, title and other claim or demand which Grantor
now has or may hereafter acquire in any and all awards or payments relating to
the taking by eminent domain, or by any proceeding or purchase in lieu thereof,
of the whole or any part of the Premises, including all awards resulting from a
change of grade of any street and awards for severance damages, together, in all
cases, with all interest thereon.
GRANTING CLAUSE SEVEN
All proceeds of, and any unearned premiums on, insurance policies covering
all or any part of the Premises, including the right to receive and apply the
proceeds of all insurance or judgments related to the Premises, or settlements
made in lieu thereof.
GRANTING CLAUSE EIGHT
All estate, interest, right, title and other claim or demand which Grantor
now has or may hereafter acquire against anyone with respect to any damage to
all or any part of the Premises, including damage arising or resulting from any
defect in or with respect to the design or construction of all or any part of
the Improvements.
GRANTING CLAUSE NINE
All deposits or other security or advance payments, including rental
payments, made by or on behalf of Grantor to others in connection with the
Obligations or the ownership or operation of all or any part of the Premises,
including any such deposits or payments made with respect to (a) Impositions (as
hereinafter defined),(b) insurance policies, (c) utility service, (d) cleaning,
maintenance, repair or similar services, (e) refuse removal or sewer service,
(f) rental of equipment, if any, used by or on behalf of Grantor, and (g)
parking or similar services or rights.
GRANTING CLAUSE TEN
All remainders, reversions or other estates in the Premises or any part
thereof.
GRANTING CLAUSE ELEVEN
All management contracts, permits, certificates, licenses, approvals,
contracts, entitlements and authorizations, however characterized, now or
hereafter issued or in any way furnished for the acquisition, construction,
development, operation and use of the Land, the Improvements or the Leases,
including building permits, environmental certificates, licenses, certificates
of operation or occupancy, warranties and guaranties, except, in each case, to
the extent that such mortgage, deed of trust, grant, assignment, transfer or
pledge is restricted by the terms of such management contract, permit,
certificate, license, approval, contract, entitlement or authorization and such
restriction is enforceable under applicable law.
GRANTING CLAUSE TWELVE
All proceeds, products, replacements, additions, substitutions, renewals
and accessions of any of the foregoing, including personal property acquired
with cash proceeds.
TO HAVE AND TO HOLD the Secured Property unto Trustee, his successors in
trust and assigns, in fee simple forever;
This conveyance is made in trust, to secure payment and performance by
Grantor of the Obligations.
DEFINITIONS AND INTERPRETATION
As used in this Deed of Trust, the following terms shall have the meanings
specified below:
"Additional Guarantor" shall have the meaning set forth in Section 1.15.
"Assignment" shall mean the Assignment of Leases, Rents, Income and Cash
Collateral, dated as of the date hereof, from Grantor, as assignor, to
Beneficiary, as assignee.
"Base Index" shall mean the CPI in effect for the year and month in which
the Loan closed.
"Beneficiary's Architect" shall mean a licensed architect or registered
engineer approved by Beneficiary.
"Code" shall mean the Uniform Commercial Code of the State.
"Condemnation Proceedings" shall have the meaning set forth in Section
1.07A.
"CPI" shall mean the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics of the United States Department of
Labor, All Items (1982-84=100), or any successor or substitute index thereto, as
appropriately adjusted and reasonably designated by Beneficiary.
"Employee Benefit Plans" shall mean any employee benefit plans maintained
at any time by Grantor.
"Environmental Claim" shall mean any asserted claim or demand, of any kind
or nature, by any Person, for any actual or alleged Environmental Damage,
whether based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute, ordinance or regulation, common law or otherwise.
"Environmental Damage" shall mean any and all claims, judgments, damages
(including consequential and punitive damages), losses, penalties, interest,
fines, liabilities (including strict liability), obligations, responsibilities,
encumbrances, liens, costs and expenses, of whatever kind or nature, contingent
or otherwise, matured or unmatured, foreseeable or unforeseeable, including
attorneys', experts' and consultants' fees and disbursements, including:
(a) those relating to any investigation, defense or
settlement of any claim, suit, administrative proceeding
or investigation of any kind or any directive of any
Governmental Agency (as hereinafter defined);
(b) those relating to damages for personal injury, or injury
to property including natural resources, occurring in,
on, under or about the Secured Property, including lost
profits and the cost of demolition and rebuilding of any
improvements on real property;
(c) diminution in the value of the Secured Property, and
damages for the loss, or restriction on the use or
adverse impact on the marketing, of the Secured Property
or any part thereof;
(d) loss of the priority of the lien of this Deed of Trust
due to the imposition of a lien against the Secured
Property; and
(e) those incurred in connection with the investigation,
cleanup, remediation, removal, abatement,
containment, closure, restoration, monitoring work or
other cure of any violation of an Environmental
Requirement required by any Governmental Agency or
reasonably necessary to make full economic use of the
Secured Property or in connection with any other
property, including the performance of any
pre-remedial studies and investigations and post
remedial monitoring and cure, or any action to
prevent a Release or threat of Release or to minimize
the further Release of any Hazardous Material so it
does not migrate or endanger or threaten to endanger
public health or the environment.
"Environmental Indemnity Agreement" shall mean that certain Environmental
Indemnity Agreement of even date herewith executed by AIMCO Properties, L.P. and
Grantor in favor of Beneficiary, as the same may be as amended, supplemented or
replaced from time to time.
"Environmental Requirements" shall mean any and all Legal Requirements (as
hereinafter defined) relating to the protection of the environment, health or
safety, including:
(a) all Legal Requirements pertaining to reporting,
licensing, permitting, investigation, remediation or
removal of, or pertaining to Releases or threatened
Releases of, Hazardous Materials, chemical
substances, pollutants, contaminants or hazardous or
toxic substances, materials or wastes, whether solid,
liquid or gaseous in nature, including Releases or
threatened Releases into the air, soil, surface
water, ground water or land;
(b) all Legal Requirements pertaining to the manufacture,
processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials,
chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials or wastes,
whether solid, liquid or gaseous in nature; and
(c) all Legal Requirements pertaining to industrial hygiene
or the protection of the health and safety of employees
or the public.
"ERISA" shall have the meaning set forth in Section 2.12.
"Event of Default" shall have the meaning set forth in Section 3.01.
"Governmental Agency" shall mean any government, quasi-governmental or
government sponsored enterprise, legislative body, commission, board, regulatory
authority, bureau, administrative or other agency, court, arbitrator, grand jury
or any other public body or entity or instrumentality, whether domestic,
foreign, federal, state, county or municipal.
"Guarantor" shall mean AIMCO Properties, L.P. and any other guarantor,
from time to time, of all or any portion of the Obligations and any indemnitor
(other than Grantor) under the Environmental Indemnity Agreement of even date
herewith, executed by Grantor in favor of Beneficiary, as amended, supplemented
or replaced from time to time.
"Guaranty" shall mean that certain Guaranty of even date herewith executed
by AIMCO Properties, L.P. in favor of Beneficiary, as the same may be as
amended, supplemented or replaced from time to time.
"Hazardous Materials" shall mean any substance:
(a) the presence of which requires notification,
investigation or remediation under any Environmental
Requirement;
(b) which is or becomes designated, defined, classified
or regulated as "hazardous", "toxic", "noxious",
"waste", "pollutant", "contaminant" or other similar
term, or which requires remediation or is regulated
under any present or future Environmental
Requirement, including the Comprehensive
Environmental Response, Compensation and Liability
Act (42 U.S.C. Section 9601 et seq.), Resource
Conservation and Recovery Act (42 U.S.C. Section 6901
et seq.), Federal Clean Air Act (42 U.S.C. Section
7401 et seq.), Federal Hazardous Materials
Transportation Act (49 U.S.C. Section 5101 et seq.),
Federal Clean Water Act (33 U.S.C. Section 1251 et
seq.), Federal Environmental Pesticide Control Act (7
U.S.C. Section 136 et seq.), Federal Toxic Substances
Control Act (15 U.S.C. Section 2601 et seq.), and
Federal Safe Drinking Water Act (42 U.S.C. Sections
300(f), et seq.);
(c) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous and is or becomes regulated by any
Governmental Agency;
(d) the presence of which on the Secured Property causes or
threatens to cause a nuisance relating to the Secured
Property or adjacent properties or poses or threatens to
pose a hazard relating to the Secured Property or
adjacent properties or to the health or safety of
Persons on or about the Secured Property or adjacent
properties;
(e) which contains asbestos, gasoline, diesel fuel or
other petroleum hydrocarbons, volatile organic
compounds, polychlorinated biphenyls (PCBs), urea
formaldehyde foam insulation or Mold (the term "Mold"
shall mean any fungi that reproduces through the
release of spores or the splitting of cells or other
means, including but not limited to mold, mildew,
fungi, fungal spores, fragments and metabolites such
as mycotoxins and microbial volatile organic
compounds);
(f) which contains or emits radioactive particles, waves or
material, including radon gas; or
(g) which is or constitutes a part of an underground storage
tank.
"Hazardous Material Claims" shall have the meaning set forth in Section
1.05E(4).
"Impositions" shall have the meaning set forth in Section 1.02A.
"Improvements" shall have the meaning set forth in Granting Clause Two.
"Increased Rate" shall have the meaning set forth in the Note.
"Indemnified Claims" shall have the meaning set forth in Section 1.05E(1).
"Land" shall have the meaning set forth in Granting Clause One.
"Lease" and "Leases" shall have the respective meanings set forth in
Section 1.08A.
"Legal Requirements" shall mean all present or future laws, statutes,
permits, approvals, plans, authorizations, guidelines, franchises, ordinances,
restrictions, orders, rules, codes, regulations, judgments, decrees, injunctions
or requirements of all Governmental Agencies or any officers thereof, including
any Board of Fire Underwriters.
"Lessee" shall have the meaning set forth in Section 1.08A.
"Loan" shall mean the loan evidenced by the Note and secured by this Deed
of Trust.
"Loan Instruments" shall mean the Note, this Deed of Trust, the Assignment
and each other instrument now or hereafter given to evidence, secure, indemnify,
guaranty or otherwise assure or provide for the payment or performance of the
Obligations or otherwise executed by Grantor in connection with the Loan.
"Make-Whole Amount" shall have the meaning set forth in the Note.
"Maturity Date" shall have the meaning set forth in the Note.
"Non-Recourse Exceptions" shall have the meaning set forth in Section
5.18.
"Note" shall have the meaning set forth in the second introductory
paragraph of this Deed of Trust.
"Obligations" shall mean and include all indebtedness, obligations,
covenants, agreements and liabilities of Grantor to Beneficiary, including all
obligations to pay interest, the Make-Whole Amount and all charges and advances,
whether direct or indirect, existing, future, contingent or otherwise, due or to
become due, pursuant to or arising out of or in connection with the Note, this
Deed of Trust, the Assignment or any other Loan Instrument, all modifications,
extensions and renewals of any of the foregoing and all expenses and costs of
collection or enforcement, including attorneys' fees and disbursements incurred
by Beneficiary in the collection or enforcement of any of the Loan Instruments
or in the exercise of any rights or remedies pursuant to the Loan Instruments or
applicable law.
"Partial Foreclosure" shall have the meaning set forth in Section 4.01B.
"Person" shall mean a corporation, a limited or general partnership, a
limited liability company or partnership, a joint stock company, a joint
venture, a trust, an unincorporated association, a Governmental Agency, an
individual or any other entity similar to any of the foregoing.
"Personal Property" shall have the meaning set forth in Granting Clause
Two.
"Premises" shall have the meaning set forth in Granting Clause Two.
"Proceeds" shall have the meaning set forth in Section 1.03F(2).
"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the environment.
"Rents" shall mean all rents, issues, profits, cash collateral,
royalties, income and other benefits derived from the Secured Property or any
part thereof (including benefits accruing from all present or future leases and
agreements, including oil, gas and mineral leases and agreements).
"Replacement Guarantees" shall have the meaning set forth in Section 1.15.
"Reserve Account Agreement" shall mean that certain Reserve Account
Agreement between Grantor and Beneficiary and dated as of the date hereof.
"Secured Property" shall mean the Premises, the Personal Property and all
other rights and interests described in the Granting Clauses of this Deed of
Trust.
"State" shall mean the State, Commonwealth or territory in which the
Secured Property is located.
"Transfer" shall have the meaning set forth in Section 1.11B.
As used in this Deed of Trust (a) words such as "herein", "hereof",
"hereto", "hereunder" and "hereby" or similar terms refer to this Deed of Trust
as a whole and not to any specific Section or provision hereof; (b) wherever the
singular or plural number or the masculine, feminine or neuter gender is used,
it shall include each other number or gender; and (c) the word "including" shall
mean "including, without limitation," and the word "includes" shall mean
"includes, without limitation."
ARTICLE I
COVENANTS AND AGREEMENTS
Grantor hereby covenants and agrees as follows:
1.01 Payment, Performance and Security. Grantor shall pay when due the
amount of, and otherwise timely perform, all Obligations.
This Deed of Trust shall secure all Obligations and all payments of the
principal and interest on all other future loans or advances made by Beneficiary
to Grantor when the promissory note evidencing the loan or advance specifically
states that it is secured by this Deed of Trust, including all modifications,
extensions, renewals, and replacements of any such future loan or advance.
1.02 Payment of Taxes, Assessments, etc.
A. Impositions. Grantor shall pay when due and payable, before any fine,
penalty, interest or cost for the nonpayment thereof may be added thereto, and
without any right of offset or credit against any interest or other amounts
payable to Beneficiary pursuant to this Deed of Trust or on the Note, all taxes,
assessments, water and sewer rents, rates and charges, transit taxes, charges
for public utilities, excises, levies, vault taxes or charges, license and
permit fees and other governmental charges, general and special, ordinary and
extraordinary, unforeseen and foreseen, of any kind and nature whatsoever
(including penalties, interest costs and charges accrued or accumulated
thereon), which at any time may be assessed, levied, confirmed, imposed upon, or
become due and payable out of or in respect to, or become a lien on, the Secured
Property or any part thereof, or any appurtenance thereto (all of the foregoing
collectively, "Impositions" and individually, an "Imposition").
B. Installments. Notwithstanding anything to the contrary contained in Section
1.02A, if by law any Imposition, at the option of the taxpayer, may be paid in
installments, and provided interest shall not accrue on the unpaid balance of
such Impositions, Grantor may exercise the option to pay the same in
installments and, in such event, shall pay such installments as the same become
due and before any fine, penalty, interest or cost may be added thereto.
C. Receipts. Grantor, upon request of Beneficiary, will furnish to Beneficiary
within ten (10) days before the date when any Imposition would become
delinquent, official receipts of the appropriate taxing authority, or other
evidence reasonably satisfactory to Beneficiary, evidencing the payment thereof.
D. Evidence of Payment. The bill, certificate or advice of nonpayment, issued by
the appropriate official (designated by law either to make or issue the same or
to receive payment of any Imposition), of the nonpayment of an Imposition shall
be prima facie evidence that such Imposition is due and unpaid at the time of
the making or issuance of such certificate, advice or bill. Grantor shall pay
Beneficiary, on demand, all charges, costs and expenses of every kind including
each tax service search fee or charge incurred by Beneficiary at any time or
times during the term of this Deed of Trust in connection with obtaining
evidence satisfactory to Beneficiary that the payment of all Impositions is
current and that there is no Imposition due and owing or which has become or
given rise to a lien on the Secured Property or any part thereof or any
appurtenance thereto.
E. Payment by Beneficiary. If Grantor shall fail to pay any Imposition in
accordance with the provisions of this Section 1.02, Beneficiary, at its option
and at such time as it may elect, may pay such Imposition, but shall be under no
obligation to do so. Grantor will repay to Beneficiary, on demand, any amount so
paid by Beneficiary, with interest thereon at the Increased Rate from the date
of such payment by Beneficiary to the date of repayment by Grantor. This Deed of
Trust shall secure each such amount and such interest.
F. Change in Law. In the event of the passage after the date of this Deed of
Trust of any law deducting the Obligations from the value of the Secured
Property or any part thereof for the purpose of taxation or resulting in any
lien thereon, or changing in any way the laws now in force for the taxation of
this Deed of Trust or the Obligations for state or local purposes, or the manner
of the operation of any such taxes so as to affect the interest of Beneficiary,
then, and in such event, Grantor shall bear and pay the full amount of such
taxes, provided that if for any reason payment by Grantor of any such new or
additional taxes would be unlawful or if the payment thereof would constitute
usury or render the Loan or the Obligations wholly or partially usurious under
any of the terms or provisions of the Note, this Deed of Trust or otherwise,
Beneficiary may, at its option, declare all Obligations secured by this Deed of
Trust, with interest thereon, to be immediately due and payable, or Beneficiary
may, at its option, pay that amount or portion of such taxes as renders the Loan
or the Obligations unlawful or usurious, in which event Grantor shall
concurrently therewith pay the remaining lawful and non-usurious portion or
balance of such taxes.
G. Joint Assessment. Grantor shall not suffer, permit or initiate the joint
assessment of the Premises and the Personal Property, or any other procedure
whereby personal property taxes and real property taxes shall be assessed,
levied or charged to the Secured Property as a single lien.
1.03 Insurance.
A. All Risk Coverage. Grantor, at its sole cost and expense, shall keep the
Improvements and the Personal Property insured against loss or damage by fire
and against loss or damage by other risks now covered by "All Risk" insurance,
in form and substance satisfactory to Beneficiary, and in an amount equal to at
least one hundred percent (100%) of the full replacement cost of the
Improvements and the Personal Property, including work performed for tenants,
without deduction for depreciation and with such other deductibles, if any, as
are satisfactory to Beneficiary, in its discretion. Such insurance shall include
an endorsement for demolition and increased cost of construction and an agreed
amount endorsement for the estimated replacement cost. Grantor's "All Risk"
insurance policy shall not exclude from coverage any loss arising from the
perils of terrorist acts or, in the alternative, Grantor shall maintain a
separate insurance policy covering terrorist acts and, in either case, the
coverage for damage caused by terrorist acts shall be on a 100% replacement cost
basis with a deductible of not more than Ten Thousand and 00/100 Dollars
($10,000.00) (such insurance coverage shall be referred to herein as "Terrorism
Insurance"). Grantor's Terrorism Insurance coverage may be part of a blanket
insurance policy provided that the blanket coverage (i) is acceptable to
Beneficiary, in its discretion, (ii) contains an endorsement to the policy
showing Beneficiary as a certificate holder and additional insured and (iii)
contains a specific allocation of value and deductible related to the coverage
on the property to be encumbered by this Deed of Trust and provides that such
value and deductible may not be affected by any claims or other matters related
to the other properties covered by the blanket policy.
B. Additional Coverage. Grantor, at its sole cost and expense, shall at all
times also maintain:
(1) Commercial general liability insurance against claims for bodily injury,
personal injury or property damage, occurring in, on, under or about the Secured
Property or in, on, under or about the adjoining streets, sidewalks and
passageways; such insurance to be in amounts and in form and substance
satisfactory to Beneficiary;
(2) Rent or business income insurance in an amount not less than one year's
aggregate rentals, including minimum rentals, escalation charges, percentage
rents (based on sales projections acceptable to Beneficiary) and other
additional rentals, and any other amounts payable by tenants and other occupants
at the Secured Property pursuant to Leases or otherwise, which amount shall be
increased from time to time upon the leasing of space at the Secured Property or
upon each increase in such aggregate rentals;
(3) If the Improvements are located in a flood hazard area, flood insurance on
the Improvements in an amount equal to the lesser of full replacement cost
thereof or the maximum amount of insurance obtainable;
(4) Insurance, in such amounts as Beneficiary shall from time to time require,
against loss or damage from leakage or explosion of steam boilers, air
conditioning equipment, pressure vessels or similar apparatus, now or hereafter
installed in or on the Secured Property; and
(5) Such other insurance and any replacements, substitutions or additions
thereto as shall at any time be reasonably required by Beneficiary against other
insurable hazards, including earthquake, war risk, nuclear reaction or
radioactive contamination, each in such amounts as Beneficiary shall determine.
C. Separate Insurance. Grantor shall not carry separate insurance, concurrent in
kind or form and contributing in the event of loss with any insurance required
hereunder. Grantor may, however, effect for its own account any insurance not
required pursuant to the provisions of this Deed of Trust, but any such
insurance effected by Grantor on the Secured Property, whether or not required
pursuant to this Section 1.03, shall be for the mutual benefit of Grantor and
Beneficiary, as their respective interests may appear, and shall be subject to
all other provisions of this Section 1.03.
D. Insurers; Policies. All insurance provided for in this Section 1.03 shall be
effected under valid and enforceable policies issued by financially responsible
insurers, rated by A.M. Best as "A" or better and as having a class size of at
least "X(10)" and authorized to do business in the State, with deductibles
acceptable to Beneficiary and otherwise in form and substance acceptable to
Beneficiary. An original copy of all such policies shall be deposited with and
held by Beneficiary and shall contain the standard non-contributory mortgagee
clause in favor of Beneficiary and a waiver of subrogation endorsement, all in
form and content satisfactory to Beneficiary. All such policies shall contain a
provision that such policies will not be cancelled or materially amended
(including any reduction in the scope or limits of coverage), without at least
thirty (30) days' prior written notice to Beneficiary. Not less than thirty (30)
days prior to the expiration dates of the expiring policies theretofore
furnished pursuant to this Section 1.03, originals of the policies bearing
notations evidencing the full payment of the annual premium or accompanied by
other evidence satisfactory to Beneficiary of such payment shall be delivered by
Grantor to Beneficiary.
E. Beneficiary's Right to Secure Coverage. If Grantor fails to furnish to
Beneficiary and keep in force the original policies of insurance required by
this Section 1.03, Beneficiary, at its option, may procure such insurance, which
procurement, at Beneficiary's further option, may be by the purchase of
insurance policies or by the addition of the Secured Property to Beneficiary's
blanket policy. In the event that Beneficiary has exercised either of such
options, promptly upon demand by Beneficiary, Grantor (i) will reimburse
Beneficiary for all premiums on the policies purchased by Beneficiary or (ii) in
the event Beneficiary has added the Secured Property to its blanket policy, will
pay to Beneficiary an amount equal to the estimated cost of the insurance
coverage which Beneficiary has added to its blanket policy had such coverage
been obtained under a separate policy and not under a blanket policy, in either
case, with interest thereon at the Increased Rate from the date Beneficiary pays
such premiums to the date Grantor repays such premiums to Beneficiary in full.
Until they are so repaid, this Deed of Trust shall secure the amount of such
premiums and interest.
F. Damage or Destruction. Upon the occurrence of any damage or casualty to the
Secured Property or any part thereof, the following shall apply:
(1) Grantor shall give Beneficiary written notice of such damage or casualty as
soon as possible, but not later than ten (10) days from the date such damage or
casualty occurs.
(2) All proceeds of insurance ("Proceeds") paid or to be paid pursuant to any of
the policies maintained pursuant to this Deed of Trust shall be payable to
Beneficiary. Grantor hereby authorizes and directs any affected insurer to make
payment of the Proceeds directly to Beneficiary. Beneficiary may commingle, with
other monies in Beneficiary's possession, all Proceeds received by Beneficiary.
All such Proceeds shall constitute additional security for the Obligations and
Grantor shall not be entitled to the payment of interest thereon. Beneficiary
may settle, adjust or compromise all claims for loss, damage or destruction
pursuant to any policy or policies of insurance.
(3) Subject to the provisions of Section 1.03H, Beneficiary shall have the
option, in its discretion, and without regard to the adequacy of its security
hereunder, of applying all or part of the Proceeds to (a) the Obligations,
whether or not then due, in such order as Beneficiary shall determine, (b) the
repair or restoration of the Secured Property, (c) reimburse Beneficiary for its
costs and expenses in connection with the recovery of the Proceeds, or (d) any
combination of the foregoing.
(4) Nothing herein contained shall be deemed to excuse Grantor from repairing or
maintaining the Secured Property as provided in Section 1.05 or restoring all
damage or destruction to the Secured Property, regardless of whether there are
Proceeds available or whether the Proceeds are sufficient in amount, and the
application or release by Beneficiary of any Proceeds shall not cure or waive
any Event of Default or notice of default pursuant to this Deed of Trust or
invalidate any act done pursuant to such notice.
G. Transfer of Interest in Policies. In the event of the foreclosure of this
Deed of Trust or other transfer of title or assignment of the Secured Property
in payment and performance, in whole or in part, of the Obligations, all right,
title and interest of Grantor in and to all policies of insurance required by
this Section 1.03 shall inure to the benefit of, and pass to the purchaser or
grantee of the Secured Property. If, prior to Beneficiary's receipt of the
Proceeds, the Secured Property shall have been sold through the foreclosure of
this Deed of Trust or other similar proceeding, Beneficiary shall have the right
to receive the Proceeds to the extent that any portion of the Obligations are
still unpaid after application of the proceeds of the foreclosure sale or
similar proceeding, together with interest thereon at the Increased Rate, plus
attorney's fees and other costs and disbursements incurred by Beneficiary in
connection with the collection of the Proceeds and in establishing the amount of
and collecting the deficiency. Grantor hereby assigns, transfers and sets over
to Beneficiary all of the Grantor's right, title and interest in and to said
sum. The balance, if any, shall be paid to Grantor, or as otherwise required by
law.
H. Grantor's Use of Proceeds.
(1) Notwithstanding any provision herein to the contrary, but subject to the
provisions of Section 1.03(H)(4), in the event of any destruction to the Secured
Property by fire or other casualty of not more than twenty-five 25% percent of
the leasable area of the Improvements, the Proceeds shall be made available to
Grantor for repair and restoration, after deducting therefrom and payment to
Beneficiary of an amount equal to Beneficiary's costs in connection with
collection, review and disbursement of the Proceeds of such damage or casualty,
provided that:
(a) The Proceeds are deposited with Beneficiary;
(b) No Event of Default shall have occurred and be continuing under the terms of
any of the Loan Instruments;
(c) The insurer does not deny liability to any named insured;
(d) Beneficiary is furnished with, and has approved (i) a complete, final set of
plans and specifications for the work to be performed in connection with the
repair or restoration, (ii) an estimate of the cost of repair and restoration,
and (iii) a certificate of Beneficiary's Architect as to such costs;
(e) The value, quality and condition of the Secured Property so repaired or
restored shall be at least equal to that of the Secured Property prior to such
damage or casualty;
(f) Grantor furnishes Beneficiary with evidence reasonably satisfactory to
Beneficiary that all Improvements so repaired or restored and their use shall
fully comply with all applicable (i) easements, covenants, conditions,
restrictions or other private agreements or instruments of record affecting the
Secured Property and (ii) Legal Requirements;
(g) If the estimated cost of such repair or restoration exceeds the Proceeds
available, Grantor shall (i) furnish a bond of completion or provide other
evidence satisfactory to Beneficiary of Grantor's ability to pay such excess
costs, or (ii) deposit with Beneficiary additional funds equal to such excess;
(h) Beneficiary shall have received written notice of damage or casualty from
Grantor within ten (10) days from the date of such damage or casualty, which
notice shall state the date of such damage or casualty, and shall contain a
request to Beneficiary to make the Proceeds available to Grantor;
(i) Beneficiary shall have received a report or proof of claim from the insurer
describing the damage or casualty and the insurer's payment therefor;
(j) During and after the repair and restoration period, the aggregate monthly
net income pursuant to rent or business income insurance and/or pursuant to all
Leases remaining in full force and effect shall be in an amount sufficient to
pay the monthly installments of principal and interest required to be paid on
the Obligations, as well as all payments for taxes and insurance required
pursuant to Section 1.04, as estimated by Beneficiary.
(2) Beneficiary shall disburse the Proceeds during the course of repair or
restoration upon (a) the certification of Beneficiary's Architect as to the cost
of the work done, (b) the conformity, as determined by Beneficiary, of the work
to plans and specifications approved by Beneficiary, and (c) receipt of evidence
of a title insurance company acceptable to Beneficiary that there are no liens
arising out of the repair or restoration or otherwise. Notwithstanding the
above, a portion of the Proceeds may be released prior to the commencement of
repair or restoration to pay for items approved by Beneficiary in its
discretion. Subject to satisfaction of the foregoing conditions, Beneficiary
shall make such disbursements within ten (10) business days after a written
request by Grantor. No payment made prior to the final completion of work shall
exceed ninety percent (90%) of the value of the work performed from time to
time, and at all times the undisbursed balance of the Proceeds remaining with
Beneficiary must be at least sufficient to pay for the cost of completion of the
work (as estimated by Beneficiary in its discretion), free and clear of liens.
Beneficiary shall make final payment after receipt of a certification of
Beneficiary's Architect confirming the completion of the work in accordance with
plans and specifications approved by Beneficiary.
(3) At its option, Beneficiary shall (a) return to Grantor the balance of the
Proceeds after full disbursement in accordance with Sections 1.03H(1) and (2),
or (b) apply such balance to the Obligations, whether or not then due, in such
order as Beneficiary shall determine.
(4) In all cases in which any destruction of the Secured Property by fire or
other casualty occurs during the last twelve (12) months prior to the Maturity
Date, or in Beneficiary's judgment, Grantor is not proceeding with the repair or
restoration in a manner that would entitle Grantor to have the Proceeds
disbursed to it, or for any other reason Beneficiary determines in its judgment
that Grantor shall not be entitled to the Proceeds pursuant to the terms of this
Deed of Trust, Beneficiary shall have the options set forth in Section 1.03
F(3).
(5) Under no circumstances shall Beneficiary become personally liable for the
fulfillment of the terms, covenants and conditions contained in any of the
Leases or obligated to take any action to repair or restore the Secured
Property.
I. Amendment as a Result of Commercial Unavailability of Insurance Against
Terrorist Acts.
(1) If any insurance required to be maintained against loss arising from the
perils of terrorist acts (other than insurance required to be maintained under
applicable law) pursuant to Section 1.03B(5) (including the limits or
deductibles or any other terms under policies for such insurance) ceases to be
commercially available in the commercial insurance market, Grantor shall provide
written notice to Beneficiary, accompanied by a certificate from an independent
insurance advisor of recognized national standing selected by Grantor and
reasonably satisfactory to Beneficiary ("Insurance Advisor"), certifying that
such insurance against loss arising from the perils of terrorist acts is not
commercially available in the commercial insurance market for buildings of
similar type and geographic location, and explaining in detail the basis for
such conclusions and recommending any waivers or modification of such insurance
requirement (which recommendation shall include the amount and type of insurance
which is commercially available, if any).
(2) Following receipt of such notice, certificate and recommendation of the
Insurance Advisor, Beneficiary shall not unreasonably withhold its approval of
the recommended waiver or modification of such insurance requirement (any such
approval to be evidenced by a writing to such effect) but in this regard,
Beneficiary may, at Grantor's expense, seek the advice of another insurance
advisor of its choosing, and factor such advice into its decision. Beneficiary
shall advise Grantor in writing of its decision concerning the recommended
waiver or modification, including any alternative requirements it may reasonably
establish, and Grantor shall, prior to the expiration of the insurance against
loss arising from the perils of terrorist acts then in effect, obtain such
insurance that is approved by Beneficiary.
(3) In the event that such insurance requirement has been waived or modified
pursuant to Section 1.03I(2), Grantor shall, from time to time upon request of
Beneficiary, provide to Beneficiary a written supplemental report from the
Insurance Advisor that provided the certificate referred to in Section 1.03I(1)
(or such other independent insurance advisor reasonably acceptable to
Beneficiary), updating such prior certificate and reaffirming the conclusions
stated therein, including as to the insurance against loss arising from the
perils of terrorist acts which is then commercially available. Such supplemental
report shall be provided within thirty (30) days after a request from
Beneficiary in accordance with this paragraph. In the event that the Insurance
Advisor (or such other insurance advisor engaged by Beneficiary at Grantor's
expense), states that a different level of insurance is then commercially
available, as compared to the insurance that was commercially available in the
prior certificate and recommendation, Grantor shall promptly (and in any event
within thirty (30) days after receipt of such updated report) obtain the then
specified level of insurance that is then commercially available, subject to
Beneficiary's approval, in the same manner as provided in Section 1.03I(2)
above.
(4) Any waiver or modification approved pursuant to Section 1.03I(2) shall be
effective for only as long as the originally required insurance is not
commercially available. Failure by Grantor to provide the supplemental report
referred to in Section 1.03I(3) within the period required shall give rise to a
rebuttable presumption that the originally required insurance is then
commercially available. In the event of such failure, any insurance waiver or
modification approved pursuant to Section 1.03I(2) shall cease to satisfy the
requirements of this Deed of Trust at the expiration of the thirty (30) day
period referred to in the second sentence of Section 1.03I(3). For the avoidance
of doubt, Beneficiary, at Grantor's expense, may establish that insurance
coverage against loss arising from the perils of terrorist acts is commercially
available independent of, and without first, requesting Grantor to provide a
supplemental report pursuant to Section 1.03I(3).
(5) For the purpose of this Section 1.03I, insurance against loss arising from
the perils of terrorist acts will be considered not "commercially available" if
(A) it is not obtainable or is obtainable only at excessive costs which are not
justified in terms of the risk to be insured, (B) it is not being carried by or
applicable to properties or operations similar to and in the same geographic
area as the Secured Property because of such excessive costs or (C) the material
provisions of The Terrorism Risk Act of 2002 (Pub. L. 107-297, 116 Stat. 232
(2002)) are no longer in effect. Notwithstanding any other provision of this
Section 1.03I to the contrary, in no event shall the annual costs of insurance
providing coverage against loss arising from the perils of terrorist acts be
deemed "excessive" to the extent such annual costs are not in excess of 100% of
the annual All Risk premium allocated to the Property (as such amount shall be
increased annually by any increase in CPI over the Base Index) ("Terrorist
Insurance Cost") and in the event some or all of the costs of maintaining
coverage against loss arising from the perils of terrorist acts in excess of the
Terrorist Insurance Cost are determined to be not "commercially available" and
are waived by Beneficiary in accordance with the terms of Section 1.03I(2), then
Grantor shall maintain such coverage as may be obtained by the expenditure of
the Terrorist Insurance Cost and such additional costs as are not determined to
be excessive.
(6) Notwithstanding anything to the contrary contained in Section 1.04 and in
addition to the payments required thereunder, Grantor agrees if the cost of the
insurance providing coverage against loss arising from the perils of terrorists
acts is deemed excessive as provided in Section 1.03I(2) and Grantor is not
otherwise required to maintain insurance against terrorist acts, until such time
as Grantor obtains insurance against loss arising from the perils of terrorists
acts as provided in Section 1.03, Grantor will pay to Beneficiary, or its
designee, on the due date of each monthly installment of principal and/or
interest pursuant to the Note, a sum equal to 1/12 of the then current annual
Terrorist Insurance Cost. Beneficiary or its designee shall hold all payments
without any obligation for the payment of interest thereon to Grantor and free
of all liens or claims on the part of the creditors of Grantor and as part of
the Secured Property. Such payments shall not be, nor be deemed to be trust
funds, but may be commingled with the general funds of Beneficiary, or its
designee. Upon receipt by Beneficiary from Grantor of an insurance policy or an
endorsement to an existing insurance policy providing coverage against loss
arising from the perils of terrorist acts in accordance with the provisions of
Section 1.03 together with satisfactory evidence that such insurance has been
paid for in full, Beneficiary will reimburse Grantor from the payments made by
Grantor pursuant to this Section 1.03I(6) to the extent same have not been
applied in accordance with the provisions of the next sentence. Upon any default
in the provisions of any Loan Instrument, Beneficiary may, at its discretion and
without regard to the adequacy of its security hereunder, apply any unused
portion of such payments to the payment of the Obligations in such manner as it
may elect.
1.04 Escrow Payments. To further secure the Obligations as to payment of the
Impositions (as set forth in Section 1.02) and premiums for insurance (as set
forth in Section 1.03), Grantor will pay to Beneficiary, or its designee, on the
due date of each monthly installment of principal and/or interest pursuant to
the Note, a sum equal to the Impositions and insurance premiums next due on the
Secured Property, all as reasonably estimated by Beneficiary, less all sums
already paid with respect to the Impositions and insurance premiums for such
period, divided by the number of months to elapse before one month prior to the
date when such Impositions and insurance premiums shall become due and payable.
Beneficiary or its designee shall hold all payments without any obligation for
the payment of interest thereon to Grantor and free of all liens or claims on
the part of creditors of Grantor and as a part of the Secured Property.
Beneficiary or its designee shall use such payments to pay current Impositions
and insurance premiums, as the same accrue and are payable. Such payments shall
not be, nor be deemed to be, trust funds, but may be commingled with the general
funds of Beneficiary, or its designee. If at any time and for any reason
Beneficiary determines that such payments are insufficient to pay the
Impositions and insurance premiums in full as they become payable, Grantor will
pay to Beneficiary or its designee, within ten (10) days after demand therefor,
such additional sum or sums as may be required in order for Beneficiary or its
designee to so pay such Impositions and insurance premiums in full. Grantor
shall furnish Beneficiary with the bills therefor within sufficient time to
enable Beneficiary or its designee to pay the Impositions and insurance premiums
before any penalty attaches and before any policy lapses. Upon any default in
the provisions of any Loan Instrument, Beneficiary may, at its discretion and
without regard to the adequacy of its security hereunder, apply any unused
portion of such payments to the payment of the Obligations in such manner as it
may elect. Transfer of legal title to the Secured Property shall automatically
transfer to the new owner any then remaining rights of Grantor in all sums held
by Beneficiary pursuant to this Section 1.04.
1.05 Care and Use of the Premises.
A. Maintenance and Repairs. Grantor, at its sole cost and expense, shall (1)
take good care of the Secured Property and the sidewalks and curbs adjoining the
Secured Property and keep the same in good order and condition, (2) make all
necessary repairs thereto, interior and exterior, structural and nonstructural,
ordinary and extraordinary, foreseen and unforeseen, (3) not commit or suffer to
be committed any waste of the Secured Property, and (4) not do or suffer to be
done anything which will increase the risk of fire or other hazard to the
Secured Property or any part thereof.
B. Standard of Repairs. The necessity for and adequacy of repairs to the Secured
Property pursuant to Section 1.05A shall be measured by the standard which is
appropriate for a residential apartment project and related facilities of
similar construction and type located in the metropolitan Raleigh, North
Carolina area. Further, Grantor shall make all repairs necessary to avoid any
structural damage to the Improvements and to keep the Secured Property in a
proper condition for its intended use. When used in this Section 1.05, the terms
"repair" and "repairs" shall include all necessary renewals and replacements.
Grantor shall make all repairs with new, first-class materials and in a good,
substantial and workerlike manner which shall be equal or better in quality and
class to the original work.
C. Removal of Equipment. Grantor shall have the right, at any time and from time
to time, to remove and dispose of equipment which may have become obsolete or
unfit for use or which is no longer useful in the operation of the Secured
Property. Grantor will promptly replace all equipment so disposed of or removed
with other equipment of a value and serviceability equal to or greater than the
original value and serviceability of the equipment so removed or disposed of,
free of all liens, claims or other encumbrances. If by reason of technological
or other developments in the operation and maintenance of buildings of the
general character of the Improvements, no replacement of the building equipment
so removed or disposed of is necessary or desirable in the proper operation or
maintenance of the Improvements, Grantor shall not be required to replace same.
The security interest of this Deed of Trust shall cover all such replacement
equipment.
D. Compliance With Laws and Insurance. Grantor shall promptly comply with any
and all applicable Legal Requirements including maintaining the Secured Property
in compliance with all Legal Requirements. Grantor shall not bring or keep any
article upon the Secured Property or cause or permit any condition to exist
thereon which would be prohibited by or could invalidate any insurance coverage
maintained, or required hereunder to be maintained, by Grantor on or with
respect to any part of the Secured Property. Grantor shall do all other acts
which from the character or use of the Secured Property may be necessary to
protect the Secured Property. Upon the reasonable request of Beneficiary,
Grantor shall furnish to Beneficiary a copy of any license, permit or approval
required by any Governmental Agency with respect to the Secured Property and/or
the operations conducted thereon. E. Hazardous Materials.
(1) Grantor hereby unconditionally and irrevocably agrees to indemnify,
reimburse, defend, exonerate, pay and hold harmless Beneficiary, and its
directors, officers, policyholders, shareholders, employees, successors
(including any successor to Beneficiary's interest in the chain of title),
assigns, agents, attorneys, contractors, subcontractors, experts, licensees,
visitors, affiliates, lessees, beneficiaries, trustees and invitees, from and
against any and all of the following (referred to collectively as the
"Indemnified Claims"): all Environmental Damages and Environmental Claims that
may be incurred by, imposed upon, or asserted against, any Person indemnified
hereunder, arising out of, related to, or in connection with:
(a) the presence of Hazardous Materials in, on, under or about or the Release or
threatened Release of any Hazardous Materials to or from (i) the Secured
Property or (ii) any other property legally or beneficially owned (or any
interest or estate which is owned) by Grantor, regardless of whether or not the
presence of such Hazardous Materials arose prior to the present ownership or
operation of the property in question or as a result of the acts or omissions of
Grantor or any other Person,
(b) the violation or alleged violation of any Environmental Requirement
affecting or applicable to the Secured Property or any activities thereon,
regardless of whether or not the violation of such Environmental Requirement
arose prior to the present ownership or operation of the property in question or
as a result of the acts or omissions of Grantor or any other Person,
(c) the breach of any warranty or covenant or the inaccuracy of any
representation contained in the Loan Instruments pertaining to Hazardous
Materials or other environmental matters, including the covenants contained in
Sections 1.05E(2), (3), (4) and (5) and the representations and warranties
contained in Sections 1.05E(4) and 2.03C and D,
(d) the transport, treatment, recycling, storage or disposal or arrangement
therefor, of any Hazardous Material to, at or from the Secured Property, or
(e) the enforcement or attempted enforcement of this indemnity.
Grantor's obligations pursuant to the foregoing indemnity shall include the
burden and expense of (x) defending against all Indemnified Claims, even if such
Indemnified Claims are groundless, false or fraudulent, (y) conducting all
negotiations of any description with respect to the Indemnified Claims, and (z)
paying and discharging any and all Indemnified Claims, when and as the same
become due, against or from Beneficiary or any other Person indemnified pursuant
to this Section 1.05E(1). Grantor's obligations under this Section 1.05E(1)
shall survive (i) the repayment of all sums due under the Note; (ii) the release
of the Secured Property or any portion thereof from the lien of this Deed of
Trust; (iii) the reconveyance of or foreclosure under this Deed of Trust
(notwithstanding that all or a portion of the obligations secured by this Deed
of Trust shall have been discharged thereby); (iv) the acquisition of the
Secured Property by Beneficiary; and/or (v) the transfer of all of Beneficiary's
rights in and to the Note and/or the Secured Property.
(2) Grantor shall maintain the Secured Property in compliance with, and shall
not cause or permit the Secured Property to be in violation of, any applicable
Environmental Requirements. Grantor shall not, and shall not permit any lessee
or occupant of the Secured Property to, use, generate, manufacture, store,
maintain, dispose of or permit to exist in, on, under or about the Secured
Property any Hazardous Materials. Grantor shall, at all times, comply fully and
in a timely manner, and cause all of its employees, agents, contractors and
subcontractors and any other Persons occupying or present on the Secured
Property to so comply, with all applicable Environmental Requirements.
(3) Upon an Event of Default, at the written request of Beneficiary, or in any
case where Beneficiary shall have reasonable suspicion of the presence of any
Hazardous Materials in, on, under or about the Secured Property, Grantor shall
provide Beneficiary, at Grantor's expense, with an environmental site assessment
or environmental audit report prepared by an environmental engineering firm
acceptable to Beneficiary and in a form acceptable to Beneficiary, assessing the
presence or absence of any Hazardous Materials and the potential costs in
connection with the abatement, cleanup or removal of any Hazardous Materials
found in, on, under or about the Secured Property. Grantor shall cooperate in
the conduct of such site assessment or environmental audit.
(4) Grantor represents and warrants that (a) no enforcement, cleanup, removal or
other governmental or regulatory action has, at any time, been instituted,
contemplated or threatened against Grantor, or to its best knowledge, the
Secured Property, pursuant to any Environmental Requirements; (b) to the best of
its knowledge, no violation or noncompliance with any Environmental Requirements
has occurred with respect to the Secured Property at any time; and (c) no claims
have, at any time, been made or threatened by any third party against the
Secured Property or against Grantor with respect to the Secured Property,
relating to damage, contribution, cost recovery, compensation, loss or injury
resulting from any Hazardous Materials (the matters set forth in this Section
1.05E(4) (a), (b) and (c) are herein referred to as "Hazardous Materials
Claims"). Grantor shall promptly advise Beneficiary, in writing, if any
Hazardous Materials Claims are hereafter asserted, or if Grantor obtains
knowledge of any Release of any Hazardous Materials in, on, under or about the
Secured Property.
(5) Without Beneficiary's prior written consent, Grantor shall not (a) take any
remedial action in response to the presence of any Hazardous Materials in, on,
under or about the Secured Property, or (b) enter into any settlement agreement,
consent decree or other compromise in respect of any such Hazardous Materials or
any Hazardous Material Claims. However, Beneficiary's prior consent shall not be
necessary in the event that the presence of any Hazardous Materials in, on,
under or about the Secured Property either poses an immediate threat to the
health, safety or welfare of any individual or is of such a nature that an
immediate remedial response is necessary and it is not possible to obtain
Beneficiary's consent before taking such action. In such event, Grantor shall
notify Beneficiary as soon as practical of any action so taken. Beneficiary
shall not withhold its consent, where such consent is required hereunder, if
either (a) a particular remedial action is ordered by a court of competent
jurisdiction, or (b) Grantor establishes to the satisfaction of Beneficiary that
there is no reasonable alternative to such remedial action which would result in
less impairment to the Secured Property.
(6) Beneficiary, if it so elects, shall have the right to join and participate
as a party in any legal proceedings or actions initiated by any Person in
connection with any Hazardous Materials Claim and, in such case, Grantor shall
pay all of Beneficiary's attorneys' fees and expenses incurred in connection
therewith.
F. Compliance With Instruments of Record. Grantor shall promptly perform and
observe, or cause to be performed and observed, all terms, covenants and
conditions of all instruments of record affecting the Secured Property,
non-compliance with which may affect the priority of the lien of this Deed of
Trust, or which may impose any duty or obligation upon Grantor or any lessee or
other occupant of the Secured Property or any part thereof. Grantor shall do or
cause to be done all things necessary to preserve intact and unimpaired all
easements, appurtenances and other interests and rights in favor, or
constituting any part, of the Secured Property.
G. Alteration of Secured Property. Grantor shall not demolish, remove,
construct, restore, add to or alter any portion of the Secured Property or any
extension thereof, or consent to or permit any such demolition, removal,
construction, restoration, addition or alteration without Beneficiary's prior
written consent, except for (1) initial tenant improvement work provided for in
any Lease in effect on the date hereof and in any other Lease approved by
Beneficiary in writing, and (2) ordinary, non-structural maintenance work.
H. Parking. Grantor shall comply with all Legal Requirements for parking and
shall grant no parking rights in the Secured Property other than those provided
for in existing Leases, except with Beneficiary's prior written consent. The
Secured Property shall contain at all times not less than 284 (or more, if
required due to a change in Legal Requirements) on-site parking spaces for
standard-size American automobiles, such parking spaces to be located upon the
Land. If any part of the automobile parking areas included within the Secured
Property is taken by condemnation or such areas are otherwise reduced, Grantor
shall provide parking facilities in kind, size and location as required to
comply with all Leases and with the parking requirements set forth herein. Any
lease or other contract for such facilities must be assignable and must be
otherwise in form and substance satisfactory to Beneficiary. Before entering
into any such lease or other contract, Grantor will furnish to Beneficiary
satisfactory assurance of the completion of such facilities free of all liens
and in conformity with all Legal Requirements.
I. Entry on Secured Property. Upon reasonable notice to Grantor from Beneficiary
or its representatives, Beneficiary or its representatives may enter upon and
inspect the Secured Property at all reasonable times; provided, however,
Beneficiary's rights under this Section 1.05I shall be subject in all respects
to the rights of tenants under the Leases or applicable law.
J. No Consent to Alterations or Repairs. Nothing contained in this Deed of Trust
shall in any way constitute the consent or request of Beneficiary, expressed or
implied, by inference or otherwise, to any contractor, subcontractor, laborer or
materialman for the performance of any labor or the furnishing of any materials
for any specific improvement, alteration or repair of the Secured Property or
any part thereof.
K. Preservation of Lien; Mechanic's Liens. Grantor shall do or cause to be done
everything necessary so that the lien of this Deed of Trust shall be fully
preserved, at the sole cost of Grantor. Grantor shall discharge, pay or bond, or
cause to be discharged, paid or bonded, from time to time when the same shall
become due, all lawful claims and demands of mechanics, material men, laborers
and others which, if unpaid, might result in, or permit the creation of, a lien
on the Secured Property or any part thereof, or on the revenues, rents, issues,
income or profits arising therefrom.
L. Use of Secured Property by Grantor. Grantor shall use, or cause to be used,
the Secured Property principally and continuously as and for a first class,
residential apartment project. Grantor shall not use, or permit the use of, the
Secured Property or any part thereof, for any other principal use without the
prior written consent of Beneficiary. Grantor shall not initiate or acquiesce to
any change in any zoning or other land use classification now or hereafter in
effect and affecting the Secured Property or any part thereof without in each
case obtaining Beneficiary's prior written consent thereto.
M. Use of Secured Property by Public. Grantor shall not suffer or permit the
Secured Property, or any part thereof, to be used by the public as such, without
restriction or in such manner as might impair Grantor's title to the Secured
Property or any part thereof, or in such manner as might make possible a claim
or claims of adverse usage or adverse possession, or of any implied dedication
to the public of the Secured Property or any part thereof.
N. Management. Management of the Premises shall be satisfactory to Beneficiary
and shall be performed by Grantor or a management company approved in writing by
Beneficiary and under a management contract satisfactory to Beneficiary, which
management contract shall be subject and subordinate to the rights and title of
Beneficiary under this instrument.
1.06 Financial Information.
A. Financial Statements. Grantor shall keep and maintain complete and accurate
books and records of the earnings and expenses of the Secured Property and,
without expense to Beneficiary, furnish to Beneficiary, within one hundred
twenty (120) days after the end of each fiscal year of Grantor, an annual
financial statement prepared and certified by an independent certified public
accountant reasonably satisfactory to Beneficiary, in accordance with generally
accepted accounting principles relating to real estate consistently applied,
which shall include: (1) a statement of financial position by Grantor with
respect to the Secured Property, (2) a statement of cash flows by Grantor with
respect to the Secured Property, (3) a detailed summary of operations relating
to the ownership and operation of the Secured Property, including, all rents and
other income derived therefrom and all operating and capital expenses paid or
incurred in connection therewith, (4) a certified rent roll with respect to the
Secured Property, and (5) such interim statements of financial position and cash
flows and such interim summaries of operations and interim rent rolls, as may be
required by Beneficiary. Grantor shall also furnish, or cause to be furnished,
to Beneficiary, within one hundred-eighty (180) days after the end of each
fiscal year of each Guarantor, if any, an annual audited financial statement,
prepared and certified by an independent, certified public accountant,
reasonably satisfactory to Beneficiary, in accordance with generally accepted
accounting principles, consistently applied.
B. Right to Inspect Books and Records. Upon reasonable notice to Grantor from
Beneficiary or its representatives, Beneficiary or its representatives shall
have the right to examine and make copies of all books and records and all
supporting vouchers and data related to the Secured Property. Such examination
may occur at the Secured Property or at Grantor's principal place of business
and shall be at Grantor's sole cost and expense.
1.07 Condemnation.
A. Beneficiary's Right to Participate in Proceedings. If the Secured Property,
or any part thereof, shall be taken in condemnation proceedings or by exercise
of any right of eminent domain (collectively, "Condemnation Proceedings"),
Beneficiary shall have the right to participate in any such Condemnation
Proceedings and all awards or payments (collectively, "Award") that may be made
in any such Condemnation Proceedings are hereby assigned to Beneficiary, and
shall be deposited with Beneficiary and applied in the manner set forth in this
Section 1.07. Grantor shall give Beneficiary immediate notice of the actual or
threatened commencement of any Condemnation Proceedings affecting all or any
part of the Secured Property, including all such Condemnation Proceedings as to
severance and consequential damage and change in grade in streets, and will
deliver to Beneficiary copies of any and all papers served or received in
connection with any Condemnation Proceedings. Notwithstanding the foregoing,
Beneficiary is hereby authorized, at its option, to commence, appear in and
prosecute in its own or Grantor's name any action or proceeding relating to any
Condemnation Proceedings and to settle or compromise any claim in connection
therewith. No settlement for the damages sustained in connection with any
Condemnation Proceedings shall be made by Grantor without Beneficiary's prior
written approval. Grantor shall execute any and all further documents that may
be required in order to facilitate the collection of each Award.
B. Application of Condemnation Award. (1) If at any time title or temporary
possession of the whole or any part of the Secured Property shall be taken in
any Condemnation Proceeding or pursuant to any agreement among Grantor,
Beneficiary and/or those authorized to exercise the right of condemnation,
Beneficiary, in its discretion and without regard to the adequacy of its
security hereunder, shall have the right to apply any Award received to payment
of the Obligations whether or not due, in such order as Beneficiary shall
determine. If all or substantially all of the Secured Property is taken and the
amount of the Award received by Beneficiary is not sufficient to pay the then
unpaid balance of the Obligations, the balance of the Obligations shall, at the
option of Beneficiary, become immediately due and payable and Grantor shall,
within ten (10) days after notice to Grantor that Beneficiary has so applied the
Award, pay the difference between such balance and the amount of the Award.
"Substantially all of the Secured Property" shall be deemed to have been taken
if the balance of the Secured Property, in the opinion of Beneficiary, (a)
cannot be restored to a self-contained and architecturally complete unit or
units or (b) the balance of the Secured Property as restored will not be
economically viable and capable of supporting all carrying charges and operating
and maintenance expenses.
C. Reimbursement of Costs. In the case of any taking covered by the provisions
of this Section 1.07, Beneficiary (to the extent that Beneficiary has not been
reimbursed therefor by Grantor) shall be entitled, as a first priority, to
reimbursement out of any Award for all reasonable costs, fees, and expenses
incurred in the determination and collection of the Award.
D. Existing Obligations. Notwithstanding any taking by Condemnation Proceedings
or any application of the Award to the Obligations, Grantor shall continue to
pay the monthly installments due pursuant to the Note, as well as all other sums
secured by this Deed of Trust. If prior to Beneficiary's receipt of the Award,
the Secured Property shall have been sold through foreclosure of this Deed of
Trust or other similar proceeding, Beneficiary shall have the right to receive
the Award to the extent that any portion of the Obligations are still unpaid
after application of the proceeds of the foreclosure sale or similar proceeding,
with interest thereon at the Increased Rate, plus attorneys' fees and other
costs and disbursements incurred by Beneficiary in connection with the
collection of the Award and in establishing the amount of, and collecting, any
deficiency. The application of the Award to the Obligations, whether or not then
due or payable, shall not postpone, abate or reduce any of the periodic
installments of interest or principal thereafter to become due pursuant to the
Note or this Deed of Trust until the Obligations are paid and performed in full.
1.08 Leases.
A. Performance of Lessor's Covenants. Grantor, as lessor, has entered and will
enter into leases or licenses with tenants, as lessees or licensees,
respectively, for parts or all of the Secured Property (all such leases and
licenses are hereinafter referred to individually as a "Lease" and collectively
as "Leases" and the lessees or licensees under such Leases are hereinafter
referred to individually as a "Lessee" and collectively as "Lessees"). Grantor
shall faithfully perform the lessor's covenants under the Leases. Grantor shall
neither do, nor neglect to do, nor permit to be done (other than enforcing the
terms of such Leases and exercising the lessor's remedies thereunder following a
default or event of default on the part of any Lessee in the performance of its
obligations pursuant to the Lease), anything which may cause the modification or
termination of any of the Leases, or of the obligations of any Lessee or any
other person claiming through such Lessee, or which may diminish or impair the
value of any Lease or the rents provided for therein, or the interest of the
lessor or of Beneficiary therein or thereunder. Each Lease shall make provision
for the attornment of the Lessee thereunder to any person succeeding to the
interest of Grantor as the result of any judicial or nonjudicial foreclosure or
transfer in lieu of foreclosure hereunder, such provision to be in form and
substance approved by Beneficiary, provided that nothing herein shall be
construed to require Beneficiary to agree to recognize the rights of any lessor
under any Lease following any such foreclosure or transfer in lieu thereof
unless Beneficiary shall expressly hereafter agree thereto in writing with
respect to a particular Lease.
B. Intentionally Deleted.
C. Representations Regarding Leases. Grantor represents and warrants that (1)
all representations made by it in the Leases are true and correct in all
material respects; (2) all Improvements and the leased space demised and let
pursuant to each Lease have been completed; (3) intentionally deleted; (4) no
Rents and other charges due and payable under the Leases are past due except as
set forth on the rent roll attached to the Rent Roll Certification delivered by
Grantor to Beneficiary as of the date hereof, including without limitation, the
"Aged Delinquency Report" attached thereto (the "Rent Roll"); (5) no Rent has
been prepaid, with the exception of special circumstances (such as the Lessee
going on extended travel and prepaying the Rent for the period of its absence),
provided, however, that to Grantor's knowledge, in such special circumstances,
no Rent has been prepaid more than two (2) months in advance; (6) there is no
existing default or breach of any covenant or condition on the part of Grantor,
or to the best of Grantor's knowledge, any Lessee under any Lease except as
shown on the Rent Roll; (7) there are no options to purchase all or any portion
of the Secured Property contained in any Lease; (8) there are no options to
renew, cancel, extend or expand by any Lessee except as stated in the Leases;
(9) intentionally deleted; (10) Grantor is the absolute owner of each Lease with
full right and title to assign the same and the Rents thereunder to Beneficiary;
(11) each Lease is valid and, except as shown on the Rent Roll, is in full force
and effect; (12) there is no outstanding assignment or pledge thereof or of the
Rents due or to become due; (13) to the best of Grantor's knowledge, no Lessee
has any defense, set-off or counterclaim against Grantor; (14) no Rents payable
pursuant to any Lease have been or will be anticipated, discounted, released,
waived, compromised or otherwise discharged, except as may be expressly
permitted by such Lease; and (15) all Leases are subject and subordinate to this
Deed of Trust.
D. Covenants Regarding Leases. Grantor shall not, without the prior written
consent of Beneficiary obtained in each instance:
(1) lease to any Person, all or any part of the space in, on or over any of the
Premises; except Leases made in the ordinary course of the business of owning
and operating an apartment project similar to the Secured Property in a prudent
manner, on Grantor's standard lease form, approved by Beneficiary, without
material deviation therefrom;
(2) cancel, terminate or accept a surrender or suffer or permit any
cancellation, termination or surrender of any Lease or any guaranty of any Lease
except, with respect to any Lease, in the ordinary course of business of owning
and operating an apartment project similar to the Secured Property in a prudent
manner;
(3) modify any Lease so as to (i) reduce the term thereof or the Rents payable
thereunder, (ii) change any renewal provision contained therein, (iii) otherwise
increase any obligation of Grantor thereunder, or (iv) reduce any obligation of
Lessee thereunder, except, in each case, in the ordinary course of business of
owning and operating an apartment project similar to the Secured Property in a
prudent manner;
(4) commence any summary proceeding or other action to recover possession of any
space demised pursuant to any Lease, other than a proceeding brought in good
faith by reason of a default of any Lessee of which Grantor has provided written
notice to Beneficiary;
(5) receive or collect, or permit the receipt or collection of, any Rents for
more than one month in advance of the payment due dates, except in special
circumstances (such as the Lessee going on extended travel and prepaying the
Rent for the period of its absence), provided, however, that in such special
circumstances, Grantor shall not receive or collect, or permit the receipt or
collection of, any Rents for more than two (2) months in advance without
Beneficiary's consent;
(6) take any other action with respect to any Lease which would impair the
security of Beneficiary pursuant to this Deed of Trust;
(7) extend any present Lease other than in accordance with the terms presently
provided for therein, except extensions of Leases made in the ordinary course of
business of owning and operating an apartment project similar to the Secured
Property in a prudent manner;
(8) execute any agreement or instrument or create or permit a lien which may be
or become superior to any Lease; (9) suffer or permit to occur the accrual of
any right in any Lessee to withhold payment of any Rent or, except in the
ordinary course of business of owning and operating an apartment project similar
to the Secured Property in a prudent manner, any release of liability of any
Lessee;
(10) sell, assign, transfer, mortgage, pledge or otherwise dispose of or
encumber, whether by merger, consolidation, operation of law or otherwise, any
Lease or any Rents;
(11) alter, modify or change the terms of any guaranty of any Lease or consent
to the release of any party thereto except in the ordinary course of business of
owning and operating an apartment project similar to the Secured Property in a
prudent manner; or
(12) request, consent, agree to, or accept, the subordination of any Lease to
any deed of trust (other than this Deed of Trust) or other encumbrance now or
hereafter affecting the Premises.
E. Application of Rents. Grantor shall use and apply all Rents from the Secured
Property first to the payment and performance of the Obligations in accordance
with the terms of the Loan Instruments, and then to the payment of all
Impositions and the costs and expenses of management, operation, repair,
maintenance, preservation, reconstruction and restoration of the Secured
Property in accordance with the requirements of this Deed of Trust and the
obligations of Grantor as the lessor under any Lease. Grantor shall not use any
Rents for purposes unrelated to the Secured Property unless and until all
current payments of the Obligations, Impositions and such costs and expenses
have been paid or provided for and adequate cash reserves have been set aside to
ensure the timely future payment of all such items.
F. Indemnity Against Unapproved Lease Modifications and Amendments. In the event
that Beneficiary or any grantee or assignee of Beneficiary takes title to, or
otherwise comes into possession of, the Secured Property and thereafter a Lessee
under a Lease attorns to Beneficiary or such other party pursuant to a
Subordination, Non-Disturbance and Attornment Agreement entered into by
Beneficiary and such Lessee, Grantor hereby indemnifies and holds Beneficiary
harmless from and against any and all claims, liabilities, costs and expenses of
any kind or nature against or incurred by Beneficiary arising out of the
enforcement by any Lessee against Beneficiary or any grantee or assignee of
Beneficiary, of any affirmative claim, cost or expense, or any defense,
abatement or right of set off under any modification or amendment to a Lease
which is binding upon Beneficiary and which was entered into by Grantor after
the date of this Deed of Trust in violation of the requirements of subsection
1.08D hereof
1.09 Assignment of Leases, Rents, Income, Profits and Cash Collateral.
A. Assignment; Discharge of Obligations. Grantor hereby unconditionally,
absolutely and presently bargains, sells, grants, assigns, releases and sets
over unto Beneficiary (1) all Leases and all other tenancies, occupancies,
subleases, franchises and concessions of the Land or Improvements or which in
any way affect the use or occupancy of all or any part of the Land or
Improvements, and any other agreements affecting the use and occupancy of all or
any part of the Land or Improvements, in each case, whether now or hereafter
existing, and all right, title and interest of Grantor thereunder, including all
rights to all security or other deposits, (2) all guarantees of the Obligations
of any lessee, licensee or other similar party under any of the foregoing,
whether now or hereafter existing, and (3) the Rents, regardless of whether the
Rents accrue before or after foreclosure or during the full period of
redemption. For the aforesaid purpose, Grantor does hereby irrevocably
constitute and appoint Beneficiary its attorney-in-fact, in its name, to receive
and collect all Rents, as the same accrue, and, out of the amount so collected,
Beneficiary, its successors and assigns, are hereby authorized (but not
obligated) to pay and discharge the Obligations (including any accelerated
Obligations) in such order as Beneficiary may determine and whether due or not,
and to pay the remainder, if any, to Grantor, or as otherwise required by law.
Neither this assignment nor any such action shall constitute Beneficiary as a
"mortgagee in possession" or otherwise make Beneficiary responsible or liable in
any manner with respect to the Secured Property or the use, occupancy, enjoyment
or operation of all or any portion thereof, unless and until Beneficiary, in
person or by agent, assumes actual possession thereof. Nor shall appointment of
a receiver for the Secured Property by any court at the request of Beneficiary
or by agreement with Grantor, or the entering into possession of the Secured
Property or any part thereof by such receiver, be deemed to make Beneficiary a
mortgagee-in-possession or otherwise responsible or liable in any manner with
respect to the Secured Property or the use, occupancy, enjoyment or operation of
all or any portion thereof. The assignment of all Leases and Rents in this
Section 1.09 is intended to be an absolute, unconditional and present assignment
from Grantor to Beneficiary and not merely the passing of a security interest.
Grantor shall, at any time or from time to time, upon request of Beneficiary,
execute and deliver any instrument as may be requested by Beneficiary to further
evidence the assignment and transfer to Beneficiary of Grantor's interest in any
Lease or Rents. Nothing herein shall in any way limit Beneficiary's remedies or
Grantor's Obligations under the Assignment.
B. Entry Onto Secured Property; Lease of Secured Property. Beneficiary, at its
option, may enter and take possession of the Secured Property and manage and
operate the same as provided in Section 4.01, such management and operation to
include the right to enter into Leases and new agreements and to take any action
which, in Beneficiary's judgment, is necessary or proper to conserve the value
of the Secured Property. The expenses (including any receiver's fees, attorneys'
fees and agent's compensation) incurred pursuant to the powers herein contained
shall be secured hereby. Beneficiary shall not be liable to account to Grantor
for any action taken pursuant hereto other than to account for any Rents
actually received by Beneficiary.
C. License to Manage Secured Property. Notwithstanding anything to the contrary
contained in Section 1.09A or Section 1.09B, so long as there shall exist no
Event of Default hereunder, Grantor shall have the license to manage and operate
the Secured Property, including the right to enter into Leases, and collect all
Rents as they accrue (but not more than one month in advance).
D. Delivery of Assignments. Grantor shall execute such additional documents as
may be requested from time to time by Beneficiary, to evidence the assignment to
Beneficiary or its nominee of any Leases now or hereafter made, such assignment
documents to be in form and content acceptable to Beneficiary. Grantor shall
deliver to Beneficiary, within thirty (30) days after Beneficiary's request (1)
a duplicate original or photocopy of each Lease which is at the time of such
request outstanding upon the Secured Property and (2) a complete schedule,
certified by Grantor, of each Lease, showing the unit number, type, Lessee name,
monthly rental, date to which Rents have been paid, term of Lease, date of
occupancy, date of expiration, existing defaults, if any, and every special
provision, concession or inducement granted to such Lessee.
E. Indemnity. Grantor shall assert no claim or liability related to
Beneficiary's exercise of its rights pursuant to this Section 1.09. Grantor
expressly waives all such claims and liabilities. Grantor hereby holds
Beneficiary harmless from and against any and all claims, liabilities and
expenses of any kind or nature against or incurred by Beneficiary arising out of
Beneficiary's exercise of its rights pursuant to this Section 1.09, including
Beneficiary's management, operation or maintenance of the Secured Property or
the collection and disposition of Rents.
1.10 Further Assurances.
A. General; Appointment of Attorney-in-Fact. Upon request by Beneficiary, from
time to time, Grantor shall prepare, execute and deliver, or cause to be
prepared, executed and delivered, to Beneficiary, all instruments, certificates
and other documents which may, in the opinion of Beneficiary, be necessary or
desirable in order to effectuate, complete, perfect or continue and preserve the
Obligations and the lien of this Deed of Trust. Upon any failure by Grantor to
do so, Beneficiary may prepare, execute and record any such instruments,
certificates and documents for and in the name of Grantor and Grantor hereby
appoints Beneficiary the agent and attorney-in-fact of Grantor for such
purposes. This power is coupled with an interest and shall be irrevocable so
long as any part of the Obligations remain unpaid or unperformed. Grantor shall
reimburse Beneficiary for all sums expended by Beneficiary in preparing,
executing and recording such instruments, certificates and documents and such
sums shall be secured by this Deed of Trust.
B. Statement Regarding Obligations. Grantor shall, within ten (10) days after
request by Beneficiary, furnish Beneficiary with a written statement, duly
acknowledged, setting forth (1) the unpaid principal balance of the Loan and the
accrued but unpaid interest thereon, (2) whether or not any setoffs or defenses
exist against the payment of such principal or interest, and (3) if such setoffs
or defenses exist, the particulars thereof.
C. Additional Security Instruments. Grantor, from time to time and within
fifteen (15) days after request by Beneficiary, shall execute, acknowledge and
deliver to Beneficiary such chattel mortgages, security agreements or other
similar security instruments, in form and substance reasonably satisfactory to
Beneficiary, covering all property of any kind whatsoever owned by Grantor or in
which Grantor may have any interest which, in the opinion of Beneficiary, is
necessary to the operation and maintenance of the Secured Property or is
otherwise a part of the Secured Property. Grantor, from time to time and within
fifteen (15) days after request by Beneficiary, shall also execute, acknowledge
and deliver any financing statement, renewal, affidavit, certificate,
continuation statement, supplementary mortgage or other document as Beneficiary
may reasonably request in order to perfect, preserve, continue, extend or
maintain the security interest under, and the priority of, this Deed of Trust or
such chattel mortgage or other security instrument, as a first lien. Grantor
shall pay to Beneficiary on demand all actual costs and expenses incurred by
Beneficiary in connection with the preparation, execution, recording, filing and
refiling of any such instrument or document, including charges for examining
title and attorneys' fees and expenses for rendering an opinion as to the
priority of this Deed of Trust and of each such chattel mortgage or other
security agreement or instrument as a valid and subsisting first lien on such
property. Neither a request so made by Beneficiary, nor the failure of
Beneficiary to make such a request, shall be construed as a release of such
property, or any part thereof, from the lien of this Deed of Trust. This
covenant and each such mortgage, chattel or other security agreement or
instrument, delivered to Beneficiary are cumulative and given as additional
security. Grantor shall pay all premiums and related costs in connection with
any title insurance policy or policies in full or partial replacement of the
title insurance policy now insuring or which will insure the lien of this Deed
of Trust.
D. Security Agreement. This Deed of Trust shall constitute a security agreement
under Article 9 of the Code with respect to the Personal Property covered by
this Deed of Trust. Pursuant to the applicable Granting Clauses hereof, Grantor
has granted Beneficiary a security interest in the Personal Property and in all
additions and accessions thereto, substitutions therefor and proceeds thereof
for the purpose of securing all Obligations now or hereafter secured by this
Deed of Trust. The following provisions relate to such security interest:
(1) The Personal Property includes all now existing or hereafter acquired or
arising equipment, inventory, accounts, chattel paper, instruments, documents,
deposit accounts, investment property, letter-of-credit rights, commercial tort
claims, supporting obligations and general intangibles now or hereafter used or
procured for use on the Premises or otherwise relating to the Premises. If
Grantor shall at any time acquire a commercial tort claim relating to the
Premises, Grantor shall immediately notify Beneficiary in a writing signed by
Grantor of the brief details thereof and grant to Beneficiary a security
interest therein and in the proceeds thereof.
(2) Grantor hereby irrevocably authorizes Beneficiary at any time and from time
to time to file in any filing office in any Uniform Commercial Code jurisdiction
any initial financing statements and amendments thereto that (a) indicate the
collateral as "all assets used or procured for use or otherwise relating to" the
Premises or words of similar effect, or as being of equal or lesser scope or in
greater detail, and to indicate the Premises as defined, or in a manner
consistent with the term as defined, in this Deed of Trust and (b) contain any
other information required by part 5 of Article 9 of the Uniform Commercial Code
of the filing office for the sufficiency or filing office acceptance of any
initial financing statement or amendment, including whether Grantor is an
organization, the type of organization and any organizational identification
number issued to Grantor. Grantor agrees to provide any such information to
Beneficiary promptly upon request. Grantor also ratifies its authorization for
Beneficiary to have filed in any filing office in any Uniform Commercial Code
jurisdiction any like initial financing statements or amendments thereto if
filed prior to the date hereof. Grantor shall pay to Beneficiary, from time to
time, within five (5) days following demand therefor , any and all costs and
expenses incurred by Beneficiary in connection with the filing of any such
initial financing statements and amendments, including attorneys' fees and all
disbursements. If such payment is not tendered to Beneficiary within such five
(5) day period, such costs and expenses shall bear interest at the Increased
Rate from the date paid by Beneficiary until the date repaid by Grantor and such
costs and expenses together with such interest, shall be part of the Obligations
and shall be secured by this Deed of Trust.
(3) Grantor shall any time and from time to time take such steps as Beneficiary
may reasonably request for Beneficiary to obtain "control" of any Personal
Property for which control is a permitted or required method to perfect or to
insure priority of the security interest in such Personal Property granted
hereby.
(4) Upon the occurrence of an Event of Default, Beneficiary shall have the
rights and remedies of a secured party under the Code as well as all other
rights and remedies available at law or in equity or under this Deed of Trust.
(5) This Deed of Trust also constitutes a fixture filing under Section 47-9-502
of the Code. For purposes of the Code, the following information is furnished:
(a) The name and address of the record owner of the real estate described in
this instrument is:
CCIP Loft, L.L.C.
c/o AIMCO
4582 South Ulster Parkway
Suite 1100
Denver, Colorado 80237
(b) the name and address of the Debtor is:
CCIP Loft, L.L.C.
c/o AIMCO
4582 South Ulster Parkway
Suite 1100
Denver, Colorado 80237
(c) the name and address of the Secured Party is:
New York Life Insurance Company
c/o New York Life Investment Management LLC
51 Madison Avenue
New York, New York 10010-1603
(d) Information concerning the security interest evidenced by this instrument
may be obtained from the Secured Party at its address above.
(e) This Deed of Trust covers goods which are or are to become fixtures.
(6) If Grantor does not have an organizational identification number and later
obtains one, Grantor shall forthwith notify Beneficiary of such organizational
identification number.
(7) Terms defined in the Code and not otherwise defined in this Deed of Trust
have the same meanings in this Section 1.10D as are set forth in the Code. In
the event that a term is used in Article 9 of the Code and also in another
Article of the Code, the term used in this Section 1.10D is that used in Article
9. The term "control", as used in this Paragraph, has the meaning given in
Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the Code, as applicable.
E. Preservation of Grantor's Existence. Grantor shall do all things necessary to
preserve and keep in full force and effect its existence, franchises, rights and
privileges under the laws of the state of its formation and of the State, and
shall comply with all applicable Legal Requirements.
F. Further Indemnities. In addition to any other indemnities contained in the
Loan Instruments, Grantor hereby agrees to indemnify and hold Beneficiary
harmless from and against all losses, liabilities, suits, obligations, fines,
damages, penalties, claims, costs, charges and expenses, including architects',
engineers' and attorneys' fees and disbursements which may be imposed upon,
incurred or asserted against Beneficiary by reason of: (1) the construction of
the Improvements, (2) any capital improvements, other work or things, done in,
on, under or about the Secured Property or any part thereof, (3) any use,
nonuse, misuse, possession, occupation, alteration, repair, condition,
operation, maintenance or management of the Secured Property or any part thereof
or any street, drive, sidewalk, curb, passageway or space adjacent thereto, (4)
any negligent or willful act or omission on the part of Grantor, any Lessee or
any agent, contractor, servant, employee, licensee or invitee of any Lessee or
of Grantor, (5) any accident, injury (including death) or damage to any person
or property occurring in, on, under or about the Secured Property or any part
thereof or in, on, under or about any street, drive, sidewalk, curb, passageway
or space adjacent thereto, (6) any default under any Loan Instrument or any
Event of Default, (7) any lien or claim arising or alleged to have arisen on or
against the Secured Property or any part thereof under any Legal Requirement or
any liability asserted against Beneficiary with respect thereto, (8) any tax
attributable to the execution, delivery, filing or recording of any Loan
Instrument, (9) any contest permitted pursuant to the provisions of this Deed of
Trust, or (10) the enforcement or attempted enforcement of this indemnity.
G. Absence of Insurance. The obligations of Grantor under this Deed of Trust and
the other Loan Instruments shall not in any way be affected by (1) the absence,
in any case, of adequate insurance, (2) the amount of the insurance or (3) the
failure or refusal of any insurer to perform any obligation required to be
performed by it pursuant to any insurance policy affecting the Secured Property.
If any claim, action or proceeding is made or brought against Beneficiary by
reason of any event as to which Grantor is obligated to indemnify Beneficiary,
then, upon demand by Beneficiary, Grantor, at Grantor's sole cost and expense,
shall resist or defend such claim, action or proceeding in Beneficiary's name,
if necessary, by such attorneys as Beneficiary shall approve. Notwithstanding
the foregoing, Beneficiary may engage its own attorneys, in its discretion, to
defend it or to assist in its defense, and Grantor shall, within five (5) days
after demand therefor, pay the fees and disbursements of such attorneys. If such
fees and disbursements are so paid by Grantor within such five (5) day period,
until so paid, such amounts shall bear interest at the Increased Rate and shall
be secured by this Deed of Trust.
H. Lost Note. Upon Beneficiary furnishing to Grantor an affidavit stating that
the Note has been mutilated, destroyed, lost or stolen, Grantor shall deliver to
Beneficiary, in substitution therefor, a new note containing the same terms and
conditions as the Note, with a notation thereon of the unpaid principal balance
and accrued and unpaid interest thereon.
1.11 Transfer or Further Encumbrances.
A. Continuing Ownership and Management. Grantor acknowledges that the continuous
ownership of the Secured Property and its continuous management and operational
control by Grantor are material to the making of the Loan.
B. Transfer or Encumbrance of Secured Property. Grantor shall not, without the
prior written consent of Beneficiary, voluntarily or involuntarily, by operation
of law or otherwise, transfer or dispose of, or suffer any third party to
transfer or dispose of, all or any part of the Secured Property, the Rents, or
any interest therein or the management and operation by Grantor of the Secured
Property. Without limiting the generality of the foregoing, for purposes of this
Section 1.11, a transfer or disposition of the Secured Property (or the Rents,
as applicable) or any part thereof or interest therein shall include (1) the
change of Grantor's type of organization, jurisdiction of organization or other
legal structure, (2) the transfer of the Secured Property or any part thereof or
interest therein to a cooperative corporation or association, (3) the conversion
of all or any part of the Secured Property or interest therein to a condominium
form of ownership, (4) the execution of a contract to sell or option to purchase
all or any part of the Secured Property or any interest therein, (5) any lease
for space in any Improvements for purposes other than occupancy by the tenant,
(6) any lease for space in the Improvements containing an option to purchase,
(7) any direct or indirect sale, assignment, conveyance, transfer (including a
transfer as a result of or in lieu of condemnation) or other alienation of all
or any part of the Rents or the Secured Property or any interest therein, (8)
the creation of a lien or other encumbrance on the Secured Property or the Rents
or any part thereof or interest therein, (9) any assignment, pledge,
hypothecation, grant of security interest in, or the execution of a conditional
sale or a title retention agreement with regard to, all or any part of the
Secured Property or the Rents and (10) unless Grantor has provided Beneficiary
with at least thirty (30) days prior written notice thereof, any change of
Grantor's name, place of business or, if Grantor has more than one place of
business, any change of its chief executive office, or any change of Grantor's
mailing address or organizational identification number if it has one. Any such
action described in this Section 1.11B is herein called a "Transfer" and all
Transfers are prohibited without the prior written consent of Beneficiary. A
Transfer shall also include any of the following events, whether made directly
or through an intermediary, and whether made in one transaction or effected in
more than one transaction:
(a) If Grantor or any general partner or member of Grantor is a corporation, a
transfer or disposition of any 50% or more in the aggregate of the outstanding
voting stock of Grantor or such general partner or member of Grantor or of any
other corporation directly or indirectly owning or controlling 50% or more of
the voting stock of Grantor or such general partner or member;
(b) If Grantor or any general partner or member of Grantor is a partnership, a
transfer or disposition of any general partnership interest in Grantor or in
such general partner or member of Grantor;
(c) If Grantor or any general partner or member of Grantor is a limited
liability company, a transfer or disposition of any membership or manager
interest in Grantor or in such general partner or member of Grantor; or
(d) If Grantor or any general partner or member of Grantor is a trust or other
entity, a transfer or disposition of any 50% or more in the aggregate of the
beneficial interests in Grantor or such general partner or member of Grantor.
For purposes of the preceding sentence a Transfer shall include any direct or
indirect sale, any execution of a contract or other agreement to sell or option
to purchase such stock or such partnership, membership or other beneficial
interests, or any assignment or pledge of such stock or such partnership,
membership or other beneficial interests, including any assignment or pledge for
security purposes. Notwithstanding the foregoing, regardless of whether or not
any transfer of (i) any interest in Grantor or in any of its constituent
entities or (ii) any voting stock in any corporation directly or indirectly
owning 50% or more of the voting stock of Grantor or of any of its constituent
entities (the "Related Corporation"), is prohibited or not by this Section 1.11,
no shareholder, partner, member or other beneficial owner of Grantor or of any
of its constituent entities and no shareholder of any Related Corporation may
pledge or assign for security purposes any of their respective interest(s) in
Grantor or its constituent entities or in any Related Corporation, as
applicable. Any pledge or assignment prohibited by the previous sentence shall
be included in the term Transfer.
C. Acceleration of Obligations. In the event of a Transfer without the prior
written consent of Beneficiary, Beneficiary may, without limiting any other
right or remedy available to Beneficiary at law, in equity or by agreement with
Grantor, and in Beneficiary's discretion, and without regard to the adequacy of
its security, accelerate the maturity of the Note and require the payment of all
then existing Obligations, including the Make-Whole Amount provided in Section
4.06. The giving of consent by Beneficiary to a Transfer in any one or more
instances shall not limit or waive the need for such consent in any other or
subsequent instances.
1.12 Expenses. Promptly after Beneficiary's demand therefor, Grantor shall pay
Beneficiary for all costs and expenses, including attorneys' fees and expenses
and costs of obtaining evidence of title, incurred by Beneficiary in connection
with any action, suit, legal proceeding, claim or dispute (a) arising under or
in connection with the performance of any rights or obligations under any Loan
Instrument or affecting the Obligations or the Secured Property, (b) involving
any insurance proceeds or condemnation awards with respect to the Secured
Property, (c) to protect the security hereof, (d) as to any concern of
Beneficiary with the condition of the Secured Property, or (e) of any other kind
or nature in which Beneficiary is made a party relating to the Secured Property
or the Loan, or appears as a party, including those related to the estate of an
insolvent or decedent or any bankruptcy, receivership, or other insolvency under
any chapter of the Bankruptcy Code (Title 11 of the United States Code), as
amended, or any other insolvency proceeding or any exercise of the power of sale
or judicial foreclosure as set forth in this Deed of Trust. If the Obligations
are referred to attorneys for collection, foreclosure or any cause set forth in
Article III, Grantor shall, within five (5) days after request therefor, pay all
costs and expenses incurred by Beneficiary, including attorneys' fees and
expenses, all costs of collection, litigation costs and costs (which may be
estimated as to items to be expended after completion of any foreclosure or
other action) of procuring title insurance policies, whether or not obtained,
Torrens certificates and similar assurances with respect to title and value as
Beneficiary may deem necessary together with all statutory costs, with or
without the institution of an action or proceeding. All costs and expenses
described in this Section 1.12, with interest thereon at the Increased Rate from
the date paid by Beneficiary to the date paid by Grantor (if not so paid within
such five (5) day period), shall be paid by Grantor on demand, and shall be
secured by this Deed of Trust.
1.13 Single Asset Covenants. For so long as the Loan is outstanding,
Grantor hereby covenants and agrees that:
A. Grantor's business and purpose shall consist solely of the ownership of the
Property and such activities as are necessary, incidental or appropriate in
connection therewith;
B. All property owned by Grantor shall be owned solely by Grantor and no
individual or other entity shall have any ownership interest in any property
owned by Grantor in such individual or other entity's name;
C. Grantor shall not own any asset or property other than incidental personal
property necessary for the ownership or operation of the Property;
D. Grantor shall not engage in any business other than the ownership, management
and operation of the Property, and conduct and operate its business as presently
conducted and operated;
E. Grantor shall not incur any indebtedness, secured or unsecured, direct or
indirect, absolute or contingent (including guaranteeing any obligation), other
than trade and operational debt incurred in the ordinary course of business with
trade creditors and in amounts as are normal and reasonable under the
circumstances and/or as permitted under the terms and conditions of the Loan
Instruments;
F. Grantor shall not commingle its funds or other assets with those of any
affiliated entity or any Guarantor of or key principal, guarantor, or indemnitor
pursuant to the Loan Instruments, or any other person; and
G. Grantor shall not guaranty, become obligated for, or hold itself out to be
responsible for the debts or obligations of any other person or entity, or the
decisions or actions respecting the daily business or affairs of any other
person or entity, or pledge its assets for the benefit of any other person or
entity.
1.14 Intentionally Omitted.
1.15 Additional Guarantor; Replacement Guarantees. If, at any time, AIMCO
Properties, L.P. does not own, directly or indirectly, at least 51% of the
ownership interests in Grantor, Grantor shall, if required by Beneficiary,
promptly deliver to Beneficiary (a) replacements of the Guaranty and the
Environmental Indemnity Agreement (collectively, the "Replacement Guarantees")
(in the same forms as the Guaranty and Environmental Indemnity Agreement
delivered as of the date hereof) executed by AIMCO Properties, L.P., Grantor (in
the case of the Environmental Indemnity Agreement only) and another creditworthy
guarantor/indemnitor acceptable to Beneficiary in its sole and absolute
discretion that owns, directly or indirectly, an ownership interest in Grantor
(an "Additional Guarantor"), and (b) an opinion with respect to due execution by
and authority of the Additional Guarantor and the enforceability of the
Replacement Guarantees against such Additional Guarantor and such other matters
as Beneficiary may require in form, scope and substance reasonably satisfactory
to Beneficiary.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Grantor represents and warrants:
2.01 Warranty of Title. Grantor (a) lawfully owns and holds title to the Secured
Property (other than the Personal Property), in fee simple, subject to no deed
of trust, mortgage, lien, charge or other encumbrance, except as specifically
set forth in the title insurance policy issued to Beneficiary upon recordation
of this Deed of Trust, (b) has full power and lawful authority to grant,
bargain, sell, convey, assign, release, pledge, set over, transfer and mortgage
the Secured Property as set forth herein,(c) lawfully owns and holds title to
the Personal Property subject to no deed of trust, mortgage, lien, charge or
other encumbrance, and (d) does warrant and will defend the title to the Secured
Property against all claims and demands whatsoever.
2.02 Ownership of Additional or Replacement Improvements and Personal Property.
All Improvements and Personal Property hereafter affixed, placed or used by
Grantor on the Secured Property shall be owned by Grantor free from all deeds of
trust, mortgages, liens, charges or other encumbrances.
2.03 No Pending Material Litigation or Proceeding; No Hazardous Materials.
A. Proceedings Affecting Grantor. There are no actions, suits, investigations or
proceedings of any kind pending, or, to the best knowledge and belief of
Grantor, threatened, against or affecting Grantor, or any Guarantor, or against
any shareholder, general partner or member of Grantor or any Guarantor, or the
business, operations, properties or assets of Grantor or any shareholder,
general partner or member of Grantor or any Guarantor, or before or by any
Governmental Agency, which may result in any material adverse change in the
business, operations, properties or assets or in the condition, financial or
otherwise, of Grantor or any Guarantor or any general partner or member of
Grantor or any Guarantor, or in the ability of Grantor to pay or otherwise
perform the Obligations. To the best knowledge and belief of Grantor, no default
exists with respect to any judgment, order, writ, injunction, decree, demand,
rule or regulation of any Governmental Agency, which might materially and
adversely affect the business, operations, properties or assets or the
condition, financial or otherwise, of Grantor or any Guarantor or any general
partner or member of Grantor or the ability of Grantor to pay or otherwise
perform the Obligations.
B. Proceedings Affecting Secured Property. There are no actions, suits,
investigations or proceedings of any kind pending, or, to the best knowledge and
belief of Grantor, threatened, against or affecting the Secured Property
(including any attempt or threat by any Governmental Agency to condemn or rezone
all or any portion of the Secured Property), or involving the validity,
enforceability or priority of the Loan Instruments or enjoining or preventing or
threatening to enjoin or prevent the use and occupancy of the Secured Property
or the performance by Beneficiary of the Obligations, and there are no rent
controls, governmental moratoria or environmental controls (other than those
generally imposed by federal or state law) presently in existence or, to the
best knowledge and belief of Grantor, threatened, affecting the Secured
Property.
C. No Hazardous Material. Neither Grantor nor, to the best knowledge and belief
of Grantor, any other Person has ever:
(1) caused or knowingly permitted any Hazardous Material to be placed, held,
located or disposed of, in, on, under or about the Secured Property or any part
thereof, except for the use and storage (in accordance with all applicable Legal
Requirements) of nominal amounts of janitorial and cleaning supplies and other
Hazardous Materials typically used in the ordinary course of operating and
maintaining a first class apartment project, or caused or knowingly permitted,
in violation of any Legal Requirement, any Hazardous Material to be placed,
held, located or disposed of, in, on, under or about any other real property
legally or beneficially owned (or any interest or estate which is so owned) by
Grantor in any jurisdiction now or hereafter having in effect a so-called
"superlien" law or ordinance (the effect of which superlien law or ordinance
would be to permit the creation of a lien on the Secured Property to secure any
obligation), and neither the Secured Property, nor any part thereof, nor any
other real property legally or beneficially owned (or any interest or estate
therein which is so owned) by Grantor in any jurisdiction now or hereafter
having in effect a so-called "superlien" law or ordinance or any part thereof,
has ever been used (whether by Grantor or, to the best knowledge or belief of
Grantor, by any other Person) as a dump site, storage (whether permanent or
temporary) site or transfer site for any Hazardous Material; or
(2) caused or knowingly permitted any asbestos or underground fuel storage
facility to be located in, on, under or about the Secured Property; or
(3) discovered any occurrence or condition on any real property adjoining or in
the vicinity of the Secured Property that could cause the Secured Property or
any part thereof to be subject to any remediation requirements or any
restrictions on the ownership, occupancy, transferability or use of the Secured
Property under any Environmental Requirement.
D. No Litigation Regarding Hazardous Material. No Person has brought, settled
or, to the best knowledge and belief of Grantor, threatened any litigation or
administrative action or proceeding alleging the presence, Release or threatened
Release of any Hazardous Material in, on, under or about the Secured Property.
2.04 Valid Organization, Good Standing and Qualification of Grantor; Other
Organizational Information. Grantor is a duly and validly organized and existing
limited liability company, in good standing under the laws of the jurisdiction
of its organization, and is duly licensed or qualified and in good standing in
all other jurisdictions where its ownership or leasing of property or the nature
of the business transacted by it makes such qualification necessary, and is
entitled to own its properties and assets and to carry on its business, all as,
and in the places where, such properties and assets are now owned or operated or
such business is now conducted. Grantor has paid all franchise and similar taxes
in the jurisdiction in which the Secured Property is located and in all of the
jurisdictions in which it is so qualified, insofar as such taxes are due and
payable at the date of this Deed of Trust, except for any such taxes the
validity of which are being contested in good faith and for which proper
reserves have been set aside on the books of Grantor. Grantor's exact legal name
is that indicated on the signature page hereof. Grantor is an organization of
the type, and is organized in the jurisdiction, as set forth in the first
paragraph of this Deed of Trust. Grantor's organizational identification number
is 84-1612278. Section 5.07 accurately sets forth Grantor's place of business
or, if Grantor has more than one place of business, its chief executive office
as well as Grantor's mailing address if different.
2.05 Authorization; No Legal Restrictions on Performance. The execution and
delivery by Grantor of the Loan Instruments and its compliance with the terms
and conditions of the Loan Instruments have been duly and validly authorized by
all necessary corporate, partnership, membership or other applicable action by
Grantor and its constituent entities and the Loan Instruments are valid and
enforceable obligations of Grantor in accordance with the terms thereof. Neither
the execution and delivery by Grantor of the Loan Instruments, nor the
consummation of the transactions contemplated by the Loan Instruments, nor
compliance with the terms and conditions thereof will, to the best knowledge and
belief of Grantor, (A) conflict with or result in a breach of, or constitute a
default under, any of the terms, obligations, covenants or conditions or
provisions of (1) any corporate charter or bylaws, partnership agreement,
limited liability company operating agreement, or other organizational or
qualification document, restriction, indenture, mortgage, deed of trust, pledge,
bank loan or credit agreement, or any other agreement or instrument to which
Grantor is now a party or by which Grantor or its properties may be bound or
affected, or (2) any judgment, order, writ, injunction, decree or demand of any
Governmental Agency, or (B) result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any property or asset of
Grantor pursuant to the terms or provisions of any of the foregoing. Grantor is
not in default in the performance, observance or fulfillment of any of the
terms, obligations, covenants or conditions contained in any indenture or other
agreement creating, evidencing or securing the Obligations or pursuant to which
Grantor is a party or by which the Grantor or its properties may be bound or
affected.
2.06 Compliance With Laws. Grantor has, to the best knowledge and belief of
Grantor, complied with all applicable Legal Requirements with respect to the
conduct of its business and ownership of its properties. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained,
and no registrations or declarations are required to be filed in connection with
the execution, delivery or performance by Grantor of its obligations under the
Loan Instruments.
2.07 Tax Status. Grantor has filed all United States income tax returns and all
state and municipal tax returns which are required to be filed, and has paid, or
made provision for the payment of, all taxes which have become due pursuant to
such returns or pursuant to any assessment received by Grantor, if any, as are
being contested in good faith and as to which proper reserves have been set
aside on the books of Beneficiary. The United States income tax liability of
Grantor has been finally determined by the Internal Revenue Service and
satisfied for all taxable years up to and including the taxable year ending
2000.
2.08 Absence of Foreign or Enemy Status; Foreign Corrupt Practices Act. Grantor
represents and warrants that it is in compliance with the requirements of
Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Person Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001) (the "Order") and other similar requirements
contained in the rules and regulations of the Office of Foreign Assets Control,
Department of the Treasury ("OFAC") and in any enabling legislation or other
executive orders or regulations in respect thereof (the Order and such other
rules regulations, legislation or orders are collectively referred to herein as
the "Orders").
Without limiting the generality of the foregoing, Grantor represents,
warrants and covenants that none of Grantor, any constituent or affiliate of
Grantor, or to Grantor's knowledge, any of Grantor's brokers or other agents
acting or benefiting in any capacity in connection with the Loan (A) is listed
on the Specially Designated Nationals and Blocked Persons List maintained by
OFAC pursuant to the Order and/or on any other list of terrorists or terrorist
organizations maintained pursuant to any of the rules and regulations of OFAC or
pursuant to any other applicable Orders, (B) is or will become a "blocked
person" described in Section 1 of the Order or (C) knowingly engages or will
engage in any dealings or transactions, or is or will be otherwise associated,
with any such blocked person.
2.09 Federal Reserve Board Regulations. No part of the proceeds of the Loan will
be used, directly or indirectly, for the purpose of buying or carrying any
margin stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve Grantor in a
violation of Regulation X of said Board (12 CFR 224) or to involve any broker or
dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock
does not constitute more than 25% of the value of the consolidated assets of
Grantor and its subsidiaries, if any, and Grantor does not have any present
intention that margin stock will constitute more than 25% of the value of such
assets. As used in this Section, the terms "margin stock" and "purpose of buying
or carrying" shall have the meanings assigned to them in said Regulation U.
2.10 Investment Company Act and Public Utility Holding Company Act. Neither
Grantor, nor any subsidiary of Grantor, if any, is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act as amended.
2.11 Exempt Status of Transactions Under Securities Act and Representations
Relating Thereto. Neither Grantor, nor anyone acting on its behalf, has (a)
solicited offers to make all or any part of the Loan, from more than 35 Persons
or (b) otherwise approached, negotiated or communicated with more than 35
Persons regarding the making of all or any part of the Loan by such Person(s).
Neither Grantor, nor anyone acting on its behalf has taken, or will take, any
action that would subject the making of the Loan to the registration
requirements of Section 5 of the Securities Act of 1933, as amended.
2.12 ERISA Compliance.
A. Neither Grantor nor any of its Covered Constituent Entities (as hereinafter
defined) is or will be an "employee benefit plan" as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974 ("ERISA") that is subject to
Title I of ERISA or a "plan" as defined in Section 4975(e)(1) of the Internal
Revenue Code of 1986 ("IRC") that is subject to Section 4975 of the IRC, and
neither the assets of Grantor nor the assets of any of its Covered Constituent
Entities are or will constitute "plan assets" of one or more such plans for
purposes of Title I of ERISA or Section 4975 of the IRC. As used in this Deed of
Trust the term "Covered Constituent Entity" shall mean any entity that holds a
direct or indirect interest in Grantor apart from any such entity (1) which is a
publicly offered security within the meaning of 29 CFR ss.2510.3-101(b)(2), (2)
whose interest in Grantor does not constitute part of a significant equity
participation by benefit plan investors within the meaning of 29 CFR
ss.2510.3-101(f), or (3) whose interest in Grantor is an "operating company,"
"venture capital operating company" or "real estate operating company" within
the meaning of 29 CFR ss.2510.3-101(c), (d) or (e), respectively.
B. Grantor is not and will continue not to be a "governmental plan" within the
meaning of Section 3(32) of ERISA and transactions by or with Grantor are not
and will not be subject to any Legal Requirements regulating investments of and
fiduciary obligations with respect to governmental plans.
C. Grantor will not engage in any transaction which would cause any obligation
or any action under the Loan Instruments, including Beneficiary's exercise of
the remedies available to Beneficiary pursuant to the Loan Instruments or at law
or equity, to be a non-exempt prohibited transaction under ERISA.
D. Grantor represents and warrants that any liability that Grantor (or any of
its affiliates) may have in respect of an employee benefit plan as defined in
Section 3(3) of ERISA has been and shall continue to be satisfied in full.
ARTICLE III
DEFAULTS
3.01 Events of Default. The existence of any of the following circumstances
shall be deemed an "Event of Default" pursuant to this Deed of Trust, without
cure or grace period unless expressly otherwise provided herein:
A. if Grantor fails to pay any portion of the Obligations as and when the same
shall become due and payable as provided in the Loan Instruments; or
B. if Grantor fails to perform or observe any other term, provision, covenant or
agreement in the Loan Instruments; or
C. if any representation, warranty, certification, financial statement or other
information made or furnished at any time pursuant to the terms of the Loan
Instruments or otherwise, by or on behalf of Grantor, any Guarantor or any other
Person liable for the Obligations, shall prove to be materially false; or
D. if Grantor shall:
(1) apply for, consent to or acquiesce in the appointment of a receiver, trustee
or liquidator of Grantor or of all or any part of Grantor's assets or the
Secured Property or any interest in any part thereof (the term "acquiesce"
includes the failure to file a petition or motion to vacate or discharge any
order, judgment or decree providing for such appointment within ten (10) days
after the appointment); or
(2) commence a voluntary case or other proceeding in bankruptcy, or admit in
writing its inability to pay its debts as they come due; or
(3) make a general assignment for the benefit of creditors; or
(4) file a petition or an answer seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief for itself
under any present or future bankruptcy code or any other statute or law relating
to bankruptcy, insolvency or other relief for debtors; or
(5) file an answer admitting the material allegations of, or consent to, or
default in answering, a petition filed against it in any bankruptcy,
reorganization or insolvency case or proceeding; or E. if a court of competent
jurisdiction enters an order for relief against Grantor under any present or
future bankruptcy code or any other statute or law relating to bankruptcy,
insolvency or other relief for debtors, which order shall continue unstayed and
in effect for any period of forty-five (45) consecutive days; or
F. if a court of competent jurisdiction enters an order, judgment or decree
adjudicating Grantor insolvent, approving a petition seeking reorganization or
arrangement of Grantor or appointing a receiver, custodian, trustee or
liquidator of Grantor or of all or any part of Grantor's assets or the Secured
Property or any interest in any part thereof, and such order, judgment or decree
shall continue unstayed and in effect for any period of forty-five (45)
consecutive days; or
G. if Grantor assigns or purports to assign the whole or any part of the Rents
arising from the Secured Property or any part thereof without the prior written
consent of Beneficiary; or
H. if a Transfer shall occur without the prior written consent of Beneficiary;
or
I. if Grantor shall be in default beyond any applicable grace period pursuant to
any other deed of trust, mortgage, security instrument or other agreement
affecting Grantor or any substantial part of its assets or all or any part of
the Secured Property; or
J. if any mechanic's, laborer's or materialman's lien, federal tax lien,
broker's lien or other lien not permitted hereunder and affecting the Secured
Property or any part thereof is not discharged, by payment, bonding, order of a
court of competent jurisdiction or otherwise, within twenty (20) days after
Grantor receives notice thereof from the lienor or from Beneficiary; or
K. if any of the events described in Section 3.01(D), Section 3.01(E) and/or
Section 3.01(F) shall occur in respect of any Guarantor; or
L. if a default by any Guarantor or other Person (other than Beneficiary) shall
occur under any guaranty, indemnity agreement, or other instrument which it has
executed in connection with the Loan; or
M. if any Guarantor shall contest, repudiate or purport to revoke any guaranty,
indemnity agreement or other instrument which it has executed in connection with
the Loan for any reason or if any such guaranty, indemnity or other instrument
shall cease to be in full force and effect as to the Guarantor or shall be
judicially declared null and void as to the Guarantor, or if any Guarantor shall
be liquidated, dissolved or wound-up.
ARTICLE IV
REMEDIES
4.01 Acceleration, Foreclosure, etc. Upon the happening of any Event of Default,
Beneficiary may, at its sole option, declare the entire unpaid balance of the
Obligations, including, the Make-Whole Amount and any other prepayment charges,
if any, due pursuant to any Loan Instrument, immediately due and payable without
notice or demand, provided, however, simultaneously with the occurrence of an
Event of Default under Section 3.01D, 3.01E or 3.01F,and without the necessity
of any notice or other action by the Beneficiary, all Obligations shall
automatically become and be due and payable, without notice or demand. In
addition, upon the happening of any Event of Default, Beneficiary may, at its
sole option, without further delay, undertake any one or more of the following
or exercise any other remedies available to it under applicable law or equity:
A. Foreclosure. Institute an action, judicial or otherwise, to foreclose this
Deed of Trust, or take such other action as may be allowed at law or in equity,
for the enforcement hereof and realization on the Secured Property or any other
security which is herein or elsewhere provided for, or proceed thereon through
power of sale or to final judgment and execution thereon for the entire unpaid
balance of the Obligations, including interest at the rate specified in the Loan
Instruments to the date of the Event of Default and thereafter at the Increased
Rate, and all other sums secured by this Deed of Trust, including all attorneys'
fees and expenses, costs of suit and other collection costs, interest at the
Increased Rate on any judgment obtained by Beneficiary from and after the date
of any sale of the Secured Property (which may be sold in one parcel or in such
parcels, manner or order as Beneficiary shall elect) until actual payment is
made of the full amount due Beneficiary pursuant to the Loan Instruments, any
law, usage or custom to the contrary notwithstanding.
B. Partial Foreclosure. Beneficiary shall have the right to foreclose the lien
hereof to satisfy payment and performance of any part of the Obligations from
time to time. If an Event of Default exists as to the payment of any part of the
Obligations, as an alternative to the right of foreclosure to satisfy payment of
the Obligations after acceleration thereof, to the extent permitted by
applicable law, Beneficiary may institute partial foreclosure proceedings
("Partial Foreclosure") with respect to the portion of the Obligations as to
which the Event of Default exists, as if under a full foreclosure, and without
declaring the entire unpaid balance of the Obligations due. If Beneficiary
institutes a Partial Foreclosure, Beneficiary may instruct the Trustee to sell,
from time to time, such part or parts of the Secured Property as Beneficiary, in
its discretion, deems appropriate, and may make each such sale subject to the
continuing lien of this Deed of Trust for the remainder, from time to time, of
the Obligations. No Partial Foreclosure, if so made, shall in any manner affect
the remainder, from time to time, of the Obligations or the priority of this
Deed of Trust. As to such remainder, this Deed of Trust and the lien hereof
shall remain in full force and effect as though no foreclosure sale had been
made pursuant to the provisions of this Section 4.01B. Notwithstanding the
filing of any Partial Foreclosure or the entry of a decree of sale therein,
Beneficiary may elect, at any time prior to any Partial Foreclosure, to
discontinue such Partial Foreclosure and the acceleration of the Obligations by
reason of any Event of Default upon which such Partial Foreclosure was
predicated, and to proceed with full foreclosure proceedings. Beneficiary may
instruct the Trustee to commence a Partial Foreclosure, from time to time, as to
any part of the Obligations without exhausting the right of full foreclosure or
Partial Foreclosure for any other part of the Obligations as to which such
Partial Foreclosure shall not have occurred.
C. Entry. Beneficiary personally, or by its agents or attorneys, may enter all
or any part of the Secured Property, and may exclude Grantor, its agents and
servants wholly therefrom without liability for trespass, damages or otherwise.
Grantor shall surrender possession of the Secured Property to Beneficiary on
demand after the happening of any Event of Default. Thereafter, Beneficiary may
use, operate, manage and control the Secured Property and conduct the business
thereof, either personally or by its superintendents, managers, agents,
servants, attorneys or receivers. Upon each such entry, Beneficiary, at the
expense of Grantor from time to time, either by purchase, repairs or
construction, may maintain and restore the Secured Property, may complete the
construction of the Improvements and in the course of such completion may make
such changes in the contemplated or completed Improvements as Beneficiary may
deem desirable and may insure the same. At the expense of Grantor, Beneficiary
may make, from time to time, all necessary or desirable repairs, renewals and
replacements and such alterations, additions, betterments and improvements
thereto and thereon as Beneficiary may deem advisable. In each of the
circumstances described in this Section 4.01C, Beneficiary shall have the right
to manage and operate the Secured Property and to carry on the business thereof
and exercise all rights and powers of Grantor with respect thereto, either in
the name of Grantor or otherwise as Beneficiary shall deem best.
D. Collection of Rents, etc. Beneficiary may collect and receive all Rents.
Beneficiary may deduct, from the monies so collected and received, all expenses
of conducting the business of the Secured Property and of all maintenance,
repairs, renewals, replacements, alterations, additions, betterments and
improvements and amounts necessary to pay for Impositions, insurance, taxes and
assessments, liens or other charges upon the Secured Property or any part
thereof, as well as reasonable compensation for the services of Beneficiary and
for all attorneys, agents, clerks, servants, and other employees engaged and
employed by Beneficiary. After such deductions and the establishment of all
reasonable reserves, Beneficiary shall apply all such monies to the payment of
the unpaid Obligations. Beneficiary shall account only for Rents actually
received by Beneficiary.
E. Receivership. Beneficiary may have a receiver appointed to enter into
possession of the Secured Property, collect the Rents therefrom and apply the
same as the court may approve. Beneficiary may have a receiver appointed, as a
matter of right without notice and without the necessity of proving either the
inadequacy of the security provided by this Deed of Trust or the insolvency of
Grantor or any other Person who may be legally or equitably liable to pay the
Obligations. Grantor and each such Person, presently and prospectively, waive
such proof and consent to the appointment of such receiver. If Beneficiary or
any receiver collects the Rents, the monies so collected shall not be
substituted for payment of the Obligations, nor can they be used to cure an
Event of Default, without the prior written consent of Beneficiary. Beneficiary
shall not be liable to account for Rents not actually received by Beneficiary.
F. Specific Performance. Beneficiary may institute an action for specific
performance of any covenant contained herein or in aid of the execution of any
power herein granted.
G. Recovery of Sums Required to be Paid. Beneficiary may, from time to time,
take action to recover any sum or sums which constitute a part of the
Obligations as such sums shall become due, without regard to whether or not the
remainder of the Obligations shall be due, and without prejudice to the right of
Beneficiary thereafter to bring an action of foreclosure or any other action for
each Event of Default existing from time to time.
H. Other Remedies. Beneficiary may take all actions permitted under the Uniform
Commercial Code of the State and may take any other action, or pursue any other
right or remedy, as Beneficiary may have under applicable law, and Grantor does
hereby grant such rights to Beneficiary.
I. Proceeds of Sale. The proceeds from any such sale shall be applied by the
Trustee FIRST: To the payment of all expenses of advertising, selling and
conveying the Secured Property, including a reasonable commission to the
Trustee; SECOND: To the payment of all unpaid Obligations and accrued interest
to the date of sale, the order and application of which shall be in
Beneficiary's sole discretion; THIRD: The balance, if any, shall be paid to
Grantor or such other persons (including the holder or beneficiary of any
inferior lien) as may be entitled thereto by law; provided, however, that if
Trustee is uncertain which person or persons are so entitled, Trustee may
interplead such remainder in any court of competent jurisdiction, and the amount
of any attorneys' fees, court costs and expenses incurred in such action shall
be a part of the Obligations and shall be reimbursable (without limitation) from
such remainder.
J. Tenancy at Will. In the event of a trustee's or other foreclosure sale
hereunder, and if at the time of such sale Grantor or any other party (other
than a tenant under a Lease as to which the Beneficiary shall have expressly
subordinated the lien of this Deed of Trust) occupies the Secured Property so
sold or any part thereof, such occupant shall immediately become the tenant of
the purchaser at such sale, which tenancy shall be a tenancy from day-to-day,
terminable at the will of such purchaser, at a reasonable rental per day based
upon the value of the portion of the Secured Property so occupied (but not less
than any rental theretofore paid by such tenant, computed on a daily basis). An
action of forcible detainer shall lie if any such tenant holds over after a
demand in writing for possession of such portion of the Secured Property, and
all damages sustained by reason thereof are hereby expressly waived by Grantor.
K. Sale of Personal Property. At the request of the Beneficiary, the Trustee
shall sell the Personal property concurrently with and in conjunction with a
sale of the Secured Property, in which case the provisions of Sections 4.01A and
B shall apply to the Personal Property as well as the Secured Property. Grantor
stipulates and agrees that a sale of the Personal Property in conjunction with
the Secured Property is a commercially reasonable manner of disposing of the
Personal Property. Alternatively, Beneficiary may sell or otherwise dispose of
the Personal Property separately and apart from the Secured Property in the time
and manner provided by the Code. To the extent that the Code shall require prior
notice of sale or other disposition of the Personal Property, five (5) days
written notice shall be deemed to be reasonable notice. Beneficiary also may (i)
require the Grantor to, and the Grantor hereby agrees that Grantor will at
Grantor's expense and upon request of Beneficiary forthwith, assemble all or
part of the Personal Property as directed by the Beneficiary and make it
available to Beneficiary at a place to be designated by Beneficiary which is
reasonably convenient to the parties; and (ii) sell the Personal Property or any
part thereof in one or more parcels at public or private sale for cash or credit
or for future delivery, and at such price or prices and upon such other terms as
Beneficiary may deem commercially reasonable. Beneficiary shall not be obligated
to make any sale of the Personal Property regardless of notice of sale having
been given. Beneficiary may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
4.02 No Election of Remedies. Beneficiary may, in its discretion, exercise all
or any of the rights and remedies provided herein or in the other Loan
Instruments, or which may be provided by statute, law, equity or otherwise, in
such order and manner and from time to time, as Beneficiary shall elect without
impairing Beneficiary's lien, or rights pursuant to any of the Loan Instruments
and without affecting the liability of any Person for the Obligations.
4.03 Beneficiary's Right to Release, etc. Beneficiary may, in its discretion,
from time to time, release (for such consideration as Beneficiary may require)
any part of the Secured Property (A) without notice to, or the consent, approval
or agreement of any other party in interest, (B) without, as to the remainder of
the Secured Property, in any way impairing or affecting the validity or the lien
of this Deed of Trust or any of the other Loan Instruments, or the priority
thereof and (C) without releasing Grantor from any liability for any of the
Obligations. Beneficiary may accept, by assignment, pledge or otherwise, any
other property in place of any part of the Secured Property as Beneficiary may
require without being accountable for so doing to any other lienor or other
Person. To the extent permitted by law, neither Grantor, nor the holder of any
lien or encumbrance affecting the Secured Property or any part thereof shall
have the right to require Beneficiary to marshal assets.
4.04 Beneficiary's Right to Remedy Defaults, etc. If Grantor defaults in the
performance of any of the covenants or agreements contained in this Deed of
Trust or any of its other obligations under the other Loan Instruments, or if
any action or proceeding is commenced which affects Beneficiary's interest in
the Secured Property or any part thereof, including, but not limited to, eminent
domain, code enforcement, or proceedings of any nature whatsoever under any
federal or state law, whether now existing or hereafter enacted or amended,
relating to bankruptcy, insolvency, arrangement, reorganization or other form of
debtor relief, then Beneficiary may, but without obligation to do so and without
releasing Grantor from any obligation hereunder, cure such defaults, make such
appearances, disburse such sums and/or take such other action as Beneficiary
deems necessary or appropriate to protect Beneficiary's interest, including
disbursement of attorneys' fees, entry upon the Secured Property to make
repairs, payment of Impositions or insurance premiums or otherwise cure the
default in question or protect the security of the Secured Property, and
payment, purchase, contest or compromise of any encumbrance, charge or lien
encumbering the Secured Property. Grantor further agrees to pay all expenses
incurred by Beneficiary (including fees and disbursements of counsel) pursuant
to this Section 4.04, including those incident to the curing of any default
and/or the protection of the rights of Beneficiary hereunder, and enforcement or
collection of payment of the Note or any future advances whether by judicial or
nonjudicial proceedings, or in connection with any bankruptcy, insolvency,
arrangement, reorganization or other debtor relief proceeding of Grantor, or
otherwise. Any amounts disbursed by Beneficiary pursuant to this Section 4.04
shall be additional indebtedness of Grantor secured by this Deed of Trust as of
the date of disbursement and shall bear interest at the Increased Rate from such
date until paid by Grantor in full. All such amounts shall be payable by Grantor
immediately without demand. Nothing contained in this Section 4.04 shall be
construed to require Beneficiary to incur any expense, make any appearance, or
take any other action and any action taken by Beneficiary pursuant to this
Section 4.04 shall be without prejudice to any other rights or remedies
available to Beneficiary pursuant to any Loan Instrument or at law or in equity.
4.05 Waivers. Grantor waives and releases (A) all benefits that might accrue to
Grantor by virtue of any present or future laws exempting the Secured Property,
or any part of the proceeds arising from any sale of the Secured Property, from
attachment, levy or sale under execution, or providing for any stay of
execution, exemption from civil process or extension of time; (B) all benefits
that might accrue to Grantor from requiring valuation or appraisal of any part
of the Secured Property levied or sold on execution of any judgment recovered
for the Obligations; (C) all notices not herein or in any other Loan Instrument
specifically required as a result of Grantor's default or of Beneficiary's
exercise, or election to exercise, any option pursuant to any of the Loan
Instruments; and (D) all rights of redemption to the extent that Grantor may
lawfully waive same. At no time will Grantor insist upon, plead or in any manner
whatsoever claim or take any benefit or advantage of any stay or extension or
moratorium law or any exemption from execution or sale of the Secured Property
or any part thereof, whenever enacted, now or at any time hereafter in force,
which may affect the covenants or terms of performance of the Loan Instruments.
Similarly, Grantor will not claim, take or insist upon any benefit or advantage
of any law now or hereafter in force providing for the valuation or appraisal of
the Secured Property or any part thereof, prior to any sale or sales thereof
which may be made pursuant to any provision hereof, or pursuant to the decree,
judgment or order of any court of competent jurisdiction. After any such sale or
sales, to the extent permitted by law, Grantor shall not claim or exercise any
right under any law or laws heretofore or hereafter enacted to redeem the
property so sold or any part thereof. Grantor waives all benefits or advantages
of any such law or laws, and covenants not to hinder, delay or impede the
execution of any power herein granted or delegated to Beneficiary. Grantor shall
suffer and permit the execution of every such power as though no such law or
laws had been made or enacted. To the extent permitted by law, the Secured
Property may be sold in one parcel, as an entirety, or in such parcels, manner
or order as Beneficiary in its discretion may decide. To the extent permitted by
law, neither Grantor nor the holder of any lien or encumbrance affecting the
Secured Property or any part thereof may require Beneficiary to marshal assets.
4.06 Prepayment. Grantor shall pay the charge provided in the Note for
prepayment of the Obligations if for any reason (including the acceleration of
the due date of the Obligations by Beneficiary following the occurrence of an
Event of Default) any of such Obligations shall be due and payable or paid prior
to the stated maturity date thereof, whether or not such payment is made prior
to or at any sale held pursuant to or by virtue of this Article IV. Beneficiary
has relied on Grantor's creditworthiness and its agreement to repay the
Obligations in strict accordance with the terms set forth in the Loan
Instruments, and would not make the Loan without the promises by Grantor to make
all payments due pursuant to the Loan Instruments and not to prepay all or any
part of the principal balance of the Note prior to the final maturity date
thereof, except on the terms expressly set forth herein and in the Note.
Therefore, any prepayment of the Note, whether occurring as a voluntary
prepayment by Grantor or occurring upon an acceleration of the Note by
Beneficiary or otherwise, will prejudice Beneficiary's ability to meet its
obligations and to earn the return on the funds advanced to Grantor, which
Beneficiary intended and expected to earn when it made the Loan, and will also
result in other losses and additional expenses to Beneficiary. In consideration
of Beneficiary making the Loan at the interest rate and for the term set forth
in the Note, Grantor expressly waives all rights it may have under applicable
law to prepay, without charge or premium, all or any part of the Note, either
voluntarily or upon an acceleration of the Note by Beneficiary, including an
acceleration upon the making or suffering by Grantor of any transfer or
disposition prohibited by Section 1.11. If a prepayment of all or any part of
the principal balance of the Note is made by or on behalf of Grantor, for any
reason, whether due to the voluntary acceptance by Beneficiary of a prepayment
tendered by Grantor, or the acceleration of the Note by Beneficiary, or in
connection with any reinstatement of the Loan Instruments pursuant to any
foreclosure proceedings, or any right of redemption exercised by Grantor or any
other party having the right to redeem or to prevent any foreclosure of this
Deed of Trust, or upon the consummation of any foreclosure sale, or under any
other circumstances, Grantor or any other Person making any such prepayment
shall be obligated to pay, concurrently therewith, the Make-Whole Amount, as
defined and as set forth in the Note, and the payment of the Make-Whole Amount
shall be a condition to the making of such prepayment, and the payment of the
Make-Whole Amount shall be secured by this Deed of Trust and the other Loan
Instruments. Grantor shall pay the Make-Whole Amount without prejudice to the
right of Beneficiary to collect any other amounts due pursuant hereto or to
declare a default hereunder. Nothing herein shall be construed as permitting any
partial prepayment of the Obligations, except with Beneficiary's prior written
consent thereto obtained in each instance.
ARTICLE V
MISCELLANEOUS
5.01 Non-Waiver. The failure of Beneficiary to insist upon strict performance of
any term of this Deed of Trust or any other Loan Instrument shall not be deemed
to be a waiver of any term of this Deed of Trust or any other Loan Instrument.
Grantor shall not be relieved of its obligation to pay and perform the
Obligations, at the time and in the manner provided in the Loan Instruments, by
reason of (A) a failure by Beneficiary to take any action to foreclose this Deed
of Trust or otherwise enforce any of the provisions of this Deed of Trust or of
any other Loan Instrument (regardless of whether or not Grantor has requested
Beneficiary to do so), (B) the release, regardless of consideration, of the
whole or any part of the Secured Property or any other security for the
Obligations, or (C) any agreement or stipulation between Beneficiary and any
subsequent owner or owners of the Secured Property or any other Person extending
the time of payment or otherwise modifying or supplementing the terms of this
Deed of Trust or any other Loan Instrument, without first having obtained the
consent of Grantor. Grantor shall pay and perform the Obligations at the time
and in the manner provided in this Deed of Trust and the other Loan Instruments
as so extended, modified or supplemented, unless expressly released and
discharged by Beneficiary. Regardless of consideration, and without the
necessity for any notice to or consent by the holder of any subordinate lien,
encumbrance, right, title or interest in or to the Secured Property, Beneficiary
may release any Person at any time liable for the payment or performance of the
Obligations, or any part thereof, or any part of the security held for the
Obligations, and may extend the time of such payment or performance or otherwise
modify the terms of any Loan Instrument, including a modification of the
interest rate payable on the principal balance of the Note, without in any
manner impairing or affecting any of the Loan Instruments or the lien thereof or
the priority of this Deed of Trust, as so extended and modified, as security for
the Obligations over any such subordinate lien, encumbrance, right, title or
interest. Beneficiary may resort for the payment and performance of the
Obligations to any other security held by Beneficiary in such order and manner
as Beneficiary, in its discretion, may elect. Beneficiary may take action to
require payment and performance of the Obligations, or any part thereof, or to
enforce any term of this Deed of Trust, without prejudice to the right of
Beneficiary thereafter to foreclose this Deed of Trust. In addition to the
rights and remedies stated in this Deed of Trust, Beneficiary may exercise every
additional right and remedy now or hereafter afforded by law or in equity. Each
right of Beneficiary pursuant to this Deed of Trust shall be separate, distinct
and cumulative, and no such right shall be given effect to the exclusion of any
other. No act of Beneficiary shall be construed as an election to proceed
pursuant to any one provision of this Deed of Trust to the exclusion of any
other provision.
5.02 Sole Discretion of Beneficiary. Except where Beneficiary has expressly
agreed to act reasonably, whenever pursuant to this Deed of Trust (A)
Beneficiary exercises any right to approve or disapprove or to give or withhold
its consent, (B) any arrangement or term is to be satisfactory to Beneficiary,
or (C) any other decision or determination is to be made by Beneficiary,
Beneficiary may give or withhold such approval or consent, determine whether or
not such arrangement or term is satisfactory, and make all other decisions or
determinations, in Beneficiary's sole and absolute discretion, and Beneficiary's
decision shall be final and conclusive.
5.03 Legal Tender. Grantor shall pay all payments of principal, interest or
other amounts required or provided for herein in lawful money of the United
States of America at the time of payment, at the above described office of
Beneficiary or at such other place as Beneficiary may from time to time
designate.
5.04 No Merger or Termination. If both the lessor's and Lessee's estates under
any Lease or any portion thereof which constitutes a part of the Secured
Property shall at any time become vested in one owner, this Deed of Trust and
the lien created hereby shall not be destroyed or terminated by the application
of the doctrine of merger and in such event, Beneficiary shall continue to have
and enjoy all of its rights and privileges as to the separate estates. In
addition, the foreclosure of this Deed of Trust shall not destroy or terminate
any Lease or sublease then existing and created by Grantor, whether by
application of the law of merger or as a matter of law or otherwise, unless
Beneficiary or any purchaser at any sale related to such foreclosure shall so
elect. No act by or on behalf of Beneficiary or any such purchaser shall
constitute a termination of any Lease or sublease, unless Beneficiary or such
purchaser shall give written notice thereof to the related Lessee or sublessee.
5.05 Discontinuance of Actions. If Beneficiary shall enforce any right pursuant
to this Deed of Trust by foreclosure, sale, entry or otherwise and discontinue
or abandon such enforcement for any reason or any such proceedings shall have
been determined adversely, then, in each such case, Grantor and Beneficiary
shall be restored to their former positions and rights hereunder, and the
Secured Property shall remain subject to the lien of this Deed of Trust.
5.06 Headings. The headings of the Sections and other subdivisions of this Deed
of Trust are for the convenience of reference only, are not to be considered a
part hereof, and shall not limit or otherwise affect any of the terms hereof.
5.07 Notice to Parties. All notices and demands or other communications
hereunder shall be in writing, and shall be deemed to have been sufficiently
given or served for all purposes when presented personally or sent by generally
recognized overnight delivery service, with postage prepaid, addressed to
Grantor or Beneficiary, as applicable, at the addresses stated below, or at such
other address of which either Grantor or Beneficiary may hereafter notify the
other in writing:
if to Grantor: CCIP Loft, L.L.C.
c/o AIMCO
4582 South Ulster Parkway
Suite 1100
Denver, Colorado 80237
Attn: Dodge McCord
with a copy to: Ballard Spahr Andrews & Ingersoll, LLP
1225 17th Street, Suite 2300
Denver, Colorado 80202
Attn: Beverly J. Quail, Esq.
if to Beneficiary: NEW YORK LIFE INSURANCE COMPANY
c/o New York Life Investment Management LLC
51 Madison Avenue
New York, New York 10010-1603
Loan No.: 373-0027
Attn: Real Estate Group
Director - Loan Administration
with a copy to: NEW YORK LIFE INSURANCE COMPANY
c/o New York Life Investment Management LLC
51 Madison Avenue
New York, New York 10010-1603
Loan No.: 373-0027
Attn: Office of the General Counsel
Managing Director - Real Estate Section
Each notice or demand so given or served shall be deemed given and effective,
(A) if personally delivered, on the day of actual delivery or refusal and (B) if
sent by generally recognized overnight delivery service, on the next business
day. Notwithstanding the foregoing, service of any notice of default or notice
of sale provided or required by law shall, if mailed as required by law, be
deemed given and effective on the date of mailing.
5.08 Successors and Assigns Included In Parties. Subject to the provisions of
Section 1.11, each reference herein to Grantor or Beneficiary shall mean and
include, the heirs, legal representatives, successors and assigns of such
Person. All covenants and agreements contained in this Deed of Trust by or on
behalf of Grantor shall bind and inure to the benefit of Grantor's heirs, legal
representatives, successors and assigns, and all covenants and agreements by or
on behalf of Beneficiary shall bind and inure to the benefit of Beneficiary's
successors and assigns.
5.09 Changes and Modifications. This Deed of Trust may only be changed or
modified by an agreement in writing, signed by both Grantor and Beneficiary.
Execution by the Trustee of such change or modification shall not be required.
5.10 Applicable Law. This Deed of Trust shall be construed and enforced
according to the law of the State, other than such law with respect to conflicts
of laws.
5.11 Invalid Provisions to Affect No Others. The unenforceability or invalidity
of any provision or provisions of this Deed of Trust as to any Persons or
circumstances shall not render that provision or those provisions unenforceable
or invalid as to any other Persons or circumstances, and all provisions hereof,
in all other respects, shall remain valid and enforceable.
5.12 Usury Savings Clause. Grantor and Beneficiary intend to conform strictly to
the usury laws now or hereafter in force in the State and all interest payable
pursuant to the Note, this Deed of Trust or any other Loan Instrument, unless
exempt from such laws, shall be subject to reduction to the amount equal to the
maximum non-usurious amount allowed pursuant to such usury laws as now or
hereafter construed by the courts having jurisdiction over such matters. The
aggregate of all interest (whether designated as interest, service charges,
points or otherwise) contracted for, chargeable or receivable pursuant to the
Note, this Deed of Trust or any other Loan Instrument shall under no
circumstances exceed the maximum legal interest rate which Beneficiary may
charge under applicable law from time to time. Any interest in excess of the
maximum amount permitted by law shall be deemed a mistake and shall be canceled
automatically and, if theretofore paid, Beneficiary shall, at its option, either
rebate such interest to Grantor or credit such interest to the principal amount
of the Obligations, or if all such principal has been repaid, Beneficiary shall
rebate such excess to Grantor.
5.13 No Statute of Limitations. To the full extent permitted by law, Grantor
hereby waives the pleading of any statute of limitations as a defense to any or
all of the Obligations.
5.14 Late Charges. If Grantor fails to pay, when due, without regard to any
grace period, any installment of interest or principal, any payment due pursuant
to Section 1.04 or any deposit or reserve due pursuant to this Deed of Trust or
any other Loan Instrument, Grantor shall pay to Beneficiary (unless waived by
Beneficiary) the Late Charge as defined and described in the Note. Each such
Late Charge, if not previously paid, shall, at the option of Beneficiary, be
added to and become part of the succeeding monthly payment to be made pursuant
to the Note, and shall be secured by this Deed of Trust.
5.15 Waiver of Jury Trial. Grantor waives any right to trial by jury with
respect to any action or proceeding (a) brought by Grantor, Beneficiary or any
other Person relating to (i) the Obligations or any understandings or prior
dealings between Grantor and Beneficiary or (ii) the Loan Instruments, or (b) to
which Beneficiary is a party.
5.16 Continuing Effectiveness. This Deed of Trust shall secure all advances made
pursuant to the Loan Instruments, all rearrangements, modifications,
replacements and renewals of the Obligations and all extensions as to the time
of payment thereof, whether or not such advances, rearrangements, modifications,
replacements, renewals or extensions are evidenced by new promissory notes or
other instruments hereafter executed and irrespective of whether filed or
recorded. The execution of this Deed of Trust shall not impair or affect any
other security which may be given to secure the payment of the Obligations, and
all such additional security shall be considered as cumulative. The taking of
additional security, execution from time to time of partial releases as to the
Secured Property or any extension of time of payment of the Obligations shall
not diminish the force, effect or lien of this Deed of Trust, and shall not
affect or impair the liability of any maker, surety or endorser for the payment
of the Obligations.
5.17 Time of Essence. Time is of the essence as to Grantor's performance of each
provision of this Deed of Trust, the Note and the other Loan Instruments.
Grantor agrees that where, by the terms of this Deed of Trust, the Note or any
other Loan Instrument, a day is named or a time is fixed for the payment of any
sum of money or the performance of any obligation by Grantor, the day and/or
time stated enters into the consideration and is of the essence of the whole
contract.
5.18 Non-Recourse. If an Event of Default has occurred (and regardless of
whether or not it has been cured), Beneficiary shall have all rights provided in
the Note, this Deed of Trust or any other Loan Instrument or at law or in
equity, and shall have full recourse to the Secured Property and to any other
collateral given by Grantor to secure any or all of the Obligations, provided
that any judgment obtained by Beneficiary in any proceeding to enforce such
rights shall be enforced only against the Secured Property and such other
collateral. Notwithstanding the foregoing, Beneficiary shall not in any way be
prohibited from naming Grantor or any of its successors or assigns or any Person
holding under or through them as parties to any actions, suits or other
proceedings initiated by Beneficiary to enforce such rights or to foreclose the
lien of this Deed of Trust or to otherwise realize upon any other lien or
security interest created in any other collateral given to secure the payment of
the Obligations. The foregoing restriction shall not apply to, and Grantor shall
be personally liable for, any and all losses, claims, damages, costs, expenses
and/or liabilities, including, without limitation, attorneys' fees and expenses,
incurred by Beneficiary (a) as a result of any material misstatement of fact (i)
by Grantor or any Person constituting Grantor, made to induce Beneficiary to
advance the principal amount evidenced by the Note or (ii) contained in any Loan
Instrument, (b) as a result of fraud committed by Grantor or any Person
constituting Grantor, (c) as a result of the collection or application of any
insurance proceeds, condemnation awards, trust funds or Rents in a manner which
is not in accordance with the provisions of the Loan Instruments, (d) as a
result of the breach of any representation or warranty contained in the Sections
of this Deed of Trust pertaining to environmental matters, including without
limitation, Sections 1.05E(4), 2.03(C) and 2.03(D), or any default with respect
to any covenant contained in the Sections of this Deed of Trust pertaining to
environmental matters, including without limitation, Section 1.05(E), (e) as a
result of any default with respect to Grantor's covenant to pay Impositions
pursuant to Section 1.02 hereof or insurance premiums pursuant to Section 1.03
hereof, (f) arising from, in respect of, as a consequence of, or in connection
with: (i) the existence of any circumstance or the occurrence of any action
described in Section 1.05E(1) hereof, (ii) claims asserted by any Person
(including, without limitation, any Governmental Agency) in connection with, or
in any way arising out of, the presence, storage, use, disposal, generation,
transportation or treatment of any Hazardous Material on, in, under or about the
Secured Property, (iii) the violation or claimed violation of any law relating
to any Hazardous Material or any other Environmental Requirement in regard to
the Secured Property, regardless of whether or not such violation or claimed
violation occurred prior to or after the date of this Deed of Trust or whether
or not such violation or claimed violation occurred prior to or after the time
that Grantor became the owner of the Secured Property, or (iv) the preparation
of any environmental audit as to the Secured Property, whether conducted or
authorized by Grantor, Beneficiary or any other Person or the implementation of
any environmental audit's recommendations, or (g) as a result of any
intentional, bad faith waste of the Secured Property committed by Grantor or its
agents (such damages to include, without limitation, all repair costs incurred
by Grantor), but excluding normal wear and tear. In addition, and
notwithstanding the restriction on enforcement contained in the first sentence
of this Section 5.18, Grantor also shall be personally liable for and
Beneficiary may seek judgment against Grantor for (w) all outstanding principal,
interest and other Obligations, including without limitation, the Make-Whole
Amount, (i) if there shall be a violation of Section 1.11 hereof (as modified by
any side letter agreement), and/or (ii) in the event that any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by, consented to or acquiesced
in by Grantor or any Guarantor and/or if any proceeding for the dissolution,
liquidation or receivership of Grantor or any Guarantor shall be instituted by
Grantor or any Guarantor and/or (iii) if the Secured Property is damaged or
destroyed in whole or in part due to an act of terrorism and Grantor does not
have the required Terrorism Insurance and otherwise does not have the funds to
repair and restore the Secured Property or Grantor does not deposit such funds
with Beneficiary to be disbursed to repair and restore the Secured Property in
accordance with the terms and conditions of this Deed of Trust and/or (x) in the
event of a loss which is or would be covered by the required Terrorism
Insurance, an amount equal to the deductible on such Terrorism Insurance, which
amount shall either be applied by Beneficiary to the debt secured by this Deed
of Trust or disbursed by Beneficiary for the repair and restoration of the
Secured Property, all in accordance with the terms of the Loan Instruments. The
restriction on enforcement contained in the first sentence of this Section 5.18
shall not apply to the Environmental Indemnity Agreement and/or to the Guaranty.
It is expressly understood and agreed, however, that nothing contained in this
Section 5.18 shall (y) in any manner or way constitute or be deemed to be a
release of the Obligations or otherwise affect or impair the enforceability of
the liens, assignments, rights and security interests created by this Deed of
Trust or any of the other Loan Instruments or any future advance or any related
agreements or (z) preclude Beneficiary from foreclosing this Deed of Trust or
from exercising its other remedies set forth in this Deed of Trust or the
Assignment, or from enforcing any of its rights and remedies in law or in equity
(including, without limitation, injunctive and declaratory relief, restraining
orders and receivership proceedings), except as provided in this Section 5.18.
All losses, claims, damages, costs, expenses, liabilities, obligations and/or
other amounts of any kind or nature, including, attorneys' fees and expenses, as
to which this Section 5.18 provides that Grantor is personally liable shall be
referred to herein as the "Non-Recourse Exceptions".
5.19 Non-Business Days. If any payment required hereunder or under any other
Loan Instrument becomes due on a Saturday, Sunday, or legal holiday in the state
in which the Premises are located, then such payment shall be due and payable on
the immediately succeeding business day.
5.20 Substitution of Trustee. At the option of Beneficiary at any time and
without cause or notice, a successor or substitute Trustee may be named,
constituted and appointed. Successor or substitute trustees may be named,
constituted, and appointed without procuring the resignation of the former
Trustee and without other formality than the execution by Beneficiary of a
written instrument recorded in the Register's Office of Wake County, North
Carolina, appointing and designating such successor or substitute Trustee,
whereupon such successor or substitute Trustee shall become vested with and
succeed to all of the rights, titles, privileges, powers and duties of the
Trustee named herein. Such right of appointment of a substitute or successor
Trustee shall exist as often and whenever from any of said causes the original
or successor or substitute Trustee cannot or will not act or has been removed as
herein provided.
5.21 No Liability of Trustee. Trustee shall not be liable for any error of
judgment or act done by Trustee in good faith, or be otherwise responsible or
accountable under any circumstances whatsoever (including Trustee's negligence),
except for Trustee's gross negligence or willful misconduct. Trustee shall have
the right to rely on any instrument, document or signature authorizing or
supporting any action taken or proposed to be taken by the Trustee hereunder,
believed by the Trustee in good faith to be genuine. All moneys received by
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated in any
manner from any other moneys (except to the extent required by law), and Trustee
shall be under no liability for interest on any moneys received by the Trustee
hereunder. Grantor hereby ratifies and confirms any and all acts which the
herein named Trustee or the Trustee's successor or successors, substitute or
substitutes, in this trust, shall do lawfully by virtue hereof. Grantor will,
immediately and without demand, reimburse Trustee for, and save the Trustee
harmless against, any and all liability and expenses which may be incurred by
the Trustee in the performance of the Trustee's duties. The foregoing indemnity
shall not terminate upon discharge of the Obligations nor the foreclosure,
release or other termination of this Deed of Trust.
5.22 Employment of Agents. The Trustee shall have, in the Trustee's discretion,
authority to employ all proper agents and attorneys in the execution of this
trust and/or in the conducting of any sale made pursuant to the terms hereof,
and to pay for such services rendered out of the proceeds of the sale of the
Secured Property, should any be realized; and if no sale be made or if the
proceeds of sale be insufficient to pay the same, then Grantor hereby undertakes
and agrees to pay the cost of such services rendered to said Trustee.
5.23 Release of Deed of Trust. If all of the Obligations have been paid in full
and all of the covenants, warranties, undertakings and agreements made in this
Deed of Trust are kept and performed, all rights under this Deed of Trust shall
terminate (except to the extent expressly provided herein with respect to
indemnifications, representations and warranties and other rights which are to
continue following the release hereof), and the Secured Property shall become
wholly clear of the liens, security interests, conveyances and assignments
evidenced hereby, and such liens and security interests shall be released by
Beneficiary in due form at Grantor's cost.
5.24 Acknowledgement of Receipt. Grantor has acknowledged receipt of a true copy
of this Deed of Trust without charge.
ARTICLE VI
SPECIAL STATE OF NORTH CAROLINA PROVISIONS
6.01 Principles of Construction. In the event of any inconsistencies between the
terms and conditions of this Article VI and the terms and conditions of this
Deed of Trust, the terms and conditions of this Article VI shall control and be
binding.
6.02 Power of Sale. Notwithstanding anything in this Deed of Trust to the
contrary, no sale of any portion of the Secured Property under the power of sale
contained in this Deed of Trust shall occur until Lender and Trustee shall have
complied with the provisions of Chapter 45 of the North Carolina General
Statutes relating to the power of sale foreclosures, including, without
limitation, the requirement for notice and a hearing.
6.03 Maturity Date. The maturity date hereof shall be defined and
determined in accordance with the Note, but in no event shall be later than
September 10, 2012.
6.04 Reasonable Attorneys Fees. Notwithstanding anything herein or in any
other Loan Document to the contrary, whenever the term "reasonable attorneys'
fees" is used it shall mean reasonable attorney fees actually incurred (based on
the actual number of hours worked by outside legal counsel and paralegals
multiplied by the usual and customary hourly rate then in effect) and actual
out-of-pocket legal expenses, notwithstanding any statutory presumption set
forth in NCGS ss.6.21.2 or otherwise to the contrary.
6.05 Trustee Commission. The Trustee shall be entitled to a reasonable
Trustee's fee, based on the actual number of hours worked by Trustee at its
customary hourly rate not to exceed 4% of the Loan amount.
[signature page to follow]
[signature page to Deed of Trust, Assignment of Leases and Rents and
Security Agreement]
IN WITNESS WHEREOF, Grantor has executed this Deed of Trust as of the date
first above written.
GRANTOR:
CCIP LOFT, L.L.C., a
Delaware limited liability company
By: Consolidated Capital Institutional Properties,
a California limited partnership, its sole member
By: ConCap Equities, Inc.,
a Delaware corporation, its general partner
By: /s/Patti K. Fielding
Name: Patti K. Fielding
Title: Executive Vice President and Treasurer
STATE OF Colorado
COUNTY OF Denver
I, Gail D. Coalson, a Notary Public of the County and State aforesaid, certify
that Patti K. Fielding, personally came before me this day and acknowledged that
(s)he is Executive Vice President and Treasurer of ConCap Equities, Inc., a
Delaware corporation, the General Partner of Consolidated Capital Institutional
Properties, a California limited partnership, Sole Member of CCIP LOFT, L.L.C.,
a Delaware limited liability company, and that (s)he, as Executive Vice
President and Treasurer being authorized to do so, executed the foregoing on
behalf of the company.
WITNESS my hand and official stamp or seal, this the 31st day of
August, 2005.
[SEAL] /s/Gail D. Coalson
Notary Public
My Commission expires: 02/17/2008
SCHEDULE A
THE LAND
Exhibit 10.39
PROMISSORY NOTE
$4,600,000.00 Raleigh, North
Carolina
August 31, 2005
FOR VALUE RECEIVED, CCIP LOFT, L.L.C. ("Maker"), a Delaware limited
liability company, having an office c/o AIMCO, 4582 South Ulster Parkway, Suite
1100, Denver, Colorado 80237, promises to pay to NEW YORK LIFE INSURANCE COMPANY
("Holder"), a New York mutual insurance company, having its principal office at
51 Madison Avenue, New York, New York 10010-1603, or order, without offset, at
its principal office in New York, New York, or at such other place as may be
designated in writing by Holder, the principal sum of Four Million Six Hundred
Thousand and 00/100 Dollars ($4,600,000.00), lawful money of the United States
of America, together with interest thereon at the rate ("Interest Rate") of five
and four one hundredths of one percent (5.04%) per annum, payable in monthly
payments ("Payments") of principal and interest in the amount of Twenty Four
Thousand Eight Hundred Seven and 00/100 Dollars ($24,807.00) commencing on the
tenth (10th) day of October, 2005 and payable on the tenth (10th) day of each
and every month thereafter until and including September 10, 2012 (the "Maturity
Date"). In addition, on the Maturity Date, Maker shall pay to Holder the entire
unpaid principal balance of this Note, together with all interest then accrued
thereon pursuant to this Note and all other Obligations (as hereinafter defined)
then unpaid pursuant to the Loan Instruments (as hereinafter defined). Holder
shall apply each Payment, when received, first to the Obligations, other than
principal and interest, which are then due and payable, but only if so elected
by Holder in its sole and absolute discretion, and then to the payment of
accrued interest on the outstanding principal balance hereof and the remainder
to the reduction of such principal balance. Interest from the date hereof
through and including September 9, 2005, is due and payable on the date of this
Note and shall be computed on the basis of the actual number of days in such
period over a 360 day year.
This Note is secured by, among other things, (a) a Deed of Trust,
Assignment of Leases and Rents and Security Agreement ("Deed of Trust"), dated
as of the date hereof, granted by Maker to Holder and encumbering premises and
other property ("Secured Property") more particularly described in the Deed of
Trust and (b) an Assignment of Leases, Rents, Income and Cash Collateral, dated
as of the date hereof, from Maker to Holder. Obligations, Loan Instruments and
all other capitalized terms used in this Note and not expressly defined herein
shall have the meanings assigned to such terms in the Deed of Trust. The terms
and provisions of the Loan Instruments, other than this Note, are hereby fully
incorporated into this Note by reference.
From and after the earlier to occur of an Event of Default or the Maturity
Date, the aggregate amount of the Obligations shall automatically bear interest
at an annual rate ("Increased Rate") equal to the Interest Rate plus five (5)
percentage points, unless compliance with applicable law requires a lesser
interest rate, in which event the aggregate amount of the Obligations shall bear
interest at the maximum rate permitted by law.
Any default in the making of any Payment or in the making of any payment
due pursuant to Section 1.04 of the Deed of Trust or in the making of any other
deposit or reserve due pursuant to any Loan Instrument on the date the same is
due will result in loss and additional expense to Holder in servicing the
Obligations, handling such delinquent payments and meeting its other financial
obligations. Accordingly, upon the occurrence of any such default, Maker shall
pay, without regard to any grace periods, a late charge ("Late Charge") of four
percent (4%) of each such overdue Payment. Maker agrees that (a) the exact
amount of such loss and additional expense is extremely difficult, if not
impossible to determine, (b) the Late Charge is a reasonable estimate of such
loss and expense and therefore does not constitute a penalty and (c) in addition
to, and not in lieu of, the exercise of any other remedies to which Holder may
be entitled, Holder may collect from Maker all Late Charges for the purpose of
defraying such loss and expense, unless applicable law requires a lesser such
charge, in which event Holder may collect from Maker a Late Charge at the
maximum rate permitted by applicable law.
Maker may not prepay the Obligations prior to October 10, 2007 ("Closed
Period"). On or after October 10, 2007, or on the tenth (10th) day of any month
thereafter, Maker may prepay the outstanding principal balance of this Note (in
whole but not in part), together with accrued interest thereon to the date of
prepayment and any other outstanding Obligations, provided that Maker gives
Holder not less than sixty (60) and not more than ninety (90) days prior written
notice of Maker's intention to make such prepayment, and provided further that,
in addition to paying the entire outstanding principal balance of this Note, all
accrued interest thereon and any other outstanding Obligations, Maker pays to
Holder the Make-Whole Amount. Any prepayment notice given by Maker shall be
deemed null and void if the prepayment covered by such notice is not made by the
date of such prepayment specified in such notice.
"Make-Whole Amount" with respect to any prepayment that occurs after the
Closed Period means an amount equal to the greater of (a) one percent (1%) of
the then entire outstanding principal balance of this Note or (b) the present
value as of the date of prepayment of the remaining scheduled payments of
principal and interest (including any balloon payment), determined by
discounting such payments at the Monthly Equivalent Treasury Security Rate (as
hereinafter defined), less the amount of principal being prepaid, provided such
difference shall not be less than zero. "Monthly Equivalent Treasury Security
Rate" means the rate which, when compounded monthly, results in a yield that is
equivalent to the yield on the Equivalent U.S. Treasury Security plus
twenty-five (25) basis points, which is compounded semi-annually. "Equivalent
U.S. Treasury Security" means the U.S. treasury bill, note or bond, having a
maturity date closest in maturity to the Maturity Date, as reported in The Wall
Street Journal (or, if The Wall Street Journal is no longer published, another
daily financial publication of national circulation selected by Holder) on the
third (3rd) business day preceding the date of prepayment. Maker waives any
right of prepayment except as expressly provided herein and as may be provided
in the other Loan Instruments. Notwithstanding anything herein to the contrary,
if Maker prepays all Obligations not more than ninety (90) days prior to the
Maturity Date and after not less than fifteen (15) days prior written notice to
Holder, Maker shall not be required to pay the Make-Whole Amount.
If the outstanding principal balance of this Note or any portion thereof
shall become due and payable or shall be paid as a result of (a) an Event of
Default (which Event of Default shall be conclusively deemed to be a willful
default made for the purpose of avoiding payment of the Make-Whole Amount), (b)
the exercise by Maker or any other person of any right of redemption or the
taking by Maker or any other person of any other action to prevent a foreclosure
of the Secured Property, or (c) a casualty or condemnation with respect to the
Secured Property, then Maker shall pay to Holder the Make-Whole Amount computed,
to the extent not prohibited by applicable law, as if Maker had elected to
prepay this Note, as provided in the preceding paragraph, on the date of such
Event of Default, exercise, action, casualty or condemnation, as applicable. If
such Event of Default, exercise, action, casualty or condemnation occurs during
the Closed Period, then, to the extent not prohibited by applicable law, the
Make-Whole Amount shall be equal to the greater of (a) ten percent (10%) of the
principal balance of this Note then unpaid or (b) the Make-Whole Amount, as
calculated in the manner set forth in the immediately preceding paragraph.
Notwithstanding the foregoing, in the event of a casualty or condemnation
with respect to the Secured Property, if Holder is not willing to permit the
insurance proceeds or condemnation award, as applicable, to be used for the
restoration of the Secured Property and the Loan is prepaid as a result of the
casualty or condemnation, then no Make-Whole Amount shall be due with respect to
the application of the insurance proceeds or condemnation award to the
Obligations; however, in the event the insurance proceeds or condemnation award
are 50% or more than the then outstanding Loan balance and Maker elects to repay
the Loan balance remaining after such application of the insurance proceeds or
condemnation award, then no Make-Whole Amount shall be due with respect to such
prepayment by Maker.
From and after the existence of an Event of Default, Holder, at its
option, may declare all Obligations to be immediately due and payable, then or
thereafter, as Holder may elect, regardless of the stated Maturity Date of this
Note.
If Holder collects all or any part of the Obligations by an action, at law
or in equity, or in any bankruptcy, receivership or other court proceeding
(whether at the trial or appellate level), or if this Note is placed in the
hands of attorney(s) for collection, Maker shall pay, in addition to the
principal and interest due or deemed to be due, whether by acceleration or
otherwise, and in addition to the Make-Whole Amount (a) all costs, including,
without limitation, attorneys' fees and expenses, of collecting or attempting to
collect all amounts due pursuant to this Note and all other Obligations, of
enforcing or attempting to enforce Holder's rights and remedies pursuant to the
Loan Instruments and of protecting the collateral securing this Note, (b) all
Late Charges due pursuant to this Note and (c) interest, at the Increased Rate,
computed on the amount of the Obligations.
The failure by Holder to exercise any right, power, privilege, remedy or
option as to maturity, foreclosure or otherwise, provided in any Loan Instrument
or otherwise available at law or in equity (each a "Remedy" and collectively,
"Remedies") before or after any Event of Default, in any one or more instances,
or the acceptance by Holder of any partial payment or partial performance, shall
not constitute a waiver of any default or any Remedy, each of which shall remain
continuously in force, until waived in writing by Holder. Holder, at its option,
may rescind, in writing, any acceleration of this Note, but the tender and
acceptance of partial payment or partial performance alone shall not rescind or
in any other way affect any acceleration of this Note or the exercise by Holder
of any of its Remedies.
Maker and Holder intend to comply strictly with all usury laws now or
hereafter in force in the jurisdiction ("State") in which the Secured Property
is located, and all interest payable pursuant to this Note or any other Loan
Instrument shall be reduced to the maximum amount which is not in excess of the
maximum non-usurious rate of interest applicable to this Note or any other Loan
Instrument ("Legal Rate") allowed under the usury laws of the State, as now or
hereafter construed by the courts having jurisdiction over such matters. If the
aggregate of all interest (whether designated as interest, Late Charges,
Make-Whole Amount or otherwise) contracted for, chargeable or receivable
pursuant to this Note or any other Loan Instrument, whether upon regular payment
or acceleration or otherwise, exceeds the Legal Rate, it shall conclusively be
deemed a mutual mistake. Such excess shall be canceled automatically, and, if
theretofore paid, shall, at the option of Holder, either be rebated to Maker or
credited in reduction of the outstanding principal balance of this Note, or, if
this Note has been repaid, such excess shall be rebated to Maker. In the event
of a conflict between the provision of this paragraph and the provisions of any
other portion of this Note or any other Loan Instrument, the provisions of this
paragraph shall control.
Maker waives all requirements for presentment, protest, notice of protest,
notice of dishonor, demand for payment and diligence in collection of this Note
or the Loan Instruments, and any and all other notices and matters of a like
nature, except for those expressly required by the Deed of Trust. Without notice
to Maker and without discharging Maker's liability hereunder, Maker consents to
any extension of time (whether one or more) of payment of this Note, release of
all or any part of the security for the payment of this Note or release of any
Person liable for payment of this Note.
This Note may be changed only by an agreement, in writing, signed by Maker
and Holder. Maker waives and renounces all homestead exemption rights as to the
Obligations or any renewal or extension thereof. No failure or delay on the part
of Holder in exercising any Remedy pursuant to this Note or any Loan Instrument,
and no course of dealing between Maker and Holder, shall operate as a waiver of
any Remedy, nor shall any single or partial exercise of any Remedy preclude any
other or further exercise thereof or the exercise of any other Remedy. All
Remedies expressly provided for in the Loan Instruments are cumulative, and are
not exclusive of any rights, powers, privileges or remedies which Holder would
otherwise have at law or equity. No notice to or demand on Maker in any case
shall entitle Maker to any other or further notice or demand in similar or other
circumstances, nor shall any such notice or demand constitute a waiver of the
right of Holder to take any other or further action in any circumstances without
notice or demand.
The obligations of each Person and entity comprising Maker shall be joint
and several. The unenforceability or invalidity of any provision of this Note as
to any Person or circumstance shall not render that provision unenforceable or
invalid as to any other Person or circumstance, and all provisions hereof, in
all other respects, shall remain valid and enforceable.
If an Event of Default has occurred (and regardless of whether or not it
has been cured), Holder may exercise any and all Remedies, and shall have full
recourse to the Secured Property and to any other collateral given by Maker to
secure any or all of the Obligations, provided that any judgment obtained by
Holder in any proceeding to enforce the Remedies shall be enforced only against
the Secured Property and/or such other collateral. Notwithstanding the
foregoing, Holder may name Maker or any of its successors or assigns or any
Person holding under or through them as parties to any actions, suits or other
proceedings initiated by Holder to enforce any Remedies against the Secured
Property and/or such other collateral, including without, limitation, any
action, suit or proceeding to foreclose the lien of the Deed of Trust against
the Secured Property or to otherwise realize upon any other lien or security
interest created in any other collateral given to secure the payment of any or
all of the Obligations. The restriction on enforcement contained in the first
sentence of this paragraph shall not apply to, and Maker shall be personally
liable for, any and all losses, claims, damages, costs, expenses and/or
liabilities, including, without limitation, attorneys' fees and expenses,
incurred by Holder (a) as a result of any material misstatement of fact (i) by
Maker or any Person constituting Maker, made to induce Holder to advance the
principal amount evidenced hereby or (ii) contained in any Loan Instrument, (b)
as a result of fraud committed by Maker or any Person constituting Maker, (c) as
a result of the collection or application of any insurance proceeds,
condemnation awards, trust funds or Rents in a manner which is not in accordance
with the provisions of the Loan Instruments, (d) as a result of the breach of
any representation or warranty contained in the Sections of the Deed of Trust
pertaining to environmental matters, including without limitation, Sections
1.05E(4), 2.03(C) and 2.03(D), or any default with respect to any covenant
contained in the Sections of the Deed of Trust pertaining to environmental
matters, including without limitation, Section 1.05(E), (e) as a result of any
default with respect to Maker's covenant to pay Impositions or insurance
premiums pursuant to the Deed of Trust, (f) arising from, in respect of, as a
consequence of, or in connection with: (i) the existence of any circumstance or
the occurrence of any action described in Section 1.05E(1) of the Deed of Trust,
(ii) claims asserted by any Person (including, without limitation, any
Governmental Agency) in connection with, or in any way arising out of, the
presence, storage, use, disposal, generation, transportation or treatment of any
Hazardous Material on, in, under or about the Secured Property, (iii) the
violation or claimed violation of any law relating to any Hazardous Material or
any other Environmental Requirement in regard to the Secured Property,
regardless of whether or not such violation or claimed violation occurred prior
to or after the date of this Note or whether or not such violation or claimed
violation occurred prior to or after the time that Maker became the owner of the
Secured Property, or (iv) the preparation of any environmental audit as to the
Secured Property, whether conducted or authorized by Maker, Holder or any other
Person or the implementation of any environmental audit's recommendations, or
(g) as a result of any intentional, bad faith waste of the Secured Property
committed by Maker or its agents (such damages to include, without limitation,
all repair costs incurred by Maker), but excluding normal wear and tear. In
addition, and notwithstanding the restriction on enforcement contained in the
first sentence of this paragraph, Maker also shall be personally liable for and
Holder may seek judgment against Maker for (w) all outstanding principal,
interest and other Obligations, including without limitation, the Make-Whole
Amount, (i) if there shall be a violation of Section 1.11 of the Deed of Trust
(as modified by any side letter agreement), and/or (ii) in the event that any
petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by,
consented to or acquiesced in by Maker or any Guarantor and/or if any proceeding
for the dissolution, liquidation or receivership of Maker or any Guarantor shall
be instituted by Maker or any Guarantor and/or (iii) if the Secured Property is
damaged or destroyed in whole or in part due to an act of terrorism and Maker
does not have the required Terrorism Insurance and otherwise does not have the
funds to repair and restore the Secured Property or Maker does not deposit such
funds with Holder to be disbursed to repair and restore the Secured Property in
accordance with the terms and conditions of the Deed of Trust and (x) in the
event of a loss which is or would be covered by the required Terrorism
Insurance, an amount equal to the deductible on such Terrorism Insurance, which
amount shall either be applied by Holder to the debt secured by the Deed of
Trust or disbursed by Holder for the repair and restoration of the Secured
Property, all in accordance with the terms of the Loan Instruments. The
restriction on enforcement contained in the first sentence of this paragraph
shall not apply to the Environmental Indemnity Agreement of even date herewith
executed by Maker and the other indemnitors, if any, in favor of Holder and/or
to the Guaranty of even date herewith executed by Guarantor for the benefit of
Holder. It is expressly understood and agreed, however, that nothing contained
in this paragraph shall (1) in any manner or way constitute or be deemed to be a
release of the Obligations or otherwise affect or impair the enforceability of
the liens, assignments, rights and security interests created by the Deed of
Trust or any of the other Loan Instruments or any future advance or any related
agreements or (2) preclude Holder from foreclosing the Deed of Trust or from
exercising its other remedies set forth in the Deed of Trust or the Assignment,
or from enforcing any of its rights and remedies in law or in equity (including,
without limitation, injunctive and declaratory relief, restraining orders and
receivership proceedings), except as provided in this paragraph.
If any payment required hereunder or under any other Loan Instrument
becomes due on a Saturday, Sunday, or legal holiday in the state in which the
Premises are located, then such payment shall be due and payable on the
immediately succeeding business day.
"Maker" and "Holder" shall be deemed to include the respective heirs,
administrators, legal representatives, successors and assigns of Maker and
Holder.
Time is of the essence with respect to each and every provision hereof.
This Note shall be governed by, and construed and enforced in accordance
with the laws of the State, other than such laws with respect to conflicts of
laws.
In the event of any inconsistencies between the terms of this Note and the
terms of any other Loan Instruments, the terms of this Note shall prevail.
This Note may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which shall constitute one and the
same document.
[signature page to follow]
[signature page to Promissory Note]
IN WITNESS WHEREOF, maker has executed this Note as of the date first
above written.
MAKER:
CCIP LOFT, L.L.C., a Delaware limited liability company
By: Consolidated Capital Institutional Properties,
a California limited partnership, its sole member
By: ConCap Equities, Inc., a Delaware corporation,
its general partner
By: /s/Patti K. Fielding
Name: Patti K. Fielding
Title: Executive Vice President and Treasurer
STATE OF Colorado
COUNTY OF Denver
I, Gail D. Coalson, a Notary Public of the County and State aforesaid, certify
that Patti K. Fielding, personally came before me this day and acknowledged that
(s)he is Executive Vice President and Treasurer of ConCap Equities, Inc., a
Delaware corporation, the General Partner of Consolidated Capital Institutional
Properties, a California limited partnership, Sole Member of CCIP LOFT, L.L.C.,
a Delaware limited liability company, and that (s)he, as Executive Vice
President being authorized to do so, executed the foregoing on behalf of the
company.
WITNESS my hand and official stamp or seal, this the 31st day of
August, 2005.
[SEAL] /s/Gail D. Coalson
Notary Public
My Commission expires: 02/17/2008
Exhibit 10.40
AIMCO PROPERTIES, L.P.
(Guarantor)
in favor of
NEW YORK LIFE INSURANCE COMPANY
(Lender)
GUARANTY
Dated: As of August 31, 2005
GUARANTY
THIS GUARANTY ("Guaranty") is executed as of August 31, 2005 by
AIMCO PROPERTIES, L.P., a Delaware limited partnership, having an address c/o
AIMCO, 4582 South Ulster Parkway, Suite 1100, Denver, Colorado 80237
("Guarantor" or "AIMCO") for the benefit of NEW YORK LIFE INSURANCE COMPANY, a
New York mutual insurance company having an address at 51 Madison Avenue, New
York, New York 10010 ("Lender").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Promissory Note, dated of even
date herewith, executed by CCIP LOFT, L.L.C., a Delaware limited liability
company ("Borrower") and payable to the order of Lender in the original
principal amount of $4,600,000.00 (together with all renewals, modifications,
increases and extensions thereof, the "Note"), Borrower has become indebted, and
may from time to time be further indebted, to Lender with respect to a loan
("Loan") which is secured by the lien and security interest of a Deed of Trust,
Assignment of Leases and Rents and Security Agreement, of even date herewith
(the "Deed of Trust"), and further evidenced, secured or governed by other
instruments and documents executed in connection with the Loan (together with
the Note and Deed of Trust, the "Loan Instruments"); and
WHEREAS, Lender is not willing to make the Loan, or otherwise extend
credit, to Borrower unless Guarantor unconditionally guarantees payment and
performance to Lender of the Guaranteed Obligations (as herein defined); and
WHEREAS, Guarantor is the owner of an indirect interest in Borrower,
and Guarantor will benefit from Lender's making the Loan to Borrower.
NOW, THEREFORE, as an inducement to Lender to make the Loan to
Borrower, and to extend such additional credit as Lender may from time to time
agree to extend under the Loan Instruments, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
ARTICLE I
NATURE AND SCOPE OF GUARANTY
1.1 Guaranty of Obligation. Guarantor hereby irrevocably and
unconditionally guarantees to Lender and its successors and assigns the payment
and performance of the Guaranteed Obligations as and when the same shall be due
and payable, whether by lapse of time, by acceleration of maturity or otherwise.
Guarantor hereby irrevocably and unconditionally covenants and agrees that it is
liable for the Guaranteed Obligations as a primary obligor and that it shall
fully perform each and every term and provision hereof.
1.2 Definition of Guaranteed Obligations. As used herein, the term
"Guaranteed Obligations" means all of Borrower's present and future obligations
under the Note and Deed of Trust arising from, under or out of the Non-Recourse
Exceptions (as defined in the Deed of Trust) together with all losses, claims,
damages, costs, expenses and/or liabilities, including, without limitation,
attorney's fees and expenses, incurred by Lender in connection therewith.
1.3 Nature of Guaranty. This Guaranty is an irrevocable, absolute,
continuing guaranty of payment and performance and not a guaranty of collection.
This Guaranty may not be revoked by Guarantor and shall continue to be effective
with respect to any Guaranteed Obligations arising or created after any
attempted revocation by Guarantor. The fact that at any time or from time to
time the Guaranteed Obligations may be increased or reduced shall not release or
discharge the obligation of Guarantor to Lender with respect to the Guaranteed
Obligations. This Guaranty may be enforced by Lender and any subsequent holder
of the Note and shall not be discharged by the assignment or negotiation of all
or part of the Note.
1.4 Guaranteed Obligations Not Reduced by Offset. The Guaranteed
Obligations and the liabilities and obligations of Guarantor to Lender hereunder
shall not be reduced, discharged or released because or by reason of any
existing or future offset, claim or defense of Borrower, or any other party,
against Lender, or any other party, or against payment of the Guaranteed
Obligations, whether such offset, claim or defense arises in connection with the
Guaranteed Obligations (or the transactions creating the Guaranteed Obligations)
or otherwise.
1.5 Payment By Guarantor. If all or any part of the Guaranteed
Obligations shall not be punctually paid when due, whether at demand, maturity,
acceleration or otherwise, Guarantor shall, immediately upon demand by Lender,
and without presentment, protest, notice of protest, notice of non-payment,
notice of intention to accelerate the maturity, notice of acceleration of the
maturity, or any other notice whatsoever, pay in lawful money of the United
States of America, the amount due on the Guaranteed Obligations to Lender at
Lender's address as set forth herein. Such demand(s) may be made at any time
coincident with or after the time for payment of all or part of the Guaranteed
Obligations, and may be made from time to time with respect to the same or
different items of Guaranteed Obligations. Such demand shall be deemed made,
given and received in accordance with the notice provisions hereof.
1.6 No Duty To Pursue Others. It shall not be necessary for Lender
(and Guarantor hereby waives any rights which Guarantor may have pursuant to
North Carolina General Statute Section 26.7, et. seq. and any other North
Carolina laws or the laws of any other jurisdiction to require Lender), in order
to enforce the obligations of Guarantor hereunder, first to (i) institute suit
or exhaust its remedies against Borrower or others liable on the Loan or the
Guaranteed Obligations or any other Person, (ii) enforce Lender's rights against
any collateral which shall ever have been given to secure the Loan, (iii)
enforce Lender's rights against any other guarantors of the Guaranteed
Obligations, (iv) join Borrower or any others liable on the Guaranteed
Obligations in any action seeking to enforce this Guaranty, (v) exhaust any
remedies available to Lender against any collateral which shall ever have been
given to secure the Loan, or (vi) resort to any other means of obtaining payment
of the Guaranteed Obligations. Lender shall not be required to mitigate damages
or take any other action to reduce, collect or enforce the Guaranteed
Obligations.
1.7 Waivers. Guarantor agrees to the provisions of the Loan
Instruments, and hereby waives notice of (i) any loans or advances made by
Lender to Borrower, (ii) acceptance of this Guaranty, (iii) any amendment or
extension of the Note, the Deed of Trust or any other Loan Instruments, (iv) the
execution and delivery by Borrower and Lender of any other loan or credit
agreement or of Borrower's execution and delivery of any promissory notes or
other documents arising under the Loan Instruments or in connection with the
Secured Property, (v) the occurrence of any breach by Borrower or an Event of
Default (as defined in the Deed of Trust), (vi) Lender's transfer or disposition
of the Guaranteed Obligations, or any part thereof, (vii) sale or foreclosure
(or posting or advertising for sale or foreclosure) of any collateral for the
Guaranteed Obligations, (viii) protest, proof of non-payment or default by
Borrower, or (ix) any other action at any time taken or omitted by Lender, and,
generally, all demands and notices of every kind in connection with this
Guaranty, the Loan Instruments, any documents or agreements evidencing, securing
or relating to any of the Guaranteed Obligations and the obligations hereby
guaranteed. In addition, and without limiting any other waivers or provisions
set forth in the Guaranty, Guarantor hereby knowingly, freely, irrevocably and
unconditionally waives and relinquishes all rights, remedies and defenses
accorded by applicable law to guarantors and sureties, and agrees not to assert
or to otherwise take advantage of any such rights, remedies or defenses. Without
limiting the generality of the foregoing or of any other waivers or provisions
set forth in the Guaranty, Guarantor hereby knowingly, freely, irrevocably and
unconditionally waives and relinquishes (A) any defense arising because of an
election made by Lender under Federal Bankruptcy Code ("FBC") Section 1111(b)(2)
or based on any borrowing or grant of a security interest under FBC Section 364,
(B) the defense of statute of limitations in any action hereunder or in any
action for the collection of any indebtedness or the performance of any of
Borrower's obligations under the Loan Instruments and (C) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of any
other person or persons, or the failure of Lender to file or enforce a claim
against the estate (in administration, bankruptcy, or any other proceeding) of
any other person or persons.
1.8 Payment of Expenses. In the event that Guarantor should breach
or fail to timely perform any provisions of this Guaranty, Guarantor shall,
immediately upon demand by Lender, pay Lender all costs and expenses (including,
without limitation, court costs and attorneys' fees and disbursements) incurred
by Lender in the enforcement hereof or the preservation of Lender's rights
hereunder. Any such amounts not paid to Lender upon Lender's demand therefor
shall bear interest at the Increased Rate (as such term is defined in the Note)
from the date of such demand until the date such amounts are paid in full by
Borrower. The covenants contained in this Section shall survive the payment and
performance of the Guaranteed Obligations.
1.9 Effect of Bankruptcy. In the event that, pursuant to any
insolvency, bankruptcy, reorganization, receivership or other debtor relief law,
or any judgment, order or decision thereunder, Lender must refund or restore any
payment, or any part thereof, received by Lender in satisfaction of the
Guaranteed Obligations, as set forth herein, any prior release or discharge from
the terms of this Guaranty given to Guarantor by Lender shall be without effect,
and this Guaranty shall remain in full force and effect. It is the intention of
Borrower and Guarantor that Guarantor's obligations hereunder shall not be
discharged except by Guarantor's performance of such obligations and then only
to the extent of such performance.
1.10 Waiver of Subrogation, Reimbursement and Contribution.
Notwithstanding anything to the contrary contained in this Guaranty, Guarantor
hereby unconditionally and irrevocably waives, releases and abrogates any and
all rights it may now or hereafter have under any agreement, at law or in equity
(including, without limitation, any law subrogating the Guarantor to the rights
of Lender), to assert any claim against or seek contribution, indemnification or
any other form of reimbursement from Borrower or any other party liable for
payment of any or all of the Guaranteed Obligations for any payment made by
Guarantor under or in connection with this Guaranty or otherwise.
1.11 Financial Reporting. Guarantor will keep and maintain complete
and accurate books and records of Guarantor's earnings and financial condition
and, without expense to Lender, will furnish to Lender, within one hundred
twenty (120) days after the end of each fiscal year of Guarantor, the following
financial information reflecting Guarantor's financial position for the
immediately preceeding year, all prepared and certified by an independent
certified public accountant reasonably satisfactory to Lender, and in accordance
with generally accepted accounting principles: (i) a statement of financial
position of Guarantor, (ii) a statement of cash flows of Guarantor, (iii) a
profit and loss statement, and (iv) a balance sheet.
1.12 Borrower. The term "Borrower" as used herein shall include any
new or successor corporation, association, partnership (general or limited),
limited liability company, joint venture, trust or other individual or
organization formed as a result of any merger, reorganization, sale, transfer,
devise, gift or bequest of Borrower or any interest in Borrower. Nothing set
forth herein, however, shall constitute a consent by Lender to any merger,
reorganization, sale, transfer, devise, gift, or bequest of Borrower or any
interest in Borrower, nor shall anything set forth herein diminish or affect in
any manner whatsoever any of the obligations or liabilities of Borrower under
the Loan Instruments.
1.13 Recourse Limitations Do Not Apply. It is understood and agreed
that the limitations of liability provided in the Note and any other Loan
Instruments shall not apply with respect to the Guarantor as to the Guaranteed
Obligations and that, notwithstanding anything to the contrary in the Note or
any other Loan Instrument, Lender shall have full and personal recourse against
the assets of the Guarantor as to the Guaranteed Obligations and such
limitations shall not apply for purposes of enforcing this Guaranty.
1.14 Guarantor's Claims Against Borrower. Guarantor shall file in
any bankruptcy or other proceeding in which the filing of claims is required by
law all claims which Guarantor may have against Borrower relating to any
indebtedness of Borrower to Guarantor and will assign to Lender all rights of
Guarantor thereunder. If Guarantor does not file any such claim, Lender, as
attorney-in-fact for Guarantor, is hereby authorized to do so in the name of
Guarantor or, in Lender's discretion, to assign the claim to a nominee and to
cause proof of claim to be filed in the name of Lender's nominee. The foregoing
power of attorney is coupled with an interest and cannot be revoked. Lender or
its nominee shall have the sole right to accept or reject any plan proposed in
such proceeding and to take any other action which a party filing a claim is
entitled to do. In all such cases, whether in administration, bankruptcy or
otherwise, the person or persons authorized to pay such claim shall pay to
Lender the amount payable on such claim and, to the full extent necessary for
that purpose, Guarantor hereby assigns to Lender all of Guarantor's rights to
any such payments or distributions to which Guarantor would otherwise be
entitled; provided, however, that Guarantor's obligations hereunder shall not be
satisfied except to the extent that Lender receives cash by reason of any such
payment or distribution. If Lender receives anything hereunder other than cash,
the same shall be held as collateral for amounts due under this Guaranty.
ARTICLE II
EVENTS AND CIRCUMSTANCES NOT REDUCING
OR DISCHARGING GUARANTOR'S OBLIGATIONS
Guarantor hereby consents and agrees to each of the following, and
agrees that Guarantor's obligations under this Guaranty shall not be released,
diminished, impaired, reduced or adversely affected by any of the following, and
waives any common law, equitable, statutory or other rights (including without
limitation rights to notice) which Guarantor might otherwise have as a result of
or in connection with any of the following:
2.1 Modifications. Any renewal, extension, increase, modification,
alteration or rearrangement of all or any part of the Guaranteed Obligations,
the Note, the Deed of Trust, the other Loan Instruments, or any other document,
instrument, contract or understanding between Borrower and Lender, or any other
parties, pertaining to the Guaranteed Obligations or any failure of Lender to
notify Guarantor of any such action.
2.2 Adjustment. Any adjustment, indulgence, forbearance or
compromise that might be granted or given by Lender to Borrower or any
Guarantor.
2.3 Condition of Borrower or Guarantor. The insolvency, bankruptcy,
arrangement, adjustment, composition, liquidation, disability, dissolution or
lack of power of Borrower, Guarantor or any other party at any time liable for
the payment of all or part of the Guaranteed Obligations; or any dissolution of
Borrower or Guarantor, or any sale, lease or transfer of any or all of the
assets of Borrower or Guarantor, or any changes in the shareholders, partners or
members of Borrower or Guarantor; or any reorganization of Borrower or
Guarantor.
2.4 Invalidity of Guaranteed Obligations. The invalidity, illegality
or unenforceability of all or any part of the Guaranteed Obligations, or any
document or agreement executed in connection with the Guaranteed Obligations,
for any reason whatsoever, including without limitation the fact that (i) the
Guaranteed Obligations, or any part thereof, exceeds the amount permitted by
law, (ii) the act of creating the Guaranteed Obligations or any part thereof is
ultra vires, (iii) the officers or representatives executing the Note, the Deed
of Trust or the other Loan Instruments or otherwise creating the Guaranteed
Obligations acted in excess of their authority, (iv) the Guaranteed Obligations
violate applicable usury laws, (v) the Borrower has valid defenses, claims or
offsets (whether at law, in equity or by agreement) which render the Guaranteed
Obligations wholly or partially uncollectible from Borrower, (vi) the creation,
performance or repayment of the Guaranteed Obligations (or the execution,
delivery and performance of any document or instrument representing part of the
Guaranteed Obligations or executed in connection with the Guaranteed
Obligations, or given to secure the repayment of the Guaranteed Obligations) is
illegal, uncollectible or unenforceable, or (vii) the Note, the Deed of Trust or
any of the other Loan Instruments have been forged or otherwise are irregular or
not genuine or authentic, it being agreed that Guarantor shall remain liable
hereon regardless of whether Borrower or any other Person be found not liable on
the Guaranteed Obligations or any part thereof for any reason.
2.5 Release of Obligors. Any full or partial release of the
liability of Borrower on the Guaranteed Obligations, or any part thereof, or of
any co-guarantors, or any other Person or entity now or hereafter liable,
whether directly or indirectly, jointly, severally, or jointly and severally, to
pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or
any part thereof, it being recognized, acknowledged and agreed by Guarantor that
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other party, and Guarantor has not been induced to
enter into this Guaranty on the basis of a contemplation, belief, understanding
or agreement that other parties will be liable to pay or perform the Guaranteed
Obligations, or that Lender will look to other parties to pay or perform the
Guaranteed Obligations.
2.6 Other Collateral. The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Guaranteed Obligations.
2.7 Release of Collateral. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, property or security at any time existing in connection with, or
assuring or securing payment of, all or any part of the Guaranteed Obligations
and any application of any collateral, property or security to the Guaranteed
Obligations in any order or manner as Lender may determine in its discretion.
2.8 Care and Diligence. The failure of Lender or any other party to
exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such
collateral, property or security, including but not limited to any neglect,
delay, omission, failure or refusal of Lender (i) to take or prosecute any
action for the collection of any of the Guaranteed Obligations or (ii) to
foreclose, or initiate any action to foreclose, or, once commenced, prosecute to
completion any action to foreclose upon any security therefor, or (iii) to take
or prosecute any action in connection with any instrument or agreement
evidencing or securing all or any part of the Guaranteed Obligations.
2.9 Unenforceability. The fact that any collateral, security,
security interest or lien contemplated or intended to be given, created or
granted as security for the repayment of the Guaranteed Obligations, or any part
thereof, shall not be properly perfected or created, or shall prove to be
unenforceable or subordinate to any other security interest or lien, it being
recognized and agreed by Guarantor that Guarantor is not entering into this
Guaranty in reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectibility or value of any of the collateral for the
Guaranteed Obligations.
2.10 Offset. The Note, the Guaranteed Obligations and the
liabilities and obligations of the Guarantor to Lender hereunder shall not be
reduced, discharged or released because of or by reason of any existing or
future right of offset, claim or defense of Borrower, or any other party,
against Lender, or any other party, or against payment of the Guaranteed
Obligations, whether such right of offset, claim or defense arises in connection
with the Guaranteed Obligations (or the transactions creating the Guaranteed
Obligations) or otherwise.
2.11 Merger. The reorganization, merger or consolidation of Borrower
into or with any other corporation or entity.
2.12 Preference. Any payment by Borrower to Lender is held to
constitute a preference under bankruptcy laws, or for any reason Lender is
required to refund such payment or pay such amount to Borrower or someone else.
2.13 Other Actions Taken or Omitted. Any other action taken or
omitted to be taken with respect to the Loan Instruments, the Guaranteed
Obligations, or the security and collateral therefor, whether or not such action
or omission prejudices Guarantor or increases the likelihood that Guarantor will
be required to pay the Guaranteed Obligations pursuant to the terms hereof, it
is the unambiguous and unequivocal intention of Guarantor that Guarantor shall
be obligated to pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, which obligation shall be deemed satisfied only upon the full
and final payment and satisfaction of the Guaranteed Obligations.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into the Loan Instruments and extend
credit to Borrower, Guarantor represents and warrants to Lender as follows:
3.1 Benefit. Guarantor is an affiliate of Borrower, is the owner of
an indirect interest in Borrower, and has received, or will receive, direct or
indirect benefit from the making of this Guaranty with respect to the Guaranteed
Obligations.
3.2 Familiarity and Reliance. Guarantor is familiar with, and has
independently reviewed books and records regarding the financial condition of
the Borrower and is familiar with the value of any and all collateral intended
to be created as security for the payment of the Note or Guaranteed Obligations;
however, Guarantor is not relying on such financial condition or the collateral
as an inducement to enter into this Guaranty.
3.3 No Representation By Lender. Neither Lender nor any other party
has made any representation, warranty or statement to Guarantor in order to
induce the Guarantor to execute this Guaranty.
3.4 Guarantor's Financial Condition. As of the date hereof, and
after giving effect to this Guaranty and the contingent obligation evidenced
hereby, Guarantor is, and will be, solvent, and has and will have assets which,
fairly valued, exceed Guarantor's obligations, liabilities (including contingent
liabilities) and debts, and has and will have property and assets sufficient to
satisfy and repay Guarantor's obligations and liabilities.
3.5 Legality. The execution, delivery and performance by Guarantor
of this Guaranty and the consummation of the transactions contemplated hereunder
do not, and will not, contravene or conflict with any law, statute or regulation
whatsoever to which Guarantor is subject or constitute a default (or an event
which with notice or lapse of time or both would constitute a default) under, or
result in the breach of, any indenture, deed of trust, mortgage, charge, lien,
or any contract, agreement or other instrument to which Guarantor is a party or
which may be applicable to Guarantor. This Guaranty is a legal and binding
obligation of Guarantor and is enforceable in accordance with its terms, except
as limited by bankruptcy, insolvency or other laws of general application
relating to the enforcement of creditors' rights.
3.6 Survival. All representations and warranties made by Guarantor
herein shall survive the execution hereof.
3.7 Review of Documents. Guarantor has examined the Note and all of
the Loan Instruments.
3.8 Litigation. There are no proceedings pending or, so far as
Guarantor knows, threatened before any court or administrative agency which
would affect the authority of Guarantor to enter into, or the validity or
enforceability of this Guaranty or which if decided adversely to Guarantor would
materially adversely affect the financial condition of Guarantor.
3.9 Tax Returns. Guarantor has filed all required federal, state and
local tax returns and has paid all taxes as shown on such returns as they have
become due. No claims have been assessed and are unpaid with respect to such
taxes.
3.10 Blocked Person. Guarantor represents and warrants that it is in
compliance with the requirements of Executive Order 13224 of September 23, 2001
Blocking Property and Prohibiting Transactions With Person Who Commit, Threaten
to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001) (the "Order") and
other similar requirements contained in the rules and regulations of the Office
of Foreign Assets Control, Department of the Treasury ("OFAC") and in any
enabling legislation or other executive orders or regulations in respect thereof
(the Order and such other rules regulations, legislation or orders are
collectively referred to herein as the "Orders"). Without limiting the
generality of the foregoing, Guarantor represents, warrants and covenants that
none of Guarantor, any constituent or affiliate of Guarantor, or to Guarantor's
knowledge, any of Guarantor's brokers or other agents acting or benefiting in
any capacity in connection with the Loan (A) is listed on the Specially
Designated Nationals and Blocked Persons List maintained by OFAC pursuant to the
Order and/or on any other list of terrorists or terrorist organizations
maintained pursuant to any of the rules and regulations of OFAC or pursuant to
any other applicable Orders, (B) is or will become a "blocked person" described
in Section 1 of the Order or (C) knowingly engages or will engage in any
dealings or transactions, or is or will be otherwise associated, with any such
blocked person.
3.11 No Outstanding Pledge. There is no outstanding pledge by
Guarantor of its interest in Borrower or the Property which secures any loan or
other obligation of Guarantor.
ARTICLE IV
SUBORDINATION OF CERTAIN INDEBTEDNESS
4.1 Subordination of All Guarantor Claims. As used herein, the term
"Guarantor Claims" shall mean all debts and liabilities of Borrower to
Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligations of Borrower thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such debts or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by Guarantor. The Guarantor Claims shall include without limitation
all rights and claims of Guarantor against Borrower (arising as a result of
subrogation or otherwise) as a result of Guarantor's payment of all or a portion
of the Guaranteed Obligations. Upon the occurrence of an Event of Default or the
occurrence of an event which would, with the giving of notice or the passage of
time, or both, constitute an Event of Default, Guarantor shall not receive or
collect, directly or indirectly, from Borrower or any other party any amount
upon the Guarantor Claims.
4.2 Claims in Bankruptcy. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor's relief, or other insolvency proceedings
involving Guarantor as debtor, Lender shall have the right to prove its claim in
any such proceeding so as to establish its rights hereunder and receive directly
from the receiver, trustee or other court custodian dividends and payments which
would otherwise be payable upon Guarantor Claims. Guarantor hereby assigns such
dividends and payments to Lender. Should Lender receive, for application upon
the Guaranteed Obligations, any such dividend or payment which is otherwise
payable to Guarantor, and which, as between Borrower and Guarantor, shall
constitute a credit upon the Guarantor Claims, then upon payment to Lender in
full of the Guaranteed Obligations, Guarantor shall become subrogated to the
rights of Lender to the extent that such payments to Lender on the Guarantor
Claims have contributed toward the liquidation of the Guaranteed Obligations,
and such subrogation shall be with respect to that proportion of the Guaranteed
Obligations which would have been unpaid if Lender had not received dividends or
payments upon the Guarantor Claims.
4.3 Payments Held in Trust. In the event that, notwithstanding
anything to the contrary in this Guaranty, Guarantor should receive any funds,
payment, claim or distribution which is prohibited by this Guaranty, Guarantor
agrees to hold in trust for Lender an amount equal to the amount of all funds,
payments, claims or distributions so received, and agrees that it shall have
absolutely no dominion over the amount of such funds, payments, claims or
distributions so received except to pay them promptly to Lender, and Guarantor
covenants promptly to pay the same to Lender.
4.4 Liens Subordinate. Guarantor agrees that any liens, security
interests, judgment liens, charges or other encumbrances upon Borrower's assets
securing payment of the Guarantor Claims shall be and remain inferior and
subordinate to any liens, security interests, judgment liens, charges or other
encumbrances upon Borrower's assets securing payment of the Guaranteed
Obligations, regardless of whether such encumbrances in favor of Guarantor or
Lender presently exist or are hereafter created or attach. Without the prior
written consent of Lender, Guarantor shall not (i) exercise or enforce any
creditor's right it may have against Borrower, or (ii) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceedings
(judicial or otherwise, including without limitation the commencement of, or
joinder in, any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security
interests, collateral rights, judgments or other encumbrances on assets of
Borrower held by Guarantor. Nothing set forth in this Section 4.4 is intended or
shall be construed as the permitting of or the granting by Lender of its consent
to the creation or existence of any liens, security interests, judgment liens,
charges or other encumbrances upon Borrower's assets or the Secured Property.
ARTICLE V
MISCELLANEOUS
5.1 Waiver. No failure to exercise, and no delay in exercising, on
the part of Lender, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right. The rights of Lender
hereunder shall be in addition to all other rights provided by law. No
modification or waiver of any provision of this Guaranty, nor consent to
departure therefrom, shall be effective unless in writing and no such consent or
waiver shall extend beyond the particular case and purpose involved. No notice
or demand given in any case shall constitute a waiver of the right to take other
action in the same, similar or other instances without such notice or demand.
5.2 Notices. All notices and demands or other communications
hereunder shall be in writing, and shall be deemed to have been sufficiently
given or served for all purposes when presented personally or sent by generally
recognized overnight delivery service, with postage prepaid, addressed to
Guarantor or Lender, as applicable, at the address stated below, or at such
other address of which either Guarantor or Lender may hereafter notify the other
in writing:
Guarantor:
AIMCO Properties, L.P.
c/o AIMCO
4582 South Ulster Parkway
Suite 1100
Denver, Colorado 80237
Attn: Dodge McCord
with a copy to:
Ballard Spahr Andrews & Ingersoll, LLP
1225 17th Street, Suite 2300
Denver, Colorado 80202
Attn: Beverly J. Quail, Esq.
Lender:
NEW YORK LIFE INSURANCE COMPANY
c/o New York Life Investment Management LLC
51 Madison Avenue
New York, New York 10010-1603
Loan No.: 373-0054
Attn: Real Estate Group
Director - Loan Administration
with a copy to:
NEW YORK LIFE INSURANCE COMPANY
c/o New York Life Investment Management LLC
51 Madison Avenue
New York, New York 10010-1603
Loan No.: 373-0054
Attn: Office of the General Counsel
Managing Director - Real Estate Section
Each notice or demand so given or served shall be deemed given and effective (a)
if personally delivered, on the day of actual delivery or refusal and (b) if
sent by generally recognized overnight delivery service, on the next business
day. Notwithstanding the foregoing, service of any notice of default provided or
required by law shall, if mailed as required by law, be deemed given and
effective on the date of mailing.
5.3 Governing Law. This Guaranty shall be governed by and construed
in accordance with the laws of the State in which the real property encumbered
by the Deed of Trust is located and the applicable laws of the United States of
America and, in connection with any action or proceeding arising out of or
relating to this Guaranty, Guarantor hereby submits to the jurisdiction of any
court of competent jurisdiction located in such State.
5.4 Invalid Provisions. If any provision of this Guaranty is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the term of this Guaranty, such provision shall be fully severable and
this Guaranty shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Guaranty, and the
remaining provisions of this Guaranty shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Guaranty, unless such continued effectiveness of this
Guaranty, as modified, would be contrary to the basic understandings and
intentions of the parties as expressed herein.
5.5 Amendments. This Guaranty may be amended only by an instrument
in writing executed by the party or an authorized representative of the party
against whom such amendment is sought to be enforced.
5.6 Parties Bound; Assignment; Joint and Several. This Guaranty
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors, assigns and legal representatives; provided, however,
that Guarantor may not, without the prior written consent of Lender, assign any
of Guarantor's rights, powers, duties or obligations hereunder. If Guarantor
consists of more than one Person, the obligations and liabilities of each such
Person shall be joint and several.
5.7 Headings. Section headings are for convenience of reference only
and shall in no way affect the interpretation of this Guaranty.
5.8 Recitals. The recital and introductory paragraphs hereof are a
part hereof, form a basis for this Guaranty and shall be considered prima facie
evidence of the facts and documents referred to therein.
5.9 Counterparts. To facilitate execution, this Guaranty may be
executed in as many counterparts as may be convenient or required. It shall not
be necessary that the signature of, or on behalf of, each party, or that the
signature of all Persons required to bind any party, appear on each counterpart.
All counterparts shall collectively constitute a single instrument. It shall not
be necessary in making proof of this Guaranty to produce or account for more
than a single counterpart containing the respective signatures of, or on behalf
of, each of the parties hereto. Any signature page to any counterpart may be
detached from such counterpart without impairing the legal effect of the
signatures thereon and thereafter attached to another counterpart identical
thereto except having attached to it additional signature pages.
5.10 Rights and Remedies. If Guarantor becomes liable for any
indebtedness owing by Borrower to Lender, by endorsement or otherwise, other
than under this Guaranty, such liability shall not be in any manner impaired or
affected hereby and the rights of Lender hereunder shall be cumulative of any
and all other rights that Lender may ever have against Guarantor. The exercise
by Lender of any right or remedy hereunder or under any other instrument, or at
law or in equity, shall not preclude the concurrent or subsequent exercise of
any other right or remedy.
5.11 Other Defined Terms. Any capitalized term utilized herein shall
have the meaning as specified in the Deed of Trust, unless such term is
otherwise specifically defined herein.
5.12 Entirety. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF
GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE GUARANTEED
OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTOR AND LENDER AS A
FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE OF
DEALING BETWEEN GUARANTOR AND LENDER, NO COURSE OF PERFORMANCE, NO TRADE
PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE
USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY
AGREEMENT. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTOR AND LENDER.
5.13 Waiver of Right To Trial By Jury. GUARANTOR HEREBY AGREES NOT
TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE NOTE, THE DEED OF TRUST, OR
THE OTHER LOAN INSTRUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY GUARANTOR, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR.
[signature page to follow]
[signature page to Guaranty]
EXECUTED as of the day and year first above written.
GUARANTOR:
AIMCO PROPERTIES, L.P., a Delaware limited
partnership
By: AIMCO-GP, Inc., a Delaware corporation,
its General Partner
By: /s/Patti K. Fielding
Name: Patti K. Fielding
Title: Executive Vice President and
Treasurer
STATE OF COLORADO
CITY AND COUNTY OF DENVER
I, Gail D. Coalson, a Notary Public of the County and State aforesaid, certify
that Patti K. Fielding, personally came before me this day and acknowledged that
(s)he is Executive Vice President and Treasurer of AIMCO-GP, Inc., a Delaware
corporation, the General Partner of AIMCO PROPERTIES, L.P., a Delaware limited
partnership, and that (s)he, as Executive Vice President being authorized to do
so, executed the foregoing on behalf of the company.
WITNESS my hand and official stamp or seal, this the 31st day of
August, 2005.
[SEAL] /s/Gail D. Coalson
Notary Public
My Commission expires: 02/17/2008