UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 1, 2005
NATIONAL PROPERTY INVESTORS 5
(Exact name of Registrant as specified in its charter)
California 0-11095 22-2385051
State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(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 1.01 Entry into A Material Definitive Agreement.
Please see the description under Item 2.03, below.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
On December 1, 2005, National Property Investors 5, a California limited
partnership (the "Registrant" or "Partnership"), obtained a second mortgage in
the principal amount of $2,900,000 on one of its investment properties, Willow
Park on Lake Adelaide, located in Altamonte Springs, Florida. The Partnership
received net proceeds of approximately $2,694,000 after payment of costs and
fees associated with obtaining the second mortgage. The second mortgage bears
interest at a fixed rate of 5.62% and requires monthly payments of principal and
interest of approximately $17,000 beginning on January 1, 2006 until the loan
matures on December 1, 2015, with a balloon payment of approximately $2,430,000
due at maturity. The Registrant has the option of extending the maturity date
for one additional year, to December 1, 2016, during which period the second
mortgage would bear interest at a rate equal to the one month British Bankers
Association's one month LIBOR Rate plus 250 basis points and would require
monthly payments of principal and interest. The Registrant may prepay the second
mortgage with the payment of a prepayment penalty as defined in the loan
agreement.
In accordance with the terms of the loan agreement relating to the second
mortgage financing, payment of the note may be accelerated at the option of the
lender if an event of default, as defined in the loan agreement occurs. Events
of default include, but are not limited to: failure to pay or deposit any amount
due under the loan agreement when due; failure to make the final payment or pay
the prepayment premium due under the note; and breach or default in the
performance of any of the covenants or agreements made by the Registrant.
The foregoing description is qualified in its entirety by reference to the
Multifamily Mortgage, Assignment of Rents, and Security Agreement; Multifamily
Note and Guaranty, copies of which are filed as exhibits 10.22, 10.23, and 10.24
to this report.
In connection with the new financing, the Registrant agreed to certain
modifications of the existing mortgage loan encumbering Willow Park on Lake
Adelaide. The modification of terms consisted of a new principal balance of
approximately $3,387,000, a fixed interest rate of 8.27%, monthly payments of
approximately $25,000 commencing January 1, 2006, through its maturity of
December 1, 2015, with a balloon payment of approximately $3,045,000 due at
maturity and a maturity date of December 1, 2015. The Registrant has the option
of extending the maturity date for one additional year, to December 1, 2016,
during which period the mortgage would bear interest at a rate equal to the one
month British Bankers Association's one month LIBOR Rate plus 250 basis points
and would require monthly payments of principal and interest. Prior to these
modifications, the interest rate on the existing mortgage was a fixed rate of
8.02% through its maturity of January 1, 2020, and required monthly payments of
approximately $34,000 through the maturity date, at which time the loan was
scheduled to be fully amortized.
The foregoing description is qualified in its entirety to the Amended and
Restated Multifamily Mortgage, Assignment of Rents, and Security Agreement;
Amended and Restated Multifamily Note; and Amended and Restated Guaranty, copies
of which are filed as exhibits 10.25, 10.26, and 10.27 to this report.
The managing general partner anticipates using the net loan proceeds received to
repay a portion of the balance of the outstanding loans owed to affiliates and
to retain some of the cash for partnership expenses.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibits are filed with this report:
10.22 Multifamily Mortgage, Assignment of Rents and Security Agreement
dated December 1, 2005 between National Investors Property 5 a
California limited partnership and GMAC Commercial Mortgage Bank.
*
10.23 Multifamily Note, dated December 1, 2005 between National Investors
Property 5 a California limited partnership and GMAC Commercial
Mortgage Bank. *
10.24 Guaranty, dated December 1, 2005 between AIMCO Properties, L.P.
and GMAC Commercial Mortgage Bank. *
10.25 Amended and Restated Multifamily Mortgage, Assignment of Rents, and
Security Agreement dated December 1, 2005 between National Investors
Property 5 a California limited partnership and Federal Home Loan
Mortgage Corporation. *
10.26 Amended and Restated Multifamily Note dated December 1, 2005 between
National Investors Property 5 a California limited partnership and
Federal Home Loan Mortgage Corporation. *
10.27 Amended and Restated Guaranty dated December 1, 2005 between
National Investors Property 5 a California limited partnership and
Federal Home Loan Mortgage Corporation. *
*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.
National Property Investors 5
By: NPI EQUITY INVESTMENTS, INC.
Managing General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: December 7, 2005
Exhibit 10.22
Prepared by, and after recording
return to:
Bernice H. Cilley, Esquire
Troutman Sanders LLP
Post Office Box 1122
Richmond, Virginia 23218-1122
MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
(FLORIDA - REVISION DATE 05-11-2004)
FHLMC Loan No. 002722690
Willow Park Apartments
MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
(FLORIDA - REVISION DATE 05-11-2004)
THIS MULTIFAMILY MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the
"Instrument") is made to be effective this 1st day of December, 2005, between
NATIONAL PROPERTY INVESTORS 5, a limited partnership organized and existing
under the laws of California, and doing business in Florida as National Property
Investors 5 Ltd., whose address is c/o AIMCO, Stanford Place 3, 4582 S. Ulster
St. Parkway, Suite 1100, Denver, Colorado 80237, as mortgagor ("Borrower"), and
GMAC COMMERCIAL MORTGAGE BANK, an industrial bank organized and existing under
the laws of Utah, whose address is 6955 Union Park Center, Suite 330, Midvale,
Utah 84047, Attention: President, with a copy to GMAC Commercial Mortgage
Corporation, 200 Witmer Road, Post Office Box 809, Horsham, Pennsylvania 19044,
Attention: Servicing - Executive Vice President, as mortgagee ("Lender").
Borrower's organizational identification number, if applicable, is 19842230015.
Borrower is indebted to Lender in the principal amount of $2,900,000.00,
as evidenced by Borrower's Multifamily Note payable to Lender dated as of the
date of this Instrument, and maturing on December 1, 2016 (the "Maturity Date").
TO SECURE TO LENDER the repayment of the Indebtedness, and all renewals,
extensions and modifications of the Indebtedness, and the performance of the
covenants and agreements of Borrower contained in the Loan Documents, Borrower
mortgages, warrants, grants, conveys and assigns to Lender the Mortgaged
Property, including the Land located in the County of Seminole, State of Florida
and described in Exhibit A attached to this Instrument.
Borrower represents and warrants that Borrower is lawfully seized of the
Mortgaged Property, has the right, power and authority to grant, convey and
assign the Mortgaged Property, and that the Mortgaged Property is unencumbered,
except as shown on the schedule of exceptions to coverage in the title policy
issued to and accepted by Lender contemporaneously with the execution and
recordation of this Instrument and insuring Lender's interest in the Mortgaged
Property (the "Schedule of Title Exceptions"). Borrower covenants that Borrower
will warrant and defend generally the title to the Mortgaged Property against
all claims and demands, subject to any easements and restrictions listed in the
Schedule of Title Exceptions.
UNIFORM COVENANTS
REVISION DATE 3-23-2005
Covenants. In consideration of the mutual promises set forth in this
Instrument, Borrower and Lender covenant and agree as follows:
1. DEFINITIONS. The following terms, when used in this Instrument
(including when used in the above recitals), shall have the
following meanings:
(a) "Attorneys' Fees and Costs" means (i) fees and out-of-pocket
costs of Lender's and Loan Servicer's attorneys, as
applicable, including costs of Lender's and Loan Servicer's
in-house counsel, support staff costs, costs of preparing for
litigation, computerized research, telephone and facsimile
transmission expenses, mileage, deposition costs, postage,
duplicating, process service, videotaping and similar costs
and expenses; (ii) costs and fees of expert witnesses,
including appraisers; and (iii) investigatory fees.
(b) "Borrower" means all persons or entities identified as
"Borrower" in the first paragraph of this Instrument, together
with their successors and assigns.
(c) "Business Day" means any day other than a Saturday, a Sunday
or any other day on which Lender is not open for business.
(d) "Collateral Agreement" means any separate agreement between
Borrower and Lender for the purpose of establishing
replacement reserves for the Mortgaged Property, establishing
a fund to assure the completion of repairs or improvements
specified in that agreement, or assuring reduction of the
outstanding principal balance of the Indebtedness if the
occupancy of or income from the Mortgaged Property does not
increase to a level specified in that agreement, or any other
agreement or agreements between Borrower and Lender which
provide for the establishment of any other fund, reserve or
account.
(e) "Controlling Entity" means an entity which owns, directly or
indirectly through one or more intermediaries, (i) a general
partnership interest or a Controlling Interest of the limited
partnership interests in Borrower (if Borrower is a
partnership or joint venture), (ii) a manager's interest in
Borrower or a Controlling Interest of the ownership or
membership interests in Borrower (if Borrower is a limited
liability company), (iii) a Controlling Interest of any class
of voting stock of Borrower (if Borrower is a corporation),
(iv) a trustee's interest or a Controlling Interest of the
beneficial interests in Borrower, or (v) a managing partner's
interest or a Controlling Interest of the partnership
interests in Borrower (if Borrower is a limited liability
partnership).
(f) "Controlling Interest" means (i) 51 percent or more of the
ownership interests in an entity, or (ii) a percentage
ownership interest in an entity of less than 51 percent, if
the owner(s) of that interest actually direct(s) the business
and affairs of the entity without the requirement of consent
of any other party. The Controlling Interest shall be deemed
to be 51 percent unless otherwise stated in Exhibit B.
(g) "Environmental Permit" means any permit, license, or other
authorization issued under any Hazardous Materials Law with
respect to any activities or businesses conducted on or in
relation to the Mortgaged Property.
(h) "Event of Default" means the occurrence of any event listed in
Section 22.
(i) "Fixtures" means all property owned by Borrower which is so
attached to the Land or the Improvements as to constitute a
fixture under applicable law, including: machinery, equipment,
engines, boilers, incinerators, installed building materials;
systems and equipment for the purpose of supplying or
distributing heating, cooling, electricity, gas, water, air,
or light; antennas, cable, wiring and conduits used in
connection with radio, television, security, fire prevention,
or fire detection or otherwise used to carry electronic
signals; telephone systems and equipment; elevators and
related machinery and equipment; fire detection, prevention
and extinguishing systems and apparatus; security and access
control systems and apparatus; plumbing systems; water
heaters, ranges, stoves, microwave ovens, refrigerators,
dishwashers, garbage disposers, washers, dryers and other
appliances; light fixtures, awnings, storm windows and storm
doors; pictures, screens, blinds, shades, curtains and curtain
rods; mirrors; cabinets, paneling, rugs and floor and wall
coverings; fences, trees and plants; swimming pools; and
exercise equipment.
(j) "Governmental Authority" means any board, commission,
department or body of any municipal, county, state or federal
governmental unit, or any subdivision of any of them, that has
or acquires jurisdiction over the Mortgaged Property or the
use, operation or improvement of the Mortgaged Property.
(k) "Hazard Insurance" is defined in Section 19.
(l) "Hazardous Materials" means petroleum and petroleum products
and compounds containing them, including gasoline, diesel fuel
and oil; explosives; flammable materials; radioactive
materials; polychlorinated biphenyls ("PCBs") and compounds
containing them; lead and lead-based paint; asbestos or
asbestos-containing materials in any form that is or could
become friable; underground or above-ground storage tanks,
whether empty or containing any substance; any substance the
presence of which on the Mortgaged Property is prohibited by
any federal, state or local authority; any substance that
requires special handling and any other material or substance
now or in the future that (i) is defined as a "hazardous
substance," "hazardous material," "hazardous waste," "toxic
substance," "toxic pollutant," "contaminant," or "pollutant"
by or within the meaning of any Hazardous Materials Law, or
(ii) is regulated in any way by or within the meaning of any
Hazardous Materials Law.
(m) "Hazardous Materials Laws" means all federal, state, and local
laws, ordinances and regulations and standards, rules,
policies and other governmental requirements, administrative
rulings and court judgments and decrees in effect now or in
the future and including all amendments, that relate to
Hazardous Materials or the protection of human health or the
environment and apply to Borrower or to the Mortgaged
Property. Hazardous Materials Laws include, but are not
limited to, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, et
seq., the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Section 6901, et seq., the Toxic Substance Control Act,
15 U.S.C. Section 2601, et seq., the Clean Water Act, 33
U.S.C. Section 1251, et seq., and the Hazardous Materials
Transportation Act, 49 U.S.C. Section 5101 et seq., and their
state analogs.
(n) "Impositions" and "Imposition Deposits" are defined in Section
7(a).
(o) "Improvements" means the buildings, structures, improvements,
and alterations now constructed or at any time in the future
constructed or placed upon the Land, including any future
replacements and additions.
(p) "Indebtedness" means the principal of, interest at the fixed
or variable rate set forth in the Note on, and all other
amounts due at any time under, the Note, this Instrument or
any other Loan Document, including prepayment premiums, late
charges, default interest, and advances as provided in Section
12 to protect the security of this Instrument.
(q) "Initial Owners" means, with respect to Borrower or any other
entity, the persons or entities that (i) on the date of the
Note, or (ii) on the date of a Transfer to which Lender has
consented, own in the aggregate 100 percent of the ownership
interests in Borrower or that entity.
(r) "Land" means the land described in Exhibit A.
(s) "Leases" means all present and future leases, subleases,
licenses, concessions or grants or other possessory interests
now or hereafter in force, whether oral or written, covering
or affecting the Mortgaged Property, or any portion of the
Mortgaged Property (including proprietary leases or occupancy
agreements if Borrower is a cooperative housing corporation),
and all modifications, extensions or renewals.
(t) "Lender" means the entity identified as "Lender" in the first
paragraph of this Instrument, or any subsequent holder of the
Note.
(u) "Loan Documents" means the Note, this Instrument, all
guaranties, all indemnity agreements, all Collateral
Agreements, O&M Programs, the MMP and any other documents now
or in the future executed by Borrower, any guarantor or any
other person in connection with the loan evidenced by the
Note, as such documents may be amended from time to time.
(v) "Loan Servicer" means the entity that from time to time is
designated by Lender to collect payments and deposits and
receive Notices under the Note, this Instrument and any other
Loan Document, and otherwise to service the loan evidenced by
the Note for the benefit of Lender. Unless Borrower receives
Notice to the contrary, the Loan Servicer is the entity
identified as "Lender" in the first paragraph of this
Instrument.
(w) "MMP" means a moisture management plan to control water
intrusion and prevent the development of Mold or moisture at
the Mortgaged Property throughout the term of this Instrument.
At a minimum, the MMP must contain a provision for (i) staff
training, (ii) information to be provided to tenants, (iii)
documentation of the plan, (iv) the appropriate protocol for
incident response and remediation and (v) routine, scheduled
inspections of common space and unit interiors.
(x) "Mold" means mold, fungus, microbial contamination or
pathogenic organisms.
(y) "Mortgaged Property" means all of Borrower's present and
future right, title and interest in and to all of the
following:
(i) the Land;
(ii) the Improvements;
(iii) the Fixtures;
(iv) the Personalty;
(v) all current and future rights, including air rights, development
rights, zoning rights and other similar rights or
interests, easements, tenements, rights-of-way, strips and
gores of land, streets, alleys, roads, sewer rights,
waters, watercourses, and appurtenances related to or
benefiting the Land or the Improvements, or both, and all
rights-of-way, streets, alleys and roads which may have
been or may in the future be vacated;
(vi) all proceeds paid or to be paid by any insurer of the Land,
the Improvements, the Fixtures, the Personalty or any other
part of the Mortgaged Property, whether or not Borrower
obtained the insurance pursuant to Lender's requirement;
(vii) all awards, payments and other compensation made or to be made
by any municipal, state or federal authority with respect to
the Land, the Improvements, the Fixtures, the Personalty or
any other part of the Mortgaged Property, including any awards
or settlements resulting from condemnation proceedings or the
total or partial taking of the Land, the Improvements, the
Fixtures, the Personalty or any other part of the Mortgaged
Property under the power of eminent domain or otherwise and
including any conveyance in lieu thereof;
(viii) all contracts, options and other agreements for the sale of
the Land, the Improvements, the Fixtures, the Personalty or
any other part of the Mortgaged Property entered into by
Borrower now or in the future, including cash or securities
deposited to secure performance by parties of their
obligations;
(ix) all proceeds from the conversion, voluntary or involuntary, of
any of the above into cash or liquidated claims, and the right
to collect such proceeds;
(x) all Rents and Leases;
(xi) all earnings, royalties, accounts receivable, issues and
profits from the Land, the Improvements or any other part of
the Mortgaged Property, and all undisbursed proceeds of the
loan secured by this Instrument and, if Borrower is a
cooperative housing corporation, maintenance charges or
assessments payable by shareholders or residents;
(xii) all Imposition Deposits;
(xiii) all refunds or rebates of Impositions by any municipal, state
or federal authority or insurance company (other than refunds
applicable to periods before the real property tax year in
which this Instrument is dated);
(xiv) all tenant security deposits which have not been forfeited by
any tenant under any Lease and any bond or other security in
lieu of such deposits; and
(xv) all names under or by which any of the above Mortgaged
Property may be operated or known, and all trademarks, trade
names, and goodwill relating to any of the Mortgaged Property.
(z) "Note" means the Multifamily Note described on page 1 of this
Instrument, including all schedules, riders, allonges and
addenda, as such Multifamily Note may be amended from time to
time.
(aa) "O&M Program" is defined in Section 18(d).
(bb) "Personalty" means all
(i) accounts (including deposit accounts) of Borrower related to
the Mortgaged Property;
(ii) equipment and inventory owned by Borrower, which are used now
or in the future in connection with the ownership, management
or operation of the Land or Improvements or are located on the
Land or Improvements, including furniture, furnishings,
machinery, building materials, goods, supplies, tools, books,
records (whether in written or electronic form), computer
equipment (hardware and software);
(iii) other tangible personal property owned by Borrower which are
used now or in the future in connection with the ownership,
management or operation of the land or Improvements or are
located on the Land or in the Improvements, including ranges,
stoves, microwave ovens, refrigerators, dishwashers, garbage
disposers, washers, dryers and other appliances (other than
Fixtures);
(iv) any operating agreements relating to the Land or the
Improvements;
(v) any surveys, plans and specifications and contracts for
architectural, engineering and construction services relating
to the Land or the Improvements;
(vi) all other intangible property, general intangibles and rights
relating to the operation of, or used in connection with, the
Land or the Improvements, including all governmental permits
relating to any activities on the Land and including subsidy
or similar payments received from any sources, including a
governmental authority; and
(vii) any rights of Borrower in or under letters of credit.
(cc) "Property Jurisdiction" is defined in Section 30(a).
(dd) "Rents" means all rents (whether from residential or
non-residential space), revenues and other income of the Land
or the Improvements, parking fees, laundry and vending machine
income and fees and charges for food, health care and other
services provided at the Mortgaged Property, whether now due,
past due, or to become due, and deposits forfeited by tenants.
(ee) "Taxes" means all taxes, assessments, vault rentals and other
charges, if any, whether general, special or otherwise,
including all assessments for schools, public betterments and
general or local improvements, which are levied, assessed or
imposed by any public authority or quasi-public authority, and
which, if not paid, will become a lien on the Land or the
Improvements.
(ff) "Transfer" is defined in Section 21.
2. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT.
(a) This Instrument is also a security agreement under the Uniform
Commercial Code for any of the Mortgaged Property which, under
applicable law, may be subjected to a security interest under
the Uniform Commercial Code, whether such Mortgaged Property
is owned now or acquired in the future, and all products and
cash and non-cash proceeds thereof (collectively, "UCC
Collateral"), and Borrower hereby grants to Lender a security
interest in the UCC Collateral. Borrower hereby authorizes
Lender to prepare and file financing statements, continuation
statements and financing statement amendments in such form as
Lender may require to perfect or continue the perfection of
this security interest and Borrower agrees, if Lender so
requests, to execute and deliver to Lender such financing
statements, continuation statements and amendments. Borrower
shall pay all filing costs and all costs and expenses of any
record searches for financing statements and/or amendments
that Lender may require. Without the prior written consent of
Lender, Borrower shall not create or permit to exist any other
lien or security interest in any of the UCC Collateral.
(b) Unless Borrower gives Notice to Lender within 30 days after
the occurrence of any of the following, and executes and
delivers to Lender modifications or supplements of this
Instrument (and any financing statement which may be filed in
connection with this Instrument) as Lender may require,
Borrower shall not (i) change its name, identity, structure or
jurisdiction of organization; (ii) change the location of its
place of business (or chief executive office if more than one
place of business); or (iii) add to or change any location at
which any of the Mortgaged Property is stored, held or
located.
(c) If an Event of Default has occurred and is continuing, Lender
shall have the remedies of a secured party under the Uniform
Commercial Code, in addition to all remedies provided by this
Instrument or existing under applicable law. In exercising any
remedies, Lender may exercise its remedies against the UCC
Collateral separately or together, and in any order, without
in any way affecting the availability of Lender's other
remedies.
(d) This Instrument constitutes a financing statement with respect
to any part of the Mortgaged Property that is or may become a
Fixture, if permitted by applicable law.
3. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN
POSSESSION.
(a) As part of the consideration for the Indebtedness, Borrower
absolutely and unconditionally assigns and transfers to Lender
all Rents. It is the intention of Borrower to establish a
present, absolute and irrevocable transfer and assignment to
Lender of all Rents and to authorize and empower Lender to
collect and receive all Rents without the necessity of further
action on the part of Borrower. Promptly upon request by
Lender, Borrower agrees to execute and deliver such further
assignments as Lender may from time to time require. Borrower
and Lender intend this assignment of Rents to be immediately
effective and to constitute an absolute present assignment and
not an assignment for additional security only. For purposes
of giving effect to this absolute assignment of Rents, and for
no other purpose, Rents shall not be deemed to be a part of
the Mortgaged Property. However, if this present, absolute and
unconditional assignment of Rents is not enforceable by its
terms under the laws of the Property Jurisdiction, then the
Rents shall be included as a part of the Mortgaged Property
and it is the intention of the Borrower that in this
circumstance this Instrument create and perfect a lien on
Rents in favor of Lender, which lien shall be effective as of
the date of this Instrument.
(b) After the occurrence of an Event of Default, Borrower
authorizes Lender to collect, sue for and compromise Rents and
directs each tenant of the Mortgaged Property to pay all Rents
to, or as directed by, Lender. However, until the occurrence
of an Event of Default, Lender hereby grants to Borrower a
revocable license to collect and receive all Rents, to hold
all Rents in trust for the benefit of Lender and to apply all
Rents to pay the installments of interest and principal then
due and payable under the Note and the other amounts then due
and payable under the other Loan Documents, including
Imposition Deposits, and to pay the current costs and expenses
of managing, operating and maintaining the Mortgaged Property,
including utilities, Taxes and insurance premiums (to the
extent not included in Imposition Deposits), tenant
improvements and other capital expenditures. So long as no
Event of Default has occurred and is continuing, the Rents
remaining after application pursuant to the preceding sentence
may be retained by Borrower free and clear of, and released
from, Lender's rights with respect to Rents under this
Instrument. From and after the occurrence of an Event of
Default, and without the necessity of Lender entering upon and
taking and maintaining control of the Mortgaged Property
directly, or by a receiver, Borrower's license to collect
Rents shall automatically terminate and Lender shall without
Notice be entitled to all Rents as they become due and
payable, including Rents then due and unpaid. Borrower shall
pay to Lender upon demand all Rents to which Lender is
entitled. At any time on or after the date of Lender's demand
for Rents, (i) Lender may give, and Borrower hereby
irrevocably authorizes Lender to give, notice to all tenants
of the Mortgaged Property instructing them to pay all Rents to
Lender, (ii) no tenant shall be obligated to inquire further
as to the occurrence or continuance of an Event of Default,
and (iii) no tenant shall be obligated to pay to Borrower any
amounts which are actually paid to Lender in response to such
a notice. Any such notice by Lender shall be delivered to each
tenant personally, by mail or by delivering such demand to
each rental unit. Borrower shall not interfere with and shall
cooperate with Lender's collection of such Rents.
(c) Borrower represents and warrants to Lender that Borrower has
not executed any prior assignment of Rents (other than an
assignment of Rents securing any prior indebtedness that is
being assigned to Lender, or paid off and discharged with the
proceeds of the loan evidenced by the Note), that Borrower has
not performed, and Borrower covenants and agrees that it will
not perform, any acts and has not executed, and shall not
execute, any instrument which would prevent Lender from
exercising its rights under this Section 3, and that at the
time of execution of this Instrument there has been no
anticipation or prepayment of any Rents for more than two
months prior to the due dates of such Rents. Borrower shall
not collect or accept payment of any Rents more than two
months prior to the due dates of such Rents.
(d) If an Event of Default has occurred and is continuing, Lender
may, regardless of the adequacy of Lender's security or the
solvency of Borrower and even in the absence of waste, enter
upon and take and maintain full control of the Mortgaged
Property in order to perform all acts that Lender in its
discretion determines to be necessary or desirable for the
operation and maintenance of the Mortgaged Property, including
the execution, cancellation or modification of Leases, the
collection of all Rents, the making of repairs to the
Mortgaged Property and the execution or termination of
contracts providing for the management, operation or
maintenance of the Mortgaged Property, for the purposes of
enforcing the assignment of Rents pursuant to Section 3(a),
protecting the Mortgaged Property or the security of this
Instrument, or for such other purposes as Lender in its
discretion may deem necessary or desirable. Alternatively, if
an Event of Default has occurred and is continuing, regardless
of the adequacy of Lender's security, without regard to
Borrower's solvency and without the necessity of giving prior
notice (oral or written) to Borrower, Lender may apply to any
court having jurisdiction for the appointment of a receiver
for the Mortgaged Property to take any or all of the actions
set forth in the preceding sentence. If Lender elects to seek
the appointment of a receiver for the Mortgaged Property at
any time after an Event of Default has occurred and is
continuing, Borrower, by its execution of this Instrument,
expressly consents to the appointment of such receiver,
including the appointment of a receiver ex parte if permitted
by applicable law. Lender or the receiver, as the case may be,
shall be entitled to receive a reasonable fee for managing the
Mortgaged Property. Immediately upon appointment of a receiver
or immediately upon the Lender's entering upon and taking
possession and control of the Mortgaged Property, Borrower
shall surrender possession of the Mortgaged Property to Lender
or the receiver, as the case may be, and shall deliver to
Lender or the receiver, as the case may be, all documents,
records (including records on electronic or magnetic media),
accounts, surveys, plans, and specifications relating to the
Mortgaged Property and all security deposits and prepaid
Rents. In the event Lender takes possession and control of the
Mortgaged Property, Lender may exclude Borrower and its
representatives from the Mortgaged Property. Borrower
acknowledges and agrees that the exercise by Lender of any of
the rights conferred under this Section 3 shall not be
construed to make Lender a mortgagee-in-possession of the
Mortgaged Property so long as Lender has not itself entered
into actual possession of the Land and Improvements.
(e) If Lender enters the Mortgaged Property, Lender shall be
liable to account only to Borrower and only for those Rents
actually received. Except to the extent of Lender's gross
negligence or willful misconduct, Lender shall not be liable
to Borrower, anyone claiming under or through Borrower or
anyone having an interest in the Mortgaged Property, by reason
of any act or omission of Lender under Section 3(d), and
Borrower hereby releases and discharges Lender from any such
liability to the fullest extent permitted by law.
(f) If the Rents are not sufficient to meet the costs of taking
control of and managing the Mortgaged Property and collecting
the Rents, any funds expended by Lender for such purposes
shall become an additional part of the Indebtedness as
provided in Section 12.
(g) Any entering upon and taking of control of the Mortgaged
Property by Lender or the receiver, as the case may be, and
any application of Rents as provided in this Instrument shall
not cure or waive any Event of Default or invalidate any other
right or remedy of Lender under applicable law or provided for
in this Instrument.
4. ASSIGNMENT OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY.
(a) As part of the consideration for the Indebtedness, Borrower
absolutely and unconditionally assigns and transfers to Lender
all of Borrower's right, title and interest in, to and under
the Leases, including Borrower's right, power and authority to
modify the terms of any such Lease, or extend or terminate any
such Lease. It is the intention of Borrower to establish a
present, absolute and irrevocable transfer and assignment to
Lender of all of Borrower's right, title and interest in, to
and under the Leases. Borrower and Lender intend this
assignment of the Leases to be immediately effective and to
constitute an absolute present assignment and not an
assignment for additional security only. For purposes of
giving effect to this absolute assignment of the Leases, and
for no other purpose, the Leases shall not be deemed to be a
part of the Mortgaged Property. However, if this present,
absolute and unconditional assignment of the Leases is not
enforceable by its terms under the laws of the Property
Jurisdiction, then the Leases shall be included as a part of
the Mortgaged Property and it is the intention of the Borrower
that in this circumstance this Instrument create and perfect a
lien on the Leases in favor of Lender, which lien shall be
effective as of the date of this Instrument.
(b) Until Lender gives Notice to Borrower of Lender's exercise of
its rights under this Section 4, Borrower shall have all
rights, power and authority granted to Borrower under any
Lease (except as otherwise limited by this Section or any
other provision of this Instrument), including the right,
power and authority to modify the terms of any Lease or extend
or terminate any Lease. Upon the occurrence of an Event of
Default, the permission given to Borrower pursuant to the
preceding sentence to exercise all rights, power and authority
under Leases shall automatically terminate. Borrower shall
comply with and observe Borrower's obligations under all
Leases, including Borrower's obligations pertaining to the
maintenance and disposition of tenant security deposits.
(c) Borrower acknowledges and agrees that the exercise by Lender,
either directly or by a receiver, of any of the rights
conferred under this Section 4 shall not be construed to make
Lender a mortgagee-in-possession of the Mortgaged Property so
long as Lender has not itself entered into actual possession
of the Land and the Improvements. The acceptance by Lender of
the assignment of the Leases pursuant to Section 4(a) shall
not at any time or in any event obligate Lender to take any
action under this Instrument or to expend any money or to
incur any expenses. Except to the extent of Lender's gross
negligence or willful misconduct, Lender shall not be liable
in any way for any injury or damage to person or property
sustained by any person or persons, firm or corporation in or
about the Mortgaged Property. Prior to Lender's actual entry
into and taking possession of the Mortgaged Property, Lender
shall not (i) be obligated to perform any of the terms,
covenants and conditions contained in any Lease (or otherwise
have any obligation with respect to any Lease); (ii) be
obligated to appear in or defend any action or proceeding
relating to the Lease or the Mortgaged Property; or (iii) be
responsible for the operation, control, care, management or
repair of the Mortgaged Property or any portion of the
Mortgaged Property. The execution of this Instrument by
Borrower shall constitute conclusive evidence that all
responsibility for the operation, control, care, management
and repair of the Mortgaged Property is and shall be that of
Borrower, prior to such actual entry and taking of possession.
(d) Upon delivery of Notice by Lender to Borrower of Lender's
exercise of Lender's rights under this Section 4 at any time
after the occurrence of an Event of Default, and without the
necessity of Lender entering upon and taking and maintaining
control of the Mortgaged Property directly, by a receiver, or
by any other manner or proceeding permitted by the laws of the
Property Jurisdiction, Lender immediately shall have all
rights, powers and authority granted to Borrower under any
Lease, including the right, power and authority to modify the
terms of any such Lease, or extend or terminate any such
Lease.
(e) Borrower shall, promptly upon Lender's request, deliver to
Lender an executed copy of each residential Lease then in
effect. All Leases for residential dwelling units shall be on
forms approved by Lender, shall be for initial terms of at
least six months and not more than two years, and shall not
include options to purchase. If Borrower is a cooperative
housing corporation, association or other validly organized
entity under municipal, county, state or federal law,
notwithstanding anything to the contrary contained in this
subsection, so long as Borrower is not in breach of any
covenant of this Instrument, Lender hereby consents to the
execution of leases of apartments for a term in excess of two
years from Borrower to a tenant shareholder of Borrower, to
the surrender or termination of such leases of apartments
where the surrendered or terminated lease is immediately
replaced or where the Borrower makes its best efforts to
secure such immediate replacement by a newly executed lease of
the same apartment to a tenant shareholder of the Borrower.
However, no consent is hereby given by Lender to any
execution, surrender, termination or assignment of a lease
under terms that would waive or reduce the obligation of the
resulting tenant shareholder under such lease to pay
cooperative assessments in full when due or the obligation of
the former tenant shareholder to pay any unpaid portion of
such assessments.
(f) Borrower shall not lease any portion of the Mortgaged Property
for non-residential use except with the prior written consent
of Lender and Lender's prior written approval of the Lease
agreement. Borrower shall not modify the terms of, or extend
or terminate, any Lease for non-residential use (including any
Lease in existence on the date of this Instrument) without the
prior written consent of Lender. However, Lender's consent
shall not be required for the modification or extension of a
non-residential Lease if such modification or extension is on
terms at least as favorable to Borrower as those customary at
that time in the applicable market and the income from the
extended or modified Lease will not be less than the income
received from the Lease as of the date of this Instrument.
Borrower shall, without request by Lender, deliver an executed
copy of each non-residential Lease to Lender promptly after
such Lease is signed. All non-residential Leases, including
renewals or extensions of existing Leases, shall specifically
provide that (i) such Leases are subordinate to the lien of
this Instrument; (ii) the tenant shall attorn to Lender and
any purchaser at a foreclosure sale, such attornment to be
self-executing and effective upon acquisition of title to the
Mortgaged Property by any purchaser at a foreclosure sale or
by Lender in any manner; (iii) the tenant agrees to execute
such further evidences of attornment as Lender or any
purchaser at a foreclosure sale may from time to time request;
(iv) the Lease shall not be terminated by foreclosure or any
other transfer of the Mortgaged Property; (v) after a
foreclosure sale of the Mortgaged Property, Lender or any
other purchaser at such foreclosure sale may, at Lender's or
such purchaser's option, accept or terminate such Lease; and
(vi) the tenant shall, upon receipt after the occurrence of an
Event of Default of a written request from Lender, pay all
Rents payable under the Lease to Lender.
(g) Borrower shall not receive or accept Rent under any Lease
(whether residential or non-residential) for more than two
months in advance.
5. PAYMENT OF INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS;
PREPAYMENT PREMIUM. Borrower shall pay the Indebtedness when
due in accordance with the terms of the Note and the other
Loan Documents and shall perform, observe and comply with all
other provisions of the Note and the other Loan Documents.
Borrower shall pay a prepayment premium in connection with
certain prepayments of the Indebtedness, including a payment
made after Lender's exercise of any right of acceleration of
the Indebtedness, as provided in the Note.
6. EXCULPATION. Borrower's personal liability for payment of the
Indebtedness and for performance of the other obligations to
be performed by it under this Instrument is limited in the
manner, and to the extent, provided in the Note.
7. DEPOSITS FOR TAXES, INSURANCE AND OTHER CHARGES.
(a) Unless this requirement is waived in writing by Lender, which
waiver may be contained in this Section 7(a), Borrower shall
deposit with Lender on the day monthly installments of
principal or interest, or both, are due under the Note (or on
another day designated in writing by Lender), until the
Indebtedness is paid in full, an additional amount sufficient
to accumulate with Lender the entire sum required to pay, when
due, the items marked "Collect" below. Lender will not require
the Borrower to make Imposition Deposits with respect to the
items marked "Deferred" below.
[Deferred] Hazard Insurance premiums or other insurance premiums required
by Lender under Section 19,
[Deferred] Taxes,
[Deferred] water and sewer charges (that could become a lien on the
Mortgaged Property),
[ N/A ] ground rents,
[Deferred] assessments or other charges (that could become a lien on the
Mortgaged Property)
The amounts deposited under the preceding sentence are collectively referred to
in this Instrument as the "Imposition Deposits." The obligations of Borrower for
which the Imposition Deposits are required are collectively referred to in this
Instrument as "Impositions." The amount of the Imposition Deposits shall be
sufficient to enable Lender to pay each Imposition before the last date upon
which such payment may be made without any penalty or interest charge being
added. Lender shall maintain records indicating how much of the monthly
Imposition Deposits and how much of the aggregate Imposition Deposits held by
Lender are held for the purpose of paying Taxes, insurance premiums and each
other Imposition.
(b) Imposition Deposits shall be held in an institution (which may be Lender, if
Lender is such an institution) whose deposits or accounts are insured or
guaranteed by a federal agency. Lender shall not be obligated to open additional
accounts or deposit Imposition Deposits in additional institutions when the
amount of the Imposition Deposits exceeds the maximum amount of the federal
deposit insurance or guaranty. Lender shall apply the Imposition Deposits to pay
Impositions so long as no Event of Default has occurred and is continuing.
Unless applicable law requires, Lender shall not be required to pay Borrower any
interest, earnings or profits on the Imposition Deposits. As additional security
for all of Borrower's obligations under this Instrument and the other Loan
Documents, Borrower hereby pledges and grants to Lender a security interest in
the Imposition Deposits and all proceeds of, and all interest and dividends on,
the Imposition Deposits. Any amounts deposited with Lender under this Section 7
shall not be trust funds, nor shall they operate to reduce the Indebtedness,
unless applied by Lender for that purpose under Section 7(e).
(c) If Lender receives a bill or invoice for an Imposition, Lender shall pay the
Imposition from the Imposition Deposits held by Lender. Lender shall have no
obligation to pay any Imposition to the extent it exceeds Imposition Deposits
then held by Lender. Lender may pay an Imposition according to any bill,
statement or estimate from the appropriate public office or insurance company
without inquiring into the accuracy of the bill, statement or estimate or into
the validity of the Imposition.
(d) If at any time the amount of the Imposition Deposits held by Lender for
payment of a specific Imposition exceeds the amount reasonably deemed necessary
by Lender, the excess shall be credited against future installments of
Imposition Deposits. If at any time the amount of the Imposition Deposits held
by Lender for payment of a specific Imposition is less than the amount
reasonably estimated by Lender to be necessary, Borrower shall pay to Lender the
amount of the deficiency within 15 days after Notice from Lender.
(e) If an Event of Default has occurred and is continuing, Lender may apply any
Imposition Deposits, in any amounts and in any order as Lender determines, in
Lender's discretion, to pay any Impositions or as a credit against the
Indebtedness. Upon payment in full of the Indebtedness, Lender shall refund to
Borrower any Imposition Deposits held by Lender.
(f) If Lender does not collect an Imposition Deposit with respect to an
Imposition either marked "Deferred" in Section 7(a) or pursuant to a separate
written waiver by Lender, then on or before the date each such Imposition is
due, or on the date this Instrument requires each such Imposition to be paid,
Borrower must provide Lender with proof of payment of each such Imposition for
which Lender does not require collection of Imposition Deposits. Lender may
revoke its deferral or waiver and require Borrower to deposit with Lender any or
all of the Imposition Deposits listed in Section 7(a), regardless of whether any
such item is marked "Deferred" in such section, upon Notice to Borrower, (i) if
Borrower does not timely pay any of the Impositions, (ii) if Borrower fails to
provide timely proof to Lender of such payment, or (iii) at any time during the
existence of an Event of Default.
(g) In the event of a Transfer prohibited by or requiring Lender's approval
under Section 21, Lender's waiver of the collection of any Imposition Deposit in
this Section 7 may be modified or rendered void by Lender at Lender's option by
Notice to Borrower and the transferee(s) as a condition of Lender's approval of
such Transfer.
8. COLLATERAL AGREEMENTS. Borrower shall deposit with Lender such amounts as may
be required by any Collateral Agreement and shall perform all other obligations
of Borrower under each Collateral Agreement.
9. APPLICATION OF PAYMENTS. If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness which is less than all
amounts due and payable at such time, then Lender may apply that payment to
amounts then due and payable in any manner and in any order determined by
Lender, in Lender's discretion. Neither Lender's acceptance of an amount that is
less than all amounts then due and payable nor Lender's application of such
payment in the manner authorized shall constitute or be deemed to constitute
either a waiver of the unpaid amounts or an accord and satisfaction.
Notwithstanding the application of any such amount to the Indebtedness,
Borrower's obligations under this Instrument and the Note shall remain
unchanged.
10. COMPLIANCE WITH LAWS. Borrower shall comply with all laws, ordinances,
regulations and requirements of any Governmental Authority and all recorded
lawful covenants and agreements relating to or affecting the Mortgaged Property,
including all laws, ordinances, regulations, requirements and covenants
pertaining to health and safety, construction of improvements on the Mortgaged
Property, fair housing, disability accommodation, zoning and land use, and
Leases. Borrower also shall comply with all applicable laws that pertain to the
maintenance and disposition of tenant security deposits. Borrower shall at all
times maintain records sufficient to demonstrate compliance with the provisions
of this Section 10. Borrower shall take appropriate measures to prevent, and
shall not engage in or knowingly permit, any illegal activities at the Mortgaged
Property that could endanger tenants or visitors, result in damage to the
Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise
materially impair the lien created by this Instrument or Lender's interest in
the Mortgaged Property. Borrower represents and warrants to Lender that no
portion of the Mortgaged Property has been or will be purchased with the
proceeds of any illegal activity.
11. USE OF PROPERTY. Unless required by applicable law, Borrower shall not (a)
allow changes in the use for which all or any part of the Mortgaged Property is
being used at the time this Instrument was executed, except for any change in
use approved by Lender, (b) convert any individual dwelling units or common
areas to commercial use, (c) initiate a change in the zoning classification of
the Mortgaged Property or acquiesce without Notice to and consent of Lender in a
change in the zoning classification of the Mortgaged Property, (d) establish any
condominium or cooperative regime with respect to the Mortgaged Property, (e)
combine all or any part of the Mortgaged Property with all or any part of a tax
parcel which is not part of the Mortgaged Property, or (f) subdivide or
otherwise split any tax parcel constituting all or any part of the Mortgaged
Property without the prior consent of Lender.
12. PROTECTION OF LENDER'S SECURITY; INSTRUMENT SECURES FUTURE ADVANCES.
(a) If Borrower fails to perform any of its obligations under this Instrument or
any other Loan Document, or if any action or proceeding is commenced which
purports to affect the Mortgaged Property, Lender's security or Lender's rights
under this Instrument, including eminent domain, insolvency, code enforcement,
civil or criminal forfeiture, enforcement of Hazardous Materials Laws,
fraudulent conveyance or reorganizations or proceedings involving a bankrupt or
decedent, then Lender at Lender's option may make such appearances, file such
documents, disburse such sums and take such actions as Lender reasonably deems
necessary to perform such obligations of Borrower and to protect Lender's
interest, including (i) payment of Attorneys' Fees and Costs, (ii) payment of
fees and out-of-pocket expenses of accountants, inspectors and consultants,
(iii) entry upon the Mortgaged Property to make repairs or secure the Mortgaged
Property, (iv) procurement of the insurance required by Section 19, and (v)
payment of amounts which Borrower has failed to pay under Sections 15 and 17.
(b) Any amounts disbursed by Lender under this Section 12, or under any other
provision of this Instrument that treats such disbursement as being made under
this Section 12, shall be secured by this Instrument, shall be added to, and
become part of, the principal component of the Indebtedness, shall be
immediately due and payable and shall bear interest from the date of
disbursement until paid at the "Default Rate," as defined in the Note.
(c) Nothing in this Section 12 shall require Lender to incur any expense or take
any action.
13. INSPECTION.
(a) Lender, its agents, representatives, and designees may make or cause to be
made entries upon and inspections of the Mortgaged Property (including
environmental inspections and tests) during normal business hours, or at any
other reasonable time, upon reasonable notice to Borrower if the inspection is
to include occupied residential units (which notice need not be in writing).
Notice to Borrower shall not be required in the case of an emergency, as
determined in Lender's discretion, or when an Event of Default has occurred and
is continuing.
(b) If Lender determines that Mold has developed as a result of a water
intrusion event or leak, Lender, at Lender's discretion, may require that a
professional inspector inspect the Mortgaged Property as frequently as Lender
determines is necessary until any issue with Mold and its cause(s) are resolved
to Lender's satisfaction. Such inspection shall be limited to a visual and
olfactory inspection of the area that has experienced the Mold, water intrusion
event or leak. Borrower shall be responsible for the cost of such professional
inspection and any remediation deemed to be necessary as a result of the
professional inspection. After any issue with Mold, water intrusion or leaks is
remedied to Lender's satisfaction, Lender shall not require a professional
inspection any more frequently than once every three years unless Lender is
otherwise aware of Mold as a result of a subsequent water intrusion event or
leak.
(c) If Lender or Loan Servicer determines not to conduct an annual inspection of
the Mortgaged Property, and in lieu thereof Lender requests a certification,
Borrower shall be prepared to provide and must actually provide to Lender a
factually correct certification each year that the annual inspection is waived
to the following effect:
Borrower has not received any written complaint, notice, letter or
other written communication from tenants, management agent or
governmental authorities regarding odors, indoor air quality, mold,
fungus, microbial contamination or pathogenic organisms ("Mold") or
any activity, condition, event or omission that causes or
facilitates the growth of Mold on or in any part of the Mortgaged
Property or if Borrower has received any such written complaint,
notice, letter or other written communication that Borrower has
investigated and determined that no Mold activity, condition or
event exists or alternatively has fully and properly remediated such
activity, condition, event or omission in compliance with the
Moisture Management Plan for the Mortgaged Property.
If Borrower is unwilling or unable to provide such certification, Lender
may require a professional inspection of the Mortgaged Property at Borrower's
expense.
14. BOOKS AND RECORDS; FINANCIAL REPORTING.
(a) Borrower shall keep and maintain at all times at the Mortgaged
Property or the management agent's office, and upon Lender's
request shall make available at the Mortgaged Property (or, at
Borrower's option, at the management agent's office), complete
and accurate books of account and records (including copies of
supporting bills and invoices) adequate to reflect correctly
the operation of the Mortgaged Property, and copies of all
written contracts, Leases, and other instruments which affect
the Mortgaged Property. The books, records, contracts, Leases
and other instruments shall be subject to examination and
inspection by Lender at any reasonable time.
(b) Within 120 days after the end of each fiscal year of Borrower,
Borrower shall furnish to Lender a statement of income and
expenses for Borrower's operation of the Mortgaged Property
for that fiscal year, a statement of changes in financial
position of Borrower relating to the Mortgaged Property for
that fiscal year and, when requested by Lender, a balance
sheet showing all assets and liabilities of Borrower relating
to the Mortgaged Property as of the end of that fiscal year.
If Borrower's fiscal year is other than the calendar year,
Borrower must also submit to Lender a year-end statement of
income and expenses within 120 days after the end of the
calendar year.
(c) Within 120 days after the end of each calendar year, and at
any other time, upon Lender's request, Borrower shall furnish
to Lender each of the following. However, Lender shall not
require any of the following more frequently than quarterly
except when there has been an Event of Default and such Event
of Default is continuing, in which case Lender may, upon
written request to Borrower, require Borrower to furnish any
of the following more frequently:
(i) a rent schedule for the Mortgaged Property showing the name of
each tenant, and for each tenant, the space occupied, the
lease expiration date, the rent payable for the current month,
the date through which rent has been paid, and any related
information requested by Lender;
(ii) an accounting of all security deposits held pursuant to all
Leases, including the name of the institution (if any) and the
names and identification numbers of the accounts (if any) in
which such security deposits are held and the name of the
person to contact at such financial institution, along with
any authority or release necessary for Lender to access
information regarding such accounts; and
(iii) a statement that identifies all owners of any interest in
Borrower and any Controlling Entity and the interest held by
each (unless Borrower or any Controlling Entity is a
publicly-traded entity in which case such statement of
ownership shall not be required), if Borrower or a Controlling
Entity is a corporation, all officers and directors of
Borrower and the Controlling Entity, and if Borrower or a
Controlling Entity is a limited liability company, all
managers who are not members.
(d) At any time upon Lender's request, Borrower shall furnish to
Lender each of the following. However, Lender shall not
require any of the following more frequently than quarterly
except when there has been an Event of Default and such Event
of Default is continuing, in which case Lender may require
Borrower to furnish any of the following more frequently:
(i) a balance sheet, a statement of income and expenses for
Borrower and a statement of changes in financial position of
Borrower for Borrower's most recent fiscal year;
(ii) a quarterly or year-to-date income and expense statement for
the Mortgaged Property; and
(iii) a monthly property management report for the Mortgaged
Property, showing the number of inquiries made and rental
applications received from tenants or prospective tenants and
deposits received from tenants and any other information
requested by Lender.
(e) Upon Lender's request at any time when an Event of Default has
occurred and is continuing, Borrower shall furnish to Lender
monthly income and expense statements and rent schedules for
the Mortgaged Property.
(f) An individual having authority to bind Borrower shall certify
each of the statements, schedules and reports required by
Sections 14(b) through 14(e) to be complete and accurate. Each
of the statements, schedules and reports required by Sections
14(b) through 14(e) shall be in such form and contain such
detail as Lender may reasonably require. Lender also may
require that any of the statements, schedules or reports
listed in Section 14(b) and 14(c)(i) and (ii) be audited at
Borrower's expense by independent certified public accountants
acceptable to Lender, at any time when an Event of Default has
occurred and is continuing or at any time that Lender, in its
reasonable judgment, determines that audited financial
statements are required for an accurate assessment of the
financial condition of Borrower or of the Mortgaged Property.
(g) If Borrower fails to provide in a timely manner the
statements, schedules and reports required by Sections 14(b)
through (e), Lender shall give Borrower Notice specifying the
statements, schedules and reports required by Section 14(b)
through (e) that Borrower has failed to provide. If Borrower
has not provided the required statements, schedules and
reports within 10 Business Days following such Notice, then
Lender shall have the right to have Borrower's books and
records audited, at Borrower's expense, by independent
certified public accountants selected by Lender in order to
obtain such statements, schedules and reports, and all related
costs and expenses of Lender shall become immediately due and
payable and shall become an additional part of the
Indebtedness as provided in Section 12. Notice to Borrower
shall not be required in the case of an emergency, as
determined in Lender's discretion, or when an Event of Default
has occurred and is continuing.
(h) If an Event of Default has occurred and is continuing,
Borrower shall deliver to Lender upon written demand all books
and records relating to the Mortgaged Property or its
operation.
(i) Borrower authorizes Lender to obtain a credit report on
Borrower at any time.
15. TAXES; OPERATING EXPENSES.
(a) Subject to the provisions of Section 15(c) and Section 15(d),
Borrower shall pay, or cause to be paid, all Taxes when due
and before the addition of any interest, fine, penalty or cost
for nonpayment.
(b) Subject to the provisions of Section 15(c), Borrower shall (i)
pay the expenses of operating, managing, maintaining and
repairing the Mortgaged Property (including utilities, repairs
and replacements) before the last date upon which each such
payment may be made without any penalty or interest charge
being added, and (ii) pay insurance premiums at least 30 days
prior to the expiration date of each policy of insurance,
unless applicable law specifies some lesser period.
(c) If Lender is collecting Imposition Deposits, to the extent
that Lender holds sufficient Imposition Deposits for the
purpose of paying a specific Imposition, then Borrower shall
not be obligated to pay such Imposition, so long as no Event
of Default exists and Borrower has timely delivered to Lender
any bills or premium notices that it has received. If an Event
of Default exists, Lender may exercise any rights Lender may
have with respect to Imposition Deposits without regard to
whether Impositions are then due and payable. Lender shall
have no liability to Borrower for failing to pay any
Impositions to the extent that (i) any Event of Default has
occurred and is continuing, (ii) insufficient Imposition
Deposits are held by Lender at the time an Imposition becomes
due and payable or (iii) Borrower has failed to provide Lender
with bills and premium notices as provided above.
(d) Borrower, at its own expense, may contest by appropriate legal
proceedings, conducted diligently and in good faith, the
amount or validity of any Imposition other than insurance
premiums, if (i) Borrower notifies Lender of the commencement
or expected commencement of such proceedings, (ii) the
Mortgaged Property is not in danger of being sold or
forfeited, (iii) if Borrower has not already paid the
Imposition, Borrower deposits with Lender reserves sufficient
to pay the contested Imposition, if requested by Lender, and
(iv) Borrower furnishes whatever additional security is
required in the proceedings or is reasonably requested by
Lender.
(e) Borrower shall promptly deliver to Lender a copy of all
notices of, and invoices for, Impositions, and if Borrower
pays any Imposition directly, Borrower shall furnish to Lender
on or before the date this Instrument requires such
Impositions to be paid, receipts evidencing that such payments
were made.
16. LIENS; ENCUMBRANCES. Borrower acknowledges that, to the extent
provided in Section 21, the grant, creation or existence of
any mortgage, deed of trust, deed to secure debt, security
interest or other lien or encumbrance (a "Lien") on the
Mortgaged Property (other than the lien of this Instrument) or
on certain ownership interests in Borrower, whether voluntary,
involuntary or by operation of law, and whether or not such
Lien has priority over the lien of this Instrument, is a
"Transfer" which constitutes an Event of Default and subjects
Borrower to personal liability under the Note.
17. PRESERVATION, MANAGEMENT AND MAINTENANCE OF MORTGAGED
PROPERTY.
(a) Borrower shall not commit waste or permit impairment or
deterioration of the Mortgaged Property.
(b) Borrower shall not abandon the Mortgaged Property.
(c) Borrower shall restore or repair promptly, in a good and
workmanlike manner, any damaged part of the Mortgaged Property
to the equivalent of its original condition, or such other
condition as Lender may approve in writing, whether or not
insurance proceeds or condemnation awards are available to
cover any costs of such restoration or repair; however,
Borrower shall not be obligated to perform such restoration or
repair if (i) no Event of Default has occurred and is
continuing, and (ii) Lender has elected to apply any available
insurance proceeds and/or condemnation awards to the payment
of Indebtedness pursuant to Section 19(h)(ii), (iii), (iv) or
(v), or pursuant to Section 20.
(d) Borrower shall keep the Mortgaged Property in good repair,
including the replacement of Personalty and Fixtures with
items of equal or better function and quality.
(e) Borrower shall provide for professional management of the
Mortgaged Property by a residential rental property manager
satisfactory to Lender at all times under a contract approved
by Lender in writing, which contract must be terminable upon
not more than 30 days notice without the necessity of
establishing cause and without payment of a penalty or
termination fee by Borrower or its successors.
(f) Borrower shall give Notice to Lender of and, unless otherwise
directed in writing by Lender, shall appear in and defend any
action or proceeding purporting to affect the Mortgaged
Property, Lender's security or Lender's rights under this
Instrument. Borrower shall not (and shall not permit any
tenant or other person to) remove, demolish or alter the
Mortgaged Property or any part of the Mortgaged Property,
including any removal, demolition or alteration occurring in
connection with a rehabilitation of all or part of the
Mortgaged Property, except (i) in connection with the
replacement of tangible Personalty, (ii) if Borrower is a
cooperative housing corporation, to the extent permitted with
respect to individual dwelling units under the form of
proprietary lease or occupancy agreement and (iii) repairs and
replacements in connection with making an individual unit
ready for a new occupant.
(g) Unless otherwise waived by Lender in writing, Borrower must
have or must establish and must adhere to the MMP. If the
Borrower is required to have an MMP, the Borrower must keep
all MMP documentation at the Mortgaged Property or at the
management agent's office and available for the Lender or the
Loan Servicer to review during any annual assessment or other
inspection of the Mortgaged Property that is required by
Lender.
18. ENVIRONMENTAL HAZARDS.
(a) Except for matters described in Section 18(b), Borrower shall
not cause or permit any of the following:
(i) the presence, use, generation, release, treatment, processing,
storage (including storage in above ground and underground
storage tanks), handling, or disposal of any Hazardous
Materials on or under the Mortgaged Property or any other
property of Borrower that is adjacent to the Mortgaged
Property;
(ii) the transportation of any Hazardous Materials to, from, or
across the Mortgaged Property;
(iii) any occurrence or condition on the Mortgaged Property or any
other property of Borrower that is adjacent to the Mortgaged
Property, which occurrence or condition is or may be in
violation of Hazardous Materials Laws;
(iv) any violation of or noncompliance with the terms of any
Environmental Permit with respect to the Mortgaged Property or
any property of Borrower that is adjacent to the Mortgaged
Property;
(v) any violation or noncompliance with the terms of any O&M
Program as defined in subsection (d).
The matters described in clauses (i) through (v) above, except as otherwise
provided in Section 18(b), are referred to collectively in this Section 18 as
"Prohibited Activities or Conditions."
(b) Prohibited Activities or Conditions shall not include lawful
conditions permitted by an O&M Program or the safe and lawful
use and storage of quantities of (i) pre-packaged supplies,
cleaning materials and petroleum products customarily used in
the operation and maintenance of comparable multifamily
properties, (ii) cleaning materials, personal grooming items
and other items sold in pre-packaged containers for consumer
use and used by tenants and occupants of residential dwelling
units in the Mortgaged Property; and (iii) petroleum products
used in the operation and maintenance of motor vehicles from
time to time located on the Mortgaged Property's parking
areas, so long as all of the foregoing are used, stored,
handled, transported and disposed of in compliance with
Hazardous Materials Laws.
(c) Borrower shall take all commercially reasonable actions
(including the inclusion of appropriate provisions in any
Leases executed after the date of this Instrument) to prevent
its employees, agents, and contractors, and all tenants and
other occupants from causing or permitting any Prohibited
Activities or Conditions. Borrower shall not lease or allow
the sublease or use of all or any portion of the Mortgaged
Property to any tenant or subtenant for nonresidential use by
any user that, in the ordinary course of its business, would
cause or permit any Prohibited Activity or Condition.
(d) As required by Lender, Borrower shall also have established a
written operations and maintenance program with respect to
certain Hazardous Materials. Each such operations and
maintenance program and any additional or revised operations
and maintenance programs established for the Mortgaged
Property pursuant to this Section 18 must be approved by
Lender and shall be referred to herein as an "O&M Program."
Borrower shall comply in a timely manner with, and cause all
employees, agents, and contractors of Borrower and any other
persons present on the Mortgaged Property to comply with each
O&M Program. Borrower shall pay all costs of performance of
Borrower's obligations under any O&M Program, and Lender's
out-of-pocket costs incurred in connection with the monitoring
and review of each O&M Program and Borrower's performance
shall be paid by Borrower upon demand by Lender. Any such
out-of-pocket costs of Lender that Borrower fails to pay
promptly shall become an additional part of the Indebtedness
as provided in Section 12.
(e) Borrower represents and warrants to Lender that, except as
previously disclosed by Borrower to Lender in writing (which
written disclosure may be in certain environmental assessments
and other written reports accepted by Lender in connection
with the funding of the Indebtedness and dated prior to the
date of this Instrument):
(i) Borrower has not at any time engaged in, caused or permitted
any Prohibited Activities or Conditions on the Mortgaged
Property;
(ii) to the best of Borrower's knowledge after reasonable and
diligent inquiry, no Prohibited Activities or Conditions exist
or have existed on the Mortgaged Property;
(iii) the Mortgaged Property does not now contain any underground
storage tanks, and, to the best of Borrower's knowledge after
reasonable and diligent inquiry, the Mortgaged Property has
not contained any underground storage tanks in the past. If
there is an underground storage tank located on the Mortgaged
Property that has been previously disclosed by Borrower to
Lender in writing, that tank complies with all requirements of
Hazardous Materials Laws;
(iv) to the best of Borrower's knowledge after reasonable and
diligent inquiry, Borrower has complied with all Hazardous
Materials Laws, including all requirements for notification
regarding releases of Hazardous Materials. Without limiting
the generality of the foregoing, Borrower has obtained all
Environmental Permits required for the operation of the
Mortgaged Property in accordance with Hazardous Materials Laws
now in effect and all such Environmental Permits are in full
force and effect;
(v) to the best of Borrower's knowledge after reasonable and
diligent inquiry, no event has occurred with respect to the
Mortgaged Property that constitutes, or with the passing of
time or the giving of notice would constitute, noncompliance
with the terms of any Environmental Permit;
(vi) there are no actions, suits, claims or proceedings pending or,
to the best of Borrower's knowledge after reasonable and
diligent inquiry, threatened that involve the Mortgaged
Property and allege, arise out of, or relate to any Prohibited
Activity or Condition; and
(vii) Borrower has not received any written complaint, order, notice
of violation or other communication from any Governmental
Authority with regard to air emissions, water discharges,
noise emissions or Hazardous Materials, or any other
environmental, health or safety matters affecting the
Mortgaged Property or any other property of Borrower that is
adjacent to the Mortgaged Property.
(f) Borrower shall promptly notify Lender in writing upon the
occurrence of any of the following events:
(i) Borrower's discovery of any Prohibited Activity or Condition;
(ii) Borrower's receipt of or knowledge of any written complaint,
order, notice of violation or other communication from any
tenant, management agent, Governmental Authority or other
person with regard to present or future alleged Prohibited
Activities or Conditions, or any other environmental, health
or safety matters affecting the Mortgaged Property or any
other property of Borrower that is adjacent to the Mortgaged
Property;
(iii) Borrower's breach of any of its obligations under this Section
18.
Any such notice given by Borrower shall not relieve Borrower of, or result in a
waiver of, any obligation under this Instrument, the Note, or any other Loan
Document.
(g) Borrower shall pay promptly the costs of any environmental
inspections, tests or audits, a purpose of which is to
identify the extent or cause of or potential for a Prohibited
Activity or Condition ("Environmental Inspections"), required
by Lender in connection with any foreclosure or deed in lieu
of foreclosure, or as a condition of Lender's consent to any
Transfer under Section 21, or required by Lender following a
reasonable determination by Lender that Prohibited Activities
or Conditions may exist. Any such costs incurred by Lender
(including Attorneys' Fees and Costs and the costs of
technical consultants whether incurred in connection with any
judicial or administrative process or otherwise) that Borrower
fails to pay promptly shall become an additional part of the
Indebtedness as provided in Section 12. As long as (i) no
Event of Default has occurred and is continuing, (ii) Borrower
has actually paid for or reimbursed Lender for all costs of
any such Environmental Inspections performed or required by
Lender, and (iii) Lender is not prohibited by law, contract or
otherwise from doing so, Lender shall make available to
Borrower, without representation of any kind, copies of
Environmental Inspections prepared by third parties and
delivered to Lender. Lender hereby reserves the right, and
Borrower hereby expressly authorizes Lender, to make available
to any party, including any prospective bidder at a
foreclosure sale of the Mortgaged Property, the results of any
Environmental Inspections made by or for Lender with respect
to the Mortgaged Property. Borrower consents to Lender
notifying any party (either as part of a notice of sale or
otherwise) of the results of any Environmental Inspections
made by or for Lender. Borrower acknowledges that Lender
cannot control or otherwise assure the truthfulness or
accuracy of the results of any Environmental Inspections and
that the release of such results to prospective bidders at a
foreclosure sale of the Mortgaged Property may have a material
and adverse effect upon the amount that a party may bid at
such sale. Borrower agrees that Lender shall have no liability
whatsoever as a result of delivering the results to any third
party of any Environmental Inspections made by or for Lender,
and Borrower hereby releases and forever discharges Lender
from any and all claims, damages, or causes of action, arising
out of, connected with or incidental to the results of, the
delivery of any of Environmental Inspections made by or for
Lender.
(h) If any investigation, site monitoring, containment, clean-up,
restoration or other remedial work ("Remedial Work") is
necessary to comply with any Hazardous Materials Law or order
of any Governmental Authority that has or acquires
jurisdiction over the Mortgaged Property or the use, operation
or improvement of the Mortgaged Property, or is otherwise
required by Lender as a consequence of any Prohibited Activity
or Condition or to prevent the occurrence of a Prohibited
Activity or Condition, Borrower shall, by the earlier of (i)
the applicable deadline required by Hazardous Materials Law or
(ii) 30 days after Notice from Lender demanding such action,
begin performing the Remedial Work, and thereafter diligently
prosecute it to completion, and shall in any event complete
the work by the time required by applicable Hazardous
Materials Law. If Borrower fails to begin on a timely basis or
diligently prosecute any required Remedial Work, Lender may,
at its option, cause the Remedial Work to be completed, in
which case Borrower shall reimburse Lender on demand for the
cost of doing so. Any reimbursement due from Borrower to
Lender shall become part of the Indebtedness as provided in
Section 12.
(i) Borrower shall comply with all Hazardous Materials Laws
applicable to the Mortgaged Property. Without limiting the
generality of the previous sentence, Borrower shall (i) obtain
and maintain all Environmental Permits required by Hazardous
Materials Laws and comply with all conditions of such
Environmental Permits; (ii) cooperate with any inquiry by any
Governmental Authority; and (iii) comply with any governmental
or judicial order that arises from any alleged Prohibited
Activity or Condition.
(j) Borrower shall indemnify, hold harmless and defend (i) Lender,
(ii) any prior owner or holder of the Note, (iii) the Loan
Servicer, (iv) any prior Loan Servicer, (v) the officers,
directors, shareholders, partners, employees and trustees of
any of the foregoing, and (vi) the heirs, legal
representatives, successors and assigns of each of the
foregoing (collectively, the "Indemnitees") from and against
all proceedings, claims, damages, penalties and costs (whether
initiated or sought by Governmental Authorities or private
parties), including Attorneys' Fees and Costs and remediation
costs, whether incurred in connection with any judicial or
administrative process or otherwise, arising directly or
indirectly from any of the following:
(i) any breach of any representation or warranty of Borrower in
this Section 18;
(ii) any failure by Borrower to perform any of its obligations
under this Section 18;
(iii) the existence or alleged existence of any Prohibited Activity
or Condition;
(iv) the presence or alleged presence of Hazardous Materials on or
under the Mortgaged Property or in any of the Improvements or
on or under any property of Borrower that is adjacent to the
Mortgaged Property; and
(v) the actual or alleged violation of any Hazardous Materials
Law.
(k) Counsel selected by Borrower to defend Indemnitees shall be
subject to the approval of those Indemnitees. In any
circumstances in which the indemnity under this Section 18
applies, Lender may employ its own legal counsel and
consultants to prosecute, defend or negotiate any claim or
legal or administrative proceeding and Lender, with the prior
written consent of Borrower (which shall not be unreasonably
withheld, delayed or conditioned) may settle or compromise any
action or legal or administrative proceeding. However, unless
an Event of Default has occurred and is continuing, or the
interests of Borrower and Lender are in conflict, as
determined by Lender in its discretion, Lender shall permit
Borrower to undertake the actions referenced in this Section
in accordance with this Section and Section 18(l) so long as
Lender approves such action, which approval shall not be
unreasonably withheld or delayed. Borrower shall reimburse
Lender upon demand for all costs and expenses incurred by
Lender, including all costs of settlements entered into in
good faith, consultants' fees and Attorneys' Fees and Costs.
(l) Borrower shall not, without the prior written consent of those
Indemnitees who are named as parties to a claim or legal or
administrative proceeding (a "Claim"), settle or compromise
the Claim if the settlement (i) results in the entry of any
judgment that does not include as an unconditional term the
delivery by the claimant or plaintiff to Lender of a written
release of those Indemnitees, satisfactory in form and
substance to Lender; or (ii) may materially and adversely
affect Lender, as determined by Lender in its discretion.
(m) Borrower's obligation to indemnify the Indemnitees shall not
be limited or impaired by any of the following, or by any
failure of Borrower or any guarantor to receive notice of or
consideration for any of the following:
(i) any amendment or modification of any Loan Document;
(ii) any extensions of time for performance required by any Loan
Document;
(iii) any provision in any of the Loan Documents limiting Lender's
recourse to property securing the Indebtedness, or limiting
the personal liability of Borrower or any other party for
payment of all or any part of the Indebtedness;
(iv) the accuracy or inaccuracy of any representations and
warranties made by Borrower under this Instrument or any other
Loan Document;
(v) the release of Borrower or any other person, by Lender or by
operation of law, from performance of any obligation under any
Loan Document;
(vi) the release or substitution in whole or in part of any
security for the Indebtedness; and
(vii) Lender's failure to properly perfect any lien or security
interest given as security for the Indebtedness.
(n) Borrower shall, at its own cost and expense, do all of the
following:
(i) pay or satisfy any judgment or decree that may be entered
against any Indemnitee or Indemnitees in any legal or
administrative proceeding incident to any matters against
which Indemnitees are entitled to be indemnified under this
Section 18;
(ii) reimburse Indemnitees for any expenses paid or incurred in
connection with any matters against which Indemnitees are
entitled to be indemnified under this Section 18; and
(iii) reimburse Indemnitees for any and all expenses, including
Attorneys' Fees and Costs, paid or incurred in connection with
the enforcement by Indemnitees of their rights under this
Section 18, or in monitoring and participating in any legal or
administrative proceeding.
(o) The provisions of this Section 18 shall be in addition to any
and all other obligations and liabilities that Borrower may
have under applicable law or under other Loan Documents, and
each Indemnitee shall be entitled to indemnification under
this Section 18 without regard to whether Lender or that
Indemnitee has exercised any rights against the Mortgaged
Property or any other security, pursued any rights against any
guarantor, or pursued any other rights available under the
Loan Documents or applicable law. If Borrower consists of more
than one person or entity, the obligation of those persons or
entities to indemnify the Indemnitees under this Section 18
shall be joint and several. The obligation of Borrower to
indemnify the Indemnitees under this Section 18 shall survive
any repayment or discharge of the Indebtedness, any
foreclosure proceeding, any foreclosure sale, any delivery of
any deed in lieu of foreclosure, and any release of record of
the lien of this Instrument. Notwithstanding the foregoing, if
Lender has never been a mortgagee-in-possession of, or held
title to, the Mortgaged Property, Borrower shall have no
obligation to indemnify the Indemnitees under this Section 18
after the date of the release of record of the lien of this
Instrument by payment in full at the Maturity Date or by
voluntary prepayment in full.
19. PROPERTY AND LIABILITY INSURANCE.
(a) Borrower shall keep the Improvements insured at all times
against such hazards as Lender may from time to time require,
which insurance shall include but not be limited to coverage
against loss by fire and allied perils, general boiler and
machinery coverage, rent loss and extra expense insurance. If
Lender so requires, such insurance shall also include sinkhole
insurance, mine subsidence insurance, earthquake insurance,
and, if the Mortgaged Property does not conform to applicable
zoning or land use laws, building ordinance or law coverage.
Borrower acknowledges and agrees that Lender's insurance
requirements may change from time to time throughout the term
of the Indebtedness. If any of the Improvements is located in
an area identified by the Federal Emergency Management Agency
(or any successor to that agency) as an area having special
flood hazards, Borrower shall insure such Improvements against
loss by flood. All insurance required pursuant to this Section
19(a) shall be referred to as "Hazard Insurance."
(b) All premiums on Hazard Insurance policies required under
Section 19(a) shall be paid in the manner provided in Section
7, unless Lender has designated in writing another method of
payment. All such policies shall also be in a form approved by
Lender. All policies of property damage insurance shall
include a non-contributing, non-reporting mortgage clause in
favor of, and in a form approved by, Lender. Lender shall have
the right to hold the original policies or duplicate original
policies of all Hazard Insurance required by Section 19(a).
Borrower shall promptly deliver to Lender a copy of all
renewal and other notices received by Borrower with respect to
the policies and all receipts for paid premiums. At least 5
days prior to the expiration date of any Hazard Insurance
policy, Borrower shall deliver to Lender evidence acceptable
to Lender that the policy has been renewed. If Borrower has
not delivered the original (or a duplicate original) of a
renewal policy prior to the expiration date of any Hazard
Insurance policy, Borrower shall deliver the original (or a
duplicate original) of a renewal policy in a form satisfactory
to Lender within 120 days after the expiration date of the
original policy.
(c) Borrower shall maintain at all times commercial general
liability insurance, workers' compensation insurance and such
other liability, errors and omissions and fidelity insurance
coverages as Lender may from time to time require.
(d) All insurance policies and renewals of insurance policies
required by this Section 19 shall be in such amounts and for
such periods as Lender may from time to time require, and
shall be issued by insurance companies satisfactory to Lender.
(e) Borrower shall comply with all insurance requirements and
shall not permit any condition to exist on the Mortgaged
Property that would invalidate any part of any insurance
coverage that this Instrument requires Borrower to maintain.
(f) In the event of loss, Borrower shall give immediate written
notice to the insurance carrier and to Lender. Borrower hereby
authorizes and appoints Lender as attorney-in-fact for
Borrower to make proof of loss, to adjust and compromise any
claims under policies of Hazard Insurance, to appear in and
prosecute any action arising from such Hazard Insurance
policies, to collect and receive the proceeds of Hazard
Insurance, and to deduct from such proceeds Lender's expenses
incurred in the collection of such proceeds. This power of
attorney is coupled with an interest and therefore is
irrevocable. However, nothing contained in this Section 19
shall require Lender to incur any expense or take any action.
Lender may, at Lender's option, (i) require a "repair or
replacement" settlement, in which case the proceeds will be
used to reimburse Borrower for the cost of restoring and
repairing the Mortgaged Property to the equivalent of its
original condition or to a condition approved by Lender (the
"Restoration"), or (ii) require an "actual cash value"
settlement in which case the proceeds may be applied to the
payment of the Indebtedness, whether or not then due. To the
extent Lender determines to require a repair or replacement
settlement and apply insurance proceeds to Restoration, Lender
shall apply the proceeds in accordance with Lender's
then-current policies relating to the restoration of casualty
damage on similar multifamily properties.
(g) Notwithstanding any provision to the contrary in this Section
19, as long as no Event of Default, or any event which, with
the giving of Notice or the passage of time, or both, would
constitute an Event of Default, has occurred and is
continuing,
(i) in the event of a casualty resulting in damage to the
Mortgaged Property which will cost $10,000 or less to repair,
the Borrower shall have the sole right to make proof of loss,
adjust and compromise the claim and collect and receive any
proceeds directly without the approval or prior consent of the
Lender so long as the insurance proceeds are used solely for
the Restoration of the Mortgaged Property; and
(ii) in the event of a casualty resulting in damage to the
Mortgaged Property which will cost more than $10,000 but less
than $50,000 to repair, the Borrower is authorized to make
proof of loss and adjust and compromise the claim without the
prior consent of Lender, and Lender shall hold the applicable
insurance proceeds to be used to reimburse Borrower for the
cost of Restoration of the Mortgaged Property and shall not
apply such proceeds to the payment of sums due under this
Instrument.
(h) Lender will have the right to exercise its option to apply
insurance proceeds to the payment of the Indebtedness only if
Lender determines that at least one of the following
conditions is met:
(i) an Event of Default (or any event, which, with the giving of
Notice or the passage of time, or both, would constitute an
Event of Default) has occurred and is continuing;
(ii) Lender determines, in its discretion, that there will not be
sufficient funds from insurance proceeds, anticipated
contributions of Borrower of its own funds or other sources
acceptable to Lender to complete the Restoration;
(iii) Lender determines, in its discretion, that the rental income
from the Mortgaged Property after completion of the
Restoration will not be sufficient to meet all operating costs
and other expenses, Imposition Deposits, deposits to reserves
and loan repayment obligations relating to the Mortgaged
Property; or
(iv) Lender determines, in its discretion, that the Restoration
will not be completed at least one year before the Maturity
Date (or six months before the Maturity Date if Lender
determines in its discretion that re-leasing of the Mortgaged
Property will be completed within such six-month period); or
(v) Lender determines that the Restoration will not be completed
within one year after the date of the loss or casualty.
(i) If the Mortgaged Property is sold at a foreclosure sale or
Lender acquires title to the Mortgaged Property, Lender shall
automatically succeed to all rights of Borrower in and to any
insurance policies and unearned insurance premiums and in and
to the proceeds resulting from any damage to the Mortgaged
Property prior to such sale or acquisition.
(j) Unless Lender otherwise agrees in writing, any application of
any insurance proceeds to the Indebtedness shall not extend or
postpone the due date of any monthly installments referred to
in the Note, Section 7 of this Instrument or any Collateral
Agreement, or change the amount of such installments.
(k) Borrower agrees to execute such further evidence of assignment
of any insurance proceeds as Lender may require.
20. CONDEMNATION.
(a) Borrower shall promptly notify Lender in writing of any action
or proceeding or notice relating to any proposed or actual
condemnation or other taking, or conveyance in lieu thereof,
of all or any part of the Mortgaged Property, whether direct
or indirect (a "Condemnation"). Borrower shall appear in and
prosecute or defend any action or proceeding relating to any
Condemnation unless otherwise directed by Lender in writing.
Borrower authorizes and appoints Lender as attorney-in-fact
for Borrower to commence, appear in and prosecute, in Lender's
or Borrower's name, any action or proceeding relating to any
Condemnation and to settle or compromise any claim in
connection with any Condemnation, after consultation with
Borrower and consistent with commercially reasonable standards
of a prudent lender. This power of attorney is coupled with an
interest and therefore is irrevocable. However, nothing
contained in this Section 20 shall require Lender to incur any
expense or take any action. Borrower hereby transfers and
assigns to Lender all right, title and interest of Borrower in
and to any award or payment with respect to (i) any
Condemnation, or any conveyance in lieu of Condemnation, and
(ii) any damage to the Mortgaged Property caused by
governmental action that does not result in a Condemnation.
(b) Lender may apply such awards or proceeds, after the deduction
of Lender's expenses incurred in the collection of such
amounts (including Attorneys' Fees and Costs) at Lender's
option, to the restoration or repair of the Mortgaged Property
or to the payment of the Indebtedness, with the balance, if
any, to Borrower. Unless Lender otherwise agrees in writing,
any application of any awards or proceeds to the Indebtedness
shall not extend or postpone the due date of any monthly
installments referred to in the Note, Section 7 of this
Instrument or any Collateral Agreement, or change the amount
of such installments. Borrower agrees to execute such further
evidence of assignment of any awards or proceeds as Lender may
require.
21. TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.
[NO RIGHT TO TRANSFER].
(a) "Transfer" means
(i) a sale, assignment, transfer or other disposition (whether
voluntary, involuntary or by operation of law);
(ii) the granting, creating or attachment of a lien, encumbrance or
security interest (whether voluntary, involuntary or by
operation of law);
(iii) the issuance or other creation of an ownership interest in a
legal entity, including a partnership interest, interest in a
limited liability company or corporate stock;
(iv) the withdrawal, retirement, removal or involuntary resignation
of a partner in a partnership or a member or manager in a
limited liability company; or
(v) the merger, dissolution, liquidation, or consolidation of a
legal entity or the reconstitution of one type of legal entity
into another type of legal entity.
For purposes of defining the term "Transfer," the term "partnership" shall mean
a general partnership, a limited partnership, a joint venture and a limited
liability partnership, and the term "partner" shall mean a general partner, a
limited partner and a joint venturer.
(b) "Transfer" does not include
(i) a conveyance of the Mortgaged Property at a judicial or
non-judicial foreclosure sale under this Instrument,
(ii) the Mortgaged Property becoming part of a bankruptcy estate by
operation of law under the United States Bankruptcy Code, or
(iii) a lien against the Mortgaged Property for local taxes and/or
assessments not then due and payable.
(c) The occurrence of any of the following Transfers shall not
constitute an Event of Default under this Instrument,
notwithstanding any provision of Section 21(e) to the
contrary:
(i) a Transfer to which Lender has consented;
(ii) a Transfer that occurs in accordance with Section 21(d);
(iii) the grant of a leasehold interest in an individual dwelling
unit for a term of two years or less not containing an option
to purchase;
(iv) a Transfer of obsolete or worn out Personalty or Fixtures that
are contemporaneously replaced by items of equal or better
function and quality, which are free of liens, encumbrances
and security interests other than those created by the Loan
Documents or consented to by Lender;
(v) the creation of a mechanic's, materialman's, or judgment lien
against the Mortgaged Property which is released of record or
otherwise remedied to Lender's satisfaction within 60 days of
the date of creation; and
(vi) if Borrower is a housing cooperative, any Transfer of the
shares in the housing cooperative or any assignment of the
occupancy agreements or leases relating thereto by tenant
shareholders of the housing cooperative.
(d) The occurrence of any of the following Transfers shall not
constitute an Event of Default under this Instrument, provided
that Borrower has notified Lender in writing within 30 days
following the occurrence of any of the following, and such
Transfer does not constitute an Event of Default under any
other Section of this Instrument:
(i) a change of the Borrower's name, provided that UCC financing
statements and/or amendments sufficient to continue the
perfection of Lender's security interest have been properly
filed and copies have been delivered to Lender;
(ii) a change of the form of the Borrower not involving a transfer
of the Borrower's assets and not resulting in any change in
liability of any Initial Owner, provided that UCC financing
statements and/or amendments sufficient to continue the
perfection of Lender's security interest have been properly
filed and copies have been delivered to Lender;
(iii) the merger of the Borrower with another entity when the
Borrower is the surviving entity;
(iv) a Transfer that occurs by devise, descent, or by operation of
law upon the death of a natural person;
(v) the grant of an easement, if before the grant Lender
determines that the easement will not materially affect the
operation or value of the Mortgaged Property or Lender's
interest in the Mortgaged Property, and Borrower pays to
Lender, upon demand, all costs and expenses, including
Attorneys' Fees and Costs, incurred by Lender in connection
with reviewing Borrower's request.
(e) The occurrence of any of the following Transfers shall
constitute an Event of Default under this Instrument:
(i) a Transfer of all or any part of the Mortgaged Property or any
interest in the Mortgaged Property;
(ii) if Borrower is a limited partnership, a Transfer of (A) any
general partnership interest, or (B) limited partnership
interests in Borrower that would cause the Initial Owners of
Borrower to own less than a Controlling Interest of all
limited partnership interests in Borrower;
(iii) if Borrower is a general partnership or a joint venture, a
Transfer of any general partnership or joint venture interest
in Borrower;
(iv) if Borrower is a limited liability company, (A) a Transfer of
any membership interest in Borrower which would cause the
Initial Owners to own less than a Controlling Interest of all
the membership interests in Borrower, (B) a Transfer of any
membership or other interest of a manager in Borrower that
results in a change of manager, or (C) a change of a nonmember
manager;
(v) if Borrower is a corporation, (A) the Transfer of any voting
stock in Borrower which would cause the Initial Owners to own
less than a Controlling Interest of any class of voting stock
in Borrower or (B) if the outstanding voting stock in Borrower
is held by 100 or more shareholders, one or more Transfers by
a single transferor within a 12-month period affecting an
aggregate of 5 percent or more of that stock;
(vi) if Borrower is a trust, (A) a Transfer of any beneficial
interest in Borrower which would cause the Initial Owners to
own less than a Controlling Interest of all the beneficial
interests in Borrower, (B) the termination or revocation of
the trust, or (C) the removal, appointment or substitution of
a trustee of Borrower;
(vii) if Borrower is a limited liability partnership, (A) a Transfer
of any partnership interest in Borrower which would cause the
Initial Owners to own less than a Controlling Interest of all
partnership interests in Borrower, or (B) a transfer of any
partnership or other interest of a managing partner in
Borrower that results in a change of manager; and
(viii) a Transfer of any interest in a Controlling Entity which, if
such Controlling Entity were Borrower, would result in an
Event of Default under any of Sections 21(e)(i) through (vii)
above.
Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default in order to exercise any of its
remedies with respect to an Event of Default under this Section 21.
22. EVENTS OF DEFAULT. The occurrence of any one or more of the
following shall constitute an Event of Default under this
Instrument:
(a) any failure by Borrower to pay or deposit when due any amount
required by the Note, this Instrument or any other Loan
Document;
(b) any failure by Borrower to maintain the insurance coverage
required by Section 19;
(c) any failure by Borrower to comply with the provisions of
Section 33;
(d) fraud or material misrepresentation or material omission by
Borrower, any of its officers, directors, trustees, general
partners or managers or any guarantor in connection with (i)
the application for or creation of the Indebtedness, (ii) any
financial statement, rent schedule, or other report or
information provided to Lender during the term of the
Indebtedness, or (iii) any request for Lender's consent to any
proposed action, including a request for disbursement of funds
under any Collateral Agreement;
(e) any failure to comply with the provisions of Section 20;
(f) any Event of Default under Section 21;
(g) the commencement of a forfeiture action or proceeding, whether
civil or criminal, which, in Lender's reasonable judgment,
could result in a forfeiture of the Mortgaged Property or
otherwise materially impair the lien created by this
Instrument or Lender's interest in the Mortgaged Property;
(h) any failure by Borrower to perform any of its obligations
under this Instrument (other than those specified in Sections
22(a) through (g)), as and when required, which continues for
a period of 30 days after Notice of such failure by Lender to
Borrower. However, if Borrower's failure to perform its
obligations as described in this Section 22(h) is of the
nature that it cannot be cured within the 30 day grace period
but reasonably could be cured within 90 days, then Borrower
shall have additional time as determined by Lender in its
discretion, not to exceed an additional 60 days, in which to
cure such default, provided that Borrower has diligently
commenced to cure such default during the 30-day grace period
and diligently pursues the cure of such default. However, no
such Notice or grace periods shall apply in the case of any
such failure which could, in Lender's judgment, absent
immediate exercise by Lender of a right or remedy under this
Instrument, result in harm to Lender, impairment of the Note
or this Instrument or any other security given under any other
Loan Document;
(i) any failure by Borrower to perform any of its obligations as
and when required under any Loan Document other than this
Instrument which continues beyond the applicable cure period,
if any, specified in that Loan Document;
(j) any exercise by the holder of any other debt instrument
secured by a mortgage, deed of trust or deed to secure debt on
the Mortgaged Property of a right to declare all amounts due
under that debt instrument immediately due and payable;
(k) Borrower voluntarily files for bankruptcy protection under the
United States Bankruptcy Code or voluntarily becomes subject
to any reorganization, receivership, insolvency proceeding or
other similar proceeding pursuant to any other federal or
state law affecting debtor and creditor rights, or an
involuntary case is commenced against Borrower by any creditor
(other than Lender) of Borrower pursuant to the United States
Bankruptcy Code or other federal or state law affecting debtor
and creditor rights and is not dismissed or discharged within
90 days after filing; and
(l) any of Borrower's representations and warranties in this
Instrument is false or misleading in any material respect.
23. REMEDIES CUMULATIVE. Each right and remedy provided in this
Instrument is distinct from all other rights or remedies under
this Instrument or any other Loan Document or afforded by
applicable law, and each shall be cumulative and may be
exercised concurrently, independently, or successively, in any
order.
24. FORBEARANCE.
(a) Lender may (but shall not be obligated to) agree with
Borrower, from time to time, and without giving notice to, or
obtaining the consent of, or having any effect upon the
obligations of, any guarantor or other third party obligor, to
take any of the following actions: extend the time for payment
of all or any part of the Indebtedness; reduce the payments
due under this Instrument, the Note, or any other Loan
Document; release anyone liable for the payment of any amounts
under this Instrument, the Note, or any other Loan Document;
accept a renewal of the Note; modify the terms and time of
payment of the Indebtedness; join in any extension or
subordination agreement; release any Mortgaged Property; take
or release other or additional security; modify the rate of
interest or period of amortization of the Note or change the
amount of the monthly installments payable under the Note; and
otherwise modify this Instrument, the Note, or any other Loan
Document.
(b) Any forbearance by Lender in exercising any right or remedy
under the Note, this Instrument, or any other Loan Document or
otherwise afforded by applicable law, shall not be a waiver of
or preclude the exercise of any other right or remedy, or the
subsequent exercise of any right or remedy. The acceptance by
Lender of payment of all or any part of the Indebtedness after
the due date of such payment, or in an amount which is less
than the required payment, shall not be a waiver of Lender's
right to require prompt payment when due of all other payments
on account of the Indebtedness or to exercise any remedies for
any failure to make prompt payment. Enforcement by Lender of
any security for the Indebtedness shall not constitute an
election by Lender of remedies so as to preclude the exercise
of any other right available to Lender. Lender's receipt of
any awards or proceeds under Sections 19 and 20 shall not
operate to cure or waive any Event of Default.
25. LOAN CHARGES. If any applicable law limiting the amount of
interest or other charges permitted to be collected from
Borrower is interpreted so that any charge provided for in any
Loan Document, whether considered separately or together with
other charges levied in connection with any other Loan
Document, violates that law, and Borrower is entitled to the
benefit of that law, that charge is hereby reduced to the
extent necessary to eliminate that violation. The amounts, if
any, previously paid to Lender in excess of the permitted
amounts shall be applied by Lender to reduce the principal of
the Indebtedness. For the purpose of determining whether any
applicable law limiting the amount of interest or other
charges permitted to be collected from Borrower has been
violated, all Indebtedness which constitutes interest, as well
as all other charges levied in connection with the
Indebtedness which constitute interest, shall be deemed to be
allocated and spread over the stated term of the Note. Unless
otherwise required by applicable law, such allocation and
spreading shall be effected in such a manner that the rate of
interest so computed is uniform throughout the stated term of
the Note.
26. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby waives the
right to assert any statute of limitations as a bar to the
enforcement of the lien of this Instrument or to any action
brought to enforce any Loan Document.
27. WAIVER OF MARSHALLING. Notwithstanding the existence of any
other security interests in the Mortgaged Property held by
Lender or by any other party, Lender shall have the right to
determine the order in which any or all of the Mortgaged
Property shall be subjected to the remedies provided in this
Instrument, the Note, any other Loan Document or applicable
law. Lender shall have the right to determine the order in
which any or all portions of the Indebtedness are satisfied
from the proceeds realized upon the exercise of such remedies.
Borrower and any party who now or in the future acquires a
security interest in the Mortgaged Property and who has actual
or constructive notice of this Instrument waives any and all
right to require the marshalling of assets or to require that
any of the Mortgaged Property be sold in the inverse order of
alienation or that any of the Mortgaged Property be sold in
parcels or as an entirety in connection with the exercise of
any of the remedies permitted by applicable law or provided in
this Instrument.
28. FURTHER ASSURANCES. Borrower shall execute, acknowledge, and
deliver, at its sole cost and expense, all further acts,
deeds, conveyances, assignments, estoppel certificates,
financing statements or amendments, transfers and assurances
as Lender may require from time to time in order to better
assure, grant, and convey to Lender the rights intended to be
granted, now or in the future, to Lender under this Instrument
and the Loan Documents.
29. ESTOPPEL CERTIFICATE. Within 10 days after a request from
Lender, Borrower shall deliver to Lender a written statement,
signed and acknowledged by Borrower, certifying to Lender or
any person designated by Lender, as of the date of such
statement, (i) that the Loan Documents are unmodified and in
full force and effect (or, if there have been modifications,
that the Loan Documents are in full force and effect as
modified and setting forth such modifications); (ii) the
unpaid principal balance of the Note; (iii) the date to which
interest under the Note has been paid; (iv) that Borrower is
not in default in paying the Indebtedness or in performing or
observing any of the covenants or agreements contained in this
Instrument or any of the other Loan Documents (or, if the
Borrower is in default, describing such default in reasonable
detail); (v) whether or not there are then existing any
setoffs or defenses known to Borrower against the enforcement
of any right or remedy of Lender under the Loan Documents; and
(vi) any additional facts requested by Lender.
30. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.
(a) This Instrument, and any Loan Document which does not itself
expressly identify the law that is to apply to it, shall be
governed by the laws of the jurisdiction in which the Land is
located (the "Property Jurisdiction").
(b) Borrower agrees that any controversy arising under or in
relation to the Note, this Instrument, or any other Loan
Document may be litigated in the Property Jurisdiction. The
state and federal courts and authorities with jurisdiction in
the Property Jurisdiction shall have jurisdiction over all
controversies that shall arise under or in relation to the
Note, any security for the Indebtedness, or any other Loan
Document. Borrower irrevocably consents to service,
jurisdiction, and venue of such courts for any such litigation
and waives any other venue to which it might be entitled by
virtue of domicile, habitual residence or otherwise. However,
nothing in this Section 30 is intended to limit Lender's right
to bring any suit, action or proceeding relating to matters
under this Instrument in any court of any other jurisdiction.
31. NOTICE.
(a) All Notices, demands and other communications ("Notice") under
or concerning this Instrument shall be in writing. Each Notice
shall be addressed to the intended recipient at its address
set forth in this Instrument, and shall be deemed given on the
earliest to occur of (i) the date when the Notice is received
by the addressee; (ii) the first Business Day after the Notice
is delivered to a recognized overnight courier service, with
arrangements made for payment of charges for next Business Day
delivery; or (iii) the third Business Day after the Notice is
deposited in the United States mail with postage prepaid,
certified mail, return receipt requested.
(b) Any party to this Instrument may change the address to which
Notices intended for it are to be directed by means of Notice
given to the other party in accordance with this Section 31.
Each party agrees that it will not refuse or reject delivery
of any Notice given in accordance with this Section 31, that
it will acknowledge, in writing, the receipt of any Notice
upon request by the other party and that any Notice rejected
or refused by it shall be deemed for purposes of this Section
31 to have been received by the rejecting party on the date so
refused or rejected, as conclusively established by the
records of the U.S. Postal Service or the courier service.
(c) Any Notice under the Note and any other Loan Document that
does not specify how Notices are to be given shall be given in
accordance with this Section 31.
32. SALE OF NOTE; CHANGE IN SERVICER; LOAN SERVICING. The Note or
a partial interest in the Note (together with this Instrument
and the other Loan Documents) may be sold one or more times
without prior Notice to Borrower. A sale may result in a
change of the Loan Servicer. There also may be one or more
changes of the Loan Servicer unrelated to a sale of the Note.
If there is a change of the Loan Servicer, Borrower will be
given Notice of the change. All actions regarding the
servicing of the loan evidenced by the Note, including the
collection of payments, the giving and receipt of Notice,
inspections of the Mortgaged Property, inspections of books
and records, and the granting of consents and approvals, may
be taken by the Loan Servicer unless Borrower receives Notice
to the contrary. If Borrower receives conflicting Notices
regarding the identity of the Loan Servicer or any other
subject, any such Notice from Lender shall govern.
33. SINGLE ASSET BORROWER. Until the Indebtedness is paid in full,
Borrower (a) shall not own any real or personal property other
than the Mortgaged Property and personal property related to
the operation and maintenance of the Mortgaged Property; (b)
shall not operate any business other than the management and
operation of the Mortgaged Property; and (c) shall not
maintain its assets in a way difficult to segregate and
identify.
34. SUCCESSORS AND ASSIGNS BOUND. This Instrument shall bind, and
the rights granted by this Instrument shall inure to, the
respective successors and assigns of Lender and Borrower.
However, a Transfer not permitted by Section 21 shall be an
Event of Default.
35. JOINT AND SEVERAL LIABILITY. If more than one person or entity
signs this Instrument as Borrower, the obligations of such
persons and entities shall be joint and several.
36. RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARY.
(a) The relationship between Lender and Borrower shall be solely
that of creditor and debtor, respectively, and nothing
contained in this Instrument shall create any other
relationship between Lender and Borrower.
(b) No creditor of any party to this Instrument and no other
person shall be a third party beneficiary of this Instrument
or any other Loan Document. Without limiting the generality of
the preceding sentence, (i) any arrangement (a "Servicing
Arrangement") between the Lender and any Loan Servicer for
loss sharing or interim advancement of funds shall constitute
a contractual obligation of such Loan Servicer that is
independent of the obligation of Borrower for the payment of
the Indebtedness, (ii) Borrower shall not be a third party
beneficiary of any Servicing Arrangement, and (iii) no payment
by the Loan Servicer under any Servicing Arrangement will
reduce the amount of the Indebtedness.
37. SEVERABILITY; AMENDMENTS. The invalidity or unenforceability
of any provision of this Instrument shall not affect the
validity or enforceability of any other provision, and all
other provisions shall remain in full force and effect. This
Instrument contains the entire agreement among the parties as
to the rights granted and the obligations assumed in this
Instrument. This Instrument may not be amended or modified
except by a writing signed by the party against whom
enforcement is sought; provided, however, that in the event of
a Transfer prohibited by or requiring Lender's approval under
Section 21, any or some or all of the Modifications to
Instrument set forth in Exhibit B (if any) may be modified or
rendered void by Lender at Lender's option by Notice to
Borrower and the transferee(s).
38. CONSTRUCTION. The captions and headings of the Sections of
this Instrument are for convenience only and shall be
disregarded in construing this Instrument. Any reference in
this Instrument to an "Exhibit" or a "Section" shall, unless
otherwise explicitly provided, be construed as referring,
respectively, to an Exhibit attached to this Instrument or to
a Section of this Instrument. All Exhibits attached to or
referred to in this Instrument are incorporated by reference
into this Instrument. Any reference in this Instrument to a
statute or regulation shall be construed as referring to that
statute or regulation as amended from time to time. Use of the
singular in this Agreement includes the plural and use of the
plural includes the singular. As used in this Instrument, the
term "including" means "including, but not limited to."
39. DISCLOSURE OF INFORMATION. Lender may furnish information
regarding Borrower or the Mortgaged Property to third parties
with an existing or prospective interest in the servicing,
enforcement, evaluation, performance, purchase or
securitization of the Indebtedness, including but not limited
to trustees, master servicers, special servicers, rating
agencies, and organizations maintaining databases on the
underwriting and performance of multifamily mortgage loans.
Borrower irrevocably waives any and all rights it may have
under applicable law to prohibit such disclosure, including
but not limited to any right of privacy.
40. NO CHANGE IN FACTS OR CIRCUMSTANCES. Borrower warrants that
(a) all information in the application for the loan submitted
to Lender (the "Loan Application") and in all financial
statements, rent schedules, reports, certificates and other
documents submitted in connection with the Loan Application
are complete and accurate in all material respects; and (b)
there has been no material adverse change in any fact or
circumstance that would make any such information incomplete
or inaccurate.
41. SUBROGATION. If, and to the extent that, the proceeds of the
loan evidenced by the Note are used to pay, satisfy or
discharge any obligation of Borrower for the payment of money
that is secured by a pre-existing mortgage, deed of trust or
other lien encumbering the Mortgaged Property (a "Prior
Lien"), such loan proceeds shall be deemed to have been
advanced by Lender at Borrower's request, and Lender shall
automatically, and without further action on its part, be
subrogated to the rights, including lien priority, of the
owner or holder of the obligation secured by the Prior Lien,
whether or not the Prior Lien is released.
42. ADJUSTABLE RATE MORTGAGE - THIRD PARTY CAP AGREEMENT "CAP
COLLATERAL."
(a) If the Note provides for interest to accrue at an adjustable
or variable interest rate (other than during the "Extension
Period," as defined in the Note, if applicable), then the
definition of "Mortgaged Property" shall include the "Cap
Collateral." The "Cap Collateral" shall mean
(i) any interest rate cap agreement, interest rate swap agreement,
or other interest rate-hedging contract or agreement obtained
by Borrower as a requirement of any Loan Document or as a
condition of Lender's making the Loan (a "Cap Agreement");
(ii) any and all moneys (collectively, "Cap Payments") payable
pursuant to any Cap Agreement by the interest rate cap
provider or other counterparty to a Cap Agreement or any
guarantor of the obligations of any such cap provider or
counterparty (a "Cap Provider");
(iii) all rights of Borrower under any Cap Agreement and all rights
of Borrower to all Cap Payments, including contract rights and
general intangibles, whether existing now or arising after the
date of this Instrument;
(iv) all rights, liens and security interests or guaranties granted
by a Cap Provider or any other person to secure or guaranty
payment of any Cap Payment whether existing now or granted
after the date of this Instrument;
(v) all documents, writings, books, files, records and other
documents arising from or relating to any of the foregoing,
whether existing now or created after the date of this
Instrument; and
(vi) all cash and non-cash proceeds and products of (ii) - (v)
above.
(b) As additional security for Borrower's obligation under the
Loan Documents, Borrower hereby assigns and pledges to Lender
all of Borrower's right, title and interest in and to the Cap
Collateral. Borrower has instructed and will instruct each Cap
Provider and any guarantor of a Cap Provider's obligations to
make Cap Payments directly to Lender or to Loan Servicer on
behalf of Lender.
(c) So long as there is no Event of Default, Lender or Loan
Servicer will remit to Borrower each Cap Payment received by
Lender or Loan Servicer with respect to any month for which
Borrower has paid in full the monthly installment of principal
and interest or interest only, as applicable, due under the
Note. Alternatively, at Lender's option so long as there is no
Event of Default, Lender may apply a Cap Payment received by
Lender or Loan Servicer with respect to any month to the
applicable monthly payment of accrued interest due under the
Note if Borrower has paid in full the remaining portion of
such monthly payment of principal and interest or interest
only, as applicable.
(d) Following an Event of Default, in addition to any other rights
and remedies Lender may have, Lender may retain any Cap
Payments and apply them to the Indebtedness in such order and
amounts as Lender determines. Neither the existence of a Cap
Agreement nor anything in this Instrument shall relieve
Borrower of its primary obligation to timely pay in full all
amounts due under the Note and otherwise due on account of the
Indebtedness.
(e) If the Note does not provide for interest to accrue at an
adjustable or variable interest rate (other than during the
Extension Period) then this Section 42 shall be of no force or
effect.
43. ACCELERATION; REMEDIES; WAIVER OF PERMISSIVE COUNTERCLAIMS. At
any time during the existence of an Event of Default, Lender,
at Lender's option, may declare the Indebtedness to be
immediately due and payable without further demand, and may
foreclose this Instrument by judicial proceeding and may
invoke any other remedies permitted by Florida law or provided
in this Instrument or in any other Loan Document. Lender shall
be entitled to collect all costs and expenses incurred in
pursuing such remedies, including attorneys' fees, costs of
documentary evidence, abstracts and title reports. Borrower
waives any and all rights to file or pursue permissive
counterclaims in connection with any legal action brought by
Lender under this Instrument, the Note or any other Loan
Document.
44. RELEASE. Upon payment of the Indebtedness, Lender shall
release this Instrument. Borrower shall pay Lender's
reasonable costs incurred in releasing this Instrument.
45. FUTURE ADVANCES. Lender may from time to time, in Lender's
discretion, make optional future or additional advances
(collectively, "Future Advances") to Borrower, except that at
no time shall the unpaid principal balance of all indebtedness
secured by the lien of this Instrument, including Future
Advances, be greater than an amount equal to two hundred
percent (200%) of the original principal amount of this Note
as set forth on the first page of this Instrument plus accrued
interest and amounts disbursed by Lender under Section 12 or
any other provision of this Instrument that treats a
disbursement by Lender as being made under Section 12. All
Future Advances shall be made, if at all, within twenty (20)
years after the date of this Instrument, or within such lesser
period that may in the future be provided by law as a
prerequisite for the sufficiency of actual or record notice of
Future Advances as against the rights of creditors or
subsequent purchasers for value. Borrower shall, immediately
upon request by Lender, execute and deliver to Lender a
promissory note evidencing each Future Advance together with a
notice of such Future Advance in recordable form. All
promissory notes evidencing Future Advances shall be secured,
pari passu, by the lien of this Instrument, and each reference
in this Instrument to the Note shall be deemed to be a
reference to all promissory notes evidencing Future Advances.
46. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A)
COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT
TO ANY ISSUE ARISING OUT OF THIS INSTRUMENT OR THE
RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER THAT
IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO
TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT
ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY,
KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL
COUNSEL.
ATTACHED EXHIBITS. The following Exhibits are attached to this
Instrument:
----
X Exhibit A Description of the Land (required).
----
----
X Exhibit B Modifications to Instrument
----
IN WITNESS WHEREOF, Borrower has signed and delivered this Instrument or
has caused this Instrument to be signed and delivered by its duly authorized
representative.
NATIONAL PROPERTY INVESTORS 5, a California
limited partnership doing business in
Florida as National Property Investors 5
Ltd.
By: NPI Equity Investments, Inc., a
Florida corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and
Treasurer
Exhibit 10.23
FHLMC Loan No. 002722690
Willow Park Apartments
MULTIFAMILY NOTE
MULTISTATE - FIXED TO FLOAT
(REVISION DATE 10-01-2004)
US $2,900,000.00 Effective Date: As of December 1, 2005
FOR VALUE RECEIVED, the undersigned (together with such party's or
parties' successors and assigns, "Borrower"), jointly and severally (if more
than one) promises to pay to the order of GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial bank, the principal sum of Two Million Nine Hundred Thousand and
00/100 Dollars (US $2,900,000.00), with interest on the unpaid principal
balance, as hereinafter provided.
1. Defined Terms.
(a) As used in this Note:
"Adjustable Interest Rate" means the variable annual interest rate
calculated for each Interest Adjustment Period so as to equal the
Index Rate for such Interest Adjustment Period (truncated at the
fifth (5th) decimal place if necessary) plus the Margin.
"Amortization Period" means a period of 360 full consecutive
calendar months.
"Base Recourse" means a portion of the Indebtedness equal to zero
percent (0%) of the original principal balance of this Note.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which Lender is not open for business.
"Default Rate" means (i) during the Fixed Rate Period, an annual
interest rate equal to four (4) percentage points above the Fixed
Interest Rate; and (ii) during the Extension Period, a variable
annual interest rate equal to four (4) percentage points above the
Adjustable Interest Rate in effect from time to time. However, at no
time will the Default Rate exceed the Maximum Interest Rate.
"Extended Maturity Date" means, if the Extension Period becomes
effective pursuant to this Note, the earlier of (i) December 1,
2016, and (ii) the date on which the unpaid principal balance of
this Note becomes due and payable by acceleration or otherwise
pursuant to the Loan Documents or the exercise by Lender of any
right or remedy thereunder.
"Extension Period" means the twelve (12) consecutive calendar months
period commencing on the Scheduled Initial Maturity Date.
"Fixed Interest Rate" means the annual interest rate of five and six
hundred twenty thousands percent (5.620%).
"Fixed Rate Period" means the period beginning on the date of this
Note and continuing through November 30, 2015.
"Index Rate" means, for any Interest Adjustment Period, the
Reference Bill(R) Index Rate for such Interest Adjustment Period.
"Initial Maturity Date" means the earlier of (i) December 1, 2015
(the "Scheduled Initial Maturity Date"), and (ii) the date on which
the unpaid principal balance of this Note becomes due and payable by
acceleration or otherwise pursuant to the Loan Documents or the
exercise by Lender of any right or remedy thereunder.
"Installment Due Date" means, for any monthly installment of
interest only or principal and interest, the date on which such
monthly installment is due and payable pursuant to Section 3 of this
Note. The "First Installment Due Date" under this Note is January 1,
2006.
"Interest Adjustment Period" means each successive one calendar
month period during the Extension Period and until the entire
Indebtedness is paid in full.
"Lender" means the holder from time to time of this Note.
"LIBOR Index" means the British Bankers Association's (BBA) one (1)
month LIBOR Rate for United States Dollar deposits, as displayed on
the LIBOR Index Page used to establish the LIBOR Index Rate.
"LIBOR Index Rate" means, for any Interest Adjustment Period after
the first Interest Adjustment Period, the BBA's LIBOR Rate for the
LIBOR Index released by the BBA most recently preceding the first
day of such Interest Adjustment Period, as such LIBOR Rate is
displayed on the LIBOR Index Page. The LIBOR Index Rate for the
first Interest Adjustment Period means the British Bankers
Association's (BBA) LIBOR Rate for the LIBOR Index released by the
BBA most recently preceding the first day of the month in which the
first Interest Adjustment Period begins, as such LIBOR Rate is
displayed on the LIBOR Index Page. "LIBOR Index Page" is the
Bloomberg L.P., page "BBAM", or such other page for the LIBOR Index
as may replace page BBAM on that service, or at the option of Lender
(i) the applicable page for the LIBOR Index on another service which
electronically transmits or displays BBA LIBOR Rates, or (ii) any
publication of LIBOR rates available from the BBA. In the event the
BBA ceases to set or publish a LIBOR rate/interest settlement rate
for the LIBOR Index, Lender will designate an alternative index, and
such alternative index shall constitute the LIBOR Index Rate.
"Loan" means the loan evidenced by this Note.
"Margin" means two and one-half (2.5) percentage points (250 basis
points).
"Maturity Date" means the Extended Maturity Date unless pursuant to
Section 3(f) of this Note the Extension Period does not or cannot
become effective, in which case the Maturity Date means the Initial
Maturity Date.
"Maximum Interest Rate" means the rate of interest that results in
the maximum amount of interest allowed by applicable law.
"Prepayment Premium Period" means the period during which, if a
prepayment of principal occurs, a prepayment premium will be payable
by Borrower to Lender. The Prepayment Premium Period is the period
from and including the date of this Note until but not including the
first day of the Window Period. For this Note, the Prepayment
Premium Period equals the Yield Maintenance Period.
"Reference Bills(R)" means the unsecured general obligations of the
Federal Home Loan Mortgage Corporation ("Freddie Mac") designated by
Freddie Mac as "Reference Bills(R) Securities" and having original
durations to maturity most comparable to the term of the Reference
Bill Index, and issued by Freddie Mac at regularly scheduled
auctions. In the event Freddie Mac shall at any time cease to
designate any unsecured general obligations of Freddie Mac as
"Reference Bills Securities", then at the option of Lender (i)
Lender may select from time to time another unsecured general
obligation of Freddie Mac having original durations to maturity most
comparable to the term of the Reference Bill Index and issued by
Freddie Mac at regularly scheduled auctions, and the term "Reference
Bills" as used in this Note shall mean such other unsecured general
obligations as selected by Lender; or (ii) for any one or more
Interest Adjustment Periods, Lender may use the applicable LIBOR
Index Rate as the Index Rate for such Interest Adjustment Period(s).
"Reference Bill Index" means the one-month Reference Bills.
One-month reference bills have original durations to maturity of
approximately 30 days.
"Reference Bill Index Rate" means, for any Interest Adjustment
Period after the first Interest Adjustment Period, the Money Market
Yield for the Reference Bills as established by the Reference Bill
auction conducted by Freddie Mac most recently preceding the first
day of such Interest Adjustment Period, as displayed on the
Reference Bill Index Page. The Reference Bill Index Rate for the
first Interest Adjustment Period means the Money Market Yield for
the Reference Bills as established by the Reference Bill auction
conducted by Freddie Mac most recently preceding the first day of
the month in which the first Interest Adjustment Period begins, as
displayed on the Reference Bill Index Page. The "Reference Bill
Index Page" is the Freddie Mac Debt Securities Web Page (accessed
via the Freddie Mac internet site at www.freddiemac.com), or at the
option of Lender, any publication of Reference Bills auction results
available from Freddie Mac. However, if Freddie Mac has not
conducted a Reference Bill auction within the 60-calendar day period
prior to the first day of an Interest Adjustment Period, the
Reference Bill Index Rate for such Interest Adjustment Period will
be the LIBOR Index Rate for such Interest Adjustment Period.
"Remaining Amortization Period" means, at any point in time, the
number of consecutive calendar months equal to the number of months
in the Amortization Period minus the number of scheduled monthly
installments of principal and interest that have elapsed since the
date of this Note.
"Security Instrument" means the multifamily mortgage, deed to secure
debt or deed of trust effective as of the effective date of this
Note, from Borrower to or for the benefit of Lender and securing
this Note.
"Treasury Security" means the 9.250% U.S. Treasury Security due
February 15, 2016.
"Window Period" means the Extension Period.
"Yield Maintenance Period" means the period from and including the
date of this Note until but not including the Scheduled Initial
Maturity Date.
(b) Other capitalized terms used but not defined in this Note
shall have the meanings given to such terms in the Security
Instrument.
2. Address for Payment. All payments due under this Note shall be
payable at GMAC Commercial Mortgage Corporation, 200 Witmer
Road, Post Office Box 809, Horsham, Pennsylvania 19044,
Attention: Servicing - Account Manager, or such other place as
may be designated by Notice to Borrower from or on behalf of
Lender.
3. Payments.
(a) During the Fixed Rate Period, interest will accrue on the
outstanding principal balance of this Note at the Fixed
Interest Rate, subject to the provisions of Section 8 of this
Note. During the Extension Period, interest will accrue on the
outstanding principal balance of this Note at the Adjustable
Interest Rate, subject to the provisions of Section 8 of this
Note.
(b) Interest under this Note shall be computed, payable and
allocated on the basis of an actual/360 interest calculation
schedule (interest is payable for the actual number of days in
each month, and each month's interest is calculated by
multiplying the unpaid principal amount of this Note as of the
first day of the month for which interest is being calculated
by the Fixed Interest Rate (during the Fixed Rate Period) or
the applicable Adjustable Interest Rate (during the Extension
Period), dividing the product by 360, and multiplying the
quotient by the number of days in the month for which interest
is being calculated). For convenience in determining the
amount of a monthly installment of principal and interest
under this Note, Lender will use a 30/360 interest calculation
payment schedule (each year is treated as consisting of twelve
30-day months). However, as provided above, the portion of the
monthly installment actually payable as and allocated to
interest will be based upon an actual/360 interest calculation
schedule, and the amount of each installment attributable to
principal and the amount attributable to interest will vary
based upon the number of days in the month for which such
installment is paid. Each monthly payment of principal and
interest will first be applied to pay in full interest due,
and the balance of the monthly payment paid by Borrower will
be credited to principal.
(c) Unless disbursement of principal is made by Lender to Borrower
on the first day of a calendar month, interest for the period
beginning on the date of disbursement and ending on and
including the last day of such calendar month shall be payable
by Borrower simultaneously with the execution of this Note. If
disbursement of principal is made by Lender to Borrower on the
first day of a calendar month, then no payment will be due
from Borrower at the time of the execution of this Note. The
Installment Due Date for the first monthly installment payment
under Section 3(d) of interest only or principal and interest,
as applicable, will be the First Installment Due Date set
forth in Section 1(a) of this Note. Except as provided in this
Section 3(c) and in Section 10, accrued interest will be
payable in arrears.
(d) Beginning on the First Installment Due Date, and continuing
until and including the monthly installment due on the Initial
Maturity Date, principal and accrued interest shall be payable
by Borrower in consecutive monthly installments due and
payable on the first day of each calendar month. The amount of
the monthly installment of principal and interest payable
pursuant to this Section 3(d) on an Installment Due Date shall
be Sixteen Thousand Six Hundred Eighty Four and 88/100 Dollars
($16,684.88).
(e) Except as otherwise provided in this Section 3(e), all
remaining Indebtedness, including all principal and interest,
shall be due and payable by Borrower on the Initial Maturity
Date. However, so long as (i) the Initial Maturity Date has
not occurred prior to the Scheduled Initial Maturity Date, and
(ii) no Event of Default or event or circumstance which, with
the giving of notice or passage of time or both, could
constitute an Event of Default exists on the Scheduled Initial
Maturity Date, then the Extension Period automatically will
become effective and the date for full payment of the
Indebtedness automatically shall be extended until the
Extended Maturity Date. If the Extension Period becomes
effective, monthly installments of principal and interest or
interest only will be payable during the Extension Period as
provided in Section 3(f). Anything in Section 21 of the
Security Instrument to the contrary notwithstanding, during
the Extension Period, Borrower will not request that Lender
consent to, and Lender will not consent to, a Transfer that,
absent such consent, would constitute an Event of Default.
(f) If the Extension Period becomes effective, beginning on
December 1, 2015, and continuing until and including the
monthly installment due on the Extended Maturity Date,
principal and accrued interest shall be payable by Borrower in
consecutive monthly installments due and payable on the first
day of each calendar month. The amount of the monthly
installment of principal and interest payable pursuant to this
Section 3(f) on an Installment Due Date shall be calculated so
as to equal the monthly payment amount which would be payable
on the Installment Due Date as if the unpaid principal balance
of this Note as of the first day of the Interest Adjustment
Period immediately preceding the Installment Due Date was to
be fully amortized, together with interest thereon at the
Adjustable Interest Rate in effect for such Interest
Adjustment Period, in equal consecutive monthly payments paid
on the first day of each calendar month over the Remaining
Amortization Period.
(g) During the Extension Period, Lender shall provide Borrower
with Notice, given in the manner specified in the Security
Instrument, of the amount of each monthly installment due
under this Note. However, if Lender has not provided Borrower
with prior notice of the monthly payment due on any
Installment Due Date, then Borrower shall pay on that
Installment Due Date an amount equal to the monthly
installment payment for which Borrower last received notice.
If Lender at any time determines that Borrower has paid one or
more monthly installments in an incorrect amount because of
the operation of the preceding sentence, or because Lender has
miscalculated the Adjustable Interest Rate or has otherwise
miscalculated the amount of any monthly installment, then
Lender shall give notice to Borrower of such determination. If
such determination discloses that Borrower has paid less than
the full amount due for the period for which the determination
was made, Borrower, within 30 calendar days after receipt of
the notice from Lender, shall pay to Lender the full amount of
the deficiency. If such determination discloses that Borrower
has paid more than the full amount due for the period for
which the determination was made, then the amount of the
overpayment shall be credited to the next installment(s) of
interest only or principal and interest, as applicable, due
under this Note (or, if an Event of Default has occurred and
is continuing, such overpayment shall be credited against any
amount owing by Borrower to Lender).
(h) All payments under this Note shall be made in immediately
available U.S. funds.
(i) Any regularly scheduled monthly installment of interest only
or principal and interest payable pursuant to this Section 3
that is received by Lender before the date it is due shall be
deemed to have been received on the due date for the purpose
of calculating interest due.
(j) Any accrued interest remaining past due for 30 days or more,
at Lender's discretion, may be added to and become part of the
unpaid principal balance of this Note and any reference to
"accrued interest" shall refer to accrued interest which has
not become part of the unpaid principal balance. Any amount
added to principal pursuant to the Loan Documents shall bear
interest at the applicable rate or rates specified in this
Note and shall be payable with such interest upon demand by
Lender and absent such demand, as provided in this Note for
the payment of principal and interest.
(k) In accordance with Section 14, interest charged under this
Note cannot exceed the Maximum Interest Rate. If the
Adjustable Interest Rate at any time exceeds the Maximum
Interest Rate, resulting in the charging of interest hereunder
to be limited to the Maximum Interest Rate, then any
subsequent reduction in the Adjustable Interest Rate shall not
reduce the rate at which interest under this Note accrues
below the Maximum Interest Rate until the total amount of
interest accrued hereunder equals the amount of interest which
would have accrued had the Adjustable Interest Rate at all
times been in effect.
4. Application of Payments. If at any time Lender receives, from
Borrower or otherwise, any amount applicable to the
Indebtedness which is less than all amounts due and payable at
such time, Lender may apply the amount received to amounts
then due and payable in any manner and in any order determined
by Lender, in Lender's discretion. Borrower agrees that
neither Lender's acceptance of a payment from Borrower in an
amount that is less than all amounts then due and payable nor
Lender's application of such payment shall constitute or be
deemed to constitute either a waiver of the unpaid amounts or
an accord and satisfaction.
5. Security. The Indebtedness is secured by, among other things,
the Security Instrument, and reference is made to the Security
Instrument for other rights of Lender as to collateral for the
Indebtedness.
6. Acceleration. If an Event of Default has occurred and is
continuing, the entire unpaid principal balance, any accrued
interest, any prepayment premium payable under Section 10, and
all other amounts payable under this Note and any other Loan
Document, shall at once become due and payable, at the option
of Lender, without any prior notice to Borrower (except if
notice is required by applicable law, then after such notice).
Lender may exercise this option to accelerate regardless of
any prior forbearance. For purposes of exercising such option,
Lender shall calculate the prepayment premium as if prepayment
occurred on the date of acceleration. If prepayment occurs
thereafter, lender shall recalculate the prepayment premium as
of the actual prepayment date.
7. Late Charge.
(a) If any monthly installment of interest or principal and
interest or other amount payable under this Note or under the
Security Instrument or any other Loan Document is not received
in full by Lender (i) during the Fixed Rate Period, within ten
(10) days after the installment or other amount is due, or
(ii) during the Extension Period, within five (5) days after
the installment or other amount is due, counting from and
including the date such installment or other amount is due
(unless applicable law requires a longer period of time before
a late charge may be imposed, in which event such longer
period shall be substituted), Borrower shall pay to Lender,
immediately and without demand by Lender, a late charge equal
to five percent (5%) of such installment or other amount due
(unless applicable law requires a lesser amount be charged, in
which event such lesser amount shall be substituted).
(b) Borrower acknowledges that its failure to make timely payments
will cause Lender to incur additional expenses in servicing
and processing the Loan and that it is extremely difficult and
impractical to determine those additional expenses. Borrower
agrees that the late charge payable pursuant to this Section
represents a fair and reasonable estimate, taking into account
all circumstances existing on the date of this Note, of the
additional expenses Lender will incur by reason of such late
payment. The late charge is payable in addition to, and not in
lieu of, any interest payable at the Default Rate pursuant to
Section 8.
8. Default Rate.
(a) So long as (i) any monthly installment under this Note remains
past due for thirty (30) days or more or (ii) any other Event
of Default has occurred and is continuing, then
notwithstanding anything in Section 3 of this Note to the
contrary, interest under this Note shall accrue on the unpaid
principal balance from the Installment Due Date of the first
such unpaid monthly installment or the occurrence of such
other Event of Default, as applicable, at the Default Rate.
(b) From and after the Maturity Date, the unpaid principal balance
shall continue to bear interest at the Default Rate until and
including the date on which the entire principal balance is
paid in full.
(c) Borrower acknowledges that (i) its failure to make timely
payments will cause Lender to incur additional expenses in
servicing and processing the Loan, (ii) during the time that
any monthly installment under this Note is delinquent for
thirty (30) days or more, Lender will incur additional costs
and expenses arising from its loss of the use of the money due
and from the adverse impact on Lender's ability to meet its
other obligations and to take advantage of other investment
opportunities; and (iii) it is extremely difficult and
impractical to determine those additional costs and expenses.
Borrower also acknowledges that, during the time that any
monthly installment under this Note is delinquent for thirty
(30) days or more or any other Event of Default has occurred
and is continuing, Lender's risk of nonpayment of this Note
will be materially increased and Lender is entitled to be
compensated for such increased risk. Borrower agrees that the
increase in the rate of interest payable under this Note to
the Default Rate represents a fair and reasonable estimate,
taking into account all circumstances existing on the date of
this Note, of the additional costs and expenses Lender will
incur by reason of the Borrower's delinquent payment and the
additional compensation Lender is entitled to receive for the
increased risks of nonpayment associated with a delinquent
loan.
9. Limits on Personal Liability.
(a) Except as otherwise provided in this Section 9, Borrower shall
have no personal liability under this Note, the Security
Instrument or any other Loan Document for the repayment of the
Indebtedness or for the performance of any other obligations
of Borrower under the Loan Documents and Lender's only
recourse for the satisfaction of the Indebtedness and the
performance of such obligations shall be Lender's exercise of
its rights and remedies with respect to the Mortgaged Property
and to any other collateral held by Lender as security for the
Indebtedness. This limitation on Borrower's liability shall
not limit or impair Lender's enforcement of its rights against
any guarantor of the Indebtedness or any guarantor of any
other obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the amount
of the Base Recourse, plus any other amounts for which
Borrower has personal liability under this Section 9.
(c) In addition to the Base Recourse, Borrower shall be personally
liable to Lender for the repayment of a further portion of the
Indebtedness equal to any loss or damage suffered by Lender as
a result of the occurrence of any of the following events:
(i) Borrower fails to pay to Lender upon demand after an Event of Default
all Rents to which Lender is entitled under Section 3(a) of
the Security Instrument and the amount of all security
deposits collected by Borrower from tenants then in
residence. However, Borrower will not be personally liable
for any failure described in this subsection (i) if
Borrower is unable to pay to Lender all Rents and security
deposits as required by the Security Instrument because of
a valid order issued in a bankruptcy, receivership, or
similar judicial proceeding.
(ii) Borrower fails to apply all insurance proceeds and
condemnation proceeds as required by the Security Instrument.
However, Borrower will not be personally liable for any
failure described in this subsection (ii) if Borrower is
unable to apply insurance or condemnation proceeds as required
by the Security Instrument because of a valid order issued in
a bankruptcy, receivership, or similar judicial proceeding.
(iii) Borrower fails to comply with Section 14(g) or (h) of the
Security Instrument relating to the delivery of books and
records, statements, schedules and reports.
(iv) Borrower fails to pay when due in accordance with the terms of
the Security Instrument the amount of any item below marked
"Deferred"; provided however, that if no item is marked
"Deferred", this Section 9(c)(iv) shall be of no force or
effect.
[Deferred] Hazard Insurance premiums or other insurance
premiums,
[Deferred] Taxes,
[Deferred] water and sewer charges (that could become a lien
on the Mortgaged Property),
[ N/A ] ground rents,
[Deferred] assessments or other charges (that could become a
lien on the Mortgaged Property)
(d) In addition to the Base Recourse, Borrower shall be personally liable to
Lender for:
(i) the performance of all of Borrower's obligations under Section
18 of the Security Instrument (relating to environmental
matters);
(ii) the costs of any audit under Section 14(g) of the Security
Instrument; and
(iii) any costs and expenses incurred by Lender in connection with
the collection of any amount for which Borrower is personally
liable under this Section 9, including Attorneys' Fees and
Costs and the costs of conducting any independent audit of
Borrower's books and records to determine the amount for which
Borrower has personal liability.
(e) All payments made by Borrower with respect to the Indebtedness
and all amounts received by Lender from the enforcement of its
rights under the Security Instrument and the other Loan
Documents shall be applied first to the portion of the
Indebtedness for which Borrower has no personal liability.
(f) Notwithstanding the Base Recourse, Borrower shall become
personally liable to Lender for the repayment of all of the
Indebtedness upon the occurrence of any of the following
Events of Default:
(i) Borrower's ownership of any property or operation of any
business not permitted by Section 33 of the Security
Instrument;
(ii) a Transfer (including, but not limited to, a lien or
encumbrance) that is an Event of Default under Section 21 of
the Security Instrument, other than a Transfer consisting
solely of the involuntary removal or involuntary withdrawal of
a general partner in a limited partnership or a manager in a
limited liability company; or
(iii) fraud or written material misrepresentation by Borrower or any
officer, director, partner, member or employee of Borrower in
connection with the application for or creation of the
Indebtedness or any request for any action or consent by
Lender.
(g) To the extent that Borrower has personal liability under this
Section 9, Lender may exercise its rights against Borrower
personally without regard to whether Lender has exercised any
rights against the Mortgaged Property or any other security,
or pursued any rights against any guarantor, or pursued any
other rights available to Lender under this Note, the Security
Instrument, any other Loan Document or applicable law. To the
fullest extent permitted by applicable law, in any action to
enforce Borrower's personal liability under this Section 9,
Borrower waives any right to set off the value of the
Mortgaged Property against such personal liability.
10. Voluntary and Involuntary Prepayments.
(a) Any receipt by Lender of principal due under this Note prior
to the Maturity Date, other than principal required to be paid
in monthly installments pursuant to Section 3, constitutes a
prepayment of principal under this Note. Without limiting the
foregoing, any application by Lender, prior to the Maturity
Date, of any proceeds of collateral or other security to the
repayment of any portion of the unpaid principal balance of
this Note constitutes a prepayment under this Note.
(b) Borrower may voluntarily prepay all of the unpaid principal
balance of this Note on a Business Day designated as the date
for such prepayment in a Notice from Borrower to Lender given
at least 30 days prior to the date of such prepayment. Unless
otherwise expressly provided in the Loan Documents, Borrower
may not voluntarily prepay less than all of the unpaid
principal balance of this Note.
(c) Borrower acknowledges that Lender has agreed that principal
may be prepaid other than on the last calendar day of a month
only because, for the purposes of the accrual of interest, any
prepayment received by Lender on any day other than the last
calendar day of the month shall be deemed to have been
received on the last calendar day of the month in which the
prepayment occurs.
(d) In order to voluntarily prepay all or any part of the
principal of this Note, Borrower must also pay to Lender,
together with the amount of principal being prepaid, (i) all
accrued and unpaid interest due under this Note, plus (ii) all
other sums due to Lender at the time of such prepayment, plus
(iii) any prepayment premium calculated pursuant to Section
10(e).
(e) Except as provided in Section 10(f), a prepayment premium
shall be due and payable by Borrower in connection with any
prepayment of principal under this Note during the Prepayment
Premium Period. The prepayment premium shall be whichever is
the greater of subsections (A) and (B) below:
(A) 1.0% of the amount of principal being prepaid; or
(B) the product obtained by multiplying:
(1) the amount of principal being prepaid or accelerated,
by
(2) the excess (if any) of the Monthly Note Rate over
the Assumed Reinvestment Rate,
by
(3) the Present Value Factor.
For purposes of subsection (B), the following definitions
shall apply:
Monthly Note Rate: one-twelfth (1/12) of the Fixed
Interest Rate, expressed as a decimal calculated to five
digits.
Prepayment Date: in the case of a voluntary
prepayment, the date on which the prepayment is made; in
the case of the application by Lender of collateral or
security to a portion of the principal balance, the date of
such application.
Assumed Reinvestment Rate: one-twelfth (1/12) of the
yield rate, as of the date 5 Business Days before the
Prepayment Date, on the Treasury Security, as reported in The
Wall Street Journal, expressed as a decimal calculated to five
digits. In the event that no yield is published on the
applicable date for the Treasury Security, Lender, in its
discretion, shall select the non-callable Treasury Security
maturing in the same year as the Treasury Security with the
lowest yield published in The Wall Street Journal as of the
applicable date. If the publication of such yield rates in The
Wall Street Journal is discontinued for any reason, Lender
shall select a security with a comparable rate and term to the
Treasury Security. The selection of an alternate security
pursuant to this Section shall be made in Lender's discretion.
Present Value Factor: the factor that discounts to
present value the costs resulting to Lender from the
difference in interest rates during the months remaining in
the Yield Maintenance Period, using the Assumed Reinvestment
Rate as the discount rate, with monthly compounding, expressed
numerically as follows:
{1-{1/1+ARR}}N/ARR
n = number of months or partial months remaining in
Yield Maintenance Period
ARR = Assumed Reinvestment Rate
(f) Notwithstanding any other provision of this Section 10, no prepayment
premium shall be payable with respect to (i) any prepayment made during the
Window Period, or (ii) any prepayment occurring as a result of the application
of any insurance proceeds or condemnation award under the Security Instrument.
(g) Unless Lender agrees otherwise in writing, a permitted or required
prepayment of less than the unpaid principal balance of this Note shall not
extend or postpone the due date of any subsequent monthly installments or change
the amount of such installments.
(h) Borrower recognizes that any prepayment of any of the unpaid principal
balance of this Note, whether voluntary or involuntary or resulting from an
Event of Default by Borrower, will result in Lender's incurring loss, including
reinvestment loss, additional expense and frustration or impairment of Lender's
ability to meet its commitments to third parties. Borrower agrees to pay to
Lender upon demand damages for the detriment caused by any prepayment, and
agrees that it is extremely difficult and impractical to ascertain the extent of
such damages. Borrower therefore acknowledges and agrees that the formula for
calculating prepayment premiums set forth in this Note represents a reasonable
estimate of the damages Lender will incur because of a prepayment. Borrower
further acknowledges that any lockout and the prepayment premium provisions of
this Note are a material part of the consideration for the Loan, and that the
terms of this Note are in other respects more favorable to Borrower as a result
of the Borrower's voluntary agreement to the lockout and prepayment premium
provisions.
11. Costs and Expenses. To the fullest extent allowed by applicable law,
Borrower shall pay all expenses and costs, including Attorneys' Fees and Costs
incurred by Lender as a result of any default under this Note or in connection
with efforts to collect any amount due under this Note, or to enforce the
provisions of any of the other Loan Documents, including those incurred in
post-judgment collection efforts and in any bankruptcy proceeding (including any
action for relief from the automatic stay of any bankruptcy proceeding) or
judicial or non-judicial foreclosure proceeding.
12. Forbearance. Any forbearance by Lender in exercising any right or remedy
under this Note, the Security Instrument, or any other Loan Document or
otherwise afforded by applicable law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy. The acceptance by Lender of any
payment after the due date of such payment, or in an amount which is less than
the required payment, shall not be a waiver of Lender's right to require prompt
payment when due of all other payments or to exercise any right or remedy with
respect to any failure to make prompt payment. Enforcement by Lender of any
security for Borrower's obligations under this Note shall not constitute an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.
13. Waivers. Borrower and all endorsers and guarantors of this Note and all
other third party obligors waive presentment, demand, notice of dishonor,
protest, notice of acceleration, notice of intent to demand or accelerate
payment or maturity, presentment for payment, notice of nonpayment, grace, and
diligence in collecting the Indebtedness.
14. Loan Charges. Neither this Note nor any of the other Loan Documents shall be
construed to create a contract for the use, forbearance or detention of money
requiring payment of interest at a rate greater than the Maximum Interest Rate.
If any applicable law limiting the amount of interest or other charges permitted
to be collected from Borrower in connection with the Loan is interpreted so that
any interest or other charge provided for in any Loan Document, whether
considered separately or together with other charges provided for in any other
Loan Document, violates that law, and Borrower is entitled to the benefit of
that law, that interest or charge is hereby reduced to the extent necessary to
eliminate that violation. The amounts, if any, previously paid to Lender in
excess of the permitted amounts shall be applied by Lender to reduce the unpaid
principal balance of this Note. For the purpose of determining whether any
applicable law limiting the amount of interest or other charges permitted to be
collected from Borrower has been violated, all Indebtedness that constitutes
interest, as well as all other charges made in connection with the Indebtedness
that constitute interest, shall be deemed to be allocated and spread ratably
over the stated term of this Note. Unless otherwise required by applicable law,
such allocation and spreading shall be effected in such a manner that the rate
of interest so computed is uniform throughout the stated term of this Note.
15. Commercial Purpose. Borrower represents that Borrower is incurring the
Indebtedness solely for the purpose of carrying on a business or commercial
enterprise, and not for personal, family, household, or agricultural purposes.
16. Counting of Days. Except where otherwise specifically provided, any
reference in this Note to a period of "days" means calendar days, not Business
Days.
17. Governing Law. This Note shall be governed by the law of the Property
Jurisdiction.
18. Captions. The captions of the Sections of this Note are for convenience only
and shall be disregarded in construing this Note.
19. Notices; Written Modifications.
(a) All Notices, demands and other communications required or permitted to be
given pursuant to this Note shall be given in accordance with Section 31 of the
Security Instrument.
(b) Any modification or amendment to this Note shall be ineffective unless in
writing signed by the party sought to be charged with such modification or
amendment; provided, however, that in the event of a Transfer under the terms of
the Security Instrument that requires Lender's consent, any or some or all of
the Modifications to Multifamily Note set forth in Exhibit A to this Note may be
modified or rendered void by Lender at Lender's option, by Notice to Borrower
and the transferee, as a condition of Lender's consent.
20. Consent to Jurisdiction and Venue. Borrower agrees that any controversy
arising under or in relation to this Note may be litigated in the Property
Jurisdiction. The state and federal courts and authorities with jurisdiction in
the Property Jurisdiction shall have jurisdiction over all controversies that
shall arise under or in relation to this Note. Borrower irrevocably consents to
service, jurisdiction, and venue of such courts for any such litigation and
waives any other venue to which it might be entitled by virtue of domicile,
habitual residence or otherwise. However, nothing in this Note is intended to
limit any right that Lender may have to bring any suit, action or proceeding
relating to matters arising under this Note in any court of any other
jurisdiction.
21. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES NOT TO ELECT A
TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE
RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT
BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
22. State-Specific Provisions. N/A.
ATTACHED EXHIBIT. The Exhibit noted below, if marked with an "X" in the
space provided, is attached to this Note:
-----
X Exhibit A Modifications to Multifamily Note
-----
IN WITNESS WHEREOF, and in consideration of the Lender's agreement to lend
Borrower the principal amount set forth above, Borrower has signed and delivered
this Note under seal or has caused this Note to be signed and delivered under
seal by its duly authorized representative.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
NATIONAL PROPERTY INVESTORS 5, a California
limited partnership doing business in
Florida as National Property Investors 5
Ltd.
By: NPI Equity Investments, Inc., a
Florida corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and
Treasurer
22-385051
Borrower's Social Security/Employer ID
Number
PAY TO THE ORDER OF FEDERAL HOME LOAN
MORTGAGE CORPORATION, WITHOUT RECOURSE.
GMAC COMMERCIAL MORTGAGE BANK, a
Utah industrial bank
By:/s/Max W. Foore
Max W. Foore
Limited Signer
FHLMC Loan No. 002722690
Exhibit 10.24
FHLMC Loan No. 002722690
Willow Park Apartments
GUARANTY
MULTISTATE
(for use in all Property jurisdictions except California)
REVISION DATE 05/06/2005
This Guaranty ("Guaranty") is entered into to be effective as of December
1, 2005, by the undersigned person(s) (the "Guarantor" jointly and severally if
more than one), for the benefit of GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial bank (the "Lender").
RECITALS
A. National Property Investors 5, a California limited partnership doing
business in Florida as National Property Investors 5 Ltd. (the "Borrower") has
requested that Lender make a loan to Borrower in the amount of $2,900,000.00
(the "Loan"). The Loan will be evidenced by a Multifamily Note from Borrower to
Lender dated effective as of the effective date of this Guaranty (the "Note").
The Note will be secured by a Multifamily Mortgage, Deed of Trust, or Deed to
Secure Debt dated effective as of the effective date of the Note (the "Security
Instrument"), encumbering the Mortgaged Property described in the Security
Instrument.
B. As a condition to making the Loan to Borrower, Lender requires that the
Guarantor execute this Guaranty.
NOW, THEREFORE, in order to induce Lender to make the Loan to Borrower,
and in consideration thereof, Guarantor agrees as follows:
1. Defined Terms. "Indebtedness," "Loan Documents" and
"Property Jurisdiction" and other capitalized terms used
but not defined in this Guaranty shall have the meanings
assigned to them in the Security Instrument.
2. Scope of Guaranty.
(a) Guarantor hereby absolutely, unconditionally and
irrevocably guarantees to Lender:
(i) the full and prompt payment when due, whether at the
Maturity Date or earlier, by reason of acceleration or
otherwise, and at all times thereafter, of each of the
following:
(A) a portion of the Indebtedness equal to zero percent (0%)
of the original principal balance of the Note (the "Base
Guaranty"); and
(B) in addition to the Base Guaranty, all other amounts for
which Borrower is personally liable under Sections 9(c),
9(d) and 9(f) of the Note; and
(C) all costs and expenses, including reasonable Attorneys'
Fees and Costs incurred by Lender in enforcing its
rights under this Guaranty; and
(ii) the full and prompt payment and performance when due of
all of Borrower's obligations under Section 18 of the
Security Instrument.
(b) If the Base Guaranty stated in Section 2(a)(i)(A) is 100 percent of the
original principal balance of the Note, then (i) the Base Guaranty shall
mean and include the full and complete guaranty of payment of the entire
Indebtedness and the performance of all Borrower's obligations under the
Loan Documents; and (ii) for so long as the Base Guaranty remains in effect
(there being no limit to the duration of the Base Guaranty unless otherwise
expressly provided in this Guaranty), the obligations guaranteed pursuant
to Sections 2(a)(i)(B), 2(a)(i)(C) and Section 3 shall be part of, and not
in addition to or in limitation of, the Base Guaranty. If the Base Guaranty
stated in Section 2(a)(i)(A) is less than 100 percent of the original
principal balance of the Note, then this Section 2(b) shall be completely
inapplicable and shall be treated as if not a part of this Guaranty.
(c) If Guarantor is not liable for the entire Indebtedness,
then all payments made by Borrower with respect to the
Indebtedness and all amounts received by Lender from the
enforcement of its rights under the Security Instrument
and the other Loan Documents (except this Guaranty)
shall be applied first to the portion of the
Indebtedness for which neither Borrower nor Guarantor
has personal liability.
3. Additional Guaranty Relating to Bankruptcy.
(a) Notwithstanding any limitation on liability provided for
elsewhere in this Guaranty, Guarantor hereby absolutely,
unconditionally and irrevocably guarantees to Lender the
full and prompt payment when due, whether at the
Maturity Date or earlier, by reason of acceleration or
otherwise, and at all times thereafter, the entire
Indebtedness, in the event that:
(i) Borrower voluntarily files for bankruptcy protection
under the United States Bankruptcy Code; or
(ii) Borrower voluntarily becomes subject to any
reorganization, receivership, insolvency proceeding, or
other similar proceeding pursuant to any other federal
or state law affecting debtor and creditor rights; or
(iii) an order of relief is entered against Borrower pursuant
to the United States Bankruptcy Code or other federal or
state law affecting debtor and creditor rights in any
involuntary bankruptcy proceeding initiated or joined in
by a "Related Party."
(b) For purposes of this Section, the term "Related Party"
means:
(i) Borrower or Guarantor; and
(ii) any person or entity that holds, directly or indirectly,
any ownership interest in or right to manage Borrower or
Guarantor, including without limitation, any
shareholder, member or partner of Borrower or Guarantor;
and
(iii) any person or entity in which any ownership interest
(direct or indirect) or right to manage is held by
Borrower, Guarantor or any partner, shareholder or
member of, or any other person or entity holding an
interest in, Borrower or Guarantor; and
(iv) any other creditor of Borrower that is related by blood,
marriage or adoption to Borrower, Guarantor or any
partner, shareholder or member of, or any other person
or entity holding an interest in, Borrower or Guarantor.
(c) If Borrower, Guarantor or any Related Party has
solicited creditors to initiate or participate in any
proceeding referred to in this Section, regardless of
whether any of the creditors solicited actually
initiates or participates in the proceeding, then such
proceeding shall be considered as having been initiated
by a Related Party.
4. Guarantor's Obligations Survive Foreclosure. The
obligations of Guarantor under this Guaranty shall
survive any foreclosure proceeding, any foreclosure
sale, any delivery of any deed in lieu of foreclosure,
and any release of record of the Security Instrument,
and, in addition, the obligations of Guarantor relating
to Borrower's obligations under Section 18 of the
Security Instrument shall survive any repayment or
discharge of the Indebtedness. Notwithstanding the
foregoing, if Lender has never been a
mortgagee-in-possession of or held title to the
Mortgaged Property, Guarantor shall have no obligation
under this Guaranty relating to Borrower's obligations
under Section 18 of the Security Instrument after the
date of the release of record of the lien of the
Security Instrument as a result of the payment in full
of the Indebtedness on the Maturity Date or by voluntary
prepayment in full.
5. Guaranty of Payment and Performance. Guarantor's
obligations under this Guaranty constitute an
unconditional guaranty of payment and performance and
not merely a guaranty of collection.
6. No Demand by Lender Necessary; Waivers by Guarantor. The
obligations of Guarantor under this Guaranty shall be
performed without demand by Lender and shall be
unconditional regardless of the genuineness, validity,
regularity or enforceability of the Note, the Security
Instrument, or any other Loan Document, and without
regard to any other circumstance which might otherwise
constitute a legal or equitable discharge of a surety, a
guarantor, a borrower or a mortgagor. Guarantor hereby
waives, to the fullest extent permitted by applicable
law:
(a) the benefit of all principles or provisions of law,
statutory or otherwise, which are or might be in
conflict with the terms of this Guaranty and agrees that
Guarantor's obligations shall not be affected by any
circumstances, whether or not referred to in this
Guaranty, which might otherwise constitute a legal or
equitable discharge of a surety, a guarantor, a borrower
or a mortgagor;
(b) the benefits of any right of discharge under any and all
statutes or other laws relating to a guarantor, a
surety, a borrower or a mortgagor, and any other rights
of a surety, a guarantor, a borrower or a mortgagor
under such statutes or laws;
(c) diligence in collecting the Indebtedness, presentment,
demand for payment, protest, all notices with respect to
the Note and this Guaranty which may be required by
statute, rule of law or otherwise to preserve Lender's
rights against Guarantor under this Guaranty, including,
but not limited to, notice of acceptance, notice of any
amendment of the Loan Documents, notice of the
occurrence of any default or Event of Default, notice of
intent to accelerate, notice of acceleration, notice of
dishonor, notice of foreclosure, notice of protest, and
notice of the incurring by Borrower of any obligation or
indebtedness;
(d) all rights to cause a marshalling of the Borrower's
assets or to require Lender to:
(i) proceed against Borrower or any other guarantor of
Borrower's payment or performance under the Loan
Documents (an "Other Guarantor");
(ii) proceed against any general partner of Borrower or any
Other Guarantor if Borrower or any Other Guarantor is a
partnership;
(iii) proceed against or exhaust any collateral held by Lender
to secure the repayment of the Indebtedness; or
(iv) pursue any other remedy it may now or hereafter have
against Borrower, or, if Borrower is a partnership, any
general partner of Borrower;
(e) any right to object to the timing, manner or conduct of
Lender's enforcement of its rights under any of the Loan
Documents; and
(f) any right to revoke this Guaranty as to any future
advances by Lender under the terms of the Security
Instrument to protect Lender's interest in the Mortgaged
Property.
7. Modification of Loan Documents. At any time or from time
to time and any number of times, without notice to
Guarantor and without affecting the liability of
Guarantor, Lender may:
(a) extend the time for payment of the principal of or
interest on the Indebtedness or renew the Indebtedness
in whole or in part;
(b) extend the time for Borrower's performance of or
compliance with any covenant or agreement contained in
the Note, the Security Instrument or any other Loan
Document, whether presently existing or hereinafter
entered into, or waive such performance or compliance;
(c) accelerate the Maturity Date of the Indebtedness as
provided in the Note, the Security Instrument, or any
other Loan Document;
(d) with Borrower, modify or amend the Note, the Security
Instrument, or any other Loan Document in any respect,
including, but not limited to, an increase in the
principal amount; and/or
(e) modify, exchange, surrender or otherwise deal with any
security for the Indebtedness or accept additional
security that is pledged or mortgaged for the
Indebtedness.
8. Joint and Several Liability. The obligations of
Guarantor (and each party named as a Guarantor in this
Guaranty) and any Other Guarantor shall be joint and
several. Lender, in its sole and absolute discretion,
may:
(a) bring suit against Guarantor, or any one or more of the
parties named as a Guarantor in this Guaranty, and any
Other Guarantor, jointly and severally, or against any
one or more of them;
(b) compromise or settle with Guarantor, any one or more of
the parties named as a Guarantor in this Guaranty, or
any Other Guarantor, for such consideration as Lender
may deem proper;
(c) release one or more of the parties named as a Guarantor
in this Guaranty, or any Other Guarantor, from
liability; and
(d) otherwise deal with Guarantor and any Other Guarantor,
or any one or more of them, in any manner, and no such
action shall impair the rights of Lender to collect from
Guarantor any amount guaranteed by Guarantor under this
Guaranty.
9. Subordination of Borrower's Indebtedness to Guarantor.
Any indebtedness of Borrower held by Guarantor now or in
the future is and shall be subordinated to the
Indebtedness and Guarantor shall collect, enforce and
receive any such indebtedness of Borrower as trustee for
Lender, but without reducing or affecting in any manner
the liability of Guarantor under the other provisions of
this Guaranty.
10. Waiver of Subrogation. Guarantor shall have no right of,
and hereby waives any claim for, subrogation or
reimbursement against Borrower or any general partner of
Borrower by reason of any payment by Guarantor under
this Guaranty, whether such right or claim arises at law
or in equity or under any contract or statute, until the
Indebtedness has been paid in full and there has expired
the maximum possible period thereafter during which any
payment made by Borrower to Lender with respect to the
Indebtedness could be deemed a preference under the
United States Bankruptcy Code.
11. Preference. If any payment by Borrower is held to
constitute a preference under any applicable bankruptcy,
insolvency, or similar laws, or if for any other reason
Lender is required to refund any sums to Borrower, such
refund shall not constitute a release of any liability
of Guarantor under this Guaranty. It is the intention of
Lender and Guarantor that Guarantor's obligations under
this Guaranty shall not be discharged except by
Guarantor's performance of such obligations and then
only to the extent of such performance.
12. Financial Statements. Guarantor, from time to time upon
written request by Lender, shall deliver to Lender such
financial statements as Lender may reasonably require.
13. Assignment. Lender may assign its rights under this
Guaranty in whole or in part and upon any such
assignment, all the terms and provisions of this
Guaranty shall inure to the benefit of such assignee to
the extent so assigned. The terms used to designate any
of the parties herein shall be deemed to include the
heirs, legal representatives, successors and assigns of
such parties, and the term "Lender" shall also include
any lawful owner, holder or pledgee of the Note.
Reference in this Guaranty to "person" or "persons"
shall be deemed to include individuals and entities.
14. Complete and Final Agreement. This Guaranty and the
other Loan Documents represent the final agreement
between the parties and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral
agreements. There are no unwritten oral agreements
between the parties. All prior or contemporaneous
agreements, understandings, representations, and
statements, oral or written, are merged into this
Guaranty and the other Loan Documents. Guarantor
acknowledges that Guarantor has received a copy of the
Note and all other Loan Documents. Neither this Guaranty
nor any of its provisions may be waived, modified,
amended, discharged, or terminated except by a writing
signed by the party against which the enforcement of the
waiver, modification, amendment, discharge, or
termination is sought, and then only to the extent set
forth in that writing.
15. Governing Law. This Guaranty shall be governed by and
enforced in accordance with the laws of the Property
Jurisdiction, without giving effect to the choice of law
principles of the Property Jurisdiction that would
require the application of the laws of a jurisdiction
other than the Property Jurisdiction.
16. Jurisdiction; Venue. Guarantor agrees that any
controversy arising under or in relation to this
Guaranty may be litigated in the Property Jurisdiction,
and that the state and federal courts and authorities
with jurisdiction in the Property Jurisdiction shall
have jurisdiction over all controversies which shall
arise under or in relation to this Guaranty. Guarantor
irrevocably consents to service, jurisdiction and venue
of such courts for any such litigation and waives any
other venue to which it might be entitled by virtue of
domicile, habitual residence or otherwise. However,
nothing herein is intended to limit Lender's right to
bring any suit, action or proceeding relating to matters
arising under this Guaranty against Guarantor or any of
Guarantor's assets in any court of any other
jurisdiction.
17. Guarantor's Interest in Borrower. Guarantor represents
to Lender that Guarantor has a direct or indirect
ownership or other financial interest in Borrower and/or
will otherwise derive a material financial benefit from
the making of the Loan.
18. STATE-SPECIFIC PROVISIONS:
1. Section 2(a)(ii) of this Guaranty is modified to read as follows:
the full and prompt payment and performance when due of all of
Borrower's obligations under Sections 18 and 47 of the Security
Instrument; and
2. Guarantor further waives all defenses based on suretyship or impairment
of collateral (Guarantor and Lender intending this waiver to have the
effects described in Section 48 of the Restatement (Third) of the Law of
Suretyship and Guaranty).
3. Guarantor hereby acknowledges that it has read and understands all of
the provisions of this Guaranty, including the waiver of jury trial set
forth in Section 20 below, and has been advised by legal counsel as
Guarantor has deemed to be necessary or appropriate.
19. Residence; Community Property Provision.
(a) Guarantor represents and warrants that his/her state of
residence is N/A.
(b) Guarantor warrants and represents that s/he is: N/A. [______]
single [______] married
20. GUARANTOR AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH
RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN
THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B)
WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT
ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE
BENEFIT OF COMPETENT LEGAL COUNSEL.
ATTACHED EXHIBIT. The following Exhibit is attached to this Guaranty:
------
X Exhibit A Modifications to Guaranty
------
IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under seal
or has caused this Guaranty to be signed and delivered under seal by its duly
authorized representative.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
AIMCO PROPERTIES, L.P., a Delaware
limited partnership
By: AIMCO-GP, Inc., a Delaware
corporation, its general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and
Treasurer
Exhibit 10.25
Prepared by, and after recording return to:
Bernice H. Cilley, Esquire
Troutman Sanders LLP
Post Office Box 1122
Richmond, Virginia 23218-1122
AMENDED AND RESTATED
MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
(FLORIDA)
DOCUMENTARY STAMPS AND INTANGIBLE TAXES IN CONNECTION WITH THE RECORDING OF THAT
CERTAIN MULTIFAMILY MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
RECORDED IN MORTGAGE BOOK 3776, PAGE 0826 OF THE PUBLIC RECORDS OF SEMINOLE
COUNTY, FLORIDA. THIS AMENDED AND RESTATED MULTIFAMILY MORTGAGE, ASSIGNMENT OF
RENTS AND SECURITY AGREEMENT SECURES NO ADDITIONAL FUNDS.
Old FHLMC Loan No. 002682516
New FHLMC Loan No. 002722682
Willow Park Apartments
FLORIDA
AMENDED AND RESTATED
MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
REVISION DATE 2-20-2004
THIS AMENDED AND RESTATED MULTIFAMILY MORTGAGE, ASSIGNMENT OF RENTS AND
SECURITY AGREEMENT (this "Instrument") is dated as of the 1st day of December,
2005, between NATIONAL PROPERTY INVESTORS 5, a limited partnership organized and
existing under the laws of the State of California, whose address is c/o AIMCO,
Stanford Place 3, 4582 S. Ulster St. Parkway, Suite 1100, Denver, Colorado
80237, as mortgagor ("Borrower"), and FEDERAL HOME LOAN MORTGAGE CORPORATION
("Lender").
RECITALS:
A. Borrower is the maker of a Multifamily Note (the "Note"), dated as of
December 15, 1999 in the original principal amount of Four Million and
00/100 Dollars (US $4,000,000.00), evidencing a loan (the "Loan") to
Borrower in such amount from GMAC Commercial Mortgage Corporation, a
California corporation (the "Original Lender").
B. The Note is secured by that certain Multifamily Mortgage, Assignment of
Rents, and Security Agreement dated as of December 15, 1999, from
Borrower, as mortgagor, to Original Lender, as mortgagee, recorded in
the land records of Seminole County, Florida (the "Land Records") in
Mortgage Book 3776, Page 0826 (the "Instrument"). The Instrument
encumbers, among other things, Borrower's interest in the land
described in Exhibit A to the Instrument and to this Amended and
Restated Instrument.
C. Pursuant to a Limited Guaranty dated as of December 15, 1999, AIMCO
Properties, L.P., a Delaware limited partnership, guaranteed some or all
of Borrower's obligations under the terms of the Note and the Instrument.
D. Original Lender (i) endorsed the Note to Lender and (ii) assigned the
Instrument to Lender by Assignment of Security Instrument dated as of
December 15, 1999 and recorded in the Land Records in Mortgage Book 3776,
Page 0897.
E. Borrower has confirmed to Lender that Borrower has no defenses or offsets
of any kind against any of the indebtedness due under the Note.
F. By Amended and Restated Multifamily Note dated effective as of the date
of this Amended and Restated Instrument, Borrower and Lender have
amended and restated the Note so as to, among other things, (i) reflect
a current unpaid balance of Three Million Three Hundred Eighty-Seven
Thousand Eighty-Eight and 00/100 Dollars ($3,387,088.00), (ii) amend
the terms of payment, and (iii) change the Maturity Date of the Note
from January 1, 2020 to an Initial Maturity Date of December 1, 2015.
Borrower and Lender now also desire to amend and restate the Instrument
as provided below.
NOW, THEREFORE, in consideration of these premises, and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the parties agree that the Instrument is amended and restated in its entirety in
the form attached hereto and made a part hereof.
FHLMC Loan No. 002722682
Willow Park Apartments
MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
(FLORIDA - REVISION DATE 05-11-2004)
THIS MULTIFAMILY MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the
"Instrument") is made to be effective this 1st day of December, 2005, between
NATIONAL PROPERTY INVESTORS 5, a limited partnership organized and existing
under the laws of California, whose address is c/o AIMCO, Stanford Place 3, 4582
S. Ulster St. Parkway, Suite 1100, Denver, Colorado 80237, as mortgagor
("Borrower"), and GMAC COMMERCIAL MORTGAGE BANK, an industrial bank organized
and existing under the laws of Utah, whose address is 6955 Union Park Center,
Suite 330, Midvale, Utah 84047, Attention: President, with a copy to GMAC
Commercial Mortgage Corporation, 200 Witmer Road, P.O. Box 809, Horsham,
Pennsylvania 19044, Attention: Servicing-Executive Vice President, as mortgagee
("Lender"). Borrower's organizational identification number, if applicable, is
19842230015.
Borrower is indebted to Lender in the principal amount of $3,387,088.00,
as evidenced by Borrower's Multifamily Note payable to Lender dated as of the
date of this Instrument, and maturing on December 1, 2016 (the "Maturity Date").
TO SECURE TO LENDER the repayment of the Indebtedness, and all renewals,
extensions and modifications of the Indebtedness, and the performance of the
covenants and agreements of Borrower contained in the Loan Documents, Borrower
mortgages, warrants, grants, conveys and assigns to Lender the Mortgaged
Property, including the Land located in the County of Seminole, State of Florida
and described in Exhibit A attached to this Instrument.
Borrower represents and warrants that Borrower is lawfully seized of the
Mortgaged Property, has the right, power and authority to grant, convey and
assign the Mortgaged Property, and that the Mortgaged Property is unencumbered,
except as shown on the schedule of exceptions to coverage in the title policy
issued to and accepted by Lender contemporaneously with the execution and
recordation of this Instrument and insuring Lender's interest in the Mortgaged
Property (the "Schedule of Title Exceptions"). Borrower covenants that Borrower
will warrant and defend generally the title to the Mortgaged Property against
all claims and demands, subject to any easements and restrictions listed in the
Schedule of Title Exceptions.
UNIFORM COVENANTS
REVISION DATE 3-23-2005
Covenants. In consideration of the mutual promises set forth in this
Instrument, Borrower and Lender covenant and agree as follows:
1. DEFINITIONS. The following terms, when used in this Instrument
(including when used in the above recitals), shall have the
following meanings:
(a) "Attorneys' Fees and Costs" means (i) fees and out-of-pocket
costs of Lender's and Loan Servicer's attorneys, as
applicable, including costs of Lender's and Loan Servicer's
in-house counsel, support staff costs, costs of preparing for
litigation, computerized research, telephone and facsimile
transmission expenses, mileage, deposition costs, postage,
duplicating, process service, videotaping and similar costs
and expenses; (ii) costs and fees of expert witnesses,
including appraisers; and (iii) investigatory fees.
(b) "Borrower" means all persons or entities identified as
"Borrower" in the first paragraph of this Instrument, together
with their successors and assigns.
(c) "Business Day" means any day other than a Saturday, a Sunday
or any other day on which Lender is not open for business.
(d) "Collateral Agreement" means any separate agreement between
Borrower and Lender for the purpose of establishing
replacement reserves for the Mortgaged Property, establishing
a fund to assure the completion of repairs or improvements
specified in that agreement, or assuring reduction of the
outstanding principal balance of the Indebtedness if the
occupancy of or income from the Mortgaged Property does not
increase to a level specified in that agreement, or any other
agreement or agreements between Borrower and Lender which
provide for the establishment of any other fund, reserve or
account.
(e) "Controlling Entity" means an entity which owns, directly or
indirectly through one or more intermediaries, (i) a general
partnership interest or a Controlling Interest of the limited
partnership interests in Borrower (if Borrower is a
partnership or joint venture), (ii) a manager's interest in
Borrower or a Controlling Interest of the ownership or
membership interests in Borrower (if Borrower is a limited
liability company), (iii) a Controlling Interest of any class
of voting stock of Borrower (if Borrower is a corporation),
(iv) a trustee's interest or a Controlling Interest of the
beneficial interests in Borrower, or (v) a managing partner's
interest or a Controlling Interest of the partnership
interests in Borrower (if Borrower is a limited liability
partnership).
(f) "Controlling Interest" means (i) 51 percent or more of the
ownership interests in an entity, or (ii) a percentage
ownership interest in an entity of less than 51 percent, if
the owner(s) of that interest actually direct(s) the business
and affairs of the entity without the requirement of consent
of any other party. The Controlling Interest shall be deemed
to be 51 percent unless otherwise stated in Exhibit B.
(g) "Environmental Permit" means any permit, license, or other
authorization issued under any Hazardous Materials Law with
respect to any activities or businesses conducted on or in
relation to the Mortgaged Property.
(h) "Event of Default" means the occurrence of any event listed in
Section 22.
(i) "Fixtures" means all property owned by Borrower which is so
attached to the Land or the Improvements as to constitute a
fixture under applicable law, including: machinery, equipment,
engines, boilers, incinerators, installed building materials;
systems and equipment for the purpose of supplying or
distributing heating, cooling, electricity, gas, water, air,
or light; antennas, cable, wiring and conduits used in
connection with radio, television, security, fire prevention,
or fire detection or otherwise used to carry electronic
signals; telephone systems and equipment; elevators and
related machinery and equipment; fire detection, prevention
and extinguishing systems and apparatus; security and access
control systems and apparatus; plumbing systems; water
heaters, ranges, stoves, microwave ovens, refrigerators,
dishwashers, garbage disposers, washers, dryers and other
appliances; light fixtures, awnings, storm windows and storm
doors; pictures, screens, blinds, shades, curtains and curtain
rods; mirrors; cabinets, paneling, rugs and floor and wall
coverings; fences, trees and plants; swimming pools; and
exercise equipment.
(j) "Governmental Authority" means any board, commission,
department or body of any municipal, county, state or federal
governmental unit, or any subdivision of any of them, that has
or acquires jurisdiction over the Mortgaged Property or the
use, operation or improvement of the Mortgaged Property.
(k) "Hazard Insurance" is defined in Section 19.
(l) "Hazardous Materials" means petroleum and petroleum products
and compounds containing them, including gasoline, diesel fuel
and oil; explosives; flammable materials; radioactive
materials; polychlorinated biphenyls ("PCBs") and compounds
containing them; lead and lead-based paint; asbestos or
asbestos-containing materials in any form that is or could
become friable; underground or above-ground storage tanks,
whether empty or containing any substance; any substance the
presence of which on the Mortgaged Property is prohibited by
any federal, state or local authority; any substance that
requires special handling and any other material or substance
now or in the future that (i) is defined as a "hazardous
substance," "hazardous material," "hazardous waste," "toxic
substance," "toxic pollutant," "contaminant," or "pollutant"
by or within the meaning of any Hazardous Materials Law, or
(ii) is regulated in any way by or within the meaning of any
Hazardous Materials Law.
(m) "Hazardous Materials Laws" means all federal, state, and local
laws, ordinances and regulations and standards, rules,
policies and other governmental requirements, administrative
rulings and court judgments and decrees in effect now or in
the future and including all amendments, that relate to
Hazardous Materials or the protection of human health or the
environment and apply to Borrower or to the Mortgaged
Property. Hazardous Materials Laws include, but are not
limited to, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, et
seq., the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Section 6901, et seq., the Toxic Substance Control Act,
15 U.S.C. Section 2601, et seq., the Clean Water Act, 33
U.S.C. Section 1251, et seq., and the Hazardous Materials
Transportation Act, 49 U.S.C. Section 5101 et seq., and their
state analogs.
(n) "Impositions" and "Imposition Deposits" are defined in Section
7(a).
(o) "Improvements" means the buildings, structures, improvements,
and alterations now constructed or at any time in the future
constructed or placed upon the Land, including any future
replacements and additions.
(p) "Indebtedness" means the principal of, interest at the fixed
or variable rate set forth in the Note on, and all other
amounts due at any time under, the Note, this Instrument or
any other Loan Document, including prepayment premiums, late
charges, default interest, and advances as provided in Section
12 to protect the security of this Instrument.
(q) "Initial Owners" means, with respect to Borrower or any other
entity, the persons or entities that (i) on the date of the
Note, or (ii) on the date of a Transfer to which Lender has
consented, own in the aggregate 100 percent of the ownership
interests in Borrower or that entity.
(r) "Land" means the land described in Exhibit A.
(s) "Leases" means all present and future leases, subleases,
licenses, concessions or grants or other possessory interests
now or hereafter in force, whether oral or written, covering
or affecting the Mortgaged Property, or any portion of the
Mortgaged Property (including proprietary leases or occupancy
agreements if Borrower is a cooperative housing corporation),
and all modifications, extensions or renewals.
(t) "Lender" means the entity identified as "Lender" in the first
paragraph of this Instrument, or any subsequent holder of the
Note.
(u) "Loan Documents" means the Note, this Instrument, all
guaranties, all indemnity agreements, all Collateral
Agreements, O&M Programs, the MMP and any other documents now
or in the future executed by Borrower, any guarantor or any
other person in connection with the loan evidenced by the
Note, as such documents may be amended from time to time.
(v) "Loan Servicer" means the entity that from time to time is
designated by Lender to collect payments and deposits and
receive Notices under the Note, this Instrument and any other
Loan Document, and otherwise to service the loan evidenced by
the Note for the benefit of Lender. Unless Borrower receives
Notice to the contrary, the Loan Servicer is the entity
identified as "Lender" in the first paragraph of this
Instrument.
(w) "MMP" means a moisture management plan to control water
intrusion and prevent the development of Mold or moisture at
the Mortgaged Property throughout the term of this Instrument.
At a minimum, the MMP must contain a provision for (i) staff
training, (ii) information to be provided to tenants, (iii)
documentation of the plan, (iv) the appropriate protocol for
incident response and remediation and (v) routine, scheduled
inspections of common space and unit interiors.
(x) "Mold" means mold, fungus, microbial contamination or
pathogenic organisms.
(y) "Mortgaged Property" means all of Borrower's present and
future right, title and interest in and to all of the
following:
(i) the Land;
(ii) the Improvements;
(iii) the Fixtures;
(iv) the Personalty;
(v) all current and future rights, including air rights, development
rights, zoning rights and other similar rights or
interests, easements, tenements, rights-of-way, strips and
gores of land, streets, alleys, roads, sewer rights,
waters, watercourses, and appurtenances related to or
benefiting the Land or the Improvements, or both, and all
rights-of-way, streets, alleys and roads which may have
been or may in the future be vacated;
(vi) all proceeds paid or to be paid by any insurer of the Land,
the Improvements, the Fixtures, the Personalty or any other
part of the Mortgaged Property, whether or not Borrower
obtained the insurance pursuant to Lender's requirement;
(vii) all awards, payments and other compensation made or to be made
by any municipal, state or federal authority with respect to
the Land, the Improvements, the Fixtures, the Personalty or
any other part of the Mortgaged Property, including any awards
or settlements resulting from condemnation proceedings or the
total or partial taking of the Land, the Improvements, the
Fixtures, the Personalty or any other part of the Mortgaged
Property under the power of eminent domain or otherwise and
including any conveyance in lieu thereof;
(viii) all contracts, options and other agreements for the sale of
the Land, the Improvements, the Fixtures, the Personalty or
any other part of the Mortgaged Property entered into by
Borrower now or in the future, including cash or securities
deposited to secure performance by parties of their
obligations;
(ix) all proceeds from the conversion, voluntary or involuntary, of
any of the above into cash or liquidated claims, and the right
to collect such proceeds;
(x) all Rents and Leases;
(xi) all earnings, royalties, accounts receivable, issues and
profits from the Land, the Improvements or any other part of
the Mortgaged Property, and all undisbursed proceeds of the
loan secured by this Instrument and, if Borrower is a
cooperative housing corporation, maintenance charges or
assessments payable by shareholders or residents;
(xii) all Imposition Deposits;
(xiii) all refunds or rebates of Impositions by any municipal, state
or federal authority or insurance company (other than refunds
applicable to periods before the real property tax year in
which this Instrument is dated);
(xiv) all tenant security deposits which have not been forfeited by
any tenant under any Lease and any bond or other security in
lieu of such deposits; and
(xv) all names under or by which any of the above Mortgaged
Property may be operated or known, and all trademarks, trade
names, and goodwill relating to any of the Mortgaged Property.
(z) "Note" means the Multifamily Note described on page 1 of this
Instrument, including all schedules, riders, allonges and
addenda, as such Multifamily Note may be amended from time to
time.
(aa) "O&M Program" is defined in Section 18(d).
(bb) "Personalty" means all
(i) accounts (including deposit accounts) of Borrower related to
the Mortgaged Property;
(ii) equipment and inventory owned by Borrower, which are used now
or in the future in connection with the ownership, management
or operation of the Land or Improvements or are located on the
Land or Improvements, including furniture, furnishings,
machinery, building materials, goods, supplies, tools, books,
records (whether in written or electronic form), computer
equipment (hardware and software);
(iii) other tangible personal property owned by Borrower which are
used now or in the future in connection with the ownership,
management or operation of the land or Improvements or are
located on the Land or in the Improvements, including ranges,
stoves, microwave ovens, refrigerators, dishwashers, garbage
disposers, washers, dryers and other appliances (other than
Fixtures);
(iv) any operating agreements relating to the Land or the
Improvements;
(v) any surveys, plans and specifications and contracts for
architectural, engineering and construction services relating
to the Land or the Improvements;
(vi) all other intangible property, general intangibles and rights
relating to the operation of, or used in connection with, the
Land or the Improvements, including all governmental permits
relating to any activities on the Land and including subsidy
or similar payments received from any sources, including a
governmental authority; and
(vii) any rights of Borrower in or under letters of credit.
(cc) "Property Jurisdiction" is defined in Section 30(a).
(dd) "Rents" means all rents (whether from residential or
non-residential space), revenues and other income of the Land
or the Improvements, parking fees, laundry and vending machine
income and fees and charges for food, health care and other
services provided at the Mortgaged Property, whether now due,
past due, or to become due, and deposits forfeited by tenants.
(ee) "Taxes" means all taxes, assessments, vault rentals and other
charges, if any, whether general, special or otherwise,
including all assessments for schools, public betterments and
general or local improvements, which are levied, assessed or
imposed by any public authority or quasi-public authority, and
which, if not paid, will become a lien on the Land or the
Improvements.
(ff) "Transfer" is defined in Section 21.
2. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT.
(a) This Instrument is also a security agreement under the Uniform
Commercial Code for any of the Mortgaged Property which, under
applicable law, may be subjected to a security interest under
the Uniform Commercial Code, whether such Mortgaged Property
is owned now or acquired in the future, and all products and
cash and non-cash proceeds thereof (collectively, "UCC
Collateral"), and Borrower hereby grants to Lender a security
interest in the UCC Collateral. Borrower hereby authorizes
Lender to prepare and file financing statements, continuation
statements and financing statement amendments in such form as
Lender may require to perfect or continue the perfection of
this security interest and Borrower agrees, if Lender so
requests, to execute and deliver to Lender such financing
statements, continuation statements and amendments. Borrower
shall pay all filing costs and all costs and expenses of any
record searches for financing statements and/or amendments
that Lender may require. Without the prior written consent of
Lender, Borrower shall not create or permit to exist any other
lien or security interest in any of the UCC Collateral.
(b) Unless Borrower gives Notice to Lender within 30 days after
the occurrence of any of the following, and executes and
delivers to Lender modifications or supplements of this
Instrument (and any financing statement which may be filed in
connection with this Instrument) as Lender may require,
Borrower shall not (i) change its name, identity, structure or
jurisdiction of organization; (ii) change the location of its
place of business (or chief executive office if more than one
place of business); or (iii) add to or change any location at
which any of the Mortgaged Property is stored, held or
located.
(c) If an Event of Default has occurred and is continuing, Lender
shall have the remedies of a secured party under the Uniform
Commercial Code, in addition to all remedies provided by this
Instrument or existing under applicable law. In exercising any
remedies, Lender may exercise its remedies against the UCC
Collateral separately or together, and in any order, without
in any way affecting the availability of Lender's other
remedies.
(d) This Instrument constitutes a financing statement with respect
to any part of the Mortgaged Property that is or may become a
Fixture, if permitted by applicable law.
3. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN
POSSESSION.
(a) As part of the consideration for the Indebtedness, Borrower
absolutely and unconditionally assigns and transfers to Lender
all Rents. It is the intention of Borrower to establish a
present, absolute and irrevocable transfer and assignment to
Lender of all Rents and to authorize and empower Lender to
collect and receive all Rents without the necessity of further
action on the part of Borrower. Promptly upon request by
Lender, Borrower agrees to execute and deliver such further
assignments as Lender may from time to time require. Borrower
and Lender intend this assignment of Rents to be immediately
effective and to constitute an absolute present assignment and
not an assignment for additional security only. For purposes
of giving effect to this absolute assignment of Rents, and for
no other purpose, Rents shall not be deemed to be a part of
the Mortgaged Property. However, if this present, absolute and
unconditional assignment of Rents is not enforceable by its
terms under the laws of the Property Jurisdiction, then the
Rents shall be included as a part of the Mortgaged Property
and it is the intention of the Borrower that in this
circumstance this Instrument create and perfect a lien on
Rents in favor of Lender, which lien shall be effective as of
the date of this Instrument.
(b) After the occurrence of an Event of Default, Borrower
authorizes Lender to collect, sue for and compromise Rents and
directs each tenant of the Mortgaged Property to pay all Rents
to, or as directed by, Lender. However, until the occurrence
of an Event of Default, Lender hereby grants to Borrower a
revocable license to collect and receive all Rents, to hold
all Rents in trust for the benefit of Lender and to apply all
Rents to pay the installments of interest and principal then
due and payable under the Note and the other amounts then due
and payable under the other Loan Documents, including
Imposition Deposits, and to pay the current costs and expenses
of managing, operating and maintaining the Mortgaged Property,
including utilities, Taxes and insurance premiums (to the
extent not included in Imposition Deposits), tenant
improvements and other capital expenditures. So long as no
Event of Default has occurred and is continuing, the Rents
remaining after application pursuant to the preceding sentence
may be retained by Borrower free and clear of, and released
from, Lender's rights with respect to Rents under this
Instrument. From and after the occurrence of an Event of
Default, and without the necessity of Lender entering upon and
taking and maintaining control of the Mortgaged Property
directly, or by a receiver, Borrower's license to collect
Rents shall automatically terminate and Lender shall without
Notice be entitled to all Rents as they become due and
payable, including Rents then due and unpaid. Borrower shall
pay to Lender upon demand all Rents to which Lender is
entitled. At any time on or after the date of Lender's demand
for Rents, (i) Lender may give, and Borrower hereby
irrevocably authorizes Lender to give, notice to all tenants
of the Mortgaged Property instructing them to pay all Rents to
Lender, (ii) no tenant shall be obligated to inquire further
as to the occurrence or continuance of an Event of Default,
and (iii) no tenant shall be obligated to pay to Borrower any
amounts which are actually paid to Lender in response to such
a notice. Any such notice by Lender shall be delivered to each
tenant personally, by mail or by delivering such demand to
each rental unit. Borrower shall not interfere with and shall
cooperate with Lender's collection of such Rents.
(c) Borrower represents and warrants to Lender that Borrower has
not executed any prior assignment of Rents (other than an
assignment of Rents securing any prior indebtedness that is
being assigned to Lender, or paid off and discharged with the
proceeds of the loan evidenced by the Note), that Borrower has
not performed, and Borrower covenants and agrees that it will
not perform, any acts and has not executed, and shall not
execute, any instrument which would prevent Lender from
exercising its rights under this Section 3, and that at the
time of execution of this Instrument there has been no
anticipation or prepayment of any Rents for more than two
months prior to the due dates of such Rents. Borrower shall
not collect or accept payment of any Rents more than two
months prior to the due dates of such Rents.
(d) If an Event of Default has occurred and is continuing, Lender
may, regardless of the adequacy of Lender's security or the
solvency of Borrower and even in the absence of waste, enter
upon and take and maintain full control of the Mortgaged
Property in order to perform all acts that Lender in its
discretion determines to be necessary or desirable for the
operation and maintenance of the Mortgaged Property, including
the execution, cancellation or modification of Leases, the
collection of all Rents, the making of repairs to the
Mortgaged Property and the execution or termination of
contracts providing for the management, operation or
maintenance of the Mortgaged Property, for the purposes of
enforcing the assignment of Rents pursuant to Section 3(a),
protecting the Mortgaged Property or the security of this
Instrument, or for such other purposes as Lender in its
discretion may deem necessary or desirable. Alternatively, if
an Event of Default has occurred and is continuing, regardless
of the adequacy of Lender's security, without regard to
Borrower's solvency and without the necessity of giving prior
notice (oral or written) to Borrower, Lender may apply to any
court having jurisdiction for the appointment of a receiver
for the Mortgaged Property to take any or all of the actions
set forth in the preceding sentence. If Lender elects to seek
the appointment of a receiver for the Mortgaged Property at
any time after an Event of Default has occurred and is
continuing, Borrower, by its execution of this Instrument,
expressly consents to the appointment of such receiver,
including the appointment of a receiver ex parte if permitted
by applicable law. Lender or the receiver, as the case may be,
shall be entitled to receive a reasonable fee for managing the
Mortgaged Property. Immediately upon appointment of a receiver
or immediately upon the Lender's entering upon and taking
possession and control of the Mortgaged Property, Borrower
shall surrender possession of the Mortgaged Property to Lender
or the receiver, as the case may be, and shall deliver to
Lender or the receiver, as the case may be, all documents,
records (including records on electronic or magnetic media),
accounts, surveys, plans, and specifications relating to the
Mortgaged Property and all security deposits and prepaid
Rents. In the event Lender takes possession and control of the
Mortgaged Property, Lender may exclude Borrower and its
representatives from the Mortgaged Property. Borrower
acknowledges and agrees that the exercise by Lender of any of
the rights conferred under this Section 3 shall not be
construed to make Lender a mortgagee-in-possession of the
Mortgaged Property so long as Lender has not itself entered
into actual possession of the Land and Improvements.
(e) If Lender enters the Mortgaged Property, Lender shall be
liable to account only to Borrower and only for those Rents
actually received. Except to the extent of Lender's gross
negligence or willful misconduct, Lender shall not be liable
to Borrower, anyone claiming under or through Borrower or
anyone having an interest in the Mortgaged Property, by reason
of any act or omission of Lender under Section 3(d), and
Borrower hereby releases and discharges Lender from any such
liability to the fullest extent permitted by law.
(f) If the Rents are not sufficient to meet the costs of taking
control of and managing the Mortgaged Property and collecting
the Rents, any funds expended by Lender for such purposes
shall become an additional part of the Indebtedness as
provided in Section 12.
(g) Any entering upon and taking of control of the Mortgaged
Property by Lender or the receiver, as the case may be, and
any application of Rents as provided in this Instrument shall
not cure or waive any Event of Default or invalidate any other
right or remedy of Lender under applicable law or provided for
in this Instrument.
4. ASSIGNMENT OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY.
(a) As part of the consideration for the Indebtedness, Borrower
absolutely and unconditionally assigns and transfers to Lender
all of Borrower's right, title and interest in, to and under
the Leases, including Borrower's right, power and authority to
modify the terms of any such Lease, or extend or terminate any
such Lease. It is the intention of Borrower to establish a
present, absolute and irrevocable transfer and assignment to
Lender of all of Borrower's right, title and interest in, to
and under the Leases. Borrower and Lender intend this
assignment of the Leases to be immediately effective and to
constitute an absolute present assignment and not an
assignment for additional security only. For purposes of
giving effect to this absolute assignment of the Leases, and
for no other purpose, the Leases shall not be deemed to be a
part of the Mortgaged Property. However, if this present,
absolute and unconditional assignment of the Leases is not
enforceable by its terms under the laws of the Property
Jurisdiction, then the Leases shall be included as a part of
the Mortgaged Property and it is the intention of the Borrower
that in this circumstance this Instrument create and perfect a
lien on the Leases in favor of Lender, which lien shall be
effective as of the date of this Instrument.
(b) Until Lender gives Notice to Borrower of Lender's exercise of
its rights under this Section 4, Borrower shall have all
rights, power and authority granted to Borrower under any
Lease (except as otherwise limited by this Section or any
other provision of this Instrument), including the right,
power and authority to modify the terms of any Lease or extend
or terminate any Lease. Upon the occurrence of an Event of
Default, the permission given to Borrower pursuant to the
preceding sentence to exercise all rights, power and authority
under Leases shall automatically terminate. Borrower shall
comply with and observe Borrower's obligations under all
Leases, including Borrower's obligations pertaining to the
maintenance and disposition of tenant security deposits.
(c) Borrower acknowledges and agrees that the exercise by Lender,
either directly or by a receiver, of any of the rights
conferred under this Section 4 shall not be construed to make
Lender a mortgagee-in-possession of the Mortgaged Property so
long as Lender has not itself entered into actual possession
of the Land and the Improvements. The acceptance by Lender of
the assignment of the Leases pursuant to Section 4(a) shall
not at any time or in any event obligate Lender to take any
action under this Instrument or to expend any money or to
incur any expenses. Except to the extent of Lender's gross
negligence or willful misconduct, Lender shall not be liable
in any way for any injury or damage to person or property
sustained by any person or persons, firm or corporation in or
about the Mortgaged Property. Prior to Lender's actual entry
into and taking possession of the Mortgaged Property, Lender
shall not (i) be obligated to perform any of the terms,
covenants and conditions contained in any Lease (or otherwise
have any obligation with respect to any Lease); (ii) be
obligated to appear in or defend any action or proceeding
relating to the Lease or the Mortgaged Property; or (iii) be
responsible for the operation, control, care, management or
repair of the Mortgaged Property or any portion of the
Mortgaged Property. The execution of this Instrument by
Borrower shall constitute conclusive evidence that all
responsibility for the operation, control, care, management
and repair of the Mortgaged Property is and shall be that of
Borrower, prior to such actual entry and taking of possession.
(d) Upon delivery of Notice by Lender to Borrower of Lender's
exercise of Lender's rights under this Section 4 at any time
after the occurrence of an Event of Default, and without the
necessity of Lender entering upon and taking and maintaining
control of the Mortgaged Property directly, by a receiver, or
by any other manner or proceeding permitted by the laws of the
Property Jurisdiction, Lender immediately shall have all
rights, powers and authority granted to Borrower under any
Lease, including the right, power and authority to modify the
terms of any such Lease, or extend or terminate any such
Lease.
(e) Borrower shall, promptly upon Lender's request, deliver to
Lender an executed copy of each residential Lease then in
effect. All Leases for residential dwelling units shall be on
forms approved by Lender, shall be for initial terms of at
least six months and not more than two years, and shall not
include options to purchase. If Borrower is a cooperative
housing corporation, association or other validly organized
entity under municipal, county, state or federal law,
notwithstanding anything to the contrary contained in this
subsection, so long as Borrower is not in breach of any
covenant of this Instrument, Lender hereby consents to the
execution of leases of apartments for a term in excess of two
years from Borrower to a tenant shareholder of Borrower, to
the surrender or termination of such leases of apartments
where the surrendered or terminated lease is immediately
replaced or where the Borrower makes its best efforts to
secure such immediate replacement by a newly executed lease of
the same apartment to a tenant shareholder of the Borrower.
However, no consent is hereby given by Lender to any
execution, surrender, termination or assignment of a lease
under terms that would waive or reduce the obligation of the
resulting tenant shareholder under such lease to pay
cooperative assessments in full when due or the obligation of
the former tenant shareholder to pay any unpaid portion of
such assessments.
(f) Borrower shall not lease any portion of the Mortgaged Property
for non-residential use except with the prior written consent
of Lender and Lender's prior written approval of the Lease
agreement. Borrower shall not modify the terms of, or extend
or terminate, any Lease for non-residential use (including any
Lease in existence on the date of this Instrument) without the
prior written consent of Lender. However, Lender's consent
shall not be required for the modification or extension of a
non-residential Lease if such modification or extension is on
terms at least as favorable to Borrower as those customary at
that time in the applicable market and the income from the
extended or modified Lease will not be less than the income
received from the Lease as of the date of this Instrument.
Borrower shall, without request by Lender, deliver an executed
copy of each non-residential Lease to Lender promptly after
such Lease is signed. All non-residential Leases, including
renewals or extensions of existing Leases, shall specifically
provide that (i) such Leases are subordinate to the lien of
this Instrument; (ii) the tenant shall attorn to Lender and
any purchaser at a foreclosure sale, such attornment to be
self-executing and effective upon acquisition of title to the
Mortgaged Property by any purchaser at a foreclosure sale or
by Lender in any manner; (iii) the tenant agrees to execute
such further evidences of attornment as Lender or any
purchaser at a foreclosure sale may from time to time request;
(iv) the Lease shall not be terminated by foreclosure or any
other transfer of the Mortgaged Property; (v) after a
foreclosure sale of the Mortgaged Property, Lender or any
other purchaser at such foreclosure sale may, at Lender's or
such purchaser's option, accept or terminate such Lease; and
(vi) the tenant shall, upon receipt after the occurrence of an
Event of Default of a written request from Lender, pay all
Rents payable under the Lease to Lender.
(g) Borrower shall not receive or accept Rent under any Lease
(whether residential or non-residential) for more than two
months in advance.
5. PAYMENT OF INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS;
PREPAYMENT PREMIUM. Borrower shall pay the Indebtedness when
due in accordance with the terms of the Note and the other
Loan Documents and shall perform, observe and comply with all
other provisions of the Note and the other Loan Documents.
Borrower shall pay a prepayment premium in connection with
certain prepayments of the Indebtedness, including a payment
made after Lender's exercise of any right of acceleration of
the Indebtedness, as provided in the Note.
6. EXCULPATION. Borrower's personal liability for payment of the
Indebtedness and for performance of the other obligations to
be performed by it under this Instrument is limited in the
manner, and to the extent, provided in the Note.
7. DEPOSITS FOR TAXES, INSURANCE AND OTHER CHARGES.
(a) Unless this requirement is waived in writing by Lender, which
waiver may be contained in this Section 7(a), Borrower shall
deposit with Lender on the day monthly installments of
principal or interest, or both, are due under the Note (or on
another day designated in writing by Lender), until the
Indebtedness is paid in full, an additional amount sufficient
to accumulate with Lender the entire sum required to pay, when
due, the items marked "Collect" below. Lender will not require
the Borrower to make Imposition Deposits with respect to the
items marked "Deferred" below.
[Deferred] Hazard Insurance premiums or other insurance premiums required
by Lender under Section 19,
[Deferred] Taxes,
[Deferred] water and sewer charges (that could become a lien on the
Mortgaged Property),
[N/A] ground rents,
[Deferred] assessments or other charges (that could become a lien on the
Mortgaged Property)
The amounts deposited under the preceding sentence are collectively referred to
in this Instrument as the "Imposition Deposits." The obligations of Borrower for
which the Imposition Deposits are required are collectively referred to in this
Instrument as "Impositions." The amount of the Imposition Deposits shall be
sufficient to enable Lender to pay each Imposition before the last date upon
which such payment may be made without any penalty or interest charge being
added. Lender shall maintain records indicating how much of the monthly
Imposition Deposits and how much of the aggregate Imposition Deposits held by
Lender are held for the purpose of paying Taxes, insurance premiums and each
other Imposition.
(b) Imposition Deposits shall be held in an institution (which may be Lender, if
Lender is such an institution) whose deposits or accounts are insured or
guaranteed by a federal agency. Lender shall not be obligated to open additional
accounts or deposit Imposition Deposits in additional institutions when the
amount of the Imposition Deposits exceeds the maximum amount of the federal
deposit insurance or guaranty. Lender shall apply the Imposition Deposits to pay
Impositions so long as no Event of Default has occurred and is continuing.
Unless applicable law requires, Lender shall not be required to pay Borrower any
interest, earnings or profits on the Imposition Deposits. As additional security
for all of Borrower's obligations under this Instrument and the other Loan
Documents, Borrower hereby pledges and grants to Lender a security interest in
the Imposition Deposits and all proceeds of, and all interest and dividends on,
the Imposition Deposits. Any amounts deposited with Lender under this Section 7
shall not be trust funds, nor shall they operate to reduce the Indebtedness,
unless applied by Lender for that purpose under Section 7(e).
(c) If Lender receives a bill or invoice for an Imposition, Lender shall pay the
Imposition from the Imposition Deposits held by Lender. Lender shall have no
obligation to pay any Imposition to the extent it exceeds Imposition Deposits
then held by Lender. Lender may pay an Imposition according to any bill,
statement or estimate from the appropriate public office or insurance company
without inquiring into the accuracy of the bill, statement or estimate or into
the validity of the Imposition.
(d) If at any time the amount of the Imposition Deposits held by Lender for
payment of a specific Imposition exceeds the amount reasonably deemed necessary
by Lender, the excess shall be credited against future installments of
Imposition Deposits. If at any time the amount of the Imposition Deposits held
by Lender for payment of a specific Imposition is less than the amount
reasonably estimated by Lender to be necessary, Borrower shall pay to Lender the
amount of the deficiency within 15 days after Notice from Lender.
(e) If an Event of Default has occurred and is continuing, Lender may apply any
Imposition Deposits, in any amounts and in any order as Lender determines, in
Lender's discretion, to pay any Impositions or as a credit against the
Indebtedness. Upon payment in full of the Indebtedness, Lender shall refund to
Borrower any Imposition Deposits held by Lender.
(f) If Lender does not collect an Imposition Deposit with respect to an
Imposition either marked "Deferred" in Section 7(a) or pursuant to a separate
written waiver by Lender, then on or before the date each such Imposition is
due, or on the date this Instrument requires each such Imposition to be paid,
Borrower must provide Lender with proof of payment of each such Imposition for
which Lender does not require collection of Imposition Deposits. Lender may
revoke its deferral or waiver and require Borrower to deposit with Lender any or
all of the Imposition Deposits listed in Section 7(a), regardless of whether any
such item is marked "Deferred" in such section, upon Notice to Borrower, (i) if
Borrower does not timely pay any of the Impositions, (ii) if Borrower fails to
provide timely proof to Lender of such payment, or (iii) at any time during the
existence of an Event of Default.
(g) In the event of a Transfer prohibited by or requiring Lender's approval
under Section 21, Lender's waiver of the collection of any Imposition Deposit in
this Section 7 may be modified or rendered void by Lender at Lender's option by
Notice to Borrower and the transferee(s) as a condition of Lender's approval of
such Transfer.
8. COLLATERAL AGREEMENTS. Borrower shall deposit with Lender such amounts as may
be required by any Collateral Agreement and shall perform all other obligations
of Borrower under each Collateral Agreement.
9. APPLICATION OF PAYMENTS. If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness which is less than all
amounts due and payable at such time, then Lender may apply that payment to
amounts then due and payable in any manner and in any order determined by
Lender, in Lender's discretion. Neither Lender's acceptance of an amount that is
less than all amounts then due and payable nor Lender's application of such
payment in the manner authorized shall constitute or be deemed to constitute
either a waiver of the unpaid amounts or an accord and satisfaction.
Notwithstanding the application of any such amount to the Indebtedness,
Borrower's obligations under this Instrument and the Note shall remain
unchanged.
10. COMPLIANCE WITH LAWS. Borrower shall comply with all laws, ordinances,
regulations and requirements of any Governmental Authority and all recorded
lawful covenants and agreements relating to or affecting the Mortgaged Property,
including all laws, ordinances, regulations, requirements and covenants
pertaining to health and safety, construction of improvements on the Mortgaged
Property, fair housing, disability accommodation, zoning and land use, and
Leases. Borrower also shall comply with all applicable laws that pertain to the
maintenance and disposition of tenant security deposits. Borrower shall at all
times maintain records sufficient to demonstrate compliance with the provisions
of this Section 10. Borrower shall take appropriate measures to prevent, and
shall not engage in or knowingly permit, any illegal activities at the Mortgaged
Property that could endanger tenants or visitors, result in damage to the
Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise
materially impair the lien created by this Instrument or Lender's interest in
the Mortgaged Property. Borrower represents and warrants to Lender that no
portion of the Mortgaged Property has been or will be purchased with the
proceeds of any illegal activity.
11. USE OF PROPERTY. Unless required by applicable law, Borrower shall not (a)
allow changes in the use for which all or any part of the Mortgaged Property is
being used at the time this Instrument was executed, except for any change in
use approved by Lender, (b) convert any individual dwelling units or common
areas to commercial use, (c) initiate a change in the zoning classification of
the Mortgaged Property or acquiesce without Notice to and consent of Lender in a
change in the zoning classification of the Mortgaged Property, (d) establish any
condominium or cooperative regime with respect to the Mortgaged Property, (e)
combine all or any part of the Mortgaged Property with all or any part of a tax
parcel which is not part of the Mortgaged Property, or (f) subdivide or
otherwise split any tax parcel constituting all or any part of the Mortgaged
Property without the prior consent of Lender.
12. PROTECTION OF LENDER'S SECURITY; INSTRUMENT SECURES FUTURE ADVANCES.
(a) If Borrower fails to perform any of its obligations under this Instrument or
any other Loan Document, or if any action or proceeding is commenced which
purports to affect the Mortgaged Property, Lender's security or Lender's rights
under this Instrument, including eminent domain, insolvency, code enforcement,
civil or criminal forfeiture, enforcement of Hazardous Materials Laws,
fraudulent conveyance or reorganizations or proceedings involving a bankrupt or
decedent, then Lender at Lender's option may make such appearances, file such
documents, disburse such sums and take such actions as Lender reasonably deems
necessary to perform such obligations of Borrower and to protect Lender's
interest, including (i) payment of Attorneys' Fees and Costs, (ii) payment of
fees and out-of-pocket expenses of accountants, inspectors and consultants,
(iii) entry upon the Mortgaged Property to make repairs or secure the Mortgaged
Property, (iv) procurement of the insurance required by Section 19, and (v)
payment of amounts which Borrower has failed to pay under Sections 15 and 17.
(b) Any amounts disbursed by Lender under this Section 12, or under any other
provision of this Instrument that treats such disbursement as being made under
this Section 12, shall be secured by this Instrument, shall be added to, and
become part of, the principal component of the Indebtedness, shall be
immediately due and payable and shall bear interest from the date of
disbursement until paid at the "Default Rate," as defined in the Note.
(c) Nothing in this Section 12 shall require Lender to incur any expense or take
any action.
13. INSPECTION.
(a) Lender, its agents, representatives, and designees may make or cause to be
made entries upon and inspections of the Mortgaged Property (including
environmental inspections and tests) during normal business hours, or at any
other reasonable time, upon reasonable notice to Borrower if the inspection is
to include occupied residential units (which notice need not be in writing).
Notice to Borrower shall not be required in the case of an emergency, as
determined in Lender's discretion, or when an Event of Default has occurred and
is continuing.
(b) If Lender determines that Mold has developed as a result of a water
intrusion event or leak, Lender, at Lender's discretion, may require that a
professional inspector inspect the Mortgaged Property as frequently as Lender
determines is necessary until any issue with Mold and its cause(s) are resolved
to Lender's satisfaction. Such inspection shall be limited to a visual and
olfactory inspection of the area that has experienced the Mold, water intrusion
event or leak. Borrower shall be responsible for the cost of such professional
inspection and any remediation deemed to be necessary as a result of the
professional inspection. After any issue with Mold, water intrusion or leaks is
remedied to Lender's satisfaction, Lender shall not require a professional
inspection any more frequently than once every three years unless Lender is
otherwise aware of Mold as a result of a subsequent water intrusion event or
leak.
(c) If Lender or Loan Servicer determines not to conduct an annual inspection of
the Mortgaged Property, and in lieu thereof Lender requests a certification,
Borrower shall be prepared to provide and must actually provide to Lender a
factually correct certification each year that the annual inspection is waived
to the following effect:
Borrower has not received any written complaint, notice, letter or
other written communication from tenants, management agent or
governmental authorities regarding odors, indoor air quality, mold,
fungus, microbial contamination or pathogenic organisms ("Mold") or
any activity, condition, event or omission that causes or
facilitates the growth of Mold on or in any part of the Mortgaged
Property or if Borrower has received any such written complaint,
notice, letter or other written communication that Borrower has
investigated and determined that no Mold activity, condition or
event exists or alternatively has fully and properly remediated such
activity, condition, event or omission in compliance with the
Moisture Management Plan for the Mortgaged Property.
If Borrower is unwilling or unable to provide such certification, Lender
may require a professional inspection of the Mortgaged Property at Borrower's
expense.
14. BOOKS AND RECORDS; FINANCIAL REPORTING.
(a) Borrower shall keep and maintain at all times at the Mortgaged
Property or the management agent's office, and upon Lender's
request shall make available at the Mortgaged Property (or, at
Borrower's option, at the management agent's office), complete
and accurate books of account and records (including copies of
supporting bills and invoices) adequate to reflect correctly
the operation of the Mortgaged Property, and copies of all
written contracts, Leases, and other instruments which affect
the Mortgaged Property. The books, records, contracts, Leases
and other instruments shall be subject to examination and
inspection by Lender at any reasonable time.
(b) Within 120 days after the end of each fiscal year of Borrower,
Borrower shall furnish to Lender a statement of income and
expenses for Borrower's operation of the Mortgaged Property
for that fiscal year, a statement of changes in financial
position of Borrower relating to the Mortgaged Property for
that fiscal year and, when requested by Lender, a balance
sheet showing all assets and liabilities of Borrower relating
to the Mortgaged Property as of the end of that fiscal year.
If Borrower's fiscal year is other than the calendar year,
Borrower must also submit to Lender a year-end statement of
income and expenses within 120 days after the end of the
calendar year.
(c) Within 120 days after the end of each calendar year, and at
any other time, upon Lender's request, Borrower shall furnish
to Lender each of the following. However, Lender shall not
require any of the following more frequently than quarterly
except when there has been an Event of Default and such Event
of Default is continuing, in which case Lender may, upon
written request to Borrower, require Borrower to furnish any
of the following more frequently:
(i) a rent schedule for the Mortgaged Property showing the name of
each tenant, and for each tenant, the space occupied, the
lease expiration date, the rent payable for the current month,
the date through which rent has been paid, and any related
information requested by Lender;
(ii) an accounting of all security deposits held pursuant to all
Leases, including the name of the institution (if any) and the
names and identification numbers of the accounts (if any) in
which such security deposits are held and the name of the
person to contact at such financial institution, along with
any authority or release necessary for Lender to access
information regarding such accounts; and
(iii) a statement that identifies all owners of any interest in
Borrower and any Controlling Entity and the interest held by
each (unless Borrower or any Controlling Entity is a
publicly-traded entity in which case such statement of
ownership shall not be required), if Borrower or a Controlling
Entity is a corporation, all officers and directors of
Borrower and the Controlling Entity, and if Borrower or a
Controlling Entity is a limited liability company, all
managers who are not members.
(d) At any time upon Lender's request, Borrower shall furnish to
Lender each of the following. However, Lender shall not
require any of the following more frequently than quarterly
except when there has been an Event of Default and such Event
of Default is continuing, in which case Lender may require
Borrower to furnish any of the following more frequently:
(i) a balance sheet, a statement of income and expenses for
Borrower and a statement of changes in financial position of
Borrower for Borrower's most recent fiscal year;
(ii) a quarterly or year-to-date income and expense statement for
the Mortgaged Property; and
(iii) a monthly property management report for the Mortgaged
Property, showing the number of inquiries made and rental
applications received from tenants or prospective tenants and
deposits received from tenants and any other information
requested by Lender.
(e) Upon Lender's request at any time when an Event of Default has
occurred and is continuing, Borrower shall furnish to Lender
monthly income and expense statements and rent schedules for
the Mortgaged Property.
(f) An individual having authority to bind Borrower shall certify
each of the statements, schedules and reports required by
Sections 14(b) through 14(e) to be complete and accurate. Each
of the statements, schedules and reports required by Sections
14(b) through 14(e) shall be in such form and contain such
detail as Lender may reasonably require. Lender also may
require that any of the statements, schedules or reports
listed in Section 14(b) and 14(c)(i) and (ii) be audited at
Borrower's expense by independent certified public accountants
acceptable to Lender, at any time when an Event of Default has
occurred and is continuing or at any time that Lender, in its
reasonable judgment, determines that audited financial
statements are required for an accurate assessment of the
financial condition of Borrower or of the Mortgaged Property.
(g) If Borrower fails to provide in a timely manner the
statements, schedules and reports required by Sections 14(b)
through (e), Lender shall give Borrower Notice specifying the
statements, schedules and reports required by Section 14(b)
through (e) that Borrower has failed to provide. If Borrower
has not provided the required statements, schedules and
reports within 10 Business Days following such Notice, then
Lender shall have the right to have Borrower's books and
records audited, at Borrower's expense, by independent
certified public accountants selected by Lender in order to
obtain such statements, schedules and reports, and all related
costs and expenses of Lender shall become immediately due and
payable and shall become an additional part of the
Indebtedness as provided in Section 12. Notice to Borrower
shall not be required in the case of an emergency, as
determined in Lender's discretion, or when an Event of Default
has occurred and is continuing.
(h) If an Event of Default has occurred and is continuing,
Borrower shall deliver to Lender upon written demand all books
and records relating to the Mortgaged Property or its
operation.
(i) Borrower authorizes Lender to obtain a credit report on
Borrower at any time.
15. TAXES; OPERATING EXPENSES.
(a) Subject to the provisions of Section 15(c) and Section 15(d),
Borrower shall pay, or cause to be paid, all Taxes when due
and before the addition of any interest, fine, penalty or cost
for nonpayment.
(b) Subject to the provisions of Section 15(c), Borrower shall (i)
pay the expenses of operating, managing, maintaining and
repairing the Mortgaged Property (including utilities, repairs
and replacements) before the last date upon which each such
payment may be made without any penalty or interest charge
being added, and (ii) pay insurance premiums at least 30 days
prior to the expiration date of each policy of insurance,
unless applicable law specifies some lesser period.
(c) If Lender is collecting Imposition Deposits, to the extent
that Lender holds sufficient Imposition Deposits for the
purpose of paying a specific Imposition, then Borrower shall
not be obligated to pay such Imposition, so long as no Event
of Default exists and Borrower has timely delivered to Lender
any bills or premium notices that it has received. If an Event
of Default exists, Lender may exercise any rights Lender may
have with respect to Imposition Deposits without regard to
whether Impositions are then due and payable. Lender shall
have no liability to Borrower for failing to pay any
Impositions to the extent that (i) any Event of Default has
occurred and is continuing, (ii) insufficient Imposition
Deposits are held by Lender at the time an Imposition becomes
due and payable or (iii) Borrower has failed to provide Lender
with bills and premium notices as provided above.
(d) Borrower, at its own expense, may contest by appropriate legal
proceedings, conducted diligently and in good faith, the
amount or validity of any Imposition other than insurance
premiums, if (i) Borrower notifies Lender of the commencement
or expected commencement of such proceedings, (ii) the
Mortgaged Property is not in danger of being sold or
forfeited, (iii) if Borrower has not already paid the
Imposition, Borrower deposits with Lender reserves sufficient
to pay the contested Imposition, if requested by Lender, and
(iv) Borrower furnishes whatever additional security is
required in the proceedings or is reasonably requested by
Lender.
(e) Borrower shall promptly deliver to Lender a copy of all
notices of, and invoices for, Impositions, and if Borrower
pays any Imposition directly, Borrower shall furnish to Lender
on or before the date this Instrument requires such
Impositions to be paid, receipts evidencing that such payments
were made.
16. LIENS; ENCUMBRANCES. Borrower acknowledges that, to the extent
provided in Section 21, the grant, creation or existence of
any mortgage, deed of trust, deed to secure debt, security
interest or other lien or encumbrance (a "Lien") on the
Mortgaged Property (other than the lien of this Instrument) or
on certain ownership interests in Borrower, whether voluntary,
involuntary or by operation of law, and whether or not such
Lien has priority over the lien of this Instrument, is a
"Transfer" which constitutes an Event of Default and subjects
Borrower to personal liability under the Note.
17. PRESERVATION, MANAGEMENT AND MAINTENANCE OF MORTGAGED
PROPERTY.
(a) Borrower shall not commit waste or permit impairment or
deterioration of the Mortgaged Property.
(b) Borrower shall not abandon the Mortgaged Property.
(c) Borrower shall restore or repair promptly, in a good and
workmanlike manner, any damaged part of the Mortgaged Property
to the equivalent of its original condition, or such other
condition as Lender may approve in writing, whether or not
insurance proceeds or condemnation awards are available to
cover any costs of such restoration or repair; however,
Borrower shall not be obligated to perform such restoration or
repair if (i) no Event of Default has occurred and is
continuing, and (ii) Lender has elected to apply any available
insurance proceeds and/or condemnation awards to the payment
of Indebtedness pursuant to Section 19(h)(ii), (iii), (iv) or
(v), or pursuant to Section 20.
(d) Borrower shall keep the Mortgaged Property in good repair,
including the replacement of Personalty and Fixtures with
items of equal or better function and quality.
(e) Borrower shall provide for professional management of the
Mortgaged Property by a residential rental property manager
satisfactory to Lender at all times under a contract approved
by Lender in writing, which contract must be terminable upon
not more than 30 days notice without the necessity of
establishing cause and without payment of a penalty or
termination fee by Borrower or its successors.
(f) Borrower shall give Notice to Lender of and, unless otherwise
directed in writing by Lender, shall appear in and defend any
action or proceeding purporting to affect the Mortgaged
Property, Lender's security or Lender's rights under this
Instrument. Borrower shall not (and shall not permit any
tenant or other person to) remove, demolish or alter the
Mortgaged Property or any part of the Mortgaged Property,
including any removal, demolition or alteration occurring in
connection with a rehabilitation of all or part of the
Mortgaged Property, except (i) in connection with the
replacement of tangible Personalty, (ii) if Borrower is a
cooperative housing corporation, to the extent permitted with
respect to individual dwelling units under the form of
proprietary lease or occupancy agreement and (iii) repairs and
replacements in connection with making an individual unit
ready for a new occupant.
(g) Unless otherwise waived by Lender in writing, Borrower must
have or must establish and must adhere to the MMP. If the
Borrower is required to have an MMP, the Borrower must keep
all MMP documentation at the Mortgaged Property or at the
management agent's office and available for the Lender or the
Loan Servicer to review during any annual assessment or other
inspection of the Mortgaged Property that is required by
Lender.
18. ENVIRONMENTAL HAZARDS.
(a) Except for matters described in Section 18(b), Borrower shall
not cause or permit any of the following:
(i) the presence, use, generation, release, treatment, processing,
storage (including storage in above ground and underground
storage tanks), handling, or disposal of any Hazardous
Materials on or under the Mortgaged Property or any other
property of Borrower that is adjacent to the Mortgaged
Property;
(ii) the transportation of any Hazardous Materials to, from, or
across the Mortgaged Property;
(iii) any occurrence or condition on the Mortgaged Property or any
other property of Borrower that is adjacent to the Mortgaged
Property, which occurrence or condition is or may be in
violation of Hazardous Materials Laws;
(iv) any violation of or noncompliance with the terms of any
Environmental Permit with respect to the Mortgaged Property or
any property of Borrower that is adjacent to the Mortgaged
Property;
(v) any violation or noncompliance with the terms of any O&M
Program as defined in subsection (d).
The matters described in clauses (i) through (v) above, except as otherwise
provided in Section 18(b), are referred to collectively in this Section 18 as
"Prohibited Activities or Conditions."
(b) Prohibited Activities or Conditions shall not include lawful
conditions permitted by an O&M Program or the safe and lawful
use and storage of quantities of (i) pre-packaged supplies,
cleaning materials and petroleum products customarily used in
the operation and maintenance of comparable multifamily
properties, (ii) cleaning materials, personal grooming items
and other items sold in pre-packaged containers for consumer
use and used by tenants and occupants of residential dwelling
units in the Mortgaged Property; and (iii) petroleum products
used in the operation and maintenance of motor vehicles from
time to time located on the Mortgaged Property's parking
areas, so long as all of the foregoing are used, stored,
handled, transported and disposed of in compliance with
Hazardous Materials Laws.
(c) Borrower shall take all commercially reasonable actions
(including the inclusion of appropriate provisions in any
Leases executed after the date of this Instrument) to prevent
its employees, agents, and contractors, and all tenants and
other occupants from causing or permitting any Prohibited
Activities or Conditions. Borrower shall not lease or allow
the sublease or use of all or any portion of the Mortgaged
Property to any tenant or subtenant for nonresidential use by
any user that, in the ordinary course of its business, would
cause or permit any Prohibited Activity or Condition.
(d) As required by Lender, Borrower shall also have established a
written operations and maintenance program with respect to
certain Hazardous Materials. Each such operations and
maintenance program and any additional or revised operations
and maintenance programs established for the Mortgaged
Property pursuant to this Section 18 must be approved by
Lender and shall be referred to herein as an "O&M Program."
Borrower shall comply in a timely manner with, and cause all
employees, agents, and contractors of Borrower and any other
persons present on the Mortgaged Property to comply with each
O&M Program. Borrower shall pay all costs of performance of
Borrower's obligations under any O&M Program, and Lender's
out-of-pocket costs incurred in connection with the monitoring
and review of each O&M Program and Borrower's performance
shall be paid by Borrower upon demand by Lender. Any such
out-of-pocket costs of Lender that Borrower fails to pay
promptly shall become an additional part of the Indebtedness
as provided in Section 12.
(e) Borrower represents and warrants to Lender that, except as
previously disclosed by Borrower to Lender in writing (which
written disclosure may be in certain environmental assessments
and other written reports accepted by Lender in connection
with the funding of the Indebtedness and dated prior to the
date of this Instrument):
(i) Borrower has not at any time engaged in, caused or permitted
any Prohibited Activities or Conditions on the Mortgaged
Property;
(ii) to the best of Borrower's knowledge after reasonable and
diligent inquiry, no Prohibited Activities or Conditions exist
or have existed on the Mortgaged Property;
(iii) the Mortgaged Property does not now contain any underground
storage tanks, and, to the best of Borrower's knowledge after
reasonable and diligent inquiry, the Mortgaged Property has
not contained any underground storage tanks in the past. If
there is an underground storage tank located on the Mortgaged
Property that has been previously disclosed by Borrower to
Lender in writing, that tank complies with all requirements of
Hazardous Materials Laws;
(iv) to the best of Borrower's knowledge after reasonable and
diligent inquiry, Borrower has complied with all Hazardous
Materials Laws, including all requirements for notification
regarding releases of Hazardous Materials. Without limiting
the generality of the foregoing, Borrower has obtained all
Environmental Permits required for the operation of the
Mortgaged Property in accordance with Hazardous Materials Laws
now in effect and all such Environmental Permits are in full
force and effect;
(v) to the best of Borrower's knowledge after reasonable and
diligent inquiry, no event has occurred with respect to the
Mortgaged Property that constitutes, or with the passing of
time or the giving of notice would constitute, noncompliance
with the terms of any Environmental Permit;
(vi) there are no actions, suits, claims or proceedings pending or,
to the best of Borrower's knowledge after reasonable and
diligent inquiry, threatened that involve the Mortgaged
Property and allege, arise out of, or relate to any Prohibited
Activity or Condition; and
(vii) Borrower has not received any written complaint, order, notice
of violation or other communication from any Governmental
Authority with regard to air emissions, water discharges,
noise emissions or Hazardous Materials, or any other
environmental, health or safety matters affecting the
Mortgaged Property or any other property of Borrower that is
adjacent to the Mortgaged Property.
(f) Borrower shall promptly notify Lender in writing upon the
occurrence of any of the following events:
(i) Borrower's discovery of any Prohibited Activity or Condition;
(ii) Borrower's receipt of or knowledge of any written complaint,
order, notice of violation or other communication from any
tenant, management agent, Governmental Authority or other
person with regard to present or future alleged Prohibited
Activities or Conditions, or any other environmental, health
or safety matters affecting the Mortgaged Property or any
other property of Borrower that is adjacent to the Mortgaged
Property;
(iii) Borrower's breach of any of its obligations under this Section
18.
Any such notice given by Borrower shall not relieve Borrower of, or result in a
waiver of, any obligation under this Instrument, the Note, or any other Loan
Document.
(g) Borrower shall pay promptly the costs of any environmental
inspections, tests or audits, a purpose of which is to
identify the extent or cause of or potential for a Prohibited
Activity or Condition ("Environmental Inspections"), required
by Lender in connection with any foreclosure or deed in lieu
of foreclosure, or as a condition of Lender's consent to any
Transfer under Section 21, or required by Lender following a
reasonable determination by Lender that Prohibited Activities
or Conditions may exist. Any such costs incurred by Lender
(including Attorneys' Fees and Costs and the costs of
technical consultants whether incurred in connection with any
judicial or administrative process or otherwise) that Borrower
fails to pay promptly shall become an additional part of the
Indebtedness as provided in Section 12. As long as (i) no
Event of Default has occurred and is continuing, (ii) Borrower
has actually paid for or reimbursed Lender for all costs of
any such Environmental Inspections performed or required by
Lender, and (iii) Lender is not prohibited by law, contract or
otherwise from doing so, Lender shall make available to
Borrower, without representation of any kind, copies of
Environmental Inspections prepared by third parties and
delivered to Lender. Lender hereby reserves the right, and
Borrower hereby expressly authorizes Lender, to make available
to any party, including any prospective bidder at a
foreclosure sale of the Mortgaged Property, the results of any
Environmental Inspections made by or for Lender with respect
to the Mortgaged Property. Borrower consents to Lender
notifying any party (either as part of a notice of sale or
otherwise) of the results of any Environmental Inspections
made by or for Lender. Borrower acknowledges that Lender
cannot control or otherwise assure the truthfulness or
accuracy of the results of any Environmental Inspections and
that the release of such results to prospective bidders at a
foreclosure sale of the Mortgaged Property may have a material
and adverse effect upon the amount that a party may bid at
such sale. Borrower agrees that Lender shall have no liability
whatsoever as a result of delivering the results to any third
party of any Environmental Inspections made by or for Lender,
and Borrower hereby releases and forever discharges Lender
from any and all claims, damages, or causes of action, arising
out of, connected with or incidental to the results of, the
delivery of any of Environmental Inspections made by or for
Lender.
(h) If any investigation, site monitoring, containment, clean-up,
restoration or other remedial work ("Remedial Work") is
necessary to comply with any Hazardous Materials Law or order
of any Governmental Authority that has or acquires
jurisdiction over the Mortgaged Property or the use, operation
or improvement of the Mortgaged Property, or is otherwise
required by Lender as a consequence of any Prohibited Activity
or Condition or to prevent the occurrence of a Prohibited
Activity or Condition, Borrower shall, by the earlier of (i)
the applicable deadline required by Hazardous Materials Law or
(ii) 30 days after Notice from Lender demanding such action,
begin performing the Remedial Work, and thereafter diligently
prosecute it to completion, and shall in any event complete
the work by the time required by applicable Hazardous
Materials Law. If Borrower fails to begin on a timely basis or
diligently prosecute any required Remedial Work, Lender may,
at its option, cause the Remedial Work to be completed, in
which case Borrower shall reimburse Lender on demand for the
cost of doing so. Any reimbursement due from Borrower to
Lender shall become part of the Indebtedness as provided in
Section 12.
(i) Borrower shall comply with all Hazardous Materials Laws
applicable to the Mortgaged Property. Without limiting the
generality of the previous sentence, Borrower shall (i) obtain
and maintain all Environmental Permits required by Hazardous
Materials Laws and comply with all conditions of such
Environmental Permits; (ii) cooperate with any inquiry by any
Governmental Authority; and (iii) comply with any governmental
or judicial order that arises from any alleged Prohibited
Activity or Condition.
(j) Borrower shall indemnify, hold harmless and defend (i) Lender,
(ii) any prior owner or holder of the Note, (iii) the Loan
Servicer, (iv) any prior Loan Servicer, (v) the officers,
directors, shareholders, partners, employees and trustees of
any of the foregoing, and (vi) the heirs, legal
representatives, successors and assigns of each of the
foregoing (collectively, the "Indemnitees") from and against
all proceedings, claims, damages, penalties and costs (whether
initiated or sought by Governmental Authorities or private
parties), including Attorneys' Fees and Costs and remediation
costs, whether incurred in connection with any judicial or
administrative process or otherwise, arising directly or
indirectly from any of the following:
(i) any breach of any representation or warranty of Borrower in
this Section 18;
(ii) any failure by Borrower to perform any of its obligations
under this Section 18;
(iii) the existence or alleged existence of any Prohibited Activity
or Condition;
(iv) the presence or alleged presence of Hazardous Materials on or
under the Mortgaged Property or in any of the Improvements or
on or under any property of Borrower that is adjacent to the
Mortgaged Property; and
(v) the actual or alleged violation of any Hazardous Materials
Law.
(k) Counsel selected by Borrower to defend Indemnitees shall be
subject to the approval of those Indemnitees. In any
circumstances in which the indemnity under this Section 18
applies, Lender may employ its own legal counsel and
consultants to prosecute, defend or negotiate any claim or
legal or administrative proceeding and Lender, with the prior
written consent of Borrower (which shall not be unreasonably
withheld, delayed or conditioned) may settle or compromise any
action or legal or administrative proceeding. However, unless
an Event of Default has occurred and is continuing, or the
interests of Borrower and Lender are in conflict, as
determined by Lender in its discretion, Lender shall permit
Borrower to undertake the actions referenced in this Section
in accordance with this Section and Section 18(l) so long as
Lender approves such action, which approval shall not be
unreasonably withheld or delayed. Borrower shall reimburse
Lender upon demand for all costs and expenses incurred by
Lender, including all costs of settlements entered into in
good faith, consultants' fees and Attorneys' Fees and Costs.
(l) Borrower shall not, without the prior written consent of those
Indemnitees who are named as parties to a claim or legal or
administrative proceeding (a "Claim"), settle or compromise
the Claim if the settlement (i) results in the entry of any
judgment that does not include as an unconditional term the
delivery by the claimant or plaintiff to Lender of a written
release of those Indemnitees, satisfactory in form and
substance to Lender; or (ii) may materially and adversely
affect Lender, as determined by Lender in its discretion.
(m) Borrower's obligation to indemnify the Indemnitees shall not
be limited or impaired by any of the following, or by any
failure of Borrower or any guarantor to receive notice of or
consideration for any of the following:
(i) any amendment or modification of any Loan Document;
(ii) any extensions of time for performance required by any Loan
Document;
(iii) any provision in any of the Loan Documents limiting Lender's
recourse to property securing the Indebtedness, or limiting
the personal liability of Borrower or any other party for
payment of all or any part of the Indebtedness;
(iv) the accuracy or inaccuracy of any representations and
warranties made by Borrower under this Instrument or any other
Loan Document;
(v) the release of Borrower or any other person, by Lender or by
operation of law, from performance of any obligation under any
Loan Document;
(vi) the release or substitution in whole or in part of any
security for the Indebtedness; and
(vii) Lender's failure to properly perfect any lien or security
interest given as security for the Indebtedness.
(n) Borrower shall, at its own cost and expense, do all of the
following:
(i) pay or satisfy any judgment or decree that may be entered
against any Indemnitee or Indemnitees in any legal or
administrative proceeding incident to any matters against
which Indemnitees are entitled to be indemnified under this
Section 18;
(ii) reimburse Indemnitees for any expenses paid or incurred in
connection with any matters against which Indemnitees are
entitled to be indemnified under this Section 18; and
(iii) reimburse Indemnitees for any and all expenses, including
Attorneys' Fees and Costs, paid or incurred in connection with
the enforcement by Indemnitees of their rights under this
Section 18, or in monitoring and participating in any legal or
administrative proceeding.
(o) The provisions of this Section 18 shall be in addition to any
and all other obligations and liabilities that Borrower may
have under applicable law or under other Loan Documents, and
each Indemnitee shall be entitled to indemnification under
this Section 18 without regard to whether Lender or that
Indemnitee has exercised any rights against the Mortgaged
Property or any other security, pursued any rights against any
guarantor, or pursued any other rights available under the
Loan Documents or applicable law. If Borrower consists of more
than one person or entity, the obligation of those persons or
entities to indemnify the Indemnitees under this Section 18
shall be joint and several. The obligation of Borrower to
indemnify the Indemnitees under this Section 18 shall survive
any repayment or discharge of the Indebtedness, any
foreclosure proceeding, any foreclosure sale, any delivery of
any deed in lieu of foreclosure, and any release of record of
the lien of this Instrument. Notwithstanding the foregoing, if
Lender has never been a mortgagee-in-possession of, or held
title to, the Mortgaged Property, Borrower shall have no
obligation to indemnify the Indemnitees under this Section 18
after the date of the release of record of the lien of this
Instrument by payment in full at the Maturity Date or by
voluntary prepayment in full.
19. PROPERTY AND LIABILITY INSURANCE.
(a) Borrower shall keep the Improvements insured at all times
against such hazards as Lender may from time to time require,
which insurance shall include but not be limited to coverage
against loss by fire and allied perils, general boiler and
machinery coverage, rent loss and extra expense insurance. If
Lender so requires, such insurance shall also include sinkhole
insurance, mine subsidence insurance, earthquake insurance,
and, if the Mortgaged Property does not conform to applicable
zoning or land use laws, building ordinance or law coverage.
Borrower acknowledges and agrees that Lender's insurance
requirements may change from time to time throughout the term
of the Indebtedness. If any of the Improvements is located in
an area identified by the Federal Emergency Management Agency
(or any successor to that agency) as an area having special
flood hazards, Borrower shall insure such Improvements against
loss by flood. All insurance required pursuant to this Section
19(a) shall be referred to as "Hazard Insurance."
(b) All premiums on Hazard Insurance policies required under
Section 19(a) shall be paid in the manner provided in Section
7, unless Lender has designated in writing another method of
payment. All such policies shall also be in a form approved by
Lender. All policies of property damage insurance shall
include a non-contributing, non-reporting mortgage clause in
favor of, and in a form approved by, Lender. Lender shall have
the right to hold the original policies or duplicate original
policies of all Hazard Insurance required by Section 19(a).
Borrower shall promptly deliver to Lender a copy of all
renewal and other notices received by Borrower with respect to
the policies and all receipts for paid premiums. At least 5
days prior to the expiration date of any Hazard Insurance
policy, Borrower shall deliver to Lender evidence acceptable
to Lender that the policy has been renewed. If Borrower has
not delivered the original (or a duplicate original) of a
renewal policy prior to the expiration date of any Hazard
Insurance policy, Borrower shall deliver the original (or a
duplicate original) of a renewal policy in a form satisfactory
to Lender within 120 days after the expiration date of the
original policy.
(c) Borrower shall maintain at all times commercial general
liability insurance, workers' compensation insurance and such
other liability, errors and omissions and fidelity insurance
coverages as Lender may from time to time require.
(d) All insurance policies and renewals of insurance policies
required by this Section 19 shall be in such amounts and for
such periods as Lender may from time to time require, and
shall be issued by insurance companies satisfactory to Lender.
(e) Borrower shall comply with all insurance requirements and
shall not permit any condition to exist on the Mortgaged
Property that would invalidate any part of any insurance
coverage that this Instrument requires Borrower to maintain.
(f) In the event of loss, Borrower shall give immediate written
notice to the insurance carrier and to Lender. Borrower hereby
authorizes and appoints Lender as attorney-in-fact for
Borrower to make proof of loss, to adjust and compromise any
claims under policies of Hazard Insurance, to appear in and
prosecute any action arising from such Hazard Insurance
policies, to collect and receive the proceeds of Hazard
Insurance, and to deduct from such proceeds Lender's expenses
incurred in the collection of such proceeds. This power of
attorney is coupled with an interest and therefore is
irrevocable. However, nothing contained in this Section 19
shall require Lender to incur any expense or take any action.
Lender may, at Lender's option, (i) require a "repair or
replacement" settlement, in which case the proceeds will be
used to reimburse Borrower for the cost of restoring and
repairing the Mortgaged Property to the equivalent of its
original condition or to a condition approved by Lender (the
"Restoration"), or (ii) require an "actual cash value"
settlement in which case the proceeds may be applied to the
payment of the Indebtedness, whether or not then due. To the
extent Lender determines to require a repair or replacement
settlement and apply insurance proceeds to Restoration, Lender
shall apply the proceeds in accordance with Lender's
then-current policies relating to the restoration of casualty
damage on similar multifamily properties.
(g) Notwithstanding any provision to the contrary in this Section
19, as long as no Event of Default, or any event which, with
the giving of Notice or the passage of time, or both, would
constitute an Event of Default, has occurred and is
continuing,
(i) in the event of a casualty resulting in damage to the
Mortgaged Property which will cost $10,000 or less to repair,
the Borrower shall have the sole right to make proof of loss,
adjust and compromise the claim and collect and receive any
proceeds directly without the approval or prior consent of the
Lender so long as the insurance proceeds are used solely for
the Restoration of the Mortgaged Property; and
(ii) in the event of a casualty resulting in damage to the
Mortgaged Property which will cost more than $10,000 but less
than $50,000 to repair, the Borrower is authorized to make
proof of loss and adjust and compromise the claim without the
prior consent of Lender, and Lender shall hold the applicable
insurance proceeds to be used to reimburse Borrower for the
cost of Restoration of the Mortgaged Property and shall not
apply such proceeds to the payment of sums due under this
Instrument.
(h) Lender will have the right to exercise its option to apply
insurance proceeds to the payment of the Indebtedness only if
Lender determines that at least one of the following
conditions is met:
(i) an Event of Default (or any event, which, with the giving of
Notice or the passage of time, or both, would constitute an
Event of Default) has occurred and is continuing;
(ii) Lender determines, in its discretion, that there will not be
sufficient funds from insurance proceeds, anticipated
contributions of Borrower of its own funds or other sources
acceptable to Lender to complete the Restoration;
(iii) Lender determines, in its discretion, that the rental income
from the Mortgaged Property after completion of the
Restoration will not be sufficient to meet all operating costs
and other expenses, Imposition Deposits, deposits to reserves
and loan repayment obligations relating to the Mortgaged
Property; or
(iv) Lender determines, in its discretion, that the Restoration
will not be completed at least one year before the Maturity
Date (or six months before the Maturity Date if Lender
determines in its discretion that re-leasing of the Mortgaged
Property will be completed within such six-month period); or
(v) Lender determines that the Restoration will not be completed
within one year after the date of the loss or casualty.
(i) If the Mortgaged Property is sold at a foreclosure sale or
Lender acquires title to the Mortgaged Property, Lender shall
automatically succeed to all rights of Borrower in and to any
insurance policies and unearned insurance premiums and in and
to the proceeds resulting from any damage to the Mortgaged
Property prior to such sale or acquisition.
(j) Unless Lender otherwise agrees in writing, any application of
any insurance proceeds to the Indebtedness shall not extend or
postpone the due date of any monthly installments referred to
in the Note, Section 7 of this Instrument or any Collateral
Agreement, or change the amount of such installments.
(k) Borrower agrees to execute such further evidence of assignment
of any insurance proceeds as Lender may require.
20. CONDEMNATION.
(a) Borrower shall promptly notify Lender in writing of any action
or proceeding or notice relating to any proposed or actual
condemnation or other taking, or conveyance in lieu thereof,
of all or any part of the Mortgaged Property, whether direct
or indirect (a "Condemnation"). Borrower shall appear in and
prosecute or defend any action or proceeding relating to any
Condemnation unless otherwise directed by Lender in writing.
Borrower authorizes and appoints Lender as attorney-in-fact
for Borrower to commence, appear in and prosecute, in Lender's
or Borrower's name, any action or proceeding relating to any
Condemnation and to settle or compromise any claim in
connection with any Condemnation, after consultation with
Borrower and consistent with commercially reasonable standards
of a prudent lender. This power of attorney is coupled with an
interest and therefore is irrevocable. However, nothing
contained in this Section 20 shall require Lender to incur any
expense or take any action. Borrower hereby transfers and
assigns to Lender all right, title and interest of Borrower in
and to any award or payment with respect to (i) any
Condemnation, or any conveyance in lieu of Condemnation, and
(ii) any damage to the Mortgaged Property caused by
governmental action that does not result in a Condemnation.
(b) Lender may apply such awards or proceeds, after the deduction
of Lender's expenses incurred in the collection of such
amounts (including Attorneys' Fees and Costs) at Lender's
option, to the restoration or repair of the Mortgaged Property
or to the payment of the Indebtedness, with the balance, if
any, to Borrower. Unless Lender otherwise agrees in writing,
any application of any awards or proceeds to the Indebtedness
shall not extend or postpone the due date of any monthly
installments referred to in the Note, Section 7 of this
Instrument or any Collateral Agreement, or change the amount
of such installments. Borrower agrees to execute such further
evidence of assignment of any awards or proceeds as Lender may
require.
21. TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.
[NO RIGHT TO TRANSFER].
(a) "Transfer" means
(i) a sale, assignment, transfer or other disposition (whether
voluntary, involuntary or by operation of law);
(ii) the granting, creating or attachment of a lien, encumbrance or
security interest (whether voluntary, involuntary or by
operation of law);
(iii) the issuance or other creation of an ownership interest in a
legal entity, including a partnership interest, interest in a
limited liability company or corporate stock;
(iv) the withdrawal, retirement, removal or involuntary resignation
of a partner in a partnership or a member or manager in a
limited liability company; or
(v) the merger, dissolution, liquidation, or consolidation of a
legal entity or the reconstitution of one type of legal entity
into another type of legal entity.
For purposes of defining the term "Transfer," the term "partnership" shall mean
a general partnership, a limited partnership, a joint venture and a limited
liability partnership, and the term "partner" shall mean a general partner, a
limited partner and a joint venturer.
(b) "Transfer" does not include
(i) a conveyance of the Mortgaged Property at a judicial or
non-judicial foreclosure sale under this Instrument,
(ii) the Mortgaged Property becoming part of a bankruptcy estate by
operation of law under the United States Bankruptcy Code, or
(iii) a lien against the Mortgaged Property for local taxes and/or
assessments not then due and payable.
(c) The occurrence of any of the following Transfers shall not
constitute an Event of Default under this Instrument,
notwithstanding any provision of Section 21(e) to the
contrary:
(i) a Transfer to which Lender has consented;
(ii) a Transfer that occurs in accordance with Section 21(d);
(iii) the grant of a leasehold interest in an individual dwelling
unit for a term of two years or less not containing an option
to purchase;
(iv) a Transfer of obsolete or worn out Personalty or Fixtures that
are contemporaneously replaced by items of equal or better
function and quality, which are free of liens, encumbrances
and security interests other than those created by the Loan
Documents or consented to by Lender;
(v) the creation of a mechanic's, materialman's, or judgment lien
against the Mortgaged Property which is released of record or
otherwise remedied to Lender's satisfaction within 60 days of
the date of creation; and
(vi) if Borrower is a housing cooperative, any Transfer of the
shares in the housing cooperative or any assignment of the
occupancy agreements or leases relating thereto by tenant
shareholders of the housing cooperative.
(d) The occurrence of any of the following Transfers shall not
constitute an Event of Default under this Instrument, provided
that Borrower has notified Lender in writing within 30 days
following the occurrence of any of the following, and such
Transfer does not constitute an Event of Default under any
other Section of this Instrument:
(i) a change of the Borrower's name, provided that UCC financing
statements and/or amendments sufficient to continue the
perfection of Lender's security interest have been properly
filed and copies have been delivered to Lender;
(ii) a change of the form of the Borrower not involving a transfer
of the Borrower's assets and not resulting in any change in
liability of any Initial Owner, provided that UCC financing
statements and/or amendments sufficient to continue the
perfection of Lender's security interest have been properly
filed and copies have been delivered to Lender;
(iii) the merger of the Borrower with another entity when the
Borrower is the surviving entity;
(iv) a Transfer that occurs by devise, descent, or by operation of
law upon the death of a natural person;
(v) the grant of an easement, if before the grant Lender
determines that the easement will not materially affect the
operation or value of the Mortgaged Property or Lender's
interest in the Mortgaged Property, and Borrower pays to
Lender, upon demand, all costs and expenses, including
Attorneys' Fees and Costs, incurred by Lender in connection
with reviewing Borrower's request.
(e) The occurrence of any of the following Transfers shall
constitute an Event of Default under this Instrument:
(i) a Transfer of all or any part of the Mortgaged Property or any
interest in the Mortgaged Property;
(ii) if Borrower is a limited partnership, a Transfer of (A) any
general partnership interest, or (B) limited partnership
interests in Borrower that would cause the Initial Owners of
Borrower to own less than a Controlling Interest of all
limited partnership interests in Borrower;
(iii) if Borrower is a general partnership or a joint venture, a
Transfer of any general partnership or joint venture interest
in Borrower;
(iv) if Borrower is a limited liability company, (A) a Transfer of
any membership interest in Borrower which would cause the
Initial Owners to own less than a Controlling Interest of all
the membership interests in Borrower, (B) a Transfer of any
membership or other interest of a manager in Borrower that
results in a change of manager, or (C) a change of a nonmember
manager;
(v) if Borrower is a corporation, (A) the Transfer of any voting
stock in Borrower which would cause the Initial Owners to own
less than a Controlling Interest of any class of voting stock
in Borrower or (B) if the outstanding voting stock in Borrower
is held by 100 or more shareholders, one or more Transfers by
a single transferor within a 12-month period affecting an
aggregate of 5 percent or more of that stock;
(vi) if Borrower is a trust, (A) a Transfer of any beneficial
interest in Borrower which would cause the Initial Owners to
own less than a Controlling Interest of all the beneficial
interests in Borrower, (B) the termination or revocation of
the trust, or (C) the removal, appointment or substitution of
a trustee of Borrower;
(vii) if Borrower is a limited liability partnership, (A) a Transfer
of any partnership interest in Borrower which would cause the
Initial Owners to own less than a Controlling Interest of all
partnership interests in Borrower, or (B) a transfer of any
partnership or other interest of a managing partner in
Borrower that results in a change of manager; and
(viii) a Transfer of any interest in a Controlling Entity which, if
such Controlling Entity were Borrower, would result in an
Event of Default under any of Sections 21(e)(i) through (vii)
above.
Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default in order to exercise any of its
remedies with respect to an Event of Default under this Section 21.
22. EVENTS OF DEFAULT. The occurrence of any one or more of the
following shall constitute an Event of Default under this
Instrument:
(a) any failure by Borrower to pay or deposit when due any amount
required by the Note, this Instrument or any other Loan
Document;
(b) any failure by Borrower to maintain the insurance coverage
required by Section 19;
(c) any failure by Borrower to comply with the provisions of
Section 33;
(d) fraud or material misrepresentation or material omission by
Borrower, any of its officers, directors, trustees, general
partners or managers or any guarantor in connection with (i)
the application for or creation of the Indebtedness, (ii) any
financial statement, rent schedule, or other report or
information provided to Lender during the term of the
Indebtedness, or (iii) any request for Lender's consent to any
proposed action, including a request for disbursement of funds
under any Collateral Agreement;
(e) any failure to comply with the provisions of Section 20;
(f) any Event of Default under Section 21;
(g) the commencement of a forfeiture action or proceeding, whether
civil or criminal, which, in Lender's reasonable judgment,
could result in a forfeiture of the Mortgaged Property or
otherwise materially impair the lien created by this
Instrument or Lender's interest in the Mortgaged Property;
(h) any failure by Borrower to perform any of its obligations
under this Instrument (other than those specified in Sections
22(a) through (g)), as and when required, which continues for
a period of 30 days after Notice of such failure by Lender to
Borrower. However, if Borrower's failure to perform its
obligations as described in this Section 22(h) is of the
nature that it cannot be cured within the 30 day grace period
but reasonably could be cured within 90 days, then Borrower
shall have additional time as determined by Lender in its
discretion, not to exceed an additional 60 days, in which to
cure such default, provided that Borrower has diligently
commenced to cure such default during the 30-day grace period
and diligently pursues the cure of such default. However, no
such Notice or grace periods shall apply in the case of any
such failure which could, in Lender's judgment, absent
immediate exercise by Lender of a right or remedy under this
Instrument, result in harm to Lender, impairment of the Note
or this Instrument or any other security given under any other
Loan Document;
(i) any failure by Borrower to perform any of its obligations as
and when required under any Loan Document other than this
Instrument which continues beyond the applicable cure period,
if any, specified in that Loan Document;
(j) any exercise by the holder of any other debt instrument
secured by a mortgage, deed of trust or deed to secure debt on
the Mortgaged Property of a right to declare all amounts due
under that debt instrument immediately due and payable;
(k) Borrower voluntarily files for bankruptcy protection under the
United States Bankruptcy Code or voluntarily becomes subject
to any reorganization, receivership, insolvency proceeding or
other similar proceeding pursuant to any other federal or
state law affecting debtor and creditor rights, or an
involuntary case is commenced against Borrower by any creditor
(other than Lender) of Borrower pursuant to the United States
Bankruptcy Code or other federal or state law affecting debtor
and creditor rights and is not dismissed or discharged within
90 days after filing; and
(l) any of Borrower's representations and warranties in this
Instrument is false or misleading in any material respect.
23. REMEDIES CUMULATIVE. Each right and remedy provided in this
Instrument is distinct from all other rights or remedies under
this Instrument or any other Loan Document or afforded by
applicable law, and each shall be cumulative and may be
exercised concurrently, independently, or successively, in any
order.
24. FORBEARANCE.
(a) Lender may (but shall not be obligated to) agree with
Borrower, from time to time, and without giving notice to, or
obtaining the consent of, or having any effect upon the
obligations of, any guarantor or other third party obligor, to
take any of the following actions: extend the time for payment
of all or any part of the Indebtedness; reduce the payments
due under this Instrument, the Note, or any other Loan
Document; release anyone liable for the payment of any amounts
under this Instrument, the Note, or any other Loan Document;
accept a renewal of the Note; modify the terms and time of
payment of the Indebtedness; join in any extension or
subordination agreement; release any Mortgaged Property; take
or release other or additional security; modify the rate of
interest or period of amortization of the Note or change the
amount of the monthly installments payable under the Note; and
otherwise modify this Instrument, the Note, or any other Loan
Document.
(b) Any forbearance by Lender in exercising any right or remedy
under the Note, this Instrument, or any other Loan Document or
otherwise afforded by applicable law, shall not be a waiver of
or preclude the exercise of any other right or remedy, or the
subsequent exercise of any right or remedy. The acceptance by
Lender of payment of all or any part of the Indebtedness after
the due date of such payment, or in an amount which is less
than the required payment, shall not be a waiver of Lender's
right to require prompt payment when due of all other payments
on account of the Indebtedness or to exercise any remedies for
any failure to make prompt payment. Enforcement by Lender of
any security for the Indebtedness shall not constitute an
election by Lender of remedies so as to preclude the exercise
of any other right available to Lender. Lender's receipt of
any awards or proceeds under Sections 19 and 20 shall not
operate to cure or waive any Event of Default.
25. LOAN CHARGES. If any applicable law limiting the amount of
interest or other charges permitted to be collected from
Borrower is interpreted so that any charge provided for in any
Loan Document, whether considered separately or together with
other charges levied in connection with any other Loan
Document, violates that law, and Borrower is entitled to the
benefit of that law, that charge is hereby reduced to the
extent necessary to eliminate that violation. The amounts, if
any, previously paid to Lender in excess of the permitted
amounts shall be applied by Lender to reduce the principal of
the Indebtedness. For the purpose of determining whether any
applicable law limiting the amount of interest or other
charges permitted to be collected from Borrower has been
violated, all Indebtedness which constitutes interest, as well
as all other charges levied in connection with the
Indebtedness which constitute interest, shall be deemed to be
allocated and spread over the stated term of the Note. Unless
otherwise required by applicable law, such allocation and
spreading shall be effected in such a manner that the rate of
interest so computed is uniform throughout the stated term of
the Note.
26. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby waives the
right to assert any statute of limitations as a bar to the
enforcement of the lien of this Instrument or to any action
brought to enforce any Loan Document.
27. WAIVER OF MARSHALLING. Notwithstanding the existence of any
other security interests in the Mortgaged Property held by
Lender or by any other party, Lender shall have the right to
determine the order in which any or all of the Mortgaged
Property shall be subjected to the remedies provided in this
Instrument, the Note, any other Loan Document or applicable
law. Lender shall have the right to determine the order in
which any or all portions of the Indebtedness are satisfied
from the proceeds realized upon the exercise of such remedies.
Borrower and any party who now or in the future acquires a
security interest in the Mortgaged Property and who has actual
or constructive notice of this Instrument waives any and all
right to require the marshalling of assets or to require that
any of the Mortgaged Property be sold in the inverse order of
alienation or that any of the Mortgaged Property be sold in
parcels or as an entirety in connection with the exercise of
any of the remedies permitted by applicable law or provided in
this Instrument.
28. FURTHER ASSURANCES. Borrower shall execute, acknowledge, and
deliver, at its sole cost and expense, all further acts,
deeds, conveyances, assignments, estoppel certificates,
financing statements or amendments, transfers and assurances
as Lender may require from time to time in order to better
assure, grant, and convey to Lender the rights intended to be
granted, now or in the future, to Lender under this Instrument
and the Loan Documents.
29. ESTOPPEL CERTIFICATE. Within 10 days after a request from
Lender, Borrower shall deliver to Lender a written statement,
signed and acknowledged by Borrower, certifying to Lender or
any person designated by Lender, as of the date of such
statement, (i) that the Loan Documents are unmodified and in
full force and effect (or, if there have been modifications,
that the Loan Documents are in full force and effect as
modified and setting forth such modifications); (ii) the
unpaid principal balance of the Note; (iii) the date to which
interest under the Note has been paid; (iv) that Borrower is
not in default in paying the Indebtedness or in performing or
observing any of the covenants or agreements contained in this
Instrument or any of the other Loan Documents (or, if the
Borrower is in default, describing such default in reasonable
detail); (v) whether or not there are then existing any
setoffs or defenses known to Borrower against the enforcement
of any right or remedy of Lender under the Loan Documents; and
(vi) any additional facts requested by Lender.
30. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.
(a) This Instrument, and any Loan Document which does not itself
expressly identify the law that is to apply to it, shall be
governed by the laws of the jurisdiction in which the Land is
located (the "Property Jurisdiction").
(b) Borrower agrees that any controversy arising under or in
relation to the Note, this Instrument, or any other Loan
Document may be litigated in the Property Jurisdiction. The
state and federal courts and authorities with jurisdiction in
the Property Jurisdiction shall have jurisdiction over all
controversies that shall arise under or in relation to the
Note, any security for the Indebtedness, or any other Loan
Document. Borrower irrevocably consents to service,
jurisdiction, and venue of such courts for any such litigation
and waives any other venue to which it might be entitled by
virtue of domicile, habitual residence or otherwise. However,
nothing in this Section 30 is intended to limit Lender's right
to bring any suit, action or proceeding relating to matters
under this Instrument in any court of any other jurisdiction.
31. NOTICE.
(a) All Notices, demands and other communications ("Notice") under
or concerning this Instrument shall be in writing. Each Notice
shall be addressed to the intended recipient at its address
set forth in this Instrument, and shall be deemed given on the
earliest to occur of (i) the date when the Notice is received
by the addressee; (ii) the first Business Day after the Notice
is delivered to a recognized overnight courier service, with
arrangements made for payment of charges for next Business Day
delivery; or (iii) the third Business Day after the Notice is
deposited in the United States mail with postage prepaid,
certified mail, return receipt requested.
(b) Any party to this Instrument may change the address to which
Notices intended for it are to be directed by means of Notice
given to the other party in accordance with this Section 31.
Each party agrees that it will not refuse or reject delivery
of any Notice given in accordance with this Section 31, that
it will acknowledge, in writing, the receipt of any Notice
upon request by the other party and that any Notice rejected
or refused by it shall be deemed for purposes of this Section
31 to have been received by the rejecting party on the date so
refused or rejected, as conclusively established by the
records of the U.S. Postal Service or the courier service.
(c) Any Notice under the Note and any other Loan Document that
does not specify how Notices are to be given shall be given in
accordance with this Section 31.
32. SALE OF NOTE; CHANGE IN SERVICER; LOAN SERVICING. The Note or
a partial interest in the Note (together with this Instrument
and the other Loan Documents) may be sold one or more times
without prior Notice to Borrower. A sale may result in a
change of the Loan Servicer. There also may be one or more
changes of the Loan Servicer unrelated to a sale of the Note.
If there is a change of the Loan Servicer, Borrower will be
given Notice of the change. All actions regarding the
servicing of the loan evidenced by the Note, including the
collection of payments, the giving and receipt of Notice,
inspections of the Mortgaged Property, inspections of books
and records, and the granting of consents and approvals, may
be taken by the Loan Servicer unless Borrower receives Notice
to the contrary. If Borrower receives conflicting Notices
regarding the identity of the Loan Servicer or any other
subject, any such Notice from Lender shall govern.
33. SINGLE ASSET BORROWER. Until the Indebtedness is paid in full,
Borrower (a) shall not own any real or personal property other
than the Mortgaged Property and personal property related to
the operation and maintenance of the Mortgaged Property; (b)
shall not operate any business other than the management and
operation of the Mortgaged Property; and (c) shall not
maintain its assets in a way difficult to segregate and
identify.
34. SUCCESSORS AND ASSIGNS BOUND. This Instrument shall bind, and
the rights granted by this Instrument shall inure to, the
respective successors and assigns of Lender and Borrower.
However, a Transfer not permitted by Section 21 shall be an
Event of Default.
35. JOINT AND SEVERAL LIABILITY. If more than one person or entity
signs this Instrument as Borrower, the obligations of such
persons and entities shall be joint and several.
36. RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARY.
(a) The relationship between Lender and Borrower shall be solely
that of creditor and debtor, respectively, and nothing
contained in this Instrument shall create any other
relationship between Lender and Borrower.
(b) No creditor of any party to this Instrument and no other
person shall be a third party beneficiary of this Instrument
or any other Loan Document. Without limiting the generality of
the preceding sentence, (i) any arrangement (a "Servicing
Arrangement") between the Lender and any Loan Servicer for
loss sharing or interim advancement of funds shall constitute
a contractual obligation of such Loan Servicer that is
independent of the obligation of Borrower for the payment of
the Indebtedness, (ii) Borrower shall not be a third party
beneficiary of any Servicing Arrangement, and (iii) no payment
by the Loan Servicer under any Servicing Arrangement will
reduce the amount of the Indebtedness.
37. SEVERABILITY; AMENDMENTS. The invalidity or unenforceability
of any provision of this Instrument shall not affect the
validity or enforceability of any other provision, and all
other provisions shall remain in full force and effect. This
Instrument contains the entire agreement among the parties as
to the rights granted and the obligations assumed in this
Instrument. This Instrument may not be amended or modified
except by a writing signed by the party against whom
enforcement is sought; provided, however, that in the event of
a Transfer prohibited by or requiring Lender's approval under
Section 21, any or some or all of the Modifications to
Instrument set forth in Exhibit B (if any) may be modified or
rendered void by Lender at Lender's option by Notice to
Borrower and the transferee(s).
38. CONSTRUCTION. The captions and headings of the Sections of
this Instrument are for convenience only and shall be
disregarded in construing this Instrument. Any reference in
this Instrument to an "Exhibit" or a "Section" shall, unless
otherwise explicitly provided, be construed as referring,
respectively, to an Exhibit attached to this Instrument or to
a Section of this Instrument. All Exhibits attached to or
referred to in this Instrument are incorporated by reference
into this Instrument. Any reference in this Instrument to a
statute or regulation shall be construed as referring to that
statute or regulation as amended from time to time. Use of the
singular in this Agreement includes the plural and use of the
plural includes the singular. As used in this Instrument, the
term "including" means "including, but not limited to."
39. DISCLOSURE OF INFORMATION. Lender may furnish information
regarding Borrower or the Mortgaged Property to third parties
with an existing or prospective interest in the servicing,
enforcement, evaluation, performance, purchase or
securitization of the Indebtedness, including but not limited
to trustees, master servicers, special servicers, rating
agencies, and organizations maintaining databases on the
underwriting and performance of multifamily mortgage loans.
Borrower irrevocably waives any and all rights it may have
under applicable law to prohibit such disclosure, including
but not limited to any right of privacy.
40. NO CHANGE IN FACTS OR CIRCUMSTANCES. Borrower warrants that
(a) all information in the application for the loan submitted
to Lender (the "Loan Application") and in all financial
statements, rent schedules, reports, certificates and other
documents submitted in connection with the Loan Application
are complete and accurate in all material respects; and (b)
there has been no material adverse change in any fact or
circumstance that would make any such information incomplete
or inaccurate.
41. SUBROGATION. If, and to the extent that, the proceeds of the
loan evidenced by the Note are used to pay, satisfy or
discharge any obligation of Borrower for the payment of money
that is secured by a pre-existing mortgage, deed of trust or
other lien encumbering the Mortgaged Property (a "Prior
Lien"), such loan proceeds shall be deemed to have been
advanced by Lender at Borrower's request, and Lender shall
automatically, and without further action on its part, be
subrogated to the rights, including lien priority, of the
owner or holder of the obligation secured by the Prior Lien,
whether or not the Prior Lien is released.
42. ADJUSTABLE RATE MORTGAGE - THIRD PARTY CAP AGREEMENT "CAP
COLLATERAL."
(a) If the Note provides for interest to accrue at an adjustable
or variable interest rate (other than during the "Extension
Period," as defined in the Note, if applicable), then the
definition of "Mortgaged Property" shall include the "Cap
Collateral." The "Cap Collateral" shall mean
(i) any interest rate cap agreement, interest rate swap agreement,
or other interest rate-hedging contract or agreement obtained
by Borrower as a requirement of any Loan Document or as a
condition of Lender's making the Loan (a "Cap Agreement");
(ii) any and all moneys (collectively, "Cap Payments") payable
pursuant to any Cap Agreement by the interest rate cap
provider or other counterparty to a Cap Agreement or any
guarantor of the obligations of any such cap provider or
counterparty (a "Cap Provider");
(iii) all rights of Borrower under any Cap Agreement and all rights
of Borrower to all Cap Payments, including contract rights and
general intangibles, whether existing now or arising after the
date of this Instrument;
(iv) all rights, liens and security interests or guaranties granted
by a Cap Provider or any other person to secure or guaranty
payment of any Cap Payment whether existing now or granted
after the date of this Instrument;
(v) all documents, writings, books, files, records and other
documents arising from or relating to any of the foregoing,
whether existing now or created after the date of this
Instrument; and
(vi) all cash and non-cash proceeds and products of (ii) - (v)
above.
(b) As additional security for Borrower's obligation under the
Loan Documents, Borrower hereby assigns and pledges to Lender
all of Borrower's right, title and interest in and to the Cap
Collateral. Borrower has instructed and will instruct each Cap
Provider and any guarantor of a Cap Provider's obligations to
make Cap Payments directly to Lender or to Loan Servicer on
behalf of Lender.
(c) So long as there is no Event of Default, Lender or Loan
Servicer will remit to Borrower each Cap Payment received by
Lender or Loan Servicer with respect to any month for which
Borrower has paid in full the monthly installment of principal
and interest or interest only, as applicable, due under the
Note. Alternatively, at Lender's option so long as there is no
Event of Default, Lender may apply a Cap Payment received by
Lender or Loan Servicer with respect to any month to the
applicable monthly payment of accrued interest due under the
Note if Borrower has paid in full the remaining portion of
such monthly payment of principal and interest or interest
only, as applicable.
(d) Following an Event of Default, in addition to any other rights
and remedies Lender may have, Lender may retain any Cap
Payments and apply them to the Indebtedness in such order and
amounts as Lender determines. Neither the existence of a Cap
Agreement nor anything in this Instrument shall relieve
Borrower of its primary obligation to timely pay in full all
amounts due under the Note and otherwise due on account of the
Indebtedness.
(e) If the Note does not provide for interest to accrue at an
adjustable or variable interest rate (other than during the
Extension Period) then this Section 42 shall be of no force or
effect.
43. ACCELERATION; REMEDIES; WAIVER OF PERMISSIVE COUNTERCLAIMS. At
any time during the existence of an Event of Default, Lender,
at Lender's option, may declare the Indebtedness to be
immediately due and payable without further demand, and may
foreclose this Instrument by judicial proceeding and may
invoke any other remedies permitted by Florida law or provided
in this Instrument or in any other Loan Document. Lender shall
be entitled to collect all costs and expenses incurred in
pursuing such remedies, including attorneys' fees, costs of
documentary evidence, abstracts and title reports. Borrower
waives any and all rights to file or pursue permissive
counterclaims in connection with any legal action brought by
Lender under this Instrument, the Note or any other Loan
Document.
44. RELEASE. Upon payment of the Indebtedness, Lender shall
release this Instrument. Borrower shall pay Lender's
reasonable costs incurred in releasing this Instrument.
45. FUTURE ADVANCES. Lender may from time to time, in Lender's
discretion, make optional future or additional advances
(collectively, "Future Advances") to Borrower, except that at
no time shall the unpaid principal balance of all indebtedness
secured by the lien of this Instrument, including Future
Advances, be greater than an amount equal to two hundred
percent (200%) of the original principal amount of this Note
as set forth on the first page of this Instrument plus accrued
interest and amounts disbursed by Lender under Section 12 or
any other provision of this Instrument that treats a
disbursement by Lender as being made under Section 12. All
Future Advances shall be made, if at all, within twenty (20)
years after the date of this Instrument, or within such lesser
period that may in the future be provided by law as a
prerequisite for the sufficiency of actual or record notice of
Future Advances as against the rights of creditors or
subsequent purchasers for value. Borrower shall, immediately
upon request by Lender, execute and deliver to Lender a
promissory note evidencing each Future Advance together with a
notice of such Future Advance in recordable form. All
promissory notes evidencing Future Advances shall be secured,
pari passu, by the lien of this Instrument, and each reference
in this Instrument to the Note shall be deemed to be a
reference to all promissory notes evidencing Future Advances.
46. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A)
COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT
TO ANY ISSUE ARISING OUT OF THIS INSTRUMENT OR THE
RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER THAT
IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO
TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT
ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY,
KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL
COUNSEL.
ATTACHED EXHIBITS. The following Exhibits are attached to this
Instrument:
----
X Exhibit A Description of the Land (required).
----
----
X Exhibit B Modifications to Instrument
----
IN WITNESS WHEREOF, Borrower has signed and delivered this Instrument or
has caused this Instrument to be signed and delivered by its duly authorized
representative.
[SIGNATURES ON NEXT PAGE]
NATIONAL PROPERTY INVESTORS 5, a California
limited partnership doing business in
Florida as National Property Investors 5
Ltd.
By: NPI Equity Investments, Inc., a
Florida corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and
Treasurer
Exhibit 10.26
Old FHLMC Loan No. 002682516
New FHLMC Loan No. 002722682
Willow Park Apartments
AMENDED AND RESTATED MULTIFAMILY NOTE
(Recast Transaction)
THIS AMENDED AND RESTATED MULTIFAMILY NOTE ("Amended and Restated Note")
is made effective as of the 1st day of December, 2005, by NATIONAL PROPERTY
INVESTORS 5, a California limited partnership doing business in Florida as
National Property Investors 5 Ltd. ("Borrower"); and the FEDERAL HOME LOAN
MORTGAGE CORPORATION ("Lender")
RECITALS
A. Borrower is the maker of a Multifamily Note (the "Note"), dated as of
December 15, 1999, in the original principal amount of Four Million and 00/100
Dollars ($4,000,000.00), evidencing a loan (the "Loan") to Borrower in such
amount from GMAC Commercial Mortgage Corporation, a California corporation (the
"Original Lender").
B. The Note is secured by that certain Multifamily Mortgage, Assignment of
Rents, and Security Agreement dated as of December 15, 1999, from Borrower, as
mortgagor, to Original Lender, as mortgagee, recorded in the land records of
Seminole County, Florida (the "Land Records") in Mortgage Book 3776, Page 0826
(the "Instrument"). The Instrument encumbers, among other things, Borrower's
interest in the land described in Exhibit A to the Instrument and to this
Amended and Restated Instrument.
C. Pursuant to a Limited Guaranty dated as of December 15, 1999, AIMCO
Properties, L.P., a Delaware limited partnership, guaranteed some or all of
Borrower's obligations under the terms of the Note and the Instrument.
D. Original Lender (i) endorsed the Note to Lender and (ii) assigned the
Instrument to Lender by Assignment of Security Instrument dated as of December
15, 1999 and recorded in the Land Records in Mortgage Book 3776, Page 0897.
E. Borrower has confirmed to Lender that Borrower has no defenses or offsets of
any kind against any of the indebtedness due under the Note.
F. Borrower and Lender have now agreed to amend and restate the Note so as to,
among other things, (i) reflect a current unpaid balance of Three Million Three
Hundred Eighty-Seven Thousand Eighty-Eight and 00/100 Dollars ($3,387,088.00),
(ii) amend the terms of payment, and (iii) change the Maturity Date of the Note
from January 1, 2020 to an Initial Maturity Date of December 1, 2015.
NOW, THEREFORE, in consideration of these premises, and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the parties agree that the Note is amended and restated in its entirety in the
form attached hereto and made a part hereof.
PAGE 14
FHLMC Loan No. 002722682
Willow Park Apartments
MULTIFAMILY NOTE
MULTISTATE - FIXED TO FLOAT
(REVISION DATE 10-01-2004)
US $3,387,088.00 Effective Date: As of December 1, 2005
FOR VALUE RECEIVED, the undersigned (together with such party's or
parties' successors and assigns, "Borrower"), jointly and severally (if more
than one) promises to pay to the order of FEDERAL HOME LOAN MORTGAGE
CORPORATION, the principal sum of Three Million Three Hundred Eighty-Seven
Thousand Eighty-Eight and 00/100 Dollars (US $3,387,088.00), with interest on
the unpaid principal balance, as hereinafter provided.
1. Defined Terms.
(a) As used in this Note:
"Adjustable Interest Rate" means the variable annual interest rate
calculated for each Interest Adjustment Period so as to equal the
Index Rate for such Interest Adjustment Period (truncated at the
fifth (5th) decimal place if necessary) plus the Margin.
"Amortization Period" means a period of 360 full consecutive
calendar months.
"Base Recourse" means a portion of the Indebtedness equal to zero
percent (0%) of the original principal balance of this Note.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which Lender is not open for business.
"Default Rate" means (i) during the Fixed Rate Period, an annual
interest rate equal to four (4) percentage points above the Fixed
Interest Rate; and (ii) during the Extension Period, a variable
annual interest rate equal to four (4) percentage points above the
Adjustable Interest Rate in effect from time to time. However, at no
time will the Default Rate exceed the Maximum Interest Rate.
"Extended Maturity Date" means, if the Extension Period becomes
effective pursuant to this Note, the earlier of (i) December 1,
2016, and (ii) the date on which the unpaid principal balance of
this Note becomes due and payable by acceleration or otherwise
pursuant to the Loan Documents or the exercise by Lender of any
right or remedy thereunder.
"Extension Period" means the twelve (12) consecutive calendar months
period commencing on the Scheduled Initial Maturity Date.
"Fixed Interest Rate" means the annual interest rate of eight and
twenty-seven hundredths percent (8.27%).
"Fixed Rate Period" means the period beginning on the date of this
Note and continuing through November 30, 2015.
"Index Rate" means, for any Interest Adjustment Period, the
Reference Bill(R) Index Rate for such Interest Adjustment Period.
"Initial Maturity Date" means the earlier of (i) December 1, 2015
(the "Scheduled Initial Maturity Date"), and (ii) the date on which
the unpaid principal balance of this Note becomes due and payable by
acceleration or otherwise pursuant to the Loan Documents or the
exercise by Lender of any right or remedy thereunder.
"Installment Due Date" means, for any monthly installment of
interest only or principal and interest, the date on which such
monthly installment is due and payable pursuant to Section 3 of this
Note. The "First Installment Due Date" under this Note is January 1,
2006.
"Interest Adjustment Period" means each successive one calendar
month period during the Extension Period and until the entire
Indebtedness is paid in full.
"Lender" means the holder from time to time of this Note.
"LIBOR Index" means the British Bankers Association's (BBA) one (1)
month LIBOR Rate for United States Dollar deposits, as displayed on
the LIBOR Index Page used to establish the LIBOR Index Rate.
"LIBOR Index Rate" means, for any Interest Adjustment Period after
the first Interest Adjustment Period, the BBA's LIBOR Rate for the
LIBOR Index released by the BBA most recently preceding the first
day of such Interest Adjustment Period, as such LIBOR Rate is
displayed on the LIBOR Index Page. The LIBOR Index Rate for the
first Interest Adjustment Period means the British Bankers
Association's (BBA) LIBOR Rate for the LIBOR Index released by the
BBA most recently preceding the first day of the month in which the
first Interest Adjustment Period begins, as such LIBOR Rate is
displayed on the LIBOR Index Page. "LIBOR Index Page" is the
Bloomberg L.P., page "BBAM", or such other page for the LIBOR Index
as may replace page BBAM on that service, or at the option of Lender
(i) the applicable page for the LIBOR Index on another service which
electronically transmits or displays BBA LIBOR Rates, or (ii) any
publication of LIBOR rates available from the BBA. In the event the
BBA ceases to set or publish a LIBOR rate/interest settlement rate
for the LIBOR Index, Lender will designate an alternative index, and
such alternative index shall constitute the LIBOR Index Rate.
"Loan" means the loan evidenced by this Note.
"Margin" means two and one-half (2.5) percentage points (250 basis
points).
"Maturity Date" means the Extended Maturity Date unless pursuant to
Section 3(f) of this Note the Extension Period does not or cannot
become effective, in which case the Maturity Date means the Initial
Maturity Date.
"Maximum Interest Rate" means the rate of interest that results in
the maximum amount of interest allowed by applicable law.
"Prepayment Premium Period" means the period during which, if a
prepayment of principal occurs, a prepayment premium will be payable
by Borrower to Lender. The Prepayment Premium Period is the period
from and including the date of this Note until but not including the
first day of the Window Period. For this Note, the Prepayment
Premium Period equals the Yield Maintenance Period.
"Reference Bills(R)" means the unsecured general obligations of the
Federal Home Loan Mortgage Corporation ("Freddie Mac") designated by
Freddie Mac as "Reference Bills(R) Securities" and having original
durations to maturity most comparable to the term of the Reference
Bill Index, and issued by Freddie Mac at regularly scheduled
auctions. In the event Freddie Mac shall at any time cease to
designate any unsecured general obligations of Freddie Mac as
"Reference Bills Securities", then at the option of Lender (i)
Lender may select from time to time another unsecured general
obligation of Freddie Mac having original durations to maturity most
comparable to the term of the Reference Bill Index and issued by
Freddie Mac at regularly scheduled auctions, and the term "Reference
Bills" as used in this Note shall mean such other unsecured general
obligations as selected by Lender; or (ii) for any one or more
Interest Adjustment Periods, Lender may use the applicable LIBOR
Index Rate as the Index Rate for such Interest Adjustment Period(s).
"Reference Bill Index" means the one-month Reference Bills.
One-month reference bills have original durations to maturity of
approximately 30 days.
"Reference Bill Index Rate" means, for any Interest Adjustment
Period after the first Interest Adjustment Period, the Money Market
Yield for the Reference Bills as established by the Reference Bill
auction conducted by Freddie Mac most recently preceding the first
day of such Interest Adjustment Period, as displayed on the
Reference Bill Index Page. The Reference Bill Index Rate for the
first Interest Adjustment Period means the Money Market Yield for
the Reference Bills as established by the Reference Bill auction
conducted by Freddie Mac most recently preceding the first day of
the month in which the first Interest Adjustment Period begins, as
displayed on the Reference Bill Index Page. The "Reference Bill
Index Page" is the Freddie Mac Debt Securities Web Page (accessed
via the Freddie Mac internet site at www.freddiemac.com), or at the
option of Lender, any publication of Reference Bills auction results
available from Freddie Mac. However, if Freddie Mac has not
conducted a Reference Bill auction within the 60-calendar day period
prior to the first day of an Interest Adjustment Period, the
Reference Bill Index Rate for such Interest Adjustment Period will
be the LIBOR Index Rate for such Interest Adjustment Period.
"Remaining Amortization Period" means, at any point in time, the
number of consecutive calendar months equal to the number of months
in the Amortization Period minus the number of scheduled monthly
installments of principal and interest that have elapsed since the
date of this Note.
"Security Instrument" means the multifamily mortgage, deed to secure
debt or deed of trust effective as of the effective date of this
Note, from Borrower to or for the benefit of Lender and securing
this Note.
"Treasury Security" means the 9.250% U.S. Treasury Security due
February 15, 2016.
"Window Period" means the Extension Period.
"Yield Maintenance Period" means the period from and including the
date of this Note until but not including the Scheduled Initial
Maturity Date.
(b) Other capitalized terms used but not defined in this Note
shall have the meanings given to such terms in the Security
Instrument.
2. Address for Payment. All payments due under this Note shall be
payable at GMAC Commercial Mortgage Corporation, 200 Witmer
Road, Post Office Box 809, Horsham, Pennsylvania 19044,
Attention: Servicing - Account Manager, or such other place as
may be designated by Notice to Borrower from or on behalf of
Lender.
3. Payments.
(a) During the Fixed Rate Period, interest will accrue on the
outstanding principal balance of this Note at the Fixed
Interest Rate, subject to the provisions of Section 8 of this
Note. During the Extension Period, interest will accrue on the
outstanding principal balance of this Note at the Adjustable
Interest Rate, subject to the provisions of Section 8 of this
Note.
(b) Interest under this Note shall be computed, payable and
allocated on the basis of an actual/360 interest calculation
schedule (interest is payable for the actual number of days in
each month, and each month's interest is calculated by
multiplying the unpaid principal amount of this Note as of the
first day of the month for which interest is being calculated
by the Fixed Interest Rate (during the Fixed Rate Period) or
the applicable Adjustable Interest Rate (during the Extension
Period), dividing the product by 360, and multiplying the
quotient by the number of days in the month for which interest
is being calculated). For convenience in determining the
amount of a monthly installment of principal and interest
under this Note, Lender will use a 30/360 interest calculation
payment schedule (each year is treated as consisting of twelve
30-day months). However, as provided above, the portion of the
monthly installment actually payable as and allocated to
interest will be based upon an actual/360 interest calculation
schedule, and the amount of each installment attributable to
principal and the amount attributable to interest will vary
based upon the number of days in the month for which such
installment is paid. Each monthly payment of principal and
interest will first be applied to pay in full interest due,
and the balance of the monthly payment paid by Borrower will
be credited to principal.
(c) Unless disbursement of principal is made by Lender to Borrower
on the first day of a calendar month, interest for the period
beginning on the date of disbursement and ending on and
including the last day of such calendar month shall be payable
by Borrower simultaneously with the execution of this Note. If
disbursement of principal is made by Lender to Borrower on the
first day of a calendar month, then no payment will be due
from Borrower at the time of the execution of this Note. The
Installment Due Date for the first monthly installment payment
under Section 3(d) of interest only or principal and interest,
as applicable, will be the First Installment Due Date set
forth in Section 1(a) of this Note. Except as provided in this
Section 3(c) and in Section 10, accrued interest will be
payable in arrears.
(d) Beginning on the First Installment Due Date, and continuing
until and including the monthly installment due on the Initial
Maturity Date, principal and accrued interest shall be payable
by Borrower in consecutive monthly installments due and
payable on the first day of each calendar month. The amount of
the monthly installment of principal and interest payable
pursuant to this Section 3(d) on an Installment Due Date shall
be Twenty-Five Thousand Four Hundred Ninety-Three and 70/100
Dollars (US $25,493.70).
(e) Except as otherwise provided in this Section 3(e), all
remaining Indebtedness, including all principal and interest,
shall be due and payable by Borrower on the Initial Maturity
Date. However, so long as (i) the Initial Maturity Date has
not occurred prior to the Scheduled Initial Maturity Date, and
(ii) no Event of Default or event or circumstance which, with
the giving of notice or passage of time or both, could
constitute an Event of Default exists on the Scheduled Initial
Maturity Date, then the Extension Period automatically will
become effective and the date for full payment of the
Indebtedness automatically shall be extended until the
Extended Maturity Date. If the Extension Period becomes
effective, monthly installments of principal and interest or
interest only will be payable during the Extension Period as
provided in Section 3(f). Anything in Section 21 of the
Security Instrument to the contrary notwithstanding, during
the Extension Period, Borrower will not request that Lender
consent to, and Lender will not consent to, a Transfer that,
absent such consent, would constitute an Event of Default.
(f) If the Extension Period becomes effective, beginning on
December 1, 2015, and continuing until and including the
monthly installment due on the Extended Maturity Date,
principal and accrued interest shall be payable by Borrower in
consecutive monthly installments due and payable on the first
day of each calendar month. The amount of the monthly
installment of principal and interest payable pursuant to this
Section 3(f) on an Installment Due Date shall be calculated so
as to equal the monthly payment amount which would be payable
on the Installment Due Date as if the unpaid principal balance
of this Note as of the first day of the Interest Adjustment
Period immediately preceding the Installment Due Date was to
be fully amortized, together with interest thereon at the
Adjustable Interest Rate in effect for such Interest
Adjustment Period, in equal consecutive monthly payments paid
on the first day of each calendar month over the Remaining
Amortization Period.
(g) During the Extension Period, Lender shall provide Borrower
with Notice, given in the manner specified in the Security
Instrument, of the amount of each monthly installment due
under this Note. However, if Lender has not provided Borrower
with prior notice of the monthly payment due on any
Installment Due Date, then Borrower shall pay on that
Installment Due Date an amount equal to the monthly
installment payment for which Borrower last received notice.
If Lender at any time determines that Borrower has paid one or
more monthly installments in an incorrect amount because of
the operation of the preceding sentence, or because Lender has
miscalculated the Adjustable Interest Rate or has otherwise
miscalculated the amount of any monthly installment, then
Lender shall give notice to Borrower of such determination. If
such determination discloses that Borrower has paid less than
the full amount due for the period for which the determination
was made, Borrower, within 30 calendar days after receipt of
the notice from Lender, shall pay to Lender the full amount of
the deficiency. If such determination discloses that Borrower
has paid more than the full amount due for the period for
which the determination was made, then the amount of the
overpayment shall be credited to the next installment(s) of
interest only or principal and interest, as applicable, due
under this Note (or, if an Event of Default has occurred and
is continuing, such overpayment shall be credited against any
amount owing by Borrower to Lender).
(h) All payments under this Note shall be made in immediately
available U.S. funds.
(i) Any regularly scheduled monthly installment of interest only
or principal and interest payable pursuant to this Section 3
that is received by Lender before the date it is due shall be
deemed to have been received on the due date for the purpose
of calculating interest due.
(j) Any accrued interest remaining past due for 30 days or more,
at Lender's discretion, may be added to and become part of the
unpaid principal balance of this Note and any reference to
"accrued interest" shall refer to accrued interest which has
not become part of the unpaid principal balance. Any amount
added to principal pursuant to the Loan Documents shall bear
interest at the applicable rate or rates specified in this
Note and shall be payable with such interest upon demand by
Lender and absent such demand, as provided in this Note for
the payment of principal and interest.
(k) In accordance with Section 14, interest charged under this
Note cannot exceed the Maximum Interest Rate. If the
Adjustable Interest Rate at any time exceeds the Maximum
Interest Rate, resulting in the charging of interest hereunder
to be limited to the Maximum Interest Rate, then any
subsequent reduction in the Adjustable Interest Rate shall not
reduce the rate at which interest under this Note accrues
below the Maximum Interest Rate until the total amount of
interest accrued hereunder equals the amount of interest which
would have accrued had the Adjustable Interest Rate at all
times been in effect.
4. Application of Payments. If at any time Lender receives, from
Borrower or otherwise, any amount applicable to the
Indebtedness which is less than all amounts due and payable at
such time, Lender may apply the amount received to amounts
then due and payable in any manner and in any order determined
by Lender, in Lender's discretion. Borrower agrees that
neither Lender's acceptance of a payment from Borrower in an
amount that is less than all amounts then due and payable nor
Lender's application of such payment shall constitute or be
deemed to constitute either a waiver of the unpaid amounts or
an accord and satisfaction.
5. Security. The Indebtedness is secured by, among other things,
the Security Instrument, and reference is made to the Security
Instrument for other rights of Lender as to collateral for the
Indebtedness.
6. Acceleration. If an Event of Default has occurred and is
continuing, the entire unpaid principal balance, any accrued
interest, any prepayment premium payable under Section 10, and
all other amounts payable under this Note and any other Loan
Document, shall at once become due and payable, at the option
of Lender, without any prior notice to Borrower (except if
notice is required by applicable law, then after such notice).
Lender may exercise this option to accelerate regardless of
any prior forbearance. For purposes of exercising such option,
Lender shall calculate the prepayment premium as if prepayment
occurred on the date of acceleration. If prepayment occurs
thereafter, lender shall recalculate the prepayment premium as
of the actual prepayment date.
7. Late Charge.
(a) If any monthly installment of interest or principal and
interest or other amount payable under this Note or under the
Security Instrument or any other Loan Document is not received
in full by Lender (i) during the Fixed Rate Period, within ten
(10) days after the installment or other amount is due, or
(ii) during the Extension Period, within five (5) days after
the installment or other amount is due, counting from and
including the date such installment or other amount is due
(unless applicable law requires a longer period of time before
a late charge may be imposed, in which event such longer
period shall be substituted), Borrower shall pay to Lender,
immediately and without demand by Lender, a late charge equal
to five percent (5%) of such installment or other amount due
(unless applicable law requires a lesser amount be charged, in
which event such lesser amount shall be substituted).
(b) Borrower acknowledges that its failure to make timely payments
will cause Lender to incur additional expenses in servicing
and processing the Loan and that it is extremely difficult and
impractical to determine those additional expenses. Borrower
agrees that the late charge payable pursuant to this Section
represents a fair and reasonable estimate, taking into account
all circumstances existing on the date of this Note, of the
additional expenses Lender will incur by reason of such late
payment. The late charge is payable in addition to, and not in
lieu of, any interest payable at the Default Rate pursuant to
Section 8.
8. Default Rate.
(a) So long as (i) any monthly installment under this Note remains
past due for thirty (30) days or more or (ii) any other Event
of Default has occurred and is continuing, then
notwithstanding anything in Section 3 of this Note to the
contrary, interest under this Note shall accrue on the unpaid
principal balance from the Installment Due Date of the first
such unpaid monthly installment or the occurrence of such
other Event of Default, as applicable, at the Default Rate.
(b) From and after the Maturity Date, the unpaid principal balance
shall continue to bear interest at the Default Rate until and
including the date on which the entire principal balance is
paid in full.
(c) Borrower acknowledges that (i) its failure to make timely
payments will cause Lender to incur additional expenses in
servicing and processing the Loan, (ii) during the time that
any monthly installment under this Note is delinquent for
thirty (30) days or more, Lender will incur additional costs
and expenses arising from its loss of the use of the money due
and from the adverse impact on Lender's ability to meet its
other obligations and to take advantage of other investment
opportunities; and (iii) it is extremely difficult and
impractical to determine those additional costs and expenses.
Borrower also acknowledges that, during the time that any
monthly installment under this Note is delinquent for thirty
(30) days or more or any other Event of Default has occurred
and is continuing, Lender's risk of nonpayment of this Note
will be materially increased and Lender is entitled to be
compensated for such increased risk. Borrower agrees that the
increase in the rate of interest payable under this Note to
the Default Rate represents a fair and reasonable estimate,
taking into account all circumstances existing on the date of
this Note, of the additional costs and expenses Lender will
incur by reason of the Borrower's delinquent payment and the
additional compensation Lender is entitled to receive for the
increased risks of nonpayment associated with a delinquent
loan.
9. Limits on Personal Liability.
(a) Except as otherwise provided in this Section 9, Borrower shall
have no personal liability under this Note, the Security
Instrument or any other Loan Document for the repayment of the
Indebtedness or for the performance of any other obligations
of Borrower under the Loan Documents and Lender's only
recourse for the satisfaction of the Indebtedness and the
performance of such obligations shall be Lender's exercise of
its rights and remedies with respect to the Mortgaged Property
and to any other collateral held by Lender as security for the
Indebtedness. This limitation on Borrower's liability shall
not limit or impair Lender's enforcement of its rights against
any guarantor of the Indebtedness or any guarantor of any
other obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the amount
of the Base Recourse, plus any other amounts for which
Borrower has personal liability under this Section 9.
(c) In addition to the Base Recourse, Borrower shall be personally
liable to Lender for the repayment of a further portion of the
Indebtedness equal to any loss or damage suffered by Lender as
a result of the occurrence of any of the following events:
(i) Borrower fails to pay to Lender upon demand after an Event of Default
all Rents to which Lender is entitled under Section 3(a) of
the Security Instrument and the amount of all security
deposits collected by Borrower from tenants then in
residence. However, Borrower will not be personally liable
for any failure described in this subsection (i) if
Borrower is unable to pay to Lender all Rents and security
deposits as required by the Security Instrument because of
a valid order issued in a bankruptcy, receivership, or
similar judicial proceeding.
(ii) Borrower fails to apply all insurance proceeds and
condemnation proceeds as required by the Security Instrument.
However, Borrower will not be personally liable for any
failure described in this subsection (ii) if Borrower is
unable to apply insurance or condemnation proceeds as required
by the Security Instrument because of a valid order issued in
a bankruptcy, receivership, or similar judicial proceeding.
(iii) Borrower fails to comply with Section 14(g) or (h) of the
Security Instrument relating to the delivery of books and
records, statements, schedules and reports.
(iv) Borrower fails to pay when due in accordance with the terms of
the Security Instrument the amount of any item below marked
"Deferred"; provided however, that if no item is marked
"Deferred", this Section 9(c)(iv) shall be of no force or
effect.
[Deferred] Hazard Insurance premiums or other insurance
premiums,
[Deferred] Taxes,
[Deferred] water and sewer charges (that could become a lien
on the Mortgaged Property),
[ N/A ] ground rents,
[Deferred] assessments or other charges (that could become a
lien on the Mortgaged Property)
(d) In addition to the Base Recourse, Borrower shall be personally liable to
Lender for:
(i) the performance of all of Borrower's obligations under Section
18 of the Security Instrument (relating to environmental
matters);
(ii) the costs of any audit under Section 14(g) of the Security
Instrument; and
(iii) any costs and expenses incurred by Lender in connection with
the collection of any amount for which Borrower is personally
liable under this Section 9, including Attorneys' Fees and
Costs and the costs of conducting any independent audit of
Borrower's books and records to determine the amount for which
Borrower has personal liability.
(e) All payments made by Borrower with respect to the Indebtedness
and all amounts received by Lender from the enforcement of its
rights under the Security Instrument and the other Loan
Documents shall be applied first to the portion of the
Indebtedness for which Borrower has no personal liability.
(f) Notwithstanding the Base Recourse, Borrower shall become
personally liable to Lender for the repayment of all of the
Indebtedness upon the occurrence of any of the following
Events of Default:
(i) Borrower's ownership of any property or operation of any
business not permitted by Section 33 of the Security
Instrument;
(ii) a Transfer (including, but not limited to, a lien or
encumbrance) that is an Event of Default under Section 21 of
the Security Instrument, other than a Transfer consisting
solely of the involuntary removal or involuntary withdrawal of
a general partner in a limited partnership or a manager in a
limited liability company; or
(iii) fraud or written material misrepresentation by Borrower or any
officer, director, partner, member or employee of Borrower in
connection with the application for or creation of the
Indebtedness or any request for any action or consent by
Lender.
(g) To the extent that Borrower has personal liability under this
Section 9, Lender may exercise its rights against Borrower
personally without regard to whether Lender has exercised any
rights against the Mortgaged Property or any other security,
or pursued any rights against any guarantor, or pursued any
other rights available to Lender under this Note, the Security
Instrument, any other Loan Document or applicable law. To the
fullest extent permitted by applicable law, in any action to
enforce Borrower's personal liability under this Section 9,
Borrower waives any right to set off the value of the
Mortgaged Property against such personal liability.
10. Voluntary and Involuntary Prepayments.
(a) Any receipt by Lender of principal due under this Note prior
to the Maturity Date, other than principal required to be paid
in monthly installments pursuant to Section 3, constitutes a
prepayment of principal under this Note. Without limiting the
foregoing, any application by Lender, prior to the Maturity
Date, of any proceeds of collateral or other security to the
repayment of any portion of the unpaid principal balance of
this Note constitutes a prepayment under this Note.
(b) Borrower may voluntarily prepay all of the unpaid principal
balance of this Note on a Business Day designated as the date
for such prepayment in a Notice from Borrower to Lender given
at least 30 days prior to the date of such prepayment. Unless
otherwise expressly provided in the Loan Documents, Borrower
may not voluntarily prepay less than all of the unpaid
principal balance of this Note.
(c) Borrower acknowledges that Lender has agreed that principal
may be prepaid other than on the last calendar day of a month
only because, for the purposes of the accrual of interest, any
prepayment received by Lender on any day other than the last
calendar day of the month shall be deemed to have been
received on the last calendar day of the month in which the
prepayment occurs.
(d) In order to voluntarily prepay all or any part of the
principal of this Note, Borrower must also pay to Lender,
together with the amount of principal being prepaid, (i) all
accrued and unpaid interest due under this Note, plus (ii) all
other sums due to Lender at the time of such prepayment, plus
(iii) any prepayment premium calculated pursuant to Section
10(e).
(e) Except as provided in Section 10(f), a prepayment premium
shall be due and payable by Borrower in connection with any
prepayment of principal under this Note during the Prepayment
Premium Period. The prepayment premium shall be whichever is
the greater of subsections (A) and (B) below:
(A) 1.0% of the amount of principal being prepaid; or
(B) the product obtained by multiplying:
(1) the amount of principal being prepaid or accelerated,
by
(2) the excess (if any) of the Monthly Note Rate over
the Assumed Reinvestment Rate,
by
(3) the Present Value Factor.
For purposes of subsection (B), the following definitions
shall apply:
Monthly Note Rate: one-twelfth (1/12) of the Fixed
Interest Rate, expressed as a decimal calculated to five
digits.
Prepayment Date: in the case of a voluntary
prepayment, the date on which the prepayment is made; in
the case of the application by Lender of collateral or
security to a portion of the principal balance, the date of
such application.
Assumed Reinvestment Rate: one-twelfth (1/12) of the
yield rate, as of the date 5 Business Days before the
Prepayment Date, on the Treasury Security, as reported in The
Wall Street Journal, expressed as a decimal calculated to five
digits. In the event that no yield is published on the
applicable date for the Treasury Security, Lender, in its
discretion, shall select the non-callable Treasury Security
maturing in the same year as the Treasury Security with the
lowest yield published in The Wall Street Journal as of the
applicable date. If the publication of such yield rates in The
Wall Street Journal is discontinued for any reason, Lender
shall select a security with a comparable rate and term to the
Treasury Security. The selection of an alternate security
pursuant to this Section shall be made in Lender's discretion.
Present Value Factor: the factor that discounts to
present value the costs resulting to Lender from the
difference in interest rates during the months remaining in
the Yield Maintenance Period, using the Assumed Reinvestment
Rate as the discount rate, with monthly compounding, expressed
numerically as follows:
{1-{1/1+ARR}}N/ARR
n = number of months or partial months remaining in
Yield Maintenance Period
ARR = Assumed Reinvestment Rate
(f) Notwithstanding any other provision of this Section 10, no prepayment
premium shall be payable with respect to (i) any prepayment made during the
Window Period, or (ii) any prepayment occurring as a result of the application
of any insurance proceeds or condemnation award under the Security Instrument.
(g) Unless Lender agrees otherwise in writing, a permitted or required
prepayment of less than the unpaid principal balance of this Note shall not
extend or postpone the due date of any subsequent monthly installments or change
the amount of such installments.
(h) Borrower recognizes that any prepayment of any of the unpaid principal
balance of this Note, whether voluntary or involuntary or resulting from an
Event of Default by Borrower, will result in Lender's incurring loss, including
reinvestment loss, additional expense and frustration or impairment of Lender's
ability to meet its commitments to third parties. Borrower agrees to pay to
Lender upon demand damages for the detriment caused by any prepayment, and
agrees that it is extremely difficult and impractical to ascertain the extent of
such damages. Borrower therefore acknowledges and agrees that the formula for
calculating prepayment premiums set forth in this Note represents a reasonable
estimate of the damages Lender will incur because of a prepayment. Borrower
further acknowledges that any lockout and the prepayment premium provisions of
this Note are a material part of the consideration for the Loan, and that the
terms of this Note are in other respects more favorable to Borrower as a result
of the Borrower's voluntary agreement to the lockout and prepayment premium
provisions.
11. Costs and Expenses. To the fullest extent allowed by applicable law,
Borrower shall pay all expenses and costs, including Attorneys' Fees and Costs
incurred by Lender as a result of any default under this Note or in connection
with efforts to collect any amount due under this Note, or to enforce the
provisions of any of the other Loan Documents, including those incurred in
post-judgment collection efforts and in any bankruptcy proceeding (including any
action for relief from the automatic stay of any bankruptcy proceeding) or
judicial or non-judicial foreclosure proceeding.
12. Forbearance. Any forbearance by Lender in exercising any right or remedy
under this Note, the Security Instrument, or any other Loan Document or
otherwise afforded by applicable law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy. The acceptance by Lender of any
payment after the due date of such payment, or in an amount which is less than
the required payment, shall not be a waiver of Lender's right to require prompt
payment when due of all other payments or to exercise any right or remedy with
respect to any failure to make prompt payment. Enforcement by Lender of any
security for Borrower's obligations under this Note shall not constitute an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.
13. Waivers. Borrower and all endorsers and guarantors of this Note and all
other third party obligors waive presentment, demand, notice of dishonor,
protest, notice of acceleration, notice of intent to demand or accelerate
payment or maturity, presentment for payment, notice of nonpayment, grace, and
diligence in collecting the Indebtedness.
14. Loan Charges. Neither this Note nor any of the other Loan Documents shall be
construed to create a contract for the use, forbearance or detention of money
requiring payment of interest at a rate greater than the Maximum Interest Rate.
If any applicable law limiting the amount of interest or other charges permitted
to be collected from Borrower in connection with the Loan is interpreted so that
any interest or other charge provided for in any Loan Document, whether
considered separately or together with other charges provided for in any other
Loan Document, violates that law, and Borrower is entitled to the benefit of
that law, that interest or charge is hereby reduced to the extent necessary to
eliminate that violation. The amounts, if any, previously paid to Lender in
excess of the permitted amounts shall be applied by Lender to reduce the unpaid
principal balance of this Note. For the purpose of determining whether any
applicable law limiting the amount of interest or other charges permitted to be
collected from Borrower has been violated, all Indebtedness that constitutes
interest, as well as all other charges made in connection with the Indebtedness
that constitute interest, shall be deemed to be allocated and spread ratably
over the stated term of this Note. Unless otherwise required by applicable law,
such allocation and spreading shall be effected in such a manner that the rate
of interest so computed is uniform throughout the stated term of this Note.
15. Commercial Purpose. Borrower represents that Borrower is incurring the
Indebtedness solely for the purpose of carrying on a business or commercial
enterprise, and not for personal, family, household, or agricultural purposes.
16. Counting of Days. Except where otherwise specifically provided, any
reference in this Note to a period of "days" means calendar days, not Business
Days.
17. Governing Law. This Note shall be governed by the law of the Property
Jurisdiction.
18. Captions. The captions of the Sections of this Note are for convenience only
and shall be disregarded in construing this Note.
19. Notices; Written Modifications.
(a) All Notices, demands and other communications required or permitted to be
given pursuant to this Note shall be given in accordance with Section 31 of the
Security Instrument.
(b) Any modification or amendment to this Note shall be ineffective unless in
writing signed by the party sought to be charged with such modification or
amendment; provided, however, that in the event of a Transfer under the terms of
the Security Instrument that requires Lender's consent, any or some or all of
the Modifications to Multifamily Note set forth in Exhibit A to this Note may be
modified or rendered void by Lender at Lender's option, by Notice to Borrower
and the transferee, as a condition of Lender's consent.
20. Consent to Jurisdiction and Venue. Borrower agrees that any controversy
arising under or in relation to this Note may be litigated in the Property
Jurisdiction. The state and federal courts and authorities with jurisdiction in
the Property Jurisdiction shall have jurisdiction over all controversies that
shall arise under or in relation to this Note. Borrower irrevocably consents to
service, jurisdiction, and venue of such courts for any such litigation and
waives any other venue to which it might be entitled by virtue of domicile,
habitual residence or otherwise. However, nothing in this Note is intended to
limit any right that Lender may have to bring any suit, action or proceeding
relating to matters arising under this Note in any court of any other
jurisdiction.
21. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES NOT TO ELECT A
TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE
RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT
BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
22. State-Specific Provisions. N/A.
ATTACHED EXHIBIT. The Exhibit noted below, if marked with an "X" in the
space provided, is attached to this Note:
-----
X Exhibit A Modifications to Multifamily Note
-----
IN WITNESS WHEREOF, and in consideration of the Lender's agreement to lend
Borrower the principal amount set forth above, Borrower has signed and delivered
this Note under seal or has caused this Note to be signed and delivered under
seal by its duly authorized representative.
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NATIONAL PROPERTY INVESTORS 5, a California
limited partnership doing business in
Florida as National Property Investors 5
Ltd.
By: NPI Equity Investments, Inc., a
Florida corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and
Treasurer
22-2385051
Borrower's Social Security/Employer ID
Number
Exhibit 10.27
Old FHLMC Loan No. 002682516
New FHLMC Loan No. 002722682
Willow Park Apartments
AMENDED AND RESTATED GUARANTY
(Recast Transaction)
THIS AMENDED AND RESTATED GUARANTY is made effective as of the 1st day of
December, 2005, by AIMCO PROPERTIES, L.P., a Delaware limited partnership
("Guarantor"), for the benefit of the FEDERAL HOME LOAN MORTGAGE CORPORATION
("Lender").
RECITALS
A. National Property Investors 5, a California limited partnership doing
business in Florida as National Property Investors 5 Ltd. ("Borrower") is the
maker of a Multifamily Note (the "Note"), dated as of December 15, 1999, in the
original principal amount of Four Million and 00/100 Dollars ($4,000,000.00),
evidencing a loan (the "Loan") to Borrower in such amount from GMAC Commercial
Mortgage Corporation, a California corporation (the "Original Lender").
B. The Note is secured by that certain Multifamily Mortgage, Assignment of
Rents, and Security Agreement dated as of December 15, 1999, from Borrower, as
mortgagor, to Original Lender, as mortgagee, recorded in the land records of
Seminole County, Florida (the "Land Records") in Deed Book 3776, Page 0826 (the
"Instrument"). The Instrument encumbers, among other things, Borrower's interest
in the land described in Exhibit A to the Instrument.
C. Pursuant to a Limited Guaranty dated as of December 15, 1999 (the
"Guaranty"), Guarantor guaranteed some or all of Borrower's obligations under
the terms of the Note and the Instrument.
D. Original Lender (i) endorsed the Note to Lender and (ii) assigned the
Instrument to Lender by Assignment of Security Instrument dated as of December
15, 1999 and recorded in the Land Records in Assignment Book 3776, Page 0897.
E. Borrower has confirmed to Lender that Borrower has no defenses or offsets of
any kind against any of the indebtedness due under the Note.
F. By Amended and Restated Multifamily Note and Amended and Restated Multifamily
Mortgage, Assignment of Rents and Security Agreement dated effective as of the
date of this Amended and Restated Guaranty, Borrower and Lender have amended and
restated the Note and the Instrument so as to, among other things, (i) reflect a
current unpaid principal balance of Three Million Three Hundred Eighty-Seven
Thousand Eighty-Eight and 00/100 Dollars ($3,387,088.00), (ii) amend the terms
of payment, and (iii) change the Maturity Date of the Note from January 1, 2020
to an Initial Maturity Date of December 1, 2015. Borrower and Lender now also
desire to amend and restate the Guaranty as provided below.
NOW, THEREFORE, in consideration of Lender's agreement to modify the Note
and Instrument, and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree that the Guaranty is
amended and restated in its entirety in the form attached hereto and made a part
hereof.
FHLMC Loan No. 002722682
GUARANTY
MULTISTATE
(for use in all Property jurisdictions except California)
REVISION DATE 05/06/2005
This Guaranty ("Guaranty") is entered into to be effective as of December
1, 2005, by the undersigned person(s) (the "Guarantor" jointly and severally if
more than one), for the benefit of the FEDERAL HOME LOAN MORTGAGE CORPORATION
(the "Lender").
RECITALS
A. National Property Investors 5, a California limited partnership doing
business in Florida as National Property Investors 5 Ltd. (the "Borrower") has
requested that Lender make a loan to Borrower in the amount of $3,387,088.00
(the "Loan"). The Loan will be evidenced by a Multifamily Note from Borrower to
Lender dated effective as of the effective date of this Guaranty (the "Note").
The Note will be secured by a Multifamily Mortgage, Deed of Trust, or Deed to
Secure Debt dated effective as of the effective date of the Note (the "Security
Instrument"), encumbering the Mortgaged Property described in the Security
Instrument.
B. As a condition to making the Loan to Borrower, Lender requires that the
Guarantor execute this Guaranty.
NOW, THEREFORE, in order to induce Lender to make the Loan to Borrower,
and in consideration thereof, Guarantor agrees as follows:
1. Defined Terms. "Indebtedness," "Loan Documents" and
"Property Jurisdiction" and other capitalized terms used
but not defined in this Guaranty shall have the meanings
assigned to them in the Security Instrument.
2. Scope of Guaranty.
(a) Guarantor hereby absolutely, unconditionally and
irrevocably guarantees to Lender:
(i) the full and prompt payment when due, whether at the
Maturity Date or earlier, by reason of acceleration or
otherwise, and at all times thereafter, of each of the
following:
(A) a portion of the Indebtedness equal to zero percent (0%)
of the original principal balance of the Note (the "Base
Guaranty"); and
(B) in addition to the Base Guaranty, all other amounts for
which Borrower is personally liable under Sections 9(c),
9(d) and 9(f) of the Note; and
(C) all costs and expenses, including reasonable Attorneys'
Fees and Costs incurred by Lender in enforcing its
rights under this Guaranty; and
(ii) the full and prompt payment and performance when due of
all of Borrower's obligations under Section 18 of the
Security Instrument.
(b) If the Base Guaranty stated in Section 2(a)(i)(A) is 100 percent of the
original principal balance of the Note, then (i) the Base Guaranty shall
mean and include the full and complete guaranty of payment of the entire
Indebtedness and the performance of all Borrower's obligations under the
Loan Documents; and (ii) for so long as the Base Guaranty remains in effect
(there being no limit to the duration of the Base Guaranty unless otherwise
expressly provided in this Guaranty), the obligations guaranteed pursuant
to Sections 2(a)(i)(B), 2(a)(i)(C) and Section 3 shall be part of, and not
in addition to or in limitation of, the Base Guaranty. If the Base Guaranty
stated in Section 2(a)(i)(A) is less than 100 percent of the original
principal balance of the Note, then this Section 2(b) shall be completely
inapplicable and shall be treated as if not a part of this Guaranty.
(c) If Guarantor is not liable for the entire Indebtedness,
then all payments made by Borrower with respect to the
Indebtedness and all amounts received by Lender from the
enforcement of its rights under the Security Instrument
and the other Loan Documents (except this Guaranty)
shall be applied first to the portion of the
Indebtedness for which neither Borrower nor Guarantor
has personal liability.
3. Additional Guaranty Relating to Bankruptcy.
(a) Notwithstanding any limitation on liability provided for
elsewhere in this Guaranty, Guarantor hereby absolutely,
unconditionally and irrevocably guarantees to Lender the
full and prompt payment when due, whether at the
Maturity Date or earlier, by reason of acceleration or
otherwise, and at all times thereafter, the entire
Indebtedness, in the event that:
(i) Borrower voluntarily files for bankruptcy protection
under the United States Bankruptcy Code; or
(ii) Borrower voluntarily becomes subject to any
reorganization, receivership, insolvency proceeding, or
other similar proceeding pursuant to any other federal
or state law affecting debtor and creditor rights; or
(iii) an order of relief is entered against Borrower pursuant
to the United States Bankruptcy Code or other federal or
state law affecting debtor and creditor rights in any
involuntary bankruptcy proceeding initiated or joined in
by a "Related Party."
(b) For purposes of this Section, the term "Related Party"
means:
(i) Borrower or Guarantor; and
(ii) any person or entity that holds, directly or indirectly,
any ownership interest in or right to manage Borrower or
Guarantor, including without limitation, any
shareholder, member or partner of Borrower or Guarantor;
and
(iii) any person or entity in which any ownership interest
(direct or indirect) or right to manage is held by
Borrower, Guarantor or any partner, shareholder or
member of, or any other person or entity holding an
interest in, Borrower or Guarantor; and
(iv) any other creditor of Borrower that is related by blood,
marriage or adoption to Borrower, Guarantor or any
partner, shareholder or member of, or any other person
or entity holding an interest in, Borrower or Guarantor.
(c) If Borrower, Guarantor or any Related Party has
solicited creditors to initiate or participate in any
proceeding referred to in this Section, regardless of
whether any of the creditors solicited actually
initiates or participates in the proceeding, then such
proceeding shall be considered as having been initiated
by a Related Party.
4. Guarantor's Obligations Survive Foreclosure. The
obligations of Guarantor under this Guaranty shall
survive any foreclosure proceeding, any foreclosure
sale, any delivery of any deed in lieu of foreclosure,
and any release of record of the Security Instrument,
and, in addition, the obligations of Guarantor relating
to Borrower's obligations under Section 18 of the
Security Instrument shall survive any repayment or
discharge of the Indebtedness. Notwithstanding the
foregoing, if Lender has never been a
mortgagee-in-possession of or held title to the
Mortgaged Property, Guarantor shall have no obligation
under this Guaranty relating to Borrower's obligations
under Section 18 of the Security Instrument after the
date of the release of record of the lien of the
Security Instrument as a result of the payment in full
of the Indebtedness on the Maturity Date or by voluntary
prepayment in full.
5. Guaranty of Payment and Performance. Guarantor's
obligations under this Guaranty constitute an
unconditional guaranty of payment and performance and
not merely a guaranty of collection.
6. No Demand by Lender Necessary; Waivers by Guarantor. The
obligations of Guarantor under this Guaranty shall be
performed without demand by Lender and shall be
unconditional regardless of the genuineness, validity,
regularity or enforceability of the Note, the Security
Instrument, or any other Loan Document, and without
regard to any other circumstance which might otherwise
constitute a legal or equitable discharge of a surety, a
guarantor, a borrower or a mortgagor. Guarantor hereby
waives, to the fullest extent permitted by applicable
law:
(a) the benefit of all principles or provisions of law,
statutory or otherwise, which are or might be in
conflict with the terms of this Guaranty and agrees that
Guarantor's obligations shall not be affected by any
circumstances, whether or not referred to in this
Guaranty, which might otherwise constitute a legal or
equitable discharge of a surety, a guarantor, a borrower
or a mortgagor;
(b) the benefits of any right of discharge under any and all
statutes or other laws relating to a guarantor, a
surety, a borrower or a mortgagor, and any other rights
of a surety, a guarantor, a borrower or a mortgagor
under such statutes or laws;
(c) diligence in collecting the Indebtedness, presentment,
demand for payment, protest, all notices with respect to
the Note and this Guaranty which may be required by
statute, rule of law or otherwise to preserve Lender's
rights against Guarantor under this Guaranty, including,
but not limited to, notice of acceptance, notice of any
amendment of the Loan Documents, notice of the
occurrence of any default or Event of Default, notice of
intent to accelerate, notice of acceleration, notice of
dishonor, notice of foreclosure, notice of protest, and
notice of the incurring by Borrower of any obligation or
indebtedness;
(d) all rights to cause a marshalling of the Borrower's
assets or to require Lender to:
(i) proceed against Borrower or any other guarantor of
Borrower's payment or performance under the Loan
Documents (an "Other Guarantor");
(ii) proceed against any general partner of Borrower or any
Other Guarantor if Borrower or any Other Guarantor is a
partnership;
(iii) proceed against or exhaust any collateral held by Lender
to secure the repayment of the Indebtedness; or
(iv) pursue any other remedy it may now or hereafter have
against Borrower, or, if Borrower is a partnership, any
general partner of Borrower;
(e) any right to object to the timing, manner or conduct of
Lender's enforcement of its rights under any of the Loan
Documents; and
(f) any right to revoke this Guaranty as to any future
advances by Lender under the terms of the Security
Instrument to protect Lender's interest in the Mortgaged
Property.
7. Modification of Loan Documents. At any time or from time
to time and any number of times, without notice to
Guarantor and without affecting the liability of
Guarantor, Lender may:
(a) extend the time for payment of the principal of or
interest on the Indebtedness or renew the Indebtedness
in whole or in part;
(b) extend the time for Borrower's performance of or
compliance with any covenant or agreement contained in
the Note, the Security Instrument or any other Loan
Document, whether presently existing or hereinafter
entered into, or waive such performance or compliance;
(c) accelerate the Maturity Date of the Indebtedness as
provided in the Note, the Security Instrument, or any
other Loan Document;
(d) with Borrower, modify or amend the Note, the Security
Instrument, or any other Loan Document in any respect,
including, but not limited to, an increase in the
principal amount; and/or
(e) modify, exchange, surrender or otherwise deal with any
security for the Indebtedness or accept additional
security that is pledged or mortgaged for the
Indebtedness.
8. Joint and Several Liability. The obligations of
Guarantor (and each party named as a Guarantor in this
Guaranty) and any Other Guarantor shall be joint and
several. Lender, in its sole and absolute discretion,
may:
(a) bring suit against Guarantor, or any one or more of the
parties named as a Guarantor in this Guaranty, and any
Other Guarantor, jointly and severally, or against any
one or more of them;
(b) compromise or settle with Guarantor, any one or more of
the parties named as a Guarantor in this Guaranty, or
any Other Guarantor, for such consideration as Lender
may deem proper;
(c) release one or more of the parties named as a Guarantor
in this Guaranty, or any Other Guarantor, from
liability; and
(d) otherwise deal with Guarantor and any Other Guarantor,
or any one or more of them, in any manner, and no such
action shall impair the rights of Lender to collect from
Guarantor any amount guaranteed by Guarantor under this
Guaranty.
9. Subordination of Borrower's Indebtedness to Guarantor.
Any indebtedness of Borrower held by Guarantor now or in
the future is and shall be subordinated to the
Indebtedness and Guarantor shall collect, enforce and
receive any such indebtedness of Borrower as trustee for
Lender, but without reducing or affecting in any manner
the liability of Guarantor under the other provisions of
this Guaranty.
10. Waiver of Subrogation. Guarantor shall have no right of,
and hereby waives any claim for, subrogation or
reimbursement against Borrower or any general partner of
Borrower by reason of any payment by Guarantor under
this Guaranty, whether such right or claim arises at law
or in equity or under any contract or statute, until the
Indebtedness has been paid in full and there has expired
the maximum possible period thereafter during which any
payment made by Borrower to Lender with respect to the
Indebtedness could be deemed a preference under the
United States Bankruptcy Code.
11. Preference. If any payment by Borrower is held to
constitute a preference under any applicable bankruptcy,
insolvency, or similar laws, or if for any other reason
Lender is required to refund any sums to Borrower, such
refund shall not constitute a release of any liability
of Guarantor under this Guaranty. It is the intention of
Lender and Guarantor that Guarantor's obligations under
this Guaranty shall not be discharged except by
Guarantor's performance of such obligations and then
only to the extent of such performance.
12. Financial Statements. Guarantor, from time to time upon
written request by Lender, shall deliver to Lender such
financial statements as Lender may reasonably require.
13. Assignment. Lender may assign its rights under this
Guaranty in whole or in part and upon any such
assignment, all the terms and provisions of this
Guaranty shall inure to the benefit of such assignee to
the extent so assigned. The terms used to designate any
of the parties herein shall be deemed to include the
heirs, legal representatives, successors and assigns of
such parties, and the term "Lender" shall also include
any lawful owner, holder or pledgee of the Note.
Reference in this Guaranty to "person" or "persons"
shall be deemed to include individuals and entities.
14. Complete and Final Agreement. This Guaranty and the
other Loan Documents represent the final agreement
between the parties and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral
agreements. There are no unwritten oral agreements
between the parties. All prior or contemporaneous
agreements, understandings, representations, and
statements, oral or written, are merged into this
Guaranty and the other Loan Documents. Guarantor
acknowledges that Guarantor has received a copy of the
Note and all other Loan Documents. Neither this Guaranty
nor any of its provisions may be waived, modified,
amended, discharged, or terminated except by a writing
signed by the party against which the enforcement of the
waiver, modification, amendment, discharge, or
termination is sought, and then only to the extent set
forth in that writing.
15. Governing Law. This Guaranty shall be governed by and
enforced in accordance with the laws of the Property
Jurisdiction, without giving effect to the choice of law
principles of the Property Jurisdiction that would
require the application of the laws of a jurisdiction
other than the Property Jurisdiction.
16. Jurisdiction; Venue. Guarantor agrees that any
controversy arising under or in relation to this
Guaranty may be litigated in the Property Jurisdiction,
and that the state and federal courts and authorities
with jurisdiction in the Property Jurisdiction shall
have jurisdiction over all controversies which shall
arise under or in relation to this Guaranty. Guarantor
irrevocably consents to service, jurisdiction and venue
of such courts for any such litigation and waives any
other venue to which it might be entitled by virtue of
domicile, habitual residence or otherwise. However,
nothing herein is intended to limit Lender's right to
bring any suit, action or proceeding relating to matters
arising under this Guaranty against Guarantor or any of
Guarantor's assets in any court of any other
jurisdiction.
17. Guarantor's Interest in Borrower. Guarantor represents
to Lender that Guarantor has a direct or indirect
ownership or other financial interest in Borrower and/or
will otherwise derive a material financial benefit from
the making of the Loan.
18. STATE-SPECIFIC PROVISIONS:
1. Section 2(a)(ii) of this Guaranty is modified to read as follows:
the full and prompt payment and performance when due of all of
Borrower's obligations under Sections 18 and 47 of the Security
Instrument; and
2. Guarantor further waives all defenses based on suretyship or impairment
of collateral (Guarantor and Lender intending this waiver to have the
effects described in Section 48 of the Restatement (Third) of the Law of
Suretyship and Guaranty).
3. Guarantor hereby acknowledges that it has read and understands all of
the provisions of this Guaranty, including the waiver of jury trial set
forth in Section 20 below, and has been advised by legal counsel as
Guarantor has deemed to be necessary or appropriate.
19. Residence; Community Property Provision.
(a) Guarantor represents and warrants that his/her state of
residence is N/A.
(b) Guarantor warrants and represents that s/he is: N/A. [______]
single [______] married
20. GUARANTOR AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH
RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN
THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B)
WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT
ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE
BENEFIT OF COMPETENT LEGAL COUNSEL.
ATTACHED EXHIBIT. The following Exhibit is attached to this Guaranty:
------
X Exhibit A Modifications to Guaranty
------
IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under seal
or has caused this Guaranty to be signed and delivered under seal by its duly
authorized representative.
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AIMCO PROPERTIES, L.P., a Delaware
limited partnership
By: AIMCO-GP, Inc., a Delaware
corporation, its general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President and
Treasurer