RIDER TO MULTIFAMILY INSTRUMENT
THIS RIDER TO MULTIFAMILY INSTRUMENT (the "Rider") is made as of the 1st
day of August 1996, and is incorporated into and shall be deemed to amend and
supplement the Multifamily Mortgage, as of the same date (the "Instrument"),
given by the undersigned OTC APARTMENTS LIMITED PARTNERSHIP a Florida limited
partnership (the "Borrower"), for the benefit of FEDERAL NATIONAL MORTGAGE
ASSOCIATION, a federally-chartered corporation, c/o GMAC Commercial Mortgage
Corporation, 650 Dresher Road, Horsham, PA 19044 [INSERT ADDRESS OF LENDER],
and its successors, assigns and transferees (the "Lender"), covering the
property described in the Instrument and defined therein as the "Property,"
located at:
1878 East Nine Mile Road, Pensacola, Escambia County, Florida
- --------------------------------------------------------------------------------
[Property Address]
The Property is located entirely within the State of Florida [INSERT NAME
OF STATE IN WHICH THE PROPERTY IS LOCATED] (the "Property Jurisdiction").
The term "Loan Documents" when used in this Rider shall mean, collectively,
the following documents: (i) the Instrument, as modified by this Rider, the
Special Rider and any other riders to the Instrument given by Borrower to Lender
and covering the Property; (ii) the Reimbursement Agreement (as defined in the
Instrument ); (iii) any other documents or agreements as shall be required to
evidence or secure the obligations of the Borrower or otherwise arising under,
related to, or made in connection with, the Reimbursement Agreement, as such
documents may be amended from time to time, including, but not limited to, any
Collateral Agreements (as defined below) or O&M Agreement (as defined below)
and that certain Cash Management, Security, Pledge and Assignment Agreement
between Borrower and Lender dated as of July 1, 1996, and (iv) the other
Security Instruments (as defined in the Special Rider).
The covenants and agreements of this Rider, and the covenants and
agreements of any other riders to the Instrument given by Borrower to Lender
and covering the Property (including without limitation the Special Rider),
shall be incorporated into and shall amend and supplement the covenants and
agreements of the Instrument as if this Rider and the other riders were a
part of the Instrument and all references to the Instrument in the Loan
Documents shall mean the Instrument as so amended and supplemented.
ADDITIONAL COVENANTS. In addition to the covenants and agreements made in
the Instrument, Borrower and Lender further covenant and agree as follows:
A. FUNDS FOR TAXES, INSURANCE AND OTHER CHARGES
Uniform Covenant 2 of the Instrument ("Funds for Taxes, Insurance and Other
Charges") is amended to change the title to "Funds for Taxes, Insurance and
Other Charges; Collateral Agreements." Existing Uniform Covenant 2 is amended to
become Uniform Covenant 2A. The following new Uniform Covenant 2B is added at
the end of Uniform Covenant 2A:
2B REPLACEMENT RESERVE AGREEMENT, COMPLETION/REPAIR AGREEMENT, ACHIEVEMENT
AGREEMENT AND OTHER COLLATERAL AGREEMENTS
(a) REPLACEMENT RESERVE AGREEMENT
Borrower shall deposit with Lender the amounts required by the Replacement
Reserve and Security Agreement (the "Replacement Reserve Agreement") between
Borrower and Lender (if any), dated the date hereof at the times required by the
Replacement Reserve Agreement, and shall perform all other obligations as and
when required pursuant to the Replacement Reserve Agreement.
(b) COMPLETION/REPAIR AGREEMENT
Borrower shall deposit with Lender the amount required by the
Completion/Repair and Security Agreement (the "Completion/Repair Agreement")
between Borrower and Lender (if any), dated the date hereof, at the time
required by the Completion/Repair Agreement, and shall perform all other
obligations as and when required pursuant to the Completion/Repair Agreement.
(d) COLLATERAL AGREEMENTS
As used herein, the term "Collateral Agreement" shall mean any of the
Replacement Reserve Agreement, the Completion/Repair Agreement, the Achievement
Agreement and any similar agreement which has been entered into between Borrower
and Lender in connection with the Reimbursement Agreement.
B. APPLICATION OF PAYMENTS
Uniform Covenant 3 of the Instrument ("Application of Payments") is amended
to add the following sentence at the end thereof:
Notwithstanding the preceding sentence, (i) Lender shall be permitted to
apply any partial payment received from Borrower in any manner determined by
Lender and in any order of priority of application as determined by Lender,
in Lender's sole discretion, and (ii) upon any breach of any covenant or
agreement of Borrower in the Instrument, the Reimbursement Agreement or any
other Loan Document, Lender shall be permitted to apply any funds held
pursuant to
RIDER TO MULTIFAMILY INSTRUMENT WITH SEPARATE EXCEPTIONS TO NON-RECOURSE
GUARANTY
- - Fannie Mae Uniform Instrument Form 4058 6/93 (PAGE 1 OF 8 PAGES)
any Collateral Agreement, any O&M Agreement or Cash Management Agreement in
any manner which is permitted pursuant to such Collateral Agreement, any O&M
Agreement or Cash Management Agreement and in any order of priority of
application as determined by Lender, in Lender's sole discretion.
C. HAZARD INSURANCE; RESTORATION OF PROPERTY
Uniform Covenant 5 of the Instrument ("Hazard Insurance") is amended to add
the following sentence at the end thereof:
Lender shall not exercise Lender's option to apply insurance proceeds to
the payment of the sums secured by the Instrument if all of the following
conditions are met: (i) Borrower is not in breach or default of any provision of
the Instrument, the Note or any other Loan Document; (ii) Lender determines that
there will be sufficient funds to restore and repair the Property to a condition
approved by Lender; (iii) Lender determines that the rental income of the
Property, after restoration and repair of the Property to a condition approved
by Lender, will be sufficient to meet all operating costs and other expenses,
payments for reserves and loan repayment obligations relating to the Property;
(iv) Lender determines that restoration and repair of the Property to a
condition approved by Lender will be completed prior to the earlier of either
(1) the maturity date of the Note or (2) within one year of the date of the loss
or casualty to the Property: and (v) Lender determines that upon restoration and
repair of the Property, there will not have been a material diminution in the
value of the Property since the date immediately preceding the casualty.
D. ENVIRONMENTAL HAZARDS PROVISION
In addition to Borrower's covenants and agreements under Uniform Covenant 6
of the Instrument ("Preservation and Maintenance of Property; Leaseholds"),
Borrower further covenants and agrees that Borrower shall not:
(a) cause or permit the presence, use, generation, manufacture,
production, processing, installation, release, discharge, storage
(including aboveground and underground storage tanks for petroleum or
petroleum products), treatment, handling, or disposal of any Hazardous
Materials (as defined below) (excluding the safe and lawful use and
storage of quantities of Hazardous Materials customarily used in the
operation and maintenance of comparable multifamily properties or for
normal household purposes) on or under the Property, or in any way
affecting the Property or its value, or which may form the basis for
any present or future demand, claim or liability relating to
contamination, exposure, cleanup or other remediation of the Property
or,
(b) cause or permit the transportation to, from or across the Property
of any Hazardous Material (excluding the safe and lawful use and
storage of quantities of Hazardous Materials customarily used in the
operation and maintenance of comparable multifamily properties or for
normal household purposes); or
(c) permit, cause or exacerbate any occurrence or condition on the
Property that is or may be in violation of Hazardous Materials Law (as
defined below).
(The matters described in (a), (b) and (c) above are referred to collectively
below as "Prohibited Activities or Conditions.")
Except with respect to any matters which have been disclosed in writing by
Borrower to Lender prior to the date of the Instrument, or matters which have
been disclosed in an environmental hazard assessment report of the Property
received by Lender prior to the date of the Instrument, Borrower represents and
warrants that it has not at any time caused or permitted any Prohibited
Activities or Conditions and to the best of its knowledge, no Prohibited
Activities or Conditions exist or have existed on or under the Property.
Borrower shall take all appropriate steps (including but not limited to
appropriate lease provisions) to prevent its employees, agents, and contractors,
and all tenants and other occupants on the Property, from causing, permitting or
exacerbating any Prohibited Activities or Conditions. Borrower shall not lease
or allow the sublease of all or any portion of the Property for non-residential
use to any tenant or subtenant that, in the ordinary course of its business,
would cause, permit or exacerbate any Prohibited Activities or Conditions, and
all non-residential leases and subleases shall provide that tenants and
sub-tenants shall not cause, permit or exacerbate any Prohibited Activities or
Conditions.
If any Prohibited Activities or Conditions exist on the Property, or if
Lender shall otherwise require Borrower to do so in writing in accordance
with reasonable commercial practices Borrower shall comply in a timely manner
with, and cause all employees, agents, and contractors of Borrower and any
other persons present on the Property to so comply with, (1) any program of
operations and maintenance ("O&M Program") relating to the Property that is
acceptable to Lender with respect to one or more Hazardous Materials (which
O&M Program may be set forth in an agreement of Borrower (an "O&M
Agreement")) and all other obligations set forth in any O&M Agreement, or any
other remedial action requested by Lender and (2) all Hazardous Materials
Laws. Any O&M Program shall be performed by qualified personnel. All costs
and expenses of the O&M Program shall be paid by Borrower, including without
limitation Lender's fees and costs incurred in connection with the monitoring
and review of the O&M Program and Borrower's performance thereunder. If
Borrower fails to timely commence or diligently continue and complete the O&M
Program and comply with any O&M Agreement, then Lender may, at Lender's
option, declare all of the sums secured by the Instrument to be immediately
due and payable, and Lender may invoke any remedies permitted by paragraph 27
of the Instrument Without limiting the foregoing, Borrower shall take prompt
remedial action in the event of the discovery of any Prohibited Activities or
Conditions and obtain Lender's prior written approval of such remedial action.
Borrower represents that Borrower has not received, and has no knowledge of
the issuance of, any claim, citation or notice of any pending or threatened
suits, proceedings, orders, or governmental inquiries or opinions involving the
Property that allege the violation of any Hazardous Materials Law ("Governmental
Actions").
Borrower shall promptly notify Lender in writing of: (i) the occurrence of
any Prohibited Activity or Condition on the Property; (ii) Borrower's actual
knowledge of the presence on or under any adjoining property of any Hazardous
Materials which can reasonably be expected to have a material adverse impact on
the Property or the value of the Property, discovery of any occurrence or
condition on the Property or any adjoining real property that could cause any
restrictions on the ownership, occupancy, transferability or use of the Property
under Hazardous Materials
Form 4058 6/93 (PAGE 2 OF 8 PAGES)
Law. Borrower shall cooperate with any governmental inquiry, and shall comply
with any governmental or judicial order which arises from any alleged Prohibited
Activities or Conditions; (iii) any Governmental Action; and (iv) any claim made
or threatened in writing by any third party against Borrower, Lender, or the
Property relating to loss or injury resulting from any Hazardous Materials. Any
such notice by Borrower shall not relieve Borrower of, or result in a waiver of
any obligation of Borrower under this paragraph D.
Borrower shall pay promptly the costs of any environmental audits, studies
or investigations (including but not limited to advice of legal counsel) and the
removal of any Hazardous Materials from the Property required by Lender as a
condition of its consent to any sale or transfer under paragraph 19 of the
Instrument of all or any part of the Property or any transfer occurring upon a
foreclosure or a deed in lieu of foreclosure or any interest therein, or
required by Lender following a reasonable determination by Lender that there may
be Prohibited Activities or Conditions on or under the Property. Borrower
authorizes Lender and its employees, agents and contractors to enter onto the
Property for the purpose of conducting such environmental audits, studies and
investigations. Any such costs and expenses incurred by Lender (including but
not limited to fees and expenses of attorneys and consultants, whether incurred
in connection with any judicial or administrative process or otherwise) which
Borrower fails to pay promptly shall become immediately due and payable and
shall become additional indebtedness secured by the Instrument pursuant to
Uniform Covenant 8 of the Instrument.
Borrower shall hold harmless, defend and indemnify Lender and its officers,
directors, trustees, employees, and agents from and against all proceedings
(including but not limited to Government Actions), claims, damages, penalties,
costs and expenses (including without limitation fees and expenses of attorneys
and expert witnesses, investigatory fees, and cleanup and remediation expenses,
whether or not incurred within the context of the judicial process), arising
directly or indirectly from (i) any breach of any representation, warranty, or
obligation of Borrower contained in this paragraph D or (ii) the presence or
alleged presence of Hazardous Materials on or under the Property.
The term "Hazardous Materials," for purposes of this paragraph D, includes
petroleum and petroleum products, flammable explosives, radioactive materials
(excluding radioactive materials in smoke detectors), polychlorinated biphenyls,
lead, asbestos in any form that is or could become friable, hazardous waste,
toxic or hazardous substances or other related materials whether in the form of
a chemical, element, compound, solution, mixture or otherwise including, but not
limited to, those materials defined as "hazardous substances," "extremely
hazardous substances," "hazardous chemicals," "hazardous materials," "toxic
substances," "solid waste," "toxic chemicals," "air pollutants," "toxic
pollutants," "hazardous wastes," "extremely hazardous waste," or "restricted
hazardous waste" by Hazardous Materials Law or regulated by Hazardous Materials
Law in any manner whatsoever.
The term "Hazardous Materials Law," for the purposes of this paragraph D,
means all federal, state, and local laws, ordinances and regulations and
standards, rules, policies and other binding governmental requirements and any
court judgments applicable to Borrower or to the Property relating to industrial
hygiene or to environmental or unsafe conditions or to human health including,
but not limited to, those relating to the generation, manufacture, storage,
handling, transportation, disposal, release, emission or discharge of Hazardous
Materials, those in connection with the construction, fuel supply, power
generation and transmission, waste disposal or any other operations or processes
relating to the Property, and those relating to the atmosphere, soil, surface
and ground water, wetlands, stream sediments and vegetation on, under, in or
about the Property.
The representations, warranties, covenants, agreements, indemnities and
undertakings of Borrower contained in this paragraph D shall be in addition to
any and all other obligations and liabilities that Borrower may have to Lender
under applicable law.
The representations, warranties, covenants, agreements, indemnities and
undertakings of Borrower contained in this paragraph D shall continue and
survive notwithstanding the satisfaction, discharge, release, assignment,
termination, subordination or cancellation of the Instrument or the payment in
full of the principal of and interest on the Note and all other sums payable
under the Loan Documents or the foreclosure of the Instrument or the tender or
delivery of a deed in lieu of foreclosure or the release of any portion of the
Property from the lien of the Instrument, except with respect to any Prohibited
Activities or Conditions or violation of any of the Hazardous Materials Laws
which first commences and occurs after the satisfaction, discharge, release,
assignment, termination or cancellation of the Instrument following the payment
in full of the principal of and interest on the Note and all other sums payable
under the Loan Documents or which first commences or occurs after the actual
dispossession from the entire Property of the Borrower and all entities which
control, are controlled by, or are under common control with the Borrower (each
of the foregoing persons or entities is hereinafter referred to as a
"Responsible Party") following foreclosure of the Instrument or acquisition of
the Property by a deed in lieu of foreclosure. Nothing in the foregoing sentence
shall relieve the Borrower from any liability with respect to any Prohibited
Activities or Conditions or violation of Hazardous Materials Laws where such
Prohibited Activities or Conditions or violation of Hazardous Materials Laws
commences or occurs, or is present as a result of, any act or omission by any
Responsible Party or by any person or entity acting on behalf of a Responsible
Party.
Form 4058 6/93 (PAGE 3 OF 8 PAGES)
F. TRANSFERS OF THE PROPERTY OR SIGNIFICANT INTERESTS IN BORROWER; TRANSFER
FEES
SEE SPECIAL RIDER ATTACHED HERETO
Form 4058 6/93 (PAGE 4 OF 8 PAGES)
G. NOTICE
Form 4058 6/93 (PAGE 5 OF 8 PAGES)
H. GOVERNING LAW
In addition to the governing law provision of Uniform Covenant 22 of the
Instrument ("Uniform Multifamily Instrument; Governing Law; Severability"), the
Borrower and Lender covenant and agree as follows:
(a) CHOICE OF LAW
The validity of the Instrument and the other Loan Documents, each of
their terms and provisions, and the rights and obligations of Borrower under
the Instrument and the other Loan Documents, shall be governed by,
interpreted, construed, and enforced pursuant to and in accordance with the
laws of the Property Jurisdiction.
(b) CONSENT TO JURISDICTION
Borrower consents to the exclusive jurisdiction of any and all state and
federal courts with jurisdiction in the Property Jurisdiction over Borrower
and the Borrower's assets. Borrower agrees that such assets shall be used
first to satisfy all claims of creditors organized or domiciled in the United
States of America ("USA") and that no assets of the Borrower in the USA shall
be considered part of any foreign bankruptcy estate.
Borrower agrees that any controversy arising under or in relation to the
Note, the Instrument or any of the other Loan Documents shall be litigated
exclusively in the Property Jurisdiction. The state and federal courts and
authorities with jurisdiction in the Property Jurisdiction shall have
exclusive jurisdiction over all controversies which may arise under or in
relation to the Note, and any security for the debt evidenced by the Note,
including without limitation those controversies relation to the execution,
interpretation, breach, enforcement, or compliance with the Note, the
Instrument, or any other issue arising under, related to, or in connection
with any of the Loan Documents. Borrower irrevocably consents to service,
jurisdiction, and venue of such courts for any litigation arising from the
Note, the Instrument or any other Loan Documents, and waives any other venue
to which it might be entitled by virtue of domicile, habitual residence or
otherwise.
I. ACCELERATION; REMEDIES
Covenant 27 of the Instrument ("Acceleration; Remedies") is amended to add
the following at the end of the first paragraph:
Upon the breach of any covenant or agreement by Borrower in the Instrument,
(including, but not limited to, the covenants to pay when due sums secured by
the Instrument) or any other Loan Document, Lender, at Lender's option may, in
addition to any remedies specified in this covenant, invoke any other remedies
provided in any Collateral Agreement.
If Borrower is in default under any promissory note (other than the Note)
evidencing a loan (the "Subordinate Loan") secured by a security instrument
(other than the Instrument) covering all or any portion of the Property (the
"Subordinate Instrument") or under any Subordinate Instrument or other loan
document executed in connection with the Subordinate Loan, (and whether or not
the Borrower has obtained the prior approval of Lender to the placement of such
Subordinate Instrument on the Property) which default remains uncured after any
applicable cure period, Borrower also then will be in default under the Note and
the Instrument. In that event, the entire unpaid principal balance of the Note,
accrued interest and any other sums due Lender secured by the Instrument then
will become due and payable, at Lender's option. If Lender exercises this option
to accelerate, Lender will do so in accordance with the provisions of the Note
and the Instrument, and the Lender may invoke any and all remedies permitted by
applicable law, the Note, the Instrument, or any of the other Loan Documents.
J. SINGLE ASSET BORROWER
SEE SPECIAL RIDER ATTACHED HERETO.
K. NON-RECOURSE LIABILITY
Form 4058 6/93 (PAGE 6 OF 8 PAGES)
The liability of Borrower and any general partner of Borrower (if Borrower
is a partnership) shall be limited to the same extent as provided in Section
3.11 of the Reimbursement Agreement.
M. WAIVER OF JURY TRIAL
Borrower (i) covenants and agrees not to elect a trial by jury with
respect to any issue arising under any of the Loan Documents triable by a
jury and (ii) waives any right to trial by jury to the extent that any such
right shall now or hereafter exist. This waiver of right to trial by jury is
separately given, knowingly and voluntarily with the benefit of competent
legal counsel by the Borrower, and this waiver is intended to encompass
individually each instance and each issue as to which the right to a jury
trial would otherwise accrue. Further, Borrower hereby certifies that no
representative or agent of the Lender (including, but not limited to, the
Lender's counsel) has represented, expressly or otherwise, to Borrower or
that Lender will not seek to enforce the provisions of this paragraph M.
Form 4058 6/93 (PAGE 7 OF 8 PAGES)
BY SIGNING BELOW, Borrower accepts and agrees to the covenants and
agreements contained in this Rider.
BORROWER:
Signed and Delivered in the OTC APARTMENTS LIMITED PARTNERSHIP, a
Presence of: Florida limited partnership
/s/ S. Phillips
- ---------------------------- By: AIMCO/OTC QRS, INC., a Delaware
corporation, its sole General Partner
/s/ Donna R. Gallup
- ---------------------------- By: /s/ H. Alcock
------------------------------
Harry Alcock
Vice President
BORROWER'S ADDRESS
1873 Bellaire Street, 17th Floor
Denver, Colorado 80222
Form 4058 6/93 (PAGE 8 OF 8 PAGES)