EXHIBIT 4.13
PREPARED OUT OF STATE AND LOAN NO. 6 103 651
UPON RECORDATION RETURN
TO:
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attn: Christina K. Braisted
ASSIGNMENT OF LEASES AND RENTS
THIS ASSIGNMENT OF LEASES AND RENTS (this "ASSIGNMENT") is made as of
September 27, 1999, by CRIT-NC, LLC, a Virginia limited liability company having
its principal office and place of business at 306 East Main Street, Richmond,
Virginia 23219 ("BORROWER"), to THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a
New Jersey corporation, having an office at Two Ravinia Drive, Suite 1400,
Atlanta, Georgia 30346 ("LENDER").
RECITALS:
A. Borrower is the sole owner of (a) the premises located in Wake County,
North Carolina, more particularly described in Exhibit A attached hereto and
incorporated herein ("PROPERTY") and (b) the landlord's interest under the
leases described in Exhibit B attached hereto and incorporated herein ("SPECIFIC
LEASES");
B. Lender has made a loan to Borrower in the principal sum of Twenty-Two
Million Nine Hundred Fifty Thousand and No/100 Dollars ($22,950,000.00) ("LOAN")
evidenced by that certain Promissory Note dated as of the date of this
Assignment ("NOTE") and secured by, among other things, that certain Deed of
Trust and Security Agreement executed by Borrower in favor of Lender dated as of
the date of this Assignment and to be recorded in the real estate records of
Mecklenburg County, North Carolina ("INSTRUMENT") (capitalized terms used
without definition shall have the meanings ascribed to them in the Instrument)
and the Documents; and
C. Lender was willing to make the Loan to Borrower only if Borrower
assigned the Leases and Rents to Lender in the manner provided below to secure
payment of the Obligations.
IN CONSIDERATION of the principal sum of the Note and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower agrees as follows:
1. Assignment. Borrower irrevocably, absolutely and unconditionally
assigns, transfers, and sets over to Lender all of the right, title, interest,
and estates that Borrower may now or later have in, to and under (a) the Leases
(which term shall also include the Specific Leases and all guaranties thereof);
(b) the Rents; (c) all proceeds from the cancellation, surrender, sale or other
disposition of the Leases; (d) the right to collect and receive all the Rents;
and (e) the right to
enforce and exercise, whether at law or in equity or by any other means, all
terms and conditions of the Leases ("LEASE PROVISIONS"). This assignment is
intended by Borrower and Lender to constitute a present, absolute assignment and
not a collateral assignment for additional security only. upon full payment and
satisfaction of the Obligations and written request by Borrower, Lender shall
transfer, set over, and assign to Borrower all right, title, and interest of
Lender in, to, and under the Leases and the Rents.
2. Borrower's License. Until an Event of Default occurs, Borrower shall
have a revocable license ("LICENSE") from Lender to exercise all rights extended
to the landlord under the Leases. Borrower shall hold the Rents, or an amount
sufficient to discharge all current sums due on the Obligations, in trust for
use in the payment of the Obligations. Upon an Event of Default, whether or not
legal proceedings have commenced and without regard to waste, adequacy of
security for the Obligations or the solvency of Borrower, the license shall
automatically terminate without notice by Lender (any such notice being
expressly waived by Borrower). Upon such termination, Borrower shall deliver to
Lender within seven (7) days (a) all Rents (including prepaid Rents) held by
Borrower, (b) all unapplied security or other deposits paid pursuant to the
Leases, and (c) all previously paid charges for services, facilities or
escalations, to the extent, in each of the foregoing instances, allocable to any
period after the Event of Default. Borrower agrees and stipulates that upon
execution of this Assignment, Borrower's only interest in the Leases or Rents is
as a licensee revocable upon an Event of Default.
3. Lender as Creditor of Tenant. Upon execution of this Assignment,
Lender, and not Borrower, shall be the creditor of any Tenant in respect of
assignments for the benefit of creditors and bankruptcy, reorganization,
insolvency, dissolution or receivership proceedings affecting any such Tenant;
provided, however, that Borrower shall be the party obligated to make timely
filings of claims in such proceedings or to otherwise pursue creditor's rights
therein. Notwithstanding the foregoing, Lender shall have the right, but not the
obligation, to file such claims instead of Borrower and if Lender does file a
claim, Borrower agrees that Lender (a) is entitled to all distributions on such
claim to the exclusion of Borrower and (b) has the exclusive right to vote such
claim and otherwise to participate in the administration of the estate in
connection with such claim. Lender shall have the option to apply any monies
received by it as such creditor to the Obligations in the order set forth in the
Documents. If a petition is filed under the Bankruptcy Code by or against
Borrower, and Borrower, as landlord under any Lease, decides to reject such
Lease pursuant to Section 365(a) of the Bankruptcy Code, then Borrower shall
give Lender at least ten (10) days' prior written notice of the date when
Borrower shall apply to the bankruptcy court for authority to reject the Lease.
Lender may, but shall not be obligated to, send Borrower within such ten-day
period a written notice stating that (a) Lender demands that Borrower assume and
assign the Lease to Lender pursuant to Section 365 of the Bankruptcy Code and
(b) Lender covenants to cure or provide adequate assurance of future performance
under the Lease. If Lender sends such notice, Borrower shall not reject the
Lease provided Lender complies with clause (b) of the preceding sentence.
4. Notice to Tenant of an Event of Default. upon demand and notice of an
Event of Default by Borrower sent by Lender to Tenants, Borrower irrevocably
authorizes each Tenant to (a) pay all Rents to Lender and (b) rely upon any such
notice from Lender without any obligation to inquire as to the actual existence
of the default, notwithstanding any claim of Borrower to the
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contrary. Borrower shall have no claim against any Tenant for any Rents paid by
Tenant to Lender.
5. Indemnification of Lender. Borrower hereby agrees to indemnify and hold
Lender harmless from any and all Losses that Lender may incur under the Leases
or by reason of this Assignment, except for Losses incurred as a direct result
of Lender's willful misconduct or gross negligence. Nothing in this Assignment
shall be construed to bind Lender to the performance of any Lease provisions or
to otherwise impose any liability on Lender including, without limitation, any
liability under covenants of quiet enjoyment in the Leases in the event that any
Tenant shall have been joined as party defendant in any action to foreclose the
Instrument and shall have been barred thereby of all right, title, interest, and
equity of redemption in the premises. This Assignment imposes no liability upon
Lender for the operation and maintenance of the Property or for carrying out the
terms of any Lease before Lender has entered and taken actual possession and
complete control of all operations of the Property. Any Losses incurred by
Lender, by reason of actual entry and taking possession under any Lease or this
Assignment or in the defense of any claims shall, at Lender's request, be
reimbursed by Borrower. Such reimbursement shall include interest at the Default
Rate and Costs. Lender may, upon entry and taking of possession, collect the
Rents and apply them to reimbursement for any such items.
6. Representations and Warranties. Borrower represents and warrants that
(a) Borrower is the absolute owner of the lessor's interest in the Leases, (b)
Borrower has the right, power and authority to assign, transfer, and set over
all of its right, title and interest in, to and under the Leases and Rents and
no other person (other than the respective Tenants) has any right, title or
interest therein, (c) the Leases are valid and in full force and effect and have
not been materially modified, amended or terminated, nor have any of the terms
and conditions of the Leases been waived, except as stated in the Leases, (d)
there are no outstanding assignments or pledges of the Leases or Rents, (d)
there are no outstanding leasing commissions due under the Leases for the
initial term or for any extensions, renewals or expansions, (f) except as
disclosed to Lender in writing, there are no existing defaults or, to any
material extent, any state of facts which, with the giving of notice and/or
passage of time, would constitute a default under the Leases by either party,
(g) no Tenant has any defense, set-off or counterclaim against Borrower to any
material extent, (h) each Tenant is in possession and paying Rent and other
charges as provided in its Lease, (i) no Rents have been or will later be
anticipated, discounted, released, waived, compromised or otherwise discharged,
except in the ordinary course of Borrower's exercise of prudent management
decisions, so long as such decisions are customary and reasonable for apartment
owners, or as may be expressly permitted by the Lease, (j) except as specified
in the Leases and shown on the rent roll delivered to Lender in connection with
the funding of the Loan (the "RENT ROLL"), there are no (i) unextinguished rent
concessions, abatements or other inducements relating to the Leases or (ii)
options or other rights to acquire any interest in the Property in favor of any
Tenant, and (k) the Rent Roll discloses all currently existing Leases and is
true, complete and accurate in all respects.
7. New Leases, Amendments and Terminations. Borrower may (a) terminate any
Lease that is in default, (b) enter into new, bona-fide, arm's length Leases (or
renew existing Leases) provided each Lease satisfies the minimum leasing
requirements in Exhibit C attached hereto and incorporated herein and is on
Borrower's standard form lease (approved by Lender) with no
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modifications that increase the obligations of the landlord, and (c) take such
actions as are customary and reasonable for apartment owners. Upon Lender's
request and at Borrower's expense, Borrower shall (i) promptly deliver to Lender
copies of all notices of default Borrower has sent to any Tenant, (ii) enforce
the Leases and all remedies available to Borrower upon any Tenant's default,
(iii) deliver to Lender copies of all papers served in connection with any such
enforcement proceedings, and (iv) consult with Lender, its agents and attorneys
with respect to the conduct thereof. Borrower shall not enter into any
settlement of any such proceeding without Lender's prior written consent except
in the ordinary course of business, and so long as such actions are reasonable
and customary for apartment owners.
8. Covenants. Borrower shall not, except with the prior written consent
of Lender in each instance, (a) sell, assign, pledge, mortgage or otherwise
transfer or encumber (except hereby) any of the Leases, Rents or any right,
title or interest of Borrower therein; (b) except in the ordinary course of
business, and so long as such actions are reasonable and customary for apartment
owners, accept prepayments of any Rents for a period of more than one (1) month
in advance of the due dates thereof; (c) in any manner intentionally or
materially impair the value of the Property or the benefits to Lender of this
Assignment; (d) except as otherwise permitted in this Assignment, waive, excuse,
condone, discount, set off, compromise, or in any manner release or discharge
any Tenant from any of its obligations under the Leases except in the ordinary
course of business, and so long as such actions are reasonable and customary for
apartment owners; (e) except as otherwise permitted herein, enter into any
settlement of any action or proceeding arising under, or in any manner connected
with, the Leases or with the obligations of the landlord or the Tenants
thereunder except in the ordinary course of business, and so long as such
actions are reasonable and customary for apartment owners; or (f) modify, cancel
or terminate any guaranties under any Lease except in the ordinary course of
business, and so long as such actions are reasonable and customary for apartment
owners. Borrower shall, at its sole cost and expense, duly and timely keep,
observe, perform, comply with and discharge all of the material obligations of
the landlord under the Leases, or cause the foregoing to be done, and Borrower
shall not take any actions that would, either presently or with the passage of
time, cause a default by Borrower under any of the Leases.
9. No Merger. Each Lease shall remain in full force and effect,
notwithstanding any merger of Borrower's and Tenant's interest thereunder.
10. Documents Incorporated. The terms and conditions of the Documents are
incorporated into this Assignment as if fully set forth in this Assignment.
11. WAIVER OF TRIAL BY JURY. BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM FILED BY EITHER PARTY, WHETHER IN CONTRACT, TORT OR OTHERWISE,
RELATING DIRECTLY OR INDIRECTLY TO THE LOAN, THE DOCUMENTS, OR ANY ACTS OR
OMISSIONS OF LENDER IN CONNECTION THEREWITH.
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IN WITNESS WHEREOF, Borrower has duly executed this Assignment as of
the date first above written.
BORROWER:
CRIT-NC, LLC, a Virginia limited
liability company (SEAL)
By: CORNERSTONE REALTY
INCOME TRUST, INC., a
Virginia corporation, Managing
Member
Attest: /s/ David S. McKenney By: /s/ Stanley J. Olander, Jr.
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Name: David S. McKenney Name: Stanley J. Olander, Jr.
-------------------- --------------------------
Title: Assistant Secretary Title: Chief Financial Officer
-------------------- --------------------------
[CORPORATE SEAL]
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ACKNOWLEDGMENT
STATE OF VIRGINIA
CITY OF RICHMOND
I, a Notary Public of the County and State aforesaid, certify that
David S. McKenney personally came before me this day and acknowledged that (s)he
is an Assistant Secretary of Cornerstone Realty Income Trust, a Virginia
corporation, which is the Managing Member of CRIT-NC, LLC, a Virginia limited
liability company, and that by authority duly given and as the act of the
company, the foregoing instrument was signed in its name by its duly authorized
Chief Financial Officer as the act and deed of the corporation on behalf of the
limited liability company.
Witness my hand and official stamp or seal this 27th day of September,
1999.
/s/ Jacquelyn B. Owens
-----------------------------------
Notary Public
My Commission Expires: 6/30/03
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[NOTARY SEAL]
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EXHIBIT A
LEGAL DESCRIPTION
(St. Regis)
BEGINNING AT AN EXISTING IRON PIPE LOCATED IN THE EASTERN RIGHT OF WAY OF
INTERSTATE 40, SAID IRON BEING S 41(DEGREE) 50' 23" E 1,731.98' FROM NCGS
MONUMENT "CARY MALL", SAID MONUMENT HAVING NC GRID COORDINATES N-739,227.5142
E-2,074,232.4091; THENCE FROM THE POINT OF BEGINNING ALONG THE SOUTHERN PROPERTY
LINE OF WESTERN BLVD. L.L.C. AS DESCRIBED IN D.B. 6927 PG. 115, N 61(DEGREE) 36'
07" E 707.54' TO AN EXISTING IRON PIPE IN THE WESTERN RIGHT OF WAY OF FARMGATE
ROAD (60' PUBLIC RIGHT OF WAY)): THENCE ALONG THE RIGHT OF WAY OF FARMGATE ROAD
ON A CURVE TO THE LEFT HAVING A RADIUS OF 420.95', AN ARC LENGTH OF 425.68', AND
A CHORD BEARING AND DISTANCE OF S 44(DEGREE) 17' 42" E 407.78' TO AN EXISTING
IRON PIPE; THENCE LEAVING SAID RIGHT OF WAY AND ALONG THE NORTHWESTERN PROPERTY
LINE OF SUNPOINTE CONDOMINIUMS AS DESCRIBED IN D.B. 3567 PG. 521, S42(DEGREE)
32' 32" W 112.09' TO AN EXISTING IRON PIPE; THENCE ALONG SAID LINE S 27(DEGREE)
27' 46" W 173.53' TO AN EXISTING IRON PIPE; THENCE ALONG THE NORTHWESTERN
PROPERTY LINE OF SUNPOINTE CONDOMINIUMS AS DESCRIBED IN D.B. 3652 PG. 430, S
33(DEGREE) 12' 51" W 128.02' TO AN EXISTING IRON PIPE; THENCE ALONG SAID LINE S
33(DEGREE) 24' 01" W 148.67' TO AN EXISTING IRON PIPE, THENCE S 20(DEGREE) 54'
44" W 295.85' TO AN EXISTING IRON PIPE IN THE EASTERN RIGHT OF WAY OF INTERSTATE
40, THENCE ALONG SAID RIGHT OF WAY ON A CURVE TO THE RIGHT HAVING A RADIUS OF
7,439.44', AN ARC LENGTH OF 560.61', AND A CHORD BEARING AND DISTANCE OF N
38(DEGREE) 31' 09" W 560.48' TO A RIGHT OF WAY MONUMENT; THENCE N 35(DEGREE) 40'
06" W 187.40' TO A RIGHT OF WAY MONUMENT; THENCE N 18(DEGREE) 02' 21" W 114.36'
TO THE POINT OF BEGINNING CONTAINING 10.358 ACRES.
Said property is described according to plat of ALTA/ACSM Land Title Survey by
M.M. Weeks Land Surveying, dated October 27, 1997 and last revised August 30,
1999, which plat is incorporated by this reference for purposes of this
description.
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(Remington Place)
BEGINNING AT AN EXISTING IRON PIPE LOCATED IN THE WESTERN RIGHT OF WAY
LINE OF LAKE DAM ROAD, SAID IRON PIPE ALSO BEING LOCATED N 22(DEGREE)
29' 44" E, 417.21 FEET FROM NCGS "LAKE DAM" (Y=728550.112 AND
X=2086847.21); RUNS THENCE FROM SAID POINT OF BEGINNING ALONG AND WITH
THE NORTHERN RIGHT OF WAY LINE OF THE I-440 BELTLINE RAMP A COURSE OF
S81(DEGREE) 31' 29" W FOR A DISTANCE OF 70.40 FEET TO A NCDOT RIGHT OF
WAY MONUMENT; THENCE CONTINUING WITH THE LINE OF SAID RAMP A COURSE OF
N 77(DEGREE) 24' 07" W FOR A DISTANCE OF 481.83 FEET TO AN EXISTING
IRON PIPE; THENCE DEPARTING SAID RAMP AND WITH THE LINE OF THE CITY OF
RALEIGH (LAKE JOHNSON CITY PARK) THE FOLLOWING EIGHT (8) COURSES
1) A COURSE OF N 17(DEGREE)22' 32" W FOR A DISTANCE OF 141.99 FEET TO
AN EXISTING IRON PIPE;
2) A COURSE OF N 8(DEGREE)37' 31" E FOR A DISTANCE OF 140.05 FEET TO AN
EXISTING IRON PIPE;
3) A COURSE OF N 35(DEGREE)37' 04" E FOR A DISTANCE OF 124.95 FEET TO
AN EXISTING IRON PIPE;
4) A COURSE OF N 87(DEGREE)33' 56" E FOR A DISTANCE OF 333.93 FEET TO
AN EXISTING IRON PIPE;
5) A COURSE OF N 88(DEGREE)17' 57" E FOR A DISTANCE OF 19.86 FEET TO AN
EXISTING IRON PIPE;
6) A COURSE OF N 24(DEGREE)27' 08" E FOR A DISTANCE OF 256.35 FEET TO
AN EXISTING IRON PIPE;
7) A COURSE OF N 33(DEGREE)00' 07" E FOR A DISTANCE OF 503.99 FEET TO
AN EXISTING IRON PIPE;
8) A COURSE OF N 24(DEGREE) 08' 03" E FOR A DISTANCE OF 445.63 FEET TO
AN EXISTING IRON PIPE IN THE WESTERN RIGHT OF WAY LINE OF LAKE DAM ROAD
(PUBLIC, 60' R/W); THENCE A COURSE OF N 24(DEGREE) 25' 18" E FOR A
DISTANCE OF 14.05 FEET TO AN EXISTING IRON PIPE; THENCE A COURSE OF N
85(DEGREE) 56' 56" E FOR A DISTANCE OF 24.08 FEET TO A PK NAIL IN THE
CENTERLINE OF SAID LAKE DAM ROAD; THENCE WITH THE CENTERLINE OF SAID
LAKE DAM ROAD THE FOLLOWING ELEVEN (11) COURSES:
1) A COURSE OF S 1(DEGREE)03' 28" E FOR A DISTANCE OF 298.38 FEET TO A
PK NAIL;
2) A COURSE OF S 0(DEGREE)51' 19" E FOR A DISTANCE OF 138.69 FEET TO A
PK NAIL;
3) A COURSE OF S 0(DEGREE)35' 42" E FOR A DISTANCE OF 95.82 FEET TO A
PK NAIL;
4) A COURSE OF S 0(DEGREE)39' 03" W FOR A DISTANCE OF 104.60 FEET TO A
PK NAIL;
5) A COURSE OF S 6(DEGREE)33' 35" W FOR A DISTANCE OF 102.72 FEET TO A
PK NAIL;
6) A COURSE OF S 12(DEGREE)41' 16" W FOR A DISTANCE OF 98.19 FEET TO A
PK NAIL;
7) A COURSE OF S 17(DEGREE)46' 18" W FOR A DISTANCE OF 96.73 FEET TO A
PK NAIL;
8) A COURSE OF S 23(DEGREE)00' 25" W FOR A DISTANCE OF 92.71 FEET TO A
PK NAIL;
9) A COURSE OF S 27(DEGREE)40' 21" W FOR A DISTANCE OF 92.48 FEET TO A
PK NAIL;
10) A COURSE OF S 28(DEGREE)35' 34" W FOR A DISTANCE OF 126.83 FEET TO
A PK NAIL;
11) A COURSE OF S 28(DEGREE) 42' 47" W FOR A DISTANCE OF 213.50 FEET TO
A PK NAIL; THENCE A COURSE OF N 61(DEGREE) 25' 55" W FOR A DISTANCE OF
29.35 FEET TO A NCDOT RIGHT OF WAY MONUMENT; THENCE A COURSE OF N
61(DEGREE) 27' 41" W FOR A DISTANCE OF 30.08 FEET TO A NCDOT RIGHT OF
WAY MONUMENT; THENCE WITH THE WESTERN RIGHT OF WAY LINE OF LAKE DAM
ROAD (AT THIS POINT 59 FEET FROM CENTERLINE) A COURSE OF S 28(DEGREE)
34' 34" W FOR A DISTANCE OF 224.84 FEET TO AN EXISTING IRON PIPE, THE
POINT AND PLACE OF BEGINNING AND CONTAINING 14.637 ACRES, MORE OR LESS.
Said property is described according to plat of As Built Survey for Cornerstone
Realty Income Trust, Inc. prepared by Murphy Hobson Sacks, Professional Land
Surveyors, dated August 1999, which plat is incorporated by this reference for
purposes of this description.
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Exhibit B
DESCRIPTION OF LEASES
All leases, subleases, lettings and licenses of or affecting the
Property, now or hereafter in effect, and all amendments, extensions,
modifications, replacements or revenues thereof, including, but not limited to,
leases of the Property to the tenants listed on the rent roll attached to that
certain Closing Certification executed by Borrower in favor of Lender of even
date herewith.
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Exhibit C
MINIMUM LEASING REQUIREMENTS
All additional Leases and renewal Leases covering the Property shall satisfy the
following conditions:
1. Minimum (original or renewal) Term: Twelve (12) month minimum,
but with respect to the entire Portfolio securing the Loan (as
defined in the Instrument) up to thirty-five percent (35%) of
the total units at any one time may be leased to tenants for a
term of less than twelve (12) months, of which up to thirteen
percent (13%) of the total units at any one time may be leased
for original or renewal terms of less than six (6) months.
2. Rental Basis: Monthly rent with electricity and, if
applicable, gas heating and cooking separately metered to
tenants.
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