WHEN RECORDED MAIL TO
Allan R. Winn, Esq.
Ballard Spahr Andrews & Ingersoll
601 13th Street, N.W.
Suite 1000 South
Washington, D.C. 20005-3807
SPACE ABOVE THIS LINE FOR RECORDER'S USE
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MULTIFAMILY DEED OF TRUST,
ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
(Wickertree)
THIS DEED OF TRUST (herein "Instrument") is made as of the 31st day of
October 1997, among the Trustor/Grantor, AIMCO/WICKERTREE, L.P., a Delaware
limited partnership whose address is 1873 S. Bellaire Street, 17th Floor,
Denver, Colorado 80222 (herein "Borrower"), TRANSNATION TITLE INSURANCE
COMPANY, an Arizona corporation whose address is (herein
"Trustee"), and the Beneficiary, GMAC COMMERCIAL MORTGAGE CORPORATION, a
corporation organized and existing under the laws of the State of California
whose address is 650 Dresher Road, P.O. Box 1015, Horsham, PA
19044-8015 (herein "Lender").
BORROWER, in consideration of the indebtedness herein recited and the
trust herein created, irrevocably grants, conveys and assigns to Trustee, in
trust, with power of sale, the following described property located in
Phoenix, Maricopa County, State of Arizona:
See EXHIBIT "A" attached hereto and incorporated herein.
This Instrument has been amended and supplemented in certain respects as set
forth in (i) Rider to Multifamily Instrument and (ii) Supplemental Rider to
Multifamily Instrument (collectively, the "Riders"), annexed hereto and
incorporated herein by this reference. In the event of any inconsistencies
between the printed portions of this Instrument and the provisions of the
Riders, the provisions of the Riders shall control.
(Page 1 of 9 Pages)
TOGETHER with all buildings, improvements and tenements now or hereafter
erected on the property, and all heretofore or hereafter vacated alleys and
streets abutting the property, and all easements, rights, appurtenances,
rents (subject however to the assignment of rents to Lender herein),
royalties, mineral, oil and gas rights and profits, water, water rights, and
water stock appurtenant to the property, and all fixtures, machinery,
equipment, engines, boilers, incinerators, building materials, appliances and
goods of every nature whatsoever now or hereafter located in, or on, or used,
or intended to be used in connection with the property, including but not
limited to, those for the purposes of supplying or distributing heating,
cooling, electricity, gas, water, air and light; and all elevators, and
related machinery and equipment, fire prevention and extinguishing apparatus,
security and access control apparatus, plumbing, bath tubs, water heaters,
water closets, sinks, ranges, stoves, refrigerators, dishwashers, disposals,
washers, dryers, awnings, storm windows, storm doors, screens, blinds,
shades, curtains and curtain rods, mirrors, cabinets, panelling, rugs,
attached floor coverings, furniture, pictures, antennas, trees and plants,
and any and all other additional items of personal property described in
EXHIBIT "B" attached hereto and incorporated herein; all of which, including
replacements and additions thereto, shall be deemed to be and remain a part
of the real property covered by this Instrument; and all of the foregoing,
together with said property (or the leasehold estate in the event this
Instrument is on a leasehold) are herein referred to as the "Property".
TO SECURE TO LENDER (a) the repayment of the indebtedness evidenced by
Borrower's note dated as of October 31, 1997 (herein "Note") in the principal
sum of Four Million Two Hundred Thirty One Thousand Seven Hundred And No/100
Dollars, with interest thereon, with the balance of the indebtedness, if not
sooner paid, due and payable on November 1, 2017, and all renewals,
extensions and modifications thereof; (d) the payment of all other sums,
with interest thereon, advanced in accordance herewith to protect the
security of this Instrument; and (e) the performance of the covenants and
agreements of Borrower herein contained.
Borrower covenants that Borrower is lawfully seised of the estate hereby
conveyed and has the right to grant, convey and assign the Property (and, if
this Instrument is on a leasehold, that the ground lease is in full force and
effect without modification except as noted above and without default on the
part of either lessor or lessee thereunder), that the Property is
unencumbered, and that Borrower will warrant and defend generally the title
to the Property against all claims and demands, subject to any easements and
restrictions listed in a schedule of exceptions to coverage in any title
insurance policy insuring Lender's interest in the Property.
UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:
1. PAYMENT OF PRINCIPAL AND INTEREST. Borrower shall promptly pay when due
the principal of and interest on the indebtedness evidenced by the Note, any
prepayment and late charges provided in the Note and all other sums secured
by this Instrument.
2. FUNDS FOR TAXES, INSURANCE AND OTHER CHARGES. Subject to applicable law or
to a written waiver by Lender, Borrower shall pay to Lender on the day
monthly installments of principal or interest are payable under the Note (or
on another day designated in writing by Lender), until the Note is paid in
full, a sum (herein "Funds") equal to one-twelfth of (a) the yearly water and
sewer rates and taxes and assessments which may be levied on the Property,
(b) the yearly ground rents, if any, (c) the yearly premium installments for
fire and other hazard insurance, rent loss insurance and such other insurance
covering the Property as Lender may require pursuant to paragraph 5 hereof,
(d) the yearly premium installments for mortgage insurance, if any, and (e)
if this Instrument is on a leasehold, the yearly fixed rents, if any, under
the ground lease, all as reasonably estimated initially and from time to time
by Lender on the basis of assessments and bills and reasonable estimates
thereof. Any waiver by Leader of a requirement that Borrower pay such Funds
may be revoked by Lender, in Lender's sole discretion, at any time upon
notice in writing to Borrower. Lender may require Borrower to pay to Lender,
in advance, such other Funds for other taxes, charges, premiums, assessments
and impositions in connection with Borrower or the Property which Lender
shall reasonably deem necessary to protect Lender's interests (herein "Other
Impositions"). Unless otherwise provided by applicable law, Lender may
require Funds for Other Impositions to be paid by Borrower in a lump sum or
in periodic installments, at Lender's option.
The Funds shall be held in an institution(s) the deposits or accounts of
which are insured or guaranteed by a Federal or state agency (including
Lender if Lender is such an institution). Lender shall apply the Funds to pay
said rates, rents, taxes, assessments, insurance premiums and Other
Impositions so long as Borrower is not in breach of any covenant or agreement
of Borrower in this Instrument. Lender shall make no charge for so holding
and applying the Funds, analyzing said account or for verifying and compiling
said assessments and bills, unless Lender pays Borrower interest, earnings or
profits on the Funds and applicable law permits Lender to make such a charge.
Borrower and Lender may agree in writing at the time of execution of this
Instrument that interest on the Funds shall be paid to Borrower, and unless
such agreement is made or applicable law requires interest, earnings or
profits to be paid, Lender shall not be required to pay Borrower any
interest, earnings or profits on the Funds. Lender shall give to Borrower,
without charge, an annual accounting of the Funds in Lender's normal format
showing credits and debits to the Funds and the purpose for which each debit
to the Funds was made. The Funds are pledged as additional security for the
sums secured by this Instrument.
If the amount of the Funds held by Lender at the time of the annual
accounting thereof shall exceed the amount deemed necessary by Lender to
provide for the payment of water and sewer rates, taxes, assessments,
insurance premiums, rents and Other Impositions, as they fall due, such
excess shall be credited to Borrower on the next monthly installment or
installments of Funds due. If at any time the amount of the Funds held by
Lender shall be less than the amount deemed necessary by Lender to pay water
and sewer rates, taxes, assessments, insurance premiums, rents and Other
Impositions, as they fall due, Borrower shall pay to Lender any amount
necessary to make up the deficiency within thirty days after notice from
Lender to Borrower requesting payment thereof.
Upon Borrower's breach of any covenant or agreement of Borrower in this
Instrument, Lender may apply, in any amount and in any order as Lender shall
determine in Lender's sole discretion, any Funds held by Lender at the time
of application (i) to pay rates, rents, taxes, assessments, insurance
premiums and Other Impositions which are now or will hereafter become due, or
(ii) as a credit against sums secured by this Instrument. Upon payment in
full of all sums secured by this Instrument, Lender shall promptly refund to
Borrower any Funds held by Lender.
(Page 2 of 9 Pages)
4. CHARGES; LIENS. Borrower shall pay all water and sewer rates, rents,
taxes, assessments, premiums, and Other Impositions attributable to the
Property at Lender's option in the manner provided under paragraph 2 hereof
or, if not paid in such manner, by Borrower making payment, when due,
directly to the payee thereof, or in such other manner as Lender may
designate in writing. Borrower shall promptly furnish to Lender all notices
of amounts due under this paragraph 4, and in the event Borrower shall make
payment directly, Borrower shall promptly furnish to Lender receipts
evidencing such payments. Borrower shall promptly discharge any lien which
has, or may have, priority over or equality with, the lien of this
Instrument, and Borrower shall pay, when due, the claims of all persons
supplying labor or materials to or in connection with the Property. Without
Lender's prior written permission, Borrower shall not allow any lien inferior
to this Instrument to be perfected against the Property.
SEE ATTACHED SUPPLEMENTAL RIDER TO MULTIFAMILY INSTRUMENT AND RIDER TO
MULTIFAMILY INSTRUMENT
6. PRESERVATION AND MAINTENANCE OF PROPERTY; LEASEHOLDS. Borrower (a) shall
not commit waste or permit impairment or deterioration of the Property, (b)
shall not abandon the Property, (c) shall restore or repair promptly and in a
good and workmanlike manner all or any part of the Property to the equivalent
of its original condition, or such other condition as Lender may approve in
writing, in the event of any damage, injury or loss thereto, whether or not
insurance proceeds are available to cover in whole or in part the costs of
such restoration or repair, (d) shall keep the Property, including
improvements, fixtures, equipment, machinery and appliances thereon in good
repair and shall replace fixtures, equipment, machinery and appliances on the
Property when necessary to keep such items in good repair, (e) shall comply
with all laws, ordinances, regulations and requirements of any governmental
body applicable to the Property, (f) shall provide for professional
management of the Property by a residential rental property manager
satisfactory to Lender pursuant to a contract approved by Lender in writing,
unless such requirement shall be waived by Lender in writing, (g) shall
generally operate and maintain the Property in a manner to ensure maximum
rentals, and (h) shall give notice in writing to Lender of and, unless
otherwise directed in writing by Lender, appear in and defend any action or
proceeding purporting to affect the Property, the security of this Instrument
or the rights or powers of Lender. Neither Borrower nor any tenant or other
person shall remove, demolish or alter any improvement now existing or
hereafter erected on the Property or any fixture, equipment, machinery or
appliance in or on the Property except when incident to the replacement of
fixtures, equipment, machinery and appliances with items of like kind.
(Page 3 of 9 Pages)
If this Instrument is on a leasehold, Borrower (i) shall comply with the
provisions of the ground lease, (ii) shall give immediate written notice to
Lender of any default by lessor under the ground lease or of any notice
received by Borrower from such lessor of any default under the ground lease
by Borrower, (iii) shall exercise any option to renew or extend the ground
lease and give written confirmation thereof to Lender within thirty days
after such option becomes exercisable, (iv) shall give immediate written
notice to Lender of the commencement of any remedial proceedings under the
ground lease by any party thereto and, if required by Lender shall permit
Lender as Borrower's attorney-in-fact to control and act for Borrower in any
such remedial proceedings and (v) shall within thirty days after request by
Lender obtain from the lessor under the ground lease and deliver to Lender
the lessor's estoppel certificate required thereunder, if any. Borrower
hereby expressly transfers and assigns to Lender the benefit of all covenants
contained in the ground lease, whether or not such covenants run with the
land, but Lender shall have no liability with respect to such covenants nor
any other covenants contained in the ground lease.
Borrower shall not surrender the leasehold estate and interests herein
conveyed nor terminate or cancel the ground lease creating said estate and
interests, and Borrower shall not, without the express written consent of
Lender, alter or amend said ground lease. Borrower covenants and agrees that
there shall not be a merger of the ground lease, or of the leasehold estate
created thereby, with the fee estate covered by the ground lease by reason of
said leasehold estate or said fee estate, or any part of either, coming into
common ownership, unless Lender shall consent in writing to such merger; if
Borrower shall acquire such fee estate, then this Instrument shall
simultaneously and without further action be spread so as to become a lien on
such fee estate.
7. USE OF PROPERTY. Unless required by applicable law or unless Lender has
otherwise agreed in writing, Borrower shall not allow changes in the use for
which all or any part of the Property was intended at the time this
Instrument was executed. Borrower shall not initiate or acquiesce in a change
in the zoning classification of the Property without Lender's prior written
consent.
8. PROTECTION OF LENDER'S SECURITY. If Borrower fails to perform the
covenants and agreements contained in this Instrument, or if any action or
proceeding is commenced which affects the Property or title thereto or the
interest of Lender therein, including, but not limited to, eminent domain,
insolvency, code enforcement, or arrangements or proceedings involving a
bankrupt or decedent, then Lender at Lender's option may make such
appearances, disburse such sums and take such action as Lender deems
necessary, in its sole discretion, to protect Lender's interest, including,
but not limited to, (i) disbursement of attorney's fees, (ii) entry upon the
Property to make repairs, (iii) procurement of satisfactory insurance as
provided in paragraph 5 hereof, and (iv) if this Instrument is on a
leasehold, exercise of any option to renew or extend the ground lease on
behalf of Borrower and the curing of any default of Borrower in the terms and
conditions of the ground lease.
Any amounts disbursed by Leader pursuant to this paragraph 8, with
interest thereon, shall become additional indebtedness of Borrower secured by
this Instrument. Unless Borrower and Lender agree to other terms of payment,
such amounts shall be immediately due and payable and shall bear interest
from the date of disbursement at the rate stated in the Note unless
collection from Borrower of interest at such rate would be contrary to
applicable law, in which event such amounts shall bear interest at the
highest rate which may be collected from Borrower under applicable law.
Borrower hereby covenants and agrees that Lender shall be subrogated to the
lien of any mortgage or other lien discharged, in whole or in part, by the
indebtedness secured hereby. Nothing contained in this paragraph 8 shall
require Lender to incur any expense or take any action hereunder.
9. INSPECTION. Lender may make or cause to be made reasonable entries upon
and inspections of the Property.
10. BOOKS AND RECORDS.
SEE ATTACHED RIDER TO MULTIFAMILY INSTRUMENT
11. CONDEMNATION. Borrower shall promptly notify Lender of any action or
proceeding relating to any condemnation or other taking, whether direct or
indirect, of the Property, or part thereof, and Borrower shall appear in and
prosecute any such action or proceeding unless otherwise directed by Lender
in writing. Borrower authorizes Lender, at Lender's option, 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 or other taking of the Property, whether direct or indirect, and
to settle or compromise any claim in connection with such condemnation or
other taking. The proceeds of any award, payment or claim for damages, direct
or consequential, in connection with any condemnation or other taking,
whether direct or indirect, of the Property, or part thereof, or for
conveyances in lieu of condemnation, are hereby assigned to and shall be paid
to Lender subject, if this Instrument is on a leasehold, to the rights of
lessor under the ground lease.
Borrower authorizes Lender to apply such awards, payments, proceeds or
damages, after the deduction of Lender's expenses incurred in the collection
of such amounts, at Lender's option, to restoration or repair of the Property
or to payment of the sums secured by this Instrument, whether or not then
due, in the order of application set forth in paragraph 3 hereof, with the
balance, if any, to Borrower. Unless Borrower and Lender otherwise agree in
writing, any application of proceeds to principal shall not extend or
postpone the due date of the monthly installments referred to in paragraphs 1
and 2 hereof or change the amount of such installments. Borrower agrees to
execute such further evidence of assignment of any awards, proceeds, damages
or claims arising in connection with such condemnation or taking as Lender
may require.
12. BORROWER AND LIEN NOT RELEASED. From time to time, Lender may, at
Lender's option, without giving notice to or obtaining the consent of
Borrower, Borrower's successors or assigns or of any junior lienholder or
guarantors, without liability on Lender's part and notwithstanding Borrower's
breach of any covenant or agreement of Borrower in this Instrument, extend
the time for payment of said indebtedness or any part tbereof, reduce the
payments thereon, release anyone liable on any of said indebtedness, accept a
renewal note or notes therefor, modify the terms and time of payment of said
indebtedness, release from the lien of this
(Page 4 of 9 Pages)
Instrument any part of the Property, take or release other or additional
security, reconvey any part of the Property, consent to any map or plan of
the Property, consent to the granting of any easement, join in any extension
or subordination agreement, and agree in writing with Borrower to modify the
rate of interest or period of amortization of the Note or change the amount
of the monthly installments payable thereunder. Any actions taken by Lender
pursuant to the terms of this paragraph 12 shall not affect the obligation of
Borrower or Borrower's successors or assigns to pay the sums secured by this
Instrument and to observe the covenants of Borrower contained herein, shall
not affect the guaranty of any person, corporation, partnership or other
entity for payment of the indebtedness secured hereby, and shall not affect
the lien or priority of lien hereof on the Property. Borrower shall pay
Lender a reasonable service charge, together with such title insurance
premiums and attorney's fees as may be incurred at Lender's option, for any
such action if taken at Borrower's request.
13. FORBEARANCE BY LENDER NOT A WAIVER. Any forbearance by Lender in
exercising any right or remedy hereunder, or otherwise afforded by applicable
law, shall not be a waiver of or preclude the exercise of any right or
remedy. The acceptance by Lender of payment of any sum secured by this
Instrument after the due date of such payment shall not be a waiver of
Lender's right to either require prompt payment when due of all other sums so
secured or to declare a default for failure to make prompt payment. The
procurement of insurance or the payment of taxes or other liens or charges by
Lender shall not be a waiver of Lender's right to accelerate the maturity of
the indebtedness secured by this Instrument, nor shall Lender's receipt of
any awards, proceeds or damages under paragraphs 5 and 11 hereof operate to
cure or waive Borrower's default in payment of sums secured by this
Instrument.
14. ESTOPPEL CERTIFICATE. Borrower shall within ten days of a written request
from Lender furnish Lender with a written statement, duly acknowledged,
setting forth the sums secured by this Instrument and any right of set-off,
counterclaim or other defense which exists against such sums and the
obligations of this Instrument.
15. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. This Instrument is intended
to be a security agreement pursuant to the Uniform Commercial Code for any of
the items specified above as part of the Property which, under applicable
law, may be subject to a security interest pursuant to the Uniform Commercial
Code, and Borrower hereby grants Lender a security interest in said items.
Borrower agrees that Lender may file this Instrument, or a reproduction
thereof, in the real estate records or other appropriate index, as a
financing statement for any of the items specified above as part of the
Property. Any reproduction of this Instrument or of any other security
agreement or financing statement shall be sufficient as a financing
statement. In addition, Borrower agrees to execute and deliver to Lender,
upon Lender's request, any financing statements, as well as extensions,
renewals and amendments thereof, and reproductions of this Instrument in such
form as Lender may require to perfect a security interest with respect to
said items. Borrower shall pay all costs of filing such financing statements
and any extensions, renewals, amendments and releases thereof, and shall pay
all reasonable costs and expenses of any record searches for financing
statements Lender may reasonably require. Without the prior written consent
of Lender, Borrower shall not create or suffer to be created pursuant to the
Uniform Commercial Code any other security interest in said items, including
replacements and additions thereto. Upon Borrower's breach of any covenant or
agreement of Borrower contained in this Instrument, including the covenants
to pay when due all sums secured by this Instrument, Lender shall have the
remedies of a secured party under the Uniform Commercial Code and, at
Lender's option, may also invoke the remedies provided in paragraph 27 of
this Instrument as to such items. In exercising any of said remedies, Lender
may proceed against the items of real property and any items of personal
property specified above as part of the Property separately or together and
in any order whatsoever, without in any way affecting the availability of
Lender's remedies under the Uniform Commercial Code or of the remedies
provided in paragraph 27 of this Instrument.
16. LEASES OF THE PROPERTY. As used in this paragraph 16, the word "lease"
shall mean "sublease" if this Instrument is on a leasehold. Borrower shall
comply with and observe Borrower's obligations as landlord under all leases
of the Property or any part thereof. Borrower will not lease any portion of
the Property for non-residential use except with the prior written approval
of Lender. Borrower, at Lender's request, shall furnish Lender with executed
copies of all leases now existing or hereafter made of all or any part of the
Property, and all leases now or hereafter entered into will be in form and
substance subject to the approval of Lender. All leases of the Property shall
specifically provide that such leases are subordinate to this Instrument;
that the tenant attorns to Lender, such attornment to be effective upon
Lender's acquisition of title to the Property; that the tenant agrees to
execute such further evidences of attornment as Lender may from time to time
request; that the attornment of the tenant shall not be terminated by
foreclosure; and that Lender may, at Lender's option, accept or reject such
attornments. Borrower shall not, without Lender's written consent, execute,
modify, surrender or terminate, either orally or in writing, any lease now
existing or hereafter made of all or any part of the Property providing for a
term of three years or more, permit an assignment or sublease of such a lease
without Lender's written consent, or request or consent to the subordination
of any lease of all or any part of the Property to any lien subordinate to
this Instrument. If Borrower becomes aware that any tenant proposes to do, or
is doing, any act or thing which may give rise to any right of set-off against
rent, Borrower shall (i) take such steps as shall be reasonably calculated to
prevent the accrual of any right to a set-off against rent, (ii) notify Lender
thereof and of the amount of said set-offs, and (iii) within ten days after
such accrual, reimburse the tenant who shall have acquired such right to
set-off or take such other steps as shall effectively discharge such set-off
and as shall assure that rents thereafter due shall continue to be payable
without set-off or deduction.
Upon Lender's request, Borrower shall assign to Lender, by written
instrument satisfactory to Lender, all leases now existing or hereafter made
of all or any part of the Property and all security deposits made by tenants
in connection with such leases of the Property. Upon assignment by Borrower
to Lender of any leases of the Property, Lender shall have all of the rights
and powers possessed by Borrower prior to such assignment and Lender shall
have the right to modify, extrend or terminate such existing leases and to
execute new leases, in Lender's sole discretion.
17. REMEDIES CUMULATIVE. Each remedy provided in this Instrument is distinct
and cumulative to all other rights or remedies under this Instrument or
afforded by law or equity, and may be exercised concurrently, independently,
or successively, in any order whatsoever.
18. ACCELERATION IN CASE OF BORROWER'S INSOLVENCY. If Borrower shall
voluntarily file a petition under the Federal Bankruptcy Act, as such Act may
from time to time be amended, or under any similar or successor Federal
statute relating to bankruptcy, insolvency, arrangements or reorganizations,
or under any state bankruptcy or insolvency act, or file an answer in an
involuntary proceeding admitting insolvency or inability to pay debts, or if
Borrower shall fail to obtain a vacation or stay of involuntary proceedings
(Page 5 of 9 Pages)
brought for the reorganization, dissolution or liquidation of Borrower, or if
Borrower shall be adjudged a bankrupt, or if a trustee or receiver shall be
appointed for Borrower or Borrower's property, or if the Property shall
become subject to the jurisdiction of a Federal bankruptcy court or similar
state court, or if Borrower shall make an assignment for the benefit of
Borrower's creditors, of if there is an attachment, execution or other
judicial seizure of any portion of Borrower's assets and such seizure is not
discharged within ten days, then Lender may, at Lender's option, declare all
of the sums secured by this Instrument to be immediately due and payable
without prior notice to Borrower, and Lender may invoke any remedies
permitted by paragraph 27 of this Instrument. Any attorney's fees and other
expenses incurred by Lender in connection with Borrower's bankruptcy or any
of the other aforesaid events shall be additional indebtedness of Borrower
secured by this Instrument pursuant to paragraph 8 hereof.
19. SEE ATTACHED RIDER TO MULTIFAMILY INSTRUMENT
20. SEE ATTACHED RIDER TO MULTIFAMILY INSTRUMENT
21. SUCCESSORS AND ASSIGNS BOUND; JOINT AND SEVERAL LIABILITY; AGENTS;
CAPTIONS. The covenants and agreements herein contained shall bind, and the
rights hereunder shall inure to, the respective successors and assigns of
Lender and Borrower, subject to the provisions of paragraph 19 hereof. All
covenants and agreements of Borrower shall be joint and several. In
exercising any rights hereunder or taking any actions provided for herein,
Lender may act through its employees, agents or independent contractors as
authorized by Lender. The captions and headings of the paragraphs of this
Instrument are for convenience only and are not to be used to interpret or
define the provisions hereof.
22. UNIFORM MULTIFAMILY INSTRUMENT; GOVERNING LAW; SEVERABILITY. This form of
multifamily instrument combines uniform covenants for national use and
non-uniform covenants with limited variations by jurisdiction to constitute a
uniform security instrument covering real property and related fixtures and
personal property. This Instrument shall be governed by the law of the
jurisdiction in which the Property is located. In the event that any
provision of this Instrument or the Note conflicts with applicable law, such
conflict shall not affect other provisions of this Instrument or the Note
which can be given effect without the conflicting provisions, and to this end
the provisions of this Instrument and the Note are declared to be severable.
In the event that 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 this Instrument or in the Note, whether considered
separately or together with other charges levied in connection with this
Instrument and the Note, violates such law, and Borrower is entitled to the
benefit of such law, such charge is hereby reduced to the extent necessary to
eliminate such violation. The amounts, if any, previously paid to Lender in
excess of the amounts payable to Lender pursuant to such charges as reduced
shall be applied by Lender to reduce the principal of the indebtedness
evidenced by the 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 which is secured
by this Instrument or evidenced by the Note and which constitutes interest,
as well as all other charges levied in connection with such 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 computed thereby is uniform throughout the stated term of
the Note.
23. 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 the Note or any other
obligation secured by this Instrument.
24. WAIVER OF MARSHALLING. Notwithstanding the existence of any other
security interests in the 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
Property shall be subjected to the remedies provided herein. Lender shall
have the right to determine the order in which any or all portions of the
indebtedness secured hereby are satisfied from the proceeds realized upon the
exercise of the remedies provided herein. Borrower, any party who consents to
this Instrument and any party who now or hereafter acquires a security
interest in the Property and who has actual or constructive notice hereof
hereby waives any and all right to require the marshalling of assets in
connection with the exercise of any of the remedies permitted by applicable
law or provided herein.
25.
(Page 6 of 9 Pages)
26. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION. As
part of the consideration for the indebtedness evidenced by the Note,
Borrower hereby absolutely and unconditionally assigns and transfers to
Lender all the rents and revenues of the Property, including those now due,
past due, or to become due by virtue of any lease or other agreement for the
occupancy or use of all or any part of the Property, regardless of to whom
the rents and revenues of the Property are payable. Borrower hereby
authorizes Lender or Lender's agents to collect the aforesaid rents and
revenues and hereby directs each tenant of the Property to pay such rents to
Lender or Lender's agents; provided, however, that prior to written notice
given by Lender to Borrower of the breach by Borrower of any covenant or
agreement of Borrower in this Instrument, Borrower shall collect and receive
all rents and revenues of the Property as trustee for the benefit of Lender
and Borrower, to apply the rents and revenues so collected to the sums
secured by this Instrument in the order provided in paragraph 3 hereof with
the balance, so long as no such breach has occurred, to the account of
Borrower, it being intended by Borrower and Lender that this assignment of
rents constitutes an absolute assignment and not an assignment for additional
security only. Upon the occurrence of an Event of Default (as defined in the
Note), and without the necessity of Lender entering upon and taking and
maintaining full control of the Property in person, by agent or by a
court-appointed receiver, Lender shall immediately be entitled to possession
of all rents and revenues of the Property as specified in this paragraph 26
as the same become due and payable, including but not limited to rents then
due and unpaid, and all such rents shall immediately upon delivery of such
notice be held by Borrower as trustee for the benefit of Lender only;
provided, however, that the written notice by Lender to Borrower of the
breach by Borrower shall contain a statement that Lender exercises its rights
to such rents. Borrower agrees that upon the occurrence of an Event of
Default (as defined in the Note) each tenant of the Property shall make such
rents payable to and pay such rents to Lender or Lender's agents on Lender's
written demand to each tenant therefor, delivered to each tenant personally,
by mail or by delivering such demand to each rental unit, without any
liability on the part of said tenant to inquire further as to the existence
of a default by Borrower.
Borrower hereby covenants that Borrower has not executed any prior
assignment of said rents, that Borrower has not performed, and will not
perform, any acts or has not executed, and will not execute, any instrument
which would prevent Lender from exercising its rights under this paragraph
26, and that at the time of execution of this Instrument there has been no
anticipation or prepayment of any of the rents of the Property for more than
two months prior to the due dates of such rents. Borrower covenants that
Borrower will not hereafter collect or accept payment of any rents of the
Property more than two months prior to the due dates of such rents. Borrower
further covenants that Borrower will execute and deliver to Lender such
further assignments of rents and revenues of the Property as Lender may from
time to time request.
Upon the occurrence of an Event of Default (as defined in the Note),
Lender may in person, by agent or by a court-appointed receiver, regardless
of the adequacy of Lender's security, enter upon and take and maintain full
control of the Property in order to perform all acts necessary and
appropriate for the operation and maintenance thereof including, but not
limited to, the execution, cancellation or modification of leases, the
collection of all rents and revenues of the Property, the making of repairs
to the Property and the execution or termination of contracts providing for
the management or maintenance of the Property, all on such terms as are
deemed best to protect the security of this Instrument. In the event Lender
elects to seek the appointment of a receiver for the Property upon Borrower's
breach of any covenant or agreement of Borrower in this Instrument, Borrower
hereby expressly consents to the appointment of such receiver. Lender or the
receiver shall be entitled to receive a reasonable fee for so managing the
Property.
All rents and revenues collected subsequent to the occurrence of an Event
of Default (as defined in the Note) shall be applied first to the costs, if
any, of taking control of and managing the Property and collecting the rents,
including, but not limited to, attorney's fees, receiver's fees, premiums on
receiver's bonds, costs of repairs to the Property, premiums on insurance
policies, taxes, assessments and other charges on the Property, and the costs
of discharging any obligation or liability of Borrower as lessor or landlord
of the Property and then to the sums secured by the Instrument. Lender or the
receiver shall have access to the books and records used in the operation and
maintenance of the Property and shall be liable to account only for those
rents actually received. Lender shall not be liable to Borrower, anyone
claiming under or through Borrower or anyone having an interest in the
Property by reason of anything done or left undone by Lender under this
paragraph 26.
If the rents of the Property are not sufficient to meet the costs, if any,
of taking control of and managing the Property and collecting the rents, any
funds expended by Lender for such purposes shall become indebtedness of
Borrower to Lender secured by this Instrument pursuant to paragraph 8 hereof.
Unless Lender and Borrower agree in writing to other terms of payment, such
amounts shall be payable upon notice from Lender to Borrower requesting
payment thereof and shall bear interest from the date of disbursement at the
rate stated in the Note unless payment of interest at such rate would be
contrary to applicable law, in which event such amounts shall bear interest
at the highest rate which may be collected from Borrower under applicable
law.
(Page 7 of 9 Pages)
Any entering upon and taking and maintaining of control of the Property
by Lender or the receiver and any application of rents as provided herein
shall not cure or waive any default hereunder or invalidate any other right
or remedy of Lender under applicable law or provided herein. This assignment
of rents of the Property shall terminate at such time as this Instrument
ceases to secure indebtedness held by Lender.
NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as
follows:
27. ACCELERATION: REMEDIES. Upon the occurrence of an Event of Default,
including, but not limited to, the covenants to pay when due any sums secured
by this Instrument, Lender at Lender's option may declare all of the sums
secured by this Instrument to be immediately due and payable without further
demand, and may invoke the power of sale and any other remedies permitted by
applicable law or provided herein. Borrower acknowledges that the power of
sale herein granted may be exercised by Lender without prior judicial
hearing. Borrower has the right to bring an action to assert the
non-existence of a breach or any other defense of Borrower to acceleration
and sale. Lender shall be entitled to collect all costs and expenses incurred
in pursuing such remedies, including, but not limited to, attorney's fees and
costs of documentary evidence, abstracts and title reports.
If Lender invokes the power of sale, Lender shall give written notice to
Trustee of the occurrence of an event of default and of Lender's election to
cause the Property to be sold. Trustee shall record a notice of sale in each
county in which the Property or some part thereof is located and shall mail
copies of such notices in the manner prescribed by applicable law to Borrower
and to the other persons prescribed by applicable law. Trustee shall give
public notice of sale and shall sell the Property according to the laws of
Arizona. Trustee may sell the Property at the time and place and under the
terms designated in the notice of sale in one or more parcels and in such
order as Trustee may determine. Trustee may postpone sale of all or any
parcel of the Property by public announcement at the time and place of any
previously scheduled sale. Lender or Lender's designee may purchase the
Property at any sale.
Trustee shall deliver to the purchaser Trustee's deed conveying the
Property so sold without any covenant or warranty, expressed or implied. The
recitals in the Trustee's deed shall be prima facie evidence of the truth of
the statements made therein. Trustee shall apply the proceeds of the sale in
the following order: (a) to all costs and expenses of the sale, including,
but not limited to, Trustee's and attorney's fees and costs of title
evidence; (b) to all sums secured by this Instrument in such order as Lender,
in Lender's sole discretion, directs; and (c) the excess, if any, to the
person or persons legally entitled thereto, or to the clerk of the superior
court of the county in which the sale took place.
28. RELEASE. Upon payment of all sums secured by this Instrument, Lender
shall release this Instrument. Borrower shall pay Lender's reasonable costs
incurred in releasing this Instrument.
29. SUBSTITUTE TRUSTEE. Lender, at Lender's option, may from time to time
remove Trustee and appoint a successor trustee to any Trustee appointed
hereunder. Without conveyance of the Property, the successor trustee shall
succeed to all the title, power and duties conferred upon the Trustee herein
and by applicable law.
30. TIME OF ESSENCE. Time is of the essence of each covenant of this
Instrument.
31. MAILING ADDRESS. Borrower's mailing address is Borrower's address stated
below.
32. WAIVERS BY SURETY. Any party who has signed this Instrument as a surety
or accommodation party, or who has subjected his property to this Instrument
to secure the indebtedness of another, hereby expressly waives the benefits
of the provision of Arizona Revised Statutes Sections 12-1641 and 12-1642, as
now existing and hereafter amended.
IN WITNESS WHEREOF, Borrower has executed this Instrument or has caused the
same to be executed by its representatives thereunto duly authorized.
WITNESS: BORROWER:
AIMCO/WICKERTREE, L. P.,
a Delaware limited partnership
By: AIMCO/Wickertree, Inc., a
Delaware corporation
/s/ Stacie Taylor
- ------------------------------
By: /s/ Harry Alcock
--------------------------------
Harry Alcock
Vice President
Borrower's Address:
1873 S. Bellaire Street, 17th Floor
Denver, Colorado 80222
(Page 8 of 9 Pages)
CORPORATE LIMITED PARTNERSHIP ACKNOWLEDGMENT
STATE OF New York New York County ss:
....................
The foregoing instrument was acknowledged before me this October 31, 1997
......................
(date)
by Harry Alcock , Vice President of
................................. .........................................
(name of officer) (office)
AIMCO/WICKERTREE, INC. , a Delaware corporation,
........................... ..................................
(name of corporation) (state)
general partner on behalf of AIMCO/WICKERTREE, L.P., a limited partnership.
...........................,
(name of partnership)
My Commission Expires: /s/ Vernaliz Y. Co
...................................
VERNALIZ Y. CO Notary Public
Notary Public, State of New York
No. 01005085381
Qualified in New York County
Commission Expires Sept. 22, 1999
This instrument was prepared by Allan R. Winn, Esq., Ballard Spahr Andrews &
Ingersoll
.............................................
601 13th Street, N.W., Suite 1000 South,
Washington, D.C. 20005
(Page 9 of 9 Pages)
RIDER TO MULTIFAMILY INSTRUMENT
(Wickertree)
THIS RIDER TO MULTIFAMILY INSTRUMENT (the "Rider") is made as of the
31st day of October, 1997, and is incorporated into and shall be deemed to
amend and supplement the Multifamily Deed of Trust of the same date (the
"Instrument"), given by the undersigned AIMCO/WICKERTREE, L.P. a Delaware
limited partnership (the "Borrower"), to secure Borrower's Multifamily Note
of the same date (the "Note") with Addendum to Multifamily Note of the same
date (the "Addendum") to GMAC Commercial Mortgage Corporation, a California
corporation, 650 Dresher Road, P.O. Box 1015, Horsham, PA. 19044-8015
[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."
The Property is located entirely within the State of Arizona [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 and any
other riders to the Instrument given by Borrower to Lender and covering the
Property; (ii) the Note, as modified by the Addendum and any other addendum to
the Note; and (iii) all other documents or agreements, including any Collateral
Agreements (as defined below) or O&M Agreements (as defined below), arising
under, related to, or made in connection with, the loan evidenced by the Note,
as such Loan Documents may be amended from time to time. Any conflict between
the provisions of the Instrument and the Rider shall be resolved in favor of the
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, 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, dated the date of the Note, 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 of the Note, 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.
(c) ACHIEVEMENT AGREEMENT
Borrower shall perform all of its obligations as and when required pursuant
to the Achievement Agreement between Borrower and Lender (if any), dated the
date of the Note.
(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 loan evidenced by the Note.
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 Note or any other Loan Document.
Lender shall be permitted to apply any funds held pursuant to any Collateral
Agreement in any manner which is permitted pursuant to such Collateral
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;
and (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.
D. ENVIRONMENTAL HAZARD 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
subtenants shall not cause, permit or exacerbate any Prohibited Activities or
Conditions.
If any Prohibited Activities or Conditions exist on the Property,
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 0&M Agreement(1) and (2) all Hazardous Materials
Laws. Any 0&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(2).
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 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 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.
(1) or other remedial action requested by Lender
(2) Conditions and obtain Lender's prior written approval of such remedial
action.
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.
E. BOOKS, RECORDS AND FINANCIAL INFORMATION
Uniform Covenant 10 of the Instrument ("Books and Records") is amended to
read as follows:
Borrower shall keep and maintain at all times and upon Lender's request.
Borrower shall make available at the Property address, complete and accurate
books of accounts and records in sufficient detail to correctly reflect the
results of the operation of the Property and copies of all written contracts,
leases and other instruments which affect the Property (including but not
limited to all bills, invoices and contracts for electrical service, gas
service, water and sewer service, waste management service, telephone service
and management services). These books, records, contracts, leases and other
instruments shall be subject to examination and inspection at any reasonable
time by Lender. Borrower shall furnish to Lender the following:
(iv) *promptly upon Borrower's receipt, copies of any complaint filed against
the Borrower or the Property management alleging any violation of fair
housing law, handicap access or the Americans with Disabilities Act and any
final administrative or judicial dispositions of such complaints. If Borrower
shall fail to timely provide the financial statements required by clause (i)
above, Lender shall have the right to have the Borrower's books and records
audited in order to obtain such financial statements, and any such costs and
expenses incurred by Lender which Borrower fails to pay promptly shall become
immediately due and payable and shall become additional indebtedness secured
by the Instrument pursuant to paragraph 8 of the Instrument. *SEE ATTACHED
SUPPLEMENTAL RIDER TO MULTIFAMILY INSTRUMENT
F. TRANSFERS OF THE PROPERTY OR SIGNIFICANT INTERESTS IN BORROWER; TRANSFER
FEES
Uniform Covenant 19 of the Instrument ("Transfers of the Property or
Beneficial Interests in Borrower, Assumption") is amended to read as set forth
below:
TRANSFERS OF THE PROPERTY OR SIGNIFICANT INTERESTS IN BORROWER; TRANSFER FEES
(a) DEFINITIONS
For purposes of the Instrument (and the Rider), the following terms have
the respective meanings set forth below:
(1) The term "Key Principal" means the entities that execute the
Exceptions to Non-Recourse Guaranty or any entity that becomes a Key
Principal after the date of the Note and are identified as such in an
amendment or supplement to the Loan Documents.
(2) The term "Transfer" means a sale, assignment, transfer substitution
or other disposition (whether voluntary or by operation of law) of, or
the granting or creating of a lien, encumbrance or security interest
in, the Property or in ownership interests, and the issuance or other
creation of ownership interests in an entity and the reconstitution of
one type of entity to another type of entity.
(3) A "Significant Interest" in any entity shall mean the following:
(i) if the entity is a general partnership or a joint venture, (A)
any partnership interest in the general partnership, or (B) any
interest of a joint venturer in joint venture;
(ii) if the entity is a limited partnership, (A) any limited
partnership interest in the entity which, together with all other
limited partnership interests in the entity Transferred since the
date of the Note, exceeds 49% of all of the limited partnership
interests in the entity, or (B) any general partnership interest
in the entity;
(iii) if the entity is a limited liability company, (A) any membership
interest which, together with all other membership interest in
the limited liability company Transferred since the date of the
Note, exceeds 49% of all of the membership interests in the
limited liability company;**
(iv) if the entity is a corporation, any voting stock in the
corporation which, together with all other voting stock of the
corporation Transferred since the date of the Note, exceeds 49%
of all of the voting stock of the corporation; or
(v) if the entity is a trust, any beneficial interest in such trust
which, together with all other beneficial interest in the trust
Transferred since the date of the Note, exceeds 49% of all of the
beneficial interests in the trust.
SEE ATTACHED SUPPLEMENTAL RIDER TO MULTIFAMILY INSTRUMENT
(b) ACCELERATION OF THE LOAN UPON TRANSFERS OF THE PROPERTY OR SIGNIFICANT
INTERESTS
Lender may, at Lender's option, declare all sums secured by the Instrument
immediately due and payable and Lender may invoke any remedies permitted by
paragraph 27 of the Instrument if, without the Lender's prior written consent,
any of the following shall occur:
(1) a Transfer of all or any part of the Property or any interest in
the Property;
(2) a Transfer of any Significant Interest in Borrower;
(3) a Transfer of any Significant Interest in a corporation,
partnership, limited liability company, joint venture, or trust
which owns a Significant Interest in the Borrower;
(4) if the Borrower is a trust, or if any trust owns a Significant
Interest in the Borrower, the addition, deletion or substitution
of a trustee of such trust, which addition, deletion or
substitution has not been approved by Lender; or
(5) a Transfer of all or any part of any Key Principal's ownership
interest (other than limited partnership interests) in the
Borrower, or in any other entity which owns, directly or
indirectly, through one or more intermediate entities, an
ownership interest in the Borrower.
SEE ATTACHED SUPPLEMENTAL RIDER TO MULTIFAMILY INSTRUMENT
(c) TRANSFER PERMITTED WITH LENDER'S PRIOR CONSENT
Lender shall consent to a Transfer which would otherwise violate this
paragraph 19 if, prior to the Transfer:
(1) Borrower causes to be submitted to Lender all information
required by Lender to evaluate the transferee and the Property
as if a new loan were being made to the transferee and secured
by the Property, in the case of a Transfer of all or any part
of the Property or an interest therein, or to the Borrower
(as reconstituted after the proposed Transfer), in the case of
a Transfer of Significant Interests;
** or (B) any merger in the entity
(2) The transferee, in the case of a Transfer of all or any part
of the Property or an interest therein, or the Borrower (as
reconstituted after the proposed Transfer), in the case of a
Transfer of Significant Interests, meet the eligibility,
credit, management and other standards, and the Property meets
the physical maintenance and replacement reserve requirements,
customarily applied by Lender for approval of new borrowers
and properties for loans secured by liens on multifamily
properties;
(3) In the case of a Transfer of all or any part of the Property,
the proposed transferee (i) executes an agreement acceptable
to Lender pursuant to which the proposed transferee agrees,
upon consummation of the Transfer, to assume and to pay and
perform all obligations of the Borrower under the Note, the
Instrument and the other Loan Documents, (ii) causes one or
more individuals acceptable to Lender to execute and deliver
to Lender an amendment or supplement to the Loan Documents as
"Key Principal," and (iii) executes such documents and
otherwise provides such documents and information as required
by Lender in connection with the Transfer;
(4) In the case of a Transfer of a Key Principal's ownership
interest pursuant to paragraph 19(b)(5), (i) the Borrower (as
reconstituted after the proposed Transfer) executes an
agreement acceptable to Lender that ratifies and confirms the
obligations of Borrower under the Note, the Instrument and the
other Loan Documents, (ii) one or more individuals acceptable
to Lender execute and deliver to Lender an amendment or
supplement to the Loan Documents as "Key Principal," and (iii)
the Borrower executes such documents and otherwise provides
such documents and information as required by Lender in
connection with the Transfer; and
(5) Borrower pays to Lender a $3000 non-refundable application fee
and a transfer fee equal to one percent (1%) of the sums
secured by the Instrument. In addition, Borrower shall be
required to reimburse Lender for all of Lender's out of pocket
expenses incurred in connection with the assumption, to the
extent such expenses exceed $3000.
SEE ATTACHED SUPPLEMENTAL RIDER TO MULTIFAMILY INSTRUMENT
(d) NO ACCELERATION OF THE LOAN FOR TRANSFERS CAUSED BY CERTAIN EVENTS
Notwithstanding the foregoing provisions of this covenant, Lender shall not
be entitled to declare sums secured by the Instrument immediately due and
payable or to invoke any remedy permitted by paragraph 27 of the Instrument
solely upon the occurrence of any of the following:
(1) A Transfer that occurs by inheritance, devise, or bequest or
by operation of law upon the death of a natural person who is
an owner of the Property or the owner of a direct or indirect
ownership interest in the Borrower.
(2) The grant of a leasehold interest in individual dwelling units
for a term of two years or less and leases for commercial uses
as long as commercial leases do not exceed 20 percent of the
rentable space of the Property (measured as required by
Lender) and provided that all such leasehold interests do not
contain an option to purchase the Property.
(3) A sale or other disposition of obsolete or worn out personal
property which is contemporaneously replaced by comparable
personal property of equal or greater value which is free and
clear of liens, encumbrances and security interests other than
those created by the Loan Documents.
(4) The creation of a mechanic's or materialmen's lien or judgment
lien against the Property which is released of record or
otherwise remedied to Lender's satisfaction, within 30 days of
the date of creation.
(5) The grant of an easement, if prior to the granting of the
easement the Borrower causes to be submitted to Lender all
information required by Lender to evaluate the easement, and
if Lender determines that the easement will not materially
affect the operation of the Property or Lender's interest in
the Property and Borrower pays to Lender, on demand, all cost
and expenses incurred by Lender in connection with reviewing
Borrower's request.
(e) OTHER PROVISIONS REGARDING TRANSFERS. SEE ATTACHED SUPPLEMENTAL RIDER
TO MULTIFAMILY INSTRUMENT
G. NOTICE
Uniform Covenant 20 of the Instrument ("Notice") is amended to read as
follows:
Each notice, demand, consent, or other approval (collectively, "notices"
and singly, "notice") given under the Note, the Instrument, and any other Loan
Document, shall be in writing to the other party, and if to Borrower, at its
address set forth below Borrower's signature on the Instrument, and if to Lender
at its address set forth at the beginning of the Rider, or at such other address
as such party may designate by notice to the other party and shall be deemed
given (a) three (3) Business Days after mailing, by certified or registered U.S.
mail, return receipt requested, postage prepaid, (b) one (1) Business Day after
delivery, fee prepaid, to a national overnight delivery service, or (c) when
delivered, if personally delivered with proof of delivery thereof.
Borrower and Lender each agrees that it will not refuse or reject delivery
of any notice given hereunder, that it will acknowledge, in writing, the receipt
of the same upon request by the other party and that any notice rejected or
refused by it shall be deemed for all purposes of this Agreement 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. As used in the Instrument, the term "Business Day" means any
day other than a Saturday, a Sunday or any other day on which Lender is not open
for business.
Lender shall not be required to deliver notice to Key Principal in
connection with any notice given to Borrower. However, if Lender shall deliver
notice to Key Principal, such notice shall be given in the manner provided in
this Uniform Covenant 20, at Key Principal's address set forth at the foot of
the Rider.
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 relating 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 of
the 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 occurrence of an Event of Default, (including, but not limited to,
the failure 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
Until the debt evidenced by the Note is paid in full, Borrower shall not
(1) acquire any real or personal property other than the Property and assets
(such as accounts) related to the operation and maintenance of the Property, or
(2) operate any business other than the management and operation of the
Property.
SEE ATTACHED SUPPLEMENTAL RIDER TO MULTIFAMILY INSTRUMENT
K. NON-RECOURSE LIABILITY
Subject to the provisions of paragraph L and notwithstanding any other
provision in the Note or Instrument, the personal liability of Borrower, any
general partner of Borrower (if Borrower is a partnership), and any Key
Principal to pay the principal of and interest on the debt evidenced by the
Note and any other agreement evidencing Borrower's obligations under the Note
and the Instrument shall be limited to (1) the real and personal property
described as the "Property" in the Instrument, (2) the personal property
described in and pledged under any Collateral Agreement executed in
connection with the loan evidenced by the Note, (3) the rents, profits,
issues, products and income of the Property received or collected by or on
behalf of Borrower (the "Rents and Profits") to the extent such receipts are
necessary, first, to pay the reasonable expenses of operating, managing,
maintaining and repairing the Property, including but not limited to real
estate taxes, utilities, assessments, insurance premiums, repairs,
replacements and ground rents, if any (the "Operating Expenses") then due and
payable as of the time of receipt of such Rents and Profits, and then, to pay
the principal and interest due under the Note, and any other sums due under
the Instrument or any other Loan Document (including but not limited to
deposits or reserves due under any Collateral Agreement), except to the
extent that Borrower did not have the legal right, because of a bankruptcy,
receivership or similar judicial proceeding, to direct the disbursement of
such sums.
Except as provided in paragraph L, Lender shall not seek (a) any judgment
for a deficiency against Borrower, any general partner of Borrower (if Borrower
is a partnership) or any Key Principal, or Borrower's or any such general
partner's or Key Principal's heirs, legal representatives, successors or
assigns, in any action to enforce any right or remedy under the Instrument, or
(b) any judgment on the Note except as may be necessary in any action brought
under the Instrument to enforce the lien against the Property or to exercise any
remedies under any Collateral Agreement.
L. EXCEPTIONS TO NON-RECOURSE LIABILITY
If, without obtaining Lender's prior written consent, (i) a Transfer
shall occur which, pursuant to Uniform Covenant 19 of the Instrument, gives
Lender the right, at its option, to declare all sums secured by the
Instrument immediately due and payable, (ii) Borrower shall encumber the
Property with the lien of any Subordinate Instrument in connection with any
financing by Borrower or (iii) Borrower shall violate the single asset
covenants in paragraph J of the Rider and in paragraph D of the Supplemental
Rider any of such events shall constitute a default by Borrower under the
Note, the Instrument and the other Loan Documents and if such event shall
continue for 30 days, paragraph K shall not apply from and after the date
which is 30 days after such event and the Borrower, any general partner of
Borrower (if Borrower is a partnership) and Key Principal (each individually
on a joint and several basis if more than one) shall be personally liable on
a joint and several basis for full recourse liability under the Note and the
other Loan Documents.
Notwithstanding paragraph K, Borrower, any general partner of Borrower
(if Borrower is a partnership) and Key Principal (each individually on a
joint and several basis if more than one), shall be personally liable on a
joint and several basis, in the amount of any loss, damage or cost (including
but not limited to attorneys' fees) resulting from (A) fraud or material
misrepresentation by Borrower or Borrower's agents or employees or any Key
Principal or general partner of Borrower in connection with obtaining the
loan evidenced by the Note, or in complying with any of Borrower's
obligations under the Loan Documents, (B) insurance proceeds, condemnation
awards, security deposits from tenants and other sums or payments received by
or on behalf of Borrower in its capacity as Owner of the Property and not
applied in accordance with the provisions of the Instrument (except to the
extent that Borrower did not have the legal right, because of a bankruptcy,
receivership or similar judicial proceeding, to direct disbursement of such
sums or payments), (C) all Rents and Profits (except to the extent that
Borrower did not have the legal right, because of a bankruptcy, receivership
or similar judicial proceeding, to direct the disbursement of such sums), and
not applied, first, to the payment of the reasonable Operating Expenses as
such Operating Expenses become due and payable, and then, to the payment of
principal and interest then due and payable under the Note and all other sums
due under the Instrument and all other Loan Documents (including but not
limited to deposits or reserves payable under any Collateral Agreement),
(D) Borrower's failure to pay transfer fees and charges due under
paragraph 19(c) of the Instrument, (E) Borrower's failure following a default
under any of the Loan Documents to deliver to Lender on demand all Rents and
Profits, and security deposits (except to the extent that Borrower did not
have the legal right because of a bankruptcy, receivership or similar judicial
proceeding to direct disbursement of such sums), books and records relating to
the Property, or (F) relating to Hazardous Materials or compliance with
Hazardous Materials Laws to the full extent*
No provision of paragraphs K or L shall (i) affect any guaranty or
similar agreement executed in connection with the debt evidenced by the Note,
(ii) release or reduce the debt evidenced by the Note, (iii) impair the right
of Lender to enforce the provisions of paragraph D of Rider, (iv) impair the
lien of the Instrument or (v) impair the right of Lender to enforce the
provisions of any Collateral Agreement.
M. WAIVER OF JURY TRIAL
Borrower and Key Principal (each for himself if more than one) (i) covenant
and agree 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) waive 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 Key Principal,
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 and Key Principal hereby certify that no representative or agent of the
Lender (including, but not limited to, the Lender's counsel) has represented,
expressly or otherwise, to Borrower of Key Principal that Lender will not seek
to enforce the provisions of this Paragraph M.
* of any losses or damages (including those resulting from diminution in
value of the Property) incurred by Lender as a result of the existence of
such Hazardous Materials or failure to comply with Hazardous Materials Laws
or the obligations of Borrower hereunder relating thereto, (G) intentional
damage to the Property, or (H) failure of Borrower to pay taxes or other
liens with priority over the Multifamily Instrument.
BY SIGNING BELOW, Borrower accepts and agrees to the covenants
and agreements contained in this Rider.
WITNESS: BORROWER:
AIMCO/WICKERTREE, L.P.,
a Delaware limited partnership
By: AIMCO/Wickertree, Inc., a
Delaware corporation
/s/ Stacie Taylor By: /s/ Harry Alcock
------------------------- ---------------------------
Harry Alcock
Vice President
CORPORATE LIMITED PARTNERSHIP ACKNOWLEDGMENT
State of New York New York County ss:
.....................
The foregoing instrument was acknowledged before me this October 31, 1997
......................
(date)
by Harry Alcock Vice President of
............................................. .........................
(name of officer) (office)
AIMCO/WICKERTREE, INC. , a Delaware corporation,
............................... ..............................
(name of corporation) (state)
general partner on behalf of AIMCO/WICKERTREE, L.P., a limited partnership.
.........................
(name of partnership)
My Commission Expires: /s/ Vernaliz Y. Co
...................................
VERNALIZ Y. CO Notary Public
Notary Public, State of New York
No. 01005085381
Qualified in New York County
Commission Expires Sept. 22, 1999
This instrument was prepared by Allan R. Winn, Esq., Ballard Spahr Andrews &
Ingersoll
............................................
601 13th Street, N.W., Suite 1000 South,
Washington, D.C. 20005
SUPPLEMENTAL RIDER TO MULTIFAMILY INSTRUMENT
THIS SUPPLEMENTAL RIDER TO MULTIFAMILY INSTRUMENT (the "Supplemental
Rider") is made as of this 31st day of October, 1997, and is incorporated into
and shall be deemed to amend and supplement the Multifamily Mortgage, Deed of
Trust or Deed to Secure Debt as of the same date (the "Instrument") as modified
by the Rider to Multifamily Instrument dated as of the same date (the "Rider"),
given by the undersigned (the "Borrower"), to secure Borrower's Multifamily Note
as of the same date (the "Note") with Addendum to Multifamily Note as of the
same date to GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation,
whose address is 650 Dresher Road, P.O. Box 1015, Horsham, Pennsylvania 19044-
8015 and its successors, assigns and transferees (the "Lender"), covering the
property described in the Instrument and defined therein as the "Property". The
Property is located entirely within the State identified in EXHIBIT A attached
hereto (the "Property Jurisdiction").
The term "Loan Documents" when used in this Supplemental Rider shall
mean, collectively, the following documents: (i) the Instrument as modified
by the Rider, this Supplemental Rider and any other riders to the Instrument
given by Borrower to Lender and covering the Property; (ii) the Note, as
modified by the Addendum; and (iii) all other documents or agreements,
including any Collateral Agreements (as defined in the Rider), or O&M
Agreements (as defined in the Rider), arising under, related to, or made in
connection with, the loan evidenced by the Note, as such loan documents may
be amended from time to time. Any conflict between the provisions of this
Instrument, the Rider and the Supplemental Rider shall be resolved in favor
of the Supplemental Rider.
The term "Net Operating Income" shall mean, during any period, "Gross
Revenues" (as hereinafter defined) less "Operating Expenses". "Gross
Revenues" shall mean all rental received from tenants occupying units in the
Property and receipts from vending machines, recreational facilities and any
and all other operating revenues received from the Property. Gross Revenues
shall not include any cash or other proceeds received by reason of fire or
other casualty insurance, proceeds of rental loss or business interruption
insurance (except to the extent that such proceeds replace the rental payment
which otherwise would have been due to Borrower from tenants of the
Property), forfeited security or other deposits or payments made by tenants
to cancel their leases, proceeds from a taking by eminent domain or
conveyance in lieu thereof, proceeds from a loan or advance, or proceeds from
sale, transfer, assignment or other disposition of any part of the Property
or any interest therein. Gross Revenues shall be determined on the basis of
sound cash basis accounting practices applied on a consistent basis and shall
be adjusted by excluding items of extraordinary, unusual and nonrecurring
income. "Operating Expenses" shall mean all reasonable, ordinary and
necessary expenses actually incurred by Borrower in respect of the ownership,
operation, renting, maintenance, and occupancy of the Property determined on
the basis of sound cash basis accounting practices applied on a consistent
basis, excluding however, federal, state or local income taxes or other taxes
based on the income of Borrower, depreciation and any other non-cash
expenditures, capital improvements or reserves for such items, other than
underwritten reserves (whether or not collected) required by the Replacement
Reserve and Security Agreement, including deposits which are deferred under such
Agreement), any expense paid or incurred in connection with the sale of all or
any part of the Property or any interest therein, any payment of principal or
interest under the Note and shall be adjusted for extraordinary, unusual, and
nonrecurring expenses.
The covenants and agreements of this Supplemental Rider, and the covenants
and agreements of any other riders to the Instrument given by Borrower to Lender
and covering the Property, shall be incorporated into and shall amend and
supplement the covenants and agreements of the Instrument as if this
Supplemental Rider and the other riders were a part of the Instrument and all
reference 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 and the Rider, Borrower and Lender further covenant and agree as
follows:
A. SUBSTITUTION OF COLLATERAL.
On and after November 1, 2007, the Borrower may substitute
collateral for the collateral securing the Loan; provided, the substituted
collateral meets or exceeds all of the terms and conditions set forth in
subparagraphs (i) through (vi), inclusive, below: (i) the original principal
balance of the Note shall not exceed 55% of the appraised value (as
determined by an appraisal reasonably satisfactory to Lender) of the proposed
substitution collateral; (ii) the Net Operating Income of the proposed
substitution collateral for the preceding twelve months is not less than 1.75
times the amount of the annual constant payment of principal and interest due
and payable on the Note; (iii) no Event of Default or event which, with the
giving of notice or the passage of time, or both, would constitute an Event
of Default under the Loan Documents shall have occurred and be continuing;
(iv) the proposed substitution collateral and the Borrower meet all the then
applicable underwriting standards and guidelines of Lender for loans on
substantially comparable property with substantially similar loan to value
ratios and debt service coverage ratios as determined by Lender in its sole
but reasonable discretion; (v) if requested by Lender, the Borrower shall
have provided Lender with an opinion of nationally recognized tax counsel, in
form and substance reasonably satisfactory to Lender, that the proposed
substitution does not constitute a "significant modification of a debt
instrument" for purposes of Section 1.1001-3 of the Treasury Regulations
under the Internal Revenue Code (1986) and (vi) the Borrower pays to Lender a
non-refundable application and collateral review fee in connection with such
substitution in the amount of $5,000 plus 25/100ths of one percent (.25%) of
the unpaid principal balance of the Note on the date of substitution, and
reimburses Lender for all of Lender's out of pocket costs and expenses,
including reasonable attorneys' fees and expenses, incurred in connection
with the substitution of collateral. The Borrower's right to substitute
collateral shall terminate during any Substitution Period (defined below)
after two substitutions of collateral have occurred among the transactions
2
described on Exhibit C attached hereto. The Borrower's right to substitute
collateral on the terms and conditions set forth in this Paragraph A shall be
reinstated on the first day of the next succeeding Substitution Period. Other
than the substitution of collateral permitted above, any substitution of
collateral shall be in the sole and absolute discretion of the Lender.
"Substitution Period" means the one year period from November 1, 2007 to
and including October 31, 2008 and each succeeding one-year period thereafter.
B. LOCKBOX.
(i) Not later than thirty (30) days after the end of each fiscal
quarter of the Borrower (including the fourth fiscal quarter in each year),
Borrower shall deliver to Lender a statement of the Gross Revenues, Operating
Expenses and Net Operating Income for the preceding fiscal quarter and for the
preceding four fiscal quarters for the Property. Each such statement shall be
in form and substance reasonably satisfactory to Lender, and shall be certified
by the chief financial officer or comptroller of Borrower to be true, accurate
and complete in all material respects.
(ii) In the event that (a) a default under the Loan Documents shall
have occurred or (b) Lender shall determine that the Net Operating Income of
the Property was, for the preceding twelve (12) months as reasonably determined
by Lender, less than 1.50 times the amount of the annual constant payment of
principal and interest due and payable on the Note calculated in accordance with
the definition of Net Operating Income on page one of this Supplemental Rider
(the "Debt Service"), then Borrower shall, following demand by Lender,
thereafter cause all Gross Revenues from the Property to be directly deposited
in a lockbox bank account (the "Lockbox") established, administered and
controlled solely by Lender. Such test may be performed by Lender no more
frequently than quarterly. Lender shall hold all funds deposited in the Lockbox
as additional security for the indebtedness secured by the Instrument. All funds
on deposit in the Lockbox shall be held by Lender free of any liens or claims on
the part of creditors of Borrower other than Lender. Borrower shall complete
such forms as may be provided by Lender to Borrower in order to notify the
Postal Service of the Lockbox arrangement. Borrower acknowledges that in such
event, Lender shall have exclusive and unrestricted access to the Lockbox,
including all mail which is delivered thereto. In the event that Lender elects
to establish a Lockbox, Borrower shall notify and direct all tenants of the
Property, and other parties obligated to make any payments to Borrower with
respect to the Property, to make such payments directly into the Lockbox with
Lender in accordance with this Supplemental Rider (such notices are hereinafter
referred to collectively as the "Payment Notices"). The Payment Notices shall
also require that such payments not be made in cash and that such obligors only
send payments and related invoices or statements to the Lockbox (but not other
correspondence). Borrower agrees to execute and deliver to Lender such Payment
Notices as may be requested by Lender to notify such tenants of the Property and
such other parties that may become obligated to make payments to Borrower of the
provisions of this paragraph. Borrower does hereby designate and appoint Lender
its agent and attorney-in-fact for the purpose of executing in the name of
Borrower, addressing and forwarding such notices to such tenants and such other
parties obligated to make any such payments or any portion thereof, which power
of attorney is coupled with an
3
interest and irrevocable by dissolution or otherwise. After the giving of the
Payment Notices by Lender, Borrower shall not communicate with any such tenant
or any such other party obligated to pay any sums to Borrower for the purpose
of cancelling such notice or directing any such party to make payments
other than in accordance with such notices. Borrower does hereby acknowledge
and agree that the forwarding of such notices by Lender to such tenants and such
other parties constitutes all actions, if any, required to be taken by Lender to
exercise, invoke or perfect its rights to collect the rents, issues and profits
of the Property. Borrower agrees that, after the establishment of the Lockbox,
any Gross Revenues received by Borrower will be promptly delivered by Borrower
to Lender for deposit in the Lockbox, and pending such delivery will be held by
Borrower in trust for Lender.
(iii) Provided no Event of Default or event which, with the
giving of notice or the passage of time or both, would constitute an Event of
Default under the Loan Documents shall have occurred and be continuing, Lender
shall remit to Borrower all funds on deposit in the Lockbox at such time as the
funds on deposit in the Lockbox are sufficient to pay for such month (A) the
principal and interest due and payable on the Note, (B) any deposits payable
pursuant to Uniform Covenant 2 of the Instrument, and (C) any monthly deposits
required pursuant to any Collateral Agreement (collectively the "Payments") .
Lender shall withdraw from the Lockbox any amounts on deposit in the Lockbox to
pay the Payments. The right of Lender to cause all Gross Revenues to be
deposited into the Lockbox shall be suspended at such time as the Borrower
establishes to the satisfaction of Lender that the Net Operating Income of the
Property for the preceding twelve (12) months equals or exceeds 1.50 times the
Debt Service, until such time as the Net Operating Income again falls below such
threshold. The collection of Gross Revenues by Lender under this Section F is
not intended to modify Borrower's obligations under the Loan Documents.
(iv) Upon the occurrence and during the continuance of any Event of
Default, Lender may at any time, without notice or demand, withdraw all or any
amount of funds on deposit in the Lockbox and apply such funds to the payment
of the indebtedness secured hereby in such order as Lender may determine in its
sole discretion.
(v) The forwarding of the Payment Notices to tenants of the Property
and such other parties obligated to make any payments to Borrower directing such
parties to make payments directly into the Lockbox shall not be deemed or
construed to constitute a waiver by Lender or any right or remedy Lender may
have under the Loan Documents to direct such tenants or other parties to make
payments directly to Lender after the occurence of an event of default.
(vi) Borrower hereby irrevocably appoints Lender as its true and
lawful agent and attorney-in-fact for purposes of collecting all items from the
Lockbox, making any and all endorsements on such items as are necessary or
appropriate, and withdrawing funds on deposit in the Lockbox to be applied as
provided in this Instrument.
(vii) Borrower agrees that it shall have no right to use any
amounts on deposit from time to time in the Lockbox except as specifically
provided herein, and that none of the funds on deposit in the Lockbox may be
withdrawn by Borrower from the Lockbox without the prior written consent of
4
Lender. No items or funds on deposit in the Lockbox shall at any time be
deemed to be trust funds. All or any of the Lockboxes created pursuant to the
Loan Documents may be maintained by Lender as a single account, and all funds
maintained in such accounts may be commingled, provided that the amounts
credited to and debited from each of such accounts shall be accounted for
separately.
(viii) Borrower agrees to indemnify Lender and its agents from
and against any and all claims, expenses, losses and liabilities growing out of
or resulting from the enforcement of the provisions herein concerning the
Lockbox, except claims, expenses, losses or liabilities resulting from Lender's
gross negligence or willful misconduct. Borrower upon demand shall pay to
Lender or its agent administering the Lockbox a monthly fee in the amount of
one-quarter of one percent (.25%) of the average deposits to the Lockbox during
the immediately preceding month for the administration of the Lockbox. Lender
or its agent shall be entitled to withdraw from the Lockbox after ten (10) days
prior written notice to Borrower, such amounts as and when due; provided,
however, that Borrower shall remain liable for the payment of such amounts in
the event that the amounts on deposit in the Lockbox are not sufficient to pay
such amounts in full as and when due.
(ix) Lender's election to establish a Lockbox in accordance with the
provisions of this paragraph D shall not be deemed an election in lieu of any
other right or remedy under the Loan Documents or otherwise afforded by law or
equity but may be exercised concurrently, independently, or successively, in any
order whatsoever, with any other right or remedy so provided.
C. INSURANCE. Without limitation of the terms and provisions of the
Instrument, Borrower shall, at its expense, procure and maintain, or cause to be
maintained, for the benefit of Borrower and Lender, insurance policies issued
by such insurance companies, in such amounts, in such form and substance, and
with such coverages, endorsements, deductibles and expiration dates as are
acceptable to Lender, providing the following types of insurance covering the
Property:
(i) Borrower shall obtain and maintain, or cause to be maintained,
insurance for Borrower and the Property providing at least the following
coverages:
(a) PROPERTY INSURANCE. Insurance with respect to the Property and
building equipment insuring against any peril included within the classification
"All Risks of Physical Loss" in amounts at all times sufficient to
prevent Lender from becoming a coinsurer within the terms of the applicable
policies and under applicable law, but in any events such insurance shall be
maintained in an amount equal to the full insurable value of the Property and
building equipment, the term "full insurable value" to mean the actual
replacement cost of the Property and building equipment (without taking into
account any depreciation, and exclusive of excavations, footings and
foundations, landscaping and paving) determined annually by an insurer, a
recognized independent insurance broker or an independent appraiser selected
and paid by Borrower and in no event less than the coverage required pursuant
to the terms of any lease. Absent such annual adjustment, each policy shall
contain inflation guard coverage insuring that the policy limit will be
increased over time to reflect the effect of
5
inflation. Borrower shall also maintain insurance against loss or damage to
such furniture, furnishings, fixtures, equipment and other items (whether
personalty or fixtures) included in the Property and owned by Borrower from time
to time, to the extent applicable, in the amount of the cost of replacing
the same, in each case, with inflation guard coverage to reflect the effect of
inflation, or annual valuation. Each policy or policies shall contain a
replacement cost endorsement and either an agreed amount endorsement (to avoid
the operation of any co-insurance provisions) or a waiver of any coinsurance
provisions, all subject to Lender's approval. The maximum deductible shall be
$10,000.00;
(b) LIABILITY INSURANCE. Comprehensive general liability insurance,
including personal injury, bodily injury, death and property damage liability,
insurance against any and all normally insurable claims, including all legal
liability to the extent insurable and imposed upon Lender and all court costs
and attorneys' fees and expenses, arising out of or connected with the
possession, use, leasing, operation, maintenance or condition of the Property in
such amounts as are generally available at commercially reasonable premiums and
are generally required by institutional Lenders for properties comparable to the
Property but in no event for a combined single limit of less than
$10,000,000.00. During any construction of the Property, Mortgagor's general
contractor for such construction shall also provide the insurance required in
this Subsection (b). Lender hereby retains the right to periodically review
the amount of said liability insurance being maintained by Borrower and to
require an increase in the amount of said liability insurance should Lender deem
an increase to be reasonably prudent under then existing circumstances;
(c) WORKERS' COMPENSATION INSURANCE. Statutory workers' compensation
insurance with respect to any work on or about the Property covering all persons
subject to the workers' compensation laws of the state in which the Property is
located;
(d) BUSINESS INTERRUPTION. Business interruption and/or loss of
"rental income" insurance in an amount sufficient to avoid any co-insurance
penalty and to provide proceeds which will cover a period of not less than one
(1) year from the date of casualty or loss, the term "rental income" to mean the
sum of (A) the total then ascertainable Rents payable under the leases and (B)
the total ascertainable amount of all other amounts to be received by Borrower
from third parties which are the legal obligation of the tenants, reduced to the
extent such amounts would not be received because of operating expenses not
incurred during a period of non-occupancy of that portion of the Property then
not being occupied. The amount of coverage shall be adjusted annually to reflect
the rents payable during the succeeding twelve (12) month period.
(e) BOILER AND MACHINERY INSURANCE. Broad form boiler and machinery
insurance (without exclusion for explosion) covering all boilers or other
pressure vessels, machinery, and equipment located in, on or about the Property
and insurance against loss of occupancy or use arising from any breakdown in
such amount per accident equal to the replacement value of the improvements
housing the machinery or $2,000,000.00 or such other amount reasonably
determined by Lender. If one or more large HVAC units is in operation at the
Property, "System Breakdowns" coverage shall be required, as
6
determined by Lender. Minimum liability coverage per accident must equal the
value of such unit(s);
(f) FLOOD INSURANCE. If required by Lender, flood insurance in an
amount at least equal to the lesser of (A) the minimum amount required, under
the terms of coverage, to compensate for any damage or loss on a replacement
basis (or the unpaid balance of the indebtedness secured hereby if replacement
cost coverage is not available for the type of building insured); or (B) the
maximum insurance available under the appropriate National Flood Insurance
Administration program. The maximum deductible shall be $3,000.00 per building
or a higher minimum amount as required by the Federal Emergency Management
Agency or other applicable law.
(g) During the period of any construction, renovation or alteration
of the Property which exceeds the lesser of 10% of the principal amount of the
Note or $500,000.00, at Lender's request, a completed value, "All Risk"
Builder's Risk form, or "Course of Construction" insurance policy in
non-reporting form for any improvements of the Property under construction,
renovation or alteration in an amount approved by Lender may be required. During
the period of any construction of any addition to the existing Property,
a completed value, "All Risk" Builder's Risk form or "Course of Construction"
insurance policy in non-reporting form, in an amount approved by Lender, shall
be required.
(h) OTHER INSURANCE. Such other insurance with respect to the
Property or on any replacements or substitutions thereof or additions thereto as
may from time to time be required by Lender against other insurable hazards or
casualties which at the time are commonly insured against in the case of
property similarly situated, including, without limitation, sinkhole, mine
subsidence, earthquake and environmental insurance, due regard being given to
the height and type of buildings, their construction, location, use and
occupancy.
(ii) All insurance provided for in Subsection C(i) hereof shall be
obtained under valid and enforceable policies (the "Policies" or in the
singular, the "Policy"), and shall be issued by one or more domestic primary
insurer(s) licensed to do business in the State where the policy issued and
also in the states where the Property is located and having a general policy
rating equal to or greater than the rating required by Fannie Mae as
published from time to time for Delegated Underwriting and Servicing
multifamily loans (each such insurer shall be referred to below as a
"Qualified Insurer"). All insurers providing insurance required by this
Instrument shall be authorized to issue insurance in the state in which the
Property is located. The Policy referred to in Subsection C(i)(b) above shall
name Lender as an additional named insured and the Policy referred to in
Subsection C(i)(a) above shall provide that all proceeds be payable to
Lender. The Policies referred to in Subsection C(i)(a) shall also contain (1)
a standard "non-contributory mortgagee" endorsement or its equivalent
relating, INTER ALIA, to recovery by Lender notwithstanding the negligent or
willful acts or omission of Borrower or Lender and shall name Lender as
mortgagee and loss payee, shall be first payable in case of loss to Lender,
and such mortgagee clauses and lender's loss payable endorsements shall be in
form and substance acceptable to Lender; (2) to the extent available at
commercially reasonable rates, a waiver of subrogation endorsement as to
Lender; and (iii) an endorsement providing for a deductible per loss of an
7
amount not more than that which is customarily maintained by prudent owners of
similar properties in the general vicinity of the Property, but in no event in
excess of $250,000.00. All Policies described in Subsection C(a) above shall
contain (i) a provision that such Policies shall not be cancelled, modified or
terminated, nor shall they expire, without at least thirty (30) days' prior
written notice to Lender in each instance; and (ii) include effective waivers by
the insurer of all claims for Insurance Premiums (defined below) against any
loss payees, additional insureds and named insureds (other than Borrower). In
the event that the Property constitutes a legal non-conforming use under
applicable building, zoning or land use laws or ordinances, the policy shall
include an ordinance or law coverage endorsement which will contain Coverage A:
"Loss Due to Operation of Law" (with a minimum liability limit equal to
Replacement Cost With Agreed Value Endorsement), Coverage B: "Demolition Cost"
and Coverage C: "Increased Cost of Construction" coverages. Certificates of
insurance with respect to all renewal and replacement Policies shall be
delivered to Lender not less than thirty (30) days prior to the expiration date
of any of the Policies required to be maintained hereunder which certificates
shall bear notations evidencing payment of applicable premiums (the "Insurance
Premiums"). Originals or certificates of such replacement Policies shall be
delivered to Lender promptly after Borrower's receipt thereof but in any case
within thirty (30) days after the effective date thereof. If Borrower fails to
maintain and deliver to Lender the original Policies or certificates of
insurance required by this Instrument, upon ten (10) days' prior notice to
Borrower, Lender may procure such insurance at Borrower's sole cost and expense.
(iii) Borrower shall comply with all insurance requirements and shall not
bring or keep or permit to be brought or kept any article upon any of the
Property or cause or permit any condition to exist thereon which would be
prohibited by an insurance requirement, or would invalidate the insurance
coverage required hereunder to be maintained by Borrower on or with respect to
any part of the Property pursuant to this Section C.
(iv) If the Property shall be damaged or destroyed, in whole or in part,
by fire or other casualty, Borrower shall give prompt notice of such damage to
Lender and provided that Borrower shall have received the Net Proceeds, Borrower
shall promptly commence and diligently prosecute the completion of the repair
and restoration of the Property as nearly as possible in the exercise of
commercially reasonable efforts to the condition the Property was in immediately
prior to such fire or other casualty, with such alterations as may be approved
by Lender (the "Restoration") and otherwise in accordance with of this
Instrument.
(v) The insurance coverage required under Section C(i)(a) may be
effected under a blanket policy or policies covering the Property and other
properties and assets not constituting a part of the security hereunder;
provided that any such blanket policy shall specify, except in the case of
public liability insurance, the portion of the total coverage of such policy
that is allocated to the Property, and any sublimit in such blanket policy
applicable to the Property, and shall in any case comply in all other
respects with the requirements of this Section C.
(vi) The insurance coverage required under Subsection C(i)(b) may be
satisfied by a layering of Comprehensive General Liability, Umbrella and Excess
Liability Policies, but in no event will the Comprehensive General
8
Liability policy be written for an amount less than $5,000,000 combined single
limit for bodily injury and property damage liability.
(vii) The delivery to Lender of the insurance policies or the
certificates of insurance as provided above shall constitute an assignment of
all proceeds payable under such insurance as relating to the Property by
Borrower to Lender as further security for the indebtedness secured hereby. In
the event of foreclosure of this Instrument, or other transfer of title to the
Property in extinguishment in part of the secured indebtedness, all right, title
and interest of Borrower in and to all proceeds payable under such policies then
in force concerning the Property shall thereupon vest in the purchaser at such
foreclosure, or in Lender or other transferee in the event of such other
transfer of title if and to the extent Lender retains an insurable interest
therein. Approval of any insurance by Lender shall not be a representation of
the solvency of any insurer or the sufficiency of any amount of insurance.
(viii) Lender shall not be responsible for nor incur any liability for
the insolvency of the insurer or other failure of the insurer to perform, even
though Lender has caused the insurance to be placed with the insurer after
failure of Borrower to furnish such insurance. Borrower shall not obtain
insurance for the Property in addition to that required by Lender without the
prior written consent of Lender, which consent will not be unreasonably withheld
provided that (i) Lender is named insured on such insurance, (ii) Lender
receives complete copies of all policies evidencing such insurance, and (iii)
such insurance complies with all of the applicable requirements set forth
herein.
D. SINGLE ASSET BORROWER. Paragraph J of the Rider is amended to add the
following provisions:
(i) Borrower represents and warrants that is has not and covenants and
agrees that it shall not:
(a) engage in any business or activity other than the ownership,
operation and maintenance of the Property, and activities incidental thereto;
(b) acquire or own any material assets other than (A) the Property,
and (B) such incidental Personal Property as may be necessary for the operation
of the Property;
(c) merge into or consolidate with any person or entity or dissolve,
terminate or liquidate in whole or in part, transfer or otherwise dispose of all
or substantially all of its assets or change its legal structure, without in
each case Lender's consent;
(d) fail to preserve its existence as an entity duly organized,
validly existing and in good standing (if applicable) under the laws of the
jurisdiction of its organization or formation, or without the prior written
consent of Lender, amend, modify, terminate or fail to comply with the
provisions of Borrower's Partnership Agreement, Articles or Certificate
Incorporation, Operating Agreement or similar organizational documents, as the
case may be, as same may be further amended or supplemented, if such amendment,
modification, termination or failure to comply would adversely
9
affect ability of Borrower to perform its obligations hereunder, under the Note
or under the Other Security Documents;
(e) own any subsidiary or make any investment in, any person or
entity without the consent of Lender;
(f) commingle its assets with the assets of any of its general
partners, members, shareholders, affiliates, principals or of any other person
or entity; notwithstanding the foregoing, after depositing Gross Revenues and
all other cash or proceeds received in connection with the Property into an
account owned and controlled exclusively by the Borrower, the Borrower shall be
entitled to deposit funds into, and to cause or permit funds to be disbursed
from, an account maintained by an affiliate of Borrower, provided that such
deposits and disbursements are made substantially in accordance with the terms
of the cash management system disclosed by Borrower to Lender on or before the
date hereof;
(g) incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the Debt and trade payables
and other obligations incurred in the ordinary course of business, provided same
are paid prior to delinquency;
(h) fail to maintain its records, books of account and bank accounts
separate and apart from those of the general partners, members, shareholders,
principals and affiliates of Borrower, the affiliates of a general partner or
member, or shareholder of Borrower, and any other person or entity;
(i) enter into any contract or agreement with any general partner,
member, shareholder, principal or affiliate of Borrower, Guarantor or
Indemnitor, or any general partner, member, principal or affiliate thereof,
except upon terms and conditions that are intrinsically fair and
substantially similar to those that would be available on an arms-length
basis with third parties other than any general partner, member, shareholder,
principal or affiliate of Borrower, Guarantor or Indemnitor, or any general
partner, member, principal or affiliate thereof;
(j) seek the dissolution or winding up in whole, or in part, of
Borrower;
(k) maintain its assets in such a manner that it will be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any general partner, member, shareholder, principal or affiliate of Borrower,
or any general partner, member, shareholder, principal or affiliate thereof or
any other person;
(l) hold itself out to be responsible for the debts of another
person;
(m) make any loans or advances to any third party, including any
general partner, member, shareholder, principal or affiliate of Borrower, or any
general partner, principal or affiliate thereof;
(n) agree to, enter into or consummate any transaction which would
render Borrower unable to furnish the certification or other evidence that:
10
(1) Borrower is not an "employee benefit plan" as defined in
Section 3(3) of Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), which is subject to Title I of ERISA, or a
"governmental plan" within the meaning of Section 3(3) of ERISA;
(2) Borrower is not subject to state statutes regulating
investments and fiduciary obligations with respect to governmental
plans; and
(3) one or more of the following circumstances is true:
(A) Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R. Section
2510.3-101(b)(2);
(B) Less than 25 percent of each outstanding class of
equity interests in Borrower are held by "benefit plan investors"
within the meaning of 29 C.F.R. Section 2510.3-101(f)(2); or
(C) Borrower qualifies as an "operating company" or a
"real estate operating company" within the meaning of 29 C.F.R.
Section 2510.3-101(c) or (e) or an investment company registered
under The Investment Company Act of 1940.
(o) fail either to hold itself out to the public as a legal entity
separate and distinct from any other entity or person or to conduct its business
solely in its own name in order not (A) to mislead others as to the identity
with which such other party is transacting business, or (B) to suggest that
Borrower is responsible for the debts of any third party (including any general
partner, principal or affiliate of Borrower, or any general partner, principal
or affiliate thereof); notwithstanding the foregoing, Lender acknowledges that
the Borrower may operate the Property through a management agent approved by
Lender which may be an affiliate of the Borrower;
(p) fail to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations; or
(q) file or consent to the filing of any petition, either voluntary or
involuntary, to take advantage of any applicable insolvency, bankruptcy,
liquidation or reorganization statute, or make an assignment for the benefit of
creditors.
(ii) If Borrower is a limited partnership or a limited liability company,
each general partner or at least one member (the "SPE Member") of Borrower, as
applicable, is a corporation whose sole asset is its interest in Borrower and
each general partner or the SPE Member of Borrower, as applicable, will at all
times comply, and will cause Borrower to comply, with each of the covenants,
terms and provisions contained in Section D(i) as if such representation,
warranty or covenant was made directly by such general partner or SPE Member.
Only the SPE Member may be designated as a manager under the law where the
Borrower is organized.
11
E. CONSENT TO RELIEF FROM AUTOMATIC STAY. Borrower hereby agrees that,
in consideration of the making of the loan by Lender to Borrower evidenced by
the Notes, and as a material inducement to Lender to make such loan and to
the Federal National Mortgage Association to acquire such loan from Lender,
in the event Borrower shall (i) file with any bankruptcy court of competent
jurisdiction or be the subject of any petition under the United States
Bankruptcy Code (the "Bankruptcy Code"), (ii) be the subject of any order for
relief issued under the Bankruptcy Code, (iii) file or be the subject of any
petition seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any present or future
federal or state act or law relating to bankruptcy, insolvency, or other
relief for debtors, (iv) have sought or consented to or acquiesced in the
appointment of any trustee, receiver, conservator, or liquidator, or (v) be
the subject of any order, judgment, or decree entered by any court of
competent jurisdiction approving a petition filed against such party for any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or state
act or law relating to bankruptcy, insolvency, or relief for debtors, then
(a) Lender shall thereupon be entitled and Borrower irrevocably consents to
relief from any automatic stay imposed by Section 362 of the Bankruptcy Code,
or otherwise, on or against the exercise of the rights and remedies otherwise
available to Lender as provided in the Note and/or Instrument or the Other
Loan Documents, and as otherwise provided by law, and Borrower hereby
irrevocably waives its right to object to such relief and acknowledges that
no reorganization in bankruptcy is feasible; (b) Borrower waives its
exclusive right pursuant to Section 1121(b) of the Bankruptcy Code to file a
plan of reorganization and irrevocably consents to the Lender filing a plan
immediately upon the entry of an order for relief if any involuntary petition
is filed against Borrower or upon the filing of a voluntary petition by the
Borrower; (c) in the event that Lender shall move pursuant to Section 1121(d)
of the Bankruptcy Code for an order reducing the 120 day exclusive period,
Borrower shall not object to any such motion; and (d) Borrower irrevocably
waives its right to demand a turnover of the Property from a receiver
appointed at the request of Lender, and agrees that it is in the best
interest of the creditors pursuant to Section 543(d) of the Bankruptcy Code
for the receiver to continue in possession, custody and control of the
Property.
F. ACCELERATION; REMEDIES. Non-Uniform Covenant 27 of the Instrument
("Acceleration; Remedies") is amended to add the following:
(i) DEFAULT. Upon the occurrence of an Event of Default (as defined in
the Note), Lender may exercise any and all remedies provided under this
Instrument and under any of the other Loan Documents, or any other remedies
available under applicable law, or any one or more of such remedies.
(ii) REMEDIES. Upon the occurrence of any Event of Default and at any
time thereafter:
(a) INDEBTEDNESS DUE. All indebtedness secured by this Instrument
in its entirety shall, at the option of Lender become immediately due and
payable without presentment, demand, notice of intention to accelerate or notice
of acceleration, or other notice of any kind except as otherwise expressly set
forth herein, all of which are hereby expressly WAIVED, and the liens and
security interests created or intended to be
12
created hereby shall be subject to foreclosure, repossession and sale in any
manner provided for herein or provided for by law, as Lender may elect, and
Lender may exercise any and all of its rights under this Instrument, the Note
and the Loan Documents.
(b) LEGAL PROCEEDINGS. Lender shall have the right and power to
proceed by suit or suits in equity or at law, whether for the specific
performance of any covenant or agreement of Borrower contained herein or in aid
of the execution of the powers herein granted, or for foreclosure or the sale of
the Property or any part thereof under the judgment or decree of any court of
competent jurisdiction, or for the enforcement of any other appropriate legal or
equitable remedy.
(c) FORECLOSURE SALE. Lender shall be entitled to institute an
action to foreclose this Instrument as to the total amount declared due and
payable by Lender, together with all of the costs, expenses and disbursements of
the Lender, including, without limitation, a reasonable fee for Lender's
attorneys at all trial and appellate levels, as hereinafter set forth. The
Property may be sold in one parcel, several parcels or groups of parcels, and
Lender shall be entitled to bid at the sale and, if Lender is the highest bidder
for the Property or any part or parts thereof, Lender shall be entitled to
purchase the same. Lender shall have the right, after paying or accounting for
all costs of said sale or sales, to credit the amount of the bid at the
foreclosure sale upon the amount of the obligations (in the order of priority
set forth below) in lieu of cash payment. In case of a foreclosure and sale of
the Property and of the obligations hereby secured, the Lender shall be entitled
to enforce payment of and to receive all amounts then remaining due and unpaid
upon the indebtedness secured by this Instrument from any and all security for
said amounts and from any and all persons or entities (including the Borrower)
under any agreement, guaranty or collateral undertaking to pay any portion of
said amount. The proceeds of any foreclosure sale of the Property shall be
distributed and applied in the order of priority set forth below.
Upon any such foreclosure sale pursuant to the judicial proceedings, the
Lender may bid for and purchase the Property and, upon compliance with the terms
of said sale, may hold, retain and possess and dispose of the Property in its
own absolute right without further accountability to the Borrower.
In any civil action to foreclose the lien hereof, there shall be allowed
and included as part of the indebtedness secured by this Instrument in the order
of judgment for foreclosure and sale all expenditures and expenses which may be
paid or incurred by or on behalf of the Lender for reasonable attorneys' fees,
appraisers' fees, outlays for documentary and expert evidence, stenographers'
charges, publication costs, and costs (which may be estimated as to items to be
expended after entry of said order or judgement) of procuring all such abstracts
of title, title searches and examinations, title insurance policies and similar
data and insurance with respect to the title as the Lender may deem reasonably
necessary either to prosecute such civil action or to evidence to bidders at any
sale which may be had pursuant to such order or judgment the true condition of
the title to, or the value of, the Property.
(iii) APPLICATION OF PROCEEDS, RENTS, ETC. The proceeds of any sale
of, and any rents and other amounts generated by the holding, leasing,
13
operation or other use of the Property shall be applied by the Lender (or the
receiver, if one is appointed) to the extent that funds are so available
therefrom, in the order of priority set forth in the Note.
G. BOOKS AND RECORDS. In addition to the obligations of the Borrower under
paragraph E of the Rider to Multifamily Instrument amending Uniform Covenant 10
of the Instrument ("Books and Records"), the Borrower shall provide the Lender
the following:
(i) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in any
event within 120 days after the close of each fiscal year of any Key
Principal during the term of this Agreement, its audited balance sheet as of
the end of such fiscal year, its audited statement of income, partners'
equity and retained earnings for such fiscal year and its audited statement
of cash flows for such fiscal year, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date and period
in the prior fiscal year, prepared in accordance with GAAP, consistently
applied, and accompanied by a certificate of its independent certified public
accountants to the effect that such financial statements have been prepared
in accordance with GAAP, consistently applied, and that such financial
statements fairly present the results of its operations and financial
condition for the periods and dates indicated, with such certification to be
free of exceptions and qualifications as to the scope of the audit or as to
the going concern nature of the business.
(ii) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and in
any event within 45 days after each of the first three fiscal quarters of any
fiscal year of any Key Principal during the term of this Agreement, its
unaudited balance sheet as of the end of such fiscal quarter and its
unaudited statement of income and retained earnings and its unaudited
statement of cash flows for the portion of the fiscal year ended with the
last day of such quarter, all in reasonable detail and stating in comparative
form the respective figures for the corresponding date and period in the
previous fiscal year, accompanied by a certificate of each Key Principal to
the effect that such financial statements have been prepared in accordance
with GAAP, consistently applied, and that such financial statements fairly
present the results of its operations and financial condition for the periods
and dates indicated.
(iii) MONTHLY PROPERTY STATEMENT. Upon Lender's request, on a
monthly basis within 15 days of the last day of the prior month, a statement
of income and expenses of the Property accompanied by a certificate of
Borrower to the effect that each such statement of income and expenses
fairly, accurately and completely presents the operations of the Property for
the period indicated.
(iv) QUARTERLY PROPERTY STATEMENT. A quarterly operating statement
of the Property detailing the total revenues received, total expenses
incurred, total cost of all capital improvements, total debt service and
total cash flow, together with a balance sheet for such quarter, to be
prepared and certified by Borrower in the form required by Lender, and if
available, any quarterly operating statement and/or balance sheet prepared by
an independent certified public accountant within thirty (30) days after the
close of each fiscal quarter.
14
(v) BORROWER'S FINANCIALS. An annual balance sheet and profit
and loss statement of Borrower, in the form required by Lender, prepare and
certified by the respective Borrower, Guarantor and/or Indemnitor, as
applicable, within ninety (90) days after the close of each fiscal year.
(vi) ANNUAL PROPERTY STATEMENTS. On an annual basis within 15 days
of the end of the fiscal year, an annual statement of income and expenses of
the Property accompanied by a certificate of Borrower to the effect that each
such statement of income and expenses fairly, accurately and completely
presents the operations of the Property for the period indicated.
(vii) ANNUAL RENT ROLL. An annual certified rent roll presented on
a quarterly basis consistent with the quarterly certified rent rolls
described above within ninety (90) days after the close of each fiscal year.
(viii) UPDATED RENT ROLLS. Upon Lender's request, a current rent
roll for the Property, showing the name of each tenant, and for each tenant,
the space occupied, the lease expiration date, the rent payable, the rent
paid and any other information requested by Lender and in the form required
by Lender and accompanied by a certificate of Borrower to the effect that
each such rent roll fairly, accurately and completely presents the
information required therein.
(ix) OPERATING BUDGET. An annual operating budget presented on a
monthly basis consistent with the annual operating statement described above
for the Property and all proposed capital replacements and improvements at
least thirty (30) days prior to the start of each calendar year.
(x) SECURITY DEPOSIT INFORMATION. Upon Lender's request, an
accounting of all security deposits held in connection with any lease of any
part of the Property, including the name and identification number of the
accounts in which such security deposits are held, the name and address of
the financial institutions 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.
(xi) SECURITY LAW REPORTING INFORMATION. Promptly upon the
mailing thereof to the partners or shareholders of Borrower or any Key
Principal, copies of all financial statements, reports and proxy statements
so mailed and promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and annual, quarterly or monthly reports
(excluding Form 4, Statement of Changes in Beneficial Ownership, or its
equivalent, unless they reflect a change in control in Owner) which Borrower
or any Key Principal shall have filed with the United States Securities and
Exchange Commission or other Governmental Authorities.
(xii) ACCOUNTANTS' REPORTS. Promptly upon receipt thereof, copies
of any reports or management letters submitted to Borrower by its independent
certified public accountants in connection with the examination of its
financial statements made by such accountants (except for reports otherwise
provided pursuant to clause (i) above).
15
(xiii) CONDITION OF APARTMENT INVESTMENT AND MANAGEMENT COMPANY.
Borrower shall promptly notify the Lender of any report, event or condition
known to the Borrower that the status of Apartment Investment and Management
Company as a real estate investment trust under Subchapter M of the Internal
Revenue Code has been terminated or brought into question.
(xiv) OTHER INFORMATION. Such other financial statements, including
monthly operating statements and rent rolls, as Lender may reasonably request.
H. TRANSFERS OF THE PROPERTY. Paragraph F of the Rider is amended to add
the following: Until such time as (1) the Loan is assumed by and the Property
transferred to a new borrower who is wholly unrelated to Borrower, (2) Borrower
has received the prior written approval of Lender to such assumption and
transfer and (3) such assumption and transfer have been completed, clauses (a)
(2), (a) (3), (b), (c) (4) and (d) of Section F of the Rider to Multifamily
Instrument shall be of no force and effect and are replaced by and read as set
forth below. At such time as clauses (1), (2) and (3) of the preceding sentence
have been fulfilled, Sections (a) through (e) of this Section H of the
Supplemental Rider to Multifamily Instrument shall be of no further force and
effect and clauses (a) (2), (a) (3), (b), (c) (4) and (d) of Section F of the
Rider to Multifamily Instrument shall be operative and controlling.
(a) DEFINITIONS
For purposes of this Instrument, the following terms have the respective
meanings set forth below:
(i) The term "TRANSFER" means (A) a sale, assignment, pledge,
transfer or other disposition (whether voluntary or by
operation of law) of, or the granting or creating of a lien,
encumbrance or security interest in, any of Borrower's
estate, rights, title or interest in the Property, or any
portion thereof, or (B) a sale, assignment, pledge, transfer
or other disposition of any interest in Borrower, its
General Partner, AIMCO REIT or in AIMCO OP, or (C) the
issuance or other creation of new ownership interests in
Borrower, its General Partner, AIMCO REIT or in AIMCO OP, or
(D) a merger or consolidation of Borrower, its General
Partner, AIMCO REIT or AIMCO OP or (E) the reconstitution of
Borrower, its General Partner, AIMCO REIT or AIMCO OP from
one type of entity to another type of entity.
(ii) A "CHANGE OF CONTROL" shall mean the earliest to occur of:
(A) the date an Acquiring Person becomes (by acquisition,
consolidation, merger or otherwise), directly or indirectly,
the beneficial owner of more than forty percent (40%) of
the total Voting Equity Capital of AIMCO REIT then
outstanding, or (B) the date on which AIMCO REIT shall cease
to hold (whether directly or indirectly through a wholly
owned intermediary entity such as AIMCO-LP, Inc. or AIMCO-GP,
Inc.) at least 50.1% of the limited partnership interests
in AIMCO OP or (C) the date on which AIMCO REIT shall cease
for any reason to own 100% of the Voting Equity Capital
(whether directly or
16
indirectly through a wholly owned intermediary entity) (or
any other securities) of the General Partner, or (D) the
date on which the General Partner shall cease for any reason
to be the sole general partner of the Borrower or (E) the
replacement (other than solely by reason of retirement at
age sixty-five or older, death or disability) of more than
50% (or such lesser percentage as is required for
decision-making by the board of directors or trustees, if
applicable) of the members of the board of directors (or
trustees, if applicable) of AIMCO REIT over a one-year
period where such replacement shall not have been approved
by a vote of at least a majority of the board of directors
(or trustees, if applicable) of AIMCO REIT then still in
office who either were members of such board of directors
(or trustees, if applicable) at the beginning of such
one-year period or whose election as members of the board of
directors (or trustees, if applicable) was previously so
approved.
(iii) An "ACQUIRING PERSON" shall mean a "PERSON" or group of
"PERSONS" within the meaning of Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended; PROVIDED,
HOWEVER, that notwithstanding the foregoing, "ACQUIRING
PERSON" shall not be deemed to include any member of the
Borrower Control Group unless such member has, directly or
indirectly, disposed of, sold or otherwise transferred to,
or encumbered or restricted (whether by means of voting
trust agreement or otherwise) for the benefit of an
Acquiring Person, all or any portion of the Voting Equity
Capital of AIMCO REIT directly or indirectly owned or
controlled by such member or such member directly or
indirectly votes all or any portion of the Voting Equity
Capital of AIMCO REIT, directly or indirectly, owned or
controlled by such member for the taking of any action
which, directly or indirectly, constitutes or would result
in a Change of Control, in which event such member of the
Borrower Control Group shall be deemed to constitute an
Acquiring Person to the extent of the Voting Equity Capital
of AIMCO REIT owned or controlled by such member.
(iv) "BORROWER CONTROL GROUP" shall mean Terry Considine, Peter K.
Kompaniez, Richard S. Ellwood, J. Landis Martin, Thomas L.
Rhodes and John D. Smith.
(v) A "PERSON" shall mean an individual, an estate, a trust, a
corporation, a partnership, a limited liability company or
any other organization or entity (whether governmental or
private).
(vi) "SECURITY" shall have the same meaning as in Section 2(1) of
the Securities Act of 1933, as amended.
(vii) "VOTING EQUITY CAPITAL" shall mean Securities of any class or
classes, the holders of which are ordinarily, in the absence
of contingencies, entitled to elect a majority of the board
of directors (or Persons performing similar functions).
17
(viii) "AIMCO REIT" shall mean Apartment Investment and Management
Company, a corporation organized and existing under the laws
of the State of Maryland.
(ix) "AIMCO OP" shall mean AIMCO Properties, L.P., a limited
partnership organized and existing under the laws of the
State of Delaware.
(x) "GENERAL PARTNER" shall mean the corporation executing the
Instrument on behalf of the Borrower, which corporation is
organized and existing under the laws of the State
of Delaware.
(b) ACCELERATION OF THE LOAN UPON TRANSFERS OF THE PROPERTY OR SIGNIFICANT
INTERESTS
Subject to clause (c) hereof, Lender may, at Lender's option, declare all
sums secured by this Instrument immediately due and payable and Lender may
invoke any remedies permitted by paragraph 27 of this Instrument if, without
Lender's prior written consent, any of the following shall occur:
(i) a Transfer; or
(ii) a Change in Control.
(c) NO ACCELERATION OF THE LOAN FOR TRANSFERS CAUSED BY CERTAIN EVENTS
Notwithstanding the foregoing provisions of this covenant, Lender shall not
be entitled to declare sums secured by this Instrument immediately due and
payable or to invoke any remedy permitted by paragraph 27 of this Instrument
solely upon the occurrence of any of the following:
(i) A Transfer that occurs by inheritance, devise, or bequest or
by operation of law upon the death of a natural person who
is an owner of an indirect ownership interest in the
Borrower.
(ii) The grant of a leasehold interest in individual dwelling
units for a term of two years or less and leases for
commercial uses provided that (A) commercial leases do not
exceed 5 percent (5%) of (1) the rentable space of the
Property (measured as required by Lender) or (2) the
rental income from the Property, (B) no such commercial
leasehold interest contains an option to purchase the
Property, and (C) all such commercial leasehold
interests, in the aggregate, (1) do not adversely affect
the value of the Property and (2) are coincidental
to the current use of the Property for multifamily
residential purposes.
(iii) A sale or other disposition of obsolete or worn out personal
property which is contemporaneously replaced by comparable
personal property of equal or greater value which is free
and clear of liens, encumbrances and security interests
other than those created by the Loan Documents.
18
(iv) The creation of a mechanic's or materialmen's lien or
judgment lien against the Property which is released of
record or otherwise remedied to Lender's satisfaction,
within thirty (30) days of the date of creation.
(v) The grant of an easement, if prior to the granting of the
easement Borrower causes to be submitted to Lender all
information required by Lender to evaluate the easement, and
if Lender determines that the easement will not materially
affect the operation of the Property or Lender's interest in
the Property and Borrower pays to Lender on demand, all
costs and expenses incurred by Lender in connection with
reviewing Borrower's request. Lender shall not unreasonably
withhold its consent to (A) the grant of a utility easement
serving the Property to a publicly operated utility, or (B)
the grant of an easement related to expansion or widening of
roadways, provided that such easement is in form and
substance reasonably acceptable to Lender and does not
materially and adversely affect the access, use or
marketability of the Property.
(vi) The transfer of limited partnership interests in Borrower
provided no Change of Control occurs as a result of such
Transfer.
(vii) The Transfer of shares of common stock, limited partnership
interests or other beneficial or ownership interests or
other forms of securities in AIMCO REIT or AIMCO OP,
and the issuance of all varieties of convertible debt,
equity and other similar securities of AIMCO REIT or AIMCO
OP, and the subsequent Transfer of such securities;
provided, however, that no Change of Control occurs as a
result of such Transfer, either upon such Transfer or upon
the subsequent conversion to equity of such convertible debt
or other securities.
(viii) The issuance by AIMCO REIT or AIMCO OP of additional common
stock, limited partnership interests or other beneficial or
ownership interests, convertible debt, equity and
other similar securities, and the subsequent Transfer
of such convertible debt or securities; provided, however,
that no Change in Control occurs as the result of such
Transfer, either upon such Transfer or upon the subsequent
conversion to equity of such convertible debt or other
securities.
(ix) So long as AIMCO REIT owns 100% of the stock of AIMCO-LP,
Inc., a Transfer of limited partnership interests that
results in AIMCO-LP, Inc. owning not less than 50.1% of the
limited partnership interests in AIMCO OP.
(d) SECONDARY FINANCING. Notwithstanding the foregoing, provided Borrower
is not otherwise in default under this Instrument or under any of the other Loan
Documents, Lender will consent to Borrower obtaining bona fide third party
subordinate debt, either secured or unsecured (the "Secondary Financing") and
the granting of a subordinate lien on the Property to secure such debt so long
as: (i) the unpaid principal balance of the loan and the
19
principal balance of the Secondary Financing does not exceed 55% of the then
current appraised value of the Property as confirmed by Lender; (ii) the
combined debt service coverage for both the Loan and the Secondary Financing is
not less than 1.75; and (iii) the Secondary Financing is used solely for the
purposes of renovating and/or making capital improvements to the Property as
approved by Lender. At least 10 days prior to the date Borrower anticipates
obtaining such Secondary Financing, Borrower shall submit to Lender full and
complete copies of any documents to be executed by Borrower to evidence or
secure such Secondary Financing, together with a detailed statement of the
renovation and/or capital improvements to be funded with proceeds of such
Secondary Financing, along with such other matters as Lender, in its reasonable
discretion, shall deem necessary to confirm satisfaction of the foregoing
conditions. Lender may require the Borrower and the subordinate debt holder
(whether secured or unsecured Secondary Financing) to execute a standstill
Subordination Agreement in form and substance satisfactory to Lender in its sole
discretion. Secondary Financing shall not include ordinary trade indebtedness.
(e) OTHER PROVISIONS REGARDING TRANSFERS. The parties acknowledge and
agree that pursuant to the provisions of the this Instrument, Lender may permit
a transfer of an indirect interest in the Borrower where Lender approves the
transferee's creditworthiness. Lender will approve such proposed transferee's
creditworthiness in connection with a transfer of indirect interests in the
Borrower so long as there is no transfer of a direct interest in Borrower or its
General Partner and so long as no "Change of Control" occurs. So long as there
is no transfer of a direct interest in Borrower or its General Partner and so
long as no Change in Control occurs, Lender's consent to the transferee's
creditworthiness in connection with a transfer of indirect interests in the
Borrower shall be deemed automatic and Borrower shall not be required to come to
Lender for consent. Alternatively, if a transfer of either a direct interest in
Borrower or its General Partner or a Change in Control is contemplated, Borrower
must obtain Lender's prior written consent. Nothing contained in this paragraph
is intended to permit, authorize or confer consent to a transfer of all or any
part of any property encumbered by the Instrument.
Lender will not unreasonably withhold its consent to a "Change of Control",
provided that Borrower gives Lender not less than forty-five (45) days prior
written notice of such Change of Control. Borrower acknowledges and agrees that
time is of the essence with respect to such notice and that the remaining
provisions of this paragraph shall be null and void unless such notice is timely
given by Borrower. Lender will not withhold its consent under this paragraph if
Lender determines in its discretion that (A) such acquiring person or entity has
a creditworthiness at least equal to that of Borrower, (B) that such acquiring
person or entity is of sufficient size and sophistication to own, operate and
manage the properties securing the Mortgages and (C) that such acquiring person
or entity has experience that is at least equal to that of Borrower in the
ownership, operation and management of a portfolio of Multifamily Residential
Property that is at least equal in value to the value of the property securing
the Instrument. Lender shall provide Borrower written notice of its decision to
consent or refuse to consent to a Change in Control under this paragraph within
thirty (30) days from the date that Lender determines that it has received all
of the information required by Lender to make the determinations described in
the preceding sentence.
20
I. COMMON FACILITIES DISTRICT. Without obtaining the prior written consent
of Lender, Borrower shall not consent to, or vote in favor of, the inclusion of
all or any part of the Property in any Community Facilities District formed
pursuant to the Community Facilities District Act, A.R.S. Section 48-701, ET
SEQ., as amended from time to time. Borrower shall immediately give notice to
Lender of any notification or advice that Borrower may receive from any
municipality or other third party of any intent or proposal to include all or
any part of the Property in a Community Facilities District. Lender shall have
the right to file a written objection to the inclusion of all or any part of the
Property in a Community Facilities District, either in its own name or in the
name of Borrower, and to appear at, and participate in, any hearing with respect
to the formation of any such district.
J. APPOINTMENT OF RECEIVER. Upon an Event of Default and after
obtaining the prior written consent of the Lender, Borrower shall apply for and
obtain, without regard to the adequacy of any security for the Note or the
solvency of the Borrower or any other person or entity, a receiver by any court
of competent jurisdiction to take charge of all the Property, to manage, operate
and carry on any business then being conducted or that could be conducted on the
Property, to carry on, protect, preserve, replace and repair the Property, and
receive and collect all rents and to apply the same to pay the receiver's
expenses for the operation of the Property. Upon appointment of said receiver,
Borrower shall immediately deliver possession of all of the Property to such
receiver. Neither the appointment of a receiver for the Property by any court
at the request of Lender or by agreement with Borrower nor the entering into
possession of all or any part of the Property by such receiver shall constitute
Lender a "mortgagee in possession" or otherwise make Lender responsible or
liable in any manner with respect to the Property or the occupancy, operation or
use thereof. Borrower agrees that Lender shall have the absolute and
unconditional right to the appointment or a receiver in any independent and/or
separate action brought by Lender regardless of whether Lender seeks any relief
in such action other than the appointment of a receiver. In that respect,
Borrower waives any express or implied requirement under common law or A.R.S.
Section 12-1241 that a receiver may be appointed only ancillary to other
judicial or non-judicial relief.
K. ADDITIONAL REMEDIES; FORECLOSURE. In addition to any remedies
provided herein for an Event of Default, Lender shall have all other legal or
equitable remedies allowed under applicable law (including specifically that of
foreclosure of this Instrument as though it were a mortgage). No failure on the
part of Lender to exercise any of its rights hereunder arising upon any Event of
Default shall be construed to prejudice its rights upon the occurrence of any
other or subsequent Event of Default. No delay on the part of Lender in
exercising any such rights shall be construed to preclude it from the exercise
thereof at any time while that Event of Default is continuing. Lender may
enforce any one or more remedies or rights hereunder successively or
concurrently. By accepting payment or performance of any of the obligations
under the Instrument or the Loan Documents after its due date, Lender shall not
thereby waive the agreement contained herein that time is of the essence, nor
shall Lender waive either its right to require prompt payment or performance
when due of the remainder of the obligations under the Loan Documents or its
right to consider the failure to so pay or perform an Event of Default. In any
action by Lender to recover a deficiency judgment
21
for any balance due under the Note upon the foreclosure of this Instrument or in
any action to recover obligations secured hereby, and as a material inducement
to making the loan evidenced by the Note, Borrower acknowledges and agrees that
the successful bid amount made at any judicial or nonjudicial foreclosure sale,
if any, shall be conclusively deemed to constitute the fair market value of the
Property, that such bid amount shall be binding against Borrower in any
proceeding seeking to determine or contest the fair market value of the Property
and that such bid amount shall be the preferred alternative means of determining
and establishing the fair market value of the Property. Borrower hereby waives
and relinquishes any right to have the fair market value of the Property
determined by a judge or jury in any action seeking a deficiency judgment or any
action to enforce the obligations pursuant to the Loan Documents secured hereby,
including, without limitation, a hearing to determine fair market value pursuant
to A.R.S. Section 12-1566, Section 33-814, Section 33-725 or Section 33-727.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
22
IN WITNESS WHEREOF, the parties hereto have executed this Supplemental
Rider or have caused the same to be executed by their respective representatives
thereunto duly authorized.
BORROWER:
AIMCO/WICKERTREE, L.P.,
a Delaware limited partnership
By: AIMCO/Wickertree, Inc., a
Delaware corporation
By: /s/ Harry Alcock
-------------------------------------
Harry Alcock
Vice President
23
EXHIBIT A
Order Number: 201862
LEGAL DESCRIPTION
That portion of the Northwest quarter of the Northeast quarter of Section 25,
Township 4 North, Range 2 East of the Gila and Salt River Base and Meridian,
Maricopa County, Arizona, described as follows:
COMMENCING at the North quarter corner of said Section 25;
THENCE due South along the centerline of 23rd Avenue 380.03 feet;;
THENCE South 89 DEG. 42' 41" East 33.00 feet to the POINT OF BEGINNING;
THENCE South 89 DEG.42' 41" East 777 feet to the West line of Rose Garden Place,
according to Book 201 of Maps, page 30, records of Maricopa County, Arizona;
THENCE South 00 DEG. 00' 04" East along West line 430.00 feet to the North line
of said subdivision;
THENCE North 89 DEG. 42' 41" West along said North line 777.00 feet;
THENCE North 430.00 feet to the POINT OF BEGINNING;
EXCEPT that portion condemned unto the State of Arizona by judgement entered in
the Arizona Superior Court, in and for the County of Maricopa, a certified copy
of which was recorded in Document No. 93-403106, records of Maricopa County,
Arizona, described as follows:
COMMENCING at the North quarter corner of said Section 25;
THENCE South 00 DEG. 13' 19" East 699.95 feet along the assumed mid-Section
line of said Section 25;
THENCE North 89 DEG. 46' 41" East 33.00 feet to the POINT OF BEGINNING in the
existing East line of the 66.00 foot right-of-way of 23rd Avenue;
THENCE North 05 DEG. 43' 56" East 163.88 feet;
THENCE North 00 DEG. 13' 19" West 107.86 feet;
THENCE North 49 DEG. 24' 47" East 73.56 feet to the North line of the above
described property;
THENCE along said North line North 89 DEG. 59' 51" West 73.04 feet to the
aforesaid East right-of-way line of 23rd Avenue;
THENCE along said East right-of-way line South 00 DEG. 13' 19" East 318.79 feet
to the POINT OF BEGINNING.
EXHIBIT "B" TO MULTIFAMILY MORTGAGE, DEED OF TRUST OR
DEED TO SECURE DEBT AND FINANCING STATEMENTS
As used herein., the term "Debtor" shall mean and include the terms
"Mortgagor", "Grantor" and "Borrower"; and the term "Creditor" shall mean and
include the terms "Lender", "Mortgagee" and "Secured Party".
This Exhibit "B" is attached to, incorporated by reference in, and forms a
part of, certain documents (collectively, the "Security Documents"), executed
and delivered by Debtor in connection with the refinancing of the Project (as
hereinafter defined), including: (i) a Multifamily Mortgage, Deed of Trust or
Deed to Secure Debt; and (ii) Financing Statements.
This Exhibit "B" refers to the following collateral, which may be now or
hereafter located on the premises of, relate to, or be used in connection with,
the acquisition or refinancing, construction, equipping, repair, ownership,
management or operation of a multifamily rental housing project (the "Project"),
located on the property named and described on Exhibit "A" (the "Property").
l. All materials now owned or hereafter acquired by the Debtor and
intended for construction, reconstruction, alteration and repair of any
building, structure or improvement now or hereafter erected or placed on the
Property, all of which materials shall be deemed to be included within the
Project immediately upon the delivery thereof to the Project.
2. All of the walks, fences, plants, trees, shrubbery, driveways,
fixtures, machinery, apparatus, equipment, appliances, fittings, and other goods
and other personal property of every kind and description whatsoever, now owned
or hereafter acquired by the Debtor and attached to or contained in and used or
usable in connection with any present or future operation of the Project,
including, by way of example rather than of limitation, all lighting, laundry,
incinerating and power equipment; all engines, boilers, machines, motors,
furnaces, compressors and transformers; all generating equipment; all pumps,
tanks, ducts, conduits, wire, switches, electrical equipment and fixtures, fans
and switchboards; all telephone equipment; all piping, tubing, plumbing
equipment and fixtures; all heating, refrigeration, air conditioning, cooling,
ventilating, sprinkling, water, gas, power and communications equipment, systems
and apparatus; all water coolers, water heaters and water closets; all fire
prevention, alarm and extinguishing systems and apparatus; all security and
access control systems and apparatus; all cleaning equipment; all lift, elevator
and escalator equipment and apparatus; all partitions, shades, blinds, awnings,
screens, screen doors, storm doors, storm windows, exterior and interior signs,
antennas, gas fixtures, bathtubs, washers, dryers, sinks, stoves, ranges, ovens,
refrigerators, garbage disposals, dishwashers, cabinets, mirrors, mantles,
pictures, panelling, floor coverings, carpets, rugs, curtains, curtain rods,
draperies and other furnishings and furniture installed or to be installed or
used or usable in the operation of any part of the Project or facilities erected
or to be erected in or upon the Property; and every renewal or replacement
thereof or articles in substitution therefor, whether or not the same are now or
hereafter attached to the Property in any manner; all except for any right,
title or interest therein owned by any tenant (it being agreed that all personal
property owned by the Debtor and placed by it on the Property shall, so far as
permitted by law, be deemed to be affixed to the Property, appropriated to its
use, and covered by each of the Security Documents to which this Exhibit "B" is
attached).
3. All of the Debtor's right, title and interest in and to any and
all judgments, awards of damages (including but not limited to severance and
consequential damages), payments, proceeds, settlements or other compensation
(collectively, the "Awards") heretofore or hereafter made, including interest
thereon, and the right to receive the same, as a result of, in connection with,
or in lieu of (i) any taking of the Property or any part thereof by the exercise
of the power of condemnation or eminent domain, or the police power, (ii) any
change or alteration of the grade of any street, or (iii) any other injury to or
decrease in the value of the Property or any part thereof (including but not
limited to destruction or decrease in value by fire or other casualty), all of
which Awards, rights thereto and shares therein are hereby assigned to the
Creditor, who is hereby authorized to collect and receive the proceeds thereof
and to give proper receipts and acquittances therefor and to apply, at its
option, the net proceeds thereof, after deducting expenses of collection, as a
credit upon any portion, as selected by the Creditor, of the indebtedness
secured by the Security Documents.
4. All of the Debtor's right, title and interest in and to any and
all payments, proceeds, settlements or other compensation heretofore or
hereafter made, including any interest thereon, and the right to receive the
same from any and all insurance policies covering the Property or any portion
thereof, or any of the other property described herein.
5. The interest of the Debtor in and to all of the rents,
royalties, mineral, oil and gas rights and profits, water, water rights and
water stock appurtenant to the Property, issues, profits, revenues, income,
tenant assistance payments, if any, and other benefits of the Property, or
arising from the use or enjoyment of all or any portion thereof, or from any
lease, agreement or tenant assistance payment contract, if any, pertaining
thereto, and all right, title and interest of the Debtor in and to, and
remedies under, all contract rights, accounts receivable and general
intangibles arising out of or in connection with any and all leases and
subleases of the Property, or any part thereof, and of the other property
described herein, or any part thereof, both now in existence or hereafter
entered into, together with all proceeds (cash and non-cash) thereof; and
including, without limitation, to the extent permitted by law, all cash or
securities deposited thereunder to secure performance by the lessees of their
obligations thereunder.
6. All of the Debtor's rights, options, powers and privileges in
and to (but not the Debtor's obligations and burdens under) any construction
contract, architectural and engineering agreements and management contract
pertaining to construction, development, ownership, equipping and management
of the Property and all of the Debtor's right, title and interest in and to
(but not the Debtor's obligations and burdens under) all architectural,
engineering and similar plans, specifications, drawings, reports, surveys,
plats, permits and the like, contracts for construction, operation and
maintenance of, or provision of services to, the Property or any of the other
property described herein, and all sewer taps and allocations, agreements for
utilities, bonds and the like, all relating to the Property.
7. All intangible personal property, accounts, licenses, permits,
instruments, contract rights, and chattel paper of the Debtor derived from,
or generated or required by, the Property, including but not limited to cash;
accounts receivable; bank accounts; certificates of deposit; securities;
promissory notes; rents; tenant assistance payments (if any; rights (if any)
to amounts held in escrow; insurance proceeds; condemnation rights; deposits;
judgments, liens and causes of
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action; warranties and guarantees (but not including syndication proceeds
generated by sale of interests in the Debtor).
8. The interest of the Debtor in and to any cash escrow fund and
in and to any and all funds, securities, instruments, documents and other
property which are at any time paid to, deposited with, under the control of,
or in the possession of the Creditor, or any of its agents, branches,
affiliates, correspondents or others acting on its behalf, which rights shall
be in addition to any right of set-off or right of lien that the Creditor may
otherwise enjoy under applicable law, regardless of whether the same arose
out of or relate in any way, whether directly or indirectly, to the Project
located upon the Property.
9. All inventory, including raw materials, components,
work-in-process, finished merchandise and packing and shipping materials.
10. Proceeds, products, returns, additions, accessions and
substitutions of and to any or all of the above.
11. Any of the above arising or acquired by the Debtor or to which
the Debtor may have a legal or beneficial interest in on the date hereof and at
any time in the future.
12. Any of the above which may become fixtures by virtue of
attachment to the Property.
13. All of the records and books of account now or hereafter
maintained by or on behalf of the Debtor in connection with the Project.
14. All names now or hereafter used in connection with the Project
and the goodwill associated therewith.
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