Common use of Nonrecourse Debt Clause in Contracts

Nonrecourse Debt. Borrower shall be liable upon the indebtedness evidenced by this Note, for all sums to accrue or to become payable thereon and for performance of all covenants contained in this Note or in any of the other Loan Documents, to the extent, but only to the extent, of Lender's security for the same, including, without limitation, all properties, rights, estates and interests covered by the Mortgage and the other Loan Documents. No attachment, execution or other writ or process shall be sought, issued or levied upon any assets, properties or funds of Borrower other than the properties, rights, estates and interests described in the Mortgage and the other Loan Documents. In the event of foreclosure of such liens, mortgages or security interests, by private power of sale or otherwise, no judgment for any deficiency upon such indebtedness, sums and amounts shall be sought or obtained by Le▇▇▇▇ ▇gainst Borrower. Subject to the foregoing, nothing herein contained shall be construed to prevent Le▇▇▇▇ ▇rom exercising and enforcing any other remedy relating to the Property allowed at law or in equity or by any statute or by the terms of any of the Loan Documents. Notwithstanding the foregoing, Borrower shall be personally liable to Lender for: (a) any damages, losses, liabilities, costs or expenses (including, without limitation, attorneys' fees) incurred by Lender due to any of the following: (i) any security deposits of tenants of the Property (not previously applied to remedy tenant defaults) which have not been paid over to Lender; (ii) any rents prepaid by any tenant of the Property more than one (1) month in advance; (iii) any insurance proceeds or condemnation awards received by Borrower and not applied according to the terms of the Mortgage; provided, however, Bo▇▇▇▇▇▇ ▇ill not be personally liable for any failure described in this Section 12(a)(iii) if Borrower is unable to apply insurance proceeds or condemnation awards as required by Le▇▇▇▇ ▇ecause of a valid, final, unappealable order issued by a court of competent jurisdiction in a judicial proceeding; (iv) repairs to the Property resulting from a casualty not reimbursed by insurance, to the extent insurance coverage for such repairs was required by the Loan Documents; (v) fraud, material misrepresentation or bad faith on the part of Borrower; (vi) any event or circumstance for which Borrower is obligated to indemnify Lender under the provisions of the Mortgage respecting Hazardous Substances, Contamination or Clean-Up; (vii) waste of the Property by Borrower, except for ordinary wear and tear, casualty and condemnation; (viii) Bo▇▇▇▇▇▇'▇ failure to pay real estate taxes or other assessments against the Property (but subject to the provisions of Section 4.1(c) of the Mortgage regarding Le▇▇▇▇’▇ failure to pay the same, in which event, Borrower shall have no liability hereunder); or (ix) Borrower's failure to comply with the Americans with Disabilities Act of 1990, as amended, or any other Laws; and (b) all rents, issues and profits from the Property collected by Borrower after an Event of Default has occurred and is continuing or after an event or circumstance has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute an Event of Default, unless such rents, issues and profits are applied to the normal operating expenses of the Property or to the Secured Debt; provided, however, Borrower will not be personally liable for any failure described in this Section 12(b) if Borrower is unable to apply rents and security deposits as required by Lender because of a valid, final, unappealable order issued by a court of competent jurisdiction in a judicial proceeding; (c) default of either landlord or tenant under any Master Lease (as defined elsewhere in the Loan Documents) that may be applicable to the Property; ; (d) the cost to repair any Casualty (as defined in the Mortgage) having a repair estimate as determined by the Lender equal to or less Three Hundred Thousand Dollars ($300,000.00); provided, however, the Borrower’s liability for the cost to repair any such Casualty will be released by Lender upon the Borrower’s satisfactory lien-free completion of such repair, as determined by the Lender in the Lender’s sole discretion. Additionally, notwithstanding other provisions of this paragraph 12, the loan evidenced by this Promissory Note and the other Loan Documents shall become fully recourse debt to Borrower and Guarantor(s) if any of the following occur: (a) Borrower secures either junior financing secured by the Property or mezzanine financing secured by interests in Borrower (collectively, “Junior Loan”) without written authorization from Lender; or (b) Borrower pays any amount toward a Junior Loan at a time when there is an Event of Default under Le▇▇▇▇’▇ loan, regardless of whether the Junior Loan was authorized or unauthorized by Le▇▇▇▇; or (c) Borrower files a petition under Chapter 11 of the United States Bankruptcy Code or under any other form of insolvency law, or any petition seeking any liquidation, dissolution, or similar relief under any present or future federal or state bankruptcy, insolvency or debtor relief acts or laws (collectively “Insolvency Petition”); or (d) any such Insolvency Petition is filed against Bo▇▇▇▇▇▇ ▇nd Borrower cooperates with or acquiesces to such filing, fails to take commercially reasonable efforts to have the same dismissed (provided, however, commercially reasonable efforts shall not require the members of Borrower to make any capital contributions in connection with such efforts) or otherwise resists or opposes the lifting of the automatic stay by the bankruptcy court to permit Lender to foreclose the Mortgage. Lender shall not be limited in any way in enforcing the personal liability and obligations of Borrower under the Loan Documents against Borrower, nor shall Lender be limited in any way in enforcing the personal liability and obligations of any guarantor and indemnitor according to the terms of the instruments creating such liabilities and obligations. To that end, Borrower hereby expressly waives any right to require Lender to bring any action against any other person or to require that resort be had to any security and, without limiting the generality of the foregoing, Borrower herewith expressly waives any right Borrower otherwise might have or might have had under the provisions of Section 26-7 of the North Carolina General Statutes, et. seq. and/or other North Carolina laws.

Nonrecourse Debt. The following individuals/entities, [Insert names and make sure they sign the Borrower shall be liable Regulatory Agreement] as identified in the “Firm Commitment” (which means the commitment for insurance of advances or commitment for insurance upon completion issued to Lender by HUD under which the indebtedness debt evidenced by this Note, for all sums the Note is to accrue or be insured pursuant to become payable thereon and for performance of all covenants contained in this Note or in any a Section of the other Loan DocumentsAct, to the extent, but only to the extent, of Lender's security dated ): do not assume personal liability for the same, including, without limitation, all properties, rights, estates and interests covered by the Mortgage and the other Loan Documents. No attachment, execution or other writ or process shall be sought, issued or levied upon any assets, properties or funds of Borrower other than the properties, rights, estates and interests described in the Mortgage and the other Loan Documents. In the event of foreclosure of such liens, mortgages or security interests, by private power of sale or otherwise, no judgment for any deficiency upon such indebtedness, sums and amounts shall be sought or obtained by Le▇▇▇▇ ▇gainst Borrower. Subject to the foregoing, nothing herein contained shall be construed to prevent Le▇▇▇▇ ▇rom exercising and enforcing any other remedy relating to the Property allowed at law or in equity or by any statute or by the terms of any of the Loan Documents. Notwithstanding the foregoing, Borrower shall be personally liable to Lender for: (a) any damages, losses, liabilities, costs or expenses (including, without limitation, attorneys' fees) incurred by Lender payments due to any of the following: (i) any security deposits of tenants of the Property (not previously applied to remedy tenant defaults) which have not been paid over to Lender; (ii) any rents prepaid by any tenant of the Property more than one (1) month in advance; (iii) any insurance proceeds or condemnation awards received by Borrower and not applied according to the terms of the Mortgage; provided, however, Bo▇▇▇▇▇▇ ▇ill not be personally liable for any failure described in this Section 12(a)(iii) if Borrower is unable to apply insurance proceeds or condemnation awards as required by Le▇▇▇▇ ▇ecause of a valid, final, unappealable order issued by a court of competent jurisdiction in a judicial proceeding; (iv) repairs to the Property resulting from a casualty not reimbursed by insurance, to the extent insurance coverage for such repairs was required by the Loan Documents; (v) fraud, material misrepresentation or bad faith on the part of Borrower; (vi) any event or circumstance for which Borrower is obligated to indemnify Lender under the provisions of the Mortgage respecting Hazardous Substances, Contamination or Clean-Up; (vii) waste of the Property by Borrower, except for ordinary wear Note and tear, casualty and condemnation; (viii) Bo▇▇▇▇▇▇'▇ failure ▇▇’s Security Instrument, or for the payments to pay real estate taxes the Reserve for Replacements, or other assessments against for matters not under their control, provided that said individuals/entities shall remain personally liable under this Agreement only with respect to the Property matters hereinafter stated; namely: (but subject to a) for funds or property of the Project coming into its hands which, by the provisions of Section 4.1(c) of the Mortgage regarding Le▇▇▇▇’▇ failure this Agreement, it is not entitled to pay the same, in which event, Borrower shall have no liability hereunder)retain; or (ix) Borrower's failure to comply with the Americans with Disabilities Act of 1990, as amended, or any other Laws; and (b) all rentsfor authorizing the conveyance, issues and profits from the Property collected by Borrower after an Event of Default has occurred and is continuing or after an event or circumstance has occurred and is continuing which with the passage of time or the giving of noticeassignment, transfer, pledge, encumbrance, relinquishment, or both, would constitute an Event of Default, unless such rents, issues and profits are applied to the normal operating expenses other disposition of the Mortgaged Property or to any interest therein in violation of this Agreement without the Secured Debtprior written approval of HUD; provided, however, Borrower will not be personally liable for any failure described in this Section 12(b) if Borrower is unable to apply rents and security deposits as required by Lender because of a valid, final, unappealable order issued by a court of competent jurisdiction in a judicial proceeding; (c) default for its own acts and deeds, or acts and deeds of either landlord or tenant under any Master Lease (as defined elsewhere others, which it has authorized in violation of the Loan Documents) that may be applicable to the Property; ; (d) the cost to repair any Casualty (as defined in the Mortgage) having a repair estimate as determined by the Lender equal to or less Three Hundred Thousand Dollars ($300,000.00); provided, however, the Borrower’s liability for the cost to repair any such Casualty will be released by Lender upon the Borrower’s satisfactory lien-free completion of such repair, as determined by the Lender in the Lender’s sole discretion. Additionally, notwithstanding other provisions of this paragraph 12, the loan evidenced by this Promissory Note and the other Loan Documents shall become fully recourse debt to Borrower and Guarantor(s) if any section. The obligations of the following occur: (a) Borrower secures either junior financing secured by the Property or mezzanine financing secured by interests individuals/entities listed in Borrower (collectivelythis paragraph shall, “Junior Loan”) without written authorization from Lender; or (b) Borrower pays any amount toward a Junior Loan at a time when there is an Event of Default under Le▇▇▇▇’▇ loan, regardless of whether the Junior Loan was authorized or unauthorized by Le▇▇▇▇; or (c) Borrower files a petition under Chapter 11 subject to applicable law of the United States Bankruptcy Code or jurisdiction governing the Security Instrument, survive any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, any termination of this Agreement, and any release of record of this Borrower’s Security Instrument. The Lender is a third party beneficiary of the personal liability obligations of the said individuals/entities under any other form this Section [38] so long as the Lender has not assigned 1. It is in HUD’s best interests that the Lender not assign the Note to HUD. Allowing the Lender to enforce the personal liability obligations of insolvency law, or any petition seeking any liquidation, dissolution, or similar relief under any present or future federal or state bankruptcy, insolvency or debtor relief acts or laws the Principals is thus in HUD’s (collectively “Insolvency Petition”); or (d) any such Insolvency Petition is filed against Boand ▇▇▇▇▇▇ ▇nd Borrower cooperates with or acquiesces to such filing, fails to take commercially reasonable efforts to have the same dismissed (provided, however, commercially reasonable efforts shall not require the members ’s) best interests. 2. The one action rule and foreclosure rules in some states may preclude enforcement of Borrower to make any capital contributions in connection with such efforts) or otherwise resists or opposes the lifting of the automatic stay by the bankruptcy court to permit Lender to foreclose the Mortgage. Lender shall not be limited in any way in enforcing the personal liability and obligations of Borrower under the Loan Documents against Borrower, nor shall Lender be limited in any way in enforcing the personal liability and obligations of any guarantor and indemnitor according to the terms of the instruments creating such liabilities and obligations. To principals after foreclosure, hence it is important to add the caveat, “subject to applicable law…” so that end, Borrower hereby expressly waives any right to require Lender to bring any action against any other person or to require that resort be had to any security and, without limiting the generality of the foregoing, Borrower herewith expressly waives any right Borrower otherwise might have or might have had under the provisions of Section 26-7 of the North Carolina General Statutes, et. seq. and/or other North Carolina lawsan enforceability opinion does not become an issue for ▇▇▇▇▇▇▇▇’s counsel.] Individual Title Individual Title

Nonrecourse Debt. Borrower shall be liable upon the indebtedness evidenced by this Note, for all sums to accrue or to become payable thereon and for performance of all covenants contained in this Note or in any of the other Loan Documents, to the extent, but only to the extent, of Lender's ▇▇▇▇▇▇’s security for the same, including, without limitation, all properties, rights, estates and interests covered by the Mortgage and the other Loan Documents. No attachment, execution or other writ or process shall be sought, issued or levied upon any assets, properties or funds of Borrower other than the properties, rights, estates and interests described in the Mortgage and the other Loan Documents. In the event of foreclosure of such liens, mortgages or security interests, by private power of sale or otherwise, no judgment for any deficiency upon such indebtedness, sums and amounts shall be sought or obtained by Le▇▇▇▇▇▇ ▇gainst against Borrower. Subject to the foregoing, nothing herein contained shall be construed to prevent Le▇▇▇▇▇▇ ▇rom from exercising and enforcing any other remedy relating to the Property allowed at law or in equity or by any statute or by the terms of any of the Loan Documents. Notwithstanding the foregoing, Borrower shall be personally liable to Lender for: (a) any damages, losses, liabilities, costs or expenses (including, without limitation, attorneys' ’ fees) incurred by Lender due to any of the following: (i) any security deposits of tenants of the Property (not previously applied to remedy tenant defaultsdefaults or previously returned to tenants in accordance with the express provisions of their leases) which have not been paid over to Lender; (ii) any rents prepaid by any tenant of the Property more than one (1) month in advance; (iii) any insurance proceeds or condemnation awards received by Borrower ▇▇▇▇▇▇▇▇ and not applied according to the terms of the Mortgage; provided, however, Bo(iv) accepting Lease termination payments without ▇▇▇▇▇▇ ▇ill not be personally liable for any failure described in this Section 12(a)(iii) if Borrower is unable ’s prior written consent and direction as to apply insurance proceeds or condemnation awards as required by Le▇▇▇▇ ▇ecause of a valid, final, unappealable order issued by a court of competent jurisdiction in a judicial proceedinguse; (ivv) repairs to the Property resulting from a casualty not reimbursed by insurance, to the extent insurance coverage for such repairs was required by the Loan Documents; (vvi) fraud, material misrepresentation or bad faith on the part of Borrower; (vivii) any event or circumstance for which Borrower is obligated to indemnify Lender under the provisions of the Mortgage respecting Hazardous Substances, Contamination or Clean-Up; (viiviii) waste of the Property by Borrower, except for ordinary wear and tear, casualty and condemnation; (viiiix) Bo▇▇▇▇▇▇'▇ Borrower’s failure to pay real estate taxes or other assessments against the Property Property; (but subject to the provisions of Section 4.1(c) of the Mortgage regarding Le▇▇▇▇’▇ failure to pay the same, in which event, Borrower shall have no liability hereunder); or (ixx) Borrower's ’s failure to comply with the Americans with Disabilities Act of 1990, as amended, or any other Laws(xi) if the ground lessee (the “Ground Lessee”) under that certain Ground Lease disclosed by that certain Memorandum of Ground Lease recorded in Bannock County, Idaho on March 1, 1983 as Instrument Nos. 703253 and 703254 and amended by Amendment recorded in Bannock County, Idaho on December 10, 1996 as Instrument No. 96020658 blocks access over the portion of North Loop Road crossing over said Ground Lessee’s leased parcel between Hospital Way and the Property; and (b) all rents, issues and profits from the Property collected by Borrower after an Event of Default has occurred and is continuing or after an event or circumstance has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute an Event of Default, unless such rents, issues and profits are applied to the normal operating expenses of the Property or to the Secured Debt; provided, however, Borrower will not be personally liable for any failure described in this Section 12(b) if Borrower is unable to apply rents and security deposits as required by Lender because of a valid, final, unappealable order issued by a court of competent jurisdiction in a judicial proceeding; (c) default of either landlord or tenant under any Master Lease (as defined elsewhere in the Loan Documents) that may be applicable to the Property; ; (d) the cost to repair any Casualty (as defined in the Mortgage) having a repair estimate as determined by the Lender equal to or less Three Hundred Thousand Dollars ($300,000.00); provided, however, the Borrower’s liability for the cost to repair any such Casualty will be released by Lender upon the Borrower’s satisfactory lien-free completion of such repair, as determined by the Lender in the Lender’s sole discretion. Additionally, notwithstanding other provisions of this paragraph 12, the loan evidenced by this Promissory Note and the other Loan Documents shall become fully recourse debt to Borrower and Guarantor(s) if any of the following occur: (a) Borrower secures either junior financing secured by the Property or mezzanine financing secured by interests in Borrower (collectively, “Junior Loan”) without written authorization from Lender; or (b) Borrower pays any amount toward a Junior Loan at a time when there is an Event of Default under Le▇▇▇▇’▇ loan, regardless of whether the Junior Loan was authorized or unauthorized by Le▇▇▇▇; or (c) Borrower files a petition under Chapter 11 of the United States Bankruptcy Code or under any other form of insolvency law, or any petition seeking any liquidation, dissolution, or similar relief under any present or future federal or state bankruptcy, insolvency or debtor relief acts or laws (collectively “Insolvency Petition”); or (d) any such Insolvency Petition is filed against Bo▇▇▇▇▇▇ ▇nd Borrower cooperates with or acquiesces to such filing, fails to take commercially reasonable efforts to have the same dismissed (provided, however, commercially reasonable efforts shall not require the members of Borrower to make any capital contributions in connection with such efforts) or otherwise resists or opposes the lifting of the automatic stay by the bankruptcy court to permit Lender to foreclose the Mortgage. Lender shall not be limited in any way in enforcing the personal liability and obligations of Borrower under the Loan Documents against Borrower, nor shall Lender be limited in any way in enforcing the personal liability and obligations of any guarantor and or indemnitor according to in accordance with the terms of the instruments creating such liabilities and obligations. To that end, Borrower hereby expressly waives any right to require Lender to bring any action against any other person or to require that resort be had to any security and, without limiting the generality of the foregoing, Borrower herewith expressly waives any right Borrower otherwise might have or might have had under the provisions of Section 26-7 of the North Carolina General Statutes, et. seq. and/or other North Carolina laws.