This instrument was prepared by
and after recording return to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
SPACE ABOVE THIS LINE FOR
RECORDER'S USE.
Loan No. 96-062
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
THIS MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
("Mortgage") is made as of the 20th day of March, 1996, between
THE COSMOPOLITAN AT ▇▇▇▇▇ PARK, LLC , a limited liability company
organized and existing under the laws of Delaware, whose address
is ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
("Borrower"), and ▇▇▇▇▇▇ FINANCIAL, INC., a corporation organized
and existing under the laws of Delaware, whose address is ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇
FINANCIAL, INC. and its successors and assigns are hereinafter
referred to as "Lender").
RECITALS
A. Borrower has executed and delivered to Lender a
Promissory Note Secured by Mortgage dated of even date herewith
in the principal amount of Seven Million and no/100 Dollars
($7,000,000.00) (which note, together with all notes issued in
substitution or exchange therefor and/or as any of the foregoing
may be amended, modified or supplemented from time to time, is
hereinafter referred to as the "Note"), providing for monthly
installments of principal and interest, with the balance thereof,
if not sooner due or paid as set forth in the Note, due and
payable on March __, 2003 (said date, or any earlier date on
which the entire unpaid principal amount shall be paid or
required to be paid in full, whether by prepayment, acceleration
or otherwise, is herein called the "Maturity Date");
B. Lender wishes to secure (i) the prompt payment of the
Note, together with all interest thereon in accordance with the
terms of the Note, as well as the prompt payment of any
additional indebtedness accruing to Lender on account of any
future payments, advances or expenditures made by Lender pursuant
to the Note or this Mortgage or any other agreement, document, or
instrument securing the payment of the indebtedness evidenced by
the Note (the Note, this Mortgage, and any other documents
evidencing or securing the indebtedness evidenced by the Note or
executed in connection therewith, and any modification, renewal,
extension thereof, are hereinafter collectively referred to as
the "Loan Documents"), and (ii) the prompt performance of each
and every covenant, condition, and agreement now or hereafter
arising contained in the Loan Documents of Borrower or any
"Principal" (as defined in the Note). All payment obligations of
Borrower or any Principal are hereinafter sometimes collectively
referred to as the "Indebtedness" and all other obligations of
Borrower or any Principal are hereinafter sometimes collectively
referred to as the "Obligations".
NOW, THEREFORE, TO SECURE TO LENDER the repayment of the
Indebtedness and the performance of the Obligations, Borrower has
executed this Mortgage and does hereby mortgage, convey, assign,
warrant, transfer, pledge and grant a security interest in and to
Lender the following described property and all proceeds thereof
(which property is hereinafter sometimes collectively referred to
as the "Property"):
A. The real estate described on Exhibit A hereto (the
"Land");
B. All improvements of every nature whatsoever now or
hereafter situated on the Land and owned by Borrower (the
"Improvements"), and all machinery, equipment, mechanical
systems and other personal property now or hereafter owned
by Borrower and used in connection with the operation of the
Improvements;
C. All easements and appurtenances now or hereafter
in any way relating to the Land or Improvements or any part
thereof;
D. All agreements affecting the use, enjoyment or
occupancy of the Land and/or Improvements now or hereafter
entered into (the "Leases") and the immediate and continuing
right to collect all rents, income, receipts, royalties,
profits, issues, service reimbursements, reasonable fees,
accounts receivables, revenues and prepayments of any of the
same from or related to the Land and/or Improvements from
time to time accruing under the Leases and/or the operation
of the Land and/or Improvements (the "Rents"), reserving to
Borrower, however, so long as no "Event of Default"
(hereinafter defined) has occurred hereunder, a revocable
license to receive and apply the Rents in accordance with
the terms and conditions of Paragraph 13 of this Mortgage;
E. All claims, demands, judgments, insurance
proceeds, awards of damages and settlements hereafter made
resulting from the taking of the Land and/or the
Improvements or any part thereof under the power of eminent
domain, or for any damage (whether caused by such taking, by
casualty or otherwise) to the Land or the Improvements or
any part thereof;
F. To the extent assignable, all now or hereafter
existing management contracts and all permits, certificates,
licenses, approvals, entitlements and authorizations,
however characterized, issued or in any way furnished for
the acquisition, construction, operation and use of the
Land, Improvements and/or Leases, including building
permits, environmental certificates, licenses, certificates
of operation, warranties and guaranties;
G. All of Borrower's rights in and to all trademarks,
tradenames, assumed names, and other rights and interests in
and to the names and marks used by Borrower in connection
with the Land or Improvements, including all rights in the
name Cosmopolitan at ▇▇▇▇▇ Park; and
H. Any monies on deposit with or for the benefit of
Lender, including deposits for the payment of real estate
taxes.
TO HAVE AND TO HOLD the Property and all parts thereof,
together with the rents, issues, profits and proceeds thereof,
unto Lender to its own proper use, benefit, and advantage
forever, subject, however, to the terms, covenants, and
conditions herein.
At no time shall the principal amount of the Indebtedness,
not including sums advanced in accordance herewith to protect the
security of this Mortgage, exceed two hundred percent (200%) of
the original amount of the Note.
Borrower covenants and agrees with Lender as follows:
1. Payment of Indebtedness; Performance of Obligations.
Borrower shall promptly pay when due the Indebtedness and
shall promptly perform all Obligations.
2. Taxes and Other Obligations.
Borrower shall pay, when due, and before any interest,
collection reasonable fees or penalties shall accrue, all taxes,
assessments, fines, impositions and other charges and
obligations, including charges and obligations for any present or
future repairs or improvements made on the Property, or for any
other goods or services or utilities furnished to the Property,
which may become a lien on or charge against the Property prior
to this Mortgage, subject, however, to Borrower's right to
contest such lien or charge upon the posting of security
reasonably satisfactory to Lender so long as such contest stays
the enforcement or collection of such lien or charge. Should
Borrower fail to make such payments, Lender may, at its option
and at the expense of Borrower, pay the amounts due for the
account of Borrower. Upon the request of Lender, Borrower shall
immediately furnish to Lender all notices of amounts due and
receipts evidencing payment. Borrower shall promptly notify
Lender of any lien on all or any part of the Property and shall
promptly discharge any unpermitted lien or encumbrance.
3. Reserves for Taxes.
Borrower shall pay to Lender, at the time of and in addition
to the monthly installments of principal and/or interest due
under the Note, a sum equal to one-twelfth (1/12) of the amount
estimated by Lender to be sufficient to enable Lender to pay at
least thirty (30) days before they become due and payable, all
taxes, assessments and other similar charges levied against the
Property. So long as no Event of Default exists hereunder,
Lender shall apply the sums to pay such tax items. These sums
may be commingled with the general funds of Lender, and these
sums shall not be deemed to be held in trust for the benefit of
Borrower. These sums shall be deposited in an interest bearing
account for the benefit of Borrower. If such amount on deposit
with Lender is insufficient to fully pay such tax items, Borrower
shall, within ten (10) days following notice at any time from
Lender, deposit such additional sum as may be required for the
full payment of such tax items. Upon the Maturity Date, the
moneys then remaining on deposit with Lender or its agent shall,
at Lender's option, be applied against the Indebtedness. The
obligation of Borrower to pay such tax items is not affected or
modified by the provisions of this paragraph.
4. Use of Property.
Unless required by applicable law, Borrower shall not permit
changes in the use of any part of the Property from the use
existing at the time this Mortgage was executed, which use
Borrower represents and warrants is limited to rental apartments
and related uses. Borrower shall not initiate or acquiesce in a
change in the zoning classification of the Property without
Lender's prior written consent.
5. Insurance and Condemnation.
Borrower shall keep the Improvements insured, and shall
maintain general liability coverage and such other coverages
requested by Lender, by carrier(s), in amounts and in form at all
times satisfactory to Lender, which carrier(s), amounts and form
shall not be changed without the prior written consent of Lender.
All such policies of insurance shall be issued by insurers
qualified under the laws of the state in which the Land is
located, duly authorized and licensed to transact business in
such state and reflecting a General Policy Rating of A-:V or
better in Best's Key Rating Guide.
In case of loss or damage by fire or other casualty,
Borrower shall give immediate written notice thereof to the
insurance carrier(s) and to Lender. Lender is authorized and
empowered to make or file proofs of loss or damage (in each case
only so long as such loss or damages is equal to or greater than
$50,000) and to settle and adjust any claim under insurance
policies which insure against such risks, or to direct Borrower,
in writing, to agree with the insurance carrier(s) on the amount
to be paid in regard to such loss.
Borrower shall immediately 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, provided such claim is
for an amount equal to or greater than $50,000. 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 as further security for the payment of
the Indebtedness and performance of the Obligations.
Provided no Event of Default then exists hereunder, the net
insurance proceeds and net proceeds of any condemnation award (in
each case after deduction only of Lender's reasonable costs and
expenses, if any, in collecting the same) shall be made available
for the restoration or repair of the Property if (a) restoration
or repair and the continued operation of the Property is
economically feasible, (b) the value of Lender's security is not
reduced, (c) the loss or condemnation, as applicable, does not
occur in the six (6) month period preceding the stated Maturity
Date (in which event Borrower shall be under no obligation to
restore or repair the Property), and (d) Borrower deposits with
Lender an amount, in cash, which Lender, in its sole discretion,
determines is necessary, in addition to the net insurance
proceeds or net proceeds of any condemnation award, as
applicable, to pay in full the cost of the restoration or repair
(Borrower's deposit shall be disbursed prior to any disbursement
of insurance proceeds held by Lender). Any excess proceeds
remaining after completion of such repair shall be distributed
first to Borrower to the extent Borrower has deposited funds with
Lender for such repair with the balance applied against the
Indebtedness. Notwithstanding the foregoing, it shall be a
condition precedent to any disbursement of insurance proceeds
held by Lender hereunder that Lender shall have approved (x) all
plans and specifications for any proposed repair or restoration,
(y) the construction schedule and (z) the architect's and general
contractor's contract for all restoration that exceeds Fifty
Thousand and no/100 Dollars ($50,000.00) in the aggregate.
Lender may establish other conditions it deems reasonably
necessary to assure the work is fully completed in a good and
workmanlike manner free of all liens or claims by reason thereof.
Borrower's deposits made pursuant to this paragraph shall be used
before the net insurance proceeds or net proceeds of any
condemnation award, as applicable, for such restoration or
repair. If the net insurance proceeds or net proceeds of any
condemnation award, as applicable, are made available for
restoration or repair, such work shall be completed by Borrower
in an expeditious and diligent fashion, and in compliance with
all applicable laws, rules and regulations. At Lender's option,
the net insurance proceeds or net proceeds of any condemnation
award, as applicable, shall be disbursed pursuant to a
construction escrow acceptable to Lender. If following the final
payments for the completion of such restoration or repair there
are any net insurance proceeds or net proceeds of any
condemnation award, as applicable, remaining, such proceeds shall
be paid (i) to Borrower to the extent Borrower was required to
make a deposit pursuant to this paragraph, (ii) then to Lender to
be applied to the Indebtedness, whether or not due and payable
until paid in full, and (iii) then to Borrower. If an Event of
Default then exists, or any of the conditions set forth in
subparagraphs (a) through (d) of this Paragraph 5 have not been
met or satisfied, the net insurance proceeds or net proceeds of
any condemnation award, as applicable, shall be applied to the
Indebtedness, whether or not due and payable, with any excess
paid to Borrower.
6. Preservation and Maintenance of Property.
Borrower (a) shall not commit waste or permit impairment or
deterioration of the Property; (b) shall not abandon the
Property; (c) shall keep the Property in good repair and restore
or repair promptly, in a good and workmanlike manner, all or any
part of the Property to the equivalent of its original condition,
ordinary wear and tear excepted, or such other condition as
Lender may approve in writing, upon any damage or loss thereto,
if net insurance proceeds are made available to cover in whole or
in part the costs of such restoration or repair; (d) shall comply
with all laws, ordinances, regulations and requirements of any
governmental body applicable to the Property; (e) shall provide
for management of the Property by Borrower or by a property
manager satisfactory to Lender pursuant to a contract in form and
substance satisfactory to Lender; (f) shall give notice in
writing to Lender of any action or proceeding purporting to
affect the Property, the security granted by the Loan Documents
or the rights or powers of Lender to the extent such action or
proceeding could potentially expose Borrower, Principal or the
Property to liability in excess of $35,000; and (g) unless
otherwise directed in writing by Lender, appear and defend any
action or proceeding purporting to affect the Property, the
security granted by the Loan Documents or the rights or powers of
Lender. Neither Borrower nor any tenant or other person shall
remove, demolish or alter any Improvement or any fixture,
equipment, machinery or appliance in or on the Land and owned or
leased by Borrower except when incident to the replacement of
fixtures, equipment, machinery and appliances with items of like
kind.
7. Protection of Lender's Security; Leases.
If Borrower fails to pay the Indebtedness or perform the
Obligations, or if any action or proceeding is commenced which
affects the Property or Lender's interest therein in excess of
$35,000, 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 the Property
or Lender's interest therein, including entry upon the Property
to make repairs and perform environmental tests and studies.
Any amounts disbursed by Lender pursuant to this Paragraph 7
(including attorneys' costs and expenses), with interest thereon
at the "Default Rate" (defined in the Note) from the date of
disbursement, shall become additional Indebtedness of Borrower
secured by the Loan Documents and shall be due and payable on
demand. Nothing contained in this Paragraph 7 shall require
Lender to incur any expense or take any action hereunder.
Except in the ordinary course of its business, Borrower
shall not, without Lender's prior written consent, execute,
modify, amend, surrender or terminate any Lease. All Leases of
space in the Property shall be on the form of lease previously
approved by Lender with tenants and for a use acceptable to
Lender. All Leases of space in the Property executed or renewed
after the date hereof must be approved by Lender prior to the
execution thereof by Borrower. Borrower shall not be authorized
to enter into any ground lease of the Property without Lender's
prior written approval. If Lender consents to any new Lease of
space in the Property or the renewal of any existing Lease of
space in the Property, at Lender's request, Borrower shall cause
the tenant thereunder to execute a subordination and attornment
agreement in form and substance satisfactory to Lender
contemporaneously with the execution of such Lease.
8. Inspection.
Lender and its authorized agents may make or cause to be
made reasonable entries upon and inspections of the Property,
including for performing any environmental inspections and
testing of the Property, and inspections of Borrower's books,
records, and contracts at all reasonable times upon reasonable
advance notice, which notice may be given in writing or orally.
9. Books and Records.
Borrower shall keep and maintain at all times at Borrower's
address stated above, or such other place as Lender may approve
in writing, complete and accurate books of accounts and records
adequate to reflect correctly the results of the operation of the
Property and copies of all written contracts, Leases and other
instruments affecting the Property.
10. Financial Statements.
Borrower shall furnish to Lender, within forty-five (45)
days after the end of each fiscal quarter of the operation of the
business of Borrower and at any other time upon Lender's request,
a balance sheet, a statement of income and expenses of the
Property and a statement of changes in financial position, each
in reasonable detail and certified as true and complete by
Borrower or its general partner or chief financial officer.
Borrower shall also furnish to Lender, and shall cause each
Principal to furnish to Lender, within sixty (60) days after the
end of each fiscal year of Borrower in preliminary form and
within ninety (90) days after the end of each fiscal year of
Borrower in final form, a balance sheet, a statement of income
and expenses and a statement of cash flows, each in reasonable
detail and certified as true and complete by Borrower or its
general partner or chief financial officer and each Principal, as
the case may be. Borrower shall furnish, together with the
foregoing quarterly financial statements and at any other time
upon Lender's request if Lender determines that the value of its
collateral has diminished, a rent schedule for the Property,
certified as true and complete by Borrower, showing the name of
each tenant, and for each tenant, the space occupied, the lease
expiration date, the rent payable, the rent paid to date, and the
security deposit being held for such tenant. If Borrower fails
to timely furnish Lender with any of the financial information
and reports set forth in this paragraph within the required time
periods, Lender shall have the right, acting in its sole
discretion, to hire a certified public accounting firm acceptable
to Lender, to prepare such financial information and reports, on
an audited basis. The costs and expenses of such accounting firm
shall be paid by Borrower on demand and, to the extent advanced
by Lender become, with interest thereon from the date advanced by
Lender at the Default Rate, additional Indebtedness of Borrower
secured by the Loan Documents. Additionally, if Borrower fails
to timely furnish Lender with any of the financial information
and reports set forth in this paragraph within the required time
periods, Lender shall be entitled to receive a late charge equal
to $500 for each financial information and/or report not so
furnished to Lender (the "Financial Late Charge"). The Financial
Late Charge shall be due and payable by Borrower immediately upon
receipt by Borrower of an invoice for same from Lender. Until
paid, the Financial Late Charge shall bear interest at the
Default Rate, and shall be deemed additional Indebtedness of
Borrower secured by the Loan Documents.
11. Hazardous Materials.
Borrower covenants and agrees that it (a) shall not use,
generate, store, or allow to be generated, stored or used, any
"Hazardous Materials" (hereinafter defined) on the Property,
except in the ordinary course of Borrower's business and in
accordance with all "Environmental Laws" (hereinafter defined),
(b) shall at all times maintain the Property in full compliance
with all applicable Environmental Laws, including timely
remediating the Property if and when required, and (c) shall
cause compliance by all tenants and sub-tenants on the Property
with Borrower's covenants and agreements contained in this
Paragraph 11.
Borrower shall promptly notify Lender in writing of (i) any
investigation, claim or other proceeding by any party caused or
threatened in connection with any Hazardous Materials on the
Property, or the failure or alleged failure of the Property to
comply with any applicable Environmental Laws, or (ii) Borrower's
discovery of any condition on or in the vicinity of the Property
that could cause the Property to fail to comply with applicable
Environmental Laws.
The term "Environmental Laws" shall include any federal,
state or local laws or regulations relating to health, safety or
protection of the environment. The term "Hazardous Materials"
shall include Hazardous Substances, as defined by the
Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. 9601 et seq., any petroleum or petroleum products
(excluding a small quantity of gasoline and oil used in
maintenance equipment on the Property), asbestos or asbestos
containing material, or any other hazardous substances, hazardous
wastes or hazardous materials as defined by other Environmental
Laws.
12. Representations and Covenants.
(a) If Borrower is a corporation, it represents that
it is a corporation duly organized, existing and in good
standing under the laws of its state of incorporation, that
it is duly qualified and in good standing under the laws of
the state where the Land is located, and that the execution
and delivery of the Loan Documents and the performance of
the obligations thereunder are within Borrower's corporate
powers, have been duly authorized by all necessary action of
its board of directors, and do not contravene the terms of
its articles of incorporation or by-laws.
(b) If Borrower is a general or limited partnership or
a limited liability company, it represents that it is duly
formed, organized and existing in the state of its
formation, that it is qualified to do business under the
laws of the state where the Land is located, and that the
execution and delivery of the Loan Documents and the
performance of the obligations thereunder do not conflict
with any provision of Borrower's partnership agreement or
operating agreement, as applicable, and all other
certificates and agreements governing Borrower, and have
been duly authorized by all necessary action of its partners
or members.
(c) Borrower represents that (i) the execution and
delivery of the Loan Documents, the payment of the
Indebtedness, and the performance of the Obligations do not
violate any law or conflict with any agreement by which
Borrower is bound, or any court order by which Borrower is
bound, (ii) no consent or approval of any governmental
authority or any third party is required for the execution
or delivery of the Loan Documents, the payment of the
Indebtedness, and the performance of the Obligations, and
(iii) the Loan Documents are valid and binding agreements,
enforceable in accordance with their terms.
(d) Borrower represents it is lawfully seized with fee
simple title in the estate hereby conveyed, has the right to
mortgage, grant, convey, assign and grant a first security
interest in the Property; the Property is unencumbered, and
Borrower will warrant and defend title to the Property
against all claims and demands, subject to easements and
restrictions listed in a schedule of exceptions to coverage
in the title insurance policy accepted by Lender insuring
Lender's interest in the Property.
(e) Borrower represents and covenants that (i) all
material permits, approvals, and certificates, including
certificates of completion and occupancy permits, required
by law or regulation have been obtained and are and shall
remain in full force and effect; and (ii) the use and
occupancy of the Land and all improvements thereon are and
shall remain in compliance with all laws.
(f) Borrower represents that all of the improvements
on the Land lie wholly within the boundaries of and building
line restrictions relating to the Land and no improvements
located on adjoining lands encroach upon the Land so as to
effect the value or marketability of the Property, except
those which are insured against by the title insurance
policy accepted by Lender insuring Lender's interest in the
Property.
(g) None of Borrower, any Principal, or any other
holder of a direct or indirect legal or beneficial interest
in Borrower is or will be, held, directly or indirectly, by
a "foreign corporation," "foreign partnership," "foreign
trust," "foreign estate," "foreign person," "affiliate" of a
"foreign person" or a "United States intermediary" of a
"foreign person" within the meaning of IRC Sections 897 and
1445, the Foreign Investments in Real Property Tax Act of
1980, the International Foreign Investment Survey Act of
1976, the Agricultural Foreign Investment Disclosure Act of
1978, the regulations promulgated pursuant to such acts or
any amendments to such acts.
(h) None of Borrower or any Principal is insolvent,
and there has been no (i) assignment made for the benefit of
the creditors of any of them, (ii) appointment of a receiver
for any of them or for the properties of any of them, or
(iii) any bankruptcy, reorganization, or liquidation
proceeding instituted by or against any of them.
(i) There has been no material adverse change in the
representations made or information heretofore supplied by
or on behalf of Borrower or any Principal in connection with
the Loan as to Borrower, any Principal, or the Property.
(j) Except as listed on Exhibit B hereto, there is no
litigation, arbitration, or other proceeding or governmental
investigation pending or, to Borrower's knowledge,
threatened against or relating to Borrower, any Principal,
or the Property.
(k) The proceeds evidenced by the Note will be used by
Borrower solely and exclusively for proper business purposes
and will not be used for the purchase or carrying of
registered equity securities within the purview and
operation of any regulation issued by the Board of Governors
of the Federal Reserve System or for the purpose of
releasing or retiring any indebtedness which was originally
incurred for any such purpose.
(l) Borrower represents and covenants that all Leases
of space in the Property existing as of the date hereof are
in writing.
13. Leases of the Property/Absolute Assignment, License to
Receive and Apply Rents.
The parties intend that this Mortgage grants a present,
absolute, and unconditional assignment of the Rents and shall,
immediately upon execution, give Lender the right to collect the
Rents and to apply them in payment of the principal, interest and
all other sums payable under the Loan Documents. Such assignment
and grant shall continue in effect until the Indebtedness is paid
in full and all Obligations are fully satisfied. Subject to the
provisions set forth herein and provided there is no Event of
Default, Lender grants to Borrower a revocable license to enforce
the Leases and collect the Rents as they become due and Borrower
shall hold the same, in trust, to be applied first to the payment
of all impositions, levies, taxes, assessments and other charges
upon the Property, second to maintenance of insurance policies
upon the Property required hereby, third to the expenses of
Property operations, including maintenance and repairs required
hereby, fourth to the payment of that portion of the Indebtedness
then due and payable, and fifth, the balance, if any, to or as
directed by Borrower. Borrower shall deliver such Rents to
Lender as are necessary for the payment of principal, interest
and other sums payable under the Loan Documents as such sums
become due.
Borrower shall comply with and observe Borrower's
obligations as landlord under all Leases. 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,
and all Leases and amendments thereto hereafter entered into will
be on a form of Lease previously approved by Lender. All
renewals of Leases and all proposed Leases for space in the
Property shall provide for rental rates comparable to existing
local market rates and shall be arms-length transactions. All
Leases other than for space in the Property shall be terminable
on not less than sixty (60) days' notice, unless approved in
writing by Lender prior to Borrower's execution thereof.
This Mortgage shall not be deemed to impose upon Lender any
of the obligations or duties of the landlord or Borrower provided
in any Lease. Borrower hereby acknowledges and agrees:
(i) Borrower is and will remain liable under the Leases to the
same extent as though this Mortgage had not been made; and
(ii) Lender has not by this Mortgage assumed any of the
obligations of Borrower under the Leases, except as to such
obligations which arise after such time as Lender shall have
assumed full ownership or control of the Property. This Mortgage
shall not make Lender responsible for the control, care,
management, or repair of the Property or any personal property or
for the carrying out of any of the terms of the Leases. Lender
shall not be liable in any way for any injury or damage to person
or property sustained by any person or persons, firm, or
corporation in or about the Property.
14. Estoppel Certificate.
Borrower shall, within ten (10) days after Lender's request,
furnish Lender with a written statement, duly acknowledged,
setting forth the sums secured by the Loan Documents and any
right of set-off, counterclaim or other defense which exists
against such sums and the Obligations.
15. Transfers of the Property or Beneficial Interest in
Borrower; Assumption.
Sale or transfer of any of the following are prohibited (i)
all or any part of the Property, or any interest therein, or (ii)
more than forty-nine percent (49%) of the beneficial interests of
each member in Borrower. Upon any such prohibited sale or
transfer or if ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ fails to continue to control the
Borrower's business or ceases to be engaged by Borrower and in
charge of the day to day operations of Borrower, then Lender may,
at Lender's option, declare all of the Indebtedness to be
immediately due and payable, and Lender may invoke any remedies
permitted by the Loan Documents. Notwithstanding the preceding
sentences, once during the term of the Note a sale or transfer of
the Property or of an interest restricted by the preceding
sentences shall be permitted when the transferee's
creditworthiness and management ability are satisfactory to
Lender in its sole and absolute discretion and the transferee has
executed, prior to the sale or transfer, a written assumption
agreement containing such terms as Lender may require, including
the payment of an assumption fee of 1% of the outstanding
principal balance of the Note at the time of such transfer.
Additionally, if the transfer of beneficial interest in or change
in control of Borrower prohibited by the foregoing results from
the death of a Principal who is an individual and if the
transferee or subsequently controlling party, as applicable, has
the creditworthiness and management ability which are
satisfactory to Lender in its sole and absolute discretion, such
transfer or change in control shall be permitted upon the
execution of a written assumption agreement containing such terms
as Lender may require.
16. No Additional Liens.
Borrower covenants not to execute any mortgage, security
agreement, assignment of leases and rents or other agreement
granting a lien (except the liens granted to Lender by the Loan
Documents) or, except as set forth in Paragraph 2 above, take or
fail to take any other action which would result in a lien
against the interest of Borrower in the Property without the
prior written consent of Lender.
17. Single Asset Entity.
Borrower shall not hold or acquire, directly or indirectly,
any ownership interest (legal or equitable) in any real or
personal property other than the Property, or become a
shareholder of or member or partner in any entity which acquires
or holds any property other than the Property, until such time as
the Indebtedness has been fully repaid and all Obligations are
satisfied.
18. Borrower and Lien Not Released.
Without affecting the liability of Borrower or any other
person liable for the payment of the Indebtedness, and without
affecting the lien or charge of this Mortgage as security for the
payment of the Indebtedness, Lender may, from time to time and
without notice to any junior lien holder or holder of any right
or other interest in and to the Property: (a) release any person
so liable, (b) waive or modify any provision of this Mortgage or
the other Loan Documents or grant other indulgences, (c) release
all or any part of the Property, (d) take additional security for
any obligation herein mentioned, (e) subordinate the lien or
charge of this Mortgage, (f) consent to the granting of any
easement, or (g) consent to any map or plan of the Property.
19. Uniform Commercial Code Security Agreement.
This Mortgage shall constitute a security agreement pursuant
to the Uniform Commercial Code for any of the items specified
herein 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. Any reproduction of this Mortgage 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 any financing statements,
as well as extensions, renewals and amendments thereof, and
reproductions of this Mortgage 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.
Lender shall have the remedies of a secured party under the
Uniform Commercial Code.
20. Events of Default; Acceleration of Indebtedness; Remedies.
The occurrence of any one or more of the following events
shall constitute an "Event of Default" under this Mortgage:
(a) failure of Borrower to pay, within ten (10) days
of the due date, any of the Indebtedness, including any
payment due under the Note; or
(b) failure of Borrower to strictly comply with
Paragraphs 11, 15, 16 and 17 of this Mortgage; or
(c) a petition under any Chapter of Title 11 of the
United States Code or any similar law or regulation is filed
by or against Borrower or any Principal (and in the case of
an involuntary petition in bankruptcy, such petition is not
discharged within sixty (60) days of its filing), or a
custodian, receiver or trustee for any of the Property is
appointed, or Borrower or any Principal makes an assignment
for the benefit of creditors, or any of them are adjudged
insolvent by any state or federal court of competent
jurisdiction, or an attachment or execution is levied
against any of the Property; or
(d) the occurrence of an "Event of Default" under and
as defined in any other Loan Document; or
(e) Borrower is in default in the payment of any
indebtedness (other than the Indebtedness) secured by the
Property and such default is declared and is not cured
within the time, if any, specified therefor in any agreement
governing the same; or
(f) any statement, report or certificate made or
delivered to Lender by Borrower or any Principal is not
materially true and complete; or
(g) failure of Borrower, within thirty (30) days after
notice and demand, to satisfy each and every Obligation,
other than those set forth in the subsections above;
provided, however, if such Obligation cannot by its nature
be cured within thirty (30) days, and if Borrower commences
to cure such failure promptly after written notice thereof
and thereafter diligently pursues the curing thereof (and
then in all events cures such failure within sixty (60) days
after the original notice thereof), Borrower shall not be in
default hereunder during such period of diligent curing.
Upon the occurrence of an Event of Default, the
Indebtedness, at the option of the Lender, shall become
immediately due and payable without notice to Borrower, and
Lender shall be entitled to all of the rights and remedies
provided in the Loan Documents or at law or in equity. Each
remedy provided in the Loan Documents is distinct and cumulative
to all other rights or remedies under the Loan Documents or
afforded by law or equity, and may be exercised concurrently,
independently, or successively, in any order whatsoever.
21. Entry; Foreclosure; Remedies.
Upon the occurrence of an Event of Default, (a) Borrower,
upon demand of Lender, shall forthwith surrender to Lender the
actual possession, or to the extent permitted by law, Lender
itself, or by such officers or agents as it may appoint, may
enter and take possession of all or any part of the Property, and
may exclude Borrower and its agents and employees wholly
therefrom, and may have joint access with Borrower to the books,
papers and accounts of Borrower; and (b) if Borrower shall for
any reason fail to surrender or deliver the Property or any part
thereof after such demand by Lender, Lender may obtain a judgment
or decree conferring on Lender the right to immediate possession
or requiring the delivery to Lender of the Property, and Borrower
specifically consents to the entry of such judgment or decree.
Upon every such entering upon or taking of possession, Lender may
hold, store, use, operate, manage and control the Property and
conduct the business thereof. Lender shall have no liability for
any loss, damage, injury, cost or expense resulting from any
action or omission by it or its representatives which was taken
or omitted in good faith.
When the Indebtedness or any part thereof shall become due,
whether by acceleration or otherwise, Lender may, either with or
without entry or taking possession as herein provided or
otherwise, proceed by suit or suits at law or in equity or by any
other appropriate proceeding or remedy to (a) enforce payment of
the Note or the performance of any term, covenant, condition or
agreement of Borrower under any of the Loan Documents, (b)
foreclose the lien hereof for the Indebtedness or part thereof
and sell the Property as an entirety or otherwise, as Lender may
determine, and/or (c) pursue any other right or remedy available
to it under or by the law and decisions of the State in which the
Land is located. The failure to join any tenant or tenants of
the Property as party defendant or defendants in any foreclosure
action or the failure of any such order or judgment to foreclose
their rights shall not be asserted by the Borrower as a defense
in any civil action instituted to collect the Indebtedness, or
any part thereof, any statute or rule of law at any time existing
to the contrary notwithstanding.
Upon any foreclosure sale, Lender may bid for and purchase
the Property and shall be entitled to apply all or any part of
the Indebtedness as a credit to the purchase price.
Upon the occurrence of an Event of Default, then, without
notice to or the consent of Borrower, Lender shall be entitled
to exercise all of the rights and remedies contained in this
Mortgage or in any other Loan Document or otherwise available at
law or in equity including the right to do any one or more of the
following:
(a) To enter upon, take possession of and manage the
Property for the purpose of collecting the Rents;
(b) To require Borrower to hold all Rents collected in
trust for the benefit of Lender;
(c) Dispossess by the usual summary proceedings any
Tenant defaulting in the payment of Rent to Borrower;
(d) Lease the Property or any part thereof;
(e) Repair, restore, and improve the Property;
(f) Apply the Rent after payment of Property expenses
as determined by Lender to Borrower's indebtedness under the
Loan Documents; and
(g) Apply to any court of competent jurisdiction for
specific performance of this Mortgage, an injunction against
the violation hereof and/or the appointment of a receiver.
22. Expenditures and Expenses.
In any civil action to foreclose the lien hereof or
otherwise enforce Lender's rights, there shall be allowed and
included as additional Indebtedness in the order or judgment for
foreclosure and sale or other order all expenditures and expenses
which may be paid or incurred by or on behalf of Lender including
reasonable attorneys' fees, costs and expenses, receiver's fees,
costs and expenses, reasonable appraiser's fees, reasonable
engineers' fees, outlays for documentary and expert evidence,
stenographers' charges, publication costs, and costs (which may
be estimates as to items to be expended after entry of said order
or judgment) of procuring all such abstracts of title, title
searches and examination, title insurance policies, Torrens'
Certificates and similar data and assurances with respect to the
title as 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 (said expenditures
and expenses are hereinafter collectively referred to as the
"Reimbursable Expenses"). All Reimbursable Expenses, and such
costs, expenses and reasonable fees as may be incurred by Lender
at any time or times hereafter in the protection of the Property,
in enforcing the Obligations, and/or the maintenance of the lien
established by any of the Loan Documents, including reasonable
accountants' and attorneys' fees, costs and expenses in any
advice, litigation, or proceeding affecting the Loan Documents or
the Property, whether instituted by Lender, Borrower or any other
party, or in preparation for the commencement or defense of any
action or proceeding or threatened action or proceeding, shall be
immediately due and payable to Lender by Borrower, and, to the
extent such services relate to the Hazardous Substance Indemnity
Agreement of even date herewith from Borrower and Principals in
favor of Lender, by Borrower and Principals, with interest
thereon at the Default Rate set forth in the Note, and shall be
secured by the Loan Documents.
23. Application of Proceeds of Foreclosure Sale.
The proceeds of any foreclosure sale of the Property shall
be distributed and applied in the order of priority set forth in
the Note with the excess, if any, being applied to any parties
entitled thereto as their rights may appear.
24. Appointment of Receiver or Mortgagee in Possession.
If an Event of Default is continuing or if Lender shall have
accelerated the Indebtedness, Lender, upon application to a court
of competent jurisdiction, shall be entitled as a matter of
strict right, without notice, and without regard to the occupancy
or value of any security for the Indebtedness or the insolvency
of any party bound for its payment, to the appointment of a
receiver or the appointment of Lender to take possession of and
to operate the Property, and to collect and apply the rents,
issues, profits and revenues thereof.
25. Forbearance by Lender Not a Waiver.
Any forbearance by Lender in exercising any right or remedy
under any of the Loan Documents, or otherwise afforded by
applicable law, shall not be a waiver of or preclude the exercise
of any right or remedy. Lender's acceptance of payment of any
sum secured by any of the Loan Documents 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, nor shall Lender's
receipt of any awards, proceeds or damages under Paragraph 5
hereof operate to cure or waive Borrower's default in payment or
sums secured by any of the Loan Documents. With respect to all
Loan Documents, only waivers made in writing by Lender shall be
effective against Lender.
26. Waiver of Statute of Limitations.
Borrower hereby waives the right to assert any statute of
limitations as a bar to the enforcement of the lien created by
any of the Loan Documents or to any action brought to enforce the
Note or any other obligation secured by any of the Loan
Documents.
27. Waiver of Homestead and Redemption.
Borrower hereby waives all right of homestead exemption in
the Property. Borrower hereby waives all right of redemption on
behalf of Borrower and on behalf of all other persons acquiring
any interest or title in the Property subsequent to the date of
this Mortgage, except decree or judgment creditors of Borrower.
28. Jury Trial Waiver.
BORROWER, AND LENDER BY ITS ACCEPTANCE OF THIS MORTGAGE,
HEREBY WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT
MATTER OF THE LOAN DOCUMENTS AND THE BUSINESS RELATIONSHIP THAT
IS BEING ESTABLISHED. THIS WAIVER IS KNOWINGLY, INTENTIONALLY
AND VOLUNTARILY MADE BY BORROWER AND BY LENDER, AND BORROWER
ACKNOWLEDGES THAT NEITHER LENDER NOR ANY PERSON ACTING ON BEHALF
OF LENDER HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS
WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY ACTIONS WHICH IN ANY WAY
MODIFY OR NULLIFY ITS EFFECT. BORROWER AND LENDER ACKNOWLEDGE
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT BORROWER AND LENDER HAVE ALREADY
RELIED ON THIS WAIVER IN ENTERING INTO THE LOAN DOCUMENTS AND
THAT EACH OF THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR
RELATED FUTURE DEALINGS. BORROWER AND LENDER FURTHER ACKNOWLEDGE
THAT THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO
BE REPRESENTED) IN THE SIGNING OF THE LOAN DOCUMENTS AND IN THE
MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL.
29. Notice.
Except for any notice required under applicable law to be
given in another manner, (a) any notice to Borrower provided for
in the Loan Documents shall be given by mailing such notice by
Federal Express or any other overnight carrier addressed to
Borrower at Borrower's address stated above or at such other
address as Borrower may designate by notice to Lender as provided
herein, and (b) any notice to Lender shall be given by Federal
Express or any other overnight carrier to Lender's address stated
above or to such other address as Lender may designate by notice
to Borrower as provided herein or by facsimile to the transmittal
number provided herein or to such other number as Lender may
designate by notice to Borrower provided, however, such notice
shall not be effective unless actually received by Lender. Any
notice provided for in the Loan Documents shall be deemed to have
been given to Borrower or Lender on the first (1st) business day
following such mailing in the manner designated herein.
30. Successors and Assigns Bound; Joint and Several Liability;
Agents; Captions.
The covenants and agreements contained in the Loan Documents
shall bind, and the rights thereunder shall inure to, the
respective successors and assigns of Lender and Borrower, subject
to the provisions of Paragraph 15 hereof. All covenants and
agreements of Borrower shall be joint and several. In exercising
any rights under the Loan Documents or taking any actions
provided for therein, Lender may act through its employees,
agents or independent contractors as authorized by Lender. The
captions and headings of the paragraphs of this Mortgage are for
convenience only and are not to be used to interpret or define
the provisions hereof.
31. Governing Law; Severability.
This Mortgage shall be governed by the law of the State of
Illinois, provided, however, that to the extent the mandatory
provisions of the laws of another jurisdiction relating to (i)
the perfection or the effect of perfection or non-perfection of
the security interests in any of the Property, (ii) the lien,
encumbrance or other interest in the Property granted or conveyed
by this Mortgage, or (iii) the availability of and procedures
relating to any remedy hereunder or related to this Mortgage are
required to be governed by such other jurisdiction's laws, such
other laws shall be deemed to govern and control. If any
provision of the Loan Documents conflicts with applicable law,
such conflict shall not affect other provisions of which can be
given effect without the conflicting provisions, and to this end
the provisions of the Loan Documents are declared to be
severable.
32. Release.
Upon payment of all sums secured by this Mortgage, Lender
shall release this Mortgage. Borrower shall pay Lender's
reasonable costs incurred in releasing this Mortgage and any
financing statements related hereto.
33. Terms.
As used in the Loan Documents, (i) "business day" means a
day when banks are not required or authorized to be closed in
Chicago, Illinois; and (ii) the phrase "including" shall mean
"including but not limited to" unless specifically set forth to
the contrary.
34. Loss of Note.
Upon notice from Lender of the loss, theft, or destruction
of the Note and upon receipt of indemnity reasonably satisfactory
to Borrower from Lender, or in the case of mutilation of the
Note, upon surrender of the mutilated Note, Borrower shall make
and deliver a new note of like tenor in lieu of the then to be
superseded Note.
35. Exculpation.
This Mortgage and other Loan Documents and all of Borrower's
obligations hereunder and thereunder are subject to the
provisions of Paragraph 10 of the Note entitled Exculpation and
which are incorporated herein by this reference.
36. Disclosure of Information.
Lender shall have the right (but shall be under no
obligation) to make available to any party for the purpose of
granting participations in or selling, transferring, assigning or
conveying all or any part of the Loan (including any governmental
agency or authority and any prospective bidder at any foreclosure
sale of the Project) any and all information which Lender may
have with respect to the Project and Borrower, whether provided
by Borrower, any Principal or any third party or obtained as a
result of any environmental assessments. Borrower and each
Principal agree that Lender shall have no liability whatsoever as
a result of delivering any such information to any third party,
and Borrower and each Principal, on behalf of themselves and
their successors and assigns, hereby release and discharge Lender
from any and all liability, claims, damages, or causes of action,
arising out of, connected with or incidental to the delivery of
any such information to any third party.
37. Sale of Loan.
Lender, at any time and without the consent of Borrower or
any Principal, may grant participations in or sell, transfer,
assign and convey all or any portion of its right, title and
interest in and to the Loan, this Mortgage and the other Loan
Documents, any guaranties given in connection with the Loan and
any collateral given to secure the Loan.
38. Exhibits.
The following Exhibits (which may contain additional
representations, warranties, and covenants) are attached to this
Mortgage and hereby made a part of this Mortgage: Exhibit A
(legal description for Land), Exhibit B (pending and threatened
litigation) and Exhibit C (Rider Number 1).
IN WITNESS WHEREOF, Borrower has executed this Mortgage or
has caused the same to be executed by its representatives
thereunto duly authorized.
BORROWER
THE COSMOPOLITAN AT ▇▇▇▇▇
PARK, LLC,
a Delaware limited liability
company
By:
____________________________________
Name:
____________________________________
Its: Manager
STATE OF ___________ )
) SS
COUNTY OF __________ )
I, ____________________________, a Notary Public in and for
said County, in the State aforesaid, DO HEREBY CERTIFY, that
___________________, the Manager of The Cosmopolitan at ▇▇▇▇▇
Park, LLC, a Delaware limited liability company, who is
personally known to me to be the same person whose name is
subscribed to the foregoing instrument as such Manager, appeared
before me this day in person and acknowledged that (he/she)
signed and delivered the said instrument as (his/her) own free
and voluntary act and as the free and voluntary act of said
limited liability company, for the uses and purposes therein set
forth.
GIVEN under my hand and Notarial Seal this ____ day of
_______________, 1996.
_________________________
Notary Public
My Commission Expires:
______________________
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT B
PENDING AND THREATENED LITIGATION
[See Section 12(j)] None
EXHIBIT C
RIDER NUMBER 1
(REPLACEMENT RESERVE PROVISIONS)
This Rider Number 1 is attached to and made a part of that
certain Mortgage, Assignment of Rents and Security Agreement
("Mortgage") dated as of the 20th day of March, 1996, between The
Cosmopolitan at ▇▇▇▇▇ Park, LLC ("Borrower") and ▇▇▇▇▇▇
Financial, Inc., a corporation organized and existing under the
laws of Delaware (▇▇▇▇▇▇ Financial, Inc. and its successors and
assigns are hereinafter referred to as "Lender"). To the extent
of any conflicts between the terms and provisions of this Rider
Number 1 and the terms and provisions of the Mortgage, the terms
and provisions of this Rider Number 1 will govern and control the
rights and obligations of the parties hereto.
1. All terms not defined in this Rider Number 1 shall have
the meaning ascribed to such terms as set forth in the Mortgage.
2. The following is hereby added as new Section 3A of the
Mortgage to the end of Section 3 and before Section 4:
"3A. Reserves for Replacement. At
the time of and in addition to the monthly
installments of principal and/or interest due
under the Note, Borrower shall deposit into a
segregated account maintained by Lender (the
"Replacement Reserve") $16.67 per apartment
unit. The replacement reserve shall bear
interest for the benefit of Borrower. The
funds contained in the Replacement Reserve
shall be utilized by Borrower solely for
capital improvements approved in advance by
Lender. Lender shall reimburse Borrower
from the Replacement Reserve for the actual
cost of such approved capital improvements
upon Borrower's providing Lender with paid
receipts, lien waivers and other
documentation deemed necessary by Lender with
minimum draws of $10,000. If and to the
extent the amount of unexpended funds in the
Replacement Reserve as of December 31 of each
calendar year during the term of the Loan
(including funds that should have been but
have not yet been deposited into such
Replacement Reserve by Borrower but excluding
any funds scheduled to be expended for
identified future capital improvements
approved in advance by Lender) exceed twenty-
five percent (25%) of the amount of the
Replacement Reserve for such calendar year,
Borrower shall promptly pay such excess
amount to Lender as a partial prepayment of
the outstanding principal balance of the Loan
to be applied to installments due in the
inverse order of their maturity. Lender may
audit Borrower's calculation of amounts
deposited into the Replacement Reserve to
determine the accuracy of Borrower's
calculation and, if such audit discloses a
shortfall in the amounts theretofore
deposited into the Replacement Reserve by
Borrower, Borrower shall promptly deposit the
amount of such shortfall into the Replacement
Reserve. Borrower shall execute any
documents and take any other actions
necessary to provide Lender with a perfected
security interest in the Replacement
Reserve."