MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
BE IT KNOWN, that on the dates hereinafter set forth, before each of us,
the undersigned Notaries Public, duly commissioned and qualified in and for the
Parish/County and States hereinafter set forth, and in the presence of the
undersigned competent witnesses, personally came and appeared ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership, represented
herein by Historic Preservation Properties 1989 Limited Partnership, a Delaware
limited partnership, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇. ▇▇▇▇▇ Bond, its General Partners
(Taxpayer Identification No. ▇▇-▇▇▇▇▇▇▇) ("Borrower"), whose permanent mailing
address is c/o RC!B Developers, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, who by me duly sworn did declare and acknowledge that Borrower is
indebted in favor of INVESTMENT PROPERTY MORTGAGE, L.L.C., a limited liability
company organized and existing under the laws of Louisiana, and whose permanent
mailing address is 300 Plaza, One ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Taxpayer Identification No. ▇▇-▇▇▇▇▇▇▇) (together with its successors and
assigns and any subsequent holders, "Lender"), under Borrower's Multifamily
Note, dated as of the date of this Instrument, in the principal amount of $
1,100,000, which Note is payable to the order of the above-named Lender, has a
stated maturity date of August 1, 2008, and, together with and as a part of the
Indebtedness, is secured by this Multifamily Mortgage, Assignment of Rents and
Security Agreement (the "Instrument").
TO SECURE TO LENDER the repayment of the Indebtedness (including the
payment of attorneys fees), and all renewals, extensions, modifications and
refinancings of the Indebtedness, and the performance of the covenants and
agreements of Borrower contained in the Loan Documents, Borrower hereby
mortgages, hypothecates and assigns to Lender the Mortgaged Property, including
the Land located in the Parish of Orleans, State of Louisiana and described in
Exhibit A attached to this Instrument. The maximum amount of the Indebtedness
outstanding at any time and from time to time that is secured by this
Instrument shall be limited to an amount equal to the original principal
balance of the Note multiplied by three, inclusive of principal, interest, late
charges, default interest, prepayment premiums, additional advances pursuant to
this Instrument, costs, expenses and attorneys' fees.
Borrower represents and warrants that Borrower is the full owner and
lawfully seized of the Mortgaged Property and has the right, power and
authority to mortgage, grant, convey and assign the Mortgaged Property, and
that the Mortgaged Property is unencumbered. Borrower covenants that Borrower
will warrant and defend generally the title to, and the ownership and
possession of, the Mortgaged Property against all claims and demands, subject
to any servitudes, easements and restrictions listed in a schedule of
exceptions to coverage in any title insurance policy issued to Lender
contemporaneously with the execution and recordation of this Instrument and
insuring Lender's interest in the Mortgaged Property.
Covenants. Borrower and Lender covenant and
agree as follows:
1. DEFINITIONS. The following terms, when used in this Instrument
(including when used in the above recitals), shall have the following meanings:
(a) "Borrower" means all persons or entities identified as "Borrower" in
the first paragraph of this Instrument, together with their successors and
assigns.
(b) "Collateral Agreement" means any separate agreement between Borrower
and Lender for the purpose of establishing replacement reserves for the
Mortgaged Property, establishing a fund to assure completion of repairs or
improvements specified in that agreement, or assuring reduction of the
outstanding principal balance of the Indebtedness if the occupancy of or income
from the Mortgaged Property does not increase to a level specified in that
agreement, or any other agreement or agreements between Borrower and Lender
which provide for the establishment of any other fund, reserve or account.
(c) "Environmental Permit" means any permit, license, or other
authorization issued under any Hazardous Materials Law with respect to any
activities or businesses conducted on or in relation to the Mortgaged Property.
(d) "Event of Default" means the occurrence of any event listed in Section
22.
(e) "Fixtures" means all property which is so attached to the Land or the
Improvements as to constitute an integral or component part, or a fixture under
applicable law, including: machinery, equipment, engines, boilers,
incinerators, installed building materials; systems and equipment for the
purpose of supplying or distributing heating, cooling, electricity, gas, water,
air, or light; antennas, cable, wiring and conduits used in connection with
radio, television, security, fire prevention, or fire detection or otherwise
used to carry electronic signals; telephone systems and equipment; elevators
and related machinery and equipment; fire detection, prevention and
extinguishing systems and apparatus; security and access control systems and
apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens,
refrigerators, dishwashers, garbage disposers, washers, dryers and other
appliances; light fixtures, awnings, storm windows and storm doors; pictures,
screens, blinds, shades, curtains and curtain rods; mirrors; cabinets,
paneling, rugs and floor and wall coverings; fences, trees and plants; swimming
pools; and exercise equipment.
(f) "Governmental Authority" means any board, commission, department or
body of any municipal, county, state or federal governmental unit, or any
subdivision of any of them, that has or acquires jurisdiction over the
Mortgaged Property or the use, operation or improvement of the Mortgaged
Property.
(g) "Hazardous Materials" means petroleum and petroleum products and
compounds containing them, including gasoline, diesel fuel and oil; explosives;
flammable materials; radioactive materials; polychlorinated biphenyls ("PCBs")
and compounds containing them; lead and lead-based paint; asbestos or
asbestos-containing materials in any form that is or could become friable;
underground or above-ground storage tanks, whether empty or containing any
substance; any substance the presence of which on the Mortgaged Property is
prohibited by any federal, state or local authority; any substance that
requires special handling; and any other material or substance now or in the
future defined as a "hazardous substance," "hazardous material," "hazardous
waste," "toxic substance," "toxic pollutant," "contaminant," or "pollutant"
within the meaning of any Hazardous Materials Law.
(h) "Hazardous Materials Laws" means all federal, state, and local laws,
ordinances and regulations and standards, rules, policies and other
governmental requirements, administrative rulings and court judgments and
decrees in effect now or in the future and including all amendments, that
relate to Hazardous: Materials and apply to Borrower or to the Mortgaged
Property. Hazardous Materials Laws include, but are not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., the Toxic Substance Control Act, 15 U.S.C. Section 260
1, et seq., the Clean Water Act, 33 U.S.C. Section 125 1, et seq., and the
Hazardous Materials Transportation Act, 49 U.S. C. Section 5 10 1, et seq., and
their state analogs.
(i) "Impositions" and "Imposition Deposits" are defined in Section 7(a).
(j) "Improvements" means the buildings, structures, improvements, and
alterations now constructed or at any time in the future constructed or placed
upon the Land, including any future replacements and additions.
(k) "Indebtedness" means the principal of, interest on, and all other
amounts due at any time under, the Note, this Instrument or any other Loan
Document, including prepayment premiums, late charges, default interest,
attorneys' fees, keeper fees, collection and foreclosure expenses, advances as
provided in Section 12 to protect the security of this Instrument, and any
other sums that Lender may advance or incur with respect to the Mortgaged
Property, or as otherwise provided in this Instrument or any other Loan
Document.
(1) [Intentionally
omitted]
(m) "Key Principal" means the natural person(s) or entity identified as
such at the foot of this Instrument, and any person or entity who becomes a Key
Principal after the date of this Instrument and is identified as such in an
amendment or supplement to this Instrument.
(n) "Land" means the immovable property described in Exhibit A. The
immovable property is located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
(o) "Leases" means all present and future leases, subleases, licenses,
concessions or grants or other possessory interests now or hereafter in force,
whether oral or written, covering or affecting the Mortgaged Property, or any
portion of the Mortgaged Property (including proprietary leases or occupancy
agreements if Borrower is a cooperative housing corporation), and all
modifications, extensions or renewals.
(p) "Lender" means the entity identified as "Lender" in the first
paragraph of this Instrument and its successors and assigns, or any subsequent
holder of the Note.
(q) "Loan Documents" means the Note, this Instrument, all guaranties, all
indemnity agreements, all Collateral Agreements, O&M Programs, and any other
documents now or in the future executed by Borrower, Key Principal, any
guarantor or any other person in connection with the loan evidenced by the
Note, as such documents may be amended from time to time.
(r) "Loan Servicer" means the entity that from time to time is designated
by Lender to collect payments and deposits and receive notices under the Note,
this Instrument and any other Loan Document, and otherwise to service the loan
evidenced by the Note for the benefit of Lender. Unless Borrower receives
notice to the contrary, the Loan Servicer is the entity identified as "Lender"
in the first paragraph of this Instrument.
(s) "Mortgaged Property" means all of Borrower's present and future right,
title and interest in and to all of the following:
(1)
the Land;
(2) the
Improvements;
(3) the
Fixtures;
(4) the
Personalty;
(5) all current and future rights, including air
rights, development rights, zoning
rights and other similar rights or interests, servitudes,
easements, tenements, rights-of-way, strips and gores of land,
streets, alleys, roads, sewer rights, waters, watercourses, and
appurtenances related to or benefitting the Land or the
Improvements, or both, and all rights-of-way, streets, alleys
and roads which may have been or may in the future be vacated;
(6) all proceeds paid or to be paid by any insurer of the Land, the
Improvements, the Fixtures, the Personalty or any other part of
the Mortgaged Property, whether or not Borrower obtained the
insurance pursuant to Lender's requirement;
(7) all awards, payments and other compensation made or
to be made by any
municipal, state or federal authority with respect to the Land,
the Improvements, the Fixtures, the Personalty or any other part
of the Mortgaged Property, including any awards or settlements
resulting from condemnation proceedings or the total or partial
taking of the Land, the Improvements, the Fixtures, the
Personalty or any other part of the Mortgaged Property under the
power of eminent domain or otherwise and including any
conveyance in lieu thereof,
(8) all contracts, options and other agreements for the
sale of the Land, the
Improvements, the Fixtures, the Personalty or any other part of
the Mortgaged Property entered into by Borrower now or in the
future, including cash or securities deposited to secure
performance by parties of their obligations;
(9) all proceeds from the conversion, voluntary or
involuntary, of any of the
above into cash or liquidated claims, and the right
to collect such proceeds;
(10) all Rents and Leases;
(11) all earnings, royalties, accounts receivable, issues and profits
from the Land, the Improvements or any other part of the
Mortgaged Property, and all undisbursed proceeds of the loan
secured by this Instrument and, if Borrower is a cooperative
housing corporation, maintenance charges or assessments payable
by shareholders or residents;
(12) all Imposition Deposits;
(13) all refunds or rebates of Impositions by any municipal, state or
federal authority or insurance company (other than refunds
applicable to periods before the real property tax year in which
this Instrument is dated);
(14) all tenant security deposits which have not been forfeited by
any tenant under any Lease; and
(15) all names under or by which any of the above Mortgaged Property
may be operated or known, and all trademarks, trade names, and
goodwill relating to any of the Mortgaged Property.
(t) "Note" means the Multifamily Note described on page I of this
Instrument, including the Acknowledgment and Agreement of Key Principal to
Personal Liability for Exceptions to Non-Recourse Liability (if any), and all
schedules, riders, allonges and addenda, as such Multifamily Note may be
amended from time to time.
(u) "O&M Program" is defined in Section 18(a).
(v) "Personalty" means all furniture, furnishings, equipment, machinery,
building materials, appliances, goods, supplies, tools, books, records (whether
in written or electronic form), computer equipment (hardware and software) and
other tangible (corporeal) personal (movable) property (other than Fixtures)
which are used now or in the future in connection with the ownership,
management or operation of the Land or the Improvements or are located on the
Land or in the Improvements, and any operating agreements relating to the Land
or the Improvements, and any surveys, plans and specifications and contracts
for architectural, engineering and construction services relating to the Land
or the Improvements and all other intangible (incorporeal) property and rights
relating to the operation of, or used in connection with, the Land or the
Improvements, including all governmental permits relating to any activities on
the Land.
(w) "Property Jurisdiction" is defined in Section 30(a).
(x) "Rents" means all rents (whether from residential or non-residential
space), revenues and other income of the Land or the Improvements, including
parking fees, laundry and vending machine income and fees and charges for food,
health care and other services provided at the Mortgaged Property, whether now
due, past due, or to become due, and deposits forfeited by tenants.
(y) "Taxes" means all taxes, assessments, vault rentals and other charges,
if any, general, special or otherwise, including all assessments for schools,
public betterments and general or local improvements, which are levied,
assessed or imposed by any public authority or quasi-public authority, and
which, if not paid, will become a lien, on the Land or the Improvements.
(z) "Transfer" means (A) a sale, assignment, transfer or other disposition
(whether voluntary, involuntary or by operation of law, and whether on a bond
for deed basis or otherwise); (B) the granting, creating or attachment of a
lien, encumbrance or security interest (whether voluntary, involuntary or by
operation of law, and whether on a bond for deed basis or otherwise); (C) the
issuance or other creation of an ownership interest in a legal entity,
including a partnership interest, interest in a limited liability company or
corporate stock; (D) the withdrawal, retirement, removal or involuntary
resignation of a partner in a partnership or a member or manager in a limited
liability company; or (E) the merger, dissolution, liquidation, or
consolidation of a legal entity. "Transfer" does not include (i) a conveyance
of the Mortgaged Property at a judicial or non-judicial foreclosure sale under
this Instrument or (ii) the Mortgaged Property becoming part of a bankruptcy
estate by operation of law under the United States Bankruptcy Code. For
purposes of defining the term "Transfer," the term "partnership" shall mean a
general partnership, a limited partnership or partnership in commendam, a joint
venture and a registered limited liability partnership, and the term "partner"
shall mean a general partner, a limited partner and a joint venturer.
(aa) "Uniform Commercial Code" or "UCC" means the Uniform Commercial Code
as adopted in any state or the District of Columbia. In Louisiana, "Uniform
Commercial Code" or "UCC" shall refer to the Louisiana Commercial Laws,
Louisiana Revised Statues Title 10, Sections 1-101, et seq.
2. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. This Instrument is also a
security agreement under the Uniform Commercial Code for any of the Mortgaged
Property which, under applicable law, may be subject to a security interest
under the Uniform Commercial Code, whether acquired now or in the future, and
all products and cash and non-cash proceeds thereof (collectively, "UCC
Collateral"), and Borrower hereby grants to Lender a security interest in the
UCC Collateral. Borrower shall execute and deliver to Lender, upon Lender's
request, financing statements, continuation statements and amendments, in such
form as Lender may require to perfect or continue the perfection of this
security interest. Borrower shall pay all filing costs and all costs and
expenses of any record searches for financing statements that Lender may
require. Without the prior written consent of Lender, Borrower shall not create
or permit to exist any other lien or security interest in any of the UCC
Collateral. If an Event of Default has occurred and is continuing, Lender shall
have the remedies of a secured party under the Uniform Commercial Code, in
addition to all remedies provided by this Instrument or existing under
applicable law. In exercising any remedies, Lender may exercise its remedies
against the UCC Collateral separately or together, and in any order, without in
any way affecting the availability of Lender's other remedies. This Instrument
constitutes a financing statement with respect to any part of the Mortgaged
Property which is or may become a Fixture.
3. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION.
(a) As part of the consideration for the Indebtedness, Borrower absolutely
and unconditionally assigns and transfers to Lender all Rents. It is the
intention of Borrower to establish a present, absolute and irrevocable transfer
and assignment to Lender of all Rents and to authorize and empower Lender to
collect and receive all Rents without the necessity of further action on the
part of Borrower. Promptly upon request by Lender, Borrower agrees to execute
and deliver such further assignments as Lender may from time to time require.
Borrower and Lender intend this assignment of Rents to be immediately effective
and to constitute an absolute present assignment and not an assignment for
additional security only. For purposes of giving effect to this absolute
assignment of Rents, and for no other purpose, Rents shall not be deemed to be
a part of the "Mortgaged Property," as that term is defined in Section I(s).
However, if this present, absolute and unconditional assignment of Rents is not
enforceable by its terms under the laws of the Property Jurisdiction, then the
Rents shall be included as a part of the Mortgaged Property and it is the
intention of the Borrower that in this circumstance this Instrument create and
perfect a security interest on Rents in favor of Lender, which security
interest shall be effective as of the date of this Instrument.
(b) After the occurrence of an Event of Default, Borrower
authorizes Lender to collect, ▇▇▇ for and compromise
Rents and directs each tenant of the Mortgaged Property
to pay all Rents to, or as directed by, Lender. However,
until the occurrence of an Event of Default, Lender
hereby grants to Borrower a revocable license to collect
and receive all Rents, to hold all Rents in trust for the
benefit of Lender and to apply all Rents to pay the
installments of interest and principal then due and
payable under the Note and the other amounts then due and
payable under the other Loan Documents, including
Imposition Deposits, and to pay the current costs and
expenses of managing, operating and maintaining the
Mortgaged Property, including utilities, Taxes and
insurance premiums (to the extent not included in
Imposition Deposits), tenant improvements and other
capital expenditures. So long as no Event of Default has
occurred and is continuing, the Rents remaining after
application pursuant to the preceding sentence may be
retained by Borrower free and clear of, and released
from, Lender's rights with respect to Rents under this
Instrument.
From and after the occurrence of an Event of Default, and without the necessity
of Lender entering upon and taking and maintaining control of the Mortgaged
Property directly, or by a receiver, Borrower's license to collect Rents shall
automatically terminate and Lender shall without notice be entitled to all
Rents as they become due and payable, including Rents then due and unpaid.
Borrower shall pay to Lender upon demand all Rents to which Lender is entitled.
At any time on or after the date of Lender's demand for Rents, Lender may give,
and Borrower hereby irrevocably authorizes Lender to give, notice to all
tenants of the Mortgaged Property instructing them to pay all Rents to Lender,
no tenant shall be obligated to inquire further as to the occurrence or
continuance of an Event of Default, and no tenant shall be obligated to pay to
Borrower any amounts which are actually paid to Lender in response to such a
notice. Any such notice by Lender shall be delivered to each tenant personally,
by mail or by delivering such demand to each rental unit. Borrower shall not
interfere with and shall cooperate with Lender's collection of such Rents.
(c) Borrower represents and warrants to Lender that Borrower has not
executed any prior assignment of Rents (other than an assignment of Rents
securing indebtedness that will be paid off and discharged with the proceeds of
the loan evidenced by the Note), that Borrower has not performed, and Borrower
covenants and agrees that it will not perform, any acts and has not executed,
and shall not execute, any instrument which would prevent Lender from
exercising its rights under this Section 3, and that at the time of execution
of this Instrument there has been no anticipation or prepayment of any Rents
for more than two months prior to the due dates of such Rents. Borrower shall
not collect or accept payment of any Rents more than two months prior to the
due dates of such Rents.
(d) If an Event of Default has occurred and is continuing, Lender may,
regardless of the adequacy of Lender's security or the solvency of Borrower and
even in the absence of waste, enter upon and take and maintain full control of
the Mortgaged Property in order to perform all acts that Lender in its
discretion determines to be necessary or desirable for the operation and
maintenance of the Mortgaged Property, including the execution, cancellation or
modification of Leases, the collection of all Rents, the making of repairs to
the Mortgaged Property and the execution or termination of contracts providing
for the management, operation or maintenance of the Mortgaged Property, for the
purposes of enforcing the assignment of Rents pursuant to Section 3(a),
protecting the Mortgaged Property or the security of this Instrument, or for
such other purposes as Lender in its discretion may deem necessary or
desirable. Alternatively, if an Event of Default has occurred and is
continuing, regardless of the adequacy of Lender's security, without regard to
Borrower's solvency and without the necessity of giving prior notice (oral or
written) to Borrower, Lender may apply to any court having jurisdiction for the
appointment of a receiver for the Mortgaged Property to take any or all of the
actions set forth in the preceding sentence. If Lender elects to seek the
appointment of a receiver for the Mortgaged Property at any time after an Event
of Default has occurred and is continuing, Borrower, by its execution of this
Instrument, expressly consents to the appointment of such receiver, including
the appointment of a receiver ex parte if permitted by applicable law. Lender
or the receiver, as the case may be, shall be entitled to receive a reasonable
fee for managing the Mortgaged Property. Immediately upon appointment of a
receiver or immediately upon the Lender's entering upon and taking possession
and control of the Mortgaged Property, Borrower shall surrender possession of
the Mortgaged Property to Lender or the receiver, as the case may be, and shall
deliver to Lender or the receiver, as the case may be, all documents, records
(including records on electronic or magnetic media), accounts, surveys, plans,
and specifications relating to the Mortgaged Property and all security deposits
and prepaid Rents. In the event Lender takes possession and control of the
Mortgaged Property, Lender may exclude Borrower and its representatives from
the Mortgaged Property. Borrower acknowledges and agrees that the exercise by
Lender of any of the rights conferred under this Section 3 shall not be
construed to make Lender a mortgagee-in-possession of the Mortgaged Property so
long as Lender has not itself entered into actual possession of the Land and
Improvements.
(e) If Lender enters the Mortgaged Property, Lender shall be liable to
account only to Borrower and 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 Mortgaged Property, by reason of any act or
omission of Lender under this Section 3, and Borrower hereby releases and
discharges Lender from any such liability to the fullest extent permitted by
law.
(f) If the Rents are not sufficient to meet the costs of taking control of
and managing the Mortgaged Property and collecting the Rents, any funds
expended by Lender for such purposes shall become an additional part of the
Indebtedness as provided in Section 12.
(g) Any entering upon and taking of control of the Mortgaged Property by
Lender or the receiver, as the case may be, and any application of Rents as
provided in this Instrument shall not cure or waive any Event of Default or
invalidate any other right or remedy of Lender under applicable law or provided
for in this Instrument.
4. ASSIGNMENT OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY.
(a) As part of the consideration for the Indebtedness, Borrower absolutely
and unconditionally assigns and transfers to Lender all of Borrower's right,
title and interest in, to and under the Leases, including Borrower's right,
power and authority to modify the terms of any such Lease, or extend or
terminate any such Lease. It is the intention of Borrower to establish a
present, absolute and irrevocable transfer and assignment to Lender of all of
Borrower's right, title and interest in, to and under the Leases. Borrower and
Lender intend this assignment of the Leases to be immediately effective and to
constitute an absolute present assignment and not an assignment for additional
security only. For purposes of giving effect to this absolute assignment of the
Leases, and for no other purpose, the Leases shall not be deemed to be a part
of the "Mortgaged Property," as that term is defined in Section I (s). However,
if this present, absolute and unconditional assignment of the Leases is not
enforceable by its terms under the laws of the Property Jurisdiction, then the
Leases shall be included as a part of the Mortgaged Property and it is the
intention of the Borrower that in this circumstance this Instrument create and
perfect a security interest on the Leases in favor of Lender, which security
interest shall be effective as of the date of this Instrument.
(b) Until Lender gives notice to Borrower of Lender's exercise of its
rights under this Section 4, Borrower shall have all rights, power and
authority granted to Borrower under any Lease (except as otherwise limited by
this Section or any other provision of this Instrument), including the right,
power and authority to modify the terms of any Lease or extend or terminate any
Lease. Upon the occurrence of an Event of Default, the permission given to
Borrower pursuant to the preceding sentence to exercise all rights, power and
authority under Leases shall automatically terminate. Borrower shall comply
with and observe Borrower's obligations under all Leases, including Borrower's
obligations pertaining to the maintenance and disposition of tenant security
deposits.
(c) Borrower acknowledges and agrees that the exercise by Lender, either
directly or by a receiver, of any of the rights conferred under this Section 4
shall not be construed to make Lender a mortgagee-in-possession of the
Mortgaged Property so long as Lender has not itself entered into actual
possession of the Land and the Improvements. The acceptance by Lender of the
assignment of the Leases pursuant to Section 4(a) shall not at any time or in
any event obligate Lender to take any action under this Instrument or to expend
any money or to incur any expenses. 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 Mortgaged Property. Prior to Lender's
actual entry into and taking possession of the Mortgaged Property, Lender shall
not (i) be obligated to perform any of the terms, covenants and conditions
contained in any Lease (or otherwise have any obligation with respect to any
Lease); (ii) be obligated to appear in or defend any action or proceeding
relating to the Lease or the Mortgaged Property; or (iii) be responsible for
the operation, control, care, management or repair of the Mortgaged Property or
any portion of the Mortgaged Property. The execution of this Instrument by
Borrower shall constitute conclusive evidence that all responsibility for the
operation, control, care, management and repair of the Mortgaged Property is
and shall be that of Borrower, prior to such actual entry and taking of
possession.
(d) Upon delivery of notice by Lender to Borrower of Lender's exercise of
Lender's rights under this Section 4 at any time after the occurrence of an
Event of Default, and without the necessity of Lender entering upon and taking
and maintaining control of the Mortgaged Property directly, by a receiver, or
by any other manner or proceeding permitted by the laws of the Property
Jurisdiction, Lender immediately shall have all rights, powers and authority
granted to Borrower under any Lease, including the right, power and authority
to modify the terms of any such Lease, or extend or terminate any such Lease.
(e) Borrower shall, promptly upon Lender's request, deliver to Lender an
executed copy of each residential Lease then in effect. All Leases for
residential dwelling units shall be on forms approved by Lender, shall be for
initial terms of at least six months and not more than two years, and shall not
include options to purchase. If customary in the applicable market, residential
Leases with terms of less than six months may be permitted with Lender's prior
written consent.
(f) Borrower shall not lease any portion of the Mortgaged Property for
non-residential use except with the prior written consent of Lender and
Lender's prior written approval of the Lease agreement. Borrower shall not
modify the terms of, or extend or terminate, any Lease for nonresidential use
(including any Lease in existence on the date of this Instrument) without the
prior written consent of Lender. Borrower shall, without request by Lender,
deliver an executed copy of each non-residential Lease to Lender promptly after
such Lease is signed. All non-residential Leases, including renewals or
extensions of existing Leases, shall specifically provide that (1) such Leases
are subordinate to the lien of this Instrument (unless waived in writing by
Lender); (2) the tenant shall attorn to Lender and any purchaser at a
foreclosure sale, such attornment to be self-executing and effective upon
acquisition of title to the Mortgaged Property by any purchaser at a
foreclosure sale or by Lender in any manner; (3) the tenant agrees to execute
such further evidences of attornment as Lender or any purchaser at a
foreclosure sale may from time to time request; (4) the Lease shall not be
terminated by foreclosure or any other transfer of the Mortgaged Property; (5)
after a foreclosure sale of the Mortgaged Property, Lender or any other
purchaser at such foreclosure sale may, at Lender's or such purchaser's option,
accept or terminate such Lease; and (6) the tenant shall, upon receipt after
the occurrence of an Event of Default of a written request from Lender, pay all
Rents payable under the Lease to Lender.
(g) Borrower shall not receive or accept Rent under any Lease (whether
residential or non-residential) for more than two months in advance.
5. PAYMENT OF INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS; PREPAYMENT
PREMIUM. Borrower shall pay the Indebtedness when due in accordance with the
terms of the Note and the other Loan Documents and shall perform, observe and
comply with all other provisions of the Note and the other Loan Documents.
Borrower shall pay a prepayment premium in connection with certain prepayments
of the Indebtedness, including a payment made after Lender's exercise of any
right of acceleration of the Indebtedness, as provided in the Note.
6. EXCULPATION. Borrower's personal liability for payment of the
Indebtedness and for performance of the other obligations to be performed by it
under this Instrument is limited in the manner, and to the extent, provided in
the Note.
7. DEPOSITS FOR TAXES, INSURANCE AND OTHER CHARGES.
(a) Borrower shall deposit with Lender on the day monthly installments of
principal or interest, or both, are due under the Note (or on another day
designated in writing by Lender), until the Indebtedness is paid in full, an
additional amount sufficient to accumulate with Lender the entire sum required
to pay, when due (1) any water and sewer charges which, if not paid, may result
in a lien on all or any part of the Mortgaged Property, (2) the premiums for
fire and other hazard insurance, rent loss insurance and such other insurance
as Lender may require under Section 19, (3) Taxes, and (4) amounts for other
charges and expenses which Lender at any time reasonably deems necessary to
protect the Mortgaged Property, to prevent the imposition of liens on the
Mortgaged Property, or otherwise to protect Lender's interests, all as
reasonably estimated from time to time by Lender. The amounts deposited under
the preceding sentence are collectively referred to in this Instrument as the
"Imposition Deposits". The obligations of Borrower for which the Imposition
Deposits are required are collectively referred to in this Instrument as
"Impositions". The amount of the Imposition Deposits shall be sufficient to
enable Lender to pay each Imposition before the last date upon which such
payment may be made without any penalty or interest charge being added. Lender
shall maintain records indicating how much of the monthly Imposition Deposits
and how much of the aggregate Imposition Deposits held by Lender are held for
the purpose of paying Taxes, insurance premiums and each other obligation of
Borrower for which Imposition Deposits are required. Any waiver by Lender of
the requirement that Borrower remit Imposition Deposits to Lender may be
revoked by Lender, in Lender's discretion, at any time upon notice to Borrower.
(b) Imposition Deposits shall be held in an institution (which may be
Lender, if Lender is such an institution) whose deposits or accounts are
insured or guaranteed by a federal agency. Lender shall not be obligated to
open additional accounts or deposit Imposition Deposits in additional
institutions when the amount of the Imposition Deposits exceeds the maximum
amount of the federal deposit insurance or guaranty. Lender shall apply the
Imposition Deposits to pay Impositions so long as no Event of Default has
occurred and is continuing. Unless applicable law requires, Lender shall not be
required to pay Borrower any interest, earnings or profits on the Imposition
Deposits. Borrower hereby pledges and grants to Lender a security interest in
the Imposition Deposits as additional security for all of Borrower's
obligations under this Instrument and the other Loan Documents. Any amounts
deposited with Lender under this Section 7 shall not be trust funds, nor shall
they operate to reduce the Indebtedness, unless applied by Lender for that
purpose under Section 7(e).
(c) If Lender receives a ▇▇▇▇ or invoice for an Imposition, Lender shall
pay the Imposition from the Imposition Deposits held by Lender. Lender shall
have no obligation to pay any Imposition to the extent it exceeds Imposition
Deposits then held by Lender. Lender may pay an Imposition according to any
▇▇▇▇, statement or estimate from the appropriate public office or insurance
company without inquiring into the accuracy of the ▇▇▇▇, statement or estimate
or into the validity of the Imposition.
(d) If at any time the amount of the Imposition Deposits held by Lender
for payment of a specific Imposition exceeds the amount reasonably deemed
necessary by Lender, the excess shall be credited against future installments
of Imposition Deposits. If at any time the amount of the Imposition Deposits
held by Lender for payment of a specific Imposition is less than the amount
reasonably estimated by Lender to be necessary, Borrower shall pay to Lender
the amount of the deficiency within 15 days after notice from Lender.
(e) If an Event of Default has occurred and is continuing, Lender may
apply any Imposition Deposits, in any amounts and in any order as Lender
determines, in Lender's discretion, to pay any Impositions or as a credit
against the Indebtedness. Upon payment in full of the Indebtedness, Lender
shall refund to Borrower any Imposition Deposits held by Lender.
8. COLLATERAL AGREEMENTS. Borrower shall deposit with Lender such amounts
as may be required by any Collateral Agreement and shall perform all other
obligations of Borrower under each Collateral Agreement.
9. APPLICATION OF PAYMENTS. If at any time Lender receives, from Borrower
or otherwise, any amount applicable to the Indebtedness which is less than all
amounts due and payable at such time, then Lender may apply that payment to
amounts then due and payable in any manner and in any order determined by
Lender, in Lender's discretion. Neither Lender's acceptance of an amount which
is less than all amounts then due and payable nor Lender's application of such
payment in the manner authorized shall constitute or be deemed to constitute
either a waiver of the unpaid amounts or an accord and satisfaction.
Notwithstanding the application of any such amount to the Indebtedness',
Borrower's obligations under this Instrument and the Note shall remain
unchanged.
10. COMPLIANCE WITH LAWS. Borrower shall comply with all laws, ordinances,
regulations and requirements of any Governmental Authority and all recorded
lawful covenants and agreements relating to or affecting the Mortgaged
Property, including all laws, ordinances, regulations, requirements and
covenants pertaining to health and safety, construction of improvements on the
Mortgaged Property, fair housing, zoning and land use, and Leases. Borrower
also shall comply with all applicable laws that pertain to the maintenance and
disposition of tenant security deposits. Borrower shall at all times maintain
records sufficient to demonstrate compliance with the provisions of this
Section 10. Borrower shall take appropriate measures to prevent, and shall not
engage in or knowingly permit, any illegal activities at the Mortgaged Property
that could endanger tenants or visitors, result in damage to the Mortgaged
Property, result in forfeiture of the Mortgaged Property, or otherwise
materially impair the lien created by this Instrument or Lender's interest in
the Mortgaged Property. Borrower represents and warrants to Lender that no
portion of the Mortgaged Property has been or will be purchased with the
proceeds of any illegal activity.
11. USE OF PROPERTY. Unless required by applicable law, Borrower shall
not (a) except for any change in use approved by Lender, allow changes in the
use for which all or any part of the Mortgaged Property is being used at the
time this Instrument was executed, (b) convert any individual dwelling units
or common areas to commercial use, (c) initiate or acquiesce in a change in
the zoning classification of the Mortgaged Property, or (d) establish any
condominium or cooperative regime with respect to the Mortgaged Property.
12. PROTECTION OF LENDER'S SECURITY.
(a) If Borrower fails to perform any of its obligations under this
Instrument or any other Loan Document, or if any action or proceeding is
commenced which purports to affect the Mortgaged Property, Lender's security
or Lenders rights under this Instrument, including eminent domain, insolvency,
code enforcement, civil or criminal forfeiture, enforcement of Hazardous
Materials Laws, fraudulent conveyance or reorganizations or proceedings
involving a bankrupt or decedent, then Lender at Lender's option may make such
appearances, disburse such sums and take such actions as Lender reasonably
deems necessary to perform such obligations of Borrower and to protect
Lender's interest, including (1) payment of fees and out-of-pocket expenses of
attorneys, accountants, inspectors and consultants, (2) entry upon the
Mortgaged Property to make repairs or secure the Mortgaged Property, (3)
procurement of the insurance required by Section 19, and (4) payment of
amounts which Borrower has failed to pay under Sections 15 and 17.
(b) Any amounts disbursed by Lender under this Section 12, or under any
other provision of this Instrument that treats such disbursement as being made
under this Section 12, shall be added to, and become part of, the principal
component of the Indebtedness, shall be immediately due and payable and shall
bear interest from the date of disbursement until paid at the "Default Rate",
as defined in the Note.
(c) Nothing in this Section 12 shall require Lender to incur any expense
or take any
action.
13. INSPECTION. Lender, its agents, representatives, and designees may
make or cause to be made entries upon and inspections of the Mortgaged
Property (including environmental inspections and tests) during normal
business hours, or at any other reasonable time.
14. BOOKS AND RECORDS; FINANCIAL REPORTING.
(a) Borrower shall keep and maintain at all times at the Mortgaged
Property or the management agent's offices, and upon Lender's request shall
make available at the Mortgaged Property, complete and accurate books of
account and records (including copies of supporting bills and invoices)
adequate to reflect correctly the operation of the Mortgaged Property, and
copies of all written contracts, Leases, and other instruments which affect the
Mortgaged Property. The books, records, contracts, Leases and other instruments
shall be subject to examination and inspection at any reasonable time by
Lender.
(b) Borrower shall furnish to Lender all of the following:
(1) within 120 days after the end of each fiscal year of Borrower, a
statement of
income and expenses for Borrower's operation of the Mortgaged
Property for that fiscal year, a statement of changes in
financial position of Borrower relating to the Mortgaged
Property for that fiscal year and, when requested by Lender, a
balance sheet showing all assets and liabilities of Borrower
relating to the Mortgaged Property as of the end of that fiscal
year;
(2) within 120 days after the end of each fiscal year
of Borrower, and at any
other time upon Lender's request, a rent schedule for the
Mortgaged Property showing the name of each tenant, and for
each tenant, the space occupied, the lease expiration date, the
rent payable for the current month, the date through which rent
has been paid, and any related information requested by Lender;
(3) within 120 days after the end of each fiscal year
of Borrower, and at any
other time upon Lender's request, an accounting of all security
deposits held pursuant to all Leases, including the name of the
institution (if any) and the names and identification numbers
of the accounts (if any) 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;
(4) within 120 days after the end of each fiscal year
of Borrower, and at any
other time upon Lender's request, a statement that identifies
all owners of any interest in Borrower and the interest held by
each, if Borrower is a corporation, all officers and directors
of Borrower, and if Borrower is a limited liability company,
all managers who are not members;
(5) upon Lender's request, a monthly property
management report for the
Mortgaged Property, showing the number of inquiries made and
rental applications received from tenants or prospective
tenants and deposits received from tenants and any other
information requested by Lender;
(6) upon Lender's request, a balance sheet, a statement
of income and expenses
for Borrower and a statement of changes in
financial position of Borrower
for Borrower's most recent fiscal year; and
(7) if required by Lender, a statement of income and
expense for the Mortgaged
Property for the prior month or quarter.
(c) Each of the statements, schedules and reports required by Section
14(b) shall be certified to be complete and accurate by an individual having
authority to bind Borrower, and shall be in such form and contain such detail
as Lender may reasonably require. Lender also may require that any statements,
schedules or reports be audited at Borrower's expense by independent certified
public accountants acceptable to Lender.
(d) If Borrower fails to provide in a timely manner the statements,
schedules and reports required by Section 14(b), Lender shall have the right to
have Borrower's books and records audited, at Borrower's expense, by
independent certified public accountants selected by Lender in order to obtain
such statements, schedules and reports, and all related costs and expenses of
Lender shall become immediately due and payable and shall become an additional
part of the Indebtedness as provided in Section 12.
(e) If an Event of Default has occurred and is continuing, Borrower shall
deliver to Lender upon written demand all books and records relating to the
Mortgaged Property or its operation.
(f) Borrower authorizes Lender to obtain a credit report on Borrower at
any time.
(g) If an Event of Default has occurred and Lender has not previously
required Borrower to furnish a quarterly statement of income and expense for
the Mortgaged Property, Lender may require Borrower to furnish such a statement
within 45 days after the end of each fiscal quarter of Borrower following such
Event of Default.
15. TAXES; OPERATING EXPENSES.
(a) Subject to the provisions of Section 15(c) and Section 15(d), Borrower
shall pay, or cause to be paid, all Taxes when due and before the addition of
any interest, fine, penalty or cost for nonpayment.
(b) Subject to the provisions of Section 15(c), Borrower shall pay the
expenses of operating, managing, maintaining and repairing the Mortgaged
Property (including insurance premiums, utilities, repairs and replacements)
before the last date upon which each such payment may be made without any
penalty or interest charge being added.
(c) As long as no Event of Default exists and Borrower has timely
delivered to Lender any bills or premium notices that it has received, Borrower
shall not be obligated to pay Taxes, insurance premiums or any other individual
Imposition to the extent that sufficient Imposition Deposits are held by Lender
for the purpose of paying that specific Imposition. If an Event of Default
exists, Lender may exercise any rights Lender may have with respect to
Imposition Deposits without regard to whether Impositions are then due and
payable. Lender shall have no liability to Borrower for failing to pay any
Impositions to the extent that any Event of Default has occurred and is
continuing, insufficient Imposition Deposits are held by Lender at the time an
Imposition becomes due and payable or Borrower has failed to provide Lender
with bills and premium notices as provided above.
(d) Borrower, at its own expense, may contest by appropriate legal
proceedings, conducted diligently and in good faith, the amount or validity of
any Imposition other than insurance premiums, if (1) Borrower notifies Lender
of the commencement or expected commencement of such proceedings, (2) the
Mortgaged Property is not in danger of being sold or forfeited, (3) Borrower
deposits with Lender reserves sufficient to pay the contested Imposition, if
requested by Lender, and (4) Borrower furnishes whatever additional security is
required in the proceedings or is reasonably requested by Lender, which may
include the delivery to Lender of the reserves established by Borrower to pay
the contested Imposition.
(e) Borrower shall promptly deliver to Lender a copy of all notices of,
and invoices for, Impositions, and if Borrower pays any Imposition directly,
Borrower shall promptly furnish to Lender receipts evidencing such payments.
16. LIENS; ENCUMBRANCES. Borrower acknowledges that, to the extent
provided in Section 21, the grant, creation or existence of any mortgage, deed
of trust, deed to secure debt, security interest or other lien, privilege or
encumbrance (a "Lien") on the Mortgaged Property (other than the lien of this
Instrument) or on certain ownership interests in Borrower, whether voluntary,
involuntary or by operation of law, and whether or not such Lien has priority
over the lien of this Instrument, is a "Transfer" which constitutes an Event of
Default.
17. PRESERVATION, MANAGEMENT AND MAINTENANCE OF MORTGAGED PROPERTY.
(a) Borrower (1) shall not commit waste or pen-nit impairment or
deterioration of the Mortgaged Property, (2) shall not abandon the Mortgaged
Property, (3) shall restore or repair promptly, in a good and workmanlike
manner, any damaged part of the Mortgaged Property to the equivalent of its
original condition, or such other condition as Lender may approve writing,
whether or not insurance proceeds or condemnation awards are available to cover
any costs of such restoration or repair, (4) shall keep the Mortgaged Property
in good repair, including the replacement of Personalty and Fixtures with items
of equal or better function and quality, (5) shall provide for professional
management of the Mortgaged Property by a residential rental property manager
satisfactory to Lender under a contract approved by Lender in writing, and (6)
shall give notice to Lender of and, unless otherwise directed in writing by
Lender, shall appear in and defend any action or proceeding purporting to
affect the Mortgaged Property, Lender's security or Lender's rights under this
Instrument. Borrower shall not (and shall not permit any tenant or other person
to) remove, demolish or alter the Mortgaged Property or any part of the
Mortgaged Property except in connection with the replacement of tangible
Personalty.
(b) If, in connection with the making of the loan evidenced by the Note or
at any later date, Lender waives in writing the requirement of Section 17(a)(5)
above that Borrower enter into a written contract for management of the
Mortgaged Property and if, after the date of this Instrument, Borrower intends
to change the management of the Mortgaged Property, Lender shall have the right
to approve such new property manager and the written contract of the management
of the Mortgaged Property and require that Borrower and such new property
manager enter into an Assignment of Management Agreement on a form approved by
Lender. If required by Lender (whether before or after an Event of Default),
Borrower will cause any Affiliate of Borrower to whom fees are payable for the
management of the Mortgaged Property to enter into an agreement with Lender, in
a form approved by Lender, providing for subordination of those fees and such
other provisions as Lender may require. "Affiliate of Borrower" means any
corporation, partnership, joint venture, limited liability company, limited
liability partnership, trust or individual controlled by, under common control
with, or which controls Borrower (the term "control" for these purposes shall
mean the ability, whether by the ownership of shares or other equity interests,
by contract or otherwise, to elect a majority of the directors of a
corporation, to make management decisions on behalf of, or independently to
select the managing partner of, a partnership, or otherwise to have the power
independently to remove and then select a ma ority of those j individuals
exercising managerial authority over an entity, and control shall be
conclusively presumed in the case of the ownership of 50% or more of the equity
interests).
18. ENVIRONMENTAL HAZARDS.
(a) Except for matters covered by a written program of operations and
maintenance approved in writing by Lender (an "O&M Program") or matters
described in Section I 8(b), Borrower shall not cause or permit any of the
following:
(1) the presence, use, generation, release, treatment,
processing, storage
(including storage in above ground and underground storage
tanks), handling, or disposal of any Hazardous Materials on or
under the Mortgaged Property or any other property of Borrower
that is adjacent to the Mortgaged Property;
(2) the transportation of any Hazardous Materials to,
from, or across the
Mortgaged
Property;
(3) any occurrence or condition on the Mortgaged
Property or any other
property of Borrower that is adjacent to the Mortgaged
Property, which occurrence or condition is or may be in
violation of Haza dous Materials Laws; or
(4) any violation of or noncompliance with the terms of
any Environmental
Permit with respect to the Mortgaged Property or any property
of Borrower that is adjacent to the Mortgaged Property.
The matters described in clauses (1) through (4) above are referred to
collectively in this Section 18 as "Prohibited Activities or Conditions".
(b) Prohibited Activities and Conditions shall not include the safe and
lawful use and storage of quantities of (1) pre-packaged supplies, cleaning
materials and petroleum products customarily used in the operation and
maintenance of comparable multifamily properties, (2) cleaning materials,
personal grooming items and other items sold in pre-packaged containers for
consumer use and used by tenants and occupants of residential dwelling units in
the Mortgaged Property; and (3) petroleum products used in the operation and
maintenance of motor vehicles from time to time located on the Mortgaged
Property's parking areas, so long as all of the foregoing are used, stored,
handled, transported and disposed of in compliance with Hazardous Materials
Laws.
(c) Borrower shall take all commercially reasonable actions (including the
inclusion of appropriate provisions in any Leases executed after the date of
this Instrument) to prevent its employees, agents, and contractors, and all
tenants and other occupants from causing or permitting any Prohibited
Activities or Conditions. Borrower shall not lease or allow the sublease or use
of all or any portion of the Mortgaged Property to any tenant or subtenant for
nonresidential use by any user that, in the ordinary course of its business,
would cause or pen-nit any Prohibited Activity or Condition.
(d) If an O&M Program has been established with respect to Hazardous
Materials, Borrower shall comply in a timely manner with, and cause all
employees, agents, and contractors of Borrower and any other persons present on
the Mortgaged Property to comply with the O&M Program. All costs of performance
of Borrower's obligations under any O&M Program shall be paid by Borrower, and
Lender's out-of-pocket costs incur-red in connection with the monitoring and
review of the O&M Program and Borrower's performance shall be paid by Borrower
upon demand by Lender. Any such out-of-pocket costs of Lender which Borrower
fails to pay promptly shall become an additional part of the Indebtedness as
provided in Section 12.
(e) Borrower represents and warrants to Lender that, except as previously
disclosed by Borrower to Lender in writing:
(1) Borrower has not at any time engaged in, caused or
permitted any Prohibited
Activities or
Conditions;
(2) to the best of Borrower's knowledge after
reasonable and diligent inquiry, no
Prohibited Activities or Conditions
exist or have existed;
(3) except to the extent previously disclosed by
Borrower to Lender in writing,
the Mortgaged Property does not now contain any underground
storage tanks, and, to the best of Borrower's knowledge after
reasonable and diligent inquiry, the Mortgaged Property has not
contained any underground storage tanks in the past. If there
is an underground storage tank located on the Property which
has been previously disclosed by Borrower to Lender in writing,
that tank complies with all requirements of Hazardous Materials
Laws;
(4) Borrower has complied with all Hazardous Materials
Laws, including all
requirements for notification regarding releases of Hazardous
Materials. Without limiting the generality of the foregoing,
Borrower has obtained all Environmental Pen-nits required for
the operation of the Mortgaged Property in accordance with
Hazardous Materials Laws now in effect and all such
Environmental Permits are in full force and effect;
(5) no event has occurred with respect to the Mortgaged
Property that
constitutes, or with the passing of time or the
giving of notice would
constitute, noncompliance with the terms of any
Environmental Permit;
(6) there are no actions, suits, claims or proceedings
pending or, to the best of
Borrower's knowledge after reasonable and diligent inquiry,
threatened that involve the Mortgaged Property and allege,
arise out of, or relate to any Prohibited Activity or
Condition; and
(7) Borrower has not received any complaint, order,
notice of violation or other
communication from any Governmental Authority with regard to
air emissions, water discharges, noise emissions or Hazardous
Materials, or any other environmental, health or safety matters
affecting the Mortgaged Property or any other property of
Borrower that is adjacent to the Mortgaged Property.
The representations and warranties in this Section 18 shall be continuing
representations and warranties that shall be deemed to be made by Borrower
throughout the terin of the loan evidenced by the Note, until the Indebtedness
has been paid in full.
(f) Borrower shall promptly notify Lender in writing upon the occurrence
of any of the following events:
(1) Borrower's discovery of any Prohibited Activity or Condition;
(2) Borrower's receipt of or knowledge of any complaint, order,
notice of
violation or other communication from any Governmental
Authority or other person with regard to present or future
alleged Prohibited Activities or Conditions or any other
environmental, health or safety matters affecting the Mortgaged
Property or any other property of Borrower that is adjacent to
the Mortgaged Property; and
(3) any representation or warranty in this Section 18 becomes untrue
after the date of this Agreement.
Any such notice given by Borrower shall not relieve Borrower of, or result in a
waiver of, any obligation under this Instrument, the Note, or any other Loan
Document.
(g) Borrower shall pay promptly the costs of any environmental
inspections, tests or audits ("Environmental Inspections") required by Lender
in connection with any foreclosure or deed in lieu of foreclosure, or as a
condition of Lender's consent to any Transfer under Section 2 1, or required by
Lender following a reasonable determination by Lender that Prohibited
Activities or Conditions may exist. Any such costs incurred by Lender
(including the fees and out-of-pocket costs of attorneys and technical
consultants whether incurred in connection with any judicial or administrative
process or otherwise) which Borrower fails to pay promptly shall become an
additional part of the Indebtedness as provided in Section 12. The results of
all Environmental Inspections made by Lender shall at all times remain the
property of Lender and Lender shall have no obligation to disclose or otherwise
make available to Borrower or any other party such results or any other
information obtained by Lender in connection with its Environmental
Inspections. Lender hereby reserves the right, and Borrower hereby expressly
authorizes Lender, to make available to any party, including any prospective
bidder at a foreclosure sale of the Mortgaged Property, the results of any
Environmental Inspections made by Lender with respect to the Mortgaged
Property. Borrower consents to Lender notifying any party (either as part of a
notice of sale or otherwise) of the results of any of Lender's Environmental
Inspections. Borrower acknowledges that Lender cannot control or otherwise
assure the truthfulness or accuracy of the results of any of its Environmental
Inspections and that the release of such results to prospective bidders at a
foreclosure sale of the Mortgaged Property may have a material and adverse
effect upon the amount which a party may bid at such sale. Borrower agrees that
Lender shall have no liability whatsoever as a result of delivering the results
of any of its Environmental Inspections to any third party, and Borrower hereby
releases and forever discharges Lender from any and all claims, damages, or
causes of action, arising out of, connected with or incidental to the results
of, the delivery of any of Lender's Environmental Inspections.
(h) If any investigation, site monitoring, containment, clean-up,
restoration or other remedial work ("Remedial Work") is necessary to comply
with any Hazardous Materials Law or order of any Governmental Authority that
has or acquires jurisdiction over the Mortgaged Property or the use, operation
or improvement of the Mortgaged Property under any Hazardous Materials Law,
Borrower shall, by the earlier of (1) the applicable deadline required by
Hazardous Materials Law or (2) 30 days after notice from Lender demanding such
action, begin performing the Remedial Work, and thereafter diligently prosecute
it to completion, and shall in any event complete the work by the time required
by applicable Hazardous Materials Law. If Borrower fails to begin on a timely
basis or diligently prosecute any required Remedial Work, Lender may, at its
option, cause the Remedial Work to be completed, in which case Borrower shall
reimburse Lender on demand for the cost of doing so. Any reimbursement due from
Borrower to Lender shall become part of the Indebtedness as provided in Section
12.
(i) Borrower shall cooperate with any inquiry by any Governmental
Authority and shall comply with any governmental or judicial order which arises
from any alleged Prohibited Activity or Condition.
(j) Borrower shall indemnify, hold harmless and defend (i) Lender, (ii)
any prior owner or holder of the Note, (iii) the Loan Servicer, (iv) any prior
Loan Servicer, (v) the officers, directors, shareholders, partners, employees
and trustees of any of the foregoing, and (vi) the heirs, legal
representatives, successors and assigns of each of the foregoing (collectively,
the "Indemnitees") from and against all proceedings, claims, damages, penalties
and costs (whether initiated or sought by Governmental Authorities or private
parties), including fees and out-of-pocket expenses of attorneys and expert
witnesses, investigatory fees, and remediation costs, whether incurred in
connection with any judicial or administrative process or otherwise, arising
directly or indirectly from any of the following:
(1) any breach of any representation or warranty of
Borrower in this Section 18;
(2) any failure by Borrower to perform any of its
obligations under this
Section
18;
(3) the existence or alleged existence of any
Prohibited Activity or Condition;
(4) the presence or alleged presence of Hazardous
Materials on or under the
Mortgaged Property or any property of Borrower that
is adjacent to the
Mortgaged Property; and
(5) the actual or alleged violation of any Hazardous Materials Law.
(k) Counsel selected by Borrower to defend Indemnitees shall be subject to
the approval of those Indemnitees. However, any Indemnitee may elect to defend
any claim or legal or administrative proceeding at the Borrower's expense.
(1) Borrower shall not, without the prior written consent of those
Indemnitees who are named as parties to a claim or legal or administrative
proceeding (a "Claim"), settle or compromise the Claim if the settlement (1)
results in the entry of any judgment that does not include as an unconditional
term the delivery by the claimant or plaintiff to Lender of a written release
of those Indemnitees, satisfactory in form and substance to Lender; or (2) may
materially and adversely affect Lender, as deten-nined by Lender in its
discretion.
(m) Lender agrees that the indemnity under this Section 18 shall be
limited to the assets of Borrower and Lender shall not seek to recover any
deficiency from any natural persons who are general partners of Borrower.
(n) Borrower shall, at its own cost and expense, do all of the following:
(1) pay or satisfy any judgment or decree that may be
entered against any
Indemnitee or Indemnitees in any legal or administrative
proceeding incident to any matters against which Indemnitees
are entitled to be indemnified under this Section 18;
(2) reimburse Indemnitees for any expenses paid or
incurred in connection with
any matters against which Indemnitees are entitled
to be indemnified under
this Section 18; and
(3) reimburse Indemnitees for any and all expenses,
including fees and out-of-
pocket expenses of attorneys and expert witnesses, paid or
incurred in connection with the enforcement by Indemnitees of
their rights under this Section 18, or in monitoring and
participating in any legal or administrative proceeding.
(o) In any circumstances in which the indemnity under this Section 18
applies, Lender may employ its own legal counsel and consultants to prosecute,
defend or negotiate any claim or legal or administrative proceeding and Lender,
with the prior written consent of Borrower (which shall not be unreasonably
withheld, delayed or conditioned), may settle or compromise any action or legal
or administrative proceeding, Borrower shall reimburse Lender upon demand for
all costs and expenses incurred by Lender, including all costs of settlements
entered into in good faith, and the fees and out-of-pocket expenses of such
attorneys and consultants,
(p) The provisions of this Section 18 shall be in addition to any and all
other obligations and liabilities that Borrower may have under applicable law
or under other Loan Documents, and each Indemnitee shall be entitled to
indemnification under this Section 18 without regard to whether Lender or that
Indemnitee has exercised any rights against the Mortgaged Property or any other
security, pursued any rights against any guarantor, or pursued any other rights
available under the Loan Documents or applicable law. If Borrower consists of
more than one person or entity, the obligation of those persons or entities to
indemnify the Indemnitees under this Section 18 shall be solidary. The
obligation of Borrower to indemnify the Indemnitees under this Section 18 shall
survive any repayment or discharge of the Indebtedness, any foreclosure
proceeding, any foreclosure sale, any delivery of any deed in lieu of
foreclosure, and any release of record of the lien of this Instrument.
19. PROPERTY AND LIABILITY INSURANCE.
(a) Borrower shall keep the Improvements insured at all times against such
hazards as Lender may from time to time require, which insurance shall include
but not be limited to coverage against loss by fire and allied perils, general
boiler and machinery coverage, and business income coverage. Lender's insurance
requirements may change from time to time throughout the term of the
Indebtedness. If Lender so requires, such insurance shall also include sinkhole
insurance, mine subsidence insurance, earthquake insurance, and, if the
Mortgaged Property does not conform to applicable zoning or land use laws,
building ordinance or law coverage. If any of the Improvements is located in an
area identified by the Federal Emergency Management Agency (or any successor to
that agency) as an area having special flood hazards, and if flood insurance is
available in that area, Borrower shall insure such Improvements against loss by
flood.
(b) All premiums on insurance policies required under Section 19(a)
shall be paid in the manner provided in Section 7,
unless Lender has designated in writing another method
of payment. All such policies shall also be in a form
approved by Lender. All policies of property damage
insurance shall include a non-contributing,
non-reporting mortgage clause in favor of, and in a form
approved by, Lender. Lender shall have the right to hold
the original policies or duplicate original policies of
all insurance required by Section 19(a). Borrower shall
promptly deliver to Lender a copy of all renewal and
other notices received by Borrower with respect to the
policies and all receipts for paid premiums. At least 30
days prior to the expiration date of a policy, Borrower
shall deliver to Lender the original (or a duplicate
original) of a renewal policy in form satisfactory to
Lender.
(c) Borrower shall maintain at all times commercial general liability
insurance, workers' compensation insurance and such other liability, errors and
omissions and fidelity insurance coverages as Lender may from time to time
require.
(d) All insurance policies and renewals of insurance policies required by
this Section 19 shall be in such amounts and for such periods as Lender may
from time to time require, and shall be issued by insurance companies
satisfactory to Lender.
(e) Borrower shall comply with all insurance requirements and shall not
permit any condition to exist on the Mortgaged Property that would invalidate
any part of any insurance coverage that this Instrument requires Borrower to
maintain.
(f) In the event of loss, Borrower shall give immediate written notice to
the insurance carrier and to Lender. Borrower hereby authorizes and appoints
Lender as attorney-in-fact for Borrower to make proof of loss, to adjust and
compromise any claims under policies of property damage insurance, to appear in
and prosecute any action arising from such property damage insurance policies,
to collect and receive the proceeds of property damage insurance, and to deduct
from such proceeds Lender's expenses incurred in the collection of such
proceeds. This power of attorney is coupled with an interest and therefore is
irrevocable. However, nothing contained in this Section 19 shall require Lender
to incur any expense or take any action. Lender may, at Lender's option, (1)
hold the balance of such proceeds to be used to reimburse Borrower for the cost
of restoring and repairing the Mortgaged Property to the equivalent of its
original condition or to a condition approved by Lender (the "Restoration"), or
(2) apply the balance of such proceeds to the payment of the Indebtedness,
whether or not then due. To the extent Lender determines to apply insurance
proceeds to Restoration, Lender shall do so in accordance with Lender's
then-current policies relating to the restoration of casualty damage on similar
multifamily properties.
(g) Lender shall not exercise its option to apply insurance proceeds to
the payment of the Indebtedness if all of the following conditions are met: (1)
no Event of Default (or any event which, with the giving of notice or the
passage of time, or both, would constitute an Event of Default) has occurred
and is continuing; (2) Lender determines, in its discretion, that there will be
sufficient funds to complete the Restoration; (3) Lender determines, in its
discretion, that the rental income from the Mortgaged Property after completion
of the Restoration will be sufficient to meet all operating costs and other
expenses, Imposition Deposits, deposits to reserves and loan repayment
obligations relating to the Mortgaged Property; (4) Lender determines, in its
discretion, that the Restoration will be completed before the earlier of (A)
one year before the maturity date of the Note or (B) one year after the date of
the loss or casualty; and (5) upon Lender's request, Borrower provides Lender
evidence of the availability during and after the Restoration of the insurance
required to be maintained by Borrower pursuant to this Section 19.
(h) If the Mortgaged Property is sold at a foreclosure sale or Lender
acquires title to the Mortgaged Property, Lender shall automatically succeed to
all rights of Borrower in and to any insurance policies and unearned insurance
premiums and in and to the proceeds resulting from any damage to the Mortgaged
Property prior to such sale or acquisition.
20. CONDEMNATION.
(a) Borrower shall promptly notify Lender of any action or proceeding
relating to any condemnation or other taking, or conveyance in lieu thereof, of
all or any part of the Mortgaged Property, whether direct or indirect (a
"Condemnation"). Borrower shall appear in and prosecute or defend any action or
proceeding relating to any Condemnation unless otherwise directed by Lender in
writing. Borrower authorizes and appoints Lender 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 and to settle or
compromise any claim in connection with any Condemnation. This power of
attorney is coupled with an interest and therefore is irrevocable. However,
nothing contained in this Section 20 shall require Lender to incur any expense
or take any action. Borrower hereby transfers and assigns to Lender all right,
title and interest of Borrower in and to any award or payment with respect to
(i) any Condemnation, or any conveyance in lieu of Condemnation, and (ii) any
damage to the Mortgaged Property caused by governmental action that does not
result in a Condemnation.
(b) Lender may apply such awards or proceeds, after the deduction of
Lender's expenses incurred in the collection of such amounts, at Lender's
option, to the restoration or repair of the Mortgaged Property or to the
payment of the Indebtedness, with the balance, if any, to Borrower. Unless
Lender otherwise agrees in writing, any application of any awards or proceeds
to the Indebtedness shall not extend or postpone the due date of any monthly
installments referred to in the Note, Section 7 of this Instrument or any
Collateral Agreement, or change the amount of such installments. Borrower
agrees to execute such further evidence of assignment of any awards or proceeds
as Lender may require.
21. TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.
(a) The occurrence of any of the following events shall constitute an
Event of Default under this Instrument:
(1) a Transfer of all or any part of the Mortgaged
Property or any interest in the
Mortgaged
Property;
(2) a Transfer of a Controlling
Interest in Borrower;
(3) a Transfer of a Controlling Interest in any entity
which owns, directly or
indirectly through one or more intermediate
entities, a Controlling Interest in
Borrower;
(4) a Transfer of all or any part of Key Principal's
ownership interests (other
than limited partnership interests) in Borrower, or in any
other entity which owns, directly or indirectly through one or
more intermediate entities, an ownership interest in Borrower;
(5) if Key Principal is an entity (A) a Transfer of a
Controlling Interest in Key
Principal, or (B) a Transfer of a Controlling Interest in any
entity which owns, directly or indirectly through one or more
inten-nediate entities, a Controlling Interest in Key
Principal;
(6) if Borrower or Key Principal is a trust, the
termination or revocation of such
trust;
and
(7) a conversion of Borrower from one type of legal entity into
another type of
legal entity, whether or not
there is a Transfer.
Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default in order to exercise any of its
remedies with respect to an Event of Default under this Section 2 1.
(b) The occurrence of any of the following events shall not constitute an
Event of Default under this Instrument, notwithstanding any provision of
Section 2 1 (a) to the contrary:
(1) a Transfer to which Lender
has consented;
(2) a Transfer that occurs by devise, descent, or by
operation of law upon the
death of a natural
person;
(3) the grant of a leasehold interest in an individual
dwelling unit for a ten-n of
two years or less not containing an
option to purchase;
(4) a Transfer of obsolete or worn out Personalty or
Fixtures that are
contemporaneously replaced by items of equal or
better function and quality,
which are free of liens, encumbrances and security interests
other than those created by the Loan Documents or consented to
by Lender;
(5) the grant of an easement, if before the grant
Lender determines that the
easement will not materially affect the operation or value of
the Mortgaged Property or Lender's interest in the Mortgaged
Property, and Borrower pays to Lender, upon demand, all costs
and expenses incurred by Lender in connection with reviewing
Borrower's request; and
(6) the creation of a tax lien or a mechanic's,
materialman's or judgment lien
against the Mortgaged Property which is bonded off, released of
record or otherwise remedied to Lender's satisfaction within 30
days of the date of creation.
(c) Lender shall consent, without any adjustment to the rate at which the
Indebtedness secured by this Instrument bears interest or to any other economic
terms of the Indebtedness, to a Transfer that would otherwise violate this
Section 21 if, prior to the Transfer, Borrower has satisfied each of the
following requirements:
(1) the submission to Lender of all information
required by Lender to make the
determination required by this
Section 21 (c);
(2) the absence of any Event
of Default;
(3) the transferee meets all of the eligibility,
credit, management and other
standards (including any standards with respect to previous
relationships between Lender and the transferee and the
organization of the transferee) customarily applied by Lender at
the time of the proposed Transfer to the approval of borrowers
in connection with the origination or purchase of similar
mortgages, deeds of trust or deeds to secure debt on multifamily
properties;
(4) the Mortgaged Property, at the time of the proposed
Transfer, meets all
standards as to its physical condition that are customarily
applied by Lender at the time of the proposed Transfer to the
approval of properties in connection with the origination or
purchase of similar mortgages on multifamily properties;
(5) in the case of a Transfer of all or any part of the
Mortgaged Property, or
direct or indirect ownership interests in Borrower or Key
Principal (if any entity), if transferor or any other person
has obligations under any Loan Document, the execution by the
transferee or one or more individuals or entities acceptable to
Lender of an assumption agreement (including, if applicable, an
Acknowledgment and Agreement of Key Principal to Personal
Liability for Exceptions to Non-Recourse Li , ability) that is
acceptable to Lender and that, among other things, requires the
transferee to perform all obligations of transferor or such
person set forth in such Loan Document, and may require that
the transferee comply with any provisions of this Instrument or
any other Loan Document which previously may have been waived
by Lender;
(6) if a guaranty has been executed and delivered in
connection with the Note,
this Instrument or any of the other Loan Documents, the
Borrower causes one or more individuals or entities acceptable
to Lender to execute and deliver to Lender a guaranty in a form
acceptable to Lender; and
(7) Lender's receipt of all of
the following:
(A) a non-refundable review fee in the amount of
$3,000 and a transfer
fee equal to I percent of the outstanding
Indebtedness immediately prior to the Transfer.
(B) In addition, Borrower shall be required to reimburse Lender
for all of
Lender's out-of-pocket costs (including
reasonable attorneys' fees)
incurred in reviewing the Transfer request, to
the extent such
expenses exceed $3,000.
(d) For purposes of this Section, the following terins shall have the
meanings set forth
below:
(1) "Initial Owners" means, with respect to Borrower or any other
entity, the persons or entities who on the date of the Note own in
the aggregate 100% of the ownership interests in Borrower or that
entity;
(2) A Transfer of a "Controlling Interest" shall mean,
with respect to any
entity, the
following:
(i) if such entity is a general partnership or a joint venture,
a Transfer of any general partnership interest or joint
venture interest which would cause the Initial Owners to
own less than 51% of all general partnership or joint
venture interests in such entity;
(ii) if such entity is a limited partnership, a
Transfer of any general
partnership interest;
(iii)if such entity is a limited liability company or a limited
liability partnership, a Transfer of any membership or
other ownership interest which would cause the Initial
Owners to own less than 5 1 % of all membership or other
ownership interests in such entity;
(iv) if such entity is a corporation (other than a
Publicly-Held Corporation) with only one class of voting
stock, a Transfer of any voting stock which would cause
the Initial Owners to own less than 5 1 % of voting stock
in such corporation;
(v) if such entity is a corporation (other than a
Publicly-Held
Corporation) with more than one class of voting stock, a
Transfer of any voting stock which would cause the Initial
Owners to own less than a sufficient number of shares of
voting stock having the power to elect a majority of
directors of such corporation; and
(vi) if such entity is a trust, the removal,
appointment or substitution of a
trustee of such trust other than (A) in the case of a land
trust, or (B) if the trustee of such trust after such
removal, appointment or substitution is a trustee
identified in the trust agreement approved by Lender.
(3) "Publicly-Held Corporation" shall mean a
corporation the outstanding
voting stock of which is registered under Section 12(b) or
12(g) of the Securities and Exchange Act of 1934, as amended.
22. EVENTS OF DEFAULT. The occurrence of any one or more of
the following shall constitute an Event of Default under this
Instrument:
(a) any failure by Borrower to pay or deposit when due any amount required
by the Note, this Instrument or any other Loan Document-,
(b) any failure by Borrower to maintain the insurance coverage required by
Section 19;
(c) any failure by Borrower to comply with the provisions of Section 33;
(d) fraud or material misrepresentation or material omission by Borrower,
or any of its officers, directors, trustees, general partners or managers, Key
Principal or any guarantor in connection with (A) the application for or
creation of the Indebtedness, (B) any financial statement, rent roll, or other
report or information provided to Lender during the term of the Indebtedness,
or (C) any request for Lender's consent to any proposed action, including a
request for disbursement of funds under any Collateral Agreement;
(e) any Event of Default under Section 2 1;
(f) the commencement of a forfeiture action or proceeding, whether civil
or criminal, which, in Lender's reasonable judgment, could result in a
forfeiture of the Mortgaged Property or otherwise materially impair the lien
created by this Instrument or Lender's interest in the Mortgaged Property;
(g) any failure by Borrower to perform any of its obligations under this
Instrument (other than those specified in Sections 22(a) through (f)), as and
when required, which continues for a period of 30 days after notice of such
failure by Lender to Borrower, but no such notice or grace period shall apply
in the case of any such failure which could, in Lender's judgment, absent
immediate exercise by Lender of a right or remedy under this Instrument, result
in harm to Lender, impairment of the Note or this Instrument or any other
security given under any other Loan Document;
(h) any failure by Borrower to perform any of its obligations as and when
required under any Loan Document other than this Instrument which continues
beyond the applicable cure period, if any, specified in that Loan Document; and
(i) any exercise by the holder of any other debt instrument secured by a
mortgage, deed of trust or deed to secure debt on the Mortgaged Property of a
right to declare all amounts due under that debt instrument immediately due and
payable.
23. REMEDIES CUMULATIVE. Each right and remedy provided in this Instrument
is distinct from all other rights or remedies under this Instrument or any
other Loan Document or afforded by applicable law, and each shall be cumulative
and may be exercised concurrently, independently, or successively, in any
order.
24. FORBEARANCE.
(a) Lender may (but shall not be obligated to) agree with Borrower, from
time to time, and without giving notice to, or obtaining the consent of, or
having any effect upon the obligations of, any guarantor or other third party
obligor, to take any of the following actions: extend the time for payment of
all or any part of the Indebtedness; reduce the payments due under this
Instrument, the Note, or any other Loan Document; release anyone liable for the
payment of any amounts under this Instrument, the Note, or any other Loan
Document; accept a renewal of the Note; modify the tern-is and time of payment
of the Indebtedness; join in any extension or subordination agreement; release
any Mortgaged Property; take or release other or additional security; modify
the rate of interest or period of amortization of the Note or change the amount
of the monthly installments payable under the Note; and otherwise modify this
Instrument, the Note, or any other Loan Document.
(b) Any forbearance by Lender in exercising any right or remedy under the
Note, this Instrument, or any other Loan Document or otherwise afforded by
applicable law, shall not be a waiver of or preclude the exercise of any other
right or remedy. The acceptance by Lender of payment of all or any part of the
Indebtedness after the due date of such payment, or in an amount which is less
than the required payment, shall not be a waiver of Lender's right to require
prompt payment when due of all other payments on account of the Indebtedness or
to exercise any remedies for any failure to make prompt payment. Enforcement by
Lender of any security for the Indebtedness shall not constitute an election by
Lender of remedies so as to preclude the exercise of any other right available
to Lender. Lender's receipt of any awards or proceeds under Sections 19 and 20
shall not operate to cure or waive any Event of Default.
25. LOAN CHARGES. If 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 any Loan Document, whether considered separately or
together with other charges levied in connection with any other Loan Document,
violates that law, and Borrower is entitled to the benefit of that law, that
charge is hereby reduced to the extent necessary to eliminate that violation.
The amounts, if any, previously paid to Lender in excess of the permitted
amounts shall be applied by Lender to reduce the principal of the Indebtedness.
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 constitutes interest, as well as all other
charges levied in connection with the Indebtedness which constitute interest,
shall be deemed to be allocated and spread over the stated tern-i 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 so computed is
uniform throughout the stated term of the Note.
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 of
this Instrument or to any action brought to enforce any Loan Document.
27. WAIVER OF MARSHALLING. Notwithstanding the existence of any other
security interests in the Mortgaged 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 Mortgaged Property shall be subjected to the remedies provided in this
Instrument, the Note, any other Loan Document or applicable law. Lender shall
have the right to determine the order in which any or all portions of the
Indebtedness are satisfied from the proceeds realized upon the exercise of such
remedies. Borrower and any party who now or in the future acquires a security
interest in the Mortgaged Property and who has actual or constructive notice of
this Instrument waives any and all right to require the marshalling of assets
or to require that any of the Mortgaged Property be sold in the inverse order
of alienation or that any of the Mortgaged Property be sold in parcels or as an
entirety in connection with the exercise of any of the remedies permitted by
applicable law or provided in this Instrument.
28. FURTHER ASSURANCES. Borrower shall execute, acknowledge, and deliver,
at its sole cost and expense, all further acts, deeds, conveyances,
assignments, estoppel certificates, financing statements, transfers and
assurances as Lender may require from time to time in order to better assure,
grant, and convey to Lender the rights intended to be granted, now or in the
future, to Lender under this Instrument and the Loan Documents.
29. ESTOPPEL CERTIFICATE. Within 10 days after a request from Lender,
Borrower shall deliver to Lender a written statement, signed and acknowledged
by Borrower, certifying to Lender or any person designated by Lender, as of the
date of such statement, (i) that the Loan Documents are unmodified and in full
force and effect (or, if there have been modifications, that the Loan Documents
are in full force and effect as modified and setting forth such modifications);
(ii) the unpaid principal balance of the Note; (iii) the date to which interest
under the Note has been paid; (iv) that Borrower is not in default in paying
the Indebtedness or in performing or observing any of the covenants or
agreements contained in this Instrument or any of the other Loan Documents (or,
if the Borrower is in default, describing such default in reasonable detail);
(v) whether or not there are then existing any setoffs or defenses known to
Borrower against the enforcement of any right or remedy of Lender under the
Loan Documents; and (vi) any additional facts requested by Lender.
30. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.
(a) This Instrument, and any Loan Document which does not itself expressly
identify the law that is to apply to it, shall be governed by the laws of the
jurisdiction in which the Land is located (the "Property Jurisdiction").
(b) Borrower agrees that any controversy arising under or in relation to
the Note, this
Instrument, or any other Loan Document shall be litigated
exclusively in the Property Jurisdiction.
The state and federal courts and authorities with I I I
1 jurisdiction in the Property
Jurisdiction shall have exclusive jurisdiction over all controversies which
shall arise under or in relation to the Note, any security for the
Indebtedness, or any other Loan Document. Borrower irrevocably consents to
service, Jurisdiction, and venue of such courts for any such litigation and
waives any other venue to which it might be entitled by virtue of domicile,
habitual residence or otherwise.
31. NOTICE.
(a) All notices, demands and other communications ("notice") under or
concerning this Instrument shall be in writing. Each notice shall be addressed
to the intended recipient at its address set forth in this Instrument, and
shall be deemed given on the earliest to occur of (1) the date when the notice
is received by the addressee; (2) the first Business Day after the notice is
delivered to a recognized overnight courier service, with arrangements made for
payment of charges for next Business Day delivery; or (3) the third Business
Day after the notice is deposited in the United States mail with postage
prepaid, certified mail, return receipt requested. As used in this Section 3 1,
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.
(b) Any party to this Instrument may change the address to which notices
intended for it are to be directed by means of notice given to the other party
in accordance with this Section 3 1. Each party agrees that it will not refuse
or reject delivery of any notice given in accordance with this Section 3 1,
that it will acknowledge, in writing, the receipt of any notice upon request by
the other party and that any notice rejected or refused by it shall be deemed
for purposes of this Section 31 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.
(c) Any notice under the Note and any other Loan Document which does not
specify how notices are to be given shall be given in accordance with this
Section 3 1.
32. SALE OF NOTE; CHANGE IN SERVICER. The Note or a partial interest in
the Note (together with this Instrument and the other Loan Documents) may be
sold one or more times without prior notice to Borrower. A sale may result in a
change of the Loan Servicer. There also may be one or more changes of the Loan
Servicer unrelated to a sale of the Note. If there is a change of the Loan
Servicer, Borrower will be given notice of the change.
33. SINGLE ASSET BORROWER. Until the Indebtedness is paid in full,
Borrower (a) shall not acquire any real or personal property other than the
Mortgaged Property and personal property related to the operation and
maintenance of the Mortgaged Property; (b) shall not operate any business other
than the management and operation of the Mortgaged Property; and (c) shall not
maintain its assets in a way difficult to segregate and identify.
34. SUCCESSORS AND ASSIGNS BOUND. This Instrument shall bind, and the
rights granted by this Instrument shall inure to, the respective successors and
assigns of Lender and Borrower. However, a Transfer not permitted by Section 21
shall be an Event of Default.
35. JOINT AND SEVERAL LIABILITY. If more than one person or entity signs
this Instrument as Borrower, the obligations of such persons and entities shall
be solidary.
36. RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARY.
(a) The relationship between Lender and Borrower shall be solely that of
creditor and debtor, respectively, and nothing contained in this Instrument
shall create any other relationship between Lender and Borrower.
(b) No creditor of any party to this Instrument and no other person shall
be a third party beneficiary of this Instrument or any other Loan Document.
Without limiting the generality of the preceding sentence, (1) any arrangement
(a "Servicing Arrangement") between. the Lender and any Loan Servicer for loss
sharing or interim advancement of funds shall constitute a contractual
obligation of such Loan Servicer that is independent of the obligation of
Borrower for the payment of the Indebtedness, (2) Borrower shall not be a third
party beneficiary of any Servicing Arrangement, and (3) no payment by the Loan
Servicer under any Servicing Arrangement will reduce the amount of the
Indebtedness.
37. SEVERABILITY; AMENDMENTS. The invalidity or unenforceability of any
provision of this Instrument shall not affect the validity or enforceability of
any other provision, and all other provisions shall remain in full force and
effect. This Instrument contains the entire agreement among the parties as to
the rights granted and the obligations assumed in this Instrument. This
Instrument may not be amended or modified except by a writing signed by the
party against whom enforcement is sought.
38. CONSTRUCTION. The captions and headings of the sections of this
Instrument are for convenience only and shall be disregarded in construing this
Instrument. Any reference in this Instrument to an "Exhibit" or a "Section"
shall, unless otherwise explicitly provided, be construed as referring,
respectively, to an Exhibit attached to this Instrument or to a Section of this
Instrument. All Exhibits attached to or referred to in this Instrument are
incorporated by reference into this Instrument. Any reference in this
Instrument to a statute or regulation shall be construed as referring to that
statute or regulation as amended from time to time. Use of the singular in this
Agreement includes the plural and use of the plural includes the singular. As
used in this Instrument, the term "including" means "including, but not limited
to."
39. LOAN SERVICING. All actions regarding the servicing of the loan
evidenced by the Note, including the collection of payments, the giving and
receipt of notice, inspections of the Property, inspections of books and
records, and the granting of consents and approvals, may be taken by the Loan
Servicer unless Borrower receives notice to the contrary. If Borrower receives
conflicting notices regarding the identity of the Loan Servicer or any other
subject, any such notice from Lender shall govern.
40. DISCLOSURE OF INFORMATION. Lender may furnish information regarding
Borrower or the Mortgaged Property to third parties with an existing or
prospective interest in the servicing, enforcement, evaluation, performance,
purchase or securitization of the Indebtedness, including trustees, master
servicers, special servicers, rating agencies, and organizations maintaining
databases on the underwriting and performance of multifamily mortgage loans.
Borrower irrevocably waives any and all rights it may have under applicable law
to prohibit such disclosure, including any right of privacy.
41. NO CHANGE IN FACTS OR CIRCUMSTANCES. All information in the
application for the loan submitted to Lender (the "Loan Application") and in
all financial statements, rent rolls, reports, certificates and other documents
submitted in connection with the Loan Application are complete and accurate in
all material respects. There has been no material adverse change in any fact or
circumstance that would make any such information incomplete or inaccurate.
42. SUBROGATION. If, and to the extent that, the proceeds of the loan
evidenced by the Note are used to pay, satisfy or discharge any obligation of
Borrower for the payment of money that is secured by a pre-existing mortgage,
deed of trust or other lien encumbering the Mortgaged Property (a "Prior
Lien"), such loan proceeds shall be deemed to have been advanced by Lender at
Borrower's request, and Lender shall automatically, and without further action
on its part, be subrogated to the rights, including lien priority, of the owner
or holder of the obligation secured by the Prior Lien, whether or not the Prior
Lien is released.
43. ACCELERATION; FORECLOSURE; CONFESSION OF JUDGMENT. At any time during
the existence of an Event of Default, Lender, at Lender's option, may
accelerate the maturity of and declare the Indebtedness to be immediately due
and payable, and may cause the Mortgaged Property and UCC Collateral to be
immediately seized and sold, in whole, in part, or separately, whether in term
of court or in vacation, under ordinary or executory process, in accordance
with applicable Louisiana law, to the highest bidder for cash, with or without
appraisement, and without the necessity of making additional demand upon or
notifying Borrower or placing Borrower in default, all of which are expressly
waived. For purposes of foreclosure under the Louisiana executory process
procedures, Borrower confesses judgment and acknowledges to be indebted to and
in favor of Lender up to the full amount of the Indebtedness, including
principal, interest, prepayment premiums, late charges, default interest,
costs, expenses, collection attorneys' fees, and any additional sums that
Lender may advance as provided under this Instrument. To the extent permitted
under applicable Louisiana law, Borrower additionally waives: (a) the benefit
of appraisal as provided in Articles 2332, 2336, 2723 and 2724 of the Louisiana
Code of Civil Procedure, and all other laws with regard to appraisal upon
judicial sale; (b) the demand and three (3) days' delay as provided under
Articles 2639 and 2721 of the Louisiana Code of Civil Procedure; (c) the notice
of seizure as provided under Articles 2293 and 2721 of the Louisiana Code of
Civil Procedure; (d) the three (3) days' delay provided under Articles 2331 and
2722 of the Louisiana Code of Civil Procedure; and (e) all other benefits
provided under Articles 2331, 2722 and 2723 of the Louisiana Code of Civil
Procedure and all other articles not specifically mentioned above. Borrower
agrees that Lender shall have all of the additional enforcement rights and
remedies of a secured party under the Louisiana Commercial Laws (Louisiana
Revised Statutes, Title 10) and under the Uniform Commercial Code of any
applicable state with respect to the UCC Collateral wherever located. Borrower
further agrees that any declarations of fact made under an authentic act before
a Notary Public in the presence of two witnesses, by a person declaring such
facts to lie within his or her knowledge, shall constitute authentic evidence
for purposes of executory process and also for purposes of Louisiana Revised
Statutes, Title 9, Sections 3509.1 and 3504(b)(6), and Title 10, Section 9-508.
44. RELEASE. Upon payment of the Indebtedness in full, Borrower may
request Lender in writing to provide Borrower with the Note marked "Canceled,"
or alternatively, at Lender's option, with a certificate sufficient to permit
Borrower to cancel this Instrument from the public records, Borrower agrees
that Lender may delay providing the foregoing to Borrower for up to 30 days
following receipt of Borrower's written request. If Borrower requests Lender to
perform the necessary services to cancel this Instrument from the public
records, Borrower agrees to pay Lender's reasonable costs incurred in
connection with such cancellation.
45. WAIVER OF HOMESTEAD. Borrower and Borrower's spouse, if any, waive all
homestead and other exemptions from seizure with respect to the Mortgaged
Property and the UCC Collateral.
46. VENDOR'S LIEN MORTGAGE. If Lender is a savings and loan
association, the
Note and the other amounts secured by this Instrument shall be secured by a
vendor's lien and privilege on and against the Mortgaged Property pursuant to
the provisions of Louisiana Revised
Statutes, Title 6, Section 833.
47. ATTORNEYS' FEES. Whenever referred to in this Instrument, other than
in Section 43, "attorneys' fees" shall mean a fee of $ 10,000-00.
48. MORTGAGE AND CONVEYANCE CERTIFICATES. The production of Mortgage and
conveyance certificates is waived by Lender and Borrower, who release me,
Notary, from all liability for nonproduction.
49. LATE CHARGE. Borrower shall pay to Lender a late charge of S% of any
monthly installment of principal and interest as provided in the Note not
received by Lender within 10 days after that installment is due.
50. KEEPER OF MORTGAGED PROPERTY. Pursuant to the provisions of Louisiana
Revised Statutes, Title 9, Section 5136, Borrower and Lender covenant and agree
that Lender shall have the right to designate a keeper of the Mortgaged
Property at the time any seizure of the Mortgaged Property is effected and that
Lender may designate itself or its employees, agents or independent contractors
as such keeper. Borrower agrees that the reasonable fees of such a keeper shall
be treated as a disbursement made under Section 12 and shall be secured by this
Instrument. At no time has or will Borrower occupy the Mortgaged Property, or
any portion of the Mortgaged Property, as its home.
51. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) COVENANTS AND
ACRE ES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF
THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER
THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY
WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN
THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH
PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
ATTACHED EXHIBITS. The following Exhibits are
attached to this Instrument:
X Exhibit A Description of the Land (required).
Exhibit B Modifications to
Instrument
IN WITNESS WHEREOF, Borrower has signed and delivered this Instrument or
has caused this Instrument to be signed and delivered by its duly authorized
representatives.
STATE OF
MASSACHUSETTS
COUNTY OF
Suffolk
THUS DONE and signed in the County of Suffolk,State of Massachusetts, in
the presence of the undersigned competent witnesses, who have hereunto signed
their names together with said appearer and me, Notary, on the 6th day of July,
1998.
BORROWER:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ASSOCIATES LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: HISTORIC PRESERVATION PROPERTIES 1989
LIMITED
PARTNERSHIP, a Delaware limited
partnership ("HPP"),
its General Partner
By: BOSTON HISTORIC PARTNERS LIMITED
PARTNERSHIP,
a Massachusetts limited partnership
("BHP"),
HPP's General Partner
Witness/Attest: By: PORTFOLIO ADVISORY
SERVICES, INC.
a Massachusetts
corporation,
BHP's General Partner
Name:
By:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Name: President
By:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
BHP's General Partner
Notary Public ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Notary Public
My Commission
Expires October
29,200-1
[SIGNATURES CONTINUED ON FOLLOWING
PAGE]
STATE OF
LOUISIANA
PARISH OF
ORLEANS
THUS DONE and signed in the Parish of Orleans, State of Louisiana, in the
presence of the undersigned competent witnesses, who have hereunto signed their
names together with said appearer and me, Notary, on the day of July, 1998.
BORROWER:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ASSOCIATES LIMITED
PARTNERSHIP,
a Delaware limited partnership
By:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, its
General Partner
Name:
Name:
By:
▇. ▇▇▇▇▇ Bond, its
General Partner
Borrower's Employer ID
Number: ▇▇-▇▇▇▇▇▇▇
Notary
Public
KEY PRINCIPAL
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Key
Principal
Name: ▇. ▇▇▇▇▇ Bond
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT A
Tract I
THAT CERTAIN PIECE OR PORTION OF GROUND, together with all the buildings and
improvements thereon and all of the rights, ways, privileges, servitudes,
advantages and appurtenances thereunto belonging or in anywise appertaining,
situated in the State of Louisiana, Parish of Orleans, in the FIRST DISTRICT of
the City of New Orleans, in ▇▇▇▇▇▇ ▇▇. ▇▇▇, bounded by Tchoupitoulas Street,
▇▇▇▇▇ Street, ▇▇▇▇▇▇▇▇▇ Street (side) (late Foucher) and St. ▇▇▇▇▇▇ Street
(side). Said portion of ground is designated as LOTS NOS. 23, 24, 25 and a
small undesignated triangle adjoining ▇▇▇ ▇▇. ▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ side,
which said lots adjoin each other and measures as follows, to-wit:
Commencing at the intersection of Julia and Tchoupitoulas Streets, which point
is the POINT OF BEGINNING, measure North 78 degrees 49 minutes West a distance
of 87.3.0 feet to a point; thence measure South I I degrees I I minutes West a
distance of 62. 10. 0 feet to a point; thence measure South 78 degrees 49
minutes East a distance of 99.8.0 feet to a point; thence measure due North a
distance of 64.0.5 feet to the POINT OF BEGINNING.
LOTS NOS. 23 and 24 adjoin each other on the ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇. ▇▇ forming the corner of ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇. ▇▇▇ ▇▇. ▇▇ adjoins Lot 25 on the ▇▇▇▇▇ Street
side, which said lots front on ▇▇▇▇▇ ▇▇▇▇▇▇. ▇▇▇ ▇▇. ▇▇ adjoins
the small undesignated triangle portion of ground on the ▇▇▇▇▇▇▇▇▇
Street side and said lots 23 and 25 adjoin each other on the St.
▇▇▇▇▇▇ Street side.
The improvements thereon bear the ▇▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇.
▇▇▇▇▇ II
Those predial servitudes of light, view and passage as established by the owner
of ▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of the City of New Orleans, in favor of
the immovable property described as Tract I as set forth and described in an
Agreement to Abandon Common Wall by and between ' ) 3 0 ▇▇▇▇▇ Street Associates
Limited Partnership [owner of the servient estate] and ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Limited
Partnership [owner of the dominant estate] passed before ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.,
Notary Public on the I " day of August, 1989, registered in C.O.B. 832, folio
11 - 16, of the conveyance records of the Parish of Orleans, State of Louisiana
on August 1, 1989, under N.A. 4811011.