MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
(Barrington Hills Apartments)
THIS MORTGAGE (herein "Instrument") is made as of the 1st day of July,
1999, between the Mortgagor/Grantor, WATERTON RAINTREE, L.L.C., a Delaware
limited liability company, whose address is c/o Waterton Associates, 000 Xxxx
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000 (herein "Borrower"), and the
Mortgagee, BERKSHIRE MORTGAGE FINANCE LIMITED PARTNERSHIP, a limited partnership
organized and existing under the laws of Massachusetts, whose address is Xxx
Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (herein "Lender").
WHEREAS, Borrower is indebted to Lender in the principal sum of Six Million
One Hundred Thousand and 00/100 Dollars, which indebtedness is evidenced by
Borrower's note dated of even date herewith (herein "Note"), providing for
monthly installments of principal and interest, with the balance of the
indebtedness, if not sooner paid, due and payable on July 1, 2029.
TO SECURE TO LENDER (a) the repayment of the indebtedness evidenced by the
Note, with interest thereon, and all renewals, extensions ands modifications
thereof; (b) the repayment of any future advances, with interest thereon, made
by Lender to Borrower pursuant to paragraph 30 hereof (herein "Future
Advances"); (c) the performance of the covenants and agreements of Borrower
contained in a Construction Loan Agreement between Lender and Borrower dated
N/A, 19__, if any, as provided in paragraph 25 hereof; (d) the payment of all
other sums, with interest thereon, advanced in accordance herewith to protect
the security of this Instrument; and (e) the performance of the covenants and
agreements of Borrower herein contained, Borrower does hereby mortgage, grant,
convey and assign to Lender the County of Pulaski, State of Arkansas: *Delete
bracketed material if not completed.
For a complete legal description of the property subject to this Instrument, see
Exhibit A attached hereto and incorporated herein by this reference.
(1 of 8 pages)
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*/ all other equipment necessary for the operation of the foregoing and any
and all personal property on the Property site, other than personal
property of the occupancy tenants, and together with the following items:
utility deposits, unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by the Borrower and all
proceeds of any conversion of the "Property" (as hereinafter defined) or
any part thereof including, without limitation, proceeds of hazard and
title insurance and all awards and compensation for the taking of eminent
domain, condemnation or otherwise, of all or any part of the Property or
any easement therein.
Together with all buildings, improvements, and tenements now or hereafter
erected on the property, and all heretofore or hereafter vacated alleys and
streets abutting the property, and all easements, rights, appurtenances, rents,
royalties, mineral, oil and gas rights and profits, water, water rights, and
water stock appurtenant to the property, and all fixtures, machinery, equipment,
engines, boilers, incinerators, building materials, appliances and goods of
every nature whatsoever now or hereafter located in, or on, or used, or intended
to be used in connection with the property, including, but not limited to, those
for the purposes of supplying or distributing heating, cooling, electricity,
gas, water, air and light; and all elevators, and related machinery and
equipment, fire prevention and extinguishing apparatus, security and access
control apparatus, plumbing, bath tubs, water heaters, water closets, sinks,
ranges, stoves, refrigerators, dishwashers, disposals, washers, dryers, awnings,
storm windows, storm doors, screens, blinds, shades, curtains and curtain rods,
mirrors, cabinets, panelling, rugs, attached floor coverings, furniture,
pictures, antennas, trees and plants, and *See above; all of which, including
replacements and additions thereto, shall be deemed to be and remain a part of
the real property covered by this Instrument; and all of the foregoing, together
with said property (or the leasehold estate in the event this Instrument is on a
leasehold) are herein referred to as the "Property".
Borrower covenants that Borrower is lawfully seized of the estate hereby
conveyed and has the right to mortgage, grant, convey and assign the Property
(and, if this Instrument is on a leasehold, that the ground lease is in full
force and effect without modification except as noted above and without default
on the part of either lessor or lessee thereunder), that the Property is
unencumbered, and that Borrower will warrant and defend generally the title to
the Property against all claims and demands, subject to any easements and
restrictions listed in a schedule of exceptions to coverage in any title
insurance policy insuring Lender's interest in the Property.
(2 of 8 pages)
Uniform Covenants. Borrower and Lender covenant and agree as follows:
1. PAYMENT OF PRINCIPAL AND INTEREST. Borrower shall promptly pay when due the
principal of and interest on the indebtedness evidenced by the Note, any
prepayment and late charges provided in the Note and all other sums secured by
this Instrument.
2. FUNDS FOR TAXES, INSURANCE AND OTHER CHARGES. Subject to applicable law or to
a written waiver by Lender, Borrower shall pay to Lender on the day monthly
installments of principal or interest are payable under the Note (or on another
day designated in writing by Lender) until the Note is paid in full, a sum
(herein "Funds") equal to one-twelfth of (a) the yearly water and sewer rates
and taxes and assessments which may be levied on the Property; (b) the yearly
ground rents, if any, (c) the yearly premium installments for fire and other
hazard insurance, rent loss insurance and such other insurance covering the
Property as Lender may require pursuant to paragraph 5 hereof; (d) the yearly
premium installments for mortgage insurance, if any, and (e) if this Instrument
is on a leasehold, the yearly fixed rents, if any, under the ground lease, all
as reasonably estimated initially and from time to time by Lender on the basis
of assessments and bills and reasonable estimates thereof. Any waiver by Lender
of a requirement that Borrower pay such Funds may be revoked by Lender, in
Lender's sole discretion, at any time upon notice in writing to Borrower. Lender
may require Borrower to pay to Lender, in advance, such other Funds for other
taxes, charges, premiums, assessments and impositions in connection with
Borrower or the Property which Lender shall reasonably deem necessary to protect
Lender's interests (herein "Other Impositions"). Unless otherwise provided by
applicable law, Lender may require Funds for Other Impositions to be paid by
Borrower in a lump sum or in periodic installments, at Lender's option.
The Funds shall be held in an institution(s) the deposits or accounts of
which are insured or guaranteed by a Federal or state agency (including Lender
if Lender is such an institution). Lender shall apply the Funds to pay said
rates, rents, taxes, assessments, insurance premiums and Other Impositions so
long as Borrower is not in breach of any covenant or agreement of Borrower in
this Instrument. Lender shall make no charge for so holding and applying the
Funds, analyzing said account or for verifying and compiling said assessments
and bills, unless Lender pays Borrower interest, earnings or profits on the
Funds and applicable law permits Lender to make such a charge. Borrower and
Lender may agree in writing at the time of execution of this Instrument that
interest on the Funds shall be paid to Borrower, and unless such agreement is
made or applicable law requires interest, earnings or profits to be paid, Lender
shall not be required to pay Borrower any interest, earnings or profits on the
Funds. Lender shall give to Borrower, without charge, an annual accounting of
the Funds in Lender's normal format showing credits and debits to the Funds and
the purpose for which each debit to the Funds was made. The Funds are pledged as
additional security for the sums secured by this Instrument.
If the amount of the Funds held by Lender at the time of the annual
accounting thereof shall exceed the amount deemed necessary by Lender to provide
for the payment of water and sewer rates, taxes, assessments, insurance
premiums, rents and Other Impositions, as they fall due, such excess shall be
credited to Borrower on the next monthly installment or installments of Funds
due. If at any time the amount of the Funds held by Lender shall be less than
the amount deemed necessary by Lender to pay water and sewer rates, taxes,
assessments, insurance premiums, rents and Other Impositions, as they fell due,
Borrower shall pay to Lender any amount necessary to make up the deficiency
within thirty days after notice from Lender to Borrower requesting payment
thereof.
Upon Borrower's breach of any covenant or agreement of Borrower in this
Instrument, Lender may apply, in any amount and in any order as Lender shall
determine in Lender's sole discretion, any Funds held by Lender at the time of
application (i) to pay rates, rents, taxes, assessments, insurance premiums and
Other Impositions which are now or will hereafter become due, or (ii) as a
credit against sums secured by this Instrument. Upon payment in full of all sums
secured by this Instrument, Lender shall promptly refund to Borrower any Funds
held by Lender.
3. APPLICATION OF PAYMENTS. Unless applicable law provides otherwise, all
payments received by Lender from Borrower under the Note or this Instrument
shall be applied by Lender in the following order of priority: (i) amounts
payable to Lender by Borrower under paragraph 2 hereof; (ii) interest payable on
the Note; (iii) principal of the Note; (iv) interest payable on advances made
pursuant to paragraph 8 hereof; (v) principal of advances made pursuant to
paragraph 8 hereof; (vi) interest payable on any Future Advance, provided that
if more than one Future Advance is outstanding, Lender may apply payments
received among the amounts of interest payable on the Future Advances in such
order as Lender, in Lender's sole discretion, may determine; (vii) principal of
any Future Advance, provided that if more than one Future Advance is
outstanding, Lender may apply payments received among the principal balances of
the Future Advances in such order as Lender, in Lender's sole discretion, may
determine; and (viii) any other sums secured by this Instrument in such order as
Lender, at Lender's option, may determine; provided, however, that Lender may,
at Lender's option, apply any sums payable pursuant to paragraph 8 hereof prior
to interest on and principal of the Note, but such application shall not
otherwise affect the order of priority of application specified in this
paragraph 3.
4. CHARGES; LIENS. Borrower shall pay all water and sewer rates, rents, taxes,
assessments, premiums, and Other Impositions attributable to the Property at
Lender's option in the manner provided under paragraph 2 hereof or, if not paid
in such manner, by Borrower making payment, when due, directly to the payee
thereof, or in such other manner as Lender may designate in writing. Borrower
shall promptly furnish to Lender all notices of amounts due under this paragraph
4, and in the event Borrower shall make payment directly, Borrower shall
promptly furnish to Lender receipts evidencing such payments. Borrower shall
promptly discharge any lien which has, or may have, priority over or equality
with, the lien of this Instrument, and Borrower shall pay, when due, the claims
of all persons supplying labor or materials to or in connection with the
Property. Without Lender's prior written permission, Borrower shall not allow
any lien inferior to this Instrument to be perfected against the Property.
5. HAZARD INSURANCE. Borrower shall keep the improvements now existing or
hereafter erected on the Property insured by carriers at all times satisfactory
to Lender against loss by fire, hazards included within the term "extended
coverage," rent loss and such other hazards, casualties, liabilities and
contingencies as Lender (and, if this Instrument is on a leasehold, the ground
lease) shall require and in such amounts and for such periods as Lender shall
require. All premiums on insurance policies shall be paid, at Lender's option,
in the manner provided under paragraph 2 hereof, or by Borrower making payment,
when due, directly to the carrier, or in such other manner as Lender may
designate in writing.
All insurance policies and renewals thereof shall be in a form acceptable
to Lender and shall include a standard mortgage clause in favor of and in form
acceptable to Lender. Lender shall have the right to hold the policies, and
Borrower shall promptly furnish to Lender all renewal notices and all receipts
of paid premiums. At least thirty days prior to the expiration date of a policy,
Borrower shall deliver to Lender a renewal policy in form satisfactory to
Lender. If this Instrument is on a leasehold, Borrower shall furnish Lender a
duplicate of all policies, renewal notices, renewal policies and receipts of
paid premiums if, by virtue of the ground lease, the originals thereof may not
be supplied by Borrower to Lender.
In the event of loss, Borrower shall give immediate written notice to the
insurance carrier and to Lender. Borrower hereby authorizes and empowers Lender
as attorney-in-fact for Borrower to make proof of loss, to adjust and compromise
any claim under insurance policies, to appear in and prosecute any action
arising from such insurance policies, to collect and receive insurance proceeds,
and to deduct therefrom Lender's expenses incurred in the collection of such
proceeds; provided however, that nothing contained in this paragraph 5 shall
require Lender to incur any expense or take any action hereunder. Borrower
further authorizes Lender, at Lender's option, (a) to hold the balance of such
proceeds to be used to reimburse Borrower for the cost of reconstruction or
repair of the Property or (b) to apply the balance of such proceeds to the
payment of the sums secured by this Instrument, whether or not then due, in the
order of application set forth in paragraph 3 hereof (subject, however, to the
rights of the lessor under the ground lease if this Instrument is on a
leasehold).
If the insurance proceeds are held by Lender to reimburse Borrower for the
cost of restoration and repair of the Property, the Property shall be restored
to the equivalent of its original condition as such other condition as Lender
may approve in writing. Lender may, at Lender's option, condition disbursement
of said proceeds on Lender's approval of such plans and specifications of an
architect satisfactory to Lender, contractor's cost estimates, architect's
certificates, waivers of liens, sworn statements of mechanics and materialmen
and such other evidence of costs, percentage completion of construction,
application of payments, and satisfaction of liens as Lender may reasonably
require. If the insurance proceeds are applied to the payment of the sums
secured by this Instrument, any such application of proceeds to principal shall
not extend or postpone the due dates of the monthly installments referred to as
paragraphs 1 and 2 hereof or change the amounts of such installments. If the
Property is sold pursuant to paragraph 27 hereof or if Lender acquires title to
the Property, Lender shall have all of the right, title and interest of Borrower
in and to any insurance policies and unearned premiums thereon and in and to the
proceeds resulting from any damage to the Property prior to such sale or
acquisition.
6. PRESERVATION AND MAINTENANCE OF PROPERTY; LEASEHOLDS. Borrower (a) shall not
commit waste or permit impairment or deterioration of the Property, (b) shall
not abandon the Property, (c) shall restore or repair promptly and in a good and
workmanlike manner all
(3 of 8 pages)
or any part of the Property to the equivalent of its original condition, or such
other condition as Lender may approve in writing, in the event of any damage,
injury or loss thereto, whether or not insurance proceeds are available to cover
in whole or in part the costs of such restoration or repair, (d) shall keep the
Property, including improvements, fixtures, equipment, machinery and appliances
thereon in good repair and shall replace fixtures, equipment, machinery and
appliances on the Property when necessary to keep suchitems in good repair, (e)
shall comply with all laws, ordinances, regulations and requirements of any
governmental body applicable to the Property, (f) shall provide for professional
management of the Property by a residential rental property manager satisfactory
to Lender pursuant to a contract approved by Lender in writing, unless such
requirement shall be waived by Lender in writing, (g) shall generally operate
and maintain the Property in a manner to ensure maximum rentals, and (h) shall
give notice in writing to Lender of and, unless otherwise directed in writing by
Lender, appear in and defend any action or proceeding purporting to affect the
Property, the security of this Instrument or the rights or powers of Lender.
Neither Borrower nor any tenant or other person shall remove, demolish or alter
any improvement now existing or hereafter erected on the Property or any
fixture, equipment, machinery or appliance in or on the Property except when
incident to the replacement of fixtures, equipment, machinery and appliances
with items of like kind.
If this Instrument is on a leasehold, Borrower (i) shall comply with the
provisions of the ground lease, (ii) shall give immediate written notice to
Lender of any default by lessor under the ground lease or of any notice received
by Borrower from such lessor of any default under the ground lease by Borrower,
(iii) shall exercise any option to renew or extend the ground lease and give
written confirmation thereof to Lender within thirty days after such option
becomes exercisable, (iv) shall give immediate written notice to Lender of the
commencement of any remedial proceedings under the ground lease by any party
thereto and, if required by Lender, shall permit Lender as Borrower's
attorney-in-fact to control and act for Borrower in any such remedial
proceedings and (v) shall within thirty days after request by Lender obtain from
the lessor under the ground lease and deliver to Lender the lessor's estoppel
certificate required thereunder, if any. Borrower hereby expressly transfers and
assigns to Lender the benefit of all covenants contained in the ground lease,
whether or not such covenants run with the land, but Lender shall have no
liability with respect to such covenants nor any other covenants contained in
the ground lease.
Borrower shall not surrender the leasehold estate and interests herein
conveyed nor terminate or cancel the ground lease creating said estate and
interests, and Borrower shall not, without the express written consent of
Lender, alter or amend said ground lease. Borrower covenants and agrees that
there shall not be a merger of the ground lease, or of the leasehold estate
created thereby, with the fee estate covered by the ground lease by reason of
said leasehold estate or said fee estate, or any part of either, coming into
common ownership, unless Lender shall consent in writing to such merger; if
Borrower shall acquire such fee estate, then this Instrument shall
simultaneously and without further action be spread so as to become a lien on
such fee estate.
7. USE OF PROPERTY. Unless required by applicable law or unless Lender has
otherwise agreed in writing, Borrower shall not allow changes in the use for
which all or any part of the Property was intended at the time this Instrument
was executed. Borrower shall not initiate or acquiesce in a change in the zoning
classification of the Property without Lender's prior written consent.
8. PROTECTION OF LENDER'S SECURITY. If Borrower fails to perform the covenants
and agreements contained in this Instrument, or if any action or proceeding is
commenced which affects the Property or title thereto or the interest of Lender
therein, including, but not limited to, eminent domain, insolvency, code
enforcement, or arrangements or proceedings involving a bankrupt or decedent,
then Lender at Lender's option may make such appearances, disburse such sums and
take such action as Lender deems necessary, in its sole discretion, to protect
Lender's interest, including, but not limited to, (i) disbursement of attorney's
fees, (ii) entry upon the Property to make repairs, (iii) procurements of
satisfactory insurance as provided in paragraph 5 hereof, and (iv) if this
Instrument is on a leasehold, exercise of any option to renew or extend the
ground lease on behalf of Borrower and the curing of any default of Borrower in
the terms and conditions of the ground lease.
Any amounts disbursed by Lender pursuant to this paragraph 8, with interest
thereon, shall become additional indebtedness of Borrower secured by this
Instrument. Unless Borrower and Lender agree to other terms of payment, such
amounts shall be immediately due and payable and shall be interest from the date
of disbursement at the rate stated in the Note unless collection from Borrower
of interest at such rate would be contrary to applicable law, in which event
such amounts shall bear interest at the highest rate which may be collected from
Borrower under applicable law. Borrower hereby covenants and agrees that Lender
shall be subrogated to the lien of any mortgage or other lien discharged, in
whole or in part, by the indebtedness secured hereby. Nothing contained in this
paragraph 8 shall require Lender to incur any expense or take any action
hereunder.
9. INSPECTION. Lender may make or cause to be made reasonable entries upon and
inspections of the Property.
SEE ATTACHED RIDER TO MULTIFAMILY INSTRUMENT.
11. CONDEMNATION. Borrower shall promptly notify Lender of any action or
proceeding relating to any condemnation or other taking, whether direct or
indirect, of the Property, or part thereof, and Borrower shall appear in and
prosecute any such action or proceeding unless otherwise directed by Lender in
writing. Borrower authorizes Lender, at Lender's option, as attorney-in-fact for
Borrower, to commence, appear in and prosecute, in Lender's or Borrower's name,
any action or proceeding relating to any condemnation or other taking of the
Property, whether direct or indirect, and to settle or compromise any claim in
connection with such condemnation or other taking. The proceeds of any award,
payment or claim for damages, direct or consequential, in connection with any
condemnation or other taking, whether direct or indirect, of the Property, or
part thereof, or for conveyances in lieu of condemnation, are hereby assigned to
and shall be paid to Lender subject, if this Instrument is on a leasehold, to
the rights of lessor under the ground lease.
Borrower authorizes Lender to apply such awards, payments, proceeds or
damages, after the deduction of Lender's expenses incurred in the collection of
such amounts, at Lender's option, to restoration or repair of the Property or to
payment of the sums secured by this Instrument, whether or not then due, in the
order of application set forth in paragraph 3 hereof, with the balance, if any,
to Borrower. Unless Borrower and Lender otherwise agree in writing, any
application of proceeds to principal shall not extend or postpone the due date
of the monthly installments referred to in paragraphs 1 and 2 hereof or change
the amount of such installments. Borrower agrees to execute such further
evidence of assignment of any awards, proceeds, damages or claims arising in
connection with such condemnation or taking as Lender may require.
12. BORROWER AND LIEN NOT RELEASED. From time to time, Lender may, at Lender's
option, without giving notice to or obtaining the consent of Borrower,
Borrower's successors or assigns or of any junior lienholder or guarantors,
without liability on Lender's part and notwithstanding Borrower's breach of any
covenant or agreement of Borrower in this Instrument, extend the time for
payment of said indebtedness or any part thereof, reduce the payments thereon,
release anyone liable on any of said indebtedness, accept a renewal note or
notes therefor, modify the terms and time of payment of said indebtedness,
release from the lien of this Instrument any part of the Property, take or
release other or additional security, recovery any part of the Property, consent
to any map or plan of the Property, consent to the granting of any easement,
join in any extension or subordination agreement, and agree in writing with
Borrower to modify the rate of interest or period of amortization of the Note or
change the amount of the monthly installments payable thereunder. Any actions
taken by Lender pursuant to the terms of this paragraph 12 shall not affect the
obligation of Borrower or Borrower's successors or assigns to pay the sums
secured by this Instrument and to observe the covenants of Borrower contained
herein, shall not affect the guaranty of any person, corporation, partnership or
other entity for payment of the indebtedness secured hereby, and shall not
affect the lien or priority of lien hereof on the Property. Borrower shall pay
Lender a reasonable service charge, together with such title insurance premiums
and attorney's fees as may be incurred at Lender's option, for any such action
if taken at Borrower's request.
13. FORBEARANCE BY LENDER NOT A WAIVER. Any forbearance by Lender in exercising
any right of remedy hereunder, or otherwise afforded by applicable law, shall
not be a waiver of or preclude the exercise of any right or remedy. The
acceptance by Lender of payment of any sum secured by this Instrument after the
due date of such payment shall not be a waiver of Lender's right to either
require prompt payment when due of all other sums so secured or to declare a
default for failure to make prompt payment. The procureness of insurance or the
payment of taxes or other liens or charges by Lender shall not be a waiver of
Lender's right to accelerate the maturity of the indebtedness secured by this
Instrument, nor shall Lender's receipt of any awards, proceeds or damages under
paragraphs 5 and 11 hereof operate to cure or waive Borrower's default in
payment of sums secured by this Instrument.
(4 of 8 pages)
14. ESTOPPEL CERTIFICATE. Borrower shall within ten days of a written request
from Lender furnish Lender with a written statement, duly acknowledged, setting
forth the sum secured by this Instrument and any right of set-off, counterclaim
or other defense which exists against such sums and the obligations of this
Instrument.
15. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. This Instrument is intended to
be a security agreement pursuant to the Uniform Commercial Code for any of the
items specified above as part of the Property which, under applicable law, may
be subject to a security interest pursuant to the Uniform Commercial Code, and
Borrower hereby grants Lender a security interest in said items. Borrower agrees
that Lender may file this Instrument, or a reproduction thereof, in the real
estate records or other appropriate index, as a financing statement for any of
the items specified above as part of the Property. Any reproduction of this
Instrument or of any other security agreement or financing statement shall be
sufficient as a financing statement. In addition, Borrower agrees to execute and
deliver to Lender, upon Lender's request, any financing statements, as well as
extensions, renewals and amendments thereof, and reproductions of this
Instrument in such form as Lender may require to perfect a security interest
with respect to said items. Borrower shall pay all costs of filing such
financing statements and any extensions, renewals, amendments and releases
thereof, and shall pay all reasonable costs and expenses of any record searches
for financing statements Lender may reasonably require. Without the prior
written consent of Lender, Borrower shall not create or suffer to be created
pursuant to the Uniform Commercial Code any other security interest in said
items, including replacements and additions thereto. Upon Borrower's breach of
any covenant or agreement of Borrower contained in this Instrument, including
the covenants to pay when due all sums secured by this Instrument, Lender shall
have the remedies of a secured party under the Uniform Commercial Code and, at
Lender's option, may also invoke the remedies provided in paragraph 27 of this
Instrument as to such items. In exercising any of said remedies, Lender may
proceed against the items of real property and any times of personal property
specified above as part of the Property separately or together and in any order
whatsoever, without in any way affecting the availability of Lender's remedies
under the Uniform Commercial Code or of the remedies provided in paragraph 27 of
this Instrument.
16. LEASES OF THE PROPERTY. As used in this paragraph 16, the word "lease" shall
mean "sublease" if this Instrument is on a leasehold. Borrower shall comply with
and observe Borrower's obligations as landlord under all leases of the Property
or any part thereof. Borrower will not lease any portion of the Property for
non-residential use except with the prior written approval of Lender. Borrower,
at Lender's request, shall furnish Lender with executed copies of all leases now
existing or hereafter made of all or any part of the Property, and all leases
now or hereafter entered into will be in form and substance subject to the
approval of Lender. All leases of the Property shall specifically provide that
such leases are subordinate to this Instrument; that the tenant attorns to
Lender, such attornment to be effective upon Lender's acquisition of title to
the Property; that the tenant agrees to execute such further evidences of
attornment as Lender may from time to time request; that the attornment of the
tenant shall not be terminated by foreclosure; and that Lender may, at Lender's
option, accept or reject such attornments. Borrower shall not, without Lender's
written consent, execute, modify, surrender or terminate, either orally or in
writing, any lease now existing or hereafter made of all or any part of the
Property providing for a term of three years or more, permit an assignment or
sublease of such a lease without Lender's written consent, or request or consent
to the subordination of any lease of all or any part of the Property to any lien
subordinate to this Instrument. If Borrowerbecomes aware that any tenant
proposes to do, or is doing, any act or thing which may give rise to any right
of set-off against rent, Borrower shall (i) take such steps as shall be
reasonably calculated to prevent the accrual of any right to a set-of against
rent, (ii) notify Lender thereof and of the amount of said set-offs, and (iii)
within ten days after such accrual, reimburse the tenant who shall have acquired
such right to set-off or take such other steps as shall effectively discharge
such set-off and as shall assure that rents thereafter due shall continue to be
payable without set-off or deduction.
Upon Lender's request, Borrower shall assign to Lender, by written
instrument satisfactory to Lender, all leases now existing or hereafter made of
all or any part of the Property and all security deposits made by tenants in
connection with such leases of the Property. Upon assignment by Borrower to
Lender of any leases of the Property, Lender shall have all of the rights and
powers possessed by Borrower prior to such assignment and Lender shall have the
right to modify, extend or terminate such existing leases and to execute new
leases, in Lender's sole discretion.
17. REMEDIES CUMULATIVE. Each remedy provided in this Instrument is distinct and
cumulative to all other rights or remedies under this Instrument or afforded by
law or equity, and may be exercised concurrently, independently, or
successively, in any order whatsoever.
18. ACCELERATION IN CASE OF BORROWER'S INSOLVENCY. If Borrower shall voluntarily
file a petition under the Federal Bankruptcy Act, as such Act may from time to
time be amended, or under any similar or successor Federal statute relating to
bankruptcy, insolvency, arrangements or reorganizations, or under any state
bankruptcy or insolvency act, or file an answer in an involuntary proceeding
admitting insolvency or inability to pay debts, or if Borrower shall fail to
obtain a vacation or stay of involuntary proceedings brought for the
reorganization, dissolution or liquidation of Borrower, or if Borrower shall be
adjudged a bankrupt, or if a trustee or receiver shall be appointed for Borrower
or Borrower's property, or if the Property shall become subject to the
jurisdiction of a Federal bankruptcy court or similar state court, or if
Borrower shall make an assignment for the benefit of Borrower's creditors, or if
there is an attachment, execution or other judicial seizure of any portion of
Borrower's assets and such seizure is not discharged within ten days, then
Lender may, at Lender's option, declare all of the sums secured by this
Instrument to be immediately due and payable without prior notice to Borrower,
and Lender may invoke any remedies permitted by paragraph 27 of this Instrument.
Any attorney's fees and other expenses incurred by Lender in connection with
Borrower's bankruptcy or any of the other aforesaid events shall be additional
indebtedness of Borrower secured by this Instrument pursuant to paragraph 8
hereof.
SEE ATTACHED RIDER TO MULTIFAMILY INSTRUMENT.
21. SUCCESSORS AND ASSIGNS BOUND; JOINT AND SEVERAL LIABILITY; AGENTS; CAPTIONS.
The covenants and agreements herein contained shall bind, and the rights
hereunder shall inure to, the respective successors and assigns of Lender and
Borrower, subject to the provisions of paragraph 19 hereof. All covenants and
agreements of Borrower shall be joint and several. In exercising any rights
hereunder or taking any actions provided for herein, Lender may act through its
employees, agents or independent contractors as authorized by Lender. The
captions and headings of the paragraphs of this Instrument are for convenience
only and are not to be used to interpret or define the provisions hereof.
22. UNIFORM MULTIFAMILY INSTRUMENT; GOVERNING LAW; SEVERABILITY. This form of
multifamily instrument combines uniform covenants for national use and
non-uniform covenants with limited variations by jurisdiction to constitute a
uniform security instrument covering real property and related fixtures and
personal property. This Instrument shall be governed by the law of the
jurisdiction in which the Property is located. In the event that any provision
of this Instrument or the Note conflicts with applicable law, such conflict
shall not affect other provisions of this
(5 of 8 pages)
Instrument of the Note which can be given effect without the conflicting
provisions, and to this end the provisions of this Instrument and the Note are
declared to be severable. In the event that any applicable law limiting the
amount of interest or other charges permitted to be collected from Borrower is
interpreted so that any charge provided for in this Instrument or in the Note,
whether considered separately or together with other charges levied in
connection with this Instrument and this Note, violates such law, and Borrower
is entitled to the benefit of such law, such charge is hereby reduced to the
extent necessary to eliminate such violation. The amounts, if any, previously
paid to Lender in excess of the amounts payable to Lender pursuant to such
charges as reduced shall be applied by Lender to reduce the principal of the
indebtedness evidenced by the Note. For the purpose of determining whether any
applicable law limiting the amount of interest or other charges permitted to be
collected from Borrower has been violated, all indebtedness which is secured by
this Instrument or evidenced by the Note and such constitutes interest, as well
as all other charges levied in connection with such indebtedness which
constitute interest, shall be deemed to be located and spread over the stated
term of the Note. Unless otherwise required by applicable law, such allocation
and spreading shall be effected in such a manner that the rate of interest
computed thereby is uniform throughout the stated term of the Note.
23. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby waives the right to assert
any statute of limitations as a bar to the enforcement of the lien of this
Instrument or to any action brought to enforce the Note or any other obligation
secured by this Instrument.
24. WAIVER OF MARSHALLING. Notwithstanding the existence of any other security
interests in the Property held by Lender or by any other party, Lender shall
have the right to determine the order in which any or all of the Property shall
be subjected to the remedies provided herein, Lender shall have the right to
determine the order in which any or all portions of the indebtedness secured
hereby are satisfied from the proceeds realized upon the exercise of the
remedies provided herein. Borrower, any party who consents to this Instrument
and any part who now or hereafter acquires a security interest in the Property
and who has actual or constructive notice hereof hereby waives any and all right
to require the marshalling of assets in connection with the exercise of any of
the remedies permitted by applicable law or provided herein.
26. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION. As part
of the consideration for the indebtedness evidenced by the Note, Borrower hereby
absolutely and unconditionally assigns and transfers to Lender all the rents and
revenues of the Property, including those now due, past due, or to become due by
virtue of any lease or other agreement for the occupancy or use of all or any
part of the Property, regardless of to whom the rents and revenues of the
Property are payable. Borrower hereby authorizes Lender or Lender's agents to
collect the aforesaid rents and revenues and hereby directs each tenant of the
Property to pay such rents to Lender or Lender's agents; provided, however, that
prior to written notice given by Lender tro Borrower of the breach by Borrower
of any covenant or agreement of Borrower to this Instrument, Borrower shall
collect and receive all rents and revenues of the Property as trustee for the
benefit of Lender and Borrower, to apply the rents and revenues so collected to
the sums secured by this Instrument in the order provided in paragraph 3 hereof
with the balance, so long as no such breach has occurred, to the account of
Borrower, it being intended by Borrower and Lender that this assignment of rents
constitutes the absolute assignment and not an assignment for additional
security only. Upon delivery of written notice by Lender to Borrower of the
breach by Borrower of any covenant or agreement of Borrower in this Instrument,
and without the necessity of Lender entering upon and taking and maintaining
full control of the Property in person, by agent or by a court-appointed
receiver, Lender shall immediately be entitled to possession of all rents and
revenues of the Property as specified in this paragraph 26 as the same become
due and payable, including but not limited to rents then due and unpaid, and all
such rents shall immediately upon delivery of such notice be held by Borrower as
trustee for the benefit of Lender only; provided, however, that the written
notice by Lender to Borrower of the breach by Borrower shall contain a statement
that Lender exercises its rights to such rents. Borrower agrees that commencing
upon delivery of such written notice of Borrower's breach by Lender to Borrower,
each tenant of the Property shall make such rents payable to and pay such rents
to Lender or Lender's agents on Lender's written demand to each tenant therefor,
delivered to each tenant personally, by mail or by delivering such demand to
each rental unit, without any liability on the part of said tenant to inquire
further as to the existence of a default by Borrower.
Borrower hereby covenants that Borrower has not executed any prior
assignment of said rents, that Borrower has not performed, and will not perform,
any acts or has not executed, and will not execute, any instrument which would
prevent Lender from exercising its rights under this paragraph 26, and that at
the time of exemption of this Instrument there has been no anticipation or
prepayment of any of the rents of the Property for more than two months prior to
the due dates of such rents. Borrower covenants that Borrower will not hereafter
collect or accept payment of any rents of the Property more than two months
prior to the due dates of such rents. Borrower further covenants that Borrower
will execute and deliver to Lender such further assignments of rents and
revenues of the Property as Lender may from time to time request.
Upon Borrower's breach of any covenant or agreement of Borrower in this
Instrument, Lender may in person, by agent or by a court-appointed receiver,
regardless of the adequacy of Lender's security, enter upon and take and
maintain full control of the Property in order to perform all acts necessary and
appropriate for the operation and maintenance thereof including, but not limited
to, the execution, cancellation or modification of leases, the collection of all
rents and revenues of the Property, the making of repairs to the Property and
the execution or permission of contracts providing for the management or
maintenance of the Property, all on such terms as are deemed best to protect the
security of this Instrument. In the event Lender elects to seek the appointment
of a receiver for the Property upon Borrower's breach of any covenant or
agreement of Borrower in this Instrument, Borrower hereby expressly consents to
the appointment of such receiver. Lender or the receiver shall be entitled to
receive a reasonable fee for so managing the Property.
All rents and revenues collected subsequent to delivery of written notice
by Lender to Borrower of the breach by Borrower of any covenant or agreement of
Borrower in this Instrument shall be applied first to the costs, if any, of
taking control of and managing the Property and collecting the rents, including,
but not limited to, attorney's fees, receiver's fees, premiums on receiver's
bonds, costs of repairs to the Property, premiums on insurance policies, taxes,
assessments and other charges on the Property, and the costs of discharging any
obligation or liability of Borrower as lessor or landlord of the Property and
then to the sums secured by this Instrument. Lender or the receiver shall have
access to the books and records used in the operation and maintenance of the
Property and shall be liable to account only for those rents actually received.
Lender shall not be liable to Borrower, anyone claiming under or through
Borrower or anyone having an interest in the Property by reason of anything done
or left undone by Lender under this paragraph 26.
If the rents of the Property are not sufficient to meet the costs, if any,
of taking control of and managing the Property and collecting the rents, any
funds expended by Lender for such purposes shall become indebtedness of Borrower
to Lender secured by this Instrument pursuant to paragraph 8 hereof. Unless
Lender and Borrower agree in writing to other terms of payment, such amounts
shall be payable upon notice from Lender to Borrower requesting payment thereof
and shall bear interest from the date of disbursement at the rate stated in the
Note unless payment of interest at such rate would be contrary to applicable
law, in which event such amounts shall bear interest at the highest rate which
may be collected from Borrower under applicable law.
Any entering upon and taking and maintaining of control of the Property by
Lender or the receiver and any application of rents as provided herein shall not
cure or waive any default hereunder or invalidate any other right or remedy of
Lender under applicable law or provided herein. This assignment of rents of the
Property shall terminate at such time as this Instrument cases to secure
indebtedness held by Lender.
(6 of 8 pages)
27. ACCELERATION; REMEDIES. Upon Borrower' breach of any covenant or agreement
of Borrower in this Instrument, including, but not limited to, the covenants to
pay when due any sums secured by this Instrument, Lender at Lender's option may
declare all of the sums secured by this Instrument to be immediately due and
payable without further demand and may foreclose this Instrument by judicial
proceeding and may invoke any other remedies permitted by applicable law or
provided herein. Lender shall be entitled to collect all costs and expenses
incurred in pursuing such remedies, including, but not limited to, attorney's
fees, costs of documentary evidence, abstracts and title reports.
28. RELEASE. Upon payment of all sums secured by this Instrument, Lender shall
release this Instrument. Borrower shall pay Lender's reasonable costs incurred
in releasing this Instrument.
29. WAIVER OF HOMESTEAD, DOWER, REDEMPTION AND APPRAISEMENT. Borrower hereby
waives all right of homestead exemption in and statutory redemption of the
Property and all right of appraisement of the Property and relinquishes all
right of dower in the Property.**
30. FUTURE ADVANCES. Upon request of Borrower, Lender, at Lender's option so
long as this Instrument secures indebtedness held by Lender, may make Future
Advances to Borrower. Such Future Advances, with interest thereon, shall be
secured by this Instrument when evidenced by promissory notes stating that said
notes are secured hereby. At no time shall the principal amount of the
indebtedness secured by this Instrument, not including sums advanced in
accordance herewith to protect the security of this Instrument, exceed the
original amount of the Note (US $6,100,000.00) plus the additional sum of US
$N/A.
31. * See Below.
IN WITNESS WHEREOF, Borrower has executed this Instrument or has caused the
same to be executed by its representatives thereunto duly authorized.
BORROWER:
WATERTON RAINTREE, L.L.C., a Delaware
limited liability company
By: Waterton Residential Property Fund II L.P., a
Delaware limited partnership, its Sole
Member
By: Waterton Fund II Managers L.P., a
Delaware limited partnership, its
General Partner
By: VS Managers, L.L.C., an
Illinois limited liability
company, its General Partner
By:/s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Managing Member
Borrower's Address:
c/o Waterton Associates
000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
* This Instrument has been amended and supplemented in certain respects as set
forth in the Rider to Multifamily Instrument (the "Rider") annexed hereto and
incorporated herein by this reference. In the event of any inconsistency between
the printed portion of this Instrument and the provisions of said Rider, the
provisions of said Rider shall control.
** including waiver of all rights of redemption under the Act of the General
Assembly of the State of Arkansas approved May 8, 1899, and all amendments
hereto.
(7 of 8 pages)
ACKNOWLEDGMENT
STATE OF ARKANSAS, PULASKI COUNTY, ss:
On this 27th day of July 1999, before me, the undersigned officer,
personally, appeared Xxxxx X. Xxxxx who acknowledged himself/herself to be the
Managing Member of V.S. Managers, L.L.C., an Illinois limited liability company,
who is the general partner of Waterton II Fund Managers, L.P., a Delaware
limited partnership, who is the sole member of Waterton Raintree, L.L.C., a
Delaware limited liability company, and he/she as such Managing Member, being
authorized to do so, executed the foregoing instrument for the purposes therein
contained by signing the name of Waterton Raintree, L.L.C.
IN TESTIMONY WHEREOF, I hereunto set my hand and official seal.
My Commission Expires: /s/ Xxxxx Xxxxxx
3-17-2007 Notary Public
SEAL
(8 of 8 pages)
EXHIBIT A
All of xxx 0, Xxxxx Xxxx Xxxxxxx, an addition to the City of Little Rock,
Pulaski County, Arkansas, as shown on plat recorded in plat book 32, page 19,
records Pulaski County, Arkansas; Xxx 0, Xxxxx Xxxx Xxxxxxx an addition to the
City of Little Rock, Pulaski County, Arkansas as shown on plat recorded in plat
book 32, page 19, records of Pulaski County, Arkansas, less and except that part
described and platted as lot 0X, Xxxxx Xxxx Xxxxxxx, an addition to the City of
Little Rock, Pulaski County, Arkansas, as shown on plat recorded as plat book
No. A-774, records of Pulaski County, Arkansas; all of that part of the lands
dedicated as right of way for Raintree Lane by said plat of White Rock Terrace
Addition recorded in plat book 32, page 19, records of Pulaski County, Arkansas,
and the North half of the forty (40) foot street right of way, closed by City
Ordinance No. 14,125, filed as instrument No. 81-40181, records of Pulaski
County, Arkansas, all being described as follows: Beginning at the Northwest
corner of said Xxx 0 (XXXXX Xxxxxxxx), xxxxxx Xxxxx 00 xxx. 55 min. 30 sec.
East, along the North line of said Lot 1, 458.76 feet to the Northeast corner of
said Xxx 0 (XXXXX Xxxxxxxx); xxxxxx Xxxxx 00 xxx. 04 min. 30 sec. West, 15.00
feet; thence South 87 deg. 55 min. 30 sec. East, 742.6 feet to the Northeast
corner of said Lot 2; thence South 01 deg. 19 min. 30 sec. West along the west
right of way line of Brookside Drive, 256.74 feet to the Northeast corner of Lot
2A; thence North 88 deg. 08 min. 30 sec. West along the North line of said Lot
2A a distance of 300.2 feet; thence South 63 deg. 51 min. 30 sec. West along
said Northerly line of Lot 2A a distance of 418.5 feet; thence North 88 deg. 08
min. 30 sec. West along said Northerly line of Lot 2A a distance of 109.73 feet;
thence South 49 deg. 51 min. 30 sec. West along said Northerly line of Lot 2A a
distance of 40.2 feet; thence South 30 deg. 19 min. 50 sec. East along the
Westerly line of said Lot 2A, a distance of 156.92 feet to the Southwest corner
of said Lot 2A; thence South 01 deg. 51 min. 30 sec. West, 20.00 feet; thence
North 88 deg. 08 min. 30 sec. West, 178.06 feet; thence North 87 deg. 51 min. 30
sec. West, 295.49 feet to the East right of way line of Reservoir Road; thence
North 01 deg. 28 min. 30 sec. East along said East right of way line of
Reservoir Road a distance of 651.03 feet to the Point of Beginning, less and
except White Rock Lane right of way, containing 507,256.2 sq. ft. (11.645
acres), more or less, Exclusive of right of way for White Rock Lane.
RIDER TO MULTIFAMILY INSTRUMENT
(Barrington Hills Apartments)
THIS RIDER TO MULTIFAMILY INSTRUMENT (the "Rider") is made as of the 1st
day of July, 1999, and is incorporated into and shall be deemed to amend and
supplement the Multifamily Mortgage, Deed of Trust or Deed to Secure Debt of the
same date (the "Instrument"), given by the undersigned, WATERTON RAINTREE,
L.L.C., a Delaware limited liability company (the "Borrower"), to secure
Borrower's Multifamily Note of the same date (the "Note") with Addendum to
Multifamily Note of the same date (the "Addendum") to BERKSHIRE MORTGAGE FINANCE
LIMITED PARTNERSHIP, a Massachusetts limited partnership, Xxx Xxxxxx Xxxxxx,
00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 [Insert address of Lender], and its
successors, assigns and transferees (the "Lender"), covering the property
described in the Instrument and defined therein as the "Property," located at:
0000 Xxxxxxxxx Xxxx, Xxxxxx Xxxx, Xxxxxxxx 00000
[Property Address]
The Property is located entirely within the State of Arkansas [Insert name of
state in which the Property is located] (the "Property Jurisdiction").
The term "Loan Documents" when used in this Rider shall mean, collectively,
the following documents: (i) the Instrument, as modified by this Rider and any
other riders to the Instrument given by Borrower to Lender and covering the
Property; (ii) the Note, as modified by the Addendum and any other addendum to
the Note; and (iii) all other documents or agreements, including any Collateral
Agreements (as defined below) or O&M Agreements (as defined below), arising
under, related to, or made in connection with, the loan evidenced by the Note,
as such Loan Documents may be amended from time to time. Any conflict between
the provisions of the Instrument and the Rider shall be resolved in favor of the
Rider.
The covenants and agreements of this Rider, and the covenants and
agreements of any other riders to the Instrument given by Borrower to Lender and
covering the Property, shall be incorporated into and shall amend and supplement
the covenants and agreements of the Instrument as if this Rider and the other
riders were a part of the Instrument and all references to the Instrument in the
Loan Documents shall mean the Instrument as so amended and supplemented.
ADDITIONAL COVENANTS. In addition to the covenants ands agreements made in
the Instrument, Borrower and Lender further covenant and agree as follows:
A. Funds for Taxes, Insurance and Other Charges
Uniform Covenant 2 of the Instrument("Funds for Taxes, Insurance and Other
Charges") is amended to change the title to "Funds for Taxes, Insurance and
Other Charges; Collateral Agreements." Existing Uniform Covenant 2 is amended to
become Xxxxxxx Xxxxxxxx 0X. The following new Uniform Covenant 2B is added at
the end of Uniform Covenant 2A:
2B Replacement Reserve Agreement, Completion/Repair Agreement, Achievement
Agreement and Other Collateral Agreements
(a) Replacement Reserve Agreement
Borrower shall deposit with Lender the amounts required by the Replacement
Reserve and Security Agreement (the "Replacement Reserve Agreement") between
Borrower and Lender, dated the date of the Note, at the times required by the
Replacement Reserve Agreement, and shall perform all other obligations as and
when required pursuant to the Replacement Reserve Agreement.
(b) Completion/Repair Agreement
Borrower shall deposit with Lender the amount required by the
Completion/Repair and Security Agreement (the "Completion/Repair Agreement")
between Borrower and Lender (if any), dated the date of the Note, at the time
required by the Completion/Repair Agreement, and shall perform all other
obligations as and when required pursuant to this Completion/Repair Agreement.
(c) Achievement Agreement
Borrower shall perform all of its obligations as and when required pursuant
to the Achievement Agreement between Borrower and Lender (if any), dated the
date of the Note.
(d) Collateral Agreements
As used herein, the term "Collateral Agreement" shall mean any of the
Replacement Reserve Agreement, the Completion/Repair Agreement, the Achievement
Agreement and any similar agreement which has been entered into between Borrower
and Lender in connection with the loan evidenced by the Note.
B. Application of Payments
Uniform Covenant 3 of the Instrument ("Application of Payments") is amended
to add the following sentence at the end thereof:
Notwithstanding the preceding sentence, (i) Lender shall be permitted to
apply any partial payment received from Borrower in any manner determined by
Lender and in any order of priority of application as determined by Lender, in
Lender's sole discretion, and (ii) upon any breach of any covenant or agreement
of Borrower in the Instrument, the Note or any other Loan Document, Lender shall
be permitted to apply any funds held pursuant to any Collateral Agreement in any
manner which is permitted pursuant to such Collateral Agreement and in any order
of priority of application as determined by Lender, in Lender's sole discretion.
(1 of 8 pages)
C. Hazard Insurance; Restoration of Property
Uniform Covenant 5 of the Instrument ("Hazard Insurance") is amended to add
the following sentence at the end thereof:
Lender shall not exercise Lender's option to apply insurance proceeds to
the payment of the sums secured by the Instrument if all of the following
conditions are met: (i) Borrower is not in breach or default of any provision of
the Instrument, the Note or any other Loan Document; (ii) Lender determines that
there will be sufficient funds to restore and repair the Property to a condition
approved by Lender; (iii) Lender determines that the rental income of the
Property, after restoration and repair of the Property to a condition approved
by Lender, will be sufficient to meet all operating costs and other expenses,
payments for reserves and loan repayment obligations relating to the Property;
and (iv) Lender determines that restoration and repair of the Property to a
condition approved by Lender will be completed prior to the earlier of either
(1) the maturity date of the Note or (2) within one year of the date of the loss
or casualty to the Property.
D. Environmental Hazards Provision
In addition to Borrower's covenants and agreements under Uniform Covenant 6
of the Instrument ("Preservation and Maintenance of Property; Leaseholds"),
Borrower further covenants and agrees that Borrower shall not:
(a) cause or permit the presence, use, generation, manufacture,
production, processing, installation, release, discharge, storage
(including aboveground and underground storage tanks for petroleum or
petroleum products), treatment, handling, or disposal of any Hazardous
Materials (as defined below) (excluding the safe and lawful use and
storage of quantities of Hazardous Materials customarily used in the
operation and maintenance of comparable multifamily properties or for
normal household purposes) on or under the Property, or in any way
affecting the Property or its value, or which may form the basis for
any present or future demand, claim or liability relating to
contamination, exposure, cleanup or other remediation of the Property
or;
(b) cause or permit the transportation to, from or across the Property of
any Hazardous Material (excluding the safe and unlawful use and
storage of quantities of Hazardous Materials customarily used in the
operation and maintenance of comparable multifamily properties or for
normal household purposes); or
(c) cause or exacerbate any occurrence or condition on the Property that
is or may be in violation of Hazardous Materials Law (as defined
below).
(The matters described in (a), (b) and (c) above are referred to collectively
below as "Prohibited Activities or Conditions.")
Except with respect to any matters which have been disclosed in writing by
Borrower to Lender prior to the date of the Instrument, or matters which have
been disclosed in an environmental hazard assessment report of the Property
received by Lender prior to the date of the Instrument, Borrower represents and
warrants that it has not at any time caused or permitted any Prohibited
Activities or Conditions and to the best of its knowledge, no Prohibited
Activities or Conditions exist or have existed on or under the Property.
Borrower shall take all appropriate steps (including but not limited to
appropriate lease provisions) to prevent its employees, agents, and contractors,
and all tenants and other occupants on the Property, from causing, permitting or
exacerbating any Prohibited Activities or Conditions. Borrower shall not lease
or allow the sublease of all or any portion of the Property for non- residential
use to any tenant or subtenant that, in the ordinary course of its business,
would cause, permit or exacerbate any Prohibited Activities or Conditions, and
all non-residential leases and subleases shall provide that tenants and
subtenants shall not cause, permit or exacerbate any Prohibited Activities or
Conditions.
If Borrower has disclosed that Prohibited Activities or Conditions exist on
the Property, Borrower shall comply in a timely manner with, and cause all
employees, agents, and contractors of Borrower and any other persons present on
the Property to so comply with, (1) any program of operations and maintenance
("O&M Program") relating to the Property that is acceptable to Lender with
respect to one or more Hazardous Materials (which O&M Program may be set forth
in an agreement of Borrower (an "O&M Agreement")) and all other obligations set
forth in any O&M Agreement, and (2) all Hazardous Materials Laws. Any O&M
Program shall be performed by qualified personnel. All costs and expenses of the
O&M Program shall be paid by Borrower, including without limitation, Lender's
fees and costs incurred in connection with the monitoring and review of the O&M
Program and Borrower's performance thereunder. If Borrower fails to timely
commence or diligently continue and complete the O&M Program and comply with any
O&M Agreement, then Lender may, at Lender's option, declare all of the sums
secured by the Instrument to be immediately due and payable, and Lender may
invoice any remedies permitted by paragraph 27 of the Instrument.
Borrower represents that Borrower has not received, and has no knowledge of
the issuance of, any claim, citation or notice of any pending or threatened
suits, proceedings, orders, or governmental inquiries or opinions involving the
Property that allege the violation of any Hazardous Materials Law ("Governmental
Actions").
Borrower shall promptly notify Lender in writing of: (i) the occurrence of
any Prohibited Activity or Condition on the Property; (ii) Borrower's actual
knowledge of the presence on or under any adjoining property of any Hazardous
Materials which can reasonably be expected to have a material adverse impact on
the Property or the value of the Property, discovery of any occurrence or
condition on the Property or any adjoining real property that could cause any
restrictions on the ownership, occupancy, transferability or use of the Property
under Hazardous Materials Law. Borrower shall cooperate with any governmental
inquiry, and shall comply with any governmental or judicial order which arises
from any alleged Prohibited Activities or Conditions; (iii) any Governmental
Action; and (iv) any claim made or threatened by any third party against
Borrower, Lender, or the Property relating to loss or injury
(2 of 8 pages)
resulting from any Hazardous Materials. Any such notice by Borrower shall not
relieve Borrower of, or result in a waiver of any obligation of Borrower under
this paragraph D.
Borrower shall pay promptly the costs of any environmental audits, studies
or investigations (including but not limited to advice of legal counsel) and the
removal of any Hazardous Materials from the Property required by Lender as a
condition of its consent to any sale or transfer under paragraph 19 of the
Instrument of all or any part of the Property or any transfer occurring upon a
foreclosure or a deed in lieu of foreclosure or any interest therein, or
required by Lender following a reasonable determination by Lender that there may
be Prohibited Activities or Conditions on or under the Property. Borrower
authorizes Lender and its employees, agents and contractors to enter onto the
Property for the purpose of conducting such environmental audits, studies and
investigations. Any such costs and expenses incurred by Lender (including but
not limited to fees and expenses of attorneys and consultants, whether incurred
in connection with any judicial or administrative process or otherwise) which
Borrower fails to pay promptly shall become immediately due and payable and
shall become additional indebtedness secured by the Instrument pursuant to
Uniform Covenant 8 of the Instrument.
Borrower shall hold harmless, defend and indemnify Lender and its officers,
directors, trustees, employees, and agents from and against all proceedings
(including but not limited to Government Actions), claims, damages, penalties,
costs and expenses (including without limitation fees and expenses of attorneys
and expert witnesses, investigatory fees, and cleanup and remediation expenses,
whether or not incurred within the context of the judicial process), arising
directly or indirectly from (i) any breach of any representation, warranty, or
obligation of Borrower contained in this paragraph D or (ii) the presence or
alleged presence of Hazardous Materials on or under the Property. Lender agrees
that the liability created under this paragraph 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 (if Borrower is a partnership).
The term "Hazardous Materials," for purposes of this paragraph D, includes
petroleum and petroleum products, flammable explosives, radioactive materials
(excluding radioactive materials in smoke detectors), polychlorinated biphenyls,
lead, asbestos in any form that is or could become friable, hazardous waste,
toxic or hazardous substances or otherrelated materials whether in the form of a
chemical, element, compound, solution, mixture or otherwise including, but not
limited to, those materials defined as "hazardous substances," "extremely
hazardous substances," "hazardous chemicals," "hazardous materials," "toxic
substances," "solid waste," "toxic chemicals," "air pollutants," "toxic
pollutants," "hazardous wastes," "extremely hazardous waste," or "restricted
hazardous waste" by Hazardous Materials Law or regulated by Hazardous Materials
Law in any manner whatsoever.
The term "Hazardous Materials Law," for the purposes of this paragraph D,
means all federal, state, and local laws, ordinances and regulations and
standards, rules, policies and other binding governmental requirements and any
court judgments applicable to Borrower or to the Property relating to industrial
hygiene or to environmental or unsafe conditions or to human health including,
but not limited to, those relating to the generation, manufacture, storage,
handling, transportation, disposal, release, emission or discharge of Hazardous
Materials, those in connection with the construction, fuel supply, power
generation and transmission, waste disposal or any other operations or processes
relating to the Property, and those relating to the atmosphere, soil, surface
and ground water, wetlands, stream sediments and vegetation on, under, in or
about the Property.
The representations, warranties, covenants, agreements, indemnities and
undertakings of Borrower contained in this paragraph D shall be in addition to
any and all other obligations and liabilities that Borrower may have to Lender
under applicable law.
The representations, warranties, covenants, agreements, indemnities and
undertakings of Borrower contained in this paragraph D shall continue and
survive notwithstanding the satisfaction, discharge, release, assignment,
termination, subordination or cancellation of the Instrument or the payment in
full of the principal of and interest on the Note and all other sums payable
under the Loan Documents or the foreclosure of the Instrument or the tender or
delivery of a deed in lieu of foreclosure or the release of any portion of the
Property from the lien of the Instrument, except with respect to any Prohibited
Activities or Conditions or violation of any of the Hazardous Materials Laws
which first commences and occurs after the satisfaction, discharge, release,
assignment, termination or cancellation of the Instrument following the payment
in full of the principal of and interest on the Note and all other sums payable
under the Loan Documents or which first commences or occurs after the actual
dispossession from the entire Property of the Borrower and all entities which
control, are controlled by, or are under common control with the Borrower (each
of the foregoing persons or entities is hereinafter referred to as a
"Responsible Party") following foreclosure of the Instrument or acquisition of
the Property by a deed in lieu of foreclosure. Nothing in the foregoing sentence
shall relieve the Borrower from any liability with respect to any Prohibited
Activities or Conditions or violation of Hazardous Materials Laws where such
Prohibited Activities or Conditions or violation of Hazardous Materials Laws
commences or occurs, or is present as a result of, any act or omission by any
Responsible Party or by any person acting on behalf of a Responsible Party.
E. Books, Records and Financial Information
Uniform Covenant 10 of the Instrument ("Books and Records") is amended to
read as follows:
Borrower shall keep and maintain at all times and upon Lender's request,
Borrower shall make available at the Property address, complete and accurate
books of accounts and records in sufficient detail to correctly reflect the
results of the operation of the Property and copies of all written contracts,
leases and other instruments which affect the Property (including but not
limited to all bills, invoices and contracts for electrical service, gas
service, water and sewer service, waste management service, telephone service
and management services). These books, records, contracts, leases and other
instruments shall be subject to examination and inspection at any reasonable
time by Lender. Borrower shall furnish to Lender the following: (i) within 120
days after the end of each fiscal year of
(3 of 8 pages)
Borrower, a statement of income and expenses of the Property and a statement of
changes in financial position and when requested by Lender, a balance sheet,
each in reasonable detail and certified by Borrower and, if Lender shall
require, the foregoing statements shall be audited by an independent certified
public accountant; (ii) together with the foregoing financial statements and at
any other time upon Lender's request, a rent schedule for the Property, in the
form required by Lender and certified by Borrower, showing the name of each
tenant, and for each tenant, the space occupied, the lease expiration date, the
rent payable, the rent paid and any other information requested by Lender; (iii)
upon Lender's request, an accounting of all security deposits held in connection
with any lease of any part of the Property, including the name and
identification number of the accounts in which such security deposits are held,
the name and address of the financial institutions in which such security
deposits are held and the name of the person to contact at such financial
institution, along with any authority or release necessary for Lender to access
information regarding such accounts; and (iv) promptly upon Borrower's receipt,
copies of any complaint filed against the Borrower or the Property management
alleging any violation of fair housing law, handicap access or the Americans
with Disabilities Act and any final administrative or judicial dispositions of
such complaints. If Borrower shall fail to timely provide the financial
statements required by clause (i) above, Lender shall have the right to have the
Borrower's books and records audited in order to obtain such financial
statements, and any such costs and expenses incurred by Lender which Borrower
fails to pay promptly shall become immediately due and payable and shall become
additional indebtedness secured by the Instrument pursuant to paragraph 8 of the
Instrument.
F. Transfers of the Property or Significant Interests in Borrower; Transfer Fees
Uniform Covenant 19 of the Instrument ("Transfers of the Property or
Beneficial Interests in Borrower, Assumption") is amended to read as set forth
below:
Transfers of the Property or Significant Interests in Borrower; Transfer Fees
(a) Definitions
For purposes of the Instrument (and the Rider), the following terms have
the respective meanings set forth below:
(1) The term "Key Principal" means the natural person(s) identified as
such at the foot of the Rider, and any natural person who becomes a
Key Principal after the date of the Note and are identified as such in
an amendment or supplement to the Loan Documents.
(2) The term "Transfer" means a sale, assignment, transfer or other
disposition (whether voluntary or by operation of law) of, or the
granting or creating of a lien, encumbrance or security interest in,
the Property or in ownership interests, and the issuance or other
creation of ownership interests in an entity and the reconstitution of
one type of entity to another type of entity.
(3) A "Significant Interest" in any entity shall mean the following:
(i) if the entity is a general partnership or a joint venture, (A)
any partnership interest in the general partnership, or (B) any
interest of a joint venturer in a joint venture;
(ii) if the entity is a limited partnership, (A) any limited
partnership interest in the entity which, together with all other
limited partnership interests in the entity Transferred since the
date of the Note, exceeds 49% of all of the limited partnership
interests in the entity, or (B) any general partnership interest
in the entity;
(iii)if the entity is a limited liability company, any membership
interest which, together with all other membership interests in
the limited liability company Transferred since the date of the
Note, exceeds 49% of all of the membership interests in the
limited liability company;
(iv) if the entity is a corporation, any voting stock in the
corporation which, together with all other voting stock of the
corporation Transferred since the date of the Note, exceeds 49%
of all of the voting stock of the corporation; or
(v) if the entity is a trust, any beneficial interest in such trust
which, together with all other beneficial interests in the trust
Transferred since the date of the Note, exceeds 49% of all of the
beneficial interests in the trust.
(b) Acceleration of the Lease Upon Transfers of the Property or
Significant Interests
Lender may, at Lender's option, declare all sums secured by the Instrument
immediately due and payable and Lender may invoke any remedies permitted by
paragraph 27 of the Instrument if, without the Lender's prior written consent,
any of the following shall occur:
(1) a Transfer of all or any part of the Property or any interest in the
Property;
(2) a Transfer of any Significant Interest in Borrower;
(3) a Transfer of any Significant Interest in a corporation, partnership,
limited liability company, joint venture, or trust which owns a
Significant Interest in the Borrower;
(4) if the Borrower is a trust, or if any trust owns a Significant
Interest in the Borrower, the addition, deletion or substitution of a
trustee of such trust, which addition, deletion or substitution has
not been approved by Lender; or
(4 of 8 pages)
(5) a Transfer of all or any part of any Key Principal's ownership
interest (other than limited partnership interests) in the Borrower,
or in any other entity which owns, directly or indirectly, through one
or more intermediate entities, an ownership interest in the Borrower.
(c) Transfers Permitted with Lender's Prior Consent
Lender shall consent to a Transfer which would otherwise violate this
paragraph 19 if, prior to the Transfer:
(1) Borrower causes to be submitted to Lender all information required by
Lender to evaluate the transferee and the Property as if a new loan
were being made to the transferee and secured by the Property, in the
case of a Transfer of all or any part of the Property or an interest
therein, or to the Borrower (as reconstituted after the proposed
Transfer), in the case of a Transfer of Significant Interests;
(2) The transferee, in the case of a Transfer of all or any part of the
Property or an interest therein, or the Borrower (as reconstituted
after the proposed Transfer), in the case of a Transfer of Significant
Interests, meet the eligibility, credit, management and other
standards, and the Property meets the physical maintenance and
replacement reserve requirements, customarily applied by Lender for
approval of new borrowers and properties for loans secured by liens on
multifamily properties;
(3) In the case of a Transfer of all or any part of the Property, the
proposed transferee (i) executes an agreement acceptable to Lender
pursuant to which the proposed transferee agrees, upon consummation of
the Transfer, to assume and to pay and perform all obligations of the
Borrower under the Note, the Instrument and the other Loan Documents,
(ii) causes one or more individuals acceptable to Lender to execute
and deliver to Lender an amendment or supplement to the Loan Documents
as "Key Principal," and (iii) executes such documents and otherwise
provides such documents and information as required by Lender in
connection with the Transfer;
(4) In the case of a Transfer of a Key Principal's ownership interest
pursuant to paragraph 19(b)(5), (i) the Borrower (as reconstituted
after the proposed Transfer) executes an agreement acceptable to
Lender that ratifies and confirms the obligations of Borrower under
the Note, the Instrument and the other Loan Documents, (ii) one or
more individuals acceptable to Lender execute and deliver to Lender an
amendment or supplement to the Loan Documents as "Key Principal," and
(iii) the Borrower executes such documents and otherwise provides such
documents and information as required by Lender in connection with the
Transfer; and
(5) Borrower pays to Lender a $3000 non-refundable application fee and a
transfer fee equal to one percent (1%) of the sums secured by the
Instrument. In addition, Borrower shall be required to reimburse
Lender for all of Lender's out of pocket expenses incurred in
connection with the assumption, to the extent such expenses exceed
$3000. *(*provided, however, that no such transfer fee shall be
required in the case of a Transfer of any ownership interest in
Borrower among any of the partners of Waterton Residential Property
Fund II L.P. ("WRPFII LP"), or its "Permitted Affiliates", provided
that: (A) the ownership and management of Borrower remains under the
direction and control of either (i) Xxxxx X. Xxxxxxxx and Xxxxx X.
Xxxxx, (ii) Xxxxxx Brothers Holdings, Inc., or (iii) any Permitted
Affiliates; and (b) such Transfer satisfies all of the other condition
of this paragraph F(c). As used herein, the term "Permitted
Affiliates" means, with respect to WRPFII LP, any person who on the
date of the Instrument (A) directly or indirectly owns, controls or
holds 100% of the outstanding voting securities of and at least 51% of
the equity and beneficial interests in WRPFII LP, (B) 100% of whose
outstanding voting securities and at least 51% of the equity and
beneficial interests are directly or indirectly owned, controlled or
held by WRPFII LP, or (C) 100% of whose outstanding securities and at
least 51% of the equity and other beneficial interests are directly or
indirectly owned, controlled or held by a person or persons who
directly or indirectly own, control or hold 100% of the outstanding
securities and equity and other beneficial interests of WRPFII LP.)
(d) No Acceleration of the Loan For Transfers Caused By Certain Events
Notwithstanding the foregoing provisions of this covenant, Lender shall not
be entitled to declare sums secured by the Instrument immediately due and
payable or to invoke any remedy permitted by paragraph 27 of the Instrument
solely upon the occurrence of any of the following:
(1) A Transfer that occurs by inheritance, devise, or bequest or by
operation of law upon the death of a natural person who is an owner of
the Property or the owner of a direct or indirect ownership interest
in the Borrower.
(2) The grant of a leasehold interest in individual dwelling units for a
term of two years or less and leases for commercial uses as long as
commercial leases do not exceed 20 percent of the rentable space of
the Property (measured as required by Lender) and provided that all
such leasehold interests do not contain an option to purchase the
Property.
(3) A sale or other disposition of obsolete or worn out personal property
which is contemporaneously replaced by comparable personal property of
equal or greater value which is free and clear of liens, encumbrances
and security interests other than those created by the Loan Documents.
(4) The creation of a mechanic's or materialmen's lien or judgment lien
against the Property which is released of record or otherwise remedied
to Lender's satisfaction, within 30 days of the date of creation.
(5) The grant of an easement, if prior to the granting of the easement the
Borrower causes to be submitted to Lender all information required by
Lender to evaluate the easement, and if Lender determines that the
easement will not materially affect the operation of the Property or
Lender's interest in the Property and Borrower pays to Lender, on
demand, all cost and expenses incurred by Lender in connection with
reviewing Borrower's request.
G. Notice
Uniform Covenant 20 of the Instrument ("Notice") is amended to read as
follows:
Each notice, demand, consent, or other approval (collectively, "notices"
and singly, "notice") given under the Note, the Instrument, and any other Loan
Document, shall be in writing to the other party, and if to Borrower, at its
address set forth below Borrower's signature on the Instrument, and if to Lender
at its address set forth at the beginning of the Rider, or at such other address
as such party may designate by notice to the other party and shall be deemed
given (a) three (3) Business Days after mailing, by certified or registered U.S.
mail, return receipt requested, postage prepaid, (b) one (1) Business Day after
delivery, fee prepaid, to a national overnight delivery
(5 of 8 pages)
service, or (c) when delivered, if personally delivered with proof of delivery
thereof.
Borrower and Lender each agrees that it will not refuse or reject delivery
of any notice given hereunder, that it will acknowledge, in writing, the receipt
of the same upon request by the other party and that any notice rejected or
refused by it shall be deemed for all purposes of this Agreement to have been
received by the rejecting party on the date so refused or rejected, as
conclusively established by the records of the U.S. Postal Service or the
courier service. As used in the Instrument, the term "Business day" means any
day other than a Saturday, a Sunday or any other day on which Lender is not open
for business.
Lender shall not be required to deliver notice to Key Principal in
connection with any notice given to Borrower. However, if Lender shall deliver
notice to Key Principal, such notice shall be given in the manner provided in
this Uniform Covenant 20, at Key Principal's address set forth at the foot of
the Rider.
H. Governing Law
In addition to the governing law provision of Uniform Covenant 22 of the
Instrument ("Uniform Multifamily Instrument; Governing Law; Severability"), the
Borrower and Lender covenant and agree as follows:
(a) Choice of Law
The validity of the Instrument and the other Loan Documents, each of their
terms and provisions, and the rights and obligations of Borrower under the
Instrument and the other Loan Documents, shall be governed by, interpreted,
construed, and enforced pursuant to and in accordance with the laws of the
Property Jurisdiction.
(b) Consent to Jurisdiction
Borrower consents to the exclusive jurisdiction of any and all state and
federal courts with jurisdiction in the Property Jurisdiction over Borrower and
the Borrower's assets. Borrower agrees that such assets shall be used first to
satisfy all claims of creditors organized or domiciled in the United States of
America ("USA") and that no assets of the Borrower in the USA shall be
considered part of any foreign bankruptcy estate.
Borrower agrees that any controversy arising under or in relation to the
Note, the Instrument or any of the other Loan Documents shall be litigated
exclusively in the Property Jurisdiction. The state and federal courts and
authorities with jurisdiction in the Property Jurisdiction shall have exclusive
jurisdiction over all controversies which may arise under or in relation to the
Note, and any security for the debt evidenced by the Note, including without
limitation those controversies relating to the execution, interpretation,
breach, enforcement, or compliance with the Note, the Instrument, or any other
issue arising under, related to, or in connection with any of the Loan
Documents. Borrower irrevocably consents to service, jurisdiction, and venue of
such courts for any litigation arising from the Note, the Instrument or any of
the other Loan Documents, and waives any other venue to which it might be
entitled by virtue of domicile, habitual residence or otherwise.
I. Acceleration; Remedies
Covenant 27 of the Instrument ("Acceleration; Remedies) is amended to add
the following at the end of the first paragraph:
Upon the breach of any covenant or agreement by Borrower in the Instrument,
(including, but not limited to, the covenants to pay when due sums secured by
the Instrument) or any other Loan Document, Lender, at Lender's option may, in
addition to any remedies specified in this covenant, invoke any other remedies
provided in any Collateral Agreement.
If Borrower is in default under any promissory note (other than the Note)
evidencing a loan (the "Subordinate Loan") secured by a security instrument
(other than the Instrument) covering all or any portion of the Property (the
"Subordinate Instrument") or under any Subordinate Instrument or other loan
document executed in connection with the Subordinate Loan, (and whether or not
the Borrower has obtained the prior approval of Lender to the placement of such
Subordinate Instrument on the Property) which default remains uncured after any
applicable cure period, Borrower also then will be in default under the Note and
the Instrument. In that event, the entire unpaid principal balance of the Note,
accrued interest and any other sums due Lender secured by the Instrument then
will become due and payable, at Lender's option. If Lender exercises this option
to accelerate, Lender will do so in accordance with the provisions of the Note
and the Instrument, and the Lender may invoke any and all remedies permitted by
applicable law, the Note, the Instrument, or any of the other Loan Documents.
J. Single Asset Borrower
Until the debt evidenced by the Note is paid in full, Borrower shall not
(1) acquire any real or personal property other than the Property and assets
(such as accounts) related to the operation and maintenance of the Property, or
(2) operate any business other than the management and operation of the
Property.
K. Non-Recourse Liability
Subject to the provisions of paragraph L and notwithstanding any other
provision in the Note or Instrument, the personal liability of Borrower, any
general partner of Borrower (if Borrower is a partnership), and any Key
Principal to pay the principal of and interest on the debt evidenced by the Note
and any other agreement evidencing Borrower's obligations under the Note and the
Instrument shall be limited to (1) the real and personal property described as
the "Property" in the Instrument, (2) the personal property described in and
pledged under any Collateral Agreement executed in connection with the loan
evidenced by the Note, (3) the rents, profits, issues, products and income of
the Property received or collected by or on behalf of Borrower (the "Rents and
Profits") to the extent such receipts
(6 of 8 pages)
are necessary, first, to pay the reasonable expenses of operating, managing,
maintaining and repairing the Property, including but not limited to real estate
taxes, utilities, assessments, insurance premiums, repairs, replacements and
ground rents, if any (the "Operating Expenses") then due and payable as of the
time of receipt of such Rents and Profits, and then, to pay the principal and
interest due under the Note, and any other sums due under the Instrument or any
other Loan Document (including but not limited to deposits or reserves due under
any Collateral Agreement), except to the extent that Borrower did not have the
legal right, because of a bankruptcy, receivership or similar judicial
proceeding, to direct the disbursement of such sums.
Except as provided in paragraph L, Lender shall not seek (a) any judgment
for a deficiency against Borrower, any general partner of Borrower (if Borrower
is a partnership) or any Key Principal, or Borrower's or any such general
partner's or Key Principal's heirs, legal representatives, successors or
assigns, in any action to enforce any right or remedy under the Instrument, or
(b) any judgment on the Note except as may be necessary in any action brought
under the Instrument to enforce the lien against the Property or to exercise any
remedies under any Collateral Agreement.
L. Exceptions to Non-Recourse Liability
If, without obtaining Lender's prior written consent, (i) a Transfer shall
occur which, pursuant to Uniform Covenant 19 of the Instrument, gives Lender the
right, at its option, to declare all sums secured by the Instrument immediately
due and payable, (ii) Borrower shall encumber the Property with the lien of any
Subordinate Instrument in connection with any financing by Borrower, or (iii)
Borrower shall violate the single asset covenant in paragraph J of the Rider,
any of such events shall constitute a default by Borrower under the Note, the
Instrument and the other Loan Documents and if such event shall continue for 30
days, paragraph K shall not apply from and after the date which is 30 days after
such event and the Borrower, any general partner of Borrower (if Borrower is a
partnership) and Key Principal (each individually on a joint and several basis
if more than one) shall be personally liable on a joint and several basis for
full recourse liability under the Note and the other Loan Documents.
Notwithstanding paragraph K, Borrower, any general partner of Borrower (if
Borrower is a partnership) and Key Principal (each individually on a joint and
several basis if more than one), shall be personally liable on a joint and
several basis, in the amount of any loss, damage or cost (including but not
limited to attorneys' fees) resulting from (A) fraud or intentional
misrepresentation by Borrower or Borrower's agents or employees or any Key
Principal or general partner of Borrower in connection with obtaining the loan
evidenced by the Note, or in complying with any of Borrower's obligations under
the Loan Documents, (B) insurance proceeds, condemnation awards, security
deposits from tenants and other sums or payments received by or on behalf of
Borrower in its capacity as owner of the Property and not applied in accordance
with the provisions of the Instrument (except to the extent that Borrower did
not have the legal right, because of a bankruptcy, receivership or similar
judicial proceeding, to direct disbursement of such sums or payments), (C) all
Rents and Profits (except to the extent that Borrower did not have the legal
right, because of a bankruptcy, receivership or similar judicial proceeding, to
direct the disbursement of such sums), and not applied, first, to the payment of
the reasonable Operating Expenses as such Operating Expenses become due and
payable, and then, to the payment of principal and interest then due and payable
under the Note and all other sums due under the Instrument and all other Loan
Documents (including but not limited to deposits or reserves payable under any
Collateral Agreement), (D) Borrower's failure to pay transfer fees and charges
due under paragraph 19(c) of the Instrument, or (E) Borrower's failure following
a default under any of the Loan Documents to deliver to Lender on demand all
Rents and Profits, and security deposits (except to the extent that Borrower did
not have the legal right because of a bankruptcy, receivership or similar
judicial proceeding to direct disbursement of such sums), books and records
relating to the Property.
No provision of paragraphs K or L shall (i) affect any guaranty or similar
agreement executed in connection with the debt evidenced by the Note, (ii)
release or reduce the debt evidenced by the Note, (iii) impair the right of
Lender to enforce the provisions of paragraph D of the Rider, (iv) impair the
lien of the Instrument or (v) impair the right of Lender to enforce the
provisions of any Collateral Agreement.
M. Waiver of Jury Trial
Borrower and Key Principal (each for himself if more than one) (i) covenant
and agree not to elect a trial by jury with respect to any issue arising under
any of the Loan Documents triable by a jury and (ii) waive any right to trial by
jury to the extent that any such right shall now or hereafter exist. This waiver
of right to trial by jury is separately given, knowingly and voluntarily with
the benefit of competent legal counsel by the Borrower and Key Principal, and
this waiver is intended to encompass individually each instance and each issue
as to which the right to a jury trial would otherwise accrue. Further, Borrower
and Key Principal hereby certify that no representative or agent of the Lender
(including, but not limited to, the Lender's counsel) has represented, expressly
or otherwise, to Borrower or Key Principal that Lender will not seek to enforce
the provisions of this paragraph M.
ADDITIONAL PROVISIONS
This Rider includes the additional provision set forth on page 7A of 8
pages hereof, which follows this page 7 of 8 pages.
(7 of 8 pages)
RIDER TO MULTIFAMILY INSTRUMENT
(Barrington Hills Apartments)
ADDITIONAL PROVISIONS
N. Hazard Insurance
Uniform Covenant 5 of the Instrument ("Hazard Insurance") is amended by
striking from the third sentence of the fourth paragraph of said Uniform
Covenant 5 (which sentence begins "If the insurance proceeds are applied. . .")
the words "or change the amounts of such installments".
O. Condemnation
Uniform Covenant 11 of the Instrument ("Condemnation") is amended by
striking from the second sentence of the second paragraph of said Uniform
Covenant 11 (which sentence begins "Unless Borrower and Lender otherwise agree.
. .") the words "or change the amount of such installments".
P. Agreement to Pay Other Expenses Incurred by Lender
The Borrower covenants and agrees that the Borrower shall pay all expenses
incurred by the Lender from time to time in connection with the origination or
administration of the indebtedness evidenced by the Note and secured by this
Instrument or in connection with the Property, including, but not limited to,
attorneys' fees, guaranty fees, survey fees, consultants' fees and title
insurance premiums, immediately upon demand of the Lender and receipt by the
Borrower of invoices or other evidence of such expenses.
Q. Amortization of Note
The second paragraph of the Instrument is amended by deleting the portion
thereof following the words "of even date herewith (herein "Note")," and
inserting in lieu thereof the following:
with interest on the unpaid principal balance from the first day of the
month of the delivery of this Note, until paid, at the per annum rate of
interest of 5.165% to, but not including, the first day of the month
immediately preceding the Initial Remarketing Date, and thereafter, at a
per annum rate equal to the Remarketing Rate in effect from time to time,
adjusted as of the first day of the month immediately preceding each
Remarketing Date, plus (i) 0.87% and (ii) such additional fees, expressed
as a percentage, as are payable in accordance with the terms of the
Indenture and the Financing Agreement from payments on the Pass-through
Certificate (the "Adjusted Mortgage Rate"), until payment of the entire
outstanding balance hereof; provided, that in the event the Trustee
purchases the Bonds on behalf of Xxxxxx Xxx on a Remarketing Date following
a failure of remarketing as provided in the Indenture, the Adjusted
Mortgage Rate shall be equal to the lesser of (a) the maximum legal rate
under the laws of the State of Arkansas or (b) the rate of twelve percent
(12%) per annum plus (i) 0.87% and (ii) such additional fees, expressed as
percentage, as are payable in accordance with the terms of the Indenture
and the Financing Agreement from payments on the Pass-through Certificate,
effective as of the first day of the month immediately preceding the date
of purchase of the Bonds by the Trustee on behalf of Xxxxxx Mae, to the
date on which the Bonds are subsequently remarketed, or if the Bonds are
not subsequently remarketed, until payment of the entire outstanding
balance hereof.
The principal and interest shall be payable at Xxx Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other place as Lender may
designate in writing in consecutive monthly installments of Thirty-Six
Thousand Seven Hundred Nine and 96/100 Dollars ($36,709.96) each, subject
to reamortization as set forth below, on the first day of each month
beginning August 1, 1999 (herein "amortization
(7A of 8 pages)
commencement date"), until the entire indebtedness evidenced hereby is
fully paid, except that any remaining indebtedness, if not sooner paid,
shall be due and payable on July 1, 2029 (herein "Note maturity date");
provided, that if the Bonds shall have been remarketed on a Remarketing
Date or purchased by the Trustee on behalf of Xxxxxx Xxx following a
failure of remarketing in accordance with the provisions of the Indenture,
the outstanding principal balance of this Note shall be reamortized as of
each such Remarketing Date or date of purchase of the Bonds by the Trustee
on behalf of Xxxxxx Mae, so as to change the amount of each subsequent
installment of principal and interest to the amount necessary to amortize
the remaining principal balance of this Note at an interest rate equal to
the Adjusted Mortgage Rate over a period of 360 months minus the number of
months in which regularly scheduled monthly installments of principal and
interest shall have become due commencing with the amortization
commencement date through the first day of the month preceding such
Remarketing Date or date of purchase of the Bonds by the Trustee on behalf
of Xxxxxx Xxx, with the first such revised payment being due hereunder on
the first day of the month in which such Remarketing Date or purchase of
the Bonds by the Trustee on behalf of Xxxxxx Mae occurs; provided, however,
that all remaining indebtedness evidenced by this Note shall be due and
payable on the Note maturity date set forth above if not sooner paid.
R. Removal of Restrictions
At any time on or after Lender's acquisition of title to the Property
pursuant to Section 27 of the Instrument, Lender shall have the right, at its
option, to operate and convey the Property free of the restrictions set forth in
any land use restriction agreement relating to low income housing tax credits,
except to the extent that Section 42(h)(6) of the Internal Revenue Code, as the
same may be amended or modified, requires otherwise with respect to the
three-year period following termination of such restrictions.
(7B of 8 pages)
BY SIGNING BELOW, Borrower accepts and agrees to the covenants and
agreements contained in this Rider.
BORROWER:
WATERTON RAINTREE, L.L.C., a Delaware
limited liability company
By: Waterton Residential Property Fund II L.P., a
Delaware limited partnership, its Sole
Member
By: Waterton Fund II Managers L.P., a
Delaware limited partnership, its
General Partner
By: VS Managers, L.L.C., an
Illinois limited liability
company, its General Partner
By:/s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Managing Member
Acknowledgment and Agreement of Key Principal to Personal Liability for the
Exceptions to Non-Recourse
Key Principal (each for himself if more than one) hereby represents to
Lender that he has a direct or indirect ownership interest in the Borrower and
that he participates in the management of the Borrower.
BY SIGNING BELOW, the undersigned Key Principal (each for himself if more
than one) understands, accepts and agrees to the provisions of paragraphs F, G,
L and M above. No transfer of Key Principal's ownership interest in Borrower or
in any entity which directly or indirectly has an ownership interest in Borrower
shall release Key Principal from liability hereunder, unless the Borrower and
Key Principal shall have complied with the provisions of paragraph F above and
Lender shall have approved the transfer and the substituted Key Principal. Key
Principal shall have no right of subrogation against the Borrower or any general
partner of Borrower by reason of any payment by Key Principal pursuant to
paragraph L.
KEY PRINCIPAL:
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx, Individually
000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
/s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, individually
000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attach notarial acknowledgment(s) for Key Principal. [Attach notarial
acknowledgment(s) for Borrower signatories, if applicable]
(8 of 8 pages)
ACKNOWLEDGMENT
STATE OF ARKANSAS, PULASKI COUNTY, ss:
On this 26th day of July, 1999, before me, the undersigned officer,
personally, appeared Xxxxx X. Xxxxx, who acknowledged himself/herself to be the
Managing Member of V.S. Managers, L.L.C., an Illinois limited liability company,
who is the general partner of Waterton II Fund Managers, L.P., a Delaware
limited partnership, who is the sole member of Waterton Raintree, L.L.C., a
Delaware limited liability company, and he/s he as such Managing Member being
authorized to do so, executed the foregoing instrument for the purposes therein
contained by signing the name of Waterton Raintree, L.L.C.
IN TESTIMONY WHEREOF, I hereunto set my hand and official seal.
My Commission Expires: /s/ Xxxxxx X. Xxxxxx
3-17-2007 Notary Public
SEAL
ACKNOWLEDGMENT
STATE OF ARKANSAS, PULASKI COUNTY, ss:
On this 26th day of July, 1999, before me, the undersigned officer,
personally, appeared Xxxxx X. Xxxxx who executed the foregoing instrument for
the purposes therein contained.
IN TESTIMONY WHEREOF, I hereunto set my hand and official seal.
My Commission Expires: /s/ Xxxxxx X. Xxxxxx
3-17-2007 Notary Public
SEAL
ACKNOWLEDGMENT
STATE OF ILLINOIS, XXXX COUNTY, ss:
On this 26th day of July, 1999, before me, the undersigned officer,
personally, appeared Xxxxx X. Xxxxxxxx who executed the foregoing instrument for
the purposes therein contained.
IN TESTIMONY WHEREOF, I hereunto set my hand and official seal.
My Commission Expires: /s/ Xxxxx Xxxxxx
8-21-1999 Notary Public
SEAL
This instrument was prepared by:
Xxxxx X. XxXxxxxxx, Esq.
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
ASSIGNMENT OF
MULTIFAMILY MORTGAGE
(Barrington Hills Apartments)
KNOW ALL MEN BY THESE PRESENTS:
THAT BERKSHIRE MORTGAGE FINANCE LIMITED PARTNERSHIP, a Massachusetts
limited partnership, whose address is Xxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 ("BMFLP"), as the holder of the instrument hereinafter
described and for valuable consideration hereby endorses, assigns and delivers
to XXXXXX MAE, a corporation organized and existing under the laws of the United
States, whose address is c/o Berkshire Mortgage Finance Limited Partnership, Xxx
Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 its successors,
participants and assigns, all right, title and interest in and to the following:
A Multifamily Mortgage, Assignment of Rents and
Security Agreement between Waterton Raintree, L.L.C., a
Delaware limited liability company (the "Borrower") and
BMFLP, dated as of the 1st day of July, 1999 and
recorded in the Public Records of Pulaski County,
Arkansas concurrently herewith, securing the payment of
a Multifamily Note, dated as of the 1st day of July,
1999, in the original principal amount of $6,100,000.00
made by the Borrower, payable to the order of BMFLP,
and creating a first lien on the property described in
Exhibit A attached hereto and by this reference made a
part hereof.
This Assignment Agreement shall be governed in all respects by the laws of
the state in which the aforementioned instrument was recorded and shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
