EXHIBIT 4.11
RECORDING REQUESTED BY AND LOAN NO. 6 103 650
WHEN RECORDED RETURN TO:
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxxxx X. Xxxxxxxx
ASSIGNMENT OF LEASES AND RENTS
(XXXXXXX COUNTY, GEORGIA)
This Assignment of Leases and Rents (this "ASSIGNMENT") is made as of
September 27, 1999, by CORNERSTONE REALTY INCOME TRUST, INC., a Virginia
corporation having its principal office and place of business at 000 Xxxx Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000 ("BORROWER"), to THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, a New Jersey corporation, having an office at Xxx Xxxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000 ("LENDER").
RECITALS:
A. Borrower is the sole owner of (a) the premises located in Gwinnett
County, Georgia, more particularly described in Exhibit A attached hereto and
incorporated herein ("PROPERTY") and (b) the landlord's interest under the
leases described in Exhibit B attached hereto and incorporated herein ("SPECIFIC
LEASES");
B. Lender has made a loan to Borrower in the principal sum of Fifty
Million Five Hundred Fifty Thousand and No/100 Dollars ($50,550,000.00) ("LOAN")
evidenced by that certain Promissory Note dated as of the date of this
Assignment ("NOTE") and secured by, among other things, that certain Deed to
Secure Debt and Security Agreement executed by Borrower in favor of Lender dated
as of the date of this Assignment and to be recorded in the real estate records
of Xxxxxxx County, Georgia ("INSTRUMENT") (capitalized terms used without
definition shall have the meanings ascribed to them in the Instrument) and the
Documents; and
C. Lender was willing to make the Loan to Borrower only if Borrower
assigned the Leases and Rents to Lender in the manner provided below to secure
payment of the Obligations.
IN CONSIDERATION of the principal sum of the Note and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower agrees as follows:
1. Assignment. Borrower irrevocably, absolutely and unconditionally
assigns, transfers, and sets over to Lender all of the right, title, interest,
and estates that Borrower may now or later have in, to and under (a) the Leases
(which term shall also include the Specific Leases and all
guaranties thereof); (b) the Rents; (c) all proceeds from the cancellation,
surrender, sale or other disposition of the Leases; (d) the right to collect and
receive all the Rents; and (e) the right to enforce and exercise, whether at law
or in equity or by any other means, all terms and conditions of the Leases
("LEASE PROVISIONS"). This assignment is intended by Borrower and Lender to
constitute a present, absolute assignment and not a collateral assignment for
additional security only. Upon full payment and satisfaction of the Obligations
and written request by Borrower, Lender shall transfer, set over, and assign to
Borrower all right, title, and interest of Lender in, to, and under the Leases
and the Rents.
2. Borrower's License. Until an Event of Default occurs, Borrower shall
have a revocable license ("LICENSE") from Lender to exercise all rights extended
to the landlord under the Leases. Borrower shall hold the Rents, or an amount
sufficient to discharge all current sums due on the Obligations, in trust for
use in the payment of the Obligations. Upon an Event of Default, whether or not
legal proceedings have commenced and without regard to waste, adequacy of
security for the Obligations or the solvency of Borrower, the License shall
automatically terminate without notice by Lender (any such notice being
expressly waived by Borrower). Upon such termination, Borrower shall deliver to
Lender within seven (7) days (a) all Rents (including prepaid Rents) held by
Borrower, (b) all unapplied security or other deposits paid pursuant to the
Leases, and (c) all previously paid charges for services, facilities or
escalations, to the extent, in each of the foregoing instances, allocable to any
period after the Event of Default. Borrower agrees and stipulates that upon
execution of this Assignment, Borrower's only interest in the Leases or Rents is
as a licensee revocable upon an Event of Default.
3. Lender as Creditor of Tenant. Upon execution of this Assignment,
Lender, and not Borrower, shall be the creditor of any Tenant in respect of
assignments for the benefit of creditors and bankruptcy, reorganization,
insolvency, dissolution or receivership proceedings affecting any such Tenant;
provided, however, that Borrower shall be the party obligated to make timely
filings of claims in such proceedings or to otherwise pursue creditor's rights
therein. Notwithstanding the foregoing, Lender shall have the right, but not the
obligation, to file such claims instead of Borrower and if Lender does file a
claim, Borrower agrees that Lender (a) is entitled to all distributions on such
claim to the exclusion of Borrower and (b) has the exclusive right to vote such
claim and otherwise to participate in the administration of the estate in
connection with such claim. Lender shall have the option to apply any monies
received by it as such creditor to the Obligations in the order set forth in the
Documents. If a petition is filed under the Bankruptcy Code by or against
Borrower, and Borrower, as landlord under any Lease, decides to reject such
Lease pursuant to Section 365(a) of the Bankruptcy Code, then Borrower shall
give Lender at least ten (10) days' prior written notice of the date when
Borrower shall apply to the bankruptcy court for authority to reject the Lease.
Lender may, but shall not be obligated to, send Borrower within such ten-day
period a written notice stating that (a) Lender demands that Borrower assume and
assign the Lease to Lender pursuant to Section 365 of the Bankruptcy Code and
(b) Lender covenants to cure or provide adequate assurance of future performance
under the Lease. If Lender sends such notice, Borrower shall not reject the
Lease provided Lender complies with clause (b) of the preceding sentence.
4. Notice to Tenant of an Event of Default. Upon demand and notice of an
Event of Default by Borrower sent by Lender to Tenants, Borrower irrevocably
authorizes each Tenant to (a) pay
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all Rents to Lender and (b) rely upon any such notice from Lender without any
obligation to inquire as to the actual existence of the default, notwithstanding
any claim of Borrower to the contrary. Borrower shall have no claim against any
Tenant for any Rents paid by Tenant to Lender.
5. Indemnification of Lender. Borrower hereby agrees to indemnify and
hold Lender harmless from any and all Losses that Lender may incur under the
Leases or by reason of this Assignment, except for Losses incurred as a direct
result of Lender's willful misconduct or gross negligence. Nothing in this
Assignment shall be construed to bind Lender to the performance of any Lease
Provisions or to otherwise impose any liability on Lender including, without
limitation, any liability under covenants of quiet enjoyment in the Leases in
the event that any Tenant shall have been joined as party defendant in any
action to foreclose the Instrument and shall have been barred thereby of all
right, title, interest, and equity of redemption in the premises. This
Assignment imposes no liability upon Lender for the operation and maintenance of
the Property or for carrying out the terms of any Lease before Lender has
entered and taken actual possession and complete control of all operations of
the Property. Any Losses incurred by Lender, by reason of actual entry and
taking possession under any Lease or this Assignment or in the defense of any
claims shall, at Lender's request, be reimbursed by Borrower. Such reimbursement
shall include interest at the Default Rate and Costs. Lender may, upon entry and
taking of possession, collect the Rents and apply them to reimbursement for any
such items.
6. Representations and Warranties. Borrower represents and warrants that
(a) Borrower is the absolute owner of the lessor's interest in the Leases, (b)
Borrower has the right, power and authority to assign, transfer, and set over
all of its right, title and interest in, to and under the Leases and Rents and
no other person (other than the respective Tenants) has any right, title or
interest therein, (c) the Leases are valid and in full force and effect and have
not been materially modified, amended or terminated, nor have any of the terms
and conditions of the Leases been waived, except as stated in the Leases, (d)
there are no outstanding assignments or pledges of the Leases or Rents, (d)
there are no outstanding leasing commissions due under the Leases for the
initial term or for any extensions, renewals or expansions, (f) except as
disclosed to Lender in writing, there are no existing defaults or, to any
material extent, any state of facts which, with the giving of notice and/or
passage of time, would constitute a default under the Leases by either party,
(g) no Tenant has any defense, set-off or counterclaim against Borrower to any
material extent, (h) each Tenant is in possession and paying Rent and other
charges as provided in its Lease, (i) no Rents have been or will later be
anticipated, discounted, released, waived, compromised or otherwise discharged,
except in the ordinary course of Borrower's exercise of prudent management
decisions, so long as such decisions are customary and reasonable for apartment
owners, or as may be expressly permitted by the Lease, (j) except as specified
in the Leases and shown on the rent roll delivered to Lender in connection with
the funding of the Loan (the "RENT ROLL"), there are no (i) unextinguished rent
concessions, abatements or other inducements relating to the Leases or (ii)
options or other rights to acquire any interest in the Property in favor of any
Tenant, and (k) the Rent Roll discloses all currently existing Leases and is
true, complete and accurate in all respects.
7. New Leases, Amendments and Terminations. Borrower may (a) terminate any
Lease that is in default, (b) enter into new, bona-fide, arm's length Leases (or
renew existing Leases)
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provided each Lease satisfies the minimum leasing requirements in Exhibit C
attached hereto and incorporated herein and is on Borrower's standard form lease
(approved by Lender) with no modifications that increase the obligations of the
landlord, and (c) take such actions as are customary and reasonable for
apartment owners. Upon Lender's request and at Borrower's expense, Borrower
shall (i) promptly deliver to Lender copies of all notices of default Borrower
has sent to any Tenant, (ii) enforce the Leases and all remedies available to
Borrower upon any Tenant's default, (iii) deliver to Lender copies of all papers
served in connection with any such enforcement proceedings, and (iv) consult
with Lender, its agents and attorneys with respect to the conduct thereof.
Borrower shall not enter into any settlement of any such proceeding without
Lender's prior written consent except in the ordinary course of business, and so
long as such actions are reasonable and customary for apartment owners.
8. Covenants. Borrower shall not, except with the prior written consent
of Lender in each instance, (a) sell, assign, pledge, mortgage or otherwise
transfer or encumber (except hereby) any of the Leases, Rents or any right,
title or interest of Borrower therein; (b) except in the ordinary course of
business, and so long as such actions are reasonable and customary for apartment
owners, accept prepayments of any Rents for a period of more than one (1) month
in advance of the due dates thereof; (c) in any manner intentionally or
materially impair the value of the Property or the benefits to Lender of this
Assignment; (d) except as otherwise permitted in this Assignment, waive, excuse,
condone, discount, set off, compromise, or in any manner release or discharge
any Tenant from any of its obligations under the Leases except in the ordinary
course of business, and so long as such actions are reasonable and customary for
apartment owners; (e) except as otherwise permitted herein, enter into any
settlement of any action or proceeding arising under, or in any manner connected
with, the Leases or with the obligations of the landlord or the Tenants
thereunder except in the ordinary course of business, and so long as such
actions are reasonable and customary for apartment owners; or (f) modify, cancel
or terminate any guaranties under any Lease except in the ordinary course of
business, and so long as such actions are reasonable and customary for apartment
owners. Borrower shall, at its sole cost and expense, duly and timely keep,
observe, perform, comply with and discharge all of the material obligations of
the landlord under the Leases, or cause the foregoing to be done, and Borrower
shall not take any actions that would, either presently or with the passage of
time, cause a default by Borrower under any of the Leases.
9. No Merger. Each Lease shall remain in full force and effect,
notwithstanding any merger of Borrower's and Tenant's interest thereunder.
10. Documents Incorporated. The terms and conditions of the Documents are
incorporated into this Assignment as if fully set forth in this Assignment.
11. WAIVER OF TRIAL BY JURY. BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM FILED BY EITHER PARTY, WHETHER IN CONTRACT, TORT OR OTHERWISE,
RELATING DIRECTLY OR INDIRECTLY TO THE LOAN, THE DOCUMENTS, OR ANY ACTS OR
OMISSIONS OF LENDER IN CONNECTION THEREWITH.
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IN WITNESS WHEREOF, Borrower has duly executed this Assignment as of
the date first above written.
Signed, sealed, and delivered BORROWER:
in the presence of:
CORNERSTONE REALTY INCOME
/s/ Xxxx X. Xxxx TRUST, INC., a Virginia corporation
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Witness
Printed Name: Xxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxxx X. Xxxxxxx, Xx.
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/s/ Xxxxxxxxx X. Xxxxx Title: Chief Financial Officer
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Notary Public
Printed Name: Xxxxxxxxx X. Xxxxx (CORPORATE SEAL)
------------------
[NOTARY SEAL]
My Commission Expires: 6/30/03
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EXHIBIT A
(Legal Description of Real Property)
(Spring Lake)
All that tract or parcel of land lying and being in Land Xxx 00 xx xxx
00xx Xxxxxxxx xx Xxxxxxx Xxxxxx, Xxxxxxx and being more particularly described
as follows:
Beginningat a point on the easterly r/w of Southlake Parkway (80' r/w)
a distance of 434.88 feet southerly from the intersection formed by the easterly
r/w of Southlake Parkway (80'r/w) and the southerly r/w of Xxxxx Court (said
point lying 33.0 feet southerly from the centerline of said Xxxxx Court) and
running thence South 87(degrees)13' 52" East, and departing the easterly r/w of
Southlake Parkway, a distance of 1166.69 feet to a point; running thence South
00(degrees) 25' 11" West a distance of 986.99 feet to a point; running thence
North 89(degrees) 36' 58" West a distance of 1283.91 feet to a point on the
easterly r/w of Southlake Parkway (80'r/w); running thence northerly along the
easterly r/w of Southlake Parkway (80'r/w) the following courses and distances:
North 07(degrees) 33' 11" East, 831.83 feet; thence along the arc of a curve to
the left 210.86 feet to the point of beginning (said arc having a chord distance
of 210.76 feet on a bearing of North 04(degrees) 28' 29" East and a radius of
1962.354 feet); said property containing 28.35027 acres or 1,234,938 square
feet.
Said property is described according to plat of ALTA/ACSM
Land Title Survey for Cornerstone Realty Income Trust, Inc.,
The Prudential Insurance Company of America and Lawyers Title
Insurance Corporation by Xxxxx & Xxxxxxxx Engineers, Inc.,
dated August 18, 1999 and last revised September 10, 1999,
which plat is incorporated by this reference for purposes of
this description.
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Exhibit B
DESCRIPTION OF LEASES
All leases, subleases, lettings and licenses of or affecting the
Property, now or hereafter in effect, and all amendments, extensions,
modifications, replacements or revenues thereof, including, but not limited to,
leases of the Property to the tenants listed on the rent roll attached to that
certain Closing Certification executed by Borrower in favor of Lender of even
date herewith.
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Exhibit C
MINIMUM LEASING REQUIREMENTS
All additional Leases and renewal Leases covering the Property shall satisfy the
following conditions:
1. Minimum (original or renewal) Term: Twelve (12) month
minimum, but with respect to the entire Property portfolio
securing the Loan (as defined in the Instrument) up to
thirty-five percent (35%) of the total units at any one time
may be leased to tenants for a term of less than twelve (12)
months, of which up to thirteen percent (13%) of the total
units at any one time may be leased for original or renewal
terms of less than six (6) months.
2. Rental Basis: Monthly rent with electricity and, if
applicable, gas heating and cooking separately metered to
tenants.
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