Exhibit 10.150
Prepared by, and after recording
return to:
Amy B. Connelly, Esq.
Krooth & Altman LLP
1850 M Street, NW, Suite 400
Washington, DC 20036
FHLMC Loan No. 534364608
MULTIFAMILY DEED OF TRUST,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
(Including Fixture Filing)
(TENNESSEE – REVISION DATE 10-18-2007)
Maximum Principal Indebtedness for Tennessee
Recording Tax Purposes is $19,350,000 .
MULTIFAMILY DEED OF TRUST,
ASSIGNMENT OF RENTS AND
SECURITY AGREEMENT
(TENNESSEE
– REVISION DATE 10-18-2007)
THIS MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY
AGREEMENT (the " Instrument ") is made as of this 19
th day of February, 2009, CCP IV KNOLLWOOD, LLC ,
a limited liability company organized and existing under the laws
of Delaware, whose address is Stanford Place 3, 4582 South Ulster
Street Parkway, Suite 1100, Denver, Colorado 80237, as grantor ("
Borrower "), to Jerome S. Grand, as trustee, a resident of
Davidson County, Tennessee (" Trustee "), for the
benefit of KEYCORP REAL ESTATE CAPITAL MARKETS, INC. , a
corporation organized and existing under the laws of Ohio, whose
address is 911 Main Street, Suite 1500, Kansas City, Missouri
64105, as beneficiary (" Lender "). Borrower's
organizational identification number, if applicable, is
4005331.
This Instrument covers property which is or may become so affixed
to real property as to become fixtures and also constitutes a
fixture filing under § 47-9-502 of Tennessee Code
Annotated. NOTICE PURSUANT TO § 47-28-104 OF TENNESSEE
CODE ANNOTATED. This Instrument secures obligatory advances
for commercial purposes as such terms are defined in §§
47-28-103 and 47-28-104 of Tennessee Code Annotated.
Borrower, in consideration of the Indebtedness and the trust
created by this Instrument, irrevocably grants, conveys, bargains,
sells, confirms and assigns to Trustee, in trust, with power of
sale, the Mortgaged Property, including the Land located in
Davidson County, State of Tennessee and described in Exhibit A
attached to this Instrument.
TO SECURE TO LENDER the repayment of the Indebtedness evidenced by
Borrower's Multifamily Note payable to Lender dated as of the date
of this Instrument, and maturing on March 1, 2019 (the "
Maturity Date "), in the principal amount of $19,350,000,
and all renewals, extensions and modifications of the Indebtedness,
and the performance of the covenants and agreements of Borrower
contained in the Loan Documents.
Borrower represents and warrants that Borrower is lawfully seized
of the Mortgaged Property and has the right, power and authority to
grant, convey and assign the Mortgaged Property, and that the
Mortgaged Property is unencumbered except as shown on the schedule
of exceptions to coverage in the title policy issued to and
accepted by Lender contemporaneously with the execution and
recordation of this Instrument and insuring Lender's interest in
the Mortgaged Property (the " Schedule of Title Exceptions
"). Borrower covenants that Borrower will warrant and defend
generally the title to the Mortgaged Property against all claims
and demands, subject to any easements and restrictions listed in
the Schedule of Title Exceptions.
UNIFORM COVENANTS
REVISION DATE 02-15-2008
Covenants. In consideration of the mutual promises
set forth in this Instrument, Borrower and Lender covenant and
agree as follows:
1. DEFINITIONS.
The following terms, when used in this Instrument (including
when used in the above recitals), shall have the following
meanings:
(a) " Attorneys' Fees
and Costs " means (i) fees and out‑of‑pocket
costs of Lender's and Loan Servicer's attorneys, as applicable,
including costs of Lender's and Loan Servicer's in-house counsel,
support staff costs, costs of preparing for litigation,
computerized research, telephone and facsimile transmission
expenses, mileage, deposition costs, postage, duplicating, process
service, videotaping and similar costs and expenses;
(ii) costs and fees of expert witnesses, including appraisers;
and (iii) investigatory fees.
(b) " Borrower "
means all persons or entities identified as "Borrower" in the first
paragraph of this Instrument, together with their successors and
assigns.
(c) " Business Day
" means any day other than a Saturday, a Sunday or any other day on
which Lender or the national banking associations are not open for
business.
(d) " Collateral
Agreement " means any separate agreement between Borrower and
Lender for the purpose of establishing replacement reserves for the
Mortgaged Property, establishing a fund to assure the completion of
repairs or improvements specified in that agreement, or assuring
reduction of the outstanding principal balance of the Indebtedness
if the occupancy of or income from the Mortgaged Property does not
increase to a level specified in that agreement, or any other
agreement or agreements between Borrower and Lender which provide
for the establishment of any other fund, reserve or account.
(e) " Controlling
Entity " means an entity which owns, directly or indirectly
through one or more intermediaries, (i) a general partnership
interest or a Controlling Interest of the limited partnership
interests in Borrower (if Borrower is a partnership or joint
venture), (ii) a manager's interest in Borrower or a
Controlling Interest of the ownership or membership interests in
Borrower (if Borrower is a limited liability company), (iii) a
Controlling Interest of any class of voting stock of Borrower (if
Borrower is a corporation), (iv) a trustee's interest or a
Controlling Interest of the beneficial interests in Borrower (if
Borrower is a trust), or (v) a managing partner's interest or a
Controlling Interest of the partnership interests in Borrower (if
Borrower is a limited liability partnership).
(f) "
Controlling Interest " means (i) 51 percent or
more of the ownership interests in an entity, or (ii) a
percentage ownership interest in an entity of less than
51 percent, if the owner(s) of that interest actually
direct(s) the business and affairs of the entity without the
requirement of consent of any other party. The Controlling
Interest shall be deemed to be 51 percent unless otherwise
stated in Exhibit B.
(g) " Environmental
Permit " means any permit, license, or other authorization
issued under any Hazardous Materials Law with respect to any
activities or businesses conducted on or in relation to the
Mortgaged Property.
(h) " Event of
Default " means the occurrence of any event listed in
Section 22.
(i) "
Fixtures " means all property owned by Borrower which is so
attached to the Land or the Improvements as to constitute a fixture
under applicable law, including: machinery, equipment, engines,
boilers, incinerators, installed building materials; systems and
equipment for the purpose of supplying or distributing heating,
cooling, electricity, gas, water, air, or light; antennas, cable,
wiring and conduits used in connection with radio, television,
security, fire prevention, or fire detection or otherwise used to
carry electronic signals; telephone systems and equipment;
elevators and related machinery and equipment; fire detection,
prevention and extinguishing systems and apparatus; security and
access control systems and apparatus; plumbing systems; water
heaters, ranges, stoves, microwave ovens, refrigerators,
dishwashers, garbage disposers, washers, dryers and other
appliances; light fixtures, awnings, storm windows and storm doors;
pictures, screens, blinds, shades, curtains and curtain rods;
mirrors; cabinets, paneling, rugs and floor and wall coverings;
fences, trees and plants; swimming pools; and exercise
equipment.
(j) "
Governmental Authority " means any board, commission,
department or body of any municipal, county, state or federal
governmental unit, or any subdivision of any of them, that has or
acquires jurisdiction over the Mortgaged Property or the use,
operation or improvement of the Mortgaged Property or over the
Borrower.
(k) " Hazard
Insurance " is defined in Section 19.
(l) " Hazardous
Materials " means petroleum and petroleum products and
compounds containing them, including gasoline, diesel fuel and oil;
explosives; flammable materials; radioactive materials;
polychlorinated biphenyls ("PCBs") and compounds containing
them; lead and lead-based paint; asbestos or
asbestos‑containing materials in any form that is or could
become friable; underground or above-ground storage tanks, whether
empty or containing any substance; any substance the presence of
which on the Mortgaged Property is prohibited by any federal, state
or local authority; any substance that requires special handling
and any other material or substance now or in the future that
(i) is defined as a "hazardous substance," "hazardous
material," "hazardous waste," "toxic substance," "toxic pollutant,"
"contaminant," or "pollutant" by or within the meaning of any
Hazardous Materials Law, or (ii) is regulated in any way by or
within the meaning of any Hazardous Materials Law.
(m) " Hazardous Materials
Laws " means all federal, state, and local laws, ordinances and
regulations and standards, rules, policies and other governmental
requirements, administrative rulings and court judgments and
decrees in effect now or in the future and including all
amendments, that relate to Hazardous Materials or the protection of
human health or the environment and apply to Borrower or to the
Mortgaged Property. Hazardous Materials Laws include, but are not
limited to, the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601, et seq. ,
the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Section 6901, et seq. , the Toxic Substance Control
Act, 15 U.S.C. Section 2601, et seq. , the Clean Water
Act, 33 U.S.C. Section 1251, et seq. , and the
Hazardous Materials Transportation Act, 49 U.S.C. Section 5101
et seq. , and their state analogs.
(n) " Impositions
" and " Imposition Deposits " are defined in
Section 7(a).
(o) " Improvements
" means the buildings, structures, improvements, and alterations
now constructed or at any time in the future constructed or placed
upon the Land, including any future replacements and additions.
(p) " Indebtedness
" means the principal of, interest at the fixed or variable rate
set forth in the Note on, and all other amounts due at any time
under, the Note, this Instrument or any other Loan Document,
including prepayment premiums, late charges, default interest, and
advances as provided in Section 12 to protect the security of
this Instrument.
(q) " Initial
Owners " means, with respect to Borrower or any other entity,
the persons or entities that (i) on the date of the Note, or
(ii) on the date of a Transfer to which Lender has consented,
own in the aggregate 100 percent of the ownership interests in
Borrower or that entity.
(r) " Land " means
the land described in Exhibit A.
(s) " Leases "
means all present and future leases, subleases, licenses,
concessions or grants or other possessory interests now or
hereafter in force, whether oral or written, covering or affecting
the Mortgaged Property, or any portion of the Mortgaged Property
(including proprietary leases or occupancy agreements if Borrower
is a cooperative housing corporation), and all modifications,
extensions or renewals.
(t) " Lender
" means the entity identified as "Lender" in the first paragraph of
this Instrument, or any subsequent holder of the Note.
(u) " Loan
Documents " means the Note, this Instrument, all guaranties,
all indemnity agreements, all Collateral Agreements, O&M
Programs, the MMP and any other documents now or in the future
executed by Borrower, any guarantor or any other person in
connection with the loan evidenced by the Note, as such documents
may be amended from time to time.
(v) " Loan
Servicer " means the entity that from time to time is
designated by Lender to collect payments and deposits and receive
Notices under the Note, this Instrument and any other Loan
Document, and otherwise to service the loan evidenced by the Note
for the benefit of Lender. Unless Borrower receives Notice to
the contrary, the Loan Servicer is the entity identified as
"Lender" in the first paragraph of this Instrument.
(w) " MMP " means a
moisture management plan to control water intrusion and prevent the
development of Mold or moisture at the Mortgaged Property
throughout the term of this Instrument. At a minimum, the MMP
must contain a provision for (i) staff training, (ii) information
to be provided to tenants, (iii) documentation of the plan, (iv)
the appropriate protocol for incident response and remediation and
(v) routine, scheduled inspections of common space and unit
interiors.
(x) " Mold " means
mold, fungus, microbial contamination or pathogenic organisms.
(y) " Mortgaged
Property " means all of Borrower's present and future right,
title and interest in and to all of the following:
(i) the Land;
(ii) the
Improvements;
(iii) the Fixtures;
(iv) the Personalty;
(v) all current and
future rights, including air rights, development rights, zoning
rights and other similar rights or interests, easements, tenements,
rights‑of‑way, strips and gores of land, streets,
alleys, roads, sewer rights, waters, watercourses, and
appurtenances related to or benefiting the Land or the
Improvements, or both, and all rights-of-way, streets, alleys and
roads which may have been or may in the future be vacated;
(vi) all proceeds paid or to be
paid by any insurer of the Land, the Improvements, the Fixtures,
the Personalty or any other part of the Mortgaged Property, whether
or not Borrower obtained the insurance pursuant to Lender's
requirement;
(vii) all awards, payments and other
compensation made or to be made by any municipal, state or federal
authority with respect to the Land, the Improvements, the Fixtures,
the Personalty or any other part of the Mortgaged Property,
including any awards or settlements resulting from condemnation
proceedings or the total or partial taking of the Land, the
Improvements, the Fixtures, the Personalty or any other part of the
Mortgaged Property under the power of eminent domain or otherwise
and including any conveyance in lieu thereof;
(viii) all contracts, options and
other agreements for the sale of the Land, the Improvements, the
Fixtures, the Personalty or any other part of the Mortgaged
Property entered into by Borrower now or in the future, including
cash or securities deposited to secure performance by parties of
their obligations;
(ix) all proceeds from the
conversion, voluntary or involuntary, of any of the above into cash
or liquidated claims, and the right to collect such proceeds;
(x) all Rents and
Leases;
(xi) all earnings, royalties,
accounts receivable, issues and profits from the Land, the
Improvements or any other part of the Mortgaged Property, and all
undisbursed proceeds of the loan secured by this Instrument;
(xii) all Imposition Deposits;
(xiii) all refunds or rebates of
Impositions by any municipal, state or federal authority or
insurance company (other than refunds applicable to periods before
the real property tax year in which this Instrument is dated);
(xiv) all tenant security deposits which
have not been forfeited by any tenant under any Lease and any bond
or other security in lieu of such deposits; and
(xv) all names under or by which any
of the above Mortgaged Property may be operated or known, and all
trademarks, trade names, and goodwill relating to any of the
Mortgaged Property.
(z) " Note " means
the Multifamily Note described on page 1 of this Instrument,
including all schedules, riders, allonges and addenda, as such
Multifamily Note may be amended from time to time.
(aa) " O&M Program " is
defined in Section 18(d).
(bb) " Personalty " means
all:
(i) accounts
(including deposit accounts) of Borrower related to the Mortgaged
Property;
(ii) equipment and
inventory owned by Borrower, which are used now or in the future in
connection with the ownership, management or operation of the Land
or Improvements or are located on the Land or Improvements,
including furniture, furnishings, machinery, building materials,
goods, supplies, tools, books, records (whether in written or
electronic form), and computer equipment (hardware and
software);
(iii) other tangible personal
property owned by Borrower which is used now or in the future in
connection with the ownership, management or operation of the Land
or Improvements or is located on the Land or in the Improvements,
including ranges, stoves, microwave ovens, refrigerators,
dishwashers, garbage disposers, washers, dryers and other
appliances (other than Fixtures);
(iv) any operating agreements
relating to the Land or the Improvements;
(v) any surveys, plans
and specifications and contracts for architectural, engineering and
construction services relating to the Land or the Improvements;
(vi) all other intangible
property, general intangibles and rights relating to the operation
of, or used in connection with, the Land or the Improvements,
including all governmental permits relating to any activities on
the Land and including subsidy or similar payments received from
any sources, including a governmental authority; and
(vii) any rights of Borrower in or
under letters of credit.
(cc) "Property Jurisdiction"
is defined in Section 30(a).
(dd) "
Rents " means all rents (whether from residential or
non-residential space), revenues and other income of the Land or
the Improvements, parking fees, laundry and vending machine income
and fees and charges for food, health care and other services
provided at the Mortgaged Property, whether now due, past due, or
to become due, and deposits forfeited by tenants, and, if Borrower
is a cooperative housing corporation or association, maintenance
fees, charges or assessments payable by shareholders or residents
under proprietary leases or occupancy agreements, whether now due,
past due, or to become due.
(ee) " Taxes " means all
taxes, assessments, vault rentals and other charges, if any,
whether general, special or otherwise, including all assessments
for schools, public betterments and general or local improvements,
which are levied, assessed or imposed by any public authority or
quasi-public authority, and which, if not paid, will become a lien
on the Land or the Improvements.
(ff) " Transfer "
is defined in Section 21.
2. UNIFORM
COMMERCIAL CODE SECURITY AGREEMENT.
(a) This Instrument is
also a security agreement under the Uniform Commercial Code for any
of the Mortgaged Property which, under applicable law, may be
subjected to a security interest under the Uniform Commercial Code,
whether such Mortgaged Property is owned now or acquired in the
future, and all products and cash and non-cash proceeds thereof
(collectively, " UCC Collateral "), and Borrower hereby
grants to Lender a security interest in the UCC Collateral.
Borrower hereby authorizes Lender to prepare and file financing
statements, continuation statements and financing statement
amendments in such form as Lender may require to perfect or
continue the perfection of this security interest and Borrower
agrees, if Lender so requests, to execute and deliver to Lender
such financing statements, continuation statements and
amendments. Borrower shall pay all filing costs and all costs
and expenses of any record searches for financing statements and/or
amendments that Lender may require. Without the prior written
consent of Lender, Borrower shall not create or permit to exist any
other lien or security interest in any of the UCC Collateral.
(b) Unless Borrower gives
Notice to Lender within 30 days after the occurrence of any of
the following, and executes and delivers to Lender modifications or
supplements of this Instrument (and any financing statement which
may be filed in connection with this Instrument) as Lender may
require, Borrower shall not (i) change its name, identity,
structure or jurisdiction of organization; (ii) change the
location of its place of business (or chief executive office if
more than one place of business); or (iii) add to or change
any location at which any of the Mortgaged Property is stored, held
or located.
(c) If an Event of
Default has occurred and is continuing, Lender shall have the
remedies of a secured party under the Uniform Commercial Code, in
addition to all remedies provided by this Instrument or existing
under applicable law. In exercising any remedies, Lender may
exercise its remedies against the UCC Collateral separately or
together, and in any order, without in any way affecting the
availability of Lender's other remedies.
(d) This Instrument
constitutes a financing statement with respect to any part of the
Mortgaged Property that is or may become a Fixture, if permitted by
applicable law.
3. ASSIGNMENT OF
RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION.
(a) As part of the
consideration for the Indebtedness, Borrower absolutely and
unconditionally assigns and transfers to Lender all Rents. It
is the intention of Borrower to establish a present, absolute and
irrevocable transfer and assignment to Lender of all Rents and to
authorize and empower Lender to collect and receive all Rents
without the necessity of further action on the part of
Borrower. Promptly upon request by Lender, Borrower agrees to
execute and deliver such further assignments as Lender may from
time to time require. Borrower and Lender intend this
assignment of Rents to be immediately effective and to constitute
an absolute present assignment and not an assignment for additional
security only. For purposes of giving effect to this absolute
assignment of Rents, and for no other purpose, Rents shall not be
deemed to be a part of the Mortgaged Property. However, if
this present, absolute and unconditional assignment of Rents is not
enforceable by its terms under the laws of the Property
Jurisdiction, then the Rents shall be included as a part of the
Mortgaged Property and it is the intention of the Borrower that in
this circumstance this Instrument create and perfect a lien on
Rents in favor of Lender, which lien shall be effective as of the
date of this Instrument.
(b) After the occurrence
of an Event of Default, Borrower authorizes Lender to collect, sue
for and compromise Rents and directs each tenant of the Mortgaged
Property to pay all Rents to, or as directed by, Lender.
However, until the occurrence of an Event of Default, Lender hereby
grants to Borrower a revocable license to collect and receive all
Rents, to hold all Rents in trust for the benefit of Lender and to
apply all Rents to pay the installments of interest and principal
then due and payable under the Note and the other amounts then due
and payable under the other Loan Documents, including Imposition
Deposits, and to pay the current costs and expenses of managing,
operating and maintaining the Mortgaged Property, including
utilities, Taxes and insurance premiums (to the extent not included
in Imposition Deposits), tenant improvements and other capital
expenditures. So long as no Event of Default has occurred and
is continuing, the Rents remaining after application pursuant to
the preceding sentence may be retained by Borrower free and clear
of, and released from, Lender's rights with respect to Rents under
this Instrument. From and after the occurrence of an Event of
Default, and without the necessity of Lender entering upon and
taking and maintaining control of the Mortgaged Property directly,
or by a receiver, Borrower's license to collect Rents shall
automatically terminate and Lender shall without Notice be entitled
to all Rents as they become due and payable, including Rents then
due and unpaid. Borrower shall pay to Lender upon demand all
Rents to which Lender is entitled. At any time on or after
the date of Lender's demand for Rents, (i) Lender may give,
and Borrower hereby irrevocably authorizes Lender to give, notice
to all tenants of the Mortgaged Property instructing them to pay
all Rents to Lender, (ii) no tenant shall be obligated to
inquire further as to the occurrence or continuance of an Event of
Default, and (iii) no tenant shall be obligated to pay to
Borrower any amounts which are actually paid to Lender in response
to such a notice. Any such notice by Lender shall be
delivered to each tenant personally, by mail or by delivering such
demand to each rental unit. Borrower shall not interfere with
and shall cooperate with Lender's collection of such Rents.
(c) Borrower represents
and warrants to Lender that Borrower has not executed any prior
assignment of Rents (other than an assignment of Rents securing any
prior indebtedness that is being assigned to Lender, or paid off
and discharged with the proceeds of the loan evidenced by the
Note), that Borrower has not performed, and Borrower covenants and
agrees that it will not perform, any acts and has not executed, and
shall not execute, any instrument which would prevent Lender from
exercising its rights under this Section 3, and that at the
time of execution of this Instrument there has been no anticipation
or prepayment of any Rents for more than two months prior to the
due dates of such Rents. Borrower shall not collect or accept
payment of any Rents more than two months prior to the due dates of
such Rents.
(d) If an Event of
Default has occurred and is continuing, Lender may, regardless of
the adequacy of Lender's security or the solvency of Borrower and
even in the absence of waste, enter upon and take and maintain full
control of the Mortgaged Property in order to perform all acts that
Lender in its discretion determines to be necessary or desirable
for the operation and maintenance of the Mortgaged Property,
including the execution, cancellation or modification of Leases,
the collection of all Rents, the making of repairs to the Mortgaged
Property and the execution or termination of contracts providing
for the management, operation or maintenance of the Mortgaged
Property, for the purposes of enforcing the assignment of Rents
pursuant to Section 3(a), protecting the Mortgaged Property or
the security of this Instrument, or for such other purposes as
Lender in its discretion may deem necessary or desirable.
Alternatively, if an Event of Default has occurred and is
continuing, regardless of the adequacy of Lender's security,
without regard to Borrower's solvency and without the necessity of
giving prior notice (oral or written) to Borrower, Lender may
apply to any court having jurisdiction for the appointment of a
receiver for the Mortgaged Property to take any or all of the
actions set forth in the preceding sentence. If Lender elects
to seek the appointment of a receiver for the Mortgaged Property at
any time after an Event of Default has occurred and is continuing,
Borrower, by its execution of this Instrument, expressly consents
to the appointment of such receiver, including the appointment of a
receiver ex parte if permitted by applicable law. If
Borrower is a housing cooperative corporation or association,
Borrower hereby agrees that if a receiver is appointed, the order
appointing the receiver may contain a provision requiring the
receiver to pay the installments of interest and principal then due
and payable under the Note and the other amounts then due and
payable under the other Loan Documents, including Imposition
Deposits, it being acknowledged and agreed that the Indebtedness is
an obligation of the Borrower and must be paid out of maintenance
charges payable by the Borrower's tenant shareholders under their
proprietary leases or occupancy agreements. Lender or the
receiver, as the case may be, shall be entitled to receive a
reasonable fee for managing the Mortgaged Property.
Immediately upon appointment of a receiver or immediately upon the
Lender's entering upon and taking possession and control of the
Mortgaged Property, Borrower shall surrender possession of the
Mortgaged Property to Lender or the receiver, as the case may be,
and shall deliver to Lender or the receiver, as the case may be,
all documents, records (including records on electronic or magnetic
media), accounts, surveys, plans, and specifications relating to
the Mortgaged Property and all security deposits and prepaid
Rents. In the event Lender takes possession and control of
the Mortgaged Property, Lender may exclude Borrower and its
representatives from the Mortgaged Property. Borrower
acknowledges and agrees that the exercise by Lender of any of the
rights conferred under this Section 3 shall not be construed
to make Lender a mortgagee-in-possession of the Mortgaged Property
so long as Lender has not itself entered into actual possession of
the Land and Improvements.
(e) If Lender enters the
Mortgaged Property, Lender shall be liable to account only to
Borrower and only for those Rents actually received. Except
to the extent of Lender's gross negligence or willful misconduct,
Lender shall not be liable to Borrower, anyone claiming under or
through Borrower or anyone having an interest in the Mortgaged
Property, by reason of any act or omission of Lender under
Section 3(d), and Borrower hereby releases and discharges
Lender from any such liability to the fullest extent permitted by
law.
(f) If the Rents
are not sufficient to meet the costs of taking control of and
managing the Mortgaged Property and collecting the Rents, any funds
expended by Lender for such purposes shall become an additional
part of the Indebtedness as provided in Section 12.
(g) Any entering upon and
taking of control of the Mortgaged Property by Lender or the
receiver, as the case may be, and any application of Rents as
provided in this Instrument shall not cure or waive any Event of
Default or invalidate any other right or remedy of Lender under
applicable law or provided for in this Instrument.
4. ASSIGNMENT OF
LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY.
(a) As part of the
consideration for the Indebtedness, Borrower absolutely and
unconditionally assigns and transfers to Lender all of Borrower's
right, title and interest in, to and under the Leases, including
Borrower's right, power and authority to modify the terms of any
such Lease, or extend or terminate any such Lease. It
is the intention of Borrower to establish a present, absolute and
irrevocable transfer and assignment to Lender of all of Borrower's
right, title and interest in, to and under the Leases.
Borrower and Lender intend this assignment of the Leases to be
immediately effective and to constitute an absolute present
assignment and not an assignment for additional security
only. For purposes of giving effect to this absolute
assignment of the Leases, and for no other purpose, the Leases
shall not be deemed to be a part of the Mortgaged Property.
However, if this present, absolute and unconditional assignment of
the Leases is not enforceable by its terms under the laws of the
Property Jurisdiction, then the Leases shall be included as a part
of the Mortgaged Property and it is the intention of the Borrower
that in this circumstance this Instrument create and perfect a lien
on the Leases in favor of Lender, which lien shall be effective as
of the date of this Instrument.
(b) Until Lender gives
Notice to Borrower of Lender's exercise of its rights under this
Section 4, Borrower shall have all rights, power and authority
granted to Borrower under any Lease (except as otherwise limited by
this Section or any other provision of this Instrument),
including the right, power and authority to modify the terms of any
Lease or extend or terminate any Lease. Upon the occurrence
of an Event of Default, the permission given to Borrower pursuant
to the preceding sentence to exercise all rights, power and
authority under Leases shall automatically terminate.
Borrower shall comply with and observe Borrower's obligations under
all Leases, including Borrower's obligations pertaining to the
maintenance and disposition of tenant security deposits.
(c) Borrower acknowledges
and agrees that the exercise by Lender, either directly or by a
receiver, of any of the rights conferred under this Section 4
shall not be construed to make Lender a mortgagee-in-possession of
the Mortgaged Property so long as Lender has not itself entered
into actual possession of the Land and the Improvements. The
acceptance by Lender of the assignment of the Leases pursuant to
Section 4(a) shall not at any time or in any event
obligate Lender to take any action under this Instrument or to
expend any money or to incur any expenses. Except to the
extent of Lender's gross negligence or willful misconduct, Lender
shall not be liable in any way for any injury or damage to person
or property sustained by any person or persons, firm or corporation
in or about the Mortgaged Property. Prior to Lender's actual
entry into and taking possession of the Mortgaged Property, Lender
shall not (i) be obligated to perform any of the terms,
covenants and conditions contained in any Lease (or otherwise have
any obligation with respect to any Lease); (ii) be obligated
to appear in or defend any action or proceeding relating to the
Lease or the Mortgaged Property; or (iii) be responsible for
the operation, control, care, management or repair of the Mortgaged
Property or any portion of the Mortgaged Property. The
execution of this Instrument by Borrower shall constitute
conclusive evidence that all responsibility for the operation,
control, care, management and repair of the Mortgaged Property is
and shall be that of Borrower, prior to such actual entry and
taking of possession.
(d) Upon delivery of
Notice by Lender to Borrower of Lender's exercise of Lender's
rights under this Section 4 at any time after the occurrence
of an Event of Default, and without the necessity of Lender
entering upon and taking and maintaining control of the Mortgaged
Property directly, by a receiver, or by any other manner or
proceeding permitted by the laws of the Property Jurisdiction,
Lender immediately shall have all rights, powers and authority
granted to Borrower under any Lease, including the right, power and
authority to modify the terms of any such Lease, or extend or
terminate any such Lease.
(e) Borrower shall,
promptly upon Lender's request, deliver to Lender an executed copy
of each residential Lease then in effect. All Leases for
residential dwelling units shall be on forms approved by Lender,
shall be for initial terms of at least six months and not more than
two years, and shall not include options to purchase.
(f) Borrower shall
not lease any portion of the Mortgaged Property for non-residential
use except with the prior written consent of Lender and Lender's
prior written approval of the Lease agreement. Borrower shall
not modify the terms of, or extend or terminate, any Lease for
non-residential use (including any Lease in existence on the date
of this Instrument) without the prior written consent of
Lender. However, Lender's consent shall not be required for
the modification or extension of a non-residential Lease if such
modification or extension is on terms at least as favorable to
Borrower as those customary at that time in the applicable market
and the income from the extended or modified Lease will not be less
than the income received from the Lease as of the date of this
Instrument. Borrower shall, without request by Lender,
deliver an executed copy of each non-residential Lease to Lender
promptly after such Lease is signed. All non-residential
Leases, including renewals or extensions of existing Leases, shall
specifically provide that (i) such Leases are subordinate to
the lien of this Instrument; (ii) the tenant shall attorn to
Lender and any purchaser at a foreclosure sale, such attornment to
be self-executing and effective upon acquisition of title to the
Mortgaged Property by any purchaser at a foreclosure sale or by
Lender in any manner; (iii) the tenant agrees to execute such
further evidences of attornment as Lender or any purchaser at a
foreclosure sale may from time to time request; (iv) the Lease
shall not be terminated by foreclosure or any other transfer of the
Mortgaged Property; (v) after a foreclosure sale of the
Mortgaged Property, Lender or any other purchaser at such
foreclosure sale may, at Lender's or such purchaser's option,
accept or terminate such Lease; and (vi) the tenant shall,
upon receipt after the occurrence of an Event of Default of a
written request from Lender, pay all Rents payable under the Lease
to Lender.
(g) Borrower shall not
receive or accept Rent under any Lease (whether residential or
non-residential) for more than two months in advance.
(h) If Borrower is a
cooperative housing corporation or association, n otwithstanding anything to the contrary contained in
this subsection or in Section 21, so long as Borrower remains a
cooperative housing corporation or association and is not in breach
of any covenant of this Instrument, Lender hereby consents
to:
(i)
the execution of leases of apartments for a term in excess of two
years from Borrower to a tenant shareholder of Borrower, so long as
such leases, including proprietary leases, are and will remain
subordinate to the lien of this Instrument; and
(ii) the
surrender or termination of such leases of apartments where the
surrendered or terminated lease is immediately replaced or where
the Borrower makes its best efforts to secure such immediate
replacement by a newly executed lease of the same apartment to a
tenant shareholder of the Borrower. However, no consent is
hereby given by Lender to any execution, surrender, termination or
assignment of a lease under terms that would waive or reduce the
obligation of the resulting tenant shareholder under such lease to
pay cooperative assessments in full when due or the obligation of
the former tenant shareholder to pay any unpaid portion of such
assessments.
5. PAYMENT OF
INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS; PREPAYMENT
PREMIUM. Borrower shall pay the Indebtedness when due in
accordance with the terms of the Note and the other Loan Documents
and shall perform, observe and comply with all other provisions of
the Note and the other Loan Documents. Borrower shall pay a
prepayment premium in connection with certain prepayments of the
Indebtedness, including a payment made after Lender's exercise of
any right of acceleration of the Indebtedness, as provided in the
Note.
6. EXCULPATION.
Borrower's personal liability for payment of the
Indebtedness and for performance of the other obligations to be
performed by it under this Instrument is limited in the manner, and
to the extent, provided in the Note.
7. DEPOSITS FOR
TAXES, INSURANCE AND OTHER CHARGES.
(a) Unless this
requirement is waived in writing by Lender, which waiver may be
contained in this Section 7(a), Borrower shall deposit with
Lender on the day monthly installments of principal or interest, or
both, are due under the Note (or on another day designated in
writing by Lender), until the Indebtedness is paid in full, an
additional amount sufficient to accumulate with Lender the entire
sum required to pay, when due, the items marked "Collect"
below. Lender will not require the Borrower to make
Imposition Deposits with respect to the items marked "Deferred"
below.
[Deferred] Hazard
Insurance premiums or other insurance premiums required by Lender
under Section 19,
[Deferred] Taxes,
[Deferred] water and
sewer charges (that could become a lien on the Mortgaged
Property),
[N/A]
ground rents,
[Deferred] assessments or
other charges (that could become a lien on the Mortgaged
Property)
The amounts deposited under the preceding sentence are collectively
referred to in this Instrument as the " Imposition Deposits
." The obligations of Borrower for which the Imposition
Deposits are required are collectively referred to in this
Instrument as " Impositions. " The amount of the
Imposition Deposits shall be sufficient to enable Lender to pay
each Imposition before the last date upon which such payment may be
made without any penalty or interest charge being added.
Lender shall maintain records indicating how much of the monthly
Imposition Deposits and how much of the aggregate Imposition
Deposits held by Lender are held for the purpose of paying Taxes,
insurance premiums and each other Imposition.
(b) Imposition Deposits
shall be held in an institution (which may be Lender, if Lender is
such an institution) whose deposits or accounts are insured or
guaranteed by a federal agency. Lender shall not be obligated
to open additional accounts or deposit Imposition Deposits in
additional institutions when the amount of the Imposition Deposits
exceeds the maximum amount of the federal deposit insurance or
guaranty. Lender shall apply the Imposition Deposits to pay
Impositions so long as no Event of Default has occurred and is
continuing. Unless applicable law requires, Lender shall not
be required to pay Borrower any interest, earnings or profits on
the Imposition Deposits. As additional security for all of
Borrower's obligations under this Instrument and the other Loan
Documents, Borrower hereby pledges and grants to Lender a security
interest in the Imposition Deposits and all proceeds of, and all
interest and dividends on, the Imposition Deposits. Any
amounts deposited with Lender under this Section 7 shall not
be trust funds, nor shall they operate to reduce the Indebtedness,
unless applied by Lender for that purpose under
Section 7(e).
(c) If Lender receives a
bill or invoice for an Imposition, Lender shall pay the Imposition
from the Imposition Deposits held by Lender. Lender shall
have no obligation to pay any Imposition to the extent it exceeds
Imposition Deposits then held by Lender. Lender may pay an
Imposition according to any bill, statement or estimate from the
appropriate public office or insurance company without inquiring
into the accuracy of the bill, statement or estimate or into the
validity of the Imposition.
(d) If at any time the
amount of the Imposition Deposits held by Lender for payment of a
specific Imposition exceeds the amount reasonably deemed necessary
by Lender, the excess shall be credited against future installments
of Imposition Deposits. If at any time the amount of the
Imposition Deposits held by Lender for payment of a specific
Imposition is less than the amount reasonably estimated by Lender
to be necessary, Borrower shall pay to Lender the amount of the
deficiency within 15 days after Notice from Lender.
(e) If an Event of
Default has occurred and is continuing, Lender may apply any
Imposition Deposits, in any amounts and in any order as Lender
determines, in Lender's discretion, to pay any Impositions or as a
credit against the Indebtedness. Upon payment in full of the
Indebtedness, Lender shall refund to Borrower any Imposition
Deposits held by Lender.
(f) If Lender does
not collect an Imposition Deposit with respect to an Imposition
either marked "Deferred" in Section 7(a) or pursuant to a
separate written waiver by Lender, then on or before the date each
such Imposition is due, or on the date this Instrument requires
each such Imposition to be paid, Borrower must provide Lender with
proof of payment of each such Imposition for which Lender does not
require collection of Imposition Deposits. Lender may revoke
its deferral or waiver and require Borrower to deposit with Lender
any or all of the Imposition Deposits listed in Section 7(a),
regardless of whether any such item is marked "Deferred" in such
section, upon Notice to Borrower, (i) if Borrower does not
timely pay any of the Impositions, (ii) if Borrower fails to
provide timely proof to Lender of such payment, or (iii) at
any time during the existence of an Event of
Default.
(g) In the event of a
Transfer prohibited by or requiring Lender's approval under
Section 21, Lender's waiver of the collection of any
Imposition Deposit in this Section 7 may be modified or
rendered void by Lender at Lender's option by Notice to Borrower
and the transferee(s) as a condition of Lender's approval of such
Transfer.
8. COLLATERAL
AGREEMENTS. Borrower shall deposit with Lender such
amounts as may be required by any Collateral Agreement and shall
perform all other obligations of Borrower under each Collateral
Agreement.
9. APPLICATION OF
PAYMENTS. If at any time Lender receives, from Borrower
or otherwise, any amount applicable to the Indebtedness which is
less than all amounts due and payable at such time, then Lender may
apply that payment to amounts then due and payable in any manner
and in any order determined by Lender, in Lender's
discretion. Neither Lender's acceptance of an amount that is
less than all amounts then due and payable nor Lender's application
of such payment in the manner authorized shall constitute or be
deemed to constitute either a waiver of the unpaid amounts or an
accord and satisfaction. Notwithstanding the application of
any such amount to the Indebtedness, Borrower's obligations under
this Instrument and the Note shall remain unchanged.
10. COMPLIANCE WITH LAWS AND
ORGANIZATIONAL DOCUMENTS.
(a) Borrower shall comply
with all laws, ordinances, regulations and requirements of any
Governmental Authority and all recorded lawful covenants and
agreements relating to or affecting the Mortgaged Property,
including all laws, ordinances, regulations, requirements and
covenants pertaining to health and safety, construction of
improvements on the Mortgaged Property, fair housing, disability
accommodation, zoning and land use, and Leases. Borrower also
shall comply with all applicable laws that pertain to the
maintenance and disposition of tenant security deposits.
(b) Borrower shall at all
times maintain records sufficient to demonstrate compliance with
the provisions of this Section 10.
(c) Borrower shall take
appropriate measures to prevent, and shall not engage in or
knowingly permit, any illegal activities at the Mortgaged Property
that could endanger tenants or visitors, result in damage to the
Mortgaged Property, result in forfeiture of the Mortgaged Property,
or otherwise materially impair the lien created by this Instrument
or Lender's interest in the Mortgaged Property. Borrower
represents and warrants to Lender that no portion of the Mortgaged
Property has been or will be purchased with the proceeds of any
illegal activity.
(d) Borrower shall at all
times comply with all laws, regulations and requirements of any
Governmental Authority relating to Borrower's formation, continued
existence and good standing in the Property Jurisdiction.
Borrower shall at all times comply with its organizational
documents, including but not limited to its partnership agreement
(if Borrower is a partnership), its by-laws (if Borrower is a
corporation or housing cooperative corporation or association) or
its operating agreement (if Borrower is an limited liability
company, joint venture or tenancy-in-common ). If Borrower is
a housing cooperative corporation or association, Borrower shall at
all times maintain its status as a "cooperative housing
corporation" as such term is defined in Section 216(b) of the
Internal revenue Code of 1986, as amended, or any successor statute
thereto.
11. USE OF
PROPERTY. Unless
required by applicable law, Borrower shall not (a) allow
changes in the use for which all or any part of the Mortgaged
Property is being used at the time this Instrument was executed,
except for any change in use approved by Lender, (b) convert
any individual dwelling units or common areas to commercial use,
(c) initiate a change in the zoning classification of the
Mortgaged Property or acquiesce without Notice to and consent of
Lender in a change in the zoning classification of the Mortgaged
Property, (d) establish any condominium or cooperative regime
with respect to the Mortgaged Property, (e) combine all or any
part of the Mortgaged Property with all or any part of a tax parcel
which is not part of the Mortgaged Property, or (f) subdivide
or otherwise split any tax parcel constituting all or any part of
the Mortgaged Property without the prior consent of Lender.
Notwithstanding anything contained in this Section to the contrary,
if Borrower is a housing cooperative corporation or association,
Lender acknowledges and consents to Borrower's use of the Mortgaged
Property as a housing cooperative.
12. PROTECTION OF LENDER'S
SECURITY; INSTRUMENT SECURES FUTURE ADVANCES.
(a) If Borrower fails to
perform any of its obligations under this Instrument or any other
Loan Document, or if any action or proceeding is commenced which
purports to affect the Mortgaged Property, Lender's security or
Lender's rights under this Instrument, including eminent domain,
insolvency, code enforcement, civil or criminal forfeiture,
enforcement of Hazardous Materials Laws, fraudulent conveyance or
reorganizations or proceedings involving a bankrupt or decedent,
then Lender at Lender's option may make such appearances, file such
documents, disburse such sums and take such actions as Lender
reasonably deems necessary to perform such obligations of Borrower
and to protect Lender's interest, including (i) payment of
Attorneys' Fees and Costs, (ii) payment of fees and
out-of-pocket expenses of accountants, inspectors and consultants,
(iii) entry upon the Mortgaged Property to make repairs or
secure the Mortgaged Property, (iv) procurement of the
insurance required by Section 19, (v) payment of amounts
which Borrower has failed to pay under Sections 15
and 17, and (vi) advances made by Lender to pay, satisfy or
discharge any obligation of Borrower for the payment of money that
is secured by a pre-existing mortgage, deed of trust or other lien
encumbering the Mortgaged Property (a " Prior Lien ").
(b) Any amounts disbursed
by Lender under this Section 12, or under any other provision
of this Instrument that treats such disbursement as being made
under this Section 12, shall be secured by this Instrument,
shall be added to, and become part of, the principal component of
the Indebtedness, shall be immediately due and payable and shall
bear interest from the date of disbursement until paid at the "
Default Rate ," as defined in the Note.
(c) Nothing in this
Section 12 shall require Lender to incur any expense or take
any action.
13. INSPECTION.
(a) Lender, its agents,
representatives, and designees may make or cause to be made entries
upon and inspections of the Mortgaged Property (including
environmental inspections and tests) during normal business
hours, or at any other reasonable time, upon reasonable notice to
Borrower if the inspection is to include occupied residential units
(which notice need not be in writing). Notice to Borrower
shall not be required in the case of an emergency, as determined in
Lender's discretion, or when an Event of Default has occurred and
is continuing.
(b) If Lender
determines that Mold has developed as a result of a water intrusion
event or leak, Lender, at Lender's discretion, may require that a
professional inspector inspect the Mortgaged Property as frequently
as Lender determines is necessary until any issue with Mold and its
cause(s) areresolved to Lender's satisfaction. Such
inspection shall be limited to a visual and olfactory inspection of
the area that has experienced the Mold, water intrusion event or
leak. Borrower shall be responsible for the cost of such
professional inspection and any remediation deemed to be necessary
as a result of the professional inspection. After any issue
with Mold, water intrusion or leaks is remedied to Lender's
satisfaction, Lender shall not require a professional inspection
any more frequently than once every three years unless Lender is
otherwise aware of Mold as a result of a subsequent water intrusion
event or leak.
(c) If Lender or Loan
Servicer determines not to conduct an annual inspection of the
Mortgaged Property, and in lieu thereof Lender requests a
certification, Borrower shall be prepared to provide and must
actually provide to Lender a factually correct certification each
year that the annual inspection is waived to the following
effect:
Borrower has not received any written complaint, notice, letter or
other written communication from tenants, management agent or
governmental authorities regarding mold, fungus, microbial
contamination or pathogenic organisms ("Mold") or any activity,
condition, event or omission that causes or facilitates the growth
of Mold on or in any part of the Mortgaged Property or if Borrower
has received any such written complaint, notice, letter or other
written communication that Borrower has investigated and determined
that no Mold activity, condition or event exists or alternatively
has fully and properly remediated such activity, condition, event
or omission in compliance with the Moisture Management Plan for the
Mortgaged Property.
If Borrower is unwilling or unable to provide such certification,
Lender may require a professional inspection of the Mortgaged
Property at Borrower's expense.
14. BOOKS AND RECORDS;
FINANCIAL REPORTING.
&nb
