SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ___________
Commission file number 0-11935
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Century Properties Fund XIX
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(Exact name of Registrant as specified in its charter)
California 94-2887133
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (404) 916-9090
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N/A
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Former name, former address and fiscal year, if changed since last report.
Indicate by check mark whether Registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by
a court. Yes No
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APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date __________________.
1 of 13
CENTURY PROPERTIES FUND XIX - FORM 10-Q - SEPTEMBER 30, 1994
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets
September 30, December 31,
1994 1993
(Unaudited) (Audited)
Assets
Cash and cash equivalents $ 996,000 $ 279,000
Restricted cash - 1,356,000
Other assets 1,326,000 659,000
Real Estate:
Real estate 94,070,000 97,436,000
Accumulated depreciation (30,947,000) (29,874,000)
------------ ------------
Real estate, net 63,123,000 67,562,000
Deferred costs, net 735,000 943,000
------------ ------------
Total assets $ 66,180,000 $ 70,799,000
------------ ------------
------------ ------------
Liabilities and Partners' Equity
Accrued expenses and other liabilities $ 1,328,000 $ 3,109,000
Notes payable to affiliate of the
general partner - 370,000
Notes payable 59,163,000 59,869,000
------------ ------------
Total liabilities 60,491,000 63,348,000
------------ ------------
Partners' equity (deficit):
General partner (8,400,000) (8,192,000)
Limited partners (89,292 units
outstanding at September 30, 1994
and December 31, 1993) 14,089,000 15,643,000
------------ ------------
Total partners' equity 5,689,000 7,451,000
------------ ------------
Total liabilities and partners' equity $ 66,180,000 $ 70,799,000
------------ ------------
------------ ------------
See notes to consolidated financial statements.
2 of 13
CENTURY PROPERTIES FUND XIX - FORM 10-Q - SEPTEMBER 30, 1994
Consolidated Statements of Operations (Unaudited)
For the Nine Months Ended
September 30, September 30,
1994 1993
Revenues:
Rental $ 10,188,000 $ 10,593,000
Interest and other income 40,000 46,000
Gain on sale of property - 576,000
------------- ------------
Total revenues 10,228,000 11,215,000
------------- ------------
Expenses:
Operating 5,123,000 5,585,000
Interest 4,355,000 5,210,000
Depreciation 2,064,000 2,087,000
General and administrative 299,000 517,000
Loss on sale of property 149,000 44,000
------------- ------------
Total expenses 11,990,000 13,443,000
------------- ------------
Net loss $ (1,762,000) $ (2,228,000)
------------- ------------
------------- ------------
Net loss per limited partnership unit $ (17) $ (22)
------------- ------------
------------- ------------
See notes to consolidated financial statements.
3 of 13
CENTURY PROPERTIES FUND XIX - FORM 10-Q - SEPTEMBER 30, 1994
Consolidated Statements of Operations (Unaudited)
For the Three Months Ended
September 30, September 30,
1994 1993
Revenues:
Rental $ 3,405,000 $ 3,343,000
Interest and other income 13,000 17,000
------------- ------------
Total revenues 3,418,000 3,360,000
------------- ------------
Expenses:
Operating 1,887,000 1,625,000
Interest 1,408,000 1,453,000
Depreciation 685,000 696,000
General and administrative 47,000 133,000
Loss on property disposition - 44,000
------------- ------------
Total expenses 4,027,000 3,951,000
------------- ------------
Net loss $ (609,000) $ (591,000)
------------- ------------
------------- ------------
Net loss per limited partnership unit $ (6) $ (6)
------------- ------------
------------- ------------
See notes to consolidated financial statements.
4 of 13
CENTURY PROPERTIES FUND XIX - FORM 10-Q - SEPTEMBER 30, 1994
Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended
September 30, September 30,
1994 1993
Operating Activities:
Net loss $ (1,762,000) $ (2,228,000)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Depreciation and amortization 2,344,000 2,348,000
Mortgage acquisition costs (78,000) -
Loss (gain) on sale of property 149,000 (532,000)
Cost expensed on attempted property
refinaning - 64,000
Financing costs paid - (497,000)
Financing costs refunded - 523,000
Changes in operating assets and
liabilities:
Other assets (667,000) (72,000)
Accrued expenses and other liabilities 358,000 (1,456,000)
------------- ------------
Net cash provided by (used in)
operating acttivities 344,000 (1,850,000)
------------- ------------
Investing Activities:
Additions to rental properties (215,000) (486,000)
Decrease (increase) in restricted cash 1,356,000 (691,000)
Proceeds from sales of property 2,450,000 11,259,000
Costs of sale of rental properties (3,000) (768,000)
------------- ------------
Net cash provided by investing
activities 3,588,000 9,314,000
------------- ------------
Financing Activities:
Repayment of note payable on sale
of property (1,965,000) -
Proceeds from notes payable to
affiliate of the general partner - 291,000
Repayment of notes payable to
affiliate of the general partner (370,000) (1,309,000)
Notes payable proceeds - 20,375,000
Notes payable principal payments (286,000) (26,343,000)
Partial repayment of notes payable (594,000) -
------------- ------------
Net cash (used in) financing activities (3,215,000) (6,986,000)
------------- ------------
Increase in Cash and Cash Equivalents 717,000 478,000
Cash and Cash Equivalents at Beginning
of Period 279,000 147,000
------------- ------------
Cash and Cash Equivalents at End
of Period 996,000 625,000
------------- ------------
------------- ------------
Supplemental Disclosure of Cash
Flow Information:
Interest paid in cash during the
period 3,819,000 6,537,000
------------- ------------
------------- ------------
Supplemental Disclosure of Non-Cash
Financing Activities:
Accrued interest added to note
payable principal 2,139,000 -
------------- ------------
------------- ------------
See notes to consolidated financial statements.
5 of 13
CENTURY PROPERTIES FUND XIX - FORM 10-Q - SEPTEMBER 30, 1994
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The accompanying consolidated financial statements, footnotes and
discussions should be read in conjunction with the consolidated financial
statements, related footnotes and discussions contained in the Partnership's
Annual Report for the year ended December 31, 1993. Certain accounts have
been reclassified in order to conform to the current period.
The financial information contained herein is unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of such
financial information have been included. All adjustments are of a normal
recurring nature, except as disclosed in Notes 3 and 4 below.
The results of operations for the nine and three months ended September 30,
1994 and 1993 are not necessarily indicative of the results to be expected
for the full year.
2. Transactions with Related Parties
(a) An affiliate of the Managing General Partner ("MGP") received
reimbursements of administrative expenses amounting to $64,000 during
the nine months ended September 30, 1994. These reimbursements are
primarily included in general and administrative expenses.
(b) On August 10, 1994, NPI Property Management Corporation ("NPI
Management") transferred its management agreement to NPI-AP
Management, L.P. ("NPI-AP Management"), an affiliate of MGP.
NPI Management and NPI-AP Management are entitled to receive a 5%
of the annual gross receipts from certain properties it manages. For
the nine months ended September 30, 1994, NPI Management or NPI-AP
Management received $392,000. These fees are included in operating
expenses.
3. Mortgage Payable
As of June 1, 1994 the lender was permitted to draw on the two letters of
credit, in the amounts of $300,000 each, which were held in connection with
the note payable encumbering the Misty Woods property. In accordance with
the loan agreement, the Partnership applied the net proceeds of the draw, in
the amount of $594,000, to the note, reducing the note payable balance to
$5,183,000. Commencing July 1, 1994, the monthly debt service payment was
reduced to $46,000.
On September 1, 1994, the Partnership obtained a modification of the
existing mortgage encumbering McMillan Place Apartments in the amount of
$12,939,000 (including accrued interest of $2,139,000). The loan was split
into a first mortgage note of $10,800,000 and a second mortgage note of
$2,139,000. The first mortgage requires monthly payments of $89,000 at
8.25% interest and is being amortized over a twenty-two year period. Under
the terms of the second mortgage, interest accrues at 8.25% (with monthly
compounding). Quarterly payments, of all excess cash flow, as defined in
the cash management agreement, are required to be made
6 of 13
CENTURY PROPERTIES FUND XIX - FORM 10-Q - SEPTEMBER 30, 1994
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Mortgage Payable (Continued)
to the lender. In addition, the Partnership is prohibited from making any
distributions from operations to its partners. The notes mature on August
31, 1999 with a balloon payment of approximately $9,746,000 on the first
mortgage plus the outstanding balance on the second mortgage note. As
specified in the modification, the Partnership was required to deposit
$80,000 in a reserve account for future capital improvements and is required
to make monthly payments of $10,000 to the reserve account for the term of
the loan.
The Partnership has balloon payments on the mortgages encumbering
Greenspoint and Sandspoint Apartments in June 1995 in the amount of
$7,909,000 and $9,213,000, respectively. The ability to hold and operate
these properties is dependent on the Partnership's ability to obtain
refinancing or debt modifications as required.
4. Disposition of Rental Properties
Plantation Forest Apartments located in Atlanta, Georgia, was sold on
February 8, 1994 for $2,450,000. After payment of the existing loan of
$1,965,000 and expenses of the sale, the proceeds to the Partnership were
approximately $482,000. The loss on sale was $149,000.
Net proceeds realized from the sale were partially used to fully repay
$370,000 of the demand notes, including accrued interest, held by an
affiliate of the general partner.
For the period ended September 30, 1993 the $576,000 gain on sale of
property was the result of the sale of Parkside Village Apartments (May
1993). The $44,000 loss on sale of property was the result of the
foreclosure of the Cove Apartments (July 1993).
5. Subsequent Events
On October 12, 1994, National Property Investors, Inc. ("NPI"), sold
one-third of its stock to an affiliate of Apollo Real Estate Advisors, L.P.
("Apollo"). NPI is the parent of NPI Equity Investments, Inc., the entity
which controls the Managing General Partner of the Partnership.
On October 17, 1994, DeForest Ventures I L.P. ("DeForest I") offered to
purchase up to 43,756 outstanding units of limited partnership interest (the
"Units") of the Partnership, representing approximately 49% of the units
outstanding, at a purchase price (the "Purchase Price") of $60 per unit, net
to the seller in cash, without interest, upon the terms and conditions set
forth in the offer to purchase (the "Offer"). Because of the conflict of
interest inherent in the fact that MGP is an affiliate of the Purchaser, the
Partnership in its Schedule 14D-9, filed with the Securities and Exchange
Commission, made no recommendation and is remaining neutral as to whether
Unitholders should tender their Units pursuant to the Offer. The majority
limited partner of DeForest I is NPI-AP Management and the shareholders who
control DeForest Capital I Corporation, the sole general partner of DeForest
I, also control NPI.
7 of 13
CENTURY PROPERTIES FUND XIX - FORM 10-Q - SEPTEMBER 30, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
This item should be read in conjunction with the Consolidated Financial
Statements and other Items contained elsewhere in this Report.
Fund Liquidity and Capital Resources
The Fund holds investments in and operates eight apartment complexes. The Fund
receives rental income from its properties and is responsible for operating
expenses, administrative expenses, capital improvements and debt service
payments. As of November 1, 1994, five of the thirteen properties originally
purchased by the Fund were sold or otherwise disposed. Five of the Fund's eight
properties generated positive cash flow during the nine months ended September
30, 1994. McMillan Place, Misty Woods and Sandspoint Apartments experienced
negative cash flow for the nine months ended September 30, 1994.
The Fund uses working capital reserves provided from any undistributed cash flow
from operations, sales and refinancing proceeds as its primary sources of
liquidity. There have been no distributions since 1987. As described in Item 1,
Note 3, the Fund is prohibited from making any distributions from operations
until the mortgages encumbering McMillan Place Apartments are satisfied.
The level of liquidity based upon cash and cash equivalents experienced a
$717,000 increase at September 30, 1994, as compared to December 31, 1993. The
Fund's $344,000 of cash provided by operating activities and $3,588,000 of cash
provided by investing activities were partially offset by $3,215,000 used in
financing activities. Cash provided by investing activities resulted from
$2,447,000 of net proceeds from the sale of Plantation Forest Apartments and the
release of $1,356,000 of restricted cash primarily relating to the partial
repayment of the mortgage encumbering the Fund's Misty Woods property, which
were partially offset by $215,000 in additions to rental properties. The cash
used in financing activities consisted of $286,000 in notes payable principal
payments, $1,965,000 to repay the note encumbering the Fund's Plantation Forest
Apartments property, a $370,000 repayment of notes payable to an affiliate of
the general partner and the $594,000 partial repayment of the note encumbering
the Fund's Misty Woods property. The increase in other assets is primarily due
to the timing of real estate tax payments from escrow accounts. The decrease in
accrued expenses and other liabilities is attributable to the modification of
the McMillan Place mortgage. Under the terms of the modification, the accrued
interest payable was converted to a second mortgage. All other increases
(decreases) in certain assets and liabilities are the result of the timing of
receipt and payment of various operating activities.
Working capital reserves are invested in a money market account or repurchase
agreements secured by United States Treasury obligations. The Managing General
Partner believes that, if market conditions remain relatively stable, cash flow
from operations, when combined with working capital reserves, will be sufficient
to fund required capital improvements and regular debt service payments until
June 1995, when the balloon payments encumbering the Greenspoint and Sandspoint
Apartments come due in the amount of $7,909,000 and $9,213,000, respectively.
The ability to hold and operate these properties is dependent on the Fund's
ability to obtain refinancing or debt modification as required. If Greenspoint
and Sandspoint Apartments are lost through foreclosure, the Fund would incur
losses of approximately $1,287,000 and $1,441,000, respectively. As described
in Item 1, Note 3, the mortgage encumbering the Fund's McMillan Place property
was modified. A balloon payment of $9,746,000 plus the outstanding balance of
the new second mortgage is required on August 31, 1999.
8 of 13
CENTURY PROPERTIES FUND XIX - FORM 10-Q - SEPTEMBER 30, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Fund Liquidity and Capital Resources (Continued)
As described in Note 5 to the consolidated financial statements, on October 17,
1994, DeForest Ventures I L.P. offered to purchase up to 43,756 outstanding
units of limited partnership interests of the Partnership, representing
approximately 49% of the units outstanding, at a purchase price of $60 per unit,
net to the seller in cash, without interest, upon the terms and conditions set
forth in the offer to purchase. The Managing General Partner believes that the
tender offer will not have a significant impact on future operations or
liquidity of the Fund.
At this time, it appears that the investment objective of capital growth will
not be attained and that investors will not receive a return of all of their
invested capital. The extent to which invested capital is returned to investors
is dependent upon the performance of the Fund's properties and the markets in
which such properties are located and on the sales price of the remaining
properties. In this regard, it is anticipated at this time that the remaining
properties will be held longer than originally expected. The ability to hold
and operate these properties is dependent on the Fund's ability to obtain
refinancing or debt modification as required.
Real Estate Market
The national real estate market has suffered from the effects of the real estate
recession including, but not limited to, a downward trend in market values of
existing residential properties. In addition, the bailout of the savings and
loan associations and sales of foreclosed properties by auction reduced market
values and caused a further restriction on the ability to obtain credit. As a
result, the Fund's ability to refinance or sell its properties may be
restricted. These factors caused a decline in market property values and serve
to reduce market rental rates and/or sales prices. Compounding these
difficulties are relatively low interest rates, which encourage existing and
potential tenants to purchase homes. In addition, there has been a significant
decline nationally in new household formation. Despite the above, the rental
market appears to be experiencing a gradual strengthening and management
anticipates that increases in revenue will generally exceed increases in
expenses during 1994 and early 1995. Furthermore, management believes that the
emergence of new institutional purchasers, including real estate investment
trusts and insurance companies, should create a more favorable market value for
the Fund's properties in the future.
Results of Operations
Nine Months Ended September 30, 1994 vs. September 30, 1993
Operating results improved by $466,000 for the nine months ended September 30,
1994, as compared to 1993, due to improved operations at most of the Fund s
remaining properties. Parkside Village Apartments and Plantation Forest
Apartments were sold in May 1993 and in February 1994, respectively. The Cove
Apartments was foreclosed in July 1993. With respect to the remaining
properties, operating results improved by $1,069,000 due to an increase in
revenues of $623,000 and a decrease in expenses of $446,000.
9 of 13
CENTURY PROPERTIES FUND XIX - FORM 10-Q - SEPTEMBER 30, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Nine Months Ended September 30, 1994 vs. September 30, 1993 (Continued)
With respect to the remaining properties, revenues increased by $623,000 due to
an increase in rental income of $629,000 and a $6,000 decrease in interest and
other income. Rental revenues increased primarily due to increased rates at the
Greenspoint, Sunrunner, Wood Ridge and Wood Lake properties, and increased
occupancy at all of the Fund's properties, except for Plantation Crossing, where
occupancy remained constant. Interest and other income declined due to a
decrease in average working capital available for investment.
With respect to the remaining properties, expenses decreased by $446,000 due to
decreases in interest expense of $434,000 and general and administrative
expenses of $219,000, which were partially offset by increases in operating
expenses of $169,000 and depreciation expense of $38,000.
Interest expense declined due to the payment of prepayment penalties in
connection with the refinancings of Wood Lake, Wood Ridge and Plantation
Crossings Apartments notes payable in June 1993 which were refinanced at lower
rates. General and administrative expenses declined due to a decrease in asset
management costs. Operating expenses increased due to painting at Misty Woods
and Sandspoint Apartments. Depreciation expense increased due to the effect of
fixed asset additions.
Three Months Ended September 30, 1994 vs. September 30, 1993
Operating results declined by $18,000 for the three months ended September 30,
1994, as compared to 1993. Plantation Forest Apartments was sold in February
1994. With respect to the remaining properties, operating results improved by
$8,000 due to an increase in revenues of $194,000, which was partially offset by
an increase in expenses of $186,000.
With respect to the remaining properties, revenues increased by $194,000 due to
an increase in rental revenues of $198,000, which was partially offset by a
decrease in interest and other income of $4,000. Rental revenues increased
primarily due to increased rates at the Fund's Greenspoint, Sunrunner, Wood
Ridge and Wood Lake properties, and increased occupancy at all of the Fund's
properties. Interest and other income decreased due to a decline in average
working capital reserves available for investment.
With respect to the remaining properties expenses increased by $186,000 due to
increases in operating expenses of $257,000 and depreciation expense of $13,000,
which were only partially offset by a decrease in general and administrative
expenses of $84,000. Operating expenses increased due to painting at Misty
Woods and Sandspoint Apartments. Depreciation expense increased due to the
effect of fixed asset additions. General and administrative expenses declined
due to a decrease in asset management costs. Interest expense remained constant.
10 of 13
CENTURY PROPERTIES FUND XIX - FORM 10-Q - SEPTEMBER 30, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Properties
A description of the properties in which the Fund has an ownership interest
during the period covered by this Report, along with occupancy data, follows:
CENTURY PROPERTIES FUND XIX
OCCUPANCY SUMMARY
Average
Occupancy Rate (%)
----------------------------
Nine Months Three Months
Number Date Ended Ended
of of September 30, September 30,
Name and Location Units Purchase 1994 1993 1994 1993
- - ----------------- ----- -------- ---- ---- ---- ----
Wood Lake Apartments 220 12/83 96 90 97 91
Atlanta, Georgia
Greenspoint Apartments 336 02/84 97 96 98 96
Phoenix, Arizona
Sandspoint Apartments 432 02/84 94 89 96 88
Phoenix, Arizona
Wood Ridge Apartments 280 04/84 96 94 97 93
Atlanta, Georgia
Plantation Crossing
Apartments 180 06/84 96 96 97 96
Atlanta, Georgia
Plantation Forest
Apartments (1) 64 06/84 - 92 - 95
Atlanta, Georgia
Sunrunner Apartments 200 07/84 97 91 99 90
St. Petersburg, Florida
McMillan Place
Apartments 402 06/85 96 93 96 95
Dallas, Texas
Misty Woods Apartments 228 06/85 94 92 98 94
Charlotte, North Carolina
(1) Property was sold in February 1994.
11 of 13
CENTURY PROPERTIES FUND XIX - FORM 10-Q - SEPTEMBER 30, 1994
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Lawrence M. Whiteside, on behalf of himself and all others similarly
situated, v. Fox Capital Management Corporation et. al., Superior Court of
the State of California, San Mateo County, Case No. 390018.
In November 1994, Lawrence Whiteside, a limited partner in the
Partnership, commenced an action in the Superior Court of California,
County of San Mateo, against, among others, the Managing General Partner
and certain of its affiliates. The action alleges, among other things,
that the tender offer constitutes (a) a breach of the fiduciary duty owed
to the limited partners of the Partnership, and (b) a breach of, or on
inducement to breach, the provisions of the Partnership Agreement of the
Partnership. The action, which has been brought as a class action on
behalf of limited partners, seeks to the enjoin the tender offer as well
as monetary damages in an unspecified amount. The Managing General
Partner believes that the action is without merit.
On November 3rd the Superior Court denied plaintiff's motion for a
temporary restraining order with respect to the tender offer. A hearing
on a motion for a preliminary injunction is scheduled to be heard on
November 18th.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
1. Amended and Restated Note A, made as of September 1, 1994, by
Century Properties Fund XIX (the "Partnership") in favor of The
Travelers Insurance Company ("Travelers") in the principal
amount of $10,800,000.
2. Amended and Restated Note B, made as of September 1, 1994, by
the Partnership in favor of Travelers in the principal amount
of $2,138,673.53.
3. Amended and Restated Deed of Trust A, dated as of September 1,
1994, between the Partnership and Travelers.
4. Amended and Restated Deed of Trust B, made as of September 1,
1994, between the Partnership and Travelers.
b. On August 10, 1994, a Current Report on Form 8-K was filed with the
Securities and Exchange Commission to provide the following
disclosure:
On August 10, 1994, National Property Investors, Inc. ("NPI"), the
parent of NPI Equity Investments II, Inc. ("NPI Equity"), entered into
an agreement with an affiliate of Apollo Real Estate Advisors, L.P.
("Apollo") to sell to Apollo up to one-third of the stock of NPI.
12 of 13
CENTURY PROPERTIES FUND XIX - FORM 10-Q - SEPTEMBER 30, 1994
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTURY PROPERTIES FUND XIX
By: FOX PARTNERS II,
A California General Partnership,
its general partner
By: FOX CAPITAL MANAGEMENT CORPORATION,
A California Corporation,
its general partner
/S/ARTHUR N. QUELER
----------------------------------------------
ARTHUR N. QUELER
Executive Vice President, Treasurer, Secretary
and Director (Principal Financial and
Accounting Officer)
13 of 13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Century
Properties Fund XIX and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 996,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 94,070,000
<DEPRECIATION> (30,947,000)
<TOTAL-ASSETS> 66,180,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 5,689,000
<TOTAL-LIABILITY-AND-EQUITY> 66,180,000
<SALES> 0
<TOTAL-REVENUES> 10,188,000
<CGS> 0
<TOTAL-COSTS> 7,187,000
<OTHER-EXPENSES> 149,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,355,000
<INCOME-PRETAX> (1,762,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,762,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,762,000)
<EPS-PRIMARY> (17)
<EPS-DILUTED> (17)
</TABLE>
EXHIBIT 99.1
McMillan Place
AMENDED AND RESTATED NOTE A
$10,800,000 As of September 1, 1994
WHEREAS, Century Properties Fund XIX, a California
limited partnership ("Maker") entered into and delivered to The
Travelers Insurance Company ("Payee"), a Promissory Note (the
"Promissory Note") dated March 31, 1986 from Maker to Payee in
the original principal sum of $10,800,000, which was modified by
(i) Modification Agreement dated as of April 1, 1988 between
Maker and Payee, a memorandum of which dated May 1, 1988 was
recorded in Volume 88201, page 2772 of the Deed of Trust Records
of Dallas County, Texas, (ii) a second Modification Agreement
dated October 1, 1989 between Maker and Payee, a memorandum of
which dated October 1, 1989 was recorded in Volume 90041,
page 2543 of the Deed of Trust Records of Dallas County, Texas
and (iii) a third Modification Agreement dated October 1, 1991
between Maker and Payee, a memorandum of which was recorded in
Volume 92120, page 2641 of the Deed of Trust Records of Dallas
County, Texas.;
WHEREAS, the Promissory Note was split and severed into
(i) Amended and Restated Note A ("Note A") and (ii) Amended and
Restated Note B ("Note B"), as set forth in a Modification and
Severance Agreement dated the date hereof between Maker and
Payee;
WHEREAS, Maker desires to amend and restate in its
entirety the terms and provisions of Note A (hereinafter referred
to as this "Note") as set forth herein;
NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Maker hereby
represents, warrants and covenants as follows:
A. As of the date hereof, the aggregate outstanding
principal balance of this Note is $10,800,000 and accrued but
unpaid interest thereon is $0.
B. Maker (and the undersigned representatives of
Maker) has the full power, authority and legal right to execute
and deliver this Note and to observe and perform the terms and
provisions of this Note.
C. The indebtedness evidenced by this Note constitutes
a valid, binding and enforceable obligation of Maker subject only
to bankruptcy and equitable remedies.
D. There exist no offsets, counterclaims or defenses
to Maker's obligation to pay the indebtedness evidenced by this
Note.
E. This Note and Note B are given in replacement and
substitution of, and evidence the same indebtedness as, the
Promissory Note and do not evidence any new or additional
indebtedness of Maker to Payee and neither is intended as a
novation of the Promissory Note.
F. The terms, covenants and provisions of this Note as
amended and restated in their entirety read as follows:
FOR VALUE RECEIVED, Maker promises to pay to Payee or
order, at Payee's office, or at such other place as may be
designated, from time to time, in writing by Payee, the principal
sum of Ten Million Eight Hundred Thousand and 00/100 Dollars
($10,800,000) in lawful money of the United States of America,
with interest thereon from the date of this Note to and including
the date this Note is paid in full calculated in the manner
hereinafter set forth.
I. DEFINITIONS
The following terms as used in this Note shall have the
following meanings:
1.1 The term "Debt" shall mean collectively the entire
unpaid Outstanding Principal Balance, together with all interest
accrued and outstanding thereon and all other sums owing under
this Note and the Deed of Trust.
1.2 The term "Deed of Trust" shall mean a certain
Amended and Restated Deed of Trust A dated the date hereof by
Maker to Robert E. Wilson, as trustee for Payee intended to be
recorded in the Deed of Trust Records of Dallas County, Texas.
1.3 "Dollars" shall mean dollars in lawful currency of
The United States of America.
1.4 "Default" shall have the meaning set forth in
Section 3.2 hereof.
1.5 "Default Rate" shall mean five (5) percent (5%)
per annum in excess of the Interest Rate but not in excess of the
maximum interest rate permitted by law.
1.6 "Escrow Agent" shall mean Chicago Title Insurance
Company.
1.7 "Interest Rate" shall mean eight and one-quarter
(8.25%) percent per annum but not in excess of the maximum
interest rate permitted by law.
1.8 "Loan" shall mean the loan evidenced by this Note
and Note B and secured by the other Loan Documents.
1.9 "Loan Documents" shall mean this Note, Note B, the
Deed of Trust, Amended and Restated Deed of Trust B dated the
date hereof from Maker to Robert E. Wilson as trustee for Payee,
the Modification and Severance Agreement dated the date hereof
between Maker and Payee, Amended and Restated Assignment of
Leases and Rents A dated the date hereof from Maker to Payee,
Amended and Restated Assignment of Leases and Rents B dated the
date hereof from Maker to Payee, the Use and Retention of Funds
Letter dated the date hereof from the Responsible Entities and
Manager to Payee, the Cash Management Agreement dated the date
hereof between Maker, Payee and Manager, the Escrow Agreement
dated the date hereof between Maker, Payee and Escrow Agent, the
Manager's Liability Letter from Manager to Payee, the Reserve
Agreement dated the date hereof between Maker and Payee, the
Guaranty of Payment dated the date hereof from the Responsible
Entities and Manager to Payee and the Hazardous Material Guaranty
and Indemnification Agreement from the Responsible Entities and
Manager to Payee dated the date hereof and any and all documents
or instruments now or hereafter executed in connection therewith.
1.10 "Loan Year" shall mean the period of twelve (12)
consecutive calendar months commencing on September 1, 1994 and
ending on August 31, 1995 and each period of twelve (12)
consecutive calendar months thereafter to and including the
Maturity Date.
1.11 "Manager" shall mean NPI-AP Management, L.P., a
Delaware limited partnership.
1.12 "Maturity Date" shall mean August 31, 1999, or
such earlier date the entire Outstanding Principal Balance and
accrued and unpaid interest thereon, and any other sums which are
due and payable pursuant to the terms and provisions of this
Note, are due and payable by reason of the acceleration of the
maturity of this Note.
1.13 "Original Principal Amount" shall mean Ten
Million Eight Hundred Thousand Dollars ($10,800,000).
1.14 "Outstanding Principal Balance" shall mean the
aggregate of all sums advanced by Payee to or for the benefit of
Maker hereunder and not repaid.
1.15 "Payment Date" shall mean the first day of
October, 1994 and the first day of each month thereafter during
the Term hereof.
1.16 "Premises" shall mean those certain parcels of
real estate and the improvements thereon located at 12610 Jupiter
Road, in Dallas, Texas and known as McMillan Apartments.
1.17 "Rents" shall have the meaning set forth in the
Deed of Trust.
1.18 "Responsible Entities" shall mean (i) Maker,
(ii) Fox Partners II, a California general partnership, (iii) Fox
Capital Management Corporation, a California corporation and
(iv) NPI Equity Investments II, Inc., a Florida corporation and
their successors and assigns.
1.19 "Term" shall mean the period commencing on
September 1, 1994 and ending on August 31, 1999.
II. PAYMENT OF INTEREST AND PRINCIPAL
2.1 Payment of Interest and Principal.
(a) Interest shall accrue on the Outstanding Principal
Balance at the Interest Rate, commencing on the date hereof.
(b) Interest and principal shall be payable in
constant monthly installments of $88,800.11 per month and shall
be paid on each Payment Date, and shall be applied first to the
payment of interest at the Interest Rate and the balance to
reduction of the Outstanding Principal Balance.
2.2 Prepayment. On any Payment Date and upon not less
than thirty (30) days' prior written notice to Payee, Maker may
prepay this Note in full or in part, without premium or penalty
upon payment of (a) all interest accrued and unpaid on the
Outstanding Principal Balance of this Note to and including the
date of prepayment, and (b) all other sums then due under this
Note, the Deed of Trust and the other Loan Documents. Any
partial prepayment of the Outstanding Principal Balance of this
Note shall not affect the amount or times installment payments
are due or payable as set forth in Section 2.1 of this Note and
all partial prepayments shall be applied against the installment
payments last coming due under this Note, in inverse order of
maturity unless Payee in its sole and absolute discretion
notifies Maker that Payee will apply such partial prepayments in
a manner other than as set forth herein.
2.3 Default Interest. On and after the occurrence of
a Default, as defined in this Note or the Deed of Trust, any
advance made by Payee under any Loan Document and any principal
or accrued interest not paid when due shall bear interest at the
Default Rate.
2.4 Principal and Interest at Maturity. The entire
Outstanding Principal Balance and all accrued and unpaid interest
thereon, and any and all other sums which are due and payable
pursuant to the terms and provisions of the Note, the Deed of
Trust and the other Loan Documents shall be due and payable on
the Maturity Date.
2.5 Calculation of Interest. All interest on this
Note shall be calculated annually on the basis of twelve 30-day
months, provided, however, that for portions of the Outstanding
Principal Balance which are outstanding for less than a full
calendar month, interest on such portion of the Outstanding
Principal Balance shall be calculated on the basis of a 365-day
year and the actual number of days elapsed in any portion of a
month for which interest may be due on such portion of the
Outstanding Principal Balance.
2.6 Payments after Default. All unpaid interest that
has accrued on the Outstanding Principal Balance, and all unpaid
payments of principal whether prior or subsequent to the
occurrence of the Default, shall be paid at the time of, and as a
condition precedent to, the curing of the Default. While any
Default exists, Payee is expressly authorized to apply payments
made to it as it may elect against any or all amounts, or
portions thereof, then due and payable hereunder or under any of
the other Loan Documents, whether towards interest, reduction of
the Outstanding Principal Balance, or any combination thereof,
unless, with respect to any voluntary payment made by Maker,
Maker directs that such voluntary payment be applied as set forth
in a notice sent concurrently with such payment, it being agreed
and understood, however, that in no event or circumstance shall
Payee be required to accept such payment nor shall such payment
cure any Default then existing unless expressly agreed to by
Payee.
2.7 Place of Payment. Payments and prepayments to be
made under this Note are to be made at such place as the legal
holder of this Note may from time to time designate.
III. SECURITY, DEFAULTS AND REMEDIES
3.1 Security for Payment. The payment of this Note is
secured by, among other things, the Deed of Trust, constituting a
first mortgage lien on certain parcels of real estate and the
improvements thereon known as McMillan Apartments, located at
12610 Jupiter Road, in Dallas, Texas (the "Premises"). By this
reference, the Deed of Trust is incorporated by reference as if
fully set forth herein.
3.2 Occurrence of Default; Acceleration of Maturity
Date. It is agreed that upon occurrence of any of the following
events of default under this Note (a "Default"):
(a) default in the payment of principal or interest on
or before the fifth (5th) day after the same is
due, or default in the due and punctual payment of
Taxes and Premiums, as defined in the Deed of
Trust, or default in the performance or observance
of any other covenant or agreement of Maker
contained herein which is not cured within thirty
(30) days from the date of such default, provided,
however, that if Maker has commenced in good faith
to cure such default during the aforesaid thirty
(30) day period and proceeds with due diligence
and continuity to completion of such cure, Maker
shall have a maximum of an additional sixty (60)
days (over and above the initial 30-day period) to
cure such default; or
(b) occurrence of any Default (as defined therein)
under any of the Loan Documents,
then, at any time thereafter, at the election of the holder or
holders hereof and without additional notice to Maker, the
Outstanding Principal Balance, together with accrued interest
thereon, shall become at once due and payable at the place of
payment as aforesaid, and Payee may proceed to exercise any
rights and remedies available to Payee under the Deed of Trust
and the other Loan Documents, and to exercise any other rights
and remedies against Maker which Payee may have at law, in equity
or otherwise.
3.3 Nature of Remedies. The remedies of Payee as
provided herein or in the Deed of Trust or any of the other Loan
Documents, shall be cumulative and concurrent, and may be pursued
singularly, successively or together, at the sole discretion of
Payee, and may be exercised as often as occasion therefor shall
arise. Failure of Payee, for any period of time or on more than
one occasion, to exercise its option to accelerate the Maturity
Date of this Note shall not constitute a waiver of the right to
exercise the same at any time thereafter or in the event of any
subsequent Default. No act of omission or commission of Payee,
including specifically any failure to exercise any right, remedy
or recourse, shall be deemed to be a waiver or release of the
same; any such waiver or release is to be effected only through a
written document executed by Payee and then only to the extent
specifically recited therein. A waiver or release in connection
with any one event shall not be construed as a waiver or release
of any subsequent event or as a bar to any subsequent exercise of
Payee's rights or remedies hereunder. Notice of the exercise of
any right or remedy granted to Payee by this Note is not required
to be given.
3.4 Payment of Attorneys' Fees and Costs. If:
(a) this Note or any Loan Document is placed in the hands of an
attorney for collection or enforcement or is collected or
enforced through any legal proceeding; (b) if an attorney is
retained to represent Payee in any bankruptcy, reorganization,
receivership, or other proceedings affecting creditors' rights
and involving a claim under this Note or any of the Loan
Documents; (c) if an attorney is retained to protect or enforce
the lien of the Deed of Trust or the rights or remedies of Payee
under any of the Loan Documents; or (d) if an attorney is
retained to represent Payee in any other proceedings whatsoever
in connection with this Note, the Deed of Trust, any of the Loan
Documents or any property subject thereto, then Maker shall pay
to Payee all reasonable attorneys' fees, disbursements, costs and
expenses incurred in connection therewith, in addition to all
other amounts due hereunder.
3.5 Late Charge. If any installment of interest,
principal, Tax and Insurance Deposits (as defined and provided
for in Section 9 of the Deed of Trust) or Reserves (as defined in
the Reserve Agreement dated the date hereof between Maker and
Payee) is not paid when due, Maker shall pay to Payee a late
charge of four (4%) percent of the amount so overdue in order to
defray part of the expense incident to handling such delinquent
payment or payments. Such late charge shall be in addition to
and separate from any increase in interest due hereunder as a
result of calculation of interest due hereunder at the Default
Rate.
IV. OTHER GENERAL AGREEMENTS
4.1 Notices. Any notice which any party hereto may
desire or may be required to give to any other party hereto shall
be in writing, and shall be deemed given (i) if and when
personally delivered, (ii) upon receipt if sent by a nationally
recognized overnight courier, or (iii) on the third (3rd)
business day after being deposited in United States registered or
certified mail, return receipt requested, postage prepaid,
addressed to a party at its address set forth below, or at such
other place as such party may have designated to all other
parties by notice in writing in accordance herewith:
(a) If to Maker:
5665 Northside Drive, N.W.
Suite 370
Atlanta, Georgia 30328
Attention: Arthur Queler
With copies to:
Post & Heymann
100 Jericho Quadrangle
Suite 214
Jericho, New York 11753
Attention: William Post, Esq.
and
NPI Property Management Corporation
5665 Northside Drive, N.W.
Suite 370
Atlanta, Georgia 30328
Attention: Arthur Queler
(b) If to Payee:
The Travelers Insurance Company
c/o Travelers Realty Investment Company
461 Fifth Avenue
New York, New York 10017
Attention: Real Estate
Loan No. 502262
With copies to:
The Travelers Insurance Company
c/o Travelers Realty Investment Company
One Tower Square - 2 SHS
Hartford, Connecticut 06183-2020
Attention: Real Estate Loan No. 502262
and
Battle Fowler
75 East 55th Street
New York, New York 10022
Attention: Dean A. Stiffle, Esq. (W.F.S.)
(Matter No. 10695.0136)
Except as otherwise specifically required herein, notice of the
exercise of any right or option granted to Payee by this Note is
not required to be given.
4.2 Governing Law and Other Agreements. Maker agrees
that: (a) this instrument and the rights and obligations of the
parties hereunder shall be governed by the laws of the State of
Texas, without reference to the conflict of law principles of
such state; and (b) upon the Maturity Date, Payee shall not have
any obligation to refinance the indebtedness evidenced by this
Note or to extend further credit to Maker.
MAKER AGREES TO SUBMIT TO PERSONAL JURISDICTION IN THE
STATE OF TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS
NOTE AND IN FURTHERANCE OF SUCH AGREEMENT, THE UNDERSIGNED HEREBY
AGREES AND CONSENTS THAT WITHOUT LIMITING OTHER METHODS OF
OBTAINING JURISDICTION, PERSONAL JURISDICTION OVER THE MAKER IN
ANY SUCH ACTION OR PROCEEDING MAY BE OBTAINED WITHIN OR WITHOUT
THE JURISDICTION OF ANY COURT LOCATED IN TEXAS AND THAT ANY
PROCESS OR NOTICE OF MOTION OR OTHER APPLICATION TO ANY SUCH
COURT IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING MAY BE
SERVED UPON MAKER BY REGISTERED OR CERTIFIED MAIL TO OR BY
PERSONAL SERVICE AT THE LAST KNOWN ADDRESS OF MAKER, WHETHER SUCH
ADDRESS BE WITHIN OR WITHOUT THE JURISDICTION OF ANY SUCH COURT.
4.3 Interpretation. The headings of sections and
paragraphs in this Note are for convenience only and shall not be
construed in any way to limit or define the content, scope, or
intent of the provisions hereof. As used in this Note, the
singular shall include the plural, and masculine, feminine, and
neuter pronouns shall be fully interchangeable, where the context
so requires. The parties hereto intend and believe that each
provision in this Note comports with all applicable law.
However, if any provision in this Note is found by a court of law
to be in violation of any applicable law, and if such court
should declare such provision of this Note to be unlawful, void
or unenforceable as written, then it is the intent of all parties
to the fullest possible extent that it is legal, valid and
enforceable, that the remainder of this Note shall be construed
as if such unlawful, void or unenforceable provision were not
contained therein, and that the rights, obligations and interests
of Maker and the holder hereof under the remainder of this Note
shall continue in full force and effect; provided, however, that
if any provision of this Note which is found to be in violation
of any applicable law concerns the imposition of interest
hereunder, the rights, obligations and interests of Maker and
Payee with respect to the imposition of interest hereunder shall
be governed and controlled by the provisions of Paragraph 4.5
hereof. Time is of the essence of this Note.
4.4 Waiver. Maker and any and all others who are now
or may become liable for all or part of the obligations of Maker
under this Note including but not limited to the Responsible
Entities (collectively the "Obligors") agree to be jointly and
severally bound hereby and jointly and severally, to the extent
permitted by law: (a) waive and renounce any and all redemption
and exemption rights and the benefit of all valuation and
appraisement privileges against the indebtedness evidenced by
this Note or by any extension or renewal hereof; (b) waive
presentment and demand for payment, notices of nonpayment and of
dishonor, protest of dishonor, and notice of protest; (c) waive
all notices in connection with the delivery and acceptance hereof
and all other notices in connection with the performance,
default, or enforcement of the payment hereof or hereunder;
(d) waive any and all lack of diligence and delays in the
enforcement of the payment hereof; (e) agree that the liability
of each of the Obligors shall be unconditional and without regard
to the liability of any other person or entity for the payment
hereof, and shall not in any manner be affected by any indulgence
or forbearance granted or consented to by Payee to any of them
with respect hereto; (f) consent to any and all extensions of
time, renewals, waivers, or modifications that may be granted by
Payee with respect to the payment or other provisions hereof, and
to the release of any security at any time given for the payment
hereof, or any part thereof, with or without substitution, and to
the release of any person or entity liable for the payment
hereof; and (g) consent to the addition of any and all other
makers, endorsers, guarantors, and other obligors for the payment
hereof, and to the acceptance of any and all other security for
the payment hereof, and agree that the addition of any such
obligors or security shall not affect the liability of any of
Maker for the payment hereof.
4.5 Excess Interest. Any provision in this Note, the
Deed of Trust or the other Loan Documents to the contrary
notwithstanding, Payee shall in no event be entitled to receive
or collect, nor shall or may amounts received hereunder be
credited, so that Payee shall be paid, as interest, a sum greater
than the maximum amount permitted by applicable law to be charged
to the person, partnership, firm or corporation primarily
obligated to pay this Note. If any construction of this Note,
the Deed of Trust or the other Loan Documents, indicates a
different right given to Payee to ask for, demand or receive any
larger sum as interest, such as a mistake in calculation or
wording, this clause shall override and control, it being the
intention of the parties that this Note, the Deed of Trust and
the other Loan Documents shall in all things comply with
applicable law, and proper adjustment shall automatically be made
accordingly. If Payee ever receives, collects or applies as
interest any sum in excess of the maximum legal rate, such excess
amount shall be applied to the monthly installments required to
be paid in reduction of the Outstanding Principal Balance in the
inverse order of maturity, and when this Note is paid in full,
any remaining excess shall be refunded to Maker. In determining
whether or not the interest paid or payable, under any specific
contingency, exceeds the highest lawful rate, Maker and Payee
shall, to the maximum extent permitted under applicable law:
(a) characterize any nonprincipal payment as an expense, fee or
premium rather than as interest; (b) exclude voluntary
prepayments and the effects thereof; and (c) "spread" the total
amount of interest throughout the entire term of this Note.
Maker, and Payee by its acceptance of this Note, recognize and
agree that Maker's obligation to pay the principal and accrued
interest of this Note is absolute and unconditional.
4.6 Successors, Payees and Assigns. Upon any
endorsement, assignment, or other transfer of this Note by Payee
or by operation of law, the term "Payee," as used herein, shall
mean such endorsee, assignee, or other transferee or successor to
Payee then becoming the holder of this Note. This Note shall
inure to the benefit of Payee and its successors and assigns and
shall be binding upon the undersigned and its successors and
assigns. The term "Maker", as used herein, shall include the
respective successors, assigns, legal and personal
representatives, executors, administrators, devisees, legatees
and heirs of Maker.
4.7 Prospective Participants. Maker acknowledges that
Payee may after the date of this Note desire to sell and assign
participation interests in the Loan to one or more domestic or
foreign banks, insurance companies, pension funds, trusts or
other institutional lenders or other persons, parties or
investors (including, but not limited to, grantor trusts, owner
trusts, special purpose corporations, REMICs, real estate
investment trusts or other similar or comparable investment
vehicles) as may be selected by Payee in its sole and absolute
discretion and on terms and conditions satisfactory to Payee in
its sole and absolute discretion (any such bank, insurance
company, pension fund, trust or other institutional lender or
other person, party or investor to whom a participation interest
in the Loan is so sold and assigned is herein referred to as a
"Participant"). Maker shall cooperate, and shall cause Manager
and each guarantor, indemnitor and other person or party
associated or connected with the Loan or the collateral therefor
to cooperate, in all respects with Payee in connection with the
sale of participation interests in the Loan in the manner
contemplated by this paragraph, and shall, in connection
therewith, execute and deliver such estoppels, certificates,
instruments and documents as may be reasonably requested by
Payee. It is agreed and understood that Maker shall not incur or
be responsible for any costs, fees or expenses of any nature
whatsoever as a result of Payee's sale of participation interests
in all or any portion of the Loan in the manner contemplated by
this paragraph more than two (2) times during any Loan Year.
Maker grants to Payee, and shall cause Manager and each
guarantor, indemnitor and other person or party associated or
connected with the Loan or the collateral therefor to grant to
Payee, the right to distribute on a confidential basis financial
and other information concerning Maker, Manager, each such
guarantor, indemnitor and other person or party and the property
encumbered by the Deed of Trust and other pertinent information
with respect to the Loan to any party who has purchased a
participation interest in the Loan or who has expressed a serious
interest in purchasing a participation interest in the Loan.
Payee shall advise any such party that such information shall be
treated as confidential. Any party to whom any such information
is distributed and who declines to purchase a participation
interest in the Loan shall be requested to return to Payee all
such information distributed to it without retaining any copies
thereof. It is agreed and understood that Payee shall in no
event and under no circumstance have any liability as a result of
any party's failure to follow the directions or advice of Maker
in handling such confidential information. Maker shall execute
and deliver, and shall cause Manager and each guarantor,
indemnitor and other person or party associated or connected with
the Loan or the collateral therefor to execute and deliver, such
documents and instruments as may be reasonably necessary to split
the Loan into two or more loans evidenced, secured and advanced
by and pursuant to separate sets of notes, deeds of trust and
other related loan documents to the full extent required by Payee
to facilitate the sale of participation interests in the Loan in
the manner contemplated by this paragraph, it being agreed that
(i) any such splitting of the Loan will not adversely affect or
diminish the rights of Payee as presently set forth in this Note,
the Deed of Trust or the other Loan Documents and will not
increase the respective obligations and liabilities of Maker,
Manager or any such guarantor, indemnitor or other person or
party above those presently set forth in this Note, the Deed of
Trust or the other Loan Documents, (ii) the deeds of trust and
other documents securing the Loan as so split will have such
priority of lien as may be specified by Payee, and (iii) the
retained interest of Payee in the Loan as so split shall be
allocated to or among one or more of such separate loans in a
manner specified by Payee in its sole and absolute discretion.
If Maker shall default in the performance of its obligation as
set forth in this paragraph, and if such default shall not be
remedied by Maker within ten (10) business days after notice by
Payee, Payee shall have the right in its discretion to declare
the Debt immediately due and payable. Payee also reserves the
right at any time during the term of the Loan and in its sole and
absolute discretion to effect a so-called securitization of the
Loan in such manner and on such terms and conditions as Payee
shall deem to be appropriate in its sole and absolute discretion
and with such domestic or foreign banks, insurance companies,
pension funds, trusts or other institutional lenders or other
persons, parties or investors (including, but not limited to,
guarantor trusts, owner trusts, special purpose corporations,
REMICs, real estate investment trusts or other similar or
comparable investment vehicles) as may be selected by Payee in
its sole and absolute discretion.
4.8 Limited Personal Liability. Without in any manner
releasing, impairing or otherwise affecting this Note, the Deed
of Trust or any of the other Loan Documents or the validity
thereof or hereof or the lien thereof, there is no personal
liability of Maker or any corporation, partnership or individual
having a direct or indirect ownership interest in Maker, or any
of their respective successors or assigns, hereunder or under any
of the other Loan Documents, and no monetary or deficiency
judgment shall be sought or enforced against Maker or any
corporation, partnership or individual having a direct or
indirect ownership interest in Maker, or any of their respective
successors or assigns; provided, however, that a judgment may be
sought against Maker or any corporation, partnership or
individual having a direct or indirect ownership interest in
Maker or any of their respective successors or assigns to the
extent necessary to enforce the rights of Payee in, to, or
against the Premises securing the Debt. Notwithstanding any of
the foregoing, nothing contained in this Section shall be deemed
to prejudice the rights of Payee to recover from the Responsible
Entities (1) all loss, damage, cost and expense (including
reasonable attorneys' fees and disbursements) incurred by Payee
as a result of any material fraud or any material
misrepresentation by any of the Responsible Entities or Manager,
(2) all loss, damage, cost and expense (including reasonable
attorneys' fees and disbursements) incurred by Payee as a result
of breach of Maker's warranties, representations and covenants
contained in Paragraph 5, Paragraph 9, Paragraph 17,
Paragraph 37, Paragraph 44 or Paragraph 48 of the Deed of Trust,
(3) all loss, damage, cost and expense (including reasonable
attorneys' fees and disbursements) incurred by Payee as a result
of intentional or negligent waste (whether financial or physical)
of the Premises including, without limitation, failure by Maker
to pay on or prior to the due date thereof all real estate taxes
and assessments levied against the Premises, subject to Maker's
right to contest the same as set forth in paragraph 5.B. of the
Deed of Trust, it being agreed and understood that Maker's
personal liability to pay real estate taxes and assessments
levied against the Premises shall not exceed the Rents generated
over such period of time to which such taxes and assessments
pertain; (4) all Rents generated from the Premises received after
any default under the Loan Documents or within one year before
any default under the Loan Documents or after acceleration of the
indebtedness evidenced and secured by the Loan Documents and not
applied to payment of such indebtedness or to payment of the
normal and customary operating expenses of the Premises; (5) all
Rents from the Premises collected more than one (1) month in
advance and all security deposits that are not held in a
segregated escrow account and that are not delivered to Payee
upon demand after the occurrence of a default under any of the
Loan Documents, (6) all insurance proceeds and condemnation
awards in respect of the Premises which are not applied in
accordance with the provisions of the Loan Documents or all loss,
damage, cost and expense (including reasonable attorneys' fees
and disbursements) incurred by Payee as a result of the failure
by Maker to maintain the insurance coverage required in
Paragraphs 7 and 8 of the Deed of Trust, (7) all or any portion
of the upfront fees, commitment fees and other costs and expenses
incurred by Payee in connection with the closing of this
transaction and required to be paid by Maker and not promptly
reimbursed by Maker, (8) all loss, damage, cost and expense
(including reasonable attorneys' fees and disbursements) incurred
by Payee under the Hazardous Material Guaranty and
Indemnification Agreement dated the date hereof from the
Responsible Entities and Manager to Payee, or (9) all loss,
damage, cost and expense (including reasonable attorneys' fees
and disbursements) incurred by Payee as a result of a breach
under the Use and Retention of Funds Letter dated the date hereof
from the Responsible Entities and Manager to Payee. The
Responsible Entities agree to pay to Payee all amounts described
in clauses (1) through (9) above on demand by Payee and agree
that they will be personally liable for payment of all such sums.
Furthermore, nothing contained in the paragraph shall be deemed
to prejudice the right of Payee to recover from the Manager all
loss, damage, cost and expense (including reasonable attorneys'
fees and disbursements) incurred by Payee under that certain
Manager's Liability Letter Agreement dated the date hereof from
the Manager to Payee.
IN WITNESS WHEREOF, Maker has executed and delivered
this Note as of the day and year first above written.
CENTURY PROPERTIES FUND XIX,
a California limited partnership
By: Fox Partners II,
a California general partnership
Its General Partner
By: Fox Capital Management
Corporation, a California
corporation, Its Managing
General Partner
By: ____________________
Name: _____________
Title: ____________
STATE OF NEW YORK )
) s.s.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day
personally appeared __________________________,
_______________________ of Fox Capital Management Corporation, a
California corporation, which corporation is managing general
partner in Fox Partners II, a California general partnership,
which general partnership is the general partner in Century
Properties Fund XIX, a California limited partnership, known to
me to be the person and officer whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the
same for the purposes and consideration therein expressed and in
the capacity therein stated as the act and deed of Fox Capital
Management Corporation, for and on behalf of Fox Partners II,
which is acting for and on behalf of Century Properties Fund XIX.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____
day of ________, 1994.
_________________________________
Notary Public in and for
the State of New York
_________________________________
(Printed or Typed Name of Notary)
My commission expires: _________
EXHIBIT 99.2
McMillan Place
AMENDED AND RESTATED NOTE B
$2,138,673.53 As of September 1, 1994
WHEREAS, Century Properties Fund XIX, a California
limited partnership ("Maker") entered into and delivered to The
Travelers Insurance Company ("Payee"), a Promissory Note (the
"Promissory Note") dated March 31, 1986 from Maker to Payee in
the original principal sum of $10,800,000, which was modified by
(i) Modification Agreement dated as of April 1, 1988 between
Maker and Payee, a memorandum of which dated May 1, 1988 was
recorded in Volume 88201, page 2772 of the Deed of Trust Records
of Dallas County, Texas, (ii) a second Modification Agreement
dated October 1, 1989 between Maker and Payee, a memorandum of
which dated October 1, 1989 was recorded in Volume 90041,
page 2543 of the Deed of Trust Records of Dallas County, Texas
and (iii) a third Modification Agreement dated October 1, 1991
between Maker and Payee, a memorandum of which was recorded in
Volume 92120, page 2641 of the Deed of Trust Records of Dallas
County, Texas.;
WHEREAS, the Promissory Note was split and severed into
(i) Amended and Restated Note A ("Note A") and (ii) Amended and
Restated Note B ("Note B"), as set forth in a Modification and
Severance Agreement dated the date hereof between Maker and
Payee;
WHEREAS, Maker desires to amend and restate in its
entirety the terms and provisions of Note B (hereinafter referred
to as this "Note") as set forth herein;
NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Maker hereby
represents, warrants and covenants as follows:
A. As of the date hereof, the aggregate outstanding
principal balance of this Note is $2,138,673.53 and accrued but
unpaid interest thereon is $0.
B. Maker (and the undersigned representatives of
Maker) has the full power, authority and legal right to execute
and deliver this Note and to observe and perform the terms and
provisions of this Note.
C. The indebtedness evidenced by this Note constitutes
a valid, binding and enforceable obligation of Maker subject only
to bankruptcy and equitable remedies.
D. There exist no offsets, counterclaims or defenses
to Maker's obligation to pay the indebtedness evidenced by this
Note.
E. This Note and Note A are given in replacement and
substitution of, and evidence the same indebtedness as the
Promissory Note and do not evidence any new or additional
indebtedness of Maker to Payee and neither is intended as a
novation of the Promissory Note.
F. The terms, covenants and provisions of this Note
as amended and restated in their entirety read as follows:
FOR VALUE RECEIVED, Maker promises to pay to Payee or
order, at Payee's office, or at such other place as may be
designated, from time to time, in writing by Payee, the principal
sum of Two Million One Hundred Thirty-Eight Thousand Six Hundred
and Seventy-Three and 53/100 Dollars ($2,138,673.53) in lawful
money of the United States of America, with interest thereon from
the date of this Note to and including the date this Note is paid
in full calculated in the manner hereinafter set forth.
I. DEFINITIONS
The following terms as used in this Note shall have the
following meanings:
1.1 The term "Debt" shall mean collectively the entire
unpaid Outstanding Principal Balance, together with all interest
accrued and outstanding thereon and all other sums owing under
this Note and the Deed of Trust.
1.2 The term "Deed of Trust" shall mean a certain
Amended and Restated Deed of Trust B dated the date hereof by
Maker to Robert E. Wilson, as trustee for Payee intended to be
recorded in the Deed of Trust Records of Dallas County, Texas.
1.3 "Dollars" shall mean dollars in lawful currency of
The United States of America.
1.4 "Default" shall have the meaning set forth in
Section 3.2 hereof.
1.5 "Default Rate" shall mean five (5) percent (5%)
per annum in excess of the Interest Rate but not in excess of the
maximum interest rate permitted by law.
1.6 "Escrow Agent" shall mean Chicago Title Insurance
Company.
1.7 "Interest Rate" shall mean eight and one-quarter
(8.25%) percent per annum but not in excess of the maximum
interest rate permitted by law.
1.8 "Loan" shall mean the loan evidenced by this Note
and Note B and secured by the other Loan Documents.
1.9 "Loan Documents" shall mean this Note, Note A, the
Deed of Trust, the Amended and Restated Deed of Trust A dated the
date hereof, from Maker to Robert E. Wilson as trustee for Payee,
the Modification and Severance Agreement dated the date hereof
between Maker and Payee, the Amended and Restated Assignment of
Leases and Rents A dated the date hereof from Maker to Payee, the
Amended and Restated Assignment of Leases and Rents B dated the
date hereof from Maker to Payee, the Use and Retention of Funds
Letter dated the date hereof from the Responsible Entities and
Manager to Payee, the Cash Management Agreement dated the date
hereof between Maker, Payee and Manager, the Escrow Agreement
dated the date hereof between Maker, Payee and Escrow Agent, the
Manager's Liability Letter from Manager to Payee, the Reserve
Agreement dated the date hereof between Maker and Payee, Guaranty
of Payment dated the date hereof from the Responsible Entities
and Manager to Payee and the Hazardous Material Guaranty and
Indemnification Agreement from the Responsible Entities and
Manager to Payee dated the date hereof and any and all documents
or instruments now or hereafter executed in connection therewith.
1.10 "Loan Year" shall mean the period of twelve (12)
consecutive calendar months commencing on September 1, 1994 and
ending on August 31, 1995 and each period of twelve (12)
consecutive calendar months thereafter to and including the
Maturity Date.
1.11 "Manager" shall mean NPI-AP Management, L.P., a
Delaware limited partnership.
1.12 "Maturity Date" shall mean August 31, 1999, or
such earlier date the entire Outstanding Principal Balance and
accrued and unpaid interest thereon, and any other sums which are
due and payable pursuant to the terms and provisions of this
Note, are due and payable by reason of the acceleration of the
maturity of this Note.
1.13 "Original Principal Amount" shall mean Two
Million One Hundred Thirty-Eight Thousand Six Hundred and
Seventy-Three and 53/100 Dollars ($2,138,673.53).
1.14 "Outstanding Principal Balance" shall mean the
aggregate of all sums advanced by Payee to or for the benefit of
Maker hereunder and not repaid.
1.15 "Premises" shall mean those certain parcels of
real estate and the improvements thereon located at 12610 Jupiter
Road, in Dallas, Texas and known as McMillan Apartments.
1.16 "Rents" shall have the meaning set forth in the
Deed of Trust.
1.17 "Responsible Entities" shall mean (i) Maker,
(ii) Fox Partners II, a California general partnership, (iii) Fox
Capital Management Corporation, a California corporation and (iv)
NPI Equity Investments II, Inc., a Florida corporation and their
successors and assigns.
1.18 "Term" shall mean the period commencing on
September 1, 1994 and ending on August 31, 1999.
II. PAYMENT OF INTEREST AND PRINCIPAL
2.1 Payment of Interest and Principal.
(a) Interest shall accrue on the Outstanding Principal
Balance at the Interest Rate, and shall not be required to be
paid on a current basis but shall be compounded on the first day
of each calendar month in the Term.
(b) The Outstanding Principal Balance, plus all
accrued but unpaid interest thereon and any other sums owing
under this Note and the Deed of Trust shall be payable in full on
the Maturity Date.
2.2 Prepayment. On the first day of any calendar
month in the Term and upon not less than thirty (30) days' prior
written notice to Payee, Maker may prepay this Note in full or in
part, without premium or penalty upon payment of (a) all interest
accrued and unpaid on the Outstanding Principal Balance of this
Note to and including the date of prepayment, and (b) all other
sums then due under this Note, the Deed of Trust and the other
Loan Documents.
2.3 Default Interest. On and after the occurrence of
a Default, as defined in this Note or the Deed of Trust, any
advance made by Payee under any Loan Document and any principal
or accrued interest not paid when due shall bear interest at the
Default Rate.
2.4 Principal and Interest at Maturity. The entire
Outstanding Principal Balance and all accrued and unpaid interest
thereon, and any and all other sums which are due and payable
pursuant to the terms and provisions of the Note, the Deed of
Trust and the other Loan Documents shall be due and payable on
the Maturity Date.
2.5 Calculation of Interest. All interest on this
Note shall be calculated annually on the basis of twelve 30-day
months, provided, however, that for portions of the Outstanding
Principal Balance which are outstanding for less than a full
calendar month, interest on such portion of the Outstanding
Principal Balance shall be calculated on the basis of a 365-day
year and the actual number of days elapsed in any portion of a
month for which interest may be due on such portion of the
Outstanding Principal Balance.
2.6 Payments after Default. All unpaid interest that
has accrued on the Outstanding Principal Balance, and all unpaid
payments of principal whether prior or subsequent to the
occurrence of the Default, shall be paid at the time of, and as a
condition precedent to, the curing of the Default. While any
Default exists, Payee is expressly authorized to apply payments
made to it as it may elect against any or all amounts, or
portions thereof, then due and payable hereunder or under any of
the other Loan Documents, whether towards interest, reduction of
the Outstanding Principal Balance, or any combination thereof,
unless, with respect to any voluntary payment made by Maker,
Maker directs that such voluntary payment be applied as set forth
in a notice sent concurrently with such payment, it being agreed
and understood, however, that in no event or circumstance shall
Payee be required to accept such payment nor shall such payment
cure any Default then existing unless expressly agreed to by
Payee.
2.7 Place of Payment. Payments and prepayments to be
made under this Note are to be made at such place as the legal
holder of this Note may from time to time designate.
III. SECURITY, DEFAULTS AND REMEDIES
3.1 Security for Payment. The payment of this Note is
secured by, among other things, the Deed of Trust, constituting a
second mortgage lien on certain parcels of real estate and the
improvements thereon known as McMillan Apartments, located at
12610 Jupiter Road, in Dallas, Texas (the "Premises"). By this
reference, the Deed of Trust is incorporated by reference as if
fully set forth herein.
3.2 Occurrence of Default; Acceleration of Maturity
Date. It is agreed that upon occurrence of any of the following
events of default under this Note (a "Default"):
(a) default in the payment of principal or interest on
or before the fifth (5th) day after the same is
due, or default in the due and punctual payment of
Taxes and Premiums, as defined in the Deed of
Trust, or default in the performance or observance
of any other covenant or agreement of Maker
contained herein which is not cured within thirty
(30) days from the date of such default, provided,
however, that if Maker has commenced in good faith
to cure such default during the aforesaid thirty
(30) day period and proceeds with due diligence
and continuity to completion of such cure, Maker
shall have a maximum of an additional sixty (60)
days (over and above the initial 30-day period) to
cure such default; or
(b) occurrence of any Default (as defined therein)
under any of the Loan Documents,
then, at any time thereafter, at the election of the holder or
holders hereof and without additional notice to Maker, the
Outstanding Principal Balance, together with accrued interest
thereon, shall become at once due and payable at the place of
payment as aforesaid, and Payee may proceed to exercise any
rights and remedies available to Payee under the Deed of Trust
and the other Loan Documents, and to exercise any other rights
and remedies against Maker which Payee may have at law, in equity
or otherwise.
3.3 Nature of Remedies. The remedies of Payee as
provided herein or in the Deed of Trust or any of the other Loan
Documents, shall be cumulative and concurrent, and may be pursued
singularly, successively or together, at the sole discretion of
Payee, and may be exercised as often as occasion therefor shall
arise. Failure of Payee, for any period of time or on more than
one occasion, to exercise its option to accelerate the Maturity
Date of this Note shall not constitute a waiver of the right to
exercise the same at any time thereafter or in the event of any
subsequent Default. No act of omission or commission of Payee,
including specifically any failure to exercise any right, remedy
or recourse, shall be deemed to be a waiver or release of the
same; any such waiver or release is to be effected only through a
written document executed by Payee and then only to the extent
specifically recited therein. A waiver or release in connection
with any one event shall not be construed as a waiver or release
of any subsequent event or as a bar to any subsequent exercise of
Payee's rights or remedies hereunder. Notice of the exercise of
any right or remedy granted to Payee by this Note is not required
to be given.
3.4 Payment of Attorneys' Fees and Costs. If:
(a) this Note or any Loan Document is placed in the hands of an
attorney for collection or enforcement or is collected or
enforced through any legal proceeding; (b) if an attorney is
retained to represent Payee in any bankruptcy, reorganization,
receivership, or other proceedings affecting creditors' rights
and involving a claim under this Note or any of the Loan
Documents; (c) if an attorney is retained to protect or enforce
the lien of the Deed of Trust or the rights or remedies of Payee
under any of the Loan Documents; or (d) if an attorney is
retained to represent Payee in any other proceedings whatsoever
in connection with this Note, the Deed of Trust, any of the Loan
Documents or any property subject thereto, then Maker shall pay
to Payee all reasonable attorneys' fees, disbursements, costs and
expenses incurred in connection therewith, in addition to all
other amounts due hereunder.
3.5 Late Charge. If any installment of interest,
principal, Tax and Insurance Deposits (as defined and provided
for in Section 9 of the Deed of Trust) or Reserves (as defined in
the Reserve Agreement dated the date hereof between Maker and
Payee) is not paid when due, Maker shall pay to Payee a late
charge of four (4%) percent of the amount so overdue in order to
defray part of the expense incident to handling such delinquent
payment or payments. Such late charge shall be in addition to
and separate from any increase in interest due hereunder as a
result of calculation of interest due hereunder at the Default
Rate.
IV. OTHER GENERAL AGREEMENTS
4.1 Notices. Any notice which any party hereto may
desire or may be required to give to any other party hereto shall
be in writing, and shall be deemed given (i) if and when
personally delivered, (ii) upon receipt if sent by a nationally
recognized overnight courier, or (iii) on the third (3rd)
business day after being deposited in United States registered or
certified mail, return receipt requested, postage prepaid,
addressed to a party at its address set forth below, or at such
other place as such party may have designated to all other
parties by notice in writing in accordance herewith:
(a) If to Maker:
5665 Northside Drive, N.W.
Suite 370
Atlanta, Georgia 30328
Attention: Arthur Queler
With copies to:
Post & Heymann
100 Jericho Quadrangle
Suite 214
Jericho, New York 11753
Attention: William Post, Esq.
and
NPI Property Management Corporation
5665 Northside Drive, N.W.
Suite 370
Atlanta, Georgia 30328
Attention: Arthur Queler
(b) If to Payee:
The Travelers Insurance Company
c/o Travelers Realty Investment Company
461 Fifth Avenue
New York, New York 10017
Attention: Real Estate
Loan No. 502262
With copies to:
The Travelers Insurance Company
c/o Travelers Realty Investment Company
One Tower Square - 2 SHS
Hartford, Connecticut 06183-2020
Attention: Real Estate Loan No. 502262
and
Battle Fowler
75 East 55th Street
New York, New York 10022
Attention: Dean A. Stiffle, Esq. (W.F.S.)
(Matter No. 10695.0136)
Except as otherwise specifically required herein, notice of the
exercise of any right or option granted to Payee by this Note is
not required to be given.
4.2 Governing Law and Other Agreements. Maker agrees
that: (a) this instrument and the rights and obligations of the
parties hereunder shall be governed by the laws of the State of
Texas, without reference to the conflict of law principles of
such state; and (b) upon the Maturity Date, Payee shall not have
any obligation to refinance the indebtedness evidenced by this
Note or to extend further credit to Maker.
MAKER AGREES TO SUBMIT TO PERSONAL JURISDICTION IN THE
STATE OF TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS
NOTE AND IN FURTHERANCE OF SUCH AGREEMENT, THE UNDERSIGNED HEREBY
AGREES AND CONSENTS THAT WITHOUT LIMITING OTHER METHODS OF
OBTAINING JURISDICTION, PERSONAL JURISDICTION OVER THE MAKER IN
ANY SUCH ACTION OR PROCEEDING MAY BE OBTAINED WITHIN OR WITHOUT
THE JURISDICTION OF ANY COURT LOCATED IN TEXAS AND THAT ANY
PROCESS OR NOTICE OF MOTION OR OTHER APPLICATION TO ANY SUCH
COURT IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING MAY BE
SERVED UPON MAKER BY REGISTERED OR CERTIFIED MAIL TO OR BY
PERSONAL SERVICE AT THE LAST KNOWN ADDRESS OF MAKER, WHETHER SUCH
ADDRESS BE WITHIN OR WITHOUT THE JURISDICTION OF ANY SUCH COURT.
4.3 Interpretation. The headings of sections and
paragraphs in this Note are for convenience only and shall not be
construed in any way to limit or define the content, scope, or
intent of the provisions hereof. As used in this Note, the
singular shall include the plural, and masculine, feminine, and
neuter pronouns shall be fully interchangeable, where the context
so requires. The parties hereto intend and believe that each
provision in this Note comports with all applicable law.
However, if any provision in this Note is found by a court of law
to be in violation of any applicable law, and if such court
should declare such provision of this Note to be unlawful, void
or unenforceable as written, then it is the intent of all parties
to the fullest possible extent that it is legal, valid and
enforceable, that the remainder of this Note shall be construed
as if such unlawful, void or unenforceable provision were not
contained therein, and that the rights, obligations and interests
of Maker and the holder hereof under the remainder of this Note
shall continue in full force and effect; provided, however, that
if any provision of this Note which is found to be in violation
of any applicable law concerns the imposition of interest
hereunder, the rights, obligations and interests of Maker and
Payee with respect to the imposition of interest hereunder shall
be governed and controlled by the provisions of Paragraph 4.5
hereof. Time is of the essence of this Note.
4.4 Waiver. Maker and any and all others who are now
or may become liable for all or part of the obligations of Maker
under this Note including but not limited to the Responsible
Entities (collectively the "Obligors") agree to be jointly and
severally bound hereby and jointly and severally, to the extent
permitted by law: (a) waive and renounce any and all redemption
and exemption rights and the benefit of all valuation and
appraisement privileges against the indebtedness evidenced by
this Note or by any extension or renewal hereof; (b) waive
presentment and demand for payment, notices of nonpayment and of
dishonor, protest of dishonor, and notice of protest; (c) waive
all notices in connection with the delivery and acceptance hereof
and all other notices in connection with the performance,
default, or enforcement of the payment hereof or hereunder;
(d) waive any and all lack of diligence and delays in the
enforcement of the payment hereof; (e) agree that the liability
of each of the Obligors shall be unconditional and without regard
to the liability of any other person or entity for the payment
hereof, and shall not in any manner be affected by any indulgence
or forbearance granted or consented to by Payee to any of them
with respect hereto; (f) consent to any and all extensions of
time, renewals, waivers, or modifications that may be granted by
Payee with respect to the payment or other provisions hereof, and
to the release of any security at any time given for the payment
hereof, or any part thereof, with or without substitution, and to
the release of any person or entity liable for the payment
hereof; and (g) consent to the addition of any and all other
makers, endorsers, guarantors, and other obligors for the payment
hereof, and to the acceptance of any and all other security for
the payment hereof, and agree that the addition of any such
obligors or security shall not affect the liability of any of
Maker for the payment hereof.
4.5 Excess Interest. Any provision in this Note, the
Deed of Trust or the other Loan Documents to the contrary
notwithstanding, Payee shall in no event be entitled to receive
or collect, nor shall or may amounts received hereunder be
credited, so that Payee shall be paid, as interest, a sum greater
than the maximum amount permitted by applicable law to be charged
to the person, partnership, firm or corporation primarily
obligated to pay this Note. If any construction of this Note,
the Deed of Trust or the other Loan Documents, indicates a
different right given to Payee to ask for, demand or receive any
larger sum as interest, such as a mistake in calculation or
wording, this clause shall override and control, it being the
intention of the parties that this Note, the Deed of Trust and
the other Loan Documents shall in all things comply with
applicable law, and proper adjustment shall automatically be made
accordingly. If Payee ever receives, collects or applies as
interest any sum in excess of the maximum legal rate, such excess
amount shall be applied to the monthly installments required to
be paid in reduction of the Outstanding Principal Balance in the
inverse order of maturity, and when this Note is paid in full,
any remaining excess shall be refunded to Maker. In determining
whether or not the interest paid or payable, under any specific
contingency, exceeds the highest lawful rate, Maker and Payee
shall, to the maximum extent permitted under applicable law:
(a) characterize any nonprincipal payment as an expense, fee or
premium rather than as interest; (b) exclude voluntary
prepayments and the effects thereof; and (c) "spread" the total
amount of interest throughout the entire term of this Note.
Maker, and Payee by its acceptance of this Note, recognize and
agree that Maker's obligation to pay the principal and accrued
interest of this Note is absolute and unconditional.
4.6 Successors, Payees and Assigns. Upon any
endorsement, assignment, or other transfer of this Note by Payee
or by operation of law, the term "Payee," as used herein, shall
mean such endorsee, assignee, or other transferee or successor to
Payee then becoming the holder of this Note. This Note shall
inure to the benefit of Payee and its successors and assigns and
shall be binding upon the undersigned and its successors and
assigns. The term "Maker", as used herein, shall include the
respective successors, assigns, legal and personal
representatives, executors, administrators, devisees, legatees
and heirs of Maker.
4.7 Prospective Participants. Maker acknowledges that
Payee may after the date of this Note desire to sell and assign
participation interests in the Loan to one or more domestic or
foreign banks, insurance companies, pension funds, trusts or
other institutional lenders or other persons, parties or
investors (including, but not limited to, grantor trusts, owner
trusts, special purpose corporations, REMICs, real estate
investment trusts or other similar or comparable investment
vehicles) as may be selected by Payee in its sole and absolute
discretion and on terms and conditions satisfactory to Payee in
its sole and absolute discretion (any such bank, insurance
company, pension fund, trust or other institutional lender or
other person, party or investor to whom a participation interest
in the Loan is so sold and assigned is herein referred to as a
"Participant"). Maker shall cooperate, and shall cause Manager
and each guarantor, indemnitor and other person or party
associated or connected with the Loan or the collateral therefor
to cooperate, in all respects with Payee in connection with the
sale of participation interests in the Loan in the manner
contemplated by this paragraph, and shall, in connection
therewith, execute and deliver such estoppels, certificates,
instruments and documents as may be reasonably requested by
Payee. It is agreed and understood that Maker shall not incur or
be responsible for any costs, fees or expenses of any nature
whatsoever as a result of Payee's sale of participation interests
in all or any portion of the Loan in the manner contemplated by
this paragraph more than two (2) times during any Loan Year.
Maker grants to Payee, and shall cause Manager and each
guarantor, indemnitor and other person or party associated or
connected with the Loan or the collateral therefor to grant to
Payee, the right to distribute on a confidential basis financial
and other information concerning Maker, Manager, each such
guarantor, indemnitor and other person or party and the property
encumbered by the Deed of Trust and other pertinent information
with respect to the Loan to any party who has purchased a
participation interest in the Loan or who has expressed a serious
interest in purchasing a participation interest in the Loan.
Payee shall advise any such party that such information shall be
treated as confidential. Any party to whom any such information
is distributed and who declines to purchase a participation
interest in the Loan shall be requested to return to Payee all
such information distributed to it without retaining any copies
thereof. It is agreed and understood that Payee shall in no
event and under no circumstance have any liability as a result of
any party's failure to follow the directions or advice of Maker
in handling such confidential information. Maker shall execute
and deliver, and shall cause Manager and each guarantor,
indemnitor and other person or party associated or connected with
the Loan or the collateral therefor to execute and deliver, such
documents and instruments as may be reasonably necessary to split
the Loan into two or more loans evidenced, secured and advanced
by and pursuant to separate sets of notes, deeds of trust and
other related loan documents to the full extent required by Payee
to facilitate the sale of participation interests in the Loan in
the manner contemplated by this paragraph, it being agreed that
(i) any such splitting of the Loan will not adversely affect or
diminish the rights of Payee as presently set forth in this Note,
the Deed of Trust or the other Loan Documents and will not
increase the respective obligations and liabilities of Maker,
Manager or any such guarantor, indemnitor or other person or
party above those presently set forth in this Note, the Deed of
Trust or the other Loan Documents, (ii) the deeds of trust and
other documents securing the Loan as so split will have such
priority of lien as may be specified by Payee, and (iii) the
retained interest of Payee in the Loan as so split shall be
allocated to or among one or more of such separate loans in a
manner specified by Payee in its sole and absolute discretion.
If Maker shall default in the performance of its obligation as
set forth in this paragraph, and if such default shall not be
remedied by Maker within ten (10) business days after notice by
Payee, Payee shall have the right in its discretion to declare
the Debt immediately due and payable. Payee also reserves the
right at any time during the term of the Loan and in its sole and
absolute discretion to effect a so-called securitization of the
Loan in such manner and on such terms and conditions as Payee
shall deem to be appropriate in its sole and absolute discretion
and with such domestic or foreign banks, insurance companies,
pension funds, trusts or other institutional lenders or other
persons, parties or investors (including, but not limited to,
guarantor trusts, owner trusts, special purpose corporations,
REMICs, real estate investment trusts or other similar or
comparable investment vehicles) as may be selected by Payee in
its sole and absolute discretion.
4.8 Limited Personal Liability. Without in any manner
releasing, impairing or otherwise affecting this Note, the Deed
of Trust or any of the other Loan Documents or the validity
thereof or hereof or the lien thereof, there is no personal
liability of Maker or any corporation, partnership or individual
having a direct or indirect ownership interest in Maker, or any
of their respective successors or assigns, hereunder or under any
of the other Loan Documents, and no monetary or deficiency
judgment shall be sought or enforced against Maker or any
corporation, partnership or individual having a direct or
indirect ownership interest in Maker, or any of their respective
successors or assigns; provided, however, that a judgment may be
sought against Maker or any corporation, partnership or
individual having a direct or indirect ownership interest in
Maker or any of their respective successors or assigns to the
extent necessary to enforce the rights of Payee in, to, or
against the Premises securing the Debt. Notwithstanding any of
the foregoing, nothing contained in this Section shall be deemed
to prejudice the rights of Payee to recover from the Responsible
Entities (1) all loss, damage, cost and expense (including
reasonable attorneys' fees and disbursements) incurred by Payee
as a result of any material fraud or any material
misrepresentation by any of the Responsible Entities or Manager,
(2) all loss, damage, cost and expense (including reasonable
attorneys' fees and disbursements) incurred by Payee as a result
of breach of Maker's warranties, representations and covenants
contained in Paragraph 5, Paragraph 9, Paragraph 17,
Paragraph 37, Paragraph 44 or Paragraph 48 of the Deed of Trust,
(3) all loss, damage, cost and expense (including reasonable
attorneys' fees and disbursements) incurred by Payee as a result
of intentional or negligent waste (whether financial or physical)
of the Premises including, without limitation, failure by Maker
to pay on or prior to the due date thereof all real estate taxes
and assessments levied against the Premises, subject to Maker's
right to contest the same as set forth in paragraph 5.B. of the
Deed of Trust, it being agreed and understood that Maker's
personal liability to pay real estate taxes and assessments
levied against the Premises shall not exceed the Rents generated
over such period of time to which such taxes and assessments
pertain; (4) all Rents generated from the Premises received after
any default under the Loan Documents or within one year before
any default under the Loan Documents or after acceleration of the
indebtedness evidenced and secured by the Loan Documents and not
applied to payment of such indebtedness or to payment of the
normal and customary operating expenses of the Premises; (5) all
Rents from the Premises collected more than one (1) month in
advance and all security deposits that are not held in a
segregated escrow account and that are not delivered to Payee
upon demand after the occurrence of a default under any of the
Loan Documents, (6) all insurance proceeds and condemnation
awards in respect of the Premises which are not applied in
accordance with the provisions of the Loan Documents or all loss,
damage, cost and expense (including reasonable attorneys' fees
and disbursements) incurred by Payee as a result of the failure
by Maker to maintain the insurance coverage required in
Paragraphs 7 and 8 of the Deed of Trust, (7) all or any portion
of the upfront fees, commitment fees and other costs and expenses
incurred by Payee in connection with the closing of this
transaction and required to be paid by Maker and not promptly
reimbursed by Maker, (8) all loss, damage, cost and expense
(including reasonable attorneys' fees and disbursements) incurred
by Payee under the Hazardous Material Guaranty and
Indemnification Agreement dated the date hereof from the
Responsible Entities and Manager to Payee, or (9) all loss,
damage, cost and expense (including reasonable attorneys' fees
and disbursements) incurred by Payee as a result of a breach
under the Use and Retention of Funds Letter dated the date hereof
from the Responsible Entities and Manager to Payee. The
Responsible Entities agree to pay to Payee all amounts described
in clauses (1) through (9) above on demand by Payee and agree
that they will be personally liable for payment of all such sums.
Furthermore, nothing contained in the paragraph shall be deemed
to prejudice the right of Payee to recover from the Manager all
loss, damage, cost and expense (including reasonable attorneys'
fees and disbursements) incurred by Payee under that certain
Manager's Liability Letter Agreement dated the date hereof from
the Manager to Payee.
IN WITNESS WHEREOF, Maker has executed and delivered
this Note as of the day and year first above written.
CENTURY PROPERTIES FUND XIX,
a California limited partnership
By: Fox Partners II,
a California general partnership
Its General Partner
By: Fox Capital Management
Corporation, a California
corporation, Its Managing
General Partner
By: ____________________
Name: _____________
Title: ____________
STATE OF NEW YORK )
) s.s.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day
personally appeared __________________________,
_______________________ of Fox Capital Management Corporation, a
California corporation, which corporation is managing general
partner in Fox Partners II, a California general partnership,
which general partnership is the general partner in Century
Properties Fund XIX, a California limited partnership, known to
me to be the person and officer whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the
same for the purposes and consideration therein expressed and in
the capacity therein stated as the act and deed of Fox Capital
Management Corporation, for and on behalf of Fox Partners II,
which is acting for and on behalf of Century Properties Fund XIX.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____
day of ________, 1994.
_________________________________
Notary Public in and for
the State of New York
_________________________________
(Printed or Typed Name of Notary)
My commission expires: _________
EXHIBIT 99.3
McMILLAN PLACE
================================================================================
CENTURY PROPERTIES FUND XIX
to
THE TRAVELERS INSURANCE COMPANY
____________________________________
AMENDED AND RESTATED DEED OF TRUST A
(Fee)
$10,800,000
____________________________________
Dated: As of September 1, 1994
Location: 12610 Jupiter Road
Dallas, Texas 75238
County: Dallas
THIS DEED OF TRUST PREPARED BY AND
AFTER RECORDING PLEASE RETURN TO:
Battle Fowler
75 East 55th Street
New York, New York 10022
Attention: Walter F. Schleimer, Esq.
================================================================================
TABLE OF CONTENTS
Page
1. Payment of Indebtedness and Performance of Covenants. . . . . . . . 8
2. Representation and Warranty of Title. . . . . . . . . . . . . . . . 8
3. Maintenance, Repair, Compliance with Law, Use, Etc. . . . . . . . . 9
4. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6. Change in Tax Laws. . . . . . . . . . . . . . . . . . . . . . . . . 15
7. Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . . . . 15
8. Insurance Policies. . . . . . . . . . . . . . . . . . . . . . . . . 17
9. Deposits for Taxes and Insurance Premiums . . . . . . . . . . . . . 18
10. Proceeds of Insurance . . . . . . . . . . . . . . . . . . . . . . . 20
11. Disbursement of Insurance Proceeds. . . . . . . . . . . . . . . . . 21
12. Condemnation and Eminent Domain . . . . . . . . . . . . . . . . . . 25
13. Assignment of Leases and Rents. . . . . . . . . . . . . . . . . . . 27
14. Observance of Lease Assignment. . . . . . . . . . . . . . . . . . . 29
15. Beneficiary's Performance of Grantor's Obligations. . . . . . . . . 30
16. Security Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 31
17. Restrictions on Transfer. . . . . . . . . . . . . . . . . . . . . . 35
18. Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
19. Foreclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
20. Right of Possession . . . . . . . . . . . . . . . . . . . . . . . . 44
21. Receiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
22. Foreclosure Sale. . . . . . . . . . . . . . . . . . . . . . . . . . 47
23. Insurance During Foreclosure. . . . . . . . . . . . . . . . . . . . 47
24. Waiver of Right of Redemption and Other Rights. . . . . . . . . . . 48
25. Rights Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . 49
26. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . 50
27. Effect of Extensions and Amendments . . . . . . . . . . . . . . . . 51
28. Execution of Separate Security Agreements, Financing Statements,
Etc.; Estoppel Letter . . . . . . . . . . . . . . . . . . . . . . 52
29. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
30. Option to Subordinate . . . . . . . . . . . . . . . . . . . . . . . 52
31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
32. Inspection of Premises and Records. . . . . . . . . . . . . . . . . 53
33. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . 54
34. Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . 55
35. Captions and Pronouns . . . . . . . . . . . . . . . . . . . . . . . 55
36. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
37. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 56
38. Beneficiary Not A Joint Venturer. . . . . . . . . . . . . . . . . . 61
39. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
40. Consent Required of Beneficiary . . . . . . . . . . . . . . . . . . 62
41. Sole Discretion of Beneficiary. . . . . . . . . . . . . . . . . . . 63
42. No Oral Change. . . . . . . . . . . . . . . . . . . . . . . . . . . 63
43. Absolute and Unconditional Obligation . . . . . . . . . . . . . . . 64
44. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
45. Limited Personal Liability. . . . . . . . . . . . . . . . . . . . . 65
46. Power of Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
47. WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . . . . . . . . . 70
48. Anti-Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . 70
49. Usury Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
50. Related Party Contracts . . . . . . . . . . . . . . . . . . . . . . 71
51. Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
52. Concerning the Trustee. . . . . . . . . . . . . . . . . . . . . . . 72
53. Trustee's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 72
54. Final Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 72
55. Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
AMENDED AND RESTATED DEED OF TRUST A
THIS AMENDED AND RESTATED DEED OF TRUST A (this "Deed of Trust")
made as of this 1st day of September, 1994, from CENTURY PROPERTIES FUND XIX,
a California limited partnership having an address at 5665 Northside Drive,
N.W., Suite 370, Atlanta, Georgia 30328 ("Grantor"), to Robert E. Wilson,
("Trustee") having an address at ___________________________________________
for the benefit of THE TRAVELERS INSURANCE COMPANY, a Connecticut corporation
having an address at One Tower Square, 2 SHS, Hartford, Connecticut 06183-2020
("Beneficiary"),
WHEREAS, Beneficiary made a loan in the original principal sum of
$10,800,000 to Grantor which loan was evidenced by a Promissory Note (the
"Promissory Note") dated March 31, 1986 from Grantor to Beneficiary in the
original principal sum of $10,800,000, as modified by (i) Modification
Agreement dated as of April 1, 1988 between Grantor and Beneficiary, a
memorandum of which dated May 1, 1988 was recorded in Volume 88201, page 2772
of the Deed of Trust Records of Dallas County, Texas, (ii) a second
Modification Agreement dated October 1, 1989 between Grantor and Beneficiary,
a memorandum of which dated October 1, 1989 was recorded in Volume 90041,
page 2543 of the Deed of Trust Records of Dallas County, Texas and (iii) a
third Modification Agreement dated October 1, 1991 between Grantor and
Beneficiary, a memorandum of which was recorded in Volume 92120, page 2641 of
the Deed of Trust Records of Dallas County, Texas;
WHEREAS, the Promissory Note was secured by a Deed of Trust,
Mortgage and Security Agreement dated March 31, 1986 from Grantor to James F.
Conway, trustee for the benefit of Beneficiary (the "Original Deed of Trust")
filed of record on April 2, 1986 in Volume 86064, page 3149 of the Deed of
Trust Records of Dallas County, Texas and an Assignment of Leases and Rents
dated as of March 31, 1986 by Grantor to Beneficiary (the "Original
Assignment") filed of record in Volume 86064, page 3183 of the Deed of Trust
Records of Dallas County, Texas.
WHEREAS, the Promissory Note was split and severed into Amended
and Restated Note A and Amended and Restated Note B, as set forth in a
Modification and Severance Agreement dated the date hereof between Grantor and
Beneficiary;
WHEREAS, Amended and Restated Note A dated the date hereof from
Grantor to Robert E. Wilson as trustee for the benefit of Beneficiary (the
"Note") is to be secured by, inter alia, this Amended and Restated Deed of
Trust A (this "Deed of Trust");
WHEREAS, the Original Assignment was split and severed into
(i) Amended and Restated Assignment of Leases and Rents A dated the date
hereof from Grantor to Beneficiary ("Assignment A") and (ii) Amended and
Restated Assignment of Leases and Rents B dated the date hereof from Grantor
to Beneficiary ("Assignment B"), as set forth in a Modification and Severance
Agreement dated the date hereof between Grantor and Beneficiary;
WHEREAS, Grantor and Beneficiary intend to modify, amend and
restate the terms and provisions of the Original Deed of Trust as hereinafter
set forth;
WHEREAS, Grantor desires to set forth the terms and provisions of
this Deed of Trust as hereinafter set forth;
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
W I T N E S S E T H :
To secure the payment of the principal indebtedness under the Note
of $10,800,000.00 (the "Outstanding Principal Balance") and interest and
prepayment premiums, if any, on the principal indebtedness under the Note (and
all replacements, renewals and extensions thereof, in whole or in part)
according to its tenor and effect, and to secure the payment of all other sums
which may be at any time due and owing or required to be paid under the Note,
this Deed of Trust, Assignment A, Amended and Restated Note B dated the date
hereof between Grantor and Beneficiary ("Note B"), Amended and Restated Deed
of Trust B dated the date hereof from Grantor to Robert E. Wilson, as trustee
for Beneficiary ("Deed of Trust B"), Assignment B, the Modification and
Severance Agreement dated the date hereof between Grantor and Beneficiary, the
Cash Management Agreement dated the date hereof among Grantor, Beneficiary and
NPI-AP Management, L.P. (the "Manager"), the Use and Retention of Funds Letter
dated the date hereof from Grantor, Fox Partners II, Fox Capital Management
Corporation, NPI Equity Investments II, Inc. and Manager to Beneficiary, the
Reserve Agreement dated the date hereof between Grantor and Beneficiary, the
Escrow Agreement dated the date hereof among Grantor, Beneficiary and Chicago
Title Insurance Company, the Guaranty of Payment dated the date hereof from
Grantor, Fox Partners II, Fox Capital Management Corporation, Manager and NPI
Equity Investments II, Inc. to Beneficiary, the Manager's Liability Letter
from the Manager to Beneficiary and the Hazardous Material Guaranty and
Indemnification Agreement dated the date hereof from Grantor, Fox
Partners, II, Fox Capital Management Corporation, NPI Equity Investments II,
Inc. and the Manager to Beneficiary and any of other documents or instruments
now or hereafter executed in connection with the Note or this Deed of Trust
(the Note, the Deed of Trust and such other documents or instruments,
collectively the "Loan Documents") and all replacements, renewals and
extensions thereof, in whole or in part (collectively, the "Indebtedness
Hereby Secured"); and to secure the performance and observance of all the
covenants, agreements and provisions contained in this Deed of Trust, the Note
and the other Loan Documents, and to charge the properties, interests and
rights hereinafter described with such payment, performance and observance,
and for other valuable consideration, the receipt and sufficiency whereof are
hereby acknowledged, Grantor DOES HEREBY GRANT, REMISE, RELEASE, LIEN,
MORTGAGE, CONVEY, PLEDGE, ASSIGN and HYPOTHECATE unto Trustee and Beneficiary,
its successors and assigns forever, the Land (as hereinafter defined) together
with the following described property, rights and interests all of which are
hereby pledged primarily and on a parity with the Land and not secondarily
(and are, together with the Land, the "Premises"):
THE LAND located in the County of Dallas, Texas and legally
described on Exhibit A attached hereto and made a part hereof (the "Land");
TOGETHER WITH all buildings, structures and improvements of every
nature whatsoever now or hereafter situated on the Land (including but not
limited to all underground and other parking facilities located in or on the
Land, all landscaped areas and areas utilized for recreational activities) and
all fixtures, machinery, appliances, equipment, furniture, and personal
property of every nature whatsoever now or hereafter owned by Grantor and
located in or on, or attached to, or used or intended to be used in connection
with or with the operation of, the Land, buildings, structures or other
improvements, or in connection with any construction which may be conducted
thereon, including all extensions, additions, improvements, betterments,
renewals, substitutions, and replacements to and proceeds of any of the
foregoing and all of the right, title and interest of Grantor in and to any
such personal property or fixtures together with the benefit of any deposits
or payments now or hereafter made on such personal property or fixtures by
Grantor or on its behalf (the "Improvements"); except that this Deed of Trust
shall not create a lien on any items of personal property which (i) are owned
by tenants who are in possession pursuant to a Lease (as hereinafter defined),
and (ii) may be removed by such tenants at the expiration or termination of
such Lease;
TOGETHER WITH all easements, rights of way, gores of land,
streets, ways, alleys, passages, sewer rights, waters, water courses, water
rights and powers, and all estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments and appurtenances whatsoever, in any way
belonging, relating or appertaining to the Land, or which hereafter shall in
any way belong, relate or be appurtenant thereto, and all of the coal, oil,
gas and other minerals of every kind and character in and underlying the Land,
whether now owned or hereafter acquired by Grantor, and the reversion and
reversions, remainder and remainders, rents, issues and profits thereof, and
all the estate, right, title, interest, property, possession, claim and demand
whatsoever, at law as well as in equity, of Grantor of, in and to the same;
TOGETHER WITH all Rents (as such term is defined hereafter)
generated from the Premises under the Leases (as such term is defined
hereinafter) or otherwise to be applied against the Indebtedness Hereby
Secured;
TOGETHER WITH all right, title and interest of Grantor in and to
any and all leases now or hereafter on or affecting the Premises whether
written or oral and all agreements for use of the Premises (the "Leases"),
together with all security therefor and all monies payable thereunder,
subject, however, to the conditional permission hereinabove given to Grantor
to collect the rentals under any such Lease;
TOGETHER WITH all fixtures and articles of personal property now
or hereafter owned by Grantor and forming a part of or used in connection with
the Land or the Improvements or the operation thereof including, but without
limitation, any and all air conditioners, antennae, appliances, apparatus,
awnings, basins, bathtubs, bidets, boilers, bookcases, cabinets, carpets,
coolers, curtains, dehumidifiers, disposals, doors, drapes, dryers, ducts,
dynamos, elevators, engines, equipment, escalators, fans, fittings, floor
coverings, furnaces, furnishings, furniture, hardware, heaters, humidifiers,
incinerators, lighting, machinery, motor vehicles, motors, ovens, pipes,
plumbing, pumps, radiators, ranges, recreational facilities, refrigerators,
screens, security systems, shades, shelving, sinks, sprinklers, stokers,
stoves, toilets, ventilators, wall coverings, washers, windows, window
coverings, wiring, and all renewals, replacements or proceeds thereof or
articles in substitution therefor, whether or not the same are or shall be
attached to the Land or the Improvements in any manner; it being mutually
agreed that all of the aforesaid property owned by Grantor and placed on the
Land or the Improvements shall, so far as permitted by law, be deemed to be
fixtures, a part of the realty, and security for the Indebtedness Hereby
Secured; notwithstanding the agreement and declaration hereinabove expressed
that certain articles of property form a part of the realty covered by this
Deed of Trust and be appropriated to its use and deemed to be realty, to the
extent that such agreement and declaration may not be effective and that any
of said articles may constitute goods (as said term is used in the Uniform
Commercial Code of Texas), this instrument shall constitute a security
agreement, creating a security interest in such goods, as collateral, in
Beneficiary as a secured party and Grantor as debtor, all in accordance with
said Uniform Commercial Code as more particularly set forth in Paragraph 16
hereof;
TOGETHER WITH all proceeds of the foregoing, including without
limitation all judgments, awards of damages and settlements hereafter made
resulting from condemnation proceeds or the taking of the Premises and/or the
Improvements or any portion thereof under the power of eminent domain, any
proceeds of any policies of insurance, maintained with respect to the Premises
and/or the Improvements or proceeds of any sale, option or contract to sell
the Premises and/or the Improvements or any portion thereof; and Grantor
hereby authorizes, directs and empowers Beneficiary, at its option, on behalf
of Grantor, or the successors or assigns of Grantor, to adjust, compromise,
claim, collect and receive such proceeds, to give proper receipts and
acquittances therefor, and, after deducting expenses of collection, to apply
the net proceeds as a credit upon any portion, as selected by Beneficiary, of
the Indebtedness Hereby Secured, notwithstanding the fact that the same may
not then be due and payable or that the Indebtedness Hereby Secured is
otherwise adequately secured; and
TOGETHER WITH all right, title, and interest of Grantor in and to
all executory contracts affecting the ownership, possession, operation,
control and services furnished to the Premises (the "Executory Contracts"),
provided, however, that permission is hereby given to Grantor so long as no
Default has occurred hereunder and is continuing to exercise the rights and
powers under the Executory Contracts and to enjoy the benefits thereunder;
TO HAVE AND TO HOLD the same, unto Trustee and Beneficiary, their
successors and assigns, forever, for the purposes and upon the uses herein set
forth, together with all right to possession of the Premises after the
occurrence of any Default; Grantor hereby RELEASING AND WAIVING all rights
under and by virtue of the homestead exemption laws of the State in which the
Premises are located;
PROVIDED, NEVERTHELESS, that if Grantor shall pay in full when due
the Indebtedness Hereby Secured and shall duly and timely perform and observe
all of the terms, provisions, covenants and agreements herein and in the Note
and the other Loan Documents provided to be performed and observed by Grantor,
then this Deed of Trust and the estate, right and interest of Beneficiary in
the Premises shall cease and become void and of no effect, but shall otherwise
remain in full force and effect.
This Deed of Trust and Deed of Trust B are given in replacement
and substitution of the Original Deed of Trust and evidence a portion of the
same indebtedness evidenced by the Promissory Note and secured by the Original
Deed of Trust and do not evidence any new or additional indebtedness of
Grantor to Beneficiary and neither is intended as a novation of the Promissory
Note or the Original Deed of Trust.
GRANTOR FURTHER COVENANTS AND AGREES AS FOLLOWS:
1. Payment of Indebtedness and Performance of Covenants. Grantor
shall (a) pay when due the Indebtedness Hereby Secured; and (b) duly and
punctually perform and observe all of the terms, provisions, conditions,
covenants and agreements on Grantor's part to be performed or observed as
provided in the Note, this Deed of Trust and the other Loan Documents.
Grantor shall have the privilege of making prepayment on the principal of the
Note (in addition to the required payments thereunder) in accordance with the
terms and conditions set forth in the Note but not otherwise.
2. Representation and Warranty of Title. At the time of the
delivery of these presents, Grantor is seized of an indefeasible estate in fee
simple in the portion of the Premises which constitutes real property and
Grantor owns good title to the portion of the Premises which constitutes
personal property subject only to the matters set forth on the title policy
insuring the lien of this Deed of Trust and any additional matters approved in
writing by Beneficiary; and has good right, full power and lawful authority to
ASSIGN, RELEASE, LIEN, CONVEY, PLEDGE, HYPOTHECATE, MORTGAGE and grant a
security interest in the same, in the manner and form aforesaid; that, except
as set forth on the title policy insuring the lien of this Deed of Trust or
consented to in writing by Beneficiary, the same is free and clear of all
liens, charges, easements, covenants, conditions, restrictions and
encumbrances whatsoever, including, as to the personal property and fixtures,
security agreements, conditional sales contracts and anything of a similar
nature; and that Grantor shall and will warrant and forever defend the title
to the Premises against the claims of all persons whomsoever claiming by,
through or under Grantor. Grantor also represents and warrants that
(i) Grantor is now, and after giving effect to this Deed of Trust will be in,
a solvent condition, (ii) the execution and delivery of this Deed of Trust by
Grantor does not constitute a "fraudulent conveyance" within the meaning of
Title 11 of the United States Code as now constituted or under any other
applicable statute, and (iii) no bankruptcy or insolvency proceedings are
pending or contemplated by or against Grantor.
3. Maintenance, Repair, Compliance with Law, Use, Etc. Grantor
shall (a) promptly repair, restore, replace or rebuild (pursuant to plans and
specifications approved by Beneficiary) any portion of the Improvements which
may become damaged or be destroyed to be of at least equal value and of
substantially the same character as prior to such damage or destruction
(whether or not proceeds of insurance are available or sufficient for that
purpose); (b) keep the Premises in good condition and repair, free from waste;
(c) pay all operating costs of the Premises; (d) complete, within a reasonable
time, any building or buildings or other Improvements now or at any time in
the process of erection upon the Premises; (e) comply with all requirements of
statutes, ordinances, rules, regulations, orders, decrees and other
requirements of law relating to the Premises or any part thereof by any
federal, state or local authority; (f) refrain from any action and correct any
condition which would increase the risk of fire or other hazard to the
Improvements or any portion thereof; (g) comply with any restrictions and
covenants of record with respect to the Premises and the use thereof, and
observe and comply with any conditions and requirements necessary to preserve
and extend any and all rights, licenses, permits (including without limitation
zoning variances, special exceptions and nonconforming uses), privileges,
franchises and concessions that are applicable to the Premises or its use and
occupancy; and (h) cause the Premises to be managed in a competent and
professional manner. Without the prior written consent of Beneficiary (which
consent may be granted or withheld in Beneficiary's sole discretion), Grantor
shall not cause, suffer or permit any (i) material alterations of the Premises
or the Improvements (including without limitation, landscaped and recreation
areas and underground on-site paved parking areas and parking pavilion and/or
structures) except as required by law or ordinance, (ii) change in the
intended use or occupancy of the Premises for which the Improvements have been
constructed including, without limitation, any change which would increase any
fire or other hazard; (iii) zoning reclassification with respect to the
Premises; (iv) unlawful use of, or nuisance to exist upon, the Premises;
(v) granting of any easements, licenses, covenants, conditions or declarations
of use against the Premises, other than use restrictions contained or provided
for in Leases approved by Beneficiary; (vi) buildings or additions to any
existing buildings or other structures to be erected on the Premises; or
(vii) all or a portion of the Premises to be operated as a cooperative or
condominium building or buildings in which the tenants or occupants
participate in active ownership, control, or management of the Premises or any
part thereof as tenant stockholder or otherwise.
4. Liens.
(i) Prohibition. Subject to the provisions of Paragraph 5 hereof
respecting Taxes (as hereinafter defined), Grantor shall not create or suffer
or permit any mortgage, lien, charge or encumbrance to attach to or be filed
against the Premises, whether such lien or encumbrance is inferior, at parity
with or superior to the lien of this Deed of Trust, including mechanic's
liens, materialmen's liens, or other claims for lien made by parties claiming
to have provided labor or material with respect to the Premises (collectively,
"Mechanic's Liens") and excepting only the lien of real estate taxes and
assessments not due or delinquent, the permitted encumbrances set forth on the
title policy insuring the lien of this Deed of Trust and any liens and
encumbrances of Beneficiary pursuant to this Deed of Trust, Deed of Trust B
and the other Loan Documents.
(ii) Contest of Mechanic's Liens Claims. Notwithstanding the
foregoing prohibition against Mechanic's Liens, Grantor, or any party
obligated to Grantor to do so, may in good faith and with due diligence
contest the validity or amount of any Mechanic's Lien and defer payment and
discharge thereof during the pendency of such contest, provided that: (i) such
contest shall have the effect of preventing the sale or forfeiture of the
Premises or any part thereof, or any interest therein, to satisfy such
Mechanic's Lien; (ii) within ten (10) days after Grantor has been notified of
the filing of such Mechanic's Lien, Grantor shall have notified Beneficiary in
writing of Grantor's intention to contest such Mechanic's Lien or to cause
such other party to contest such Mechanic's Lien; and (iii) Grantor either
shall have obtained a title insurance endorsement over such Mechanic's Liens
insuring Beneficiary against loss or damage by reason of the existence of such
Mechanic's Liens or, at the option of Grantor, Grantor shall have deposited or
caused to be deposited with Beneficiary at such place as Beneficiary may from
time to time in writing appoint, and in the absence of such appointment, then
at the place of payment designated in the Note, a sum of money which shall be
sufficient in the judgment of Beneficiary to pay in full such Mechanic's Lien
and all interest which might become due thereon, and shall keep on deposit an
amount so sufficient at all times, increasing such amount to cover additional
interest whenever, in the judgment of Beneficiary, such increase is advisable.
Such deposits are to be held without any allowance of interest. If Grantor
shall fail to maintain or cause to be maintained sufficient funds on deposit
as hereinabove provided, shall fail to prosecute such contest or cause such
contest to be prosecuted with due diligence or shall fail to pay or cause to
be paid the amount of the Mechanic's Lien plus any interest finally determined
to be due upon the conclusion of such contest, Beneficiary may, at its option,
apply the money as deposited in payment of or on account of such Mechanic's
Lien, or that part thereof then unpaid, together with all interest thereon.
If the amount of money so deposited shall be insufficient for the payment in
full of such Mechanic's Lien, together with all interest thereon, Grantor
shall forthwith, upon demand, deposit with Beneficiary a sum which, when added
to the funds then on deposit, shall be sufficient to make such payment in
full. If the contest of the Mechanic's Lien claim is ultimately resolved in
favor of the claimant, Beneficiary shall apply the money so deposited in full
payment of such Mechanic's Lien or that part thereof then unpaid, together
with all interest thereon (provided Grantor is not then in Default, as
hereafter defined, under this Deed of Trust) when furnished with evidence
satisfactory to Beneficiary of the amount of payment to be made. Any surplus
monies remaining in the control of Beneficiary shall be paid to Grantor,
provided Grantor is not then in Default hereunder.
5. Taxes.
A. Payment. Grantor shall pay or cause to be paid when due and
before any penalty attaches, all general and special taxes, assessments, water
charges, sewer charges, and other fees, taxes, charges and assessments of
every kind and nature whatsoever levied or assessed against the Premises or
any part thereof or any interest therein or any obligation or instrument
secured hereby, and all installments thereof (collectively, "Taxes"), whether
or not assessed against Grantor, and Grantor shall furnish to Beneficiary
receipts therefor as soon as reasonably possible, but in any event within
thirty (30) days after the date the same are due; and shall discharge any
claim or lien relating to Taxes upon the Premises, other than matters
expressly permitted by the terms hereof.
B. Contest. Grantor may, in good faith and with due diligence,
contest or cause to be contested the validity or amount of any such Taxes,
provided that:
(a) such contest shall have the effect of preventing the
collection of the Taxes so contested and the sale or forfeiture of the
Premises or any part thereof or interest therein to satisfy the same;
(b) Grantor has notified Beneficiary in writing of the
intention of Grantor to contest the same or to cause the same to be contested
before any Tax has been increased by any interest, penalties, or costs; and
(c) Grantor has deposited or caused to be deposited with
Beneficiary, at such place as Beneficiary may from time to time in writing
designate, a sum of money (or other security acceptable to Beneficiary) that,
when added to the monies or other security, if any, deposited with Beneficiary
pursuant to Paragraph 9 hereof, is sufficient, in Beneficiary's judgment, to
pay in full, or provide for payment in full of, such contested Tax and all
penalties and interest that might become due thereon, and shall keep on
deposit an amount or other security sufficient, in Beneficiary's judgment, to
pay in full, or provide for payment in full of, such contested Tax, increasing
such amount or other security to cover additional penalties and interest
whenever, in Beneficiary's judgment, such increase is advisable.
If Grantor fails to prosecute such contest with due diligence or fails to
maintain sufficient funds or security on deposit as hereinabove provided,
Beneficiary may, at its option, within ten (10) days following Beneficiary's
written notice to Grantor (or such shorter period of time necessary in
Beneficiary's opinion to prevent the collection of Taxes or the sale or
forfeiture of the Premises or any part thereof or interest therein), apply the
monies or liquidate any other security deposited with Beneficiary, in payment
of, or on account of, such Taxes, or any portion thereof then unpaid,
including all penalties and interest thereon. If the amount of the money and
any such security so deposited is insufficient for the payment in full of such
Taxes, together with all penalties and interest thereon, Grantor shall
forthwith, upon demand, either deposit with Beneficiary a sum that, when added
to such funds then on deposit, is sufficient to make such payment in full, or,
if Beneficiary has applied funds on deposit on account of such Taxes, restore
such deposit to an amount satisfactory to Beneficiary. Provided that Grantor
is not then in default hereunder, Beneficiary shall, if so requested in
writing by Grantor, after final disposition of such contest and upon Grantor's
delivery to Beneficiary of an official bill for such Taxes, apply the money or
security so deposited in full payment of such Taxes or that part thereof then
unpaid, together with all penalties and interest thereon and return any excess
to Grantor, unless Grantor has paid all such Taxes, together with all
penalties and interest thereon, and has provided Beneficiary with evidence
reasonably satisfactory to Beneficiary of such payment, in which event
Beneficiary shall return such money or security to Grantor. All money held by
Beneficiary pursuant to this Paragraph 5B shall be held without any allowance
of interest thereon.
C. Tax Services Contract. If Beneficiary elects, Grantor shall
maintain, at Grantor's expense while any portion of the Indebtedness Hereby
Secured is outstanding, a tax services contract issued by a tax reporting
agency approved by Beneficiary, it being agreed and understood that
Beneficiary shall not elect to maintain such tax service contract for so long
as Grantor provides satisfactory evidence to Beneficiary of Grantor's
continuing efforts to minimize or reduce taxes through proper and legal means.
If Beneficiary does not elect to maintain a tax service contract, Grantor
shall reimburse Beneficiary on demand for the cost of making annual tax
searches.
6. Change in Tax Laws. If, by the laws of the United States of
America, or of any state or municipality having jurisdiction over Beneficiary,
Grantor or the Premises, any tax is imposed or becomes due in respect of the
issuance of the Note or the recording of this Deed of Trust, Grantor shall pay
such tax in the manner required by such law. If any law, statute, rule,
regulation, order or court decree has the effect of deducting from the value
of the Premises for the purpose of taxation any lien thereon, or imposing upon
Beneficiary the payment of the whole or any part of the taxes required to be
paid by Grantor, or changing in any way the laws relating to the taxation of
mortgages or debts secured by mortgages or the interest of Beneficiary in the
Premises, or the manner of collection of taxes, so as to affect this Deed of
Trust, the Indebtedness Hereby Secured or Beneficiary, then, and in any such
event, Grantor, upon demand by Beneficiary, shall pay such taxes, or reimburse
Beneficiary therefor on demand, unless Beneficiary determines, in
Beneficiary's sole and exclusive judgment, that such payment or reimbursement
by Grantor is unlawful; in which event the Indebtedness Hereby Secured shall
be due and payable within thirty (30) days after written demand by Beneficiary
to Grantor. Nothing in this Paragraph 6 shall require Grantor to pay any
income, franchise or excise tax imposed upon Beneficiary, excepting only such
which may be levied against the income of Beneficiary as a complete or partial
substitute for taxes required to be paid by Grantor pursuant hereto.
7. Insurance Coverage. Grantor will insure the Premises against
such perils and hazards, and in such amounts and with such limits, as
Beneficiary may from time to time require, and in any event will continuously
maintain the following described policies of insurance without cost to
Beneficiary (the "Insurance Policies"):
(a) Property insurance against loss and damage by all
risks of physical loss or damage, including fire, sprinkler leakage, windstorm
and other risks covered by the so-called extended coverage endorsement
covering the Improvements and the Personal Property in amounts not less than
the full insurable replacement value of all Improvements, Personal Property,
fixtures and equipment from time to time on the Premises, but in no event less
than the Indebtedness Hereby Secured, as the same may be increased from time
to time by Beneficiary to reflect any increase in the aggregate amount of
principal and interest owing under the Note and Amended and Restated Note B
dated the date hereof from Grantor to Beneficiary bearing a replacement-cost
agreed-amount endorsement;
(b) Comprehensive general public liability against death,
bodily injury and property damage with a combined single limit in an amount
not less than One Million Dollars ($1,000,000) including a waiver of
subrogation clause acceptable to Beneficiary, and naming Beneficiary as an
additional insured;
(c) Business interruption insurance including rental
interruption insurance to cover loss of rental income, with the standard
mortgagee's clauses in form and amounts satisfactory to Beneficiary, but in no
event shall such policy be in an amount less than twelve (12) months'
projected gross rental income from the Premises, with 90% co-insurance as a
minimum;
(d) An umbrella excess liability policy with a limit of not
less than Four Million Dollars ($4,000,000) over primary insurance, which
policy shall include, but not be limited to, automobile liability, and
safeguarding of personalty, with coverages, risks insured, and waiver of
subrogation clause acceptable to Beneficiary, and naming Beneficiary as an
additional insured;
(e) Steam boiler, machinery and pressurized vessel
insurance, with 90% co-insurance as a minimum, and naming Beneficiary as an
additional insured;
(f) Earthquake insurance with 90% co-insurance as a
minimum, if available, and if required by Beneficiary;
(g) If the Premises is located in a federal flood hazard
area other than Zone C or Zone X as described in the Housing and Urban
Development Administration Special Flood Hazard Area Maps, flood insurance
with 90% co-insurance as a minimum; and
(h) The types and amounts of coverage as are customarily
(i) maintained by owners or operators of like properties, or (ii) required by
sophisticated institutional lenders in like transactions.
8. Insurance Policies. All Insurance Policies shall be in form,
companies and amounts satisfactory to Beneficiary from time to time. An
insurance company shall not be satisfactory unless such insurance company (a)
has Best's general policyholder rating of "A-" or better and a financial
rating of "Class VIII" or better; (b) is licensed in Texas (or Beneficiary is
furnished a service of suit endorsement) and has actively been in business for
at least five (5) years; (c) if it is a mutual company, is a nonassessable
company; and (d) does not provide insurance on any one building in excess of
10% of its policyholders' surplus (including capital). All Insurance Policies
insuring against casualty and business interruption and other appropriate
policies shall include non-contributing mortgagee endorsements in favor of and
with loss payable to Beneficiary, as well as standard waiver of subrogation
endorsements, shall provide that the coverage shall not be terminated or
materially modified, nor a risk materially changed without thirty (30) days'
advance written notice to Beneficiary and shall provide that no claims shall
be paid thereunder without ten (10) days' advance written notice to
Beneficiary. If a blanket policy is issued, a certified copy of said policy
shall be furnished, together with a certificate indicating that Beneficiary is
an additional insured under such policy in the designated amount. Grantor
will deliver all Insurance Policies, premium prepaid for a period acceptable
to Beneficiary and, in case of Insurance Policies about to expire, Grantor
will deliver renewal or replacement policies not less than thirty (30) days
prior to the date of expiration. The requirements of the preceding sentence
shall apply to any separate policies of insurance taken out by Grantor
concurrent in form or contributing in the event of loss with the Insurance
Policies.
9. Deposits for Taxes and Insurance Premiums. In order to assure
the payment of Taxes and premiums payable with respect to all Insurance
Policies ("Premiums") as and when the same shall become due and payable:
(a) Grantor shall deposit with Beneficiary on the first
business day of each and every month, an amount equal to one-twelfth (1/12) of
the Taxes and Premiums to become due upon the Premises between one and
thirteen months after the date of such deposit; provided that in the case of
the first such deposit, there shall be deposited in addition an amount which,
when added to the aggregate amount of monthly deposits to be made hereunder
with respect to Taxes and Premiums to become due and payable within thirteen
months after such first deposit, will provide (without interest) a sufficient
fund to pay such Taxes and Premiums, one month prior to the date when they are
due and payable. The amounts of such deposits (herein generally called "Tax
and Insurance Deposits") shall be based upon Beneficiary's estimate as to the
amount of Taxes and Premiums. Grantor shall promptly, upon the demand of
Beneficiary, make additional Tax and Insurance Deposits as Beneficiary may
from time to time require due to (i) failure of Beneficiary to require, or
failure of Grantor to make, Tax and Insurance Deposits in previous months,
(ii) underestimation of the amounts of Taxes and/or Premiums, (iii) the
particular due dates and amounts of Taxes and/or Premiums, or (iv) application
of the Tax and Insurance Deposits pursuant to Paragraph 9(c) hereof. All Tax
and Insurance Deposits shall be held by Beneficiary without any allowance of
interest thereon.
(b) Beneficiary will, out of the Tax and Insurance
Deposits, upon the presentation to Beneficiary by Grantor of the bills
therefor, pay the Taxes and Premiums or will, upon the presentation of
receipted bills therefor, reimburse Grantor for such payments made by Grantor.
If the total Tax and Insurance deposits on hand shall not be sufficient to pay
all of the Taxes and Premiums when the same shall become due, then Grantor
shall pay to Beneficiary on demand the amount necessary to make up the
deficiency.
(c) To the extent permitted under applicable law, upon a
Default under this Deed of Trust, Beneficiary may, at its option, without
being required so to do, apply any Tax and Insurance Deposits on hand to any
of the Indebtedness Hereby Secured, in such order and manner as Beneficiary
may elect. When the Indebtedness Hereby Secured has been fully paid, any
remaining Tax and Insurance Deposits shall be paid to Grantor. All Tax and
Insurance Deposits are hereby pledged as additional security for the
Indebtedness Hereby Secured, and shall be held by Beneficiary irrevocably to
be applied for the purposes for which made as herein provided, and shall not
be subject to the direction or control of Grantor.
(d) Provided no Default has occurred under the Deed of
Trust, Beneficiary shall apply the Tax and Insurance Deposits to the payment
of the Taxes or Premiums for the payment of which such Tax and Insurance
Deposits were made.
(e) The provisions of this Deed of Trust are for the
benefit of Grantor and Beneficiary alone. No provision of this Deed of Trust
shall be construed as creating in any party other than Grantor and
Beneficiary, any rights in and to the Tax and Insurance Deposits or any rights
to have the Tax and Insurance Deposits applied to payment of Taxes and
Premiums. Beneficiary shall have no obligation or duty to any third party to
collect Tax and Insurance Deposits.
10. Proceeds of Insurance. Grantor will give Beneficiary
immediate notice of any loss or damage to the Premises, and:
(a) In case of loss or damage covered by any of the
Insurance Polices equal to or in excess of $25,000, Beneficiary (or, after
entry of decree of foreclosure, the purchaser at the foreclosure sale or
decree creditor, as the case may be) is hereby authorized at its option either
(i) to settle and adjust any claim under such Insurance Policies without the
consent of Grantor or (ii) allow Grantor to settle and adjust such claim
without the consent of Beneficiary. In the case of loss or damage covered by
any of the Insurance Policies less than $25,000, Beneficiary hereby authorizes
Grantor to settle and adjust such claim without the consent of Beneficiary.
In all cases Beneficiary shall, and is hereby authorized to, collect and
receipt for all insurance proceeds; and the reasonable expenses incurred by
Beneficiary in the adjustment and collection of insurance proceeds, if any
shall be so much additional Indebtedness Hereby Secured, and shall be
reimbursed to Beneficiary upon demand or, in the event and to the extent
sufficient proceeds are available, shall be deducted by Beneficiary from said
insurance proceeds prior to any other application thereof. If Grantor has
settled and adjusted a claim under $25,000 covered by any of the Insurance
Policies, Beneficiary shall release such proceeds of insurance to Grantor
within thirty (30) days of receipt by Beneficiary of all information regarding
such loss or damage reasonably requested by Beneficiary and evidence
satisfactory to Beneficiary that such loss or damage has been restored,
repaired, replaced or rebuilt in a manner satisfactory to Beneficiary and all
costs in connection with such restoration have been paid in full. Each
insurance company which has issued an Insurance Policy is hereby authorized
and directed to make payment for all losses covered by an Insurance Policy to
Beneficiary alone, and not to Beneficiary and Grantor jointly.
(b) Except as set forth below, Beneficiary shall, in its
sole discretion, elect to apply the proceeds of Insurance Policies consequent
upon any casualty either (i) to reduce the Indebtedness Hereby Secured; or
(ii) to reimburse Grantor for the cost of restoring, repairing, replacing or
rebuilding (collectively, "Restoring") the loss or damage of the casualty,
subject to the conditions and in accordance with the provisions of Paragraph
11 hereof. If Beneficiary elects to apply the proceeds of Insurance Policies
to the Indebtedness Hereby Secured and such proceeds do not discharge that
indebtedness in full, the entire Indebtedness Hereby Secured shall become
immediately due and payable with interest thereon at the Default Rate (as
defined in the Note).
(c) If insurance proceeds are made available to Grantor as
set forth in Paragraph 11 hereof, Grantor hereby covenants to restore, repair,
replace or rebuild the Improvements, to be of at least equal value, and of
substantially the same character as prior to such loss or damage, and Grantor
shall pay all costs of such restoring, repairing, replacing or rebuilding.
11. Disbursement of Insurance Proceeds. (a) Notwithstanding
anything to the contrary contained in Paragraph 10, if a loss or damage to the
Premises which is covered by insurance, occurs other than within one year
prior to the maturity date set forth in the Note,
(i) if immediately prior to the loss or damage and during any
period of repair and/or rebuilding, Grantor was not in
default under the Loan Documents;
(ii) if upon completion of the repairs, the rents receivable
pursuant to Leases that remain in full force and effect
shall be adequate to satisfy the debt service payable under
the Note and to pay the taxes and operating expenses of the
Premises;
(iii) if not more than three buildings constituting a portion of
the Improvements are damaged or destroyed in whole or in
part at any one time;
(iv) if all of the requirements of any regulatory authority
having jurisdiction over Beneficiary will be satisfied after
the repair or restoration,
then Beneficiary, after first applying such insurance proceeds to the payment
of all expenses incurred by Beneficiary in obtaining such proceeds, agrees to
apply the balance of the insurance proceeds to reimburse Grantor for the cost
of Restoring the Premises or any part thereof affected by an insured casualty,
in accordance with the terms and conditions provided for in this paragraph.
(b) If Beneficiary makes proceeds available for Restoring the
Premises, Grantor shall be obligated to use such proceeds solely for restoring
the Premises in accordance with this paragraph, unless Beneficiary otherwise
specifies in writing. Application by Beneficiary of any insurance proceeds
upon the Indebtedness Hereby Secured shall not excuse Grantor from making the
regularly scheduled payments of principal and interest due under the Note, nor
shall such application extend or reduce the amount of such payments. In
addition, such application by Beneficiary of insurance proceeds upon the
Indebtedness Hereby Secured may be made in such order or manner as Beneficiary
may elect in its sole discretion; provided that no premium or penalty shall be
payable in connection with any prepayment of the Indebtedness Hereby Secured
made out of insurance proceeds as aforesaid;
(c) If proceeds of insurance shall be made available to Grantor
for the Restoring of the Premises, Grantor hereby covenants to restore the
same in accordance with plans and specifications approved by Beneficiary, and
Grantor shall cause to be prepared and presented to Beneficiary a certified
construction statement, acceptable to Beneficiary, showing the total cost of
the restoration or repair; to the extent such cost exceeds the available
insurance proceeds, the amount of such excess cost shall be paid, in cash, to
Beneficiary, before any disbursement is made by Beneficiary pursuant hereto,
to be held in an account pursuant hereto (such insurance proceeds are
hereinafter called the "Construction Funds");
(d) Any portion of the insurance proceeds remaining after payment
in full of the Indebtedness Hereby Secured shall be paid to Grantor or as
ordered by a court of competent jurisdiction;
(e) In the event of foreclosure of the Deed of Trust or other
transfer of title to the Premises in extinguishment of the Indebtedness Hereby
Secured, all right, title and interest of Grantor in and to any insurance
policies then in force shall pass to the purchaser or grantee, and Grantor
hereby appoints Beneficiary its attorney-in-fact, in Grantor's name, to assign
and transfer all such policies and proceeds to such purchaser or grantee;
(f) The Construction Funds shall be made available to Grantor not
more than once during any calendar month as the Restoring of the Premises
progresses. The funds paid by Grantor to Beneficiary to pay all excess costs
shall be disbursed prior to the disbursement of any insurance proceeds. No
payment made prior to final completion of such Restoring shall exceed 90% of
the value of the work performed from time to time;
(g) There shall be delivered to Beneficiary, with such
certificates, sworn statements and lien waivers in an amount at least equal to
the amount of Construction Funds to be paid out to Grantor pursuant to each
architect's certificate and dated as of the date of the disbursement to which
they relate, provided that lien waivers may be delivered with respect to the
amount of Construction Funds disbursed thirty (30) days subsequent to such
disbursements if Beneficiary has received a title insurance endorsement
satisfactory to Beneficiary insuring against mechanic's liens which may arise
with respect to the disbursed Construction Funds;
(h) There shall be delivered to Beneficiary such other evidence
as Beneficiary may reasonably request, from time to time, during the Restoring
work, as to the progress of the work, compliance with the approved plans and
specifications, the cost of the work and the total amount needed to complete
the work;
(i) There shall be delivered to Beneficiary, at the sole expense
of Grantor, such other evidence as Beneficiary may reasonably request from
time to time, including, without limitation, updated title insurance
endorsements, showing that there are no liens against the Premises arising in
connection with the Restoring work, that the remaining Construction Funds are
sufficient to complete the restoring work, and that the Loan Documents,
including this Deed of Trust, are then still insured as a first lien on the
Deed of Trust Premises;
(j) If such Construction Funds are at any time determined by
Beneficiary not to be adequate for completion of the Restoring work, Grantor
shall immediately pay any deficiency to Beneficiary to be held and disbursed
as Construction Funds and prior to any other funds then held by Beneficiary
for disbursement pursuant hereto;
(k) If Grantor at any time shall fail to promptly and fully
perform the conditions and covenants set out above or if during the Restoring
work a Default occurs under any of the Loan Documents, Beneficiary may, at its
option, immediately cease making any further payments to Grantor for such
Restoring work, and may further, at its option, apply the Construction Funds
then in its possession either to the reduction of the Indebtedness Hereby
Secured or to the Restoring of the Premises in the manner above provided and
notwithstanding any such default or defaults, without affecting the lien of
this Deed of Trust and the obligations hereunder. Construction Funds may be
disbursed by Beneficiary directly or through a third party escrow agent, such
as, but not limited to, a title insurance company, or its agent, as
Beneficiary may determine in its sole discretion. Any excess Construction
Funds shall be applied by Beneficiary against the Indebtedness Hereby Secured
in such order or manner as Beneficiary may elect in its sole discretion;
12. Condemnation and Eminent Domain. Any and all awards (the
"Awards") heretofore or hereafter made or to be made to the present, or any
subsequent, owner of the Premises, by any governmental or other lawful
authority for the taking by condemnation or eminent domain, of all or any part
of the Premises (including any award from the United States government at any
time after the allowance of a claim therefor, the ascertainment of the amount
thereto, and the issuance of a warrant for payment thereof), or the proceeds
from a sale in lieu of such condemnation or eminent domain are hereby assigned
by Grantor to Beneficiary, which Awards Beneficiary is hereby authorized to
collect and receive from the condemnation authorities, and Beneficiary is
hereby authorized to give appropriate receipts and acquittances therefor.
Grantor shall give Beneficiary immediate notice of the actual or threatened
commencement of any condemnation or eminent domain proceedings affecting all
or any part of the Premises and shall deliver to Beneficiary copies of any and
all papers served in connection with any such proceedings. Grantor further
agrees to make, execute, and deliver to Beneficiary, at any time upon request,
free, clear, and discharged of any encumbrance of any kind whatsoever (except
the rights of the holders of any junior mortgage loans expressly consented to
in writing by Beneficiary, provided such rights are expressly subordinate to
the rights of Beneficiary), any and all further assignments and other
instruments deemed reasonably necessary by Beneficiary for the purpose of
validly and sufficiently assigning all Awards and other compensation
heretofore and hereafter made to Grantor for any taking, either permanent or
temporary, under any such proceeding. If any portion of or interest in the
Premises is taken by condemnation or eminent domain, either temporarily or
permanently, and the remaining portion of the Premises is not, in the judgment
of Beneficiary, a viable apartment complex of the same character than the same
was prior to the taking, then, at the option of Beneficiary, the entire
Indebtedness Hereby Secured shall immediately become due and payable. After
deducting from the Award for such taking all of its expenses incurred in the
collection and administration of the Award, including reasonable attorney's
fees, Beneficiary shall be entitled to apply the net proceeds toward repayment
of such portion of the Indebtedness Hereby Secured as it deems appropriate
without affecting the lien of this Deed of Trust. In the event of any partial
taking of parking spaces at the Premises, which in the judgment of the
Beneficiary leaves the Premises as a viable apartment complex of the same
character as prior to the taking; provided no Default has occurred and is then
continuing, the Award, in respect of such taking of such parking spaces, shall
be applied to reimburse Grantor for the cost of building additional parking
spaces in locations approved by Beneficiary, and such Award shall be disbursed
in the same manner as is provided in Paragraph 11 hereof for the application
of insurance proceeds, provided that any surplus after payment of such costs
shall be applied on account of the Indebtedness Hereby Secured. If the Award
is not applied for reimbursement of such restoration costs, the Award shall be
applied against the Indebtedness Hereby Secured, in such order or manner as
Beneficiary shall elect.
13. Assignment of Leases and Rents. Grantor hereby absolutely
and presently sells, assigns and transfers unto Beneficiary (subject to the
license granted to Grantor below) all of the rents, royalties, issues,
profits, revenue, income, security deposits and other benefits generated from
the Premises under the Leases or otherwise and all of the rents, leases,
issues and profits now due and which may hereafter become due under or by
virtue of any Leases which may have been heretofore or may be hereafter made
or agreed to by Grantor or the agents of any Grantor or which may be made or
agreed to by Beneficiary under the powers herein granted (collectively the
"Rents"), it being the intention hereby to establish an absolute transfer and
assignment of all such Rents and Leases to Beneficiary and not merely the
granting of a security interest. Notwithstanding the foregoing, Beneficiary
hereby grants to Grantor a license to collect and retain the Rents. However,
upon Default under the Note, this Deed of Trust or any other of the Loan
Documents entered into for the Indebtedness Hereby Secured, the license to
Grantor from Beneficiary shall thereupon terminate and thereafter Beneficiary
shall be entitled to take possession of the Premises, and subject to the
effect of any Leases, remove all persons therefrom and rent the Premises for
Grantor's account and employ such agents and attorneys as may be necessary
with respect thereto. Likewise, upon such Default, Beneficiary shall be
entitled to the immediate appointment of a receiver of the Premises, without
regard to the value of the Premises or the solvency of any person or persons
primarily or contingently liable for the payment of the Indebtedness Hereby
Secured, whether or not Beneficiary has an adequate remedy at law; and upon
any such Default, whether or not a receiver has been sought or appointed,
Beneficiary may collect all Rents, and apply the Rents so collected in their
entirety to the extent of the Indebtedness Secured Hereby, after deducting
Beneficiary's costs and expenses of collection of such Rents (including,
without limitation, reasonable attorneys' fees and the costs and expenses of
litigation). Upon payment in full and satisfaction of the Indebtedness Hereby
Secured, this assignment of Rents shall terminate automatically. Grantor
hereby irrevocably appoints Beneficiary its agent in its name and stead (with
or without taking possession of the Premises as provided in Paragraph 20
hereof) to rent, lease or let all or any portion of the Premises to any party
or parties at such rental and upon such terms as Beneficiary shall, in its
reasonable discretion, determine, and to collect all of said Rents arising
from or accruing at any time hereafter, and all now due or that may hereafter
become due under each and every of the Leases, written or oral, or other
tenancy existing, or which may hereafter exist on the Premises, with the
rights and powers and subject to the same immunities, exoneration of liability
and rights of recourse and indemnity as Beneficiary would have upon taking
possession pursuant to the provisions of Paragraph 20 hereof. Grantor
represents and agrees that no rent has been or will be paid by any person in
possession of any portion of the Premises for more than one installment in
advance and that the payment of none of the rents to accrue for any portion of
said Premises has been or will be waived, released, reduced, discounted or
otherwise discharged or compromised by Grantor except as may be permitted in
the Assignment of Leases (as hereinafter defined). Grantor will not assign
any of the rents or profits of the Premises, except to Beneficiary or a
permitted purchaser or grantee of the Premises. Nothing herein contained
shall be construed as constituting Beneficiary a "mortgagee-in-possession" in
the absence of the taking of actual possession of the Premises by Beneficiary
pursuant to Paragraph 20 hereof. Possession by a court-appointed receiver
will not be considered possession by Beneficiary. In the exercise of the
powers herein granted Beneficiary, no liability shall be asserted or enforced
against Beneficiary, all such liability being expressly waived and released by
Grantor. Grantor further agrees to assign and transfer to Beneficiary all
future Leases upon all or any part of the Premises and to execute and deliver,
at the request of Beneficiary, all such further assurances and assignments in
the Premises as Beneficiary shall from time to time require. In the event
Beneficiary requires that Grantor execute and record a separate Assignment of
Rents or separate assignments of any of the Leases to Beneficiary, the terms
and provisions of those assignments shall control in the event of a conflict
between the terms of this Deed of Trust and the terms thereof. The remedies
provided herein are in addition to the remedies provided to Beneficiary under
that certain Cash Management Agreement dated the date hereof between Grantor
and Beneficiary.
14. Observance of Lease Assignment. Grantor expressly covenants
and agrees that if any lessee under any of the Leases transferred, sold or
assigned to Beneficiary or if Grantor, as lessor therein, shall fail to
perform and fulfill any term, covenant, condition or provision in said Lease,
on its part to be performed or fulfilled at the times and in the manner in
said Lease provided; or if Grantor shall enter into any Leases other than on a
standard form previously approved by Beneficiary, for a term longer than one
year and other than in the ordinary course of business on commercially prudent
terms and provisions consistent with market rental rates for comparable
residential projects in the area where the Premises is located and including
no free rent periods without the prior written consent of Beneficiary or if
Grantor shall permit or agree to any renewal, extension, compromise,
settlement or termination or make any material change or modification of any
kind or nature of or with respect to any of the Leases or the terms thereof
(except that Grantor shall be entitled to terminate up to but not in excess of
ten (10) residential Leases through customary non-payment proceedings in any
given calendar month provided that such termination is in the ordinary course
of business and is commercially prudent), without Beneficiary's prior written
consent; or if Grantor shall suffer or permit to occur any breach or default
under the provisions of any assignment of any Lease given as additional
security for the payment of the Indebtedness Hereby Secured, which breach or
default is not cured within the applicable grace period provided therein; then
and in any such event, such breach or default shall constitute a Default
hereunder and at the option of Beneficiary, and upon notice to Grantor, the
Indebtedness Secured Hereby shall become due and payable as in the case of
other Defaults.
15. Beneficiary's Performance of Grantor's Obligations. In case
of Default, Beneficiary, either before or after acceleration of the
Indebtedness Hereby Secured or the foreclosure of the lien hereof or
foreclosure sale, may, but shall not be required to, make any payment or
perform any act herein required of Grantor (whether or not Grantor is
personally liable therefor) in any form and manner deemed expedient to
Beneficiary. Upon any such payment or performance of any such act,
Beneficiary shall as soon as reasonably possible provide notice thereof to
Grantor but its failure to do so shall not affect the rights of Beneficiary
and the obligation of Grantor hereunder. Beneficiary may, but shall not be
required to, complete construction, furnishing and equipping of the
Improvements and rent, operate and manage the Premises and such Improvements
and pay operating costs and expenses, including management fees, of every kind
and nature in connection therewith, so that the Premises shall be operational
and usable for their intended purposes. All monies paid, and all expenses
paid or incurred in connection therewith, including reasonable attorneys' fees
and other monies advanced by Beneficiary to protect the Premises and the lien
hereof, or to complete construction, furnishing and equipping or to rent,
operate and manage the Premises or to pay any such operating costs and
expenses thereof or to keep the Premises operational and usable for their
intended purpose shall be so much additional Indebtedness Hereby Secured,
whether or not the Indebtedness Hereby Secured, as a result thereof, shall
exceed the face amount of the Note, and shall become immediately due and
payable on demand, and with interest thereon at the Default Rate (as such term
is defined in the Note). Inaction of Beneficiary shall never be considered as
a waiver of any right accruing to it on account of any Default nor shall the
provisions of this Paragraph or any exercise by Beneficiary of its rights
hereunder prevent any default from constituting a Default. Beneficiary, in
making any payment hereby authorized (a) relating to Taxes, may do so
according to any bill, statement or estimate, without inquiry into the
validity of any tax, assessment, sale, forfeiture, tax lien or title or claim
thereof; (b) for the purchase, discharge, compromise or settlement of any
lien, may do so without inquiry as to the validity or amount of any claim for
lien which may be asserted; or (c) in connection with the completion of
construction, furnishing or equipping of the Premises or the rental,
operation, or management of the Premises or the payment of operating costs and
expenses thereof, may do so in such amounts and to such persons as Beneficiary
may deem appropriate. Nothing contained herein shall be construed to require
Beneficiary to advance or expend monies for any purpose mentioned herein, or
for any other purpose.
16. Security Agreement. Beneficiary and Grantor agree that this
Deed of Trust shall constitute a Security Agreement within the meaning of the
Texas Uniform Commercial Code (hereinafter the "Code") with respect to (i) any
and all sums at any time on deposit for the benefit of Beneficiary or held by
Beneficiary (whether deposited by or on behalf of Grantor or anyone else)
pursuant to any of the provisions of the Deed of Trust and (ii) with respect
to any personal property included in the granting clauses of this Deed of
Trust and Exhibit B hereto, which personal property may not be deemed to be
affixed to the Premises or may not constitute a "fixture" (within the meaning
of Section 9-313 of the Code), (which property is hereinafter referred to as
"Personal Property") and all replacements of such Personal Property,
substitutions for such Personal Property, additions to such Personal Property,
and the proceeds thereof (all of said Personal Property and the replacements,
substitutions and additions thereto and the proceeds thereof being sometimes
hereinafter collectively referred to as the "Collateral"), and that a security
interest in and to the Collateral is hereby granted to Beneficiary, and the
Collateral and all of Grantor's right, title and interest therein are hereby
assigned to Beneficiary, all to secure payment of the Indebtedness Hereby
Secured. All of the terms, provisions, conditions and agreements contained in
this Deed of Trust pertain and apply to the Collateral as fully and to the
same extent as to any other property comprising the Premises; and the
following provisions of this Paragraph shall not limit the applicability of
any other provision of this Deed of Trust but shall be in addition thereto:
(a) Grantor (being the Debtor as that term is used in the
Code) is and will be the true and lawful owner of the Collateral, subject to
no liens, charges or encumbrances other than the lien hereof, other liens and
encumbrances benefiting Beneficiary and no other party, and liens and
encumbrances, if any, expressly permitted by this Deed of Trust (including,
without limitation, those certain liens and encumbrances, if any, set forth on
the title insurance policy insuring the lien of this Deed of Trust) or
otherwise expressly consented to in writing by Beneficiary.
(b) The Collateral is to be used by Grantor solely for
business purposes.
(c) The Collateral will be kept at the Premises, and,
except for Obsolete Collateral (as hereinafter defined), will not be removed
therefrom without the consent of Beneficiary (being the Secured Party as that
term is used in the Code). The Collateral may be affixed to the Premises but
will not be affixed to any other real estate.
(d) The only persons having any interest in the Collateral
are Grantor, Beneficiary and holders of interests, if any, expressly permitted
hereby or otherwise expressly consented to in writing by Beneficiary.
(e) No Financing Statement (other than Financing Statements
showing Beneficiary as the sole secured party, or with respect to liens or
encumbrances, if any, expressly permitted by this Deed of Trust or otherwise
expressly consented to in writing by Beneficiary) covering any of the
Collateral or any proceeds thereof is on file in any public Land Records
except pursuant hereto; and Grantor will at its own cost and expense, upon
demand, furnish to Beneficiary such further information and will execute and
deliver to Beneficiary such financing statements and other documents in form
satisfactory to Beneficiary and will do all such acts and things as
Beneficiary may at any time or from time to time request or as may be
necessary or appropriate to establish and maintain a perfected security
interest in the Collateral as security for the Indebtedness Hereby Secured,
subject to no other liens or encumbrances, other than liens or encumbrances
benefiting Beneficiary and no other party and liens and encumbrances (if any)
expressly permitted by this Deed of Trust; and Grantor will pay the cost of
filing or recording such financing statements or other documents, and this
instrument, in all public Land Records wherever filing or recording is deemed
by Beneficiary to be necessary or desirable.
(f) Upon Default hereunder, Beneficiary shall have the
remedies of a secured party under the Code, including without limitation, the
right to take immediate and exclusive possession of the Collateral, or any
part thereof, and for that purpose may, so far as Grantor can give authority
therefor, with or without judicial process, enter (if this can be done without
breach of the peace), upon any place which the Collateral or any part thereof
may be situated and remove the same therefrom (provided that if the Collateral
is affixed to real estate, such removal shall be subject to the conditions
stated in the Code); and Beneficiary shall be entitled to hold, maintain,
preserve and prepare the Collateral for sale, until disposed of, or may
propose to retain the Collateral subject to Grantor's right of redemption in
satisfaction of Grantor's obligations, as provided in the Code. Beneficiary
may render the Collateral unusable without removal and may dispose of the
Collateral on the Premises. Beneficiary may require Grantor to assemble the
Collateral and make it available to Beneficiary for its possession at a place
to be designated by Beneficiary. Beneficiary will give Grantor reasonable
notice of the time and place of any public sale of the Collateral or of the
time after which any private sale or any other intended disposition thereof is
to be made. The requirements of reasonable notice shall be met if such notice
is mailed, by certified United States mail or equivalent, postage prepaid, to
the address of Grantor hereinafter set forth at least ten (10) days before the
time of the sale or disposition. Beneficiary may buy at any public sale and,
if the Collateral is of a type customarily sold in a recognized market or is
of a type which is the subject of widely distributed standard price
quotations, Beneficiary may buy at private sale. Any such sale may be held as
part of and in conjunction with any foreclosure sale of the Premises, the
Premises including the Collateral to be sold as one lot if Beneficiary so
elects. The net proceeds realized upon any such disposition, after deduction
for the expenses of retaking, holding, preparing for sale, selling or the like
and the attorneys' fees and legal expenses incurred by Beneficiary, shall be
applied against the Indebtedness Hereby Secured in such order or manner as
Beneficiary shall select. Beneficiary will account to Grantor for any surplus
realized on such disposition.
(g) The terms and provisions contained in this Paragraph 16
shall, unless the context otherwise requires, have the meanings and be
construed as provided in the Code.
(h) This Deed of Trust is intended to be a financing
statement within the purview of Section 9-402(f) of the Code with respect to
the Collateral and the goods described herein, which goods are or may become
fixtures relating to the Premises. The addresses of Grantor (Debtor) and
Beneficiary (Secured Party) are hereinafter set forth. The addresses of
Grantor (Debtor) hereinafter set forth is the chief executive offices of
Grantor (Debtor) (i.e. the place where in fact the Debtor conducts the main
part of its business operations). This Deed of Trust is to be filed for
record with the Recorder of Deeds of the county or counties where the Premises
are located.
(i) To the extent permitted by applicable law, the security
interest created hereby is specifically intended to cover and include all
Executory Contracts, any management agreement regarding the Premises and all
Leases between Grantor (or its agent), as lessor, and various tenants named
therein, as lessee, including all extended terms and all extensions and
renewals of the terms thereof, as well as any amendments to or replacement of
said Leases, together with all of the right, title and interest of Grantor, as
lessor thereunder, including, without limiting the generality of the
foregoing, the present and continuing right to make claim for, collect,
receive and receipt for any and all of the rents, rent equivalents, income,
revenues, issues and profits and moneys payable as damages or in lieu of the
rent and moneys payable as the purchase price of the Premises or any part
thereof or of awards or claims for money and other sums of money payable or
receivable thereunder howsoever payable, and to bring actions and proceedings
thereunder or for the enforcement thereof, and to do any and all things which
Grantor or any lessor is or may become entitled to do under the Leases.
Notwithstanding the foregoing, it is expressly understood and agreed that
Beneficiary shall not exercise any of the rights or powers conferred upon it
by this paragraph until a Default shall exist under this Deed of Trust.
(j) Notwithstanding anything herein to the contrary, this
Paragraph 16 shall not be deemed to apply to any items of personal property
which (i) are owned by tenants who are in possession pursuant to a Lease and
(ii) may be removed by such tenants at the expiration or termination of such
Lease.
17. Restrictions on Transfer. Grantor shall not, without the
prior written consent of Beneficiary, create, effect, contract for, consent
to, suffer or permit any "Prohibited Transfer" (as hereinafter defined). Any
conveyance, sale, assignment, transfer, lien, pledge, hypothecation, mortgage,
security interest or other encumbrance or alienation (or any agreement to do
any of the foregoing) of any of the following properties, rights or interests
which occurs, is granted, accomplished, attempted or effectuated without the
prior written consent of Beneficiary shall constitute a "Prohibited Transfer":
(a) the Premises or any part thereof or interest therein,
excepting only sales or other dispositions of Collateral (hereinafter called
"Obsolete Collateral") no longer useful in connection with the operation of
the Premises, provided that such Obsolete Collateral has been or is
contemporaneously being replaced by Collateral of at least equal value and
utility which is subject to the lien hereof with the same priority as with
respect to the Obsolete Collateral;
(b) any shares of capital stock of a corporate Grantor or a
corporation which is a general partner in Grantor or a corporation which is a
general partner of a partnership which is the general partner of Grantor, or
any shares of capital stock of National Property Investors, Inc., a Delaware
corporation ("NPI, Inc."), it being agreed and understood that a transfer of
stock of NPI, Inc. shall not constitute a Prohibited Transfer hereunder so
long as one of Michael Ashner, Martin Lifton, Steven Lifton and Arthur N.
Queler is the chief operating officer of NPI, Inc. charged with the authority
and power to direct the day-to-day operation and management of NPI, Inc. and
so long as any one or more of the current shareholders of NPI, Inc. shall own
at least a 5% interest in NPI, Inc.
(c) any general partnership interests in Grantor or any
partnership which is the general partner of Grantor;
(d) 50% or more of the limited partnership interests or
capital stock, as applicable, in Grantor, any general partner of Grantor or
any general partner of the general partner of Grantor is transferred in any
one calendar year; or
(e) any general partner of Grantor or of Grantor's general
partner shall cease to be a general partner thereof;
in each case whether any such conveyance, sale, assignment, transfer, lien,
pledge, mortgage, security interest, encumbrance or alienation is effected
directly, indirectly, voluntarily or involuntarily, by operation of law or
otherwise; provided, however, that the foregoing provisions of this
Paragraph 17 shall not apply (i) to liens securing the Indebtedness Hereby
Secured, (ii) to the lien of current taxes and assessments not in default, or
(iii) to any transfers of the Premises, or part thereof, or interest therein,
or shares of stock or partnership or joint venture interests, as the case may
be, by or on behalf of an owner thereof who is deceased or declared judicially
incompetent, to such owner's heirs, legatees, devisees, executors,
administrators, estate or personal representatives, (iv) to the lien of Deed
of Trust B. Grantor shall not create, effect, contract for, consent to or
permit any Prohibited Transfer unless otherwise agreed by Beneficiary.
Notwithstanding the foregoing, provided that no default has
occurred and is continuing under the Loan Documents, if the stock of NPI, Inc.
is anticipated to be transferred to a bona fide third party and (i) one of
Michael Ashner, Martin Lifton, Steven Lifton or Arthur N. Queler will not be
the chief operating officer of NPI, Inc. charged with the authority and power
to direct the day to day operation and management of NPI, Inc., or (ii) any
one or more of the current shareholders of NPI, Inc. will not own at least 5%
interest of NPI, Inc., Grantor shall use reasonable efforts to notify
Beneficiary of such transfer prior to its occurrence. On the date of such
transfer, Grantor shall provide Beneficiary with notice of such transfer.
Grantor shall deliver to Beneficiary copies as evidence of the transfer,
including stock certificates. The Loan shall, without further act or
instrument, become immediately due and payable on the date which is one (1)
year from the date of the transfer at which time the outstanding principal
balance, accrued interest and all sums owing under the Loan shall be
immediately due and payable. Nothing contained herein shall release Grantor
from any liability under the Loan Documents, which shall continue unmodified
and in full force and effect.
Notwithstanding the foregoing, provided no default has occurred
and is continuing under the Loan Documents, upon request of Grantor,
Beneficiary shall consent to the transfer of the Premises to an Affiliate of
Grantor provided that the Affiliate assumes all the obligations of Grantor and
any guarantor or indemnitor under the Loan (including but not limited to the
Responsible Entities) and enters and delivers all documents, instruments,
legal opinions, title endorsements and such other items as Beneficiary may
reasonably require in connection with such transfer. The term "Affiliate"
shall mean any person or entity currently controlled by, under common control
with, or controlling Grantor but shall not include Fox Realty Investors or Fox
Partners '83. The consent by Beneficiary to any transfer under this paragraph
shall not release Grantor or any of the Responsible Entities from any
liability under the Loan Documents, which shall continue unmodified and in
full force and effect.
Any consent by Beneficiary permitting a transaction otherwise
prohibited under this Paragraph 17 shall not constitute a consent to or waiver
of any right, remedy or power of Beneficiary to withhold its consent on a
subsequent occasion to a transaction not otherwise permitted by the provisions
of this Paragraph 17, and notwithstanding the giving of such consent Grantor
shall not engage in any "prohibited transaction" with any "party-in-interest"
as such terms are defined in ERISA (as defined in Paragraph 44) or otherwise
contravene the provisions of Paragraph 44.
No such consent shall be considered by Beneficiary unless the
appropriate service fees and legal fees are paid in advance and no such
consent shall be given unless Grantor agrees, in addition to any other
conditions to such consent imposed by Beneficiary, that immediately upon
closing of the subject sale or transfer, Grantor will provide Beneficiary with
a copy of the deed or other instrument conveying title to the Premises to the
transferee and with an affidavit and agreement of indemnification regarding
Internal Revenue Code Sections 1445 and 7701 in form satisfactory to
Beneficiary executed by the transferee under oath.
In determining whether or not to make the loan secured hereby,
Beneficiary evaluated the background and experience of Grantor in owning and
operating property such as the Premises, found it acceptable and relied and
continues to rely upon same as the means of maintaining the value of the
Premises which is Beneficiary's security for the Note. Grantor is
well-experienced in borrowing money and owning and operating property such as
the Premises, was ably represented by a licensed attorney at law in the
negotiation and documentation of the loan secured hereby and bargained at
arm's length and without duress of any kind for all of the terms and
conditions of the loan, including this provision.
Grantor recognizes that Beneficiary is entitled to keep its loan
portfolio at current interest rates by either making new loans at such rates
or collecting assumption fees and/or increasing the interest rate on a loan,
the security for which is purchased by a party other than the original
Grantor. Grantor further recognizes that any secondary junior financing
placed upon the Premises (a) may divert funds which would otherwise be used to
pay the Note secured hereby; (b) could result in acceleration and foreclosure
by any such junior encumbrancer which would force Beneficiary to take measures
and incur expenses to protect its security; (c) would detract from the value
of the Premises should Beneficiary come into possession thereof with the
intention of selling same; and (d) would impair Beneficiary's right to accept
a deed in lieu of foreclosure, as a foreclosure by Beneficiary would be
necessary to clear the title to the Premises. In accordance with the
foregoing and for the purposes of (i) protecting Beneficiary's security, both
of repayment and of value of the Premises; (ii) giving Beneficiary the full
benefit of its bargain and contract with Grantor; (iii) allowing Beneficiary
to raise the interest rate and collect assumption fees; and (iv) keeping the
Premises free of subordinate financing liens, Grantor agrees that if this
Paragraph 17 be deemed a restraint on alienation, that it is a reasonable one.
18. Defaults. If one or more of the following events (herein
called "Defaults") shall occur:
(a) Grantor shall default in the payment of principal or
interest, Tax or Insurance Deposits or Reserves (as defined in the Reserve
Agreement dated the date hereof between Beneficiary and Grantor) and such
default continues past the fifth (5th) day after the same is due;
(b) Grantor shall default in the due and punctual payment
of Taxes or Premiums;
(c) If any default shall exist for any reason other than
the non-payment of money under the Note, under this Deed of Trust, or under
any other Loan Documents which is not cured within the grace period provided
for thereunder, and if no grace period is specified, within thirty (30) days
from the date of such default, provided, however, that if Grantor has
commenced in good faith to cure such default during the aforesaid thirty (30)
day period and proceeds with due diligence and continuity to completion of
such cure, Grantor shall have a maximum of an additional sixty (60) days
(above and beyond the initial 30 day period) to cure such default; or
(d) If any of the information contained in any
documentation provided to Beneficiary by Grantor in conjunction with the
Indebtedness Hereby Secured shall not be true, accurate and complete in all
material respects or shall be misleading in any material respect;
(e) If (and for the purpose of this Subparagraph 18(e)
only, the term Grantor shall mean and include not only Grantor, but also any
general partner in Grantor, any owner of more than ten percent (10%) of the
stock in a corporate Grantor or corporate general partner of Grantor, and each
person who, as guarantor, co-maker or otherwise, shall be or become liable for
or obligated upon all or any part of the Indebtedness Hereby Secured or any of
the covenants or agreements contained herein) any of the following shall
occur:
(i) Grantor shall file a voluntary petition in
bankruptcy or for arrangement, reorganization or other relief under any
chapter of the Federal Bankruptcy Code or any similar law, state or
federal, now or hereafter in effect;
(ii) Grantor shall file an answer or other pleading
in any proceeding admitting insolvency, bankruptcy, or inability to pay
its debts as they mature;
(iii) Within ninety (90) days after the filing against
Grantor of any involuntary proceeding under the Federal Bankruptcy Code
or similar law, state or federal, now or hereafter in effect, such
proceedings shall not have been dismissed;
(iv) All or a substantial part of Grantor's assets
are attached, seized, subjected to a writ or distress warrant, or are
levied upon, unless such attachment, seizure, writ, warrant or levy is
vacated within sixty (60) days;
(v) Grantor shall make an assignment for the benefit
of creditors or shall admit in writing its inability to pay its debts
generally as they become due or shall consent to the appointment of a
receiver or trustee or liquidator of all or the major part of its
property, or the Premises; or
(vi) An order appointing a receiver, trustee or
liquidator of Grantor or all or a major part of Grantor's property or
the Premises is not vacated within ninety (90) days following the entry
thereof; or
(f) If a default, after passage of time or notice, as may
be required, shall occur under any other deed of trust, whether subordinate or
superior to this Deed of Trust, now or hereafter encumbering the Premises or
any portion thereof, including but not limited to that Amended and Restated
Deed of Trust B dated the date hereof between Grantor and Beneficiary;
then Beneficiary is hereby authorized and empowered, at its option and without
affecting the lien hereby created or the priority of said lien or any other
right of Beneficiary hereunder, to declare, without further notice, all
Indebtedness Hereby Secured to be immediately due and payable with interest
thereon at the Default Rate, whether or not such Default be thereafter
remedied by Grantor, and Beneficiary may immediately proceed to foreclose this
Deed of Trust and/or to exercise any right, power or remedy provided by this
Deed of Trust, the Note or any of the other Loan Documents or by law or in
equity or any other document or instrument regulating, evidencing, securing or
guarantying any of the Indebtedness Hereby Secured.
19. Foreclosure. When the Indebtedness Hereby Secured, or any
part thereof, shall become due, whether by acceleration or otherwise,
Beneficiary shall have the right to foreclose the lien hereof in accordance
with the laws of the State of Texas and to exercise any other remedies of
Beneficiary provided in the Note, this Deed of Trust or any of the other Loan
Documents, or which Beneficiary may have at law, at equity or otherwise. In
any suit to foreclose the lien hereof, there shall be allowed and included as
additional Indebtedness Hereby Secured in the decree of sale, all reasonable
expenditures and expenses authorized by law and all other expenditures and
expenses which may be paid or incurred by or on behalf of Beneficiary for
attorneys' fees, appraiser's fees, outlays for documentary and expert
evidence, stenographer's charges, publication costs, and costs (which may be
estimated as to items to be expended after entry of the decree) of procuring
all such abstracts of title, title searches and examinations, title insurance
policies, and similar data and assurances with respect to title as Beneficiary
may deem necessary either to prosecute such suit or to evidence to bidders at
sales which may be had pursuant to such decree the true conditions of the
title to or the value of the Premises. All expenditures and expenses of the
nature mentioned in this Paragraph, and such other expenses and fees as may be
incurred in the protection of the Premises and rents and income therefrom and
the maintenance of the lien of this Deed of Trust, including the fees of any
attorney employed by Beneficiary in any litigation or proceedings affecting
this Deed of Trust, the Note, the other Loan Documents or the Premises,
including probate and bankruptcy proceedings, or in preparation of the
commencement or defense of any proceedings or threatened suit or proceeding,
or otherwise in dealing specifically therewith, shall be so much additional
Indebtedness Hereby Secured and shall be immediately due and payable by
Grantor, with interest thereon at the Default Rate until paid.
20. Right of Possession. When the Indebtedness Hereby Secured
shall become due, whether by acceleration or otherwise, or in any case in
which, under the provisions of this Deed of Trust, Beneficiary has a right to
institute foreclosure proceedings, Grantor shall, forthwith upon demand of
Beneficiary, surrender to Beneficiary, and Beneficiary shall be entitled to
take actual possession of, the Premises or any part thereof, personally, by
its agent or attorneys or be placed in possession pursuant to court order as
mortgagee in possession or receiver, and Beneficiary, in its discretion,
personally, by its agents or attorneys or pursuant to court order as mortgagee
in possession or receiver, may enter upon and take and maintain possession of
all or any part of the Premises, together with all documents, books, records,
papers, and accounts of Grantor, including those accounts which were set up to
hold any security deposits, or the then owner of the Premises relating
thereto, and may exclude Grantor, such owner, and any agents and servants
thereof wholly therefrom and may, on behalf of Grantor or such owner, or in
its own name as Beneficiary and under the powers herein granted:
(1) hold, operate, manage, and control all or any part of
the Premises and conduct the business, if any, thereof, either personally or
by its agents, with full power to use such measures, legal or equitable, as in
its discretion may be deemed proper or necessary to enforce the payment or
security of the rents, issues, deposits, profits, and avails of the Premises,
including without limitation actions for recovery of rent, actions in forcible
detainer, and actions in distress for rent, all without notice to Grantor;
(2) cancel or terminate any Lease or sublease of all or any
part of the Premises for any cause or on any ground that would entitle Grantor
to cancel the same;
(3) elect to disaffirm any Lease or sublease of all or any
part of the Premises made subsequent to this Deed of Trust without
Beneficiary's prior written consent;
(4) extend or modify any then existing Leases and make new
Leases of all or any part of the Premises, which
extensions, modifications, and new Leases may provide for terms to expire, or
for options to lessees to extend or renew terms to expire, beyond the maturity
date of the loan evidenced by the Note and the issuance of a deed or deeds to
a purchaser or purchasers at a foreclosure sale, it being understood and
agreed that any such Leases, and the options or other such provisions to be
contained therein, shall be binding upon Grantor, all persons whose interests
in the Premises are subject to the lien hereof, and the purchaser or
purchasers at any foreclosure sale, notwithstanding any redemption,
reinstatement, discharge of the Indebtedness Hereby Secured, satisfaction of
any foreclosure decree, or issuance of any certificate of sale or deed to any
such purchaser;
(5) make all necessary or proper repairs, decoration
renewals, replacements, alterations, additions, betterments, and improvements
in connection with the Premises as may seem judicious to Beneficiary, to
insure and reinsure the Premises and all risks incidental to Beneficiary's
possession, operation, and management thereof, and to receive all rents,
issues, deposits, profits, and avails therefrom; and
(6) apply the net income, after allowing a reasonable fee
for the collection thereof and for the management of the Premises, to the
payment of Taxes, Insurance Premiums and other charges applicable to the
Premises, or in reduction of the Indebtedness Hereby Secured in such order and
manner as Beneficiary shall select.
Nothing herein contained shall be construed as constituting
Beneficiary a mortgagee in possession in the absence of the actual taking of
possession of the Premises.
21. Receiver. Upon the occurrence of a Default hereunder, a
court of competent jurisdiction may appoint a receiver upon petition of
Beneficiary, and Beneficiary shall be entitled to the appointment of a
receiver at Beneficiary's sole option. Such appointment may be made either
before or after sale, without notice, without regard to the solvency or
insolvency of Grantor at the time of application for such receiver, and
without regard to the then value of the Premises or whether the same shall be
then occupied as a homestead or not; and Beneficiary hereunder or any employee
or agent thereof may be appointed as such receiver. Such receiver shall have
all powers and duties prescribed by law, including the power to make leases to
be binding upon all parties, including Grantor, the purchaser at a sale
pursuant to a judgment of foreclosure and any person acquiring an interest in
the Premises after entry of a judgment of foreclosure. In addition, such
receiver shall also have the power to extend or modify any then existing
leases, which extensions and modifications may provide for terms to expire, or
for options to lessees to extend or renew terms to expire, beyond the maturity
date of the Note and beyond the date the issuance of a deed or deeds to a
purchaser or purchasers at a foreclosure sale, it being understood and agreed
that any such leases, and the options or other provisions to be contained
therein, shall be binding upon Grantor and all the persons whose interest in
the Premises are subject to the lien hereof and upon the purchaser or
purchasers at any foreclosure sale, notwithstanding any redemption,
reinstatement, discharge of the Indebtedness Hereby Secured, satisfaction of
any foreclosure judgment, or issuance of any certificate of sale or deed to
any purchaser. In addition, such receiver shall have the power to collect the
rents, issues and profits of the Premises during the pendency of such
foreclosure suit and, in case of a sale and deficiency, during the full
statutory period of redemption, if any, whether there be a redemption or not,
as well as during any further times when Grantor, except for the intervention
of such receiver, would be entitled to collection of such rents, issues and
profits, and such receiver shall have all other powers which may be necessary
or are usual in such cases for the protection, possession, control, management
and operation of the Premises during the whole of said period. The court may,
from time to time, authorize the receiver to apply the net income from the
Premises in payment in whole or in part of: (a) the Indebtedness Hereby
Secured or the indebtedness secured by a decree foreclosing this Deed of
Trust, or any tax, special assessment, or other lien which may be or become
superior to the lien hereof or of such decree, provided such application is
made prior to the foreclosure sale; or (b) the deficiency in case of a sale
and deficiency.
22. Foreclosure Sale. The proceeds of any foreclosure sale of
the Premises shall be distributed and applied in accordance with applicable
law. The judgment of foreclosure or order confirming the sale shall provide
for application of sale proceeds in the following order of priority: First,
all items not covered by the provisions of Paragraph 19 hereof, which under
the terms hereof constitute Indebtedness Hereby Secured additional to the
principal and interest evidenced by the Note in such order as Beneficiary
shall elect with interest thereon as herein provided; and Second, all
principal and interest remaining unpaid on the Note in such order as
Beneficiary shall elect.
23. Insurance During Foreclosure. In case of an insured loss
after foreclosure proceedings have been instituted, the proceeds of any
Insurance Policy, if not applied in rebuilding or restoring the Improvements,
as aforesaid, shall be used to pay the amount due in accordance with any
decree of foreclosure that may be entered in any such proceedings, and the
balance, if any, shall be paid as the court may direct. In the case of
foreclosure of this Deed of Trust, the court, in its decree, may provide that
the mortgagee's clause attached to each of the casualty Insurance Policies may
be cancelled and that the decree creditor may cause a new loss clause to be
attached to each of said casualty Insurance Policies making the loss
thereunder payable to said decree creditor. In the event of foreclosure sale,
provided such Insurance Policies are assignable, Beneficiary is hereby
authorized, without the consent of Grantor, to assign any and all Insurance
Policies to the purchaser at the sale, provided such Insurance Policies are
assignable, or to take such other steps as Beneficiary may deem advisable to
cause the interest of such purchaser to be protected by any of the Insurance
Polices without credit or allowance to Grantor for prepaid premiums thereon.
24. Waiver of Right of Redemption and Other Rights. To the full
extent permitted by law, Grantor hereby covenants and agrees that it will not
at any time insist upon or plead, or in any manner whatsoever claim or take
any advantage of, any stay, exemption or extension law or any so-called
"Moratorium Law" now or at any time hereafter in force, nor claim, take or
insist upon any benefit or advantage of or from any law now or hereafter in
force providing for the valuation or appraisement of the Premises, or any part
thereof, prior to any sale or sales thereof to be made pursuant to any
provisions herein contained, or to any decree, judgment or order of any court
of competent jurisdiction; or claim or exercise any rights under any statute
now or hereafter in force to redeem the property, or any part thereof, or
relating to the marshalling thereof, upon foreclosure sale or other
enforcement hereof. To the full extent permitted by law, Grantor hereby
expressly waives any and all rights to reinstatement and redemption, on its
own behalf, on behalf of all persons claiming or having an interest (direct or
indirect) by, through or under Grantor and on behalf of each and every person
acquiring any interest in or title to the Premises subsequent to the date
hereof, it being the intent hereof that any and all such rights of
reinstatement and redemption (except the right to repay the Note in full by
paying the entire Indebtedness Hereby Secured, including, but not limited to,
the outstanding principal balance of the Note, any prepayment premium and all
accrued and unpaid interest thereon prior to any foreclosure sale or
conveyance in lieu thereof and thereby obtain a release of this Deed of Trust)
of Grantor and such other persons, are and shall be deemed to be hereby waived
to the full extent permitted by applicable law. To the full extent permitted
by law (but subject to paragraph 45 of this Deed of Trust), Grantor agrees
that it will not, by invoking or utilizing any applicable law or laws or
otherwise, hinder, delay or impede the exercise of any right, power or remedy
herein or otherwise granted or delegated to Beneficiary, but will suffer and
permit the exercise of every such right, power and remedy as though no such
law or laws have been or will have been made or enacted. To the full extent
permitted by law, Grantor hereby agrees that no action for the enforcement of
the lien or any provision hereof shall be subject to any defense which would
not be good and valid in an action at law upon the Note.
25. Rights Cumulative. Each right, power and remedy herein
conferred upon Beneficiary herein or in any of the other Loan Documents is
cumulative and in addition to every other right, power or remedy, express or
implied, now or hereafter provided by law or in equity, and each and every
right, power and remedy herein set forth or otherwise so existing may be
exercised from time to time as often and in such order as may be deemed
expedient to Beneficiary. The exercise of one right, power or remedy shall
not be a waiver of the right to exercise at the same time or thereafter any
other right, power or remedy; and no delay or omission of Beneficiary in the
exercise of any right, power or remedy accruing hereunder or arising otherwise
shall impair any such right, power or remedy, or be construed to be a wavier
of any default or acquiescence therein. Except as otherwise specifically
required herein, notice of the exercise of any right, remedy or power granted
to Beneficiary by this Deed of Trust is not required to be given. If any
provision of this Deed of Trust shall grant to Beneficiary any rights or
remedies upon default of Grantor which are more limited than the rights that
would otherwise be vested in Beneficiary under applicable law in the absence
of said provisions, Beneficiary shall be vested with the rights granted in
such applicable law to the full extent permitted by law.
26. Successors and Assigns.
(a) Holder of the Note. This Deed of Trust and each and
every covenant, agreement and other provision hereof shall be binding upon
Grantor and its successors and assigns (including, without limitation, each
and every record owner from time to time of the Premises or any other person
having an interest therein), and shall inure to the benefit of Beneficiary and
its successors and assigns. Wherever herein Beneficiary is referred to, such
reference shall be deemed to include the holder from time to time of the Note,
whether so expressed or not; and each such holder from time to time of the
Note shall have and enjoy all of the rights, privileges, powers, options and
benefits afforded hereby and hereunder, and may enforce all and every of the
terms and provisions hereof, as fully and to the same extent and with the same
effect as if such holder of the Note from time to time were herein by name
specifically granted such rights, privileges, powers, options and benefits and
was herein by name designated Beneficiary.
(b) Covenants Run With Land; Successor Owners. All of the
covenants of this Deed of Trust shall run with the Land and be binding on any
successor owners of the Land. If the ownership of the Premises or any portion
thereof becomes vested in a person or persons other than Grantor, Beneficiary
may, without notice to Grantor, deal with such successor or successors in
interest of Grantor with reference to this Deed of Trust and the Indebtedness
Hereby Secured in the same manner as with Grantor without in any way releasing
or discharging Grantor from its obligations hereunder. Grantor will give
immediate written notice to Beneficiary of any conveyance, transfer or change
of ownership of the Premises, but nothing in this Paragraph shall vary or
negate the effect of the provisions of Paragraph 17 hereof.
(c) Offsets, Counterclaims and Defenses. Any assignee of
this Deed of Trust and the Note shall take the same free and clear of all
offsets, counterclaims or defenses of any nature whatsoever which Grantor may
have against any assignor of this Deed of Trust and the Note, and no such
offset, counterclaim or defense shall be interposed or asserted by Grantor in
any action or proceeding brought by any such assignee upon this Deed of Trust
or the Note and any such right to interpose or assert any such offset,
counterclaim or defense in any such action or proceeding is hereby expressly
waived by Grantor.
27. Effect of Extensions and Amendments. If the payment of the
Indebtedness Hereby Secured, or any part thereof, be extended or varied, or if
any part of the security or guaranties therefor be released, all persons now
or at any time hereafter liable therefor, or interested in the Premises, shall
be held to assent to such extension, variation or release, and their
liability, and the lien, and all provisions hereof, shall continue in full
force and effect; the right of recourse against all such persons being
expressly reserved by Beneficiary, notwithstanding any such extension,
variation or release. Any person, firm or corporation taking a junior
mortgage, or other lien upon the Premises or any part thereof or any interest
therein, shall take the said lien subject to the rights of Beneficiary to
amend, modify, extend or release the Note, this Deed of Trust, or any other
document or instrument evidencing, securing or guarantying the Indebtedness
Hereby Secured, in each and every case without obtaining the consent of the
holder of such junior lien and without the lien of this Deed of Trust losing
its priority over the rights of any such junior lien except as otherwise
expressly provided in a separate Subordination Agreement by and between
Beneficiary and the holder of such junior lien.
28. Execution of Separate Security Agreements, Financing
Statements, Etc.; Estoppel Letter. Grantor will do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged and delivered all such
further acts, conveyances, notes, mortgages, security agreements, financing
statements and assurances as Beneficiary shall reasonably require for the
better assuring, conveying, mortgaging, assigning and confirming unto
Beneficiary all property mortgaged hereby or property intended so to be,
whether now owned by Grantor or hereafter acquired. Without limitation of the
foregoing, Grantor will assign to Beneficiary, upon request, as further
security for the Indebtedness Secured Hereby, its interests in all agreements,
contracts, licenses and permits affecting the Premises, such assignments to be
made by instruments reasonably satisfactory to Beneficiary, but no such
assignment shall be construed as a consent by Beneficiary to any agreement,
contract, license or permit or to impose upon Beneficiary any obligations with
respect thereto. From time to time, Grantor will furnish within five (5)
business days after Beneficiary's request a written and duly acknowledged
statement of the Indebtedness Hereby Secured and whether any alleged offsets
or defenses exist against the Indebtedness Hereby Secured.
29. Subrogation. If any part of the Indebtedness Hereby Secured
is used directly or indirectly to pay off, discharge or satisfy, in whole or
in part, any prior lien or encumbrance upon the Premises or any part thereof,
then, to the extent permitted by law, Beneficiary shall be subrogated to the
rights of the holder thereof in and to such other lien or encumbrance and any
additional security held by such holder, and shall have the benefit of the
priority of the same.
30. Option to Subordinate. At the option of Beneficiary, this
Deed of Trust shall become subject and subordinate, in whole or in part (but
not with respect to priority of entitlement to insurance proceeds or any award
in condemnation) to any and all Leases of all or any part of the Premises upon
the execution by Beneficiary and recording thereof, at any time hereafter, in
the Land Records of the Recorder of Deeds in and for the county wherein the
Premises are situated, of a unilateral declaration to that effect.
31. Governing Law. The place of negotiation, execution and
delivery of this Deed of Trust and the location of the Premises being the
State of Texas, this Deed of Trust shall be construed and enforced according
to the laws of the State of Texas, without reference to the conflicts of law
principles of that state.
GRANTOR AGREES TO SUBMIT TO PERSONAL JURISDICTION IN THE STATE OF
TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS DEED OF TRUST AND IN
FURTHERANCE OF SUCH AGREEMENT, GRANTOR HEREBY AGREES AND CONSENTS THAT WITHOUT
LIMITING OTHER METHODS OF OBTAINING JURISDICTION, PERSONAL JURISDICTION OVER
THE GRANTOR IN ANY SUCH ACTION OR PROCEEDING MAY BE OBTAINED WITHIN OR WITHOUT
THE JURISDICTION OF ANY COURT LOCATED IN TEXAS AND THAT ANY PROCESS OR NOTICE
OF MOTION OR OTHER APPLICATION TO ANY SUCH COURT IN CONNECTION WITH ANY SUCH
ACTION OR PROCEEDING MAY BE SERVED UPON THE GRANTOR BY REGISTERED OR CERTIFIED
MAIL TO OR BY PERSONAL SERVICE AT THE LAST KNOWN ADDRESS OF GRANTOR, WHETHER
SUCH ADDRESS BE WITHIN OR WITHOUT THE JURISDICTION OF ANY SUCH COURT.
32. Inspection of Premises and Records. Beneficiary and its
representatives and agents shall have the right to inspect the Premises
without notice and inspect and make copies of all books, records, and
documents relating thereto upon five (5) days' prior written notice, at all
reasonable times, and access shall be permitted for that purpose. Grantor
shall keep and maintain full and correct books and records showing in detail
the income and expenses of the Premises, and shall permit Beneficiary or its
agents to examine such books, income tax returns and records and all
supporting vouchers and data upon five (5) days' prior written notice, at any
time and from time to time on request at its Land Records at the address
hereinafter identified or at such other location as may be mutually agreed
upon.
33. Financial Statements. Grantor shall, within forty-five (45)
days after the close of each calendar year, furnish Beneficiary with an annual
statement of all elements of income and expense from the operation of the
Premises during such calendar year in form reasonably satisfactory to
Beneficiary. Each annual statement shall be certified by a general partner of
Grantor and will be on an income tax basis in accordance with accounting
practices consistently applied or, at Grantor's option, in accordance with
generally accepted accounting principles consistently applied (except for
changes in application). Each annual statement shall include an annual rent
schedule, including a schedule of each tenant having a percentage lease.
Beneficiary shall have the right, upon prior notice to Grantor, to inspect and
make copies of Grantor's books and records with respect to the Premises for
the purpose of verifying any such schedule. In addition, within ninety (90)
days after the close of each calendar year or as soon thereafter as reasonably
practicable (but in no event later than one-hundred twenty (120) days after
the close of each calendar year), Grantor shall furnish Beneficiary with an
annual financial statement of Grantor accompanied by an opinion of an
independent certified public accountant stating that such annual statement
presents fairly the financial condition of Grantor and has been prepared in
accordance with generally accepted accounting principles consistently applied
(except for changes in application with which such accountant concurs) and
that the examination of such accountant in connection with such financial
statement has been made in accordance with generally accepted auditing
standards and included such tests of the accounting records and such other
auditing procedures as were considered necessary in the circumstances. The
statements shall be either addressed to Beneficiary or shall be accompanied by
a written acknowledgement from the accountants preparing such statements that
Beneficiary shall have whatever rights it would have if it were named as an
addressee of such statements. Grantor shall provide to Beneficiary such other
information as Beneficiary shall from time to time request relating to the
financial condition of Grantor or the operation of the Premises.
34. Time of the Essence. Time is of the essence of the Note,
this Deed of Trust, and any other Loan Documents.
35. Captions and Pronouns. The captions and headings of the
various sections of this Deed of Trust are for convenience only, and are not
to be construed as confining or limiting in any way the scope or intent of the
provisions hereof. Whenever the context requires or permits, the singular
shall include the plural, the plural shall include the singular, and the
masculine, feminine and neuter shall be freely interchangeable.
36. Notices. Any notice, demand or other communication which any
party hereto may desire or may be required to give to any other party hereto
shall be in writing, and shall be deemed given (i) if and when personally
delivered, (ii) upon receipt if sent by a nationally recognized overnight
courier, or (iii) on the third (3rd) business day after being deposited in
United States registered or certified mail, return-receipt requested, postage
prepaid, addressed to a party at its address set forth below, or to such other
address as the party to receive such notice may have designated to all other
parties by notice in accordance herewith:
(1) If to Beneficiary:
The Travelers Insurance Company
c/o Travelers Realty Investment Company
461 Fifth Avenue
New York, New York 10017
Attn: Loan No. 502262
With copies to:
The Travelers Insurance Company
c/o Travelers Realty Investment Company
One Tower Square, 2 SHS
Hartford, Connecticut 06183-2020
Attn: Loan No. 502262
and
Battle Fowler
75 East 55th Street
New York, New York 10022
Attn: Dean A. Stiffle, Esq. (W.F.S.)
Matter No. 10695.0136
(2) If to Grantor:
5665 Northside Drive, N.W., Suite 370
Atlanta, Georgia 30328
Attn: Arthur Queler
With copies to:
Post & Heymann
100 Jericho Quadrangle
Suite 214
Jericho, New York 11753
Attn: William Post, Esq.
and
NPI Property Management Corporation
5665 Northside Drive, N.W., Suite 370
Atlanta, Georgia 30328
Attn: Arthur Queler
Except as otherwise specifically required herein, notice of the exercise of
any right, power or option granted to Beneficiary by this Deed of Trust is not
required to be given.
37. Environmental Matters. For the purposes of this paragraph
the following terms shall have the following meanings: (i) the term
"Hazardous Material" shall mean any material or substance that, whether by its
nature or use, is now or hereafter defined as a hazardous waste, hazardous
substance, pollutant or contaminant under any Environmental Requirement, or
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and which is now or hereafter
regulated under any Environmental Requirement, or which is or contains
petroleum, gasoline, diesel fuel or another petroleum hydrocarbon product,
(ii) the term "Environmental Requirements" shall collectively mean all present
and future laws, statutes, ordinances, rules, regulations, orders, codes,
licenses, permits, decrees, judgments, directives or the equivalent of or by
any Governmental Authority and relating to or addressing the protection of the
environment or human health, and (iii) the term "Governmental Authority" shall
mean the Federal government, or any state or other political subdivision
thereof, or any agency, court or body of the Federal government, any state or
other political subdivision thereof, exercising executive, legislative,
judicial, regulatory or administrative functions. Grantor hereby represents
and warrants to Beneficiary that to the best of Grantor's knowledge after
diligent inquiry (i) no Hazardous Material is currently located at, on, in,
under or about the Premises, (ii) no Hazardous Material is currently located
at, in, on, under or about the Premises in a manner which violates any
Environmental Requirement, or which requires cleanup or corrective action of
any kind under any Environmental Requirement, (iii) no releasing, emitting,
discharging, leaching, dumping or disposing of any Hazardous Material from the
Premises onto or into any other property or from any other property onto or
into the Premises has occurred or is occurring in violation of any
Environmental Requirement, (iv) no notice of violation, lien, complaint, suit,
order or other notice with respect to the Premises is presently outstanding
under any Environmental Requirement, and (v) the Premises and the operation
thereof are in full compliance with all Environmental Requirements. Grantor
shall comply, and shall cause all tenants or other occupants of the Premises
to comply, in all respects with all Environmental Requirements, and will not
generate, store, handle, process, dispose of or otherwise use, and will not
permit any tenant or other occupant of the Premises to generate, store,
handle, process, dispose of or otherwise use, Hazardous Materials at, in, on,
under or about the Premises in a manner that could lead or potentially lead to
the imposition on Grantor, Beneficiary or the Premises of any liability or
lien of any nature whatsoever under any Environmental Requirement. Grantor
shall notify Beneficiary promptly in the event of any spill or other release
of any Hazardous Material at, in, on, under or about the Premises which is
required to be reported to a Governmental Authority under any Environmental
Requirement, will promptly forward to Beneficiary copies of any notices
received by Grantor relating to alleged violations of any Environmental
Requirement and will promptly pay when due any fine or assessment against
Beneficiary, Grantor or the Premises relating to any Environmental
Requirement. If at any time it is determined that the operation or use of the
Premises violates any applicable Environmental Requirement or that there are
Hazardous Materials located at, in, on, under or about the Premises which,
under any Environmental Requirement, require special handling in collection,
storage, treatment or disposal, or any other form of cleanup or corrective
action, Grantor shall, subject to Grantor's right to contest set forth below
within thirty (30) days after receipt of notice thereof from any Governmental
Authority or from Beneficiary, take, at its sole cost and expense, such
actions as may be necessary to fully comply in all respects with all
Environmental Requirements, provided, however, that if such compliance cannot
reasonably be completed within such thirty (30) day period, Grantor shall
commence such necessary action within such thirty (30) day period and shall
thereafter diligently and expeditiously proceed to fully comply in all
respects and in a timely fashion with all Environmental Requirements. Grantor
may, in good faith and with due diligence, contest or cause to be contested
any assertion that the operation or use of the Premises violates applicable
Environmental Requirements or that there are Hazardous Materials located at,
in or on, under or about the Premises provided that: i) such contest shall
have the effect of preventing the sale or forfeiture of the Premises or any
part thereof or interest, ii) Grantor has notified Beneficiary in writing of
the intention of Grantor to contest the same or to cause the same to be
contested, and iii) Grantor has deposited or caused to be deposited with
Beneficiary in a non-interest bearing account, at such place as Beneficiary
may from time to time in writing designate, a sum of money (or other security
acceptable to Beneficiary) that, in Beneficiary's judgment, is sufficient to
pay in full, or provide for payment in full of, such contested matters, any
related clean-up costs and all penalties and interest that might become due
thereon, and shall keep on deposit an amount or other security sufficient, in
Beneficiary's judgment, to pay in full, or provide for payment in full of,
such contested matters, any related clean-up costs, increasing such amount or
other security to cover additional penalties and interest whenever, in
Beneficiary's judgment, such increase is advisable. If Grantor fails to
timely take, or to diligently and expeditiously proceed to complete in a
timely fashion, any such action, Beneficiary, may, in its sole and absolute
discretion, make advances or payments towards the performance or satisfaction
of the same, but shall in no event be under any obligation to do so. All sums
so advanced or paid by Beneficiary (including, without limitation, counsel and
consultant fees and expenses, investigation and laboratory fees and expenses,
and fines or other penalty payments) and all sums advanced or paid in
connection with any judicial or administrative investigation or proceeding
relating thereto, will immediately, upon demand, become due and payable from
Grantor and shall bear interest at the Default Rate (as hereinafter defined)
from the date any such sums are so advanced or paid by Beneficiary until the
date any such sums are repaid by Grantor to Beneficiary. Grantor will execute
and deliver, promptly upon request, such instruments as Beneficiary may deem
useful or necessary to permit Beneficiary to take any such action, and such
additional notes and mortgages, as Beneficiary may require to secure all sums
so advanced or paid by Beneficiary. If a lien is filed against the Premises
by any Governmental Authority resulting from the need to expend or the actual
expending of monies arising from an action or omission, whether intentional or
unintentional, of Grantor or for which Grantor is responsible, resulting in
the releasing, spilling, leaking, leaching, pumping, emitting, pouring,
emptying or dumping of any Hazardous Material into the waters or onto land
located within or without the State where the Premises is located, then
Grantor will, within thirty (30) days from the date that Grantor is first
given notice that such lien has been placed against the Premises (or within
such shorter period of time as may be specified by Beneficiary if such
Governmental Authority has commenced steps to cause the Premises to be sold
pursuant to such lien) either (a) pay the claim and remove the lien, or (b)
furnish a cash deposit, bond, or such other security with respect thereto as
is satisfactory in all respects to Beneficiary and is sufficient to effect a
complete discharge of such lien on the Premises. Beneficiary may, at its
option, at intervals of not less than one year, or more frequently if
Beneficiary reasonably believes that a Hazardous Material or other
environmental condition violates or threatens to violate any Environmental
Requirement, cause an environmental audit of the Premises or portions thereof
to be conducted to confirm Grantor's compliance with the provisions of this
paragraph, and Grantor shall cooperate in all reasonable ways with Beneficiary
in connection with any such audit. If such audit discloses that a violation
of an Environmental Requirement exists, Grantor shall pay all costs and
expenses incurred in connection with such audit, otherwise, the costs and
expenses of such audit shall, notwithstanding anything to the contrary set
forth in this paragraph, be paid by Beneficiary. If this Deed of Trust is
foreclosed, or if the Premises is sold pursuant to the provisions of this Deed
of Trust, or if Grantor tenders a deed or assignment in lieu of foreclosure or
sale, Grantor shall deliver the Premises to the purchaser at foreclosure or
sale or to Beneficiary, its nominee, or wholly owned subsidiary, as the case
may be, in a condition that complies in all respects with all Environmental
Requirements. Grantor will defend, indemnify, and hold harmless Beneficiary,
its employees, agents, officers, and directors, from and against any and all
claims, demands, penalties, causes of action, fines, liabilities, settlements,
damages, costs, or expenses of whatever kind or nature, known or unknown,
foreseen or unforeseen, contingent or otherwise (including, without
limitation, counsel and consultant fees and expenses, investigation and
laboratory fees and expenses, court costs, and litigation expenses) arising
out of, or in any way related to, (i) any breach by Grantor of any of the
provisions of this paragraph, (ii) the presence, disposal, spillage,
discharge, emission, leakage, release, or threatened release of any Hazardous
Material which is at, in, on, under, about, from or affecting the Premises,
including, without limitation, any damage or injury resulting from any such
Hazardous Material to or affecting the Premises or the soil, water, air,
vegetation, buildings, personal property, persons or animals located on the
Premises or on any other property or otherwise, (iii) any personal injury
(including wrongful death) or property damage (real or personal) arising out
of or related to any such Hazardous Material, (iv) any lawsuit brought or
threatened, settlement reached, or order or directive of or by any
Governmental Authority relating to such Hazardous Material, or (v) any
violation of any Environmental Requirement. The obligations and liabilities
of Grantor under this paragraph shall survive and continue in full force and
effect and shall not be terminated, discharged or released, in whole or in
part, irrespective of whether the Indebtedness Hereby Secured has been paid in
full and irrespective of any foreclosure of this Deed of Trust, sale of the
Premises pursuant to the provisions of this Deed of Trust or acceptance by
Beneficiary, its nominee or wholly owned subsidiary of a deed or assignment in
lieu of foreclosure or sale and irrespective of any other fact or circumstance
of any nature whatsoever.
38. Beneficiary Not A Joint Venturer. Any provision hereof to
the contrary notwithstanding, Beneficiary, by virtue of its acceptance of this
Deed of Trust and the making of the loan secured hereby or any action taken
pursuant hereto or contemplated hereby or by virtue of an affiliate of
Beneficiary having an ownership interest in Grantor, shall not be deemed to be
by such action or ownership a partner or joint venturer with Grantor or any
guarantor or any other parties. Grantor shall indemnify Beneficiary against,
shall hold Beneficiary harmless from, and shall reimburse Beneficiary for, any
and all claims, demands, judgments, penalties, fines, liabilities, costs,
damages and expenses, including court costs and attorneys' fees incurred by
Beneficiary (prior to trial, at trial and on appeal) in any action against or
involving Beneficiary resulting from such a construction of the parties and
their relationship. Any inspection of the Premises, any review of any plans,
contracts, subcontracts (including, without limitation, environmental reviews,
audits, assessments and/or reports relating to the Premises), or any analysis
of the Premises made by Beneficiary or any of its agents, architects or
consultants is intended solely for the benefit of Beneficiary and shall not be
deemed to create or form the basis of any warranty, representation, covenant,
implied promise or liability to Grantor or any of its employees or agents, any
guest or invitee upon the Premises, or any other person.
39. Expenses. Grantor agrees to pay any and all recording and
filing fees, mortgage recording taxes, transfer taxes, title insurance
premiums, escrow and other title company charges, reasonable attorneys' fees
and disbursements (including the fees and expenses of outside counsel for
Beneficiary and excluding fees and expenses of in-house counsel for
Beneficiary), appraisal and survey fees, environmental engineer and consultant
fees, consulting architect fees, if any, financial consultant fees, fees of
other engineers and consultants, insurance costs and all other expenses in
connection with the making of the loan evidenced by the Note. Beneficiary
shall have the right, at its option, to pay any such expenses and upon such
payment such expenses shall be deemed to be a part of the Indebtedness Hereby
Secured and shall be payable on demand with interest at the Default Rate.
40. Consent Required of Beneficiary. Any consent by Beneficiary
in any single instance shall not be deemed or construed to be Beneficiary's
consent in any like matter arising at a subsequent date and the failure of
Beneficiary to promptly exercise any right, power, remedy, consent or approval
provided herein or at law or in equity shall not constitute or be construed as
a waiver of the same nor shall Beneficiary be estopped from exercising such
right, power, remedy, consent or approval at a later date. Any consent or
approval requested of and granted by Beneficiary pursuant hereto shall be
narrowly construed to be applicable only to Grantor and the matter identified
in such consent or approval and no third party shall claim any benefit by
reason thereof, and any such consent or approval shall not be deemed to
constitute Beneficiary a venturer or partner with Grantor nor shall privity of
contract be presumed to have been established with any such third party. If
Beneficiary deems it to be in its best interest to retain the assistance of
persons, firms or corporations (including, but not limited to, attorneys,
appraisers, engineers, consultants and surveyors) with respect to a request
for consent or approval, Grantor shall reimburse Beneficiary for all costs
incurred in connection with the employment of such persons, firms or
corporations.
41. Sole Discretion of Beneficiary. Except as may otherwise be
expressly provided to the contrary, wherever pursuant to the Note, this Deed
of Trust, or any other document or instrument now or hereafter executed and
delivered in connection therewith or otherwise with respect to the loan
secured hereby, Beneficiary exercises any right given to it to consent or not
consent, or to approve or disapprove, or any arrangement or term is to be
satisfactory to Beneficiary, the decision of Beneficiary to consent or not
consent, or to approve or disapprove or to decide that arrangements or terms
are satisfactory or not satisfactory, shall be in the sole and absolute
discretion of Beneficiary and shall be final and conclusive.
42. No Oral Change. This Deed of Trust may only be modified,
amended or changed by an agreement in writing signed by Grantor and
Beneficiary, and may only be released, discharged or satisfied of record by an
agreement in writing signed by Beneficiary. No waiver of any term, covenant
or provision of this Deed of Trust shall be effective unless given in writing
by Beneficiary and if so given by Beneficiary shall only be effective in the
specific instance in which given. Grantor acknowledges that the Note, this
Deed of Trust and the other documents and instruments executed and delivered
in connection therewith or otherwise in connection with the loan secured
hereby set forth the entire agreement and understanding of Grantor and
Beneficiary with respect to the loan secured hereby and that no oral or other
agreements, understanding, representation or warranties exist with respect to
the loan secured hereby other than those set forth in the Note, this Deed of
Trust and such other executed and delivered documents and instruments.
43. Absolute and Unconditional Obligation. Grantor acknowledges
that Grantor's obligation to pay the Indebtedness Hereby Secured in accordance
with the provision of the Note and this Deed of Trust is and shall at all
times continue to be absolute and unconditional in all respects, and shall at
all times be valid and enforceable irrespective of any other agreements or
circumstances of any nature whatsoever which might otherwise constitute a
defense to the Note or this Deed of Trust or the obligation of Grantor
thereunder to pay the Indebtedness Hereby Secured or the obligations of any
other person relating to the Note or this Deed of Trust or the obligations of
Grantor under the Note or this Deed of Trust or otherwise with respect to the
loan secured hereby, and Grantor absolutely, unconditionally and irrevocably
waives any and all right to assert any defense, setoff, counterclaim or
crossclaim of any nature whatsoever with respect to the obligation of Grantor
to pay the Indebtedness Hereby Secured in accordance with the provisions of
the Note and this Deed of Trust or the obligations of any other person
relating to the Note or this Deed of Trust or obligations of Grantor under the
Note or this Deed of Trust or otherwise with respect to the loan secured
hereby in any action or proceeding brought by Beneficiary to collect the
Indebtedness Hereby Secured, or any portion thereof, or to enforce, foreclose
and realize upon the lien and security interest created by this Deed of Trust
or any other document or instrument securing repayment of the Indebtedness
Hereby Secured, in whole or in part. Nothing contained in this Paragraph 43
shall preclude Grantor from asserting any legal claim of Grantor based on the
Note, this Deed of Trust or the other Loan Documents in a separate subsequent
legal proceeding.
44. ERISA. Grantor covenants and agrees that during the term of
the loan secured hereby, unless Beneficiary shall have previously consented in
writing, (a) it will take no action which would cause it to become an
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended from time to time ("ERISA"), or a
"governmental plan" as defined in Section 3(32) of ERISA, or its assets to
become "plan assets" as defined in 29 C.F.R. Section 2510.3-101, or "assets of
a governmental plan" subject to regulation under state statutes, and (b) it
will not sell, assign or transfer the Premises, or any portion thereof or
interest therein, to any transferee which does not execute and deliver to
Beneficiary its written assumption of the obligations of this covenant.
Grantor further covenants and agrees to protect, defend, indemnify and hold
Beneficiary harmless from and against all loss, cost, damage and expense
(including without limitation, all attorneys' fees and excise taxes, costs of
correcting any prohibited transaction or obtaining an appropriate exemption)
which Beneficiary may incur as a result of Grantor's breach of this covenant.
This indemnity shall survive the extinguishment of the lien of the Deed of
Trust by foreclosure or action in lieu thereof, and this covenant shall
survive such extinguishment; furthermore, the foregoing indemnity shall
supersede any limitations on Grantor's liability under the Note, the Deed of
Trust, or any of the other Loan Documents.
45. Limited Personal Liability. Without in any manner releasing,
impairing or otherwise affecting the Note, this Deed of Trust or any other
Loan Documents or the validity thereof or hereof or the lien thereof, there is
no personal liability of Grantor or any corporation, partnership or individual
having a direct or indirect ownership interest in Grantor, or any of their
respective successors or assigns, hereunder or under any of the other Loan
Documents, and no monetary or deficiency judgment shall be sought or enforced
against Grantor or any corporation, partnership or individual having a direct
or indirect ownership interest in Grantor, or any of their respective
successors or assigns; provided, however, that a judgment may be sought
against Grantor or any corporation, partnership or individual having a direct
or indirect ownership interest in Grantor or their respective successors or
assigns to the extent necessary to enforce the rights of Beneficiary in, to,
or against the Premises. Notwithstanding any of the foregoing, nothing
contained in this Paragraph shall be deemed to prejudice the rights of
Beneficiary to recover from Grantor, Fox Partners II, Fox Capital Management
Corporation and NPI Equity Investments II, Inc. and their successors and
assigns (the "Responsible Entities") (1) all loss, damage, cost and expense
(including reasonable attorneys' fees and disbursements) incurred by
Beneficiary as a result of any material fraud or any material
misrepresentation by any of the Responsible Entities or Manager, (2) all loss,
damage, cost and expense (including reasonable attorneys' fees and
disbursements) incurred by Beneficiary as a result of breach of Grantor's
warranties, representations and covenants contained in Paragraph 5,
Paragraph 9, Paragraph 17, Paragraph 37, Paragraph 44 or Paragraph 48 of this
Deed of Trust, (3) all loss, damage, cost and expense (including reasonable
attorneys' fees and disbursements) incurred by Beneficiary as a result of
intentional or negligent waste (whether financial or physical) of the Premises
including, without limitation, failure by Grantor to pay on or prior to the
due date thereof all real estate taxes and assessments levied against the
Premises, subject to Grantor's right to contest the same as set forth in
paragraph 5.B. of this Deed of Trust, it being agreed and understood that
Grantor's personal liability to pay real estate taxes and assessments levied
against the Premises shall not exceed the Rents generated from the Premises
over such period of time to which such taxes and assessments pertain; (4) all
Rents generated from the Premises received after any default under the Loan
Documents or within one year before any default under the Loan Documents or
after acceleration of the indebtedness evidenced and secured by the Loan
Documents and not applied to payment of such indebtedness or to payment of the
normal and customary operating expenses of the Premises; (5) all Rents from
the Premises collected more than one (1) month in advance and all security
deposits that are not held in a segregated escrow account and that are not
delivered to Beneficiary upon demand after the occurrence of a default under
any of the Loan Documents, (6) all insurance proceeds and condemnation awards
in respect of the Premises which are not applied in accordance with the
provisions of the Loan Documents or all loss, damage, cost and expense
(including reasonable attorneys fees and disbursements) incurred by
Beneficiary as a result of the failure by Grantor to maintain the insurance
coverage required in Paragraph 7 of this Deed of Trust, (7) all or any portion
of the upfront fees, commitment fees and other costs and expenses incurred by
Beneficiary in connection with the closing of this transaction and required to
be paid by Grantor and not promptly reimbursed by Grantor, (8) all loss,
damage, cost and expense (including reasonable attorneys' fees and
disbursements) incurred of Beneficiary under the Hazardous Material Guaranty
and Indemnification Agreement dated the date hereof from the Responsible
Entities and the Manager, or (9) all loss, damage, cost and expense (including
reasonable attorneys' fees and disbursements) incurred by Beneficiary as a
result of a breach under the Use and Retention of Funds Letter dated the date
hereof from Grantor, Fox Partners II, Fox Capital Management Corporation,
Manager and NPI Equity Investments II, Inc. to Beneficiary. The Responsible
Entities agree to pay to Beneficiary all amounts described in clauses (1)
through (9) above on demand by Beneficiary and agrees that they will be
personally liable for payment of all such sums. Furthermore, nothing
contained in the paragraph shall be deemed to prejudice the right of
Beneficiary to recover from the Manager all loss, damage, cost and expense
(including reasonable attorneys' fees and disbursements) incurred by
Beneficiary under that certain Manager's Liability Letter dated the date
hereof from the Manager to Beneficiary.
46. Power of Sale. If a Default as set forth in paragraph 18 of
this Deed of Trust shall occur, Trustee, upon request by Beneficiary after
such default, shall sell the Premises at public auction to the highest bidder
for cash, between the hours of ten o'clock A.M. and four o'clock P.M. on the
first Tuesday in any month, at the door of the Courthouse in the County in
which the Premises, or any part thereof, is situated, after giving notice of
the sale to begin and be completed in the time prescribed by the Texas
Property Code, by posting, or causing to be posted, at least twenty-one (21)
consecutive days prior to the date of said sale, written or printed notice
thereof at the Courthouse door in each of the Counties in which the Premises
is situated (such notice shall designate the County where the Premises will be
sold) and filing the notice with the County Clerk in the County where the
Premises is located. In addition, at least twenty-one (21) days preceding the
date of sale written notice of the proposed sale shall be served by certified
mail on each debtor obligated to pay the Indebtedness Hereby Secured,
according to the records of Beneficiary at the most recent address as shown by
the records of Beneficiary, in a Post Office or official depository under the
care and custody of the United States Postal Service. The affidavit of any
person having knowledge of the facts to the effect that such service was
completed shall be prima facie evidence of the fact of service. Grantor
authorizes and empowers Trustee to sell the Premises, together, or in lots or
parcels, as Trustee shall deem expedient, to execute and deliver to the
purchaser or purchasers thereof good and sufficient deeds of conveyance
thereto by fee simple title, with covenants of general warranty (and the title
of such purchaser, or purchasers, when so made by Trustee, Grantor binds
itself to warrant and forever defend), and to receive the proceeds of said
sale which shall be applied as follows, in the following order: (i) to all
reasonable costs and expenses of the sale, including, but not limited to,
reasonable trustee's fees and attorney's fees and costs of title evidence;
(ii) to the repayment of the Indebtedness Hereby Secured and the debt secured
by Deed of Trust B in such amounts and in such order as Beneficiary shall in
its sole and absolute discretion determine; and (iii) the excess, if any, to
Grantor or such other person or persons entitled thereto by law. If default
be made in the payment of any installment of the Note, or any part thereof, or
if for any reason (other than the fault of Beneficiary) Grantor fails to keep
or perform any of the covenants, conditions or stipulations herein,
Beneficiary shall have the option to proceed with foreclosure in satisfaction
of such items, either through the courts or by directing Trustee to proceed as
if under a foreclosure, conducting the sale as herein provided and without
declaring the Indebtedness Hereby Secured due, and provided that if said sale
is made because of such default, such sale may be made subject to the
unmatured part of the Indebtedness Hereby Secured by this Deed of Trust, and
such sale, if so made, shall not in any manner affect the unmatured part of
the Indebtedness Hereby Secured by this Deed of Trust, but, as to such
unmatured part this Deed of Trust shall remain in full force as though no sale
had been made under the provisions of this paragraph. Several sales may be
made without exhausting the right of sale for any unmatured part of the
Indebtedness Hereby Secured, it being the purpose to provide for a foreclosure
and sale of the Premises for any matured portion of the Indebtedness Hereby
Secured without exhausting the power of foreclosure and to sell the Premises
for any other part of the Indebtedness Hereby Secured whether matured at the
time or subsequently maturing. In case of any sale hereunder, all
prerequisites to the sale shall be presumed to have been performed, and in any
conveyance given hereunder, all statements of facts, or other recitals therein
made as to the nonpayment of money secured, or as to the request to Trustee to
enforce this Deed of Trust, or as to the proper and due appointment of any
substitute trustee, or as to the advertisement of sale, or time, place and
manner of sale, or as to any other Preliminary fact or thing, shall be taken
in all courts of law or equity as prima facie evidence that the facts so
stated or recited are true.
47. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY LAW,
GRANTOR WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT TO FORECLOSE
THIS DEED OF TRUST.
48. Anti-Forfeiture. Grantor represents and warrants to
Beneficiary that there has not been committed by Grantor or any other person
in occupancy of or involved with the operation or use of the Premises any act
or omission affording the federal government or any state or local government
the right of forfeiture as against the Premises or any part thereof or any
monies paid in performance of Grantor's obligations under the Note or under
any of the other Loan Documents. Grantor hereby covenants and agrees not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture. In furtherance thereof, Grantor hereby indemnifies Beneficiary
and agrees to defend and hold Beneficiary harmless from and against any loss,
damage or injury by reason of the breach of the covenants and agreements or
the warranties and representations set forth in this Paragraph 48. Without
limiting the generality of the foregoing, the filing of formal charges or the
commencement of proceedings against Grantor or all or any part of the Premises
under any federal or state law for which forfeiture of the Premises or any
part thereof or of any monies paid in performance of Grantor's obligations
under the Loan Documents is a potential result, shall, at the election of
Beneficiary, constitute an occurrence of a Default hereunder without notice or
opportunity to cure.
49. Usury Laws. This Deed of Trust and the Note, are subject to
the express condition that at no time shall Grantor be obligated or required
to pay interest on the principal balance due under the Note at a rate which
could subject the holder of the Note to either civil or criminal liability as
a result of being in excess of the maximum interest rate which Grantor is
permitted by law to contract or agree to pay. If by the terms of this Deed of
Trust or the Note, Beneficiary ever receives, collects or applies as interest
any sum in excess of the maximum legal rate, such excess amount shall be
applied to the reduction of the unpaid principal balance of the Note in the
inverse order of maturity, and if the Note is paid in full, any remaining
excess shall be refunded to Grantor. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the highest
lawful rate, Beneficiary and Grantor shall, to the maximum extent permitted
under the applicable law: (a) characterize any nonprincipal payment as an
expense, fee or premium rather than as interest; (b) exclude voluntary
prepayments and the effects thereof; and (c) "spread" the total amount of
interest throughout the entire term of the Note. Grantor, and Beneficiary by
its acceptance of this Deed of Trust, recognize and agree that Grantor's
obligation to pay the principal and accrued interest on the Note is absolute
and unconditional.
50. Related Party Contracts. All agreements, contracts or other
arrangements, whether written or oral, between Mortgagor and any Related
Party, as hereinafter defined, shall be fully disclosed to Mortgagee, shall
require the consent of Mortgagee to be effective and shall provide for
payments under such agreements, contracts and other arrangements that are
market rate in the area where the Premises is located. The term "Related
Party" shall mean any person or entity in which any of Michael Ashner, Martin
Lifton, Steven Lifton or Arthur N. Queler or any relative (i.e. spouse,
grandparent, parent, child, grandchild, sibling, aunt, uncle or cousin) has
either an ownership or management interest either directly or indirectly.
51. Receipt. Grantor hereby acknowledges receipt of a true copy
of this Deed of Trust without charge.
52. Concerning the Trustee. Trustee shall be under no duty to
take any action hereunder except as expressly required hereunder or by law, or
to perform any act which would involve Trustee in any expense or liability or
to institute or defend any suit in respect hereof, unless properly indemnified
to Trustee's reasonable satisfaction. Trustee, by acceptance of this Deed of
Trust, covenants to perform and fulfill the trusts herein created, being
liable, however, only for willful negligence or misconduct, and hereby waives
any statutory fee and agrees to accept reasonable compensation, in lieu
thereof, for any services rendered by Trustee in accordance with the terms
hereof. Trustee may resign at any time upon giving thirty (30) days' notice
to Grantor and to Beneficiary. Beneficiary may remove Trustee at any time or
from time to time and select a successor trustee. In the event of the death,
removal, resignation, refusal to act, or inability to act of Trustee, or in
its sole discretion for any reason whatsoever or for no reason, Beneficiary
may, without notice and without specifying any reason therefor and without
applying to any court, select and appoint a successor trustee, by an
instrument recorded wherever this Deed of Trust is recorded and all powers,
rights, duties and authority of Trustee, as aforesaid, shall thereupon become
vested in such successor. Such substitute trustee shall not be required to
give bond for the faithful performance of the duties of Trustee hereunder
unless required by Beneficiary.
53. Trustee's Fees. Grantor shall pay all costs, fees and
expenses incurred by Trustee and Trustee's agents and counsel in connection
with the performance by Trustee of Trustee's duties hereunder and all such
costs, fees and expenses shall be secured by this Deed of Trust.
54. Final Agreement. THIS DEED OF TRUST REPRESENTS THE FINAL
AGREEMENT BETWEEN GRANTOR AND BENEFICIARY AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF GRANTOR
AND BENEFICIARY. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN GRANTOR AND
BENEFICIARY.
55. Release. Grantor hereby releases and forever discharges
Beneficiary, its agents, servants, employees, directors, officers, attorneys,
affiliates, subsidiaries, successors and assigns and all persons, firms,
corporations and organizations acting in its behalf of and from all damage,
loss, claims, demands, liabilities, obligations, actions and causes of action
whatsoever which Grantor may now have or claim to have against Beneficiary, as
of the date hereof, whether presently known or unknown, and of every nature
and extent whatsoever on account of or in any way touching, concerning,
arising out of or founded upon the Loan Documents, including, without
limitation, all such loss or damage of any kind heretofore sustained, or that
may arise as a consequence of the dealings between the parties up to and
including the date of execution hereof. This agreement and covenant on the
part of Grantor is contractual, and not a mere recital.
IN WITNESS WHEREOF, Grantor has executed and delivered this Deed
of Trust as of the day and year first above written.
Grantor:
CENTURY PROPERTIES FUND XIX,
a California limited partnership
By: Fox Partners II,
a California general partnership,
Its General Partner
By: Fox Capital Management
Corporation, a California
corporation, its Managing
General Partner
By: ________________________
Name: _________________
Title: ________________
STATE OF NEW YORK )
: s.s.
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day personally
appeared __________________________, _______________________ of Fox Capital
Management Corporation, a California corporation, which corporation is
managing general partner in Fox Partners II, a California general partnership,
which general partnership is the general partner in Century Properties
Fund XIX, a California limited partnership, known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that he executed the same for the purposes and consideration therein
expressed and in the capacity therein stated as the act and deed of Fox
Capital Management Corporation, for and on behalf of Fox Partners II, which is
acting for and on behalf of Century Properties Fund XIX.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
________, 1994.
_________________________________
Notary Public in and for
the State of New York
_________________________________
(Printed or Typed Name of Notary)
My commission expires: _________
Exhibit A
The Land
EXHIBIT "B"
Description of Collateral
All of the following property now or at any time hereafter owned
by Debtor (as defined in Paragraph 16(a) of this Deed of Trust and also
referred in this Exhibit B as "Debtor") or in which Debtor may now or at
anytime hereafter have any interest or rights, together with all of Debtor's
right, title and interest therein (excepting any items of personal property
which (i) are owned by tenants who are in possession pursuant to leases or
license agreements approved by Secured Party, and (ii) may be removed by such
tenants at the expiration or termination of such lease or license agreements);
1. All fixtures and personal property now or hereafter owned by
Debtor and attached to or contained in and used or useful in connection with
the Premises or the Improvements, including without limitation any and all air
conditioners, antennae, appliances, apparatus, awnings, basins, bathtubs,
bidets, boilers, bookcases, cabinets, carpets, coolers, curtains,
dehumidifiers, disposals, doors, drapes, dryers, ducts, dynamos, elevators,
engines, equipment, escalators, fans, fittings, floor coverings, furnaces,
furnishings, furniture, hardware, heaters, humidifiers, incinerators, kitchen
equipment and utensils, lighting, machinery, motors, ovens, pipes, plumbing,
pumps, radiators, ranges, recreational facilities, refrigerators, screens,
security systems, shades, shelving, sinks, sprinklers, stokers, stoves,
toilets, ventilators, wall coverings, washers, windows, window coverings,
wiring, all renewals or replacements thereof or articles in substitution
therefor;
2. Articles or parts now or hereafter affixed to the property
described in Paragraph 1 above or used in connection with such property, any
and all replacements for such property, and all other property of a similar
type or used for similar purposes now or hereafter in or on the Premises or
any of the Improvements;
3. Debtor's right, title, and interest in all personal property
used or to be used in connection with the operation of the Premises or the
conduct of business thereon, including without limitation business equipment
and inventories located on the Premises or elsewhere, together with files,
books of account, and other records, wherever located;
4. Debtor's right, title, and interest in and to any and all
contracts now or hereafter relating to the Premises executed by any
architects, engineers, consultants, or contractors, including all amendments,
supplements, and revisions thereof, together with all Debtor's rights and
remedies thereunder and the benefit of all covenants and warranties thereon,
and also together with all drawings, designs, estimates, layouts, surveys'
plats, plans, specifications and test results prepared by any architect,
engineer, or contractor, including any amendments, supplements, and revisions
thereof and the right to use and enjoy the same, as well as all building
permits, environmental permits, approvals and licenses, other governmental or
administrative permits, licenses, names, authorizations, agreements and rights
relating to construction or operation of the Premises and/or the Improvements;
5. Debtor's right, title, and interest in and to any and all
contracts now or hereafter relating to the operation of the Premises or the
conduct of business thereon, including without limitation all management,
leasing and other service contracts, the books and records, and the right to
appropriate and use any and all trade names used or to be used in connection
with such business;
6. Debtor's entire right, title, and interest in the rents, rent
equivalents, issues, income, revenue, deposits (including without limitation,
security deposits and utility deposits), and profits in connection with all
leases, contracts, lettings, licenses, and other agreements made or agreed to
by any person or entity (including without limitation, Debtor and Secured
Party under the powers granted by this Deed of Trust and the other Loan
Documents) with any person or entity pertaining to all or any part of the
Premises, whether such agreements have been heretofore or are hereafter made;
7. Debtor's right, title, and interest in all sale contracts,
earnest money deposits, proceeds of sale contracts, accounts receivable, and
general intangibles relating to the Premises, excluding, however, any such
right arising from a transfer permitted by the terms of Paragraph 17 of this
Deed of Trust;
8. All rights in and proceeds from all fire and hazard,
loss-of-income, and other non-liability insurance policies now or hereafter
covering the Improvements, the use or occupancy thereof, or the business
conducted thereon;
9. All awards or payments, including interest thereon, that may
be made with respect to the Premises and/or the Improvements, whether from the
right of the exercise of eminent domain (including any transfer made in lieu
of the exercise of said right) or for any other injury to or decrease in value
of the Premises and/or the Improvements; and
10. All proceeds from the sale, transfer, or pledge of any or all
of the foregoing property.
EXHIBIT 99.4
McMillan Place
================================================================================
CENTURY PROPERTIES FUND XIX
to
THE TRAVELERS INSURANCE COMPANY
_____________________________________
AMENDED AND RESTATED DEED OF TRUST B
(Fee)
$2,138,673.53
_____________________________________
Dated: As of September 1, 1994
Location: 12610 Jupiter Road
Dallas, Texas 75238
County: Dallas
THIS DEED OF TRUST PREPARED BY AND
AFTER RECORDING PLEASE RETURN TO:
Battle Fowler
75 East 55th Street
New York, New York 10022
Attention: Walter F. Schleimer, Esq.
================================================================================
TABLE OF CONTENTS
Page
1. Payment of Indebtedness and Performance of Covenants. . . . . . . . 8
2. Representation and Warranty of Title. . . . . . . . . . . . . . . . 8
3. Maintenance, Repair, Compliance with Law, Use, Etc. . . . . . . . . 9
4. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6. Change in Tax Laws. . . . . . . . . . . . . . . . . . . . . . . . . 15
7. Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . . . . 15
8. Insurance Policies. . . . . . . . . . . . . . . . . . . . . . . . . 17
9. Deposits for Taxes and Insurance Premiums . . . . . . . . . . . . . 18
10. Proceeds of Insurance . . . . . . . . . . . . . . . . . . . . . . . 20
11. Disbursement of Insurance Proceeds. . . . . . . . . . . . . . . . . 21
12. Condemnation and Eminent Domain . . . . . . . . . . . . . . . . . . 25
13. Assignment of Leases and Rents. . . . . . . . . . . . . . . . . . . 27
14. Observance of Lease Assignment. . . . . . . . . . . . . . . . . . . 29
15. Beneficiary's Performance of Grantor's Obligations. . . . . . . . . 30
16. Security Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 31
17. Restrictions on Transfer. . . . . . . . . . . . . . . . . . . . . . 35
18. Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
19. Foreclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
20. Right of Possession . . . . . . . . . . . . . . . . . . . . . . . . 44
21. Receiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
22. Foreclosure Sale. . . . . . . . . . . . . . . . . . . . . . . . . . 47
23. Insurance During Foreclosure. . . . . . . . . . . . . . . . . . . . 47
24. Waiver of Right of Redemption and Other Rights. . . . . . . . . . . 48
25. Rights Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . 49
26. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . 50
27. Effect of Extensions and Amendments . . . . . . . . . . . . . . . . 51
28. Execution of Separate Security Agreements, Financing Statements,
Etc.; Estoppel Letter . . . . . . . . . . . . . . . . . . . . . . 52
29. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
30. Option to Subordinate . . . . . . . . . . . . . . . . . . . . . . . 52
31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
32. Inspection of Premises and Records. . . . . . . . . . . . . . . . . 53
33. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . 54
34. Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . 55
35. Captions and Pronouns . . . . . . . . . . . . . . . . . . . . . . . 55
36. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
37. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 56
38. Beneficiary Not A Joint Venturer. . . . . . . . . . . . . . . . . . 61
39. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
40. Consent Required of Beneficiary . . . . . . . . . . . . . . . . . . 62
41. Sole Discretion of Beneficiary. . . . . . . . . . . . . . . . . . . 63
42. No Oral Change. . . . . . . . . . . . . . . . . . . . . . . . . . . 63
43. Absolute and Unconditional Obligation . . . . . . . . . . . . . . . 64
44. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
45. Limited Personal Liability. . . . . . . . . . . . . . . . . . . . . 65
46. Power of Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
47. WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . . . . . . . . . 70
48. Anti-Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . 70
49. Usury Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
50. Related Party Contracts . . . . . . . . . . . . . . . . . . . . . . 71
51. Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
52. Concerning the Trustee. . . . . . . . . . . . . . . . . . . . . . . 72
53. Trustee's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 72
54. Final Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 72
55. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
56. Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
AMENDED AND RESTATED DEED OF TRUST B
THIS AMENDED AND RESTATED DEED OF TRUST B (this "Deed of Trust")
made as of this 1st day of September, 1994, from CENTURY PROPERTIES FUND XIX,
a California limited partnership having an address at to 5665 Northside Drive,
N.W., Suite 370, Atlanta, Georgia 30328 ("Grantor"), to Robert E. Wilson
("Trustee"), having an address at ________________________ for the benefit of
THE TRAVELERS INSURANCE COMPANY, a Connecticut corporation having an address
at One Tower Square, 2 SHS, Hartford, Connecticut 06183-2020 ("Beneficiary"),
WHEREAS, Beneficiary made a loan in the original principal sum of
$10,800,000 to Grantor which loan was evidenced by a Promissory Note (the
"Promissory Note") dated March 31, 1986 from Grantor to Beneficiary in the
original principal sum of $10,800,000, as modified by (i) Modification
Agreement dated as of April 1, 1988 between Grantor and Beneficiary, a
memorandum of which dated May 1, 1988 was recorded in Volume 88201, page 2772
of the Deed of Trust Records of Dallas County, Texas, (ii) a second
Modification Agreement dated October 1, 1989 between Grantor and Beneficiary,
a memorandum of which dated October 1, 1989 was recorded in Volume 90041,
page 2543 of the Deed of Trust Records of Dallas County, Texas and (iii) a
third Modification Agreement dated October 1, 1991 between Grantor and
Beneficiary, a memorandum of which was recorded in Volume 92120, page 2641 of
the Deed of Trust Records of Dallas County, Texas;
WHEREAS, the Promissory Note was secured by a Deed of Trust,
Mortgage and Security Agreement dated March 31, 1986 from Grantor to James F.
Conway, trustee for the benefit of Beneficiary (the "Original Deed of Trust")
filed of record on April 2, 1986 in Volume 86064, page 3149 of the Deed of
Trust Records of Dallas County, Texas and an Assignment of Leases and Rents
dated as of March 31, 1986 by Grantor to Beneficiary (the "Original Assignment
of Leases") filed of record in Volume 86064, page 3183 of the Deed of Trust
Records of Dallas County, Texas.
WHEREAS, the Promissory Note was split and severed into Amended
and Restated Note A and Amended and Restated Note B, as set forth in a
Modification and Severance Agreement dated the date hereof between Grantor and
Beneficiary;
WHEREAS, Amended and Restated Note B dated the date hereof from
Grantor to Beneficiary (the "Note") is to be secured by, inter alia, this
Amended and Restated Deed of Trust B (this "Deed of Trust") which lien shall
be subordinate to the lien of Amended and Restated Deed of Trust A ("Deed of
Trust A") dated the date hereof from Grantor to Robert E. Wilson as trustee
for the benefit of Beneficiary;
WHEREAS, the Original Assignment was split and severed into (i)
Amended and Restated Assignment of Leases and Rents A dated the date hereof
from Grantor to Beneficiary ("Assignment A") and Amended and Restated
Assignment of Leases and Rents B dated the date hereof from Grantor to
Beneficiary ("Assignment B"), as set forth in a Modification and Severance
Agreement dated the dated hereof between Grantor and Beneficiary;
WHEREAS, Grantor and Beneficiary intend to modify, amend and
restate the terms and provisions of the original Deed of Trust as hereinafter
set forth;
WHEREAS, Grantor desires to set forth the terms and provisions of
this Deed of Trust as hereinafter set forth;
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
W I T N E S S E T H :
To secure the payment of the principal indebtedness under the Note
of $2,138,673.53 (the "Outstanding Principal Balance") and interest and
prepayment premiums, if any, on the principal indebtedness under the Note (and
all replacements, renewals and extensions thereof, in whole or in part)
according to its tenor and effect, and to secure the payment of all other sums
which may be at any time due and owing or required to be paid under the Note,
this Deed of Trust, any of the other documents or instruments now or hereafter
executed in connection with the Note, this Deed of Trust, Assignment B,
Amended and Restated Note A dated the date hereof from Grantor to Robert E.
Wilson as trustee for the benefit of Beneficiary, Deed of Trust A, Assignment
A, the Modification and Severance Agreement dated the date hereof between
Grantor and Beneficiary, the Cash Management Agreement dated the date hereof
between the Grantor, Beneficiary and NPI-AP Management, L.P. (the "Manager"),
the Use and Retention of Funds Letter dated the date hereof from Grantor, Fox
Partners II, Fox Capital Management Corporation, the Manager and NPI Equity
Investments II, Inc. to Beneficiary, the Reserve Agreement dated the date
hereof between Grantor and Beneficiary, the Escrow Agreement dated the date
hereof among Grantor, Beneficiary and Chicago Title Insurance Company, the
Guaranty of Payment dated the date hereof from Grantor, Fox Partners II, Fox
Capital Management Corporation, the Manager and NPI Equity Investments II,
Inc. to Beneficiary, the Manager's Liability Letter from the Manager to
Beneficiary and the Hazardous Material Guaranty and Indemnification Agreement
dated the date hereof from Grantor, Fox Partners II, Fox Capital Management
Corporation, NPI Equity Investments II, Inc., and the Manager to Beneficiary
and any other documents or instruments now or hereafter executed in connection
with the Note or this Deed of Trust (the Note, the Deed of Trust and such
other documents or instruments, collectively the "Loan Documents") and all
replacements, renewals and extensions thereof, in whole or in part
(collectively, the "Indebtedness Hereby Secured"); and to secure the
performance and observance of all the covenants, agreements and provisions
contained in this Deed of Trust, the Note and the other Loan Documents, and to
charge the properties, interests and rights hereinafter described with such
payment, performance and observance, and for other valuable consideration, the
receipt and sufficiency whereof are hereby acknowledged, Grantor DOES HEREBY
GRANT, REMISE, RELEASE, LIEN, MORTGAGE, CONVEY, PLEDGE, ASSIGN and HYPOTHECATE
unto Trustee and Beneficiary, its successors and assigns forever, the Land (as
hereinafter defined) together with the following described property, rights
and interests all of which are hereby pledged primarily and on a parity with
the Land and not secondarily (and are, together with the Land, the
"Premises"):
THE LAND located in the County of Dallas, Texas and legally
described on Exhibit A attached hereto and made a part hereof (the "Land");
TOGETHER WITH all buildings, structures and improvements of every
nature whatsoever now or hereafter situated on the Land (including but not
limited to all underground and other parking facilities located in or on the
Land, all landscaped areas and areas utilized for recreational activities) and
all fixtures, machinery, appliances, equipment, furniture, and personal
property of every nature whatsoever now or hereafter owned by Grantor and
located in or on, or attached to, or used or intended to be used in connection
with or with the operation of, the Land, buildings, structures or other
improvements, or in connection with any construction which may be conducted
thereon, including all extensions, additions, improvements, betterments,
renewals, substitutions, and replacements to and proceeds of any of the
foregoing and all of the right, title and interest of Grantor in and to any
such personal property or fixtures together with the benefit of any deposits
or payments now or hereafter made on such personal property or fixtures by
Grantor or on its behalf (the "Improvements"); except that this Deed of Trust
shall not create a lien on any items of personal property which (i) are owned
by tenants who are in possession pursuant to a Lease (as hereinafter defined),
and (ii) may be removed by such tenants at the expiration or termination of
such Lease;
TOGETHER WITH all easements, rights of way, gores of land,
streets, ways, alleys, passages, sewer rights, waters, water courses, water
rights and powers, and all estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments and appurtenances whatsoever, in any way
belonging, relating or appertaining to the Land, or which hereafter shall in
any way belong, relate or be appurtenant thereto, and all of the coal, oil,
gas and other minerals of every kind and character in and underlying the Land,
whether now owned or hereafter acquired by Grantor, and the reversion and
reversions, remainder and remainders, rents, issues and profits thereof, and
all the estate, right, title, interest, property, possession, claim and demand
whatsoever, at law as well as in equity, of Grantor of, in and to the same;
TOGETHER WITH all Rents (as such term is defined hereinafter)
generated from the Premises under the Leases (as such term is defined
hereinafter) or otherwise to be applied against the Indebtedness Hereby
Secured;
TOGETHER WITH all right, title and interest of Grantor in and to
any and all leases now or hereafter on or affecting the Premises whether
written or oral and all agreements for use of the Premises (the "Leases"),
together with all security therefor and all monies payable thereunder,
subject, however, to the conditional permission hereinabove given to Grantor
to collect the rentals under any such Lease;
TOGETHER WITH all fixtures and articles of personal property now
or hereafter owned by Grantor and forming a part of or used in connection with
the Land or the Improvements or the operation thereof including, but without
limitation, any and all air conditioners, antennae, appliances, apparatus,
awnings, basins, bathtubs, bidets, boilers, bookcases, cabinets, carpets,
coolers, curtains, dehumidifiers, disposals, doors, drapes, dryers, ducts,
dynamos, elevators, engines, equipment, escalators, fans, fittings, floor
coverings, furnaces, furnishings, furniture, hardware, heaters, humidifiers,
incinerators, lighting, machinery, motor vehicles, motors, ovens, pipes,
plumbing, pumps, radiators, ranges, recreational facilities, refrigerators,
screens, security systems, shades, shelving, sinks, sprinklers, stokers,
stoves, toilets, ventilators, wall coverings, washers, windows, window
coverings, wiring, and all renewals, replacements or proceeds thereof or
articles in substitution therefor, whether or not the same are or shall be
attached to the Land or the Improvements in any manner; it being mutually
agreed that all of the aforesaid property owned by Grantor and placed on the
Land or the Improvements shall, so far as permitted by law, be deemed to be
fixtures, a part of the realty, and security for the Indebtedness Hereby
Secured; notwithstanding the agreement and declaration hereinabove expressed
that certain articles of property form a part of the realty covered by this
Deed of Trust and be appropriated to its use and deemed to be realty, to the
extent that such agreement and declaration may not be effective and that any
of said articles may constitute goods (as said term is used in the Uniform
Commercial Code of Texas), this instrument shall constitute a security
agreement, creating a security interest in such goods, as collateral, in
Beneficiary as a secured party and Grantor as debtor, all in accordance with
said Uniform Commercial Code as more particularly set forth in Paragraph 16
hereof;
TOGETHER WITH all proceeds of the foregoing, including without
limitation all judgments, awards of damages and settlements hereafter made
resulting from condemnation proceeds or the taking of the Premises and/or the
Improvements or any portion thereof under the power of eminent domain, any
proceeds of any policies of insurance, maintained with respect to the Premises
and/or the Improvements or proceeds of any sale, option or contract to sell
the Premises and/or the Improvements or any portion thereof; and Grantor
hereby authorizes, directs and empowers Beneficiary, at its option, on behalf
of Grantor, or the successors or assigns of Grantor, to adjust, compromise,
claim, collect and receive such proceeds, to give proper receipts and
acquittances therefor, and, after deducting expenses of collection, to apply
the net proceeds as a credit upon any portion, as selected by Beneficiary, of
the Indebtedness Hereby Secured, notwithstanding the fact that the same may
not then be due and payable or that the Indebtedness Hereby Secured is
otherwise adequately secured; and
TOGETHER WITH all right, title, and interest of Grantor in and to
all executory contracts affecting the ownership, possession, operation,
control and services furnished to the Premises (the "Executory Contracts"),
provided, however, that permission is hereby given to Grantor so long as no
Default has occurred hereunder and is continuing to exercise the rights and
powers under the Executory Contracts and to enjoy the benefits thereunder;
TO HAVE AND TO HOLD the same, unto Trustee and Beneficiary, their
successors and assigns, forever, for the purposes and upon the uses herein set
forth, together with all right to possession of the Premises after the
occurrence of any Default; Grantor hereby RELEASING AND WAIVING all rights
under and by virtue of the homestead exemption laws of the State in which the
Premises are located;
PROVIDED, NEVERTHELESS, that if Grantor shall pay in full when due
the Indebtedness Hereby Secured and shall duly and timely perform and observe
all of the terms, provisions, covenants and agreements herein and in the Note
and the other Loan Documents provided to be performed and observed by Grantor,
then this Deed of Trust and the estate, right and interest of Beneficiary in
the Premises shall cease and become void and of no effect, but shall otherwise
remain in full force and effect.
This Deed of Trust and Deed of Trust A are given in replacement
and substitution of the Original Deed of Trust and evidence a portion of the
same indebtedness evidenced by the Promissory Note and secured by the Original
Deed of Trust and do not evidence any new or additional indebtedness of
Grantor to Beneficiary and neither is intended as a novation of the Promissory
Note or the Original Deed of Trust.
GRANTOR FURTHER COVENANTS AND AGREES AS FOLLOWS:
1. Payment of Indebtedness and Performance of Covenants. Grantor
shall (a) pay when due the Indebtedness Hereby Secured; and (b) duly and
punctually perform and observe all of the terms, provisions, conditions,
covenants and agreements on Grantor's part to be performed or observed as
provided in the Note, this Deed of Trust and the other Loan Documents.
Grantor shall have the privilege of making prepayment on the principal of the
Note (in addition to the required payments thereunder) in accordance with the
terms and conditions set forth in the Note but not otherwise.
2. Representation and Warranty of Title. At the time of the
delivery of these presents, Grantor is seized of an indefeasible estate in fee
simple in the portion of the Premises which constitutes real property and
Grantor owns good title to the portion of the Premises which constitutes
personal property subject only to the matters set forth on the title policy
insuring the lien of this Deed of Trust and any additional matters approved in
writing by Beneficiary; and has good right, full power and lawful authority to
ASSIGN, RELEASE, LIEN, CONVEY, PLEDGE, HYPOTHECATE, MORTGAGE and grant a
security interest in the same, in the manner and form aforesaid; that, except
as set forth on the title policy insuring the lien of this Deed of Trust or
consented to in writing by Beneficiary, the same is free and clear of all
liens, charges, easements, covenants, conditions, restrictions and
encumbrances whatsoever, including, as to the personal property and fixtures,
security agreements, conditional sales contracts and anything of a similar
nature; and that Grantor shall and will warrant and forever defend the title
to the Premises against the claims of all persons whomsoever claiming by,
through or under Grantor. Grantor also represents and warrants that
(i) Grantor is now, and after giving effect to this Deed of Trust will be in,
a solvent condition, (ii) the execution and delivery of this Deed of Trust by
Grantor does not constitute a "fraudulent conveyance" within the meaning of
Title 11 of the United States Code as now constituted or under any other
applicable statute, and (iii) no bankruptcy or insolvency proceedings are
pending or contemplated by or against Grantor.
3. Maintenance, Repair, Compliance with Law, Use, Etc. Grantor
shall (a) promptly repair, restore, replace or rebuild (pursuant to plans and
specifications approved by Beneficiary) any portion of the Improvements which
may become damaged or be destroyed to be of at least equal value and of
substantially the same character as prior to such damage or destruction
(whether or not proceeds of insurance are available or sufficient for that
purpose); (b) keep the Premises in good condition and repair, free from waste;
(c) pay all operating costs of the Premises; (d) complete, within a reasonable
time, any building or buildings or other Improvements now or at any time in
the process of erection upon the Premises; (e) comply with all requirements of
statutes, ordinances, rules, regulations, orders, decrees and other
requirements of law relating to the Premises or any part thereof by any
federal, state or local authority; (f) refrain from any action and correct any
condition which would increase the risk of fire or other hazard to the
Improvements or any portion thereof; (g) comply with any restrictions and
covenants of record with respect to the Premises and the use thereof, and
observe and comply with any conditions and requirements necessary to preserve
and extend any and all rights, licenses, permits (including without limitation
zoning variances, special exceptions and nonconforming uses), privileges,
franchises and concessions that are applicable to the Premises or its use and
occupancy; and (h) cause the Premises to be managed in a competent and
professional manner. Without the prior written consent of Beneficiary (which
consent may be granted or withheld in Beneficiary's sole discretion), Grantor
shall not cause, suffer or permit any (i) alterations of the Premises or the
Improvements (including without limitation, landscaped and recreation areas
and underground on-site paved parking areas and parking pavilion and/or
structures) except as required by law or ordinance, (ii) change in the
intended use or occupancy of the Premises for which the Improvements have been
constructed including, without limitation, any change which would increase any
fire or other hazard; (iii) zoning reclassification with respect to the
Premises; (iv) unlawful use of, or nuisance to exist upon, the Premises;
(v) granting of any easements, licenses, covenants, conditions or declarations
of use against the Premises, other than use restrictions contained or provided
for in Leases approved by Beneficiary; (vi) buildings or additions to any
existing buildings or other structures to be erected on the Premises; or
(vii) all or a portion of the Premises to be operated as a cooperative or
condominium building or buildings in which the tenants or occupants
participate in active ownership, control, or management of the Premises or any
part thereof as tenant stockholder or otherwise.
4. Liens.
(i) Prohibition. Subject to the provisions of Paragraph 5 hereof
respecting Taxes (as hereinafter defined), Grantor shall not create or suffer
or permit any mortgage, lien, charge or encumbrance to attach to or be filed
against the Premises, whether such lien or encumbrance is inferior, at parity
with or superior to the lien of this Deed of Trust, including mechanic's
liens, materialmen's liens, or other claims for lien made by parties claiming
to have provided labor or material with respect to the Premises (collectively,
"Mechanic's Liens") and excepting only the lien of real estate taxes and
assessments not due or delinquent, the permitted encumbrances set forth on the
title policy insuring the lien of this Deed of Trust and any liens and
encumbrances of Beneficiary pursuant to this Deed of Trust, Deed of Trust A
and the other Loan Documents.
(ii) Contest of Mechanic's Liens Claims. Notwithstanding the
foregoing prohibition against Mechanic's Liens, Grantor, or any party
obligated to Grantor to do so, may in good faith and with due diligence
contest the validity or amount of any Mechanic's Lien and defer payment and
discharge thereof during the pendency of such contest, provided that: (i) such
contest shall have the effect of preventing the sale or forfeiture of the
Premises or any part thereof, or any interest therein, to satisfy such
Mechanic's Lien; (ii) within ten (10) days after Grantor has been notified of
the filing of such Mechanic's Lien, Grantor shall have notified Beneficiary in
writing of Grantor's intention to contest such Mechanic's Lien or to cause
such other party to contest such Mechanic's Lien; and (iii) Grantor either
shall have obtained a title insurance endorsement over such Mechanic's Liens
insuring Beneficiary against loss or damage by reason of the existence of such
Mechanic's Liens or, at the option of Grantor, Grantor shall have deposited or
caused to be deposited with Beneficiary at such place as Beneficiary may from
time to time in writing appoint, and in the absence of such appointment, then
at the place of payment designated in the Note, a sum of money which shall be
sufficient in the judgment of Beneficiary to pay in full such Mechanic's Lien
and all interest which might become due thereon, and shall keep on deposit an
amount so sufficient at all times, increasing such amount to cover additional
interest whenever, in the judgment of Beneficiary, such increase is advisable.
Such deposits are to be held without any allowance of interest. If Grantor
shall fail to maintain or cause to be maintained sufficient funds on deposit
as hereinabove provided, shall fail to prosecute such contest or cause such
contest to be prosecuted with due diligence or shall fail to pay or cause to
be paid the amount of the Mechanic's Lien plus any interest finally determined
to be due upon the conclusion of such contest, Beneficiary may, at its option,
apply the money as deposited in payment of or on account of such Mechanic's
Lien, or that part thereof then unpaid, together with all interest thereon.
If the amount of money so deposited shall be insufficient for the payment in
full of such Mechanic's Lien, together with all interest thereon, Grantor
shall forthwith, upon demand, deposit with Beneficiary a sum which, when added
to the funds then on deposit, shall be sufficient to make such payment in
full. If the contest of the Mechanic's Lien claim is ultimately resolved in
favor of the claimant, Beneficiary shall apply the money so deposited in full
payment of such Mechanic's Lien or that part thereof then unpaid, together
with all interest thereon (provided Grantor is not then in Default, as
hereafter defined, under this Deed of Trust) when furnished with evidence
satisfactory to Beneficiary of the amount of payment to be made. Any surplus
monies remaining in the control of Beneficiary shall be paid to Grantor,
provided Grantor is not then in Default hereunder.
5. Taxes.
A. Payment. Grantor shall pay or cause to be paid when due and
before any penalty attaches, all general and special taxes, assessments, water
charges, sewer charges, and other fees, taxes, charges and assessments of
every kind and nature whatsoever levied or assessed against the Premises or
any part thereof or any interest therein or any obligation or instrument
secured hereby, and all installments thereof (collectively, "Taxes"), whether
or not assessed against Grantor, and Grantor shall furnish to Beneficiary
receipts therefor as soon as reasonably possible, but in any event within
thirty (30) days after the date the same are due; and shall discharge any
claim or lien relating to Taxes upon the Premises, other than matters
expressly permitted by the terms hereof.
B. Contest. Grantor may, in good faith and with due diligence,
contest or cause to be contested the validity or amount of any such Taxes,
provided that:
(a) such contest shall have the effect of preventing the
collection of the Taxes so contested and the sale or forfeiture of the
Premises or any part thereof or interest therein to satisfy the same;
(b) Grantor has notified Beneficiary in writing of the
intention of Grantor to contest the same or to cause the same to be contested
before any Tax has been increased by any interest, penalties, or costs; and
(c) Grantor has deposited or caused to be deposited with
Beneficiary, at such place as Beneficiary may from time to time in writing
designate, a sum of money (or other security acceptable to Beneficiary) that,
when added to the monies or other security, if any, deposited with Beneficiary
pursuant to Paragraph 9 hereof, is sufficient, in Beneficiary's judgment, to
pay in full, or provide for payment in full of, such contested Tax and all
penalties and interest that might become due thereon, and shall keep on
deposit an amount or other security sufficient, in Beneficiary's judgment, to
pay in full, or provide for payment in full of, such contested Tax, increasing
such amount or other security to cover additional penalties and interest
whenever, in Beneficiary's judgment, such increase is advisable.
If Grantor fails to prosecute such contest with due diligence or fails to
maintain sufficient funds or security on deposit as hereinabove provided,
Beneficiary may, at its option, within ten (10) days following Beneficiary's
written notice to Grantor (or such shorter period of time necessary in
Beneficiary's opinion to prevent the collection of Taxes or the sale or
forfeiture of the Premises or any part thereof or interest therein), apply the
monies or liquidate any other security deposited with Beneficiary, in payment
of, or on account of, such Taxes, or any portion thereof then unpaid,
including all penalties and interest thereon. If the amount of the money and
any such security so deposited is insufficient for the payment in full of such
Taxes, together with all penalties and interest thereon, Grantor shall
forthwith, upon demand, either deposit with Beneficiary a sum that, when added
to such funds then on deposit, is sufficient to make such payment in full, or,
if Beneficiary has applied funds on deposit on account of such Taxes, restore
such deposit to an amount satisfactory to Beneficiary. Provided that Grantor
is not then in default hereunder, Beneficiary shall, if so requested in
writing by Grantor, after final disposition of such contest and upon Grantor's
delivery to Beneficiary of an official bill for such Taxes, apply the money or
security so deposited in full payment of such Taxes or that part thereof then
unpaid, together with all penalties and interest thereon and return any excess
to Grantor, unless Grantor has paid all such Taxes, together with all
penalties and interest thereon, and has provided Beneficiary with evidence
reasonably satisfactory to Beneficiary of such payment, in which event
Beneficiary shall return such money or security to Grantor. All money held by
Beneficiary pursuant to this Paragraph 5B shall be held without any allowance
of interest thereon.
C. Tax Services Contract. If Beneficiary elects, Grantor shall
maintain, at Grantor's expense while any portion of the Indebtedness Hereby
Secured is outstanding, a tax services contract issued by a tax reporting
agency approved by Beneficiary, it being agreed and understood that
Beneficiary shall not elect to maintain such tax service contract for so long
as Grantor provides satisfactory evidence to Beneficiary of Grantor's
continuing efforts to minimize or reduce taxes through proper and legal means.
If Beneficiary does not elect to maintain a tax service contract, Grantor
shall reimburse Beneficiary on demand for the cost of making annual tax
searches.
6. Change in Tax Laws. If, by the laws of the United States of
America, or of any state or municipality having jurisdiction over Beneficiary,
Grantor or the Premises, any tax is imposed or becomes due in respect of the
issuance of the Note or the recording of this Deed of Trust, Grantor shall pay
such tax in the manner required by such law. If any law, statute, rule,
regulation, order or court decree has the effect of deducting from the value
of the Premises for the purpose of taxation any lien thereon, or imposing upon
Beneficiary the payment of the whole or any part of the taxes required to be
paid by Grantor, or changing in any way the laws relating to the taxation of
mortgages or debts secured by mortgages or the interest of Beneficiary in the
Premises, or the manner of collection of taxes, so as to affect this Deed of
Trust, the Indebtedness Hereby Secured or Beneficiary, then, and in any such
event, Grantor, upon demand by Beneficiary, shall pay such taxes, or reimburse
Beneficiary therefor on demand, unless Beneficiary determines, in
Beneficiary's sole and exclusive judgment, that such payment or reimbursement
by Grantor is unlawful; in which event the Indebtedness Hereby Secured shall
be due and payable within thirty (30) days after written demand by Beneficiary
to Grantor. Nothing in this Paragraph 6 shall require Grantor to pay any
income, franchise or excise tax imposed upon Beneficiary, excepting only such
which may be levied against the income of Beneficiary as a complete or partial
substitute for taxes required to be paid by Grantor pursuant hereto.
7. Insurance Coverage. Grantor will insure the Premises
against such perils and hazards, and in such amounts and with such limits, as
Beneficiary may from time to time require, and in any event will continuously
maintain the following described policies of insurance without cost to
Beneficiary (the "Insurance Policies"):
(a) Property insurance against loss and damage by all
risks of physical loss or damage, including fire, sprinkler leakage, windstorm
and other risks covered by the so-called extended coverage endorsement
covering the Improvements and the Personal Property in amounts not less than
the full insurable replacement value of all Improvements, Personal Property,
fixtures and equipment from time to time on the Premises, but in no event less
than the Indebtedness Hereby Secured, as the same may be increased from time
to time by Beneficiary to reflect any increase in the aggregate amount of
principal and interest owing under the Note and Amended and Restated Note A
dated the date hereof from Grantor to Beneficiary upon notice to Grantor
bearing a replacement-cost agreed-amount endorsement;
(b) Comprehensive general public liability against death,
bodily injury and property damage with a combined single limit in an amount
not less than One Million Dollars ($1,000,000) including a waiver of
subrogation clause acceptable to Beneficiary, and naming Beneficiary as an
additional insured;
(c) Business interruption insurance including rental
interruption insurance to cover loss of rental income, with the standard
mortgagee's clauses in form and amounts satisfactory to Beneficiary, but in no
event shall such policy be in an amount less than twelve (12) months'
projected gross rental income from the Premises, with 90% co-insurance as a
minimum;
(d) An umbrella excess liability policy with a limit of not
less than Four Million Dollars ($4,000,000) over primary insurance, which
policy shall include, but not be limited to, automobile liability, and
safeguarding of personalty, with coverages, risks insured, and waiver of
subrogation clause acceptable to Beneficiary, and naming Beneficiary as an
additional insured;
(e) Steam boiler, machinery and pressurized vessel
insurance, with 90% co-insurance as a minimum, and naming Beneficiary as an
additional insured;
(f) Earthquake insurance with 90% co-insurance as a
minimum, if available, and if required by Beneficiary;
(g) If the Premises is located in a federal flood hazard
area other than Zone C or Zone X as described in the Housing and Urban
Development Administration Special Flood Hazard Area Maps, flood insurance
with 90% co-insurance as a minimum; and
(h) The types and amounts of coverage as are customarily
(i) maintained by owners or operators of like properties, or (ii) required by
sophisticated institutional lenders in like transactions.
8. Insurance Policies. All Insurance Policies shall be in form,
companies and amounts satisfactory to Beneficiary from time to time. An
insurance company shall not be satisfactory unless such insurance company (a)
has Best's general policyholder rating of "A-" or better and a financial
rating of "Class VIII" or better; (b) is licensed in Texas (or Beneficiary is
furnished a service of suit endorsement) and has actively been in business for
at least five (5) years; (c) if it is a mutual company, is a nonassessable
company; and (d) does not provide insurance on any one building in excess of
10% of its policyholders' surplus (including capital). All Insurance Policies
insuring against casualty and business interruption and other appropriate
policies shall include non-contributing mortgagee endorsements in favor of and
with loss payable to Beneficiary, as well as standard waiver of subrogation
endorsements, shall provide that the coverage shall not be terminated or
materially modified, nor a risk materially changed without thirty (30) days'
advance written notice to Beneficiary and shall provide that no claims shall
be paid thereunder without ten (10) days' advance written notice to
Beneficiary. If a blanket policy is issued, a certified copy of said policy
shall be furnished, together with a certificate indicating that Beneficiary is
an additional insured under such policy in the designated amount. Grantor
will deliver all Insurance Policies, premium prepaid for a period acceptable
to Beneficiary and, in case of Insurance Policies about to expire, Grantor
will deliver renewal or replacement policies not less than thirty (30) days
prior to the date of expiration. The requirements of the preceding sentence
shall apply to any separate policies of insurance taken out by Grantor
concurrent in form or contributing in the event of loss with the Insurance
Policies.
9. Deposits for Taxes and Insurance Premiums. In order to assure
the payment of Taxes and premiums payable with respect to all Insurance
Policies ("Premiums") as and when the same shall become due and payable:
(a) Grantor shall deposit with Beneficiary on the first
business day of each and every month, an amount equal to one-twelfth (1/12) of
the Taxes and Premiums to become due upon the Premises between one and
thirteen months after the date of such deposit; provided that in the case of
the first such deposit, there shall be deposited in addition an amount which,
when added to the aggregate amount of monthly deposits to be made hereunder
with respect to Taxes and Premiums to become due and payable within thirteen
months after such first deposit, will provide (without interest) a sufficient
fund to pay such Taxes and Premiums, one month prior to the date when they are
due and payable. The amounts of such deposits (herein generally called "Tax
and Insurance Deposits") shall be based upon Beneficiary's estimate as to the
amount of Taxes and Premiums. Grantor shall promptly, upon the demand of
Beneficiary, make additional Tax and Insurance Deposits as Beneficiary may
from time to time require due to (i) failure of Beneficiary to require, or
failure of Grantor to make, Tax and Insurance Deposits in previous months,
(ii) underestimation of the amounts of Taxes and/or Premiums, (iii) the
particular due dates and amounts of Taxes and/or Premiums, or (iv) application
of the Tax and Insurance Deposits pursuant to Paragraph 9(c) hereof. All Tax
and Insurance Deposits shall be held by Beneficiary without any allowance of
interest thereon.
(b) Beneficiary will, out of the Tax and Insurance
Deposits, upon the presentation to Beneficiary by Grantor of the bills
therefor, pay the Taxes and Premiums or will, upon the presentation of
receipted bills therefor, reimburse Grantor for such payments made by Grantor.
If the total Tax and Insurance deposits on hand shall not be sufficient to pay
all of the Taxes and Premiums when the same shall become due, then Grantor
shall pay to Beneficiary on demand the amount necessary to make up the
deficiency.
(c) To the extent permitted under applicable law, upon a
Default under this Deed of Trust, Beneficiary may, at its option, without
being required so to do, apply any Tax and Insurance Deposits on hand to any
of the Indebtedness Hereby Secured, in such order and manner as Beneficiary
may elect. When the Indebtedness Hereby Secured has been fully paid, any
remaining Tax and Insurance Deposits shall be paid to Grantor. All Tax and
Insurance Deposits are hereby pledged as additional security for the
Indebtedness Hereby Secured, and shall be held by Beneficiary irrevocably to
be applied for the purposes for which made as herein provided, and shall not
be subject to the direction or control of Grantor.
(d) Provided no Default has occurred under the Deed of
Trust, Beneficiary shall apply the Tax and Insurance Deposits to the payment
of the Taxes or Premiums for the payment of which such Tax and Insurance
Deposits were made.
(e) The provisions of this Deed of Trust are for the
benefit of Grantor and Beneficiary alone. No provision of this Deed of Trust
shall be construed as creating in any party other than Grantor and
Beneficiary, any rights in and to the Tax and Insurance Deposits or any rights
to have the Tax and Insurance Deposits applied to payment of Taxes and
Premiums. Beneficiary shall have no obligation or duty to any third party to
collect Tax and Insurance Deposits.
10. Proceeds of Insurance. Grantor will give Beneficiary
immediate notice of any loss or damage to the Premises, and:
(a) In case of loss or damage covered by any of the
Insurance Polices equal to or in excess of $25,000, Beneficiary (or, after
entry of decree of foreclosure, the purchaser at the foreclosure sale or
decree creditor, as the case may be) is hereby authorized at its option either
(i) to settle and adjust any claim under such Insurance Policies without the
consent of Grantor or (ii) allow Grantor to settle and adjust such claim
without the consent of Beneficiary. In the case of loss or damage covered by
any of the Insurance Policies less than $25,000, Beneficiary hereby authorizes
Grantor to settle and adjust such claim without the consent of Beneficiary.
In all cases Beneficiary shall, and is hereby authorized to, collect and
receipt for all insurance proceeds; and the reasonable expenses incurred by
Beneficiary in the adjustment and collection of insurance proceeds, if any
shall be so much additional Indebtedness Hereby Secured, and shall be
reimbursed to Beneficiary upon demand or, in the event and to the extent
sufficient proceeds are available, shall be deducted by Beneficiary from said
insurance proceeds prior to any other application thereof. If Grantor has
settled and adjusted a claim under $25,000 covered by any of the Insurance
Policies, Beneficiary shall release such proceeds of insurance to Grantor
within thirty (30) days of receipt by Beneficiary of all information regarding
such loss or damage reasonably requested by Beneficiary and evidence
satisfactory to Beneficiary that such loss or damage has been restored,
repaired, replaced or rebuilt in a manner satisfactory to Beneficiary and all
costs in connection with such restoration have been paid in full. Each
insurance company which has issued an Insurance Policy is hereby authorized
and directed to make payment for all losses covered by an Insurance Policy to
Beneficiary alone, and not to Beneficiary and Grantor jointly.
(b) Except as set forth below, Beneficiary shall, in its
sole discretion, elect to apply the proceeds of Insurance Policies consequent
upon any casualty either (i) to reduce the Indebtedness Hereby Secured; or
(ii) to reimburse Grantor for the cost of restoring, repairing, replacing or
rebuilding (collectively, "Restoring") the loss or damage of the casualty,
subject to the conditions and in accordance with the provisions of Paragraph
11 hereof. If Beneficiary elects to apply the proceeds of Insurance Policies
to the Indebtedness Hereby Secured and such proceeds do not discharge that
indebtedness in full, the entire Indebtedness Hereby Secured shall become
immediately due and payable with interest thereon at the Default Rate (as
defined in the Note).
(c) If insurance proceeds are made available to Grantor as
set forth in Paragraph 11 hereof, Grantor hereby covenants to restore, repair,
replace or rebuild the Improvements, to be of at least equal value, and of
substantially the same character as prior to such loss or damage, and Grantor
shall pay all costs of such restoring, repairing, replacing or rebuilding.
11. Disbursement of Insurance Proceeds. (a) Notwithstanding
anything to the contrary contained in Paragraph 10, if a loss or damage to the
Premises which is covered by insurance, occurs other than within one year
prior to the maturity date set forth in the Note,
(i) if immediately prior to the loss or damage and during any
period of repair and/or rebuilding, Grantor was not in
default under the Loan Documents;
(ii) if upon completion of the repairs, the rents receivable
pursuant to Leases that remain in full force and effect
shall be adequate to satisfy the debt service payable under
the Note and to pay the taxes and operating expenses of the
Premises;
(iii) if not more than three buildings constituting a portion of
the Improvements are damaged or destroyed in whole or in
part at any one time;
(iv) if all of the requirements of any regulatory authority
having jurisdiction over Beneficiary will be satisfied after
the repair or restoration,
then Beneficiary, after first applying such insurance proceeds to the payment
of all expenses incurred by Beneficiary in obtaining such proceeds, agrees to
apply the balance of the insurance proceeds to reimburse Grantor for the cost
of Restoring the Premises or any part thereof affected by an insured casualty,
in accordance with the terms and conditions provided for in this paragraph.
(b) If Beneficiary makes proceeds available for Restoring the
Premises, Grantor shall be obligated to use such proceeds solely for restoring
the Premises in accordance with this paragraph, unless Beneficiary otherwise
specifies in writing. Application by Beneficiary of any insurance proceeds
upon the Indebtedness Hereby Secured shall not excuse Grantor from making the
regularly scheduled payments of principal and interest due under the Note, nor
shall such application extend or reduce the amount of such payments. In
addition, such application by Beneficiary of insurance proceeds upon the
Indebtedness Hereby Secured may be made in such order or manner as Beneficiary
may elect in its sole discretion; provided that no premium or penalty shall be
payable in connection with any prepayment of the Indebtedness Hereby Secured
made out of insurance proceeds as aforesaid;
(c) If proceeds of insurance shall be made available to Grantor
for the Restoring of the Premises, Grantor hereby covenants to restore the
same in accordance with plans and specifications approved by Beneficiary, and
Grantor shall cause to be prepared and presented to Beneficiary a certified
construction statement, acceptable to Beneficiary, showing the total cost of
the restoration or repair; to the extent such cost exceeds the available
insurance proceeds, the amount of such excess cost shall be paid, in cash, to
Beneficiary, before any disbursement is made by Beneficiary pursuant hereto,
to be held in an account pursuant hereto (such insurance proceeds are
hereinafter called the "Construction Funds");
(d) Any portion of the insurance proceeds remaining after payment
in full of the Indebtedness Hereby Secured shall be paid to Grantor or as
ordered by a court of competent jurisdiction;
(e) In the event of foreclosure of the Deed of Trust or other
transfer of title to the Premises in extinguishment of the Indebtedness Hereby
Secured, all right, title and interest of Grantor in and to any insurance
policies then in force shall pass to the purchaser or grantee, and Grantor
hereby appoints Beneficiary its attorney-in-fact, in Grantor's name, to assign
and transfer all such policies and proceeds to such purchaser or grantee;
(f) The Construction Funds shall be made available to Grantor not
more than once during any calendar month as the Restoring of the Premises
progresses. The funds paid by Grantor to Beneficiary to pay all excess costs
shall be disbursed prior to the disbursement of any insurance proceeds. No
payment made prior to final completion of such Restoring shall exceed 90% of
the value of the work performed from time to time;
(g) There shall be delivered to Beneficiary, with such
certificates, sworn statements and lien waivers in an amount at least equal to
the amount of Construction Funds to be paid out to Grantor pursuant to each
architect's certificate and dated as of the date of the disbursement to which
they relate, provided that lien waivers may be delivered with respect to the
amount of Construction Funds disbursed thirty (30) days subsequent to such
disbursements if Beneficiary has received a title insurance endorsement
satisfactory to Beneficiary insuring against mechanic's liens which may arise
with respect to the disbursed Construction Funds;
(h) There shall be delivered to Beneficiary such other evidence
as Beneficiary may reasonably request, from time to time, during the Restoring
work, as to the progress of the work, compliance with the approved plans and
specifications, the cost of the work and the total amount needed to complete
the work;
(i) There shall be delivered to Beneficiary, at the sole expense
of Grantor, such other evidence as Beneficiary may reasonably request from
time to time, including, without limitation, updated title insurance
endorsements, showing that there are no liens against the Premises arising in
connection with the Restoring work, that the remaining Construction Funds are
sufficient to complete the restoring work, and that the Loan Documents,
including this Deed of Trust, are then still insured as a first lien on the
Deed of Trust Premises;
(j) If such Construction Funds are at any time determined by
Beneficiary not to be adequate for completion of the Restoring work, Grantor
shall immediately pay any deficiency to Beneficiary to be held and disbursed
as Construction Funds and prior to any other funds then held by Beneficiary
for disbursement pursuant hereto;
(k) If Grantor at any time shall fail to promptly and fully
perform the conditions and covenants set out above or if during the Restoring
work a Default occurs under any of the Loan Documents, Beneficiary may, at its
option, immediately cease making any further payments to Grantor for such
Restoring work, and may further, at its option, apply the Construction Funds
then in its possession either to the reduction of the Indebtedness Hereby
Secured or to the Restoring of the Premises in the manner above provided and
notwithstanding any such default or defaults, without affecting the lien of
this Deed of Trust and the obligations hereunder. Construction Funds may be
disbursed by Beneficiary directly or through a third party escrow agent, such
as, but not limited to, a title insurance company, or its agent, as
Beneficiary may determine in its sole discretion. Any excess Construction
Funds shall be applied by Beneficiary against the Indebtedness Hereby Secured
in such order or manner as Beneficiary may elect in its sole discretion;
12. Condemnation and Eminent Domain. Any and all awards (the
"Awards") heretofore or hereafter made or to be made to the present, or any
subsequent, owner of the Premises, by any governmental or other lawful
authority for the taking by condemnation or eminent domain, of all or any part
of the Premises (including any award from the United States government at any
time after the allowance of a claim therefor, the ascertainment of the amount
thereto, and the issuance of a warrant for payment thereof), or the proceeds
from a sale in lieu of such condemnation or eminent domain are hereby assigned
by Grantor to Beneficiary, which Awards Beneficiary is hereby authorized to
collect and receive from the condemnation authorities, and Beneficiary is
hereby authorized to give appropriate receipts and acquittances therefor.
Grantor shall give Beneficiary immediate notice of the actual or threatened
commencement of any condemnation or eminent domain proceedings affecting all
or any part of the Premises and shall deliver to Beneficiary copies of any and
all papers served in connection with any such proceedings. Grantor further
agrees to make, execute, and deliver to Beneficiary, at any time upon request,
free, clear, and discharged of any encumbrance of any kind whatsoever (except
the rights of the holders of any junior mortgage loans expressly consented to
in writing by Beneficiary, provided such rights are expressly subordinate to
the rights of Beneficiary), any and all further assignments and other
instruments deemed reasonably necessary by Beneficiary for the purpose of
validly and sufficiently assigning all Awards and other compensation
heretofore and hereafter made to Grantor for any taking, either permanent or
temporary, under any such proceeding. If any portion of or interest in the
Premises is taken by condemnation or eminent domain, either temporarily or
permanently, and the remaining portion of the Premises is not, in the judgment
of Beneficiary, a viable apartment complex of the same character than the same
was prior to the taking, then, at the option of Beneficiary, the entire
Indebtedness Hereby Secured shall immediately become due and payable. After
deducting from the Award for such taking all of its expenses incurred in the
collection and administration of the Award, including reasonable attorney's
fees, Beneficiary shall be entitled to apply the net proceeds toward repayment
of such portion of the Indebtedness Hereby Secured as it deems appropriate
without affecting the lien of this Deed of Trust. In the event of any partial
taking of parking spaces at the Premises, which in the judgment of the
Beneficiary leaves the Premises as a viable apartment complex of the same
character as prior to the taking; provided no Default has occurred and is then
continuing, the Award, in respect of such taking of such parking spaces, shall
be applied to reimburse Grantor for the cost of building additional parking
spaces in locations approved by Beneficiary, and such Award shall be disbursed
in the same manner as is provided in Paragraph 11 hereof for the application
of insurance proceeds, provided that any surplus after payment of such costs
shall be applied on account of the Indebtedness Hereby Secured. If the Award
is not applied for reimbursement of such restoration costs, the Award shall be
applied against the Indebtedness Hereby Secured, in such order or manner as
Beneficiary shall elect.
13. Assignment of Leases and Rents. Grantor hereby absolutely
and presently sells, assigns and transfers unto Beneficiary (subject to the
license granted to Grantor below) all of the rents, royalties, issues,
profits, revenue, income, security deposits and other benefits generated from
the Premises under the Leases or otherwise and all of the rents, leases,
issues and profits now due and which may hereafter become due under or by
virtue of any Leases which may have been heretofore or may be hereafter made
or agreed to by Grantor or the agents of any Grantor or which may be made or
agreed to by Beneficiary under the powers herein granted (collectively the
"Rents"), it being the intention hereby to establish an absolute transfer and
assignment of all such Rents and Leases to Beneficiary and not merely the
granting of a security interest. Notwithstanding the foregoing, Beneficiary
hereby grants to Grantor a license to collect and retain the Rents. However,
upon Default under the Note, this Deed of Trust or any other of the Loan
Documents entered into for the Indebtedness Hereby Secured, the license to
Grantor from Beneficiary shall thereupon terminate and thereafter Beneficiary
shall be entitled to take possession of the Premises, and subject to the
effect of any Leases, remove all persons therefrom and rent the Premises for
Grantor's account and employ such agents and attorneys as may be necessary
with respect thereto. Likewise, upon such Default, Beneficiary shall be
entitled to the immediate appointment of a receiver of the Premises, without
regard to the value of the Premises or the solvency of any person or persons
primarily or contingently liable for the payment of the Indebtedness Hereby
Secured, whether or not Beneficiary has an adequate remedy at law; and upon
any such Default, whether or not a receiver has been sought or appointed,
Beneficiary may collect all Rents, and apply the Rents so collected in their
entirety to the extent of the Indebtedness Secured Hereby, after deducting
Beneficiary's costs and expenses of collection of such Rents (including,
without limitation, reasonable attorneys' fees and the costs and expenses of
litigation). Upon payment in full and satisfaction of the Indebtedness Hereby
Secured, this assignment of Rents shall terminate automatically. Grantor
hereby irrevocably appoints Beneficiary its agent in its name and stead (with
or without taking possession of the Premises as provided in Paragraph 20
hereof) to rent, lease or let all or any portion of the Premises to any party
or parties at such rental and upon such terms as Beneficiary shall, in its
reasonable discretion, determine, and to collect all of said Rents arising
from or accruing at any time hereafter, and all now due or that may hereafter
become due under each and every of the Leases, written or oral, or other
tenancy existing, or which may hereafter exist on the Premises, with the
rights and powers and subject to the same immunities, exoneration of liability
and rights of recourse and indemnity as Beneficiary would have upon taking
possession pursuant to the provisions of Paragraph 20 hereof. Grantor
represents and agrees that no rent has been or will be paid by any person in
possession of any portion of the Premises for more than one installment in
advance and that the payment of none of the rents to accrue for any portion of
said Premises has been or will be waived, released, reduced, discounted or
otherwise discharged or compromised by Grantor except as may be permitted in
the Assignment of Leases (as hereinafter defined). Grantor will not assign
any of the rents or profits of the Premises, except to Beneficiary or a
permitted purchaser or grantee of the Premises. Nothing herein contained
shall be construed as constituting Beneficiary a "mortgagee-in-possession" in
the absence of the taking of actual possession of the Premises by Beneficiary
pursuant to Paragraph 20 hereof. Possession by a court-appointed receiver
will not be considered possession by Beneficiary. In the exercise of the
powers herein granted Beneficiary, no liability shall be asserted or enforced
against Beneficiary, all such liability being expressly waived and released by
Grantor. Grantor further agrees to assign and transfer to Beneficiary all
future Leases upon all or any part of the Premises and to execute and deliver,
at the request of Beneficiary, all such further assurances and assignments in
the Premises as Beneficiary shall from time to time require. In the event
Beneficiary requires that Grantor execute and record a separate Assignment of
Rents or separate assignments of any of the Leases to Beneficiary, the terms
and provisions of those assignments shall control in the event of a conflict
between the terms of this Deed of Trust and the terms thereof. The remedies
provided herein are in addition to the remedies provided to Beneficiary under
that certain Cash Management Agreement dated the date hereof between Grantor
and Beneficiary.
14. Observance of Lease Assignment. Grantor expressly covenants
and agrees that if any lessee under any of the Leases transferred, sold or
assigned to Beneficiary or if Grantor, as lessor therein, shall fail to
perform and fulfill any term, covenant, condition or provision in said Lease,
on its part to be performed or fulfilled at the times and in the manner in
said Lease provided; or if Grantor shall enter into any Leases other than on a
standard form previously approved by Beneficiary, for a term longer than one
year and other than in the ordinary course of business on commercially prudent
terms and provisions consistent with market rental rates for comparable
residential projects in the area where the Premises is located and including
no free rent periods, without the prior written consent of Beneficiary or if
Grantor shall permit or agree to any renewal, extension, compromise,
settlement or termination or make any material change or modification of any
kind or nature of or with respect to any of the Leases or the terms thereof
(except that Grantor shall be entitled to terminate up to but not in excess of
ten (10) residential Leases through customary non-payment proceedings in any
given calendar month provided that such termination is in the ordinary course
of business and is commercially prudent) without Beneficiary's prior written
consent; or if Grantor shall suffer or permit to occur any breach or default
under the provisions of any assignment of any Lease given as additional
security for the payment of the Indebtedness Hereby Secured, which breach or
default is not cured within the applicable grace period provided therein; then
and in any such event, such breach or default shall constitute a Default
hereunder and at the option of Beneficiary, and upon notice to Grantor, the
Indebtedness Secured Hereby shall become due and payable as in the case of
other Defaults.
15. Beneficiary's Performance of Grantor's Obligations. In case
of Default, Beneficiary, either before or after acceleration of the
Indebtedness Hereby Secured or the foreclosure of the lien hereof or
foreclosure sale, may, but shall not be required to, make any payment or
perform any act herein required of Grantor (whether or not Grantor is
personally liable therefor) in any form and manner deemed expedient to
Beneficiary. Upon any such payment or performance of any such act,
Beneficiary shall as soon as reasonably possible provide notice thereof to
Grantor but its failure to do so shall not affect the rights of Beneficiary
and the obligation of Grantor hereunder. Beneficiary may, but shall not be
required to, complete construction, furnishing and equipping of the
Improvements and rent, operate and manage the Premises and such Improvements
and pay operating costs and expenses, including management fees, of every kind
and nature in connection therewith, so that the Premises shall be operational
and usable for their intended purposes. All monies paid, and all expenses
paid or incurred in connection therewith, including reasonable attorneys' fees
and other monies advanced by Beneficiary to protect the Premises and the lien
hereof, or to complete construction, furnishing and equipping or to rent,
operate and manage the Premises or to pay any such operating costs and
expenses thereof or to keep the Premises operational and usable for their
intended purpose shall be so much additional Indebtedness Hereby Secured,
whether or not the Indebtedness Hereby Secured, as a result thereof, shall
exceed the face amount of the Note, and shall become immediately due and
payable on demand, and with interest thereon at the Default Rate (as such term
is defined in the Note). Inaction of Beneficiary shall never be considered as
a waiver of any right accruing to it on account of any Default nor shall the
provisions of this Paragraph or any exercise by Beneficiary of its rights
hereunder prevent any default from constituting a Default. Beneficiary, in
making any payment hereby authorized (a) relating to Taxes, may do so
according to any bill, statement or estimate, without inquiry into the
validity of any tax, assessment, sale, forfeiture, tax lien or title or claim
thereof; (b) for the purchase, discharge, compromise or settlement of any
lien, may do so without inquiry as to the validity or amount of any claim for
lien which may be asserted; or (c) in connection with the completion of
construction, furnishing or equipping of the Premises or the rental,
operation, or management of the Premises or the payment of operating costs and
expenses thereof, may do so in such amounts and to such persons as Beneficiary
may deem appropriate. Nothing contained herein shall be construed to require
Beneficiary to advance or expend monies for any purpose mentioned herein, or
for any other purpose.
16. Security Agreement. Beneficiary and Grantor agree that this
Deed of Trust shall constitute a Security Agreement within the meaning of the
Texas Uniform Commercial Code (hereinafter the "Code") with respect to (i) any
and all sums at any time on deposit for the benefit of Beneficiary or held by
Beneficiary (whether deposited by or on behalf of Grantor or anyone else)
pursuant to any of the provisions of the Deed of Trust and (ii) with respect
to any personal property included in the granting clauses of this Deed of
Trust and Exhibit B hereto, which personal property may not be deemed to be
affixed to the Premises or may not constitute a "fixture" (within the meaning
of Section 9-313 of the Code), (which property is hereinafter referred to as
"Personal Property") and all replacements of such Personal Property,
substitutions for such Personal Property, additions to such Personal Property,
and the proceeds thereof (all of said Personal Property and the replacements,
substitutions and additions thereto and the proceeds thereof being sometimes
hereinafter collectively referred to as the "Collateral"), and that a security
interest in and to the Collateral is hereby granted to Beneficiary, and the
Collateral and all of Grantor's right, title and interest therein are hereby
assigned to Beneficiary, all to secure payment of the Indebtedness Hereby
Secured. All of the terms, provisions, conditions and agreements contained in
this Deed of Trust pertain and apply to the Collateral as fully and to the
same extent as to any other property comprising the Premises; and the
following provisions of this Paragraph shall not limit the applicability of
any other provision of this Deed of Trust but shall be in addition thereto:
(a) Grantor (being the Debtor as that term is used in the
Code) is and will be the true and lawful owner of the Collateral, subject to
no liens, charges or encumbrances other than the lien hereof, other liens and
encumbrances benefiting Beneficiary and no other party, and liens and
encumbrances, if any, expressly permitted by this Deed of Trust (including,
without limitation, those certain liens and encumbrances, if any, set forth on
the title insurance policy insuring the lien of this Deed of Trust) or
otherwise expressly consented to in writing by Beneficiary.
(b) The Collateral is to be used by Grantor solely for
business purposes.
(c) The Collateral will be kept at the Premises, and,
except for Obsolete Collateral (as hereinafter defined), will not be removed
therefrom without the consent of Beneficiary (being the Secured Party as that
term is used in the Code). The Collateral may be affixed to the Premises but
will not be affixed to any other real estate.
(d) The only persons having any interest in the Collateral
are Grantor, Beneficiary and holders of interests, if any, expressly permitted
hereby or otherwise expressly consented to in writing by Beneficiary.
(e) No Financing Statement (other than Financing Statements
showing Beneficiary as the sole secured party, or with respect to liens or
encumbrances, if any, expressly permitted by this Deed of Trust or otherwise
expressly consented to in writing by Beneficiary) covering any of the
Collateral or any proceeds thereof is on file in any public Land Records
except pursuant hereto; and Grantor will at its own cost and expense, upon
demand, furnish to Beneficiary such further information and will execute and
deliver to Beneficiary such financing statements and other documents in form
satisfactory to Beneficiary and will do all such acts and things as
Beneficiary may at any time or from time to time request or as may be
necessary or appropriate to establish and maintain a perfected security
interest in the Collateral as security for the Indebtedness Hereby Secured,
subject to no other liens or encumbrances, other than liens or encumbrances
benefiting Beneficiary and no other party and liens and encumbrances (if any)
expressly permitted by this Deed of Trust; and Grantor will pay the cost of
filing or recording such financing statements or other documents, and this
instrument, in all public Land Records wherever filing or recording is deemed
by Beneficiary to be necessary or desirable.
(f) Upon Default hereunder, Beneficiary shall have the
remedies of a secured party under the Code, including without limitation, the
right to take immediate and exclusive possession of the Collateral, or any
part thereof, and for that purpose may, so far as Grantor can give authority
therefor, with or without judicial process, enter (if this can be done without
breach of the peace), upon any place which the Collateral or any part thereof
may be situated and remove the same therefrom (provided that if the Collateral
is affixed to real estate, such removal shall be subject to the conditions
stated in the Code); and Beneficiary shall be entitled to hold, maintain,
preserve and prepare the Collateral for sale, until disposed of, or may
propose to retain the Collateral subject to Grantor's right of redemption in
satisfaction of Grantor's obligations, as provided in the Code. Beneficiary
may render the Collateral unusable without removal and may dispose of the
Collateral on the Premises. Beneficiary may require Grantor to assemble the
Collateral and make it available to Beneficiary for its possession at a place
to be designated by Beneficiary. Beneficiary will give Grantor reasonable
notice of the time and place of any public sale of the Collateral or of the
time after which any private sale or any other intended disposition thereof is
to be made. The requirements of reasonable notice shall be met if such notice
is mailed, by certified United States mail or equivalent, postage prepaid, to
the address of Grantor hereinafter set forth at least ten (10) days before the
time of the sale or disposition. Beneficiary may buy at any public sale and,
if the Collateral is of a type customarily sold in a recognized market or is
of a type which is the subject of widely distributed standard price
quotations, Beneficiary may buy at private sale. Any such sale may be held as
part of and in conjunction with any foreclosure sale of the Premises, the
Premises including the Collateral to be sold as one lot if Beneficiary so
elects. The net proceeds realized upon any such disposition, after deduction
for the expenses of retaking, holding, preparing for sale, selling or the like
and the attorneys' fees and legal expenses incurred by Beneficiary, shall be
applied against the Indebtedness Hereby Secured in such order or manner as
Beneficiary shall select. Beneficiary will account to Grantor for any surplus
realized on such disposition.
(g) The terms and provisions contained in this Paragraph 16
shall, unless the context otherwise requires, have the meanings and be
construed as provided in the Code.
(h) This Deed of Trust is intended to be a financing
statement within the purview of Section 9-402(f) of the Code with respect to
the Collateral and the goods described herein, which goods are or may become
fixtures relating to the Premises. The addresses of Grantor (Debtor) and
Beneficiary (Secured Party) are hereinafter set forth. The addresses of
Grantor (Debtor) hereinafter set forth is the chief executive offices of
Grantor (Debtor) (i.e. the place where in fact the Debtor conducts the main
part of its business operations). This Deed of Trust is to be filed for
record with the Recorder of Deeds of the county or counties where the Premises
are located.
(i) To the extent permitted by applicable law, the security
interest created hereby is specifically intended to cover and include all
Executory Contracts, any management agreement regarding the Premises and all
Leases between Grantor (or its agent), as lessor, and various tenants named
therein, as lessee, including all extended terms and all extensions and
renewals of the terms thereof, as well as any amendments to or replacement of
said Leases, together with all of the right, title and interest of Grantor, as
lessor thereunder, including, without limiting the generality of the
foregoing, the present and continuing right to make claim for, collect,
receive and receipt for any and all of the rents, rent equivalents, income,
revenues, issues and profits and moneys payable as damages or in lieu of the
rent and moneys payable as the purchase price of the Premises or any part
thereof or of awards or claims for money and other sums of money payable or
receivable thereunder howsoever payable, and to bring actions and proceedings
thereunder or for the enforcement thereof, and to do any and all things which
Grantor or any lessor is or may become entitled to do under the Leases.
Notwithstanding the foregoing, it is expressly understood and agreed that
Beneficiary shall not exercise any of the rights or powers conferred upon it
by this paragraph until a Default shall exist under this Deed of Trust.
(j) Notwithstanding anything herein to the contrary, this
Paragraph 16 shall not be deemed to apply to any items of personal property
which (i) are owned by tenants who are in possession pursuant to a Lease and
(ii) may be removed by such tenants at the expiration or termination of such
Lease.
17. Restrictions on Transfer. Grantor shall not, without the
prior written consent of Beneficiary, create, effect, contract for, consent
to, suffer or permit any "Prohibited Transfer" (as hereinafter defined). Any
conveyance, sale, assignment, transfer, lien, pledge, hypothecation, mortgage,
security interest or other encumbrance or alienation (or any agreement to do
any of the foregoing) of any of the following properties, rights or interests
which occurs, is granted, accomplished, attempted or effectuated without the
prior written consent of Beneficiary shall constitute a "Prohibited Transfer":
(a) the Premises or any part thereof or interest therein,
excepting only sales or other dispositions of Collateral (hereinafter called
"Obsolete Collateral") no longer useful in connection with the operation of
the Premises, provided that such Obsolete Collateral has been or is
contemporaneously being replaced by Collateral of at least equal value and
utility which is subject to the lien hereof with the same priority as with
respect to the Obsolete Collateral;
(b) any shares of capital stock of a corporate Grantor or a
corporation which is a general partner in Grantor or a corporation which is a
general partner of a partnership which is the general partner of Grantor, or
any shares of capital stock of National Property Investors, Inc., a Delaware
corporation ("NPI, Inc."), it being agreed and understood that a transfer of
stock of NPI, Inc. shall not constitute a Prohibited Transfer hereunder so
long as one of Michael Ashner, Martin Lifton, Steven Lifton and Arthur N.
Queler is the chief operating officer of NPI, Inc. charged with the authority
and power to direct the day-to-day operation and management of NPI, Inc. and
so long as any one or more of the current shareholders of NPI, Inc. shall own
at least a 5% interest in NPI, Inc.
(c) any general partnership interests in Grantor or any
partnership which is the general partner of Grantor;
(d) 50% or more of the limited partnership interests or
capital stock, as applicable, in Grantor, any general partner of Grantor or
any general partner of the general partner of Grantor is transferred in any
one calendar year; or
(e) any general partner of Grantor or of Grantor's general
partner shall cease to be a general partner thereof;
in each case whether any such conveyance, sale, assignment, transfer, lien,
pledge, mortgage, security interest, encumbrance or alienation is effected
directly, indirectly, voluntarily or involuntarily, by operation of law or
otherwise; provided, however, that the foregoing provisions of this
Paragraph 17 shall not apply (i) to liens securing the Indebtedness Hereby
Secured, (ii) to the lien of current taxes and assessments not in default, or
(iii) to any transfers of the Premises, or part thereof, or interest therein,
or shares of stock or partnership or joint venture interests, as the case may
be, by or on behalf of an owner thereof who is deceased or declared judicially
incompetent, to such owner's heirs, legatees, devisees, executors,
administrators, estate or personal representatives, (iv) to the lien of
Amended and Restated Deed of Trust A. Grantor shall not create, effect,
contract for, consent to or permit any Prohibited Transfer unless otherwise
agreed by Beneficiary.
Notwithstanding the foregoing, provided that no default has
occurred and is continuing under the Loan Documents, if the stock of NPI, Inc.
is anticipated to be transferred to a bona fide third party and (i) one of
Michael Ashner, Martin Lifton, Steven Lifton or Arthur N. Queler will not be
the chief operating officer of NPI, Inc. charged with the authority and power
to direct the day to day operation and management of NPI, Inc., or (ii) any
one or more of the current shareholders of NPI, Inc. will not own at least 5%
interest of NPI, Inc., Grantor shall use reasonable efforts to notify
Beneficiary of such transfer prior to its occurrence. On the date of such
transfer, Grantor shall provide Beneficiary with notice of such transfer.
Grantor shall deliver to Beneficiary copies as evidence of the transfer,
including stock certificates. The Loan shall, without further act or
instrument, become immediately due and payable on the date which is one (1)
year from the date of the transfer at which time the outstanding principal
balance, accrued interest and all sums owing under the Loan shall be
immediately due and payable. Nothing contained herein shall release Grantor
from any liability under the Loan Documents, which shall continue unmodified
and in full force and effect.
Notwithstanding the foregoing, provided no default has occurred
and is continuing under the Loan Documents, upon request of Grantor,
Beneficiary shall consent to the transfer of the Premises to an Affiliate of
Grantor provided that the Affiliate assumes all the obligations of Grantor and
any guarantor or indemnitor under the Loan (including but not limited to the
Responsible Entities) and enters and delivers all documents, instruments,
legal opinions, title endorsements and such other items as Beneficiary may
reasonably require in connection with such transfer. The term "Affiliate"
shall mean any person or entity currently controlled by, under common control
with, or controlling Grantor but shall not include Fox Realty Investors or Fox
Partners '83. The consent by Beneficiary to any transfer under this paragraph
shall not release Grantor or any of the Responsible Entities from any
liability under the Loan Documents, which shall continue unmodified and in
full force and effect.
Any consent by Beneficiary permitting a transaction otherwise
prohibited under this Paragraph 17 shall not constitute a consent to or waiver
of any right, remedy or power of Beneficiary to withhold its consent on a
subsequent occasion to a transaction not otherwise permitted by the provisions
of this Paragraph 17, and notwithstanding the giving of such consent Grantor
shall not engage in any "prohibited transaction" with any "party-in-interest"
as such terms are defined in ERISA (as defined in Paragraph 44) or otherwise
contravene the provisions of Paragraph 44.
No such consent shall be considered by Beneficiary unless the
appropriate service fees and legal fees are paid in advance and no such
consent shall be given unless Grantor agrees, in addition to any other
conditions to such consent imposed by Beneficiary, that immediately upon
closing of the subject sale or transfer, Grantor will provide Beneficiary with
a copy of the deed or other instrument conveying title to the Premises to the
transferee and with an affidavit and agreement of indemnification regarding
Internal Revenue Code Sections 1445 and 7701 in form satisfactory to
Beneficiary executed by the transferee under oath.
In determining whether or not to make the loan secured hereby,
Beneficiary evaluated the background and experience of Grantor in owning and
operating property such as the Premises, found it acceptable and relied and
continues to rely upon same as the means of maintaining the value of the
Premises which is Beneficiary's security for the Note. Grantor is
well-experienced in borrowing money and owning and operating property such as
the Premises, was ably represented by a licensed attorney at law in the
negotiation and documentation of the loan secured hereby and bargained at
arm's length and without duress of any kind for all of the terms and
conditions of the loan, including this provision.
Grantor recognizes that Beneficiary is entitled to keep its loan
portfolio at current interest rates by either making new loans at such rates
or collecting assumption fees and/or increasing the interest rate on a loan,
the security for which is purchased by a party other than the original
Grantor. Grantor further recognizes that any secondary junior financing
placed upon the Premises (a) may divert funds which would otherwise be used to
pay the Note secured hereby; (b) could result in acceleration and foreclosure
by any such junior encumbrancer which would force Beneficiary to take measures
and incur expenses to protect its security; (c) would detract from the value
of the Premises should Beneficiary come into possession thereof with the
intention of selling same; and (d) would impair Beneficiary's right to accept
a deed in lieu of foreclosure, as a foreclosure by Beneficiary would be
necessary to clear the title to the Premises. In accordance with the
foregoing and for the purposes of (i) protecting Beneficiary's security, both
of repayment and of value of the Premises; (ii) giving Beneficiary the full
benefit of its bargain and contract with Grantor; (iii) allowing Beneficiary
to raise the interest rate and collect assumption fees; and (iv) keeping the
Premises free of subordinate financing liens, Grantor agrees that if this
Paragraph 17 be deemed a restraint on alienation, that it is a reasonable one.
18. Defaults. If one or more of the following events (herein
called "Defaults") shall occur:
(a) Grantor shall default in the payment of principal or
interest, Tax or Insurance Deposits or Reserves (as defined in the Reserve
Agreement dated the date hereof between Beneficiary and Grantor) and such
default continues past the fifth (5th) day after the same is due;
(b) Grantor shall default in the due and punctual payment
of Taxes or Premiums;
(c) If any default shall exist for any reason other than
the non-payment of money under the Note, under this Deed of Trust, or under
any other Loan Documents which is not cured within the grace period provided
for thereunder, and if no grace period is specified, within thirty (30) days
from the date of such default, provided, however, that if Grantor has
commenced in good faith to cure such default during the aforesaid thirty (30)
day period and proceeds with due diligence and continuity to completion of
such cure, Grantor shall have a maximum of an additional sixty (60) days
(above and beyond the initial 30 day period) to cure such default; or
(d) If any of the information contained in any
documentation provided to Beneficiary by Grantor in conjunction with the
Indebtedness Hereby Secured shall not be true, accurate and complete in all
material respects or shall be misleading in any material respect;
(e) If (and for the purpose of this Subparagraph 18(e)
only, the term Grantor shall mean and include not only Grantor, but also any
general partner in Grantor, any owner of more than ten percent (10%) of the
stock in a corporate Grantor or corporate general partner of Grantor, and each
person who, as guarantor, co-maker or otherwise, shall be or become liable for
or obligated upon all or any part of the Indebtedness Hereby Secured or any of
the covenants or agreements contained herein) any of the following shall
occur:
(i) Grantor shall file a voluntary petition in
bankruptcy or for arrangement, reorganization or other relief under any
chapter of the Federal Bankruptcy Code or any similar law, state or
federal, now or hereafter in effect;
(ii) Grantor shall file an answer or other pleading
in any proceeding admitting insolvency, bankruptcy, or inability to pay
its debts as they mature;
(iii) Within ninety (90) days after the filing against
Grantor of any involuntary proceeding under the Federal Bankruptcy Code
or similar law, state or federal, now or hereafter in effect, such
proceedings shall not have been dismissed;
(iv) All or a substantial part of Grantor's assets
are attached, seized, subjected to a writ or distress warrant, or are
levied upon, unless such attachment, seizure, writ, warrant or levy is
vacated within sixty (60) days;
(v) Grantor shall make an assignment for the benefit
of creditors or shall admit in writing its inability to pay its debts
generally as they become due or shall consent to the appointment of a
receiver or trustee or liquidator of all or the major part of its
property, or the Premises; or
(vi) An order appointing a receiver, trustee or
liquidator of Grantor or all or a major part of Grantor's property or
the Premises is not vacated within ninety (90) days following the entry
thereof; or
(f) If a default, after passage of time or notice, as may
be required, shall occur under any other deed of trust, whether subordinate or
superior to this Deed of Trust, now or hereafter encumbering the Premises or
any portion thereof, including but not limited to that Deed of Trust A dated
the date hereof between Grantor and Beneficiary;
then Beneficiary is hereby authorized and empowered, at its option and without
affecting the lien hereby created or the priority of said lien or any other
right of Beneficiary hereunder, to declare, without further notice, all
Indebtedness Hereby Secured to be immediately due and payable with interest
thereon at the Default Rate, whether or not such Default be thereafter
remedied by Grantor, and Beneficiary may immediately proceed to foreclose this
Deed of Trust and/or to exercise any right, power or remedy provided by this
Deed of Trust, the Note or any of the other Loan Documents or by law or in
equity or any other document or instrument regulating, evidencing, securing or
guarantying any of the Indebtedness Hereby Secured.
19. Foreclosure. When the Indebtedness Hereby Secured, or any
part thereof, shall become due, whether by acceleration or otherwise,
Beneficiary shall have the right to foreclose the lien hereof in accordance
with the laws of the State of Texas and to exercise any other remedies of
Beneficiary provided in the Note, this Deed of Trust or any of the other Loan
Documents, or which Beneficiary may have at law, at equity or otherwise. In
any suit to foreclose the lien hereof, there shall be allowed and included as
additional Indebtedness Hereby Secured in the decree of sale, all reasonable
expenditures and expenses authorized by law and all other expenditures and
expenses which may be paid or incurred by or on behalf of Beneficiary for
attorneys' fees, appraiser's fees, outlays for documentary and expert
evidence, stenographer's charges, publication costs, and costs (which may be
estimated as to items to be expended after entry of the decree) of procuring
all such abstracts of title, title searches and examinations, title insurance
policies, and similar data and assurances with respect to title as Beneficiary
may deem necessary either to prosecute such suit or to evidence to bidders at
sales which may be had pursuant to such decree the true conditions of the
title to or the value of the Premises. All expenditures and expenses of the
nature mentioned in this Paragraph, and such other expenses and fees as may be
incurred in the protection of the Premises and rents and income therefrom and
the maintenance of the lien of this Deed of Trust, including the fees of any
attorney employed by Beneficiary in any litigation or proceedings affecting
this Deed of Trust, the Note, the other Loan Documents or the Premises,
including probate and bankruptcy proceedings, or in preparation of the
commencement or defense of any proceedings or threatened suit or proceeding,
or otherwise in dealing specifically therewith, shall be so much additional
Indebtedness Hereby Secured and shall be immediately due and payable by
Grantor, with interest thereon at the Default Rate until paid.
20. Right of Possession. When the Indebtedness Hereby Secured
shall become due, whether by acceleration or otherwise, or in any case in
which, under the provisions of this Deed of Trust, Beneficiary has a right to
institute foreclosure proceedings, Grantor shall, forthwith upon demand of
Beneficiary, surrender to Beneficiary, and Beneficiary shall be entitled to
take actual possession of, the Premises or any part thereof, personally, by
its agent or attorneys or be placed in possession pursuant to court order as
mortgagee in possession or receiver, and Beneficiary, in its discretion,
personally, by its agents or attorneys or pursuant to court order as mortgagee
in possession or receiver, may enter upon and take and maintain possession of
all or any part of the Premises, together with all documents, books, records,
papers, and accounts of Grantor, including those accounts which were set up to
hold any security deposits, or the then owner of the Premises relating
thereto, and may exclude Grantor, such owner, and any agents and servants
thereof wholly therefrom and may, on behalf of Grantor or such owner, or in
its own name as Beneficiary and under the powers herein granted:
(1) hold, operate, manage, and control all or any part of
the Premises and conduct the business, if any, thereof, either personally or
by its agents, with full power to use such measures, legal or equitable, as in
its discretion may be deemed proper or necessary to enforce the payment or
security of the rents, issues, deposits, profits, and avails of the Premises,
including without limitation actions for recovery of rent, actions in forcible
detainer, and actions in distress for rent, all without notice to Grantor;
(2) cancel or terminate any Lease or sublease of all or any
part of the Premises for any cause or on any ground that would entitle Grantor
to cancel the same;
(3) elect to disaffirm any Lease or sublease of all or any
part of the Premises made subsequent to this Deed of Trust without
Beneficiary's prior written consent;
(4) extend or modify any then existing Leases and make new
Leases of all or any part of the Premises, which extensions, modifications,
and new Leases may provide for terms to expire, or for options to lessees to
extend or renew terms to expire, beyond the maturity date of the loan
evidenced by the Note and the issuance of a deed or deeds to a purchaser or
purchasers at a foreclosure sale, it being understood and agreed that any such
Leases, and the options or other such provisions to be contained therein,
shall be binding upon Grantor, all persons whose interests in the Premises are
subject to the lien hereof, and the purchaser or purchasers at any foreclosure
sale, notwithstanding any redemption, reinstatement, discharge of the
Indebtedness Hereby Secured, satisfaction of any foreclosure decree, or
issuance of any certificate of sale or deed to any such purchaser;
(5) make all necessary or proper repairs, decoration
renewals, replacements, alterations, additions, betterments, and improvements
in connection with the Premises as may seem judicious to Beneficiary, to
insure and reinsure the Premises and all risks incidental to Beneficiary's
possession, operation, and management thereof, and to receive all rents,
issues, deposits, profits, and avails therefrom; and
(6) apply the net income, after allowing a reasonable fee
for the collection thereof and for the management of the Premises, to the
payment of Taxes, Insurance Premiums and other charges applicable to the
Premises, or in reduction of the Indebtedness Hereby Secured in such order and
manner as Beneficiary shall select.
Nothing herein contained shall be construed as constituting
Beneficiary a mortgagee in possession in the absence of the actual taking of
possession of the Premises.
21. Receiver. Upon the occurrence of a Default hereunder, a
court of competent jurisdiction may appoint a receiver upon petition of
Beneficiary, and Beneficiary shall be entitled to the appointment of a
receiver at Beneficiary's sole option. Such appointment may be made either
before or after sale, without notice, without regard to the solvency or
insolvency of Grantor at the time of application for such receiver, and
without regard to the then value of the Premises or whether the same shall be
then occupied as a homestead or not; and Beneficiary hereunder or any employee
or agent thereof may be appointed as such receiver. Such receiver shall have
all powers and duties prescribed by law, including the power to make leases to
be binding upon all parties, including Grantor, the purchaser at a sale
pursuant to a judgment of foreclosure and any person acquiring an interest in
the Premises after entry of a judgment of foreclosure. In addition, such
receiver shall also have the power to extend or modify any then existing
leases, which extensions and modifications may provide for terms to expire, or
for options to lessees to extend or renew terms to expire, beyond the maturity
date of the Note and beyond the date the issuance of a deed or deeds to a
purchaser or purchasers at a foreclosure sale, it being understood and agreed
that any such leases, and the options or other provisions to be contained
therein, shall be binding upon Grantor and all the persons whose interest in
the Premises are subject to the lien hereof and upon the purchaser or
purchasers at any foreclosure sale, notwithstanding any redemption,
reinstatement, discharge of the Indebtedness Hereby Secured, satisfaction of
any foreclosure judgment, or issuance of any certificate of sale or deed to
any purchaser. In addition, such receiver shall have the power to collect the
rents, issues and profits of the Premises during the pendency of such
foreclosure suit and, in case of a sale and deficiency, during the full
statutory period of redemption, if any, whether there be a redemption or not,
as well as during any further times when Grantor, except for the intervention
of such receiver, would be entitled to collection of such rents, issues and
profits, and such receiver shall have all other powers which may be necessary
or are usual in such cases for the protection, possession, control, management
and operation of the Premises during the whole of said period. The court may,
from time to time, authorize the receiver to apply the net income from the
Premises in payment in whole or in part of: (a) the Indebtedness Hereby
Secured or the indebtedness secured by a decree foreclosing this Deed of
Trust, or any tax, special assessment, or other lien which may be or become
superior to the lien hereof or of such decree, provided such application is
made prior to the foreclosure sale; or (b) the deficiency in case of a sale
and deficiency.
22. Foreclosure Sale. The proceeds of any foreclosure sale of
the Premises shall be distributed and applied in accordance with applicable
law. The judgment of foreclosure or order confirming the sale shall provide
for application of sale proceeds in the following order of priority: First,
all items not covered by the provisions of Paragraph 19 hereof, which under
the terms hereof constitute Indebtedness Hereby Secured additional to the
principal and interest evidenced by the Note in such order as Beneficiary
shall elect with interest thereon as herein provided; and Second, all
principal and interest remaining unpaid on the Note in such order as
Beneficiary shall elect.
23. Insurance During Foreclosure. In case of an insured loss
after foreclosure proceedings have been instituted, the proceeds of any
Insurance Policy, if not applied in rebuilding or restoring the Improvements,
as aforesaid, shall be used to pay the amount due in accordance with any
decree of foreclosure that may be entered in any such proceedings, and the
balance, if any, shall be paid as the court may direct. In the case of
foreclosure of this Deed of Trust, the court, in its decree, may provide that
the mortgagee's clause attached to each of the casualty Insurance Policies may
be cancelled and that the decree creditor may cause a new loss clause to be
attached to each of said casualty Insurance Policies making the loss
thereunder payable to said decree creditor. In the event of foreclosure sale,
provided such Insurance Policies are assignable, Beneficiary is hereby
authorized, without the consent of Grantor, to assign any and all Insurance
Policies to the purchaser at the sale, provided such Insurance Policies are
assignable, or to take such other steps as Beneficiary may deem advisable to
cause the interest of such purchaser to be protected by any of the Insurance
Polices without credit or allowance to Grantor for prepaid premiums thereon.
24. Waiver of Right of Redemption and Other Rights. To the full
extent permitted by law, Grantor hereby covenants and agrees that it will not
at any time insist upon or plead, or in any manner whatsoever claim or take
any advantage of, any stay, exemption or extension law or any so-called
"Moratorium Law" now or at any time hereafter in force, nor claim, take or
insist upon any benefit or advantage of or from any law now or hereafter in
force providing for the valuation or appraisement of the Premises, or any part
thereof, prior to any sale or sales thereof to be made pursuant to any
provisions herein contained, or to any decree, judgment or order of any court
of competent jurisdiction; or claim or exercise any rights under any statute
now or hereafter in force to redeem the property, or any part thereof, or
relating to the marshalling thereof, upon foreclosure sale or other
enforcement hereof. To the full extent permitted by law, Grantor hereby
expressly waives any and all rights to reinstatement and redemption, on its
own behalf, on behalf of all persons claiming or having an interest (direct or
indirect) by, through or under Grantor and on behalf of each and every person
acquiring any interest in or title to the Premises subsequent to the date
hereof, it being the intent hereof that any and all such rights of
reinstatement and redemption (except the right to repay the Note in full by
paying the entire Indebtedness Hereby Secured, including, but not limited to,
the outstanding principal balance of the Note, any prepayment premium and all
accrued and unpaid interest thereon prior to any foreclosure sale or
conveyance in lieu thereof and thereby obtain a release of this Deed of Trust)
of Grantor and such other persons, are and shall be deemed to be hereby waived
to the full extent permitted by applicable law. To the full extent permitted
by law (but subject to paragraph 45 of this Deed of Trust), Grantor agrees
that it will not, by invoking or utilizing any applicable law or laws or
otherwise, hinder, delay or impede the exercise of any right, power or remedy
herein or otherwise granted or delegated to Beneficiary, but will suffer and
permit the exercise of every such right, power and remedy as though no such
law or laws have been or will have been made or enacted. To the full extent
permitted by law, Grantor hereby agrees that no action for the enforcement of
the lien or any provision hereof shall be subject to any defense which would
not be good and valid in an action at law upon the Note.
25. Rights Cumulative. Each right, power and remedy herein
conferred upon Beneficiary herein or in any of the other Loan Documents is
cumulative and in addition to every other right, power or remedy, express or
implied, now or hereafter provided by law or in equity, and each and every
right, power and remedy herein set forth or otherwise so existing may be
exercised from time to time as often and in such order as may be deemed
expedient to Beneficiary. The exercise of one right, power or remedy shall
not be a waiver of the right to exercise at the same time or thereafter any
other right, power or remedy; and no delay or omission of Beneficiary in the
exercise of any right, power or remedy accruing hereunder or arising otherwise
shall impair any such right, power or remedy, or be construed to be a wavier
of any default or acquiescence therein. Except as otherwise specifically
required herein, notice of the exercise of any right, remedy or power granted
to Beneficiary by this Deed of Trust is not required to be given. If any
provision of this Deed of Trust shall grant to Beneficiary any rights or
remedies upon default of Grantor which are more limited than the rights that
would otherwise be vested in Beneficiary under applicable law in the absence
of said provisions, Beneficiary shall be vested with the rights granted in
such applicable law to the full extent permitted by law.
26. Successors and Assigns.
(a) Holder of the Note. This Deed of Trust and each and
every covenant, agreement and other provision hereof shall be binding upon
Grantor and its successors and assigns (including, without limitation, each
and every record owner from time to time of the Premises or any other person
having an interest therein), and shall inure to the benefit of Beneficiary and
its successors and assigns. Wherever herein Beneficiary is referred to, such
reference shall be deemed to include the holder from time to time of the Note,
whether so expressed or not; and each such holder from time to time of the
Note shall have and enjoy all of the rights, privileges, powers, options and
benefits afforded hereby and hereunder, and may enforce all and every of the
terms and provisions hereof, as fully and to the same extent and with the same
effect as if such holder of the Note from time to time were herein by name
specifically granted such rights, privileges, powers, options and benefits and
was herein by name designated Beneficiary.
(b) Covenants Run With Land; Successor Owners. All of the
covenants of this Deed of Trust shall run with the Land and be binding on any
successor owners of the Land. If the ownership of the Premises or any portion
thereof becomes vested in a person or persons other than Grantor, Beneficiary
may, without notice to Grantor, deal with such successor or successors in
interest of Grantor with reference to this Deed of Trust and the Indebtedness
Hereby Secured in the same manner as with Grantor without in any way releasing
or discharging Grantor from its obligations hereunder. Grantor will give
immediate written notice to Beneficiary of any conveyance, transfer or change
of ownership of the Premises, but nothing in this Paragraph shall vary or
negate the effect of the provisions of Paragraph 17 hereof.
(c) Offsets, Counterclaims and Defenses. Any assignee of
this Deed of Trust and the Note shall take the same free and clear of all
offsets, counterclaims or defenses of any nature whatsoever which Grantor may
have against any assignor of this Deed of Trust and the Note, and no such
offset, counterclaim or defense shall be interposed or asserted by Grantor in
any action or proceeding brought by any such assignee upon this Deed of Trust
or the Note and any such right to interpose or assert any such offset,
counterclaim or defense in any such action or proceeding is hereby expressly
waived by Grantor.
27. Effect of Extensions and Amendments. If the payment of the
Indebtedness Hereby Secured, or any part thereof, be extended or varied, or if
any part of the security or guaranties therefor be released, all persons now
or at any time hereafter liable therefor, or interested in the Premises, shall
be held to assent to such extension, variation or release, and their
liability, and the lien, and all provisions hereof, shall continue in full
force and effect; the right of recourse against all such persons being
expressly reserved by Beneficiary, notwithstanding any such extension,
variation or release. Any person, firm or corporation taking a junior
mortgage, or other lien upon the Premises or any part thereof or any interest
therein, shall take the said lien subject to the rights of Beneficiary to
amend, modify, extend or release the Note, this Deed of Trust, or any other
document or instrument evidencing, securing or guarantying the Indebtedness
Hereby Secured, in each and every case without obtaining the consent of the
holder of such junior lien and without the lien of this Deed of Trust losing
its priority over the rights of any such junior lien except as otherwise
expressly provided in a separate Subordination Agreement by and between
Beneficiary and the holder of such junior lien.
28. Execution of Separate Security Agreements, Financing
Statements, Etc.; Estoppel Letter. Grantor will do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged and delivered all such
further acts, conveyances, notes, mortgages, security agreements, financing
statements and assurances as Beneficiary shall reasonably require for the
better assuring, conveying, mortgaging, assigning and confirming unto
Beneficiary all property mortgaged hereby or property intended so to be,
whether now owned by Grantor or hereafter acquired. Without limitation of the
foregoing, Grantor will assign to Beneficiary, upon request, as further
security for the Indebtedness Secured Hereby, its interests in all agreements,
contracts, licenses and permits affecting the Premises, such assignments to be
made by instruments reasonably satisfactory to Beneficiary, but no such
assignment shall be construed as a consent by Beneficiary to any agreement,
contract, license or permit or to impose upon Beneficiary any obligations with
respect thereto. From time to time, Grantor will furnish within five (5)
business days after Beneficiary's request a written and duly acknowledged
statement of the Indebtedness Hereby Secured and whether any alleged offsets
or defenses exist against the Indebtedness Hereby Secured.
29. Subrogation. If any part of the Indebtedness Hereby Secured
is used directly or indirectly to pay off, discharge or satisfy, in whole or
in part, any prior lien or encumbrance upon the Premises or any part thereof,
then, to the extent permitted by law, Beneficiary shall be subrogated to the
rights of the holder thereof in and to such other lien or encumbrance and any
additional security held by such holder, and shall have the benefit of the
priority of the same.
30. Option to Subordinate. At the option of Beneficiary, this
Deed of Trust shall become subject and subordinate, in whole or in part (but
not with respect to priority of entitlement to insurance proceeds or any award
in condemnation) to any and all Leases of all or any part of the Premises upon
the execution by Beneficiary and recording thereof, at any time hereafter, in
the Land Records of the Recorder of Deeds in and for the county wherein the
Premises are situated, of a unilateral declaration to that effect.
31. Governing Law. The place of negotiation, execution and
delivery of this Deed of Trust and the location of the Premises being the
State of Texas, this Deed of Trust shall be construed and enforced according
to the laws of the State of Texas, without reference to the conflicts of law
principles of that state.
GRANTOR AGREES TO SUBMIT TO PERSONAL JURISDICTION IN THE STATE OF
TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS DEED OF TRUST AND IN
FURTHERANCE OF SUCH AGREEMENT, GRANTOR HEREBY AGREES AND CONSENTS THAT WITHOUT
LIMITING OTHER METHODS OF OBTAINING JURISDICTION, PERSONAL JURISDICTION OVER
THE GRANTOR IN ANY SUCH ACTION OR PROCEEDING MAY BE OBTAINED WITHIN OR WITHOUT
THE JURISDICTION OF ANY COURT LOCATED IN TEXAS AND THAT ANY PROCESS OR NOTICE
OF MOTION OR OTHER APPLICATION TO ANY SUCH COURT IN CONNECTION WITH ANY SUCH
ACTION OR PROCEEDING MAY BE SERVED UPON THE GRANTOR BY REGISTERED OR CERTIFIED
MAIL TO OR BY PERSONAL SERVICE AT THE LAST KNOWN ADDRESS OF GRANTOR, WHETHER
SUCH ADDRESS BE WITHIN OR WITHOUT THE JURISDICTION OF ANY SUCH COURT.
32. Inspection of Premises and Records. Beneficiary and its
representatives and agents shall have the right to inspect the Premises
without notice and inspect and make copies of all books, records, and
documents relating thereto upon five (5) days' prior written notice, at all
reasonable times, and access shall be permitted for that purpose. Grantor
shall keep and maintain full and correct books and records showing in detail
the income and expenses of the Premises, and shall permit Beneficiary or its
agents to examine such books, income tax returns and records and all
supporting vouchers and data upon five (5) days' prior written notice, at any
time and from time to time on request at its Land Records at the address
hereinafter identified or at such other location as may be mutually agreed
upon.
33. Financial Statements. Grantor shall, within forty-five (45)
days after the close of each calendar year, furnish Beneficiary with an annual
statement of all elements of income and expense from the operation of the
Premises during such calendar year in form reasonably satisfactory to
Beneficiary. Each annual statement shall be certified by a general partner of
Grantor and will be on an income tax basis in accordance with accounting
practices consistently applied or, at Grantor's option, in accordance with
generally accepted accounting principles consistently applied (except for
changes in application). Each annual statement shall include an annual rent
schedule, including a schedule of each tenant having a percentage lease.
Beneficiary shall have the right, upon prior notice to Grantor, to inspect and
make copies of Grantor's books and records with respect to the Premises for
the purpose of verifying any such schedule. In addition, within ninety (90)
days after the close of each calendar year or as soon thereafter as reasonably
practicable (but in no event later than one-hundred twenty (120) days after
the close of each calendar year), Grantor shall furnish Beneficiary with an
annual financial statement of Grantor accompanied by an opinion of an
independent certified public accountant stating that such annual statement
presents fairly the financial condition of Grantor and has been prepared in
accordance with generally accepted accounting principles consistently applied
(except for changes in application with which such accountant concurs) and
that the examination of such accountant in connection with such financial
statement has been made in accordance with generally accepted auditing
standards and included such tests of the accounting records and such other
auditing procedures as were considered necessary in the circumstances. The
statements shall be either addressed to Beneficiary or shall be accompanied by
a written acknowledgement from the accountants preparing such statements that
Beneficiary shall have whatever rights it would have if it were named as an
addressee of such statements. Grantor shall provide to Beneficiary such other
information as Beneficiary shall from time to time request relating to the
financial condition of Grantor or the operation of the Premises.
34. Time of the Essence. Time is of the essence of the Note,
this Deed of Trust, and any other Loan Documents.
35. Captions and Pronouns. The captions and headings of the
various sections of this Deed of Trust are for convenience only, and are not
to be construed as confining or limiting in any way the scope or intent of the
provisions hereof. Whenever the context requires or permits, the singular
shall include the plural, the plural shall include the singular, and the
masculine, feminine and neuter shall be freely interchangeable.
36. Notices. Any notice, demand or other communication which any
party hereto may desire or may be required to give to any other party hereto
shall be in writing, and shall be deemed given (i) if and when personally
delivered, (ii) upon receipt if sent by a nationally recognized overnight
courier, or (iii) on the third (3rd) business day after being deposited in
United States registered or certified mail, return-receipt requested, postage
prepaid, addressed to a party at its address set forth below, or to such other
address as the party to receive such notice may have designated to all other
parties by notice in accordance herewith:
(1) If to Beneficiary:
The Travelers Insurance Company
c/o Travelers Realty Investment Company
461 Fifth Avenue
New York, New York 10017
Attn: Loan No. 502262
With copies to:
The Travelers Insurance Company
c/o Travelers Realty Investment Company
One Tower Square, 2 SHS
Hartford, Connecticut 06183-2020
Attn: Loan No. 502262
and
Battle Fowler
75 East 55th Street
New York, New York 10022
Attn: Dean A. Stiffle, Esq. (W.F.S.)
Matter No. 10695.0136
(2) If to Grantor:
5665 Northside Drive, N.W., Suite 370
Atlanta, Georgia 30328
Attn: Arthur Queler
With copies to:
Post & Heymann
100 Jericho Quadrangle
Suite 214
Jericho, New York 11753
Attn: William Post, Esq.
and
NPI Property Management Corporation
5665 Northside Drive, N.W.
Suite 370
Atlanta, Georgia 30328
Attn: Arthur Queler
Except as otherwise specifically required herein, notice of the exercise of
any right, power or option granted to Beneficiary by this Deed of Trust is not
required to be given.
37. Environmental Matters. For the purposes of this paragraph
the following terms shall have the following meanings: (i) the term
"Hazardous Material" shall mean any material or substance that, whether by its
nature or use, is now or hereafter defined as a hazardous waste, hazardous
substance, pollutant or contaminant under any Environmental Requirement, or
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and which is now or hereafter
regulated under any Environmental Requirement, or which is or contains
petroleum, gasoline, diesel fuel or another petroleum hydrocarbon product,
(ii) the term "Environmental Requirements" shall collectively mean all present
and future laws, statutes, ordinances, rules, regulations, orders, codes,
licenses, permits, decrees, judgments, directives or the equivalent of or by
any Governmental Authority and relating to or addressing the protection of the
environment or human health, and (iii) the term "Governmental Authority" shall
mean the Federal government, or any state or other political subdivision
thereof, or any agency, court or body of the Federal government, any state or
other political subdivision thereof, exercising executive, legislative,
judicial, regulatory or administrative functions. Grantor hereby represents
and warrants to Beneficiary that to the best of Grantor's knowledge after
diligent inquiry (i) no Hazardous Material is currently located at, on, in,
under or about the Premises, (ii) no Hazardous Material is currently located
at, in, on, under or about the Premises in a manner which violates any
Environmental Requirement, or which requires cleanup or corrective action of
any kind under any Environmental Requirement, (iii) no releasing, emitting,
discharging, leaching, dumping or disposing of any Hazardous Material from the
Premises onto or into any other property or from any other property onto or
into the Premises has occurred or is occurring in violation of any
Environmental Requirement, (iv) no notice of violation, lien, complaint, suit,
order or other notice with respect to the Premises is presently outstanding
under any Environmental Requirement, and (v) the Premises and the operation
thereof are in full compliance with all Environmental Requirements. Grantor
shall comply, and shall cause all tenants or other occupants of the Premises
to comply, in all respects with all Environmental Requirements, and will not
generate, store, handle, process, dispose of or otherwise use, and will not
permit any tenant or other occupant of the Premises to generate, store,
handle, process, dispose of or otherwise use, Hazardous Materials at, in, on,
under or about the Premises in a manner that could lead or potentially lead to
the imposition on Grantor, Beneficiary or the Premises of any liability or
lien of any nature whatsoever under any Environmental Requirement. Grantor
shall notify Beneficiary promptly in the event of any spill or other release
of any Hazardous Material at, in, on, under or about the Premises which is
required to be reported to a Governmental Authority under any Environmental
Requirement, will promptly forward to Beneficiary copies of any notices
received by Grantor relating to alleged violations of any Environmental
Requirement and will promptly pay when due any fine or assessment against
Beneficiary, Grantor or the Premises relating to any Environmental
Requirement. If at any time it is determined that the operation or use of the
Premises violates any applicable Environmental Requirement or that there are
Hazardous Materials located at, in, on, under or about the Premises which,
under any Environmental Requirement, require special handling in collection,
storage, treatment or disposal, or any other form of cleanup or corrective
action, Grantor shall, subject to Grantor's right to contest set forth below
within thirty (30) days after receipt of notice thereof from any Governmental
Authority or from Beneficiary, take, at its sole cost and expense, such
actions as may be necessary to fully comply in all respects with all
Environmental Requirements, provided, however, that if such compliance cannot
reasonably be completed within such thirty (30) day period, Grantor shall
commence such necessary action within such thirty (30) day period and shall
thereafter diligently and expeditiously proceed to fully comply in all
respects and in a timely fashion with all Environmental Requirements.
Grantor may, in good faith and with due diligence, contest or cause to be
contested any assertion that the operation or use of the Premises violates
applicable Environmental Requirements or that there are Hazardous Materials
located at, in, on, under or about the Premises, provided that: i) such
contest shall have the effect of preventing the sale or forfeiture of the
Premises or any part thereof or interest, ii) Grantor has notified Beneficiary
in writing of the intention of Grantor to contest the same or to cause the
same to be contested, and iii) Grantor has deposited or caused to be deposited
with Beneficiary in a non-interest bearing account, at such place as
Beneficiary may from time to time in writing designate, a sum of money (or
other security acceptable to Beneficiary) that, in Beneficiary's judgment is
sufficient, to pay in full, or provide for payment in full of, such contested
matters, any related clean-up costs and all penalties and interest that might
become due thereon, and shall keep on deposit an amount or other security
sufficient, in Beneficiary's judgment, to pay in full, or provide for payment
in full of, such contested matters, any related clean-up costs increasing such
amount or other security to cover additional penalties and interest whenever,
in Beneficiary's judgment, such increase is advisable. If Grantor fails to
timely take, or to diligently and expeditiously proceed to complete in a
timely fashion, any such action, Beneficiary, may, in its sole and absolute
discretion, make advances or payments towards the performance or satisfaction
of the same, but shall in no event be under any obligation to do so. All sums
so advanced or paid by Beneficiary (including, without limitation, counsel and
consultant fees and expenses, investigation and laboratory fees and expenses,
and fines or other penalty payments) and all sums advanced or paid in
connection with any judicial or administrative investigation or proceeding
relating thereto, will immediately, upon demand, become due and payable from
Grantor and shall bear interest at the Default Rate (as hereinafter defined)
from the date any such sums are so advanced or paid by Beneficiary until the
date any such sums are repaid by Grantor to Beneficiary. Grantor will execute
and deliver, promptly upon request, such instruments as Beneficiary may deem
useful or necessary to permit Beneficiary to take any such action, and such
additional notes and mortgages, as Beneficiary may require to secure all sums
so advanced or paid by Beneficiary. If a lien is filed against the Premises
by any Governmental Authority resulting from the need to expend or the actual
expending of monies arising from an action or omission, whether intentional or
unintentional, of Grantor or for which Grantor is responsible, resulting in
the releasing, spilling, leaking, leaching, pumping, emitting, pouring,
emptying or dumping of any Hazardous Material into the waters or onto land
located within or without the State where the Premises is located, then
Grantor will, within thirty (30) days from the date that Grantor is first
given notice that such lien has been placed against the Premises (or within
such shorter period of time as may be specified by Beneficiary if such
Governmental Authority has commenced steps to cause the Premises to be sold
pursuant to such lien) either (a) pay the claim and remove the lien, or (b)
furnish a cash deposit, bond, or such other security with respect thereto as
is satisfactory in all respects to Beneficiary and is sufficient to effect a
complete discharge of such lien on the Premises. Beneficiary may, at its
option, at intervals of not less than one year, or more frequently if
Beneficiary reasonably believes that a Hazardous Material or other
environmental condition violates or threatens to violate any Environmental
Requirement, cause an environmental audit of the Premises or portions thereof
to be conducted to confirm Grantor's compliance with the provisions of this
paragraph, and Grantor shall cooperate in all reasonable ways with Beneficiary
in connection with any such audit. If such audit discloses that a violation
of an Environmental Requirement exists, Grantor shall pay all costs and
expenses incurred in connection with such audit, otherwise, the costs and
expenses of such audit shall, notwithstanding anything to the contrary set
forth in this paragraph, be paid by Beneficiary. If this Deed of Trust is
foreclosed, or if the Premises is sold pursuant to the provisions of this Deed
of Trust, or if Grantor tenders a deed or assignment in lieu of foreclosure or
sale, Grantor shall deliver the Premises to the purchaser at foreclosure or
sale or to Beneficiary, its nominee, or wholly owned subsidiary, as the case
may be, in a condition that complies in all respects with all Environmental
Requirements. Grantor will defend, indemnify, and hold harmless Beneficiary,
its employees, agents, officers, and directors, from and against any and all
claims, demands, penalties, causes of action, fines, liabilities, settlements,
damages, costs, or expenses of whatever kind or nature, known or unknown,
foreseen or unforeseen, contingent or otherwise (including, without
limitation, counsel and consultant fees and expenses, investigation and
laboratory fees and expenses, court costs, and litigation expenses) arising
out of, or in any way related to, (i) any breach by Grantor of any of the
provisions of this paragraph, (ii) the presence, disposal, spillage,
discharge, emission, leakage, release, or threatened release of any Hazardous
Material which is at, in, on, under, about, from or affecting the Premises,
including, without limitation, any damage or injury resulting from any such
Hazardous Material to or affecting the Premises or the soil, water, air,
vegetation, buildings, personal property, persons or animals located on the
Premises or on any other property or otherwise, (iii) any personal injury
(including wrongful death) or property damage (real or personal) arising out
of or related to any such Hazardous Material, (iv) any lawsuit brought or
threatened, settlement reached, or order or directive of or by any
Governmental Authority relating to such Hazardous Material, or (v) any
violation of any Environmental Requirement. The obligations and liabilities
of Grantor under this paragraph shall survive and continue in full force and
effect and shall not be terminated, discharged or released, in whole or in
part, irrespective of whether the Indebtedness Hereby Secured has been paid in
full and irrespective of any foreclosure of this Deed of Trust, sale of the
Premises pursuant to the provisions of this Deed of Trust or acceptance by
Beneficiary, its nominee or wholly owned subsidiary of a deed or assignment in
lieu of foreclosure or sale and irrespective of any other fact or circumstance
of any nature whatsoever.
38. Beneficiary Not A Joint Venturer. Any provision hereof to
the contrary notwithstanding, Beneficiary, by virtue of its acceptance of this
Deed of Trust and the making of the loan secured hereby or any action taken
pursuant hereto or contemplated hereby or by virtue of an affiliate of
Beneficiary having an ownership interest in Grantor, shall not be deemed to be
by such action or ownership a partner or joint venturer with Grantor or any
guarantor or any other parties. Grantor shall indemnify Beneficiary against,
shall hold Beneficiary harmless from, and shall reimburse Beneficiary for, any
and all claims, demands, judgments, penalties, fines, liabilities, costs,
damages and expenses, including court costs and attorneys' fees incurred by
Beneficiary (prior to trial, at trial and on appeal) in any action against or
involving Beneficiary resulting from such a construction of the parties and
their relationship. Any inspection of the Premises, any review of any plans,
contracts, subcontracts (including, without limitation, environmental reviews,
audits, assessments and/or reports relating to the Premises), or any analysis
of the Premises made by Beneficiary or any of its agents, architects or
consultants is intended solely for the benefit of Beneficiary and shall not be
deemed to create or form the basis of any warranty, representation, covenant,
implied promise or liability to Grantor or any of its employees or agents, any
guest or invitee upon the Premises, or any other person.
39. Expenses. Grantor agrees to pay any and all recording and
filing fees, mortgage recording taxes, transfer taxes, title insurance
premiums, escrow and other title company charges, reasonable attorneys' fees
and disbursements (including the fees and expenses of outside counsel for
Beneficiary and excluding fees and expenses of in-house counsel for
Beneficiary), appraisal and survey fees, environmental engineer and consultant
fees, consulting architect fees, if any, financial consultant fees, fees of
other engineers and consultants, insurance costs and all other expenses in
connection with the making of the loan evidenced by the Note. Beneficiary
shall have the right, at its option, to pay any such expenses and upon such
payment such expenses shall be deemed to be a part of the Indebtedness Hereby
Secured and shall be payable on demand with interest at the Default Rate.
40. Consent Required of Beneficiary. Any consent by Beneficiary
in any single instance shall not be deemed or construed to be Beneficiary's
consent in any like matter arising at a subsequent date and the failure of
Beneficiary to promptly exercise any right, power, remedy, consent or approval
provided herein or at law or in equity shall not constitute or be construed as
a waiver of the same nor shall Beneficiary be estopped from exercising such
right, power, remedy, consent or approval at a later date. Any consent or
approval requested of and granted by Beneficiary pursuant hereto shall be
narrowly construed to be applicable only to Grantor and the matter identified
in such consent or approval and no third party shall claim any benefit by
reason thereof, and any such consent or approval shall not be deemed to
constitute Beneficiary a venturer or partner with Grantor nor shall privity of
contract be presumed to have been established with any such third party. If
Beneficiary deems it to be in its best interest to retain the assistance of
persons, firms or corporations (including, but not limited to, attorneys,
appraisers, engineers, consultants and surveyors) with respect to a request
for consent or approval, Grantor shall reimburse Beneficiary for all costs
incurred in connection with the employment of such persons, firms or
corporations.
41. Sole Discretion of Beneficiary. Except as may otherwise be
expressly provided to the contrary, wherever pursuant to the Note, this Deed
of Trust, or any other document or instrument now or hereafter executed and
delivered in connection therewith or otherwise with respect to the loan
secured hereby, Beneficiary exercises any right given to it to consent or not
consent, or to approve or disapprove, or any arrangement or term is to be
satisfactory to Beneficiary, the decision of Beneficiary to consent or not
consent, or to approve or disapprove or to decide that arrangements or terms
are satisfactory or not satisfactory, shall be in the sole and absolute
discretion of Beneficiary and shall be final and conclusive.
42. No Oral Change. This Deed of Trust may only be modified,
amended or changed by an agreement in writing signed by Grantor and
Beneficiary, and may only be released, discharged or satisfied of record by an
agreement in writing signed by Beneficiary. No waiver of any term, covenant
or provision of this Deed of Trust shall be effective unless given in writing
by Beneficiary and if so given by Beneficiary shall only be effective in the
specific instance in which given. Grantor acknowledges that the Note, this
Deed of Trust and the other documents and instruments executed and delivered
in connection therewith or otherwise in connection with the loan secured
hereby set forth the entire agreement and understanding of Grantor and
Beneficiary with respect to the loan secured hereby and that no oral or other
agreements, understanding, representation or warranties exist with respect to
the loan secured hereby other than those set forth in the Note, this Deed of
Trust and such other executed and delivered documents and instruments.
43. Absolute and Unconditional Obligation. Grantor acknowledges
that Grantor's obligation to pay the Indebtedness Hereby Secured in accordance
with the provision of the Note and this Deed of Trust is and shall at all
times continue to be absolute and unconditional in all respects, and shall at
all times be valid and enforceable irrespective of any other agreements or
circumstances of any nature whatsoever which might otherwise constitute a
defense to the Note or this Deed of Trust or the obligation of Grantor
thereunder to pay the Indebtedness Hereby Secured or the obligations of any
other person relating to the Note or this Deed of Trust or the obligations of
Grantor under the Note or this Deed of Trust or otherwise with respect to the
loan secured hereby, and Grantor absolutely, unconditionally and irrevocably
waives any and all right to assert any defense, setoff, counterclaim or
crossclaim of any nature whatsoever with respect to the obligation of Grantor
to pay the Indebtedness Hereby Secured in accordance with the provisions of
the Note and this Deed of Trust or the obligations of any other person
relating to the Note or this Deed of Trust or obligations of Grantor under the
Note or this Deed of Trust or otherwise with respect to the loan secured
hereby in any action or proceeding brought by Beneficiary to collect the
Indebtedness Hereby Secured, or any portion thereof, or to enforce, foreclose
and realize upon the lien and security interest created by this Deed of Trust
or any other document or instrument securing repayment of the Indebtedness
Hereby Secured, in whole or in part. Nothing contained in this Paragraph 43
shall preclude Grantor from asserting any legal claim of Grantor based on the
Note, this Deed of Trust or the other Loan Documents in a separate subsequent
legal proceeding.
44. ERISA. Grantor covenants and agrees that during the term of
the loan secured hereby, unless Beneficiary shall have previously consented in
writing, (a) it will take no action which would cause it to become an
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended from time to time ("ERISA"), or a
"governmental plan" as defined in Section 3(32) of ERISA, or its assets to
become "plan assets" as defined in 29 C.F.R. Section 2510.3-101, or "assets of
a governmental plan" subject to regulation under state statutes, and (b) it
will not sell, assign or transfer the Premises, or any portion thereof or
interest therein, to any transferee which does not execute and deliver to
Beneficiary its written assumption of the obligations of this covenant.
Grantor further covenants and agrees to protect, defend, indemnify and hold
Beneficiary harmless from and against all loss, cost, damage and expense
(including without limitation, all attorneys' fees and excise taxes, costs of
correcting any prohibited transaction or obtaining an appropriate exemption)
which Beneficiary may incur as a result of Grantor's breach of this covenant.
This indemnity shall survive the extinguishment of the lien of the Deed of
Trust by foreclosure or action in lieu thereof, and this covenant shall
survive such extinguishment; furthermore, the foregoing indemnity shall
supersede any limitations on Grantor's liability under the Note, the Deed of
Trust, or any of the other Loan Documents.
45. Limited Personal Liability. Without in any manner releasing,
impairing or otherwise affecting the Note, this Deed of Trust or any other
Loan Documents or the validity thereof or hereof or the lien thereof, there is
no personal liability of Grantor or any corporation, partnership or individual
having a direct or indirect ownership interest in Grantor, or any of their
respective successors or assigns, hereunder or under any of the other Loan
Documents, and no monetary or deficiency judgment shall be sought or enforced
against Grantor or any corporation, partnership or individual having a direct
or indirect ownership interest in Grantor, or any of their respective
successors or assigns; provided, however, that a judgment may be sought
against Grantor or any corporation, partnership or individual having a direct
or indirect ownership interest in Grantor or their respective successors or
assigns to the extent necessary to enforce the rights of Beneficiary in, to,
or against the Premises. Notwithstanding any of the foregoing, nothing
contained in this Paragraph shall be deemed to prejudice the rights of
Beneficiary to recover from Grantor, Fox Partners II, Fox Capital Management
Corporation and NPI Equity Investments II, Inc. and their successors and
assigns (the "Responsible Entities") (1) all loss, damage, cost and expense
(including reasonable attorneys' fees and disbursements) incurred by
Beneficiary as a result of any material fraud or any material
misrepresentation by any of the Responsible Entities or Manager, (2) all loss,
damage, cost and expense (including reasonable attorneys' fees and
disbursements) incurred by Beneficiary as a result of breach of Grantor's
warranties, representations and covenants contained in Paragraph 5,
Paragraph 9, Paragraph 17, Paragraph 37, Paragraph 44 or Paragraph 48 of this
Deed of Trust, (3) all loss, damage, cost and expense (including reasonable
attorneys' fees and disbursements) incurred by Beneficiary as a result of
intentional or negligent waste (whether financial or physical) of the Premises
including, without limitation, failure by Grantor to pay on or prior to the
due date thereof all real estate taxes and assessments levied against the
Premises, subject to Grantor's right to contest the same as set forth in
paragraph 5.B. of this Deed of Trust, it being agreed and understood that
Grantor's personal liability to pay real estate taxes and assessments levied
against the Premises shall not exceed the Rents generated from the Premises
over such period of time to which such taxes and assessments pertain; (4) all
Rents generated from the Premises received after any default under the Loan
Documents or within one year before any default under the Loan Documents or
after acceleration of the indebtedness evidenced and secured by the Loan
Documents and not applied to payment of such indebtedness or to payment of the
normal and customary operating expenses of the Premises; (5) all Rents from
the Premises collected more than one (1) month in advance and all security
deposits that are not held in a segregated escrow account and that are not
delivered to Beneficiary upon demand after the occurrence of a default under
any of the Loan Documents, (6) all insurance proceeds and condemnation awards
in respect of the Premises which are not applied in accordance with the
provisions of the Loan Documents or all loss, damage, cost and expense
(including reasonable attorneys fees and disbursements) incurred by
Beneficiary as a result of the failure by Grantor to maintain the insurance
coverage required in Paragraph 7 of this Deed of Trust, (7) all or any portion
of the upfront fees, commitment fees and other costs and expenses incurred by
Beneficiary in connection with the closing of this transaction and required to
be paid by Grantor and not promptly reimbursed by Grantor, (8) all loss,
damage, cost and expense (including reasonable attorneys' fees and
disbursements) incurred of Beneficiary under the Hazardous Material Guaranty
and Indemnification Agreement dated the date hereof from the Responsible
Entities and the Manager, or (9) all loss, damage, cost and expense (including
reasonable attorneys' fees and disbursements) incurred by Beneficiary as a
result of a breach under the Use and Retention of Funds Letter dated the date
hereof from Grantor, Fox Partners II, Fox Capital Management Corporation,
Manager and NPI Equity Investments II, Inc. to Beneficiary. The Responsible
Entities agree to pay to Beneficiary all amounts described in clauses (1)
through (9) above on demand by Beneficiary and agrees that they will be
personally liable for payment of all such sums. Furthermore, nothing
contained in the paragraph shall be deemed to prejudice the right of
Beneficiary to recover from the Manager all loss, damage, cost and expense
(including reasonable attorneys' fees and disbursements) incurred by
Beneficiary under that certain Manager's Liability Letter dated the date
hereof from the Manager to Beneficiary.
46. Power of Sale. If a Default as set forth in paragraph 18 of
this Deed of Trust shall occur, Trustee, upon request by Beneficiary after
such default, shall sell the Premises at public auction to the highest bidder
for cash, between the hours of ten o'clock A.M. and four o'clock P.M. on the
first Tuesday in any month, at the door of the Courthouse in the County in
which the Premises, or any part thereof, is situated, after giving notice of
the sale to begin and be completed in the time prescribed by the Texas
Property Code, by posting, or causing to be posted, at least twenty-one (21)
consecutive days prior to the date of said sale, written or printed notice
thereof at the Courthouse door in each of the Counties in which the Premises
is situated (such notice shall designate the County where the Premises will be
sold) and filing the notice with the County Clerk in the County where the
Premises is located. In addition, at least twenty-one (21) days preceding the
date of sale written notice of the proposed sale shall be served by certified
mail on each debtor obligated to pay the Indebtedness Hereby Secured,
according to the records of Beneficiary at the most recent address as shown by
the records of Beneficiary, in a Post Office or official depository under the
care and custody of the United States Postal Service. The affidavit of any
person having knowledge of the facts to the effect that such service was
completed shall be prima facie evidence of the fact of service. Grantor
authorizes and empowers Trustee to sell the Premises, together, or in lots or
parcels, as Trustee shall deem expedient, to execute and deliver to the
purchaser or purchasers thereof good and sufficient deeds of conveyance
thereto by fee simple title, with covenants of general warranty (and the title
of such purchaser, or purchasers, when so made by Trustee, Grantor binds
itself to warrant and forever defend), and to receive the proceeds of said
sale which shall be applied as follows, in the following order: (i) to all
reasonable costs and expenses of the sale, including, but not limited to,
reasonable trustee's fees and attorney's fees and costs of title evidence;
(ii) to the repayment of the Indebtedness Hereby Secured and the debt secured
by Deed of Trust A in such amounts and in such order as Beneficiary shall in
its sole and absolute discretion determine; and (iii) the excess, if any, to
Grantor or such other person or persons entitled thereto by law. If default
be made in the payment of any installment of the Note, or any part thereof, or
if for any reason (other than the fault of Beneficiary) Grantor fails to keep
or perform any of the covenants, conditions or stipulations herein,
Beneficiary shall have the option to proceed with foreclosure in satisfaction
of such items, either through the courts or by directing Trustee to proceed as
if under a foreclosure, conducting the sale as herein provided and without
declaring the Indebtedness Hereby Secured due, and provided that if said sale
is made because of such default, such sale may be made subject to the
unmatured part of the Indebtedness Hereby Secured by this Deed of Trust, and
such sale, if so made, shall not in any manner affect the unmatured part of
the Indebtedness Hereby Secured by this Deed of Trust, but, as to such
unmatured part this Deed of Trust shall remain in full force as though no sale
had been made under the provisions of this paragraph. Several sales may be
made without exhausting the right of sale for any unmatured part of the
Indebtedness Hereby Secured, it being the purpose to provide for a foreclosure
and sale of the Premises for any matured portion of the Indebtedness Hereby
Secured without exhausting the power of foreclosure and to sell the Premises
for any other part of the Indebtedness Hereby Secured whether matured at the
time or subsequently maturing. In case of any sale hereunder, all
prerequisites to the sale shall be presumed to have been performed, and in any
conveyance given hereunder, all statements of facts, or other recitals therein
made as to the nonpayment of money secured, or as to the request to Trustee to
enforce this Deed of Trust, or as to the proper and due appointment of any
substitute trustee, or as to the advertisement of sale, or time, place and
manner of sale, or as to any other Preliminary fact or thing, shall be taken
in all courts of law or equity as prima facie evidence that the facts so
stated or recited are true.
47. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY LAW,
GRANTOR WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT TO FORECLOSE
THIS DEED OF TRUST.
48. Anti-Forfeiture. Grantor represents and warrants to
Beneficiary that there has not been committed by Grantor or any other person
in occupancy of or involved with the operation or use of the Premises any act
or omission affording the federal government or any state or local government
the right of forfeiture as against the Premises or any part thereof or any
monies paid in performance of Grantor's obligations under the Note or under
any of the other Loan Documents. Grantor hereby covenants and agrees not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture. In furtherance thereof, Grantor hereby indemnifies Beneficiary
and agrees to defend and hold Beneficiary harmless from and against any loss,
damage or injury by reason of the breach of the covenants and agreements or
the warranties and representations set forth in this Paragraph 48. Without
limiting the generality of the foregoing, the filing of formal charges or the
commencement of proceedings against Grantor or all or any part of the Premises
under any federal or state law for which forfeiture of the Premises or any
part thereof or of any monies paid in performance of Grantor's obligations
under the Loan Documents is a potential result, shall, at the election of
Beneficiary, constitute an occurrence of a Default hereunder without notice or
opportunity to cure.
49. Usury Laws. This Deed of Trust and the Note, are subject to
the express condition that at no time shall Grantor be obligated or required
to pay interest on the principal balance due under the Note at a rate which
could subject the holder of the Note to either civil or criminal liability as
a result of being in excess of the maximum interest rate which Grantor is
permitted by law to contract or agree to pay. If by the terms of this Deed of
Trust or the Note, Beneficiary ever receives, collects or applies as interest
any sum in excess of the maximum legal rate, such excess amount shall be
applied to the reduction of the unpaid principal balance of the Note in the
inverse order of maturity, and if the Note is paid in full, any remaining
excess shall be refunded to Grantor. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the highest
lawful rate, Beneficiary and Grantor shall, to the maximum extent permitted
under the applicable law: (a) characterize any nonprincipal payment as an
expense, fee or premium rather than as interest; (b) exclude voluntary
prepayments and the effects thereof; and (c) "spread" the total amount of
interest throughout the entire term of the Note. Grantor, and Beneficiary by
its acceptance of this Deed of Trust, recognize and agree that Grantor's
obligation to pay the principal and accrued interest on the Note is absolute
and unconditional.
50. Related Party Contracts. All agreements, contracts or other
arrangements, whether written or oral, between Mortgagor and any Related
Party, as hereinafter defined, shall be fully disclosed to Mortgagee, shall
require the consent of Mortgagee to be effective and shall provide for
payments under such agreements, contracts and other arrangements that are
market rate in the area where the Premises is located. The term "Related
Party" shall mean any person or entity in which any of Michael Ashner, Martin
Lifton, Steven Lifton or Arthur N. Queler or any relative (i.e., spouse,
grandparent, parent, child, grandchild, sibling, aunt, uncle or cousin) has
either an ownership or management interest either directly or indirectly.
51. Receipt. Grantor hereby acknowledges receipt of a true copy
of this Deed of Trust without charge.
52. Concerning the Trustee. Trustee shall be under no duty to
take any action hereunder except as expressly required hereunder or by law, or
to perform any act which would involve Trustee in any expense or liability or
to institute or defend any suit in respect hereof, unless properly indemnified
to Trustee's reasonable satisfaction. Trustee, by acceptance of this Deed of
Trust, covenants to perform and fulfill the trusts herein created, being
liable, however, only for willful negligence or misconduct, and hereby waives
any statutory fee and agrees to accept reasonable compensation, in lieu
thereof, for any services rendered by Trustee in accordance with the terms
hereof. Trustee may resign at any time upon giving thirty (30) days' notice
to Grantor and to Beneficiary. Beneficiary may remove Trustee at any time or
from time to time and select a successor trustee. In the event of the death,
removal, resignation, refusal to act, or inability to act of Trustee, or in
its sole discretion for any reason whatsoever or for no reason, Beneficiary
may, without notice and without specifying any reason therefor and without
applying to any court, select and appoint a successor trustee, by an
instrument recorded wherever this Deed of Trust is recorded and all powers,
rights, duties and authority of Trustee, as aforesaid, shall thereupon become
vested in such successor. Such substitute trustee shall not be required to
give bond for the faithful performance of the duties of Trustee hereunder
unless required by Beneficiary.
53. Trustee's Fees. Grantor shall pay all costs, fees and
expenses incurred by Trustee and Trustee's agents and counsel in connection
with the performance by Trustee of Trustee's duties hereunder and all such
costs, fees and expenses shall be secured by this Deed of Trust.
54. Final Agreement. THIS DEED OF TRUST REPRESENTS THE FINAL
AGREEMENT BETWEEN GRANTOR AND BENEFICIARY AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF GRANTOR
AND BENEFICIARY. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN GRANTOR AND
BENEFICIARY.
55. Subordination. This Deed of Trust is subject and
subordinate in all respects to Deed of Trust A and all amendments,
modifications, increases and consolidations thereof.
56. Release. Grantor hereby releases and forever discharges
Beneficiary, its agents, servants, employees, directors, officers, attorneys,
affiliates, subsidiaries, successors and assigns and all persons, firms,
corporations and organizations acting in its behalf of and from all damage,
loss, claims, demands, liabilities, obligations, actions and causes of action
whatsoever which Grantor may now have or claim to have against Beneficiary, as
of the date hereof, whether presently known or unknown, and of every nature
and extent whatsoever on account of or in any way touching, concerning,
arising out of or founded upon the Loan Documents, including, without
limitation, all such loss or damage of any kind heretofore sustained, or that
may arise as a consequence of the dealings between the parties up to and
including the date of execution hereof. This agreement and covenant on the
part of Grantor is contractual, and not a mere recital.
IN WITNESS WHEREOF, Grantor has executed and delivered this Deed
of Trust as of the day and year first above written.
Grantor:
CENTURY PROPERTIES FUND XIX,
a California limited partnership
By: Fox Partners II,
a California general partnership,
Its General Partner
By: Fox Capital Management
Corporation, a California
corporation, its Managing
General Partner
By: ________________________
Name: _________________
Title: ________________
STATE OF NEW YORK )
) s.s.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day personally
appeared __________________________, _______________________ of Fox Capital
Management Corporation, a California corporation, which corporation is
managing general partner in Fox Partners II, a California general partnership,
which general partnership is the general partner in Century Properties
Fund XIX, a California limited partnership, known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that he executed the same for the purposes and consideration therein
expressed and in the capacity therein stated as the act and deed of Fox
Capital Management Corporation, for and on behalf of Fox Partners II, which is
acting for and on behalf of Century Properties Fund XIX.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
________, 1994.
_________________________________
Notary Public in and for
the State of New York
_________________________________
(Printed or Typed Name of Notary)
My commission expires: _________
Exhibit A
THE LAND
EXHIBIT "B"
DESCRIPTION OF COLLATERAL
All of the following property now or at any time hereafter owned
by Debtor (as defined in Paragraph 16(a) of this Deed of Trust and also
referred in this Exhibit B as "Debtor") or in which Debtor may now or at
anytime hereafter have any interest or rights, together with all of Debtor's
right, title and interest therein (excepting any items of personal property
which (i) are owned by tenants who are in possession pursuant to leases or
license agreements approved by Secured Party, and (ii) may be removed by such
tenants at the expiration or termination of such lease or license agreements);
1. All fixtures and personal property now or hereafter owned by
Debtor and attached to or contained in and used or useful in connection with
the Premises or the Improvements, including without limitation any and all air
conditioners, antennae, appliances, apparatus, awnings, basins, bathtubs,
bidets, boilers, bookcases, cabinets, carpets, coolers, curtains,
dehumidifiers, disposals, doors, drapes, dryers, ducts, dynamos, elevators,
engines, equipment, escalators, fans, fittings, floor coverings, furnaces,
furnishings, furniture, hardware, heaters, humidifiers, incinerators, kitchen
equipment and utensils, lighting, machinery, motors, ovens, pipes, plumbing,
pumps, radiators, ranges, recreational facilities, refrigerators, screens,
security systems, shades, shelving, sinks, sprinklers, stokers, stoves,
toilets, ventilators, wall coverings, washers, windows, window coverings,
wiring, all renewals or replacements thereof or articles in substitution
therefor;
2. Articles or parts now or hereafter affixed to the property
described in Paragraph 1 above or used in connection with such property, any
and all replacements for such property, and all other property of a similar
type or used for similar purposes now or hereafter in or on the Premises or
any of the Improvements;
3. Debtor's right, title, and interest in all personal property
used or to be used in connection with the operation of the Premises or the
conduct of business thereon, including without limitation business equipment
and inventories located on the Premises or elsewhere, together with files,
books of account, and other records, wherever located;
4. Debtor's right, title, and interest in and to any and all
contracts now or hereafter relating to the Premises executed by any
architects, engineers, consultants, or contractors, including all amendments,
supplements, and revisions thereof, together with all Debtor's rights and
remedies thereunder and the benefit of all covenants and warranties thereon,
and also together with all drawings, designs, estimates, layouts, surveys'
plats, plans, specifications and test results prepared by any architect,
engineer, or contractor, including any amendments, supplements, and revisions
thereof and the right to use and enjoy the same, as well as all building
permits, environmental permits, approvals and licenses, other governmental or
administrative permits, licenses, names, authorizations, agreements and rights
relating to construction or operation of the Premises and/or the Improvements;
5. Debtor's right, title, and interest in and to any and all
contracts now or hereafter relating to the operation of the Premises or the
conduct of business thereon, including without limitation all management,
leasing and other service contracts, the books and records, and the right to
appropriate and use any and all trade names used or to be used in connection
with such business;
6. Debtor's entire right, title, and interest in the rents, rent
equivalents, issues, income, revenue, deposits (including without limitation,
security deposits and utility deposits), and profits in connection with all
leases, contracts, lettings, licenses, and other agreements made or agreed to
by any person or entity (including without limitation, Debtor and Secured
Party under the powers granted by this Deed of Trust and the other Loan
Documents) with any person or entity pertaining to all or any part of the
Premises, whether such agreements have been heretofore or are hereafter made;
7. Debtor's right, title, and interest in all sale contracts,
earnest money deposits, proceeds of sale contracts, accounts receivable, and
general intangibles relating to the Premises, excluding, however, any such
right arising from a transfer permitted by the terms of Paragraph 17 of this
Deed of Trust;
8. All rights in and proceeds from all fire and hazard,
loss-of-income, and other non-liability insurance policies now or hereafter
covering the Improvements, the use or occupancy thereof, or the business
conducted thereon;
9. All awards or payments, including interest thereon, that may
be made with respect to the Premises and/or the Improvements, whether from the
right of the exercise of eminent domain (including any transfer made in lieu
of the exercise of said right) or for any other injury to or decrease in value
of the Premises and/or the Improvements; and
10. All proceeds from the sale, transfer, or pledge of any or all
of the foregoing property.
