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 0-13418
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Century Properties Growth Fund XXII
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(Exact name of Registrant as specified in its charter)
California 94-2939418
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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
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
----- -----
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 _____
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 GROWTH FUND XXII - 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 $ 232,000 $ 341,000
Restricted cash 795,000 775,000
Cash investments - 1,187,000
Other assets 1,952,000 520,000
Real Estate:
Real estate 127,667,000 127,614,000
Furnishings 11,962,000 11,626,000
Accumulated depreciation (42,942,000) (39,860,000)
-------------- ------------
Net real estate 96,687,000 99,380,000
Deferred financing costs, net 798,000 792,000
-------------- ------------
Total assets $ 100,464,000 $102,995,000
-------------- ------------
-------------- ------------
Liabilities and Partners' Equity
Accrued expenses and other liabilities 2,530,000 1,908,000
Notes payable 80,499,000 81,848,000
-------------- ------------
Total liabilities 83,029,000 83,756,000
-------------- ------------
Partners' equity (deficit):
General partner (7,027,000) (6,814,000)
Limited partners (82,848 units
outstanding at September 30, 1994 and
December 31, 1993) 24,462,000 26,053,000
-------------- ------------
Total partners' equity 17,435,000 19,239,000
-------------- ------------
Total liabilities and partners' equity $ 100,464,000 $102,995,000
-------------- ------------
-------------- ------------
See notes to consolidated financial statements.
2 of 13
CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994
Consolidated Statements of Operations (Unaudited)
For the Nine Months Ended
September 30 September 30,
1994 1993
Revenues:
Rental $ 14,587,000 $ 13,735,000
Interest and other income 47,000 73,000
-------------- ------------
Total revenues 14,634,000 13,808,000
-------------- ------------
Expenses:
Operating 7,326,000 6,915,000
Interest 5,609,000 5,777,000
Depreciation 3,082,000 3,114,000
General and administrative 421,000 545,000
-------------- ------------
Total expenses 16,438,000 16,351,000
-------------- ------------
Net loss $ (1,804,000) $ (2,543,000)
-------------- ------------
-------------- ------------
Net loss per limited partnership unit $ (19) $ (27)
-------------- ------------
-------------- ------------
See notes to consolidated financial statements.
3 of 13
CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994
Consolidated Statements of Operations (Unaudited)
For the Nine Months Ended
September 30 September 30,
1994 1993
Revenues:
Rental $ 4,956,000 $ 4,646,000
Interest and other income 10,000 22,000
----------- -----------
Total revenues 4,966,000 4,668,000
----------- -----------
Expenses:
Operating 2,544,000 2,485,000
Interest 1,897,000 1,931,000
Depreciation 1,030,000 980,000
General and administrative 47,000 160,000
----------- -----------
Total expenses 5,518,000 5,556,000
----------- -----------
Net loss $ (552,000) $ (888,000)
----------- -----------
----------- -----------
Net loss per limited partnership unit $ (6) $ (9)
----------- -----------
----------- -----------
See notes to consolidated financial statements.
4 of 13
CENTURY PROPERTIES GROWTH FUND XXII - 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 $(1,804,000) $(2,543,000)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 3,349,000 3,385,000
Financing costs paid (273,000) (71,000)
Changes in operating assets and liabilities:
Other assets (1,432,000) (131,000)
Accrued expenses and other liabilities 622,000 265,000
----------- -----------
Net cash provided by operating activities 462,000 905,000
----------- -----------
Investing Activities:
Additions to rental properties (389,000) (852,000)
Purchase of cash investments - (1,188,000)
Proceeds from cash investments 1,187,000 595,000
Restricted cash (increase) decrease (20,000) 8,000
----------- -----------
Net cash provided by (used in) investing
activities 778,000 (1,437,000)
----------- -----------
Financing Activities:
Repayment of note on debt modification (805,000) 33,000
Notes payable principal payments (544,000) (442,000)
----------- -----------
Net cash (used in) financing activities (1,349,000) (409,000)
----------- -----------
Decrease in Cash and Cash Equivalents (109,000) (941,000)
Cash and Cash Equivalents at Beginning of Period 341,000 2,236,000
----------- -----------
Cash and Cash Equivalents at End of Period $ 232,000 $ 1,295,000
----------- -----------
----------- -----------
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period $ 5,263,000 $ 5,485,000
----------- -----------
----------- -----------
See notes to consolidated financial statements.
5 of 13
CENTURY PROPERTIES GROWTH FUND XXII - 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.
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) Affiliates of the Managing General Partner ("MGP") received
reimbursements of administrative expenses amounting to $136,000 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 management fee equal to 5%
of annual gross receipts from certain properties it manages. For the
nine months ended September 30, 1994, NPI Management and NPI-AP
Management received $563,000. These fees are included in operating
expenses.
3. Notes Payable
(a) The Partnership finalized a debt modification agreement with the
Monterey Village Apartments mortgagee in January 1994. The terms of the
loan include a seven year extension with a reduction in the interest
rate from 10.50 percent to 8.25 percent and a 30 year amortization
period in exchange for a principal payment of $805,000. In connection
with the modification, the Partnership incurred extension fees and costs
totalling $78,000. The amount of financing costs paid during the
period ended September 30, 1994 was $53,000.
(b) On September 1, 1994, the Partnership completed a debt modification
agreement with the Cooper s Pointe Apartments mortgagee. The loan
requires monthly payments of $46,000 at 8.25% and is being amortized
over 20 years. The loan matures on August 31, 1999 with a balloon
payment of $4,746,000. As specified in the loan documents, the
Partnership is required to make monthly deposits of $7,000 to a
replacement reserve for future capital improvements. The Partnership
incurred costs and extension fees in connection with this modification
of $49,000.
6 of 13
CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Notes Payable (Continued)
(c) On September 1, 1994, the Partnership completed a debt modification
agreement with the Copper Mill Apartments mortgagee. The loan requires
monthly payments of $31,000 at 8.25% and is being amortized over 20
years. The loan matures on August 31, 1999 with a balloon payment of
$3,240,000. As specified in the loan documents, the Partnership is
required to make monthly deposits of $5,000 to a replacement reserve for
future capital improvements. The Partnership incurred costs and
extension fees in connection with this modification of $121,000.
The loans securing Copper Mill Apartments and Cooper Pointe Apartments
are cross collateralized.
The Partnership has balloon payments due as follows:
Property Maturity Date Payment
Hampton Greens Apartments 1/95 $5,750,000
Stoney Creek Apartments 1/95 $6,750,000
The Partnership has received a loan commitment to refinance the Hampton
Greens, Stoney Creek, Wood Creek and Promontory Point Apartment notes.
The Wood Creek and Promontory Point Apartments mortgages mature November
1995 and April 1997, respectively. In September 1994, the Partnership
paid a $50,000 application fee in connection with the proposed
refinancing of the four referenced properties. It is anticipated that
these loan refinancings will be finalized in the fourth quarter of 1994.
The ability to hold and operate these properties is dependent on the
Partnership s ability to obtain refinancing or debt modification as
required.
4. 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 40,595 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 $80 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 GROWTH FUND XXII - 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.
Liquidity and Capital Resources
The Fund holds investments in and operates residential real estate properties.
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, one of the eleven properties
originally purchased by the Fund was lost through foreclosure. All of the
Fund's properties, except for its Cooper s Pointe property, generated positive
cash flow from operations during the nine months ended September 30, 1994.
The Fund uses working capital reserves from any undistributed cash flow from
operations and refinancing proceeds as its primary source of liquidity. There
have been no distributions since 1988. It is not currently anticipated that the
Fund will make any distributions from operations in the near future.
Liquidity based upon cash and cash equivalents experienced a $109,000 decrease
at September 30, 1994, as compared to December 31, 1993. The Fund's $462,000 of
cash from operating activities and $778,000 of cash from investing activities
were more than offset by $1,349,000 of cash used in financing activities. Cash
provided by operating activities included $273,000 of financing costs paid. The
decrease in receivables and other assets and the increase in accrued expenses
and other liabilities, when comparing September 30, 1994 to September 30, 1993,
is primarily due to the timing of real estate tax payments and the prepayment of
insurance premiums. The increase in cash from investing activities included
$1,187,000 of proceeds from cash investments which was partially offset by
$389,000 of additions to real estate and a $20,000 increase in restricted cash.
As described in Item 1, Note 3, cash used in financing activities consisted of
an $805,000 partial repayment of the mortgage encumbering the Fund's Monterey
Village Apartments property, as well as $544,000 of notes payable principal
payments. 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 currently 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 in 1994
and the foreseeable future. In 1995 through 1997, the Fund will have to arrange
refinancings or debt modifications. If necessary, the Fund could dispose of the
properties with significant balloon payments, in order to reduce future cash
requirements.
If the notes with January 1995 balloon payments are not refinanced or extended,
or the properties are not sold, the properties could be lost through
foreclosure. If Hampton Greens and Stoney Creek Apartments are lost through
foreclosure, the Fund would incur a loss of approximately $2,600,000 and
$2,500,000, respectively. The Fund has received a loan commitment to refinance
the properties.
8 of 13
CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
As described in Note 4 to the consolidated financial statements, on October 17,
1994, DeForest Ventures I L.P. offered to purchase up to 40,595 outstanding
units of limited partnership interests of the Partnership, representing
approximately 49% of the units outstanding, at a purchase price of $80 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 bail out 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 existing 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 $739,000 for the nine months ended September 30,
1994, as compared to 1993, due to increases in revenues of $826,000 and in
expenses of $87,000.
Revenues increased by $826,000 for the nine months ended September 30, 1994, as
compared to 1993, due to an increase of $852,000 in rental income, which was
slightly offset by a decrease of $26,000 in interest and other income. Revenues
increased primarily due to an increase in rental rates at Plantation Creek
Apartments and improved occupancy at all the Fund's properties, except for
Monterey Village Apartments and Four Winds Apartments. Occupancy at Promontory
Pointe remained constant. Interest and other income decreased due to a decline
in average working capital reserves available for investment.
9 of 13
CENTURY PROPERTIES GROWTH FUND XXII - 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)
Expenses increased by $87,000 for the nine months ended September 30, 1994, as
compared to 1993, due to an increase of $411,000 in operating expenses, which
was only partially offset by decreases of $168,000 in interest expense, $32,000
in depreciation expense and $124,000 in general and administrative expenses.
Operating expenses increased due to maintenance and rent-up expenses at the
Fund's Autumn Run, Monterey Village, Plantation Creek, Promontory Point, Wood
Creek and Stony Creek Apartments, which were slightly offset by a decrease in
maintenance and rent-up expenses at the Fund's Cooper's Pointe Apartments.
Interest expense decreased primarily due to the partial repayment and lower
interest rate resulting from the January 1994 debt modification on the mortgage
encumbering the Fund's Monterey Village Apartments and the May 1993 reduction in
the interest rate on the Cooper's Pointe Apartments mortgage from 9 percent to
8 1/4 percent. Depreciation expense decreased due to the effect of assets
becoming fully depreciated which was only slightly offset by the under accrual
during the three months ended September 30, 1993. General and administrative
expenses declined due to the reduction in asset management costs effective July
1, 1994, which was partially offset by the increased costs associated with the
management transition.
Three Months Ended September 30, 1994 vs. September 30, 1993
Operating results improved by $336,000 for the three months ended September 30,
1994, as compared to 1993, due to increases in revenues of $298,000 along with a
decrease in expenses of $38,000.
Revenues increased by $298,000 for the three months ended September 30, 1994, as
compared to 1993, due to an increase of $310,000 in rental income, which was
slightly offset by a decrease of $12,000 in interest and other income. Revenues
increased primarily due to an increase in rental rates at Plantation Creek
Apartments and improved occupancy at all the Fund's properties, except for Four
Winds Apartments, Promontory Point Apartments and Hampton Greens Apartments.
Occupancy at Cooper s Pointe Apartments remained constant. Interest and other
income decreased due to a decline in average working capital reserves available
for investment.
Expenses decreased by $38,000 for the three months ended September 30, 1994, as
compared to 1993, due to an increase of $59,000 in operating expenses and
$50,000 in depreciation expense, which was more than offset by decreases of
$34,000 in interest expense and $113,000 in general and administrative expenses.
Operating expenses increased due to maintenance and rent-up expenses at the
Fund's Autumn Run, Monterey Village, Plantation Creek, Promontory Point, Wood
Creek and Stoney Creek Apartments, which were slightly offset by decreases in
maintenance and rent-up expenses at the Fund's Cooper's Pointe Apartments.
Depreciation expense increased due to an under accrual during the three months
ended September 30, 1993, which was partially offset by the effect of assets
becoming fully depreciated. Interest expense decreased primarily due to a
repayment and lower interest rate resulting from the January 1994 debt
modification on the mortgage encumbering the Fund's Monterey Village Apartments
property. General and administrative expenses declined due to the reduction in
asset management costs effective July 1, 1994.
10 of 13
CENTURY PROPERTIES GROWTH FUND XXII - 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 GROWTH FUND XXII
OCCUPANCY SUMMARY
Average
Occupancy
Rate (%)
-------------
Nine Months Three Months
Ended Ended
Number of Date of September 30, September 30,
Name and Location Units Purchase 1994 1993 1994 1993
- - ----------------- ----- -------- ---- ---- ---- ----
Wood Creek Apartments 432 05/84 97 91 97 90
Mesa, Arizona
Plantation Creek Apartments 484 06/84 97 90 97 93
Atlanta, Georgia
Stoney Creek Apartments 364 06/85 93 91 95 92
Dallas, Texas
Four Winds Apartments 350 09/85 94 96 94 96
Overland Park, Kansas
Promontory Point Apartments 252 10/85 96 96 96 97
Austin, Texas
Cooper's Pointe Apartments 192 11/85 94 92 94 94
Charleston, South Carolina
Hampton Greens Apartments 309 12/85 95 94 95 96
Dallas, Texas
Monterey Village Apartments 224 04/86 92 94 96 91
Rancho Cucamonga, California
Autumn Run Apartments 320 06/86 97 89 98 96
Naperville, Illinois
Copper Mill Apartments 192 09/86 97 95 99 97
Richmond, Virginia
11 of 13
CENTURY PROPERTIES GROWTH FUND XXII - 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 of Century
Properties Fund XIX, a limited partnership affiliated with 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, made as of September 1, 1994, by
Century Properties Growth Fund XXIII (the "Partnership") in
favor of The Travelers Insurance Company ("Travelers") in the
principal amount of $3,679,026.14.
2. Amended and Restated Deed of Trust, dated as of September 1,
1994, between the Partnership and Travelers with respect to
Copper Mill Apartments.
3. Amended and Restated Note, made as of September 1, 1994,
by the Partnership in favor of Travelers in the principal
amount of $5,388,360.35.
4. Amended and Restated Mortgage, dated as of September 1, 1994
between the Partnership and Travelers with respect to Cooper's
Pointe.
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 GROWTH FUND XXII - 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 GROWTH FUND XXII
By: FOX PARTNERS IV,
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 Growth Fund XXII 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> 232,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 139,629,000
<DEPRECIATION> (42,942,000)
<TOTAL-ASSETS> 100,464,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 17,435,000
<TOTAL-LIABILITY-AND-EQUITY> 100,464,000
<SALES> 0
<TOTAL-REVENUES> 14,587,000
<CGS> 0
<TOTAL-COSTS> 10,408,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,609,000
<INCOME-PRETAX> (1,804,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,804,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,804,000)
<EPS-PRIMARY> (19)
<EPS-DILUTED> (19)
</TABLE>
EXHIBIT 99.1
COPPER MILL
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH
CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR
AND ALLOWS THE CREDITOR TO OBTAIN JUDGMENT AGAINST YOU WITHOUT
FURTHER NOTICE.
AMENDED AND RESTATED NOTE
$3,679,026.14 As of September 1, 1994
WHEREAS, Century Properties Growth Fund XXII, a
California limited partnership ("Maker") entered into and
delivered to The Travelers Insurance Company ("Payee"), a Deed of
Trust Note dated November 26, 1986 from Maker to Joseph W.
Sprouls and Kandis A. Ulrich, trustees for the benefit of the
Payee in the original principal sum of $3,750,000 which was
modified by that certain First Amendment to Deed of Trust and
Security Agreement dated as of June 16, 1987 between Maker and
Payee, which was recorded in the clerk's office of the Circuit
Court of Henrico, Virginia (collectively, the "Deed of Trust
Note");
WHEREAS, Maker desires to modify, amend and restate in
its entirety the terms and provisions of the Deed of Trust Note
as hereinafter set forth in this Amended and Restated Note (this
"Note");
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 $3,679,026.14 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 is given in replacement and substitution
of, and evidences the same indebtedness as the Deed of Trust Note
and does not evidence any new or additional indebtedness of Maker
to Payee and is not intended as a novation of the Deed of Trust
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 Three Million Six Hundred Seventy-Nine Thousand and
Twenty-Six and 14/100 Dollars ($3,679,026.14) 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 "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 "Deed of Trust" shall mean (i) a certain Amended
and Restated Deed of Trust (the "First Deed of Trust") dated the
date hereof by Maker to Douglas N. Beck and Virginia A. Davis,
trustees for the benefit of Payee, intended to be recorded in the
clerk's office of the Circuit Court of Henrico County, Virginia
and constituting a first mortgage lien on a portion of the
Premises located at 3400 Copper Mill Trace, Henrico County,
Virginia and known as Copper Mill Apartments and (ii) a certain
Subordinate Mortgage (the "Subordinate Mortgage") dated the date
hereof by Maker to Payee, intended to be recorded in the RMC
office for Charleston County, South Carolina and constituting a
second mortgage lien on a portion of the Premises located at 2225
Greenridge Road, North Charleston, South Carolina and known as
Cooper's Pointe Apartments.
1.3 "Default" shall have the meaning set forth in
Section 3.2 hereof.
1.4 "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.
1.5 "Dollars" shall mean dollars in lawful currency of
The United States of America.
1.6 "Escrow Agent" shall mean Lawyers Title Insurance
Company.
1.7 "Interest Rate" shall mean eight and one-quarter
(8.25%) percent per annum.
1.8 "Loan" shall mean the loan evidenced by this Note
and secured by the other Loan Documents.
1.9 "Loan Documents" shall mean this Note, the First
Deed of Trust, the Amended and Restated Assignment of Leases,
Rents and Profits dated the date hereof from Maker to Payee, the
Subordinate Mortgage, the Subordinate Assignment of Leases, Rents
and Profits dated the date hereof from Maker to Payee, the Cash
Management Letter dated the date hereof from Maker and Manager to
Payee, the Copper Mill Reserve Agreement dated the date hereof
between Maker and Payee, the Copper Mill Escrow Agreement dated
the date hereof among Maker, Payee and Escrow Agent, the Copper
Mill Manager's Liability Letter from Manager to Payee, the Copper
Mill Guaranty of Payment dated the date hereof from Maker, Fox
Partners IV, Fox Capital Management Corporation, NPI Equity
Investments II, Inc. and Manager to Payee and the Copper Mill
Hazardous Material Guaranty and Indemnification Agreement dated
the date hereof from Maker, Fox Partners IV, Fox Capital
Management Corporation, NPI Equity Investments II, Inc. and
Manager to Payee, the Release Letter from Payee to Maker and any
other 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 Three
Million Seven Hundred and Fifty Thousand Dollars ($3,750,000).
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 (i) located on the real
property described in Exhibit A to the Deed of Trust, and known
as Copper Mill Apartments and located at 3400 Copper Mill Trace,
Henrico County, Virginia and (ii) located on the real property
described in Exhibit A to the Subordinate Mortgage and known as
Cooper's Pointe Apartments and located at 2225 Greenridge Road,
North Charleston, South Carolina.
1.17 "Rents" shall have the meaning set forth in the
First Deed of Trust.
1.18 "Responsible Entities" shall mean (i) Maker,
(ii) NPI Equity Investments II, Inc., a Florida corporation,
(iii) Fox Partners IV, a California general partnership, and
(iv) Fox Capital Management Corporation, a California 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 $31,347.72 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 First Deed of Trust and the other Loan Documents (other
than the Subordinate Mortgage). 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 First 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 First Deed
of Trust and all 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. 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 First 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 or Reserves 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. 204311
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. 204311
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
Commonwealth of Virginia, 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
COMMONWEALTH OF VIRGINIA IN ANY ACTION OR PROCEEDING ARISING OUT
OF THIS NOTE AND IN FURTHERANCE OF SUCH AGREEMENT, THE MAKER
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 VIRGINIA 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. The Deed of Trust and this Note
are subject to the express condition that at no time shall Maker
be obligated or required to pay interest on the principal balance
due under this Note at a rate which could subject the holder of
this Note to either civil or criminal liability as a result of
being in excess of the maximum interest rate which Maker is
permitted by law to contract or agree to pay. If by the terms of
this Note or the Deed of Trust, 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 reduction of the
unpaid principal balance of this Note in the inverse order of
maturity, and if 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, Payee and Maker shall, to the maximum
extent permitted under the applicable law: characterize any
nonprincipal payment as an expense, fee or premium rather than as
interest; exclude voluntary prepayments and the effects thereof;
and "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 on 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 First 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 First 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 First 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, or (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 the Manager. The Responsible
Entities agree to pay to Payee all amounts described in
clauses (1) through (8) above on demand by Payee 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 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 dated the date hereof from the Manager
to Payee.
4.9 Confession of Judgment. Upon a Default, Maker
authorizes any attorney admitted to practice before any court of
record in the United States to appear on behalf of Maker in the
Circuit Court for the City of Alexandria, Virginia or in the
General District Court for the City of Alexandria, Virginia, or
before the clerk thereof or prothonotary or other court official,
and to confess judgment against Maker, without opportunity of
Maker for prior hearing, in favor of Payee in the full amount due
on this Note (including principal, accrued interest and any and
all charges, fees and costs) plus reasonable attorneys' fees,
disbursements and court costs. In addition to all other courts
where jurisdiction and venue would be proper, Maker consents to
the jurisdiction and venue of the Circuit Court for the City of
Alexandria, Virginia or the General District Court for the City
of Alexandria for the entry of said judgment. For the purpose of
allowing Payee to file a confession of judgment in the Circuit
Court for the City of Alexandria, Virginia or in the General
District Court for the City of Alexandria, Virginia to recover
any sums of money due under this Note, Maker hereby duly
constitutes and appoints Virginia A. Davis its attorney in fact
to confess judgment against Maker in the Circuit Court for the
City of Alexandria, Virginia, or in the General District Court
for the City of Alexandria, Virginia. Maker waives the benefit
of any and every statute, ordinance, or rule of court which may
be lawfully waived conferring upon Maker any right or privilege
of exemption, homestead rights, stay of execution, of
supplementary proceedings, or other relief from the enforcement
or immediate enforcement of a judgment or related proceedings on
a judgment. The authority and power to appear for and enter
judgment against Maker shall not be exhausted by one or more
exercises thereof, or by any imperfect exercise thereof, and
shall not be extinguished by any judgment entered pursuant
thereto; such authority and power may be exercised on one or more
occasions from time to time, in the same jurisdiction, as often
as the holder shall deem necessary or advisable.
IN WITNESS WHEREOF, Maker has executed and delivered
this Note as of the day and year first above written.
CENTURY PROPERTIES GROWTH FUND XXII,
a California limited partnership
By: Fox Partners IV, a California
general partnership,
Its General Partner
By: Fox Capital Management
Corporation, a California
corporation,
Its Managing General Partner
By:
Name:
Title:
[CORPORATE SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
This instrument was acknowledged before me the day
of September, 1994 by , the
of Fox Capital Management Corporation, a California corporation
on behalf of the corporation as managing general partner of Fox
Partners IV, a California general partnership which is the
general partner of Century Properties Growth Fund XXII, a
California limited partnership.
[NOTARIAL SEAL]
-------------------------------
Notary Public in and for the
State of ___________________
Notary public's printed name:
____________________________
My Commission Expires:
__________________________
EXHIBIT 99.2
Copper Mill
================================================================================
CENTURY PROPERTIES GROWTH FUND XXII
to
THE TRAVELERS INSURANCE COMPANY
____________________________________
AMENDED AND RESTATED DEED OF TRUST
(Fee)
Douglas N. Beck and Virginia A. Davis, Trustees
$3,679,026.14
____________________________________
Dated: As of September 1, 1994
Location: Henrico County, Virginia
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. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7. Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8. Insurance Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9. Deposits for Taxes and Insurance Premiums . . . . . . . . . . . . . . . 18
10. Proceeds of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 19
11. Disbursement of Insurance Proceeds. . . . . . . . . . . . . . . . . . . 21
12. Condemnation and Eminent Domain . . . . . . . . . . . . . . . . . . . . 25
13. Assignment of Leases and Rents. . . . . . . . . . . . . . . . . . . . . 26
14. Observance of Lease Assignment. . . . . . . . . . . . . . . . . . . . . 28
15. Beneficiary's Performance of Grantor's Obligations. . . . . . . . . . . 29
16. Security Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
17. Restrictions on Transfer. . . . . . . . . . . . . . . . . . . . . . . . 35
18. Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
19. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
20. Right of Possession . . . . . . . . . . . . . . . . . . . . . . . . . . 48
21. Receiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
22. Foreclosure Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
23. Insurance During Foreclosure. . . . . . . . . . . . . . . . . . . . . . 51
24. Waiver of Right of Redemption and Other Rights. . . . . . . . . . . . . 52
25. Rights Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
26. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . 54
27. Effect of Extensions and Amendments . . . . . . . . . . . . . . . . . . 55
28. Execution of Separate Security Agreements, Financing
Statements, Etc.; Estoppel Letter . . . . . . . . . . . . . . . . . . 55
29. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
30. Option to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . 56
31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
32. Inspection of Premises and Records. . . . . . . . . . . . . . . . . . . 57
33. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . 57
34. Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . 58
35. Captions and Pronouns . . . . . . . . . . . . . . . . . . . . . . . . . 59
36. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
37. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . 60
38. Beneficiary Not A Joint Venturer. . . . . . . . . . . . . . . . . . . . 65
39. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
40. Consent Required of Beneficiary . . . . . . . . . . . . . . . . . . . . 66
41. Sole Discretion of Beneficiary. . . . . . . . . . . . . . . . . . . . . 67
42. No Oral Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
43. Absolute and Unconditional Obligation . . . . . . . . . . . . . . . . . 68
44. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
45. Limited Personal Liability. . . . . . . . . . . . . . . . . . . . . . . 69
46. Power of Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
47. WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . . . . . . . . . . . 77
48. Anti-Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
49. Usury Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
50. Related Party Contracts . . . . . . . . . . . . . . . . . . . . . . . . 78
51. Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
52. Concerning the Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 79
53. Trustee's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
54. Final Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
55. Recordation Tax Exemption . . . . . . . . . . . . . . . . . . . . . . . 80
56. Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Copper Mill
AMENDED AND RESTATED DEED OF TRUST
THIS AMENDED AND RESTATED DEED OF TRUST (this "Deed of Trust")
made as of this 1st day of September, 1994, from CENTURY PROPERTIES GROWTH
FUND XXII, a California limited partnership having an address at 5665
Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328 ("Grantor"), to
Douglas N. Beck, a resident of the City of Alexandria, Virginia and
Virginia A. Davis, a resident of Fairfax County, Virginia ("Trustees"), 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
$3,750,000 to Grantor which loan was evidenced by a Deed of Trust Note (the
"Original Note") dated November 26, 1986 from Grantor to Beneficiary in the
original principal sum of $3,750,000 and secured by (i) a Deed of Trust and
Security Agreement (the "Original Deed of Trust") dated November 26, 1986 from
Grantor to Joseph W. Sprouls and Kandis A. Ulrich, trustees for the benefit of
Beneficiary filed of record on December 1, 1986 in Deed Book 2038, page 839 in
the Clerk's office of the Circuit Court of Henrico County, Virginia, as
amended by First Amendment to Deed of Trust and Security Agreement dated June
16, 1987 from Grantor to Beneficiary and (ii) an Assignment of Leases, Rents
and Profits (the "Original Assignment") dated as of November 26, 1986 by
Grantor to Beneficiary filed of record in Deed Book 2038, page 861 in the
Clerk's Office of the Circuit Court of Henrico County, Virginia, encumbering
the property known as Copper Mill Apartments in Henrico County, Virginia (the
"Copper Mill Apartments").
WHEREAS, the Original Note was modified, amended and restated by a
certain Amended and Restated Deed of Trust Note (the "Note") dated the date
hereof between Grantor and Beneficiary in the original principal sum of
$3,679,026.14;
WHEREAS, to further secure the Note, Grantor delivered to
Beneficiary a certain Subordinate Mortgage (as hereinafter defined);
WHEREAS, the Original Assignment was modified, amended and
restated by a certain Amended and Restated Assignment of Leases, Rents and
Profits (the "Assignment") dated the date hereof between Grantor and
Beneficiary;
WHEREAS, a Subordinate Assignment of Leases, Rents and Profits
(the "Subordinate Assignment") was entered into as of 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 in this Deed of Trust;
WHEREAS, the Note is to be secured by, inter alia, this Deed of
Trust and the Subordinate Mortgage;
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 Grantor covenants, warrants and agrees as follows:
W I T N E S S E T H :
To secure the payment of the principal indebtedness under the Note
of $3,679,026.14 (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, the Assignment, the Subordinate Mortgage (as hereinafter
defined), the Subordinate Assignment, the Cash Management Letter dated the
date hereof from Grantor and NPI-AP Management, L.P. (the "Manager") to
Beneficiary, the Copper Mill Reserve Agreement dated the date hereof between
Grantor and Beneficiary, the Copper Mill Escrow Agreement dated the date
hereof between Grantor, Beneficiary and Lawyers Title Insurance Corporation,
the Copper Mill Manager's Liability Letter from the Manager to Beneficiary and
the Copper Mill Guaranty of Payment dated the date hereof from Grantor, Fox
Partners IV, Fox Capital Management Corporation, Manager and NPI Equity
Investments II, Inc. to Beneficiary and the Copper Mill Hazardous Material
Guaranty and Indemnification Agreement dated the date hereof from Grantor, Fox
Partners IV, Fox Capital Management Corporation, NPI Equity Investments II,
Inc. and Manager to Beneficiary, the Release Letter dated the date hereof from
Beneficiary to Grantor and any other documents or instruments now or hereafter
executed in connection with the Note or this Deed of Trust (the Note, this
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 Henrico, Virginia 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, royalties, issues, profits, revenue,
income, security deposits and other benefits generated from the Premises under
the Leases (as such term is hereinafter defined) 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 Code of
Virginia (1950)), 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 Code of
Virginia (1950) 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;
IN TRUST unto Trustee to secure the Indebtedness Hereby Secured
and the performance and observance of all the covenants, agreements and
provisions contained in this Deed of Trust, the Note and the other Loan
Documents.
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 is given in replacement and substitution of the
Original Deed of Trust and evidences the same indebtedness evidenced by the
Original Note and secured by the Original Deed of Trust and does not evidence
any new or additional indebtedness of Grantor to Beneficiary and is not
intended as a novation of the Original 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 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 5.B. 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 Three Million Six Hundred Seventy-Nine Thousand and Twenty-Six and 14/100
Dollars ($3,679,026.14) and 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 Department of Housing and
Urban Development, Federal Insurance 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 Virginia (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 "The Travelers Insurance Company, its affiliates,
subsidiaries, successors and assigns, as their interest may appear," 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
any of the Loan Documents.
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 Indebted-
ness 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. Benefici-
ary 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 immedi-
ately 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
Code of Virginia (1950) (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 8.9-313 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 8.9-402(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 Clerk's Office of the Circuit Court of Henrico County,
Virginia.
(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, or (iv) to the lien
created by the Subordinate Deed of Trust (the "Subordinate of Deed of Trust")
dated the date hereof made by Grantor to Beneficiary in the principal amount
of $5,388,360.35 securing that certain Amended and Restated Note made by
Grantor to Beneficiary in connection with a loan made with respect to the
Cooper's Pointe Apartments. 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, Fox
Associates '84 or Fox Partners '85. 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;
(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 the Subordinate Deed of
Trust; or
(g) If a default, after passage of time or notice, as may
be required, shall occur under a Subordinate Mortgage (the "Subordinate
Mortgage") in the sum of $3,679,026.14 dated the date hereof from Grantor to
Beneficiary encumbering certain property located at 2225 Greenridge Road,
North Charleston, South Carolina and known as Cooper's Pointe Apartments;
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. Remedies. (a) Upon the occurrence of any one or more
Defaults, Beneficiary and/or Trustee may (but shall not be obligated), in
addition to any rights or remedies available to it hereunder or under the
other Loan Documents, take such action personally or by its agents or
attorneys, with or without entry, and without notice, demand, presentment or
protest (each and all of which are hereby waived), as it deems necessary or
advisable to protect and enforce Beneficiary's rights and remedies against
Grantor and in and to the Premises, including the following actions, each of
which may be pursued concurrently or otherwise, at such time and in such order
as Beneficiary may determine, in its sole discretion, without impairing or
otherwise affecting its rights or remedies:
(i) declare the entire balance of the Indebtedness Hereby
Secured (including the entire principal balance thereof, all accrued and
unpaid interest and any premium thereon and all other such sums secured
hereby) to be immediately due and payable, and upon any such declaration the
entire unpaid balance of the Indebtedness Hereby Secured shall become and be
immediately due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by Grantor,
anything in the Loan Documents to the contrary notwithstanding; or
(ii) institute a proceeding or proceedings, judicial or
otherwise, for the complete foreclosure of this Deed of Trust under any
applicable provision of law; or
(iii) subject to the provisions and restrictions of any applicable
law, institute a proceeding or proceedings, judicial or otherwise, for the
partial foreclosure of this Deed of Trust under any applicable provision of
law for the portion of the Indebtedness Hereby Secured then due and payable,
subject to the lien of this Deed of Trust continuing unimpaired and without
loss of priority so as to secure the balance of the Indebtedness Hereby
Secured not then due and payable; or
(iv) cause any or all of the Premises to be sold under the power
of sale hereby granted, and more fully described in Paragraph 46 of this Deed
of Trust, in any manner permitted by applicable law. For any sale under the
power of sale granted by this Deed of Trust, Trustee shall give all notices
and make all advertisements required by law and then, upon the expiration of
such time as is required by law, may sell the Premises, and all estate, right,
title, interest, claim and demand of Grantor therein, and all rights of
redemption thereof, at one or more sales, as an entirety or in parcels, with
such elements of real and/or personal property (and, to the extent permitted
by applicable law, may elect to deem all of the Premises to be real property
for purposes thereof), and at such time or place and upon such terms as
Trustee may deem expedient, or as may be required by applicable law. Upon any
sale, Trustee shall execute and deliver to the purchaser or purchasers a
trustee's deed or deeds conveying the property sold, and the recitals in the
trustee's deed or deeds of any facts affecting the regularity or validity of
the sale will be conclusive against all persons. In the event of a sale, by
foreclosure or otherwise, of less than all of the Premises, this Deed of Trust
shall continue as a lien and security interest on the remaining portion of the
Premises; or
(v) institute an action, suit or proceeding in equity for the
specific performance of any of the provisions contained in the Loan Documents;
or
(vi) apply for the appointment of a receiver, custodian, trustee,
liquidator or conservator of the Premises, to be vested with the fullest
powers permitted under applicable law, and subject to the provisions and
restrictions of any applicable law, ex parte and as a matter of right and
without regard to or the necessity to disprove the adequacy of the security
for the Indebtedness Hereby Secured or the solvency of Grantor or any other
person liable for the payment of the Indebtedness Hereby Secured, and Grantor
and each other person so liable waives or shall be deemed to have waived such
necessity and consents or shall be deemed to have consented to such
appointment; or
(vii) subject to the provisions and restrictions of any applicable
law, enter upon the Premises, and exclude Grantor and its agents and servants
wholly therefrom, without liability for trespass, damages or otherwise, and
take possession of all books, records and accounts relating thereto and all
other Premises, and Grantor agrees to surrender possession of the Premises and
of such books, records and accounts to Beneficiary on demand after the
happening of any Default; and having and holding the same may use, operate,
manage, preserve, control and otherwise deal therewith and conduct the
business thereof, either personally or by its superintendents, managers,
agents, servants, attorneys or receivers, without interference from Grantor;
and upon each such entry and from time to time thereafter may, at the expense
of Grantor and the Premises, without interference by Grantor and as
Beneficiary may deem advisable, (i) either by purchase, repair or
construction, maintain and restore the Premises, (ii) insure and reinsure the
same, (iii) make all necessary or property repairs, renewals, replacements,
alterations, additions, betterments and improvements thereto and thereon,
(iv) in the event of casualty, complete the reconstruction of the Improvements
and, in the course of such completion, may make such changes in the
contemplated or completed Improvements as it may deem advisable, (v) in every
such case in connection with the foregoing have the right to exercise all
rights and powers of Beneficiary with respect to the Premises, either in
Grantor's name or otherwise, including the right to make, terminate, cancel,
enforce or modify Leases, obtain and evict tenants and subtenants on such
terms as Beneficiary shall deem advisable and to take any actions described in
subsection (ix) below of this Section; or
(viii) subject to the provisions and restrictions of any applicable
law, may, with or without the entrance upon the Premises, collect, receive,
sue for and recover in its own name all Rents and cash collateral derived from
the Premises, and after deducting therefrom all costs, expenses and
liabilities of every character incurred by Beneficiary in collecting the same
and in using, operating, managing, preserving and controlling the Premises,
and otherwise in exercising Beneficiary's rights under subsection (vii) of
this Paragraph, including all amounts necessary to pay impositions, insurance
premiums and other charges in connection with the Premises, as well as
compensation for the services of Beneficiary and its attorneys, agents and
employees, to apply the remainder as provided in Paragraph 46(b); or
(ix) release any portion of the Premises for such consideration
as Beneficiary may require without, as to the remainder of the Premises, in
any way impairing or affecting the lien or priority of this Deed of Trust, or
improving the position of any subordinate lienholder with respect thereto,
except to the extent that the Indebtedness Hereby Secured shall have been
reduced by the actual monetary consideration, if any, received by Beneficiary
for such release, and may accept by assignment, pledge or otherwise any other
property in place thereof as Beneficiary may require without being accountable
for so doing to any other lienholder; or
(x) may take all actions permitted under the Uniform Commercial
Code of the Commonwealth of Virginia; or
(xi) may take any other action, or pursue any other right or
remedy, as Beneficiary may have under applicable law, and Grantor does hereby
grant the same to Beneficiary.
In the event that Beneficiary shall exercise any of the rights or
remedies set forth in subsections (vii) and (viii) of this Paragraph,
Beneficiary shall not be deemed to have entered upon or taken possession of
the Premises except upon the exercise of its option to do so evidenced by its
demand and overt act for such purpose, nor shall it be deemed a beneficiary or
mortgagee in possession by reason of such entry or taking possession.
Beneficiary shall not be liable to account for any action taken pursuant to
any such exercise other than for rents actually received by Beneficiary, nor
liable for any loss sustained by Grantor resulting from any failure to let the
Premises, or from any other act or omission of Beneficiary except to the
extent such loss is caused by the willful misconduct or bad faith of such
party. Grantor hereby consents to, ratifies and confirms the exercise by
Beneficiary of said rights and remedies, and appoints Trustee and/or
Beneficiary as its attorney-in-fact, which appointment shall be deemed to be
coupled with an interest and irrevocable, for such purposes.
(b) Upon a foreclosure sale of any portion or interest in the
Premises, Trustee shall be entitled to a commission equal to five percent (5%)
of the Indebtedness Hereby Secured. In the event any portion of the Premises
is advertised for foreclosure sale and not sold, Trustee shall be entitled to
a commission equal to two and one-half percent (2.5%) of the Indebtedness
Hereby Secured. In any proceeding (whether judicial, by power of sale or
otherwise) to foreclose this Deed of Trust or enforce any other remedy of
Beneficiary under the Loan Documents, there shall be allowed and included as
an addition to and a part of the Indebtedness Hereby Secured (in the decree
for sale, if applicable, or other judgment or decree, if applicable) all
expenditures and expenses (including, without limitation, the foregoing
commissions) which may be paid or incurred in connection with the exercise by
Trustee or Beneficiary of any of the rights and remedies provided or referred
to in Paragraph 19(a), or any comparable provision of any other Loan Document,
together with interest thereon at the Default Rate and the same shall be part
of the Indebtedness Hereby Secured and shall be secured by this Deed of Trust.
No party shall be required to accept payment in full of the Note unless
accompanied by a tender of payment of such expenditures, expenses and
commissions.
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, 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 Paragraph 46
hereof and applicable law.
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 Trustee 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
Commonwealth of Virginia, this Deed of Trust shall be construed and enforced
according to the laws of the Commonwealth of Virginia, without reference to
the conflicts of law principles of that commonwealth. GRANTOR AGREES TO
SUBMIT TO PERSONAL JURISDICTION IN THE COMMONWEALTH OF VIRGINIA 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 VIRGINIA 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 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 sound 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. 204311
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. 204311
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 including, without limitation, the Virginia Air
Pollution Control Law, Va. Code Ann. Section 10.1-1300 et seq.; the Virginia
State Water Control Law, Va. Code Ann. Section 62.1-44.2 et seq.; the Virginia
Waste Management Act, Va. Code Ann. Section 10.1-1400 et. seq., 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 IV, 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, or (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 to Beneficiary. The Responsible Entities agree to
pay to Beneficiary all amounts described in clauses (1) through (8) 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. (a) Subject to the provisions or other
requirements of law, the following provisions shall apply to any sale or sales
of the Premises under or by virtue of Section 19 or this Section 46, whether
made under the power of sale herein granted or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale:
(i) Upon the occurrence of a Default, Grantor (x) declares its
assent to the passing of a decree for the sale of any or all of the Premises
or any estate or interest therein by any equity court which may have
jurisdiction over the sale of the Premises and (y) authorizes and empowers
Trustee to take possession of any or all of the Premises and to sell any or
all of the same or any estate or interest therein in accordance with the
provisions of Va. Code Ann. Sections 55-59 to 55-59.4 and/or of any other
applicable general or local law, rule or regulation of the United States of
America or the Commonwealth of Virginia relating to or affecting deeds of trust
or security agreements, including any amendments thereof or additions thereto.
Neither the foregoing assent to decree nor the foregoing power of sale shall be
exhausted in the event that such proceeding or sale is dismissed or cancelled
before the Indebtedness Hereby Secured is paid in full.
(ii) Trustee may conduct any number of sales from time to time.
The power of sale set forth in Paragraph 19(a)(iv) hereof shall not be
exhausted by any one or more such sales as to any part of the Premises which
shall not have been sold, nor by any sale which is not completed or is
defective in Beneficiary's opinion, until the Indebtedness Hereby Secured
shall have been paid in full.
(iii) Any sale may be postponed or adjourned by public
announcement at the time and place appointed for such sale or for such
postponed or adjourned sale without further notice.
(iv) After each sale, Trustee, or an officer of any court
empowered to do so, shall execute and deliver to the purchaser or purchasers
at such sale a good and sufficient instrument or instruments granting,
conveying, assigning and transferring all right, title and interest of Grantor
in and to the property and rights sold and shall receive the proceeds of said
sale or sales and apply the same as herein provided. Trustee and/or
Beneficiary is hereby appointed the true and lawful attorney-in-fact of
Grantor, which appointment is irrevocable and shall be deemed to be coupled
with an interest, in Grantor's name and stead, to make all necessary
conveyances, assignments, transfers and deliveries of the property and rights
so sold, and for that purpose Trustee and/or Beneficiary may execute all
necessary instruments of conveyance, assignment, transfer and delivery, and
may substitute one or more persons with like power, Grantor hereby ratifying
and confirming all that said attorney or any such substitute or substitutes
shall lawfully do by virtue thereof. Nevertheless, Grantor, if requested by
Trustee or Beneficiary, shall ratify and confirm any such sale or sales by
executing and delivering to Beneficiary or such purchaser or purchasers all
such instruments as may be advisable, in Beneficiary's judgment, for the
purposes as may be designated in such request.
(v) Any and all statements of fact or other recitals made in any
of the instruments referred to in subsection (iii) of this Paragraph given by
Beneficiary or Trustee as to nonpayment of the Indebtedness Hereby Secured, or
as to the occurrence of any Default, or as to Beneficiary having declared all
or any of the Indebtedness Hereby Secured to be due and payable, or as to the
request to sell, or as to notice of time, place and terms of sale and of the
property or rights to be sold having been duly given, or as to the refusal,
failure or inability to act of Beneficiary, or as to the appointment of any
substitute or successor Beneficiary or Trustee, or as to any other act or
thing having been duly done by Grantor, Beneficiary, Trustee, or by such
substitute or successor Beneficiary or Trustee, shall be taken as conclusive
and binding against all persons as to evidence of the truth of the facts so
stated and recited. Subject to the provisions and restrictions of any
applicable law, Beneficiary and/or Trustee may appoint or delegate any one or
more persons as agent to perform any act or acts necessary or incident to any
sale so held, including the posting of notices and the conduct of sale, but in
the name and on behalf of Beneficiary or Trustee, as the case may be.
(vi) The receipt of Trustee for the purchase money paid at any
such sale, or the receipt of any other person authorized to receive the same,
shall be sufficient discharge therefor to any purchaser of any property or
rights sold as aforesaid, and no such purchaser, or its representatives,
grantees or assigns, after paying such purchase price and receiving such
receipt, shall be bound to see to the application of such purchase price or
any part thereof upon or for any trust or purpose of this Deed of Trust or, in
any manner whatsoever, be answerable for any loss, misapplication or
nonapplication of any such purchase money, or part thereof, or be bound to
inquire as to the authorization, necessity, expediency or regularity of any
such sale.
(vii) Any such sale or sales shall operate to divest all of the
estate, right, title, interest, claim and demand whatsoever, whether at law or
in equity, of Grantor in and to the properties and rights so sold, and shall
be a perpetual bar both at law and in equity against Grantor and any and all
persons claiming or who may claim the same, or any part thereof or any
interest therein, by, through or under Grantor to the fullest extent permitted
by applicable law.
(viii) Upon any such sale or sales, Beneficiary may bid for and
acquire the Premises and, in lieu of paying cash therefor, may make settlement
for the purchase price by crediting against the Indebtedness Hereby Secured
the amount of the bid made therefor, after deducting therefrom the expenses of
the sale, the cost of any enforcement proceeding hereunder and any other sums
which Beneficiary is authorized to deduct under the terms hereof and under
applicable law, to the extent necessary to satisfy such bid.
(ix) In the event that Grantor, or any person claiming by,
through or under Grantor, shall refuse or fail to surrender possession of the
Premises after any sale thereof, then Grantor, or such person, shall be deemed
a tenant at sufferance of the purchaser at such sale, subject to eviction by
means of forcible entry and detainer proceedings or other like proceedings, or
subject to any other right or remedy available hereunder or under applicable
law.
(x) Subject to the provisions and restrictions of any applicable
law, upon any such sale, it shall not be necessary for Beneficiary, Trustee or
any public officer acting under execution or order of the court to have
present or constructive possession of any of the Premises.
(xi) In the event of any sale referred to in this Paragraph, the
entire Indebtedness Hereby Secured, if not previously due and payable,
immediately thereupon shall, notwithstanding anything to the contrary herein
or in the other Loan Documents, become due and payable.
(xii) In the event a foreclosure hereunder shall be commenced by
Trustee or Beneficiary, Trustee or Beneficiary may at any time before the sale
of the Premises abandon the sale, and may institute suit for the collection of
the Indebtedness Hereby Secured and/or for the foreclosure of this Deed of
Trust, or in the event that Trustee or Beneficiary should institute a suit for
collection of the Indebtedness Hereby Secured and/or for the foreclosure of
this Deed of Trust, Trustee or Beneficiary may at any time before the entry of
final judgment in said suit dismiss the same and sell the Premises in
accordance with the provisions of this Deed of Trust.
(b) Application of Proceeds. The purchase money, proceeds or
avails of any sale referred to in Subsection (a) of this Paragraph, together
with any other sums which may be held by Trustee or Beneficiary hereunder,
whether under the provisions of Paragraph 19, this Paragraph 46 or otherwise,
shall, except as herein expressly provided to the contrary, be applied as
follows:
First: To the payment of the costs and expenses of any such sale,
including compensation to Trustee and/or Beneficiary, its agents and
counsel, and of any judicial proceeding wherein the same may be made,
and of all expenses, liabilities and advances made or incurred by
Trustee and/or Beneficiary hereunder, together with interest thereon as
provided herein, and all taxes, assessments and other charges, except
any taxes, assessments or other charges subject to which the Premises
shall have been sold.
Second: To the payment of all taxes, levies, assessments and
other charges, with costs and interest, if they have priority over the
lien of this Deed of Trust, including the then due pro rata portion
thereof for the calendar year.
Third: To the payment of all expenditures of Beneficiary pursuant
to the provisions of Paragraph 19 hereof not otherwise reimbursed, which
expenditures 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.
Fourth: To the payment of all principal and interest remaining
unpaid on the Note in such order as Beneficiary shall elect.
Fifth: To the extent permitted by applicable law, to be set aside
by Beneficiary as adequate security for the payment of sums which would
have been paid by application under clauses First through Fourth above
to Beneficiary, arising out of an obligation or liability with respect
to which Grantor has agreed to indemnify Beneficiary, but which sums are
not yet due and payable or liquidated.
Sixth: To the payment of any liens of record inferior to this
Deed of Trust under which sale is made, with lawful interest.
Seventh: To the payment of the surplus, if any, to Grantor or
whomsoever may be lawfully entitled to receive the same.
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 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: characterize any nonprincipal payment as an
expense, fee or premium rather than as interest; exclude voluntary prepayments
and the effects thereof; and "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 Grantor and any Related Party,
as hereinafter defined, shall be fully disclosed to Beneficiary, shall be
required to be consented to by Beneficiary 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. Recordation Tax Exemption. This Deed of Trust is exempt from
recordation tax under Va. Code Ann. Section 58.1-809.
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 the day and year first above written.
Grantor:
CENTURY PROPERTIES GROWTH FUND XXII,
a California limited partnership
By: Fox Partners IV,
a California general partnership
its General Partner
By: Fox Capital Management
Corporation, a California
corporation, its Managing
General Partner
By: ________________________
Name: _________________
Title: _________________
[CORPORATE SEAL]
STATE OF NEW YORK )
: s.s.
COUNTY OF NEW YORK )
This instrument was acknowledged before me the day of September,
1994 by , the of Fox Capital
Management Corporation, a California corporation on behalf of the corporation as
managing general partner of Fox Partners IV, a California general partnership
which is the general partner of Century Properties Growth Fund XXII, a
California limited partnership.
[NOTARIAL SEAL]
________________________________
Notary Public in and for the
State of ____________________
Notary Public's printed name:
________________________________
My Commission Expires:
_____________________________
Exhibit A
[Copper Mill Legal Description]
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 99.3
COOPER'S POINTE
AMENDED AND RESTATED NOTE
$5,388,360.35 As of September 1, 1994
WHEREAS, Century Properties Growth Fund XXII, a
California limited partnership ("Maker") entered into and
delivered to The Travelers Insurance Company ("Payee"), a
Mortgage Note dated November 27, 1985 from Maker to Payee in the
original principal sum of $5,600,000, which was modified by that
certain Modification of First Mortgage Real Estate Note, Mortgage
and Security Agreement, and Assignment of Leases, Rents and
Profits ("Modification Agreement") dated as of June 1, 1993
between Maker and Payee, and recorded in Book 229 at Page 272 in
the RMC Office of Charleston County, South Carolina collectively
(the "Mortgage Note");
WHEREAS, Maker desires to modify, amend and restate in
its entirety the terms and provisions of the Mortgage Note as
hereinafter set forth in this Amended and Restated Note (this
"Note");
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 $5,388,360.35 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 is given in replacement and substitution
of, and evidences the same indebtedness as the Mortgage Note and
does not evidence any new or additional indebtedness of Maker to
Payee and is not intended as a novation of the Mortgage 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 Five Million Three Hundred Eighty-Eight Thousand Three
Hundred and Sixty and 35/100 Dollars ($5,388,360.35), 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 "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 Mortgage.
1.2 "Default" shall have the meaning set forth in
Section 3.2 hereof.
1.3 "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.
1.4 "Dollars" shall mean dollars in lawful currency of
The United States of America.
1.5 "Escrow Agent" shall mean Old Republic National
Title Insurance Company.
1.6 "Interest Rate" shall mean eight and one-quarter
(8.25%) percent per annum.
1.7 "Loan" shall mean the loan evidenced by this Note
and secured by the other Loan Documents.
1.8 "Loan Documents" shall mean this Note, the
Mortgage, the Amended and Restated Assignment of Leases, Rents
and Profits dated the date hereof from Maker to Payee, the
Subordinate Deed of Trust, the Subordinate Assignment of Leases,
Rents and Profits dated the date hereof from Maker to Payee, the
Cash Management Letter dated the date hereof from Maker and
Manager to Payee, the Cooper's Pointe Reserve Agreement dated the
date hereof between Maker and Payee, the Cooper's Pointe
Manager's Liability Letter from Manager to Payee, the Cooper's
Pointe Guaranty of Payment dated the date hereof from Maker, Fox
Partners IV, Fox Capital Management Corporation, NPI Equity
Investments II, Inc. and Manager to Payee, the Cooper's Pointe
Hazardous Material Guaranty and Indemnification Agreement dated
the date hereof from Maker, Fox Partners IV, Fox Capital
Management Corporation, NPI Equity Investments II, Inc. and
Manager to Payee, the Release Letter from Payee to Maker and any
other documents or instruments now or hereafter executed in
connection therewith.
1.9 "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.
1.10 "Manager" shall mean NPI-AP Management, L.P., a
Delaware limited partnership.
1.11 "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.
1.12 "Mortgage" shall mean (i) a certain Amended and
Restated Mortgage (the "First Mortgage") dated the date hereof by
Maker to Payee, intended to be recorded in the RMC office for
Charleston County, South Carolina and constituting a first
mortgage lien on a portion of the Premises described in Exhibit A
attached hereto, located at 2225 Greenridge Road, North
Charleston, South Carolina and known as Cooper's Pointe
Apartments, and (ii) a certain Subordinate Deed of Trust (the
"Subordinate Deed of Trust") dated the date hereof by Maker to
Douglas N. Beck and Virginia A. Davis, as trustees for Payee,
intended to be recorded in the clerk's office of the Circuit
Court, Henrico County, Virginia and constituting a second
mortgage lien on the Property described in Exhibit A attached
thereto, known as Copper Mill Apartments and located at 3400
Copper Mill Trace, Henrico County, Virginia.
1.13 "Original Principal Amount" shall mean Five
Million Three Hundred Eighty-Eight Thousand Three Hundred and
Sixty and 35/100 Dollars ($5,388,360.35).
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 (i) located on the real
property described in Exhibit A to the Mortgage, known as
Cooper's Pointe Apartments and located at 2225 Greenridge Road in
North Charleston, South Carolina, and (ii) located on the real
property described in Exhibit A to the Subordinate Deed of Trust,
and known as Copper Mill Apartments, and located at 3400 Copper
Mill Trace, Henrico County, Virginia.
1.17 "Rents" shall have the meaning set forth in the
First Mortgage.
1.18 "Responsible Entities" shall mean (i) Maker,
(ii) NPI Equity Investments II, Inc., a Florida corporation,
(iii) Fox Partners IV, a California general partnership, and (iv)
Fox Capital Management Corporation, a California 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 $45,912.37 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 Mortgage and the other Loan Documents (other than the
Subordinate Deed of Trust). 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 Mortgage, 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 Mortgage
and all of 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 Mortgage. By this reference,
the Mortgage 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 First
Mortgage, 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 Mortgage 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 Mortgage 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 Mortgage 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 Mortgage, 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 or Reserves 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. 502191
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. 502191
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
South Carolina, 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
SOUTH CAROLINA 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 SOUTH CAROLINA 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. (a) The Mortgage and this Note
are subject to the express condition that at no time shall Maker
be obligated or required to pay interest on the principal balance
due under this Note at a rate which could subject the holder of
this Note to either civil or criminal liability as a result of
being in excess of the maximum interest rate which Maker is
permitted by law to contract or agree to pay. If by the terms of
the Mortgage or this Note, Maker is at any time required or
obligated to pay interest on the principal balance due under this
Note at a rate in excess of such maximum rate, the rate of
interest under this Note shall be deemed to be immediately
reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in
excess of such maximum rate shall be applied and shall be deemed
to have been payments in reduction of the principal balance of
this Note.
(b) The Maker warrants that the extension of credit
evidenced by this Note is solely for business or commercial
purposes and not for personal, family or agricultural purposes
under the South Carolina Consumer Protection Act.
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 Mortgage 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 Mortgage 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 Mortgage or the other
Loan Documents, (ii) the mortgages 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
Mortgage 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 47 of the Mortgage,
(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
Mortgage, 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 Mortgage, (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, or (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 the Manager. The Responsible Entities
agree to pay to Payee all amounts described in clauses (1)
through (8) above on demand by Payee 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 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 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.
Mortgagor:
CENTURY PROPERTIES GROWTH FUND XXII,
a California limited partnership
By: Fox Partners IV,
a California general partnership,
its General Partner
By: Fox Capital Management
Corporation,
a California corporation,
its Managing General Partner
By:
Name:
Title:
WITNESSES:
[CORPORATE SEAL]
_____________________
_____________________
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK)
PERSONALLY appeared before me ______________________,
who, being by me duly sworn, says that (s)he saw the within named
____________. the ___________________ of FOX CAPITAL MANAGEMENT
CORPORATION, a California corporation, Managing General Partner
of FOX PARTNERS IV, a California general partnership, the sole
general partner of CENTURY PROPERTIES GROWTH FUND XXII, a
California limited partnership, sign, seal and as his act and
deed deliver the foregoing instrument and that (s)he with
_________ witnessed the execution delivery thereof.
----------------------
----------------------
Witnesses
SWORN to before me, this ____ day of ____________________, A.D.
1994
_____________________________(SEAL)
Notary Public of New York
My Commission Expires: _____________________
[NOTARIAL SEAL]
EXHIBIT 99.4
COOPER'S POINTE
CENTURY PROPERTIES GROWTH FUND XXII
to
THE TRAVELERS INSURANCE COMPANY
____________________________________
AMENDED AND RESTATED MORTGAGE
(Fee)
$5,388,360.35
____________________________________
Dated: As of September 1, 1994
Street Address: 2225 Greenridge Road
Town: North Charleston
County: Charleston
State: South Carolina
THIS MORTGAGE 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. Mortgagee's Performance of Mortgagor'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. . . . . . . . . . . . . . . . . . . . 48
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 . . . . . . . . . . . . . . . . . . . . . . . 53
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. Mortgagee Not A Joint Venturer. . . . . . . . . . . . . . . . . . . 61
39. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
40. Consent Required of Mortgagee . . . . . . . . . . . . . . . . . . . 62
41. Sole Discretion of Mortgagee. . . . . . . . . . . . . . . . . . . . 63
42. No Oral Change. . . . . . . . . . . . . . . . . . . . . . . . . . . 63
43. Absolute and Unconditional Obligation . . . . . . . . . . . . . . . 64
44. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
45. Limited Personal Liability. . . . . . . . . . . . . . . . . . . . . 65
46. WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . . . . . . . . . 67
47. Anti-Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . 68
48. Usury Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
49. Related Party Contracts . . . . . . . . . . . . . . . . . . . . . . 69
50. Final Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 69
51. Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Coopers Pointe
AMENDED AND RESTATED MORTGAGE
THIS AMENDED AND RESTATED MORTGAGE (this "Mortgage") made as of
this 1st day of September, 1994, from CENTURY PROPERTIES GROWTH FUND XXII, a
California limited partnership having an address at 5665 Northside Drive,
N.W., Suite 370, Atlanta, Georgia 30328 ("Mortgagor"), in favor of THE
TRAVELERS INSURANCE COMPANY, a Connecticut corporation having an address at
One Tower Square, 2 SHS, Hartford, Connecticut 06183-2020 ("Mortgagee"),
WHEREAS, Mortgagee made a loan in the original principal sum of
$5,600,000 to Mortgagor which loan was evidenced by a Mortgage Note dated
November 27, 1985 from Mortgagor to Mortgagee in the original principal sum of
$5,600,000, as modified by that certain Modification and First Mortgage Real
Estate Note, Mortgage and Security Agreement, and Assignment of Leases, Rents
and Profits (the "Modification Agreement") dated as of June 1, 1993 between
Mortgagor and Mortgagee and recorded in Book 229 at page 272 in the RMC Office
for Charleston County, South Carolina (the "Original Note"), encumbering the
property known as Cooper's Pointe Apartments in North Charleston, South
Carolina (the "Cooper's Pointe Property"),
WHEREAS, the Original Note was secured by a (i) Mortgage and
Security Agreement dated November 27, 1985 from Mortgagor to Mortgagee filed
of record in Book Z149 at page 323 in the RMC Office for Charleston County,
South Carolina as modified by the Modification Agreement (the "Original
Mortgage"), (ii) an Assignment of Leases, Rents and Profits dated as of
November 27, 1985 by Mortgagor to Mortgagee filed of record in Book Z149 at
page 919 in the RMC Office for Charleston County, South Carolina (the
"Original Assignment"), and (iii) a Cash Management Agreement and a Pledge and
Security Agreement (the "Original Security Agreements") both dated as of
June 1, 1993 from Mortgagor to Mortgagee.
WHEREAS, the Original Note was modified, amended and restated by a
certain Amended and Restated Note (the "Note") dated the date hereof between
Mortgagor and Mortgagee in the principal sum of $5,388,360.35;
WHEREAS, the Original Assignment was modified, amended and
restated in the Amended and Restated Assignment of Leases, Rents and Profits
dated the date hereof between Mortgagor and Mortgagee (the "Assignment");
WHEREAS, to further secure the Note, Mortgagor delivered to
Mortgagee a certain Subordinate Deed of Trust (as hereinafter defined);
WHEREAS, a Subordinate Assignment of Leases, Rents and Profits was
entered into as of the date hereof between Mortgagor and Mortgagee (the
"Subordinate Assignment");
WHEREAS, Mortgagor and Mortgagee intend to modify, amend and
restate the terms and provisions of the Original Mortgage and the Original
Security Agreements as hereinafter set forth in this Mortgage;
WHEREAS, the Note is to be secured, inter alia, by this Mortgage
and the Subordinate Deed of Trust;
WHEREAS, Mortgagor desires to set forth the terms and provisions
of this Mortgage 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 $5,388,360.35 (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 Mortgage, the Assignment, the Subordinate Deed of Trust (as hereinafter
defined), the Subordinate Assignment, the Cash Management Letter dated the
date hereof from Mortgagor and NPI-AP Management, L.P. (the "Manager") to
Mortgagee, the Cooper's Pointe Reserve Agreement dated the date hereof between
Mortgagor and Mortgagee, the Cooper's Pointe Manager's Liability Letter from
the Manager to Mortgagee, the Cooper's Pointe Guaranty of Payment dated the
date hereof from Mortgagor, Fox Partners IV, Manager, Fox Capital Management
Corporation and NPI Equity Investments II, Inc. to Mortgagee and the Cooper's
Pointe Hazardous Material Guaranty and Indemnification Agreement dated the
date hereof from Mortgagor, Fox Partners IV, Fox Capital Management
Corporation, NPI Equity Investments II, Inc. and the Manager to Mortgagee, the
Release Letter dated the date hereof from Mortgagee to Mortgagor and any other
documents or instruments now or hereafter executed in connection with the Note
or this Mortgage (the Note, the Mortgage and such other documents or
instruments, referred to hereinafter collectively as 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 Mortgage, 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, Mortgagor DOES HEREBY
GRANT, REMISE, RELEASE, LIEN, MORTGAGE, CONVEY, PLEDGE, ASSIGN and HYPOTHECATE
unto Mortgagee, 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 Charleston, South Carolina 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 Mortgagor 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 Mortgagor 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
Mortgagor or on its behalf (the "Improvements"); except that this Mortgage
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 Mortgagor, 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 Mortgagor of, in and to the same;
TOGETHER WITH all rents, royalties, issues, profits, revenue,
income, security deposits and other benefits generated from the Premises under
the Leases (as such term is hereinafter defined) or otherwise to be applied
against the Indebtedness Hereby Secured;
TOGETHER WITH all right, title and interest of Mortgagor 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 Mortgagor
to collect the rentals under any such Lease;
TOGETHER WITH all fixtures and articles of personal property now
or hereafter owned by Mortgagor 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 Mortgagor 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
Mortgage 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 South Carolina), this instrument shall constitute a security
agreement, creating a security interest in such goods, as collateral, in
Mortgagee as a secured party and Mortgagor 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 Mortgagor
hereby authorizes, directs and empowers Mortgagee, at its option, on behalf of
Mortgagor, or the successors or assigns of Mortgagor, 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 Mortgagee, 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 Mortgagor 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 Mortgagor 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 Mortgagee, its successors and
assigns, in fee simple 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 (as defined herein);
TO HAVE AND TO HOLD the same, unto Mortgagee, its successors and
assigns, in fee simple 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 (as defined herein); and the Mortgagor covenants
that it is lawfully seized and possessed of the Premises in fee simple and has
good title to convey the same, that the same are encumbered except as set
forth in the title policy insuring the lien of this Mortgage, and that the
Mortgagor will warrant and defend the title thereto against the claims of all
persons whatsoever; and Mortgagor hereby releases and waives all right under
and by virtue of the Homestead Exemption Laws of the State of South Carolina;
PROVIDED, NEVERTHELESS, that if Mortgagor 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
Mortgagor, then this Mortgagor and the estate, right and interest of Mortgagee
in the Premises shall cease and become void and of no effect, but shall
otherwise remain in full force and effect.
This Mortgage is given in replacement and substitution of the
Original Mortgage and evidences the same indebtedness evidenced by the
Original Note and secured by the Original Mortgage and does not evidence any
new or additional indebtedness of Mortgagor to Mortgagee and is not intended
as a novation of the Original Note or the Original Mortgage.
MORTGAGOR FURTHER COVENANTS AND AGREES AS FOLLOWS:
1. Payment of Indebtedness and Performance of Covenants.
Mortgagor 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 Mortgagor's part to be performed or observed as
provided in the Note, this Mortgage and the other Loan Documents. Mortgagor
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, Mortgagor is seized of an indefeasible estate in
fee simple in the portion of the Premises which constitutes real property and
Mortgagor 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 Mortgage and any additional matters approved in
writing by Mortgagee; 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 Mortgage or
consented to in writing by Mortgagee, 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 Mortgagor shall and will warrant and forever defend the title to the
Premises against the claims of all persons whomsoever claiming by, through or
under Mortgagor. Mortgagor also represents and warrants that (i) Mortgagor is
now, and after giving effect to this Mortgage will be in, a solvent condition,
(ii) the execution and delivery of this Mortgage by Mortgagor 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 Mortgagor. Mortgagor hereby releases and waives all rights
under and by virtue of the Homestead Exemption Laws of the State of South
Carolina to the extent permitted by law;
3. Maintenance, Repair, Compliance with Law, Use, Etc. Mortgagor
shall (a) promptly repair, restore, replace or rebuild (pursuant to plans and
specifications approved by Mortgagee) 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 Mortgagee (which
consent may be granted or withheld in Mortgagee's sole discretion), Mortgagor
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 Mortgagee; (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), Mortgagor 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 Mortgage, 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 Mortgage and any liens and encumbrances
of Mortgagee pursuant to this Mortgage and the other Loan Documents.
(ii) Contest of Mechanic's Liens Claims. Notwithstanding the
foregoing prohibition against Mechanic's Liens, Mortgagor, or any party
obligated to Mortgagor 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 Mortgagor has been notified
of the filing of such Mechanic's Lien, Mortgagor shall have notified Mortgagee
in writing of Mortgagor's intention to contest such Mechanic's Lien or to
cause such other party to contest such Mechanic's Lien; and (iii) Mortgagor
either shall have obtained a title insurance endorsement over such Mechanic's
Liens insuring Mortgagee against loss or damage by reason of the existence of
such Mechanic's Liens or, at the option of Mortgagor, Mortgagor shall have
deposited or caused to be deposited with Mortgagee at such place as Mortgagee
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 Mortgagee 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 Mortgagee,
such increase is advisable. Such deposits are to be held without any
allowance of interest. If Mortgagor 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, Mortgagee 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, Mortgagor shall
forthwith, upon demand, deposit with Mortgagee 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, Mortgagee 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 Mortgagor is not then in Default, as hereafter
defined, under this Mortgage) when furnished with evidence satisfactory to
Mortgagee of the amount of payment to be made. Any surplus monies remaining
in the control of Mortgagee shall be paid to Mortgagor, provided Mortgagor is
not then in Default hereunder.
5. Taxes.
A. Payment. Mortgagor 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 Mortgagor, and Mortgagor shall furnish to Mortgagee
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. Mortgagor 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) Mortgagor has notified Mortgagee in writing of the
intention of Mortgagor 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) Mortgagor has deposited or caused to be deposited with
Mortgagee, at such place as Mortgagee may from time to time in writing
designate, a sum of money (or other security acceptable to Mortgagee) that,
when added to the monies or other security, if any, deposited with Mortgagee
pursuant to Paragraph 9 hereof, is sufficient, in Mortgagee'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 Mortgagee'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 Mortgagee's judgment, such increase is advisable.
If Mortgagor fails to prosecute such contest with due diligence or fails to
maintain sufficient funds or security on deposit as hereinabove provided,
Mortgagee may, at its option, within ten (10) days following Mortgagee's
written notice to Mortgagor (or such shorter period of time necessary in
Mortgagee'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 Mortgagee, 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, Mortgagor shall
forthwith, upon demand, either deposit with Mortgagee a sum that, when added
to such funds then on deposit, is sufficient to make such payment in full, or,
if Mortgagee has applied funds on deposit on account of such Taxes, restore
such deposit to an amount satisfactory to Mortgagee. Provided that Mortgagor
is not then in default hereunder, Mortgagee shall, if so requested in writing
by Mortgagor, after final disposition of such contest and upon Mortgagor's
delivery to Mortgagee 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 Mortgagor, unless Mortgagor has paid all such Taxes, together with all
penalties and interest thereon, and has provided Mortgagee with evidence
reasonably satisfactory to Mortgagee of such payment, in which event Mortgagee
shall return such money or security to Mortgagor. All money held by Mortgagee
pursuant to this Paragraph 5.B. shall be held without any allowance of
interest thereon.
C. Tax Services Contract. If Mortgagee elects, Mortgagor shall
maintain, at Mortgagor's expense while any portion of the Indebtedness Hereby
Secured is outstanding, a tax services contract issued by a tax reporting
agency approved by Mortgagee, it being agreed and understood that Mortgagee
shall not elect to maintain such tax service contract for so long as Mortgagor
provides satisfactory evidence to Mortgagee of Mortgagor's continuing efforts
to minimize or reduce taxes through proper and legal means. If Mortgagee does
not elect to maintain a tax service contract, Mortgagor shall reimburse
Mortgagee 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 Mortgagee,
Mortgagor or the Premises, any tax is imposed or becomes due in respect of the
issuance of the Note or the recording of this Mortgage, Mortgagor 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
Mortgagee the payment of the whole or any part of the taxes required to be
paid by Mortgagor, or changing in any way the laws relating to the taxation of
mortgages or debts secured by mortgages or the interest of Mortgagee in the
Premises, or the manner of collection of taxes, so as to affect this Mortgage,
the Indebtedness Hereby Secured or Mortgagee, then, and in any such event,
Mortgagor, upon demand by Mortgagee, shall pay such taxes, or reimburse
Mortgagee therefor on demand, unless Mortgagee determines, in Mortgagee's sole
and exclusive judgment, that such payment or reimbursement by Mortgagor is
unlawful; in which event the Indebtedness Hereby Secured shall be due and
payable within thirty (30) days after written demand by Mortgagee to
Mortgagor. Nothing in this Paragraph 6 shall require Mortgagor to pay any
income, franchise or excise tax imposed upon Mortgagee, excepting only such
which may be levied against the income of Mortgagee as a complete or partial
substitute for taxes required to be paid by Mortgagor pursuant hereto.
7. Insurance Coverage. Mortgagor will insure the Premises
against such perils and hazards, and in such amounts and with such limits, as
Mortgagee may from time to time require, and in any event will continuously
maintain the following described policies of insurance without cost to
Mortgagee (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 Five Million Three Hundred Eighty-Eight Thousand Three Hundred and Sixty
and 35/100 Dollars ($5,388,360.35) and 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 Mortgagee, and naming Mortgagee 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 Mortgagee, but in no
event shall such policy be in an amount less than twelve (12) months'
projected gross rental income from the Premises, with a 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 Mortgagee, and naming Mortgagee as an
additional insured;
(e) Steam boiler, machinery and pressurized vessel
insurance, with a 90% co-insurance as a minimum, and naming Mortgagee as an
additional insured;
(f) Earthquake insurance, with a 90% co-insurance as a
minimum if available, and if required by Mortgagee.
(g) If the Premises is located in a federal flood hazard
area other than Zone C or Zone X as described in the Department of Housing and
Urban Development, Federal Insurance Administration Special Flood Hazard Area
Maps, flood insurance with a 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 Mortgagee 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 South Carolina (or
Mortgagee 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 "The Travelers Insurance
Company, its affiliates, subsidiaries, successors and assigns, as their
interests may appear," 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 Mortgagee and shall provide that no claims shall be paid
thereunder without ten (10) days' advance written notice to Mortgagee. If a
blanket policy is issued, a certified copy of said policy shall be furnished,
together with a certificate indicating that Mortgagee is an additional insured
under such policy in the designated amount. Mortgagor will deliver all
Insurance Policies, premium prepaid for a period acceptable to Mortgagee and,
in case of Insurance Policies about to expire, Mortgagor 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 Mortgagor 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) Mortgagor shall deposit with Mortgagee 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 Mortgagee's estimate as to the
amount of Taxes and Premiums. Mortgagor shall promptly, upon the demand of
Mortgagee, make additional Tax and Insurance Deposits as Mortgagee may from
time to time require due to (i) failure of Mortgagee to require, or failure of
Mortgagor 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 Mortgagee without any allowance of
interest thereon.
(b) Mortgagee will, out of the Tax and Insurance Deposits,
upon the presentation to Mortgagee by Mortgagor of the bills therefor, pay the
Taxes and Premiums or will, upon the presentation of receipted bills therefor,
reimburse Mortgagor for such payments made by Mortgagor. 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 Mortgagor shall pay to Mortgagee
on demand the amount necessary to make up the deficiency.
(c) To the extent permitted under applicable law, upon a
Default under this Mortgage, Mortgagee 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 Mortgagee may elect.
When the Indebtedness Hereby Secured has been fully paid, any remaining Tax
and Insurance Deposits shall be paid to Mortgagor. All Tax and Insurance
Deposits are hereby pledged as additional security for the Indebtedness Hereby
Secured, and shall be held by Mortgagee irrevocably to be applied for the
purposes for which made as herein provided, and shall not be subject to the
direction or control of Mortgagor.
(d) Provided no Default has occurred under the Mortgage,
Mortgagee 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 Mortgage are for the benefit of
Mortgagor and Mortgagee alone. No provision of this Mortgage shall be
construed as creating in any party other than Mortgagor and Mortgagee, 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. Mortgagee
shall have no obligation or duty to any third party to collect Tax and
Insurance Deposits.
10. Proceeds of Insurance. Mortgagor will give Mortgagee
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, Mortgagee (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 Mortgagor or (ii) allow Mortgagor to settle and adjust such claim without
the consent of Mortgagee. In the case of loss or damage covered by any of the
Insurance Policies less than $25,000, Mortgagee hereby authorizes Mortgagor to
settle and adjust such claim without the consent of Mortgagee. In all cases
Mortgagee shall, and is hereby authorized to, collect and receipt for all
insurance proceeds; and the reasonable expenses incurred by Mortgagee in the
adjustment and collection of insurance proceeds, if any shall be so much
additional Indebtedness Hereby Secured, and shall be reimbursed to Mortgagee
upon demand or, in the event and to the extent sufficient proceeds are
available, shall be deducted by Mortgagee from said insurance proceeds prior
to any other application thereof. If Mortgagor has settled and adjusted a
claim under $25,000 covered by any of the Insurance Policies, Mortgagee shall
release such proceeds of insurance to Mortgagor within thirty (30) days of
receipt by Mortgagee of all information regarding such loss or damage
reasonably requested by Mortgagee and evidence satisfactory to Mortgagee that
such loss or damage has been restored, repaired, replaced or rebuilt in a
manner satisfactory to Mortgagee 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 Mortgagee alone, and not to Mortgagee
and Mortgagor jointly.
(b) Except as set forth below, Mortgagee 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 Mortgagor 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 Mortgagee 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) from the date of such application by Mortgagee.
(c) If insurance proceeds are made available to Mortgagor
as set forth in Paragraph 11 hereof, Mortgagor 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
Mortgagor 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, Mortgagor 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 Mortgagee will be satisfied after
the repair or restoration,
then Mortgagee, after first applying such insurance proceeds to the payment of
all expenses incurred by Mortgagee in obtaining such proceeds, agrees to apply
the balance of the insurance proceeds to reimburse Mortgagor 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 Mortgagee makes proceeds available for Restoring the
Premises, Mortgagor shall be obligated to use such proceeds solely for
restoring the Premises in accordance with this paragraph, unless Mortgagee
otherwise specifies in writing. Application by Mortgagee of any insurance
proceeds upon the Indebtedness Hereby Secured shall not excuse Mortgagor 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 Mortgagee of insurance proceeds
upon the Indebtedness Hereby Secured may be made in such order or manner as
Mortgagee 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 Mortgagor
for the Restoring of the Premises, Mortgagor hereby covenants to restore the
same in accordance with plans and specifications approved by Mortgagee, and
Mortgagor shall cause to be prepared and presented to Mortgagee a certified
construction statement, acceptable to Mortgagee, 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 Mortgagee,
before any disbursement is made by Mortgagee 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 Mortgagor or as
ordered by a court of competent jurisdiction;
(e) In the event of foreclosure of the Mortgage or other transfer
of title to the Premises in extinguishment of the Indebtedness Hereby Secured,
all right, title and interest of Mortgagor in and to any insurance policies
then in force shall pass to the purchaser or grantee, and Mortgagor hereby
appoints Mortgagee its attorney-in-fact, in Mortgagor'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 Mortgagor
not more than once during any calendar month as the Restoring of the Premises
progresses. The funds paid by Mortgagor to Mortgagee 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 Mortgagee, 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 Mortgagor 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 Mortgagee has received a title insurance endorsement
satisfactory to Mortgagee insuring against mechanic's liens which may arise
with respect to the disbursed Construction Funds;
(h) There shall be delivered to Mortgagee such other evidence as
Mortgagee 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 Mortgagee, at the sole expense of
Mortgagor, such other evidence as Mortgagee 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
Mortgage, are then still insured as a first lien on the Mortgage Premises;
(j) If such Construction Funds are at any time determined by
Mortgagee not to be adequate for completion of the Restoring work, Mortgagor
shall immediately pay any deficiency to Mortgagee to be held and disbursed as
Construction Funds and prior to any other funds then held by Mortgagee for
disbursement pursuant hereto;
(k) If Mortgagor 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, Mortgagee may, at its
option, immediately cease making any further payments to Mortgagor 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 Mortgage and the obligations hereunder. Construction Funds may be
disbursed by Mortgagee directly or through a third party escrow agent, such
as, but not limited to, a title insurance company, or its agent, as Mortgagee
may determine in its sole discretion. Any excess Construction Funds shall be
applied by Mortgagee against the Indebtedness Hereby Secured in such order or
manner as Mortgagee 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 Mortgagor to Mortgagee, which Awards Mortgagee is hereby authorized to
collect and receive from the condemnation authorities, and Mortgagee is hereby
authorized to give appropriate receipts and acquittances therefor. Mortgagor
shall give Mortgagee 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 Mortgagee copies of any and all papers
served in connection with any such proceedings. Mortgagor further agrees to
make, execute, and deliver to Mortgagee, 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 Mortgagee, provided such rights are expressly subordinate to the
rights of Mortgagee), any and all further assignments and other instruments
deemed reasonably necessary by Mortgagee for the purpose of validly and
sufficiently assigning all Awards and other compensation heretofore and
hereafter made to Mortgagor 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
Mortgagee, a viable apartment complex of the same character than the same was
prior to the taking, then, at the option of Mortgagee, 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, Mortgagee
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 Mortgage. In the event of any partial taking of parking
spaces at the Premises, which in the judgment of the Mortgagee 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
Mortgagor for the cost of building additional parking spaces in locations
approved by Mortgagee, 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 Mortgagee shall
elect.
13. Assignment of Leases and Rents. Mortgagor hereby absolutely
and presently sells, assigns and transfers unto Mortgagee (subject to the
license granted to Mortgagor 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, security deposits 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 Mortgagor or the agents of any Mortgagor or
which may be made or agreed to by Mortgagee 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 Mortgagee and
not merely the granting of a security interest. Notwithstanding the
foregoing, Mortgagee hereby grants to Mortgagor a license to collect and
retain the Rents. However, upon Default under the Note, this Mortgage or any
other of the Loan Documents entered into for the Indebtedness Hereby Secured,
the license to Mortgagor from Mortgagee shall thereupon terminate and
thereafter Mortgagee 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 Mortgagor's account and employ such agents and attorneys as may
be necessary with respect thereto. Likewise, upon such Default, Mortgagee
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 Mortgagee has an adequate remedy at law; and
upon any such Default, whether or not a receiver has been sought or appointed,
Mortgagee may collect all Rents, and apply the Rents so collected in their
entirety to the extent of the Indebtedness Secured Hereby, after deducting
Mortgagee'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. Mortgagor
hereby irrevocably appoints Mortgagee 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 Mortgagee 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 Mortgagee would have upon taking
possession pursuant to the provisions of Paragraph 20 hereof. Mortgagor
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 Mortgagor except as may be permitted in
the Assignment of Leases (as hereinafter defined). Mortgagor will not assign
any of the rents or profits of the Premises, except to Mortgagee or a
permitted purchaser or grantee of the Premises. Nothing herein contained
shall be construed as constituting Mortgagee a "mortgagee-in-possession" in
the absence of the taking of actual possession of the Premises by Mortgagee
pursuant to Paragraph 20 hereof. Possession by a court-appointed receiver
will not be considered possession by Mortgagee. In the exercise of the powers
herein granted Mortgagee, no liability shall be asserted or enforced against
Mortgagee, all such liability being expressly waived and released by
Mortgagor. Mortgagor further agrees to assign and transfer to Mortgagee all
future Leases upon all or any part of the Premises and to execute and deliver,
at the request of Mortgagee, all such further assurances and assignments in
the Premises as Mortgagee shall from time to time require. In the event
Mortgagee requires that Mortgagor execute and record a separate Assignment of
Rents or separate assignments of any of the Leases to Mortgagee, the terms and
provisions of those assignments shall control in the event of a conflict
between the terms of this Mortgage and the terms thereof. The remedies
provided herein are in addition to the remedies provided to Mortgagee under
any of the Loan Documents.
14. Observance of Lease Assignment. Mortgagor expressly
covenants and agrees that if any lessee under any of the Leases transferred,
sold or assigned to Mortgagee or if Mortgagor, 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 Mortgagor shall enter into any Leases other than
on a standard form previously approved by Mortgagee, 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 Mortgagee
or if Mortgagor 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 Mortgagor 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 Mortgagee's prior
written consent; or if Mortgagor 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 Mortgagee, and upon notice to
Mortgagor, the Indebtedness Secured Hereby shall become due and payable as in
the case of other Defaults.
15. Mortgagee's Performance of Mortgagor's Obligations. In case
of Default, Mortgagee, 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 Mortgagor (whether or not Mortgagor is personally liable therefor)
in any form and manner deemed expedient to Mortgagee. Upon any such payment
or performance of any such act, Mortgagee shall as soon as reasonably possible
provide notice thereof to Mortgagor but its failure to do so shall not affect
the rights of Mortgagee and the obligation of Mortgagor hereunder. Mortgagee
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 Mortgagee 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 Mortgagee
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
Mortgagee of its rights hereunder prevent any default from constituting a
Default. Mortgagee, 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 Mortgagee
may deem appropriate. Nothing contained herein shall be construed to require
Mortgagee to advance or expend monies for any purpose mentioned herein, or for
any other purpose.
16. Security Agreement. Mortgagee and Mortgagor agree that this
Mortgage shall constitute a Security Agreement within the meaning of the South
Carolina Uniform Commercial Code (hereinafter the "Code") with respect to
(i) any and all sums at any time on deposit for the benefit of Mortgagee or
held by Mortgagee (whether deposited by or on behalf of Mortgagor or anyone
else) pursuant to any of the provisions of the Mortgage and (ii) with respect
to any personal property included in the granting clauses of this Mortgage 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 Mortgagee, and the Collateral and
all of Mortgagor's right, title and interest therein are hereby assigned to
Mortgagee, all to secure payment of the Indebtedness Hereby Secured. All of
the terms, provisions, conditions and agreements contained in this Mortgage
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
Mortgage but shall be in addition thereto:
(a) Mortgagor (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 Mortgagee and no other party, and liens and
encumbrances, if any, expressly permitted by this Mortgage (including, without
limitation, those certain liens and encumbrances, if any, set forth on the
title insurance policy insuring the lien of this Mortgage) or otherwise
expressly consented to in writing by Mortgagee.
(b) The Collateral is to be used by Mortgagor 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 Mortgagee (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 Mortgagor, Mortgagee and holders of interests, if any, expressly permitted
hereby or otherwise expressly consented to in writing by Mortgagee.
(e) No Financing Statement (other than Financing Statements
showing Mortgagee as the sole secured party, or with respect to liens or
encumbrances, if any, expressly permitted by this Mortgage or otherwise
expressly consented to in writing by Mortgagee) covering any of the Collateral
or any proceeds thereof is on file in any Uniform Commercial Code or public
Land Records except pursuant hereto; and Mortgagor will at its own cost and
expense, upon demand, furnish to Mortgagee such further information and will
execute and deliver to Mortgagee such financing statements and other documents
in form satisfactory to Mortgagee and will do all such acts and things as
Mortgagee 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
Mortgagee and no other party and liens and encumbrances (if any) expressly
permitted by this Mortgage; and Mortgagor will pay the cost of filing or
recording such financing statements or other documents, and this instrument,
in any Uniform Commercial Code or public Land Records wherever filing or
recording is deemed by Mortgagee to be necessary or desirable.
(f) Upon Default hereunder, Mortgagee 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 Mortgagor 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 Mortgagee 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 Mortgagor's right of redemption in
satisfaction of Mortgagor's obligations, as provided in the Code. Mortgagee
may render the Collateral unusable without removal and may dispose of the
Collateral on the Premises. Mortgagee may require Mortgagor to assemble the
Collateral and make it available to Mortgagee for its possession at a place to
be designated by Mortgagee. Mortgagee will give Mortgagor 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 Mortgagor hereinafter set forth at least ten (10) days before the
time of the sale or disposition. Mortgagee 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,
Mortgagee 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 Mortgagee 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 Mortgagee, shall be applied
against the Indebtedness Hereby Secured in such order or manner as Mortgagee
shall select. Mortgagee will account to Mortgagor 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 Mortgage 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 Mortgagor (Debtor) and
Mortgagee (Secured Party) are hereinafter set forth. The addresses of
Mortgagor (Debtor) hereinafter set forth is the chief executive offices of
Mortgagor (Debtor) (i.e. the place where in fact the Debtor conducts the main
part of its business operations). This Mortgage is to be filed for record in
the RMC office for Charleston County, South Carolina.
(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 Mortgagor (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 Mortgagor,
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
Mortgagor or any lessor is or may become entitled to do under the Leases.
Notwithstanding the foregoing, it is expressly understood and agreed that
Mortgagee shall not exercise any of the rights or powers conferred upon it by
this paragraph until a Default shall exist under this Mortgage.
(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. Mortgagor shall not, without the
prior written consent of Mortgagee, 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 Mortgagee 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 Mortgagor or
a corporation which is a general partner in Mortgagor or a corporation which
is a general partner of a partnership which is the general partner of
Mortgagor, 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 Mortgagor or any
partnership which is the general partner of Mortgagor;
(d) 50% or more of the limited partnership interests or
capital stock, as applicable, in Mortgagor, any general partner of Mortgagor
or any general partner of the general partner of Mortgagor is transferred in
any one calendar year; or
(e) any general partner of Mortgagor or of Mortgagor'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 created
by the Subordinate Mortgage (the "Subordinate Mortgage") dated the date hereof
made by Mortgagor to Mortgagee in the principal amount of $3,679,026.14
securing that certain Amended and Restated Note made by Mortgagor to Mortgagee
in connection with a loan made with respect to the Copper Mill Apartments.
Mortgagor shall not create, effect, contract for, consent to or permit any
Prohibited Transfer unless otherwise agreed by Mortgagee.
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 operations 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., Mortgagor shall use reasonable efforts to notify
Mortgagee of such transfer prior to its occurrence. On the date of such
transfer, Mortgagor shall provide Mortgagee with notice of such transfer.
Mortgagor shall deliver to Mortgagee 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 Mortgagor
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 Mortgagor,
Mortgagee shall consent to the transfer of the Premises to an Affiliate of
Mortgagor provided that the Affiliate assumes all the obligations of Mortgagor
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 Mortgagee 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 Mortgagor, but shall not include Fox Realty Investors,
Fox Associates '84 or Fox Partners '85. The consent by Mortgagee to any
transfer under this paragraph shall not release Mortgagor 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 Mortgagee permitting a transaction otherwise
prohibited under this Paragraph 17 shall not constitute a consent to or waiver
of any right, remedy or power of Mortgagee 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 Mortgagor
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 Mortgagee unless the
appropriate service fees and legal fees are paid in advance and no such
consent shall be given unless Mortgagor agrees, in addition to any other
conditions to such consent imposed by Mortgagee, that immediately upon closing
of the subject sale or transfer, Mortgagor will provide Mortgagee 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 Mortgagee
executed by the transferee under oath.
In determining whether or not to make the loan secured hereby,
Mortgagee evaluated the background and experience of Mortgagor 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 Mortgagee's security for the Note. Mortgagor 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.
Mortgagor recognizes that Mortgagee 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
Mortgagor. Mortgagor 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 Mortgagee to take measures
and incur expenses to protect its security; (c) would detract from the value
of the Premises should Mortgagee come into possession thereof with the
intention of selling same; and (d) would impair Mortgagee's right to accept a
deed in lieu of foreclosure, as a foreclosure by Mortgagee would be necessary
to clear the title to the Premises. In accordance with the foregoing and for
the purposes of (i) protecting Mortgagee's security, both of repayment and of
value of the Premises; (ii) giving Mortgagee the full benefit of its bargain
and contract with Mortgagor; (iii) allowing Mortgagee to raise the interest
rate and collect assumption fees; and (iv) keeping the Premises free of
subordinate financing liens, Mortgagor 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) Mortgagor 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 Mortgagee and Mortgagor) and such
default continues past the fifth (5th) day after the same is due;
(b) Mortgagor 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 Mortgage, 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 Mortgagor 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,
Mortgagor 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 Mortgagee by Mortgagor 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 Mortgagor shall mean and include not only Mortgagor, but also
any general partner in Mortgagor, any owner of more than ten percent (10%) of
the stock in a corporate Mortgagor or corporate general partner of Mortgagor,
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) Mortgagor 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) Mortgagor 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
Mortgagor 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 Mortgagor'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) Mortgagor 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 Mortgagor or all or a major part of Mortgagor's property
or the Premises is not vacated within ninety (90) days following the
entry thereof;
(f) If a default, after passage of time or notice, as may
be required, shall occur under any other mortgage, whether subordinate or
superior to this Mortgage, now or hereafter encumbering the Premises or any
portion thereof including, but not limited to, the Subordinate Mortgage; or
(g) If a default, after passage of time or notice, as may
be required, shall occur under that certain Subordinate Deed of Trust (the
"Subordinate Deed of Trust") from Mortgagor to Raymond N. Beck and Virginia A.
Davis, as Trustees for Mortgagee dated as of the date hereof in the sum of
$5,388,360.35 encumbering property located in Henrico County, Virginia and
known as Copper Mill Apartments and recorded in the Clerk's Office of the
Circuit Court of Henrico County, Virginia;
then Mortgagee 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 Mortgagee 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 Mortgagor, and Mortgagee may immediately proceed to foreclose this
Mortgage and/or to exercise any right, power or remedy provided by this
Mortgage, 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,
Mortgagee shall have the right to foreclose the lien hereof in accordance with
the laws of the State of South Carolina and to exercise any other remedies of
Mortgagee provided in the Note, this Mortgage or any of the other Loan
Documents, or which Mortgagee 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 Mortgagee 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 Mortgagee
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 Mortgage, including the fees of any
attorney employed by Mortgagee in any litigation or proceedings affecting this
Mortgage, 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 Mortgagor, 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 Mortgage, Mortgagee has a right to
institute foreclosure proceedings, Mortgagor shall, forthwith upon demand of
Mortgagee, surrender to Mortgagee, and Mortgagee 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 Mortgagee, 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 Mortgagor, including those accounts which were set up
to hold any security deposits, or the then owner of the Premises relating
thereto, and may exclude Mortgagor, such owner, and any agents and servants
thereof wholly therefrom and may, on behalf of Mortgagor or such owner, or in
its own name as Mortgagee 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 Mortgagor;
(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
Mortgagor to cancel the same;
(3) elect to disaffirm any Lease or sublease of all or any
part of the Premises made subsequent to this Mortgage without Mortgagee'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 Mortgagor, 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 Mortgagee, to insure
and reinsure the Premises and all risks incidental to Mortgagee'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 Mortgagee shall select.
Nothing herein contained shall be construed as constituting
Mortgagee a mortgagee in possession in the absence of the actual taking of
possession of the Premises.
21. Receiver. Upon the occurrence of a Default, a court of
competent jurisdiction may appoint a receiver upon petition of Mortgagee, and
Mortgagee shall be entitled to the appointment of a receiver at Mortgagee's
sole option. Such appointment may be made either before or after sale,
without notice, without regard to the solvency or insolvency of Mortgagor 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 Mortgagee 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 Mortgagor, 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 Mortgagor 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
Mortgagor, 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 Mortgage, 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 Mortgagee shall
elect with interest thereon as herein provided; and Second, all principal and
interest remaining unpaid on the Note in such order as Mortgagee 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 Mortgage, 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, Mortgagee is hereby
authorized, without the consent of Mortgagor, 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 Mortgagee may deem advisable to
cause the interest of such purchaser to be protected by any of the Insurance
Polices without credit or allowance to Mortgagor for prepaid premiums thereon.
24. Waiver of Right of Redemption and Other Rights. To the full
extent permitted by law, Mortgagor 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, 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, Mortgagor 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
Mortgagor 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 Mortgage) of Mortgagor 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
Mortgage), Mortgagor 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
Mortgagee, 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, Mortgagor 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 Mortgagee 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 Mortgagee. 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 Mortgagee 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
Mortgagee by this Mortgage is not required to be given. If any provision of
this Mortgage shall grant to Mortgagee any rights or remedies upon default of
Mortgagor which are more limited than the rights that would otherwise be
vested in Mortgagee under applicable law in the absence of said provisions,
Mortgagee 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 Mortgage and each and every
covenant, agreement and other provision hereof shall be binding upon Mortgagor
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 Mortgagee and its
successors and assigns. Wherever herein Mortgagee 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 Mortgagee.
(b) Covenants Run With Land; Successor Owners. All of the
covenants of this Mortgage 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 Mortgagor, Mortgagee
may, without notice to Mortgagor, deal with such successor or successors in
interest of Mortgagor with reference to this Mortgage and the Indebtedness
Hereby Secured in the same manner as with Mortgagor without in any way
releasing or discharging Mortgagor from its obligations hereunder. Mortgagor
will give immediate written notice to Mortgagee 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 Mortgage and the Note shall take the same free and clear of all offsets,
counterclaims or defenses of any nature whatsoever which Mortgagor may have
against any assignor of this Mortgage and the Note, and no such offset,
counterclaim or defense shall be interposed or asserted by Mortgagor in any
action or proceeding brought by any such assignee upon this Mortgage 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
Mortgagor.
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 Mortgagee, 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 Mortgagee to amend, modify,
extend or release the Note, this Mortgage, 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 Mortgage losing its priority over the rights of
any such junior lien except as otherwise expressly provided in a separate
Subordination Agreement by and between Mortgagee and the holder of such junior
lien.
28. Execution of Separate Security Agreements, Financing
Statements, Etc.; Estoppel Letter. Mortgagor 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 Mortgagee shall reasonably require for the better
assuring, conveying, mortgaging, assigning and confirming unto Mortgagee all
property mortgaged hereby or property intended so to be, whether now owned by
Mortgagor or hereafter acquired. Without limitation of the foregoing,
Mortgagor will assign to Mortgagee, 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 Mortgagee, but no such assignment shall
be construed as a consent by Mortgagee to any agreement, contract, license or
permit or to impose upon Mortgagee any obligations with respect thereto. From
time to time, Mortgagor will furnish within five (5) business days after
Mortgagee'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, Mortgagee 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 Mortgagee, this
Mortgage 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 Mortgagee 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 Mortgage and the location of the Premises being the State of
South Carolina, this Mortgage shall be construed and enforced according to the
laws of the State of South Carolina, without reference to the conflicts of law
principles of that state. MORTGAGOR AGREES TO SUBMIT TO PERSONAL JURISDICTION
IN THE STATE OF SOUTH CAROLINA IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS
MORTGAGE AND IN FURTHERANCE OF SUCH AGREEMENT, MORTGAGOR HEREBY AGREES AND
CONSENTS THAT WITHOUT LIMITING OTHER METHODS OF OBTAINING JURISDICTION,
PERSONAL JURISDICTION OVER THE MORTGAGOR IN ANY SUCH ACTION OR PROCEEDING MAY
BE OBTAINED WITHIN OR WITHOUT THE JURISDICTION OF ANY COURT LOCATED IN SOUTH
CAROLINA AND THAT ANY PROCESS OR NOTICE OF MOTION OR THE APPLICATION TO ANY
SUCH COURT IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING MAY BE SERVED UPON
MORTGAGOR BY REGISTERED OR CERTIFIED MAIL TO OR BY PERSONAL SERVICE AT THE
LAST KNOWN ADDRESS OF MORTGAGOR, WHETHER SUCH ADDRESS BE WITHIN OR WITHOUT THE
JURISDICTION OF ANY SUCH COURT.
32. Inspection of Premises and Records. Mortgagee 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. Mortgagor
shall keep and maintain full and correct books and records showing in detail
the income and expenses of the Premises, and shall permit Mortgagee 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 the address hereinafter identified or
at such other location as may be mutually agreed upon.
33. Financial Statements. Mortgagor shall, within forty-five
(45) days after the close of each calendar year, furnish Mortgagee 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
Mortgagee. Each annual statement shall be certified by a general partner of
Mortgagor and will be on an income tax basis in accordance with sound
accounting practices consistently applied or, at Mortgagor'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. Mortgagee shall have the right, upon prior notice to Mortgagor, to
inspect and make copies of Mortgagor'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), Mortgagor shall furnish Mortgagee
with an annual financial statement of Mortgagor accompanied by an opinion of
an independent certified public accountant stating that such annual statement
presents fairly the financial condition of Mortgagor 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 Mortgagee or shall be accompanied by a
written acknowledgement from the accountants preparing such statements that
Mortgagee shall have whatever rights it would have if it were named as an
addressee of such statements. Mortgagor shall provide to Mortgagee such other
information as Mortgagee shall from time to time request relating to the
financial condition of Mortgagor or the operation of the Premises.
34. Time of the Essence. Time is of the essence of the Note,
this Mortgage, and any other Loan Documents.
35. Captions and Pronouns. The captions and headings of the
various sections of this Mortgage 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 Mortgagee:
The Travelers Insurance Company
c/o Travelers Realty Investment Company
461 Fifth Avenue
New York, New York 10017
Attn: Loan No. 502191
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. 502191
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 Mortgagor:
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 Mortgagee by this Mortgage 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. Mortgagor hereby represents
and warrants to Mortgagee that to the best of Mortgagor'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. Mortgagor
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 Mortgagor, Mortgagee or the Premises of any liability or
lien of any nature whatsoever under any Environmental Requirement. Mortgagor
shall notify Mortgagee 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 Mortgagee copies of any notices received
by Mortgagor relating to alleged violations of any Environmental Requirement
and will promptly pay when due any fine or assessment against Mortgagee,
Mortgagor 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, Mortgagor shall,
subject to Mortgagor's right to contest set forth below within thirty (30)
days after receipt of notice thereof from any Governmental Authority or from
Mortgagee, 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, Mortgagor 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. Mortgagor 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) Mortgagor has notified Mortgagee in writing of the intention of
Mortgagor to contest the same or to cause the same to be contested, and
iii) Mortgagor has deposited or caused to be deposited with Mortgagee in a
non-interest bearing account, at such place as Mortgagee may from time to time
in writing designate, a sum of money (or other security acceptable to
Mortgagee) that, in Mortgagee'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 Mortgagee'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 Mortgagee's judgment,
such increase is advisable. If Mortgagor fails to timely take, or to
diligently and expeditiously proceed to complete in a timely fashion, any such
action, Mortgagee, 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
Mortgagee (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 Mortgagor and shall bear
interest at the Default Rate (as hereinafter defined) from the date any such
sums are so advanced or paid by Mortgagee until the date any such sums are
repaid by Mortgagor to Mortgagee. Mortgagor will execute and deliver,
promptly upon request, such instruments as Mortgagee may deem useful or
necessary to permit Mortgagee to take any such action, and such additional
notes and mortgages, as Mortgagee may require to secure all sums so advanced
or paid by Mortgagee. 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 Mortgagor or for which Mortgagor 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
Mortgagor will, within thirty (30) days from the date that Mortgagor 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 Mortgagee 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 Mortgagee and is sufficient to effect a
complete discharge of such lien on the Premises. Mortgagee may, at its
option, at intervals of not less than one year, or more frequently if
Mortgagee 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 Mortgagor's compliance with the provisions of this
paragraph, and Mortgagor shall cooperate in all reasonable ways with Mortgagee
in connection with any such audit. If such audit discloses that a violation
of an Environmental Requirement exists, Mortgagor 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 Mortgagee. If this Mortgage is
foreclosed, or if the Premises is sold pursuant to the provisions of this
Mortgage, or if Mortgagor tenders a deed or assignment in lieu of foreclosure
or sale, Mortgagor shall deliver the Premises to the purchaser at foreclosure
or sale or to Mortgagee, its nominee, or wholly owned subsidiary, as the case
may be, in a condition that complies in all respects with all Environmental
Requirements. Mortgagor will defend, indemnify, and hold harmless Mortgagee,
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 Mortgagor 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 Mortgagor 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 Mortgage, sale of the
Premises pursuant to the provisions of this Mortgage or acceptance by
Mortgagee, 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. Mortgagee Not A Joint Venturer. Any provision hereof to the
contrary notwithstanding, Mortgagee, by virtue of its acceptance of this
Mortgage and the making of the loan secured hereby or any action taken
pursuant hereto or contemplated hereby or by virtue of an affiliate of
Mortgagee having an ownership interest in Mortgagor, shall not be deemed to be
by such action or ownership a partner or joint venturer with Mortgagor or any
guarantor or any other parties. Mortgagor shall indemnify Mortgagee against,
shall hold Mortgagee harmless from, and shall reimburse Mortgagee for, any and
all claims, demands, judgments, penalties, fines, liabilities, costs, damages
and expenses, including court costs and attorneys' fees incurred by Mortgagee
(prior to trial, at trial and on appeal) in any action against or involving
Mortgagee 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 Mortgagee or any of its agents, architects or
consultants is intended solely for the benefit of Mortgagee and shall not be
deemed to create or form the basis of any warranty, representation, covenant,
implied promise or liability to Mortgagor or any of its employees or agents,
any guest or invitee upon the Premises, or any other person.
39. Expenses. Mortgagor 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
Mortgagee and excluding fees and expenses of in-house counsel for Mortgagee),
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. Mortgagee 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 Mortgagee. Any consent by Mortgagee in
any single instance shall not be deemed or construed to be Mortgagee's consent
in any like matter arising at a subsequent date and the failure of Mortgagee
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 Mortgagee be estopped from exercising such right, power,
remedy, consent or approval at a later date. Any consent or approval
requested of and granted by Mortgagee pursuant hereto shall be narrowly
construed to be applicable only to Mortgagor 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
Mortgagee a venturer or partner with Mortgagor nor shall privity of contract
be presumed to have been established with any such third party. If Mortgagee
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, Mortgagor shall reimburse Mortgagee for all costs incurred in
connection with the employment of such persons, firms or corporations.
41. Sole Discretion of Mortgagee. Except as may otherwise be
expressly provided to the contrary, wherever pursuant to the Note, this
Mortgage, or any other document or instrument now or hereafter executed and
delivered in connection therewith or otherwise with respect to the loan
secured hereby, Mortgagee 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 Mortgagee, the decision of Mortgagee 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 Mortgagee and shall be final and conclusive.
42. No Oral Change. This Mortgage may only be modified, amended
or changed by an agreement in writing signed by Mortgagor and Mortgagee, and
may only be released, discharged or satisfied of record by an agreement in
writing signed by Mortgagee. No waiver of any term, covenant or provision of
this Mortgage shall be effective unless given in writing by Mortgagee and if
so given by Mortgagee shall only be effective in the specific instance in
which given. Mortgagor acknowledges that the Note, this Mortgage 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 Mortgagor and Mortgagee 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 Mortgage and such other executed
and delivered documents and instruments.
43. Absolute and Unconditional Obligation. Mortgagor
acknowledges that Mortgagor's obligation to pay the Indebtedness Hereby
Secured in accordance with the provision of the Note and this Mortgage 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 Mortgage or the obligation of
Mortgagor thereunder to pay the Indebtedness Hereby Secured or the obligations
of any other person relating to the Note or this Mortgage or the obligations
of Mortgagor under the Note or this Mortgage or otherwise with respect to the
loan secured hereby, and Mortgagor 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
Mortgagor to pay the Indebtedness Hereby Secured in accordance with the
provisions of the Note and this Mortgage or the obligations of any other
person relating to the Note or this Mortgage or obligations of Mortgagor under
the Note or this Mortgage or otherwise with respect to the loan secured hereby
in any action or proceeding brought by Mortgagee 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 Mortgage 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
Mortgagor from asserting any legal claim of Mortgagor based on the Note, this
Mortgage or the other Loan Documents in a separate subsequent legal proceeding.
44. ERISA. Mortgagor covenants and agrees that during the term
of the loan secured hereby, unless Mortgagee 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
Mortgagee its written assumption of the obligations of this covenant.
Mortgagor further covenants and agrees to protect, defend, indemnify and hold
Mortgagee 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 Mortgagee may incur as a result of Mortgagor's breach of this covenant.
This indemnity shall survive the extinguishment of the lien of the Mortgage by
foreclosure or action in lieu thereof, and this covenant shall survive such
extinguishment; furthermore, the foregoing indemnity shall supersede any
limitations on Mortgagor's liability under the Note, the Mortgage, or any of
the other Loan Documents.
45. Limited Personal Liability. Without in any manner releasing,
impairing or otherwise affecting the Note, this Mortgage or any other Loan
Documents or the validity thereof or hereof or the lien thereof, there is no
personal liability of Mortgagor or any corporation, partnership or individual
having a direct or indirect ownership interest in Mortgagor, 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 Mortgagor or any corporation, partnership or individual having a
direct or indirect ownership interest in Mortgagor, or any of their respective
successors or assigns; provided, however, that a judgment may be sought
against Mortgagor or any corporation, partnership or individual having a
direct or indirect ownership interest in Mortgagor or their respective
successors or assigns to the extent necessary to enforce the rights of
Mortgagee in, to, or against the Premises. Notwithstanding any of the
foregoing, nothing contained in this Paragraph shall be deemed to prejudice
the rights of Mortgagee to recover from Mortgagor, Fox Partners IV, 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 Mortgagee as a result of any material fraud or any material
misrepresentation by any of the Responsible Entities or the Manager, (2) all
loss, damage, cost and expense (including reasonable attorneys' fees and
disbursements) incurred by Mortgagee as a result of breach of Mortgagor's
warranties, representations and covenants contained in Paragraph 5,
Paragraph 9, Paragraph 17, Paragraph 37, Paragraph 44 or Paragraph 48 of this
Mortgage, (3) all loss, damage, cost and expense (including reasonable
attorneys' fees and disbursements) incurred by Mortgagee as a result of
intentional or negligent waste (whether financial or physical) of the Premises
including, without limitation, failure by Mortgagor to pay on or prior to the
due date thereof all real estate taxes and assessments levied against the
Premises, subject to Mortgagor's right to contest the same as set forth in
paragraph 5.B. of this Mortgage, it being agreed and understood that
Mortgagor'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 Mortgagee 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 Mortgagee
as a result of the failure by Mortgagor to maintain the insurance coverage
required in Paragraph 7 of this Mortgage, (7) all or any portion of the
upfront fees, commitment fees and other costs and expenses incurred by
Mortgagee in connection with the closing of this transaction and required to
be paid by Mortgagor and not promptly reimbursed by Mortgagor, or (8) all
loss, damage, cost and expense (including reasonable attorneys' fees and
disbursements) incurred of Mortgagee under the Hazardous Material Guaranty and
Indemnification Agreement dated the date hereof from the Responsible Entities
and the Manager. The Responsible Entities agree to pay to Mortgagee all
amounts described in clauses (1) through (8) above on demand by Mortgagee 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 Mortgagee to recover from the Manager all loss, damage, cost and
expense (including reasonable attorneys' fees and disbursements) incurred by
Mortgagee under that certain Manager's Liability Letter dated the date hereof
from the Manager to Mortgagee.
46. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY LAW,
MORTGAGOR WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT TO FORECLOSE
THIS MORTGAGE.
47. Anti-Forfeiture. Mortgagor represents and warrants to
Mortgagee that there has not been committed by Mortgagor 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 Mortgagor's obligations under the Note or under
any of the other Loan Documents. Mortgagor hereby covenants and agrees not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture. In furtherance thereof, Mortgagor hereby indemnifies Mortgagee
and agrees to defend and hold Mortgagee 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 Mortgagor 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 Mortgagor's
obligations under the Loan Documents is a potential result, shall, at the
election of Mortgagee, constitute a Default hereunder without notice or
opportunity to cure.
48. Usury Laws. (a) This Mortgage and the Note are subject to
the express condition that at no time shall Mortgagor 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 Mortgagor is
permitted by law to contract or agree to pay. If by the terms of this
Mortgage or the Note, Mortgagor is at any time required or obligated to pay
interest on the principal balance due under the Note at a rate in excess of
such maximum rate, the rate of interest under the Note shall be deemed to be
immediately reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in excess of
such maximum rate shall be applied and shall be deemed to have been payments
in reduction of the principal balance of the Note.
(b) Mortgagor warrants that the extension of credit evidenced by
the Note and secured hereby is solely for business or commercial purposes and
not for personal, family, household or agricultural purposes under the South
Carolina Consumer Protection Act.
49. Related Party Contracts. All agreements, contracts or other
arrangements, whether written or oral, between Mortgagor and a Related Party,
as hereinafter defined, shall be fully disclosed to Mortgagee, shall be
required to be consented to by 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.
50. Final Agreement. THIS MORTGAGE REPRESENTS THE FINAL
AGREEMENT BETWEEN MORTGAGOR AND MORTGAGEE AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF MORTGAGOR
AND MORTGAGEE. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN MORTGAGOR AND
MORTGAGEE.
51. Release. Mortgagor hereby releases and forever discharges
Mortgagee, 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 Mortgagor may now have or claim to have against Mortgagee, 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 Mortgagor is contractual, and not a mere recital.
IN WITNESS WHEREOF, Mortgagor has have executed and delivered this
Mortgage as of the day and year first above written.
Mortgagor:
CENTURY PROPERTIES GROWTH FUND XXII,
a California limited partnership
By: FOX PARTNERS IV,
a California general partnership,
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION,
a California corporation,
its Managing General Partner
By:
Name:
Title:
[CORPORATE SEAL]
WITNESSES:
_____________________
_____________________
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
PERSONALLY appeared before me ______________________, who, being
by me duly sworn, says that (s)he saw the , the
of FOX CAPITAL MANAGEMENT CORPORATION, a California corporation,
managing general partner of FOX PARTNERS IV, a California general partnership,
the sole general partner of CENTURY PROPERTIES GROWTH FUND XXII, a California
limited partnership, sign, seal and as his act and deed, deliver the foregoing
instrument and that (s)he with ____________________ witnessed the execution
and delivery thereof.
--------------------
--------------------
Witnesses
SWORN to before me, this ____ day of September, A.D. 1994
_____________________________(SEAL)
Notary Public of New York
My Commission Expires: _____________________
[NOTARIAL SEAL]
Exhibit A
[Cooper's Pointe Legal Description]
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 Mortgage 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 Mortgage 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
Mortgage;
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.
