SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K / A
AMENDMENT NO. 1
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: June 28, 1996
(Date of Earliest Event Reported)
Commission File No. 0-13693
VININGS INVESTMENT PROPERTIES TRUST
A MASSACHUSETTS BUSINESS TRUST
I.R.S. EMPLOYER IDENTIFICATION NO. 13-6850434
3111 PACES MILL ROAD
ATLANTA, GEORGIA 30339
TELEPHONE: (770) 984-9500
<PAGE>
Item 7. Financial Statements and Exhibits
- ------------------------------------------
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
The financial statements required by Item 7(a) relating to the
acquisition of The Thicket Apartments are attached hereto as Exhibit 99.1
and incorporated herein by this reference.
(b) PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma financial information required by Item 7(b) relating
to the acquisition of The Thicket Apartments is attached hereto as Exhibit
99.2 and incorporated herein by this reference.
(c) EXHIBITS
Exhibit
No. Description
- ----------- ----------------------------------------------------------------
99.1 Statements of Excess Revenues Over Specific Operating Expenses for
The Thicket Apartments for the Period from January 1, 1996 to June
28, 1996 and the year ended December 31, 1995.
99.2 Unaudited Pro Forma Consolidated Statements of Operations for the
six and twelve month periods ended June 30, 1996 and December 31,
1995.
10.1 Commercial Credit Agreement between Hardwick Bank and Trust
Company and the Trustees of the Vinings Investment Properties
Trust.
10.2 Deed to Secure Debt and Security Agreement
10.3 Promissory Note
10.4 Agreement for Purchase and Sale, dated March 27, 1996
(excluding exhibits) *
* Incorporated by reference to the Registrant's current report on Form 8-K filed
with the Securities and Exchange Commission on July 2, 1996.
<PAGE>
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 hereunto duly authorized.
VININGS INVESTMENT PROPERTIES TRUST
Date: September 10, 1996 By: /s/ Stephanie A. Reed
---------------------
Stephanie A. Reed
Vice President and Treasurer
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Description
- ----------- ----------------------------------------------------------------
99.1 Statements of Excess Revenues Over Specific Operating Expenses
for The Thicket Apartments for the Period from January 1, 1996
to June 28, 1996 and the year ended December 31, 1995.
99.2 Unaudited Pro Forma Consolidated Statements of Operations for
the six and twelve month periods ended June 30, 1996 and December
31, 1995.
10.1 Commercial Credit Agreement between Hardwick Bank and Trust
Company and the Trustees of the Vinings Investment Properties
Trust.
10.2 Deed to Secure Debt and Security Agreement
10.3 Promissory Note
10.4 Agreement for Purchase and Sale, dated March 27, 1996
(excluding exhibits) *
* Incorporated by reference to the Registrant's current report on Form 8-K filed
with the Securities and Exchange Commission on July 2, 1996.
THE THICKET APARTMENTS
STATEMENTS OF EXCESS REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE PERIOD FROM JANUARY 1, 1996
TO JUNE 28, 1996 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 1995
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Trustees and Shareholders of
Vinings Investment Properties Trust:
We have audited the accompanying statement of excess revenues over specific
operating expenses for The Thicket Apartments for the year ended December 31,
1995. This financial statement is the responsibility of management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of excess revenues over specific operating
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
excess revenues over specific operating expenses. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of The Thicket
Apartments after acquisition by the Trust. The accompanying statement of excess
revenues over specific operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of The Thicket
Apartments' revenues and expenses.
In our opinion, the statement of excess revenues over specific operating
expenses presents fairly, in all material respects, the excess of revenues over
specific operating expenses (exclusive of expenses described in Note 2) of The
Thicket Apartments for the year ended December 31, 1995 in conformity with
generally accepted accounting principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
August 16, 1996
<PAGE>
<TABLE>
THE THICKET APARTMENTS
STATEMENTS OF EXCESS REVENUES
OVER SPECIFIC OPERATING
EXPENSES
<CAPTION>
For The Period
From
January 1, 1996 Year Ended
to June 28, 1996 December 31,
(UNAUDITED) 1995
----------- ----
<S> <C> <C>
Revenues:
Rental revenues (Note 1) $ 852,397 $1,621,037
Other property revenues 24,213 53,201
-------------------- ---------------------
Total property revenues 876,610 1,674,238
Specific Operating Expenses (Note 2):
Property operating and maintenance 400,304 768,905
--------------------
- ---------------------------------
Excess of Revenues Over Specific
Operating Expenses $ 476,306 $ 905,333
==================== =====================
<FN>
The accompanying notes are an integral part of these statements.
</FN>
</TABLE>
<PAGE>
THE THICKET APARTMENTS
NOTES TO STATEMENTS OF EXCESS REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE PERIOD FROM JANUARY 1, 1996 TO
JUNE 28, 1996 (UNAUDITED) AND
THE YEAR ENDED DECEMBER 31, 1995
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
- -- ------------------------------------------------
Description of Real Estate Property Acquired
On June 28, 1996, Vinings Investment Properties Trust and Subsidiaries (the
"Trust") through Thicket Apartments L.P., a Delaware limited partnership
and indirect wholly owned subsidiary of the Trust acquired The Thicket
Apartments, a 254-unit apartment complex located in DeKalb County, Georgia,
for a cash purchase price of $8,650,000. The occupancy rate of the 254
apartment homes was approximately 97% as of June 28, 1996.
The acquisition was financed primarily by a mortgage loan on the acquired
property of approximately $7.4 million with the remainder financed through
borrowings under the Trust's line of credit.
RENTAL REVENUES
Rents from leases are accounted for ratably over the term of each lease,
which is generally for a period of 12 months or less.
2. BASIS OF ACCOUNTING
- -- -------------------
The accompanying statements of excess revenues over specific operating
expenses are presented on the accrual basis. These statements have been
prepared in accordance with the applicable rules and regulations of the
Securities and Exchange Commission for real estate properties acquired.
Accordingly, the statements exclude certain historical expenses not
comparable to the operations of The Thicket Apartments after acquisition by
the Trust, such as depreciation and interest.
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
The unaudited consolidated statements of operations are presented as if the
Trust acquired The Thicket Apartments as of the beginning of each period
presented. In management's opinion, all adjustments necessary to present fairly
the effects of the acquisition of The Thicket Apartments have been made.
The unaudited pro forma statements of operations are not necessarily indicative
of what the actual results of operations of the Company would have been assuming
the Trust had acquired the apartment community as of the beginning of each
period presented, nor do they purport to represent the results of operations for
future periods.
The assets and liabilities associated with the acquisition of The Thicket
Apartments, on June 28, 1996, are incorporated in the financial statements on
Form 10-Q for the period ended June 30, 1996 as filed with the Securities and
Exchange Commission. Therefore, a pro forma balance sheet is not presented.
<PAGE>
<TABLE>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
<CAPTION>
THE ADDITIONAL
COMPANY THICKET PRO FORMA COMPANY
HISTORICAL APARTMENTS ADJUSTMENTS PRO FORMA
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
REVENUES
Rental revenue $329,622 $852,397 (A) $1,182,019
Other property revenues 0 24,213 (A) 24,213
-------------- --------------- --------------
Total property revenues 329,622 876,610 1,206,232
Miscellaneous income 141,229 141,229
Interest income 91,903 91,903
-------------- --------------- --------------
233,132 233,132
-------------- --------------- --------------
Total revenues 562,754 876,610 1,439,364
-------------- --------------- --------------
EXPENSES
Investment advisor's fees 333,461 333,461
Trustees' fees and expenses 43,294 43,294
Professional fees 378,690 378,690
Other operating expenses 165,656 165,656
Property operating and maintenance 108,973 400,304 (A) 509,277
Depreciation and amortization 40,900 181,059 (B) 221,959
Interest expense 0 398,347 (C) 398,347
-------------- --------------- ---------------- --------------
Total expenses 1,070,974 400,304 579,406 2,050,684
-------------- --------------- ---------------- --------------
Income (loss) before loss on sale
of real estate investments (508,220) 476,306 (579,406) (611,320)
Loss on sale of real estate investments (26,800) (26,800)
-------------- --------------
Net income (loss) ($535,020) $476,306 ($579,406) ($638,120)
============== =============== ================ ==============
Weighted average number of
shares outstanding 8,645,000 8,645,000
============== ==============
PER SHARE INFORMATION:
Net loss ($0.06) ($0.07)
============== ==============
<FN>
The accompanying notes are an integral part of these statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995 (Unaudited)
<CAPTION>
THE ADDITIONAL
COMPANY THICKET PRO FORMA COMPANY
HISTORICAL APARTMENTS ADJUSTMENTS PRO FORMA
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
REVENUES
Rental revenue $600,454 $1,621,037 (A) $2,221,491
Other property revenues 0 53,201 (A) 53,201
-------------- ---------------- --------------
Total property revenues 600,454 1,674,238 2,274,692
-------------- ---------------- --------------
Loan commitment fees 22,447 22,447
Interest Income 891,499 891,499
Income from partnership 1,730,508 1,730,508
-------------- ---------------- --------------
2,644,454 2,644,454
-------------- ---------------- --------------
Total revenues 3,244,908 1,674,238 4,919,146
-------------- ---------------- --------------
EXPENSES
Investment advisor's fees 361,568 361,568
Trustees fees and expenses 70,246 70,246
Professional fees 428,166 428,166
Other operating expenses 267,934 267,934
Property operating and maintenance 290,548 768,905 (A) 1,059,453
Depreciation and amortization 361,013 362,117 (B) 723,130
Interest expense 0 795,567 (C) 795,567
-------------- ---------------- ---------------- --------------
Total expenses 1,779,475 768,905 1,157,684 3,706,064
-------------- ---------------- ---------------- --------------
Income before gain (loss) on sale
of real estate investments 1,465,433 905,333 (1,157,684) 1,213,082
-------------- ---------------- ---------------- --------------
GAIN (LOSS) ON REAL ESTATE INVESTMENTS
Gain on sale of real estate investments 1,853,148 1,853,148
Loss on sale of real estate investments (198,035) (198,035)
Allowance to reduce mortgage receivable
to fair value (2,542,000) (2,542,000)
-------------- --------------
(886,887) (886,887)
-------------- --------------
Net income (loss) $578,546 $905,333 ($1,157,684) $326,195
============== ================ ================ ==============
Weighted average number of
shares outstanding 8,645,000 8,645,000
============== ==============
PER SHARE INFORMATION:
Income before gain (loss) on real
estate investments $0.17 $0.14
Gain (loss) on sale of real estate
investments (0.10) (0.10)
-------------- --------------
Net income $0.07 $0.04
============== ==============
<FN>
The accompanying notes are an integral part of these statements.
</FN>
</TABLE>
<PAGE>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF OPERATIONS
(A) Represents the pro forma adjustments necessary to reflect a full period
of rental revenues, other property revenues and property operating and
maintenance expenses for The Thicket Apartments for the six and twelve month
periods ended June 30, 1996 and December 31, 1995, respectively.
(B) Represents the pro forma adjustments necessary to reflect a full period
of depreciation expense for the six and twelve month periods ended June 30,
1996, and December 31, 1995, respectively, based on the costs associated with
the acquisition of The Thicket Apartments. Additionally, represents adjustments
to reflect a full period of amortization of loan costs associated with the
acquisition of the property and are reflected for the six and twelve month
periods ended June 30, 1996, and December 31, 1995, respectively.
(C) Reflects increased interest expense associated with borrowings utilized
to acquire The Thicket Apartments. Borrowings include $7.3 million of mortgage
debt at a fixed rate of 9.04% and additional borrowings under the Trust's line
of credit of approximately $1.5 million at a weighted average interest rate of
8.25%. If interest rates under the line of credit fluctuated .125%, interest
costs on the pro forma line of credit debt would increase or decrease by
approximately $1,976 on an annualized basis.
PREPARED BY AND UPON
RECORDATION RETURN TO:
R. Russell Berry, Esq.
Womble Carlyle Sandridge & Rice, PLLC
1275 Peachtree Street, N.E., Suite 700
Atlanta, Georgia 30339
______________________________
DEED TO SECURE DEBT AND
SECURITY AGREEMENT
______________________________
by and between
THICKET APARTMENTS, L.P., as mortgagor
(Borrower)
to
UNIVEST MORTGAGE CAPITAL, LLC, as mortgagee
(Lender)
Dated: June 27, 1996
Location: Thicket Apartments
5816 Covington Highway
Decatur, DeKalb County, Georgia 30035
THE NAMES OF THE DEBTOR AND THE SECURED PARTY, THE MAILING ADDRESS OF THE
SECURED PARTY FROM WHICH INFORMATION CONCERNING THE SECURITY INTEREST MAY BE
OBTAINED, THE MAILING ADDRESS OF THE DEBTOR AND A STATEMENT INDICATING THE
TYPES, OR DESCRIBING THE ITEMS, OF COLLATERAL, ARE AS DESCRIBED IN SECTION 1.1
HEREOF IN COMPLIANCE WITH THE REQUIREMENTS OF ARTICLE 9, SECTION 402 OF THE
UNIFORM COMMERCIAL CODE, TITLE 11 OF THE CODE OF GEORGIA.
THIS DEED TO SECURE DEBT AND SECURITY AGREEMENT (the "Security Instrument")
made as of the 27th day of June, 1996, by THICKET APARTMENTS, L.P., a Delaware
limited partnership having its principal place of business at 3111 Paces Mill
Road, Suite A-200, Atlanta, Georgia 30339 ("Borrower") to UNIVEST MORTGAGE
CAPITAL, LLC, a Georgia limited liability company having its principal place of
business at Six Concourse Parkway, Suite 1400, Atlanta, Georgia 30328-5346
("Lender").
WITNESSETH:
To secure the payment of an indebtedness in the principal sum of SEVEN
MILLION THREE HUNDRED NINETY-TWO THOUSAND AND NO/100 DOLLARS ($7,392,000.00),
lawful money of the United States of America, to be paid with interest according
to a certain Promissory Note dated the date hereof made by Borrower to Lender
with a maturity date of July 1, 2003 (the note, together with all extensions,
renewals or modifications thereof, being hereinafter collectively called the
"Note") (said indebtedness, interest and all other sums due hereunder and under
the Note or the Other Security Documents, as hereinafter defined, being
collectively called the "Debt"), Borrower, for and in consideration of the sum
of Ten ($10.00) Dollars and other valuable consideration in hand paid, the
receipt of which hereby is acknowledged, and the further consideration, uses,
purposes and trusts herein set forth and declared, has granted, bargained, sold,
transferred, assigned, set- over and conveyed and by these presents does hereby
grant, bargain, sell, mortgage, convey, assign, transfer, pledge and set over
unto Lender and unto his successors in the trust hereby created and his assigns,
forever, all of Borrower's right, title and interest in the real property
described in Exhibit "A" attached hereto (the "Land") and the buildings,
structures, fixtures, additions, enlargements, extensions, modifications,
repairs, replacements and improvements now or hereafter located thereon (the
"Improvements");
TOGETHER WITH: all right, title, interest and estate of Borrower now owned,
or hereafter acquired, in and to the following property, rights, interests and
estates (the Land, the Improvements, together with the following property,
rights, interests and estates, being hereinafter collectively referred to as the
"Property"):
(a) all easements, rights-of-way, strips and gores of land, streets, ways,
alleys, passages, sewer rights, water, water courses, water rights and powers,
air rights and development rights, and all estates, rights, titles, interests,
privileges, liberties, tenements, hereditaments and appurtenances of any nature
whatsoever, in any way belonging, relating or pertaining to the Land and the
Improvements and the reversion and reversions, remainder and remainders, and all
land lying in the bed of any street, road or avenue, opened or proposed, in
front of or adjoining the Land, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both at law and in
equity, of Borrower of, in and to the Land and the Improvements and every part
and parcel thereof, with the appurtenances thereto;
(b) all machinery, furnishings, equipment, fixtures (including, but not
limited to, all heating, air conditioning, plumbing, lighting, communications
and elevator fixtures) and other property of every kind and nature whatsoever
owned by Borrower, or in which Borrower has or shall have an interest, now or
hereafter located upon the Land and the Improvements, or appurtenant thereto,
and usable in connection with the present or future operation and occupancy of
the Land and the Improvements and all building equipment, materials and supplies
of any nature whatsoever owned by Borrower or in which Borrower has or shall
have an interest, now or hereafter located upon the Land and the Improvements,
or appurtenant thereto, and usable in connection with the present or future
operation and occupancy of the Land and the Improvements and all building
equipment, goods, materials and supplies of any nature whatsoever owned by
Borrower or in which Borrower has or shall have an interest, now or hereafter
located upon the Land and the Improvements, or appurtenant thereto, or usable in
connection with the present or future operation and occupancy of the Land and
the Improvements (hereinafter collectively called the "Equipment"), and the
right, title and interest of Borrower in and to any of the Equipment which may
be subject to any security interests, as defined in the Uniform Commercial Code,
as adopted and enacted by the state or states where any of the Property is
located (the "Uniform Commercial Code"), superior in lien to the lien of this
Security Instrument;
(c) all awards or payments, including interest thereon, which may
heretofore and hereafter be made with respect to the Property, whether from real
estate tax refunds or the exercise of the right of eminent domain (including,
but not limited to, any transfer made in lieu of or in anticipation of the
exercise of said right), or for a change of grade, or for any other injury to or
decrease in the value of the Property;
(d) all leases and other agreements affecting the use, enjoyment or
occupancy of the Land and the Improvements heretofore or hereafter entered into
(the "Leases") and all rents, issues, profits (including all oil and gas or
other mineral royalties and bonuses) from the Land and the Improvements (the
"Rents") and all proceeds from the sale or other disposition of the Leases and
the right to receive and apply the Rents to the payment of the Debt;
(e) all proceeds of and any unearned premiums on any insurance policies
covering the Property, including, without limitation, the right to receive and
apply the proceeds of any insurance, judgments, or settlements made in lieu
thereof, for damage to the Property;
(f) the right, in the name and on behalf of Borrower, to appear in and
defend any action or proceeding brought with respect to the Property and to
commence any action or proceeding to protect the interest of Lender in the
Property;
(g) all right, title and interest of Borrower in, to and under all
accounts, escrows, documents, instruments, chattel paper, claims, deposits,
trademarks and general intangibles, as the foregoing terms are defined in the
Uniform Commercial Code, and all contract rights, franchises, books, records,
plans, specifications, permits, licenses (to the extent assignable), approvals,
actions and causes of action which now or hereafter relate to, are derived from
or are used in connection with the Land or the use, operation, maintenance,
occupancy or enjoyment thereof or the conduct of any business or activities
thereon (hereinafter collectively called the "Intangibles");
TO HAVE AND TO HOLD the above granted and described Property unto and to
the use and benefit of Lender, in fee simple, and the successors and assigns of
Lender, forever;
PROVIDED, HOWEVER, these presents are upon the express condition that, if
Borrower shall well and truly pay to Lender the Debt at the time and in the
manner provided in the Note and this Security Instrument and shall well and
truly abide by and comply with each and every covenant and condition set forth
herein and in the Note, these presents and the estate hereby granted shall be
canceled and terminated;
AND Borrower represents and warrants to and covenants and agrees with
Lender as follows:
PART I
GENERAL PROVISIONS
1. PAYMENT OF DEBT AND INCORPORATION OF COVENANTS, CONDITIONS AND
AGREEMENTS. Borrower will pay the Debt at the time and in the manner provided in
the Note and in this Security Instrument. All the covenants, conditions and
agreements contained in (a) the Note and (b) all and any of the documents other
than the Note or this Security Instrument now or hereafter executed by Borrower
and/or others and by or in favor of Lender, which wholly or partially secure or
guaranty payment of the Note (the "Other Security Documents"), are hereby made a
part of this Security Instrument to the same extent and with the same force as
if fully set forth herein.
2. WARRANTY OF TITLE. Borrower warrants that Borrower has good, marketable
and insurable fee simple title to the Property and has the full power, authority
and right to execute, deliver and perform its obligations under this Security
Instrument and to encumber, mortgage, give, grant, bargain, sell, alien,
enfeoff, convey, confirm, pledge, assign and hypothecate the same and that
Borrower possesses an unencumbered fee estate in the Land and the Improvements
and that it owns the Property free and clear of all liens, encumbrances and
charges whatsoever except for those exceptions shown in the title insurance
policy insuring the lien of this Security Instrument and that this Security
Instrument is and will remain a valid and enforceable first lien on and security
interest in the Property, subject only to said exceptions. Borrower shall
forever warrant, defend and preserve such title and the validity and priority of
the lien of this Security Instrument and shall forever warrant and defend the
same to Lender against the claims of all persons whomsoever, subject only to
said exceptions.
3. INSURANCE. (a) Borrower, at its sole cost and expense, will keep the
Property insured during the entire term of this Security Instrument for the
mutual benefit of Borrower and Lender against loss or damage by fire and against
loss or damage by other risks and hazards covered by a standard extended
coverage policy, including, but not limited to, riot and civil commotion,
vandalism, malicious mischief, burglary and theft. Such insurance shall be in an
amount (i) equal to the then full replacement cost of the Improvements and
Equipment, without deduction for physical depreciation, and (ii) such that the
insurer would not deem Borrower a co-insurer under said policies. The policies
of insurance carried in accordance with this Paragraph 3 shall be paid annually
in advance and shall contain the "Replacement Cost Endorsement" with a waiver of
depreciation.
(b) Borrower, at its sole cost and expense, for the mutual benefit of
Borrower and Lender, shall also obtain and maintain during the entire term of
this Security Instrument the following policies of insurance:
(i) Flood insurance if any part of the Property is located in an area
identified now or in the future by the Federal Emergency Management Agency
as an area having special flood hazards and in which flood insurance has
been made available under the National Flood Insurance Act of 1968 (and any
amendment or successor act thereto) in an amount at least equal to the
outstanding principal amount of the Note or the maximum limit of coverage
available with respect to the Improvements and Equipment under said Act,
whichever is less.
(ii) Comprehensive public liability insurance, including broad form
property damage, blanket contractual and personal injuries (including death
resulting therefrom) coverages.
(iii) Rental loss insurance in an amount equal to the aggregate annual
amount of all rents and additional rents payable by all of the tenants
under the Leases (whether or not such Leases are terminable in the event of
a fire or casualty), such rental loss insurance to cover rental losses for
a period of at least twelve (12) months after the date of the fire or
casualty in question. The amount of such rental loss insurance shall be
increased from time to time during the term of this Security Instrument as
and when new Leases and renewal Leases are entered into in accordance with
the terms of this Security Instrument, to reflect all increased rent and
increased additional rent payable by all of the tenants under such renewal
Leases and all rent and additional rent payable by all of the tenants under
such new Leases.
(iv) Insurance against loss or damage from (x) leakage of sprinkler
systems and (y) explosion of steam boilers, air conditioning equipment,
high pressure piping, machinery and equipment, pressure vessels or similar
apparatus now or hereafter installed in the Improvements.
(v) War risk insurance upon the Property, as and when such insurance
is obtainable from the United States of America or any agency or
instrumentality thereof at reasonable rates, for the maximum amount of
insurance obtainable and which is customarily required by institutional
mortgagees with respect to similar properties similarly situated.
(vi) Worker's compensation insurance with respect to any employees of
Borrower, as required by any governmental authority or legal requirement.
(vii) Such other insurance as may from time to time be reasonably
required by Lender in order to protect its interests.
(c) All policies of insurance (the "Policies") required pursuant
to this Paragraph 3: (i) shall be issued by an insurer satisfactory to
Lender, (ii) shall contain the standard mortgagee non-contribution
clause naming Lender as the person to which all payments made by such
insurance company shall be paid, (iii) shall be maintained throughout
the term of this Security Instrument without cost to Lender, (iv)
shall be delivered to Lender, (v) shall contain such provisions as
Lender deems reasonably necessary or desirable to protect its
interest, including, without limitation, endorsements providing that
neither Borrower, Lender nor any other party shall be a co-insurer
under said Policies and that Lender shall receive at least thirty (30)
days prior written notice of any modification or cancellation, and
(vi) shall be satisfactory in form and substance to Lender and shall
be approved by Lender as to amounts, form, risk coverage, deductibles,
loss payees and insureds. Borrower shall pay the premiums for such
Policies (the "Insurance Premiums") as the same become due and
payable. Not later than thirty (30) days prior to the expiration date
of each of the Policies, Borrower will deliver to Lender satisfactory
evidence of the renewal of each of the Policies. In lieu of any of the
Policies required hereunder, Borrower may provide to Lender a
certified copy of any blanket policy of insurance and an original
allocation, or equivalent, endorsement with respect to any such
blanket policy of insurance, or other evidence satisfactory to Lender
that acceptable coverage is in full force and effect under any such
blanket policy of insurance.
(d) If the Property shall be damaged or destroyed, in whole or in
part, by fire or other casualty, Borrower shall give prompt notice
thereof to Lender. In the event of a Minor Casualty (hereinafter
defined), the net amount of all insurance proceeds received by Lender
with respect to such damage or destruction, after deduction of the
costs and expenses incurred by Lender in collecting the same (the "Net
Proceeds") shall be disbursed by Lender in accordance with the terms
and conditions set forth herein to pay for the costs and expenses of
the Restoration (hereinafter defined), provided the following
conditions are satisfied: (i) no Event of Default has occurred and
remains uncured under this Security Instrument, the Note or any of the
Other Security Documents; (ii) Borrower proceeds promptly after the
insurance claims are settled with the restoration, replacement,
rebuilding or repair of the Property as nearly as possible to the
condition the Property was in immediately prior to such fire or other
casualty (the "Restoration"); (iii) Lender determines that the Net
Proceeds paid to Lender together with any deposit made by Borrower to
Lender will be sufficient, in Lender's sole judgment, to pay in full
all costs of the Restoration; (iv) Borrower carries builder's risk
insurance satisfactory to Lender; (v) Lender agrees in writing that
the rental income of the Property as restored will be sufficient to
meet all operating costs and other expenses, payments for reserves and
repayment of the Debt; (vi) the Restoration shall be done in
compliance with all applicable laws, rules and regulations and the
Property and use thereof subsequent to Restoration will be in
compliance with all applicable building and zoning requirements; (vii)
a set of plans and specifications in connection with the Restoration
shall be submitted to Lender and shall be satisfactory to Lender in
all respects; (viii) all reasonable costs and expenses incurred by
Lender in connection with making the Net Proceeds available for
Restoration, including, without limitation, counsel fees and
inspecting engineer fees incurred by Lender, shall be paid by
Borrower; (ix) less than fifty percent (50%) of total floor area of
the Improvements is destroyed, damaged or rendered unusable; (x)
Leases demising in the aggregate at least fifty percent (50%) of the
rentable space in the Improvements remain in full force and effect
during and after the completion of the Restoration; (xi) Lender shall
be satisfied that all operating deficits for the Property will be
covered by either the Net Proceeds or other funds of Borrower; (xii)
the Property will meet a post-restoration debt service coverage ratio
specified by Lender subsequent to Restoration; (xiii) the Restoration
will be completed at least one (1) year prior to maturity of the
indebtedness secured by this Security Instrument, or upon such earlier
date as may be required under leases in effect or pursuant to zoning
regulations; (xiv) the Restoration is commenced as soon as reasonably
practicable (but in no event later than ninety (90) days after the
occurrence of the casualty) and completed in an expeditious and
diligent manner; (xv) the casualty has not resulted in loss of access
to the Property; and (xvi) Lender shall have received evidence
reasonably satisfactory to it that, during the period of the
Restoration, the sum of (A) income derived from the Property, as
reasonably determined by Lender, plus (B) proceeds of rent loss
insurance or business interruption insurance, if any, to be paid will
equal or exceed the sum of (C) expenses in connection with the
operation of the Property and (D) the debt service under the Note. The
term "Minor Casualty" shall mean a casualty which renders untenantable
no more than 25% of the net rentable area of the Improvements and
results in a rent interruption of no more than 25% of the Rents. For
the purpose of this paragraph, an apartment unit shall be considered
untenantable if following the casualty such unit is not rentable at
the rent existing prior to the casualty.
(e) The Net Proceeds received by Lender following a Minor
Casualty shall be held in trust by Lender in an interest- bearing
account with all interest thereon to be used in connection with the
Restoration as herein set forth and shall be paid by Lender to, or as
directed by, Borrower, less customary retainage, from time to time
during the course of the Restoration (but no more frequently than once
per month), upon receipt of evidence satisfactory to Lender that (i)
all materials installed and work and labor performed (except to the
extent they are to be paid for out of the requested payment) in
connection with the Restoration have been paid for in full, (ii) no
mechanics' or other liens or encumbrances on the Property arising out
of the Restoration exist which have not been bonded or otherwise
discharged or released, and (iii) the balance of the Net Proceeds plus
the balance of any deficiency deposits given by Borrower to Lender
pursuant to the provisions of this paragraph hereinafter set forth
shall be sufficient to pay in full the balance of the cost of the
Restoration.
(f) The excess, if any, of the Net Proceeds after payment to
Borrower as provided herein shall be applied by Lender in reduction of
the Debt in such priority and proportions as Lender in its discretion
shall deem proper. Notwithstanding anything to the contrary contained
herein, (i) if the Net Proceeds shall be less than $100,000.00 only
one disbursement shall be required upon the completion of the
Restoration to the satisfaction of Lender and (ii) if the Net Proceeds
shall be $20,000.00 or less, the Net Proceeds shall be released to
Borrower, in trust, and Borrower shall apply such funds for the
completion of the Restoration, and upon completion of the Restoration,
Borrower shall deliver evidence satisfactory to Lender that (A) all
materials installed and work and labor performed in connection with
the Restoration have been paid for in full, (B) no mechanics' or other
liens or encumbrances on the Property arising out of the Restoration
exist which have not been bonded or otherwise discharged or discharged
or record. If at any time the Net Proceeds, or the undisbursed balance
thereof, shall not in the opinion of Lender be sufficient to pay in
full the balance of the cost of the Restoration, Borrower shall
deposit the deficiency with Lender in an interest-bearing account
before any further disbursement of the Net Proceeds shall be made.
(g) Any amount of the Net Proceeds received by Lender and not
required to be disbursed for the Restoration pursuant to the
provisions hereof may, in Lender's discretion, be either retained and
applied by Lender toward the repayment of the Debt in such priority
and proportions as Lender in its discretion shall deem proper, or, at
the discretion of Lender, either in whole or in part, to Borrower for
such purposes as Lender shall designate. Such application toward the
Debt shall be without any prepayment consideration, except that if an
Event of Default, or an event with notice and/or the passage of time,
or both, would constitute an Event of Default, has occurred, then such
application shall be subject to the prepayment consideration computed
in accordance with the Note. If Lender shall receive and retain such
insurance proceeds, (i) the amount of the lien of this Security
Instrument shall be reduced only by the amount thereof received and
retained by Lender and actually applied by Lender in reduction of the
Debt, and (ii) Lender may, at its option, recalculate the monthly
installments of principal and interest in accordance with the
provisions of the Note.
(h) Borrower shall not carry separate insurance, concurrent in
kind or form or contributing in the event of loss, with any insurance
required under this Paragraph 3; provided, however, that
notwithstanding the foregoing, Borrower may carry insurance not
required under this Security Instrument, provided any such insurance
affecting the Property shall be for the mutual benefit of Borrower and
Lender, as their respective interests may appear, and shall be subject
to all other provisions of this Paragraph 3.
(i) Borrower shall set forth in its notice to Lender of any
damage to or destruction of the Property Borrower's good faith
estimate of the cost of the Restoration, or, if Borrower cannot
reasonably estimate the anticipated cost of the Restoration, Borrower
shall nonetheless give Lender prompt notice of the occurrence of such
damage or destruction, and will diligently proceed to obtain estimates
to enable Borrower to quantify the anticipated cost of the Restoration
free and clear from any and all liens and claims. Borrower shall not
adjust, compromise or settle any claim for any sums to be paid by any
insurer without the prior written consent of Lender.
(j) If Borrower shall fail in any respect to comply with its
obligations under this Paragraph 3, then, in addition to all other
rights available hereunder, at law or in equity, Lender, or any
receiver of the Property or any portion thereof, upon five (5) days
prior notice to Borrower (except in the event of emergency in which
case no notice shall be required), may (but shall have no obligation
to) perform or cause to be performed the Restoration and may take such
other steps as it deems advisable. Borrower hereby waives, for
Borrower and all others holding under or through Borrower, any claim,
other than for gross negligence or willful misconduct, against Lender
and any receiver arising out of any act or omission of Lender or such
receiver pursuant hereto, and Lender may apply all or any portion of
any sums paid by an insurer to reimburse Lender and such receiver for
all amounts incurred in connection with the Restoration and any costs
not reimbursed to Lender or the receiver upon demand, together with
interest thereon, from the date such amounts are advanced until the
same are paid to Lender or the receiver.
4. PAYMENT OF TAXES, ETC. (a) Borrower shall pay all taxes, assessments,
water rates, and sewer rates, now or hereafter levied or assessed or imposed
against the Property or any part thereof (the "Taxes") and all ground rents,
maintenance charges, other governmental impositions, and other charges,
including, without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Land and assessments of property
owner's associations, now or hereafter levied or assessed or imposed against the
Property or any part thereof (the "Other Charges") as same become due and
payable. Borrower will deliver to Lender, promptly upon Lender's request,
evidence satisfactory to Lender that the Taxes and Other Charges have been so
paid or are not then delinquent. Borrower shall not suffer and shall promptly
cause to be paid and discharged (by bonding or otherwise) any lien or charge
whatsoever which may be or become a lien or charge against the Mortgaged
Property, and shall promptly pay for all utility services provided to the
Property. Borrower shall furnish to Lender or its designee receipts for the
payment of the Taxes, Other Charges and said utility services prior to the date
the same shall become delinquent.
(b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, the
amount or validity or application, in whole or in part, of any of the
Taxes or Other Charges, provided that (i) Borrower is not in default
under the Note or this Security Instrument, (ii) Borrower is permitted
to do so under the provisions of any mortgage or deed of trust
superior in lien to this Security Instrument, (iii) such proceeding
shall suspend the collection of the Taxes or Other Charges from
Borrower and from the Property, (iv) such proceeding shall be
permitted under and be conducted in accordance with the provisions of
any other instrument to which Borrower is subject and shall not
constitute a default thereunder, (v) neither the Property nor any part
thereof or interest therein will be in danger of being sold,
forfeited, terminated, canceled or lost, (vi) Borrower shall have set
aside adequate reserves for the payment of the Taxes or Other Charges,
together with all interest and penalties thereon, and (vii) Borrower
shall have furnished such security as may be required in the
proceeding, or as may be requested by Lender to insure the payment of
any such Taxes or Other Charges, together with all interest and
penalties thereon.
5. ESCROW FUND. (a) Borrower shall, at the option of Lender or its
designee, pay to Lender on the first day of each calendar month (i) one-twelfth
(1/12) of an amount which would be sufficient to pay those Taxes payable on an
annual basis, or estimated by Lender to be payable, during the next ensuing
twelve (12) months and (ii) one-twelfth (1/12) of an amount which would be
sufficient to pay the Insurance Premiums due for the renewal of the coverage
afforded by the Policies upon the expiration thereof (said amounts in (i) and
(ii) above hereinafter called the "Escrow Fund"). The Escrow Fund and the
payments of interest or principal or both, payable pursuant to the Note, shall
be added together and shall be paid as an aggregate sum by Borrower to Lender.
Borrower hereby pledges to Lender any and all monies now or hereafter deposited
in the Escrow Fund as additional security for the payment of the Debt. Lender
will apply the Escrow Fund to payments of Taxes and Insurance Premiums required
to be made by Borrower pursuant to Paragraphs 3 and 4 hereof. If the amount of
the Escrow Fund shall exceed the amounts due for Taxes and Insurance Premiums
pursuant to Paragraphs 3 and 4 hereof, Lender shall, in its discretion, refund
any excess to Borrower or credit such excess against future payments to be made
to the Escrow Fund. In allocating such excess, Lender may deal with the person
shown on the records of Lender to be the owner of the Property. If the Escrow
Fund is not sufficient to pay the items set forth in (i) and (ii) above,
Borrower shall promptly pay to Lender, upon demand, an amount which Lender shall
estimate as sufficient to make up the deficiency.
(b) Upon the occurrence of an Event of Default (hereinafter
defined) Lender may apply any sums then present in the Escrow Fund to
the payment of the following items in any order in its sole
discretion:
(i) Taxes and Other Charges;
(ii) Insurance Premiums;
(iii)Interest on the unpaid principal balance of the Note;
(iv) Amortization of the unpaid principal balance of the
Note; or
(v) All other sums payable pursuant to the Note, this
Security Instrument and the Other Security Documents, including,
without limitation, advances made by Lender pursuant to the terms
of this Security Instrument.
Until expended or applied as above provided, any amounts in the Escrow Fund
shall constitute additional security for the Debt. The Escrow Fund may be
commingled with other monies held by Lender. No earnings or interest on the
Escrow Fund shall be payable to Borrower.
6. CONDEMNATION. Borrower shall promptly give Lender notice of the actual
or threatened commencement of any condemnation or eminent domain proceeding and
shall deliver to Lender copies of any and all papers served in connection with
such proceedings, and Borrower shall appear in and prosecute any such
proceedings unless otherwise directed by Lender in writing. Lender is hereby
irrevocably appointed as Borrower's attorney-in-fact, coupled with an interest,
with power, at Lender's option, to collect, receive and retain any award or
payment for said condemnation or eminent domain and to make any compromise or
settlement in connection with such proceeding, subject to the provisions of this
Security Instrument. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise (including, but not limited to,
any transfer made in lieu of or in anticipation of the exercise of such taking),
Borrower shall continue to pay the Debt at the time and in the manner provided
for its payment in the Note and in this Security Instrument, and the Debt shall
not be reduced until any award or payment therefor shall have been actually
received and applied by Lender, after the deduction of expenses of collection,
to the reduction or discharge of the Debt. Lender shall not be limited to the
interest paid on the award by the condemning authority but shall be entitled to
receive out of the award interest at the rate or rates provided herein and in
the Note. Lender may apply any such award or payment to the reduction or
discharge of the Debt whether or not then due and payable. Any reduction of the
Debt pursuant to the terms of this Paragraph 6 shall not be deemed a prepayment
of the Debt and no prepayment consideration, if any, shall be due. If the
Property is sold, through foreclosure or otherwise, prior to the receipt by
Lender of such award or payment, Lender shall have the right, whether or not a
deficiency judgment on the Note shall have been sought, recovered or denied, to
receive said award or payment, or a portion thereof sufficient to pay the Debt.
7. LEASES AND RENTS. (a) Borrower does hereby absolutely and
unconditionally assign to Lender Borrower's right, title and interest in and to
all current and future Leases and Rents, it being intended by Borrower that this
assignment constitutes a present, absolute assignment and not an assignment for
additional security only. Such assignment to Lender shall not be construed to
bind Lender to the performance of any of the covenants, conditions or provisions
contained in any such Lease or otherwise impose any obligation upon Lender.
Borrower agrees to execute and deliver to Lender such additional instruments, in
form and substance satisfactory to Lender, as may hereafter be requested by
Lender to further evidence and confirm such assignment. Nevertheless, subject to
the terms of this Paragraph 7, Lender grants to Borrower a revocable license to
operate and manage the Property and to collect the Rents. Borrower shall hold
the Rents, or a portion thereof sufficient to discharge all current sums due on
the Debt, in trust for the benefit of Lender for use in the payment of such
sums. Upon an Event of Default, the license granted to Borrower herein shall
automatically be revoked, and Lender shall immediately be entitled to possession
of all Rents, whether or not Lender enters upon or takes control of the
Property. Lender is hereby granted and assigned by Borrower the right, at its
option, upon revocation of the license granted herein, to enter upon the
Property in person, by agent or by court-appointed receiver to collect the
Rents. Any Rents collected after the revocation of the license may be applied
toward payment of the Debt in such priority and proportions as Lender, in its
discretion, shall deem proper.
(b) All Leases shall be written on the standard form of lease which
has been approved by Lender. Upon request, Borrower shall furnish Lender
with executed copies of all Leases. No material changes may be made to the
Lender-approved standard lease without the prior written consent of Lender.
In addition, all renewals of Leases and all proposed leases shall provide
for rental rates comparable to existing local market rates and shall be
arms-length transactions. All proposed leases shall be subject to the prior
approval of Lender except that all proposed leases which (i) are on the
same form of lease which has been approved by Lender, (ii) are the result
of an arms-length transaction,(iii) provide for rental rates comparable to
existing market rates, (iv) where space to be leased does not exceed more
than ten percent (10%) of total rentable space of the Property, (v) where
the proposed tenant is an independent third party not affiliated with the
Borrower, and (vi) do not contain any terms which would materially affect
Lender's rights under this Security Instrument, the Note or the Other
Security Documents, shall not be subject to the prior approval of Lender.
All Leases shall provide that they are subordinate to this Security
Instrument and that the lessee agrees to attorn to Lender. Borrower (i)
shall observe and perform all the obligations imposed upon the lessor under
the Leases and shall not do or permit to be done anything to impair the
value of the Leases as security for the Debt; (ii) shall enforce all of the
terms, covenants and conditions contained in the Leases upon the part of
the lessee thereunder to be observed or performed, short of termination
thereof, except in the ordinary course of business; (iii) shall promptly
send copies to Lender of all notices of default which Borrower shall send
or receive thereunder; (iv) shall not collect any of the Rents more than
one (1) month in advance; (v) shall not execute any other assignment of
lessor's interest in the Leases or the Rents; (vi) shall not alter, modify
or change the terms of the Leases without the prior written consent of
Lender, or, except if a tenant is in default, cancel or terminate the
Leases or accept a surrender thereof or convey or transfer or suffer or
permit a conveyance or transfer of the Land or of any interest therein so
as to effect a merger of the estates and rights of, or a termination or
diminution of the obligations of, lessees thereunder; provided however,
that any Lease may be canceled if at the time of the cancellation thereof a
new lease is entered into on substantially the same terms or more favorable
terms as the canceled lease; (vii) shall not alter, modify or change the
terms of any guaranty of the Leases or cancel or terminate such guaranty
without the prior written consent of Lender; (viii) shall not consent to
any assignment of or subletting under the Lease not in accordance with
their terms, without the prior written consent of Lender; and (ix) shall
execute and deliver at the request of Lender all such further assurances,
confirmations and assignments in connection with the Property as Lender
shall from time to time require.
(c) All security deposits of lessees, whether held in cash or any
other form, shall not be commingled with any other funds of Borrower and,
if cash, shall be deposited by Borrower at such commercial or savings banks
or banks as may be reasonably satisfactory to Lender; provided, however, in
all cases, the deposits shall be fully insured by the Federal Deposit
Insurance Corporation. Any bond or other instrument which Borrower is
permitted to hold in lieu of cash security deposits under any applicable
legal requirements shall be maintained in full force and effect unless
replaced by cash deposits as hereinabove described, shall be issued by an
institution reasonably satisfactory to Lender, shall, if permitted pursuant
to any legal requirements, name Lender as payee or mortgagee thereunder
(or, at Lender's option, be fully assignable to Lender) and shall, in all
respects, comply with any applicable legal requirements and otherwise be
reasonably satisfactory to Lender. Borrower shall, upon request, provide
Lender with evidence reasonably satisfactory to Lender of Borrower's
compliance with the foregoing. Following the occurrence and during the
continuance of any Event of Default, Borrower shall, upon Lender's request,
if permitted by any applicable legal requirements, turn over to Lender the
security deposits (and any interest theretofore earned thereon) with
respect to all or any portion of the Property, to be held by Lender subject
to the terms of the Leases.
8. MAINTENANCE OF PROPERTY. Borrower shall cause the Property to be
maintained in a good and safe condition and repair. The Improvements and the
Equipment shall not be removed, demolished or materially altered (except for
normal replacement of the Equipment) without the consent of Lender. Borrower
shall promptly comply with all laws, orders and ordinances affecting the
Property, or the use thereof. Borrower shall promptly repair, replace or rebuild
any part of the Property which may be destroyed by any casualty, or become
damaged, worn or dilapidated or which may be affected by any proceeding of the
character referred to in Paragraph 6 hereof and shall complete and pay for any
structure at any time in the process of construction or repair on the Land.
Borrower shall not initiate, join in, acquiesce in, or consent to any change in
any private restrictive covenant, zoning law or other public or private
restriction, limiting or defining the uses which may be made of the Property or
any part thereof. If under applicable zoning provisions the use of all or any
portion of the Property is or shall become a nonconforming use, Borrower will
not cause or permit such nonconforming use to be discontinued or abandoned
without the express written consent of Lender. Borrower shall not, without the
prior written consent of Lender, (a) change the use of the Land or cause or
permit the use or occupancy of any part of the Land to be discontinued if such
discontinuance would violate any zoning or other law, ordinance or regulation;
(b) permit or undertake any structural or other alteration or improvement,
demolition or removal of the Property or any portion thereof; (c) permit or
suffer to occur any waste on or to the Property or to any portion thereof; or
(d) take any steps whatsoever to convert the Property, or any portion thereof,
to a condominium or cooperative form of ownership.
9. TRANSFER OR ENCUMBRANCE OF THE PROPERTY. (a) Borrower acknowledges that
Lender has examined and relied on the creditworthiness and experience of
Borrower and its general partners, principals and (if Borrower is a trust)
beneficial owners in owning and operating properties such as the Property in
agreeing to make the loan secured hereby, and will continue to rely on
Borrower's ownership of the Property as a means of maintaining the value of the
Property as security for the repayment of the Debt. Borrower acknowledges that
Lender has a valid interest in maintaining the value of the Property so as to
ensure that, should Borrower default in the repayment of the Debt, Lender can
recover the Debt by a sale of the Property.
(b) Borrower agrees that Borrower shall not, without the prior written
consent of Lender, sell, convey, mortgage, grant, bargain, encumber,
pledge, assign, or otherwise transfer the Property or any part thereof or
permit the Property or any part thereof to be sold, conveyed, mortgaged,
granted, bargained, encumbered, pledged, assigned, or otherwise
transferred. In the event of the sale, transfer, conveyance, mortgage,
encumbrance, pledge or otherwise of either (i) all or any part of the
Property, or any interest therein (other than obsolete or worn Equipment
replaced by adequate substitutes of equal or greater value than the
replaced items when new), or (ii) beneficial interests in Borrower (if
Borrower is not a natural person or persons but is a corporation,
partnership, trust or other legal entity) without Lender's prior written
consent, Lender may, at Lender's option, declare the Debt immediately due
and payable, and Lender may invoke any remedies permitted by this Security
Instrument. A sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment or transfer within the meaning of this Paragraph 9 shall
be deemed to include, but shall not be limited to, (a) an installment sales
agreement wherein Borrower agrees to sell the Property or any part thereof
for a price to be paid in installments; (b) an agreement by Borrower
leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other
transfer of, or the grant of a security interest in, Borrower's right,
title and interest in and to any Leases or any Rents; (c) if Borrower, any
guarantor, any indemnitor, or any general partner or member of Borrower,
guarantor or indemnitor is a corporation, the voluntary or involuntary
sale, conveyance, transfer or pledge of such corporation's stock (or the
stock of any corporation directly or indirectly controlling such
corporation by operation of law or otherwise) or the creation or issuance
of new stock by which an aggregate of more than 20% of such corporation's
stock shall be vested in a party or parties who are not now stockholders;
(d) if Borrower, any guarantor or indemnitor or any general partner or
member of Borrower, any guarantor or indemnitor is a limited or general
partnership or joint venture, the change, removal or resignation of a
general partner or managing partner, or the transfer or pledge of the
partnership interest of any general partner or managing partner or any
profits or proceeds relating to such partnership interest or the voluntary
or involuntary sale, conveyance, transfer or pledge of any limited
partnership interests (or the limited partnership interests of any limited
partnership directly or indirectly controlling such limited partnership by
operation of law or otherwise) or the creation or issuance of new limited
partnership interests, by which an aggregate of more than 20% of such
limited partnership interests are held by parties who are not currently
limited partners; and (e) if Borrower, any guarantor or indemnitor or any
general partner or member of Borrower, any guarantor or indemnitor is a
limited liability company, the change, removal or resignation of the
managing member or the transfer or pledge of the membership interest of any
managing member or any profits or proceeds relating to such membership
interest or the voluntary or involuntary sale, conveyance, transfer or
pledge of any membership interests (or the membership interests of any
limited liability company directly or indirectly controlling such limited
liability company by operation of law or otherwise) or the creation or
issuance of new membership interests, by which an aggregate of more than
20% of such membership interests are held by parties who are not currently
members.
(c) Notwithstanding the foregoing, transfers by devise or descent or
by operation of law upon the death of a partner, stockholder or member of
Borrower, any guarantor or indemnitor or any general partner thereof shall
not be deemed to be a sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment or transfer within the meaning of this
Paragraph 9.
(d) Lender reserves the right to condition the consent required
hereunder upon a modification of the terms hereof and on assumption of the
Note, this Security Instrument and the Other Security Documents as so
modified by the proposed transferee, payment of a transfer fee of not less
than one percent (1%) of the principal balance of the Note and all of
Lender's expenses incurred in connection with such transfer, or such other
conditions as Lender shall determine in its sole discretion to be in the
interest of Lender. Lender shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in
order to declare the Debt immediately due and payable upon Borrower's sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Property without Lender's consent.
(e) Lender's consent to a sale, conveyance, mortgage, encumbrance,
pledge or transfer of the Property shall not be deemed to be a waiver of
Lender's right to require such consent to any future occurrence of same.
Any sale, conveyance, mortgage, encumbrance, pledge or transfer of the
Property made in contravention of this Paragraph 9 shall be null and void
and of no force and effect.
(f) Borrower agrees to bear and shall pay or reimburse Lender on
demand for all reasonable expenses (including, without limitation,
reasonable attorneys' fees actually incurred and disbursements, title
search costs and title insurance endorsement premiums) incurred by Lender
in connection with the review, approval and documentation of any such sale,
conveyance, mortgage, encumbrance, pledge or transfer.
10. ESTOPPEL CERTIFICATES. After request by Lender, Borrower, within ten
(10) days, shall furnish Lender with a statement, duly acknowledged and
certified, setting forth (i) the amount of the original principal amount of the
Note, (ii) the unpaid principal amount of the Note, (iii) the rate of interest
of the Note, (iv) the date installments of interest and/or principal were last
paid, (v) any offsets or defenses to the payment of the Debt, if any, and (vi)
that the Note and this Security Instrument are valid, legal and binding
obligations and have not been modified or if modified, giving particulars of
such modification.
11. CHANGES IN THE LAWS REGARDING TAXATION. If any law is enacted or
adopted or amended after the date of this Security Instrument which deducts the
Debt from the value of the Property for the purpose of taxation or which imposes
a tax, either directly or indirectly, on the Debt or Lender's interest in the
Property, Borrower will pay such tax, with interest and penalties thereon, if
any. In the event Lender is advised by counsel chosen by it that the payment of
such tax or interest and penalties by Borrower would be unlawful or taxable to
Lender or unenforceable or provide the basis for a defense of usury, then in any
such event, Lender shall have the option, by written notice of not less than
ninety (90) days, to declare the Debt immediately due and payable.
12. NO CREDITS ON ACCOUNT OF THE DEBT. Borrower will not claim or demand or
be entitled to any credit or credits on account of the Debt for any part of the
Taxes or Other Charges assessed against the Property, or any part thereof, and
no deduction shall otherwise be made or claimed from the assessed value of the
Property, or any part thereof, for real estate tax purposes by reason of this
Security Instrument or the Debt. In the event such claim, credit or deduction
shall be required by law, Lender shall have the option, by written notice of not
less than ninety (90) days, to declare the Debt immediately due and payable.
13. DOCUMENTARY STAMPS. If at any time the United States of America, any
State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note or this Security Instrument, or impose
any other tax or charge on the same, Borrower will pay for the same, with
interest and penalties thereon, if any.
14. USURY LAWS. This Security Instrument and the Note are subject to the
express condition that at no time shall Borrower be obligated or required to pay
interest on the Debt or any portion thereof 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 Borrower is permitted by applicable
law to contract or agree to pay. If by the terms of this Security Instrument or
the Note, Borrower is at any time required or obligated to pay interest on the
Debt or any portion thereof at a rate in excess of such maximum rate, the rate
of interest under the same 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.
15. BOOKS AND RECORDS. (a) Borrower and any guarantors, if any, shall keep
adequate books and records of account and furnish to Lender and in a form
acceptable to Lender: (i) quarterly certified rent rolls signed and dated by
Borrower detailing the names of all tenants of the Improvements, the portion of
the Improvements occupied by each tenant, the rent and any other charges payable
under each lease, and the term of each lease, and any other information as is
reasonably required by Lender, not later than forty-five (45) days following the
close of each quarter; (ii) quarterly operating statements of the Property
detailing the total revenues received and total expenses incurred to be prepared
and certified by Borrower, not later than forty-five (45) days following the
close of each quarter; (iii) an annual operating statement of the Property
detailing the total revenues received, total expenses incurred, total cost of
all capital improvements, total debt service and total cash flow, to be prepared
and certified by Borrower in the form required by Lender, or if required by
Lender upon the occurrence of any Event of Default, an audited annual operating
statement prepared and certified by an independent certified public accountant
acceptable to Lender, within ninety (90) days after the close of each fiscal
year of Borrower; (iv) an annual balance sheet and profit and loss statement of
Borrower and of any guarantor, prepared and certified by Borrower or such
guarantor, in form and substance satisfactory to Lender, or if required by
Lender upon the occurrence of any Event of Default, audited financial statements
prepared and certified by an independent certified public accountant acceptable
to Lender, within ninety (90) days after the close of each fiscal year of
Borrower or such guarantor; (v) an annual year end rent roll certified by
Borrower as true and correct not later than ninety (90) days following the close
of each fiscal year; (vi) an annual operating budget detailing revenues and
expenses delivered to Lender not later than forty-five (45) days after the close
of the fiscal year; and (g) other financial statements as may, from time to
time, be required by Lender. In the event Borrower fails to provide to Lender
any report required hereunder, not later than sixty (60) days after written
notice from Lender requesting such report, the Note shall bear interest at the
Default Rate until such time as Lender receives such report.
(b) Lender shall from time to time upon reasonable notice, have the
right to examine the books and records of Borrower, its affiliates, any
guarantor and any indemnitor. Borrower, its affiliates, any guarantor and
any indemnitor shall furnish to Lender and its agents convenient facilities
for the examination and audit of any such books and records. Within a
reasonable time after request by Lender, Borrower, its affiliates, any
guarantor and any indemnitor shall provide any other information with
respect to the Property and the financial condition of Borrower, its
affiliates, any guarantor and any indemnitor as Lender may from time to
time request. For the purposes of this Paragraph 15(b), "affiliates" shall
mean any entities with which the Borrower is entitled to file a
Consolidated Income Tax Return under United States Federal Income Tax laws.
16. PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe and perform
each and every term to be observed or performed by Borrower pursuant to the
terms of any agreement or recorded instrument affecting or pertaining to the
Property.
17. FURTHER ACTS, ETC. Borrower will, at the cost of Borrower, and without
expense to Lender, do, execute, acknowledge and deliver all and every such
further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers and assurances as Lender shall, from time to time,
require, for the better assuring, conveying, assigning, transferring, and
confirming unto Lender the property and rights hereby mortgaged, given, granted,
bargained, sold, aliened, enfeoffed, conveyed, confirmed, pledged, assigned and
hypothecated or intended now or hereafter so to be, or which Borrower may be or
may hereafter become bound to convey or assign to Lender, or for carrying out
the intention or facilitating the performance of the terms of this Security
Instrument or for filing, registering or recording this Security Instrument.
Borrower on demand, will execute and deliver and hereby authorizes Lender to
execute in the name of Borrower or without the signature of Borrower to the
extent Lender may lawfully do so, one or more financing statements, chattel
mortgages or other instruments, to evidence more effectively the security
interest of Lender in the Property. Borrower grants to Lender an irrevocable
power of attorney coupled with an interest for the purpose of exercising and
perfecting any and all rights and remedies available to Lender at law and in
equity, including, without limitation, such rights and remedies available to
Lender pursuant to this Paragraph 17.
18. RECORDING OF SECURITY INSTRUMENT, ETC. Borrower, forthwith upon the
execution and delivery of this Security Instrument and thereafter, from time to
time, will cause this Security Instrument, and any security instrument creating
a lien or security interest or evidencing the lien hereof upon the Property and
each instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the lien or security interest
hereof upon, and the interest of Lender in, the Property. Borrower will pay all
filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Security Instrument and the
Note, any mortgage supplemental hereto, any security instrument with respect to
the Property and any instrument of further assurance, and all federal, state,
county and municipal, taxes, duties, imposts, assessments and charges arising
out of or in connection with the execution and delivery of this Security
Instrument, any mortgage supplemental hereto, any security instrument with
respect to the Property or any instrument of further assurance, except where
prohibited by law so to do. Borrower shall hold harmless and indemnify Lender,
its successors and assigns, against any liability, incurred by reason of the
imposition of any Tax on the making and recording of this Security Instrument.
19. PREPAYMENT. If permitted by the Note, the Debt may be prepaid in
accordance with the terms thereof.
20. EVENTS OF DEFAULT. The Debt shall become immediately due and payable at
the option of Lender upon the occurrence of any one or more of the following
events ("Event of Default"):
(a) if any portion of the Debt is not paid prior to the tenth (10th)
day after the same is due or if the entire Debt is not paid on or before
the Maturity Date (as defined in the Note);
(b) if any of the Taxes or Other Charges is not paid when the same is
due and payable, subject to the provisions of Paragraph 4;
(c) if the Policies are not kept in full force and effect, or if the
Policies are not assigned and delivered to Lender upon request;
(d) if Borrower violates or does not comply with any of the provisions
of Paragraphs 7, 8, 9 or 32;
(e) if any representation or warranty of Borrower or any guarantor
made herein or in any such guaranty, or in any certificate, report,
financial statement or other instrument or document furnished to Lender
shall have been false or misleading in any material respect when made;
(f) if Borrower or any guarantor shall make an assignment for the
benefit of creditors or if Borrower shall generally not be paying its debts
as they become due;
(g) if a receiver, liquidator or trustee of Borrower or of any
guarantor shall be appointed or if Borrower or any guarantor shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any
similar federal or state law, shall be filed by or against, consented to,
or acquiesced in by, Borrower or any guarantor or if any proceeding for the
dissolution or liquidation of Borrower or of any guarantor shall be
instituted; however, if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by Borrower or such
guarantor, upon the same not being discharged, stayed or dismissed within
sixty (60) days;
(h) if the Property becomes subject to any mechanic's, materialman's
or other lien other than a lien for local real estate taxes and assessments
not then due and payable and such lien shall remain undischarged of record
(by payment, bonding or otherwise) for a period of thirty (30) days after
Borrower is provided notice thereof;
(i) if Borrower fails to cure promptly any violations of laws or
ordinances affecting or which may be interpreted to affect the Property;
(j) except as permitted in this Security Instrument, the actual or
threatened alteration, improvement, demolition or removal of any of the
Improvements without the prior consent of Lender;
(k) if the Property is damaged, in any manner which is not covered by
insurance, solely as a result of Borrower's failure to maintain insurance
required in accordance with this Security Instrument;
(l) violation of the Single Purpose Entity/Separateness provisions of
Paragraph 50 hereof;
(m) default under any other mortgage, deed of trust, deed to secure
debt or other security agreement covering all or a portion of the Property,
whether it be junior or senior to this Security Instrument, subject to any
applicable notice and cure periods;
(n) if any default occurs under that certain environmental indemnity
agreement dated the date hereof given by Borrower, Peter D. Anzo and Martin
H. Petersen to Lender and such default continues after the expiration of
applicable notice and grace periods, if any; and
(o) if for more than ten (10) days after notice from Lender, Borrower
shall continue to be in default under any other term, covenant or condition
of the Note, this Security Instrument, or any of the Other Security
Documents in the case of any default which can be cured by the payment of a
sum of money or for thirty (30) days after notice from Lender in the case
of any other default, provided that if such default cannot reasonably be
cured within such thirty (30) day period and Borrower shall have commenced
to cure such default within such thirty (30) day period and thereafter
diligently and expeditiously proceeds to cure the same, such thirty (30)
day period shall be extended for so long as it shall require Borrower in
the exercise of due diligence to cure such default, it being agreed that no
such extension shall be for a period in excess of sixty (60) days.
21. DEFAULT INTEREST. Upon the occurrence of any Event of Default, Borrower
will pay, from the date of such Event of Default, interest on the unpaid
principal balance of the Note at the rate of five percent (5%) above the
Applicable Interest Rate (as defined in the Note) (the "Default Rate"). The
Default Rate shall be computed from the occurrence of the Event of Default until
the actual receipt and collection of the Debt or, if permitted by Lender, the
date such Event of Default is cured. This charge shall be added to the Debt, and
shall be deemed secured by this Security Instrument. This clause, however, shall
not be construed as an agreement or privilege to extend the date of the payment
of the Debt, nor as a waiver of any other right or remedy accruing to Lender by
reason of the occurrence of any Event of Default. If the Default Rate is above
the maximum rate permitted by applicable law, the Default Rate shall be the
maximum rate permitted by applicable law.
22. RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event of Default or
if Borrower fails to make any payment or to do any act as herein provided,
Lender may, but without any obligation to do so and without notice to or demand
on Borrower and without releasing Borrower from any obligation hereunder, make
or do the same in such manner and to such extent as Lender may deem necessary to
protect the security hereof. Lender is authorized to enter upon the Property for
such purposes, or appear in, defend, or bring any action or proceeding to
protect its interest in the Property or to foreclose this Security Instrument or
collect the Debt, and the cost and expense thereof (including reasonable
attorneys' fees actually incurred to the extent permitted by law), with interest
as provided in this Paragraph 22, shall constitute a portion of the Debt and
shall be due and payable to Lender upon demand. All such costs and expenses
incurred by Lender in remedying such Event of Default or in appearing in,
defending, or bringing any such action or proceeding shall bear interest at the
Default Rate, for the period after notice from Lender that such cost or expense
was incurred to the date of payment to Lender. All such costs and expenses
incurred by Lender, together with interest thereon calculated at the Default
Rate, shall be deemed to constitute a portion of the Debt and be secured by this
Security Instrument and the Other Security Documents and shall be immediately
due and payable upon demand by Lender therefor.
23. LATE PAYMENT CHARGE. If any portion of the Debt is not paid within ten
(10) days after the date on which it is due, Borrower shall pay to Lender upon
demand an amount equal to the lesser of five percent (5%) of such unpaid portion
of the Debt or the maximum amount permitted by applicable law, to defray the
expense incurred by Lender in handling and processing such delinquent payment
and to compensate Lender for the loss of the use of such delinquent payment, and
such amount shall be secured by this Security Instrument and the Other Security
Documents.
24. PREPAYMENT AFTER EVENT OF DEFAULT. If following the occurrence of any
Event of Default, Borrower shall tender payment of an amount sufficient to
satisfy the Debt at any time prior to a sale of the Property either through
foreclosure or the exercise of other remedies available to Lender under this
Security Instrument, such tender by Borrower shall be deemed to be a voluntary
prepayment under the Note in the amount tendered. If at the time of such tender
prepayment of the principal balance of the Note is not permitted, Borrower
shall, in addition to the entire Debt, also pay to Lender a sum equal to
interest which would have accrued on the principal balance of the Note at the
Applicable Interest Rate from the date of such tender to the earlier of (i) the
Maturity Date, or (ii) the first day of the period during which prepayment of
the principal balance of the Note would have been permitted, together with a
prepayment consideration equal to the prepayment consideration which would have
been payable as of the first day of the period during which prepayment would
have been permitted. If at the time of such tender prepayment of the principal
balance of the Note is permitted, Borrower shall, in addition to the entire
Debt, also pay to Lender the applicable prepayment consideration specified in
the Note.
25. RIGHT OF ENTRY. Lender and its agents shall have the right to enter and
inspect the Property at all reasonable times, subject to the rights of tenants
in possession.
26. REMEDIES. (a) Upon the occurrence of any Event of Default, Lender may
take such action, without notice or demand, as it deems advisable to protect and
enforce its rights against Borrower and in and to the Property, including, but
not limited to, the following actions, each of which may be pursued concurrently
or otherwise, at such time and in such order as Lender may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of Lender:
(i) declare the entire unpaid Debt to be immediately due and payable;
(ii) institute proceedings for the complete foreclosure of this
Security Instrument in which case the Property or any interest therein may
be sold for cash or, to the extent permitted by law, upon credit in one or
more parcels or in several interests or portions and in any order or
manner;
(iii) with or without entry, to the extent permitted and pursuant to
the procedures provided by applicable law, institute proceedings for the
partial foreclosure of this Security Instrument for the portion of the Debt
then due and payable, subject to the continuing lien of this Security
Instrument for the balance of the Debt not then due;
(iv) sell for cash or, to the extent permitted by law, upon credit the
Property or any part thereof and all estate, claim, demand, right, title
and interest of Borrower therein and rights of redemption thereof, pursuant
to power of sale or otherwise, at one or more sales, as an entirety or in
parcels, at such time and place, upon such terms and after such notice
thereof as may be required or permitted by law;
(v) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein or in
the Note;
(vi) recover judgment on the Note either before, during or, to the
extent permitted by law, after any proceedings for the enforcement of this
Security Instrument;
(vii) apply for the appointment of a trustee, receiver, liquidator or
conservator of the Property, without notice and without regard for the
adequacy of the security for the Debt and without regard for the solvency
of Borrower, any guarantor or of any person, firm or other entity liable
for the payment of the Debt;
(viii) enforce Lender's interest in the Leases and Rents and enter
into or upon the Property, either personally or by its agents, nominees or
attorneys and dispossess Borrower and its agents and servants therefrom,
and thereupon Lender may (A) use, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and every part of the
Property and conduct the business thereof; (B) complete any construction on
the Property in such manner and form as Lender deems advisable; (C) make
alterations, additions, renewals, replacements and improvements to or on
the Property; (D) exercise all rights and powers of Borrower with respect
to the Property, whether in the name of Borrower or otherwise, including,
without limitation, the right to make, cancel, enforce or modify leases,
obtain and evict tenants, and demand, sue for, collect and receive all
earnings, revenues, rents, issues, profits and other income of the Property
and every part thereof; or (E) apply the receipts from the Property to the
payment of the Debt, after deducting therefrom all expenses (including
reasonable attorneys' fees) actually incurred in connection with the
aforesaid operations and all amounts necessary to pay the taxes,
assessments, insurance and other charges in connection with the Property,
as well as just and reasonable compensation for the services of Lender, its
counsel, agents and employees;
(ix) require Borrower to pay monthly in advance to Lender, or any
receiver appointed to collect the Rents, the fair and reasonable rental
value for the use and occupation of any portion of the Property occupied by
Borrower and require Borrower to vacate and surrender possession to Lender
of the Property or to such receiver and, in default thereof, evict Borrower
by summary proceedings or otherwise; or
(x) require that all payments under any lease of the Property,
including, without limitation, all rental payments under the Leases, be
paid directly to a lock-box account designated by Lender and apply all sums
in the lock-box account to the payment of the Debt in such order, priority
and proportions as Lender shall deem appropriate in its discretion;
(xi) at Lender's option, replace the manager of the Property; or
(xii) pursue such other rights or remedies as may be available at law
or in equity.
In the event of a sale, by foreclosure or otherwise, of less than all of
the Property, this Security Instrument shall continue as a lien on the remaining
portion of the Property.
(b) The proceeds of any sale made under or by virtue of this Paragraph
26, together with any other sums which then may be held by Lender under
this Security Instrument, whether under the provisions of this Paragraph 26
or otherwise, shall be applied by Lender to the payment of the Debt in such
priority and proportions as Lender in its discretion shall deem proper.
(c) Lender may adjourn from time to time any sale by it to be made
under or by virtue of this Security Instrument by announcement at the time
and place appointed for such sale or for such adjourned sale or sales; and,
except as otherwise provided by any applicable provision of law, Lender,
without further notice or publication, may make such sale at the time and
place to which the same shall be so adjourned.
(d) Upon the completion of any sale made by Lender under or by virtue
of this Paragraph 26, Lender, or an officer of any court empowered to do
so, shall execute and deliver to the accepted purchaser a good and
sufficient instrument conveying, assigning and transferring all estate,
right, title and interest in and to the property and rights sold. Lender is
hereby irrevocably appointed the true and lawful attorney of Borrower, in
its name and stead, to make all necessary conveyances, assignments,
transfers and deliveries of the Property and rights so sold and for that
purpose Lender may execute all necessary instruments of conveyance,
assignment and transfer, and may substitute one or more persons with like
power, Borrower hereby ratifying and confirming all that its said attorney
or such substitute shall lawfully do by virtue hereof. Any sale made under
or by virtue of this Paragraph 26, whether made under power of sale,
nonjudicial or under or by virtue of judicial proceedings or of a judgment
or decree of foreclosure and sale, shall operate to divest all the estate,
right, title, interest, claim and demand whatsoever, whether at law or in
equity, of Borrower in and to the property and rights so sold, and shall be
a perpetual bar both at law and in equity against Borrower and against any
and all persons claiming or who may claim the same, or any part thereof
from, through or under Borrower.
(e) Upon any sale made under or by virtue of this Paragraph 26,
whether made under power of sale, nonjudicial or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale,
Lender may bid for and acquire the Property or any part thereof and in lieu
of paying cash therefor may make settlement for the purchase price by
crediting upon the Debt the net sales price after deducting therefrom the
expenses of the sale and costs of the action and any other sums which
Lender is authorized to deduct under this Security Instrument.
(f) No recovery of any judgment by Lender and no levy of an execution
under any judgment upon the Property or upon any other property of Borrower
shall affect in any manner or to any extent the lien of this Security
Instrument upon the Property or any part thereof, or any liens, rights,
powers or remedies of Lender hereunder, but such liens, rights, powers and
remedies of Lender shall continue unimpaired as before.
(g) Lender may terminate or rescind any proceeding or other action
brought in connection with its exercise of the remedies provided in this
Paragraph 26 at any time before the conclusion thereof, as determined in
Lender's sole discretion and without prejudice to Lender.
(h) Lender may resort to any remedies and the security given by the
Note, this Security Instrument or the Other Security Documents, in whole or
in part, and in such portions and in such order as determined by Lender's
sole discretion. No such action shall in any way be considered a waiver of
any rights, benefits or remedies evidenced or provided by the Note, this
Security Instrument or the Other Security Documents. The failure of Lender
to exercise any right, remedy or option provided in the Note, this Security
Instrument or the Other Security Documents shall not be deemed a waiver of
such right, remedy or option or of any covenant or obligation secured by
the Note, this Security Instrument or the Other Security Documents. No
acceptance by Lender of any payment after the occurrence of any Event of
Default and no payment by Lender of any obligation for which Borrower is
liable hereunder shall be deemed to waive or cure any Event of Default with
respect to Borrower, or Borrower's liability to pay such obligation. No
sale of all or any portion of the Property, no forbearance on the part of
Lender, and no extension of time for the payment of the whole or any
portion of the Debt or any other indulgence given by Lender to Borrower,
shall operate to release or in any manner affect the interest of Lender in
the remaining Property or the liability of Borrower to pay the Debt. No
waiver by Lender shall be effective unless it is in writing and then only
to the extent specifically stated.
(i) The interests and rights of Lender under the Note, this Security
Instrument or the Other Security Documents shall not be impaired by any
indulgence, including (i) any renewal, extension or modification which
Lender may grant with respect to any of the Debt, (ii) any surrender,
compromise, release, renewal, extension, exchange or substitution which
Lender may grant with respect to the Property or any portion thereof; or
(iii) any release or indulgence granted to any maker, endorser, guarantor
or surety of any of the Debt.
27. SECURITY AGREEMENT. (a) This Security Instrument is both a real
property deed to secure debt and a security agreement within the meaning of the
Uniform Commercial Code. The Property includes both real and personal property
and all other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. Borrower by executing and delivering this Security
Instrument has granted and hereby grants to Lender, as security for the Debt, a
security interest in the Property to the full extent that the Property may be
subject to the Uniform Commercial Code (said portion of the Property so subject
to the Uniform Commercial Code being called in this Paragraph 27 the
"Collateral").
(b) The mention in a financing statement filed in the records normally
pertaining to personal property of any portion of the Property shall not
derogate from or impair in any manner the intention of Borrower and Lender
hereby declared that all items of Collateral are part of the real property
encumbered hereby to the fullest extent permitted by law, regardless of
whether any such item is physically attached to the Improvements or whether
serial numbers are used for the better identification of certain items.
Specifically, the mention in any such financing statement of (i) the rights
in or to any insurance, (ii) any condemnation award or payment, (iii)
Borrower's interest in any Leases or Rents, or (iv) any other item included
in the Property, shall not be construed to alter, impair or impugn any
rights of Lender's lien upon any security interest in the Property. Any
such mention shall be for the protection of Lender in the event that notice
of Lender's priority of interest as to any portion of the Property is
required to be filed in accordance with the Uniform Commercial Code to be
effective against or take priority over the interest of any particular
class of persons, including the federal government or any subdivision or
instrumentality thereof.
(c) Except for the security interest granted by this Security
Instrument, Borrower is, and as to portions of the Collateral to be
acquired after the date hereof will be, the sole owner of the Collateral,
free from any lien, security interest, encumbrance or adverse claim thereon
of any kind whatsoever except for those exceptions shown in the title
insurance policy insuring the lien of this Security Instrument. Borrower
shall notify Lender of, and shall defend the Collateral against, all claims
and demands of all persons at any time claiming the same or any interest
therein.
(d) Except as otherwise provided in this Security Instrument, Borrower
shall not lease (other than in the ordinary course of business) or transfer
all or any portion of the Collateral without the prior written consent of
Lender.
(e) The Collateral is not used or bought for personal, family or
household purposes.
(f) The Collateral shall be kept on or at the Property, and the
applicable Borrower shall not remove the Collateral from the Property
without the prior consent of Lender, except such portions or items of the
Collateral as are consumed or worn out in ordinary usage, all of which
shall be promptly replaced by Borrower with items of equal or greater
value.
(g) In the event of any change in name, identity or structure of any
Borrower, such Borrower shall notify Lender thereof and promptly after
request shall execute, file and record such Uniform Commercial Code forms
as are necessary to maintain the priority of Lender's lien upon and
security interest in the Collateral, and shall pay all expenses and fees in
connection with the filing and recording thereof. If Lender shall require
the filing or recording of additional Uniform Commercial Code forms or
continuation statements, Borrower shall, promptly after request, execute,
file and record such Uniform Commercial Code forms or continuation
statements as Lender shall deem necessary, and shall pay all expenses and
fees in connection with the filing and recording thereof, it being
understood and agreed, however, that no such additional documents shall
increase Borrower's obligations under the Note, this Security Instrument
and Other Security Documents.
(h) Borrower hereby irrevocably appoints Lender as its
attorney-in-fact, coupled with an interest, to file with the appropriate
public office on its behalf any financing or other statements signed only
by Lender, as secured party, in connection with the Collateral covered by
this Security Instrument.
(i) If an Event of Default shall occur, Lender, in addition to any
other rights and remedies which it may have, shall have and may exercise
immediately and without demand, any and all rights and remedies granted to
a secured party upon default under the Uniform Commercial Code, including,
without limiting the generality of the foregoing, the right to take
possession of the Collateral or any part thereof, and to take such other
measures as Lender may deem necessary for the care, protection and
preservation of the Collateral. Upon request or demand of Lender, Borrower
shall, at its expense, assemble the Collateral and make it available to
Lender at a convenient place acceptable to Lender. Borrower shall pay to
Lender on demand any and all expenses, including legal expenses and
attorneys' fees, actually incurred or paid by Lender in protecting its
interest in the Collateral and in enforcing its rights hereunder with
respect to the Collateral.
(j) Any disposition pursuant to the Uniform Commercial Code of so much
of the Collateral as may constitute personal property shall be considered
commercially reasonable if made pursuant to a public sale which is
advertised at least twice in a newspaper of local circulation in the
community where the real property is located. Lender may dispose of the
Collateral together with or separately from a disposal of the Property. Any
notice required by the Uniform Commercial Code to be given to Borrower
shall be considered reasonable and properly given if given in the manner
provided in this Paragraph 27 at least five (5) calendar days prior to the
date of any scheduled public sale. This Security Instrument is filed as
fixture filing and covers goods which are or are to become fixtures on the
Property.
(k) The proceeds of any disposition of the Collateral, or any part
thereof, may be applied by Lender to the payment of the Debt in such
priority and proportions as Lender in its discretion shall deem proper.
(l) With respect to the machinery, apparatus, equipment, fittings,
fixtures, building supplies and materials, articles of personal property,
chattels, chattel paper, documents, inventory, accounts, farm products,
consumer goods and general intangibles referred to or described in this
Security Instrument, or in any way connected with the use and enjoyment of
the Property and owned by Borrower, this Security Instrument is hereby made
and declared to be a security agreement encumbering each and every item of
such property included herein as a part of the Property, in compliance with
the provisions of the Uniform Commercial Code as enacted in the State of
Georgia. Upon request by Lender, at any time and from time to time, a
financing statement or statements reciting this Security Instrument to be a
security agreement affecting all of such property shall be executed by
Borrower and Lender and appropriately filed. The remedies for any violation
of the covenants, terms and conditions of the security agreement contained
in this Security Instrument shall be (i) as prescribed herein, or (ii) as
prescribed by general law, or (iii) as prescribed by the specific statutory
consequences now or hereafter enacted and specified in said Uniform
Commercial Code, all at Lender's sole election. Borrower and Lender agree
that the filing of any such financing statement or statements in the
records normally having to do with personal property shall not in any way
affect the agreement of Borrower and Lender that everything owned by
Borrower and used in connection with the production of income from the
Property or adapted for use therein or which is described or reflected in
this Security Instrument is, and at all times and for all purposes and in
all proceedings, legal or equitable, shall be, regarded as part of the real
estate conveyed hereby regardless of whether (1) any such item is
physically attached to the improvements, (2) serial numbers are used for
the better identification of certain items capable of being thus identified
in an exhibit to this Security Instrument or (3) any such item is referred
to or reflected in any such financing statement or statements so filed at
any time. Similarly, the mention in any such financing statement or
statements of the rights in and to (A) the proceeds of any insurance
policy, or (B) any award in eminent domain proceedings for a taking or for
loss of value, or (C) Borrower's interest as lessor in any present or
future lease or rights to income growing out of the use and/or occupancy of
the Property, whether pursuant to lease or otherwise, shall not in any way
alter any of the rights of Lender as determined by this Security Instrument
or affect the priority of Lender's security interest granted hereby or by
any other recorded document, it being understood and agreed that such
mention in such financing statement or statements is solely for the
protection of Lender in the event any court shall at any time hold with
respect thereto, that notice of Lender's priority of interest, to be
effective against all persons or against a particular class of persons,
must be filed in the Uniform Commercial Code records.
(m) Borrower warrants that (i) Borrower's (that is, "Debtor's") name,
identity or corporate structure and residence or principal place of
business are as set forth in subsection (n) below; (ii) Borrower (that is,
"Debtor") has been using or operating under said name, identity or
corporate structure without change for the time period set forth in
subsection (n) below; and (iii) the location of the collateral is upon the
Land. Borrower covenants and agrees that Borrower will furnish Lender with
notice of any change in the matters addressed by clauses (i) or (iii) of
this subsection within thirty (30) days of the effective date of any such
change and Borrower will promptly execute any financing statements or other
instruments deemed necessary by Lender to prevent any filed financing
statement from becoming misleading or losing its perfected status.
(o) The information contained in this subsection is provided in order
that this Security Instrument shall comply with the requirements of the
Uniform Commercial Code, as enacted in the State of Georgia, for
instruments to be filed as financing statements. The names of the "Debtor"
and the "Secured Party", the identity or corporate structure and residence
or principal place of business of "Debtor", and the time period for which
"Debtor" has been using or operating under said name and identity or
corporate structure without change, are as set forth in Schedule 1 of
Exhibit B attached hereto and by this reference made a part hereof; the
mailing address of the "Secured Party" from which information concerning
the security interest may be obtained, and the mailing address of "Debtor",
are as set forth in Schedule 2 of said Exhibit B attached hereto; and a
statement indicating the types, or describing the items, of collateral is
set forth hereinabove.
28. ACTIONS AND PROCEEDINGS. Lender has the right to appear in and defend
any action or proceeding brought with respect to the Property and to bring any
action or proceeding, in the name and on behalf of Borrower, which Lender, in
its discretion, decides should be brought to protect its interest in the
Property. Lender shall, at its option, be subrogated to the lien of any mortgage
or other security instrument discharged in whole or in part by the Debt, and any
such subrogation rights shall constitute additional Security for the payment of
the Debt.
29. WAIVER OF COUNTERCLAIM. Borrower hereby waives the right to assert a
counterclaim, other than a mandatory or compulsory counterclaim, in any action
or proceeding brought against it by Lender, and waives trial by jury in any
action or proceeding brought by either party hereto against the other or in any
counterclaim asserted by Lender against Borrower, or in any matters whatsoever
arising out of or in any way connected with this Security Instrument, the Note,
any of the Other Security Documents or the Debt.
30. RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall have the right from
time to time to take action to recover any sum or sums which constitute a part
of the Debt as the same become due, without regard to whether or not the balance
of the Debt shall be due, and without prejudice to the right of Lender
thereafter to bring an action of foreclosure, or any other action, for a default
or defaults by Borrower existing at the time such earlier action was commenced.
31. MARSHALING AND OTHER MATTERS. Borrower hereby waives, to the extent
permitted by law, the benefit of all appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all rights of
marshaling in the event of any sale hereunder of the Property or any part
thereof or any interest therein. Further, Borrower hereby expressly waives any
and all rights of redemption from sale under any order or decree of foreclosure
of this Security Instrument on behalf of Borrower, and on behalf of each and
every person acquiring any interest in or title to the Property subsequent to
the date of this Security Instrument and on behalf of all persons to the extent
permitted by applicable law.
32. ENVIRONMENTAL HAZARDS. (a) Borrower represents and warrants, to the
best of Borrower's knowledge, after due inquiry and investigation, that: (i)
there are no Hazardous Substances (defined below) or underground storage tanks
in, on, or under the Property, except those that are both (A) in compliance with
Environmental Law (defined below) and with permits issued pursuant thereto and
(B) fully disclosed to Lender in writing pursuant to the written reports
resulting from the environmental assessments of the Property delivered to Lender
(the "Environmental Report"); (ii) there are no past, present or threatened
Releases (defined below) of Hazardous Substances in, on, under or from the
Property except as described in the Environmental Report; (iii) there is no
threat of any Release of Hazardous Substances migrating to the Property except
as described in the Environmental Report; (iv) there is no past or present
non-compliance with Environmental Law, or with permits issued pursuant thereto,
in connection with the Property except as described in the Environmental Report;
(v) Borrower does not know of, and has not received, any written or oral notice
or other communication from any person or entity (including but not limited to a
governmental entity) relating to Hazardous Substances or Remediation (defined
below) thereof, of possible liability of any person or entity pursuant to any
Environmental Law, other environmental condition in connection with the
Property, or any actual or potential administrative or judicial proceedings in
connection with any of the foregoing; and (vi) Borrower has truthfully and fully
provided to Lender, in writing, any and all information relating to conditions
in, on, under or from the Property that is known to Borrower and that is
contained in Borrower's files and records, including but not limited to any
reports relating to Hazardous Substances in, on, under or from the Property
and/or to the environmental condition of the Property.
"Environmental Law" means any present and future federal, state and local
laws, statutes, ordinances, rules, regulations and the like, as well as common
law, relating to protection of human health or the environment, relating to
Hazardous Substances, relating to liability for or costs of Remediation or
prevention of Releases of Hazardous Substances or relating to liability for or
costs of other actual or threatened danger to human health or the environment.
"Environmental Law" includes, but is not limited to, the following statutes, as
amended, any successor thereto, and any regulations promulgated pursuant
thereto, and any state or local statutes, ordinances, rules, regulations and the
like addressing similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource
Conservation and Recovery Act (including but not limited to Subtitle I relating
to underground storage tanks); the Solid Waste Disposal Act; the Clean Water
Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking
Water Act; the Occupational Safety and Health Act; the Federal Water Pollution
Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the
Endangered Species Act; the National Environmental Policy Act; and the River and
Harbors Appropriation Act. "Environmental Law" also includes, but is not limited
to, any present and future federal, state and local laws, statutes, ordinances,
rules, regulations and the like, as well as common law: conditioning transfer of
property upon a negative declaration or other approval of a governmental
authority of the environmental condition of the property; requiring notification
or disclosure of Releases of Hazardous Substances or other environmental
condition of the Property to any governmental authority or other person or
entity, whether or not in connection with transfer of title to or interest in
property; imposing conditions or requirements in connection with permits or
other authorization for lawful activity; relating to nuisance, trespass or other
causes of action related to the Property; and relating to wrongful death,
personal injury, or property or other damage in connection with any physical
condition or use of the Property.
"Hazardous Substances" include but are not limited to any and all
substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or regulatory
effect under any present or future Environmental Law or that may have a negative
impact on human health or the environment, including but not limited to
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables and
explosives.
"Release" of any Hazardous Substance includes but is not limited to any
release, deposit, discharge, emission, leaking, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing or other
movement of Hazardous Substances.
"Remediation" includes but is not limited to any response, remedial,
removal, or corrective action, any activity to cleanup, detoxify, decontaminate,
contain or otherwise remediate any Hazardous Substance, any actions to prevent,
cure or mitigate any Release of any Hazardous Substance, any action to comply
with any Environmental Law or with any permits issued pursuant thereto, any
inspection, investigation, study, monitoring, assessment, audit, sampling or
testing, laboratory or other analysis, or evaluation relating to any Hazardous
Substances or to anything referred to in this Paragraph 32.
(b) Borrower covenants and agrees that: (i) all uses and operations on
or of the Property, whether by Borrower or any other person or entity,
shall be in compliance with all Environmental Law and permits issued
pursuant thereto; (ii) there shall be no Releases of Hazardous Substances
in, on, under or from the Property; (iii) there shall be no Hazardous
Substances in, on, or under the Property, except those that are both (A) in
compliance with all Environmental Law and with permits issued pursuant
thereto and (B) fully disclosed to Lender in writing; (iv) Borrower shall
keep the Property free and clear of all liens and other encumbrances
imposed pursuant to any Environmental Law, whether due to any act or
omission of Borrower or any other person or entity (the "Environmental
Liens"); (v) Borrower shall, at its sole cost and expense, fully and
expeditiously cooperate in all activities pursuant to subparagraph 32(c)
below, including but not limited to providing all relevant information and
making knowledgeable persons available for interviews; (vi) Borrower shall,
at its sole cost and expense, perform any environmental site assessment or
other investigation of environmental conditions in connection with the
Property, pursuant to any reasonable written request of Lender (including
but not limited to sampling, testing and analysis of soil, water, air,
building materials and other materials and substances whether solid, liquid
or gas), and share with Lender the reports and other results thereof, and
Lender and other parties shall be entitled to rely on such reports and
other results thereof; (vii) Borrower shall, at its sole cost and expense,
comply with all reasonable written requests of Lender to (A) reasonably
effectuate Remediation of any condition (including but not limited to a
Release of a Hazardous Substance) in, on, under or from the Property; (B)
comply with any Environmental Law; (C) comply with any directive from any
governmental authority; and (D) take any other reasonable action necessary
or appropriate for protection of human health or the environment; (viii)
Borrower shall not do or allow any tenant or other user of the Property to
do any act that materially increases the dangers to human health or the
environment, poses an unreasonable risk of harm to any person or entity
(whether on or off the Property), impairs or may impair the value of the
Property, is contrary to any requirement of any insurer, constitutes a
public or private nuisance, constitutes waste, or violates any covenant,
condition, agreement or easement applicable to the Property; and (ix)
Borrower shall immediately notify Lender in writing of (A) any presence or
Releases or threatened Releases of Hazardous Substances in, on, under, from
or migrating towards the Property; (B) any non-compliance with any
Environmental Law related in any way to the Property; (C) any actual or
potential environmental lien against the Property; (D) any required or
proposed Remediation of environmental conditions relating to the Property;
and (E) any written or oral notice or other communication which Borrower
becomes aware from any source whatsoever (including but not limited to a
governmental entity) relating in any way to Hazardous Substances or
Remediation thereof, possible liability of any person or entity pursuant to
any Environmental Law, other environmental conditions in connection with
the Property, or any actual or potential administrative or judicial
proceedings in connection with anything referred to in this Paragraph 32.
(c) Lender and any other person or entity designated by Lender,
including but not limited to any receiver, any representative of a
governmental entity, and any environmental consultant shall have the right,
but not the obligation, to enter upon the Property at all reasonable times
to assess any and all aspects of the environmental condition of the
Property and its use, including but not limited to conducting any
environmental assessment or audit (the scope of which shall be determined
in Lender's sole and absolute discretion) and taking samples of soil,
ground water or other water, air or building materials, and conducting
other invasive testing. Borrower shall cooperate with and provide access to
Lender and any such person or entity designated by Lender.
33. INDEMNIFICATION. Subject to the limitations set forth in Paragraph 47
hereof, Borrower shall protect, defend, indemnify and save harmless Lender from
and against all liabilities, obligations, claims, demands, damages, penalties,
causes of action, losses, fines, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses actually incurred), imposed
upon or incurred by or asserted against Lender by reason of (a) ownership of
this Security Instrument, the Property or any interest therein or receipt of any
Rents; (b) any accident, injury to or death of persons or loss of or damage to
property occurring in, on or about the Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (c) any use, non use or condition in, on or about the Property or any
part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (d) any failure on the part of Borrower to
perform or comply with any of the terms of this Security Instrument; (e)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Property or any part thereof; (f) the failure of any
person to file timely with the Internal Revenue Service an accurate Form 1099-B,
Statement for Recipients of Proceeds from Real Estate, Broker and Barter
Exchange Transactions, which may be required in connection with this Security
Instrument, or to supply a copy thereof in a timely fashion to the recipient of
the proceeds of the transaction in connection with which this Security
Instrument is made; (g) the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release, or threatened release of any Hazardous
Substances on, from, or affecting the Property or any other property occurring
prior to or during Borrower's ownership of the Property; (h) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
or related to the presence of such Hazardous Substances as set forth in
subparagraph 33(g); (i) any lawsuit brought or threatened, settlement reached,
or government order relating to the presence of such Hazardous Substances as set
forth in subparagraph 33(g); (j) any violation of laws, orders, regulations,
requirements, or demands of government authorities, which are based upon or in
any way related to such Hazardous Substances, including, without limitation, the
costs and expenses of any remedial action, attorney and consultant fees,
investigation and laboratory fees, court costs, and litigation expenses; (k) any
representation or warranty made herein or in the Note, this Security Instrument
or the Other Security Documents being false or misleading in any respect as of
the date such representation or warranty was made; (1) any claim by brokers,
finders or similar persons claiming to be entitled to a commission in connection
with any Lease or other transaction involving the Property or any part thereof
under any legal requirement or any liability asserted against Lender with
respect thereto; or (m) the claims of any lessee of all or any portion of the
Property or any person acting through or under any lessee or otherwise arising
under or as a consequence of any Lease. Any amounts payable to Lender by reason
of the application of this Paragraph 33 shall be secured by this Security
Instrument and shall become immediately due and payable and shall bear interest
at the Default Rate from the date loss or damage is sustained by Lender until
paid. The obligations and liabilities of Borrower under this Paragraph 33 shall
survive any termination, satisfaction, assignment, entry of a judgment of
foreclosure, delivery of a deed in a nonjudicial foreclosure or delivery of a
deed in lieu of foreclosure of this Security Instrument.
34. NOTICES. All notices or other written communications hereunder shall be
deemed to have been properly given (i) upon delivery, if delivered in person or
by facsimile transmission with receipt acknowledged by the recipient thereof,
(ii) one (1) Business Day (defined below) after having been deposited for
overnight delivery with any reputable overnight courier service, or (iii) three
(3) Business Days after having been deposited in any post office or mail
depository regularly maintained by the U.S. Postal Service and sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to Borrower: Thicket Apartments, L.P.
3111 Paces Mill Road, Suite A-200
Atlanta, Georgia 30339
Attention: General Partner
If to Lender: Univest Mortgage Capital, LLC
Six Concourse Parkway, Suite 1400
Atlanta, Georgia 30328-5346
Attention: Daniel B. Lambert
Facsimile No. (770) 399-8396
or addressed as such party may from time to time designate by written
notice to the other parties.
Either party by notice to the other may designate additional or different
addresses for subsequent notices or communications.
For purposes of this Subsection, "Business Day" shall mean a day on which
commercial banks are not authorized or required by law to close in New York, New
York.
35. AUTHORITY. (a) Borrower (and the undersigned representative of
Borrower, if any) has full power, authority and right to execute, deliver and
perform its obligations pursuant to this Security Instrument, and to mortgage,
give, grant, bargain, sell, alien, enfeoff, convey, confirm, pledge, hypothecate
and assign the Property pursuant to the terms hereof and to keep and observe all
of the terms of this Security Instrument on Borrower's part to be performed.
(b) Borrower represents and warrants that Borrower is not a "foreign
person" within the meaning of 1445(f)(3) of the Internal Revenue Code of
1986, as amended and the related Treasury Department regulations, including
temporary regulations.
36. WAIVER OF NOTICE. Borrower shall not be entitled to any notices of any
nature whatsoever from Lender except with respect to matters for which this
Security Instrument specifically and expressly provides for the giving of notice
by Lender to Borrower and except with respect to matters for which Lender is
required by applicable law to give notice, and Borrower hereby expressly waives
the right to receive any notice from Lender with respect to any matter for which
this Security Instrument does not specifically and expressly provide for the
giving of notice by Lender to Borrower.
37. REMEDIES OF BORROWER. In the event that a claim or adjudication is made
that Lender has acted unreasonably or unreasonably delayed acting in any case
where by law or under the Note, this Security Instrument or the Other Security
Documents, it has an obligation to act reasonably or promptly, Lender shall not
be liable for any monetary damages, and Borrower's remedies shall be limited to
injunctive relief or declaratory judgment.
38. SOLE DISCRETION OF LENDER. Wherever pursuant to this Security
Instrument, Lender exercises any right given to it to approve or disapprove, or
any arrangement or term is to be satisfactory to Lender, the decision of Lender
to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Lender and
shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
39. NON-WAIVER. The failure of Lender to insist upon strict performance of
any term hereof shall not be deemed to be a waiver of any term of this Security
Instrument. Borrower shall not be relieved of Borrower's obligations hereunder
by reason of (a) the failure of Lender to comply with any request of Borrower or
any guarantors to take any action to foreclose this Security Instrument or
otherwise enforce any of the provisions hereof or of the Note or the Other
Security Documents, (b) the release, regardless of consideration, of the whole
or any part of the Property, or of any person liable for the Debt or any portion
thereof, or (c) any agreement or stipulation by Lender extending the time of
payment or otherwise modifying or supplementing the terms of the Note, this
Security Instrument or the Other Security Documents. Lender may resort for the
payment of the debt to any other security held by Lender in such order and
manner as Lender, in its discretion, may elect. Lender may take action to
recover the Debt, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of Lender thereafter to foreclose this Security
Instrument. The rights and remedies of Lender under this Security Instrument
shall be separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Lender shall be construed as an election to
proceed under any one provision herein to the exclusion of any other provision.
Lender shall not be limited exclusively to the rights and remedies herein stated
but shall be entitled to every right and remedy now or hereafter afforded at law
or in equity.
40. NO ORAL CHANGE. This Security Instrument, and any provisions hereof,
may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.
41. LIABILITY. If Borrower consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several. This Security Instrument shall be binding upon and inure to the benefit
of Borrower and Lender and their respective successors and assigns forever.
42. INAPPLICABLE PROVISIONS. If any term, covenant or condition of the Note
or this Security Instrument is held to be invalid, illegal or unenforceable in
any respect, the Note and this Security Instrument shall be construed without
such provision.
43. HEADINGS, ETC. The headings and captions of various paragraphs of this
Security Instrument are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
44. DUPLICATE ORIGINALS. This Security Instrument may be executed in any
number of duplicate originals and each such duplicate original shall be deemed
to be an original.
45. DEFINITIONS. Unless the context clearly indicates a contrary intent or
unless otherwise specifically provided herein, words used in this Security
Instrument may be used interchangeably in singular or plural form and the word
"Borrower" shall mean "each Borrower and any subsequent owner or owners of the
Property or any part thereof or any interest therein," the word "Lender" shall
mean "Lender and any subsequent holder of the Note," the word "Note" shall mean
"the Note and any other evidence of indebtedness secured by this Security
Instrument," the word "person" shall include an individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, and any other entity, and the words "Property" shall include any
portion of the Property and any interest therein. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa.
46. ASSIGNMENTS. Lender shall have the right to assign or transfer its
rights under this Security Instrument without limitation. Any assignee or
transferee shall be entitled to all the benefits afforded Lender under this
Security Instrument.
47. NON-RECOURSE LIABILITY. (a) Subject to the provisions of Paragraph 48
of this Security Instrument, and notwithstanding any other provision in the
Note, this Security Instrument or the Other Security Documents, the personal
liability of Borrower to pay the Debt shall be limited to (i) the Property, and
(ii) the Rents, including any Rents received or collected by or on behalf of
Borrower after and during the continuance of an Event of Default, except to the
extent that Borrower did not have the legal right, because of a bankruptcy,
receivership or similar judicial proceeding, to direct the disbursement of such
sums.
(b) Except as provided in Paragraph 48 of this Security Instrument,
Lender shall not seek (i) any judgment for a deficiency against Borrower in
any action to enforce any right or remedy under this Security Instrument,
or (ii) any judgment on the Note except as may be necessary in any action
brought under this Security Instrument to enforce the lien against the
Property.
(c) No provision of this Paragraph 47 shall (i) affect any guaranty,
indemnity or similar agreement executed in connection with the indebtedness
evidenced by the Note, (ii) release or reduce the indebtedness evidenced by
the Note, or (iii) impair the lien of this Security Instrument.
48. EXCEPTIONS TO NON-RECOURSE LIABILITY. (a) Borrower shall be personally
liable to Lender in the amount of any loss, damage or cost incurred by Lender
resulting from (i) fraud or intentional misrepresentation by Borrower or any
other person or entity employed by or an agent of Borrower in connection with
obtaining the loan evidenced by the Note, (ii) insurance proceeds, condemnation
awards, or other sums or payments attributable to the Property not applied in
accordance with the provisions of this Security Instrument, except to the extent
that Borrower did not have the legal right, because of a bankruptcy,
receivership, or similar judicial proceeding, to direct disbursement of such
sums or payments, (iii) all Rents received following and during the continuance
of any Event of Default under the Note or this Security Instrument and not
applied to payment of principal and interest due under the Note (including any
such Rents received or collected by or on behalf of Borrower after an Event of
Default, except to the extent that Borrower did not have the legal right,
because of a bankruptcy, receivership or similar judicial proceeding, to direct
the disbursement of such Rents), and payments of utilities, taxes and
assessments and insurance on the Property, as they become due or payable, (iv)
Borrower's failure to pay transfer fees and charges due Borrower under the Note
or this Security Instrument in connection with any transfer of all or any part
of the Property, or any interest therein, to the extent permitted herein by
Lender, from Borrower to Borrower's transferee, or transfer of beneficial
interest in Borrower (if Borrower is not a natural person or persons but is a
corporation, partnership, trust or other legal entity), (v) a default by
Borrower under Paragraphs 32 or 33(g) through (j) of this Security Instrument,
(vi) failure to pay any recording taxes or documentary stamps or other charges
required in connection with this Security Instrument, (vii) failure to pay real
estate taxes for the Property, (viii) failure to pay insurance premiums for the
Property, (ix) misapplication or misappropriation of Rents or security deposits
collected in advance, (x) the inability of Lender to enforce the Assignment of
Leases and Rents executed by Borrower in favor of Lender with regard to the
Property, and (xi) failure of Borrower to comply with all provisions of the
Note, Security Instrument or Other Security Documents regarding delivery of
financial or operating statements including, without limitation, Paragraph 15 of
this Security Instrument.
(b) Notwithstanding the foregoing, the agreement of Lender not to
pursue recourse liability as set forth in this Paragraph 48 shall become
NULL and VOID and shall be of no further force and effect in the event
Borrower shall be in default of the provisions of Paragraphs 50 or 9
hereof.
(c) No provision of this Paragraph 48 shall (i) affect any guaranty,
indemnity or similar agreement executed in connection with the indebtedness
evidenced by the Note, (ii) release or reduce the indebtedness evidenced by
the Note, or (iii) impair the lien of this Security Instrument.
49. MANAGEMENT. Borrower covenants and agrees that any replacement or
successor manager of the Property shall have demonstrated management experience
of a type similar to the management of the Property as of the date hereof and
shall be subject to the reasonable approval of Lender. Any replacement or
successor exclusive leasing agent for the Property, if other than Borrower or
such Property manager approved by Lender, shall have demonstrated leasing
experience of a type similar to the leasing at the Property as of the date
hereof and shall be subject to the reasonable approval of Lender. In the event
of the bankruptcy or insolvency of the manager of the Property, Borrower shall,
at the request of Lender, terminate the manager and replace the manager with a
new manager approved by Lender.
50. SINGLE PURPOSE ENTITY/SEPARATENESS. Borrower represents, warrants and
covenants as follows:
(a) Borrower does not own and will not own any encumbered asset or
property other than (i) the Property, and (ii) incidental personal property
necessary for the ownership or operation of the Property.
(b) Borrower will not engage in any business other than the ownership,
management and operation of the Property and Borrower will conduct and
operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any
Constituent Party, as defined below, or Affiliate, as defined below, of the
Borrower or any Affiliate of a Constituent Party or any guarantor, except
upon terms and conditions that are intrinsically fair and substantially
similar to those that would be available on an arms-length basis with third
parties other than any Constituent Party or Affiliate of Borrower, any
Constituent Party or any guarantor.
(d) Borrower has not incurred and will not incur any indebtedness,
secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation), other than (i) the Debt, and (ii) trade and
operational debt incurred in the ordinary course of business with trade
creditors and in amounts as are normal and reasonable under the
circumstances. No indebtedness other than the Debt may be secured
(subordinate or pari passu) by the Property.
(e) Borrower has not made and will not make any loans or advances to
any third party (including any Constituent Party or Affiliate of Borrower,
any Constituent Party or any guarantor).
(f) Borrower is solvent and Borrower will pay its debts from its
assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things
necessary to preserve its existence, and Borrower will not, nor will
Borrower permit any Constituent Party or guarantor to, amend, modify or
otherwise change the partnership certificate, partnership agreement,
articles of incorporation and bylaws, articles or certificate of
organization, operating agreement, trust or other organizational documents
of Borrower or such Constituent Party or guarantor in a manner which would
adversely affect Borrower's existence as a single purpose entity.
(h) Borrower will maintain books and records and bank accounts
separate from those of its Affiliates and any Constituent Party.
(i) Borrower will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other entity
(including any Affiliate of Borrower, any Constituent Party, any guarantor
or any Affiliate of any Constituent Party or guarantor).
(j) Borrower will maintain, to the best of its ability, adequate
capital for the normal obligations reasonably foreseeable in a business of
its size and character and in light of its contemplated business
operations.
(k) Borrower or any Constituent Party will not seek the dissolution or
winding up, in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower
with those of any Constituent Party, guarantor, any Affiliate of guarantor,
any Constituent Party or any guarantor, or any other person.
(m) Borrower has and will maintain its assets in such a manner that it
will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any Constituent Party, guarantor, or any
Affiliate of any Constituent Party or any guarantor, or any other person.
(n) Borrower does not and will not hold itself out to be responsible
for the debts or obligations of any other person.
As used herein, the term "Constituent Party" shall mean any signatory
to this Security Instrument that signs on Borrower's behalf that is a
corporation, general partner, general partnership, limited partnership,
joint venture, trust, or other type of business organization, and the term
"Affiliate" shall mean any person or entity directly or indirectly
controlling, controlled by or under common control with another person or
entity.
[The foregoing covenants shall apply to managing members, general
partners or principal shareholders of Borrower when appropriate as
determined by Lender.]
51. TIME IS OF THE ESSENCE. Borrower agrees that where, by the terms of the
Note, this Security Instrument or any Other Security Document, a day is named or
a time is fixed for the payment of any sum of money or the performance of any
agreement, the time and day stated enters into the consideration of and is of
the essence of such agreement.
52. EQUITABLE SUBROGATION. In the event any indebtedness secured by any
prior lien on the Property is paid from the proceeds of the loan secured by this
Security Instrument, the Lender shall be subrogated to the rights of the holder
of such lien as fully as if such lien had been assigned to the Lender.
53. GOVERNING LAW. Unless otherwise specified herein, this Security
Instrument shall be construed and interpreted under the laws of the state in
which the Property is located.
54. WAIVER OF TRIAL BY JURY. BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR
INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR THE LOAN
EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY INSTRUMENT OR THE OTHER SECURITY
DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS
OR AGENTS IN CONNECTION THEREWITH.
55. BUSINESS PURPOSES. The loan evidenced by the Note is solely for the
business purpose of Borrower, and is not for personal, family, household or
agricultural purposes.
56. TRANSFER OF LOAN. Lender may, at any time, sell, transfer or assign the
Note, this Security Instrument or the Other Security Documents, and any or all
servicing rights with respect thereto, or grant participations therein or issue
mortgage pass-through certificates or other securities evidencing a beneficial
interest in a rated or unrated public offering or private placement (the
"Securities"). Lender may forward to each purchaser, transferee, assignee,
servicer, participant, investor in such Securities or any rating agency rating
such Securities (all of the foregoing entities collectively referred to as the
"Investor") and each prospective Investor, all documents and information which
Lender now has or may hereafter acquire relating to the Debt and to Borrower,
any guarantor, any indemnitors and the Property, whether furnished by Borrower,
any guarantor, any indemnitors or otherwise, as Lender determines necessary or
desirable. Borrower, any guarantor and any indemnitor agree to cooperate with
Lender in connection with any transfer made or any Securities created as
contemplated by this Section, including, without limitation, the delivery of an
estoppel certificate required in accordance with provisions hereof and such
other documents as may be reasonably requested by Lender. Borrower shall also
furnish and Borrower, any guarantor and any indemnitor consent to Lender
furnishing to such Investors or such prospective Investors or rating agency any
and all information concerning the Property, the Leases, the financial condition
of Borrower, any guarantor and any indemnitor as may be requested by Lender, any
Investor or any prospective Investor or rating agency in connection with any
sale, transfer or participation interest.
57. In the event of any inconsistencies between the provisions of Part II
of this Security Instrument and the provisions of Part I of this Security
Instrument, the provisions of Part II shall control and be binding.
PART II
STATE SPECIFIC PROVISIONS
58. GEORGIA PROVISIONS. Notwithstanding anything to the contrary elsewhere
in this Security Instrument, if an Event of Default shall have occurred, Lender,
at its option, may sell the Property or any part of the Property at one or more
public sale or sales before the door of the courthouse of the county in which
the Land or any part of the Land is situated, to the highest bidder for cash, in
order to pay the Debt and all expenses of sale and of all proceedings in
connection therewith, including reasonable attorneys' fees actually incurred,
after advertising the time, place and terms of sale once a week for four (4)
weeks immediately preceding such sale (but without regard to the number of days)
in a newspaper in which Sheriff's sales are advertised in said county. At any
such public sale, Lender may execute and deliver to the purchaser a conveyance
of the Property or any part of the Property in fee simple with full warranties
of title, and to this end Borrower hereby constitutes and appoints Lender the
agent and attorney-in-fact of Borrower to make such sale and conveyance, and
thereby to divest Borrower of all right, title and equity that Borrower may have
in and to the Property and to vest the same in the purchaser or purchasers at
such sale or sales, and all the acts and doings of said agent and
attorney-in-fact are hereby ratified and confirmed and any recitals in said
conveyance or conveyances as to facts essential to a valid sale shall be binding
upon Borrower. The aforesaid power of sale and agency hereby granted are coupled
with an interest and are irrevocable by death or otherwise, are granted as
cumulative of the other remedies provided hereby or by law for collection of the
Debt and shall not be exhausted by one exercise thereof but may be exercised
until full payment of all of the Debt. In the event of any sale under this
Security Instrument by virtue of the exercise of the powers herein granted, or
pursuant to any order in any judicial proceeding or otherwise, the Property may
be sold as an entirety or in separate parcels and in such manner or order as
Lender in its sole discretion may elect, and if Lender so elects, Lender may
sell the personal property covered by this Security Instrument at one or more
separate sales in any manner permitted by the Uniform Commercial Code of the
State of Georgia, and one or more exercises of the powers herein granted shall
not extinguish nor exhaust such powers, until the entire Property is sold or the
Debt is paid in full. If the Debt is now or hereafter further secured by any
chattel mortgages, pledges, contracts of guaranty, assignments of lease or other
security instruments, Lender may at its option exhaust the remedies granted
under any of said security instruments either concurrently or independently, and
in such order as Lender may determine.
59. DEED TO SECURE DEBT. This conveyance is to be construed under the
existing laws of the State of Georgia as a deed passing title, and not as a
mortgage, and is intended to secure the payment of all sums secured hereby.
60. ERISA. (a) Borrower shall not engage in any transaction which would
cause any obligation, or action taken or to be taken, hereunder (or the exercise
by Lender of any of its rights under the Note, this Security Instrument and the
Other Security Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(b) Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of
this Security Instrument, as requested by Lender in its sole discretion,
that (i) Borrower is not an "employee benefit plan" as defined in Section
3(3) of ERISA, or other retirement arrangement, which is subject to Title I
of ERISA or Section 4975 of the Internal revenue Code of 1986, as amended
(the "Code"), or a "governmental plan" within the meaning of Section 3(32)
of ERISA; (ii) Borrower is not subject to state statutes regulating
investments and fiduciary obligations with respect to governmental plans;
and (iii) one or more of the following circumstances is true:
(A) Equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. section 2510.3-101(b)(2);
(B) Less than 25 percent of each outstanding class of equity
interests in Borrower are held by "benefit plan investors" within the
meaning of 29 C.F.R. section 2510.3- 101(f)(2); or
(C) Borrower qualifies as an "operating company" or a "real
estate operating company" within the meaning of 29 C.F.R. section
2510.3-101(c) or (e) or an investment company registered under The
Investment Company Act of 1940.
IN WITNESS WHEREOF, this Security Instrument has been executed by Borrower
the day and year first above written.
"BORROWER":
Signed, sealed and delivered THICKET APARTMENTS, L.P., a Delaware limited
in the presence of: partnership
________________________ By: THICKET HOLDINGS, INC., a Delaware
Unofficial Witness corporation, General Partner
________________________ BY: /s/ Stephanie A. Reed
Notary Public STEPHANIE A. REED,
Vice President/Secretary
[NOTARIAL SEAL]
[CORPORATE SEAL]
Commission Expiration Date:
________________________
COMMERCIAL CREDIT AGREEMENT
THIS AGREEMENT made and entered into as of the 28th day of June 1996, by
and between HARDWICK BANK AND TRUST COMPANY ("Hardwick") and the TRUSTEES OF THE
VININGS INVESTMENT PROPERTIES TRUST, a Massachusetts business trust
("Borrower").
WITNESSETH:
WHEREAS, Borrower has requested that Hardwick extend a line of credit (the
Credit Line") to Borrower in amount not to exceed the principal sum of Two
Million and No/100 Dollars ($2,000,000);
WHEREAS, Hardwick is willing to extend the Credit Line to Borrower upon the
terms and conditions of the Agreement and the other Financing Documents
(hereinafter defined).
NOW, THEREFORE, in consideration of the premises and in further
consideration of the agreements, covenants, promises, conditions,
representations and warranties hereinafter set forth, the parties do hereby
agree as follows:
ARTICLE 1
TERMS AND DEFINITIONS
Certain terms used in this Agreement are defined herein. In addition to the
other terms hereinafter defined, the following terms shall have the meanings set
forth in this Article 1:
1.01. "Affiliate": means any trustee, officer or shareholder of Borrower or
any person, corporation, partnership or other entity who or which, directly or
indirectly or beneficially, owns any beneficial interest in Borrower, or any
member of the immediate family of any such officer, trustee or shareholder, or
any Person which is controlled by, controls, or is under common control with
Borrower.
1.02. "Agreement": means this Commercial Credit Agreement, as it may be
amended, modified or supplemented from time to time.
1.03. "Banking Day": means a day when Hardwick is open to the public for
ordinary banking business.
1.04. "Base Rate": means the variable rate of interest per annum defined as
the "Base Rate" in the Master Note (as referred to and defined in Article 2 of
this Agreement).
1.05. "Borrower": means the Trustees of the Vinings Investment Properties
Trust., a Massachusetts business trust, which was formerly known as Mellon
Participating Mortgage Trust Commercial Properties Series 85/10.
1.06 "Credit Line": means the line of credit established by Hardwick in
favor of Borrower pursuant to Section 4.01 of this Agreement in an amount not to
exceed at any time or times the principal sum of Two Million and No/100
($2,000,000).
1.07. "Credit Line Loan Account": means the account on the books of
Hardwick in which will be recorded loans and advances against the Credit Line,
payments made by Borrower on advances against the Credit Line and other
appropriate debits and credits as provided in this Agreement.
1.08. "Credit Line Termination Date": means June 28, 1997
1.09, "Depository Account": means the depository account of Borrower
maintained at Hardwick and identified as account number .
1.10. "Event of Default": means any one or more of the events defined as an
"Event of Default" in Article 8 of this Agreement.
1.11. "Financing Documents": Means collectively, this Agreement, the
documents referred to in Article 2 and all other documents and instruments
evidencing or securing or otherwise relating to the Credit Line.
1.12. "Governmental Authority": means the United States, the State or
Georgia, Gwinnett County, any municipality in which the Real Property may be
located, and any agency, department, commission, board, bureau or
instrumentality of any of them.
1.13. "Guarantors": means Gilbert H. Watts, Jr. ("Watts"), Peter D. Anzo
("Anzo"), and Martin H. Petersen ("Petersen"), Vinings Investment Properties,
Inc., a Maryland corporation ("Vinings"), and PBC Acquisition, Inc., a Delaware
corporation ("PBC").
1.14. "Hardwick": means Hardwick Bank and Trust Company, and its successors
and assigns.
1.15. "Loan Obligations": means the aggregate of all principal and interest
owing from time to time under the Master Note and all expenses, charges and
other amounts owing by Borrower to Hardwick under the Financing Documents.
1.16. "Master Note": means the Master Note, as defined in Article 2 of this
Agreement.
1.17. "Obligations": means all loans, advances, debts, liabilities,
obligations, covenants and duties owing by Borrower to Hardwick of every kind
and nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, whether arising under the Financing Documents or any other
instrument or agreement, whether or not for the payment of money, whether
executed alone or together with another Person or Persons, whether arising by
reason of an extension of credit, opening of a letter of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect, absolute or
contingent, now existing or hereafter arising or created, and however acquired.
The term includes, but not by way of limitation, all interest, charges,
expenses, attorneys fees, and other sums chargeable under this or any other
agreement or instrument.
1.18. "Person": means any individual, sole proprietorship, partnership,
joint venture, unincorporated organization, association, firm, corporation,
partnership, institution, entity, party or government (whether national,
federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, body, agency or department thereof).
1.19. "Real Property": shall mean the real property described in the
Security Deed (as defined in Article 2 hereof), together with all building
improvements now or hereafter located thereon.
1.20. "UCC": means the Uniform Commercial Code as adopted by the State of
Georgia, as amended from time to time.
ARTICLE 2
FINANCING DOCUMENTS
Borrower has duly authorized, executed and delivered to Hardwick, or caused
the same to be executed, the following documents:
2.01. Master Note. The promissory note (the "Master Note"), dated of even
date herewith, in the principal face of the Credit Line, payable to the order of
Hardwick, evidencing Borrower's obligation to pay the amounts advanced or
re-advanced by Hardwick against the Credit Line with interest and agreed charges
and all renewals, modifications, amendments and substitutions, if any, thereof.
2.02. Guaranty. The Guaranty (the "Guaranty") dated the date hereof whereby
the Guarantors have agreed, among other things, to guaranty to Hardwick the
payment by Borrower of all of its Obligations to Hardwick.
2.03. Security Deed. The Deed to Secure Debt and Security Agreement
(hereinafter the "Security Deed"), from PBC to Hardwick, dated of even date
herewith and conveying the Real Property to Hardwick to Secure the Guaranty;
which Security Deed is to be recorded in the office of the Clerk of the Superior
Court of Gwinnett County, Georgia on or about the date hereof.
2.04. Financing Statements. UCC Financing Statements from PBC in favor of
Hardwick giving notice of the security agreement contained in the Security Deed;
which Financing Statements are to be recorded in the offices of the Clerks of
the Superior Court of Gwinnett County, Georgia on or about the date hereof and
in all other public offices where the filing thereof is necessary to perfect the
security interest of Hardwick.
2.05. Lease Assignment. The Assignment of Leases, Rents and Profits
(hereinafter the "Lease Assignment"), from PBC to Hardwick, dated of even date
herewith and securing the Guaranty; which Lease Assignment is to be recorded in
the office of the Clerk of the Superior Court of Gwinnett County, Georgia, on or
about the date hereof.
ARTICLE 3
CONDITIONS TO DISBURSEMENT
Prior to the advance by Hardwick of any amount against the Credit Line
Borrower shall deliver, or cause to be delivered, to Hardwick, in each case in
form and substance to Hardwick and its counsel, the following (any of which can
be waived by Hardwick in its sole discretion):
3.01. Organizational Documents of Borrower. A copy of Borrower's
Declaration of Trust, together with all amendments thereto and a copy of the
by-laws of Borrower, as amended, each certified as being a true, correct and
complete by Borrower.
3.02. Proceedings of Borrower. Certified copies of all proceedings which
shall have been taken by Borrower to authorize the execution and deliver of this
Agreement and the other Financing Documents to be executed by Borrower and the
transactions contemplated hereby and thereby.
3.03. Corporate Documents of Vinings. A copy of Vinings' articles of
incorporation, certified by the Secretary of State and the State of Maryland,
together with a certificate from the Secretary of State of Maryland certifying
that Vinings is in good standing, and together with a certificate from the
Secretary of State of Georgia certifying that Vinings is a foreign corporation
authorized to do business in the State of Georgia and is in good standing.
3.04. Corporate Proceedings of Vinings. Certified copies of all corporate
proceedings which shall have been taken by Vinings to authorize the execution
and deliver of the Guaranty.
3.05. Corporate Documents of PBC. A copy of PBC' articles of incorporation,
certified by the Secretary of State of the State of Delaware, together with a
certificate from the Secretary of State of Delaware certifying that PBC is in
goody standing, and together with a certificate from the Secretary of State of
Georgia certifying that PBC is a foreign corporation authorized to do business
in the Sate of Georgia and is in good standing.
3.06. Corporate Proceedings of PBC. Certified copies of all corporate
proceedings which shall have been taken by PBC to authorize the execution and
deliver of the Guaranty, the Security Deed, the Lease Assignment and the
Financing Statements.
3.07. Financing Documents. This Agreement and the other Financing
Documents.
3.08. Insurance. The certificates of insurance or insurance policies as
required by Section 6.01 of this Agreement.
3.09. Title Opinion. An opinion of title with respect to the Real Property,
issued by a law firm of recognized expertise, certifying that, in the opinion of
such law firm, the Real Property is owned by Borrower free and clear of all
title defects, liens and encumbrances, except such as may be approved by
Hardwick, and including copies of all exceptions mentioned therein.
3.10. Costs of closing. Borrower shall pay or reimburse Hardwick for the
payment of all out of pocket expenses, including without limitation legal fees
and recording fees and expenses, including recording fees with respect to the
Financing Documents, paid or incurred by Hardwick as the result of the
transactions contemplated by this Agreement, including the out of pocket
expenses of Hardwick's counsel.
ARTICLE 4
CREDIT LINE
4.01. Credit Line. Contemporaneously with the execution and delivery of
this Agreement, the Master Note and the other Financing Documents, Hardwick is,
subject to the terms of this Agreement, hereby establishing in favor of Borrower
the Credit Line. Subject to the terms of this Agreement and if Borrower is not
in default hereunder, and if no condition exists which but for the giving of
notice or the lapse of time, or both, would constitute and Event of Default
hereunder, Borrower will be advanced funds against the Credit Line in accordance
with the terms of this Article 4, until the earlier of
(i) Credit Line Termination Date or (ii) the date that the Credit Line is
terminated as provided for in Section 9.01 hereof.
4.02. Interest. The outstanding principal balance of the Master Note shall
bear interest at a variable rate of interest per annum as provided for in the
Master Note. Borrower shall, in accordance with the terms of the Master Note
make monthly payments of interest to Hardwick on the outstanding principal
balance of the Master Note, and Borrower hereby irrevocably authorizes Hardwick
to draft the Depository Account for the interest due on the Master Note.
Interest on the amount of each advance under the Credit Line shall be calculated
from the date of each such advance.
4.03. Termination of Credit Line. The termination of the Credit Line
pursuant to the provisions of Section 4.01 or Section 9.01 shall not affect the
rights, liabilities and obligations of the parties with respect to advances made
Hardwick prior to the effective date of termination, and upon any termination of
the Credit Line, all provisions of this Agreement and the Financing Documents
shall remain in full force and effect, except for the obligation of Hardwick to
extend credit to Borrower under the Credit Line, until all Obligations of
Borrower to Hardwick shall have been paid in full.
4.04 Credit Line Loan Account. Hardwick shall establish on its books a
Credit Line Loan Account with respect to the Credit Line, and shall enter all
advances against the Credit Line in the Credit Line Loan Account. Hardwick shall
also record in the Credit Line Loan Account in accordance with customary
accounting practice all other charges, expenses and other items properly
chargeable to Borrower with respect to the Credit Line, including interest
charges, all payments made by Borrower on account of the Credit Line and the
interest payable thereon, and other appropriate debits and credits. The debit
balance in the Credit Line Loan Account shall reflect the amount of the
indebtedness of Borrower to Hardwick from time to time under the Credit Line by
reason of advances against the Credit Line and other appropriate charges,
including interest charges. At least once each month Hardwick shall render a
statement of account for the Credit Line Loan Account which statement shall be
considered correct and accepted by Borrower and conclusively binding upon
Borrower unless Borrower notifies Hardwick to the contrary within ten (10) days
of Hardwick's sending such statement to Borrower.
4.05 Advances Against Credit Line. Subject to the terms of this Agreement,
Borrower shall be advanced funds against the Credit Line upon written request,
signed by a duly authorized representative of the Borrower, or upon the verbal
request of a person duly authorized by the Borrower for such purpose. Borrower
agrees that all verbal requests for advances against the Credit Line shall be
confirmed in writing by a duly authorized representative of Borrower by
telecopier or facsimile transmission to Hardwick and by mailing of the original
of such confirmation to Hardwick. Until the Borrower shall direct otherwise, by
written notice actually received by an officer of Hardwick holding a title of
vice president or greater, any one or more of the following persons shall be
authorized to request advances against the Credit Line: Peter D. Anzo and Martin
H. Petersen. Borrower hereby specifically vests such persons with authority to
request advances against the Credit Line. Borrower may, with the prior written
approval of Hardwick and by written authorization of duly authorized officers of
Borrower delivered to Hardwick, change the designation of the persons authorized
to request advances against the Credit Line. In no event and at no time shall
more than three (3) persons be authorized by the Borrower to request advances
against the Credit Line. All advances against the Credit Line shall be made to
the Depository Account unless otherwise directed in writing by one of the
authorized representatives of Borrower. Hardwick agrees that if a request for an
advance against the Credit Line is made on or before 11:00 A. M. Eastern
Standard Time or Eastern Daylight Savings Time, as applicable, on a Banking Day,
such advance will be made on the same Banking Day. If such request is received
after said time, Hardwick may if able, but shall not be required, to make the
advance until the next Banking Day of Hardwick. Notwithstanding the foregoing it
is expressly agreed that in the event that Hardwick should make an advance
against the Credit Line at the request of a person reasonably believed by
Hardwick, its officers or employees, to be a person authorized to request
advances against the Credit Line, Borrower shall be liable for the payment of
same and interest thereon as provided in the Master Note, provided that the
advance is made in the manner provided for herein or the Borrower has otherwise
received the beneficial use of such funds. Hardwick shall have no duty or
obligation to make an advance against the Credit Line other than on a Banking
Day.
ARTICLE 5
WARRANTIES OF BORROWER
Borrower hereby warrants and represents and/or covenants to Hardwick as
follows:
5.01. Status and Authority of Borrower. That Borrower (i) is a business
trust duly organized, existing and in good standing under the laws of the State
of Massachusetts, (ii) is duly qualified to do business in and is in good
standing in every other jurisdiction in which the character of character of the
properties owned by it or in which the transaction of its business makes such
qualification necessary, (iii) has the power, authority and legal right to carry
on the business now being conducted by it and to engage in the transactions
contemplated by the Agreement and the other Financing Documents to be executed
by Borrower, and (iv) the execution and delivery of this Agreement and the
Financing Documents to be executed by Borrower and the performance and
observance of the provisions hereof and thereof have been duly authorized by all
necessary actions on the part of Borrower.
5.02. Validity and Enforceability of Financing Documents. That the
Agreement and the other Financing Documents are in all respects legal, valid and
binding in accordance with their respective terms, subject only to (i)
applicable bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting the enforcement of creditors' rights generally; and (ii) general
principals of equity.
5.03. Conflicting Transactions of Borrower. That the consummation of the
transactions hereby contemplated and the performance of the obligations of
Borrower under and by virtue of the Agreement and the other Financing Documents
to be executed by Borrower will not result in any breach of, or constitute a
default under, any mortgage, security deed, deed of trust, security agreement,
lease, bank loan or credit agreement, trust indenture, corporate charter or
by-laws or any other agreement or instrument to which Borrower is a party or by
which it is bound of affected.
5.04. Pending Litigation. Except as may have been disclosed to Hardwick in
writing, there are no actions, suits or proceedings pending, or to the knowledge
of Borrower threatened, against or affecting Borrower or the Real Property, at
law or in equity, or before or by any Governmental Authority.
5.05. Information Concerning Real Property. That, subject to any limitation
stated therein or in connection therewith, all information by or on the behalf
of Borrower or PBC concerning the Real Property or otherwise for the purpose of
obtaining the financial benefits contemplated by this Agreement, is or will be
at the time the same is furnished, accurate and complete in all material
respects and complete insofar as completeness may be necessary to give Hardwick
a true and accurate knowledge of the subject matter.
5.06. Financial Statements. That the financial statements of Borrower and
the Guarantors which have theretofore been delivered by Borrower or Guarantors
or on behalf of Borrower or Guarantors to Hardwick are materially true in all
respects, and that (i) the financial statements of Borrower, Vinings and PBC
have been prepared in accordance with generally accepted accounting practices,
and (ii) the financial statements of Watts, Petersen and Anzo each fairly
represent the financial condition of the subject thereof as of the respective
dates thereof; and there are no material liabilities, direct or indirect, fixed
or contingent, of Borrower or any Guarantor as of the date of such financial
statements which are not reflected thereon or in the notes thereto. There has
been no material adverse change in the financial condition, business operations
or prospects of Borrower or any Guarantor since the respective dates of said
financial statements; and that no additional borrowings have been made by
Borrower or any Guarantor since the respective dates thereof other than the
borrowing contemplated hereby or as otherwise expressly approved by Hardwick.
5.07. Taxes. Borrower has filed all federal, state and local tax returns
which are required to be filed and has paid, or made adequate provision for the
payment of, all taxes which have become due pursuant to said returns or to
assessments received by Borrower.
5.08. ERISA Requirements. Unless previously disclosed in writing to
Hardwick, Borrower has not established and is not a party to any stock option or
deferred compensation plan or contract for the benefit of its employees or
officers, any pension, profit sharing or retirement plan, or any other agreement
or arrangement with any officer, director or stockholder, member of their
families or trusts for their benefit, and Borrower is in compliance with all
applicable provisions of the Employee Retirement Security Act of 1974, as
amended ("ERISA").
5.09. Regulation U. None of the proceeds of the Credit Line shall be used
directly or indirectly for the purpose of purchasing or carrying any stock in
violation of Regulation U of the Board of Governors of the Federal Reserve
System.
5.10. No Events of Default under Financing Documents. That no Event of
Default by Borrower exists under this Agreement, or under any of the other
Financing Documents, and no event has occurred and is continuing which with
notice or the passage of time, or both, would constitute an Event of Default
under any of the Financing Documents.
ARTICLE 6
AFFIRMATIVE COVENANTS OF BORROWER
Borrower hereby covenants and agrees with Hardwick as follows.
6.01. Insurance. To obtain, or cause to be obtained, such insurance or
evidence of insurance as Hardwick may reasonable require, including, but not
limited to, the following:
(a) Property and Casualty Insurance. As required by the terms of the
Security Deed.
(b) Public Liability and Workmen's Compensation Insurance. A
certificate from an insurance company indicating that Borrower is covered
by public liability and workmen's compensation insurance to the reasonable
satisfaction of Hardwick.
6.02. Collection of Insurance Proceeds. To cooperate with Hardwick in
obtaining for Hardwick the benefits of any insurance or other proceeds lawfully
or equitably payable to Hardwick in connection with the transactions
contemplated hereby and to reimburse Hardwick for any expenses incurred in
connection therewith (including the payment by Borrower of the expense of an
independent appraisal on behalf of Hardwick in case of a fire or other casualty
affecting the Inventory, or any part thereof).
6.03. Change of Name or Use of Tradename. To give Hardwick at least thirty
(30) days prior written notice of (i) any proposes change in the location of the
principal offices or principal place of business of Borrower, (ii) any proposed
change in Borrower's corporate name, and (iii) any proposed use of a trade-name
or other fictitious name by Borrower.
6.04. Financial Statements. For so long as Borrower shall have any
Obligation to Hardwick, Borrower agrees to deliver to Hardwick the following
financial statements and reports:
(a) Financial Statements of Borrower.
(1) As soon as practicable after the end of each fiscal year of
Borrower, but in any event within ninety (90) days thereafter, a copy
of: (i) a balance sheet for Borrower at the end of such year, and (ii)
statements of income and surplus for Borrower for such year, setting
forth in each case in comparative form the figures for the previous
fiscal year of Borrower, all in reasonable detail and accompanied by
an unqualified opinion of a firm of independent certified public
accountants of recognized expertise, reasonably acceptable to
Hardwick, certifying that such financial statements have been prepared
in accordance with generally accepted accounting principles applied on
a consistent basis. At the time of the furnishing of such financial
statements Borrower shall, if requested by Hardwick, also furnish
Hardwick with a certificate from the president or the chief financial
officer of Borrower stating that he has reviewed this Agreement, the
other Financing Documents and the affairs of Borrower and that he is
unaware of the occurrence of an event which constitutes an Event of
Default hereunder or which would constitute an Event of Default
hereunder with the giving of notice or the lapse of time, or both, or,
if such an event has occurred, stating the facts with respect thereto.
(2) As soon as practicable after the close of each calendar
quarter of Borrower except the last quarter in each fiscal year of
Borrower, but in any event within thirty (30) days thereafter, a copy
of: (i) a balance sheet for Borrower as of the end of such quarter,
and (ii) statements of income and surplus of Borrower for such
quarter, all in reasonable detail and certified as complete and
correct, subject to changes resulting from year-end adjustments, by
the president or chief financial officer of Borrower. At the time of
the furnishing of such financial statements, Borrower shall, if
Hardwick so requests, also furnish Hardwick with a certificate signed
by the president or the chief financial officer of Borrower stating
that he has reviewed this Agreement, the other Financing Documents and
the affairs of Borrower and that he is unaware of the occurrence of an
event which constitutes an Event of Default hereunder or which would
constitute an Event of Default hereunder with the giving of notice or
the lapse of time, or both, or, if such an event has occurred, stating
the facts with respect thereto.
(3) Such other and further information respecting its affairs and
financial condition as Hardwick may, from time to time, reasonably
request.
6.05. Maintenance of Existence. Borrower will maintain its existence as a
business trust and, in each jurisdiction in which the nature of its business or
the character of the property owned by Borrower makes its qualification
necessary, maintain good standing.
6.06. Accrual of Taxes and Benefit Contributions. During each fiscal year,
accrue all current tax liabilities of all kinds, all required withholding of
income taxes and social security taxes of employees, all required old age and
unemployment contributions, all required payments to any employee benefit plans
maintained by Borrower, and pay the same as they become due.
6.07. Compliance with Laws. Comply with all applicable statues and
governmental regulations governing or regulating the business of Borrower.
6.08. Notice of Legal Action. Give Hardwick prompt notice of any suit or
proceeding against Borrower involving more than $50,000.
6.09. Notice of Damage to or Loss of Collateral. Immediately notify
Hardwick of any event causing a material loss or depreciation in value of the
Real Estate and the amount of such loss or depreciation, except Borrower shall
not be required to notify Hardwick of depreciation resulting from ordinary use.
ARTICLE 7
NEGATIVE COVENANTS OF BORROWER
Until the Loan Obligations have been paid in full, Borrower covenants and
agrees that it will not, without the prior written consent of Hardwick, which in
each case shall not be unreasonable withheld:
7.01. Merger or Consolidation. Merge or consolidate with or into any other
Person. In the event Hardwick consents to any such merger or consolidation and
as a condition thereto, Borrower shall deliver or cause to be delivered to
Hardwick such assurances, including opinions from Borrower's legal counsel,
acceptable to Hardwick, that the Loan Obligations and Hardwick's security
interest and lien on the Real Property are unaffected thereby.
7.02. Transactions with Affiliates. Purchase, acquire, or lease property
from, or sell, transfer or lease any property to any Affiliate, except on terms
which are no less favorable to Borrower than would be the case if such
transactions had been made with disinterested third parties.
7.03. Guaranty of Others Obligations. Be a surety, guarantor or endorser or
otherwise become liable to any Person, other than Hardwick, for or upon the
obligations of any other Person, other than by endorsement of instruments or
items or payment for deposit to the general account of Borrower.
7.07. Loans or Advances by Borrower. Make any loans or advances to any
Person, including officers, trustees and employees of Borrower, except in the
ordinary course of the business of Borrower.
7.08. Accountants. Maintain independent certified public accountants who
are not approved by Hardwick.
ARTICLE 8
DEFAULTS
An Event of Default shall be deemed to have occurred under this Agreement
if:
8.01. Default under Master Note. Borrower shall fail to pay when due and
payable any installment of interest or principal, or principal and interest, as
provided for the Master Note and the continuation of such default beyond any
grace period provided for in the Master Note; or
8.02. Breach of Covenant. Borrower breaches or fails to perform, observe or
meet any term, covenant or condition made herein or in any of the Financing
Documents executed by Borrower (other than a default as referred to in Section
8.01 above) and does not cure same within 10 days after written notice thereof,
with respect to such breaches or failures curable by the payment of money, or
within 15 days after written notice thereof, with respect to all other breaches
and failures, provided, however, that with respect to breaches or failures which
cannot be cured by the payment of money, and cannot reasonably be cured within
such period (but can be cured), no Event of Default shall exist hereunder so
long as Borrower promptly commences and thereafter diligently pursues the cure
thereof and continues to satisfy all of Borrower's monetary obligations under
the Financing Documents, but in any event such period shall not exceed 30 days
from the date of written notice of default or extend the maturity of the Master
Note; or
8.03. Breach of Warranty. Any warranties or representations made or agreed
to be made herein by Borrower shall be breached by Borrower or shall be
determined to have been false or incomplete in any material respect at the time
given or made; or
8.04. Breach Under Financing Documents. Any default or event of default
shall occur and be continuing under the Guaranty, the Security Deed or the Lease
Assignment;
8.05. Judgment Liens. A final judgment shall be rendered by a court of law
or equity against Borrower or any Guarantor and the same shall remain
undischarged for the period of thirty (30) days unless such judgment is fully
covered by collectible insurance. For purposes hereof, the term "final
judgement" shall mean a judgment of a court of competent jurisdiction which is
not subject to further direct review or appeal; or
8.06. Bankruptcy. (i) The fining by Borrower or any Guarantor of a
voluntary petition in bankruptcy under Title 11 of the United States Code, or
the issuing of an order for relief against Borrower or any Guarantor under Title
11 of the United States Code, or (ii) the filing by Borrower or any Guarantor of
any petition or answer seeking or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief for Borrower or any Guarantor under any present or future federal, state
or other law or regulation relating to bankruptcy, insolvency or other relief
for debtors, or (iii) Borrower's or any Guarantor's seeking or consenting to or
acquiescing in the appointment of any custodian, trustee, receiver, conservator
or liquidator of Borrower or such Guarantor or of all or a substantial part of
the property of Borrower or any such Guarantor or of any or all of the rents,
issues, profits, revenues and royalties thereof, of (iv) the making by Borrower
or any Guarantor of a general assignment for the benefit of creditors, or (v)
the entry by a court of competent jurisdiction of an order judgment or decree
approving a petition filed against Borrower or any Guarantor seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future federal, state or other law or
regulation relating to bankruptcy, insolvency or other relief for debtors, or
(vi) the appointment of any custodian, trustee, receiver, conservator or
liquidator of Borrower or any Guarantor or of all or substantial part of the
property of Borrower or any such Guarantor or of any or all of the rents,
issues, profits, revenues and royalties thereof without the consent or
acquiescence of Borrower or the respective Guarantor; or
8.07. Secondary Financing and Sale of Real Property. PBC shall, without the
prior written consent of Hardwick, sell, transfer or convey all or any part of
its interest in the Real Property, or any portion thereof, or shall enter into
any secondary financing arrangement with respect to the Real Property, or any
part thereof, without the prior written consent of Hardwick; or
8.08. Ejectment from Real Property. PBC shall be ejected from the Real
Property or any part thereof or from the use and occupancy thereof by reason of
any defect in the title to the Real Property; or
8.09. Adverse Claims to Real Property. In any Person shall file any claim
in any legal or equitable proceeding challenging the priority of the lien and
security interest of Hardwick in the Real Property or any part thereof; or
8.10. Damage to or Loss of Real Property. If there shall occur any material
uninsured damage to or loss or destruction of the Real Property, or any part
thereof; or if the Real Property, or any material portion thereof, is subjected
to waste; or
8.11. Failure to Notify. Borrower shall fail to notify Hardwick in writing
immediately after damage or loss to the Real Property by reason of fire or other
casualty, and prior to the making of any repairs thereto, or to permit Hardwick
to inspect such damage or loss prior to the making of, during and upon
completion of any repairs thereto; or
8.12. Liquidation of Dissolution of Borrower of Corporate Guarantors. If
either Borrower, Vinings or PBC is liquidated or dissolved or its charter
expires or is revoked and is not reinstated within thirty (30) days; or
8.13. Default under Other Documents. If there shall occur any default or
event of default under and as defined in any other agreement now or hereafter
evidencing or securing any indebtedness or Obligation of Borrower or any
Guarantor to Hardwick; or
8.14. Revocation of Guaranty. If any one or more of the Guarantors shall
revoke or rescind or attempt to revoke or rescind the Guaranty or such
Guarantor's obligations thereunder; or
8.15. Death of Guarantor. If either Anzo, Watts or Petersen shall die; or
8.16. Insecurity. If Hardwick should otherwise reasonably deem itself, its
security interest, if any, or any indebtedness hereunder unsafe or insecure or
should Hardwick believe in good faith that the prospect of payment or other
performance by Borrower or any Guarantor is impaired, and Borrower fails upon
request of Hardwick to provide Hardwick such additional collateral as it shall
reasonably request; or
8.17. Failure to Disprove Default. Hardwick shall reasonably suspect the
occurrence of any one or more of the aforesaid Events of Default and Borrower,
upon the request of Hardwick, shall fail to provide evidence reasonably
satisfactory to Hardwick that such Event or Events of Default have not in fact
occurred.
ARTICLE 9
REMEDIES OF HARDWICK
Upon the occurrence of any one or more of the Events of Default set out in
Article 9 hereof, Hardwick, at its option and in addition to and not in lieu of
the remedies provided for in the other Financing Documents, shall be entitled to
proceed to exercise any of the following remedies:
9.01. Termination of Credit Line. Hardwick may immediately and without
notice to Borrower, terminate the Credit Line, whereupon Hardwick shall have no
further duty or obligation to make advances against the Credit Line to Borrower,
except that upon the occurrence of an Event of Default under Section 8.06 the
Credit Line shall automatically be terminated without the necessity of any act
or action on the part of Hardwick.
9.02. Default under Other Financing Documents. Borrower agrees that the
occurrence of such Event of Default shall constitute a default under each of the
other Financing Documents, thereby entitling Hardwick (i) to exercise any of the
various remedies therein and herein provided, including the acceleration of the
indebtedness evidenced by the Master Note and to exercise any or all of the
rights, remedies and powers contained herein and in the other Financing
Documents, and (ii) cumulatively to exercise all other rights, options and
privileges provided by law or in equity.
9.03. Offset and Setoff. Hardwick may, at its option, without any further
notice to Borrower (such notice being hereby expressly waived), set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held by, or any other indebtedness at any time owing by
Hardwick to Borrower to or for the credit or the account of Borrower against the
Obligations, irrespective of whether any demand has been made hereunder or
whether such obligation is mature. The rights given hereunder are cumulative to
all other rights of set-off under this or any other agreement or by operation of
law or otherwise. Hardwick shall promptly notify Borrower of any such set-off
and application, but failure to do so shall not affect the validity thereof.
9.04. Attorneys' Fees and Expenses. In the event of the occurrence of an
Event of Default and as the result thereof Hardwick shall employ attorneys or
incur other expenses for the collection of payments due hereunder or under any
of the Financing Documents, or the enforcement or observance of any agreement
herein or therein contained, Borrower agrees that it will on demand pay to
Hardwick the reasonable fees and expenses of such attorneys and such other
expenses incurred by Hardwick, including without limitation the reasonable out
of pocket expenses of its attorneys.
9.05. No Waiver of Remedies. No delay or omission to exercise any right or
remedy accruing upon the occurrence of an Event of Default shall impair any such
right or remedy or shall be construed to be a waiver thereof, but each such
right and remedy may be exercised from time to time as often as may be deemed
expedient by Hardwick. No course of dealing between Hardwick and Borrower or any
delay on Hardwick's part in exercising any rights or remedies shall operate as a
waiver of Hardwick's rights or remedies.
9.06. Waiver of Events of Default. Hardwick shall not be liable for any
action or omission on the part of Hardwick, its officers, agents and employees,
except for those arising out of gross negligence or willful misconduct. The
failure by Hardwick at any time or times hereafter to require strict performance
by Borrower of any of the terms, provisions, representations, warranties and
covenants contained in the Agreement or any other of the Financing Documents
shall not waive, affect or diminish any right of Hardwick thereafter to demand
strict compliance and performance therewith and with respect to any other
provisions, warranties, terms and conditions contained herein and therein any
waiver of any Event of Default shall not waive or affect any other Event of
Default, whether prior or subsequent thereto, and whether the same or of a
different type. None of the warranties, conditions, provisions or terms of this
Agreement or the other Financing Documents shall be deemed to have been waived
by any act or knowledge of Hardwick, its agents, officers or employees, but only
by an instrument in writing signed by an officer of Hardwick and directed to
Borrower specifying such waiver. Hardwick may waive any Event of Default
hereunder and its consequences or rescind any declaration of the acceleration of
the Master Note. Such waiver shall also waive the corresponding Event of Default
hereunder and its consequences. In the event of any such waiver or rescission,
or in the event any proceeding taken by Hardwick on account of any Event of
Default shall have been discontinued or abandoned or determined adversely to
Hardwick, then, and in every such case, Hardwick and Borrower shall be restored
to their former positions, respectively, and rights hereunder and under the
other Financing Documents, but no such waiver or rescission shall extend to any
subsequent or other then existing Event of Default or impair any rights,
remedies or powers of Hardwick.
ARTICLE 10
MISCELLANEOUS
10.01. Addresses and Notices. Each notice, demand, election or request
which by any provision of this Agreement is required or permitted to be given
pursuant to this Agreement (hereinafter in this Section referred to as "Notice")
must be in writing and shall be deemed to have been properly given or served by
personal delivery or by depositing same in the United States mail, registered or
certified mail with return receipt requested, postage prepaid, addressed as
follows:
To Borrower: Vinings Investment Properties Trust
3111 Paces Mill Road
Suite A-200
Atlanta, Georgia 30339-5704
Attention: Peter D. Anzo
To Hardwick: Hardwick Bank and Trust Company
P. O. Box 1367
Dalton, Georgia 30722-1367
Attention: Dan Davis
Borrower and Hardwick, by notice given in accordance with this Section 10.01,
shall have the right to change their respective addresses for the giving of
notices and each shall have the right to specify as its address any other
address in the United States of America. Each notice shall be effective upon the
earlier of (i) being personally delivered or (ii) three days after the deposit
thereof in the United States Mail in accordance with this Section, and the time
period in which a response to any notice, demand or request must be given shall
commence to run from the effective date of such notice. Rejection or other
refusal to accept or the inability to deliver because of changed address of
which no notice was given shall be deemed to be receipt of the notice, demand or
request sent.
10.02. Construction of Agreement. This Agreement and the other Financing
Documents supersede and incorporate all representations, promises, and
statements, oral or written, made in connection with the Credit Line. The
Financing Documents are to be construed as part and parcel of this Agreement,
and, by this reference thereto, are incorporated herein and made a part hereof.
In the event of any conflict between the provisions of this Agreement and the
provisions of any of the Financing Documents, the provisions of this Agreement
shall govern. It is, however, the intention of the parties that the terms and
conditions of this Agreement and the Financing Documents shall be liberally
construed as mutually consistent, complementary, or supplementary, rather than
conflicting.
10.03. Assignment. Borrower may not assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of Hardwick.
10.04. Binding Effect. Whenever in this Agreement one of the parties hereto
is named or referred to, the legal representative, successors and assigns of
such party shall be included in all covenants and agreements contained in this
Agreement by or on behalf of Borrower or by or on behalf of Hardwick shall bind
and inure to the benefit of their respective legal representatives, successors
and assigns.
10.05. Headings. The heading of the Articles, Sections and sub-sections of
this Agreement are for convenience of reference only, and not to be considered a
part hereof and shall not limit or otherwise affect the terms hereof.
10.06. Invalid Provisions Affect No Others. If fulfillment of any provision
hereof or any transaction related hereto at the time performance of such
provisions shall be due, shall involve transcending the limit of validity
presently prescribed by law, with regard to transactions of like character and
amount, the ipso facto, the obligation to be fulfilled shall be reduced to the
limits of such validity; and if any clause or provision herein contained
operates or would prospectively operate to invalidate this Agreement in whole or
in part, then such clause or provision only shall be held for naught, as though
not herein contained, and the remainder of this Agreement shall remain operative
and in full force and effect.
10.07. Number and Gender. Whenever the singular or plural number, or the
masculine, feminine or neuter gender is used herein, it shall equally include
the other.
10.08. Amendment and Modification. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, but only by a
written instrument signed by the party against whom enforcement of the change,
waiver, discharge or termination is sought.
10.09. Survival of Covenants. All covenants, agreements, representations
and warranties made herein and in certificates or reports delivered pursuant
hereto shall be deemed to have been material and relied upon by Hardwick, and
shall survive the execution and delivery of the Master Note and the other
Financing Documents.
10.10. Execution of Counterparts. This Agreement may be executed in several
counterparts, each of which, when executed and delivered, shall be deemed an
original, but such counterparts shall together constitute one and the same
instrument.
10.11. Governing Law. This Agreement shall be governed exclusively, and
shall construed and enforced in accordance with, the applicable laws of the
State of Georgia.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers and Borrower has caused its seal to be affixed
hereon as of the day and year first above written.
VININGS INVESTMENT PROPERTIES TRUST
By: /s/ Peter D. Anzo
Peter D. Anzo, Authorized Trustee, on behalf of
all of the Trustees.
HARDWICK BANK AND TRUST COMPANY
By: /s/ Daniel P. Davis
Vice President
PROMISSORY NOTE
$7,392,000.00 Atlanta, Georgia
June 27, 1996
FOR VALUE RECEIVED, THICKET APARTMENTS, L.P., a Delaware limited
partnership, as maker, having its principal place of business at 3111 Paces Mill
Road, Suite A- 200, Atlanta, Georgia 30339 (hereinafter referred to as
"Borrower"), promises to pay to the order of UNIVEST MORTGAGE CAPITAL, LLC, a
Georgia limited liability company, as payee, having its principal place of
business at Six Concourse Parkway, Suite 1400, Atlanta, Georgia 30328-5346
(hereinafter referred to as "Lender"), at such place as the holder hereof may
from time to time designate in writing, the principal sum of Seven Million Three
Hundred Ninety-Two Thousand and No/100 Dollars ($7,392,000.00 ), in lawful money
of the United States of America, with interest thereon to be computed from the
date of this Note at the Applicable Interest Rate (hereinafter defined), and to
be paid in installments as follows:
1. A payment of interest only on June 27, 1996, on account of interest for
the month of June, 1996;
2. A constant payment of $59,690.58 on the first day of August , 1996 and
on the first day of each calendar month thereafter up to and including the first
day of June, 2003; each of the payments to be applied as follows:
(a) first, to the payment of interest computed at the Applicable
Interest Rate; and
(b) the balance toward the reduction of the principal sum;
and the balance of said principal sum together with all interest thereon shall
be due and payable on the first day of July, 2003 (the "Maturity Date").
Interest on the principal sum of this Note shall be calculated on the basis of a
three hundred sixty (360) day year composed of twelve (12) months of thirty (30)
days each except that interest due and payable for a period less than a full
month shall be calculated by multiplying the actual number of days elapsed in
such period by a daily rate based on said 360 day year. All amounts due under
this Note shall be payable without set off, counterclaim or any other deduction
whatsoever.
The term "Applicable Interest Rate" as used in this Note shall mean from
the date of this Note through and including the Maturity Date, a rate of 9.04%
per annum.
The whole of the principal sum of this Note, together with all interest
accrued and unpaid thereon and all other sums due under the Security Instrument
(hereinafter defined) and this Note (all such sums hereinafter collectively
referred to as the "Debt"), or any portion thereof, shall without notice become
immediately due and payable at the option of Lender if any payment required in
this Note is not paid within ten (10) days of the date when due or on the
happening of any other default, after the expiration of any applicable notice
and grace periods, herein or under the terms of the Security Instrument or the
Other Security Documents, as hereinafter defined (hereinafter each an "Event of
Default"). Time is of the essence in this Note, the Security Instrument and the
Other Security Documents. All of the terms, covenants and conditions contained
in the Security Instrument and the Other Security Documents (hereinafter
defined) are hereby made part of this Note to the same extent and with the same
force as if they were fully set forth herein. In the event that it should become
necessary to employ counsel to collect the Debt or to protect or foreclose the
security hereof, Borrower also agrees to pay on demand all costs of collection
incurred by Lender, including reasonable attorneys' fees actually incurred for
the services of counsel whether or not suit be brought.
If following the occurrence of any Event of Default, Borrower shall tender
payment of an amount sufficient to satisfy the Debt at any time prior to a sale
of the Property (as defined in the Security Instrument) either through
foreclosure or the exercise of other remedies available to Lender under the
Security Instrument, such tender by Borrower shall be deemed to be a voluntary
prepayment under this Note in the amount tendered. If at the time of such tender
prepayment of the principal balance of this Note is not permitted, Borrower
shall, in addition to the entire Debt, also pay to Lender a sum equal to
interest which would have accrued on the principal balance of this Note at the
Applicable Interest Rate from the date of such tender to the earlier of (i) the
Maturity Date, or (ii) the first day of the period during which prepayment of
the principal balance of this Note would have been permitted, together with a
prepayment consideration equal to the prepayment consideration which would have
been payable as of the first day of the period during which prepayment would
have been permitted. If at the time of such tender prepayment of the principal
balance of this Note is permitted, Borrower shall, in addition to the entire
Debt, also pay to Lender the applicable prepayment consideration specified in
this Note.
The principal balance of this Note may not be prepaid in whole or in part
(except with respect to the application of insurance proceeds or condemnation
awards pursuant to the Security Instrument) prior to the commencement of the
fourth Loan Year (as hereinafter defined). During the fourth Loan Year or at
anytime thereafter, provided no Event of Default exists, the principal balance
of this Note may be prepaid, in whole but not in part (except with respect to
the application of insurance proceeds or condemnation awards pursuant to the
Security Instrument), on any scheduled payment date under this Note upon not
less than ninety (90) days prior written notice to Lender specifying the
scheduled payment date on which prepayment is to be made (the "Prepayment Date")
and upon payment of (a) interest accrued and unpaid on the principal balance of
this Note to and including the Prepayment Date, (b) all other sums then due
under this Note, and the Other Security Documents, and (c) a prepayment
consideration in an amount equal to the greater of (i) one percent (1%) of the
outstanding principal balance of this Note at the time of prepayment, or (ii)
the present value as of the Prepayment Date of the remaining scheduled payments
of principal and interest from the Prepayment Date through the Maturity Date
(including any balloon payment) determined by discounting such payments at the
Discount Rate (as hereinafter defined) less the amount of principal being
prepaid. The term "Discount Rate" means the rate which, when compounded monthly,
is equivalent to the Treasury Rate (as hereinafter defined), when compounded
semi-annually. The term "Treasury Rate" means the yield calculated by the linear
interpolation of the yields, as reported in Federal Reserve Statistical Release
H.15-Selected Interest Rates under the heading "U.S. Government
Securities/Treasury Constant Maturities" for the week ending prior to the
Prepayment Date, of U.S. Treasury constant maturities with maturity dates (one
longer and one shorter) most nearly approximating the Maturity Date. (In the
event Release H.15 is no longer published, Lender shall select a comparable
publication to determine the Treasury Rate.) Lender shall notify Borrower of the
amount and the basis of determination of the required prepayment consideration.
Notwithstanding the foregoing, there shall be no prepayment consideration due in
connection with (1) the prepayment of the principal balance of this Note if
prepayment occurs within six (6) months preceding the Maturity Date or (2) a
complete or partial prepayment resulting from the application of insurance
proceeds or condemnation awards pursuant to the Security Instrument. If any such
notice of prepayment is given, the principal balance of this Note and the other
sums required under this paragraph shall be due and payable on the Prepayment
Date. Lender shall not be obligated to accept any prepayment of the principal
balance of this Note unless it is accompanied by the prepayment consideration
due in connection therewith. The term "Loan Year" for purposes of this paragraph
means each complete 365 day period (366 days in a leap year) after the first day
of the first calendar month after the date of this Note.
Borrower does hereby agree that upon the occurrence of an Event of Default
which is not cured within any applicable grace or notice period, or upon the
failure of Borrower to pay the Debt in full on the Maturity Date, Lender shall
be entitled to receive and Borrower shall pay interest on the entire unpaid
principal sum at the rate of five percent (5%) above the Applicable Interest
Rate (the "Default Rate"); provided, however, that in the event Lender permits
Borrower to cure such Event of Default, then the rate of interest on the unpaid
principal balance of this Note shall be the Applicable Interest Rate and shall
be computed from the date such Event of Default is cured. The Default Rate shall
be computed from the occurrence of the Event of Default until the actual receipt
and collection of the Debt or, if permitted by Lender, the date such Event of
Default is cured. This charge shall be added to the Debt, and shall be deemed
secured by the Security Instrument. This clause, however, shall not be construed
as an agreement or privilege to extend the date of the payment of the Debt, nor
as a waiver of any other right or remedy accruing to Lender by reason of the
occurrence of any Event of Default. In the event the Default Rate would
otherwise exceed the maximum rate permitted by applicable law, the Default Rate
shall be the maximum rate permitted by applicable law.
This Note is secured by the Security Instrument and the Other Security
Documents. The term "Security Instrument" as used in this Note shall mean that
certain Deed to Secure Debt and Security Agreement dated the date hereof in the
principal sum of $7,392,000.00 given by Borrower to Lender covering the fee
estate of Borrower in certain premises located in DeKalb County, State of
Georgia, and other property, as more particularly described therein and intended
to be duly recorded in said County. The term "Other Security Documents" as used
in this Note shall mean all and any of the documents other than this Note or the
Security Instrument now or hereafter executed by Borrower and/or others and by
or in favor of Lender, which wholly or partially secure or guarantee payment of
this Note. Whenever used, the singular number shall include the plural, the
plural the singular, and the words "Lender" and "Borrower" shall include their
respective successors, assigns, heirs, executors and administrators.
This Note is subject to the express condition that at no time shall
Borrower be obligated or required to pay interest on the Debt or any portion
thereof at a rate which could subject Lender to either civil or criminal
liability as a result of being in excess of the maximum interest rate which
Borrower is permitted by applicable law to contract or agree to pay. If by the
terms of this Note, Borrower is at any time required or obligated to pay
interest on the Debt or any portion thereof 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 the maximum rate shall
be deemed to have been payments in reduction of principal and not on account of
the interest due hereunder.
If any sum payable under this Note is not paid within ten (10) days after
the date on which it is due, Borrower shall pay to Lender upon demand an amount
equal to the lesser of five percent (5%) of such unpaid sum or the maximum
amount permitted by applicable law to defray the expenses incurred by Lender in
handling and processing such delinquent payment and to compensate Lender for the
loss of the use of such delinquent payment and such amount shall be secured by
the Security Instrument and the Other Security Documents.
This Note may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Borrower or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
If Borrower consists of more than one person or party, the obligations and
liabilities of each such person or party shall be joint and several.
Borrower and all others who may become liable for the payment of all or any
part of the Debt do hereby severally waive presentment and demand for payment,
notice of dishonor, protest and notice of protest, notice of non-payment and
notice of intent to accelerate the maturity hereof (and of such acceleration).
No release of any security for the Debt or extension of time for payment of this
Note or any installment hereof, and no alteration, amendment or waiver of any
provision of this Note, the Security Instrument and the Other Security Documents
made by agreement between Lender and any other person or party shall release,
modify, amend, waive, extend, change, discharge, terminate or affect the
liability of Borrower, and any other who may become liable for the payment of
all or any part of the Debt, under this Note, the Security Instrument and the
Other Security Documents.
Borrower (and the undersigned representative of Borrower, if any)
represents that Borrower has full power, authority and legal right to execute,
deliver and perform its obligations pursuant to this Note, the Security
Instrument and the Other Security Documents and that this Note, the Security
Instrument and the Other Security Documents constitute valid and binding
obligations of Borrower.
Upon the transfer of this Note, Borrower hereby waiving notice of any such
transfer, Lender may deliver all the collateral mortgaged, granted, pledged or
assigned pursuant to the Security Instrument and the Other Security Documents,
or any part thereof, to the transferee who shall thereupon become vested with
all the rights herein or under applicable law given to Lender with respect
thereto, and Lender shall thereafter forever be relieved and fully discharged
from any liability or responsibility in the matter; but Lender shall retain all
rights hereby given to it with respect to any liabilities and the collateral not
so transferred.
BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT,
TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THIS
NOTE, THE APPLICATION FOR THE LOAN EVIDENCED BY THIS NOTE, THIS NOTE, THE
SECURITY INSTRUMENT OR THE OTHER SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF
LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH.
The personal liability of Borrower to pay the Debt shall be limited to (a)
the Property and (b) the Rents (as defined in the Security Instrument),
including any received or collected by or on behalf of Borrower after and during
the continuance of an Event of Default, except to the extent that Borrower did
not have the legal right, because of a bankruptcy, receivership or similar
judicial proceeding, to direct the disbursement of such sums.
Except as provided herein, Lender hereof shall not seek (a) any judgment
for a deficiency against Borrower in any action to enforce any right or remedy
under the Security Instrument, or (b) any judgment on this Note except as may be
necessary in any action brought under the Security Instrument to enforce the
lien against the Property.
Notwithstanding the foregoing, Borrower shall be personally liable to
Lender in the amount of any loss, damage or cost incurred by Lender resulting
from (i) fraud or intentional misrepresentation by Borrower or any other person
or entity employed by or an agent of Borrower in connection with obtaining the
loan evidenced by this Note, (ii) insurance proceeds, condemnation awards, or
other sums or payments attributable to the Property not applied in accordance
with the provisions of the Security Instrument, except to the extent that
Borrower did not have the legal right, because of a bankruptcy, receivership, or
similar judicial proceeding, to direct disbursement of such sums or payments,
(iii) all Rents received following and during the continuance of any Event of
Default under this Note or the Security Instrument and not applied to payment of
principal and interest due under this Note (including any such Rents received or
collected by or on behalf of Borrower after an Event of Default, except to the
extent that Borrower did not have the legal right, because of a bankruptcy,
receivership or similar judicial proceeding, to direct the disbursement of such
Rents), and payments of utilities, taxes and assessments and insurance on the
Property, as they become due or payable, or (iv) Borrower's failure to pay
transfer fees and charges due Lender hereof under this Note or the Security
Instrument in connection with any transfer of all or any part of the Property,
or any interest therein, to the extent permitted herein by Lender from Borrower
to Borrower's transferee, or transfer of beneficial interest in Borrower (if
Borrower is not a natural person or persons but is a corporation, partnership,
trust or other legal entity), (v) a default by Borrower under paragraphs 32 or
33(g) through (j) of the Security Instrument, (vi) failure to pay any recording
taxes or documentary stamps or other charges required in connection with the
Security Instrument, (vii) failure to pay real estate taxes for the Property,
(viii) failure to pay insurance premiums for the Property, (ix) misapplication
or misappropriation of Rents or security deposits collected in advance, (x) the
inability of Lender to enforce the Assignment of Leases and Rents executed by
Borrower in favor of Lender with regard to the Property, and (xi) failure of
Borrower to comply with all provisions of this Note, the Security Instrument or
Other Security Documents regarding delivery of financial or operating
statements, including, without limitation, paragraph 15 of the Security
Instrument. Notwithstanding the foregoing, the agreement of Lender not to pursue
recourse liability as set forth above shall become NULL and VOID and shall be of
no further force and effect in the event Borrower shall be in default of the
provisions of Paragraphs 50 or 9 of the Security Instrument.
No provision contained herein shall (a) affect any guaranty, indemnity or
similar agreement executed in connection with the indebtedness evidenced by this
Note, (b) release or reduce the Debt, or (c) impair the lien of the Security
Instrument.
All notices or other written communications hereunder shall be deemed to
have been properly given (i) upon delivery, if delivered in person or by
facsimile transmission with receipt acknowledged by the recipient thereof, (ii)
one (1) Business Day (defined below) after having been deposited for overnight
delivery with any reputable overnight courier service, or (iii) three (3)
Business Days after having been deposited in any post office or mail depository
regularly maintained by the U.S. Postal Service and sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
If to Borrower:
---------------
Thicket Apartments, L.P.
3111 Paces Mill Road, Suite A-200
Atlanta, Georgia 30339
Attention: General Partner
If to Lender:
-------------
Univest Mortgage Capital, LLC
Six Concourse Parkway, Suite 1400
Atlanta, Georgia 30328-5346
Attention: Daniel B. Lambert
Facsimile No.: (770) 399-8396
or addressed as such party may from time to time designate by written notice to
the other parties.
Either party by notice to the other may designate additional or different
addresses for subsequent notices or communications.
For purposes of this Subsection, "Business Day" shall mean a day on which
commercial banks are not authorized or required by law to close in New York, New
York.
This Note shall be governed and construed in accordance with the laws of
the State of Georgia and the applicable laws of the United States of America.
ln the event that it should become necessary to employ counsel to collect
the Debt or to protect or foreclose the security therefor, Borrower also agrees
to pay all reasonable fees and expenses of Lender, including, without
limitation, reasonable attorney's fees actually incurred for the services of
such counsel whether or not suit be brought.
IN WITNESS WHEREOF, Borrower has duly executed this Note the day and year
first above written. BORROWER:
Signed, sealed and delivered THICKET APARTMENTS, L.P., a Delaware limited
in the presence of: partnership
________________________ By: THICKET HOLDINGS, INC., a Delaware
Unofficial Witness corporation, General Partner
________________________ BY: /s/ Peter D. Anzo
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Notary Public PETER D. ANZO,
Chief Executive Officer
[NOTARIAL SEAL]
[CORPORATE SEAL]
Commission Expiration Date:
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