Exhibit
10.11
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RECORDING REQUESTED
BY
AND WHEN RECORDED MAIL
TO:
Blank Rome LLP
The
Chrysler Building
405
Lexington Avenue
New York, New York 10174-0208
Attention: Carol M. Joseph, Esq.
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Federal Home Loan
Numbers:
Old Loan
#002649160
New Loan #
504180193
Sun
RiverVillageApartments
County:
Maricopa
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AMENDED
AND RESTATED
MULTIFAMILY DEED OF TRUST,
ASSIGNMENT OF RENTS,
SECURITY
AGREEMENT AND FIXTURE FILING
(ARIZONA
– REVISION DATE 05-11-2004)
(RECAST
TRANSACTION)
Sun River Village
Apartments
505 W. Baseline
Road
Tempe, Arizona
Federal Home
Loan Numbers:
Old Loan #002649160
New Loan # 504180193
Sun RiverVillageApartments
AMENDED AND RESTATED
MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
(ARIZONA
– REVISION DATE 05-11-2004)
(RECAST TRANSACTION)
THIS AMENDED AND RESTATED MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF
RENTS AND SECURITY AGREEMENT AND FIXTURE FILING (RECAST
TRANSACTION) (the "Amended and Restated Instrument") is made to be
effective as of this 2nd day of October, 2009, between CENTURY SUN
RIVER, LIMITED PARTNERSHIP, a limited partnership organized and
existing under the laws of Arizona, whose address is c/o AIMCO,
Stanford Place 3, 4582 South Ulster Street Parkway, Suite 1100,
Denver, Colorado 80237, as trustor ("Borrower") and FEDERAL HOME
LOAN MORTGAGE CORPORATION, as beneficiary ("Lender").
RECITALS
A. Borrower is the maker
of a Multifamily Note (the “ Note ”), dated May
23, 2001 in the original amount of Ten Million and 00/100 Dollars
($10,000,000.00) evidencing a loan (the “ Loan
”) to Borrower in such amount from LEND LEASE MORTGAGE
CAPITAL, L.P. , a Texas limited partnership (the “
Original Lender ”).
B. The Note is
secured by that certain Multifamily Deed of Trust, Assignment of
Rents and Security Agreement, dated May 23, 2001, from Borrower, as
grantor, to Original Lender, a beneficiary, recorded in the Office
of the Maricopa County Recorder, Arizona (the “ Land
Records ”) as Instrument No. 2001-0438719 (the “
Instrument ”). The Instrument encumbers, among
other things, Borrower’s interest in the land described in
Exhibit A to the Instrument and to the Amended and Restated
Instrument.
C. Pursuant to a Limited
Guaranty dated May 23, 2001,
AIMCO Properties, L.P. , a Delaware limited partnership,
guaranteed some or all of Borrower’s obligations under the
terms of the Note and the Instrument.
D. Original Lender (i)
endorsed the Note to Lender and (ii) assigned the Instrument to
Lender by Assignment of Security Instrument dated May 23, 2001 and
recorded in the Land Records as Instrument No. 2001-0438722.
E. Borrower has
confirmed to Lender that Borrower has no defenses or offsets of any
kind against any of the indebtedness due under the Note.
F. By Amended and
Restated Multifamily Note dated effective as of the date of this
Amended and Restated Instrument, Borrower and Lender have amended
and restated the Note so as to, among other things, (i) reflect an
aggregate current unpaid balance of Seven Million Four Hundred
Fifty-Two Thousand Three Hundred Eighty-Three and 00/100 Dollars
($7,452,383.00) , and (ii) amend the terms of payment.
Borrower and Lender now also desire to amend and restate the
Instrument as provided below.
NOW, THEREFORE, in consideration of these
premises, and other good and valuable consideration, the receipt
and sufficiency of which are acknowledged, the parties agree that
the Instrument is amended and restated in its entirety in the form
attached hereto and made a part hereof.
[NO FURTHER TEXT ON THIS PAGE]
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BORROWER:
CENTURY SUN RIVER, LIMITED PARTNERSHIP , an
Arizona limited partnership
By: CPF XIV/SUN RIVER, INC. , an Arizona
corporation,
its managing general partner
By: /s/Patti K. Fielding
Name: Patti K. Fielding
Title: Executive Vice President and
Treasurer
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FEDERAL HOME LOAN MORTGAGE
CORPORATION
By: /s/Joe W. Marsh
Name: Joe W. Marsh
Title: Senior Director
Head of Regional Underwriting & Credit
Multifamily Sourcing Division
Federal Home Loan Numbers:
Old Loan
#002649160
New Loan #
504180193
Sun
RiverVillageApartments
MULTIFAMILY DEED OF TRUST,
ASSIGNMENT OF RENTS,
SECURITY
AGREEMENT AND FIXTURE FILING
(ARIZONA
– REVISION DATE 05-11-2004)
THIS MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (the “ Instrument
”) is made to be effective this 2 nd day of
October, 2009, by CENTURY
SUN RIVER, LIMITED PARTNERSHIP , a limited partnership
organized and existing under the laws of Arizona, whose address is
c/o AIMCO, Stanford Place 3, 4582 South Ulster Street Parkway,
Suite 1100, Denver, Colorado 80237, as trustor (“
Borrower ”), to STEWART TITLE & TRUST OF
PHOENIX, a corporation organized and existing under the laws of
Delaware whose address is 244 W. Osborn, Phoenix, Arizona 85013, as
trustee (“ Trustee ”), for the benefit of
FEDERAL HOME LOAN MORTGAGE CORPORATION , whose address is
8200 Jones Branch Drive, McLean, Virginia 22102, as beneficiary
(“ Lender ”). Borrower’s
organizational identification number, if applicable, is N/A
.
Borrower, in consideration of the Indebtedness and the trust
created by this Instrument, irrevocably grants, conveys and assigns
to Trustee, in trust, with power of sale, the Mortgaged Property,
including the Land located in Maricopa County, State of Arizona and
described in Exhibit A attached to this Instrument.
TO SECURE TO LENDER the repayment of the Indebtedness evidenced by
Borrower’s Multifamily Note payable to Lender, dated as of
the date of this Instrument, and maturing June 1, 2021 (the
“ Maturity Date ”), in the principal amount of
$7,452,383.00 and all renewals, extensions and modifications
of the Indebtedness, and the performance of the covenants and
agreements of Borrower contained in the Loan Documents.
Borrower represents and warrants that Borrower is lawfully seized
of the Mortgaged Property and has the right, power and authority to
grant, convey and assign the Mortgaged Property, and that the
Mortgaged Property is unencumbered except as shown on the schedule
of exceptions to coverage in the title policy issued to and
accepted by Lender contemporaneously with the execution and
recordation of this Instrument and insuring Lender’s interest
in the Mortgaged Property (the “ Schedule of Title
Exceptions ”). Borrower covenants that Borrower
will warrant and defend generally the title to the Mortgaged
Property against all claims and demands, subject to any easements
and restrictions listed in the Schedule of Title Exceptions.
Covenants. In consideration of the mutual promises
set forth in this Instrument, Borrower and Lender covenant and
agree as follows:
1.
DEFINITIONS. The following terms,
when used in this Instrument (including when used in the above
recitals), shall have the following meanings:
(a)
“
Attorneys’ Fees and
Costs ” means (i) fees
and out‑of‑pocket costs of Lender’s and Loan
Servicer’s attorneys, as applicable, including costs of
Lender’s and Loan Servicer’s in-house counsel, support
staff costs, costs of preparing for litigation, computeriz
ed research,
telephone and facsimile transmission expenses, mileage, deposition
costs, postage, duplicating, process service, videotaping and
similar costs and expenses; (ii) costs and fees of expert
witnesses, including appraisers; and (iii) investigatory
fees.
(b)
“
Borrower ” means all persons or
entities identifi ed as “Borrower”
in the first paragraph of this Instrument, together with their
successors and assigns.
(c)
“
Business Day ” means any day other
than a Saturday, a Sunday or any other day on which Lender or the
national banking associations are not open for
business.
(d)
“
Collateral Agreement
” means
any separate agreement between Borrower and Lender for the purpose
of establishing replacement reserves for the Mortgag
ed Property,
establishing a fund to assure the completion of repairs or
improvements specified in that agreement, or assuring reduction of
the outstanding principal balance of the Indebtedness if the
occupancy of or income from the Mortgaged Property does not
increase to a level specified in that agreement, or any other
agreement or agreements between Borrower and Lender which provide
for the establishment of any other fund, reserve or
account.
(e)
“
Controlling Entity
” means an
entity which owns, directly or indirectly through one or more
interm ediaries, (i) a general
partnership interest or a Controlling Interest of the limited
partnership interests in Borrower (if Borrower is a partnership or
joint venture), (ii) a manager’s interest in Borrower or
a Controlling Interest of the ownership or membership interests in
Borrower (if Borrower is a limited liability company), (iii) a
Controlling Interest of any class of voting stock of Borrower (if
Borrower is a corporation), (iv) a trustee’s interest or
a Controlling Interest of the beneficial interests in Borrower (if
Borrower is a trust), or (v) a managing partner’s interest or
a Controlling Interest of the partnership interests in Borrower (if
Borrower is a limited liability partnership).
(f)
“
Controlling Interest
” means
(i) 51 percent or more of the ownership interests in an
entity, or (ii) a percentage ownership interest in an entity
of less than 51 percent, if the owner(s) of that interest
actually direct(s) the business and affairs of the entity
without the requirement of consent of any other party. The
Controlling Interest shall be deem ed to be 51 percent
unless otherwise stated in Exhibit B.
(g)
“
Environmental Permit
” means
any permit, license, or other authorization issu
ed under any
Hazardous Materials Law with respect to any activities or
businesses conducted on or in relation to the Mortgaged
Property.
(h)
“
Event of Default ” means the occurrence
of any event list ed in
Section 22.
(i)
“
Fixtures ” means all property
owned by Borrower which is so attached to the Land or the
Improvements as to constitute a fixture under applicable law,
including: machinery, equipment, engines, boilers, incinerators,
installed building materials; systems and equipment for the purpose
of supplying or distributing heating, cooling, electricity, gas,
water, air, or light; antennas, cable, wiring and conduits used in
connection with radio, television, security, fire prevention, or
fire detection or otherwise used to carry electronic signals;
telephone systems and equipment; elevators and related machinery
and equipment; fire detection, prevention and extinguishing systems
and apparatus; security and access control systems and apparatus;
plumbing systems; water heaters, ranges, stoves, microwave ovens,
refrigerators, dishwashers, garbage disposers, washers, dryers and
other appliances; light fixtures, awnings, storm windows and storm
doors; pictures, screens, blinds, shades, curtains and curtain
rods; mirrors; cabinets, paneling, rugs and floor and wall
coverings; fences, trees and plants; swimming pools; and exercise
equipment.
(j)
“
Governmental Authority
” means
any board, commission, department or body of any municipal, county,
state or f ederal governmental unit, or
any subdivision of any of them, that has or acquires jurisdiction
over the Mortgaged Property or the use, operation or improvement of
the Mortgaged Property or over the Borrower.
(k)
“
Hazard Insurance ” is defin
ed in
Section 19.
(l)
“
Hazardous Materials
” means
petroleum and petroleum products and compounds containing them,
including gasoline, diesel fuel and oil; explosives; flammable
materials; radioactive materials; polychlorinat ed biphenyls
(“PCBs”) and compounds containing them; lead and
lead-based paint; asbestos or asbestos‑containing materials
in any form that is or could become friable; underground or
above-ground storage tanks, whether empty or containing any
substance; any substance the presence of which on the Mortgaged
Property is prohibited by any federal, state or local authority;
any substance that requires special handling and any other material
or substance now or in the future that (i) is defined as a
“hazardous substance,” “hazardous
material,” “hazardous waste,” “toxic
substance,” “toxic pollutant,”
“contaminant,” or “pollutant” by or within
the meaning of any Hazardous Materials Law, or (ii) is
regulated in any way by or within the meaning of any Hazardous
Materials Law.
(m)
“
Hazardous Materials Laws
” means
all f ederal, state, and local
laws, ordinances and regulations and standards, rules, policies and
other governmental requirements, administrative rulings and court
judgments and decrees in effect now or in the future and including
all amendments, that relate to Hazardous Materials or the
protection of human health or the environment and apply to Borrower
or to the Mortgaged Property. Hazardous Materials Laws include, but
are not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, et
seq. , the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Section 6901, et seq. , the Toxic Substance
Control Act, 15 U.S.C. Section 2601, et seq. , the
Clean Water Act, 33 U.S.C. Section 1251, et seq. , and
the Hazardous Materials Transportation Act, 49 U.S.C.
Section 5101 et seq. , and their state
analogs.
(n)
“
Impositions ” and “
Imposition Deposits
” are
defin ed
in Section 7(a).
(o)
“
Improvements ” means the buildings,
structures, improvements, and alterations now constructed or at any
time in the future constructed or placed upon the Land, including
any future replacements and additions.
(p)
“
Indebt edness ” means the principal
of, interest at the fixed or variable rate set forth in the Note
on, and all other amounts due at any time under, the Note, this
Instrument or any other Loan Document, including prepayment
premiums, late charges, default interest, and advances as provided
in Section 12 to protect the security of this
Instrument.
(q)
“
Initial Owners ” means, with respect
to Borrower or any other entity, the persons or entities that
(i) on the date of the Note, or (ii) on the date of a
Transfer to which Lender has consent ed, own in the aggregate
100 percent of the ownership interests in Borrower or that
entity.
(r)
“
Land ” means the land
describ ed in Exhibit A.
(s)
“
Leases ” means all present
and future leases, subleases, licenses, concessions or grants or
other possessory interests now or hereafter in force, whether oral
or written, covering or affecting the Mortgag ed Property, or any portion
of the Mortgaged Property (including proprietary leases or
occupancy agreements if Borrower is a cooperative housing
corporation), and all modifications, extensions or
renewals.
(t)
“
Lender ” means the entity
identifi ed as “Lender”
in the first paragraph of this Instrument, or any subsequent holder
of the Note.
(u)
“
Loan Documents ” means the Note, this
Instrument, all guaranties, all indemnity agreements, all
Collateral Agreements, O&M Programs, the MMP and any other
documents now or in the future execut ed by Borrower, any guarantor
or any other person in connection with the loan evidenced by the
Note, as such documents may be amended from time to
time.
(v)
“
Loan Servicer ” means the entity
that from time to time is designat ed by Lender to collect
payments and deposits and receive Notices under the Note, this
Instrument and any other Loan Document, and otherwise to service
the loan evidenced by the Note for the benefit of Lender.
Unless Borrower receives Notice to the contrary, the Loan Servicer
is the entity identified as “Lender” in the first
paragraph of this Instrument.
(w)
“
MMP ” means a moisture
management plan to control water intrusion and prevent the
development of Mold or moisture at the Mortgag ed Property throughout the
term of this Instrument. At a minimum, the MMP must contain a
provision for (i) staff training, (ii) information to be provided
to tenants, (iii) documentation of the plan, (iv) the appropriate
protocol for incident response and remediation and (v) routine,
scheduled inspections of common space and unit
interiors.
(x)
“
Mold ” means mold, fungus,
microbial contamination or pathogenic organisms.
(y)
“
Mortgaged Property
” means
all of Borrower’s present and future right, title and
interest in and to all of the following:
(i)
the
Land;
(ii)
the
Improvements;
(iii)
the
Fixtures;
(iv)
the
Personalty;
(v)
all current and
future rights, including air rights, development rights, zoning
rights and other similar rights or interests, easements, tenements,
rights‑of‑way, strips and gores of land, streets,
alleys, roads, sewer rights, waters, watercourses, and
appurtenances relat ed to or benefiting the Land
or the Improvements, or both, and all rights-of-way, streets,
alleys and roads which may have been or may in the future be
vacated;
(vi)
all proce
eds paid or to be
paid by any insurer of the Land, the Improvements, the Fixtures,
the Personalty or any other part of the Mortgaged Property, whether
or not Borrower obtained the insurance pursuant to Lender’s
requirement;
(vii)
all awards,
payments and other compensation made or to be made by any
municipal, state or f ederal authority with respect
to the Land, the Improvements, the Fixtures, the Personalty or any
other part of the Mortgaged Property, including any awards or
settlements resulting from condemnation proceedings or the total or
partial taking of the Land, the Improvements, the Fixtures, the
Personalty or any other part of the Mortgaged Property under the
power of eminent domain or otherwise and including any conveyance
in lieu thereof;
(viii)
all contracts,
options and other agreements for the sale of the Land, the
Improvements, the Fixtures, the Personalty or any other part of the
Mortgag ed Property enter ed into by
Borrower now or in the future, including cash or securities
deposited to secure performance by parties of their
obligations;
(ix)
all proce
eds from the
conversion, voluntary or involuntary, of any of the above into cash
or liquidated claims, and the right to collect such
proceeds;
(x)
all Rents and
Leases;
(xi)
all earnings,
royalties, accounts receivable, issues and profits from the Land,
the Improvements or any other part of the Mortgag
ed Property, and
all undisbursed proceeds of the loan secured by this
Instrument;
(xii)
all Imposition
Deposits;
(xiii)
all refunds or
rebates of Impositions by any municipal, state or federal authority
or insurance company (other than refunds applicable to periods
before the real property tax year in which this Instrument is
dated);
(xiv)
all tenant
security deposits which have not been forfeit ed by any tenant under any
Lease and any bond or other security in lieu of such deposits;
and
(xv)
all names under
or by which any of the above Mortgag ed Property may be operated
or known, and all trademarks, trade names, and goodwill relating to
any of the Mortgaged Property.
(z)
“
Note ” means the
Multifamily Note describ ed on page 1 of this
Instrument, including all schedules, riders, allonges and addenda,
as such Multifamily Note may be amended from time to
time.
(aa)
“
O&M Program ” is defin
ed in
Section 18(d).
(bb)
“
Personalty ” means
all:
(i)
accounts
(including deposit accounts) of Borrower relat ed to the Mortgag ed
Property;
(ii)
equipment and
inventory own ed by Borrower, which are
used now or in the future in connection with the ownership,
management or operation of the Land or Improvements or are located
on the Land or Improvements, including furniture, furnishings,
machinery, building materials, goods, supplies, tools, books,
records (whether in written or electronic form), and computer
equipment (hardware and software);
(iii)
other tangible
personal property own ed by Borrower which is used
now or in the future in connection with the ownership, management
or operation of the Land or Improvements or is located on the Land
or in the Improvements, including ranges, stoves, microwave ovens,
refrigerators, dishwashers, garbage disposers, washers, dryers and
other appliances (other than Fixtures);
(iv)
any operating
agreements relating to the Land or the Improvements;
(v)
any surveys,
plans and specifications and contracts for architectural,
engineering and construction services relating to the Land or the
Improvements;
(vi)
all other
intangible property, general intangibles and rights relating to the
operation of, or us ed in connection with, the
Land or the Improvements, including all governmental permits
relating to any activities on the Land and including subsidy or
similar payments received from any sources, including a
governmental authority; and
(vii)
any rights of
Borrower in or under letters of cr edit.
(cc)
“Property
Jurisdiction” is defined in
Section 30(a).
(dd)
“
Rents ” means all rents
(whether from residential or non-residential space), revenues and
other income of the Land or the Improvements, parking fees, laundry
and vending machine income and fees and charges for food, health
care and other services provid ed at the Mortgag ed
Property, whether now due, past due, or to become due, and deposits
forfeited by tenants, and, if Borrower is a cooperative housing
corporation or association, maintenance fees, charges or
assessments payable by shareholders or residents under proprietary
leases or occupancy agreements, whether now due, past due, or to
become due.
(ee)
“
Taxes ” means all taxes,
assessments, vault rentals and other charges, if any, whether
general, special or otherwise, including all assessments for
schools, public betterments and general or local improvements,
which are levi ed, assessed or imposed by
any public authority or quasi-public authority, and which, if not
paid, will become a lien on the Land or the
Improvements.
(ff)
“
Transfer ” is defin
ed in
Section 21.
2.
UNIFORM COMMERCIAL CODE SECURITY
AGREEMENT.
(a)
This Instrument
is also a security agreement under the Uniform Commercial Code for
any of the Mortgag ed Property which, under
applicable law, may be subjected to a security interest under the
Uniform Commercial Code, whether such Mortgaged Property is owned
now or acquired in the future, and all products and cash and
non-cash proceeds thereof (collectively, “
UCC Collateral ”), and Borrower hereby
grants to Lender a security interest in the UCC Collateral.
Borrower hereby authorizes Lender to prepare and file financing
statements, continuation statements and financing statement
amendments in such form as Lender may require to perfect or
continue the perfection of this security interest and Borrower
agrees, if Lender so requests, to execute and deliver to Lender
such financing statements, continuation statements and
amendments. Borrower shall pay all filing costs and all costs
and expenses of any record searches for financing statements and/or
amendments that Lender may require. Without the prior written
consent of Lender, Borrower shall not create or permit to exist any
other lien or security interest in any of the UCC
Collateral.
(b)
Unless Borrower
gives Notice to Lender within 30 days after the occurrence of
any of the following, and executes and delivers to Lender
modifications or supplements of this Instrument (and any financing
statement which may be fil ed in connection with this
Instrument) as Lender may require, Borrower shall not
(i) change its name, identity, structure or jurisdiction of
organization; (ii) change the location of its place of
business (or chief executive office if more than one place of
business); or (iii) add to or change any location at which any
of the Mortgaged Property is stored, held or located.
(c)
If an Event of
Default has occurr ed and is continuing, Lender
shall have the remedies of a secured party under the Uniform
Commercial Code, in addition to all remedies provided by this
Instrument or existing under applicable law. In exercising
any remedies, Lender may exercise its remedies against the UCC
Collateral separately or together, and in any order, without in any
way affecting the availability of Lender’s other
remedies.
(d)
This Instrument
constitutes a financing statement with respect to any part of the
Mortgaged Property that is or may become a Fixture, if permitted by
applicable law.
3.
ASSIGNMENT OF RENTS; APPOINTMENT OF
RECEIVER; LENDER IN POSSESSION.
(a)
As part of the
consideration for the Indebt edness, Borrower absolutely
and unconditionally assigns and transfers to Lender all
Rents. It is the intention of Borrower to establish a
present, absolute and irrevocable transfer and assignment to Lender
of all Rents and to authorize and empower Lender to collect and
receive all Rents without the necessity of further action on the
part of Borrower. Promptly upon request by Lender, Borrower
agrees to execute and deliver such further assignments as Lender
may from time to time require. Borrower and Lender intend
this assignment of Rents to be immediately effective and to
constitute an absolute present assignment and not an assignment for
additional security only. For purposes of giving effect to
this absolute assignment of Rents, and for no other purpose, Rents
shall not be deemed to be a part of the Mortgaged Property.
However, if this present, absolute and unconditional assignment of
Rents is not enforceable by its terms under the laws of the
Property Jurisdiction, then the Rents shall be included as a part
of the Mortgaged Property and it is the intention of the Borrower
that in this circumstance this Instrument create and perfect a lien
on Rents in favor of Lender, which lien shall be effective as of
the date of this Instrument.
(b)
After the
occurrence of an Event of Default, Borrower authorizes Lender to
collect, sue for and compromise Rents and directs each tenant of
the Mortgag ed Property to pay all Rents
to, or as directed by, Lender. However, until the occurrence
of an Event of Default, Lender hereby grants to Borrower a
revocable license to collect and receive all Rents, to hold all
Rents in trust for the benefit of Lender and to apply all Rents to
pay the installments of interest and principal then due and payable
under the Note and the other amounts then due and payable under the
other Loan Documents, including Imposition Deposits, and to pay the
current costs and expenses of managing, operating and maintaining
the Mortgaged Property, including utilities, Taxes and insurance
premiums (to the extent not included in Imposition Deposits),
tenant improvements and other capital expenditures. So long
as no Event of Default has occurred and is continuing, the Rents
remaining after application pursuant to the preceding sentence may
be retained by Borrower free and clear of, and released from,
Lender’s rights with respect to Rents under this Instrument.
From and after the occurrence of an Event of Default, and without
the necessity of Lender entering upon and taking and maintaining
control of the Mortgaged Property directly, or by a receiver,
Borrower’s license to collect Rents shall automatically
terminate and Lender shall without Notice be entitled to all Rents
as they become due and payable, including Rents then due and
unpaid. Borrower shall pay to Lender upon demand all Rents to
which Lender is entitled. At any time on or after the date of
Lender’s demand for Rents, (i) Lender may give, and
Borrower hereby irrevocably authorizes Lender to give, notice to
all tenants of the Mortgaged Property instructing them to pay all
Rents to Lender, (ii) no tenant shall be obligated to inquire
further as to the occurrence or continuance of an Event of Default,
and (iii) no tenant shall be obligated to pay to Borrower any
amounts which are actually paid to Lender in response to such a
notice. Any such notice by Lender shall be delivered to each
tenant personally, by mail or by delivering such demand to each
rental unit. Borrower shall not interfere with and shall
cooperate with Lender’s collection of such Rents.
(c)
Borrower
represents and warrants to Lender that Borrower has not executed
any prior assignment of Rents (other than an assignment of Rents
securing any prior indebtedness that is being assigned to Lender,
or paid off and discharged with the proceeds of the loan evidenced
by the Note), that Borrower has not performed, and Borrower
covenants and agrees that it will not perform, any acts and has not
executed, and shall not execute, any instrument which would prevent
Lender from exercising its rights under this Section 3, and
that at the time of execution of this Instrument there has been no
anticipation or prepayment of any Rents for more than two months
prior to the due dates of such Rents. Borrower shall not
collect or accept payment of any Rents more than two months prior
to the due dates of such Rents.
(d)
If an Event of
Default has occurr ed and is continuing, Lender
may, regardless of the adequacy of Lender’s security or the
solvency of Borrower and even in the absence of waste, enter upon
and take and maintain full control of the Mortgaged Property in
order to perform all acts that Lender in its discretion determines
to be necessary or desirable for the operation and maintenance of
the Mortgaged Property, including the execution, cancellation or
modification of Leases, the collection of all Rents, the making of
repairs to the Mortgaged Property and the execution or termination
of contracts providing for the management, operation or maintenance
of the Mortgaged Property, for the purposes of enforcing the
assignment of Rents pursuant to Section 3(a), protecting the
Mortgaged Property or the security of this Instrument, or for such
other purposes as Lender in its discretion may deem necessary or
desirable. Alternatively, if an Event of Default has occurred
and is continuing, regardless of the adequacy of Lender’s
security, without regard to Borrower’s solvency and without
the necessity of giving prior notice (oral or written) to
Borrower, Lender may apply to any court having jurisdiction for the
appointment of a receiver for the Mortgaged Property to take any or
all of the actions set forth in the preceding sentence. If
Lender elects to seek the appointment of a receiver for the
Mortgaged Property at any time after an Event of Default has
occurred and is continuing, Borrower, by its execution of this
Instrument, expressly consents to the appointment of such receiver,
including the appointment of a receiver ex parte if
permitted by applicable law. If Borrower is a housing
cooperative corporation or association, Borrower hereby agrees that
if a receiver is appointed, the order appointing the receiver may
contain a provision requiring the receiver to pay the installments
of interest and principal then due and payable under the Note and
the other amounts then due and payable under the other Loan
Documents, including Imposition Deposits, it being acknowledged and
agreed that the Indebtedness is an obligation of the Borrower and
must be paid out of maintenance charges payable by the
Borrower’s tenant shareholders under their proprietary leases
or occupancy agreements. Lender or the receiver, as the case
may be, shall be entitled to receive a reasonable fee for managing
the Mortgaged Property. Immediately upon appointment of a
receiver or immediately upon the Lender’s entering upon and
taking possession and control of the Mortgaged Property, Borrower
shall surrender possession of the Mortgaged Property to Lender or
the receiver, as the case may be, and shall deliver to Lender or
the receiver, as the case may be, all documents, records (including
records on electronic or magnetic media), accounts, surveys, plans,
and specifications relating to the Mortgaged Property and all
security deposits and prepaid Rents. In the event Lender
takes possession and control of the Mortgaged Property, Lender may
exclude Borrower and its representatives from the Mortgaged
Property. Borrower acknowledges and agrees that the exercise
by Lender of any of the rights conferred under this Section 3
shall not be construed to make Lender a mortgagee-in-possession of
the Mortgaged Property so long as Lender has not itself entered
into actual possession of the Land and Improvements.
(e)
If Lender enters
the Mortgaged Property, Lender shall be liable to account only to
Borrower and only for those Rents actually received. Except
to the extent of Lender’s gross negligence or willful
misconduct, Lender shall not be liable to Borrower, anyone claiming
under or through Borrower or anyone having an interest in the
Mortgaged Property, by reason of any act or omission of Lender
under Section 3(d), and Borrower hereby releases and
discharges Lender from any such liability to the fullest extent
permitted by law.
(f)
If the Rents are
not sufficient to meet the costs of taking control of and managing
the Mortgag ed Property and collecting
the Rents, any funds expended by Lender for such purposes shall
become an additional part of the Indebtedness as provided in
Section 12.
(g)
Any entering upon
and taking of control of the Mortgag ed Property by Lender or the
receiver, as the case may be, and any application of Rents as
provided in this Instrument shall not cure or waive any Event of
Default or invalidate any other right or remedy of Lender under
applicable law or provided for in this Instrument.
4.
ASSIGNMENT OF LEASES; LEASES
AFFECTING THE MORTGAGED PROPERTY.
(a)
As part of the
consideration for the Indebt edness, Borrower absolutely
and unconditionally assigns and transfers to Lender all of
Borrower’s right, title and interest in, to and under the
Leases, including Borrower’s right, power and authority to
modify the terms of any such Lease, or extend or terminate any such
Lease. It is the intention of Borrower to establish a
present, absolute and irrevocable transfer and assignment to Lender
of all of Borrower’s right, title and interest in, to and
under the Leases. Borrower and Lender intend this assignment
of the Leases to be immediately effective and to constitute an
absolute present assignment and not an assignment for additional
security only. For purposes of giving effect to this absolute
assignment of the Leases, and for no other purpose, the Leases
shall not be deemed to be a part of the Mortgaged Property.
However, if this present, absolute and unconditional assignment of
the Leases is not enforceable by its terms under the laws of the
Property Jurisdiction, then the Leases shall be included as a part
of the Mortgaged Property and it is the intention of the Borrower
that in this circumstance this Instrument create and perfect a lien
on the Leases in favor of Lender, which lien shall be effective as
of the date of this Instrument.
(b)
Until Lender
gives Notice to Borrower of Lender’s exercise of its rights
under this Section 4, Borrower shall have all rights, power
and authority grant ed to Borrower under any
Lease (except as otherwise limited by this Section or any
other provision of this Instrument), including the right, power and
authority to modify the terms of any Lease or extend or terminate
any Lease. Upon the occurrence of an Event of Default, the
permission given to Borrower pursuant to the preceding sentence to
exercise all rights, power and authority under Leases shall
automatically terminate. Borrower shall comply with and
observe Borrower’s obligations under all Leases, including
Borrower’s obligations pertaining to the maintenance and
disposition of tenant security deposits.
(c)
Borrower
acknowl edges and agrees that the
exercise by Lender, either directly or by a receiver, of any of the
rights conferred under this Section 4 shall not be construed
to make Lender a mortgagee-in-possession of the Mortgaged Property
so long as Lender has not itself entered
into actual possession of the Land and the Improvements. The
acceptance by Lender of the assignment of the Leases pursuant to
Section 4(a) shall not at any time or in any event
obligate Lender to take any action under this Instrument or to
expend any money or to incur any expenses. Except to the
extent of Lender’s gross negligence or willful misconduct,
Lender shall not be liable in any way for any injury or damage to
person or property sustained by any person or persons, firm or
corporation in or about the Mortgaged Property. Prior to
Lender’s actual entry into and taking possession of the
Mortgaged Property, Lender shall not (i) be obligated to
perform any of the terms, covenants and conditions contained in any
Lease (or otherwise have any obligation with respect to any Lease);
(ii) be obligated to appear in or defend any action or
proceeding relating to the Lease or the Mortgaged Property; or
(iii) be responsible for the operation, control, care,
management or repair of the Mortgaged Property or any portion of
the Mortgaged Property. The execution of this Instrument by
Borrower shall constitute conclusive evidence that all
responsibility for the operation, control, care, management and
repair of the Mortgaged Property is and shall be that of Borrower,
prior to such actual entry and taking of possession.
(d)
Upon delivery of
Notice by Lender to Borrower of Lender’s exercise of
Lender’s rights under this Section 4 at any time after
the occurrence of an Event of Default, and without the necessity of
Lender entering upon and taking and maintaining control of the
Mortgag ed Property directly, by a
receiver, or by any other manner or proceeding permitted by the
laws of the Property Jurisdiction, Lender immediately shall have
all rights, powers and authority granted to Borrower under any
Lease, including the right, power and authority to modify the terms
of any such Lease, or extend or terminate any such
Lease.
(e)
Borrower shall,
promptly upon Lender’s request, deliver to Lender an
execut ed
copy of each residential Lease then in effect. All Leases for
residential dwelling units shall be on forms approved by Lender,
shall be for initial terms of at least six months and not more than
two years, and shall not include options to
purchase.
(f)
Borrower shall
not lease any portion of the Mortgag ed Property for
non-residential use except with the prior written consent of Lender
and Lender’s prior written approval of the Lease
agreement. Borrower shall not modify the terms of, or extend
or terminate, any Lease for non-residential use (including any
Lease in existence on the date of this Instrument) without the
prior written consent of Lender. However, Lender’s
consent shall not be required for the modification or extension of
a non-residential Lease if such modification or extension is on
terms at least as favorable to Borrower as those customary at that
time in the applicable market and the income from the extended or
modified Lease will not be less than the income received from the
Lease as of the date of this Instrument. Borrower shall,
without request by Lender, deliver an executed copy of each
non-residential Lease to Lender promptly after such Lease is
signed. All non-residential Leases, including renewals or
extensions of existing Leases, shall specifically provide that
(i) such Leases are subordinate to the lien of this
Instrument; (ii) the tenant shall attorn to Lender and any
purchaser at a foreclosure sale, such attornment to be
self-executing and effective upon acquisition of title to the
Mortgaged Property by any purchaser at a foreclosure sale or by
Lender in any manner; (iii) the tenant agrees to execute such
further evidences of attornment as Lender or any purchaser at a
foreclosure sale may from time to time request; (iv) the Lease
shall not be terminated by foreclosure or any other transfer of the
Mortgaged Property; (v) after a foreclosure sale of the
Mortgaged Property, Lender or any other
purchaser at such foreclosure sale may, at Lender’s or such
purchaser’s option, accept or terminate such Lease; and
(vi) the tenant shall, upon receipt after the occurrence of an
Event of Default of a written request from Lender, pay all Rents
payable under the Lease to Lender.
(g)
Borrower shall
not receive or accept Rent under any Lease (whether residential or
non-residential) for more than two months in
advance.
(h)
If Borrower is a
cooperative housing corporation or association, notwithstanding
anything to the contrary contain ed in this subsection or in
Section 21, so long as Borrower remains a cooperative housing
corporation or association and is not in breach of any covenant of
this Instrument, Lender hereby consents to:
(i)
the execution of
leases of apartments for a term in excess of two years from
Borrower to a tenant shareholder of Borrower, so long as such
leases, including proprietary leases, are and will remain
subordinate to the lien of this Instrument; and
(ii)
the surrender or
termination of such leases of apartments where the surrender
ed or terminated
lease is immediately replaced or where the Borrower makes its best
efforts to secure such immediate replacement by a newly executed
lease of the same apartment to a tenant shareholder of the
Borrower. However, no consent is hereby given by Lender to
any execution, surrender, termination or assignment of a lease
under terms that would waive or reduce the obligation of the
resulting tenant shareholder under such lease to pay cooperative
assessments in full when due or the obligation of the former tenant
shareholder to pay any unpaid portion of such
assessments.
5.
PAYMENT OF INDEBTEDNESS; PERFORMANCE
UNDER LOAN DOCUMENTS; PREPAYMENT PREMIUM. Borrower shall pay
the Indebt edness when due in accordance
with the terms of the Note and the other Loan Documents and shall
perform, observe and comply with all other provisions of the Note
and the other Loan Documents. Borrower shall pay a prepayment
premium in connection with certain prepayments of the Indebtedness,
including a payment made
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