35. Forward Commitment Fee Leasehold MortgageTHIS INSTRUMENT PREPARED BY:
Aviva Yakren, Esq.
Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Citibank, N.A.
Transaction and Asset Management Group/Post Closing
Citi Community Capital
3800 Citibank Center
Tampa, Florida 33610
Re: Vista Breeze Deal ID No. 60001596
32-11 3STn53��
OR BK 34013 F'ss 3123-3197 (75F`9s)
RECORDED 12/18/2023 14=33;,20
JUAK F ERNANDEZ- BAROUIN
CLERK OF THE COURT & COMPTROLI._ER
111ANI-DADE C:OUhjT r F1_
ABOVE SPACE RESERVED FOR
RECORDING PURPOSES ONLY
FORWARD COMMITMENT FEE MULTIFAMILY LEASEHOLD MORTGAGE,
ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
(FLORIDA)
THIS MORTGAGE IS EXECUTED AND DELIVERED IN CONNECTION WITH AND
PURSUANT TO THE ISSUANCE OF A CERTAIN NOTE BY THE HOUSING
FINANCE AUTHORITY OF MIAMI-DADE COUNTY, FLORIDA AND IS EXEMPT
FROM DOCUMENTARY STAMP TAXES AND INTANGIBLE TAX PURSUANT TO
SECTION 159.621 FLORIDA STATUTES.
e��
1.
DEFINITIONS...................................................................................................................3
2.
UNIFORM COMMERCIAL CODE SECURITY AGREEMENT .................................
12
3.
ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN
POSSESSION..................................................................................................................
13
4.
ASSIGNMENT OF LEASES; LEASES AFFECTING THE MORTGAGED
PROPERTY.....................................................................................................................
16
5.
PAYMENT OF INDEBTEDNESS; PERFORMANCE UNDER FORWARD
COMMITMENT FEE DOCUMENTS............................................................................
18
6.
RESERVED.....................................................................................................................
18
7.
RESERVED.....................................................................................................................
18
8.
RESERVED.....................................................................................................................
18
9.
APPLICATION OF PAYMENTS...................................................................................
18
10.
COMPLIANCE WITH LAWS........................................................................................
18
11.
USE OF PROPERTY......................................................................................................
18
12.
PROTECTION OF LENDER'S SECURITY; INSTRUMENT SECURES
FUTURE ADVANCES...................................................................................................
19
13.
INSPECTION..................................................................................................................
20
14.
BOOKS AND RECORDS; FINANCIAL REPORTING ................................................
20
15.
TAXES; OPERATING EXPENSES...............................................................................
22
16.
LIENS; ENCUMBRANCES...........................................................................................
23
17.
PRESERVATION, MANAGEMENT AND MAINTENANCE OF
MORTGAGED PROPERTY...........................................................................................
24
18.
ENVIRONMENTAL HAZARDS...................................................................................
25
19.
PROPERTY AND LIABILITY INSURANCE...............................................................
34
20.
CONDEMNATION.........................................................................................................37
21.
TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN
BORROWER...................................................................................................................
38
22.
EVENTS OF DEFAULT.................................................................................................
44
23.
REMEDIES CUMULATIVE..........................................................................................
46
24.
FORBEARANCE............................................................................................................
46
25.
WAIVER OF STATUTE OF LIMITATIONS................................................................
47
26.
WAIVER OF MARSHALLING.....................................................................................
47
27.
FURTHER ASSURANCES............................................................................................
47
-i-
28.
ESTOPPEL CERTIFICATE............................................................................................
48
29.
GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE ........................
48
30.
NOTICE...........................................................................................................................48
31.
CHANGE IN SERVICER...............................................................................................
50
32.
SINGLE ASSET BORROWER......................................................................................
51
33.
SUCCESSORS AND ASSIGNS BOUND......................................................................
51
34.
JOINT AND SEVERAL LIABILITY.............................................................................
51
35.
RELATIONSHIP OF PARTIES; NO THIRD PARTY LENDER ..................................
51
36.
SEVERABILITY; AMENDMENTS...............................................................................
51
37.
CONSTRUCTION...........................................................................................................51
38.
SERVICER......................................................................................................................52
39.
DISCLOSURE OF INFORMATION..............................................................................
52
40.
NO CHANGE IN FACTS OR CIRCUMSTANCES......................................................
53
41.
SUBROGATION.............................................................................................................53
42.
FINANCING STATEMENT...........................................................................................
53
43.
STATE SPECIFIC PROVISIONS (FLORIDA).............................................................
53
44.
WAIVER OF TRIAL BY JURY.....................................................................................
53
45.
ATTACHED EXHIBITS.................................................................................................
54
T VT TTTI TTCl
EXHIBIT A
Description of the Land
EXHIBIT B
Modifications to Instrument
EXHIBIT C
Financing Statement Information
EXHIBIT D
Modifications to Instrument (Ground Lease)
EXHIBIT E
Description of Ground Lease
-11-
FORWARD COMMITMENT FEE MULTIFAMILY LEASEHOLD MORTGAGE,
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING
(FLORIDA)
This FORWARD COMMITMENT FEE MULTIFAMILY LEASEHOLD
MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE
FILING (FLORIDA) (this "Instrument") is dated as of the lst day of December, 2023, by J,
VISTA BREEZE, LTD., a Florida limited partnership, whose address is c/o Atlantic Pacific
Communities, 161 NW 6th Street, Suite 1020, Miami, Florida 33136, as borrower ("Borrower"),
to CITIBANK, N.A., a national banking association, whose address is 388 Greenwich Street,
Trading 4th Floor, New York, New York 10013, as Lender, and its successors and assigns
("Lender"). Borrower's organizational identification number is A20000000470.
A. The Housing Authority of the City of Miami Beach, a public body corporate and
politic established pursuant to Chapter 421, Florida Statutes (the "Landlord"), is the legal owner
of fee simple title to the Land (as hereinafter defined) and pursuant to that certain Second
Amended and Restated Ground Lease, dated as of December 15, 2023, between the Landlord
and Borrower, Borrower is the holder of a leasehold interest in the Land.
B. Borrower has applied to the Housing Finance Authority of Miami -Dade County,
Florida, a public body corporate and politic organized and existing under the laws of the State of
Florida ("Governmental Lender"), for a loan (the "Borrower Loan") for the acquisition,
construction, rehabilitation, development and/or equipping of the Mortgaged Property (as
hereinafter defined).
C. Borrower has requested that the Governmental Lender enter into that certain
Funding Loan Agreement, dated as of December 1, 2023 (the "Original Funding Loan
Agreement"), among the Governmental Lender, The Bank of New York Mellon Trust Company,
N.A., a national banking association, as fiscal agent (the "Fiscal Agent"), and Bank of America,
N.A., a national banking association (the "Original Funding Lender"), pursuant to which the
Original Funding Lender will make a loan to the Governmental Lender in the original principal
amount of $32,500,000 (the "Funding Loan"), the proceeds of which Governmental Lender will
use to make the Borrower Loan pursuant to that certain Construction Phase Borrower Loan
Agreement, dated as of December 1, 2023 (the "Original Borrower Loan Agreement"), by and
between the Governmental Lender and Borrower. Borrower and Original Funding Lender have
also entered into that certain Construction Disbursement Agreement, dated as of December 15,
2023 (the "Disbursement Agreement"), which provides for the manner, procedures and
conditions of disbursements of the Borrower Loan proceeds.
D. The Borrower Loan is evidenced by that certain Construction Phase Project Loan
Note, dated as of the Closing Date (the "Original Borrower Note"), made by Borrower payable
to the order of Governmental Lender, as endorsed and assigned to Fiscal Agent for the benefit of
the Original Funding Lender.
Vista Breeze
E. The Borrower Loan is secured by, among other things, that certain Leasehold
Mortgage, Assignment of Rents, Security Agreement and Fixture Filing, dated as of December 15,
2023, executed by Borrower for the benefit of Governmental Lender (the "Senior Security
Instrument"; together with the Original Borrower Note, the Original Borrower Loan Agreement,
the Disbursement Agreement and all other documents executed in connection with the Borrower
Loan, the "Borrower Loan Documents"), which Senior Security Instrument encumbers the
Mortgaged Property.
F. Pursuant to the Original Funding Loan Agreement, the Original Borrower Note, the
Senior Security Instrument, the Original Borrower Loan Agreement, the Funding Loan Documents
(as defined in the Original Funding Loan Agreement) and all other Borrower Loan Documents
except for the Unassigned Rights (as defined in the Original Funding Loan Agreement), are being
assigned by Governmental Lender to Fiscal Agent for the benefit of Original Funding Lender to
secure the Funding Loan.
G. At the request of Borrower, Original Funding Lender, Lender and Borrower entered
into that certain Forward Purchase Agreement, dated as of the date hereof (the "Forward
Purchase Agreement"), pursuant to which the Lender agreed to acquire Original Funding
Lender's interests in the Funding Loan and Funding Loan Documents upon satisfaction of the
terms and conditions set forth therein.
H. In order to assure performance by Borrower of its obligations under the Forward
Purchase Agreement, Borrower has executed and delivered to Lender a certain Promissory Note
(Forward Commitment Fee) dated as of the date hereof (the "Forward Commitment Fee Note"),
maturing on the Termination Date (as defined in the Forward Purchase Agreement) (the "Maturity
Date") and secured by this Instrument.
NOW THEREFORE:
Granting Clause. Borrower, in consideration of the Indebtedness and the trust created by
this Instrument, irrevocably grants, conveys and assigns to Lender, with power of sale, the
Mortgaged Property, including the Land located in the City of Miami Beach, Miami -Dade County,
Florida, and described in Exhibit A attached to this Instrument, to have and to hold the Mortgaged
Property unto Lender, Lender's successor in trust and Lender's assigns forever.
TO SECURE TO LENDER and its successors and assigns the repayment of the
Indebtedness evidenced by the Forward Commitment Fee Note executed by Borrower and
maturing on the Maturity Date, and all renewals, extensions and modifications of the Indebtedness,
including, without limitation, the payment of all sums advanced by or on behalf of Lender to
protect the security of this Instrument under Section 12 and the performance of the covenants and
agreements of Borrower contained in the Forward Commitment Fee Documents.
2 Vista Breeze
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 for the Permitted
Encumbrances. Borrower covenants that Borrower will warrant and defend generally the title to
the Mortgaged Property against all claims and demands, subject to any Permitted Encumbrances.
This Instrument is also a financing statement and a fixture filing under the Uniform
Commercial Code of the Property Jurisdiction and the information set forth on Exhibit C is
included for that purpose.
Covenants. 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) "Affiliate" means, as to any Person, any other Person that, directly or
indirectly, is in Control of, is Controlled by or is under common Control with such Person.
(b) "Bankruptcy Event" means any one or more of the following:
(i) (A) the commencement of a voluntary case under one or more of the
Insolvency Laws by the Borrower; (B) the acknowledgment in
writing by the Borrower that it is unable to pay its debts generally
as they mature; (C) the making of a general assignment for the
benefit of creditors by the Borrower; (D) the commencement of an
involuntary case under one or more Insolvency Laws against the
Borrower; or (E) the appointment of a receiver, liquidator,
custodian, sequestrator, trustee or other similar officer who
exercises control over the Borrower or any substantial part of the
assets of the Borrower provided that any proceeding or case under
(D) or (E) above is not dismissed within 90 days after filing;
(ii) Any Guarantor or any Affiliate of a Guarantor files an involuntary
petition against Borrower under one or more of the Insolvency
Laws; or
(iii) Both (A) an involuntary petition under any one or more of the
Insolvency Laws is filed against Borrower, or Borrower directly or
indirectly becomes the subject of any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution,
liquidation or similar proceeding relating to it under the laws of any
jurisdiction, or in equity, and (B) Borrower or any Affiliate of
Borrower has acted in concert or conspired with such creditors of
Borrower (other than Lender) to cause the filing thereof with the
Vista Breeze
intent to interfere with enforcement rights of Lender after the
occurrence of an Event of Default.
(c) "Lender" means the entity identified as "Lender" in the first paragraph of
this Instrument, or any subsequent holder of the Forward Commitment Fee Note.
(d) "Lender Parties" means Lender, any Servicer and their respective
successors and assigns, together with any lawful owner, holder or pledgee of the Forward
Commitment Fee Note.
(e) "Borrower" means all persons or entities identified as "Borrower" in the
first paragraph of this Instrument, together with their successors and assigns.
(f) "Borrower's Agreement of Limited Partnership" means that
certain Amended and Restated Agreement of Limited Partnership, dated as of December
15, 2023, as the same may be amended and/or restated from time to time.
(g) "Borrower's Organizational Documents" means, collectively: (i) the
certificate of limited partnership of Borrower filed with the Office of the Secretary of State
of Florida on October 21, 2020; and (ii) Borrower's Agreement of Limited Partnership.
(h) "Business Day" means any day other than (i) a Saturday or a Sunday, or
(ii) a day on which federally insured depository institutions in New York, New York are
authorized or obligated by law, regulation, governmental decree or executive order to be
closed.
(i) "Closing Date" has the meaning ascribed thereto in the Forward Purchase
Agreement.
0) "Control" means, with respect to any Person, either (i) ownership directly
or through other entities of more than 50% of all beneficial equity interest in such Person,
or (ii) the possession, directly or indirectly, of the power to direct or cause the direction of
the management or policies of such Person, through the ownership of voting securities, by
contract or otherwise, including the power to elect a majority of the directors of a
corporation, to select the managing partner of a partnership, or otherwise to have the power
independently to remove and then select a majority of those individuals exercising
managerial authority over an entity.
(k) "Conversion" shall have the meaning set forth in the Forward Purchase
Agreement.
(1) "Environmental Permit" means any permit, license, or other authorization
issued under any Hazardous Materials Law with respect to any activities or businesses
conducted on or in relation to the Mortgaged Property.
4 Vista Breeze
(m) "Environmental Reports" means those certain environmental reports
obtained by, and approved by Lender in connection with the closing of the Loan.
(n) "Event of Default" means the occurrence of any event listed in Section 22.
(o) "Fiscal Agent" has the meaning ascribed thereto in the Recitals hereof.
(p) "Fixtures" means all property 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.
(q) "Forward Commitment Fee Documents" has the meaning ascribed
thereto in the Forward Purchase Agreement.
(r) "Forward Commitment Fee Note" has the meaning ascribed thereto in the
recitals to this Instrument.
(s) "Forward Purchase Agreement" means that certain Forward Purchase
Agreement by and among Original Funding Lender, Lender, and Borrower dated as of the
date hereof, pursuant to which Lender has agreed to purchase the Loan from Original
Funding Lender at Conversion on the terms and conditions set forth therein.
(t) "Funding Loan" has the meaning ascribed thereto in the recitals to this
Instrument.
(u) "Governmental Authority" means any board, commission, department or
body of any municipal, county, state or federal governmental unit, or any subdivision of
any of them, that has or acquires jurisdiction over the Mortgaged Property or the use,
operation or improvement of the Mortgaged Property.
(v) "Guarantor" means (i) Howard D. Cohen Revocable Trust U/A/D/
4/6/1993, and/or (ii) any other person or entity which may hereafter become a guarantor,
and the successors and assigns of Guarantor.
(w) "Hazardous Materials" means petroleum and petroleum products and
compounds containing them, including gasoline, diesel fuel and oil; explosives; flammable
5 Vista Breeze
materials; radioactive materials; polychlorinated biphenyls ("PCBs") and compounds
containing them; lead and lead -based paint; asbestos or asbestos -containing materials in
any form that is or could become friable; underground or above -ground storage tanks,
whether empty or containing any substance; radon; Mold; toxic or mycotoxin spores; 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 (whether or not naturally occurring) now or in the future that (i) is defined as
a "hazardous substance " "hazardous material," "hazardous waste," "toxic substance,"
"toxic pollutant," "solid waste", "pesticide", "contaminant," or "pollutant", or otherwise
classified as hazardous or toxic 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.
(x) "Hazardous Materials Laws" means all federal, state, and local laws,
ordinances and regulations and standards, rules, policies and other governmental
requirements, rule of common law (including, without limitation, nuisance and trespass),
consent order, administrative rulings and court judgments and decrees or other government
directive in effect now or in the future and including all amendments, that relate to
Hazardous Materials or to the protection or conservation of the environment or human
health and apply to Borrower or to the Mortgaged Property, including, without limitation,
those relating to industrial hygiene, or the use, analysis, generation, manufacture, storage,
discharge, release, disposal, transportation, treatment, investigation, or remediation of
Hazardous Materials. 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, 42 U.S.C.
Section 6901, et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq.,
the Clean Water Act, 33 U.S.C. Section 1251, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 5101, et seq., the Superfund Amendments and
Reauthorization Act, the Solid Waste Disposal Act, the Clean Air Act, the Occupational
Safety and Health Act, and their state analogs.
(y) "Impositions" shall have the meaning ascribed thereto in Section 15(d).
(z) "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.
(aa) "Indebtedness" means collectively, the principal of, interest on, and all
other amounts due at any time under, the Forward Commitment Fee Note, this Instrument
or any other Forward Commitment Fee Document, including any prepayment premiums,
late charges, default interest, and advances as provided in Section 12 to protect the security
of this Instrument, and any fees or expenses paid by Lender on behalf of Borrower to
Lender, or any other parry for the Loan or other amounts relating to the Forward
Commitment Fee Documents which are paid by Lender.
6 Vista Breeze
(bb) "Initial Owners" means, with respect to Borrower or any other entity, the
persons or entities who on the date of the Forward Commitment Fee Note, directly or
indirectly, own in the aggregate 100% of the ownership interests in Borrower or that entity.
(cc) "Insolvency Laws" means the United States Bankruptcy Code, 11 U.S.C.
§ 101, et seq., together with any other federal or state law affecting debtor and creditor
rights or relating to the bankruptcy, insolvency, reorganization, arrangement, readjustment
of debt, dissolution, liquidation or similar proceeding, as amended from time to time, to
the extent applicable to the Borrower.
(dd) "Land" means the land described in Exhibit A.
(ee) "Leases" means all present and future leases, subleases, licenses,
concessions or grants or other possessory interests now or hereafter in force, whether oral
or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged
Property (including proprietary leases or occupancy agreements if Borrower is a
cooperative housing corporation), and all modifications, extensions or renewals.
(ff) "Loan" has the meaning ascribed thereto in the Forward Purchase
Agreement.
(gg) "Material Property Agreements" means any agreement which, in
Lender's sole discretion, acting in good faith, materially affects the Mortgaged Property,
the use thereof or otherwise materially affects the rights of Borrower or Lender Parties in,
to, and with respect to the Mortgaged Property or the proceeds therefrom, including,
without limitation, each of the following: (i) any agreement regarding the payment in lieu
of taxes ("PILOT"), (ii) all covenants, conditions and restrictions, including, without
limitation, any declaration subjecting the Mortgaged Property to an association of owners
or other community governance, (iii) any agreement regarding the abatement or exemption
of real estate taxes, (iv) any easement pursuant to which the Mortgaged Property is granted
access to a public right of way, (v) any material lease of all or any portion of the Mortgaged
Property, (vi) any operating agreements relating to the Land or the Improvements and
(vii) any regulatory agreements, declarations, land use restriction agreements or similar
instruments affecting the Mortgaged Property including the operation or use thereof.
(hh) "Maturity Date" has the meaning ascribed thereto in the recitals to this
Instrument.
(ii) "MMP" means an operations and maintenance plan, moisture management
program and/or microbial operations and maintenance program approved by Lender to
control water intrusion and prevent the development of Mold or moisture at the Mortgaged
Property throughout the term of this Instrument. If required by Lender, the MMP shall
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.
Vista Breeze
6j) "Mold" means mold, fungus, microbial contamination or pathogenic
organisms.
(kk) "Mortgaged Property" means all of Borrower's present and future right,
title and interest in and to all of the following:
(i) the Land;
(ii) the Improvements;
(iii) the Fixtures;
(iv) the Personalty;
(v) all current and future rights, including air rights, development rights,
zoning rights and other similar rights or interests, easements,
tenements, rights -of -way, strips and gores of land, streets, alleys,
roads, sewer rights, waters, watercourses, and appurtenances related
to or benefiting the Land or the Improvements, or both, and all
rights -of -way, streets, alleys and roads which may have been or may
in the future be vacated;
(vi) all proceeds paid or to be paid by any insurer of the Land, the
Improvements, the Fixtures, the Personalty or any other part of the
Mortgaged Property, whether or not Borrower obtained the
insurance pursuant to Lender's requirements;
(vii) all awards, payments and other compensation made or to be made
by any municipal, state or federal authority with respect to the Land,
the Improvements, the Fixtures, the Personalty or any other part of
the Mortgaged Property, including any awards or settlements
resulting from condemnation proceedings or the total or partial
taking of the Land, the Improvements, the Fixtures, the Personalty
or any other part of the Mortgaged Property under the power of
eminent domain or otherwise and including any conveyance in lieu
thereof,
(viii) all contracts, options and other agreements for the sale of the Land,
the Improvements, the Fixtures, the Personalty or any other part of
the Mortgaged Property entered into by Borrower now or in the
future, including cash or securities deposited to secure performance
by parties of their obligations;
(ix) all Rents and Leases;
Vista Breeze
(x) all earnings, royalties, accounts receivable, issues and profits from
the Land, the Improvements or any other part of the Mortgaged
Property, whether the foregoing are now due, past due, or to become
due, all undisbursed proceeds of the loan secured by this Instrument,
deposits forfeited by tenants, and, if Borrower is a cooperative
housing corporation, maintenance charges or assessments payable
by shareholders or residents;
(xi) 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);
(xii) all tenant security deposits which have not been forfeited by any
tenant under any Lease and any bond or other security in lieu of such
deposits;
(xiii) all names under or by which any of the above Mortgaged Property
may be operated or known, and all trademarks, trade names, and
goodwill relating to any of the Mortgaged Property;
(xiv) all documents, writings, books, files, records and other documents
arising from or relating to any of the foregoing, whether now
existing or hereafter created; and
(xv) all proceeds from the conversion, voluntary or involuntary, of any
of the above into cash or liquidated claims, and the right to collect
such proceeds, and all other cash and non -cash proceeds and
products of any of the foregoing.
(11) "O&M Program" has the meaning ascribed thereto in Section 18(d).
(mm) "Original Borrower Loan Agreement" has the meaning ascribed thereto
in the recitals to this Instrument.
(nn) "Original Borrower Loan Documents" has the meaning ascribed thereto
in the recitals to this Instrument.
(oo) "Original Borrower Note" has the meaning ascribed thereto in the recitals
to this Instrument.
(pp) "Original Funding Lender" has the meaning ascribed thereto in the
recitals to this Instrument.
(qq) "Original Funding Loan Agreement" has the meaning ascribed thereto in
the recitals to this Instrument.
9 Vista Breeze
(rr) "Permitted Encumbrances" means any easements, encumbrances or
restrictions listed on the schedule of exceptions in the title insurance policy issued to
Governmental Lender as of the date of recordation of this Instrument insuring
Governmental Lender's interest in the Mortgaged Property, together with the liens securing
the Senior Security Instrument, any extended low-income housing commitment (as such
term is defined in Section 42(h)(6)(B) of the Internal Revenue Code), the Regulatory
Agreement (defined herein) and the liens securing the Subordinate Loans (defined herein)
and such other title and survey exceptions as Lender has approved or may approve in
writing in Lender's sole and absolute discretion.
(ss) "Permitted Debt" means any debt of Borrower secured by a deed of trust
or mortgage recorded prior to this Instrument (including, without limitation, the loan
secured by the Senior Security Instrument and the Subordinate Loans).
(tt) "Permitted Transfer" has the meaning ascribed thereto in Section 21(b).
(uu) "Person" means any individual, corporation, limited liability company,
partnership, joint venture, estate, trust, unincorporated association, any federal, state,
county or municipal government or any bureau, department or agency thereof and any
fiduciary acting in such capacity on behalf of any of the foregoing.
(vv) "Personalty" means all of Borrower's right, title and interest in and to all:
(i) accounts (including deposit accounts) of Borrower related to the
Mortgaged Property;
(ii) Imposition Deposits;
(iii) equipment, goods, supplies and inventory owned by Borrower that
are used now or in the future in connection with the ownership,
management or operation of the Land or the Improvements or are
located on the Land or in the Improvements (other than Fixtures),
including furniture, furnishings, machinery, building materials,
tools, books, records (whether in written or electronic form),
computer equipment (hardware and software);
(iv) other tangible personal property owned by Borrower which are used
now or in the future in connection with the ownership, management
or operation of the Land or Improvements or are located on the Land
or in the Improvements (other than Fixtures), including ranges,
stoves, microwave ovens, refrigerators, dishwashers, garbage
disposers, washers, dryers and other appliances;
(v) any operating agreements relating to the Land or the Improvements;
10 Vista Breeze
(vi) any surveys, plans and specifications and contracts for architectural,
engineering and construction services relating to the Land or the
Improvements;
(vii) documents, instruments, chattel paper, claims, deposits, deposit
accounts, payment intangibles, other intangible property, general
intangibles, and rights relating to the operation of, or used in
connection with, the Land or the Improvements, including all
governmental permits relating to any activities on the Land and
including subsidy or similar payments received from any sources,
including a Governmental Authority; and
(viii) any rights of Borrower in or under letters of credit.
(ww) "Project" means the 119-unit multifamily residential project, known or to
be known as Vista Breeze and located in the City of Miami Beach, Miami -Dade County,
Florida.
(xx) "Property Jurisdiction' means the State of Florida.
(yy) "Regulatory Agreement" means the Land Use Restriction Agreement,
dated as of December 15, 2023, by and among Governmental Lender, Fiscal Agent and
Borrower, regulating or restricting the use or manner of operation of the Mortgaged
Property and containing requirements that specified percentages of the dwelling units in
the Mortgaged Property be occupied by tenants whose incomes are below specified levels.
(zz) "Rents" means all rents (whether from residential or non-residential space),
revenues and other income of the Land or the Improvements, including subsidy payments
received from any sources (including, but not limited to payments under any Housing
Assistance Payments Contract or similar agreements), parking fees, laundry and vending
machine income and fees and charges for food, health care and other services provided at
the Mortgaged Property, whether now due, past due, or to become due, and deposits
forfeited by tenants.
(aaa) "Senior Lenders" means Original Funding Lender together with the
holder(s) of any other Permitted Debt.
(bbb) "Servicer" means the servicing party that is designated by Lender to service
the Loan, together with its successors in such capacity.
(ccc) "Senior Security Instrument" has the meaning ascribed thereto in the
recitals to this Instrument.
(ddd) "Subordinate Loans" has the meaning ascribed to that term in the Original
Funding Loan Agreement.
11 Vista Breeze
(eee) "Taxes" means, collectively, all taxes, assessments, vault rentals and other
charges, if any, general, special or otherwise, including all assessments for schools, public
betterments and general or local improvements, which are levied, assessed or imposed by
any public authority or quasi -public authority, and which, if not paid, will become a lien,
on the Land or the Improvements.
(fff) "Transfer" means (i) a sale, assignment, transfer, or other disposition
(whether voluntary, involuntary or by operation of law); (ii) the grant, creation, or
attachment of a lien, encumbrance, or security interest (whether voluntary, involuntary or
by operation of law); (iii) the issuance or other creation of a direct or indirect ownership
interest; or (iv) the withdrawal, retirement, removal or involuntary resignation of any
owner or manager of a legal entity.
(ggg) "Uniform Commercial Code" means the Florida Uniform Commercial
Code.
(hhh) "United States Bankruptcy Code" means the United States Bankruptcy
Code, 11 U.S.C. Section 101 et seq., as amended from time to time.
2. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT.
(a) This Instrument is also a security agreement under the Uniform Commercial
Code for any of the Mortgaged Property which, under applicable law, may be subjected to
a security interest under the Uniform Commercial Code, whether such Mortgaged Property
is owned now or acquired in the future, and all products and cash and non -cash proceeds
thereof (collectively, "UCC Collateral"), and Borrower hereby grants to Lender a security
interest in the UCC Collateral. Borrower hereby authorizes Lender to prepare and file any
and all 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 without execution by Borrower. 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 except for
the Permitted. Encumbrances. If an Event of Default has occurred and is continuing (it
being acknowledged and agreed that in no event shall Lender have any obligation to accept
a cure of an Event of Default), 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. This Instrument constitutes
a financing statement with respect to any part of the Mortgaged Property which is or may
become a Fixture.
(b) Unless Borrower gives at least thirty (30) days' prior written notice to
Lender and subject to Section 21 hereof, Borrower shall not: (i) change its name, identity,
12 Vista Breeze
or structure of organization; (ii) change its state of organization through dissolution,
merger, transfer of assets or otherwise; (iii) change its principal place of business (or chief
executive office if more than one place of business); or (iv) add to or change any location
at which any of the Mortgaged Property is stored, held or located. Such notice shall be
accompanied by new financing statements and/or financing statement amendments in the
same form as the financing statements delivered to Lender on the date hereof. Without
limiting the foregoing, upon the occurrence and during the continuance of an Event of
Default (it being acknowledged and agreed that in no event shall Lender have any
obligation to accept a cure of an Event of Default), Borrower hereby authorizes and
irrevocably appoints Lender and each of its officers attorneys -in -fact for Borrower to
execute, deliver, and file, as applicable, such financing statements, continuation statements
or amendments deemed necessary by Lender in its sole discretion for and on behalf of
Borrower, without execution by Borrower. Borrower shall also execute and deliver to
Lender modifications or supplements of this Instrument as Lender may require in
connection with any change described in this Section.
3. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN
POSSESSION.
(a) As part of the consideration for the Indebtedness, Borrower absolutely and
unconditionally assigns and transfers to Lender all Rents. It is the intention of Borrower
to establish a present, absolute and irrevocable transfer and assignment to Lender of all
Rents and to authorize and empower Lender to collect and receive all Rents without the
necessity of further action on the part of Borrower. Promptly upon request by Lender,
Borrower agrees to execute and deliver such further assignments of Rents 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
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) Borrower authorizes Lender to collect, sue for and compromise Rents and
directs each tenant of the Mortgaged Property to pay all Rents to, or as directed by, Lender.
However, until the occurrence of an Event of Default, Lender hereby grants to Borrower a
revocable license to collect and receive all Rents, to hold all Rents in trust for the benefit
of Lender and to apply all Rents to pay the installments of interest and principal then due
and payable under the Forward Commitment Fee Note and the other amounts then due and
payable under the other Forward Commitment Fee Documents, and to pay the current costs
and expenses of managing, operating and maintaining the Mortgaged Property, including
utilities, Taxes and insurance premiums, tenant improvements and other capital
expenditures. So long as no Event of Default has occurred and is continuing (it being
13 Vista Breeze
acknowledged and agreed that in no event shall Lender have any obligation to accept a cure
of an Event of Default), 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. Upon the occurrence and continuation of an
Event of Default (it being acknowledged and agreed that in no event shall Lender have any
obligation to accept a cure 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 (such license shall be reinstated upon Borrower's cure of the
Event of Default to the satisfaction of Lender). Borrower shall pay to Lender upon demand
all Rents to which Lender is entitled. At any time on or after the occurrence and
continuation of an Event of Default (it being acknowledged and agreed that in no event
shall Lender have any obligation to accept a cure of an Event of Default), 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, no tenant shall be
obligated to inquire further as to the right of Lender to collect Rents, and 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 indebtedness
that will be paid off and discharged with the proceeds of the Loan or in connection with
the Subordinate Loans), 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 (other than a
security deposit not in excess of one month's rent). Borrower shall not collect or accept
payment of any Rents more than two months prior to the due dates of such Rents (other
than a security deposit not in excess of one month's rent).
(d) If an Event of Default has occurred and is continuing (it being
acknowledged and agreed that in no event shall Lender have any obligation to accept a cure
of an Event of Default), Lender may, but shall in no event be required to, 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 assigmment of Rents pursuant to Section 3(a), protecting the Mortgaged
14 Vista Breeze
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 (it being acknowledged and agreed that in no event shall Lender
have any obligation to accept a cure of an Event of Default), 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 (it being acknowledged and agreed that in no event shall Lender have
any obligation to accept a cure of an Event of Default), 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. 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 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. 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 this Section 3, and
Borrower hereby releases and discharges Lender from any such liability to the fullest extent
permitted by law, except for the gross negligence or willful misconduct of Lender or its
agents.
(f) If the Rents are not sufficient to meet the costs of taking control of and
managing the Mortgaged Property and collecting the Rents, any funds expended by Lender
for such purposes shall become an additional part of the Indebtedness as provided in
Section 12.
(g) Any entering upon and taking of control of the Mortgaged Property by
Lender or the receiver, as the case may be, and any application of Rents as provided in this
Instrument shall not cure or waive any Event of Default or invalidate any other right or
remedy of Lender under applicable law or provided for in this Instrument.
15 Vista Breeze
4. ASSIGNMENT OF LEASES; LEASES AFFECTING THE MORTGAGED
PROPERTY.
(a) As part of the consideration for the Indebtedness, Borrower absolutely and
unconditionally assigns and transfers to Lender all of Borrower's right, title and interest in,
to and under the Leases, including Borrower's right, power and authority to modify the
terms of any such Lease, or extend or terminate any such Lease. It is the intention of
Borrower to establish a present, absolute and irrevocable transfer and assignment to Lender
of all of Borrower's right, title and interest in, to and under the Leases. Borrower and
Lender intend this assignment of the Leases to be immediately effective and to constitute
an absolute present assignment and not an assignment for additional security only. For
purposes of giving effect to this absolute assignment of the Leases, and for no other
purpose, the Leases shall not be deemed to be a part of the "Mortgaged Property" as that
term is defined in Section 1. 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 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) Unless an Event of Default has occurred and is continuing (it being
acknowledged and agreed that in no event shall Lender have any obligation to accept a cure
of an Event of Default), Borrower shall have all rights, power and authority granted to
Borrower under any Lease (except as otherwise limited by this Section or any other
provision of this Instrument), including the right, power and authority to modify the terms
of any Lease or extend or terminate any Lease. During the continuance of an Event of
Default, the permission given to Borrower pursuant to the preceding sentence to exercise
all rights, power and authority under Leases shall automatically terminate. Borrower shall
comply with and observe Borrower's obligations under all Leases, including Borrower's
obligations pertaining to the maintenance and disposition of tenant security deposits.
(c) Borrower acknowledges and agrees that the exercise by Lender, either
directly or by a receiver, of any of the rights conferred under this Section 4 shall not be
construed to make Lender a mortgagee -in -possession of the Mortgaged Property so long
as Lender has not itself entered into actual possession of the Land and the Improvements.
The acceptance by Lender of the assignment of the Leases pursuant to Section 4(a) shall
not at any time or in any event obligate Lender to take any action under this Instrument or
to expend any money or to incur any expenses. 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, except to the extent arising from the gross
negligence or willful misconduct of Lender. 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
16 Vista Breeze
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 during the continuance of an Event of
Default (it being acknowledged and agreed that in no event shall Lender have any
obligation to accept a cure of an Event of Default), and without the necessity of Lender
entering upon and taking and maintaining control of the Mortgaged Property directly, by a
receiver, or by any other manner or proceeding permitted by the laws of the Property
Jurisdiction, Lender immediately shall have all rights, powers and authority granted to
Borrower under any Lease, including the right, power and authority to modify the terms of
any such Lease, or extend or terminate any such Lease.
(e) Borrower shall, promptly upon Lender's request, deliver to Lender an
executed copy of each residential Lease then in effect. All Leases for residential dwelling
units shall (i) be on forms approved by Lender, (ii) be for initial terms of at least six
(6) months and not more than two (2) years, (iii) not include options to purchase, (iv) be
legally valid, binding, and enforceable obligations of the tenants, (v) contain language
expressly stating that such Lease is subordinate to the lien of this Instrument and
(vi) comply with all applicable laws.
(f) Except for laundry facilities and cable television services for tenants on
market terms and conditions, Borrower shall not lease any portion of the Mortgaged
Property for non-residential use except with the prior written consent of Lender and
Lender's prior written approval of the Lease agreement. Borrower shall not modify the
terms of, or extend or terminate, any Lease for non-residential use (including any Lease in
existence on the date of this Instrument) without the prior written consent of Lender.
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.
17 Vista Breeze
(g) Borrower shall not receive or accept Rent under any Lease (whether
residential or non-residential) for more than two months in advance (other than a security
deposit not in excess of one month's rent).
5. PAYMENT OF INDEBTEDNESS; PERFORMANCE UNDER FORWARD
COMMITMENT FEE DOCUMENTS. Borrower shall pay the Indebtedness when due in
accordance with the terms of the Forward Commitment Fee Note and the other Forward
Commitment Fee Documents and shall perform, observe and comply with all other provisions of
the Forward Commitment Fee Note and the other Forward Commitment Fee Documents.
6. RESERVED.
7. RESERVED.
8. RESERVED.
9. APPLICATION OF PAYMENTS. If at any time Lender receives, from
Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts
due and payable at such time, then Lender may apply that payment to amounts then due and
payable in any manner and in any order determined by Lender, in Lender's discretion. Neither
Lender's acceptance of an amount that is less than all amounts then due and payable nor Lender's
application of such payment in the manner authorized shall constitute or be deemed to constitute
either a waiver of the unpaid amounts or an accord and satisfaction. Notwithstanding the
application of any such amount to the Indebtedness, Borrower's obligations under this Instrument
and the Forward Commitment Fee Note shall remain unchanged.
10. COMPLIANCE WITH LAWS. Borrower shall comply with all laws,
ordinances, regulations and requirements of any Governmental Authority and all recorded lawful
covenants and agreements relating to or affecting the Mortgaged Property, including all laws,
ordinances, regulations, requirements and covenants pertaining to health and safety, construction
of improvements on the Mortgaged Property, fair housing, disability accommodation, zoning and
land use, and Leases. Borrower also shall comply with all applicable laws that pertain to the
maintenance and disposition of tenant security deposits. Borrower shall at all times maintain
records sufficient to demonstrate compliance with the provisions of this Section 10. Borrower
shall take appropriate measures to prevent, and shall not engage in or knowingly permit, any illegal
activities at the Mortgaged Property that could endanger tenants or visitors, result in damage to the
Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise materially impair
the lien created by this Instrument or Lender's interest in the Mortgaged Property. Borrower
represents and warrants to Lender that no portion of the Mortgaged Property has been or will be
purchased with the proceeds of any illegal activity.
11. USE OF PROPERTY. Unless required by applicable law, Borrower shall not
(a) allow changes in the use for which all or any part of the Mortgaged Property is being used at
the time this Instrument was executed, except for any change in use approved by Lender,
(b) convert any individual dwelling units or common areas to commercial use, (c) initiate a change
18 Vista Breeze
in the zoning classification of the Mortgaged Property or acquiesce in a change in the zoning
classification of the Mortgaged Property, (d) establish any condominium or cooperative regime
with respect to the Mortgaged Property; (e) combine all or any part of the Mortgaged Property
with all or any part of a tax parcel which is not part of the Mortgaged Property, or (f) subdivide or
otherwise split any tax parcel constituting all or any part of the Mortgaged Property without the
prior consent of Lender.
12. PROTECTION OF LENDER'S SECURITY; INSTRUMENT SECURES
FUTURE ADVANCES.
(a) If Borrower fails to perform any of its obligations under this Instrument or
any other Forward Commitment Fee Document after the expiration of any applicable notice
and cure period, or if any action or proceeding (including a Bankruptcy Event) is
commenced which purports to affect the Mortgaged Property, Lender's security or
Lender's rights under this Instrument, including eminent domain, insolvency, code
enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials Laws,
fraudulent conveyance or reorganizations or proceedings involving a bankrupt or decedent,
then Lender at Lender's option may make such appearances, file such documents, disburse
such sums and take such actions as Lender deems necessary to perform such obligations of
Borrower and to protect Lender's interest, including (i) payment of fees, expenses and
reasonable fees of attorneys, accountants, inspectors and consultants, (ii) entry upon the
Mortgaged Property to make repairs or secure the Mortgaged Property, (iii) procurement
of the insurance required by Section 19 (specifically including, without limitation, flood
insurance if required by Section 19), and (iv) payment of amounts which Borrower has
failed to pay under Sections 15 and 17.
(b) Any amounts disbursed by Lender under this Section 12, or under any other
provision of this Instrument that treats such disbursement as being made under this
Section 12, shall be secured by this Instrument, shall be added to, and become part of, the
principal component of the Indebtedness, shall be immediately due and payable and shall
bear interest from the date of disbursement until paid at the "Default Rate", as defined in
the Forward Commitment Fee Note.
(c) If the Lender shall elect to pay any sum due with reference to the Project or
the Mortgaged Property, the Lender may do so in reliance on any bill, statement or
assessment procured from the appropriate Governmental Authority or other issuer thereof
without inquiring into the accuracy or validity thereof. Similarly, in making any payments
to protect the security intended to be created by this Instrument and/or the other Forward
Commitment Fee Documents, the Lender shall not be bound to inquire into the validity of
any apparent or threatened adverse title, lien, encumbrance, claim or charge before making
an advance for the purpose of preventing or removing the same.
(d) Nothing in this Section 12 shall require Lender to incur any expense or take
any action.
19 vista Breeze
13. INSPECTION.
(a) Lender and its agents, representatives, and designees may make or cause to
be made entries upon and inspections of the Mortgaged Property (including environmental
inspections and tests to the extent permitted under Section 18) during normal business
hours, or at any other reasonable time, upon reasonable notice to Borrower and subject to
the rights of tenants (if any) under their respective leases if the inspection is to include
occupied residential units (which notice need not be in writing). Notice to Borrower shall
not be required in the case of an emergency, as determined in Lender's discretion, or when
an Event of Default has occurred and is continuing (it being acknowledged and agreed that
in no event shall Lender have any obligation to accept a cure of an Event of Default).
(b) If Lender determines that Mold has developed as a result of a water intrusion
event or leak, Lender, at Lender's discretion, may require that a professional inspector
inspect the Mortgaged Property as frequently as Lender determines is necessary until any
issue with Mold and its cause(s) are resolved to Lender's satisfaction. Such inspection
shall be limited to a visual and olfactory inspection of the area that has experienced the
Mold, water intrusion event or leak. Borrower shall be responsible for the cost of such
professional inspection and any remediation deemed to be necessary as a result of the
professional. inspection. After any issue with Mold, water intrusion or leaks is remedied to
Lender's satisfaction, Lender shall not require a professional inspection any more
frequently than once every three years unless Lender is otherwise aware of Mold as a result
of a subsequent water intrusion event or leak.
(c) If Lender determines not to conduct an annual inspection of the Mortgaged
Property, and in lieu thereof Lender requests a certification, Borrower shall be prepared to
provide and must actually provide to Lender a factually correct certification each year that
the annual inspection is waived to the following effect: that Borrower represents and
warrants that Borrower has not received any written complaint, notice, letter or other
written communication from tenants, management agent or any Governmental Authority
regarding odors, indoor air quality, Mold or any activity, condition, event or omission that
causes or facilitates the growth of Mold on or in any part of the Mortgaged Property, or if
Borrower has received any such written complaint, notice, letter or other written
communication, that Borrower has investigated and determined that no Mold activity,
condition or event exists or alternatively has fully and properly remediated such activity,
condition, event or omission in compliance with the MMP for the Mortgaged Property. If
Borrower is unwilling or unable to provide such certification, Lender may require a
professional inspection of the Mortgaged Property at Borrower's expense.
14. BOOKS AND RECORDS; FINANCIAL REPORTING.
(a) Borrower shall keep and maintain at all times at the Mortgaged Property or
the management agent's offices, and upon Lender's request shall make available at the
Mortgaged Property, complete and accurate books of account and records (including copies
of supporting bills and invoices) adequate to reflect correctly the operation of the
20 Vista Breeze
Mortgaged Property, and copies of all written contracts, Leases, and other instruments
which affect the Mortgaged Property. The books, records, contracts, Leases and other
instruments shall be subject to examination and inspection at any reasonable time by
Lender upon reasonable advance notice.
(b) Borrower shall furnish to Lender all of the following:
(i) (1) except as provided in clause (2) below, within 45 days after the
end of each fiscal quarter of Borrower, a statement of income and
expenses for Borrower's operation of the Mortgaged Property on a
year-to-date basis as of the end of each fiscal quarter, (2) within
120 days after the end of each fiscal year of Borrower, (A) a
statement of income and expenses for Borrower's operation of the
Mortgaged Property for such fiscal year, (B) a statement of changes
in financial position of Borrower relating to the Mortgaged Property
for such fiscal year, and (C) a balance sheet showing all assets and
liabilities of Borrower relating to the Mortgaged Property as of the
end of such fiscal year; and (3) any of the foregoing at any other
time upon Lender's request;
(ii) within 45 days after the end of each fiscal quarter of Borrower, and
at any other time upon Lender's request, a rent schedule for the
Mortgaged Property showing the name of each tenant, and for each
tenant, the space occupied, the lease expiration date, the rent payable
for the current month, the date through which rent has been paid,
and any related information requested by Lender;
(iii) within 120 days after the end of each fiscal year of Borrower, and at
any other time upon Lender's request, an accounting of all security
deposits held pursuant to all Leases, including the name of the
institution (if any) and the names and identification numbers of the
accounts (if any) in which such security deposits are held and the
name of the person to contact at such financial institution, along with
any authority or release necessary for Lender to access information
regarding such accounts;
(iv) within 120 days after the end of each fiscal year of Borrower, and at
any other time upon Lender's request, a statement that identifies all
owners of any interest in Borrower and the interest held by each, if
Borrower is a corporation, all officers and directors of Borrower,
and if Borrower is a limited liability company, all managers who are
not members;
(v) upon Lender's request, a monthly property management report for
the Mortgaged Property, showing the number of inquiries made and
21 Vista Breeze
rental applications received from tenants or prospective tenants and
deposits received from tenants and any other information requested
by Lender;
(vi) upon Lender's request, a balance sheet, a statement of income and
expenses for Borrower and a statement of changes in financial
position of Borrower for Borrower's most recent fiscal year;
(vii) annually, if applicable, within 60 days of the date required for
submission by the agency in the Property Jurisdiction responsible
for monitoring the low income housing tax credit program, a low
income housing tax credit compliance report in form and substance
acceptable to Lender; and
(viii) if required by Lender, within 30 days of the end of each calendar
month, a monthly statement of income and expenses for such
calendar month on a year-to-date basis for Borrower's operation of
the Mortgaged Property.
(c) Each of the statements, schedules and reports required by Section 14(b)
shall be certified to be complete and accurate by an individual having authority to bind
Borrower and shall be in such form and contain such detail as Lender may require. Lender
also may require that any statements, schedules or reports be audited at Borrower's expense
by independent certified public accountants acceptable to Lender.
(d) If Borrower fails to provide in a timely manner the statements, schedules
and reports required by Section 14(b), Lender shall have the right to have Borrower's books
and records audited, at Borrower's expense, by independent certified public accountants
selected by Lender in order to obtain such statements, schedules and reports, and all related
actual costs and expenses of Lender shall become immediately due and payable and shall
become an additional part of the Indebtedness as provided in Section 12.
(e) If an Event of Default has occurred and is continuing (it being
acknowledged and agreed that in no event shall Lender have any obligation to accept a cure
of an Event of Default), Borrower shall deliver to Lender upon written demand all books
and records relating to the Mortgaged Property or its operation.
(f) Borrower authorizes Lender to obtain a credit report on Borrower at any
time.
15. TAXES; OPERATING EXPENSES.
(a) Subject to the provisions of Section 15(c) and Section 15(d), Borrower shall
pay, or cause to be paid, all Taxes when due and before the imposition of any interest, fine,
penalty or cost for nonpayment.
22 Vista Breeze
(b) Subject to the provisions of Section 15(c), Borrower shall pay (i) the
expenses of operating, managing, maintaining and repairing the Mortgaged Property
(including insurance premiums, utilities, repairs and replacements) before the last date
upon which each such payment may be made without any penalty or interest charge being
added, and (ii) insurance premiums at least 30 days prior to the expiration date of each
policy of insurance, unless applicable law specifies some lesser period.
(c) Reserved.
(d) Borrower, at its own expense, may contest by appropriate legal proceedings,
conducted diligently and in good faith, the amount or validity of any Taxes or other utility
or similar charges that could become a lien on the Mortgaged Property ("Impositions"),
other than insurance premiums, if (i) Borrower notifies Lender of the commencement or
expected commencement of such proceedings, (ii) the Mortgaged Property is not in danger
of being sold or forfeited, (iii) Borrower deposits with Lender reserves sufficient to pay the
contested Imposition, if requested by Lender, and (iv) Borrower furnishes whatever
additional security is required in the proceedings or is requested by Lender, which may
include the delivery to Lender of the reserves established by Borrower to pay the contested
Imposition.
(e) Borrower shall promptly deliver to Lender copies of all notices of, and
invoices for, Impositions, and if Borrower pays any Imposition directly, Borrower shall
promptly furnish to Lender on or before the date this Instrument requires such Impositions
to be paid, copies of receipts evidencing that such payments were made.
(f) All payments made by Borrower to Lender pursuant to this Instrument or
any of the Forward Commitment Fee Documents shall be free and clear of any and all tax
liabilities whatsoever (other than United States federal income taxation payable by Lender)
and, to the extent Lender is required to pay any such tax liabilities, Borrower shall
reimburse Lender in respect of any such payment of taxes and, immediately upon request
from Lender, shall deliver to Lender copies of receipts evidencing the payment of such
taxes.
16. LIENS; ENCUMBRANCES. Borrower acknowledges that, to the extent
provided in Section 21, the grant, creation or existence of any mortgage, deed of trust, deed to
secure debt, security interest or other lien or encumbrance (a "Lien") on the Mortgaged Property
(other than the lien of this Instrument and the Permitted Encumbrances) or on certain ownership
interests in Borrower, whether voluntary, involuntary or by operation of law, and whether or not
such Lien has priority over the lien of this Instrument, is a "Transfer" which constitutes an Event
of Default and subjects Borrower to personal liability under the Forward Commitment Fee Note.
Borrower shall maintain the lien created by this Instrument as a subordinate mortgage lien upon
the Mortgaged Property, subject to no other Liens or encumbrances other than Permitted
Encumbrances.
23 Vista Breeze
17. PRESERVATION, MANAGEMENT AND MAINTENANCE OF
MORTGAGED PROPERTY.
(a) Borrower shall not commit waste or permit impairment or deterioration of
the Mortgaged Property.
(b) Borrower shall not abandon the Mortgaged Property.
(c) Borrower shall restore or repair promptly, in a good and workmanlike
manner, any damaged part of the Mortgaged Property to the equivalent of its original
condition, or such other condition as Lender may approve in writing, whether or not
insurance proceeds or condemnation awards are available to cover any costs of such
restoration or repair.
(d) Borrower shall keep the Mortgaged Property in good repair (normal wear
and tear excepted), including the replacement of Personalty and Fixtures with items of
equal or better function and quality.
(e) Borrower shall provide for professional management of the Mortgaged
Property by a residential rental property manager satisfactory to Lender at all times, under
a contract approved by Lender, in writing, which contract must be terminable upon not
more than thirty (30) days' notice without the necessity of establishing cause and without
payment of a penalty or termination fee by Borrower or its successors. There shall be no
change in the property manager or any contract for the management of the Mortgaged
Property without Lender's prior written approval. Lender shall have the right to require
that Borrower and any new property manager enter into an Assignment of Management
Agreement on a form approved by Lender. If required by Lender (whether before or after
an Event of Default), Borrower will cause any Affiliate of Borrower to whom fees are
payable for the management of the Mortgaged Property to enter into an agreement with
Lender, in a form approved by Lender, providing for subordination of those fees and such
other provisions as Lender may require.
(f) Borrower shall give notice to Lender of and, unless otherwise directed in
writing by Lender, shall appear in and defend any action or proceeding purporting to affect
the Mortgaged Property, Lender's security or Lender's rights under this Instrument.
Borrower shall not (and shall not permit any tenant or other person to) remove, demolish
or alter the Mortgaged Property or any part of the Mortgaged Property, including any
removal, demolition or alteration occurring in connection with a rehabilitation of all or part
of the Mortgaged Property, except (i) in connection with the replacement of tangible
Personalty and (ii) repairs and replacements in connection with malting an individual unit
ready for a new occupant.
(g) Unless otherwise waived by Lender in writing, Borrower must have or must
establish and must adhere to the MMP. If Borrower is required to have an MMP, Borrower
must keep all MMP documentation at the Mortgaged Property or at the management
24 Vista Breeze
agent's office and available for Lender or its agents to review during any annual assessment
or inspection of the Mortgaged Property that is required by Lender.
18. ENVIRONMENTAL HAZARDS.
(a) Except for matters described in Section 18(b), Borrower shall not cause or
permit any of the following:
(i) the presence, use, generation, release, treatment, processing, storage
(including storage in above ground and underground storage tanks),
handling, or disposal of any Hazardous Materials on or under the
Mortgaged Property (whether as a result of activities on the
Mortgaged Property or on surrounding properties) or any other
property of Borrower that is adjacent to the Mortgaged Property;
(ii) the transportation of any Hazardous Materials to, from, or across the
Mortgaged Property (whether as a result of activities on the
Mortgaged Property or on surrounding properties);
any occurrence or condition on the Mortgaged Property (whether as
a result of activities on the Mortgaged Property or on surrounding
properties) or any other property of Borrower that is adjacent to the
Mortgaged Property, which occurrence or condition is or may be in
violation of Hazardous Materials Laws;
(iv) any violation of or noncompliance with the terms of any
Environmental Permit with respect to the Mortgaged Property or
any property of Borrower that is adjacent to the Mortgaged Property;
(v) the imposition of any environmental lien against the Mortgaged
Property; or
(vi) any violation or noncompliance with the terms of any O&M
Program.
The matters described in clauses (i) through (vi) above, except as otherwise provided in
Section 18(b), are referred to collectively in this Section 18 as "Prohibited Activities or
Conditions".
(b) Prohibited Activities or Conditions shall not include lawful conditions
permitted by an O&M Program or the safe and lawful use and storage of quantities of
(i) pre -packaged supplies, cleaning materials, petroleum products, household products,
paints, solvents, lubricants and other materials customarily used in the construction,
renovation, operation, maintenance or use of comparable multifamily properties,
(ii) cleaning materials, household products, personal grooming items and other items sold
in pre -packaged containers for consumer use and used by tenants and occupants of
25 Vista Breeze
residential dwelling units in the Mortgaged Property; and (iii) petroleum products used in
the operation and maintenance of motor vehicles from time to time located on the
Mortgaged Property's parking areas, so long as all of the foregoing are used, stored,
handled, transported and disposed of in compliance with Hazardous Materials Laws.
(c) Borrower shall take all commercially reasonable actions (including the
inclusion of appropriate provisions in any Leases executed after the date of this Instrument)
to prevent its employees, agents, and contractors, and all tenants and other occupants from
causing or permitting any Prohibited Activities or Conditions. Borrower shall not lease or
allow the sublease or use of all or any portion of the Mortgaged Property to any tenant or
subtenant for nonresidential use by any user that, in the ordinary course of its business,
would cause or permit any Prohibited Activity or Condition.
(d) If and as required by Lender, Borrower shall also establish a written
operations and maintenance program with respect to certain Hazardous Materials. Each
such operations and maintenance program and any additional or revised operations and
maintenance programs established for the Mortgaged Property pursuant to this Instrument
must be approved by Lender and shall be referred to herein as an "O&M Program."
Borrower shall comply in a timely manner with, and cause all employees, agents, and
contractors of Borrower and any other persons present on the Mortgaged Property to
comply with each O&M Program. Borrower shall pay all costs of performance of
Borrower's obligations under any O&M Program, and any Lender Parry's out-of-pocket
costs incurred by such Lender Party in connection with the monitoring and review of each
O&M Program and Borrower's performance shall be paid by Borrower upon demand by
such Lender Party. Any such out-of-pocket costs of such Lender Party which Borrower
fails to pay promptly shall become an additional part of the Indebtedness as provided in
Section 12.
(e) Without limitation of the foregoing, (i) Borrower hereby agrees to
implement and maintain during the entire term of the Indebtedness the O&M Program(s),
and (ii) if asbestos -containing materials are found to exist at the Mortgaged Property, the
O&M Program with respect thereto shall be undertaken consistent with the Guidelines for
Controlling Asbestos -Containing Materials in Buildings (USEPA, 1985) and other relevant
guidelines and applicable Hazardous Materials Laws.
(f) With respect to any O&M Program, Lender may require (i) periodic notices
or reports to Lender in form, substance and at such intervals as Lender may specify;
(ii) amendments to such O&M Program to address changing circumstances, laws or other
matters, including, without limitation, variations in response to reports provided by
environmental consultants; and (iii) execution of an Operations and Maintenance
Agreement relating to such O&M Program satisfactory to Lender.
(g) Borrower represents and warrants to Lender Parties that, except as
otherwise disclosed in the Environmental Reports:
26 vista Breeze
(i) Borrower has not at any time engaged in, caused or permitted any
Prohibited Activities or Conditions;
(ii) to the best of Borrower's knowledge after reasonable and diligent
inquiry, no Prohibited Activities or Conditions exist or have existed,
and Borrower has provided Lender with copies of all reports and
information acquired in such inquiries;
(iii) the Mortgaged Property does not now contain any underground
storage tanks and, to the best of Borrower's knowledge, the
Mortgaged Property has not contained any underground storage
tanks in the past. If there is an underground storage tank located on
the Mortgaged Property that has been disclosed in the
Environmental Reports, that tank complies with all requirements of
Hazardous Materials Laws;
(iv) Borrower has complied with and will continue to comply with all
Hazardous Materials Laws, including all requirements for
notification regarding releases of Hazardous Materials. Without
limiting the generality of the foregoing, Borrower has obtained all
Environmental Permits required for the operation of the Mortgaged
Property in accordance with Hazardous Materials Laws now in
effect and all such Environmental Permits are in full force and
effect;
(v) no event has occurred with respect to the Mortgaged Property that
constitutes, or with the passing of time or the giving of notice would
constitute, noncompliance with the terms of any Environmental
Permit or Hazardous Materials Law;
(vi) there are no actions, suits, claims or proceedings pending or, to the
best of Borrower's knowledge after reasonable and diligent inquiry,
threatened that involve the Mortgaged Property and allege, arise out
of, or relate to any Prohibited Activity or Condition;
(vii) Borrower has not received any complaint, order, notice of violation
or other communication from any Governmental Authority with
regard to air emissions, water discharges, noise emissions or
Hazardous Materials, or any other environmental, health or safety
matters affecting the Mortgaged Property or any other property of
Borrower that is adjacent to the Mortgaged Property;
(viii) no prior Remedial Work (as defined below) has been undertaken,
and no Remedial Work is ongoing, with respect to the Mortgaged
Property during Borrower's ownership thereof or, to the best of
27 Vista Breeze
Borrower's knowledge, at any time prior to Borrower's ownership
thereof; and
(ix) Borrower has disclosed in the Agreement of Environmental
Indemnification all material facts known to Borrower or contained
in Borrower's records the nondisclosure of which could cause any
representation or warranty made herein or any statement made in the
Agreement of Environmental Indemnification to be false or
materially misleading.
The representations and warranties in this Section 18 shall be continuing representations
and warranties that shall be deemed to be made by Borrower throughout the term of the
Loan, until the Indebtedness has been paid in full or otherwise discharged.
(h) Borrower shall promptly notify Lender in writing upon the occurrence of
any of the following events:
(i) Borrower's discovery of any Prohibited Activity or Condition;
(ii) Borrower's receipt of or knowledge of any complaint, order, notice
of violation or other communication from any tenant, management
agent, Governmental Authority or other person with regard to
present or fixture alleged Prohibited Activities or Conditions or any
other environmental, health or safety matters affecting the
Mortgaged Property or any other property of Borrower that is
adjacent to the Mortgaged Property;
(iii) Borrower's receipt of or knowledge of any personal injury claim,
proceeding or cause of action directly or indirectly arising as a result
of the presence of asbestos or other Hazardous Materials on or from
the Mortgaged Property;
(iv) Borrower's discovery that any representation or warranty in this
Section 18 has become untrue after the date of this Instrument; and
(v) Borrower's breach of any of its obligations under this Section 18.
Any such notice given by Borrower shall not relieve Borrower of, or result in a waiver of,
any obligation under this Instrument, the Forward Commitment Fee Note, or any other
Forward Commitment Fee Document.
(i) Borrower shall pay promptly the actual costs of any environmental
inspections, tests or audits ("Environmental Inspections") required by Lender or any
Lender Party in connection with any foreclosure or deed in lieu of foreclosure, or as a
condition of Lender's consent to any Transfer under Section 21, or required by Lender
following a determination by Lender that Prohibited Activities or Conditions may exist.
28 Vista Breeze
Any such costs incurred by Lender (including, without limitation, actual fees and expenses
of attorneys, expert witnesses, engineers, technical consultants and investigatory fees,
whether incurred in connection with any judicial or administrative process or otherwise)
that Borrower fails to pay promptly shall become an additional part of the Indebtedness as
provided in Section 12. The results of all Environmental Inspections made by Lender shall
at all times remain the property of Lender and Lender shall have no obligation to disclose
or otherwise make available to Borrower or any other party such results or any other
information obtained by Lender in connection with such Environmental Inspections.
Lender hereby reserves the right, and Borrower hereby expressly authorizes Lender, to
make available to any party, including any prospective bidder at a foreclosure sale of the
Mortgaged Property, the results of any Environmental Inspections made by Lender with
respect to the Mortgaged Property. Borrower consents to Lender notifying any party
(either as part of a notice of sale or otherwise) of the results of any of Lender's
Environmental Inspections. Borrower acknowledges that Lender cannot control or
otherwise assure the truthfulness or accuracy of the results of any of its Environmental
Inspections and that the release of such results to prospective bidders at a foreclosure sale
of the Mortgaged Property may have a material and adverse effect upon the amount which
a party may bid at such sale. Borrower agrees that Lender shall have no liability
whatsoever as a result of delivering the results of any of its Environmental Inspections to
any third party, and Borrower hereby releases and forever discharges Lender from any and
all claims, damages, or causes of action, arising out of, connected with or incidental to the
results of, the delivery of any of Lender's Environmental Inspections.
0) If any investigation, site monitoring, containment, clean-up, restoration or
other remedial work ("Remedial Work") is necessary to comply with or cure a violation
of any Hazardous Materials Law or order of any Governmental Authority that has or
acquires jurisdiction over the Mortgaged Property or the use, operation or improvement of
the Mortgaged Property under any Hazardous Materials Law, or is otherwise required by
Lender as a consequence of any Prohibited Activity or Condition or to prevent the
occurrence of a Prohibited Activity or Condition, Borrower shall, by the earlier of (i) the
applicable deadline required by such Hazardous Materials Law or (ii) thirty (30) days after
notice from Lender demanding such action, begin performing the Remedial Work, and
thereafter diligently prosecute it to completion, and shall in any event complete the work
by the time required by such Hazardous Materials Law. Borrower shall promptly provide
Lender with a cost estimate from an environmental consultant acceptable to Lender to
complete any required Remedial Work. If required by Lender, Borrower shall promptly
establish with Lender a reserve fund in the amount of such estimate. If in Lender's opinion
the amount reserved at any time during the Remedial Work is insufficient to cover the work
remaining to complete the Remedial Work or achieve compliance, Borrower shall increase
the amount reserved in compliance with Lender's written request. All amounts so held in
reserve, until disbursed, are hereby pledged to Lender as security for payment of
Borrower's obligations under this Instrument. If Borrower fails to begin on a timely basis
or diligently prosecute any required Remedial Work, Lender may, at its option, cause the
Remedial Work to be completed, in which case Borrower shall reimburse Lender on
29 Vista Breeze
demand for the cost of doing so. Any reimbursement due from Borrower to Lender shall
become part of the Indebtedness as provided in Section 12.
(k) Borrower shall comply with all Hazardous Materials Laws applicable to the
Mortgaged Property. Without limiting the generality of the previous sentence, Borrower
shall (i) obtain and maintain all Environmental Permits required by Hazardous Materials
Laws and comply with all conditions of such Environmental Permits; (ii) cooperate with
any inquiry by any Governmental Authority; and (iii) comply with any governmental or
judicial order that arises from any alleged Prohibited Activity or Condition.
(1) BORROWER SHALL INDEMNIFY, HOLD HARMLESS AND
DEFEND LENDER PARTIES AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
SHAREHOLDERS, PARTNERS, EMPLOYEES, AGENTS, ATTORNEYS,
TRUSTEES, HEIRS AND LEGAL REPRESENTATIVES (COLLECTIVELY, THE
"INDEMNITEES") FROM AND AGAINST ALL LOSSES, PROCEEDINGS,
CLAIMS, DAMAGES, PENALTIES AND COSTS (WHETHER INITIATED OR
SOUGHT BY GOVERNMENTAL AUTHORITIES OR PRIVATE PARTIES),
INCLUDING, WITHOUT LIMITATION, ACTUAL FEES AND OUT-OF-POCKET
EXPENSES OF ATTORNEYS AND EXPERT WITNESSES, ENGINEERING FEES,
ENVIRONMENTAL CONSULTANT FEES, INVESTIGATORY FEES, AND
REMEDIATION COSTS (INCLUDING, WITHOUT LIMITATION, ANY FINANCIAL
ASSURANCES REQUIRED TO BE POSTED FOR COMPLETION OF REMEDIAL
WORK AND COSTS ASSOCIATED WITH ADMINISTRATIVE OVERSIGHT), AND
ANY OTHER LIABILITIES OF WHATEVER KIND AND WHATEVER NATURE,
WHETHER INCURRED IN CONNECTION WITH ANY JUDICIAL OR
ADMINISTRATIVE PROCESS OR OTHERWISE, ARISING DIRECTLY OR
INDIRECTLY FROM ANY OF THE FOLLOWING:
(i) ANY BREACH OF ANY REPRESENTATION OR WARRANTY
OF BORROWER IN THIS SECTION 18;
(ii) ANY FAILURE BY BORROWER TO PERFORM ANY OF ITS
OBLIGATIONS UNDER THIS SECTION 18;
(iii) THE EXISTENCE OR ALLEGED EXISTENCE OF ANY
PROHIBITED ACTIVITY OR CONDITION;
(iv) THE PRESENCE OR ALLEGED PRESENCE OF HAZARDOUS
MATERIALS ON OR UNDER THE MORTGAGED PROPERTY
(WHETHER AS A RESULT OF ACTIVITIES ON THE
MORTGAGED PROPERTY OR ON SURROUNDING
PROPERTIES) OR IN ANY OF THE IMPROVEMENTS OR ON
OR UNDER ANY PROPERTY OF BORROWER THAT IS
ADJACENT TO THE MORTGAGED PROPERTY;
30 Vista Breeze
(v) THE ACTUAL OR ALLEGED VIOLATION OF ANY
HAZARDOUS MATERIALS LAW;
(vi) ANY LOSS OR DAMAGE RESULTING FROM A LOSS OF
PRIORITY OF THIS INSTRUMENT OR ANY OTHER
FORWARD COMMITMENT FEE DOCUMENT DUE TO AN
IMPOSITION OF AN ENVIRONMENTAL LIEN AGAINST THE
MORTGAGED PROPERTY; AND
(vii) ANY PERSONAL INJURY CLAIM, PROCEEDING OR CAUSE
OF ACTION DIRECTLY OR INDIRECTLY ARISING AS A
RESULT OF THE PRESENCE OF ASBESTOS OR OTHER
HAZARDOUS MATERIALS ON OR FROM THE
MORTGAGED PROPERTY.
(m) COUNSEL SELECTED BY BORROWER TO DEFEND INDEMNITEES
SHALL BE SUBJECT TO THE APPROVAL OF THOSE INDEMNITEES. IN ANY
CIRCUMSTANCES IN WHICH THE INDEMNITY UNDER THIS SECTION 18
APPLIES, ANY LENDER PARTY MAY EMPLOY ITS OWN LEGAL COUNSEL AND
CONSULTANTS TO PROSECUTE, DEFEND OR NEGOTIATE ANY CLAIM OR
LEGAL OR ADMINISTRATIVE PROCEEDING AT BORROWER'S EXPENSE, AND
SUCH LENDER PARTY, WITH THE PRIOR WRITTEN CONSENT OF BORROWER
(WHICH SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR
CONDITIONED) MAY SETTLE OR COMPROMISE ANY ACTION OR LEGAL OR
ADMINISTRATIVE PROCEEDING. BORROWER SHALL REIMBURSE SUCH
LENDER PARTY UPON DEMAND FOR ALL COSTS AND EXPENSES INCURRED
BY SUCH LENDER PARTY, INCLUDING, WITHOUT LIMITATION, ALL COSTS
OF SETTLEMENTS ENTERED INTO IN GOOD FAITH, AND THE FEES AND OUT
OF POCKET EXPENSES OF SUCH ATTORNEYS AND CONSULTANTS.
(n) BORROWER SHALL NOT, WITHOUT THE PRIOR WRITTEN
CONSENT OF THOSE INDEMNITEES WHO ARE NAMED AS PARTIES TO A
CLAIM OR LEGAL OR ADMINISTRATIVE PROCEEDING (A "CLAIM"), SETTLE
OR COMPROMISE THE CLAIM IF THE SETTLEMENT (1) RESULTS IN THE
ENTRY OF ANY JUDGMENT THAT DOES NOT INCLUDE AS AN
UNCONDITIONAL TERM THE DELIVERY BY THE CLAIMANT OR PLAINTIFF
TO LENDER PARTIES OF A WRITTEN RELEASE OF THOSE INDEMNITEES,
SATISFACTORY IN FORM AND SUBSTANCE TO LENDER; OR (2) MAY
MATERIALLY AND ADVERSELY AFFECT LENDER PARTIES, AS DETERMINED
BY LENDER IN ITS DISCRETION.
(o) BORROWER'S OBLIGATION TO INDEMNIFY THE INDEMNITEES
SHALL NOT BE LIMITED OR IMPAIRED BY ANY OF THE FOLLOWING, OR BY
ANY FAILURE OF BORROWER OR ANY GUARANTOR TO RECEIVE NOTICE OF
OR CONSIDERATION FOR ANY OF THE FOLLOWING:
31 vista Breeze
(i) ANY AMENDMENT OR MODIFICATION OF ANY FORWARD
COMMITMENT FEE DOCUMENT;
(ii) ANY EXTENSIONS OF TIME FOR PERFORMANCE
REQUIRED BY ANY FORWARD COMMITMENT FEE
DOCUMENT;
(iii) ANY PROVISION IN ANY FORWARD COMMITMENT FEE
DOCUMENT LIMITING LENDER PARTIES' RECOURSE TO
PROPERTY SECURING THE INDEBTEDNESS, OR LIMITING
THE PERSONAL LIABILITY OF BORROWER OR ANY
OTHER PARTY FOR PAYMENT OF ALL OR ANY PART OF
THE INDEBTEDNESS;
(iv) THE ACCURACY OR INACCURACY OF ANY
REPRESENTATIONS AND WARRANTIES MADE BY
BORROWER UNDER THIS INSTRUMENT OR ANY OTHER
FORWARD COMMITMENT FEE DOCUMENT;
(v) THE RELEASE OF BORROWER OR ANY OTHER PERSON,
BY LENDER PARTIES OR BY OPERATION OF LAW, FROM
PERFORMANCE OF ANY OBLIGATION UNDER ANY
FORWARD COMMITMENT FEE DOCUMENT;
(vi) THE RELEASE OR SUBSTITUTION IN WHOLE OR IN PART
OF ANY SECURITY FOR THE INDEBTEDNESS; AND
(vii) FAILURE BY LENDER PARTIES TO PROPERLY PERFECT
ANY LIEN OR SECURITY INTEREST GIVEN AS SECURITY
FOR THE INDEBTEDNESS.
(p) BORROWER SHALL, AT ITS OWN COST AND EXPENSE, DO ALL
OF THE FOLLOWING:
(i) PAY OR SATISFY ANY JUDGMENT OR DECREE THAT MAY
BE ENTERED AGAINST ANY INDEMNITEE OR
INDEMNITEES IN ANY LEGAL OR ADMINISTRATIVE
PROCEEDING INCIDENT TO ANY MATTERS AGAINST
WHICH INDEMNITEES ARE ENTITLED TO BE
INDEMNIFIED UNDER THIS SECTION 18;
(ii) REIMBURSE 1NDEMNITEES FOR ANY AND ALL EXPENSES
PAID OR INCURRED IN CONNECTION WITH ANY
MATTERS AGAINST WHICH INDEMNITEES ARE ENTITLED
TO BE INDEMNIFIED UNDER THIS SECTION 18; AND
32 Vista Breeze
(iii) REIMBURSE INDEMNITEES FOR ANY AND ALL EXPENSES,
INCLUDING, WITHOUT LIMITATION, FEES AND OUT OF
POCKET EXPENSES OF ATTORNEYS AND EXPERT
WITNESSES, PAID OR INCURRED IN CONNECTION WITH
THE ENFORCEMENT BY INDEMNITEES OF THEIR RIGHTS
UNDER THIS SECTION 18, OR IN MONITORING AND
PARTICIPATING IN ANY LEGAL OR ADMINISTRATIVE
PROCEEDING.
(q) THE PROVISIONS OF THIS SECTION 18 SHALL BE IN ADDITION
TO ANY AND ALL OTHER OBLIGATIONS AND LIABILITIES THAT BORROWER
MAY HAVE UNDER APPLICABLE LAW OR UNDER ANY OTHER FORWARD
COMMITMENT FEE DOCUMENT, AND EACH INDEMNITEE SHALL BE
ENTITLED TO INDEMNIFICATION UNDER THIS SECTION 18 WITHOUT
REGARD TO WHETHER ANY OTHER LENDER PARTY OR THAT INDEMNITEE
HAS EXERCISED ANY RIGHTS AGAINST THE MORTGAGED PROPERTY OR
ANY OTHER SECURITY, PURSUED ANY RIGHTS AGAINST ANY GUARANTOR,
OR PURSUED ANY OTHER RIGHTS AVAILABLE UNDER THE FORWARD
COMMITMENT FEE DOCUMENTS OR APPLICABLE LAW. IF BORROWER
CONSISTS OF MORE THAN ONE PERSON OR ENTITY, THE OBLIGATION OF
THOSE PERSONS OR ENTITIES TO INDEMNIFY THE INDEMNITEES UNDER
THIS SECTION 18 SHALL BE JOINT AND SEVERAL. THE OBLIGATION OF
BORROWER TO INDEMNIFY THE INDEMNITEES UNDER THIS SECTION 18
SHALL SURVIVE ANY REPAYMENT OR DISCHARGE OF THE INDEBTEDNESS,
ANY FORECLOSURE PROCEEDING, ANY FORECLOSURE SALE, ANY
DELIVERY OF ANY DEED IN LIEU OF FORECLOSURE, AND ANY RELEASE OF
RECORD OF THE LIEN OF THIS INSTRUMENT.
(r) Notwithstanding anything herein to the contrary, (i) Borrower shall have no
obligation hereunder to indemnify any Indemnitee for any liability under this Section 18 to
the extent that the Prohibited Activity or Condition giving rise to such liability resulted
solely from the gross negligence or willful misconduct of such Indemnitee, and
(ii) Borrower's liability under this Section 18 shall not extend to cover the violation of any
Hazardous Materials Laws or Prohibited Activities or Conditions that first arise, commence
or occur as a result of actions of Lender, its successors, assigns or designees, after the
satisfaction, discharge, release, assignment, termination or cancellation of this Instrument
following the payment in full of the Forward Commitment Fee Note and all other sums
payable under the Forward Commitment Fee Documents or after the actual dispossession
from the entire Mortgaged Property of Borrower and all Affiliates of Borrower following
foreclosure of this Instrument or acquisition of the Mortgaged Property by a deed in lieu
of foreclosure.
33 vista Breeze
19. PROPERTY AND LIABILITY INSURANCE.
(a) Borrower shall keep the Improvements insured at all times against such
hazards as Lender may from time to time require, which insurance shall include but not be
limited to coverage against loss by fire and allied perils, general boiler and machinery
coverage, business income coverage and extra expense insurance, coverage against acts of
terrorism, mold and earthquake coverage. Borrower acknowledges and agrees that
Lender's insurance requirements may change from time to time throughout the term of the
Indebtedness. If Lender so requires, such insurance shall also include sinkhole insurance,
mine subsidence insurance, earthquake insurance, and, if the Mortgaged Property does not
conform to applicable zoning or land use laws, building ordinance or law coverage. If any
portion of the Improvements is at any time located in an area identified by the Federal
Emergency Management Agency (or any successor to that agency) as an area now or
hereafter having special flood hazards, and if flood insurance is available in that area,
Borrower shall insure such Improvements against loss by flood in an amount equal to the
maximum amount available under the National Flood Insurance Program or any successor
thereto.
(b) All premiums on insurance policies required under Section 19(a) shall be
paid in the manner provided in Section 7, unless Lender has designated in writing another
method of payment. All such policies shall also be in a form approved by Lender. All
policies of property damage insurance shall include a non-contributing, non -reporting
mortgage clause in favor of, and in a form approved by, Lender. Lender shall have the
right to hold the original policies or duplicate original policies of all insurance required by
Section 19(a). Borrower shall promptly deliver to Lender a copy of all renewal and other
notices received by Borrower with respect to the policies and all receipts for paid
premiums. At least 30 days prior to the expiration date of a policy, Borrower shall deliver
to Lender the original (or a duplicate original) of a renewal policy in form satisfactory to
Lender.
(c) All insurance policies and renewals of insurance policies required by this
Section 19 shall be in such amounts and for such periods as Lender may from time to time
require consistent with Lender's then current practices and standards, and shall be issued
by insurance companies satisfactory to Lender.
(d) During any period of construction and/or rehabilitation, and at all times
prior to occupancy of the Project by any tenants following the completion of the
construction and/or rehabilitation of the Project in accordance with the Senior Security
Instrument, the following provisions shall apply, in addition to the other provisions of this
Section 19 and without limiting the generality of the other provisions of this Section 19:
(i) Borrower shall provide (or cause to be provided), maintain and keep
in force, the following insurance coverage:
34 vista Breeze
Builder's "all risk" insurance or the equivalent coverage, including theft, to insure all buildings,
machinery, equipment, materials, supplies, temporary structures and all other property of any
nature on -site, off -site and while in transit which is to be used in fabrication, erection, installation
and construction and/or rehabilitation of the Project, and to remain in effect until the entire Project
has been completed and accepted by Borrower and is first occupied by any tenants (provided that
in any event, such coverage shall remain in effect until such time as Borrower has provided Lender
with evidence of property insurance covering the Improvements and meeting the requirements of
this Section 19). Such insurance shall be provided on a replacement cost value basis and shall
include foundations, other underground property, tenant improvements and personal property. If
tenant improvements and personal property are not included in the above coverage, they may be
insured separately by Borrower provided coverage is acceptable to Lender. Builders "all risk"
insurance shall (i) be on a nonreporting, completed value form, (ii) cover soft costs, debris removal
expense (including removal of pollutants), resulting loss and damage to property due to faulty or
defective workmanship or materials and error in design or specification, loss while the property is
in the care, custody and control of others to whom the property may be entrusted, (iii) provide that
Borrower can complete and occupy the Mortgaged Property without further written consent from
the insurer, and (iv) cover loss of income resulting from delay in occupancy and use of the
Mortgaged Property due to loss. During the initial construction and/or rehabilitation of the Project
and until such time as the Project is first occupied by any tenants, the Borrower shall not be
required to maintain property insurance as required by this Section 19 for so long as Builder's "all
risk" insurance or equivalent coverage is maintained in accordance with this paragraph.
If any portion of the Mortgaged Property is or becomes located in an area identified by the United
States Secretary of Housing and Urban Development 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 Flood Disaster Protection Act of 1973, as amended, Borrower shall also keep the
improvements and the equipment located thereon insured against loss by flood in an amount at
least equal to the principal amount of the Loan or the maximum limits of coverage available with
respect to the Mortgaged Property, whichever is less. All such insurance shall also cover
continuing expenses not directly involved in the direct cost of construction, rehabilitation or
renovation, including interest on money borrowed to finance construction, rehabilitation or
renovation, continuing interest on the Loan, advertising, promotion, real estate taxes and other
assessments, the cost of renegotiating leases, and other expenses incurred as the result of property
loss or destruction by the insured peril. Such coverage shall not contain any monthly limitation.
(ii) If Lender fails to receive proof and evidence of the insurance
required hereunder, Lender shall have the right, but not the
obligation, to obtain or cause to be obtained current coverage (and,
in its sole discretion, advance funds) to pay the premiums for it. If
Lender makes an advance for such purpose, Borrower shall repay
such advance immediately on demand and such advance shall be
considered to be a demand loan to Borrower bearing interest at the
Default Rate (as defined in the Forward Commitment Fee Note) and
secured by the Mortgaged Property.
35 Vista Breeze
(e) Borrower shall maintain at all times commercial general liability insurance,
workers' compensation insurance (to the extent Borrower has employees) and such other
liability, errors and omissions and fidelity insurance coverages as Lender may from time
to time require, consistent with Lender's then current practices and standards.
(f) Borrower shall comply with all insurance requirements and shall not permit
any condition to exist on the Mortgaged Property that would invalidate any part of any
insurance coverage that this Instrument requires Borrower to maintain.
. (g) In the event of loss, Borrower shall give immediate written notice to the
insurance carrier and to Lender. Borrower hereby authorizes and appoints Lender as
attorney -in -fact for Borrower to make proof of loss, to adjust and compromise any claims
under policies of property damage insurance, to appear in and prosecute any action arising
from such property damage insurance policies, to collect and receive the proceeds of
property damage insurance, and to deduct from such proceeds Lender's expenses incurred
in the collection of such proceeds. This power of attorney is coupled with an interest and
therefore is irrevocable. However, nothing contained in this Section 19 shall require
Lender to incur any expense or take any action. Lender may, at Lender's option, (i) cause
the Fiscal Agent to hold the balance of such proceeds to be used to reimburse Borrower for
the cost of restoring and repairing the Mortgaged Property to the equivalent of its original
condition or to a condition approved by Lender (the "Restoration"), or (ii) apply the
balance of such proceeds to the payment of the Indebtedness, whether or not then due. To
the extent Lender determines to apply insurance proceeds to Restoration, Lender shall
cause the Fiscal Agent to disburse the proceeds in accordance with Lender's then -current
policies relating to the restoration of casualty damage on similar multifamily properties.
(h) Lender shall not exercise its option to apply insurance proceeds to the
payment of the Indebtedness if all of the following conditions are met: (i) no Event of
Default (or any event which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default) has occurred and is continuing (it being acknowledged and
agreed that in no event shall Lender have any obligation to accept a cure of an Event of
Default); (ii) Lender determines, in its discretion, that there will be sufficient funds to
complete the Restoration (and complete construction of the Project in accordance with the
Original Borrower Loan Agreement and the Plans and Specifications, as defined therein,
if such construction has not been completed at such time); (iii) Lender determines; in its
discretion, that the net operating income generated by the Mortgaged Property after
completion of the Restoration will be sufficient to meet all operating costs and other
expenses, Imposition Deposits, deposits to reserves and loan repayment obligations
relating to the Mortgaged Property; (iv) Lender determines, in its discretion, that the
Restoration will be completed before the earlier of (A) one year before the Maturity Date
set forth in the Forward Commitment Fee Note, or (B) one year after the date of the loss or
casualty; and (v) upon Lender's request, Borrower provides Lender evidence of the
availability during and after the Restoration of the insurance required to be maintained
pursuant to this Instrument.
36 vista Breeze
(i) If the Mortgaged Property is sold at a foreclosure sale or Lender acquires
title to the Mortgaged Property, Lender shall automatically succeed to all rights of
Borrower in and to any insurance policies and unearned insurance premiums and in and to
the proceeds resulting from any damage to the Mortgaged Property prior to such sale or
acquisition.
0) Reserved.
(k) Borrower agrees to execute such further evidence of assignment of any
insurance proceeds as Lender may require.
(1) Borrower further agrees that to the extent that Borrower obtains any form
of property damage insurance for the Mortgaged Property or any portion thereof that
insures perils not required to be insured against by Lender, such policy of property damage
insurance shall include a standard mortgagee clause and shall name Lender as loss payee
and, within ten (10) days following Borrower's purchase of such additional insurance,
Borrower shall cause to be delivered to Lender a duplicate original policy of insurance with
respect to such policy. Any insurance proceeds payable to Borrower under such policy
shall be additional security for the Indebtedness and Lender shall have the same rights to
such policy and proceeds as it has with respect to insurance policies required by Lender
pursuant to this Section 19.
20. CONDEMNATION.
(a) Borrower shall promptly notify Lender in writing of any action or
proceeding or notice relating to any proposed or actual condemnation or other taking, or
conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or
indirect (a "Condemnation"), and shall deliver to the Lender copies of any and all papers
served in connection with such Condemnation. Borrower shall appear in and prosecute or
defend any action or proceeding relating to any Condemnation unless otherwise directed
by Lender in writing. Borrower authorizes and appoints Lender as attorney -in -fact for
Borrower to commence, appear in and prosecute, in Lender's or Borrower's name, any
action or proceeding relating to any Condemnation and to settle or compromise any claim
in connection with any Condemnation. This power of attorney is coupled with an interest
and therefore is irrevocable. However, nothing contained in this Section 20 shall require
Lender to incur any expense or take any action. Borrower hereby transfers and assigns to
Lender all right, title and interest of Borrower in and to any award or payment with respect
to (i) any Condemnation, or any conveyance in lieu of Condemnation, and (ii) any damage
to the Mortgaged Property caused by governmental action that does not result in a
Condemnation.
(b) Subject to the provisions of Section 20(c), Lender may apply such awards
or proceeds, after the deduction of Lender's expenses incurred in the collection of such
amounts (including, without limitation, fees and out-of-pocket expenses of attorneys and
expert witnesses, investigatory fees, whether incurred in connection with any judicial or
37 Vista Breeze
administrative process or otherwise), at Lender's option, to the restoration or repair of the
Mortgaged Property or to the payment of the Indebtedness in accordance with the
provisions of the Forward Commitment Fee Note as to application of payments to the
Indebtedness, with the balance, if any, to Borrower. Unless Lender otherwise agrees in
writing, any application of any awards or proceeds to the Indebtedness shall not extend or
postpone the due date of payments due under the Forward Commitment Fee Note,
Section 7 of this Instrument or any Collateral Agreement or any other Forward
Commitment Fee Document, or change the amount of such payments, except as otherwise
provided in the Forward Commitment Fee Note. Borrower agrees to execute such further
evidence of assignment of any awards or proceeds as Lender may require.
(c) Lender shall not exercise its option to apply condemnation awards to
payment of the Indebtedness if all of the following conditions are met (i) no Event of
Default (or any event which, with the giving of notice or passage of time, or both, would
constitute an Event of Default) has occurred and is continuing (it being acknowledged and
agreed that in no event shall Lender have any obligation to accept a cure of an Event of
Default), (ii) Lender determined, in its discretion, that there will be sufficient funds to
complete the Restoration, (iii) Lender determines, in its discretion, that the net operating
income generated by the Mortgaged Property after completion of the Restoration will be
sufficient to meet all operating costs and other expenses, Imposition Deposits, deposits to
reserves and loan repayment obligations relating to the Mortgaged Property, and (iv)
Lender determines, in its discretion, that the Restoration will be completed before the
earlier of (A) one year before the Mandatory Prepayment Date set forth in the Note, or (B)
one year after the date of the loss or casualty.
21. TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN
BORROWER.
(a) The occurrence of any of the following events shall constitute an Event of
Default under this Instrument:
(i) other than the lien of this Instrument and the Permitted
Encumbrances, a Transfer of all or any part of the Mortgaged
Property or any interest in the Mortgaged Property;
(ii) a Transfer of a Controlling Interest in Borrower;
(iii) a Transfer of a Controlling Interest in any entity which owns,
directly or indirectly through one or more intermediate entities, a
Controlling Interest in Borrower;
(iv) a Transfer of all or any part of a Guarantor's ownership interests in
Borrower, or in any other entity which owns, directly or indirectly
through one or more intermediate entities, an ownership interest in
Borrower (other than a Transfer of an aggregate beneficial
38 Vista Breeze
ownership interest in Borrower of 49% or less of such Guarantor's
original ownership interest in Borrower and which does not
otherwise result in a Transfer of the Guarantor's Controlling Interest
in such intermediate entities or in Borrower);
(v) if Guarantor is an entity, (A) a Transfer of a Controlling Interest in
Guarantor, or (B) a Transfer of a Controlling Interest in any entity
which owns, directly or indirectly through one or more intermediate
entities, a Controlling Interest in Guarantor;
(vi) if Borrower or Guarantor is a trust, the termination or revocation of
such trust; unless the trust is terminated as a result of the death of an
individual trustor, in which event Lender must be notified and such
Borrower or Guarantor must be replaced with an individual or entity
acceptable to Lender, in accordance with the provisions of
Section 21(c) hereof, within 90 days of such death (provided
however that no property inspection shall be required and a 1%
transfer fee will not be charged);
(vii) if Guarantor is a natural person, the death of such individual; unless
the Lender is notified and such individual is replaced with an
individual or entity acceptable to Lender, in accordance with the
provisions of Section 21(c) hereof, within 90 days of such death
(provided however that no property inspection shall be required and
a 1 % transfer fee will not be charged);
(viii) the merger, dissolution, liquidation, or consolidation of
(i) Borrower, (ii) any Guarantor that is a legal entity, or (iii) any
legal entity holding, directly or indirectly, a Controlling Interest in
Borrower or in any Guarantor that is an entity;
(ix) a conversion of Borrower from one type of legal entity into another
type of legal entity (including the conversion of a general
partnership into a limited partnership and the conversion of a limited
partnership into a limited liability company), whether or not there is
a Transfer; if such conversion results in a change in any assets,
liabilities, legal rights or obligations of Borrower (or of any
Guarantor, or any general partner of Borrower, as applicable), by
operation of law or otherwise;
(x) a Transfer of the economic benefits or right to cash flows
attributable to the ownership interests in Borrower and/or, if
Guarantor is an entity, Guarantor, separate from the Transfer of the
underlying ownership interests, unless the Transfer of the
39 vista Breeze
underlying ownership interests would otherwise not be prohibited
by this Instrument; and
(xi) the filing, recording, or consent to filing or recording of any plat or
map subdividing, replatting or otherwise affecting the Mortgaged
Property or any other replat or subdivision of the Mortgaged
Property, whether or not any such action affects the priority of the
lien of this Instrument.
Lender shall not be required to demonstrate any actual impairment of its security or any
increased risk of default in order to exercise any of its remedies with respect to an Event
of Default under this Section 21.
(b) The occurrence of any of the following events shall not constitute an Event
of Default under this Instrument, notwithstanding any provision of Section 21(a) to the
contrary (each a "Permitted Transfer"):
(i) a Transfer to which Lender has consented;
(ii) except as provided in Section 21(a)(vi) and (vii), a Transfer that
occurs by devise, descent, pursuant to the provisions of a trust, or by
operation of law upon the death of a natural person;
(iii) the grant of a leasehold interest in an individual dwelling unit for a
term of two years or less not containing an option to purchase;
(iv) a Transfer of obsolete or worn out Personalty or Fixtures that are
contemporaneously replaced by items of equal or better function and
quality, which are free of liens, encumbrances and security interests
other than those created by or permitted pursuant to the Forward
Commitment Fee Documents or consented to by Lender;
(v) the grant of an easement, servitude, or restrictive covenant if, before
the grant, Lender determines that the easement, servitude, or
restrictive covenant will not materially affect the operation or value
of the Mortgaged Property or Lender's interest in the Mortgaged
Property, and Borrower pays to Lender, upon demand, all
reasonable costs and expenses incurred by Lender in connection
with reviewing Borrower's request; provided, however, utility
easements of a type usually permitted or required to operate a
multifamily project in the Property Jurisdiction (such as, by way of
example, gas, sewer and electricity supplier easements and
easements to provide cable service) shall be deemed to be Permitted
Transfers without the need for Lender's prior review or
determination so long as (A) such easement does not obligate
40 Vista Breeze
Borrower to incur any additional costs, (B) such easement does not
grant the grantee of the easement the option to acquire any other
estate in the Mortgaged Property, and (C) Lender is not obligated to
subordinate the lien of this Security Instrument to the proposed
easement;
(vi) the creation of a mechanic's, materialman's, or judgment lien
against the Mortgaged Property which is released of record, bonded
to the full satisfaction of Lender, or otherwise remedied to Lender's
satisfaction within 45 days after Borrower has actual or constructive
notice of the existence of such lien;
(vii) the conveyance of the Mortgaged Property at a judicial or non -
judicial foreclosure sale under this Instrument; and
(viii) the assignment of Managing General Partner's Class B limited
partner interest in the Borrower to Administrative General Partner
pursuant to Section 7.1 of Borrower's Agreement of Limited
Partnership.
(c) Lender shall consent to a Transfer that would otherwise violate this
Section 21 if, prior to the Transfer, Borrower has satisfied each of the following
requirements:
(i) the submission to Lender of all information required by Lender to
make the determination required by this Section 21(c);
(ii) the absence of any Event of Default;
(iii) the transferee meets all of the eligibility, credit, management and
other standards (including any standards with respect to previous
relationships between Lender and the transferee and the
organization of the transferee) customarily applied by Lender at the
time of the proposed Transfer to the approval of borrowers in
connection with the origination or purchase of similar mortgage
finance structures on similar multifamily properties, unless partially
waived by Lender in exchange for such additional conditions as
Lender may require;
(iv) the Mortgaged Property, at the time of the proposed Transfer, meets
all standards as to its physical condition, that are customarily applied
by Lender at the time of the proposed Transfer to the approval of
properties in connection with the origination or purchase of similar
mortgage finance structures on similar multifamily properties,
41 Vista Breeze
unless partially waived by Lender in exchange for such additional
conditions as Lender may require;
(v) if the transferor or any other person has obligations under any
Forward Commitment Fee Document, the execution by the
transferee or one or more individuals or entities acceptable to Lender
of an assumption agreement that is acceptable to Lender and that,
among other things, requires the transferee to perform all obligations
of transferor or such person set forth in the Forward Commitment
Fee Documents, and may require that the transferee comply with
any provisions of this Instrument or any other Forward Commitment
Fee Document which previously may have been waived by Lender;
(vi) if a guaranty has been executed and delivered in connection with the
Forward Commitment Fee Note, this Instrument or any of the other
Forward Commitment Fee Documents by the transferor, Borrower
causes one or more individuals or entities acceptable to Lender to
execute and deliver to Lender a substitute guaranty in a form
acceptable to Lender;
(vii) Lender's receipt of all of the following:
a non-refundable review fee in the amount of $3,000, and a transfer fee equal to one percent (1%)
of the Maximum Permanent Period Amount (as defined in the Forward Commitment Fee Note);
and
Borrower's reimbursement of all of Lender's out-of-pocket costs (including, reasonable attorneys'
fees) incurred in reviewing the Transfer request, to the extent such expenses exceed $3,000;
(viii) Borrower has agreed to Lender's conditions to approve such
Transfer, which may include, but are not limited to (A) providing
additional collateral, guaranties, or other credit support to mitigate
any risks concerning the proposed transferee or the performance or
condition of the Mortgaged Property, and (B) amending the Forward
Commitment Fee Documents to (1) delete any specially negotiated
terms or provisions previously granted for the exclusive benefit of
transferor and (2) restore to original provisions of the standard
Lender forms of multifamily loan documents, to the extent such
provisions were previously modified; and
(ix) Lender's receipt of evidence of consent to the Transfer, to the extent
required pursuant to the terms of the Regulatory Agreement.
(d) For purposes of this Section, the following terms shall have the meanings
set forth below:
42 Vista Breeze
(i) A Transfer of a "Controlling Interest" shall mean:
with respect to any entity, the following:
if such entity is a general partnership or a joint venture, a Transfer of any general partnership
interest or joint venture interest which would cause the Initial Owners to own less than a
Controlling Percentage of all general partnership or joint venture interests in such entity;
if such entity is a limited partnership, (A) a Transfer of any general partnership interest, or (B) a
Transfer of any partnership interests which would cause the Initial Owners to own less than a
Controlling Percentage of all limited partnership interests in such entity;
if such entity is a limited liability company or a limited liability partnership, (A) a Transfer of any
membership or other ownership interest which would cause the Initial Owners to own less than a
Controlling Percentage of all membership or other ownership interests in such entity, (B) a
Transfer of any membership, or other interest of a manager, in such entity that results in a change
of manager, or (C) a change of the non-member manager;
if such entity is a corporation (other than a Publicly -Held Corporation) with only one class of
voting stock, a Transfer of any voting stock which would cause the Initial Owners to own less than
a Controlling Percentage of voting stock in such corporation;
if such entity is a corporation (other than a Publicly -Held Corporation) with more than one class
of voting stock, a Transfer of any voting stock which would cause the Initial Owners to own less
than a sufficient number of shares of voting stock having the power to elect the majority of
directors of such corporation; and
if such entity is a trust (other than a Publicly -Held Trust), the removal, appointment or substitution
of a trustee of such trust other than (A) in the case of a land trust, or (B) if the trustee of such trust
after such removal, appointment, or substitution is a trustee identified in the trust agreement
approved by Lender; and/or
any agreement (including provisions contained in the organizational and/or governing documents
of Borrower or Guarantor) or Transfer not specified in clause (A), the effect of which, either
immediately or after the passage of time or occurrence of a specified event or condition, including
the failure of a specified event or condition to occur or be satisfied, would (i) cause a change in or
replacement of the Person that controls the management and operations of the Borrower or
Guarantor or (ii) limit or otherwise modify the extent of such Person's control over the
management and operations of Borrower or Guarantor.
(ii) "Controlling Percentage" shall mean (i) greater than 50% of the
ownership interests in an entity, or (ii) a percentage ownership
interest in an entity of 50% or less if the owner(s) of that interest
actually direct(s) the business and affairs of the entity without
requirement of consent of any other party.
43 Vista Breeze
(iii) "Publicly -Held Corporation" shall mean a corporation the
outstanding voting stock of which is registered under
Section 12(b) or 12(g) of the Securities and Exchange Act of 1934,
as amended.
(iv) "Publicly -Held Trust" shall mean a real estate investment trust the
outstanding voting shares or beneficial interests of which are
registered under Section 12(b) or 12(g) of the Securities Exchange
Act of 1934, as amended.
(e) Lender shall be provided with written notice of all Transfers under this
Section 21, whether or not such Transfers are permitted under Section 21(b) or approved
by Lender under Section 21(c), no later than 10 days prior to the date of the Transfer.
22. EVENTS OF DEFAULT. The occurrence of any one or more of the following
shall constitute an Event of Default under this Instrument:
(a) (i) any failure by Borrower to pay or deposit any payment of principal,
interest, principal reserve fund deposit, any payment with a specified due date, or any other
scheduled payment or deposit required by the Forward Commitment Fee Note, this
Instrument or any other Forward Commitment Fee Document when such payment or
deposit is due or (ii) any failure by Borrower to pay or deposit any unscheduled payment
or deposit, or other payment or deposit without a specified due date, required by the
Forward Commitment Fee Note, this Instrument or any other Forward Commitment Fee
Document, within five (5) days after written notice from Lender;
(b) any failure by Borrower to maintain the insurance coverage required by
Section 19;
(c) any failure by Borrower to comply with the provisions of Section 32;
(d) fraud or material misrepresentation or material omission by Borrower or
Guarantor, any of their respective officers, directors, trustees, general partners, managing
members, managers, agents or representatives in connection with (i) the application for the
Loan, (ii) any financial statement, rent roll, or other report or information provided to
Lender during the term of the Indebtedness, or (iii) any request for Lender's consent to any
proposed action, including a request for disbursement of funds under any Collateral
Agreement;
(e) any of Borrower's representations and warranties in this Instrument is false
or misleading in any material respect;
(f) any Event of Default under Section 21;
(g) the commencement of a forfeiture action or proceeding, whether civil or
criminal, which, in Lender's judgment, could result in a forfeiture of the Mortgaged
44 vista Breeze
Property or otherwise materially impair the lien created by this Instrument or Lender's
interest in the Mortgaged Property;
(h) any failure by Borrower to perform or comply with any of its obligations
under this Instrument (other than those specified in this Section 22), as and when required,
which continues for a period of thirty (30) days after written notice of such failure by
Lender to Borrower; provided, however, if such failure is susceptible of cure but cannot
reasonably be cured within such thirty (30) day period, and the Borrower shall have
commenced to cure such failure 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 an additional period of time as is reasonably necessary for the Borrower in the exercise
of due diligence to cure such failure, such additional period, not to exceed sixty (60) days.
However, no such notice or grace period shall apply to the extent such failure could, in
Lender's judgment, absent immediate exercise by Lender of a right or remedy under this
Instrument, result in harm to Lender, impairment of the Forward Commitment Fee Note or
this Instrument or any other security given under any other Forward Commitment Fee
Document;
(i) any failure by Borrower or any Guarantor to perform any of its obligations
as and when required under any Forward Commitment Fee Document other than this
Instrument which continues beyond the applicable notice and cure period, if any, specified
in that Forward Commitment Fee Document;
0) any exercise by the holder of any debt instrument secured by a mortgage,
deed of trust or deed to secure debt on the Mortgaged Property of a right to declare all
amounts due under that debt instrument immediately due and payable;
(k) the occurrence of a Bankruptcy Event;
(1) any Event of Default (as defined in any of the Forward Commitment Fee
Documents), which continues beyond the expiration of any applicable cure period;
(m) any breach of, or event of default by Borrower under, any other document
or agreement relating to the Loan or the provision of low income housing tax credits to the
Mortgaged Property to which Borrower is a party, which continues beyond the expiration
of any applicable notice and cure period thereunder;
(n) any failure by Borrower or the Project to qualify for low income housing
tax credits pursuant to the provisions of Section 42 of the Internal Revenue Code;
(o) Reserved;
(p) any amendment, modification, waiver or termination of any of the
provisions of Borrower's Organizational Documents without the prior written consent of
Lender, other than (i) modifications necessary to reflect the occurrence of a Permitted
45 Vista Breeze
Transfer or (ii) modifications that do not: (A) impose any additional or greater obligations
on Borrower or any of the partners, managers or members of Borrower, (B) reduce or
relieve Borrower or any of the partners, managers or members of Borrower of any of their
obligations, (C) modify the timing, amounts, number, conditions or other terms of the
installments or other payment obligations of the partners or members of Borrower or
(D) impair the collateral for the Loan; provided, however, that Borrower shall promptly
provide to Lender a copy of any modifications to Borrower's Organizational Documents
that do not require Lender's consent;
(q) (i) any breach of any Material Property Agreement by Borrower or its
officers, directors, employees, agents or tenants that continues beyond any applicable
notice and cure period; (ii) any failure by Borrower or its officers, directors, employees or
agents or any other party to deliver concurrently (in case of notices given) or promptly (in
case of notices received) copies of any and all notices received or given thereby to Lender
with respect to any Material Property Agreement;
(r) if Borrower or any Guarantor is a trust, the termination or revocation of any
such trust; unless the trust is terminated as a result of the death of an individual trustor, in
which event Lender must be notified and such Borrower or Guarantor must be replaced
with an individual or entity acceptable to Lender, in accordance with the provisions of
Section 21(c) hereof, within 90 days of such death (provided however that no property
inspection shall be required and a 1 % transfer fee will not be charged); or
(s) if any Guarantor is a natural person, the death of such individual; unless the
Lender is notified and such individual is replaced with an individual or entity acceptable
to Lender, in accordance with the provisions of Section 21(c) hereof, within 90 days of
such death (provided however that no property inspection shall be required and a 1 %
transfer fee will not be charged).
23. REMEDIES CUMULATIVE. Each right and remedy provided in this Instrument
is distinct from all other rights or remedies under this Instrument or any other Forward
Commitment Fee Document or afforded by applicable law, and each shall be cumulative and may
be exercised concurrently, independently, or successively, in any order.
24. FORBEARANCE.
(a) Lender may (but shall not be obligated to) agree with Borrower, from time
to time, and without giving notice to, or obtaining the consent of, or having any effect upon
the obligations of, any guarantor or other third party obligor, to take any of the following
actions: extend the time for payment of all or any part of the Indebtedness; reduce the
payments due under this Instrument, the Forward Commitment Fee Note, or any other
Forward Commitment Fee Document; release anyone liable for the payment of any
amounts under this Instrument, the Forward Commitment Fee Note, or any other Forward
Commitment Fee Document; accept a renewal of the Forward Commitment Fee Note;
modify the terms and time of payment of the Indebtedness; join in any extension or
46 Vista Breeze
subordination agreement; release any Mortgaged Property; take or release other or
additional security; modify the rate of interest or period of amortization of the Forward
Commitment Fee Note or change the amount of the monthly installments payable under
the Forward Commitment Fee Note; and otherwise modify this Instrument, the Forward
Commitment Fee Note, or any other Forward Commitment Fee Document.
(b) Any forbearance by Lender in exercising any right or remedy under the
Forward Commitment Fee Note, this Instrument, or any other Forward Commitment Fee
Document or otherwise afforded by applicable law, shall not be a waiver of or preclude the
exercise of any other right or remedy, or the subsequent exercise of any right or remedy.
The acceptance by Lender of payment of all or any part of the Indebtedness after the due
date of such payment, or in an amount which is less than the required payment, shall not
be a waiver of Lender's right to require prompt payment when due of all other payments
on account of the Indebtedness or to exercise any remedies for any failure to make prompt
payment. Enforcement by Lender of any security for the Indebtedness shall not constitute
an election by Lender of remedies so as to preclude the exercise of any other right available
to Lender. Lender's receipt of any awards or proceeds under Sections 19 and 20 shall not
operate to cure or waive any Event of Default.
25. WAIVER OF STATUTE OF LIMITATIONS. BORROWER HEREBY
WAIVES THE RIGHT TO ASSERT ANY STATUTE OF LIMITATIONS AS A BAR TO THE
ENFORCEMENT OF THE LIEN OF THIS INSTRUMENT OR TO ANY ACTION BROUGHT
TO ENFORCE ANY FORWARD COMMITMENT FEE DOCUMENT.
26. WAIVER OF MARSHALLING. Notwithstanding the existence of any other
security interests in the Mortgaged Property held by Lender or by any other party, Lender shall
have the right to determine the order in which any or all of the Mortgaged Property shall be
subjected to the remedies provided in this Instrument, the Forward Commitment Fee Note, any
other Forward Commitment Fee Document or applicable law. Lender shall have the right to
determine the order in which any or all portions of the Indebtedness are satisfied from the proceeds
realized upon the exercise of such remedies. Borrower and any party who now or in the future
acquires a security interest in the Mortgaged Property and who has actual or constructive notice of
this Instrument waives any and all right to require the marshalling of assets or to require that any
of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged
Property be sold in parcels or as an entirety in connection with the exercise of any of the remedies
permitted by applicable law or provided in this Instrument.
27. FURTHER ASSURANCES. Borrower shall execute, acknowledge, and deliver,
at its sole cost and expense, all further acts, deeds, conveyances, assignments, estoppel certificates,
financing statements or amendments, transfers and assurances as Lender may require from time
to time in order to better assure, grant, and convey to Lender the rights intended to be granted, now
or in the future, to Lender under this Instrument and the Forward Commitment Fee Documents.
In furtherance thereof, on the request of Lender, Borrower shall re -execute or ratify any of the
Forward Commitment Fee Documents or execute any other documents or take such other actions
as may be necessary to effect the assignment, pledge or other transfer of the Loan to any party that
47 Vista Breeze
may purchase, insure, credit enhance or otherwise finance all or any part of the Loan, including,
without limitation, any Credit Enhancer (including Freddie Mac or Fannie Mae), the U.S.
Department of Housing and Urban Development, or any insurance company, conduit lender or any
other lender or investor. Notwithstanding the foregoing sentence, in no event shall Borrower be
required to execute and deliver any document or perform any act otherwise required pursuant to
the foregoing sentence to the extent such document or act imposes a material additional obligation
or liability on Borrower or materially adversely affects the rights of Borrower under any Forward
Commitment Fee Document.
28. ESTOPPEL CERTIFICATE. Within 10 days after a request from Lender,
Borrower shall deliver to Lender a written statement, signed and acknowledged by Borrower,
certifying to Lender or any person designated by Lender, as of the date of such statement, (i) that
the Forward Commitment Fee Documents are unmodified and in full force and effect (or, if there
have been modifications, that the Forward Commitment Fee Documents are in full force and effect
as modified and setting forth such modifications); (ii) the unpaid principal balance of the Forward
Commitment Fee Note; (iii) the date to which interest under the Forward Commitment Fee Note
has been paid; (iv) that Borrower is not in default in paying the Indebtedness or in performing or
observing any of the covenants or agreements contained in this Instrument or any of the other
Forward Commitment Fee Documents (or, if Borrower is in default, describing such default in
reasonable detail); (v) whether or not there are then existing any setoffs or defenses known to
Borrower against the enforcement of any right or remedy of Lender under the Forward
Commitment Fee Documents; and (vi) any additional facts requested by Lender.
29. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.
(a) This Instrument, and any Forward Commitment Fee Document which does
not itself expressly identify the law that is to apply to it, shall be governed by the laws of
the Property Jurisdiction.
(b) Borrower agrees that any controversy arising under or in relation to the
Forward Commitment Fee Note, this Instrument, or any other Forward Commitment Fee
Document may be litigated in the Property Jurisdiction. The state and federal courts and
authorities with jurisdiction in the Property Jurisdiction shall have jurisdiction over all
controversies that shall arise under or in relation to the Forward Commitment Fee Note,
any security for the Indebtedness, or any other Forward Commitment Fee Document.
Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any
such litigation and waives any other venue to which it might be entitled by virtue of
domicile, habitual residence or otherwise. However, nothing in this Section 29 is intended
to limit Lender's right to bring any suit, action or proceeding relating to matters arising
under this Instrument in any court of any other jurisdiction.
30. NOTICE.
(a) All notices, demands and other communications ("notice") under or
concerning this Instrument shall be in writing and addressed as set forth below. Each notice
48 Vista Breeze
shall be deemed given on the earliest to occur of (i) the date when the notice is received by
the addressee; (ii) the first Business Day after the notice is delivered to a recognized
overnight courier service, with arrangements made for payment of charges for next
Business Day delivery; or (iii) the third Business Day after the notice is deposited in the
United States mail with postage prepaid, certified mail, return receipt requested.
If to Borrower: Vista Breeze, LTD.
c/o Atlantic Pacific Communities
161 NW 6th Street, Suite 1020
Miami, Florida 33136
Attention: Kenneth Naylor
With a copy to: Klein Hornig LLP
1325 G Street NW, Suite 770
Washington, D.C. 20005
Attention: Chris Hornig, Esq.
With a copy to: Vista Breeze HACMB, Inc.
c/o Housing Authority of the City of Miami Beach
200 Alton Road Miami Beach, FL 33139
Attention: Miguell Del Campillo, Executive Director
Phone: (305) 532-6401, ext. 3020
Email: miguell@hacmb.org
With a copy to: Fox Rothschild LLP
BNY Mellon Center
500 Grant Street, Suite 2500
Pittsburgh, PA 15219
Attention: Michael H. Syme, Esq.
Email: msyme@foxrothschild.com
Phone: (412) 391-2450
49 Vista Breeze
If to Lender: Citibank, N.A.
388 Greenwich Street, Trading 4th Floor
New York, New York 10013
Attention: Transaction Management Group
Re: Vista Breeze Deal ID No. 60001596
Facsimile: (212) 723 8209
With a copy to: Citibank, N.A.
325 East Hillcrest Drive, Suite 160
Thousand Oaks, California 91360
Attention: Operations Manager/Asset Manager
Re: Vista Breeze Deal ID No. 60001596
Facsimile: (805) 557 0924
With a copy to: Citibank, N.A.
388 Greenwich Street, Trading 4th Floor
New York, New York 10013
Attention: Account Specialist
Re: Vista Breeze Deal ID No. 60001596
Facsimile: (212) 723-8209
And a copy of any notices Citibank, N.A.
of default sent to: 388 Greenwich Street, 17th Floor
New York, New York 10013
Attention: General Counsel's Office
Re: Vista Breeze Deal ID No. 60001596
Facsimile: (646) 291-5754
(b) Any party to this Instrument may change the address to which notices
intended for it are to be directed by means of notice given to the other party in accordance
with this Section 30. Each party agrees that it will not refuse or reject delivery of any
notice given in accordance with this Section 30, that it will acknowledge, in writing, the
receipt of any notice upon request by the other party and that any notice rejected or refused
by it shall be deemed for purposes of this Section 30 to have been received by the rejecting
party on the date so refused or rejected, as conclusively established by the records of the
U.S. Postal Service or the courier service.
(c) Any notice under the Forward Commitment Fee Note and any other
Forward Commitment Fee Document that does not specify how notices are to be given
shall be given in accordance with this Section 30.
31. CHANGE IN SERVICER. If there is a change of the Servicer, Borrower will be
given notice of the change.
50 Vista Breeze
32. SINGLE ASSET BORROWER. Until the Indebtedness is paid in full, Borrower
(a) shall not acquire any real or personal property other than the Mortgaged Property and personal
property related to the operation and maintenance of the Mortgaged Property; (b) shall not operate
any business other than the management and operation of the Mortgaged Property; and (c) shall
not maintain its assets in a way difficult to segregate and identify.
33. SUCCESSORS AND ASSIGNS BOUND. This Instrument shall bind, and the
rights granted by this Instrument shall inure to, the successors and assigns of Lender and the
permitted successors and assigns of Borrower.
34. JOINT AND SEVERAL LIABILITY. If more than one person or entity signs
this Instrument as Borrower, the obligations of such persons and entities shall be joint and several.
35. RELATIONSHIP OF PARTIES; NO THIRD PARTY LENDER.
(a) The relationship between Lender and Borrower shall be solely that of
creditor and debtor, respectively, and nothing contained in this Instrument shall create any
other relationship between Lender and Borrower.
(b) No creditor of any party to this Instrument and no other person (other than
a holder of the Forward Commitment Fee Note and Servicer) shall be a third party Lender
of this Instrument or any other Forward Commitment Fee Document. Without limiting the
generality of the preceding sentence, (i) any arrangement (a "Servicing Arrangement")
between Lender and any Servicer for loss sharing or interim advancement of funds shall
constitute a contractual obligation of such Servicer that is independent of the obligation of
Borrower for the payment of the Indebtedness, (ii) Borrower shall not be a third party
Lender of any Servicing Arrangement, and (iii) no payment by Servicer under any
Servicing Arrangement will reduce the amount of the Indebtedness.
36. SEVERABILITY; AMENDMENTS. The invalidity or unenforceability of any
provision of this Instrument shall not affect the validity or enforceability of any other provision,
and all other provisions shall remain in full force and effect. This Instrument contains the entire
agreement among the parties as to the rights granted and the obligations assumed in this
Instrument. This Instrument may not be amended or modified except by a writing signed by the
party against whom enforcement is sought; provided, however, that in the event of a Transfer that
is not a Permitted Transfer, any or some or all of the Modifications to Instrument set forth in
Exhibit B (if any) may be modified or rendered void by Lender at Lender's option by notice to
Borrower or such transferee.
37. CONSTRUCTION. The captions and headings of the sections of this Instrument
are for convenience only and shall be disregarded in construing this Instrument. Any reference in
this Instrument to an "Exhibit" or a "Section" shall, unless otherwise explicitly provided, be
construed as referring, respectively, to an Exhibit attached to this Instrument or to a Section of this
Instrument. All Exhibits attached to or referred to in this Instrument are incorporated by reference
into this Instrument. Any reference in this Instrument to a statute or regulation shall be construed
51 Vista Breeze
as referring to that statute or regulation as amended from time to time. Use of the singular in this
Instrument includes the plural and use of the plural includes the singular. As used in this
Instrument, the term "including" means "including, but not limited to."
38. SERVICER.
(a) Borrower further acknowledges that Lender may from time to time and in
accordance with the terms of the Loan Agreement, appoint a Servicer or a replacement
servicer to collect payments, escrows and deposits, to give and receive notices under the
Forward Commitment Fee Note, this Instrument, or the other Forward Commitment Fee
Documents, and to otherwise service the Loan. Borrower hereby acknowledges and agrees
that, unless Borrower receives written notice from Lender to the contrary, any action or
right which shall or may be taken or exercised by Lender may be taken or exercised by
Servicer with the same force and effect, including, without limitation, the collection of
payments, the giving of notice, the holding of escrows, inspection of the Mortgaged
Property, inspections of books and records, the request for documents or information, and
the granting of consents and approvals. Borrower further agrees that, unless Lender
instructs Borrower to the contrary in writing, (i) any notices, books or records, or other
documents or information to be delivered under this Instrument, the Forward Commitment
Fee Note, or any other Forward Commitment Fee Document shall also be simultaneously
delivered to the Servicer at the address provided for notices to Servicer pursuant to
Section 30 hereof, and (ii) any payments to be made under the Forward Commitment Fee
Note or for escrows under Section 7 of this Instrument or under any of the other Forward
Commitment Fee Documents shall be made to Servicer. In the event Borrower receives
conflicting notices regarding the identity of the Servicer or any other subject, any such
notice from Lender shall govern.
(b) Borrower further acknowledges and agrees that, for the purpose of
determining whether a security interest is created or perfected under the Uniform
Commercial Code of the Property Jurisdiction, any escrows or other funds held by Servicer
pursuant to the Forward Commitment Fee Documents shall be deemed to be held by
Lender.
39. DISCLOSURE OF INFORMATION. Lender may furnish information
regarding Borrower or the Mortgaged Property to third parties with an existing or prospective
interest in the servicing, enforcement, evaluation, performance, purchase or securitization of the
Indebtedness, including but not limited to trustees, master servicers, special servicers, rating
agencies, and organizations maintaining databases on the underwriting and performance of
multifamily mortgage loans. Without limiting the generality of the foregoing, without notice to or
the consent of Borrower, Lender may disclose to any title insurance company which insures any
interest of Lender under this Instrument (whether as primary insurer, coinsurer or reinsurer) any
information, data or material in its possession relating to Borrower, the Loan, the Improvements
or the Mortgaged Property. Borrower irrevocably waives any and all rights it may have under
applicable law to prohibit such disclosure, including but not limited to any right of privacy.
52 Vista Breeze
40. NO CHANGE IN FACTS OR CIRCUMSTANCES. Borrower warrants that all
information in Borrower's application for the Loan and in all financial statements, rent rolls,
reports, certificates and other documents submitted in connection with Borrower's application for
the Loan are complete and accurate in all material respects. There has been no material adverse
change in any fact or circumstance that would make any such information incomplete or
inaccurate.
41. SUBROGATION. If, and to the extent that, the proceeds of the Loan are used to
pay, satisfy or discharge any obligation of Borrower for the payment of money that is secured by
a pre-existing mortgage, deed of trust or other lien encumbering the Mortgaged Property (a "Prior
Lien"), such loan proceeds shall be deemed to have been advanced by Lender at Borrower's
request, and Lender shall automatically, and without further action on its part, be subrogated to the
rights, including lien priority, of the owner or holder of the obligation secured by the Prior Lien,
whether or not the Prior Lien is released.
42. FINANCING STATEMENT. As provided in Section 2, this Instrument
constitutes a financing statement with respect to any part of the Mortgaged Property which is or
may become a Fixture and for the purposes of such financing statement: (a) the Debtor shall be
Borrower and the Secured Party shall be Lender; (b) the addresses of Borrower as Debtor and of
Lender as Secured Party are as specified above in the first paragraph of this Instrument; (c) the
name of the record owner is Borrower; (d) the types or items of collateral consist of any part of
the Mortgaged Property which is or may become a Fixture; and (e) the organizational identification
number of Borrower (if any) as Debtor is set forth on Exhibit C.
43. STATE SPECIFIC PROVISIONS (FLORIDA).
(a) Principles of Construction. In the event of any inconsistencies between the.
terms and conditions of this Section 43 and the terms and conditions of this Instrument, the
terms and conditions of this Section 43 shall control and be binding.
(b) Copy of Instrument. Borrower acknowledges that Borrower has received a
copy of this Instrument without charge.
(c) Assignment of Leases and Rents. The assignments of leases and rents
contained in this Instrument are intended to provide the Lender with all of the rights and
remedies of mortgagees pursuant to Section 697.07 of the Florida Statutes (hereinafter
"Section 697.07"), as may be amended from time to time. However, in no event shall this
reference diminish, alter, impair, or affect any other rights and remedies of the Lender,
including but not limited to, the appointment of a receiver, nor shall any provision in this
section diminish, alter, impair or affect any rights or powers of the receiver in law or equity
or as set forth herein. In addition, this assignment shall be fully operative without regard
to value of the Property or without regard to the adequacy of the Property to serve as
security for the obligations owed by Borrower to Lender, and shall be in addition to any
rights arising under Section 697.07. Further, except for the notices required hereunder, if
any, Borrower hereby waives any notice of default or demand for turnover of rents by
53 Vista Breeze
Lender, together with any rights under Section 697.07 to apply to a court to deposit the
rents into the registry of the court or such other depository as the court may designate.
44. WAIVER OF TRIAL BY JURY. TO THE FULLEST EXTENT
PERMITTED BY LAW, BORROWER AND LENDER EACH (A) COVENANTS AND
AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE
ARISING OUT OF THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE
PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY
AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY,
KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL
COUNSEL.
45. ATTACHED EXHIBITS. The following Exhibits are attached to this Instrument
and are incorporated by reference herein as if more fully set forth in the text hereof.
®
Exhibit A
Description of the Land.
®
Exhibit B
Modifications to Instrument.
®
Exhibit C
Financing Statement Information.
®
Exhibit D
Modifications to Instrument (Ground Lease).
®
Exhibit E
Description of Ground Lease.
The terms of this Instrument are modified and supplemented as set forth in said Exhibits. To the
extent of any conflict or inconsistency between the terms of said Exhibits and the text of this
Instrument, the terms of said Exhibits shall be controlling in all respects.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
54 Vista Breeze
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Instrument or caused this Instrument to be duly executed and delivered by its authorized
representative as of the date first set forth above.
Witness:
By: &��
Signature
K,cku P. eA
Printed Name
Bye
Signature
I e hecct KAW- knQ-Z
Printed Name
STATE OF for td4
COUNTY OF Mk ctn1 t - D"e
$ BORROWER:
VISTA BREEZE, LTD.,
a Florida limited partnership
By: APC Vista Breeze, LLC,
a Florida limited liability company,
its managing general partner
B,
N
Ti
ACKNOWLEDGEMENT
The foregoing instrument was acknowledged before me by means of physical
presence or ❑ online notarization, this 21 day of k pv e-o-7l e,- , 20z3, by Kenneth
Naylor, as Vice President of APC Vista Breeze, LLC, a Florida limited liability company, the
managing general partner of Vista Breeze, Ltd., a Florida limited partnership. Said person is
personally known to me or has produced a valid driver's lic a as ide ication.
[Notary Seal] Signature of person taking acknowledgment
Name (typed, printed or stamped): the "a r Tn ng Z
Title or Rank: tAo-rek-ry
Serial number (if any): ( 4 N Z o
Notary Public State of Florida
At Rebeca Martinez
My Commission
1 "1 HH 213601
Forward Commitment Fee Mortgage Ack-1 Exp. 11412026
lista Breeze
EXHIBIT A
DESCRIPTION OF THE LAND
That leasehold estate created by that Second Amended and Restated Ground Lease, by and
between Vista Breeze, Ltd., a Florida limited partnership, and the Housing Authority of The City
of Miami Beach, a public body corporate and politic, as evidenced by that Amended and
Restated Memorandum of Lease to be recorded over the following described lands:
PARCEL 1:
LOT 3,4 and 5, Block 55, OF NORMANDY GOLF COURSE, ACCORDING TO THE PLAT
THEREOF, AS RECORDED IN PLAT BOOK 44, AT PAGE 62, OF THE PUBLIC RECORDS
OF MIAMI-DADE COUNTY, FLORIDA.
PARCEL 2:
LOTS 6,7 and 8, BLOCK 56, NORMANDY GOLF COURSE SUBDIVISION, ACCORDING
TO THE PLAT THEREOF RECORDED IN PLAT BOOK 44, PAGE 62, OF THE PUBLIC
RECORDS OF MIAMI-DADE COUNTY, FLORIDA.
Forward Commitment Fee Mortgage A-1 Vista Breeze
MODIFICATIONS TO INSTRUMENT
The following modifications are made to the text of the Instrument that precedes this Exhibit:
1. Section 21(a) of the Instrument is amended by adding the following at the end of
such Section:
"(xii) notwithstanding anything to the contrary herein or in Borrower's Organizational
Documents, a Transfer or pledge of a general partnership interest in Borrower or an interest in any
general partner of Borrower to a 501(c)(3) nonprofit corporation, or a limited liability company
whose sole member is a 501(c)(3) nonprofit corporation, without the prior written consent of
Lender following full review and underwriting by Lender of the proposed transferee."
2. Section 21(b) of the Instrument is amended by adding the following at the end of
such Section:
"(viii) Provided that (i) Borrower owns the Mortgaged Property and remains the
borrower under the Note, (ii) APC Vista Breeze, LLC, a Florida limited
liability company ("Managing General Partner") is the managing general
partner of Borrower or the Class B limited partner with irrevocable rights
of control, (iii) Vista Breeze HACMB, Inc., a Florida not for profit
corporation and tax-exempt entity pursuant to Section 501(c)(3) of the
Internal Revenue Code (the "Administrative General Partner") is the
administrative general partner of Borrower and (iv) Bank of America, N.A.,
a national banking association, or its permitted transferee (the "Equity
Investor"), has not less than a 99.99% limited partnership interest in
Borrower:
(A) the removal by Equity Investor of Managing General Partner as
managing general partner of Borrower or removal by Equity
Investor of Administrative General Partner as administrative general
partner and replacement as managing general partner or
administrative general partner, as applicable, by Banc of America
CDC Special Holding Company, Inc., a North Carolina corporation
("Special Limited Partner"), or by a wholly -owned affiliate of
Special Limited Partner, which removal shall be in accordance with
the terms of the limited partnership agreement of Borrower,
provided that (i) the entity replacing the removed Managing General
Partner or Administrative General Partner must be the Special
Limited Partner or a single purpose entity, (ii) after such
replacement, Special Limited Partner or the Initial Owners of
Special Limited Partner must own directly or indirectly not less than
a Controlling Percentage of the general partnership interests, as
applicable, in the entity which replaced the removed Managing
General Partner or Administrative General Partner and (iii) each
B-1 Vista Breeze
Guarantor (if affiliated with the removed general partner) shall be
replaced as Guarantor by an individual or entity that is approved by
Lender and satisfies Lender's mortgage credit standards for
guarantors; or
(B) For the sole purpose of effecting the initial sale of limited
partnership interests to a purchaser of low income housing tax
credits allocated to the Mortgaged Property in either a one or two-
step transaction: (i) a Transfer of limited partnership interests of
Equity Investor in Borrower to (A) a wholly -owned affiliate of
Equity Investor or a wholly -owned affiliate of Special Limited
Partner, or (B) an entity whose management is controlled by Equity
Investor, by a wholly -owned affiliate of Equity Investor or by
Special Limited Partner, or (ii) so long as Special Limited Partner
remains the sole managing member, sole manager or sole general
partner, as applicable, of Equity Investor, the transfer of non -
managing membership interests or limited partnership interests, as
applicable, in Equity Investor;
(C) provided that Equity Investor has previously made all requisite
capital contributions applicable to LIHTCs pursuant to the terms of
the operating agreement of Borrower, a Transfer of membership
interests of Equity Investor in Borrower to (1) any financial
institution, corporation, financial service firm or insurance company
that is investment grade (defined as BBB- or better rating by S&P
or similar rating agency) or has net assets of $250,000,000 or more
or is a wholly -owned subsidiary of such an entity, or (2) a syndicated
tax credit fund whose manager has at least five (5) years of prior
experience in tax credit funds which have totaled in the aggregate at
least $50,000,000 in equity; provided, however, the transferee is not
(and does not have a principal who is) (w) a person identified on the
U.S Treasury Department Office of Foreign Assets Control (OFAC)
List, (x) any other person or foreign country or agency thereof with
whom a U.S. person may not conduct business or transactions by
prohibition of Federal law or Executive Order of the President of the
United States of America, and (y) is not a person that the Lender
and/or Servicer is prohibited from doing business with in
accordance with its customary business practices; provided, further,
Lender shall be provided with advance written notice of any
proposed Transfer permitted under this Section 21(b)(viii)(C) no
later than 30 days before the date of the proposed Transfer.
(ix) a Transfer of the interests of Equity Investor in Borrower to the Housing
Authority of the City of Miami Beach ("HACMB"), Managing General
Partner or the Administrative General Partner or to an Affiliate of HACMB,
B-2 Vista Breeze
the Managing General Partner or the Administrative General Partner at any
time following the expiration of, for each building in the Project, the
applicable credit period of ten (10) taxable years described in Code Section
42(f)(1), provided that at the time of such Transfer (A) Lender shall be
provided with advance written notice of any proposed Transfer permitted
under this Section 21(b)(ix) no later than 30 days before the date of the
proposed Transfer, (B) the transferee, if other than the Managing General
Partner or any Guarantor, shall be subject to the satisfactory completion by
Lender of due diligence with respect to such transferee, including without
limitation, financial, credit, U.S Treasury Department Office of Foreign
Assets Control (OFAC), know -your -customer (KYC) and similar reviews,
(C) no Event of Default shall have occurred and be continuing, and (D)
Borrower shall pay to Lender a $10,000 transfer fee and the reasonable costs
and expenses of Lender in connection with such Transfer, including
reasonable legal fees.
Borrower must provide Lender with: (i) advance written notice of the identity of
any entity replacing the Managing General Partner or a Guarantor pursuant to this
Section 21(b), and (ii) upon request by Lender from time to time, the names of all
owners of interests in Borrower, whether such interests are owned directly or
indirectly."
3. Section 30(a) of the Instrument is amended to add the following at the end of such
Paragraph:
"Lender agrees that, so long as Equity Investor has a continuing ownership interest in Borrower,
effective notice to Borrower under the Loan Documents shall require delivery of a copy of such
notice to Equity Investor. Such notice shall be given in the manner provided in this Section 30(a),
at Equity Investor's address set forth below:
Bank of America, N.A.
MA5-100-04-11
100 Federal Street
Boston, MA 02110
Attention: Tax Credit Asset Management — Vista Breeze
With a copy to:
Holland & Knight LLP
10 St. James Avenue, 11th Floor
Boston, MA 02116
Attention: Sara C. Heskett, Esq.
Lender agrees that, notwithstanding its rights to invoke the remedies permitted by Section 43 of
this Instrument, upon the breach of any covenant or agreement by Borrower in this Instrument
B-3 Vista Breeze
(including, but not limited to, the covenants to pay when due sums secured by this Instrument) or
any other Loan Document, Lender shall not, so long as Equity Investor has a continuing ownership
interest in Borrower, conduct a foreclosure sale of the Mortgaged Property or receive a deed -in -
lieu of foreclosure, until such time as Equity Investor has first been given 30 days written notice
of such default and has failed, within such 30-day period to cure such default; provided, however,
that Lender shall be entitled, during such 30-day period, to continue to accelerate the Note and to
pursue its remedies. Any cure tendered by Equity Investor will be accepted or rejected on the
same basis as cures tendered by Borrower."
4. The following new Sections are added to the Instrument after the last numbered
Section:
"46. RECOURSE LIABILITY. So long as Equity Investor has a continuing ownership
interest in Borrower, the provisions of Section 4 of the Forward Commitment Fee Note shall be
operative only after Equity Investor has been given thirty (30) days' notice of the applicable
Event(s) of Default described in Section 4of the Forward Commitment Fee Note, together with an
opportunity within such thirty (30) day period to remedy the applicable Event(s) of Default. In all
events, Lender shall be entitled during such thirty (30) day period to exercise all of its rights and
remedies under this Instrument upon the occurrence of such Event of Default other than foreclosure
of the Mortgaged Property.
47. EXTENDED LOW-INCOME HOUSING COMMITMENT. Lender agrees
that the lien of this Instrument shall be subordinate to any extended low-income housing
commitment (as such term is defined in Section 42(h)(6)(B) of the Internal Revenue Code) (the
"Extended Use Agreement") recorded against the Mortgaged Property; provided that such
Extended Use Agreement, by its terms, must terminate upon foreclosure under this Instrument or
upon a transfer of the Mortgaged Property by instrument in lieu of foreclosure, in accordance with
Section 42(h)(6)(E) of the Internal Revenue Code.
48. ANNUAL LIHTC REPORTING REQUIREMENTS. Borrower must submit to
Lender each year at the time of annual submission of Borrower's financial analysis of operations,
a copy of the following sections of Borrower's federal tax return: Internal Revenue Forms 1065,
8586, 8609 and Form 8609, Schedule A, which must reflect the total low-income housing tax
credits ("LIHTCs") allocated to the Mortgaged Property and the LIHTCs claimed for the
Mortgaged Property in the preceding year.
49. CROSS -DEFAULT. Borrower acknowledges and agrees that (a) any failure by
Borrower or the Project to qualify for low income housing tax credits pursuant to the provisions
of Section 42 of the Internal Revenue Code and (b) any default, event of default, or breach
(however such terms may be defined) after the expiration of any applicable notice and/or cure
periods under the Extended Use Agreement shall be an Event of Default under this Instrument and
that any costs, damages or other amounts, including reasonable attorney's fees incurred by Lender
as a result of such an Event of Default by Borrower, including amounts paid to cure any default or
event of default, under the Extended Use Agreement shall be an obligation of Borrower and
become a part of the Indebtedness secured by this Instrument.
B-4 Vista Breeze
50. ANNUAL COMPLIANCE. Borrower shall submit to Lender on an annual basis,
evidence that the Mortgaged Property is in ongoing compliance with all income, occupancy and
rent restrictions under the Extended Use Agreement relating to the Mortgaged Property. Such
submissions shall be made contemporaneously with Borrower's reports required to be made to the
regulator under the Extended Use Agreement.
51. TAX EXEMPTION OR ABATEMENT.
(a) Borrower represents, warrants and covenants to Lender that the Mortgaged
Property is eligible for and will receive a tax exemption or abatement (the "Tax
Abatement") for the exemption for property used by nonprofit homes for the aged under
Section 196.1975 Florida Statutes (the "Program").
(b) Borrower must file or cause to be filed on a timely basis all documentation
necessary to maintain the Tax Abatement.
(c) Borrower must comply or cause compliance fully with all of the Program
requirements in order to obtain and maintain the Tax Abatement.
(d) Borrower shall promptly provide Lender with a copy of any notice
Borrower may receive alleging that Borrower is in breach of the requirements of the
Program or that the Mortgaged Property is not being maintained as required by the
Program.
(e) In any application for a Transfer of the Mortgaged Property, any interest in
the Mortgaged Property or any interest in Borrower, Borrower shall notify Lender if the
completion of such Transfer without the consent of the agency administering the Tax
Abatement would result in the termination of the Tax Abatement.
(f) Borrower shall avail itself of all rights and opportunities to renew or extend
the Tax Abatement.
(g) Borrower shall not voluntarily take or cause to be taken any action that
would threaten the Tax Abatement or cause the Tax Abatement to terminate without the
prior written consent of Lender.
(h) Borrower represents and warrants that:
(1) Borrower has not received any notice indicating that the Tax
Abatement will be terminated or will not be obtained.
(2) Borrower has adhered to any income, rent or other restrictions
imposed by the Tax Abatement.
B-5 Vista Breeze
(i) Each of the following shall constitute an Event of Default:
(1) Any breach of any of the representations and warranties in
Subsection (h).
(2) Any transfer of the Mortgaged Property, any interest in the
Mortgaged Property, or any interest in Borrower that would cause the Tax
Abatement to terminate.
0) In addition to the foregoing:
(1) The Borrower shall notify Lender if it receives any notice indicating
that the Tax Abatement will be terminated before its scheduled expiration date.
(2) The Borrower shall notify Lender if a Transfer of the Mortgaged
Property or any interest in Borrower would result in the termination of the Tax
Abatement.
52. REGULATORY AGREEMENT. Notwithstanding anything in this Instrument
to the contrary, the Lender hereby acknowledges and consents to the lien of the Regulatory
Agreement and agrees that, irrespective of the order of recordation or date of effectiveness, the
lien of this Instrument shall be subordinate to the Regulatory Agreement. Borrower acknowledges
and agrees that any default, event of default, or breach (however such terms may be defined) after
the expiration of any applicable notice and/or cure periods under the Regulatory Agreement shall
be an Event of Default under this Instrument and that any costs, damages or other amounts,
including reasonable attorney's fees incurred by the Lender as a result of such an Event of Default
by Borrower, including amounts paid to cure any default or event of default, under the Regulatory
Agreement shall be an obligation of Borrower and become a part of the Indebtedness secured by
this Instrument.
53. INTENTIONALLY OMITTED.
54. AFFORDABILITY RESTRICTIONS.
(a) Borrower shall not use the Mortgaged Property for any purpose other than
Affordable Housing until the later of (i) the expiration of the term of the Affordability
Restriction (as defined below) or (ii) 15 years from the date of this Instrument.
(b) Borrower's tenant selection procedure shall be conducted in accordance
with all applicable state and federal laws including but not limited to fair housing laws,
rules and regulations. If any Affordable Unit in the Mortgaged Property is occupied by a
Qualifying Tenant(s) at the time of initial occupancy, and such Qualifying Tenant's income
should subsequently exceed 140 percent of the applicable income limit, Borrower shall,
after such determination of income, rent the next available residential unit of comparable
or smaller size in the Mortgaged Property to another Qualified Tenant.
B-6 Vista Breeze
(c) A family, who, at the commencement of occupancy of a unit in the
Mortgaged Property, was of low or moderate income, shall be treated as continuing to meet
the low and moderate income requirement.
(d) For purposes of this Section:
"Affordable Housing" means a multifamily housing project in which 20 percent or
more of the residential units are both rent -restricted and occupied by families whose
incomes are 50 percent or less of the area median income as determined by the U.S.
Department of Housing and Urban Development ("HUD"), with adjustments for household
size, or in which 40 percent or more of the residential units are both rent -restricted and
occupied by families whose incomes are 60 percent or less of the area median income as
determined by the HUD Commissioner with adjustments for household size. A residential
unit is rent -restricted if the Gross Rent with respect to such unit does not exceed 30 percent
of the Imputed Income Limitation (as defined herein) applicable to such unit.
"Affordability Restriction" means a contractual agreement or covenant prohibiting
the use of the Mortgaged Property for any purpose other than Affordable Housing.
"Affordable Units" means those units which are designated by Borrower for
occupancy by Qualifying Tenants.
"Gross Rent" means the rental charge for an Affordable Unit in the Mortgaged
Property including any utility allowance determined by HUD in accordance with Section
8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) ("Section 8"). Gross Rent
does not include any subsidy payment under Section 8 or any comparable rental assistance
program (with respect to such unit or the tenant(s) thereof), nor does it include any fee for
a basis of the low income status of the tenant(s) of the unit by any governmental program
of assistance (or by an organization described in Section 501(c)(3) and exempt from tax
under Section 501(a) of the Code (26 U.S.C. 501(a)) if such program (or organization)
provides assistance for rent and the amount of assistance provided for rent is not separable
from the amount of assistance provided for supportive services. Gross Rent does not
include any rental payment to the owner of a unit if the owner pays an equivalent amount
to the Farmers Home Administration under Section 515 of the Housing Act of 1949 (42
U.S.C. 1485).
"Imputed Income Limitation" has the meaning as defined in Section 42(g)(2)(C) of
the Code (26 U.S.C. 42(g)(2)(C).
"Qualifying ing Tenant" means persons or family whose income at time of initial
occupancy does not exceed 50 percent or 60 percent as applicable, of the area median
income, as determined by HUD with adjustments for family size.
55. FAIR HOUSING; EQUAL OPPORTUNITY. Borrower shall: (a) comply with
the provisions of Title VIII of the Civil Rights Act of 1968, as amended, and any regulations or
B-7 Vista Breeze
administrative procedures issued pursuant thereto. These laws and regulations prohibit
discrimination in the rental or financing of housing on the basis of race, color, national origin,
religion (creed), or sex. Borrower agrees to administer the Property and related activities in a
manner to affirmatively further fair housing. Borrower also agrees to comply with similar state
and local fair housing laws and ordinances; and (b) comply with the provisions of Executive Order
11063 on Equal Opportunity in Housing and all regulations issued pursuant thereto. This order
and related regulations prohibit discrimination on the basis of race, color, religion (creed), national
origin, or sex in housing and related facilities provided through Federal financial assistance.
56. AFFORDABILITY RESTRICTION. The Affordability Restriction is
incorporated into and made a part of this Instrument and a default under such Agreement shall
constitute an Event of Default under this Instrument and Lender may exercise all of its rights under
this Instrument.
57. SUBORDINATION; STANDSTILL. This Instrument, the other Forward
Commitment Fee Documents, and all of the rights of Lender and obligations of Borrower are
subject and subordinate to the obligations of Borrower to, and rights of, Senior Lenders under the
Permitted Debt, the Senior Security Instrument and the other Permitted Debt. Until such time as
any of the Senior Security Instrument has been released and discharged, Lender shall not without
the prior written consent of Original Funding Lender, which may be withheld in Original Funding
Lender's sole and absolute discretion, exercise any of Lender's remedies under this Instrument
(including, without limitation, the commencement of any judicial or non judicial action of
proceeding (a) to have a receiver appointed to collect any monies payable to Borrower; or (b) to
foreclose the lien(s) created by this Instrument; or (c) to file or join in the filing of any involuntary
Bankruptcy Proceeding against Borrower or any person or entity which owns a direct or indirect
interest in Borrower). Each Senior Lender shall be a third party Lender of this Section 57 and this
Section 57 shall not be amended, modified or deleted with Senior Lender's prior written consent."
All capitalized terms used in this Exhibit not specifically defined herein shall have the
meanings set forth in the text of the Instrument that precedes this Exhibit.
B-8 Vista Breeze
1
2
EXHIBIT C
FINANCING STATEMENT INFORMATION
Name and Address of Debtor:
Vista Breeze, Ltd.
c/o Atlantic Pacific Communities
161 NW 6th Street
Suite 1020
Miami, Florida 33136
Debtor's State of Organization and Organizational I.D.#:
State of Formation:
Type of Entity:
Organizational I.D.#:
3. Name and Address of Secured Party:
4. The Collateral is:
Florida
limited partnership
A20000000470
Citibank, N.A.
388 Greenwich Street, Trading 4th Floor
New York, New York 10013
Fixtures (as that term is described in the
Uniform Commercial Code of Florida)
attached to the Land described in Exhibit A
attached to this Instrument.
EXHIBIT D
MODIFICATIONS TO INSTRUMENT
(Ground Lease)
The following modifications are made to the text of the Instrument that precedes this Exhibit:
1. The granting clause on page 2 is deleted in its entirety and the following new
granting clause is inserted in its place:
"Granting Clause. Borrower, in consideration of the Indebtedness and the trust created by
this Instrument, irrevocably grants, conveys and assigns to Lender, with power of sale, the
Mortgaged Property, including the Leasehold Estate in the Land located in Miami -Dade County,
Florida and described in Exhibit A attached to this Instrument, to have and to hold the Mortgaged
Property unto Lender, Lender's successor in trust and Lender's assigns forever."
2. The definition of Mortgaged Property in Section 1 is amended by deleting
paragraph (i) and inserting the following new paragraph in its place: "(i) the Ground Lease and the
Leasehold Estate;"
3. The definition of Mortgaged Property in Section 1 is amended by deleting the word
"Land" from paragraph (viii) and inserting the words "Leasehold Estate" in its place.
4. Section 1 is amended by adding the following new definitions:
"Event of Ground Lessor Bankruptcy" means either of the following actions
taken by or with respect to Ground Lessor: (i) Ground Lessor pursuant to or within the
meaning of the United States Bankruptcy Code (x) commences a voluntary case, or (y)
consents to the entry of an order for relief against it in an involuntary case; or (ii) a court
of competent jurisdiction enters an order or decree under the United States Bankruptcy
Code that is for relief against Ground Lessor in an involuntary case.
"Ground Lease" means the lease described in Exhibit E pursuant to which
Borrower leases the Land, as such lease may from time to time be amended, modified,
supplemented, renewed and extended.
"Ground Lessee Default" means (i) a default by Borrower in making any payment
of rent, additional rent or other sum of money payable by Borrower to Ground Lessor under
the Ground Lease on the date such payment is due and payable, or (ii) a default by Borrower
in performing or observing any of the terms, covenants or conditions of the Ground Lease
(other than the payments referred to in clause (i)) required to be performed or observed by
Ground Lessee.
"Ground Lessor" means the lessor from time to time under the Ground Lease.
"Ground Lessor Default" means a default by Ground Lessor in performing or
observing any of the terms, covenants or conditions of the Ground Lease required to be
performed or observed by Ground Lessor.
I Vista Breeze
"Ground Rent" means the base or minimum rent payable in fixed monthly or other
periodic installments under the Ground Lease.
"Leased Premises" means the Land and any other real property leased by Borrower
pursuant to the Ground Lease.
"Leasehold Estate" means Borrower's interest in the Land and any other real
property leased by Borrower pursuant to the Ground Lease, including (i) all rights of
Borrower to renew or extend the term of the Ground Lease, (ii) all amounts deposited by
Borrower with Ground Lessor under the Ground Lease, (iii) Borrower's right or privilege
to terminate, cancel, surrender, modify or amend the Ground Lease, and (iv) all other
options, privileges and rights granted and demised to Borrower under the Ground Lease
and all appurtenances with respect to the Ground Lease.
5. Section 22(d) is amended in its entirety to read as follows:
"(d) fraud or material misrepresentation or material omission by Borrower or
Guarantor, any of their respective officers, directors, trustees, general partners, managing
members, managers, agents or representatives in connection with (i) the application for the
Loan, (ii) any financial statement, rent roll, or other report or information provided to
Lender during the term of the Indebtedness, (iii) any request for Lender's consent to any
proposed action, including a request for disbursement of funds under any Collateral
Agreement or (iv) any of the representations and warranties contained in Section 53;"
6. Section 22 is amended by inserting the following new provision as additional
subsection (t):
"any failure by Borrower to comply with the provisions of Sections 58, 59, 60, 62, 63(b),
64(a) or 65;"
7. The following new Sections are added at the end of the Instrument after the last
numbered Section:
"58. REPRESENTATIONS AND WARRANTIES REGARDING GROUND
LEASE. Borrower warrants and represents to Lender that, as of the date of this Instrument: (i)
the Ground Lease is in full force and effect in accordance with its terms; (ii) Borrower has not
waived, canceled or surrendered any of its rights under the Ground Lease; (iii) Borrower is the
sole owner of the Leasehold Estate, without defect; (iv) the Leasehold Estate, the Leased Premises
and the Mortgaged Property are free and clear of all liens, encumbrances and other matters
affecting title, other than the lien of this Instrument and the Permitted Encumbrances; (v) there is
no existing Ground Lessee Default and no event has occurred which, with the passage of time or
the giving of notice, or both, would constitute a Ground Lessee Default; and (vi) to the best of
Borrower's knowledge, there is no existing Ground Lessor Default and no event has occurred
which, with the passage of time or the giving of notice, or both, would constitute a Ground Lessor
Default.
2 Vista Breeze
59. NOTICES UNDER GROUND LEASE. Borrower shall deliver to Lender, within
ten (10) days after Borrower's receipt, a true and correct copy of each notice, demand, complaint
or request from Ground Lessor under, or with respect to, the Ground Lease.
60. BORROWER'S OBLIGATIONS TO COMPLY WITH GROUND LEASE.
Borrower shall (i) pay the Ground Rent and all other sums of money due and payable at any time
and from time to time under the Ground Lease as and when such sums become due and payable,
but in any event before the expiration of any grace period provided in the Ground Lease for the
payment of any such sum, and (ii) at all times fully perform, observe and comply with all other
terms, covenants and conditions of the Ground Lease to be performed, observed or complied with
by Borrower as lessee under the Ground Lease. If the Ground Lease does not provide for a grace
period for the payment of a sum of money, Borrower shall make the payment on or before the date
on which the payment becomes due and payable. Borrower shall deliver evidence of the payment
to Lender within ten (10) days after receipt of a written request from Lender for evidence of the
payment.
61. LENDER'S RIGHT TO CURE GROUND LESSEE DEFAULTS. At any time
after Lender receives notice of a Ground Lessee Default, (i) Lender may (but shall not be obligated
to do so), make any payment, perform any obligation and take any other action Borrower would
have the right to pay, perform or take under the Ground Lease which Lender deems necessary or
desirable to cure the Ground Lessee Default, and (ii) Lender and its authorized agents shall have
the right at any time or from time to time to enter the Land and Improvements, or any part thereof,
to such extent and as often as Lender, in its discretion, deems necessary or desirable in order to
cure the Ground Lessee Default, subject to the rights of the tenants and occupants of the Mortgaged
Property. Lender may exercise its rights under this Section immediately after receipt of notice of
a Ground Lessee Default and without regard to any grace period provided to Borrower in the
Ground Lease to cure the Ground Lessee Default. For purposes of exercising its rights under this
Section, Lender shall be fully protected for any action taken or omitted to be taken by Lender, in
good faith, in reliance on any written notice from Ground Lessor stating that a Ground Lessee
Default has occurred and is continuing even though Borrower may question or deny the existence
or nature of the Ground Lessee Default. All actual expenditures made by Lender pursuant to this
Section to cure a Ground Lessee Default shall become an additional part of the Indebtedness as
provided in Section 12.
62. COVENANTS TO PROTECT LEASEHOLD ESTATE. Borrower shall not,
without the written consent of Lender (which may be given or withheld by Lender in its discretion),
(i) surrender the Leasehold Estate to Ground Lessor or terminate or cancel the Ground Lease, (ii)
amend, modify or change the Ground Lease, either orally or in writing, or waive any of Borrower's
rights under the Ground Lease, (iii) subordinate the Ground Lease or the Leasehold Estate to any
mortgage, deed of trust or other lien on Ground Lessor's fee title to the Leased Premises, or (iv)
except as otherwise provided in Section 63(b), reject or assume the Ground Lease or assign the
Leasehold Estate pursuant to Section 365(h) of the United States Bankruptcy Code. Borrower
absolutely and unconditionally transfers and assigns to Lender all of Borrower's rights to
surrender, terminate, cancel, modify and change the Ground Lease, and any such surrender,
termination, cancellation, modification or change made without the prior written consent of Lender
shall be void and have no legal effect.
3 Vista Breeze
63. GROUND LESSEE'S BANKRUPTCY.
(a) Borrower assigns to Lender, as additional security for the Indebtedness, Borrower's
right to reject the Ground Lease under Section 365 of the United States Bankruptcy Code after the
occurrence of a Bankruptcy Event, subject to Section 58(b).
(b) If, after the occurrence of a Bankruptcy Event, Borrower decides to reject the
Ground Lease, Borrower shall give Lender written notice, at least ten (10) days in advance, of the
date on which Borrower intends to apply to the Bankruptcy Court for authority and permission to
reject the Ground Lease. Lender shall have the right, but not the obligation, within ten (10) days
after receipt of Borrower's notice, to deliver to Borrower a notice ("Lender's Assumption
Notice") in which (i) Lender demands that Borrower assume the Ground Lease and assign the
Ground Lease to Lender, or its designee, in accordance with the United States Bankruptcy Code,
and (ii) Lender agrees to cure or provide adequate assurance of prompt cure of all Ground Lessee
Defaults reasonably susceptible of being cured by Lender and of future performance under the
Ground Lease. If Lender timely delivers Lender's Assumption Notice to Borrower, Borrower shall
not reject the Ground Lease and shall, within fifteen (15) days after receipt of Lender's notice,
comply with the demand contained in clause (i) of Lender's notice. If Lender does not timely
deliver Lender's Assumption Notice to Borrower, Borrower shall have the right to reject the
Ground Lease.
64. GROUND LESSOR'S BANKRUPTCY.
(a) If, after the occurrence of an Event of Ground Lessor Bankruptcy, Ground Lessor
rejects the Ground Lease pursuant to Section 365(h) of the United States Bankruptcy Code (i)
Borrower, immediately after obtaining notice of the rejection, shall deliver a copy of the notice to
Lender, (ii) Borrower shall not, without Lender's prior written consent (which may be given or
withheld in Lender's discretion), elect to treat the Ground Lease as terminated pursuant to Section
365(h) or any other applicable provision of the United States Bankruptcy Code, and (iii) this
Instrument and the lien created by this Instrument shall extend to and encumber Borrower's
retained rights under the Ground Lease that are appurtenant to the Leased Premises for the balance
of the term of the Ground Lease and for any renewal or extension of those rights under the Ground
Lease. Borrower transfers and assigns to Lender, as additional security for the Indebtedness,
Borrower's rights, after Ground Lessor's rejection of the Ground Lease, to treat the Ground Lease
as terminated, and any termination of the Ground Lease made by Borrower without Lender's prior
written consent shall be void and have no legal effect.
(b) Borrower transfers and assigns to Lender, as additional security for the
Indebtedness, all of Borrower's rights to damages caused by Ground Lessor's rejection of the
Ground Lease after the occurrence of an Event of Ground Lessor Bankruptcy and all of Borrower's
rights to offset such damages against rent payable under the Ground Lease. As long as no Event
of Default has occurred and is continuing (it being acknowledged and agreed that in no event shall
Lender have any obligation to accept a cure of an Event of Default), Lender agrees that it will not
enforce its rights under the preceding sentence, but will permit Borrower to exercise such rights
with Lender's prior written consent. Any amounts received by Lender as damages arising out of
Ground Lessor's rejection of the Ground Lease shall be applied in the manner set forth in Section 9.
4 Vista Breeze
65. OPTION TO RENEW OR EXTEND GROUND LEASE. Borrower shall give
Lender written notice of Borrower's intention to exercise each option to renew or extend the term
of the Ground Lease at least ninety (90) days, but not more than one hundred fifty (150) days,
before the last day on which the option may be timely exercised. If Borrower intends to renew or
extend the term of the Ground Lease, it shall deliver to Lender, together with the notice of such
decision, a copy of the notice of renewal or extension it delivers to Ground Lessor. If Borrower
does not intend to renew or extend the term of the Ground Lease or, if Borrower fails to deliver its
written notice of exercise of its option to renew or extend the term of the Ground Lease at least
ninety (90) days before the last day on which the option may be timely exercised, Lender shall
have the right, but shall not be obligated, to renew or extend the term of the Ground Lease for and
on behalf of Borrower.
66. NO MERGER OF ESTATES. If Borrower acquires the fee estate of Ground
Lessor under the Ground Lease (the "Fee Estate") (i) there shall be no merger between the Fee
Estate and the Leasehold Estate unless all persons, including Lender, having an interest in the
Ground Lease consent in writing to the merger, and (ii) simultaneously with Borrower's
acquisition of the Fee Estate, the lien of this Instrument shall automatically, without the necessity
of any further conveyance, be spread to cover the Fee Estate and as so spread shall be prior to the
lien of any mortgage, deed of trust or other lien placed on the Fee Estate after the date of this
Instrument. Promptly after Borrower's acquisition of the Fee Estate, Borrower, at its sole cost and
expense, including payment of Lender's actual attorneys' fees and out-of-pocket disbursements,
shall execute and deliver all documents and instruments necessary to subject the Fee Estate to the
lien of this Instrument, and shall provide to Lender a title insurance policy insuring the lien of this
Instrument as a first lien on the Fee Estate and the Leasehold Estate. If Lender acquires the Fee
Estate and the Leasehold Estate (whether pursuant to the provisions of the Ground Lease, by
foreclosure of this Instrument, or otherwise), the Fee Estate and the Leasehold Estate shall not
merge as a result of such acquisition and shall remain separate and distinct for all purposes after
such acquisition unless and until Lender shall elect to merge the Fee Estate and the Leasehold
Estate.
67. NEW LEASE. If (i) the Ground Lease is canceled or terminated for any reason
before the natural expiration of its term, and (ii) Lender (or its designee) obtains from Ground
Lessor a new lease in accordance with the term of the Ground Lease, Borrower shall have no right,
title or interest in and to the new lease or the leasehold estate created by the new lease.
68. APPOINTMENT OF LENDER AS BORROWER'S ATTORNEY -IN -FACT.
Borrower makes, constitutes and appoints Lender as Borrower's attorney -in -fact, in Borrower's
name, place and stead, with full power of substitution, to take all actions and to sign all documents
and instruments which Lender, in its discretion, considers to be necessary or desirable to (i) prevent
or cure a Ground Lessee Default pursuant to Section 56, (ii) perform or carry out any of Borrower's
covenants under Section 55, (iii) renew or extend the term of the Ground Lease pursuant to Section
60, (iv) appoint arbitrators and conduct arbitration proceedings pursuant to the Ground Lease, and
(v) request and obtain estoppel certificates from Ground Lessor pursuant to the Ground Lease.
Borrower gives and grants to Lender, as Borrower's attorney -in -fact, full power and authority to
do and perform every act and sign every document and instrument necessary and proper to be done
in the exercise of the foregoing power as fully as Borrower might or could do, and Borrower hereby
ratifies and confirms all acts that Lender, as Borrower's attorney -in -fact, shall lawfully do or cause
Vista Breeze
to be done by virtue of this power of attorney. This power of attorney, being coupled with an
interest, shall be irrevocable as long as any of the Indebtedness remains unpaid."
All capitalized terms used in this Exhibit not specifically defined herein shall have the
meanings set forth in the text of the Instrument that precedes this Exhibit.
Vista Breeze
OR BK 34013 PG 3197
LAST PAGE
EXHIBIT E
DESCRIPTION OF GROUND LEASE
Second Amended and Restated Ground Lease, between Housing Authority of the City of Miami
Beach, as Landlord, and Vista Breeze, Ltd., as Tenant, dated as of December 15, 2023.
7
Vista Breeze
4863-8531-8795v.4