Exhibit 10.354
This document prepared by,
and after recording return to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLC
70West Madison Street
Suite 3300
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Allstate Life Insurance Company
Allstate Insurance Company
Loan No. 122532
DEED TO SECURE DEBT AND SECURITY AGREEMENT
FROM
INLAND WESTERN LAWRENCEVILLE ▇▇▇▇▇▇▇▇, L.L.C., AS GRANTOR
("BORROWER")
TO
ALLSTATE LIFE INSURANCE COMPANY AND ALLSTATE INSURANCE COMPANY,
AS GRANTEE (COLLECTIVELY, "LENDER")
DATED: SEPTEMBER 27, 2004
LOAN AMOUNT: $7,561,700
PROPERTY ADDRESS:
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
THIS DEED TO SECURE DEBT secures the indebtedness of those certain two
Mortgage Notes of even date herewith executed by BORROWER and payable to the
order of LENDER in the aggregate principal sum of SEVEN MILLION FIVE HUNDRED
SIXTY-ONE THOUSAND SEVEN HUNDRED DOLLARS ($7,561,700) (collectively, the "Note")
with interest thereon and all late charges, loan fees, commitment fees, and
prepayment premiums, maturing April 1, 2009.
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TABLE OF CONTENTS
Page
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ARTICLE I COVENANTS OF BORROWER............................................................5
1.01. Performance of Obligations Secured...............................................5
1.02. Insurance........................................................................5
1.03. Condemnation.....................................................................6
1.04. Damage to Property...............................................................8
1.05. Escrow Fund for Condemnation and Insurance Proceeds..............................9
1.06. Taxes, Liens and other Items....................................................11
1.07. Assignment of Leases, Contracts, Rents and Profit...............................12
1.08. Due on Sale or Encumbrance......................................................16
1.09. Preservation and Maintenance of Property........................................16
1.10. Use of Property.................................................................16
1.11. Alterations and Additions.......................................................17
1.12. Offset Certificates.............................................................18
1.13. Lender's Costs and Expenses.....................................................18
1.14. Protection of Security; Costs and Expenses......................................19
1.15. Borrower's Covenants Respecting Collateral......................................20
1.16. Covenants Regarding Financial Statements........................................22
1.17. Environmental Covenants.........................................................24
1.18. Further Assurances..............................................................25
1.19. Borrower's Continued Existence..................................................25
ARTICLE II EVENTS OF DEFAULT...............................................................26
2.01. Monetary and Performance Defaults...............................................26
2.02. Bankruptcy, Insolvency, Dissolution.............................................26
2.03. Misrepresentation...............................................................27
2.04. Default under Subordinate Loans.................................................27
2.05. Liens...........................................................................27
2.06. Judgments.......................................................................27
2.07. Leases..........................................................................28
2.08. Borrower's Continued Existence..................................................28
2.09. Breach of Due on Sale or Encumbrance Provision..................................28
2.10. Default under Indemnity.........................................................28
ARTICLE III REMEDIES........................................................................28
3.01. Acceleration....................................................................28
3.02. Entry...........................................................................28
3.03. Judicial Action.................................................................30
3.04. Power of Sale...................................................................30
3.05. Rescission of Notice of Default.................................................31
3.06. Lender's Remedies Respecting Collateral.........................................31
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3.07. Proceeds of Sales...............................................................31
3.08. Condemnation and Insurance Proceeds.............................................32
3.09. Waiver of Marshalling, Rights of Redemption, Homestead and Valuation............32
3.10. Remedies Cumulative.............................................................33
3.11. Nonrecourse.....................................................................33
ARTICLE IV MISCELLANEOUS...................................................................35
4.01. Severability....................................................................35
4.02. Certain Charges and Brokerage Fees..............................................35
4.03. Notices.........................................................................36
4.04. Borrower Not Released; Certain Lender Acts......................................37
4.05. Inspection......................................................................38
4.06. Release or Reconveyance or Cancellation.........................................38
4.07. Statute of Limitations..........................................................38
4.08. Interpretation..................................................................38
4.09. Captions........................................................................38
4.10. Consent.........................................................................38
4.11. Delegation to Subagents.........................................................39
4.12. Successors and Assigns..........................................................39
4.13. Governing Law...................................................................39
4.14. Changes in Taxation.............................................................39
4.15. Maximum Interest Rate...........................................................39
4.16. Time of Essence.................................................................40
4.17. Reproduction of Documents.......................................................40
4.18. No Oral Modifications...........................................................40
4.19. Waiver of Borrower's Rights.....................................................40
4.20 Attorneys' Fees.................................................................41
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DEED TO SECURE DEBT AND SECURITY AGREEMENT
THIS
DEED TO SECURE DEBT AND SECURITY AGREEMENT is made as of September 27,
2004 ("Security Deed"), from INLAND WESTERN LAWRENCEVILLE ▇▇▇▇▇▇▇▇, L.L.C., a
Delaware limited liability company ("Borrower"), as Grantor, whose mailing
address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to ALLSTATE LIFE
INSURANCE COMPANY, an Illinois insurance corporation ("▇▇▇▇"), and ALLSTATE
INSURANCE COMPANY, an Illinois insurance corporation ("AIC", and together with
▇▇▇▇, "Lender"), as Grantee, whose mailing address is ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇.
BORROWER, in consideration of the indebtedness herein recited, hereby
irrevocably grants, bargains, sells, conveys, transfers and assigns, to Lender,
its successors and assigns, with power of sale and right of entry and
possession, all of Borrower's estate, right, title and interest in, to and under
that certain real property located in Gwinnett County, Georgia, more
particularly described in EXHIBIT A attached hereto and incorporated herein by
this reference (the "Land");
TOGETHER with all of Borrower's now or hereafter acquired estate, right,
title and interest in, to and under all buildings, structures, improvements and
fixtures now existing or hereafter erected on the Land and all right, title and
interest, if any, of Borrower in and to the streets and roads, opened or
proposed, abutting the Land to the center lines thereof, and strips within or
adjoining the Land, the air space and right to use said air space above the
Land, all rights of ingress and egress on or within the Land, all easements,
rights and appurtenances thereto or used in connection with the Land, including,
without limitation, all lateral support, alley and drainage rights, all
revenues, income, rents, cash or security deposits, advance rental deposits,
profits, royalties, and other benefits thereof or arising from the use or
enjoyment of all or any portion thereof (subject however to the rights and
authorities given herein to Borrower to collect and apply such revenues, and
other benefits), all interests in and rights, royalties and profits in
connection with all minerals, oil and gas and other hydrocarbon substances
thereon or therein, and water stock, all options to purchase or lease, all
development or other rights relating to the Land or the operation thereof or
used in connection therewith (including, without limitation, all concurrency
rights, permits, prepaid utilities and impact fees of any nature, storm water
drainage rights and reservations, sanitary sewer rights and reservations,
potable water rights and reservations, allocations of traffic trips, use, rights
and reservations, law enforcement, library, park and educational fees, uses,
rights and reservations), including all Borrower's right, title and interest in
all fixtures, attachments, partitions, machinery, equipment, building materials,
appliances and goods of every nature whatever, whether now or hereafter located
on, or attached to, the Land, all of which, including replacements and additions
thereto, shall, to the fullest extent permitted by law and for the purposes of
this Security Deed, be deemed to be real property and, whether affixed or
annexed thereto or not, be deemed conclusively to be real property; and Borrower
agrees to execute and deliver, from time to time, such further instruments and
documents as may be required by Lender to confirm the legal operation and effect
of this Security Deed on any of the foregoing. All of the foregoing property
described in this Section (the "Improvements") together with the Land and the
hereinafter defined Collateral, shall be hereinafter referred to as the
"Property").
TOGETHER with all of Borrower's now existing or hereafter acquired right,
title and interest in the following:
(A) All equipment, fixtures, inventory, goods, farm goods, instruments,
appliances, furnishings, machinery, tools, raw materials, component parts, work
in progress and materials, and all other tangible personal property of
whatsoever kind, used or consumed in the improvement, use or enjoyment of the
Property now or any time hereafter owned or acquired by Borrower, wherever
located and all products thereof whether in possession of Borrower or whether
located on the Property or elsewhere;
(B) To the extent such general intangibles are assignable, all general
intangibles relating to the Property or the design, development, operation,
management and use of the Property (other than trademarks that contain the word
"Inland"), including, but not limited to, (1) all names under which or by which
the Property may at any time be owned and operated or any variant thereof, and
all goodwill in any way relating to the Property and all service marks and
logotypes used in connection therewith, (2) all permits, licenses,
authorizations, variances, land use entitlements, approvals, consents,
clearances, and rights obtained from governmental agencies issued or obtained in
connection with the Property, (3) all permits, licenses, approvals, consents,
authorizations, franchises and agreements issued or obtained in connection with
the construction, use, occupation or operation of the Property, (4) all
materials prepared for filing or filed with any governmental agency, and (5) all
of the books and records of Borrower in any way relating to construction or
operation of the Property;
(C) All shares of stock or partnership interest or other evidence of
ownership of any part of the Property that is owned by Borrower in common with
others, including all water stock relating to the Property, if any, and all
documents or rights of membership in any owners' or members' association or
similar group having responsibility for managing or operating any part of the
Property provided, however, that the foregoing shall not include any ownership
interests in Borrower;
(D) All accounts, deposit accounts, supporting obligations,
letter-of-credit rights, tax and insurance escrows held pursuant to or in
connection with this Security Deed or otherwise in connection with the Property,
(including, without limitation, the escrow established pursuant to that certain
Escrow and Guaranty Agreement dated as of August 9, 2004, as amended, among
Borrower, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Partners, L.L.C., a Florida limited liability
company, and Chicago Title and Trust Company, as escrowee, including the funds
and securities held under such escrow), accounts receivable, instruments,
documents, documents of title, general intangibles, rights to payment of every
kind, all of Borrower's rights, direct or indirect, under or pursuant to any and
all construction, development, financing, guaranty, indemnity, maintenance,
management, service, supply and warranty agreements, commitments, contracts,
subcontracts, insurance policies, licenses and bonds now or anytime hereafter
arising from construction on the Land or the use or enjoyment of the Property to
the extent such are assignable;
(E) All condemnation and eminent domain proceeds (including payments in
lieu thereof) and insurance proceeds related to the Property;
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(F) All articles of personal property now or hereafter attached to,
placed upon for an indefinite term or used in connection with the Land,
appurtenances to the Land, and the Improvements together with all goods and
other property which are or at any time become so related to the Property that
an interest in them arises under real estate law as fixtures;
TOGETHER with all additions to, substitutions for and the products of all
of the above, and all proceeds therefrom, whether cash proceeds or noncash
proceeds, received when any such property (or the proceeds thereof) is sold,
used, exchanged, leased, licensed, or otherwise disposed of, whether voluntarily
or involuntarily. Such proceeds shall include any of the foregoing specifically
described property of Borrower acquired with cash proceeds. Together with, and
without limiting the above items, all Goods, Accounts, Documents, Instruments,
Money, Chattel Paper, Deposit Accounts, Letter-of-Credit Rights, Investment
Property, Equipment and General Intangibles arising from or used in connection
with the Property, as those terms are defined in the Uniform Commercial Code
from time to time in effect in the state in which the Property is located. (All
of the foregoing including such products and proceeds thereof, are collectively
referred to as "Collateral".)
The personal property in which Lender has a security interest includes
goods which are or shall become fixtures on the Property. This Security Deed is
intended to serve as a security agreement pursuant to the terms of the
applicable provisions of the Uniform Commercial Code of the state in which the
Property is located. Borrower warrants and agrees that there is no financing
statement covering the foregoing Collateral, the Property, or any part thereof,
on file in any public office. Borrower hereby authorizes Lender, its counsel and
its representatives, at any time and from time to time, to file financing
statements and amendments thereto relating to the security interest granted
herein without the signature of Borrower.
THIS CONVEYANCE IS INTENDED TO OPERATE AND IS TO BE CONSTRUED AS A DEED
PASSING TITLE TO THE PROPERTY TO LENDER AND IS MADE UNDER THOSE PROVISIONS OF
THE EXISTING LAWS OF THE STATE OF GEORGIA RELATING TO DEEDS TO SECURE DEBT, AND
NOT AS A MORTGAGE, AND MADE FOR THE FOLLOWING USES AND FOR THE PURPOSE OF
SECURING IN SUCH ORDER OF PRIORITY AS LENDER MAY ELECT:
(A) The repayment of the indebtedness evidenced by (1) that certain
Mortgage Note (the "▇▇▇▇ Note") of even date herewith with a maturity date of
April 1, 2009, executed by Borrower and payable to the order of ▇▇▇▇, in the
principal sum of FIVE MILLION SIX HUNDRED SEVENTY ONE THOUSAND TWO HUNDRED
SEVENTY FIVE DOLLARS ($5,671,275), with interest thereon as provided therein and
all late charges, loan fees, commitment fees, Prepayment Premium (as described
in the ▇▇▇▇ Note), and all extensions, renewals, modifications, amendments and
replacements of the ▇▇▇▇ Note, and (2) that certain Mortgage Note (the "AIC
Note" and, together with the ▇▇▇▇ Note, the "Note" or the "Notes") of even date
herewith with a maturity date of April 1, 2009, executed by Borrower and payable
to the order of AIC, in the principal sum of ONE MILLION EIGHT HUNDRED NINETY
THOUSAND FOUR HUNDRED TWENTY FIVE DOLLARS ($1,890,425), with interest thereon as
provided therein and all late charges, loan fees, commitment fees, Prepayment
Premium (as described in the AIC Note), and all extensions, renewals,
modifications, amendments and replacements of the AIC Note;
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(B) The payment of all other sums which may be advanced by or otherwise
be due to Lender under any provision of this Security Deed or under any other
instrument or document referred to in clause (C) below or otherwise, with
interest thereon at the rate provided herein or therein;
(C) The performance of each and every covenant and agreement of Borrower
contained (1) herein, in the Note, or in any note evidencing a Future Advance
(as hereinafter defined), and (2) in the obligations of Borrower upon any and
all pledge or other security agreements, loan agreements, disbursement
agreements, supplemental agreements, environmental indemnity agreements (the
foregoing shall not include the Commitment Letter between Borrower and Lender),
assignments (both present and collateral) and all instruments of indebtedness or
security now or hereafter executed by Borrower in connection with any
indebtedness referred to in clauses (A), (B), or (D) - (H) of this Section
(including but not limited to the Absolute Assignment of Leases and Rents of
even date herewith from Borrower to Lender (the "Assignment of Leases and
Rents") or for the purpose of supplementing or amending this Security Deed or
any instrument secured hereby (all of the foregoing in this clause (C), as the
same may be amended, modified or supplemented from time to time, together with
the Note and this Security Deed, being referred to hereinafter as "Related
Agreements") and all costs and expenses, including reasonable attorneys' and
paralegals' fees with respect to all such documents, including, without
limitation, the negotiation and drafting of any loan settlement or workout
agreement;
(D) The repayment of any other loans or advances, with interest thereon,
hereafter made to Borrower (or any successor in interest to Borrower as the
owner of the Property or any part thereof) by Lender when the promissory note
evidencing the loan or advance specifically states that said note is secured by
this Security Deed, together with all extensions, renewals, modifications,
amendments and replacements thereof (herein and in the Related Agreements
"Future Advance");
(E) Any and all additional advances made by Lender to protect or
preserve the Property or the security title and security interest created
hereby, or to pay taxes, insurance premiums or to repair or maintain the
Property, to complete the Improvements (whether or not the original grantor or
Borrower remains the owner of the Property at the time of such advances and
whether or not the original grantee or Lender remains the owner of the
indebtedness secured hereby and this instrument);
(F) Any and all expenses incident to the collection of the indebtedness
secured hereby and the foreclosure hereof by action in any court or by exercise
of the power of sale herein contained;
(G) Any and all indebtedness now owing or which may hereafter be owing
by Borrower to Lender, however, and whenever incurred or evidenced, whether
direct or indirect, absolute or contingent, due or to become due, together with
any and all renewal or renewals and extensions of said indebtedness; and
(H) The full and prompt payment and performance of any and all
obligations or covenants of Borrower to Lender under the terms of any other
agreements, assignments or other
4
instruments now or hereafter evidencing, securing or otherwise relating to the
indebtedness evidenced by the Note.
TO HAVE AND TO HOLD the Property to the use, benefit, and behoof of Lender,
forever, in Fee Simple. This Security Deed is intended (i) to constitute a
security agreement as required under the Uniform Commercial Code, and (ii) to
operate and is to be construed as a deed passing title to the Property to Lender
and is made under those provisions of the existing laws of the State of Georgia
relating to deeds to secure debt, and not as a mortgage, and is given to secure
the payment of the indebtedness described above.
Borrower warrants that Borrower has good title to the Property, is lawfully
seized and possessed of the Property and every part thereof, and has the right
to convey same; that the Property is unencumbered except as may be expressly
provided in the Permitted Exceptions described in EXHIBIT B attached hereto and
incorporated herein by this reference (the "Permitted Exceptions"); and that
Borrower will forever warrant and defend title to the Property unto Lender
against the claims of all persons whomsoever.
ARTICLE I
COVENANTS OF BORROWER
To protect the security of this Security Deed, and as additional
consideration to Lender, Borrower covenants, warrants and agrees as follows:
1.01. PERFORMANCE OF OBLIGATIONS SECURED. Borrower shall promptly pay when
due the principal of and interest on the indebtedness evidenced by the Note, the
principal of and interest on any Future Advance, any Prepayment Premium and late
charges provided for in the Note or in any note evidencing a Future Advance, and
shall further perform fully and in a timely manner all other obligations of
Borrower contained herein or in the Note or in any note evidencing a Future
Advance or in any of the Related Agreements.
1.02. INSURANCE. For all times during the period there remains any
indebtedness under the Note, or any and all other indebtedness (including
without limitation Future Advances) secured by this Security Deed, Borrower
shall keep the Property insured against all risks or hazards as Lender may
reasonably require. Such insurance shall be in policy form, amount and coverage
reasonably satisfactory to Lender, including, but not limited to:
(A) Fire and extended coverage on an "all risk" replacement cost basis,
in an amount equal to the insurable value of the Improvements, without
coinsurance or deducting for depreciation, containing a waiver of subrogation
clause and a deductible amount acceptable to Lender;
(B) General public liability insurance, in such form, amount and
deductible satisfactory to Lender, and naming Lender c/o Lender's servicing
agent, if any, as additional insured covering Lender's interest in the Property;
(C) Business interruption or rent loss insurance endorsement in an
amount at least equal to 100 percent of the sum of: annual debt service on the
Note, the annual debt service on
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any other financing permitted by Lender, ground rents, if any, and operating
expenses (without contribution from Borrower for a period of 12 months),
including, without limitation, real estate taxes and assessments and insurance,
for the Property;
(D) Flood insurance (whether or not available through the National Flood
Insurance Program) sufficient to cover any damage which may be anticipated in
the event of flood unless Borrower has provided Lender evidence satisfactory to
Lender that no portion of the Property is located within the boundaries of the
100 year flood plain (Flood Zone A);
(E) "Dram shop" insurance if alcoholic beverages are sold on the
Property;
(F) Boiler and machinery insurance when risks covered thereby are
present and Lender requires such insurance; and
(G) Earthquake insurance if Lender requires such insurance.
The insurance coverages described in subsections (A), (C), (D), (F), and
(G) above shall name Lender c/o Lender's servicing agent, if any, under a
standard noncontributory mortgagee loss payable clause (and naming Lender as
loss payee for rent loss coverage) or otherwise directly insure Lender's
interest in the Property. All losses under said insurance shall be payable to
Lender in the manner provided in Sections 1.04 and 1.05 hereof. All policies of
insurance required under this Section 1.02 shall be with a company or companies
with a policy rating of A and financial rating of at least Class X in the most
current edition of Best's Key Rating Guide and authorized to do business in the
state in which the Property is located. All policies of insurance shall provide
that they will not be canceled or modified without 30 days' prior written notice
to Lender. True copies of the above mentioned insurance policies or evidence of
such insurance (in the form of ▇▇▇▇▇ Form 28) satisfactory to Lender shall be
delivered to and held by Lender. True copies of all renewal and replacement
policies or evidences of such insurance forms (▇▇▇▇▇ Form 28) thereof shall be
delivered to Lender at least 30 days before the expiration of the expiring
policies. If any renewal or replacement policy is not obtained as required
herein, Lender is authorized to obtain the same in Borrower's name and at
Borrower's expense. Lender shall not by the fact of failing to obtain any
insurance, incur any liability for or with respect to the amount of insurance
carried, the form or legal sufficiency of insurance contracts, solvency of
insurance companies, or payment or defense of lawsuits, and Borrower hereby
expressly assumes full responsibility therefor and all liability, if any, with
respect thereto.
1.03. CONDEMNATION.
(A) Immediately upon obtaining knowledge of the commencement or threat
of any action in connection with (1) any condemnation, (2) any other taking of
the Property or any part thereof by any public authority or private entity
having the power of eminent domain, or (3) any conveyance in lieu of such
condemnation or taking of the Property or any part thereof ("Condemnation"),
Borrower shall notify Lender in writing but in no event later than ten (10) days
after Borrower obtains knowledge of the commencement of or threat or likelihood
of a Condemnation: Lender shall have the right, but not the obligation, to
participate in any proceedings relating to any Condemnation and may, in its sole
discretion, consent or withhold its consent to any settlement, adjustment, or
compromise of any claims arising from the
6
Condemnation and no such settlement, adjustment or compromise shall be final or
binding upon Lender without Lender's prior consent.
(B) Except as expressly provided in Section 1.03(C), if all or part of
the Property is taken by Condemnation and Lender in its reasonable judgment
determines that the remainder of the Property, if any, cannot be operated as an
economically viable entity at substantially the same level of operations as
immediately prior to such Condemnation, then all proceeds of the Condemnation
("Condemnation Proceeds") shall be paid over to Lender and shall be applied
first toward reimbursement of the costs and expenses (including reasonable
attorneys' and paralegals' fees) of Lender, if any, in connection with the
condemnation or the recovery of such Condemnation Proceeds, and then, in the
sole and absolute discretion of Lender and without regard to the adequacy of its
security under this Security Deed, shall be applied against all amounts due
hereunder or under the Note in such amounts and priority as Lender shall deem
appropriate and any remaining Condemnation Proceeds shall be released to
Borrower. Partial prepayment of the Note under this Section 1.03(B) with
Condemnation Proceeds shall not be subject to the Prepayment Premium; however,
such partial prepayment shall not entitle Borrower to prepay the portion of the
Note remaining unpaid after application of the Condemnation Proceeds. Full or
partial prepayment of the balance shall continue to be subject to the terms and
conditions of the Note, including the No-Prepayment Period and the Prepayment
Premium as defined and described therein.
(C) If less than all of the Property is taken by Condemnation and Lender
in its reasonable judgment determines that the remainder of the Property can be
operated as an economically viable entity at substantially the same level of
operations as immediately prior to such Condemnation, then Borrower shall
diligently restore the Property to a condition and use as close as possible to
its condition immediately prior to the Condemnation and all Condemnation
Proceeds shall be made available to Borrower for such restoration. If the
estimated cost of restoration, as reasonably determined by Lender, is equal to
or less than One Hundred Fifty Thousand Dollars ($150,000), all Condemnation
Proceeds shall be released directly to Borrower for restoration of the Property.
If the estimated cost of restoration exceeds One Hundred Fifty Thousand Dollars
($150,000), all Condemnation Proceeds shall be deposited into an escrow fund in
accordance with Section 1.05 below. Lender shall have the right to obtain an
opinion of an independent contractor or engineer satisfactory to Lender, at
Borrower's expense, to estimate the cost to restore the remaining portion of the
Property. If the amount of the Condemnation Proceeds is not sufficient to
restore the Property based on the opinion of an independent contractor or
engineer, subject to revision as restorations are made, Borrower shall be
obligated to pay the difference toward the restoration of the Property, prior to
the disbursement of any Condemnation Proceeds to, or for the account of,
Borrower.
(D) If an Event of Default exists at any time from the time of a
Condemnation through the completion of restoration and payment of any
Condemnation Proceeds, the use of the Condemnation Proceeds shall be governed by
the remedies set forth in Article III below. If an event has occurred which with
notice, the passage of time, or both, could become an Event of Default, then,
the Condemnation Proceeds shall be held by Lender or in the Escrow Fund (as
defined below), as applicable, pending cure of such event prior to the
expiration of any applicable cure or grace period. The application of any
Condemnation Proceeds to the
7
indebtedness secured hereby shall not cure or waive any Event of Default
hereunder, or invalidate any act done pursuant to any notice thereof.
1.04. DAMAGE TO PROPERTY.
(A) Promptly upon obtaining knowledge of any damage to the Property or
any part thereof with an estimated cost of restoration in excess of Fifty
Thousand Dollars ($50,000), but in no event later than ten (10) days after
Borrower obtains such knowledge, Borrower shall notify Lender of such damage in
writing. Borrower shall diligently restore the Property to the same condition
that existed immediately prior to the damage whether or not insurance proceeds
are sufficient for such restoration. All proceeds of any insurance on the
Property ("Insurance Proceeds") received by Borrower shall be applied to such
restoration. Lender shall have the right to obtain an opinion of an independent
contractor or engineer satisfactory to Lender, at Borrower's expense, to
estimate the cost to restore the Property to its original condition, which
opinion may be revised as restorations are made. If the amount of the Insurance
Proceeds is not sufficient to restore the Property based on an independent
contractor's or engineer's opinion, subject to revision as restorations are
made, Borrower shall be obligated to pay the difference toward the restoration
of the Property, prior to the application of any Insurance Proceeds to such
restoration as provided herein.
(B) If the estimated cost of restoration is equal to or less than One
Hundred Fifty Thousand Dollars ($150,000), Borrower shall promptly settle and
adjust any claims under the insurance policies which insure against such risks
and, upon receipt of the Insurance Proceeds, Lender shall deliver such to
Borrower for use in restoration of the Property.
(C) If the estimated cost of restoration is greater than One Hundred
Fifty Thousand Dollars ($150,000), Lender shall have the right, but not the
obligation, to participate in the settlement of the insurance claims and may, in
its sole discretion, consent or withhold its consent to any settlement,
adjustment, or compromise of such insurance claims and no such settlement,
adjustment, or compromise shall be final or binding upon Lender without its
prior consent. Upon settlement of insurance claims, and if Borrower can
demonstrate to the reasonable satisfaction of Lender that the projected ratio of
Net Operating Income, as defined below, to annual debt service due under the
Note and any other notes secured by the Property ("Debt Coverage Ratio") will be
at least one hundred five percent (105%) for the twelve (12) months immediately
following reconstruction of the Property, the Insurance Proceeds shall be
deposited into an escrow fund in accordance with Section 1.05 below.
As used in this Security Deed, "Net Operating Income" shall mean:
(i) all gross operating revenues anticipated to be received during the
following twelve-month period based on leases in effect as of the date of
calculation and only for such time as those leases are contracted to remain in
effect without expiration by their terms or optional termination by the tenant
(unless the tenant has waived its termination rights in writing or the term of
the lease has been extended in writing), including without limitation all
amounts to be received from tenants as payment of operating expenses (including
real estate taxes and insurance and/or other operating expenses reimbursed by
tenants) but not including refundable deposits, lease termination payments,
excess tenant improvement and leasing commission
8
payments included as additional rent, principal or interest payments received by
Borrower on loans to tenants and fees and reimbursements for work performed for
tenants by Borrower, less:
(ii) all amounts, calculated on a pro forma basis, for the operation or
maintenance of the Property for the following 12 month period, including ground
rents, the cost of property management (which shall be no less than four percent
(4%) of gross revenues), maintenance, cleaning, security, landscaping, parking
maintenance and utilities, and other costs and expenses approved in writing by
Lender and amounts reasonably estimated by Lender for the payment of real estate
taxes and assessments and other taxes related to the operation of the Property,
insurance premiums, necessary repairs and future replacements of equipment;
payments under the Note shall not be included in Net Operating Income.
Notwithstanding the foregoing, if any of the Related Agreements require a
historical calculation of Net Operating Income, it shall be calculated on a cash
basis for the previous twelve-month period as of the date of such calculation.
(D) If in the reasonable judgment of Lender the conditions of Section
1.04(C) cannot be satisfied, then at any time from and after the occurrence of
the damage, upon written notice to Borrower, Lender may declare the entire
balance of the Note and/or any Future Advances then outstanding and accrued and
unpaid interest thereon, and all other sums or payments required thereunder or
under this Security Deed, without any Prepayment Premium (provided there is no
Event of Default hereunder), to be immediately due and payable, and all
Insurance Proceeds shall be applied by Lender first to the reimbursement of any
costs or expenses (including reasonable attorneys' and paralegals' fees and
expenses) incurred by Lender in connection with the damage, the recovery of
Insurance Proceeds, or the determination to be made hereunder, and then to the
payment of the indebtedness secured by this Security Deed in such order as
Lender may determine in its sole discretion.
(E) Notwithstanding any provision herein to the contrary, if an Event of
Default exists at any time from the time of damage through the completion of
restoration and the final release of any Insurance Proceeds to Borrower, the use
of the Insurance Proceeds shall be governed by the remedies set forth in Article
III below. If an event has occurred which with notice, the passage of time, or
both, could become an Event of Default, then the Insurance Proceeds shall be
held by Lender or in the Escrow Fund, as applicable, pending cure of such event
prior to the expiration of any applicable cure or grace period. The application
of any Insurance Proceeds to the indebtedness secured hereby shall not cure or
waive any Event of Default hereunder or invalidate any act done pursuant to any
notice thereof.
1.05. ESCROW FUND FOR CONDEMNATION AND INSURANCE PROCEEDS.
(A) In the circumstances indicated above in subsections 1.03(C) and
1.04(C), all Condemnation Proceeds and Insurance Proceeds, as the case may be
("Proceeds"), shall be deposited in an interest bearing escrow fund ("Escrow
Fund"). The escrow agent and the form of the escrow agreement shall be
reasonably satisfactory to Lender and Borrower. The costs and fees of such
escrow agent shall be paid by Borrower. If the amount of the Proceeds is not
sufficient to restore the Property based on an independent contractor's or
engineer's opinion obtained by Lender at Borrower's expense, subject to revision
as restorations are made,
9
Borrower shall be obligated to deposit in the Escrow Fund the difference between
the contractor's or engineer's estimate and the amount of the Proceeds or
deliver to the escrow agent an irrevocable, unconditional letter of credit
issued in the amount of such difference in a form and by a financial institution
acceptable to Lender or other cash equivalent acceptable to Lender. Borrower's
funds, if necessary, and the Proceeds shall be deposited into the Escrow Fund
and shall not be released by the escrow agent unless used to restore the
Property to its original condition and unless a disbursement agent satisfactory
to Lender and Borrower approves such disbursements from time to time. The escrow
agreement shall provide that the escrow agent shall only disburse funds to
Borrower so long as the restoration work is being diligently performed by
Borrower and only after (1) Borrower has delivered to Lender and Lender has
approved the plans and specifications for the restoration of the Property; (2)
Borrower has executed a contract acceptable to Lender with a general contractor
acceptable to Lender for the restoration of the Property; (3) the general
contractor has submitted lien waivers and/or releases, executed by the general
contractor and all subcontractors and suppliers which may be partial to the
extent of partial payments and which, in the case of releases, may be contingent
upon payment if the escrow agent makes payment directly to such contractor,
subcontractor or supplier; (4) Borrower has furnished Lender with an endorsement
to its title policy showing no additional exceptions; and (5) Borrower has
deposited its funds in the Escrow Fund as provided in this Section and has
submitted such other documents and information as may be reasonably requested by
Lender to determine that the work to be paid for has been performed in
accordance with the plans and specifications reasonably approved by Lender. If
any requisition for payment of work performed is for an amount which would
result in the remaining balance of the Escrow Fund to be insufficient to
complete the remainder of the restoration, Borrower shall advance the requisite
amount in cash to the Escrow Fund immediately upon written request from the
disbursement agent or Lender. Any failure by Borrower to satisfy any of the
conditions to the disbursement of proceeds set forth in this paragraph upon
demand by Lender shall constitute a Performance Default, as hereinafter defined.
(B) Any Condemnation Proceeds and any interest thereon remaining in the
Escrow Fund after payment of the costs to complete the restoration of the
Property pursuant to the approved plans and specifications and the costs of the
escrow agent and other costs described in Section 1.05(A) shall be paid first,
to Borrower to the extent of any funds of Borrower's contributed to the
restoration pursuant to Section 1.05(A) (so long as there is no Event of Default
or an event which with notice, the passage of time, or both, could become an
Event of Default); thereafter any remaining Condemnation Proceeds shall be
returned to Borrower (i) if in Lender's sole discretion (reasonably exercised)
the restoration of the Property has been completed in a satisfactory manner and
with satisfactory results and (ii) so long as there is no Event of Default or an
event which with notice, the passage of time, or both, could become an Event of
Default. If the conditions of Section 1.05(B)(i) are not satisfied, then any
remaining Condemnation Proceeds shall be applied to the partial payment or
prepayment of the Note without payment of any Prepayment Premium; provided,
however, that any such partial prepayment shall not entitle Borrower to prepay
the portion of the Note remaining unpaid after application of the Proceeds.
Prepayment of the balance shall continue to be subject to the terms and
conditions of the Note, including the No-Prepayment Period and the Prepayment
Premium described therein. If an Event of Default exists, the use of the
Condemnation Proceeds shall be governed by Article III below. If, however, an
event exists which with notice, the passage of time, or both, could become an
Event of Default, the remaining balance in the Escrow Fund shall be held by the
10
escrow agent pending cure of the event prior to the expiration of any applicable
cure or grace period.
(C) Any Insurance Proceeds and any interest thereon remaining in the
Escrow Fund after payment of the costs to complete the restoration of the
Property pursuant to the approved plans and specifications and the costs of the
escrow agent and other costs described in Section 1.05(A) shall be paid first,
to Borrower to the extent of any funds of Borrower's contributed to the
restoration pursuant to Section 1.05)(A) (so long as there is no Event of
Default or an event which with notice, the passage of time, or both, could
become an Event of Default); thereafter any remaining Insurance Proceeds shall
be returned to Borrower (i) if in Lender's sole discretion (reasonably
exercised) the restoration of the Property has been completed in a satisfactory
manner and with satisfactory results and (ii) so long as there is no Event of
Default or an event which with notice, the passage of time, or both, could
become an Event of Default. If the conditions of Section 1.05(C)(i) are not
satisfied, then any remaining Insurance Proceeds shall be applied to the partial
payment or prepayment of the Note without payment of any Prepayment Premium;
provided, however, that any such partial prepayment shall not entitle Borrower
to prepay the portion of the Note remaining unpaid after application of the
Proceeds. Prepayment of the balance shall continue to be subject to the terms
and conditions of the Note, including the No-Prepayment Period and the
Prepayment Premium described therein. If an Event of Default exists, the use of
the Insurance Proceeds shall be governed by Article III below. If, however, an
event exists which with notice, the passage of time, or both, could become an
Event of Default, the remaining balance in the Escrow Fund shall be held by the
escrow agent pending cure of the event prior to the expiration of any applicable
cure or grace period.
1.06. TAXES, LIENS AND OTHER ITEMS.
(A) Borrower shall pay or cause to be paid any and all taxes, bonds,
assessments, fees, liens, charges, fines, impositions and any accrued interest
or penalty thereon, and any and all other items which are attributable to or
affect the Property (collectively, "Impositions") by making payment prior to
delinquency directly to the payee thereof and promptly furnish copies of paid
receipts for these to Lender. Borrower shall promptly discharge or bond any lien
or encumbrance on the Property whether or not said lien or encumbrance has or
may attain priority over this Security Deed. This Security Deed shall be the
sole encumbrance on the Property and, if with the consent of Lender it is not
the sole encumbrance, then it shall be prior to any and all other liens or
encumbrances on the Property. Borrower may in good faith and with due diligence
protest the payment of any Imposition which it believes unwarranted or excessive
and may defer payment of such Imposition pending conclusion of such contest if
legally permitted to do so, provided that the priority of this Security Deed and
Lender's security is not materially and adversely affected and that Borrower
shall have furnished Lender or the taxing authority such security as may be
required.
(B) As further security for the payment of the Note and the payment of
real estate taxes, regular or special assessments and insurance premiums,
Borrower shall be required to deposit one-twelfth (1/12) of the annual amounts
of such items as estimated by Lender, with each monthly payment on the Note, so
that Lender will hold a sufficient amount to pay all such charges not less than
thirty (30) days prior to the date on which such items become due and payable.
Lender shall be furnished evidence to allow it to estimate such amounts,
including paid
11
receipts or annual insurance premium statements, assessment notices and tax
receipts. All funds so deposited shall, until applied to the payment of the
aforesaid items, as hereinafter provided, be held by Lender without interest
(except to the extent required under applicable law) and may be commingled with
other funds of Lender. All funds so deposited shall be applied to the payment of
the aforesaid items only upon the satisfaction of the following conditions: (1)
no Event of Default or event, which with notice or the passage of time or both
could become an Event of Default, shall have occurred; (2) Lender shall have
sufficient funds to pay the full amounts of such items (which funds may include
amounts paid solely for such purpose by Borrower in addition to the escrowed
funds); and (3) Borrower shall have furnished Lender with prior written
notification that such items are due and with the bills and invoices therefor in
sufficient time to pay the same before any penalty or interest attaches and
before policies of insurance lapse, as the case may be, and shall have deposited
any additional funds as Lender may determine as necessary to pay such items.
(C) Lender expressly disclaims any obligation to pay the aforesaid items
unless and until Borrower complies with all of the provisions set forth in
subsections 1.06(A) and (B). Borrower hereby pledges and grants a security
interest in any and all monies now or hereafter deposited pursuant to subsection
1.06(B) as additional security for the Note and Related Agreements. If any Event
of Default shall have occurred, or if the Note shall be accelerated as herein
provided, all funds so deposited may, at Lender's option, be applied as
determined solely by Lender or to cure said Event of Default or as provided in
this Section 1.06. In no event shall Borrower claim any credit against the
principal and interest due hereunder for any payment or deposit for any of the
aforesaid items.
1.07. ASSIGNMENT OF LEASES, CONTRACTS, RENTS AND PROFITS.
(A) Borrower hereby absolutely, presently and unconditionally grants,
assigns, transfers, conveys and sets over to Lender, subject to all of the
terms, covenants and conditions set forth herein, all of Borrower's right, title
and interest in and to the following whether arising under the Leases (as
defined herein), by statute, at law, in equity, or in any other way:
(1) All of the leases of the Property which are in effect on the
date hereof and all leases entered into or in effect from time to time after the
date hereof, including, without limitation, all amendments, extensions,
replacements, modifications and renewals thereof and all subleases, concession
agreements, any ground leases or ground subleases and all other agreements
affecting the same (the "Leases") and all guaranties thereunder;
(2) All of the rents, income, profits, revenue, security
deposits, judgments, Condemnation Proceeds, Insurance Proceeds, unearned
insurance premiums, all termination and/or cancellation payments received by
Borrower in connection with any Lease, proceeds from the surrender, sale or
other disposition of any Lease, any other fees or sums payable to Borrower or
any other person as landlord and any award or payment in connection with any
enforcement action of any Lease, including, without limitation, any award to
Borrower made hereafter in any court involving any of the tenants under the
Leases in any bankruptcy, insolvency, or reorganization proceeding in any state
or federal court, and Borrower's right to appear in any action and/or to collect
any such award or payment, and all payments by any tenant in lieu of rent
(collectively, "Rents and Profits"); and
12
(3) All contracts, agreements, management, operating and
maintenance agreements, warranties, licenses, permits, guaranties and sales
contracts relating to the Property and the Collateral entered into by, or
inuring to the benefit of, Borrower (the "Contracts").
(B) Notwithstanding the provisions of subsection 1.07(A), so long as no
Event of Default has occurred and is continuing hereunder, and, subject to
subsection 1.07(F) and Article III, Borrower shall have a license to manage the
Property; to collect, receive and use all Rents and Profits in accordance with
the terms of the Leases; to let the Property subject to the terms hereof and to
take all actions which a reasonable and prudent landlord would take in enforcing
the provisions of the Leases and Contracts; provided, however, that all amounts
so collected shall be applied toward operating expenses, real estate taxes and
insurance relating to the Property, capital repair items necessary to the
operation of the Property on a current basis, and the payment of sums due and
owing under the Note and this Security Deed prior to any other expenditure or
distribution by Borrower. From and after the occurrence of an Event of Default
(whether or not Lender shall have exercised Lender's option to declare the Note
immediately due and payable), such license shall be automatically revoked
without any action required by Lender. Any amounts received by Borrower or its
agents in the performance of any acts prohibited by the terms of this Security
Deed, including but not limited to any amounts received in connection with any
cancellation, modification or amendment of any of the Leases prohibited by the
terms of this Security Deed and any amounts received by Borrower as rents,
income, issues or profits from the Property from and after the occurrence of an
Event of Default under this Security Deed, the Note, or any of the other Related
Agreements, shall be held by Borrower as trustee for Lender and all such amounts
shall be accounted for to Lender and shall not be commingled with other funds of
Borrower. Any person acquiring or receiving all or any portion of such trust
funds shall acquire or receive the same in trust for Lender as if such person
had actual or constructive notice that such funds were impressed with a trust in
accordance herewith.
(C) Upon the occurrence of an Event of Default, Lender shall have the
right but not the obligation to perform as landlord under the Leases and as a
party under the Contracts. The assignment of Rents and Profits set forth herein
constitutes an irrevocable direction and authorization to all tenants under the
Leases to pay all Rents and Profits to Lender upon demand and without further
consent or other action by Borrower. Borrower irrevocably appoints Lender its
true and lawful attorney, at the option of Lender at any time after the
occurrence of an Event of Default, to demand, receive and enforce payment, to
give receipts, releases and satisfactions, and to ▇▇▇, either in the name of
Borrower or in the name of Lender, for all such Rents and Profits and apply the
same to the indebtedness secured by this Security Deed.
(D) Neither the foregoing assignment of Rents and Profits, Leases and
Contracts to Lender nor the exercise by Lender of any of its rights or remedies
under Article III shall be deemed to make Lender a "mortgagee-in-possession" or
otherwise liable in any manner with respect to the Property, unless Lender, in
person or by agent, assumes actual possession thereof. Nor shall appointment of
a receiver for the Property by any court at the request of Lender or by
agreement with Borrower, or the entering into possession of the Property by such
receiver, be deemed to make Lender a "mortgagee-in-possession" or otherwise
liable in any manner with respect to the Property, Collateral or any of the
Rents and Profits.
13
(E) In the event Lender collects and receives any Rents and Profits
under this Section 1.07 pursuant to any Monetary or Performance Default as
defined in Section 2.01 hereof, such collection or receipt shall in no way
constitute a curing of the Monetary or Performance Default.
(F) Borrower shall not, without the prior written consent of Lender, (1)
enter into any lease, extend or renew any Lease (other than extensions or
renewals in accordance with the terms of a lease approved by Lender), or consent
to or permit the assignment or subletting of any Leases (other than assignments
or subleases in accordance with the terms of a lease approved by Lender), or
amend or terminate any Lease; (2) alter, modify, change or terminate the terms
of any guaranties of any Leases; (3) create or permit any lien or encumbrance
which, upon foreclosure, would be superior to any such Leases or in any other
manner impair Lender's rights and interest with respect to the Rents and
Profits; (4) pledge, transfer, mortgage or otherwise encumber or assign the
Leases, the Contracts or the Rents and Profits; or (5) collect rents more than
30 days prior to their due date. Notwithstanding the foregoing, so long as no
Event of Default has occurred and is continuing hereunder, Borrower may enter
into Leases, extend or renew Leases, and permit the assignment or sublease of
Leases which demise 10,000 rentable square feet or less for a term of five years
or less ("Non-material Leases"), provided they are on rental rates, including
rental concessions, at least equal to that charged for comparable properties
within the Property's submarket area, have been negotiated at arm's length, and
do not contain material modifications to the form of lease previously approved
by Lender. Borrower may also amend Non-material Leases without Lender's prior
written consent if, in Borrower's prudent business judgment, such amendments are
necessary and do not impair the value of the Property. Lender will not
unreasonably withhold or delay its consent to any item submitted to it for
approval pursuant to subsections 1.07(F)(1) or (2) above. Any lease submitted
for Lender's consent shall, at Lender's option, be accompanied by a
Subordination, Nondisturbance and Attornment Agreement in Lender's then current
form or another form reasonably acceptable to Lender.
(G) Borrower shall promptly give notice to Lender of any default under
any of the Leases meeting the criteria of a lease for which Lender's consent
would have been required pursuant to Section 1.07(F) regardless of whether such
Leases were executed before or after the date of this Security Deed, together
with a complete copy of any notices delivered to or by the tenant as a result of
such default. Lender shall have the right, but not the obligation, to cure any
default of Borrower under any of the Leases and all amounts disbursed in
connection with said cure shall be deemed to be indebtedness secured hereby.
(H) Lender shall have the right to approve any lease forms used by
Borrower for lease of space in the Property.
(I) Borrower hereby represents, warrants and agrees that:
(1) Borrower has the right, power and capacity to make this assignment
and that no person, firm or corporation or other entity other than Borrower has
or will have any right, title or interest in or to the Leases, Contracts, or
Rents and Profits.
(2) Borrower shall, at its sole cost and expense, perform and discharge
all of the obligations and undertakings of the landlord under the Leases.
Borrower shall enforce the
14
performance of each obligation of the tenants under the Leases and will appear
in and prosecute or defend any action connected with the Leases or the
obligations of the tenants thereunder.
(J) Lender shall not be obligated to perform or discharge, nor does it
hereby undertake to perform or discharge, any obligation, duty or liability
under the Leases or under or by reason of this assignment. Borrower shall and
does hereby agree to indemnify Lender for and to defend and hold Lender harmless
from any and all liability, loss or damage which Lender may or might incur under
the Leases or under or by reason of this assignment, and from any and all claims
whatsoever which may be asserted against Lender by reason of any alleged
obligations or undertakings on Lender's part to perform or discharge any of the
terms, covenants or agreements contained in the Leases; provided, however, that
the foregoing indemnity shall not apply to the extent any of the foregoing
arises wholly or in substantial part from the gross negligence or willful
misconduct of Lender. Should Lender incur any liability, loss or damage under
the Leases or under or by reason of this assignment, or in the defense of any of
such claims or demands, the amount thereof, including costs, expenses and
attorneys' and paralegals' fees at all trial and appellate levels and whether
suit be brought or not, shall be secured by this Security Deed; and Borrower
shall reimburse Lender therefor immediately upon demand, and upon failure of
Borrower to do so, Lender may declare all sums so secured to be immediately due
and payable.
(K) Lender may take or release other security, may release any party
primarily or secondarily liable for any indebtedness secured hereby, may grant
extensions, renewals or indulgences with respect to such indebtedness, and may
apply any other security therefor held by it to the satisfaction of such
indebtedness, without prejudice to any of its rights hereunder.
(L) Nothing herein contained and no act done or omitted by Lender
pursuant to the powers and rights granted it herein shall be deemed to be a
waiver by Lender of its other rights and remedies under the Note, this Security
Deed and the Related Agreements, and this assignment is made and accepted
without prejudice to any of the other rights and remedies possessed by Lender
under the terms thereof. The right of Lender to collect said indebtedness and to
enforce any other security therefor held by it may be exercised by Lender either
prior to, simultaneously with, or subsequent to any action taken by it
hereunder. It is the intent of both Borrower and Lender that this assignment be
supplementary to, and not in substitution or derogation of, any other provision
contained in this Security Deed giving Lender any interest in or rights with
respect to the Leases, Contracts, or Rents and Profits.
(M) Neither this assignment nor pursuit of any remedy hereunder by
Lender shall cause or constitute a merger of the interests of the tenant and
Borrower under any of the Leases such that any of the Leases hereby assigned are
no longer valid and binding legal obligations of the parties executing the same.
(N) Borrower agrees, from time to time, to execute and deliver, upon
demand, all assignments and any and all other writings as Lender may reasonably
deem necessary or desirable to carry out the purpose and intent hereof, or to
enable Lender to enforce any right or rights hereunder.
15
(O) In the event of any conflict between the terms of this Section 1.07
and the terms of the Assignment of Leases and Rents, the terms of the Assignment
of Leases and Rents shall control.
1.08. DUE ON SALE OR ENCUMBRANCE. Neither Borrower, nor its sole member
shall, without the prior written consent of Lender: (i) create, effect, consent
to, suffer to exist, assume, incur, permit (voluntarily or involuntarily, by
operation of law or otherwise) any direct or indirect conveyance, sale,
assignment, transfer, grant, lien, pledge, mortgage, security interest or other
encumbrance or disposition (each of the foregoing defined as "Transfer") of the
Property or an interest therein; (ii) be divested of its title to the Property
or any interest therein; (iii) enter into a contract to sell or grant any option
to purchase that results in a transfer of possession or equitable title to the
Property or any portion thereof prior to the payment of the Note in accordance
with its terms; (iv) enter into any lease giving the tenant any option to
purchase the Property or any portion thereof; (v) permit or suffer any Transfer
of any direct or indirect ownership interest in Borrower or any indemnitor or
guarantor under this Security Deed or any Related Agreement; (vi) permit or
suffer any Transfer of any ownership interest in any direct or indirect owner of
a legal or beneficial interest in Borrower (including, without limitation its
partners, members, trustees, beneficiaries or shareholders); (vii) permit or
suffer the merger, dissolution, liquidation, or consolidation of Borrower or any
of the direct or indirect owners of Borrower or the conversion of one type of
legal entity into another type of legal entity. Except as expressly consented to
in writing by Lender, Borrower shall not incur any additional indebtedness
(secured or unsecured, direct or contingent) other than unsecured debt or trade
payables incurred in the ordinary course of business in connection with the
operation of the Property. Upon the occurrence of any of the prohibited actions
specified herein, then Lender shall have the right, at its option, to declare
the indebtedness secured by this Security Deed immediately due and payable,
irrespective of the maturity date specified in the Note.
1.09. PRESERVATION AND MAINTENANCE OF PROPERTY. Borrower shall hire
competent and responsible property managers who shall be reasonably acceptable
to Lender. Borrower, at its sole cost and expense, shall keep the Property and
every part thereof in good condition and repair, in accordance with sound and
prudent property management practices, and shall promptly and faithfully comply
with and obey all laws, ordinances, rules, regulations, requirements and orders
of every duly constituted governmental authority or agent having jurisdiction
with respect to the Property. All repairs, replacements and renewals shall be at
least equal in quality to the original Improvements. Borrower shall not permit
or commit any waste, impairment, or deterioration of the Property, nor commit,
suffer or permit any act upon or use of the Property in violation of law or
applicable order of any governmental authority, whether now existing or
hereafter enacted, or in violation of any covenants, conditions or restrictions
affecting the Property or bring or keep any article in the Property or cause or
permit any condition to exist thereon which would be prohibited by or invalidate
the insurance coverage required to be maintained hereunder. Borrower shall
promptly restore any portion of the Property which may be damaged or destroyed.
Borrower shall promptly bond or discharge any mechanics' liens against the
Property.
1.10. USE OF PROPERTY. Except as may have been previously agreed in
writing by Lender, Borrower shall continue to operate the Property for the
purposes for which it was used on the date hereof and for no other purpose.
Borrower shall not make or suffer any improper or
16
offensive use of the Property or any part thereof and shall not use or permit to
be used any part of the Property for any dangerous, noxious, offensive or
unlawful trade or business or for any purpose which will reduce the value of the
Property in any respect or will cause the Property or any part thereof or
interest therein to be subject to forfeiture. Borrower at its expense will
promptly comply with all rights of way or use, privileges, franchises,
servitudes, licenses, easements, tenements, hereditaments and appurtenances
forming a part of the Property and all instruments relating or evidencing the
same, in each case, to the extent compliance therewith is required of Borrower
under the terms thereof. Borrower will not take any action which results in a
forfeiture or termination of the rights afforded to Borrower under any such
instruments and will not, without the prior written consent of Lender, amend in
any material respect any of such instruments. Borrower shall at all times comply
with all laws affecting the Property and comply with any instruments of record
at the time in force affecting the Property or any part thereof and shall
procure, maintain and comply with all permits, licenses, and other
authorizations required for any use of the Property or any part thereof then
being made, and for the proper erection, installation, operation and maintenance
of the Improvements or any part thereof. Borrower shall not initiate, join in,
acquiesce in, or consent to any change in any private restrictive covenant,
zoning law or other public or private restriction, limiting or defining the uses
which may be made of the Property or any part thereof. In furtherance of the
foregoing sentence, Borrower will not, by act or omission: (i) impair the
integrity of the Property as a single zoning lot separate and apart from all
other premises; or (ii) permit or suffer to permit the Property to be used by
the public or any party in such manner as might make possible a claim of adverse
usage or possession or any implied dedication or easement. If under applicable
zoning provisions the use of all or any portion of the Property is or shall
become a nonconforming use, Borrower will not cause or permit such nonconforming
use to be discontinued or abandoned, if such discontinuance or abandonment would
prevent the same or similar nonconforming use in the future, without the express
written consent of Lender (except that a nonconforming use that results from a
tenant's use may be discontinued without Lender's consent if such tenant's lease
terminates or expires by its terms).
1.11. ALTERATIONS AND ADDITIONS. Borrower shall not cause, suffer or
permit:
(A) Any material alterations of the Property except (1) as required by
any law, statute, ordinance, order, rule, regulation, decree or other
requirement of the United States, the applicable state or county in which the
Property is located or any political subdivision of any of the foregoing, or any
agency, department, commission, board, court, bureau or instrumentality of any
of them ("Governmental Authority") or by any condition of any approval, consent,
registration, franchise, permit, license, variance, certificate of occupancy or
other authorization with regard to zoning, landmark, ecological, environmental,
air quality, subdivision, planning, building or land use required by any
Governmental Authority for the construction, lawful occupancy and operation of
the Property and the actual and contemplated uses thereof, or (2) as permitted
or required to be made by the terms of any Leases approved by Lender (with
respect to work in any space demised thereunder);
(B) Any demolition or removal of any portion of the Property;
(C) Any change which would increase the risk of fire or other hazard;
17
(D) Any zoning, reclassification with respect to the Property; or
(E) Any unlawful use of, or nuisance to exist upon, the Property.
As used herein, the term "material alteration" shall mean any alteration,
improvement or replacement (i) the cost of which (including any related
alteration, improvement or replacement) shall exceed two percent of the
principal amount of the indebtedness secured by this Security Deed (excluding
tenant improvement work pursuant to Leases), or (ii) which materially and
adversely affects the mechanical, electrical, heating, ventilating,
air-conditioning or other building or operating systems of any of the
Improvements, or materially and adversely affects the cost of operation or
maintenance of any such building or operating systems, affects the structure or
structural soundness of any of the improvements of the Property, or the exterior
or appearance of the Property, or otherwise has a material adverse effect on the
Property including the use and/or value thereof.
1.12. OFFSET CERTIFICATES. Borrower, within five days upon request in
person or within ten days upon request by mail, shall furnish a written
statement duly acknowledged and notarized, of all amounts due on any
indebtedness secured hereby or secured by any of the Related Agreements, whether
for principal or interest on the Note or otherwise, and stating whether any
offsets or defenses exist against the indebtedness secured hereby and covering
such other matters with respect to any such indebtedness as Lender may
reasonably require.
1.13. LENDER'S COSTS AND EXPENSES. Borrower shall pay all costs, fees and
expenses of Lender, its agents and counsel, in connection with the performance
of Lender's obligations, duties, rights, options and permitted actions
hereunder. Borrower will pay or reimburse Lender upon demand for all reasonable
attorney's and paralegals' fees, costs and expenses, including those in
connection with appellate proceedings, incurred by Lender in any proceedings
involving the estate of a decedent or an insolvent, or in any action, legal
proceeding or dispute of any kind in which Lender is a plaintiff or defendant,
affecting the indebtedness secured hereby or the Property or Collateral, this
Security Deed or the interest created herein, any condemnation action involving
the Property or any action to protect the security hereof; and any such amounts
paid by Lender shall be secured by this Security Deed. If Borrower shall default
in the payment of any tax, lien, assessment or charge levied or assessed against
the Property; in the payment of any utility charge, whether public or private;
in the payment of any insurance premium; in the procurement of insurance
coverage and the delivery of the insurance policies required hereunder; in the
performance of any covenant, term or condition of any leases affecting all or
any part of the Property; or in the performance or observance of any covenant,
condition or term of this Security Deed; then Lender, at its option, may perform
or observe the same, and all payments made or costs incurred by Lender in
connection therewith, shall be secured hereby and shall be, without demand,
immediately repaid by Borrower to Lender with interest thereon at the Default
Rate as described in the Note. Lender shall be the sole judge of the legality,
validity and priority of any such tax, lien, assessment, charge, claim, premium
and obligation, of the necessity for any such actions and of the amount
necessary to be paid in satisfaction thereof. Lender is hereby empowered to
enter and to authorize others to enter upon the Property or any part thereof for
the purpose of performing or observing any such defaulted covenant, condition or
term, without thereby becoming liable to Borrower or any other person in
possession holding under Borrower. All rights of Lender as set forth herein are
rights to be exercised at the sole option and discretion
18
of Lender and Lender shall have no duty to Borrower or any other person or
entity to perform any acts authorized by this Section or to incur any expense,
make any appearance or take any other action.
1.14. PROTECTION OF SECURITY; COSTS AND EXPENSES.
(A) In addition to any other rights or remedies of Lender hereunder,
under any of the Related Agreements, or in law or in equity, upon the occurrence
and during the continuance of an Event of Default (or prior thereto after notice
to Borrower, when possible, if Borrower is not paying or performing the act
itself and Lender determines in its sole good faith judgment that the same is
appropriate to preserve the Property or the lien of this Security Deed or any
other collateral securing the indebtedness evidenced by the Note, either before
or after acceleration of the indebtedness) Lender may, but shall not be required
to, make any payment or perform any act required to be performed by Borrower
hereunder or under any of the Related Agreements in any form and manner deemed
expedient to Lender, including, without limitation, if applicable: (1) paying
any Impositions which remain unpaid; (2) procuring the release, discharge,
compromise or settlement of any lien filed or otherwise asserted against the
Property which has not been discharged by Borrower in accordance with the
provisions of this Security Deed or any of the Related Agreements, and (3)
obtaining insurance policies where insurance coverage was required to be
obtained hereunder and the required evidence that Borrower had obtained the same
has not been delivered to Lender as required hereunder. Nothing herein shall be
construed to require Lender to advance or expend monies for any purpose
mentioned herein, or for any other purpose.
(B) Borrower and its property manager, if applicable, shall appear in
and defend any action or proceeding purporting to affect the security of this
Security Deed or any additional or other security for the obligations secured
hereby, or the rights or powers of the Lender, and shall pay all costs and
expenses actually incurred, including, without limitation, cost of evidence of
title and actual attorneys' and paralegals' fees, in any such action or
proceeding in which Lender may appear, and in any suit brought by Lender to
foreclose this Security Deed or to enforce or establish any other rights or
remedies of Lender hereunder or under any other security for the obligations
secured hereby. If Borrower fails to perform any of the covenants or agreements
contained in this Security Deed, or if any action or proceeding is commenced
which affects Lender's interest in the Property or any part thereof, including,
eminent domain, code enforcement, or proceedings of any nature whatsoever under
any federal or state law, whether now existing or hereafter enacted or amended,
relating to bankruptcy, insolvency, arrangement, reorganization or other form of
debtor relief, or to a decedent, then Lender may, but without obligation to do
so and without notice to or demand upon Borrower, perform such covenant or
agreement and compromise any encumbrance, charge or lien which in the judgment
of Lender appears to be prior or superior hereto. Borrower shall further pay all
expenses of Lender actually incurred (including reasonable and actual fees and
disbursements of counsel) incident to the protection or enforcement of the
rights of Lender hereunder, and enforcement or collection of payment of the Note
or any Future Advance whether by judicial or nonjudicial proceedings, or in
connection with any bankruptcy, insolvency, arrangement, reorganization or other
debtor relief proceeding of Borrower, or otherwise.
(C) Borrower shall pay to Lender, immediately upon written notice from
Lender: (i) all recordation, transfer, stamp, documentary or other fees or taxes
levied on Lender (exclusive
19
of Lender's income taxes) by reason of the making or recording of the Note, this
Security Deed or any Related Agreement, and (ii) all intangible property taxes
levied upon any holder of the Note or Lender under this Security Deed or secured
party under the Related Agreements.
Any amounts disbursed by Lender pursuant to this Section or Section 1.13,
including, without limitation, reasonable attorneys' and paralegals' fees,
whether or not the indebtedness as a result thereof shall exceed the face amount
of the Note, shall be additional indebtedness of Borrower secured by this
Security Deed and each of the Related Agreements as of the date of disbursement
shall become immediately due and payable on demand and shall bear interest at
the Default Rate set forth in the Note, from demand until paid. All such amounts
shall be payable by Borrower immediately upon demand. Nothing contained in this
section shall be construed to require Lender to incur any expense, make any
appearance, or take any other action.
1.15. BORROWER'S COVENANTS RESPECTING COLLATERAL.
(A) This instrument also creates a security interest in the Collateral,
the Contracts and in any sums held by Lender, its servicing agent or any escrow
agent appointed under the terms of this Security Deed, which security interest
Borrower hereby grants in favor of Lender under the Georgia Uniform Commercial
Code, and Lender shall also have all the rights and remedies of a secured party
under the Georgia Uniform Commercial Code, and without limitation upon or in
derogation of the rights and remedies created and accorded to Lender by this
Security Deed pursuant to the common law or any other laws of the State of
Georgia or any other jurisdiction, it being understood that the rights and
remedies of Lender under the Georgia Uniform Commercial Code shall be cumulative
and in addition to all other rights and remedies of Lender arising under the
Security Deed, the Note, the Related Agreements, the common law or any other
laws of the State of Georgia or any other jurisdiction. The security interest
granted by this Security Deed is for the purpose of securing all obligations of
Borrower as set forth in this Security Deed, the Note and the Related
Agreements. Borrower acknowledges that this Security Deed shall constitute a
Security Agreement as that term is used under the laws of the State of Georgia
in favor of Lender. To the extent a security interest cannot be granted or
perfected under the applicable Uniform Commercial Code provisions in any
personal property in which Borrower has any right, title or interest, Borrower
hereby pledges to Lender all of its right, title and interest in all such
personal property including, but not limited to, deposit accounts, escrowed
funds, cash and cash receipts, as the same shall relate to the Property or the
Collateral or the conduct of business on the Property, now existing, hereafter
acquired, wherever located and however held. Any person holding property in
which Borrower has any interest shall be deemed to be holding such property in
trust for Lender.
(B) Borrower shall execute and deliver financing and continuation
statements covering the Collateral from time to time and in such form as Lender
may require to perfect and continue the perfection of Lender's security interest
with respect to such property, and Borrower shall pay all reasonable costs and
expenses of any record searches for financing statements Lender may require.
Borrower hereby authorizes and empowers Lender to file (and hereby irrevocably
appoints Lender its agent and attorney-in-fact, which shall be coupled with an
interest, to execute and file, on Borrower's behalf) at any time and from time
to time any initial financing statements, amendments thereto and continuation
statements with or without signature of Borrower as authorized by applicable
law, as applicable to the Collateral. For purposes of
20
such filings, Borrower agrees to furnish any information requested by Lender
promptly upon request by Lender describing the Collateral. Borrower hereby
ratifies and approves all filings of financing statements, amendments and
continuations applicable to the Collateral made or filed by Lender prior to the
date of this Security Deed.
(C) Without the prior written consent of Lender, Borrower shall not
create or suffer to be created any other security interest in or lien or
encumbrance on the Collateral, including replacements and additions thereto.
(D) Without the prior written consent of Lender or except in the
ordinary course of business, Borrower shall not sell, transfer or encumber any
of the Collateral, or remove any of the Collateral from the Property unless
Borrower shall promptly substitute and replace the property removed with similar
property of at least equivalent value on which Lender shall have a continuing
security interest ranking at least equal in priority to Lender's security
interest in the property removed.
(E) Borrower shall (1) upon reasonable notice (unless an emergency or
Event of Default exists) permit Lender and its representatives to enter upon the
Property to inspect the Collateral and Borrower's books and records relating to
the Collateral and make extracts therefrom and to arrange for verification of
the amount of Collateral, under procedures acceptable to Lender, directly with
Borrower's debtors or otherwise at Borrower's expense; (2) promptly notify
Lender of any attachment or other legal process levied against any of the
Collateral and any information received by Borrower relative to the Collateral,
Borrower's debtors or other persons obligated in connection therewith, which may
in any way affect the value of the Collateral or the rights and remedies of
Lender in respect thereto; (3) reimburse Lender upon demand for any and all
costs actually incurred, including, without limitation, reasonable and actual
attorneys', paralegals' and accountants' fees, and other expenses incurred in
collecting any sums payable by Borrower under any obligation secured hereby, or
in the checking, handling and collection of the Collateral and the preparation
and enforcement of any agreement relating thereto; (4) notify Lender of each
location at which the Collateral is or will be kept, other than for temporary
processing, storage or similar purposes, and of any removal thereof to a new
location, including, without limitation, each office of Borrower at which
records relating to the Collateral are kept; (5) provide, maintain and deliver
to Lender originals or certified copies of the policies of insurance and
certificates of insurance insuring the Collateral against loss or damage by such
risks and in such amounts, form and by such companies as Lender may require and
with loss payable to Lender, and in the event Lender takes possession of the
Collateral, the insurance policy or policies and any unearned or returned
premium thereon shall at the option of Lender become the sole property of
Lender; and (6) do all acts necessary to maintain, preserve and protect all
Collateral, keep all Collateral in good condition and repair and prevent any
waste or unusual or unreasonable depreciation thereof.
(F) Until Lender exercises its right to collect proceeds of the
Collateral pursuant hereto, Borrower will collect with diligence any and all
proceeds of the Collateral. If an Event of Default exists, any proceeds received
by Borrower shall be held in trust for Lender, and Borrower shall keep all such
collections separate and apart from all other funds and property so as to be
capable of identification as the property of Lender and shall deliver to Lender
such
21
collections at such time as Lender may request in the identical form received,
properly endorsed or assigned when required to enable Lender to complete
collection thereof.
(G) Lender shall have all of the rights and remedies granted to a
secured party under the Uniform Commercial Code of the state in which the
Collateral is located, as well as all other rights and remedies available at law
or in equity. During the continuance of any Event of Default hereunder or under
the Note, Lender shall have the right to take possession of all or any part of
the Collateral, to receive directly or through its agent(s) collections of
proceeds of the Collateral (including notification of the persons obligated to
make payments to Borrower in respect of the Collateral), to release persons
liable on the Collateral and compromise disputes in connection therewith, to
exercise all rights, powers and remedies which Borrower would have, but for the
security agreement contained herein, to all of the Collateral and proceeds
thereof, and to do all other acts and things and execute all documents in the
name of Borrower or otherwise, deemed by Lender as necessary, proper and
convenient in connection with the preservation, perfection or enforcement of its
rights hereunder; and
(H) After any Event of Default hereunder or under the Note, Borrower
shall, at the request of Lender, assemble and deliver the Collateral and books
and records pertaining to the Property at a place designated by Lender, and
Lender may, with reasonable notice to Borrower (unless an emergency exists),
enter onto the Property and take possession of the Collateral. It is agreed that
public or private sales, for cash or on credit to a wholesaler or retailer or
investor, or user of collateral of the types subject to the security agreement,
or public auction, are all commercially reasonable since differences in the
sales prices generally realized in the different kinds of sales are ordinarily
offset by the differences in the costs and credit risks of such sales. The
proceeds of any sale of the Collateral shall be applied first to the expenses of
Lender actually incurred in retaking, holding, preparing for sale, or selling
the Collateral or similar matters, including reasonable and actual attorneys'
and paralegals' fees, and then, as Lender shall solely determine.
(I) Upon the request of Lender, Borrower will cooperate with Lender in
obtaining control with respect to those items of Collateral consisting of
deposit accounts, investment property, letter-of-credit rights or any other
Collateral as to which "control" is required under the applicable Uniform
Commercial Code for perfection of a security interest.
1.16. COVENANTS REGARDING FINANCIAL STATEMENTS.
(A) Borrower shall keep true books of record and account in which full,
true and correct entries in accordance with sound accounting practice and
principles applied on a consistent basis from year to year shall be made of all
dealings or transactions with respect to the Property.
(B) (1) Borrower shall deliver to Lender:
(A) Within one hundred twenty (120) days after the last day of each
fiscal year of Borrower and Borrower's sole member during the term of the Note,
unaudited financial reports prepared on a cash basis, including income
statements and cash flow statements covering the operation of the Property and
unaudited annual financial reports prepared on a cash basis,
22
including balance sheets, income statements and cash flow statements covering
the financial condition of Borrower and the Borrower's sole member for the
previous fiscal year, all certified to Lender to be complete, correct and
accurate by the individual, managing member, manager or chief financial officer
of the party whom the report concerns; and
(B) If available, within thirty (30) days after receipt by Borrower,
original annual audit reports of an independent certified public accountant
prepared in accordance with generally accepted accounting principles containing
an unqualified opinion, including balance sheets, income statements and cash
flow statements covering the operation of the Property and the financial
condition of Borrower and Borrower's sole member for the previous fiscal year.
(2) At the request of Lender from time to time (but no more often than
once in each fiscal quarter of Borrower during the term of the Note), Borrower
shall also deliver to Lender unaudited financial reports prepared on a cash
basis, including income statements and cash flow statements covering the
operation of the Property and unaudited financial reports prepared on a cash
basis, including balance sheets, income statements and cash flow statements
covering the financial condition of Borrower and Borrower's sole member for the
previous fiscal quarter, a portfolio analysis report covering the operation of
all properties of which Borrower or Borrower's sole member is the owner (direct
or indirect) or a general partner of the owner (direct or indirect), setting out
a cash flow statement (including debt service payments) for each such property,
and a current rent roll of the Property, all certified to Lender to be complete,
correct and accurate by the individual, managing member, manager or chief
financial officer of the party whom the report concerns.
(3) All reports covering the financial condition of Borrower or
Borrower's sole member shall include, without limitation, balance sheets and
statements of income and of partner's equity, if applicable, setting forth in
each case in comparative form the figures for the previous fiscal quarter or
year, as the case may be. All interim quarterly reports shall also include a
breakdown of all categories of revenues and expenses, and any supporting
schedules and data requested by Lender. Each set of annual or quarterly
financial reports or quarterly rent rolls delivered to Lender pursuant to this
Section 1.14 shall also be accompanied by a certificate of the chief financial
officer, the managing member or the manager of the party whom the report
concerns, stating whether any condition or event exists or has existed during
the period covered by the annual or quarterly reports which then constituted or
now constitutes an Event of Default under the Note or this Security Deed, or
which if continued or not cured would, after passage of time, constitute an
Event of Default, and if any such condition or event then existed or now exists,
specifying its nature and period of existence and what Borrower did or proposes
to do with respect to such condition or event.
(C) In the event such statements are not in a form reasonably acceptable
to Lender or Borrower fails to furnish such statements and reports, then Lender
shall have the immediate and absolute right to audit the respective books and
records of the Property and Borrower or Borrower's member, as applicable, at the
expense of Borrower.
(D) Notwithstanding the foregoing, Borrower shall not be required to
deliver financial reports covering the financial condition of Borrower if and so
long as (1) the Property is
23
Borrower's only asset, and (2) Borrower delivers the unaudited financial reports
covering the operation of the Property when and as described above.
1.17. ENVIRONMENTAL COVENANTS.
Borrower covenants:
(A) That no Hazardous Materials (as defined below) are currently on or
in the Property (except as expressly described in the Phase I Environmental Site
Assessment of the Property prepared by ATC Associates, Inc., dated July 20,
2004, as updated for Lender) or shall be installed, used, generated,
manufactured, treated, handled, refined, produced, processed, stored or disposed
of, in, on or under the Property other than Hazardous Materials in quantities
and of types reasonably and customarily associated with general office use which
have been and are stored, used and disposed of in compliance with Hazardous
Material Laws (as defined below) and the presence of which do not require
compliance with any reporting requirements under any Hazardous Material Laws;
(B) That no activity shall be undertaken on the Property which would
cause:
(1) the Property to become a hazardous waste treatment, storage
or disposal facility under any Hazardous Material Law,
(2) a release or threatened release of Hazardous Material from
the Property in violation of any Hazardous Material Law, or
(3) the discharge of Hazardous Material into any watercourse,
body of surface or subsurface water or wetland, or the discharge into the
atmosphere of any Hazardous Material which would require a permit under any
Hazardous Material Law and for which no such permit has been issued;
(C) That no activity shall be undertaken or permitted to be undertaken,
by Borrower on the Property which would result in a violation under any
Hazardous Material Law; and
(D) To obtain and deliver to Lender, within a reasonable time following
completion of actions required by an appropriate governmental agency,
certifications of engineers or other professionals reasonably acceptable to
Lender, in form and substance satisfactory to Lender, certifying that all
necessary and required actions to clean up, remove, contain, prevent and
eliminate all releases or threats of release of Hazardous Materials on or about
the Property to the levels required by the appropriate governmental agencies
have been taken and, to the knowledge of such professional, the Property is then
in compliance with applicable Hazardous Material Laws as then in effect and
applicable to such actions. For purposes of this Security Deed, "Hazardous
Materials" means and includes asbestos or any substance containing asbestos,
polychlorinated biphenyls, any explosives, radioactive materials, chemicals
known or suspected to cause cancer or reproductive toxicity, pollutants,
effluents, contaminants, emissions, infectious wastes, any petroleum or
petroleum-derived waste or product or related materials and any items defined as
hazardous, special or toxic materials, substances or waste under any Hazardous
Material Law, or any material which shall be removed from the Property pursuant
to any administrative order or enforcement proceeding or in order to place the
Property in a condition
24
that is suitable for ordinary use. "Hazardous Material Laws" means all federal,
state and local laws (whether under common law, statute or otherwise),
ordinances, rules, regulations and guidance documents now in force, as amended
from time to time, in any way relating to or regulating human health or safety,
industrial hygiene or environmental conditions, protection of the environment,
pollution or contamination of the air, soil, surface water or groundwater, and
includes, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., the
Clean Water Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, as amended,
42 U.S.C. Section 7401 et seq., the Occupational Safety and Health Act, 29
U.S.C. Section 651 et seq., the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801 et seq., the Federal Water Pollution Control Act, 33 U.S.C.
Section 1321 et seq., and the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq.
1.18. FURTHER ASSURANCES. Borrower, from time to time, will execute,
acknowledge, subscribe and deliver to or at the direction of Lender such
documents and further assurance as Lender may reasonably require for the purpose
of evidencing, perfecting or confirming the lien and security interest created
by this Security Deed or the security to be afforded by the Related Agreements,
or both. Without limiting the foregoing and notwithstanding anything in this
Security Deed or the Related Agreements to the contrary, Borrower will defend,
indemnify and hold Lender harmless with respect to any suit or proceeding in
which the validity, enforceability or priority of any such lien or security
interest, or both, is endangered or contested, directly or indirectly. If
Borrower fails to undertake the defense of any such claim in a timely manner,
or, in Lender's sole determination, fails to prosecute such defense with due
diligence, then Lender is authorized to take, at the sole expense of Borrower,
all necessary and proper action in defense of any such claim, including, without
limitation, the retention of legal counsel, the prosecution or defense of
litigation and the compromise or discharge of claims, including payment of all
costs and reasonable attorneys' and paralegals' fees. All costs, expenses and
losses, if any, so incurred by Lender, including all attorneys' and paralegals'
fees, regardless of whether suit is brought, for all administrative, trial and
appellate proceedings, if any, will constitute advances by Lender as provided in
Section 1.14 hereinabove.
1.19. BORROWER'S CONTINUED EXISTENCE. Borrower shall at all times during
the term of the Loan maintain its legal existence and qualification to do or
transact business in the state in which the Property or any of the Collateral is
located. Borrower's exact legal name, state of organization and chief executive
office are as set forth respectively in the initial paragraph of this Security
Deed. So long as any of the indebtedness secured hereby remains outstanding,
Borrower will provide Lender with thirty (30) days prior written notice of any
change in Borrower's name, organizational identification number, state of
organization or, if any individual, principal residence.
25
ARTICLE II
EVENTS OF DEFAULT
Each of the following shall constitute an event of default ("Event of
Default") hereunder:
2.01. MONETARY AND PERFORMANCE DEFAULTS.
(A) Failure to make any payment due under the Note, or any note
evidencing a Future Advance, other than the final payment and Prepayment
Premium, or to make any payment due under this Security Deed to Lender or any
other party, including without limitation, payment of escrow deposits, real
estate taxes, insurance premiums and ground rents, if any, on or before the
fourth (4th) day after such payment is due; or
(B) Failure to make the final payment or the Prepayment Premium due
under the Note or any note evidencing a Future Advance when such payment is due
whether at maturity, by reason of acceleration, as part of a prepayment or
otherwise (the defaults in (A) and (B) hereinafter "Monetary Default"); or
(C) Breach or default in the performance of any of the covenants or
agreements of Borrower contained herein, in the Note or in any Related Agreement
("Performance Default"), if such Performance Default shall continue for thirty
(30) days or more after written notice to Borrower from Lender specifying the
nature of the Performance Default; provided, however, that if such Performance
Default is of a nature that it cannot be cured within the thirty (30) day
period, then Borrower shall not be in default if it commences good faith efforts
to cure the Performance Default within the thirty (30) day period, demonstrates
continuous diligent efforts to cure the Performance Default in a manner
reasonably satisfactory to Lender and, within a reasonable period, not to exceed
one hundred eighty (180) days after the date of the original written notice of
the Performance Default, completes the cure of such Performance Default.
Notwithstanding the foregoing, if the breach or default is one which is defined
as an Event of Default elsewhere in this Article II or in the default definition
of any Related Agreement, then Borrower shall not be entitled to any notice or
cure period upon the occurrence of such breach or default except for such notice
and cure periods, if any, as may be expressly granted in such other defined
Event of Default; or
(D) Failure to maintain Insurance as provided for in Section 1.02 of
this Security Deed; or
(E) Failure to pay Impositions as provided for in Section 1.06.
2.02. BANKRUPTCY, INSOLVENCY, DISSOLUTION.
(A) Any court of competent jurisdiction shall sign an order (1)
adjudicating Borrower, its sole member, or any Guarantor (which term when used
in this Security Deed shall mean any guarantor of payment of the indebtedness)
bankrupt or insolvent, (2) appointing a receiver, trustee or liquidator of the
Property or Collateral or of a substantial part of the property of Borrower, its
sole member, or any Guarantor, or (3) approving a petition for, or effecting an
26
arrangement in bankruptcy, or any other judicial modification or alteration of
the rights of Lender or of other creditors of Borrower, its sole member, or any
Guarantor; or
(B) Borrower, its sole member, or any Guarantor shall (1) apply for or
consent to the appointment of a receiver, trustee or liquidator for it or for
any of its property, (2) as debtor, file a voluntary petition in bankruptcy, or
petition or answer seeking reorganization or an arrangement with creditors or to
take advantage of any bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution or liquidation law or statute, or an answer admitting the
material allegations of a petition filed against it and any proceeding under
such law, (3) admit in writing an inability to pay its debts as they mature, or
(4) make a general assignment for the benefit of creditors; or
(C) An involuntary petition in bankruptcy is filed against Borrower, its
such sole member, or any Guarantor and the same is not vacated or stayed within
90 days of the filing date.
2.03. MISREPRESENTATION. Borrower makes or furnishes a representation,
warranty, statement, certificate, schedule and/or report to Lender in or
pursuant to this Security Deed or any of the Related Agreements which is false
or misleading in any material respect as of the date made or furnished, or
becomes false or breached upon or after execution of this Security Deed.
2.04. DEFAULT UNDER SUBORDINATE LOANS. An occurrence of a default under
any loan subordinate to this Security Deed which is not an independent default
under this Security Deed which results in the commencement of foreclosure
proceedings or the taking of any other remedial action under such subordinate
loan.
2.05. LIENS. Any federal, state or local tax lien or any claim of lien for
labor or materials or any other lien or encumbrance of any nature whatsoever is
recorded against Borrower or any of the Property or Collateral and is not
removed by payment or transferred to substitute security in the manner provided
by law, within thirty (30) days after it is recorded in accordance with
applicable law.
2.06. JUDGMENTS. (A) A final judgment, other than a final judgment in
connection with any condemnation, is entered against Borrower that (1)
materially and adversely affects the value, use or operation of the Property or
other Collateral, or (2) adversely affects, or reasonably may adversely affect,
the validity or enforceability of this Security Deed, any of the Related
Agreements or the Note or priority of the liens or security interests created by
this Security Deed or any of the Related Agreements; or (B) execution or other
final process issues thereon with respect to the Property or other Collateral;
and (C) Borrower does not discharge the same or provide for its discharge in
accordance with its terms, or procure a stay of execution thereon, in any event
within thirty (30) days from entry, or Borrower shall not, within such period or
such longer period during which execution on such judgment shall have been
stayed, appeal therefrom or from the order, decree or process upon or pursuant
to which such judgment shall have been entered, and cause its execution to be
stayed during such appeal, or if on appeal such order, decree or process shall
be affirmed and Borrower shall not discharge such judgment or provide for its
discharge in accordance with its terms within sixty (60) days after the entry of
such order or decree or affirmance, or if any stay of execution on appeal is
released or otherwise discharged.
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2.07. LEASES. Borrower's default in the performance of its obligations as
lessor under any Lease of 10,000 square feet or more, which default could
result, in Lender's judgment, in the termination of said Lease.
2.08. BORROWER'S CONTINUED EXISTENCE. Borrower ceases to exist or to be
qualified to do or transact business in the state in which the Property or any
of the Collateral is located or is dissolved or is a party to a merger,
consolidation or reorganization, or sells all or substantially all of its
assets.
2.09. BREACH OF DUE ON SALE OR ENCUMBRANCE PROVISION. Any occurrence of a
prohibited Transfer under Section 1.08 hereof.
2.10. DEFAULT UNDER INDEMNITY. Borrower or any guarantor or indemnitor
defaults under any obligation imposed upon Borrower or any guarantor or
indemnitor by any indemnity whether contained within this Security Deed, the
Note, any of the Related Agreements or otherwise.
ARTICLE III
REMEDIES
Upon the occurrence of any Event of Default, Lender shall have the
following rights and remedies set forth in Sections 3.01 through 3.08:
3.01. ACCELERATION. Notwithstanding the stated maturity date in the Note,
or any note evidencing any Future Advance, Lender may without notice or demand,
declare the entire principal amount of the Note and/or any Future Advances then
outstanding and accrued and unpaid interest thereon, and all other sums or
payments required thereunder or under this Security Deed or the Related
Agreements including, but not limited to the Prepayment Premium described in the
Note, to be due and payable immediately.
3.02. ENTRY. Irrespective of whether Lender exercises the option provided
in Section 3.01 above, Lender in person or by agent or by court-appointed
receiver may, at its option, without any action on its part being required,
without in any way waiving such Event of Default, with or without the
appointment of a receiver, or an application therefor:
(A) Take possession of, conduct tests of, manage or hire a manager to
manage, lease and operate the Property or any part thereof, on such terms and
for such period of time as Lender may deem proper, with full power to make, from
time to time, all alterations, renovations, repairs or replacements thereto as
may seem proper to Lender;
(B) With or without taking possession of the Property, collect and
receive all Rents and Profits (which term, as used herein, shall have the
meaning ascribed to such term in the Assignment of Leases and Rents), notify
tenants under any lease relating to the Property (the "Leases") or any other
parties in possession of the Property to pay Rents and Profits directly to
Lender, its agent or a court-appointed receiver and apply such Rents and Profits
to the payment of:
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(1) all costs and expenses incident to taking and retaining possession
of the Property (including the cost of any receivership), management and
operation of the Property, keeping the Property properly insured and all
alterations, renovations, repairs and replacements to the Property;
(2) all taxes, charges, claims, assessments, and any other liens which
may be prior in lien or payment to this Security Deed or the Note, and premiums
for insurance, with interest on all such items; and
(3) the indebtedness secured hereby together with all costs and
attorneys' fees, in such order or priority as to any of such items as Lender in
its sole discretion may determine, any statute, law, custom or use to the
contrary notwithstanding;
(C) Exclude Borrower, its agents and servants, wholly from the Property;
(D) Have joint access with Borrower to the books, papers and accounts of
Borrower relating to the Property, at the expense of Borrower;
(E) Commence, appear in and/or defend any action or proceedings
purporting to affect the interests, rights, powers and/or duties of Lender
hereunder, whether brought by or against Borrower or Lender; and
(F) pay, purchase, contest or compromise any claim, debt, lien, charge
or encumbrance which in the judgment of Lender may affect or appear to affect
the interest of Lender or the rights, powers and/or duties of Lender hereunder.
Borrower or Lender, as a matter of right without notice to Borrower or
anyone claiming under it and without regard to the then value of the Property or
the interest of Borrower therein, shall have the right to apply to any court
having jurisdiction to appoint a receiver or receivers to take charge of the
Property or any portion thereof. Any such receiver or receivers shall have all
of the usual and customary powers and duties of receivers in like or similar
cases and all of the powers and duties of Borrower or Lender in case of entry as
provided hereinabove, including without limitation, the right to collect and
receive Rents and Profits. All such Rents and Profits paid to Lender or
collected by such receiver shall be applied as provided for in subparagraph
3.02(B) above. Borrower for itself and any subsequent owner of the Property
hereby waives any and all defenses to the application for such receiver and
hereby irrevocably consents to such appointment without notice of any
application therefore.
The receipt by Lender of any Rents and Profits pursuant to this Security
Deed after the institution of foreclosure or other proceedings under the
Security Deed shall not cure any such Event of Default or affect such
proceedings or any sale pursuant thereto. After deducting the expenses and
amounts set forth above in this Section 3.02, as well as just and reasonable
compensation for all Lender's employees and other agents (including, without
limitation, reasonable and actual attorneys' fees and management and rental
commissions) engaged and employed, the moneys remaining, at the option of
Lender, may be applied to the indebtedness secured hereby. Whenever all amounts
due on the Note and under this Security Deed shall have been paid and all Events
of Default have been cured and any such cure has been accepted by Lender, Lender
shall surrender possession to Borrower. The same right of entry, however, shall
29
exist if any subsequent Event of Default shall occur; provided, however, Lender
shall not be under any obligation to make any of the payments or do any of the
acts referred to in this Section 3.02.
3.03. JUDICIAL ACTION. Lender may bring an action in any court of
competent jurisdiction to foreclose this instrument or to enforce any of the
covenants and agreements hereof. The Property may be foreclosed in parts or as
an entirety.
3.04. POWER OF SALE. Lender may elect to cause the Property or any part
thereof to be sold under the power of sale herein granted in any manner
permitted by applicable law at one or more public sale or sales at the usual
place for conducting sales at the courthouse of the county in which the Land or
any part of the Land is situated, to the highest bidder for cash, in order to
pay the indebtedness secured hereby, and all expenses of sale and of all
proceedings in connection therewith, including attorneys' fees, after
advertising the time, place and terms of each sale once a week for four (4)
consecutive weeks immediately preceding such sale (but without regard to the
number of days) in a newspaper in which Sheriff's sales are advertised in said
county, all other notice, including judicial notice, being hereby waived by
Borrower. Upon the expiration of such time and the giving of such notice of
sale, and without the necessity of any demand on Borrower, Lender, at the time
and place specified in the notice of sale, shall sell the Property or any part
thereof. The foregoing notwithstanding, Lender may sell, or cause to be sold,
any tangible or intangible personal property or any part thereof, and which
constitutes a part of the security hereunder, in the foregoing manner, or as may
otherwise be provided by law. Lender may, from time to time, postpone any sale
hereunder by public announcement thereof at the time and place noticed therefor
or by giving notice of the time and place of the postponed sale in the manner
required by law. If the Property consists of several lots, parcels or items of
property, Lender may designate the order in which such lots, parcels or items
shall be offered for sale or sold. Any person, including Borrower or Lender, may
purchase at any sale hereunder, and Lender shall have the right to purchase at
any sale hereunder by crediting upon the bid price the amount of all or any part
of the indebtedness hereby secured plus interest, late charges, prepayment fees,
and reasonable attorneys' fees, as herein provided. Should Lender desire that
more than one sale or other disposition of the Property be conducted, Lender
may, at its option, cause the same to be conducted simultaneously, or
successively, on the same day, or at such different times and in such order as
Lender may deem to be in its best interests, and no such sale shall terminate or
otherwise affect the security of this Security Deed on any part of the Property
not sold until all indebtedness secured hereby has been fully paid. In the event
of default of any purchaser, Lender shall have the right to resell the Property
as set forth above. Upon any sale hereunder, Lender shall execute and deliver to
the purchaser or purchasers a deed or deeds conveying the property so sold in
Fee Simple, with or without any covenant or warranty whatever, express or
implied, whereupon such purchaser or purchasers shall be let into immediate
possession; and the recitals of facts in any such deed or deeds such as default,
the giving of notice of default and notice of sale, and other facts affecting
the regularity or validity of such sale or disposition, shall be conclusive
proof of the truth of such facts and any such deed or deeds shall be conclusive
against all persons as to such facts recited therein. Borrower hereby
constitutes and appoints Lender the agent and attorney-in-fact of Borrower to
make such recitals, sale and conveyance, and thereby to divest Borrower of all
right, title and equity that Borrower may have in and to the Property and to
vest the same in the purchaser or purchasers at such sale or sales. The
conveyance to be made by Lender, or its assigns, (and in the event of a deed in
lieu
30
of foreclosure, then as to such conveyance) shall be effective to bar all right,
title and interest, equity or redemption, including all statutory redemption,
homestead, dower, courtesy, and all other exemptions of Borrower, or its
successors in interest, in and to the Property. The aforesaid power of sale and
agency hereby granted are coupled with an interest and are irrevocable by death
or otherwise and shall not be exhausted by one exercise thereof, but may be
exercised until full payment of all sums secured hereby.
3.05. RESCISSION OF NOTICE OF DEFAULT. Lender, from time to time before
any such public sale or deed in lieu of foreclosure, may rescind any such notice
of breach or default and of election to cause the Property to be sold. Lender
may evidence such rescission, among other methods, by executing and delivering
to Borrower a written notice of such rescission, which notice, when recorded,
shall also constitute a cancellation of any prior declaration of default and
demand for sale or such documents as may be required by the laws of the state in
which the Property is located. The exercise by Lender of such right of
rescission shall not constitute a waiver of any breach or Event of Default then
existing or subsequently occurring, or impair the right of Lender to execute and
deliver to Borrower, as above provided, other declarations of default and demand
for sale, and notices of breach or default, and of election to cause the
Property to be sold to satisfy the obligations hereof, nor otherwise affect any
provision, agreement, covenant or condition of the Note and/or of this Security
Deed or any of the rights, obligations or remedies of the parties hereunder. If
Lender shall have proceeded to invoke any right, remedy or recourse permitted
under the Related Agreements and shall thereafter elect to discontinue or
abandon it for any reason, Lender shall have the unqualified right to do so and,
in such an event, Borrower and Lender shall be restored to their former
positions with respect to the indebtedness, the obligations, the Related
Agreements, the Property and otherwise, and the rights, remedies, recourses and
powers of Lender shall continue as if the right, remedy or recourse had never
been invoked, but no such discontinuance or abandonment shall waive any Event of
Default which may then exist or the right of Lender thereafter to exercise any
right, remedy or recourse under the Related Agreements for such Event of
Default. Borrower hereby expressly waives any and all benefits Borrower may have
under the Official Code of Georgia ("O.C.G.A.") Section 44-14-85 to claim or
assert that the indebtedness has been reinstated in accordance with its terms
following the withdrawal of any foreclosure proceedings by Lender and
acknowledges and agrees that reinstatement shall occur only upon written
agreement of Lender.
3.06. LENDER'S REMEDIES RESPECTING COLLATERAL. Lender may realize upon the
Collateral, enforce and exercise all of Borrower's rights, powers, privileges
and remedies in respect of the Collateral, dispose of or otherwise deal with the
Collateral in such order as Lender may in its discretion determine, and exercise
any and all other rights, powers, privileges and remedies afforded to a secured
party under the laws of the state in which the Property is located as well as
all other rights and remedies available at law or in equity.
3.07. PROCEEDS OF SALES. The proceeds of any sale made under or by virtue
of this Article III, together with all other sums which then may be held by
Lender under this Security Deed, whether under the provisions of this Article
III or otherwise, shall be applied as follows:
(A) To the payment of the costs, fees and expenses of sale and of any
judicial proceedings wherein the same may be made, including the cost of
evidence of title in connection
31
with the sale, compensation to Lender, and to the payment of all expenses
(including reasonable attorneys' and paralegals fees and costs), liabilities and
advances made or incurred by Lender under this Security Deed, together with
interest on all advances made by Lender at the interest rate applicable under
the Note, but limited to any maximum rate permitted by law to be charged by
Lender;
(B) To the payment of any and all sums expended by Lender under the
terms hereof, not then repaid, with accrued interest at the Default Rate set
forth in the Note, and all other sums (except advances of principal and interest
thereon) required to be paid by Borrower pursuant to any provisions of this
Security Deed, or the Note, or any note evidencing any Future Advance, or any of
the Related Agreements, including, without limitation, all expenses, liabilities
and advances made or incurred by Lender under this Security Deed or in
connection with the enforcement thereof, together with interest thereon as
herein provided; and
(C) To the payment of the entire amount then due, owing or unpaid for
principal and interest upon the Note, any notes evidencing any Future Advance,
and any other obligation secured hereby, with interest on the unpaid principal
at the rate set forth therein from the date of advancement thereof until the
same is paid in full; and then
(D) The remainder, if any, to the person or persons, including Borrower,
legally entitled thereto.
3.08. CONDEMNATION AND INSURANCE PROCEEDS. All Condemnation Proceeds,
Insurance Proceeds and any interest earned thereon shall be paid over either by
the condemning authority, insurance company or escrow agent to Lender and shall
be applied first toward reimbursement of the costs and expenses of Lender
(including reasonable attorneys' and paralegals' fees), if any, in connection
with the recovery of such Proceeds, and then shall be applied in the sole and
absolute discretion of Lender and without regard to the adequacy of its security
under this Security Deed (A) to the payment or prepayment of all or any portion
of the Note including the Prepayment Premium described in the Note; (B) to the
reimbursement of expenses incurred by Lender in connection with the restoration
of the Property or Collateral; or (C) to the performance of any of the covenants
contained in this Security Deed as Lender may determine. Any prepayment of the
Note or portion thereof pursuant to Lender's election under this Section shall
be subject to the Prepayment Premium described in the Note. Upon any Event of
Default by Borrower under this Security Deed, all right, title and interest of
Borrower in and to all any and all insurance policies then in force, including
any and all unearned premiums and existing claims, will inure to Lender, which,
at its sole option, and as attomey-in-fact for Borrower, may then make, settle
and give binding acquittances for claims under all such policies, and may assign
and transfer such policies or cancel or surrender them, applying any unearned
premium in such manner as Lender may elect. The foregoing appointment of Lender
as attomey-in-fact for Borrower is coupled with an interest, and is irrevocable.
3.09. WAIVER OF MARSHALLING, RIGHTS OF REDEMPTION. HOMESTEAD AND
VALUATION.
(A) Borrower, for itself and for all persons hereafter claiming through
or under it or who may at any time hereafter become holders of liens junior to
the lien of this Security Deed, hereby expressly waives and releases all rights
to direct the order in which any of the Property or
32
Collateral shall be sold in the event of any sale or sales pursuant hereto and
to have any of the Property and/or any other property now or hereafter
constituting security for any of the indebtedness secured hereby marshalled upon
any foreclosure of this Security Deed or of any other security for any of said
indebtedness.
(B) To the fullest extent permitted by law, Borrower, for itself and all
who may at any time claim through or under it, hereby expressly waives, releases
and renounces all rights of redemption from any foreclosure sale, all rights of
homestead, exemption, monitoring reinstatements, forbearance, appraisement,
valuation, stay and all rights under any other laws which may be enacted
extending the time for or otherwise affecting enforcement or collection of the
Note, the debt evidenced thereby, or this Security Deed.
3.10. REMEDIES CUMULATIVE. No remedy herein conferred upon or reserved to
Lender is intended to be exclusive of any other remedy herein or by law or
equity provided, but each shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute. No delay or omission of Lender to exercise any right or power
accruing upon any Event of Default shall impair any right or power or shall be
construed to be a waiver of any Event of Default or any acquiescence therein.
Every power and remedy given by this Security Deed to Lender may be exercised
separately, successively or concurrently from time to time as often as may be
deemed expedient by Lender. If there exists additional security for the
performance of the obligations secured hereby, Lender, at its sole option, and
without limiting or affecting any of its rights or remedies hereunder, may
exercise any of the rights and remedies to which it may be entitled hereunder
either concurrently with whatever rights and remedies it may have in connection
with such other security or in such order as it may determine. Any application
of any amounts or any portion thereof held by Lender at any time as additional
security or otherwise, to any indebtedness secured hereby shall not extend or
postpone the due dates of any payments due from Borrower to Lender hereunder or
under the Note, any Future Advance, or under any of the Related Agreements, or
change the amounts of any such payments or otherwise be construed to cure or
waive any default or notice of default hereunder or invalidate any act done
pursuant to any such default or notice.
3.11. NONRECOURSE. Except as otherwise set forth in this Section, Lender's
recourse under this Security Deed, the Note and the Related Agreements shall be
limited to and satisfied from the Property and the proceeds thereof, the rents
and all other income arising therefrom during and after the month in which an
Event of Default has occurred, the other assets of Borrower arising out of the
Property which are given as collateral for the Note, and any other collateral
given in writing to Lender as security for repayment of the Note (all of the
foregoing are collectively referred to as the "Loan Collateral").
Notwithstanding the preceding sentence:
(A) Lender may, in accordance with the terms of this Security Deed, the
Note or any Related Agreement: (1) foreclose the lien of this Security Deed; (2)
take appropriate action to enforce this Security Deed, the Note and the Related
Agreements to realize upon and/or protect the Loan Collateral; (3) name Borrower
as a party defendant in any action brought under this Security Deed, the Note or
the Related Agreements so long as the exercise of any remedy is limited to the
Loan Collateral; (4) pursue all of its rights and remedies against any guarantor
or surety or master tenant whether or not a partner, member or other owner of
Borrower; and (5)
33
pursue all of its rights and remedies against Borrower and the indemnitors under
that certain Environmental Indemnity Agreement of even date herewith;
(B) Lender may seek damages or other monetary relief, to the extent of
actual monetary loss, or any other remedy at law or in equity against Borrower,
and the indemnitors/guarantors, if any, under any nonrecourse exception
indemnity agreements ("Nonrecourse Indemnitors") by reason of or in connection
with: (1) the failure of Borrower to pay to Lender, upon demand, all rents,
issues and profits of the Property to which Lender is entitled pursuant to this
Security Deed, the Note or the Related Agreements following an Event of Default;
(2) any waste of the Property or any willful act or omission by Borrower which
damages or materially reduces the value of the Property; (3) the distribution of
rents, issues and profits from the Property prior to the payment of operating
expenses or the provision for reserves, if any, to be made pursuant to this
Security Deed, the Note or the Related Agreements prior to any other expenditure
or distribution by Borrower; (4) the failure to account for and to turn over
security deposits (and interest required by law or agreement to be paid thereon)
or prepaid rents following the occurrence of an Event of Default under this
Security Deed, the Note or any Related Agreements; (5) the failure to timely pay
all real estate taxes or any regular or special assessments affecting the
Property; (6) the failure to account for and to turn over real estate tax
accruals following the occurrence of an Event of Default under this Security
Deed, the Note or any Related Agreements; (7) the failure to maintain casualty
and liability insurance as required under the Note or the Related Agreements or
to apply insurance proceeds or condemnation awards relating to the Property or
other collateral in the manner required under applicable provisions of this
Security Deed, the Note or any Related Agreement; (8) any modification,
termination or cancellation of any lease of all or any portion of the Property
without Lender's prior written consent, if and to the extent such consent is
required under the Note or the Related Agreements and if and to the extent such
modification, termination or cancellation has a material adverse affect on the
value of the Property; (9) a default by Borrower under any lease of all or any
portion of the Property; or (10) costs and expenses, including, without
limitation, attorney's fees and transfer taxes, incurred by Lender in connection
with the enforcement of this Security Deed, the Note or the Related Agreements
or in connection with a deed-in-lieu of foreclosure if the Event of Default
giving rise to the enforcement action is one described in subsections (B) or (C)
as an exception to the nonrecourse provisions, or if Borrower or any principal
of Borrower objects to any actions taken by Lender to exercise its remedies
under this Security Deed, the Note or the Related Agreements; Borrower or
principal of Borrower commences any lawsuit to enjoin or delay a foreclosure of
the Property by Lender, or raises defenses or counterclaims to a foreclosure
action; Borrower applies for the appointment of a receiver, trustee or
liquidator for it or for any of its property, or, as a debtor, files a voluntary
petition in bankruptcy, or petition or answer seeking reorganization or an
arrangement with creditors or takes advantage of any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation law or statute, or
makes a general assignment for the benefit of creditors; or in the event any
bankruptcy or reorganization proceedings (voluntary or involuntary), Borrower or
any principal of Borrower opposes any motion by Lender for relief from the
Automatic Stay; and
(C) Borrower, its sole member or general partners and the Nonrecourse
Indemnitor(s), if any, shall become personally liable for payment of all the
indebtedness evidenced by the Note and performance of all other obligations of
Borrower under this Security Deed, the Note and
34
Related Agreements upon the occurrence of any: (i) fraud or willful
misrepresentation of a material fact by Borrower, its sole member or general
partners, or Nonrecourse Indemnitor(s), if any, in connection with this Security
Deed, the Note, the Related Agreements or any request for any action or consent
by Lender; (ii) a Transfer of any interest in Borrower or all or any portion of
the Property or any interest therein in violation of the terms of this Security
Deed, the Note or the Related Agreements; or (iii) the incurrence by Borrower of
any indebtedness in violation of the terms of this Security Deed, the Note or
Related Agreements (whether secured or unsecured, direct or contingent), other
than unsecured debt or routine trade payables incurred in the ordinary course of
business in connection with the operation of the Property.
In addition, Borrower, its sole member or general partners and the
Nonrecourse Indemnitors, if any, shall be responsible for any costs and expenses
incurred by Lender in connection with the collection of any amounts for which
Borrower, its sole member or general partners, if any, and the Nonrecourse
Indemnitors, if any, are personally liable under this Section 3.11, including
attorneys' and paralegals' fees and expenses, court costs, filing fees and all
other costs and expenses incurred in connection therewith.
ARTICLE IV
MISCELLANEOUS
4.01. SEVERABILITY. In the event any one or more of the provisions
contained in this Security Deed shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Security Deed, but
this Security Deed shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein, but only to the extent
that it is invalid, illegal or unenforceable.
4.02. CERTAIN CHARGES AND BROKERAGE FEES.
(A) Borrower agrees to pay Lender its standard charge (or if there is no
standard charge, then Borrower shall reimburse Lender for its reasonable
expenses) for each written statement requested of Lender as to the obligations
secured hereby, furnished at Borrower's request. Borrower further agrees to pay
the charges of Lender for any other service rendered Borrower, or on its behalf,
connected with this Security Deed or the indebtedness secured hereby, including,
without limitation, the delivery to an escrow holder of a request for full or
partial release or satisfaction of this Security Deed, transmittal to an escrow
holder of moneys secured hereby, changing its records pertaining to this
Security Deed and indebtedness secured hereby to show a new owner of the
Property, and replacing an existing policy of insurance held hereunder with
another such policy.
(B) Borrower agrees to indemnify and hold Lender harmless from any
responsibility and/or liability for the payment of any commission charge or
brokerage fees to anyone which may be payable in connection with the funding of
the loan evidenced by the Note and this Security Deed or refinancing of any
prior indebtedness, if applicable, based upon any action taken by Borrower. It
is understood that any such commission charge or brokerage fees shall be paid
directly by Borrower to the entitled parties.
35
4.03. NOTICES.
(A) All notices expressly provided hereunder to be given by Lender to
Borrower and all notices, demands and other communications of any kind or nature
whatever which Borrower may be required or may desire to give to or serve on
Lender shall be in writing and shall be (1) hand-delivered, effective upon
receipt, (2) sent by United States Express Mail or by private overnight courier,
effective upon receipt, or (3) served by certified mail, to the appropriate
address set forth below, or at such other place as Borrower or Lender, as the
case may be, may from time to time designate in writing by ten (10) days prior
written notice thereof. Any such notice or demand served by certified mail,
return receipt requested, shall be deposited in the United States mail, with
postage thereon fully prepaid and addressed to the party so to be served at its
address stated below or at such other address of which said party shall have
theretofore notified in writing, as provided above, the party giving such
notice. Service of any such notice or demand so made shall be deemed effective
on the day of actual delivery as shown by the addressee's return receipt or the
expiration of three (3) business days after the date of mailing, whichever is
the earlier in time, except that service of any notice of default or notice of
sale provided or required by law in connection with any foreclosure shall, if
mailed, be deemed effective on the date of mailing. Any notice required to be
given by Lender shall be equally effective if given by Lender's agent, if any.
(B) Borrower hereby requests that any notice, demand, request or other
communication (including any notice of an Event of Default and notice of sale as
may be required by law) desired to be given or required pursuant to the terms
hereof be addressed to Borrower as follows:
Inland Western Lawrenceville ▇▇▇▇▇▇▇▇, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
The Inland Real Estate Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
All notices and other communications to Lender shall be addressed as
follows:
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Mortgage Division Servicing Manager
36
With a copy to:
Allstate Life Insurance Company
Investment Law Division
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By acceptance of this Security Deed, ▇▇▇▇ and AIC collectively represent
and warrant to Borrower that they have appointed Allstate Investments, LLC as
their agent, investment advisor and manager of their investment assets,
including this Loan. Notwithstanding any contrary term or provision in this
Security Deed or in any Related Agreement, and until Borrower receives written
notice signed by Allstate Investments, LLC, (i) Borrower will communicate only
to Allstate Investments, LLC with respect to any and all notices, consents,
approvals, requests, modifications and agreements required or otherwise relating
to this Security Deed or the Loan (collectively, "Approvals and Requests") and
Allstate Investments, LLC shall communicate and act on behalf of Lender with
respect to all Approvals and Requests, and (ii) Borrower shall be entitled to
rely on any communications from or actions by Allstate Investments, LLC with
respect to Lender and all Approvals and Requests made by Allstate Investments,
LLC shall be deemed to be made by and binding upon Lender. In the event Allstate
Investments, LLC ceases to be the agent, investment advisor and investment
manager for one or more of the companies comprising Lender, Lender collectively
agree that they shall appoint another agent or shall designate one of the
companies comprising Lender to communicate and act on behalf of Lender.
Additionally, Lender collectively represent and warrant that: (i) there will
always be one loan servicer in connection with the Loan; (ii) Borrower shall be
consistently directed to make all payments due under the Notes to a single loan
servicer; (iii) Borrower shall have no responsibility for allocating any such
payments among the holders of the Notes. The Notes shall be pari passu and
interests of each entity comprising Lender in and to the Related Agreements and
all Loan Collateral shall be co-equal without any preference or priority over
the interests of any other entity comprising Lender.
4.04. BORROWER NOT RELEASED; CERTAIN LENDER ACTS.
(A) Extension of the time for payment or modification of the terms of
payment of any sums secured by this Security Deed granted by Lender to any
successor in interest of Borrower shall not operate to release, in any manner,
the liability of Borrower. Lender shall not be required to: commence proceedings
against such successor or refuse to extend time for payment or otherwise modify
the terms of payment of the sums secured by this Security Deed, by reason of any
demand made by Borrower. Without affecting the liability of any person,
including Borrower, but subject to the terms and provisions of Section 3.11, for
the payment of any indebtedness secured hereby, or the legal operation and
effect of this Security Deed on the remainder of the Property for the full
amount of any such indebtedness and liability unpaid, Lender is empowered as
follows: Lender may from time to time and without notice (1) release any person
liable for the payment of any of the indebtedness; (2) extend the time or
otherwise alter the terms of payment of any of the indebtedness; (3) accept
additional real or personal property of any kind as security therefor, whether
evidenced by deeds of trust, mortgages,
37
security agreements or any other instruments of security; or (4) alter,
substitute or release any property securing the indebtedness.
(B) Lender may at its sole option and without any duty to do so, at any
time, and from time to time, (1) consent to the making of any map or plan of the
Property or any part thereof; (2) join in granting any easement or creating any
restriction thereon; (3) join in any subordination or other agreement affecting
this Security Deed or the legal operation and effect or charge hereof; or (4)
release or reconvey, without any warranty, all or part of the Property from the
lien of this Security Deed.
4.05. INSPECTION. Upon reasonable prior notice and subject to the rights
of tenants under the Leases, Lender may at any reasonable time make or cause to
be made entry upon and make inspections, reappraisals, surveys, construction and
environmental testing of the Property or any part thereof in person or by agent,
and if Lender has a reasonable basis to believe that Borrower is in breach of
any covenant of this Security Deed in regard to the Property, the cost of any
such inspection shall be borne by Borrower.
4.06. RELEASE OR RECONVEYANCE OR CANCELLATION. Upon the payment in full of
all sums secured by this Security Deed, Lender shall cancel this Security Deed
and shall surrender this Security Deed and all notes evidencing indebtedness
secured by this Security Deed to Borrower. The duly recorded cancellation shall
constitute a reassignment of the Leases by the Lender to Borrower. Borrower
shall pay all costs of recordation, if any.
4.07. STATUTE OF LIMITATIONS. Borrower hereby expressly waives and
releases to the fullest extent permitted by law, the pleading of any statute of
limitations as a defense to any and all obligations secured by this Security
Deed.
4.08. INTERPRETATION. Wherever used in this Security Deed, unless the
context otherwise indicates a contrary intent, or unless otherwise specifically
provided herein, the word "Borrower" shall mean and include both Borrower and
any subsequent owner or owners of the Property, and the word "Lender" shall mean
and include not only the original Lender hereunder but also any future owner and
holder, including pledgees, of the Note or other obligations secured hereby. In
this Security Deed, the Note and the Related Agreements, whenever the context so
requires, the masculine gender includes the feminine and/or neuter, and the
neuter includes the feminine and/or masculine, and the singular number includes
the plural. In this Security Deed, the Note and the Related Agreements, the use
of the word "including" shall not be deemed to limit the generality of the term
or clause to which it has reference, whether or not non-limiting language (such
as "without limitation," or "but not limited to," or words of similar import) is
used with reference thereto.
4.09. CAPTIONS. The captions and headings of the Articles and Sections of
this Security Deed, the Note and the Related Agreements are for convenience only
and are not to be used to interpret, define or limit the provisions hereof.
4.10. CONSENT. The granting or withholding of consent by Lender to any
transaction as required by the terms hereof shall not be deemed a waiver of the
right to require consent to future or successive transactions. Borrower
covenants and agrees to reimburse Lender promptly on
38
demand for all legal and other expenses incurred by Lender or its servicing
agent in connection with all requests by Borrower for consent or approval under
this Security Deed.
4.11. DELEGATION TO SUBAGENTS. Wherever a power of attorney is conferred
upon Lender hereunder or under the Related Agreements, it is understood and
agreed that such power is conferred with full power of substitution, and Lender
may elect in its sole discretion to exercise such power itself or to delegate
such power, or any part thereof, to one or more subagents and such power shall
be deemed to be coupled with an interest and irrevocable so long as this
Security Deed has not been cancelled.
4.12. SUCCESSORS AND ASSIGNS. All of the grants, obligations, covenants,
agreements, terms, provisions and conditions herein shall run with the land and
shall apply to, bind and inure to the benefit of, the heirs, administrators,
executors, legal representatives, successors and assigns of Borrower (but this
shall not permit any assignment prohibited hereby) and the endorsees,
transferees, successors and assigns of Lender. In the event Borrower is composed
of more than one party, the obligations, covenants, agreements, and warranties
contained herein and in the Related Agreements as well as the obligations
arising therefrom are and shall be joint and several as to each such party.
4.13. GOVERNING LAW. THIS SECURITY DEED AND THE RELATED AGREEMENTS ARE
INTENDED TO BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH
THE PROPERTY IS LOCATED. BORROWER HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY.
4.14. CHANGES IN TAXATION. If, after the date of this Security Deed, any
law is passed by the state in which the Property is located or by any other
governing entity, imposing upon Lender any tax against the Property, or changing
in any way the laws for the taxation of mortgages or deeds to secure debts, or
debts secured by mortgages or deeds to secure debt so that an additional or
substitute tax is imposed on Lender or the holder of the Note, Borrower shall
reimburse Lender for the amount of such taxes immediately upon receipt of
written notice from Lender. Provided, however, that such requirement of payment
shall be ineffective if Borrower is permitted by law to pay the whole of such
tax in addition to all other payments required hereunder, without any penalty or
charge thereby accruing to Lender and if Borrower in fact pays such tax prior to
the date upon which payment is required by such notice.
4.15. MAXIMUM INTEREST RATE. No provision of this Security Deed or of the
Note or of any note evidencing a Future Advance shall require the payment or
permit the collection of interest in excess of the maximum non-usurious rate
permitted by applicable law. In the event such interest does exceed the maximum
legal rate, it shall be canceled automatically to the extent that such interest
exceeds the maximum legal rate and if theretofore paid, credited on the
principal amount of the Note or, if the Note has been prepaid, then such excess
shall be rebated to Borrower. It is the intent of Borrower and Lender that the
interest rate charged under the Note, this Security Deed, any note representing
any Future Advance and any of the Related Agreements shall comply with all
applicable law and not exceed the maximum rate allowed by law.
39
4.16. TIME OF ESSENCE. Time is of the essence of the obligations of
Borrower in this Security Deed and the Related Agreements and each and every
term, covenant and condition made herein or therein by or applicable to
Borrower.
4.17. REPRODUCTION OF DOCUMENTS. This Security Deed and all documents
relating thereto, specifically excluding the Note but including, without
limitation, consents, waivers and modifications which may hereafter be executed,
financial and operating statements, certificates and other information
previously or hereafter furnished to Lender, may be reproduced by Lender by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process and Lender may destroy any original document ("Master") so
reproduced. Borrower agrees and stipulates that any such reproduction is binding
as an original and shall be admissible in evidence with equal dignity as the
Master in any judicial or administrative proceeding (whether or not the Master
is in existence and whether or not such reproduction was made or preserved by
Lender in the regular course of business) and any enlargement, facsimile or
further reproduction of such a reproduction shall be no less admissible.
4.18. NO ORAL MODIFICATIONS. This Security Deed may not be amended or
modified orally, but only by an agreement in writing signed by the party against
whom enforcement of any amendment or modification is sought.
4.19. WAIVER OF BORROWER'S RIGHTS. BY EXECUTION OF THIS SECURITY DEED AND
BY INITIALING THIS SECTION 4.19, BORROWER EXPRESSLY: (A) ACKNOWLEDGES THE RIGHT
TO ACCELERATE THE INDEBTEDNESS EVIDENCED BY THE NOTE AND THE POWER OF ATTORNEY
GIVEN HEREIN TO LENDER TO SELL THE PROPERTY BY NONJUDICIAL FORECLOSURE UPON
DEFAULT BY BORROWER WITHOUT ANY JUDICIAL HEARING AND WITHOUT ANY NOTICE (EXCEPT
AS OTHERWISE PROVIDED HEREIN); (B) EXCEPT TO THE EXTENT PROVIDED OTHERWISE
HEREIN, WAIVES AND ALL RIGHTS THAT BORROWER MAY HAVE UNDER THE CONSTITUTION OF
THE UNITED STATES (INCLUDING THE FIFTH AND FOURTEENTH AMENDMENTS THEREOF), THE
VARIOUS PROVISIONS OF THE CONSTITUTIONS FOR THE SEVERAL STATES, OR BY REASON OF
ANY OTHER APPLICABLE LAW, TO NOTICE AND TO JUDICIAL HEARING PRIOR TO THE
EXERCISE BY LENDER OF ANY RIGHT OR REMEDY HEREIN PROVIDED TO LENDER; (C)
ACKNOWLEDGES THAT BORROWER HAS READ THIS SECURITY DEED AND ITS PROVISIONS HAVE
BEEN EXPLAINED FULLY TO BORROWER AND BORROWER HAS CONSULTED WITH COUNSEL OF
BORROWER'S CHOICE PRIOR TO EXECUTING THIS SECURITY DEED; AND (D) ACKNOWLEDGES
THAT ALL WAIVERS OF THE AFORESAID RIGHTS OF BORROWER HAVE BEEN MADE KNOWINGLY,
INTENTIONALLY AND WILLINGLY BY BORROWER AS PART OF A BARGAINED FOR LOAN
TRANSACTION:
INITIALED BY BORROWER:
----------------
40
4.20 ATTORNEYS' FEES. Notwithstanding anything contained herein to the
contrary, (i) "reasonable attorneys' fees" are not, and shall not be, statutory
attorneys' fees under the O.C.G.A., (ii) if, under any circumstances Borrower is
required hereunder to pay any or all of Lender's attorneys' fees and expenses,
Borrower shall be responsible only for actual legal fees and out of pocket
expenses actually incurred by Lender at customary hourly rates for the work
done, and (iii) Borrower shall not be liable under any circumstances for
additional attorneys' fees or expenses under O.C.G.A. Section 13-1-11.
* * * * *
[Signature Page Follows]
41
IN WITNESS WHEREOF, the undersigned has executed this Security Deed under
seal as of the day and year first hereinabove written.
BORROWER:
Signed, sealed and delivered in the INLAND WESTERN LAWRENCEVILLE
presence of: ▇▇▇▇▇▇▇▇, L.L.C., a Delaware limited
liability company
/s/[ILLEGIBLE] By: INLAND WESTERN RETAIL REAL
-------------------------------------- ESTATE TRUST, INC., a Maryland
Unofficial Witness corporation, its sole member
/s/▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ By: /s/[ILLEGIBLE]
-------------------------------------- ----------------------------------
Notary Public Its Asst. Secretary
----------------------------------
My commission expires: 3/12/07
--------
(Affix Notary Seal)
[SEAL]
OFFICIAL SEAL
▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
NOTARY PUBLIC - STATE OF ILLINOIS
MY COMMISSION EXPIRES: 03-12-07
42
EXHIBIT A
(Property Description)
All that tract or parcel of land lying and being in Land ▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, and being more particularly described as
follows: Commencing at the mitered intersection of the southerly right-of-way of
▇▇▇▇▇▇▇▇ Road (Variable R/W) and the easterly right-of-way of New Hope Road
(Variable R/W); thence along the easterly right-of-way of New Hope Road
(Variable R/W) South 05 degrees 33 minutes 35 seconds West, 61.87 feet to a
point; thence South 42 degrees 34 minutes 44 seconds East, 130.53 feet to a
point; thence South 21 degrees 56 minutes 22 seconds East, 17.84 feet to a
point, said point being the POINT OF BEGINNING.
Thence leaving said right-of-way North 54 degrees 10 minutes 29 seconds East,
47.04 feet to a pk nail set; thence North 67 degrees 22 minutes 22 seconds East,
153.85 feet to a #4 rebar set; thence North 11 degrees 46 minutes 21 seconds
East, 15.00 feet to a #4 rebar set; thence North 42 degrees 34 minutes 44
seconds West, 191.20 feet to a #4 rebar set on the southerly right-of-way of
▇▇▇▇▇▇▇▇ Road (Variable R/W); thence along said right-of-way North 59 degrees 38
minutes 34 seconds East, 161.67 feet to a pk nail set; thence North 58 degrees
03 minutes 36 seconds East, 267.52 feet to a #4 rebar set; thence leaving said
right-of-way South 25 degrees 56 minutes 49 seconds East, 170.04 feet to a #4
rebar set; thence North 61 degrees 20 minutes 10 seconds East, 51.94 feet to a
point in the centerline of creek; thence following the meanderings of said
centerline of creek South 44 degrees 03 minutes 59 seconds East, 14.56 feet to a
point;
thence South 30 degrees 00 minutes 00 seconds East, 35.90 feet to a point;
thence South 70 degrees 00 minutes 36 seconds East, 17.51 feet to a point;
thence South 40 degrees 13 minutes 49 seconds East, 26.81 feet to a point;
thence South 65 degrees 09 minutes 23 seconds East, 28.57 feet to a point;
thence South 87 degrees 38 minutes 26 seconds East, 21.01 feet to a point;
thence South 55 degrees 53 minutes 05 seconds East, 15.86 feet to a point;
thence North 58 degrees 27 minutes 11 seconds East, 16.02 feet to a point;
thence South 37 degrees 57 minutes 00 seconds East, 18.78 feet to a point;
thence North 87 degrees 34 minutes 41 seconds East, 21.49 feet to a point;
thence South 55 degrees 38 minutes 31 seconds East, 34.69 feet to a point;
thence South 43 degrees 11 minutes 29 seconds East, 31.75 feet to a point;
thence North 89 degrees 20 minutes 16 seconds East, 15.89 feet to a point;
thence South 60 degrees 43 minutes 13 seconds East, 16.10 feet to a point;
thence South 22 degrees 52 minutes 09 seconds East, 17.44 feet to a point;
thence North 81 degrees 58 minutes 29 seconds East, 24.27 feet to a point;
thence South 68 degrees 31 minutes 25 seconds East, 24.33 feet to a point;
thence North 76 degrees 41 minutes 11 seconds East, 18.29 feet to a point;
thence South 49 degrees 10 minutes 28 seconds East, 24.05 feet to a point;
thence South 03 degrees 46 minutes 12 seconds East, 27.16 feet to a point;
thence South 85 degrees 13 minutes 34 seconds East, 62.19 feet to a point;
thence South 61 degrees 49 minutes 36 seconds East, 46.23 feet to a point;
thence South 74 degrees 13 minutes 36 seconds East, 70.82 feet to a point;
thence leaving said centerline of creek South 55 degrees 19 minutes 08 seconds
West, 841.26 feet to a #4 rebar set on the easterly right-of-way of New Hope
Road (Variable R/W); thence along said right-of-way North 42 degrees 26 minutes
56 seconds West, 73.12 feet to a #4 rebar
set; thence leaving said right-of-way North 47 degrees 33 minutes 04 seconds
East, 20.42 feet to a #4 rebar set;
thence North 77 degrees 31 minutes 01 seconds East, 34.34 feet to a pk nail set;
thence North 47 degrees 33 minutes 04 seconds East, 101.83 feet to a #4 rebar
set;
thence North 06 degrees 08 minutes 30 seconds East, 20.00 feet to a #4 rebar
set;
thence North 42 degrees 26 minutes 49 seconds West, 108.86 feet to a #4 rebar
set;
thence South 68 degrees 40 minutes 22 seconds West, 155.01 feet to a #4 rebar
set;
thence South 47 degrees 33 minutes 04 seconds West, 22.40 feet to a #4 rebar set
on the easterly right-of-way of New Hope Road (Variable R/W); thence along said
right-of-way North 42 degrees 26 minutes 56 seconds West, 298.39 feet to a #4
rebar set; thence North 21 degrees 56 minutes 22 seconds West, 0.67 feet to a #4
rebar set, said point being the POINT OF BEGINNING.
Address: ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
EXHIBIT B
(Permitted Exceptions)