[Texas]
Loan No. 20028043003
Property Name: Wellington Apartments
MULTIFAMILY DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF RENTS AND FIXTURE FILING
from
Wellington Apartments, L.L.C., a Delaware limited liability company
to
First American Title Insurance Company
for the benefit
of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc.
Dated as of February 27, 2003
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PREPARED BY AND UPON RECORDATION RETURN TO:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Seyfarth ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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TABLE OF CONTENTS
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TABLE OF CONTENTS................................................................................................ i
DEFINITIONS......................................................................................................iv
ARTICLE I. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER................................................3
Section 1.1. Representations, Warranties and Covenants of Borrower......................................3
Section 1.2. Certain Covenants..........................................................................7
Section 1.3. Further Acts, etc..........................................................................7
Section 1.4. Recording of Mortgage, etc.................................................................8
Section 1.5. Changes in Taxation Laws...................................................................8
Section 1.6. Indemnification............................................................................8
Section 1.7. Cost of Defending and Upholding the Mortgage Lien..........................................9
ARTICLE II. INSURANCE...........................................................................................9
Section 2.1. Insurance Coverage.........................................................................9
Section 2.2. Policy Terms..............................................................................11
Section 2.3. Assignment of Proceeds....................................................................12
Section 2.4. Comply with Insurance Requirements........................................................13
ARTICLE III. CASUALTY AND CONDEMNATION.........................................................................13
Section 3.1. Casualty and Condemnation.................................................................13
Section 3.2. Condemnation..............................................................................13
Section 3.3. Casualty and Restoration..................................................................14
Section 3.4. Disbursement of Net Proceeds..............................................................15
Section 3.5. Builders' Risk............................................................................16
Section 3.6. Application of Net Proceeds...............................................................16
ARTICLE IV. TAXES; RESERVES...................................................................................17
Section 4.1. Payment of Taxes..........................................................................17
Section 4.2. Right to Contest..........................................................................17
Section 4.3. Reserve Account...........................................................................18
ARTICLE V. MANAGEMENT..........................................................................................19
Section 5.1. Management................................................................................19
ARTICLE VI. LEASES AND RENTS...................................................................................19
Section 6.1. Assignment................................................................................19
Section 6.2. Lease Forms, Renewals, etc................................................................20
ARTICLE VII. MAINTENANCE AND REPAIR............................................................................22
Section 7.1. Maintenance and Repair of the Property; Alterations; Replacement of Equipment.............22
(i)
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ARTICLE VIII. TRANSFER OR ENCUMBRANCE OF THE PROPERTY..........................................................23
Section 8.1. No Transfer/Encumbrance...................................................................23
Section 8.2. Permitted Transfers.......................................................................23
Section 8.3. Conditions to Consent.....................................................................23
ARTICLE IX. BOOKS AND RECORDS; REPORTING REQUIREMENTS..........................................................24
Section 9.1. Estoppel Certificates.....................................................................24
Section 9.2. Financial Statements and Books and Records................................................24
ARTICLE X. SECURITY AGREEMENT; FIXTURE FILING..................................................................25
Section 10.1. Security Agreement; Fixture Filing.......................................................25
ARTICLE XI. DEFAULTS...........................................................................................26
Section 11.1. Events of Default........................................................................26
Section 11.2. Remedies.................................................................................27
Section 11.3. Interest After Default...................................................................32
Section 11.4. Borrower's Actions After Default.........................................................32
Section 11.5. Control by Lender After Default..........................................................32
Section 11.6. Right to Cure Defaults...................................................................32
Section 11.7. Recovery of Sums Required to Be Paid.....................................................33
Section 11.8. Marshaling and Other Matters.............................................................33
Section 11.9. No Impairment; No Releases...............................................................33
ARTICLE XII. NEGATIVE COVENANTS REGARDING INDEBTEDNESS AND CHANGES IN BORROWER.................................33
Section 12.1. Negative Covenants Regarding Indebtedness and Changes in Borrower........................33
ARTICLE XIII. ENVIRONMENTAL COMPLIANCE.........................................................................35
Section 13.1. Indemnity................................................................................35
Section 13.2. Representations Regarding Hazardous Materials............................................35
Section 13.3. Covenants, Representations and Warranties................................................36
Section 13.4. Indemnification Procedures...............................................................38
Section 13.5. General Provisions.......................................................................39
ARTICLE XIV. MISCELLANEOUS.....................................................................................40
Section 14.1. Right of Entry...........................................................................40
Section 14.2. No Merger................................................................................40
Section 14.3. Tax Reduction Proceedings................................................................40
Section 14.4. Attorney-in Fact.........................................................................40
Section 14.5. Substitution or Resignation of Trustee...................................................41
Section 14.6. Conveyance by Trustee/Defeasance.........................................................41
(ii)
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ARTICLE XV. RULES OF CONSTRUCTION..............................................................................41
Section 15.1. Rules of Construction.....................................................................41
ARTICLE XVI. STATE SPECIFIC PROVISIONS.........................................................................47
Section 16.1. Inconsistencies..........................................................................47
Exhibit A Legal Description
(iii)
DEFINITIONS
For all purposes of this Deed of Trust, the following capitalized terms
shall have the meaning set forth below or in the provision referenced below:
"Affiliate" shall mean, with respect to any party, (i) each Person that
controls, is controlled by or is under common control with such party, (ii) each
Person that, directly or indirectly, owns or controls, whether beneficially or
as a trustee, guardian or other fiduciary, any of the stock of such party, and
(iii) each of such party's officers, directors, members, joint venturers and
partners. For the purpose of this definition, "control" of a Person shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise.
"Appraisal" shall mean an appraisal of the Property, reasonably
satisfactory to Lender in form and content, performed by an Appraiser.
"Appraiser" shall mean a licensed real estate appraiser who is a member of
the American Institute of Real Estate Appraisers, having sufficient expertise
and experience to perform an Appraisal, and otherwise reasonably satisfactory to
Lender.
"Architect" shall mean a reputable architect, engineer licensed in the
State, or general contractor selected by Borrower and reasonably satisfactory to
Lender.
"Assignment" shall mean the Assignment of Leases and Rents of even date
herewith from Borrower to Lender pertaining to the Property, as the same may be
amended, supplemented or modified from time to time.
"Borrower" shall have the meaning set forth in the first paragraph on page
1 hereof.
"Business Day" shall mean a weekday, Monday through Friday, except a legal
holiday or a day on which banking institutions in New York, New York are
authorized by law to be closed.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (42 U.S.C. ss. 9601 et seq.), as amended or
supplemented from time to time.
Claim" shall have the meaning set forth in Section 13.4 hereof.
"Collateral" shall mean all of the Property which is governed by the UCC.
"Contracts" shall have the meaning set forth in the NINTH granting clause
hereof.
"Costs" shall mean, collectively, all liens, damages, losses, fines,
liabilities, obligations, settlements, penalties, assessments, citations,
directives, claims, litigations, demands, response costs (including, without
limitation, investigation, removal, remediation, mitigation, containment,
post-closure and monitoring costs), defenses, judgments, suits, proceedings,
costs, laboratory fees, disbursements and expenses of any kind or nature
whatsoever (including, without limitation, reasonable attorneys', consultants'
and experts' fees and disbursements).
(iv)
"Costs" shall also include any future reduction in sales price of, or
unmarketability and consequent inability of Lender or Trustee to sell the
Property pursuant to the power of sale provided herein, and the lost opportunity
costs resulting from the inability of Lender or Trustee to sell or dispose of
its interest in the Property, all as a consequence of any event described in
Section 13.1.
"Debt" shall have the meaning set forth in the recitals on page 1 hereof.
"Deed of Trust" shall have the meaning set forth in the first paragraph on
page 1 hereof.
"Default Rate" shall have the meaning set forth in the Note.
"Environmental Laws" shall mean, collectively, any present or future
federal, state or local law, statute, rule, regulation, common law duty or
ordinance, and any judicial or administrative order, judgment, permit or
authorization issued pursuant thereto, pertaining to the environment, natural
resources, pollution, health, safety or clean-up, including, without limitation,
each of the laws, statutes and ordinances identified in the definition of
Hazardous Materials hereinafter set forth, as enacted as of the date hereof and
as hereafter amended or supplemented, and all regulations promulgated pursuant
thereto.
"Equipment" shall have the meaning set forth in the FOURTH granting clause
hereof.
"Event of Default" shall have the meaning set forth in Section 11.1 hereof.
"Governmental Authority" shall mean any federal, state, regional, local or
other government or political subdivision or agency thereof and any body or
authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Hazardous Materials" shall mean and include (i) those elements, wastes,
materials, substances or compounds identified or regulated as hazardous or toxic
pursuant to the CERCLA, the Resource Conservation and Recovery Act of 1976 (42
U.S.C. ss. 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. ss.
1251 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. ss. 5101 et
seq.), the Clean Air Act (42 U.S.C. ss. 7401 et seq.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. ss. 136 et seq.), the Emergency Planning
and Community Right-to-Know Act (42 U.S.C. ss. 11001 et seq.), the Occupational
Safety and Health Act (29 U.S.C. ss. 651 et seq.), the Residential Lead-Based
Paint Hazard Reduction Act (42 U.S.C. ss. 4851 et seq.), any analogous state or
local laws, any amendments thereto, and the regulations promulgated pursuant to
said laws, all as amended from time to time, relating to or affecting the
Property, (ii) any hazardous, toxic or harmful substances, wastes, materials,
pollutants or contaminants (including, without limitation, asbestos,
polychlorinated biphenyls, petroleum or petroleum by-products or wastes,
flammable explosives, radioactive materials, infectious substances, materials
containing lead-based paint or raw materials which include hazardous
constituents) or any other substances or materials which are identified by or
regulated by Environmental Laws, on, in, under or affecting all or any portion
of the Property or any surrounding areas, and (iii) any substances now or
hereafter defined as or included in the definitions of "hazardous substances",
"hazardous wastes", "hazardous materials", "pollutants", "contaminants" or
"toxic substances" under any applicable Legal Requirements.
(v)
"Improvements" shall have the meaning set forth in the SECOND granting
clause hereof.
"Indemnitor" shall mean Wilshire Oil Company of Texas, a Delaware
corporation having an address of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ and all heirs, executors, legal representatives, successors and assigns of
Wilshire Oil Company of Texas.
"Insurance Requirements" shall mean all terms of any insurance policy
required by this Deed of Trust, all requirements of the issuer of any such
policy, and all regulations and then current standards applicable to or
affecting the Property or any use or condition thereof, which may, at any time,
be recommended by the Board of Fire Underwriters, if any, having jurisdiction
over the Property, or such other authority exercising similar functions.
"Leases" shall have the meaning set forth in the FIFTH granting clause
hereof.
"Legal Requirements" shall mean all federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions (including, without limitation any of the
foregoing relating to Hazardous Materials) affecting either the Property or the
ownership, occupancy, construction, use, alteration or operation thereof,
whether now or hereafter enacted and in force, including, without limitation,
(i) any which may require repairs, modifications or alterations in or to the
Property, (ii) any which may in any way limit the use and enjoyment thereof, and
all permits, licenses and authorizations and regulations relating thereto, (iii)
all covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrower, any time in force affecting
or relating to the Property, or (iv) any which may pertain to requirements for
equal opportunity, anti-discrimination, fair housing disability accommodation,
safety, environmental protection, zoning or land use.
"Lender" shall have the meaning set forth in the first paragraph on page 1
hereof.
"Licenses" shall have the meaning set forth in the EIGHTH granting clause
hereof.
"Lien" shall mean, with respect to any property or asset, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, right of
reverter, option to purchase, reversionary interest, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever on or
with respect to such property or asset (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic affect as any of the foregoing).
"Loan" shall have the meaning set forth in the recitals on page 1 hereof.
"Loan Documents" shall mean, collectively, all documents, instruments,
certifications and agreements now or hereafter given in connection with,
evidencing, securing or relating to the Loan or the indebtedness evidenced by
the Note, including, without limitation, all indemnities, guaranties, the Note,
this Deed of Trust, related UCC financing statements, the Assignment and the
Reserve Agreement.
"Maturity Date" shall have the meaning set forth in the Note.
(vi)
"Net Proceeds" shall mean, in connection with any casualty, the insurance
proceeds actually received by Lender and in connection with any Taking, any
condemnation awards, proceeds or other payments, in either case, including any
interest accrued or which accrues thereon and less any adjusters' fees and
expenses and all costs and expenses, including, without limitation, all
reasonable architects', attorneys', engineers' and other consultants' and
professionals' fees and disbursements incurred by Lender in connection with the
casualty or Taking in question.
"Note" shall have the meaning set forth in the recitals on page 1 hereof.
"Officer's Certificate" shall mean a certificate of Borrower signed by the
President, any Vice President, the Treasurer or any other officer authorized so
to sign by the board of directors or by-laws of Borrower, and delivered to
Lender or, if Borrower is a partnership with one or more corporate general
partners, a certificate so executed by such general partner(s) and/or any other
partners having the power and authority to sign on behalf of Borrower or, if
Borrower is a limited liability company with one or more corporate members or
managers, a certificate so executed by such member(s), manager(s) and/or any
other members having the power and authority to sign on behalf of Borrower.
"Other Charges" shall have the meaning set forth in Section 4.1 hereof.
"Payment Date" shall have the meaning set forth in the Note.
"Permitted Encumbrances" shall have the meaning set forth in Section 1.1
(d) hereof.
"Person" shall mean any individual, corporation, partnership, joint
venture, estate, trust, limited liability company, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing, and any of the heirs, executors, legal representatives, successors
and assigns of any of the foregoing, as applicable.
"Premises" shall have the meaning set forth in the FIRST granting clause
hereof.
"Prepayment Charge" shall have the meaning set forth in the Note.
"Property" shall have the meaning set forth in the recitals on page 1
hereof.
"Rating Agencies" shall mean Standard & Poor's Ratings Group, ▇▇▇▇▇'▇
Investors Service, Inc., Fitch, Inc. or any successors thereto.
"Rents" shall have the meaning set forth in the FIFTH granting clause
hereof.
"Reserve Account" shall have the meaning set forth in Section 4.3 hereof.
"Reserve Agreement" shall mean that agreement dated the date hereof, made
by Borrower in favor of Lender, in connection with additional Reserves, if any,
required by Lender, other than for Taxes and insurance premiums expressly
provided for in Article IV hereof.
(vii)
"Reserves" shall have the meaning set forth in Section 4.3 hereof.
"Restoration Work" shall have the meaning set forth in Section 3.3 hereof.
"Retention Amount" shall have the meaning set forth in Section 3.4 (e)
hereof.
"Special-Purpose Entity" shall mean an entity which owns no interest or
property other than the Property or interests in Borrower and otherwise is
required to comply with the Special-Purpose Entity Provisions.
"Special-Purpose Entity Provisions" shall mean the provisions required by
Lender to be included in an entity's organizational documents for such entity to
satisfy Lender's bankruptcy-remote requirements. Such provisions deal with
certain prohibited activities of the entity, subordination of certain
indemnification obligations, separateness covenants and, if applicable,
anti-dissolution, voting and independent director requirements.
"State" shall mean the state or commonwealth in which the Premises is
located.
"Taking" shall mean a taking or voluntary conveyance during the term hereof
of any of the Property, or any interest therein or right accruing thereto or the
use thereof or relocation of any roadway providing access thereto, including,
without limitation, any change of grade of any street, road, avenue or the
widening of streets, roads or avenues adjoining or abutting the Premises, or any
other injury to, or decrease in value of the Property, as the result of, or in
settlement of any condemnation or other eminent domain proceeding affecting the
Property whether or not the same shall have actually been commenced.
"Taxes" shall have the meaning set forth in Section 4.1 hereof.
"Transfer" shall mean any direct or indirect sale, conveyance, mortgaging,
grant, bargain, alienation, encumbrance, pledge, assignment or other transfer of
the Property or any part thereof, or interest therein, or agreement to do any of
the foregoing, whether voluntary or involuntary, including, without limitation,
all of the items enumerated in Section 8.1 hereof.
"Trustee" shall mean the Person identified as such in this Deed of Trust
and its successors and assigns.
"UCC" shall mean the Uniform Commercial Code as in effect in the State.
(viii)
THIS MULTIFAMILY DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND
FIXTURE FILING (as the same may be supplemented, amended, modified or extended
from time to time, "Deed of Trust") is made as of February 27, 2003, by
Wellington Apartments, L.L.C., a Delaware limited liability company having an
address of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ , ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ("Borrower"), to
First American Title Insurance Company, a Texas corporation, having an address
at 1500 South Dairy Ashford, Suite 300, 77077 ("Trustee"), for the benefit of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., a Delaware corporation, having an address
at 4 World Financial Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇ ("Lender").
W I T N E S S E T H:
WHEREAS, Borrower has requested that Lender make a loan to Borrower in the
aggregate principal sum of FOUR MILLION FOUR HUNDRED THOUSAND DOLLARS ($
4,400,000) ("Loan") to be used for the purposes set forth herein; and
WHEREAS, Lender has agreed to make the Loan to Borrower upon, and subject
to, the terms and conditions set forth herein and in the other Loan Documents;
NOW THEREFORE, in consideration of Lender making the Loan, and other good
and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, and TO SECURE (i) the payment of all principal, accrued
interest and other sums due under that certain promissory note dated the date
hereof, made by Borrower in favor of Lender in the original principal amount of
FOUR MILLION FOUR HUNDRED THOUSAND DOLLARS ($ 4,400,000) Dollars ("Note"); and
(ii) the payment and performance of all other covenants, obligations,
liabilities or sums due or to become due under this Deed of Trust, the Note or
any other Loan Document, including, without limitation, interest on said
obligations, liabilities or sums now due or to become due under this Deed of
Trust, the Note or any other Loan Document; and (iii) any further or subsequent
advances made by Lender or Trustee pursuant to this Deed of Trust, the Note or
any other Loan Document to protect or preserve the Property or the lien or
security created hereby, including all advances and costs incurred by Lender or
Trustee to perform any obligation of Borrower under the Loan Documents and (iv)
all costs of collection in connection with this Deed of Trust and the other Loan
Documents (items (i) through (iv), collectively, "Debt"), Borrower does hereby
irrevocably grant, bargain, sell, alien, demise, convey, assign, transfer,
mortgage, grant a security interest in, hypothecate, pledge, set over unto
Trustee and to the Trustee's successors and assigns in trust forever (to the
extent legally permitted), with power of sale, all right, title and interest of
Borrower in, to and under all of the following property, rights, interests and
estates, whether now owned or hereafter acquired (collectively, and any part or
portion thereof, "Property"):
FIRST, all plots, pieces or parcels of real property described in Exhibit A
hereto ("Premises");
SECOND, all buildings, structures and improvements of every kind or nature
now or hereafter located on the Premises (collectively, "Improvements");
THIRD, all easements, rights-of-way, strips and gores of land, streets,
ways, alleys, passages, sewer rights, water, ▇▇▇▇▇, water courses, ▇▇▇▇▇, water
rights, utility capacity, ditches, reservoirs, air rights and development
rights, lateral supports, foundations and drainage, and all estates, rights,
interests, reversions, remainders, tenements, hereditaments and appurtenances of
any nature whatsoever located on, under, above or pertaining to the Premises and
Improvements;
FOURTH, all machinery, equipment, fittings, furniture, furnishings,
fixtures (including, but not limited to, all heating, air conditioning,
ventilating, waste disposal, sprinkler and fire and theft protection equipment,
plumbing, lighting, communications and elevator fixtures), building equipment,
materials and supplies, and all warranties and guaranties relating thereto, and
all other property of every kind and nature whatsoever, now or hereafter located
upon, in or used in connection with the Premises or the Improvements or
appurtenant thereto (collectively, "Equipment");
FIFTH, all leases, tenancies, licenses, subleases, assignments and other
agreements affecting the use, enjoyment or occupancy of all or any portion of
the Premises or the Improvements now existing or hereafter entered into, and all
amendments, renewals and extensions thereto (collectively, "Leases"), together
with all income, rents, issues, profits, revenues and royalties therefrom
(collectively, "Rents"), and all security deposits, guarantees or other security
held by Borrower in connection therewith, and all other credits, rights,
options, claims and causes of action of Borrower in connection with any of the
foregoing;
SIXTH, all proceeds, awards and payments, including interest thereon, which
may hereafter be made with respect to all or any portion of the Property in
connection with any Taking, and all proceeds of, and any unearned premiums
under, any insurance policies covering all or any portion of the Property, and
all refunds or rebates of Taxes, impositions and Other Charges or in connection
with other Property, and any interest thereon;
SEVENTH, all accounts, funds, deposits and reserves, including without
limitation, those Reserves referred to in or governed by Article IV hereof and
any Reserves covered by the Reserve Agreement, and all accounts receivable,
contract rights, rights, claims, actions, general intangibles, trademarks, trade
names, franchises, service marks, building names and logos;
EIGHTH, all licenses, permits, building permits, certificates, certificates
of occupancy, consents, authorizations, approvals, variances and land use
entitlements for the construction, use, occupancy and operation of the
Improvements and the Premises (collectively, "Licenses");
NINTH, all contracts, documents, agreements and arrangements to which
Borrower is a party or bound or which relate to the use, operation, ownership or
enjoyment of the Property, including without limitation all service contracts,
management agreements, zoning agreements, development agreements, utility
agreements, parking arrangements, operating contracts, supply and maintenance
contracts, equipment or other personal property leases, and all amendments
thereto; and all income, revenue, rights of reimbursement and benefits
therefrom, and all deposits, security, credits and advance payments in
connection with any of the foregoing; and all books and records relating to the
Property (collectively, "Contracts");
-▇-
▇▇▇▇▇, all claims with respect to the Property, including without
limitation, for loss or damage arising from any defect in or with respect to the
design or construction of the Improvements or the Equipment; and the right to
appear in and defend any action or proceeding, in the name and on behalf of
Borrower, brought with respect to any of the Property; and the right to commence
any action or proceeding to protect the interest of Lender in such Property;
ELEVENTH, all drawings, designs, architectural renderings, models, surveys,
reports, studies, tests, plans and specifications for the design, development,
construction, repair, improvement, ownership or operation of the Property;
TWELFTH, all oil, gas, minerals, timber and crops in, on, under or
pertaining to the Premises and all royalties, revenues, leasehold and other
rights and interests of Borrower pertaining thereto, including, without
limitation, any surface or subsurface entry rights to the Premises or any other
property; and
THIRTEENTH, all renewals, substitutions, improvements, accessions,
attachments, additions, replacements and all proceeds to or of each of the
foregoing, and all conversions of the security constituted thereby so that,
immediately upon such acquisition, construction, assemblage, placement or
conversion, as the case may be, and in each such case, the foregoing shall be
deemed a part of the Property and shall automatically become subject to the lien
of this Deed of Trust as fully and completely and with the same priority and
effect as though now owned by Borrower and specifically described herein,
without any further mortgage or assignment or conveyance by Borrower.
TO HAVE AND TO HOLD the above described Property unto Trustee, its
successors and assigns, in fee simple forever, and to warrant and forever defend
the title thereto, subject only to Permitted Encumbrances.
PROVIDED, ALWAYS, that if Borrower shall pay and discharge the Debt in full
and perform and observe the terms, covenants and conditions set forth in the
Loan Documents, then these presents and the estate hereby granted shall cease,
determine and be void.
AND, Borrower covenants with and represents and warrants to Lender and
Trustee as follows:
ARTICLE I. REPRESENTATIONS, WARRANTIES
AND COVENANTS OF BORROWER
Section 1.1. Representations, Warranties and Covenants of Borrower.
Borrower represents and warrants to, and covenants with Lender and Trustee as
follows:
(a) Payment of Debt. Borrower shall pay the Debt at the time and in the
manner provided in the Note and the other Loan Documents and shall perform all
of its obligations in accordance with the provisions set forth herein and in the
other Loan Documents.
(b) Authorization. Borrower has duly authorized the execution, delivery and
performance of the Loan Documents to which it is a party, and has taken all
requisite action and obtained all required approvals and consents for the Loan
Documents to be binding upon and
-3-
enforceable against Borrower. Borrower warrants that the execution, delivery and
performance of such Loan Documents will not (i) violate any provision of any
organizational document of Borrower or any instrument, contract, covenant,
mortgage, indenture or other agreement to which Borrower is a party or bound and
(ii) to its knowledge, violate or contravene any law, judgment, order, rule or
regulation applicable to Borrower.
(c) Enforceability. The Note, this Deed of Trust and the other Loan
Documents are (i) legal, valid and binding obligations of Borrower, enforceable
against Borrower in accordance with their respective terms and (ii) not subject
to any right of rescission, set-off, counterclaim or defense, and no claim of
any such right has been asserted with respect thereto.
(d) Title. Borrower has good, indefeasible, marketable and insurable fee
simple title to the Premises and Improvements, free and clear of all liens,
claims, encumbrances and charges whatsoever except for those expressly set forth
as exceptions to title or subordinate matters in the title insurance policy
insuring the lien of this Deed of Trust which Lender has agreed to accept
("Permitted Encumbrances"). Borrower has the right, power and authority to
mortgage and convey its interest in the Property as contemplated herein.
Borrower shall forever warrant and defend such title, and the validity and
priority of the lien of this Deed of Trust, to Lender, from and against the
claims of all Persons. The foregoing warranty of title shall survive the
foreclosure of this Deed of Trust or any deed given in lieu thereof.
(e) Use of the Property. Borrower shall cause the Property to be used for
its current use in compliance with all Licenses and Legal Requirements. Borrower
shall not allow any change in the manner of use of the Property to occur.
Borrower shall not permit the Property to be used by the public or any Person
not a tenant under a Lease in such manner as might impair Borrower's title to
the Property or give rise to a claim of adverse usage or possession or of
implied dedication. Borrower shall not file or subject the Premises or
Improvements to any subdivision, declaration of condominium, cooperative or
other multiple ownership regime.
(f) Legal Requirements. Borrower is in compliance in all material respects
with all Legal Requirements. There is no evidence of any illegal activities at
the Property. Borrower shall comply with all present and future Legal
Requirements in all material respects.
(g) Licenses. Borrower possesses all Licenses, franchises, patents,
copyrights, trademarks and trade names necessary (i) for the use, occupancy,
maintenance and operation of the Property and (ii) to conduct its business
substantially as now conducted. All such items are currently in full force and
effect, and Borrower shall do all things necessary to comply with and keep such
items in full force and effect.
(h) Leases and Contracts. Borrower has delivered to Lender true, correct
and complete copies of all Contracts and Leases, and as of the date of this Deed
of Trust, is in compliance with all of the material terms thereof. Borrower is
not a party to any Contract or Lease or subject to any restriction which may
have a material adverse effect on Borrower or the Property. To the best
knowledge of Borrower, after due inquiry and investigation, no default exists,
or with notice or the passage of time or both would exist, by any party under
any Contract or Lease, which would, in the aggregate, have a material adverse
effect on Borrower or the Property. Borrower shall comply in a timely fashion
with all of its material covenants and
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obligations and satisfaction of all conditions under all Leases and Contracts to
which it is a party or bound.
(i) No Bankruptcy Filing. Any borrowings made by Borrower under the Loan do
not and will not render Borrower insolvent. No bankruptcy, reorganization or
insolvency proceedings are pending against Borrower or, if Borrower is a
partnership or limited liability company, against any general partner or member
of Borrower, or against any guarantor or indemnitor of any obligations under the
Loan. Borrower is not contemplating either filing a petition under any state or
federal bankruptcy or insolvency laws or liquidating a major portion of its
assets. Borrower has no knowledge of any party contemplating the filing of any
such petition against it or against any general partner or member, if
applicable, or any guarantor or indemnitor.
(j) Disclosure. No statement of fact made by or on behalf of Borrower to
Lender or Trustee in connection with the Loan or in any certificate, rent roll,
document, affidavit, data, financial or operating statement or schedule
furnished to Lender or Trustee in connection with the Loan, (i) contains any
untrue statement of a material fact or (ii) omits to state any material fact
necessary to make statements contained therein or herein true or not misleading
as of the date given, and there has been no material adverse change in the
information set forth therein. There is no fact presently known to Borrower
which has not been disclosed to Lender which has or could have a material
adverse effect on either Borrower or the Property. For purposes of this Section
1.1(j), "known to Borrower" shall mean (x) known to any of Borrower's managing
member's officers, directors or employees with supervisory responsibilities and
(y) if the property manager at the Premises is an Affiliate of Borrower, known
to any of such property manager's officers, directors or employees with
supervisory responbilities.
(k) Financial Information. All financial data that has been delivered by or
on behalf of Borrower to Lender or Trustee (i) is true, correct and complete in
all material respects, (ii) accurately represents the financial condition of the
Person covered thereby as of the date stated therein, and (iii) has been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered. As of the date of this Deed
of Trust, neither Borrower nor, if Borrower is a partnership or limited
liability company, any general partner or member of Borrower, has any material
contingent liability, liability for taxes or other unusual or forward commitment
not reflected in the financial statements delivered to Lender. Since the date of
the last financial statements delivered by Borrower to Lender, there has been no
material adverse change in the financial condition of the Property, Borrower
nor, if Borrower is a partnership or limited liability company, any general
partner or member of Borrower.
(l) No Advance Payments. Borrower has not received any rent, payment,
deposit or other amount of any nature for any existing or prospective occupant
or tenant at the Premises more than one (1) month in advance of its due date.
(m) Other Security Interests. There are no security agreements or financing
statements affecting the Property other than (i) as approved in writing by
Lender prior to the date hereof and (ii) those created in favor of Lender.
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(n) Federal Reserve Regulations. No part of the proceeds of the Loan will
be used for the purpose of purchasing or acquiring any "margin stock" within the
meaning of Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulations G, T, U or X or any other Regulations of such Board of Governors, or
for any purposes prohibited by Legal Requirements or by the terms and conditions
of the Loan Documents.
(o) Utilities. The Property has all necessary and sufficient utility
services for the full use, occupancy, disposition and enjoyment of the Property,
including water, storm sewer, sanitary sewer, electric, gas, telephone and cable
facilities, located in the public rights-of-way or within perpetual easements
acceptable to Lender.
(p) Public Access. The Property has adequate access to completed, dedicated
all-weather streets, roads, highways, driveways, curb cuts and bridges necessary
for the full utilization of the Property for its current purpose, without
further condition or cost to Borrower.
(q) Separate Lots. The Premises is made up of one or more parcels, each of
which constitutes a separate tax lot and none of which constitutes a portion of
any other tax lot. Borrower shall not consent to or initiate the joint
assessment of the Premises and the Improvements (i) with any other real property
constituting a separate tax lot or (ii) with any of the Property which may be
deemed to constitute personal property.
(r) Litigation. To the best knowledge of Borrower, after due inquiry and
investigation, there is no judicial or administrative action, suit or proceeding
pending or threatened against or affecting Borrower, or, if Borrower is a
partnership or limited liability company, against any general partner or member
of Borrower, or against the Property which, if adversely determined, would have
a material adverse effect on either the Property or the ability of Borrower to
perform its covenants and obligations under the Loan Documents.
(s) Casualty Damage. As of the date of this Deed of Trust, the Property is
free from unrepaired damage caused by fire, flood or other casualty.
(t) Taking. As of the date of this Deed of Trust, no proceeding for a
Taking has been commenced or, to the best of Borrower's knowledge, threatened or
contemplated.
(u) No Delinquent Taxes. The Property and Borrower are free from delinquent
Taxes and Other Charges.
(v) Tax Filings. Borrower and, if Borrower is a partnership or limited
liability company, each of the general partners or members of Borrower, have
filed all federal, state and local tax returns required to be filed and have
paid or made adequate provision for the payment of all federal, state and local
taxes, charges and assessments, including sales and payroll taxes. The income
tax returns filed by Borrower and, if Borrower is a partnership or limited
liability company, each of the general partners and members of Borrower,
accurately and correctly reflect the income and taxes of Borrower and such
general partners or members for the periods covered thereby, subject only to
reasonable adjustments required by the Internal Revenue Service or other
applicable tax authority upon audit, which will have no material adverse effect
on the financial
-6-
condition of Borrower, such general partners or members, or Borrower's ability
to perform the covenants and obligations required to be performed under the Loan
Documents.
(w) Property Condition. The Improvements are structurally sound, in good
repair, free of defects in materials and workmanship and have been constructed
and installed in substantial compliance with all Legal Requirements. All major
building systems located within the Improvements including, without limitation,
heating, ventilation and air conditioning systems and electrical and plumbing
systems, are in good working order and condition.
(x) Equipment. There are no fixtures, machinery, apparatus, tools,
equipment or articles of personal property attached or appurtenant to, or
located on, or used in connection with the management, operation or maintenance
of the Property, except for the Equipment and equipment leased by Borrower for
the management, operation or maintenance of the Property in accordance with the
Loan Documents. All of the Equipment is free and clear of all Liens, except for
the lien of this Deed of Trust and the Permitted Encumbrances.
(y) Not Foreign Person. Borrower is not a "foreign person" within the
meaning of ss.1445(f)(3) of the Internal Revenue Code of 1986 as amended and the
related Treasury Department regulations, including temporary regulations.
With respect to the representations set forth in items (j), (k) and (l), the
term "Borrower" shall also include any predecessor-in-interest to Borrower who
applied for the Loan secured hereby, if applicable.
Section 1.2. Liens. Borrower shall, at its expense, maintain this Deed of
Trust as a first priority lien on the Property and shall keep the Property free
and clear of all Liens of any kind and nature other than the Permitted
Encumbrances. If Borrower fails to comply with the requirements of this
provision, Lender or Trustee may, but shall not be obligated to, pay any such
Lien, and Borrower shall reimburse Lender or Trustee, as the case may be, on
demand for all sums so expended, together with interest thereon at the Default
Rate from the date advanced to the date repaid, all of which shall be deemed
part of the Debt. Borrower shall, within thirty (30) days following the filing
of any materialman's, mechanic's or similar lien, discharge such lien of record,
by payment, bonding or otherwise and, promptly upon request by Lender, deliver
to Lender evidence reasonably satisfactory to Lender of the discharge thereof.
Nothing contained herein shall be deemed a consent or request of Lender, express
or implied, by inference or otherwise, to the performance of any alteration,
repair or other work by any contractor, subcontractor or laborer or the
furnishing of any materials by any materialmen in connection therewith.
Section 1.3. Further Acts, etc. At its sole cost and expense, Borrower
shall execute, acknowledge and deliver all such further acts, deeds,
conveyances, mortgages, assignments, financing statements, transfers and
assurances as Lender or Trustee shall, from time to time, require to confirm and
fully protect the lien and priority of this Deed of Trust, or to file, register
or record this Deed of Trust. On demand, Borrower shall execute and deliver and
hereby authorizes Lender and Trustee to execute in the name of Borrower or
without the signature of Borrower, to the extent Lender or Trustee may lawfully
do so, one or more financing statements, chattel mortgages or comparable
security instruments, to evidence more effectively the lien
-7-
hereof upon the Property. Borrower grants to Lender and Trustee an irrevocable
power of attorney coupled with an interest for the purpose of (i) protecting,
perfecting, preserving and realizing upon the interests granted pursuant to this
Deed of Trust and to effect the intent hereof, and (ii) correcting any mistakes,
filling in blanks and otherwise completing and perfecting the Loan Documents
(provided such changes do not impose any additional liability or obligation upon
Borrower). Borrower hereby ratifies all that Lender shall lawfully do or cause
to be done pursuant to this Section 1.3.
Section 1.4. Recording of Deed of Trust, etc. Upon execution and delivery
of this Deed of Trust and thereafter, from time to time, Borrower shall cause
this Deed of Trust and any other Loan Document specified by Lender or Trustee,
and any document of further assurance, to be filed, registered or recorded in
such manner and in such places as may be required by any Legal Requirement in
order to publish notice of and fully protect Trustee's and Lender's interest in
and lien or security interest upon the Property. Borrower shall pay all filing,
registration or recording fees, and all expenses incidental to the preparation,
execution and acknowledgment and subsequent release or reconveyance of this Deed
of Trust, any deed of trust supplemental hereto, any instrument of further
assurance, and any other Loan Document with respect to the Property and all
federal, state, county and municipal, taxes, duties, imposts, documentary
stamps, assessments, intangibles taxes and other charges arising out of or in
connection with the execution, delivery, filing or recordation of this Deed of
Trust, the Note or any other Loan Document.
Section 1.5. Changes in Taxation Laws. In the event of the passage after
the date of this Deed of Trust of any Legal Requirement deducting from the value
of the Property for the purpose of taxation, amounts in respect of any Lien
thereon or changing in any way the Legal Requirements now in force for the
taxation of this Deed of Trust and/or the Debt for federal, state or local
purposes, or the manner of the collection of any such taxes so as to adversely
affect the interest of Lender, or impose any tax or other charge on any Loan
Document, then Borrower will pay such tax, with interest and penalties thereon,
if any, within the statutory period. In the event Lender receives an opinion of
counsel chosen by it (the cost of which shall be paid by Borrower upon demand)
to the effect that the payment of such tax, interest and/or penalties by
Borrower would be (i) unlawful, (ii) taxable to Lender, (iii) unenforceable,
(iv) provide the basis for a defense of usury, or (v) entitle Borrower to any
credit against the Debt, then in any such event, Lender shall have the option,
by giving Borrower at least thirty (30) days' prior written notice, to declare
the Debt immediately due and payable, without any Prepayment Charge.
Section 1.6. Indemnification. (a) In addition and without limitation to any
other provision of this Deed of Trust, Borrower shall protect, indemnify and
save harmless Lender and Trustee, and their agents, employees, officers and
directors, from and against all Costs, claims, actions, suits, proceedings or
demands imposed upon or incurred by or asserted against Lender or Trustee, or
any of their agents, employees, officers or directors, by reason of (i)
ownership of this Deed of Trust, the Property or any interest therein, or
receipt of any Rents; (ii) any accident, injury to or death of any person or
loss of or damage to property occurring in, on or about the Property or on the
adjoining sidewalks, curbs, parking areas, streets or ways; (iii) any use,
nonuse or condition in, on or about, or possession of, the Property or on the
adjoining sidewalks, curbs, parking areas, streets or ways; (iv) performance of
any labor or services or the furnishing of any materials or other property in
respect of the Property; (v) any claim by brokers, finders or
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similar parties claiming to be entitled to a commission in connection with any
Lease or other transaction involving the Property; (vi) any Lien or claim
arising on or against the Property under any Legal Requirement or any liability
asserted against Lender or Trustee with respect thereto; or (vii) the claims of
any tenant, or its invitees or other party acting through or under any tenant or
otherwise arising under or as a consequence of any Lease. Any amounts payable to
Lender pursuant to this Section 1.6 shall constitute a part of the Debt secured
by this Deed of Trust and other Loan Documents, shall become immediately due and
payable and shall bear interest at the Default Rate from the date loss or damage
is sustained by Lender until paid.
(b) Notwithstanding the foregoing, Borrower shall have no obligation to
indemnify Lender or Trustee, as the case may be, pursuant to this Section for
liabilities, obligations, claims, damages, penalties, causes of action, costs
and expenses relative to the foregoing which result directly from the willful
misconduct or gross negligence of such Person.
(c) Notwithstanding the foregoing provisions of this Section to the
contrary, Trustee shall not be answerable or accountable hereunder except for
its own willful misconduct or gross negligence, and Borrower agrees to
indemnify, defend and hold Trustee harmless from and against any cost, loss,
damage, liability or expense (including, without limitation reasonable
attorney's fees and disbursements) which Trustee may incur or sustain in the
exercise or performance of its powers and duties hereunder.
Section 1.7. Cost of Defending and Upholding the Deed of Trust Lien. If any
Claim is commenced to which Lender or Trustee is made a party relating to the
Loan Documents, the Property or Lender's or Trustee's interest therein or in
which it becomes necessary to defend or uphold the lien of this Deed of Trust or
any other Loan Document, Borrower shall, on demand, reimburse Lender or Trustee,
as the case may be, for all Costs incurred by Lender in connection therewith.
Such Costs, together with interest thereon at the Default Rate from the date of
demand through the date of repayment, shall constitute part of the Debt.
ARTICLE II. INSURANCE
Section 2.1. Insurance Coverage. Borrower shall, at its own cost and
expense, maintain the following insurance coverages with respect to the Property
during the term of this Deed of Trust:
(a) Casualty. Insurance against loss or damage by fire, lightning, hail,
windstorm and other hazards covered by an "all risk" policy or a policy covering
"special" causes of loss, with such endorsements as Lender or Trustee may from
time to time reasonably require. The amount of such insurance shall be equal to
the lesser of (i) 100% of the full insurable replacement value of the Property
(exclusive of footings and foundations below the lowest basement floor) and
contain a replacement cost endorsement and agreed amount endorsement or (ii) the
original principal Loan amount evidenced by the Note provided a waiver of any
co-insurance provisions can be and is obtained, and in either case, the policy
shall be without deduction for depreciation. The determination of the
replacement cost amount shall be adjusted annually to comply with the
requirements of the insurer issuing the coverage or, at Lender's election, by
reference to such indexes, appraisals or information as Lender determines in its
reasonable discretion, and, unless the insurance required by this paragraph
shall be effected by blanket and/or umbrella policies in
-9-
accordance with the requirements of this Deed of Trust, the policy shall include
inflation guard coverage.
(b) Liability. Commercial general liability insurance under a policy
containing "Comprehensive General Liability Form" of coverage (or a comparably
worded form of coverage) and the "Broad Form CGL" endorsement (or a policy which
otherwise incorporates the language of such endorsement), providing coverage on
an occurrence (not "claims made") basis, which policy shall include, without
limitation, coverage against claims for personal injury, bodily injury, death
and property damage liability with respect to the Property and the operations
related thereto, whether on or off the Premises, and the following coverages:
Employee as Additional Insured, Product Liability/Completed Operations; Broad
Form Contractual Liability, Independent Contractor, Personal Injury and
Advertising Injury Protection, Medical Payment (with a minimum limit of $5,000
per person), Broad Form Cross Suits Liability Endorsement, where applicable,
hired and non-owned automobile coverage (including rented and leased vehicles),
and, if any alcoholic beverages shall be sold, manufactured or distributed on
the Property, liquor liability coverage, all of which shall be in such amounts
as Lender may from time to time reasonably require, but not less than One
Million Dollars ($1,000,000) per occurrence with a Two Million Dollar
($2,000,000) general aggregate limit. If such policy shall cover more than one
property, such limits shall apply on a "per location" basis. In the event a
swimming pool is located at the Property, Borrower shall obtain an excess
liability or umbrella policy to increase the foregoing limits to Four Million
Dollars ($4,000,000) per occurrence with a Five Million Dollar ($5,000,000)
general aggregate limit.
(c) Business Interruption. Business interruption and/or business income
insurance, (i) with loss payable to Lender; (ii) covering all risks required to
be covered by the insurance provided for in Section 2.1(a); (iii) in an amount
equal to the annual net income from the Property (net profit before payment of
income taxes) plus normal operating expenses of the Property, including payroll
and (iv) including either an agreed amount endorsement or a waiver of any
co-insurance provisions, so as to prevent Borrower, Lender and any other insured
thereunder from being a co-insurer. The amount of business interruption and/or
business income insurance shall be determined upon the execution of this Deed of
Trust and once each calendar year thereafter.
(d) Boiler. If the Property contains steam boilers, or other high pressure
vessels, insurance covering the major components of the central heating, air
conditioning and ventilating systems, boilers, other pressure vessels, high
pressure piping and machinery, elevators and escalators, if any, and other
similar equipment installed in the Improvements, in an amount equal to one
hundred percent (100%) of the full replacement cost of the Property, which
policies shall insure against physical damage to and loss of occupancy and use
of the Improvements arising out of an accident or breakdown covered thereunder.
(e) Flood. Flood insurance with a deductible not to exceed Three Thousand
Dollars ($3,000), or such greater amount as may be satisfactory to Lender in its
sole discretion, and in an amount equal to the full insurable value of the
Property or the maximum amount available, whichever is less, if the Property is
located in an area designated by the Federal Emergency Management Agency as a
special flood hazard area (Zone A or Zone V) as having special flood hazards,
and if flood insurance is available under the National Flood Insurance Act.
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(f) Worker's Compensation. Worker's compensation insurance or other similar
insurance which may be required by any Legal Requirement in an amount at least
equal to the minimum required by law.
(g) Building Ordinance and Law. Building ordinance and law coverage
acceptable to Lender, including, without limitation, Coverage for Loss to the
Undamaged Portion of the Building, Demolition Cost Coverage and Increased Cost
of Construction Coverage.
(h) Miscellaneous. Such other insurance coverages, in such amounts, and
such other forms and endorsements, as may from time to time be required by
Lender and which are customarily required by institutional lenders for similar
properties, similarly situated, including, without limitation, coverages against
other insurable hazards including, by way of example only, earthquake, sinkhole,
mine subsidence and acts of terrorism, which at the time are commonly insured
against and generally available. Borrower may carry insurance not required under
this Deed of Trust, provided any such insurance affecting the Property shall be
for the mutual benefit of Borrower and Lender, as their respective interests may
appear, and shall be subject to all other provisions of this Article II.
Section 2.2. Policy Terms. (a) All insurance required by this Article II
shall have a term of not less than one year and shall be in the form and amount
and with deductibles as, from time to time, shall be reasonably acceptable to
Lender, under valid and enforceable policies issued by financially responsible
insurers either licensed to transact business in the State where the Property is
located, or obtained through a duly authorized surplus line insurance agent or
otherwise in conformity with the laws of such State, with a rating of not less
than the third (3rd) highest rating category by any one of the Rating Agencies
or with an A.M. Best Company, Inc. rating of A or higher and a financial size
category of not less than X or a rating of at least BBB in the Insurer Solvency
Review published by Standard & Poor's. Originals or certified copies of all
insurance policies shall be delivered to and held by Lender. All such policies
shall name Lender as an additional insured, shall provide for loss payable to
Lender and shall contain: (i) standard "non-contributory mortgagee" endorsement
or its equivalent relating, inter alia, to recovery by Lender notwithstanding
(a) the negligent or willful acts or omissions of Borrower, (b) occupancy or use
of the Property for purposes more hazardous than those permitted by the terms of
such policy, (c) any foreclosure or other action taken by Lender pursuant to
this Deed of Trust upon the occurrence of an Event of Default, or (d) any change
in title or ownership of the Property; and (ii) a provision that such policies
shall not be canceled or amended, including, without limitation, any amendment
reducing the scope or limits of coverage, or failed to be renewed, without at
least thirty (30) days prior written notice to Lender in each instance. With
respect to insurance policies which require payment of premiums annually, not
less than thirty (30) days prior to the expiration dates of the insurance
policies obtained pursuant to this Deed of Trust, Borrower shall pay such
amount, except to the extent provision is actually made therefor pursuant to
Section 4.3(b). Not less than thirty (30) days prior to the expiration dates of
the insurance policies obtained pursuant to this Deed of Trust, originals or
certified copies of renewals of such policies (or certificates evidencing such
renewals), together with evidence satisfactory to Lender of the payment of all
premiums by Borrower and not through or by any financing arrangement, shall be
delivered by Borrower to Lender. Borrower shall not carry separate insurance,
concurrent in kind or form or contributing in the event of loss, with any
insurance required under this Article II. If the limits of any policy required
hereunder are
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reduced or eliminated due to a covered loss, Borrower shall pay the additional
premium, if any, in order to have the original limits of insurance reinstated,
or Borrower shall purchase new insurance in the same type and amount that
existed immediately prior to the loss.
(b) If Borrower fails to maintain and deliver to Lender the policies and
certificates of insurance required by this Deed of Trust, Lender or Trustee may,
at their option, procure such insurance and Borrower shall pay or, as the case
may be, reimburse Lender or Trustee, as the case may be, for, all premiums
thereon promptly, upon demand by Lender or Trustee, as the case may be, with
interest thereon at the Default Rate from the date paid by Lender or Trustee to
the date of repayment and such sum shall constitute a part of the Debt.
(c) The insurance required by this Deed of Trust may, at the option of
Borrower, be effected by blanket and/or umbrella policies issued to Borrower
covering the Property and the other properties of Borrower provided that, in
each case, the policies otherwise comply with the provisions of this Deed of
Trust and allocate to the Property, from time to time, the coverage specified by
this Deed of Trust, without possibility of reduction or coinsurance by reason
of, or damage to, any other property (real or personal) named therein. If the
insurance required by this Deed of Trust shall be effected by any such blanket
or umbrella policies, Borrower shall furnish to Lender original policies or
certified copies thereof, with schedules attached thereto showing the amount of
insurance applicable to the Property provided under such policies.
(d) Neither Lender, Trustee nor their agents or employees shall be liable
for any loss or damage insured by the insurance policies required to be
maintained under this Deed of Trust; it being understood that (i) Borrower shall
look solely to its insurance company for the recovery of such loss or damage,
(ii) such insurance company shall have no rights of subrogation against Lender,
Trustee, their agents or employees, and (iii) Borrower shall use its best
efforts to procure from such insurance company a waiver of subrogation rights
against Lender and Trustee. If, however, such insurance policies do not provide
for a waiver of subrogation rights against Lender and Trustee (whether because
such a waiver is unavailable or otherwise), then Borrower hereby agrees, to the
extent permitted by law and to the extent not prohibited by such insurance
policies, to waive its rights of recovery, if any, against Lender and Trustee,
their agents and employees, whether resulting from any damage to the Property,
any liability claim in connection with the Property or otherwise. If any such
insurance policy shall prohibit Borrower from waiving such claims, then Borrower
must obtain from such insurance company a waiver of subrogation rights against
Lender and Trustee.
Section 2.3. Assignment of Proceeds. (a) Borrower hereby assigns to Lender
all of its rights to insurance proceeds and condemnation awards in connection
with the Property, all of which proceeds shall be payable to Lender as
collateral and further security for the payment of the Debt and the performance
of Borrower's obligations under the Loan Documents. Borrower hereby authorizes
and directs the issuer of any such insurance or award to make payment directly
to Lender. Nothing herein contained shall be deemed to excuse Borrower from
repairing or maintaining the Property as provided in this Deed of Trust or
restoring all damage or destruction to the Property, provided that Lender shall
have elected to apply the Net Proceeds to pay for the cost of the Restoration
Work, regardless of the sufficiency of the Net Proceeds. No application or
release of proceeds by Lender shall be deemed a waiver or cure or any default or
Event of Default.
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(b) In the event of sale by Trustee pursuant to the power of sale provided
herein or any other conveyance of title or assignment of the Property in
extinguishment, in whole or in part, of the Debt, all right, title and interest
of Borrower, to the extent permissible, in and to all policies of insurance
required by this Deed of Trust shall inure to the benefit of the successor in
interest to Borrower or the purchaser of the Property. The provisions of this
Section 2.3(b) shall survive the termination of this Deed of Trust by sale by
Trustee pursuant to the power of sale provided herein or otherwise.
(c) Borrower hereby authorizes Lender to pay out of any proceeds or awards,
all adjusters' fees and expenses, and all of Lender's costs and expenses,
including, without limitation, all reasonable architects', attorneys',
engineers' and other consultants' and professionals' fees and disbursements,
incurred by Lender in connection with the (i) casualty or Taking, (ii) recovery
of the proceeds or award or (iii) repair or restoration or the Property pursuant
to Article III.
Section 2.4. Comply with Insurance Requirements. Borrower promptly shall
comply with, and shall cause the Property to comply with, all Insurance
Requirements and shall not by any action or omission invalidate any insurance
policy required to be carried hereunder or materially increase the premiums on
any such policy above the normal premium charged by the carrier of such policy.
ARTICLE III. CASUALTY AND CONDEMNATION
Section 3.1. Casualty and Condemnation. In the event of any damage or
destruction to, or commencement or threat of a Taking of, the Property, Borrower
shall give prompt written notice thereof to Lender. Borrower hereby assigns to
Lender all insurance proceeds, condemnation awards, compensation and other
recoveries related to damage or destruction to, or a Taking of, the Property. In
connection therewith, Lender is hereby irrevocably appointed as Borrower's
attorney-in-fact, coupled with an interest, with exclusive power (i) to collect,
receive and retain all such proceeds and recoveries, (ii) to make any compromise
or settlement in connection therewith, (iii) to give, execute and deliver on
behalf of Borrower proper receipts and acquittances therefor and (iv) to endorse
any checks, drafts or other instruments representing any insurance proceeds,
condemnation awards or other recoveries. If no Event of Default exists, Borrower
may participate in any such claims, suits or proceedings and shall be authorized
and entitled to compromise or settle any such claims, suits or proceedings in an
amount less than One Hundred Thousand Dollars ($100,000). Borrower shall execute
and deliver to Lender any and all instruments, proofs of loss, receipts,
vouchers and releases reasonably required in connection with any such claims,
suits, proceedings or settlements promptly after request therefor by Lender and
shall cooperate with Lender in connection therewith.
Section 3.2. Condemnation. In the event of a Taking, Lender shall have the
option, in its sole discretion, to apply any Net Proceeds toward the payment of
the Debt, to cure any default or Event of Default hereunder or to allow such
proceeds to be applied to the restoration of the Property to a usable whole. Any
Net Proceeds to be applied to restoration shall be disbursed subject to the
satisfaction of the conditions in Section 3.3 and in the manner set forth in
Section 3.4.
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Section 3.3. Casualty and Restoration. (a) In the event of any casualty to
the Property, Borrower shall promptly commence and diligently prosecute to
completion the repair, replacement, restoration and rebuilding of the Property
(the "Restoration Work") so damaged, destroyed or taken in full compliance with
all Legal Requirements and the provisions of this Article III, and free and
clear from any and all Liens, claims and encumbrances.
(b) Following (i) the occurrence of a Taking in which Lender approves, in
its sole discretion, Borrower's request to rebuild, or (ii) an insured casualty,
Lender shall apply the Net Proceeds to pay the cost of the Restoration Work in
accordance with Section 3.4 hereof provided:
(i) no Event of Default exists;
(ii) Borrower has provided its written (A) agreement to proceed
promptly and diligently with the Restoration Work in compliance with all Legal
Requirements and plans and specifications approved by an Architect, the
applicable Governmental Authority and, if requested, Lender and (B)
certification setting forth a reasonable estimate of the cost of completing the
Restoration Work and time schedule therefor;
(iii) the Restoration Work can be completed prior to the earlier of
(A) one year prior to the Maturity Date, or (B) the date occurring six (6)
months after the date of the casualty or Taking;
(iv) in Lender's sole judgment, there are sufficient proceeds of
business interruption, rent insurance or cash available to pay the Debt through
the completion of the Restoration Work and any reasonable period thereafter for
leasing the Property;
(v) in the event of a casualty, Borrower provides substantiation
requested by and satisfactory to Lender with respect to:
(A) the feasibility and reasonability of the schedule and costs;
(B) the restoration of the Property resulting in an economically
viable project at least equivalent to the quality and character of the Property
immediately prior to the casualty;
(C) the projected income and cash flow of the Property after the
restoration being at least equivalent to the levels prior to the casualty;
(D) the sufficiency of the Net Proceeds to complete the
Restoration Work during all phases of such work; and
(E) this Deed of Trust remaining a first priority lien on the
Property.
(c) If the cost of the Restoration Work exceeds the Net Proceeds, Borrower
shall deliver to Lender either: (i) cash collateral; (ii) an unconditional,
irrevocable, transferable letter of credit in form, substance, amount and issued
by a bank acceptable to Lender or (iii) a
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completion bond in form, substance, amount and issued by a surety company
acceptable to Lender.
(d) Notwithstanding the foregoing, if a casualty involves destruction of
seventy-five percent (75%) or more of the Premises, any right to rebuild or
restore the Property shall be in Lender's sole discretion.
(e) Borrower agrees with Lender that all fees, costs and expenses
(including without limitation, all reasonable attorneys' fees, engineers' fees,
architects' fees, insurance consultants' fees, title endorsements and all
disbursements) incurred by Lender in connection with the restoration of the
Property, reviewing and monitoring the restoration and verifying compliance with
this Article III shall constitute a part of the cost of Restoration Work and
shall be paid by Borrower.
Section 3.4. Disbursement of Net Proceeds. (a) Any Net Proceeds to be used
to pay the cost of Restoration Work pursuant to Sections 3.2 or 3.3 hereof shall
be held by Lender and shall be paid out from time to time to Borrower as the
work progresses (less any cost to Lender or Trustee of recovering and paying out
such proceeds, including reasonable attorneys' fees and costs allocable to
inspecting the work and the plans and specifications therefor), subject to each
of the following conditions:
(b) Each request for payment shall be made on not less than ten (10)
Business Days prior notice to Lender and shall be accompanied by a certificate
of an Architect stating (i) that all of the Restoration Work completed has been
performed in compliance with the approved plans and specifications, (ii) that
the sum is justly due, or is required to reimburse Borrower for payments justly
made, to the contractor, subcontractors, materialmen, laborers, engineers,
architects or other Persons rendering services or materials for the Restoration
Work (giving a brief description of such services and materials), and (iii) that
the undisbursed Net Proceeds are sufficient to complete the Restoration Work;
provided, however, that Lender shall not be obligated to disburse such funds if
Lender reasonably determines that Borrower shall not be in compliance with
conditions set forth in Section 3.3 (b) hereof. Additionally, each request for
payment shall contain a statement signed by Borrower approving both the
Restoration Work performed to date and the Restoration Work covered by the
request for payment in question. As to any personal property covered by the
request for payment, Lender shall be furnished with satisfactory evidence of
payment therefor and such further evidence satisfactory to assure Lender of its
valid first lien on the personal property.
(c) Each request for payment shall be accompanied by lien waivers covering
that part of the Restoration Work for which payment or reimbursement is being
requested and, if required by Lender, a search prepared by a title company, or
by other evidence satisfactory to Lender indicating that no mechanics' or other
liens or title retention instruments have been filed in connection with such
Restoration Work.
(d) Proceeds shall not be disbursed more frequently than once every thirty
(30) days.
(e) Until such time as the Restoration Work has been completed and Lender
shall have received copies of any and all final certificates of occupancy or
other Licenses required to
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comply with all Legal Requirements, Lender shall be entitled to retain up to ten
percent (10%) of the cost of the Restoration Work (the "Retention Amount").
Borrower hereby covenants diligently to seek to obtain all Licenses. Provided no
Event of Default shall exist, promptly after the completion of the Restoration
Work and delivery of such Licenses to Lender, Lender shall pay the Retention
Amount to Borrower. Any excess Net Proceeds remaining after the completion of
the Restoration Work shall, so long as no Event of Default exists, be remitted
to Borrower.
(f) The application or release by Lender of any proceeds shall not cure or
waive any default or Event of Default.
(g) If Borrower (i) shall fail promptly to submit to Lender for approval
plans and specifications for the Restoration Work approved by the Architect and
by all Governmental Authorities whose approval is required, (ii) shall fail to
promptly commence such Restoration Work after obtaining all approvals, (iii)
shall fail to diligently prosecute such Restoration Work to completion, or (iv)
shall fail in any other respect to comply with its Restoration Work obligations
under Section 3.3 and this Section 3.4, then Lender, Trustee or any receiver of
the Property, upon five (5) days prior notice to Borrower (except in the event
of emergency in which case no notice shall be required), shall have the right
but not the obligation to perform or cause to be performed such Restoration
Work, and may take such other steps as it deems advisable. Borrower hereby
waives any claim, other than for gross negligence or willful misconduct, against
Lender, Trustee and any receiver arising out of any act or omission of Lender,
Trustee or such receiver pursuant hereto.
Section 3.5. Builders' Risk. During the period of any new construction on
the Premises, Borrower shall maintain a so-called "Builder's All-Risk Completed
Value" or "Course of Construction" insurance policy in non-reporting form for
any improvements under construction, including, without limitation, for
demolition and increased cost of construction or renovation, in an amount equal
to 100% of the estimated replacement cost value on the date of completion,
including "soft cost" coverage. Borrower shall also maintain Worker's
Compensation Insurance, covering all Persons engaged in such construction, in an
amount at least equal to the minimum required by Legal Requirements. In
addition, each contractor and subcontractor shall be required to provide Lender
with a certificate of insurance for (i) Worker's Compensation Insurance covering
all Persons engaged by the contractor or subcontractor in the construction in an
amount at least equal to the minimum required by Legal Requirements, and (ii)
general liability insurance showing minimum limits of at least $5,000,000,
including coverage for products and completed operations. Borrower shall cause
each contractor and subcontractor to cover Borrower and Lender as an additional
insured under such liability policy and to indemnify and hold Borrower and
Lender harmless from and against any and all claims, damages, losses,
liabilities, costs and expenses arising out of, relating to or otherwise in
connection with its performance of such construction.
Section 3.6. Application of Net Proceeds. Except if the Net Proceeds are
applied to the repair and restoration of the Property in accordance with this
Article III, Lender shall have the option, in its discretion, and without regard
to the adequacy of its security, to apply all or any part of the proceeds it may
receive pursuant to Article II, in such order and amounts as Lender shall elect,
to any one or more of the following: (i) the payment of the Debt in accordance
with the provisions of the Note, (ii) the cure of any default or Event of
Default or (iii) the
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reimbursement of the costs and expenses of Lender or Trustee in connection with
the recovery of the proceeds. All amounts deposited with Lender pursuant to
Article II hereof or this Article III, until expended or applied as provided
herein, may be commingled with the general funds of Lender and shall constitute
additional security for the payment of the Debt and performance of all of
Borrower's obligations under the Loan Documents. Lender makes no representation
or warranty as to the rate or amount of interest, if any, which may accrue on
any proceeds deposited by Lender in any bank or other financial institution and
shall have no liability in connection therewith. Lender shall not be deemed a
trustee or other fiduciary with respect to its any amounts received or held by
it pursuant to Article II or this Article III.
ARTICLE IV. TAXES; RESERVES
Section 4.1. Payment of Taxes. Borrower shall pay or cause to be paid in a
timely fashion all taxes, assessments, water rates and sewer rents, now or
hereafter levied, assessed or imposed against the Property (collectively
"Taxes") and all ground rents, utility charges, maintenance charges,
governmental impositions, excises, levies, fees, licenses and charges which may
be or become a lien or charge against the Property (including, without
limitation, charges for any easements, vault charges and license fees for the
use of vaults, chutes and similar areas adjoining the Property), now or
hereafter levied, imposed or assessed against the Property (the "Other
Charges"). Borrower shall furnish to Lender or its agent or designee receipts
for the payment of the Taxes and Other Charges prior to the date the same shall
become delinquent and at any time upon Lender's request.
Section 4.2. Right to Contest. After prior written notice to Lender,
Borrower shall have the right, at its sole expense, to contest by appropriate
legal proceedings, promptly initiated and diligently conducted in good faith,
the validity, amount or application, in whole or in part, of any of the Taxes or
Other Charges, provided that:
(a) no Event of Default exists;
(b) such proceeding shall suspend the collection of the Taxes or Other
Charges from Borrower and from the Property and no portion of the Property or
interest therein shall be in danger of being sold, forfeited, terminated,
canceled or lost;
(c) such proceeding shall be permitted under and conducted in accordance
with the provisions of any other instrument or agreement to which Borrower is
bound or to which the Property or Borrower is subject and shall not constitute a
default thereunder;
(d) Borrower shall have furnished such security as may be required in the
proceeding or by Lender to insure the payment of any such Taxes or Other
Charges, together with all interest and penalties thereon or, if not required,
Borrower shall have set aside adequate reserves for the payment of the Taxes or
Other Charges, together with all interest and penalties thereon.
Upon completion of any contest, Borrower shall immediately pay any amount due,
and deliver to Lender proof of the completion of the contest and payment of the
amount due, whereupon Lender shall return any security deposited with Lender.
Borrower shall deliver copies of all notices relating to any Taxes and Other
Charges covered by this Article IV to Lender.
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Section 4.3. Reserve Account. (a) On each Payment Date, Borrower shall
deposit with Lender (or its servicer) a sum equal to (i) one-twelfth of the
aggregate annual amount which would be sufficient to pay the Taxes and (ii)
one-twelfth of the aggregate of the current annual insurance premiums for all
insurance required by the terms of this Deed of Trust. The monthly deposits
described in (i) and (ii) above, together with any reserves established pursuant
to the Reserve Agreement, are hereinafter referred to, collectively, as the
"Reserves" and all amounts held by, or to be held by Lender under this Article
IV are hereinafter collectively referred to as the "Reserve Account". In
addition, on the date hereof, Borrower shall pay to Lender for deposit into the
Reserve Account an amount which, when added to the Reserves subsequently
required to be deposited with Lender hereunder, will result in there being
sufficient amounts in the Reserve Account to pay the next due installments of
Taxes and insurance premiums. The determination of the amount of the Reserves
and the fractional part thereof to be deposited with Lender shall be made by
Lender in its sole discretion.
(b) Application of Reserves. So long as no Event of Default exists, to the
extent of amounts on deposit in the Reserve Account, Lender shall apply the
Reserve Account to payments of Taxes and insurance premiums required to be made
by Borrower herein. Borrower shall be responsible for ensuring the receipt by
Lender (or any servicer or other party Lender designates), at least thirty (30)
days prior to the respective due date for payment thereof, of all bills,
invoices and statements for all Taxes and insurance premiums. In making any
payment from the Reserve Account, Lender shall be entitled to rely on any ▇▇▇▇,
statement or estimate obtained from the appropriate public office or insurance
company or agent without any inquiry into the accuracy of such ▇▇▇▇, statement
or estimate nor the validity, enforceability or contestability of any tax,
assessment, valuation, sale, forfeiture, tax lien, title or claim thereof.
(c) Security Interest. Borrower hereby grants to Lender a lien on and
security interest in all Reserves now or hereafter in the Reserve Account, and
such Reserve Account shall constitute additional security for the Debt until
expended or applied as above provided. Upon the occurrence of an Event of
Default, Lender may apply any sums then present in the Reserve Account to the
payment of the following items in any order and amount, in its sole discretion:
(i) Taxes and Other Charges; (ii) insurance premiums; (iii) any other advance or
payment made by Lender or Trustee to preserve and protect the Property or the
lien of this Deed of Trust, (iv) the Debt and (v) any other sum payable to
Lender by Borrower under any Loan Document.
(d) Reserve Account Balances. If the amount of the Reserve Account shall
exceed the amounts due for Taxes and insurance premiums pursuant to this Article
IV, Lender shall, in its discretion, return any excess to Borrower or credit
such excess against future payments to be made to the Reserve Account. In
allocating such excess, Lender may deal with the Person shown on the records of
Lender to be the owner of the Property. If the Reserve Account is not sufficient
to pay the items set forth in Section 4.1, Borrower shall promptly pay to
Lender, upon demand, an amount which Lender shall estimate as sufficient to make
up such deficiency.
(e) Right to Make Advances. If Borrower shall fail to pay any Taxes or
insurance premiums in accordance with this Article and is not contesting such
charges in accordance with the terms hereof, then Lender or Trustee shall have
the right, but not the obligation, to advance such Taxes or insurance premium.
Borrower shall repay Lender or Trustee, as the case may be,
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on demand, any amount so advanced by Lender or Trustee, as the case may be, with
interest thereon at the Default Rate from the date of the advance to the date of
repayment.
(f) Limitation of Liability. Lender `s acceptance of Reserves shall not
impose any responsibility on Lender beyond the payment of Taxes and insurance
premiums for which the Reserves were paid into the Reserve Account following
Lender's receipt of bills, invoices or statements therefor in accordance with
the terms of this Deed of Trust. Upon assignment of this Deed of Trust by
Lender, any funds in the Reserve Account shall be paid over to the assignee and
Lender shall thereupon be completely released from all liability with respect
thereto.
(g) Additional Reserves. If there is a default or Event of Default
hereunder, or if Lender deems it prudent to require additional Reserves during
the term of the Loan, Lender shall have the right to require Borrower to deposit
additional Reserves with Lender on each Payment Date. Borrower shall commence
paying such additional Reserves on the next Payment Date. All such Reserves, and
the rights and obligations of Lender and Borrower in connection therewith, shall
be governed by this Article IV and the Reserve Agreement.
(h) Miscellaneous. Unless expressly required by applicable law, no Reserves
shall be deemed to be escrow or trust funds and the Reserves may, at Lender's
discretion, be held in a separate account or be commingled with the general
funds of Lender. No earnings or interest on the Reserve Account shall be payable
to Borrower.
ARTICLE V. MANAGEMENT
Section 5.1. Management. If the Property is not managed by Borrower, it
shall be managed either by an Affiliate of Borrower or professional property
management company reasonably acceptable to Lender. The Property shall be
managed in accordance with generally accepted management practices for
properties of similar type and class in the vicinity of the Property. Management
by an Affiliate or a professional property management company shall be pursuant
to a written agreement approved by and collaterally assigned to Lender. In no
event shall any manager be removed or replaced or the terms of any management
agreement modified or amended without the prior written consent of Lender. In
the event of default by Borrower hereunder or under any management contract then
in effect, which default is not cured within any applicable grace or cure
period, Lender shall have the right to terminate, or to direct Borrower to
terminate, such management contract upon thirty (30) days' notice and to retain,
or to direct Borrower to retain, a new management agent approved by Lender.
ARTICLE VI. LEASES AND RENTS
Section 6.1. Assignment. (a) Borrower does hereby bargain, transfer,
pledge, convey, sell, assign and set over unto Lender, all Leases and Rents.
This assignment of Leases and Rents is an absolute, unconditional and present
assignment from Borrower to Lender and not an assignment for security.
The exercise by Lender of any of its rights or remedies pursuant to this
Section 6.1 shall not be deemed to make Lender a mortgagee-in-possession.
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(b) So long as no Event of Default shall exist hereunder, Borrower shall
have a revocable license to take all actions with respect to all Leases, present
and future, subject to the terms of this Deed of Trust and the Assignment. The
existence or exercise of Borrower's revocable license to collect Rent shall not
operate to subordinate this assignment to any subsequent assignment. This
assignment shall be fully operative without any further action on the part of
any Person. Upon the occurrence of an Event of Default hereunder, Lender shall
be entitled to all Rents, whether or not Lender takes possession of the
Property.
(c) Borrower agrees to deliver to Lender within ten (10) days after
Lender's request a complete list of the Leases, certified pursuant to an
Officer's Certificate stating the demised premises, the names of the lessees,
the Rent payable under the Leases, the date to which such Rents have been paid,
the terms of the Leases, the dates of occupancy, the dates of expiration, any
Rent concessions, work obligations or other inducements granted to the lessees,
and any renewal options. Borrower shall also deliver on demand a copy of any
Lease not previously delivered to Lender.
(d) Upon the occurrence of an Event of Default, the license granted
hereinabove automatically shall terminate without notice to Borrower, and
Lender, Trustee or a receiver may thereupon or at any time thereafter (i) enter
upon the Property, and collect, retain and apply the Rents toward payment of the
Debt in such priority and proportions as Lender in its discretion shall deem
proper, (ii) dispossess by the usual summary proceedings any lessee defaulting
in making any payment due under any Lease or sublease or defaulting in the
performance of any of its other obligations under its Lease or sublease, (iii)
let the Premises, the Improvements or any portion thereof and (iv) perform such
other acts as Lender or Trustee is entitled to perform hereunder or that
Borrower is entitled to perform as landlord under any Lease. This assignment and
grant shall continue in effect until the entire amount of the Debt shall be paid
in full and all of the obligations shall be fully performed in accordance with
this Deed of Trust and the other Loan Documents. The execution of this Deed of
Trust constitutes and evidences the irrevocable consent of Borrower to the entry
upon and taking possession of the Premises, the Improvements and the Equipment
by Lender, Trustee or such receiver.
(e) In addition to the rights which Lender may have herein, upon the
occurrence of any Event of Default, Lender, at its option, may require Borrower
to (i) pay monthly in advance to Lender, or any receiver appointed to collect
the Rents, the fair and reasonable rental value for the use and occupation of
such part of the Property as may be in the possession of Borrower and (ii)
vacate and surrender possession of the Property to Lender, Trustee or such
receiver; and in default thereof, Borrower may be evicted by summary proceedings
or otherwise.
Section 6.2. Leases. (a) All new leases and lease renewals shall,
regardless of whether Lender's approval is required,
(i) be arms'-length transactions on commercially reasonable terms;
(ii) be for actual occupancy by the tenant thereunder;
(iii) contain prevailing market rental rates, terms and conditions;
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(iv) be fully subordinated to this Deed of Trust and provide for
attornment to Lender, if it becomes a successor landlord;
(v) in the case of new Leases, be written on the form of Lease
approved by Lender; without material revision (unless required
by law); and
(vi) as to non-residential tenants only, not permit the tenant to "go
dark" or otherwise stop operating, not contain termination
rights other than for landlord default, or major casualty or
Taking, and not permit the lease to be contingent upon the
operation or existence of another tenant at the Property.
(b) Borrower shall observe and perform all the obligations imposed upon the
lessor under the Leases and pursuant to applicable Legal Requirements. Borrower
shall not, without the prior written consent of Lender: (i) accept Rents
(exclusive of security deposits) for more than one month in advance, (ii) do or
permit anything to impair the value of the Leases as security for the Debt;
(iii) amend or modify any non-residential Lease, except as permitted under this
Section 6.2; (iv) enter into any non-residential Lease not in conformity with
Section 6.2 (a); (v) take or omit to take any action or exercise any right or
option which would permit the tenant under any non-residential Lease to cancel
or terminate said Lease or accept the surrender or assignment of any Lease; (vi)
permit any Lease to become subordinate to any Lien other than the lien of this
Deed of Trust; (vii) further pledge, transfer, mortgage or otherwise encumber or
assign the Leases or future payments of Rents except if expressly permitted by
this Deed of Trust (viii) cancel or terminate any non-residential Lease (other
than for non-payment of rent or any other material default thereunder); or (ix)
discount, release, waive, compromise or otherwise discharge any Rents payable or
other obligations under the Leases. However, Borrower may take any of the
actions described in subsections (viii) and (ix) so long as such actions are
taken by Borrower in the ordinary course of business and are consistent with
sound customary leasing and management practices for similar properties and
prompt notice thereof is given to Lender.
(c) Upon the occurrence of an Event of Default, whether before or after the
whole principal sum secured hereby is declared to be immediately due or whether
before or after the institution of any sale by Trustee of the Property or any
portion thereof by Trustee pursuant to the power of sale provided herein or
otherwise, Lender shall have, and Borrower hereby gives and grants to Lender,
the right, power and authority to make and enter into Leases with respect to the
Property for such rents and for such periods of occupancy and upon such other
terms and conditions as Lender determines in its sole discretion with like
effect as if such Leases had been made by Borrower as the owner in fee simple of
the Property free and clear of any conditions or limitations established by this
Deed of Trust. Borrower expressly acknowledges and agrees that the term of such
Lease may extend beyond the Maturity Date of the Loan or any sale by Trustee of
the Property. In furtherance of the rights granted Lender under Section 6.1 (d)
hereof and this Section 6.2 (c), Borrower hereby irrevocably appoints Lender,
Trustee and any receiver of the Property as the attorneys-in-fact of Borrower
coupled with an interest. In connection with any action taken by Lender, Trustee
or any receiver of the Property pursuant to this Article, Lender, Trustee or any
receiver of the Property shall not be liable for any loss sustained by Borrower
resulting from any failure to let the Property, or from any other act or
omission of Lender, Trustee or any receiver of the Property in managing the
Property, except for any such loss
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resulting from Lender's or such receiver's (as applicable) gross negligence or
willful misconduct. Neither Lender nor any receiver of the Property shall be
obligated to perform or discharge any obligation, duty or liability under any
Lease.
(d) All security deposits of lessees, whether held in cash or any other
form, shall be treated by Borrower as trust funds, shall not be commingled with
any other funds of Borrower and, if cash, shall be deposited by Borrower at a
bank or other financial institution reasonably satisfactory to Lender. Any bond
or other instrument which Borrower is permitted to hold in lieu of cash security
deposits under applicable Legal Requirements shall be maintained in full force
and effect unless replaced by cash deposits as hereinabove described and shall
be issued by a financial institution reasonably satisfactory to Lender. The bond
or other instrument shall, , if permitted pursuant to Legal Requirements, at
Lender's option, name Lender as payee or beneficiary thereunder or be fully
assignable to Lender and shall otherwise be reasonably satisfactory to Lender.
ARTICLE VII. MAINTENANCE AND REPAIR
Section 7.1. Maintenance and Repair of the Property; Alterations;
Replacement of Equipment. Borrower hereby covenants and agrees that:
(a) Borrower shall (i) maintain the Property and the sidewalks and curbs
adjoining the Property in good repair and shall keep the same in good, safe and
insurable condition and in compliance with all existing and future applicable
Legal Requirements, (ii) promptly make all repairs and replacements to the
Property, interior and exterior, structural and nonstructural, ordinary and
extraordinary, unforeseen and foreseen, and maintain the Property in a manner
appropriate for similar buildings for their present uses, (iii) not commit or
suffer to be committed any waste of the Property or do or suffer to be done
anything which will increase the risk of fire or other hazard to the Property or
otherwise impair the value thereof and (iv) not abandon the Property. Borrower
shall keep the sidewalks, vaults, gutters and curbs comprising, in front of or
adjacent to, the Property, clean and free from dirt, snow, ice, rubbish and
obstructions. All repairs and replacements made by Borrower shall (i) be made
with first-class materials, in a good and workmanlike manner, (ii) be equal or
better in quality and class to the original work, (iii) comply with all
applicable Legal Requirements and Insurance Requirements and (iv) be at
Borrower's sole expense.
(b) Borrower shall not demolish, remove, construct, and, except as
expressly provided in Article III hereof, restore or alter the Property or any
portion thereof, nor consent to or permit any of the foregoing, without Lender's
prior written consent in each instance, which consent may be given or withheld
in Lender's discretion. Notwithstanding the foregoing, Lender's consent shall
not be required with respect to nonstructural, interior alterations involving
less than One Hundred Thousand Dollars ($100,000) to complete, as evidenced by
an Officer's Certificate delivered to Lender prior to the commencement of such
alteration.
(c) Notwithstanding the provisions of this Deed of Trust to the contrary,
Borrower shall have the right, at any time and from time to time, to remove and
dispose of Equipment which may have become obsolete or unfit for use or which is
no longer useful in the management, operation or maintenance of the Property.
Borrower shall promptly replace any
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such Equipment so disposed of or removed with other Equipment of at least equal
quality, value, serviceability and use, free of superior title, liens and
claims. However, if by reason of technological or other developments in the
operation and maintenance of buildings of the general character of any
Improvement, replacement of the Equipment so removed or disposed of is not
necessary or desirable for the proper management, operation or maintenance of
the Property, Borrower shall not be required to replace the same.
ARTICLE VIII. TRANSFER OR ENCUMBRANCE OF THE PROPERTY
Section 8.1. No Transfer/Encumbrance. Without the prior written consent of
Lender, Borrower agrees that it shall not Transfer, or agree to Transfer, all or
any portion of the Property or any interest therein. For purposes of the
preceding sentence, the following shall be prohibited:
(i) an installment sale agreement wherein Borrower agrees to sell
the Property or any part thereof for a price to be paid in
installments;
(ii) an agreement by Borrower leasing all or a substantial portion of
the Property for other than actual occupancy by a space tenant
thereunder;
(iii) a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower's right, title and interest in
and to any Leases or any Rents;
(iv) subjecting the Property to a condominium regime or transferring
the Property to a cooperative corporation or similar
association;
(v) any merger or consolidation involving Borrower;
(vi) any voluntary or involuntary sale, conveyance, transfer, pledge
or encumbrance of a majority of the beneficial interests in
Borrower or any general partner or managing member (or if no
managing member, any member) of Borrower, whether occurring in
one or a series of transactions; and
(vii) any Transfer by Wilshire Oil Company of Texas of any of their
interest in Borrower or the general partner or member of
Borrower, if applicable.
Section 8.2. Permitted Transfers. Notwithstanding the foregoing, the
following shall not be deemed to be Transfers hereunder (i) transfer by devise
or descent or by operation of law upon the death of a member, general partner or
stockholder of Borrower or any member or general partner thereof; and (ii) a
sale, transfer or hypothecation of a membership, partnership or shareholder
interest in Borrower, whichever the case may be, by a current member, general
partner or shareholder, as applicable, to an immediate family member (i.e.,
parents, spouses, siblings, children or grandchildren) of such member, general
partner or shareholder, or to a trust for the benefit of an immediate family
member of such member, general partner or shareholder.
Section 8.3. Conditions to Consent. Lender reserves the right to condition
its consent to any sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment or other transfer under this Article VIII upon (a) its
receipt of all information regarding the proposed
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transferee which Lender deems necessary to underwrite the credit-worthiness and
managerial expertise of the proposed transferee at least sixty (60) days prior
to the proposed Transfer, (b) Lender's receipt of an assumption fee equal to
one-half of one percent (0.5%) of the then outstanding balance (including
principal and interest) of the Loan, (c) payment of all costs, fees and expenses
of Lender and its counsel in connection with the Transfer, (d) execution and
delivery of Lenders' form of assumption agreement, indemnities, guaranties,
ratifications, financing statements, note modifications, opinions and all other
agreements required by Lender, (e) delivery of all title, casualty, liability
and other insurance policies, endorsements and certificates required by Lender,
and (f) satisfaction of such other conditions as Lender shall determine in its
sole discretion. No request for consent will be entertained by Lender if the
Loan is in default or if the Transfer is to occur within sixty (60) days of any
contemplated sale of the Loan by Lender, whether in connection with a
securitization or otherwise. Any approval or denial of consent to a Transfer
prohibited under this Article VIII shall be in the sole and absolute discretion
of Lender.
ARTICLE IX. BOOKS AND RECORDS; REPORTING REQUIREMENTS
Section 9.1. Estoppel Certificates. Borrower shall at its own expense,
within fifteen (15) days after request by Lender, furnish Lender with a
statement, duly acknowledged and certified, setting forth (a) the amount of the
original principal amount of the Note, and the unpaid principal amount of the
Note, (b) the rate of interest of the Note, (c) the date payments of interest
and/or principal were last paid, (d) any offsets or defenses to the payment of
the Debt, and if any are alleged, the nature thereof, (e) that the Note, this
Deed of Trust and the other Loan Documents have not been modified or if
modified, giving particulars of such modification and (f) that no default or
Event of Default exists pursuant to the Note or this Deed of Trust or any event
or circumstance which, with the giving of notice or the passage of time, or
both, would constitute a default or Event of Default hereunder, or if such
default, Event of Default, event or circumstance exists, the nature thereof, the
period of time it has existed, and the action being taken to remedy such
default, Event of Default, event or circumstance.
Section 9.2. Financial Statements and Books and Records. Borrower shall
keep accurate books and records of account of the Property and its own financial
affairs sufficient to permit the preparation of financial statements therefrom
in accordance with generally accepted accounting principles. Lender and its duly
authorized representatives, agents, and employees shall have the right to
examine, copy and audit Borrower's records and books of account at all
reasonable times and, except during an emergency or following the occurrence and
during the continuance of an Event of Default, upon reasonable advance written
notice. Borrower shall provide to Lender the following financial statements and
information, all of which must be certified to Lender as being true and correct
by Borrower or the entity to which they pertain and, if financial statements, be
compiled in accordance with generally accepted accounting principles
consistently applied, and be in form and substance acceptable to Lender:
(a) during the first twelve (12) months of the Loan, promptly upon request,
operating statements for the Property for the immediately preceding twelve month
period and a rent roll for the preceding month;
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(b) copies of all tax returns filed by Borrower, within thirty (30) days
after the date of filing;
(c) annually, within thirty (30) days after the end of each calendar year,
operating statements for the Property for the immediately preceding twelve (12)
month period and a rent roll for the Property containing the name of each
tenant, the space occupied by such tenant, the lease commencement date and
expiration date, security deposit, rent, additional rent, arrearages, and such
other information as may customarily be reflected thereon or reasonably
requested by Lender;
(d) annual financial statements for Borrower within ninety (90) days after
the end of each fiscal year and, upon Lender's request, financial statements
from each indemnitor and guarantor under the Loan; and
(e) such other information with respect to the Property, Borrower, the
principals, members or general partners of Borrower, as applicable, and each
indemnitor and guarantor under any indemnity or guaranty executed in connection
with the Note secured hereby which may be requested from time to time by Lender,
within a reasonable time after the applicable request.
In the event Borrower fails to supply any of the financial information as and
when required in items (a) through (e) above or, upon the occurrence of an Event
of Default, Lender, in addition to any other rights and remedies contained
herein, shall have the right (but no obligation) to make or cause to be made
such inspections of the Property and such audits of Borrower and/or the Property
as Lender shall determine, in its sole discretion, by such Person(s) as Lender
deems appropriate. Borrower agrees to pay or to reimburse Lender for any expense
incurred therefor and further agrees to provide and/or make available all
necessary information and personnel and to otherwise cooperate in connection
with any such inspection or audit. If Borrower fails to pay or reimburse Lender
within ten (10) days of a request by Lender therefor, the amounts so owed shall
be added to the Debt and shall accrue interest at the Default Rate.
ARTICLE X. SECURITY AGREEMENT; FIXTURE FILING
Section 10.1. Security Agreement; Fixture Filing. (a) This Deed of Trust is
both a real property deed of trust and a "security agreement" within the meaning
of the UCC. The Property includes both real and personal property and all other
rights and interests, whether tangible or intangible in nature, of Borrower in
the Property. This Deed of Trust further constitutes a financing statement filed
as a fixture filing and covers goods which are or are to become fixtures on the
Premises. The name of the record owner of the Property is Borrower. The address
of the secured party (Lender) is the address set forth as Lender's address on
page 1 hereof and the address of the debtor (Borrower) is the address set forth
as Borrower's address on page 1 hereof. Borrower hereby grants to Lender as
security for the Debt a security interest in the Property to the full extent
that the Property may be subject to the UCC of the State. If an Event of Default
shall occur, Lender, in addition to any other rights and remedies which it may
have, shall have and may exercise immediately and without demand, any and all
rights and remedies granted to a secured party upon default under the UCC. Any
disposition pursuant to the UCC of so much of the Property as may constitute
personal property shall be considered commercially reasonable if
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made pursuant to a public sale which is advertised at least twice in a newspaper
in which sheriff's sales are advertised in the county where the Premises is
located. Any notice of sale, disposition or other intended action by Lender with
respect to the Collateral given to Borrower in accordance with the provisions
hereof at least ten (10) days prior to such action, shall constitute reasonable
notice to Borrower. The proceeds of any disposition of the Collateral, or any
part thereof, may be applied by Lender to the payment of the Debt in such
priority and proportions as Lender in its discretion shall deem proper.
(b) Borrower hereby irrevocably appoints Lender as its attorney-in-fact,
coupled with an interest, and authorize Lender to file with the appropriate
public office on its behalf any financing, continuation or other statements, as
secured party, in connection with the Collateral covered by this Deed of Trust
at Borrower's cost and expense.
ARTICLE XI. DEFAULTS
Section 11.1. Events of Default. The Debt shall become immediately due at
the option of Lender upon any one or more of the following events (each, an
"Event of Default"):
(a) if any monthly payment of interest or principal is not paid as required
pursuant to the Note within five (5) days after the date that the same is due or
if all or any portion of the principal amount of the Note shall not be paid on
the Maturity Date;
(b) if any other amount payable pursuant to the Note, this Deed of Trust,
or any other Loan Document except as set forth in (a) above is not paid within
five (5) days after the date when due and payable in accordance with the
provisions thereof;
(c) if a default occurs under any of the other Loan Documents and such
default is not cured within any applicable grace or cure period provided therein
or, if an Event of Default occurs under the terms of any of the Loan Documents;
(d) if Borrower fails to maintain insurance in accordance with Article II
hereof;
(e) if Borrower fails to comply with Article VIII or Article XII hereof;
(f) if any representation, warranty or covenant of Borrower made herein or
in any other Loan Document or in any certificate, report, financial statement or
other instrument or agreement furnished to Lender shall prove false or
misleading in any material respect;
(g) if a receiver, liquidator or trustee is appointed for Borrower, any
general partner or member of Borrower or any indemnitor of any of Borrower's
obligations under the Loan; or if Borrower or any general partner or member of
Borrower or any indemnitor becomes insolvent, makes an assignment for the
benefit of creditors or admits in writing its inability to pay its debts
generally as they become due; or if any petition for bankruptcy, reorganization,
liquidation or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against, consented to, or acquiesced
in by, Borrower or any general partner or member of Borrower or any indemnitor
of any of Borrower's obligations under the Loan; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
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consented to by Borrower or such general partner or member of Borrower or
indemnitor, then upon the same not being discharged, stayed or dismissed within
thirty (30) days thereof;
(h) if Borrower shall be in default beyond any notice or grace period, if
any, under any other deed of trust or security agreement covering any part of
the Property without regard to its priority relative to this Deed of Trust;
provided, however, this provision shall not be deemed a waiver of the provisions
hereof prohibiting further encumbrances affecting the Property or any other
provision of this Deed of Trust;
(i) if the Property becomes subject (i) to any Lien other than a Lien for
real estate taxes and assessments not yet due and payable, or (ii) to any
mechanic's, materialman's or other Lien, and such Lien shall not be discharged
(by payment, bonding, or otherwise) within thirty (30) days unless contested in
accordance with the terms hereof;
(j) if Borrower discontinues the operation of the Property for reasons
other than repair or restoration arising from a casualty or Taking, or if
Borrower is enjoined by any court or other Governmental Authority from
continuing the operation of its business, including, without limitation,
entering into Leases or performing its obligations thereunder, which injunction
is not released or stayed, for forty-five (45) days;
(k) if Borrower or any general partner or member of Borrower shall
institute or cause to be instituted any proceeding for the termination or
dissolution of Borrower or any such general partner or member;
(l) if the Property or any part thereof, is subjected to waste or to
removal, demolition or material alteration so that the value of the Property is
materially diminished thereby; and Lender determines that it is not adequately
protected from any loss, damage or risk associated therewith;
(m) if any judgment, writ, warrant of attachment or execution or similar
process is issued or levied against the Property and is not released, vacated or
fully bonded within thirty (30) days after its issue or levy; or
(n) if Borrower shall fail to perform any of the other terms, covenants or
conditions of the Note, this Deed of Trust or any other Loan Document, other
than as set forth in (a) through (m) above, for thirty (30) days after notice
from Lender, provided that if such default is susceptible of cure but cannot
reasonably be cured within such thirty (30) day period and Borrower shall have
commenced to cure such default within such thirty (30) day period and thereafter
diligently and expeditiously proceeds to cure the same, such thirty (30) day
period shall be extended for so long as it shall require Borrower in the
exercise of due diligence to cure such default up to but not exceeding a maximum
period of ninety (90) days.
Section 11.2. Remedies. (a) Remedies Available. During the existence of any
Event of Default, Lender and, upon request of Lender, Trustee may, in addition
to any other rights or remedies available to it hereunder, at law or in equity,
take such action, without notice or demand, as it deems advisable to protect and
enforce any one or more or its rights against Borrower and in and to the
Property, including, without limitation, the following actions:
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(i) declare all or any portion of the unpaid Debt to be immediately due and
payable; provided, however, that upon the occurrence of any of the events
specified in Section 11.1(g) the entire Debt will be immediately due and payable
without notice or demand or any other declaration of the amounts due and
payable;
(ii) enter into or upon the Property, either personally or by its agents,
nominees or attorneys, and dispossess Borrower and its agents and servants
therefrom, with or without a sale by Trustee of the Property pursuant to the
power of sale provided herein and without applying for a receiver for the Rents
and without any payment of rent or other compensation to Borrower, but subject
to the rights of the tenants under the Leases. Thereupon Lender or Trustee may
(A) use, operate, manage, control, insure, maintain, repair, restore and
otherwise deal with any or all of the Property and conduct the business thereat,
(B) make alterations, additions, renewals, replacements and improvements to or
on any of the Property, (C) exercise all rights and powers of Borrower with
respect to all or any portion of the Property, whether in the name of Borrower
or otherwise, including, without limitation, the right to make, cancel, enforce
or modify leases and contracts, obtain and evict tenants, and demand, ▇▇▇ for,
collect and receive all earnings, revenues, rents, issues, profits and other
income of the Property, and (D) apply the receipts from the Property to the
payment of the Debt, after deducting therefrom all expenses (including, without
limitation, reasonable attorneys' fees and disbursements) reasonably incurred in
connection with the aforesaid operations and all amounts necessary to pay the
taxes, assessments, insurance and other charges in connection with the Property,
as well as just and reasonable compensation for the services of Lender's and
Trustee's third-party agents;
(iii) have an Appraisal or other valuation of the Property performed by an
Appraiser (and Borrower covenants and agrees it shall cooperate in causing any
such valuation or Appraisal to be performed) and any cost or expense incurred by
Lender or Trustee, as the case may be, in connection therewith shall constitute
a portion of the Debt and be secured by this Deed of Trust and shall be
immediately due and payable to Lender or Trustee, as the case may be, with
interest, at the Default Rate, until the date of payment to Lender or Trustee,
as the case may be;
(iv) sell all or any portion of the Property and any or all estate, claim,
demand, right, title and interest of Borrower therein and rights of redemption
thereof, pursuant to power of sale or otherwise, at one or more sales, in whole
or in parcels, in any order or manner, at such time and place, upon such terms
and after such notice thereof as may be required or permitted by law, at the
discretion of Lender or Trustee, and in the event of a sale of less than all of
the Property, this Deed of Trust shall continue as a lien on the remaining
portion of the Property;
(v) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained in any of the Loan
Documents,
(vi) recover judgment on the Note or any guaranty either before, during or
after (or in lieu of) any proceedings for the enforcement of this Deed of Trust;
(vii) apply, ex parte, for the appointment of a custodian, trustee,
receiver, liquidator or conservator of the Property or any part thereof,
irrespective of the adequacy of the security for the Debt and without regard to
the solvency of Borrower or of any Person liable for the payment
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of the Debt, and such receiver or other official shall have all rights and
powers permitted by applicable law and such other rights and powers as the court
making such appointment may confer, but the appointment of such receiver or
other official shall not impair or in any manner prejudice the rights of Lender
or Trustee to receive the Rent with respect to any of the Property pursuant to
this Deed of Trust or the Assignment;
(viii) require Borrower or any receiver appointed to collect the Rents to
pay Lender monthly in advance the fair and reasonable rental value for any
portion of the Property used or occupied by Borrower. Upon demand by Lender,
Trustee or such receiver, Borrower shall immediately vacate and surrender
possession to Lender, Trustee or such receiver. In default thereof, Borrower may
be evicted by Lender, Trustee or such receiver by summary proceedings or
otherwise; or
(ix) pursue any or all such other rights or remedies as Lender or Trustee
may have under applicable law or in equity; provided, however, that the
provisions of this Section 11.2(a) shall not be construed to extend or modify
any of the notice requirements or grace periods provided for hereunder or under
any of the other Loan Documents.
Each of the foregoing remedies may be pursued individually, concurrently or
otherwise, at such time and in such order as Lender or Trustee may determine, in
its sole discretion, without impairing or otherwise affecting any other rights
and remedies of Lender or Trustee hereunder, at law or in equity.
(b) If Lender elects to cause the Property or any portion thereof to be
sold, Trustee shall sell the Property in accordance with the following:
(i) Trustee may cause any such sale or other disposition to be
conducted immediately upon the occurrence of any Event of Default
(or immediately upon the expiration of any redemption or
reinstatement period required by law and not capable of being
waived by Borrower), or Trustee may delay any such sale or other
disposition for such period of time as Lender deems to be in its
best interest. Should Lender desire that more than one such sale
or other disposition be conducted, Lender may, at its option,
cause Trustee to conduct such sales simultaneously, or
successively, on the same day, or at such different days or times
and in such order as Lender may deem to be in its best interest.
(ii) Thereafter, upon the giving of such notice of the time, terms and
place of sale as may then be required by law, and without the
necessity of any demand on Borrower, Trustee shall sell the
Property or the portion thereof so specified by Lender at public
auction. Lender, from time to time, also may rescind any notice
of default or Event of Default theretofore given and such notice
of its election to sell the Property. The exercise by Lender of
such right of postponement or rescission shall not constitute a
waiver of any default or Event of Default then existing or
subsequently occurring nor impair the right of the Lender to give
notice of default or Event of Default and notice of its election
to sell the
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Property or otherwise affect any provision of this Deed of Trust
or any of the other Loan Documents.
(iii) In the event of a sale or other disposition of the Property or
any portion thereof and the execution of a deed or other
conveyance pursuant thereto, the recitals therein of facts, such
as default or Event of Default hereunder, the giving of notice of
such default or Event of Default and notice of sale, demand that
such sale should be made, postponement of such sale, the terms of
sale, the sale, the purchase, payment of purchase money 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 conveyance shall be conclusive against all
Persons as to all matters and facts recited therein.
(iv) Trustee may, and upon the request of Lender shall, adjourn from
time to time any sale by it to be made under or by virtue of this
Deed of Trust by announcement at the time and place appointed for
such sale or for such adjourned sale or sales and, except as
otherwise provided by any applicable provision of Legal
Requirements, Trustee, without further notice or publication, may
make such sale at the time and place to which the same shall be
so adjourned.
(c) Application of Proceeds. The purchase money proceeds or avails of any
sale made under or by virtue of this Section 11.2, together with any other sums
which then may be held by Lender or Trustee under this Deed of Trust, whether
under the provisions of this Section 11.2 or otherwise, shall be applied as
follows:
First: To the payment of the third-party costs and expenses reasonably
incurred in connection with any such sale and to advances, fees and
expenses, including, without limitation, reasonable fees and expenses of
Trustee and of Trustee's and Lender's legal counsel, and of any judicial
proceedings wherein the same may be made, and of all expenses, liabilities
and advances reasonably made or incurred by Lender and Trustee under this
Deed of Trust, together with interest as provided herein on all such
expenses, liabilities and advances made by Lender or Trustee, as the case
may be;
Second: To the payment of the whole amount then due, owing and unpaid
upon the Note for principal and interest, with interest on the unpaid
principal at the Default Rate from the date of the occurrence of the
earliest Event of Default that formed a basis for such sale until the same
is paid in full;
Third: To the payment of any other Debt required to be paid by
Borrower pursuant to any provision of this Deed of Trust, the Note, or any
of the other Loan Documents; and
Fourth: The surplus, if any, to Borrower unless otherwise required by
Legal Requirements.
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Lender, Trustee and any receiver or custodian of all or any portion of the
Property shall be liable to account for only those rents, issues, proceeds and
profits actually received by it.
(d) Rights Pertaining to Sales.
(i) Lender may adjourn from time to time any sale to be made under
or by virtue of this Deed of Trust by announcement at the time
and place appointed for such sale or adjourned sale. Except as
otherwise provided by any applicable Legal Requirements,
Lender, without further notice or publication, may make such
sale at the time and place to which the same shall be so
adjourned.
(ii) Upon the completion of any sale made by Trustee under or by
virtue of this Section, Trustee, or any officer of any court
empowered to do so, shall execute and deliver to any accepted
purchaser good and sufficient instruments granting, conveying,
assigning and transferring all estate, right, title and
interest in and to the Property sold without any covenant or
warranty whatsoever express or implied, or as otherwise
determined by Lender. Trustee is hereby irrevocably appointed
the true and lawful attorney-in-fact of Borrower (coupled with
an interest), in its name and stead, to make all necessary
conveyances, assignments, transfers and deliveries of the
Property so sold. For that purpose Trustee may execute all
necessary instruments of conveyance, assignment, transfer and
delivery, and substitute one or more Persons with like power.
Borrower hereby ratifies and confirms all that such
attorney-in-fact or substitutes shall lawfully do by virtue
hereof. Borrower, if so requested by Lender or Trustee, shall
ratify and confirm any such sale by executing and delivering
to Lender or any purchaser all such instruments as Lender
deems necessary or desirable. Any sale made pursuant to this
Section, whether by power of sale or otherwise, shall operate
to divest all the estate, right, title, interest, claim and
demand whatsoever, whether at law or in equity of Borrower in
and to the Property so sold, and shall, to the fullest extent
permitted by Legal Requirements, be a perpetual bar both at
law and in equity against Borrower and against any and all
Persons claiming or who may claim the same, or any part
thereof, from, through or under Borrower.
(iii) In the event of any sale made pursuant to this Section 11.2,
the entire Debt immediately thereupon shall become due and
payable, anything in the Loan Documents to the contrary
notwithstanding.
(iv) Upon any sale made pursuant to this Section 11.2, Lender may
bid for and acquire all or any portion of the Property. In
lieu of paying cash therefor, Lender or Trustee may make
settlement for the purchase price by crediting against the
Debt the net sales price after deducting therefrom the
expenses of the sale and the costs of the action.
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(e) No Release. No recovery of any judgment by Lender or Trustee and no
levy of an execution under any judgment upon the Property or upon any other
property of Borrower shall release or impair the lien of this Deed of Trust upon
the Property, or any liens, rights, powers or remedies of Lender or Trustee
hereunder until the Debt is paid in full.
(f) Tenancy at Sufferance. Unless Lender, Trustee or the purchaser of the
Property pursuant to any sale thereof resulting from the exercise of Lender's or
Trustee's rights hereunder would have the right automatically to cause Borrower
or any Person in possession of the Property to be evicted therefrom immediately
upon such sale, any sale of the Property pursuant to this Deed of Trust, without
further notice, shall create the relation of landlord and tenant at sufferance
between the purchaser and Borrower or any Person in possession of the Property
through Borrower, and upon failure of Borrower or such Person to surrender
possession thereof immediately, Borrower or such Person may be removed by a writ
of possession of the purchaser in any court having jurisdiction.
Section 11.3. Interest After Default. If any portion of the Debt is not
paid when due (whether by acceleration or otherwise), and after any applicable
grace period, then Borrower shall pay interest at the Default Rate on the entire
outstanding principal balance of the Debt from the date on which such amount
first becomes due until the earlier of the cure of all Events of Default or the
payment of the entire amount due to Lender, whether or not any action shall have
been taken or proceeding commenced to recover the same or to sell the Property.
All unpaid and accrued interest shall be secured by this Deed of Trust as part
of the Debt. Nothing in this Section 11.3 or in any other provision of this Deed
of Trust shall constitute an extension of the time for payment of the Debt.
Section 11.4. Borrower's Actions After Default. After the happening of any
Event of Default and immediately upon the commencement of any action, suit or
other legal proceedings by Lender in connection therewith, Borrower shall (a)
after receipt of notice of the institution of any such action, waive the
issuance and service of process and enter its voluntary appearance in such
action, suit or proceeding, (b) if required by Lender or Trustee, consent to the
appointment of a receiver or receivers of the Property and of all the earnings,
revenues, rents, issues, profits and income thereof, and (c) waive any defense
Borrower might have for the failure of Lender or Trustee to make any tenants
party defendants to a foreclosure proceeding or to foreclose their rights in any
such proceeding.
Section 11.5. Control by Lender After Default. Notwithstanding the
appointment of any custodian, receiver, liquidator or trustee of Borrower, any
of its property, or the Property, to the extent permitted by Legal Requirements,
Lender or Trustee shall be entitled to obtain possession and control of all of
the Property in accordance with the terms hereof.
Section 11.6. Right to Cure Defaults. Upon the occurrence of any Event of
Default hereunder, Lender, Trustee or their agents, without notice to or demand
on Borrower and without releasing Borrower from any obligation hereunder, may,
but without obligation to do so, perform, pay or otherwise cure any defaulted
obligation of Borrower in such manner and to such extent as Lender may deem
necessary to protect the Property or the lien of this Deed of Trust. Lender,
Trustee and their agents are authorized to enter upon the Property, or appear
in, defend, or bring any action or proceeding, to protect Lender's interest in
the Property, cause the sale of
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the Property or collect the Debt. Trustee's or Lender's costs, as the case may
be, and expenses in connection with this Section 11.6 (including reasonable
attorneys' fees to the extent permitted by law), shall (i) constitute a portion
of the Debt, (ii) be due and payable to Lender or Trustee, as the case may be,
upon demand and (iii) accrue interest at the Default Rate from the date so
demanded to the date Lender or Trustee, as the case may be, is paid in full.
Section 11.7. Recovery of Sums Required to Be Paid. Lender shall have the
right from time to time to take action to recover any sums which constitute a
part of the Debt as the same become due and payable hereunder (after the
expiration of any grace period or the giving of any notice herein provided, if
any), without regard to whether the balance of the Debt shall be due, and
without prejudice to the right of Lender thereafter to bring an action of
foreclosure, or any other action, for any default by Borrower existing at the
time such earlier action was commenced.
Section 11.8. Marshaling and Other Matters. Borrower hereby waives, to the
fullest extent permitted by law, the benefit of all appraisement, valuation,
stay, extension, reinstatement, redemption (both equitable and statutory) and
homestead laws now or hereafter in force and all rights of marshaling in the
event of any sale hereunder of any of the Property or any interest therein.
Borrower hereby expressly waives all rights of redemption from sale, whether
equitable or statutory, under any order or decree of foreclosure of this Deed of
Trust. Such waiver shall bind Borrower, and every Person acquiring any interest
in or title to any of the Property subsequent to the date hereof and all other
Persons, to the fullest extent permitted by applicable law.
Section 11.9. No Impairment; No Releases. The interests and rights of
Lender under the Loan Documents shall not be impaired by any indulgence,
including (i) any renewal, extension or modification which Lender may grant with
respect to any of the Debt; (ii) any surrender, compromise, release, renewal,
extension, exchange or substitution which Lender may grant with respect to any
of the Property; or (iii) any release or indulgence granted to any maker,
endorser, guarantor or surety of any of the Debt.
ARTICLE XII. NEGATIVE COVENANTS REGARDING
INDEBTEDNESS AND CHANGES IN BORROWER
Section 12.1. Negative Covenants Regarding Indebtedness and Changes in
Borrower. Borrower hereby represents, warrants and covenants that it shall not:
(a) dissolve, terminate or materially amend the terms of its certificate of
incorporation, articles of organization, operating agreement or partnership
agreement, as applicable;
(b) enter into any transaction to merge, consolidate, liquidate or dissolve
(or suffer any liquidation or dissolution), or acquire by purchase or otherwise
all or substantially all the business or assets of, or any stock or other
evidence of beneficial ownership of, any Person;
(c) guarantee, indemnify or otherwise become liable on or in connection
with any obligation of any other Person;
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(d) at any time own any encumbered asset other than (i) the Property, and
(ii) incidental personal property necessary for the operation of the Property;
(e) at any time be engaged directly or indirectly, in any business other
than the ownership, management and operation of the Property;
(f) enter into any contract or agreement with any general partner,
principal, member or Affiliate of Borrower or any Affiliate of the general
partner or member of Borrower except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be available on
an arm's-length basis with third parties other than an Affiliate;
(g) incur, create or assume any indebtedness, secured or unsecured, direct
or contingent (including guaranteeing any obligation), other than (i) the Loan,
and (ii) indebtedness which represents trade payables or accrued expenses
incurred in the ordinary course of business of owning and operating the
Property. No other debt may be secured (senior, subordinate or pari passu) by
the Property;
(h) make any loans or advances to any third party (including any
Affiliate);
(i) become insolvent or fail to pay its debt from its assets as the same
shall become due;
(j) fail to do all things necessary to preserve its existence as a
Special-Purpose Entity, nor shall Borrower, any partner, limited or general,
member or shareholder thereof, amend, modify or otherwise change its partnership
certificate, partnership agreement, articles of organization, operating
agreement, articles of incorporation or by-laws in a manner which adversely
affects Borrower's existence as a Special-Purpose Entity;
(k) fail to conduct and operate its business as presently conducted and
operated;
(l) fail to maintain books and records and bank accounts separate from
those of its Affiliates, including its members or general partners, as
applicable;
(m) fail to at all times hold itself out to the public as a legal entity
separate and distinct from any other entity (including any Affiliate thereof,
including the general partner or any member of Borrower or any Affiliate of the
general partner or any member of Borrower, as applicable);
(n) fail to file its own tax returns;
(o) fail to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations;
(p) seek the dissolution or winding up, in whole or in part, of Borrower;
(q) commingle the funds and other assets of Borrower with those of any
general partner, any member, any Affiliate or any other Person;
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(r) fail to maintain its assets in such a manner that it is not costly or
difficult to segregate, ascertain or identify its individual assets from those
of any Affiliate or any other Person; and
(s) hold itself out to be responsible for the debts or obligations of any
other Person.
ARTICLE XIII. ENVIRONMENTAL COMPLIANCE
Section 13.1. Indemnity. (a) Borrower hereby assumes liability for, and
agrees to pay, protect, defend, indemnify and save Lender harmless from and
against any and all Costs which may be imposed upon, incurred by or asserted or
awarded against Lender and Trustee or the Property, and arising directly or
indirectly from: (i) the violation or alleged violation of any Environmental
Laws relating to or affecting the Property, whether or not caused by or within
the control of Borrower; (ii) the actual or alleged presence, release or threat
of release of, or exposure to any Hazardous Materials on, in, under or affecting
all or any portion of the Property or any surrounding areas, regardless of
whether or not caused by or within the control of Borrower; (iii) any actual or
alleged personal injury or property damage arising out of or related to
Hazardous Materials and the Property; (iv) any acts or omissions that exacerbate
an existing condition at the Property or that give rise to liability under any
Environmental Law; (v) the failure by Borrower to comply fully with the terms
and conditions of Article XIII of this Deed of Trust; (vi) the breach of any
representation or warranty contained in Article XIII of this Deed of Trust;
(vii) the enforcement of Article XIII of this Deed of Trust; (viii) complying
with Environmental Laws in connection with the Property or surrounding areas or
(ix) assessment, investigation, containment, monitoring, remediation and/or
removal of any and all Hazardous Materials from the Property or any surrounding
areas.
(b) Notwithstanding any provision hereof to the contrary, Borrower shall
have no liability under this Deed of Trust with respect to Costs relating to
Hazardous Materials which are initially placed on, in or under the Property
after the earlier of (i) Lender or Trustee taking actual possession and control
of the Property following an Event of Default, and (ii) Lender or Trustee
exercising the power of sale contained herein or otherwise taking title to the
Property. Borrower shall have no liability under this Deed of Trust to Lender or
Trustee, as the case may be, with respect to Costs which result directly and
solely from Trustee's or Lender's, as the case may be, willful misconduct or
gross negligence.
(c) Borrower's obligation to defend Lender hereunder shall include defense
at both the trial and appellate levels and shall be with attorneys, consultants
and experts acceptable to Lender.
Section 13.2. Representations Regarding Hazardous Materials. Borrower
hereby represents and warrants to and covenants and agrees with Lender as
follows:
(a) The Property and all businesses or operations conducted thereon are in
compliance with all Environmental Laws;
(b) No Hazardous Materials have been disposed of on or released (as used
herein, "release" shall have the meaning provided in 42 U.S.C. ss. 9601(22)) at,
onto or under the
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Property by Borrower or, to the Borrower's best knowledge, after due inquiry and
investigation, by any other Person;
(c) No Hazardous Materials are located in, on or under, or have been
handled, generated, stored, processed or discharged from the Property by
Borrower or, to the Borrower's best knowledge, after due inquiry and
investigation, by any other Person, except for those substances used by Borrower
or tenants of the Property in the ordinary course of their business or for
ordinary living activities in compliance with all Environmental Laws and not
reasonably expected to give rise to liability under Environmental Laws;
(d) The Property is not subject to any private or governmental lien or
judicial or administrative notice or action relating to or arising under
Environmental Laws;
(e) There are no underground storage receptacles or surface impoundments,
landfills or dumps for Hazardous Materials on the Property;
(f) Borrower has received no notice of, and to the best of Borrower's
knowledge and belief, there exists no investigation, action, proceeding or claim
by any Governmental Authority or by Person which could result in any liability,
penalty, sanction or judgment under any Environmental Laws with respect to any
condition, use or operation of the Property, nor does Borrower know of any basis
for any of the foregoing;
(g) Except as previously disclosed to Lender in writing, there is no
asbestos-containing material or lead-based paint at the Property, nor are there
any PCBs, endangered species habitats or wetlands at the Property;
(h) Borrower has received no notice that, and to the best of Borrower's
knowledge and belief, there has been no claim by any Person that any use,
operation or condition of the Property has caused any nuisance or any other
liability or adverse condition on, in or under any other property, nor does
Borrower know of any basis for such a claim;
(i) Except as previously disclosed in writing to Lender, Borrower has not
knowingly waived or released any Person from liability with regard to Hazardous
Materials in, on, under or around the Property, nor retained or assumed,
contractually or otherwise, any other Person's liability relative to Hazardous
Materials or any claim, action or proceeding relating thereto; and
(j) Neither the Property nor any other property owned by Borrower (i) is
included or, to Borrower's knowledge, after due inquiry, proposed for inclusion
on the National Priorities List issued pursuant to CERCLA by the United States
Environmental Protection Agency (the "EPA") or on any of the inventories of
other potential "Problem" sites issued by the EPA or other applicable
Governmental Authority nor (ii) otherwise identified by the EPA as a potential
CERCLA site or included or, to Borrower's knowledge, after due inquiry, proposed
for inclusion on any such list or inventory issued pursuant to any other
Environmental Law or issued by any other Governmental Authority.
Section 13.3. Covenants, Representations and Warranties. (a) Borrower
shall, and shall cause all property managers, agents, employees, tenants and
other permitted occupants of the Property to: (i) comply with all applicable
Environmental Laws, (ii) keep or cause the Property
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to be kept free from Hazardous Materials (except those substances used by
Borrower or tenants of the Property in the ordinary course of their business, in
compliance with, and not likely to give rise to liability under, Environmental
Laws, (iii) not install or use, or permit the installation or use of, any
underground receptacles containing Hazardous Materials on the Property, (iv)
expressly prohibit the use, generation, handling, storage, production, release,
processing and disposal of Hazardous Materials by all future tenants of the
Property (except those substances used by such tenants in the ordinary course of
their business, in compliance with, and not likely to give rise to liability
under, Environmental Laws) and use all reasonable efforts to prevent existing
tenants from taking any such actions, (v) in any event not install on the
Property or permit to be installed on the Property polychlorinated biphenyls,
urea formaldehyde insulation, asbestos or any substance containing asbestos or
any material containing lead-based paint, and (vi) prohibit the disposal and/or
release of any Hazardous Materials on, at, beneath, or near the Property.
(b) Borrower immediately shall notify Lender in writing should Borrower
become aware of (i) any release of Hazardous Materials or other actual or
potential environmental problem or liability with respect to or affecting the
Property, (ii) any lien, action or notice of violation or potential liability
affecting the Property or Borrower arising under any Environmental Law, (iii)
the institution of any investigation, inquiry or proceeding concerning Borrower
or the Property pursuant to any Environmental Law or otherwise relating to
Hazardous Materials, or (iv) the discovery of any occurrence, condition or state
of facts which would render any representation or warranty contained in this
Deed of Trust incorrect in any respect if made at the time of such discovery.
Borrower shall promptly transmit to Lender copies of any and all citations,
orders, notices or, upon written request of Lender, other communications
relating to any of the foregoing.
(c) Regardless of the source of contamination, Borrower shall, at its sole
expense, promptly take or cause to be taken all actions necessary or advisable
for the clean-up of the Property and other property affected by contamination
in, on, under or at the Property, including, without limitation, all
investigative, monitoring, removal, containment and remedial actions, in
accordance with the all applicable Environmental Laws (and in all events in a
manner satisfactory to the applicable Governmental Authority and Lender).
Borrower shall further pay or cause to be paid, at no expense to Lender or
Trustee, all clean-up, administrative and enforcement costs of the applicable
Governmental Authority which may be asserted against the Property. In the event
Borrower fails to do so, or following an Event of Default, Lender or Trustee, at
its sole election, may cause the Property or other affected property to be freed
from any Hazardous Materials or otherwise brought into compliance with
Environmental Laws. Any cost incurred in connection therewith shall be included
in Costs. Borrower hereby grants to Lender and Trustee access to the Property
and an irrevocable license to remove any items deemed by Lender to be Hazardous
Materials and to do all things Lender shall deem necessary or prudent to bring
the Property into compliance with all Environmental Laws. However, Lender and
Trustee shall have no obligation to inspect or clean up any Hazardous Materials.
Lender and Trustee shall not be deemed a generator of any Hazardous Materials
removed from the Property.
(d) Upon the request of Lender or Trustee, at any time (i) after an Event
of Default or (ii) Lender or Trustee has reasonable grounds to believe that (x)
Hazardous Materials are or have been released, stored or disposed of on, in,
under or around the Property or (y) the Property may
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be in violation of Environmental Laws, Borrower shall cause an investigation or
audit of the Property to be undertaken by a hydrogeologist, environmental
engineer or other appropriate consultant approved by Lender, to determine
whether any Hazardous Materials are located on, at, beneath, or near the
Property and/or whether the Property is in compliance with Environmental Laws,
provided that Lender shall cause such consultant to return the Property to a
physical condition reasonably similar to its condition prior thereto, after
completion of any physical investigation or audit of the Property. The scope of
any investigation or audit shall be approved by Lender. If Borrower fails to
provide reports of such investigation or audit within thirty (30) days after
such request, Lender may, but shall have no obligation to, order the same.
Borrower hereby grants to Lender, Trustee and their contractors access to the
Property and an irrevocable license to undertake such investigation or audit.
All costs of any such investigation or audit shall be included in Costs and
shall be paid by Borrower in accordance with the terms of Section 13.4 (c)
hereof.
(e) In the event that a Lien is filed against the Property pursuant to any
Environmental Law, Borrower shall, within thirty (30) days from the date that
Borrower receives notice of such Lien (but in any event ten (10) days prior to
the date of any sale contemplated pursuant to such Lien, either (i) pay the
claim and remove the Lien from the Property, or (ii) furnish (A) a bond
satisfactory to Lender in the amount of the claim out of which the Lien arises,
(B) a cash deposit in the amount of the claim out of which the Lien arises, (C)
other security reasonably satisfactory to Lender in an amount sufficient to
discharge the claim out of which the Lien arises, or (D) security in a form and
amount satisfactory to the applicable Governmental Authority pursuant to a valid
consent or other order, and Borrower shall promptly remove or arrange for the
removal of the Lien. Notwithstanding the foregoing, Borrower shall use its best
efforts to take all actions and make all payments necessary or prudent to
prevent a sale pursuant to any Lien.
(f) The amount of Borrower's liability hereunder is unrelated to the amount
of the Loan and any failure of the Loan to be repaid in full. The enforcement of
this Deed of Trust by Lender or Trustee shall not be construed by Borrower as an
indirect attempt to recover any Loan deficiency or loss relating to the failure
of the Loan to be repaid in full. Borrower acknowledges that it may have
liability hereunder even if the Loan is repaid in full by reason of a full
credit bid at any sale under this Deed of Trust, and that the amount of
Borrower's liability hereunder could exceed the entire amount paid by Borrower
for the Property.
Section 13.4. Indemnification Procedures. (a) If any action, proceeding,
litigation or claim shall be brought or asserted against Lender or Trustee for
any matter which Lender or Trustee is indemnified hereunder (each, a "Claim"),
Lender or Trustee, as the case may be, shall notify Borrower in writing thereof
and Borrower shall promptly assume the defense thereof, including, without
limitation, the employment of counsel acceptable to Lender or Trustee, as the
case may be, and the negotiation of any settlement. Any failure of Lender or
Trustee to notify Borrower of such matter shall not impair or reduce the
obligations of Borrower hereunder. Lender and Trustee shall have the right, at
the expense of Borrower (which expense shall be included in Costs), if Lender or
Trustee has reason to believe that its interests are not being adequately
represented or diverge from other interests being represented by such counsel,
to employ separate counsel in any such action and to participate in the defense
thereof. In the event Borrower shall fail to discharge or undertake to defend
Lender or Trustee, as the case may be, against any Claim, such failure shall
constitute an Event of Default and Lender or Trustee, as the
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case may be, may, at its sole election, defend or settle such Claim. The
liability of Borrower to Lender and Trustee hereunder for any settlement by
Lender or Trustee, as the case may be, shall be conclusively established by any
settlement entered into by Lender or Trustee, as the case may be, in good faith,
and such good faith shall be conclusively established if the settlement is made
on the advice of independent legal counsel for Lender or Trustee, as the case
may be. The amount of Borrower's liability hereunder shall include the
settlement consideration and all other Costs, which shall be paid by Borrower as
provided in Section 13.4 (c) below. Costs incurred in connection with a Claim
shall be reimbursed by Borrower without the requirement of waiting for the
ultimate outcome of such Claim.
(b) Without the prior written consent of Lender or Trustee, as the case may
be, Borrower shall not settle or compromise any Claim in any manner or consent
to the entry of any judgment (i) in which the claimant or plaintiff does not
unconditionally release Lender or Trustee, as the case may be, from all
liability and obligations in respect of such Claim and obtain a dismissal of
such Claim with prejudice; or (ii) that may adversely affect Lender or Trustee,
as the case may be, (as determined in the sole discretion of Lender or Trustee,
as the case may be) or obligate Lender or Trustee, as the case may be, to pay
any sum or perform any obligation.
(c) Borrower shall pay to Lender or Trustee, as the case may be, any and
all Costs within ten (10) days after written notice from Lender or Trustee, as
the case may be. All Costs shall be immediately reimbursable to Lender or
Trustee, as the case may be, or, upon request of Lender or Trustee, as the case
may be, paid directly to the party sending a ▇▇▇▇ or other statement to Lender
or Trustee, as the case may be. Any Costs not paid within the aforementioned ten
(10) day period shall bear interest at the Default Rate from the date such
notice is given until the date paid in full.
Section 13.5. General Provisions. (a) If at any time all or any part of any
payment received by Lender or Trustee, as the case may be, pursuant to this Deed
of Trust shall be rescinded or returned for any reason whatsoever, including,
without limitation, the insolvency, bankruptcy or reorganization of Borrower,
then the obligations of Borrower hereunder shall, to the extent of such
rescinded or returned payment, be reinstated and shall continue as though such
previous payment received by Lender or Trustee, as the case may be, had never
occurred.
(b) Nothing contained in this Deed of Trust shall prevent or in any way
diminish or interfere with any rights or remedies, including, without
limitation, the right to cost recovery or contribution, which Borrower may have
against any other Person under CERCLA or any other applicable federal, state or
local laws, all such rights being hereby expressly reserved.
(c) At Lender's election, from time to time, Borrower shall agree to
reconveyance of this Deed of Trust with respect to any portion of the Property
with respect to which Lender believes in good faith Hazardous Materials have
been discovered on, at, in, under, or above and have or are or reasonably likely
to have a material adverse effect on the Property, Borrower, Lender, Trustee or
the lien or priority of this Deed of Trust, or with respect to which Lender
believes in good faith an Environmental Law has been or may have been violated
which has or is reasonably likely to have a material adverse effect on the
Property, Borrower, Lender, Trustee or the lien or priority of this Deed of
Trust. Borrower shall, at Borrower's expense, cause any consents, agreements and
instruments to be entered into that may be reasonably required by Lender in
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connection with such reconveyance, including, without limitation, subdivision
consents, appropriate surveys, appraisals of the subdivisions, consents of
tenants, access agreements, easement agreements, consents of parties to existing
agreements and consents of subordinate lienors. Borrower shall pay for any new
title insurance policy or endorsement required by Lender in connection with any
such release.
(d) This indemnification and the representations contained in Section
13.5 shall survive the termination of this Deed of Trust whether by repayment of
the Debt, exercise of the power of sale hereunder, or otherwise. Nothing in this
Article XIII shall be deemed to deprive Lender or Trustee of any rights or
remedies otherwise available to Lender or Trustee, including, without
limitation, those rights and remedies provided elsewhere in this Deed of Trust
or the other Loan Documents.
ARTICLE XIV. MISCELLANEOUS
Section 14.1. Right of Entry. Lender, Trustee and their agents and
employees shall have the right, subject to the rights of tenants under existing
and valid Leases, to enter and inspect, and/or take any action permitted
hereunder with respect to the Property at all reasonable times and, except in
the event of an emergency, upon reasonable notice.
Section 14.2. No Merger. If Borrower's and Lender's estates become the
same, whether by sale by Trustee of the Property, or otherwise, this Deed of
Trust and the lien created hereby shall not be destroyed or terminated by the
application of the doctrine of merger and Lender shall continue to have and
enjoy all of the rights and privileges of Lender as to the separate estates.
Upon the a sale by Trustee of the Property, any Leases or subleases then
existing and created by Borrower shall not be destroyed or terminated by
application of the law of merger or as a result of such sale unless Lender or
any purchaser at any such sale shall so elect. No act by or on behalf of Lender
or any such purchaser shall constitute a termination of any Lease or sublease
unless Lender or such purchaser shall give written notice thereof to such Lessee
or sublessee.
Section 14.3. Tax Reduction Proceedings. During the existence of an Event
of Default, Borrower shall be deemed to have appointed Lender and Trustee as its
attorneys-in-fact to seek a reduction or reductions in the assessed valuation of
the Property for real property tax purposes or for any other purpose and to
prosecute any action or proceeding in connection therewith. This power, being
coupled with an interest, shall be irrevocable for so long as any part of the
Debt remains unpaid and any Event of Default shall be continuing.
Section 14.4. Attorney-in Fact. At any time during the term of this Deed of
Trust and upon the failure of Borrower to act or perform in accordance with the
requirements of this Deed of Trust, whether or not an Event of Default has been
declared, Lender or Trustee shall be appointed as attorney-in-fact for Borrower
to take any action or make any performance on behalf of Borrower at the sole
cost and expense of Borrower. Borrower shall reimburse Lender or Trustee, as the
case may be, on demand for all costs and expenses incurred by Lender or Trustee,
as the case may be, and such amounts not promptly paid by Borrower shall become
part of the Debt. Such power shall be irrevocable for so long as any part of the
Debt remains unpaid and shall be coupled with an interest.
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Section 14.5. Substitution or Resignation of Trustee. (a) Lender may,
without notice or cause, and in Lender's sole discretion, substitute a successor
or successors to the Trustee named herein or acting hereunder or fill a vacancy
in the position of Trustee hereunder. Upon such appointment, and without
conveyance to the successor Trustee, the latter shall be vested with the title,
powers and duties conferred upon any Trustee herein named or acting hereunder.
Each such appointment and substitution shall be made by written instrument
executed and acknowledged by Lender, containing reference to this Deed of Trust
and its place of recordation. The recordation of such instrument in the office
in which this Deed of Trust is recorded shall be conclusive proof of the proper
appointment of such successor Trustee.
(b) Trustee may resign by written instrument executed by Trustee,
containing reference to this Deed of Trust and its place of recordation. The
recordation in the office in which this Deed of Trust is recorded and delivery
to Lender in accordance with paragraph (2) of Article XV hereof shall be
conclusive proof of the resignation of such Trustee. Upon such resignation,
Lender may appoint a successor Trustee in accordance with Section 14.5(a)
hereof.
Section 14.6. Conveyance by Trustee/Defeasance. Upon receipt by Trustee of
written notice from Lender that the Debt has been fully paid and the obligations
fully performed pursuant to the terms hereof and the other Loan Documents,
Trustee shall reconvey the Property, without warranty, to Borrower or such
Person or Persons lawfully entitled thereto.
ARTICLE XV. RULES OF CONSTRUCTION
Section 15.1. Rules of Construction. The following provisions shall apply
to this Deed of Trust and also to any other Loan Document which expressly states
that it incorporates by reference these Rules of Construction, and the
application of these provisions to such other Loan Documents shall apply with
the same import as though such provisions were fully set forth therein:
(1) General Rules of Usage. This Article shall apply to each Loan Document
as from time to time amended, modified, replaced, restated, extended or
supplemented, including by waiver or consent, and to all attachments thereto and
all other documents or instruments incorporated therein. When used in any Loan
Document governed by this Article: (i) "hereof," "herein," "hereunder" and
comparable terms refer to the entire Loan Document in which such terms are used
and not to any particular article, section or other subdivision thereof or
attachment thereto; (ii) references to any gender include, unless the context
otherwise requires, references to all genders, (iii) references to the singular
include, unless the context otherwise requires, references to the plural, and
vice versa; (iv) "shall" and "will" have equal force and effect; (v) references
in a Loan Document to "Article," "Section," "Paragraph" or another subdivision
or to an attachment are, unless the context otherwise requires, to an article,
section, paragraph or subdivision of or an attachment to such Loan Document,
(vi) "include," "includes" and "including" shall be deemed to be followed by
"without limitation" whether or not they are in fact followed by such words or
words of like import and (vii) all references to the Property shall include all
of the Property or any part or portion of the Property.
(2) Notices. All notices, consents, approvals, statements, requests,
reports, demands, instruments or other communications to be given pursuant to
any Loan Document
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(each, a "notice") shall be in writing and shall be deemed given if addressed to
the party intended to receive the same at the address set forth below (i) upon
receipt when personally delivered at such address, (ii) four (4) Business Days
after the same is deposited in the United States mail as first class registered
or certified mail, return receipt requested, postage prepaid, or (iii) one
Business Day after the date of delivery of such notice to a nationwide,
reputable commercial courier service:
Lender: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., 4 World Financial Center,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇, Attention: Commercial
Mortgage Servicing
with a copy by the same means sent simultaneously to:
Seyfarth ▇▇▇▇, Two ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
and Wachovia Securities URP 4, NC-1075, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Helena Day
Borrower: Wellington Apartments, L.L.C., a Delaware limited liability
company having an address of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ , ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇
Indemnitor: Wilshire Oil Company of Texas, a Delaware corporation
having an address of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇
with a copy of any notice to Borrower or Indemnitor by the same means
sent simultaneously to: Wilentz, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, Box 10, Woodbridge, New Jersey, 07095,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Trustee: First American Title Insurance Company, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, 77077, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
Any party may change the address to which any notice is to be delivered to
any other address within the United States of America by furnishing written
notice of such change at least fifteen (15) days prior to the effective date of
such change to the other parties in the manner set forth above. Rejection or
refusal to accept, or inability to deliver because of changed address or because
no notice of changed address was given, shall be deemed to be receipt of any
such notice. Any notice to an entity shall be deemed to be given on the date
specified in this Section (2), as applicable, without regard to when such notice
is delivered by the entity to the individual to whose attention it is directed
and without regard to the fact that proper delivery may be refused by someone
other than the individual to whose attention it is directed. If a notice is
received by an entity, the fact that the individual to whose attention it is
directed is no longer at such address or associated with such entity shall not
affect the effectiveness of such notice. Notices may be given on behalf of any
party by such party's attorneys.
(3) Severability. Whenever possible, each provision of the Loan Documents
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of any Loan Document shall be prohibited by
or invalid or unenforceable under the applicable law of any jurisdiction with
respect to any Person or circumstance, such provision
-42-
shall be ineffective to the extent of such prohibition, invalidity or
unenforceability, without invalidating the remaining provisions of the Loan
Document or affecting the validity or enforceability of such provisions in any
other jurisdiction or with respect to other Persons or circumstances. To the
extent permitted by applicable law, the parties to the Loan Document thereby
waive any provision of law that renders any provision thereof prohibited,
invalid or unenforceable in any respect.
(4) Remedies Not Exclusive. No remedy conferred upon or reserved to Lender
or Trustee under any Loan Document is intended to be exclusive of any other
remedy available to Lender or Trustee under the Loan Document or any other Loan
Document, at law, in equity or by statute, and each and every such remedy shall
be cumulative and in addition to every other remedy given thereunder or under
any other Loan Document or now or hereafter existing at law or in equity.
Remedies may be exercised in any order Lender or Trustee elects.
(5) Liability. If Borrower or Indemnitor consists of more than one Person,
the obligations and liabilities of each such Person under such Loan Document
shall be joint and several.
(6) Successors and Assigns. Each Loan Document shall be binding upon
Borrower or Indemnitor, as applicable, and their respective successors, assigns,
heirs, executors and personal representatives, and shall inure to the benefit of
Lender, Trustee and all subsequent holders of the Loan Document and their
respective officers, directors, employees, shareholders, agents, successors and
assigns. Nothing in any Loan Document, whether express or implied, shall be
construed to give any Person (other than the parties thereto and their permitted
successors and assigns as expressly provided therein) any legal or equitable
right, remedy or claim under or in respect of such Loan Document or any
covenants, conditions or provisions contained therein. If any Loan Document is
to be recorded, all of the grants, covenants, terms, provisions and conditions
of such Loan Document shall run with the land.
(7) No Oral Modifications. Each Loan Document, and any of the provisions
thereof, cannot be altered, modified, amended, waived, extended, changed,
discharged or terminated orally or by any act on the part of Borrower,
Indemnitor Lender or Trustee, but only by an agreement in writing signed by the
party against whom enforcement of any alteration, modification, amendment,
waiver, extension, change, discharge or termination is sought.
(8) Entire Agreement. Each Loan Document, together with the other
applicable Loan Documents, constitutes the entire agreement of the parties
thereto with respect to the subject matter thereof and supersedes all prior
written and oral agreements and understandings with respect to such subject
matter.
(9) Waiver of Acceptance. Borrower and Indemnitor hereby waive any
acceptance of any Loan Document by Lender and Trustee in writing, and the Loan
Document shall immediately be binding upon Borrower or Indemnitor, as the case
may be.
(10) Jurisdiction, Court Proceedings. EACH OF BORROWER AND INDEMNITOR, TO
THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY, WITH AND UPON THE
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ADVICE OF COMPETENT COUNSEL, (I) SUBMITS TO PERSONAL, NONEXCLUSIVE JURISDICTION
IN THE STATE OF Texas WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDING BY ANY
PERSON ARISING FROM, RELATING TO OR IN CONNECTION WITH THE LOAN DOCUMENT OR THE
LOAN, (II) AGREES THAT ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN Bexar COUNTY, Texas,
(III) SUBMITS TO THE JURISDICTION OF SUCH COURTS, (IV) AGREES THAT IT WILL NOT
BRING ANY ACTION, SUIT OR PROCEEDING IN ANY FORUM OTHER THAN Bexar COUNTY, Texas
(BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF LENDER OR TRUSTEE TO BRING ANY
ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM), (V) IRREVOCABLY AGREES NOT TO
ASSERT ANY OBJECTION WHICH IT MAY EVER HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT LOCATED IN Texas AND
ANY CLAIM THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM, AND (VI) CONSENTS AND AGREES TO SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO BORROWER OR
INDEMNITOR, AS THE CASE MAY BE, AT THE ADDRESS FOR NOTICES DESCRIBED HEREINABOVE
AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT
VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR
EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW).
(11) Waiver of Jury Trial. BORROWER, INDEMNITOR AND LENDER, TO THE FULL
EXTENT PERMITTED BY LAW, EACH HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY,
WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER
FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING, INCLUDING,
WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY OF THEM AGAINST THE OTHER
BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO OR IN CONNECTION WITH THE
LOAN DOCUMENTS, THE LOAN OR ANY COURSE OF CONDUCT, ACT, OMISSION, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PERSON
(INCLUDING, WITHOUT LIMITATION, SUCH PERSON'S DIRECTORS, OFFICERS, PARTNERS,
MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH
SUCH PERSON), IN CONNECTION WITH THE LOAN OR THE LOAN DOCUMENT, INCLUDING,
WITHOUT LIMITATION, IN ANY COUNTERCLAIM WHICH BORROWER OR INDEMNITOR MAY BE
PERMITTED TO ASSERT THEREUNDER OR WHICH MAY BE ASSERTED BY LENDER, TRUSTEE OR
THEIR AGENTS AGAINST BORROWER OR INDEMNITOR, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE. THIS WAIVER BY BORROWER AND INDEMNITOR OF THEIR RIGHT TO A JURY
TRIAL IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN.
(12) No Waivers by Lender or Trustee. No delay or omission of Lender or
Trustee in exercising any right or power accruing upon any default under any
Loan Document shall
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impair any such right or power or shall be construed to be a waiver of any
default under such Loan Document or any acquiescence therein, nor shall any
single or partial exercise of any such right or power or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. Acceptance
of any payment after the occurrence of a default under any Loan Document shall
not be deemed to waive or cure such default under such Loan Document; and every
power and remedy given by the Loan Document to Lender or Trustee may be
exercised from time to time as often as may be deemed expedient by Lender or
Trustee. Without limiting the generality of the foregoing, any payment made by
Lender or Trustee for insurance premiums or Taxes or any other amounts in
connection with affecting the Property shall not constitute a waiver of
Borrower's or Indemnitor's default in making such payments and shall not
obligate Lender or Trustee to make any further payments. Borrower and Indemnitor
hereby waive any right to require Lender or Trustee at any time to pursue any
remedy in Lender's or Trustee's power whatsoever.
(13) Waiver of Notice. Except as specifically and expressly provided for in
any Loan Document or pursuant to applicable Legal Requirements, neither Borrower
nor Indemnitor shall be entitled to any notices of any nature whatsoever from
Lender or Trustee. Each of Borrower and Indemnitor hereby expressly waives the
right to receive any notice from Lender or Trustee with respect to any matter
for which the Loan Document does not specifically and expressly provide for the
giving of notice by Lender or Trustee to Borrower or Indemnitor, as the case may
be.
(14) Offsets, Counterclaims and Defenses. Borrower and Indemnitor each
hereby knowingly waives the right to assert any counterclaim, other than a
compulsory counterclaim, in any action or proceeding brought against either of
them by Lender or Trustee. Any assignee of the Loan Document or any successor of
Lender shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to the Loan Document which Borrower or Indemnitor
may otherwise have against any assignor of the Loan Document, and no such
unrelated counterclaim or defense shall be interposed or asserted by Borrower or
Indemnitor in any action or proceeding brought by any such assignee under such
Loan Document. Any such right to interpose or assert any such unrelated offset,
counterclaim or defense in any such action or proceeding is hereby expressly
waived by Borrower and Indemnitor.
(15) Restoration of Rights. In case Lender or Trustee shall have proceeded
to enforce any right under any Loan Document by power of sale, entry or
otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely to Lender or Trustee, then,
in every such case, Borrower, Indemnitor, Lender and Trustee shall be restored
to their former positions and rights thereunder.
(16) TIME OF THE ESSENCE. TIME SHALL BE OF THE ESSENCE IN THE PERFORMANCE
OF ALL OBLIGATIONS OF BORROWER AND INDEMNITOR UNDER THE LOAN DOCUMENT.
(17) Governing Law. The laws of the State of New York (without giving
effect to any conflict-of laws rules of the State of New York that might require
the application of the laws of another jurisdiction) shall govern the issue of
whether any late payment charge arising under
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Section IV of the Note is valid and enforceable and the issue of whether the
interest contracted for, charged, taken, reserved or received by Lender on or in
connection with the Note, this Deed of Trust or any of the other Loan Documents
is usurious or otherwise unlawful. With regard to all other issues, the note,
this Deed of Trust and any other loan documents shall be governed by and
construed in accordance with the laws of the State of Texas, except to the
extent that the applicability of any of such laws may now or hereafter be
preempted by Federal law, in which such case Federal law shall so govern and be
controlling.
(18) Savings Clause. Each Loan Document is subject to the express condition
that at no time shall Borrower be obligated or required to pay interest on the
Debt at a rate which could subject Lender to either civil or criminal liability
as a result of being in excess of the maximum interest rate which Borrower is
permitted by applicable law to contract or agree to pay. If, by the terms of any
Loan Document, Borrower is at any time required or obligated to pay interest on
the Debt at a rate in excess of such maximum rate, the rate of interest shall be
deemed to be immediately reduced to such maximum rate and the interest payable
shall be computed at such maximum rate and all previous payments in excess of
such maximum rate shall be deemed to have been payments in reduction of the
principal and not on account of the interest due hereunder. All sums paid or
agreed to be paid to Lender for the use, forbearance, or detention of the Debt
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full stated term of the Note until payment
in full so that the rate or amount of interest on account of the Debt does not
exceed the applicable maximum lawful rate of interest from time to time in
effect. This provision shall supersede any inconsistent provision of this or any
other Loan Document.
(19) Sole Discretion of Lender. Wherever pursuant to any Loan Document,
Lender has the right to consent to or approve any matter, or when any
arrangement or term is to be satisfactory to Lender or is in Lender's
discretion, the decision of Lender to consent or approve or deny consent or
disapprove such matter or to decide that arrangements or terms are satisfactory
or acceptable or not satisfactory or acceptable shall be in the sole discretion
of Lender and shall be final and conclusive, except as may be otherwise
specifically provided therein. In addition, Lender shall have the right to
refuse to grant its consent, approval or acceptance or to indicate its
satisfaction whenever such consent, approval, acceptance or satisfaction shall
be required under the Loan Document.
(20) Counterparts. Any Loan Document may be executed in any number of
separate counterparts, each of which, when so executed and delivered, shall be
deemed an original, but all of which, collectively and separately, shall
constitute one and the same Loan Document. All signatures need not be on the
same counterpart.
(21) Exhibits Incorporated; Headings. Any exhibits attached to the Loan
Documents and any provisions of other Loan Documents incorporated by reference
to herein, shall be deemed to be incorporated therein with the same effect as if
fully set forth in the body thereof. The headings and captions of the various
articles, sections and paragraphs of the Loan Document are for convenience of
reference only and shall not be construed as modifying, defining or limiting, in
any way, the scope or intent of the provisions thereof.
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(22) No Joint Venture or Partnership. Borrower, Indemnitor and Lender
intend that the relationship created under the Loan Document be solely that of
mortgagor and mortgagee, borrower and lender, or indemnitor and lender, as the
case may be. Nothing therein is intended to create a joint venture, partnership,
tenancy-in-common, agency or joint tenancy relationship between Borrower and
Lender or Indemnitor and Lender, as the case may be, nor to grant to Lender any
interest in the Property other than that of mortgagee or lender; it being the
intent of the parties hereto that Lender shall not share in any loss whatsoever
generated by the Property and that Lender shall have no control over the
day-to-day management and operation of the Property.
(23) Remedies of Borrower and Indemnitor. If Borrower or Indemnitor, as the
case may be, shall seek the approval or consent of Lender under the Loan
Document, which Loan Document expressly provides that Lender's approval shall
not be unreasonably withheld, and Lender shall fail or refuse to give such
consent or approval, the burden of proof as to whether or not Lender acted
unreasonably shall be upon Borrower or Indemnitor, as the case may be. In
addition thereto, in the event that a claim or adjudication is made that Lender
has acted unreasonably or unreasonably delayed acting in any case where by law
or under the Loan Document it has an obligation to act reasonably or promptly,
Lender shall not be liable for any monetary damages, and Borrower's and
Indemnitor's remedies shall be limited to injunctive relief or declaratory
judgment.
(24) Method of Payment. All amounts required to be paid by any party to the
Loan Document to any other party shall be paid in such freely transferable legal
tender of the United States of America at the time of payment, either by wire
transfer or check (subject to collection).
(25) Conflicts; Construction. In case of a conflict between any provision
of the Loan Document and any provision of the other Loan Documents, the
provision selected by Lender in its sole subjective discretion shall prevail and
be controlling. The provisions of the Loan Document shall be liberally construed
in favor of Lender.
(26) True Copy. By executing the Loan Document, Borrower or Indemnitor, as
the case may be, acknowledges that it has received a true copy of the Loan
Document.
(27) Other Miscellaneous Provisions. With respect to the Loan Document: (i)
any act which Lender or Trustee, as the case may be, is permitted to perform
thereunder may be performed at any time and from time to time by Lender or
Trustee, as the case may be, or by any Person designated by Lender or Trustee,
as the case may be, and (ii) each appointment of Lender as attorney-in-fact for
Borrower or Indemnitor under such Loan Document shall be irrevocable and coupled
with an interest.
ARTICLE XVI. STATE SPECIFIC PROVISIONS
Section 16.1. Inconsistencies. In the event of any inconsistencies between
the terms and conditions of this Article XVI and the other provisions of this
Deed of Trust, the terms and conditions of this Article XVI shall control.
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Section 16.2. Without limitation to the provisions of Section 11.2 hereof,
and cumulative of the remedies provided herein, the following provisions shall
be applicable to foreclosures in the State of Texas:
(a) Lender shall have the right, by and through Trustee, or otherwise, to
sell or offer for sale the Property upon the occurrence of an Event of Default,
in such portions, order and parcels as Lender may determine, with or without
having first taken possession of the same, to the highest bidder for cash at
public auction in accordance with the requirements of Section 51.002 of the
Texas Property Code, as it may be amended, supplemented, replaced or succeeded
from time to time (the "Property Code"). In instances where the Property is
located in the State of Texas, such sale shall be made at the courthouse of the
county in which the Property (or any portion thereof to be sold) is located,
whether the parts or parcels thereof, if any, in different counties are
contiguous or not, and without the necessity of having any personal property
present at such sale. Each such sale shall be made in the area designated by the
county commissioners for foreclosure sales (or, if no area has been designated,
at the location at the courthouse designated by Lender by or through Trustee in
the written notice hereinafter described), on the first Tuesday of a month
between the hours of 10:00 a.m. and 4:00 p.m. after advertising the time, place
and terms of sale and that portion of the Property to be sold by posting or
causing to be posted written or printed notice thereof at least twenty-one (21)
days before the date of the sale, both at the courthouse door of each county in
which the Property is located and with the county clerk of each county in which
the Property is located, which notice shall be posted at the courthouse door and
filed with the county clerk by Trustee, or by any Person acting for him. The
written notice shall include the earliest time at which the sale will be held.
(b) Lender shall serve, or shall cause to be served, at least twenty-one
(21) days before the date of sale written or printed notice of the proposed sale
by certified mail on each debtor obligated to pay the Debt according to the
records of Lender by the deposit of such notice in the United States mail,
postage prepaid and addressed to the debtor at the debtor's last known address
as shown by the records of Lender. If and to the extent that the Property Code
shall at any time or from time to time be amended to change the manner or
procedure of sale as set forth above, then the provisions of this paragraph
shall be deemed to be automatically amended to conform such provisions to the
amended provisions of the Property Code. The affidavit of a Person knowledgeable
of the facts to the effect that service was completed is prima facie evidence of
service.
(c) Lender may, at its option, accomplish all or any of the aforesaid in
such manner as permitted or required by the Property Code relating to the sale
of real property or by Chapter 9 of the Texas Business and Commerce Code, as it
may be amended, supplemented, replaced or succeeded from time to time (the
"Commerce Code") relating to the sale of collateral after default by a debtor,
or by any other present or subsequent articles or enactments relating thereto.
Nothing contained in this paragraph shall be construed to limit in any way
Trustee's right to sell the Property by private or judicial sale if, and to the
extent that, such private or judicial sale is permitted under the laws of the
state where the Property (or that portion thereof to be sold) is located, or by
public or private sale after entry of a judgment by any court of competent
jurisdiction ordering the same. At any such sale:
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(i) whether made under the power herein contained, the Property Code,
the Commerce Code, any other Legal Requirement, or by virtue of
any judicial proceedings or any other legal right, remedy or
recourse, it shall not be necessary for Trustee to have
physically present, or to have constructive possession of, the
Property, and the title to and right of possession of any such
Property sold shall pass to the purchaser thereof as completely
as if the same had been actually present and delivered to the
purchaser at such sale. Borrower shall deliver to Trustee any
portion of the Property not actually or constructively possessed
by Trustee immediately upon demand by Trustee;
(ii) each instrument of conveyance executed by Trustee shall contain a
general warranty of title, binding upon Borrower;
(iii) each and every recital contained in any instrument of conveyance
made by Trustee shall conclusively establish the truth and
accuracy of the matters recited therein, including, without
limitation, nonpayment of the Debt, advertisement and conduct of
such sale in the manner provided herein and otherwise by law, and
appointment of any successor Trustee hereunder;
(iv) any and all prerequisites to the validity thereof shall be
conclusively presumed to have been performed;
(v) the receipt by Trustee or such other party or officer making the
sale of the full amount of the purchase money shall be sufficient
to discharge the purchaser or purchasers from any further
obligation for the payment thereof, and no such purchaser or
purchasers, or his or their assigns or personal representatives,
shall thereafter be obligated to see to the application of such
purchase money or be in any way answerable for any loss,
misapplication or nonapplication thereof;
(vi) to the fullest extent permitted by law, Borrower shall be
completely and irrevocably divested of all of its right, title,
interest, claim and demand whatsoever, either at law or in
equity, in and to the Property or portion thereof sold, and such
sale shall be a perpetual bar, both at law and in equity, against
Borrower and against all other Persons claiming or to claim the
Property or portion thereof sold or to any part thereof; and
(vii) to the extent and under such circumstances as are permitted by
law, Lender may be a purchaser at any such sale.
(d) In addition to the rights and remedies described above, Lender may also
exercise any and all other rights, remedies and recourses granted under the Loan
Documents or now or hereafter existing in equity, at law, by virtue of statute
or otherwise.
Section 16.3 The term "Lender shall mean and refer to any lawful holder or
owner of the Note.
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Section 16.4 In no event will the assignment under Article VI reduce the
indebtedness evidenced by the Note or any other Debt except to the extent, if
any, that Rents are actually received by Lender and applied on or after receipt
to such Debt in accordance with the provisions hereof.
Section 16.5 IT IS EXPRESSLY ACKNOWLEDGED AND AGREED BY BORROWER THAT THE
INDEMNITIES CONTAINED IN THIS DEED OF TRUST PROTECTS LENDER FROM CLAIMS BASED ON
STRICT LIABILITY AND THE CONSEQUENCES OF LENDER'S ACTS OR OMISSIONS, INCLUDING,
WITHOUT LIMITATION, THE NEGLIGENT ACTS OR OMISSIONS OF LENDER, TO THE EXTENT
PROVIDED BY LAW; PROVIDED, HOWEVER, THAT NOTHING CONTAINED HEREIN SHALL BE
DEEMED TO RELIEVE LENDER FROM LIABILITY DUE TO ITS GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
IN WITNESS WHEREOF, Borrower has duly executed this Deed of Trust the day
and year first above written.
Wellington Apartments, L.L.C.
a Delaware limited liability company
By: Wellington Holding, Inc.
a Delaware corporation
Its Managing Member
By:
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its President
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
) ss.:
COUNTY OF )
BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, known to me to be
the President of WELLINGTON HOLDING, INC., the Delaware corporation that
executed the foregoing instrument, and known to me to be the person who executed
the foregoing instrument on behalf of said corporation, said corporation being
known to me to be managing member of WELLINGTON APARTMENTS, L.L.C., the Delaware
limited liability company that executed the foregoing instrument, and
acknowledged to me that such corporation executed the same as such managing
member and that such limited liability company executed the same for the
purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this _____ day of ___________,
2003.
___________________________________
Notary Public for State of Texas
Notary's Printed Name:_____________
My Commission Expires:_________
EXHIBIT A
Legal Description
METES AND BOUNDS DESCRIPTION OF A 8.694 ACRE TRACT
Being 8.694 acres consisting of the remaining portion of ▇▇▇ ▇▇, ▇▇▇▇▇
▇, ▇.▇.▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Subdivision Unit 1, San Antonio, Bexar County,
Texas, as recorded in Volume 5970, Page 49, Deed and P1at Records of Bexar
County, Texas, and being more particularly described as follows:
BEGINNING at a 1/2" steel rod found on the northwest line of ▇▇▇▇▇▇▇▇▇
Road (86' R.O.W.) at the east corner of the remaining portion of ▇▇▇ ▇▇, ▇▇▇▇▇
▇, ▇.▇.▇. ▇▇▇▇▇, as shown on said ▇▇▇▇ Oaks Park Subdivision Unit 1 for the most
northerly south corner of Lot 15 and the herein described tract, said point
being located 149.09 feet from the intersection of said northwest line of
▇▇▇▇▇▇▇▇▇ Road extended with the northeast line of Cambray Drive (60' R.O.W.)
extended;
THENCE with the northeastern most southwest line of said Lot 15 and the
northeast line of said remaining portion of ▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇(▇▇▇▇▇▇) 20' 03"
West 124.57 feet to a 1/2" steel rod found at the north corner of said remaining
portion of Lot 13, for an interior corner of said Lot 15 and the herein
described tract;
THENCE with a southeast line of said Lot 15 and the northwest line of
said remaining portion of Lot 13, South 41(degree) 38' 27" West 150.06 feet to
a 1/2" steel rod found on the northeast line of said Cambray Drive at the west
corner of said remaining portion of Lot 13, for the most southerly south corner
of said Lot 15 and the herein described tract;
THENCE with said northeast line of Cambray Drive and the
southwesternmost southwest line of said ▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇(▇▇▇▇▇▇) 18' 29" West
356.83 feet to a 1/2" steel rod found at the west corner of said Lot 15 and the
herein described tract;
THENCE with the northwest line of said Lot 15 and the southeast line of
a 20-foot wide alley as shown on a subdivision plat of Glenoaks Parks Unit 1 as
recorded in Volume 3975, Page 219, Deed and Plat Records of Bexar County, Texas,
North 41(degree) 39' 00" East 880.10 feet a 1/2" steel rod with a "Sun Belt" cap
set on the southwest right-of-way line of ▇▇▇▇▇▇▇ Road (right-of-way varies) for
the north corner of the herein described tract, said point being located on a
curve to the southeast whose radius point bears South 39(degree) 10' 49" West
with a central angle of 01(degree) 26' 10", a radius of 1223.58 feet and a
tangent length of 15.34 feet;
THENCE in a southeasterly direction with said new southwest
right-of-way line of ▇▇▇▇▇▇▇ Road along the arc of said curve a distance of
30.67 feet to a 1/2" steel rod with a "Sun Belt" cap set for P.T. of said curve;
THENCE continuing with said new southwest right-of-way line of ▇▇▇▇▇▇▇
Road South 49(degree) 25' 57" East 276.48 feet to a 1/2" steel rod found on the
northwest line of ▇▇▇ ▇▇, ▇▇▇▇▇ ▇, ▇.▇.▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Subdivision Unit
1 as recorded in Volume 5300, Page 230, Deed and Plat Records of Bexar County,
Texas, for the most northerly east corner of the herein described tract.
THENCE with the northwesternmost southeast line of said Lot 15 and said
northwest line of Lot 14, South 41(degree) 36' 19" West 165.42 feet to a 1/2"
steel rod found at the west corner of said Lot 14, for an interior corner of
said Lot 15 and the herein described tract;
THENCE with the southwesternmost northeast line of said Lot 15 and the
southwest line of said ▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇(▇▇▇▇▇▇) ▇▇' ▇▇" ▇▇▇▇ 174.7l feet to a
1/2" steel rod found on said northwest line of ▇▇▇▇▇▇▇▇▇ Road at the south
corner of said Lot 14, for the most southerly east corner of said Lot 15 and
therein described tract;
THENCE with the southeasternmost southeast line of said ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ 41(degree) 42' 07" West 574.07 feet to
the POINT OF BEGINNING and containing 8.694 acres or 378,711 square feet, more
or less.
and being assessed as tax parce1 no. ▇▇▇▇▇-▇▇▇-▇▇▇▇, which number covers no
other land.