▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ASSOCIATES LLC, as mortgagor
(Borrower)
to
THE CHASE MANHATTAN BANK, as mortgagee
(Lender)
---------------------------------
MORTGAGE AND
SECURITY AGREEMENT
---------------------------------
Dated: As of April 2, 1998
Location: Port Richmond Village Shopping Center
2403-2499 Aramingo Avenue
Philadelphia, Pennsylvania
City: Philadelphia
PREPARED BY AND UPON
RECORDATION RETURN TO:
MESSRS. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
File No.: 86000-00519
===============================================================================
THIS MORTGAGE AND SECURITY AGREEMENT (the "Security Instrument")
is made as of the 2nd day of April, 1998, by PORT RICHMOND ASSOCIATES LLC, a New
York limited liability company, having its principal place of business at c/o
Bryant Development Corp., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as
mortgagor ("Borrower") to THE CHASE MANHATTAN BANK, a New York banking
corporation, having an address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ as mortgagee ("Lender").
RECITALS:
Borrower is the fee owner of the Land (hereinafter defined).
In addition, Borrower intends to hereafter acquire a leasehold
estate in certain land described in Exhibit B attached hereto arising pursuant
to that certain Ground Lease by and between the Commonwealth of Pennsylvania,
acting through the Department of Transportation (the "Owner"), as ground lessor,
and Urban Center Associates, as ground lessee, dated August 12, 1988, which
lease shall be assigned on the date hereof to Borrower and effective upon
consent to assignment by Owner (collectively, the "Ground Lease").
Borrower by its promissory note of even date herewith given to
Lender is indebted to Lender in the principal sum of TWELVE MILLION AND 00/100
DOLLARS ($12,000,000) in lawful money of the United States of America (the note
together with all extensions, renewals, modifications, substitutions and
amendments thereof shall collectively be referred to as the "Note"), with
interest from the date thereof at the rates set forth in the Note, principal and
interest to be payable in accordance with the terms and conditions provided in
the Note.
Borrower desires to secure the payment of the Debt (as defined in
Article 2) and the performance of all of its obligations under the Note and the
Other Obligations (as defined in Article 2).
Article 1 - GRANTS OF SECURITY
Section 1.1 PROPERTY MORTGAGED. Borrower does hereby
irrevocably mortgage, grant, bargain, sell, pledge, assign, warrant, transfer
and convey to Lender, and grant a security interest to Lender in, the following
property, rights, interests and estates now owned, or hereafter acquired by
Borrower (collectively, the "Property"):
(a) Land. The real property described in Exhibit A attached
hereto and made a part hereof (the "Land");
(b) Ground Lease. The Ground Lease and the leasehold estate
created thereby in the real property described therein and in
Exhibit B attached hereto which is made a part hereof;
(c) Pursuant to the terms of Section 24.1 hereof all
assignments, modifications, extensions and renewals of the Ground
Lease and all credits, deposits, options, privileges and rights of
Borrower as tenant under the Ground Lease, including, but not
limited to, the right, if any, to renew or extend the Ground Lease
for a succeeding term or terms, and also including all the right,
title, claim or demand whatsoever of Borrower either in law or in
equity, in possession or expectancy, of, in and to Borrower's
right, as tenant under the Ground Lease, to elect under Section
365(h)(1) of the Bankruptcy Code, Title 11 U.S.C.A. ss.101 et seq.
(the "Bankruptcy Code") to terminate or treat the Ground Lease as
terminated in the event (i) of the bankruptcy, reorganization or
insolvency of the Owner, and (ii) the rejection of the Ground
Lease by the Owner, as debtor in possession, or by a trustee for
the Owner, pursuant to Section 365 of the Bankruptcy Code;
(d) Additional Land. All ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ and
development rights hereafter acquired by Borrower for use in
connection with the Land and the development of the Land and all
additional lands and estates therein which may, from time to time,
by supplemental mortgage or otherwise be expressly made subject to
the lien of this Security Instrument;
(e) Improvements. The buildings, structures, fixtures,
additions, enlargements, extensions, modifications, repairs,
replacements and improvements now or hereafter erected or
located on the Land (the "Improvements");
(f) Easements. All easements, rights-of-way or use,
rights, strips and gores of land, streets, ways, alleys, passages,
sewer rights, water, water courses, water rights and powers, air
rights and development rights, and all estates, rights, titles,
interests, privileges, liberties, servitudes, tenements,
hereditaments and appurtenances of any nature whatsoever, in any
way now or hereafter belonging, relating or pertaining to the Land
and/or the Improvements, including, but not limited to, those
arising under and by virtue of the Ground Lease and the
Improvements and the reversion and reversions, remainder and
remainders, and all land lying in the bed of any street, road or
avenue, opened or proposed, in front of or adjoining the Land, to
the center line thereof and all the estates, rights, titles,
interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both
at law and in equity, of Borrower of, in and to the Land and/or
the Improvements, including, but not limited to those arising
under and by virtue of the Ground Lease and every part and parcel
thereof, with the appurtenances thereto;
(g) Fixtures and Personal Property. All machinery,
equipment, fixtures (including, but not limited to, all heating,
air conditioning, plumbing, lighting, communications and elevator
fixtures) and other property of every kind and nature whatsoever
owned by Borrower, or in which Borrower has or shall have an
interest, now or hereafter located upon the Land and the
Improvements, or
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appurtenant thereto, and usable in connection with the present or
future operation and occupancy of the Land and the Improvements
and all building equipment, materials and supplies of any nature
whatsoever owned by Borrower, or in which Borrower has or shall
have an interest, now or hereafter located upon the Land and the
Improvements, or appurtenant thereto, or usable in connection
with the present or future operation and occupancy of the Land
and the Improvements (collectively, the "Personal Property"), and
the right, title and interest of Borrower in and to any of the
Personal Property which may be subject to any security interests,
as defined in the Uniform Commercial Code, as adopted and enacted
by the state or states where any of the Property is located (the
"Uniform Commercial Code"), superior in lien to the lien of this
Security Instrument and all proceeds and products of the above;
(h) Leases and Rents. All leases (including the
Ground Lease), subleases and other agreements affecting the use,
enjoyment or occupancy of the Land and/or the Improvements
heretofore or hereafter entered into and all extensions,
amendments and modifications thereto, whether before or after
the filing by or against Borrower of any petition for relief
under the Bankruptcy Code (the "Leases") and all right, title and
interest of Borrower, its successors and assigns therein and
thereunder, including, without limitation, cash or securities
deposited thereunder to secure the performance by the lessees of
their obligations thereunder and all rents, additional rents,
revenues, issues and profits (including all oil and gas or other
mineral royalties and bonuses) from the Land and the Improvements
whether paid or accruing before or after the filing by or against
Borrower of any petition for relief under the Bankruptcy Code
(the "Rents") and all proceeds from the sale or other disposition
of the Leases and the right to receive and apply the Rents to the
payment of the Debt;
(i) Condemnation Awards. All awards or payments, including
interest thereon, which may heretofore and hereafter be made with
respect to the Property, whether from the exercise of the right
of eminent domain (including but not limited to any transfer made
in lieu of or in anticipation of the exercise of the right), or
for a change of grade, or for any other injury to or decrease in
the value of the Property;
(j) Insurance Proceeds. All proceeds of and any unearned
premiums on any insurance policies covering the Property,
including, without limitation, the right to receive and apply the
proceeds of any insurance, judgments, or settlements made in lieu
thereof, for damage to the Property;
(k) Tax Certiorari. All refunds, rebates or credits in
connection with a reduction in real estate taxes and assessments
charged against the Property as a result of tax certiorari or any
applications or proceedings for reduction;
-4-
(l) Conversion. All proceeds of the conversion, voluntary
or involuntary, of any of the foregoing including, without
limitation, proceeds of insurance and condemnation awards, into
cash or liquidation claims;
(m) Rights. The right, in the name and on behalf of
Borrower, to appear in and defend any action or proceeding
brought with respect to the Property and to commence any action
or proceeding to protect the interest of Lender in the Property;
(n) Agreements. All agreements, contracts, certificates,
instruments, franchises, permits, licenses, plans, specifications
and other documents, now or hereafter entered into, and all
rights therein and thereto, respecting or pertaining to the use,
occupation, construction, management or operation of the Land and
any part thereof and any Improvements or respecting any business
or activity conducted on the Land and any part thereof and all
right, title and interest of Borrower therein and thereunder,
including, without limitation, the right, upon the happening of
any default hereunder, to receive and collect any sums payable to
Borrower thereunder;
(o) Trademarks. All tradenames, trademarks, servicemarks,
logos, copyrights, goodwill, books and records and all other
general intangibles relating to or used in connection with the
operation of the Property; and
(p) Other Rights. Any and all other rights of Borrower in
and to the items set forth in Subsections (a) through (o) above.
Section 1.2 ASSIGNMENT OF RENTS. Borrower hereby absolutely and
unconditionally assigns to Lender Borrower's right, title and interest in and to
all current and future Leases and Rents; it being intended by Borrower that this
assignment constitutes a present, absolute assignment and not an assignment for
additional security only. Nevertheless, subject to the terms of this Section 1.2
and Section 3.7, Lender grants to Borrower a revocable license to collect and
receive the Rents. Borrower shall hold the Rents, or a portion thereof
sufficient to discharge all current sums due on the Debt, for use in the payment
of such sums.
Section 1.3 SECURITY AGREEMENT. This Security Instrument is both
a real property mortgage and a "security agreement" within the meaning of the
Uniform Commercial Code. The Property includes both real and personal property
and all other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Security Instrument,
Borrower hereby grants to Lender, as security for the Obligations (defined in
Section 2.3), a security interest in the Personal Property to the full extent
that the Personal Property may be subject to the Uniform Commercial Code.
Section 1.4 PLEDGE OF MONIES HELD. Borrower hereby pledges to
Lender any and all monies now or hereafter held by Lender, including, without
limitation, any sums deposited in the Escrow Fund (as defined in Section 3.5),
Net Proceeds (as defined in Section 4.4) and
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condemnation awards or payments described in Section 3.6, as additional security
for the Obligations until expended or applied as provided in this Security
Instrument.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property unto
and to the use and benefit of Lender, and the successors and assigns of Lender,
forever;
PROVIDED, HOWEVER, these presents are upon the express condition
that, if Borrower shall well and truly pay to Lender the Debt at the time and in
the manner provided in the Note and this Security Instrument, shall well and
truly perform the Other Obligations as set forth in this Security Instrument and
shall well and truly abide by and comply with each and every covenant and
condition set forth herein and in the Note, these presents and the estate hereby
granted shall cease, terminate and be void.
Article 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1 DEBT. This Security Instrument and the grants,
assignments and transfers made in Article 1 are given for the purpose of
securing the following, in such order of priority as Lender may determine in its
sole discretion (the "Debt"):
(a) the payment of the indebtedness evidenced by the Note in
lawful money of the United States of America;
(b) the payment of interest, default interest, late charges and
other sums, as provided in the Note, this Security Instrument or the
Other Security Documents (defined below);
(c) the payment of the Prepayment Consideration
(as defined in the Note), if any;
(d) the payment of all other moneys agreed or provided to be
paid by Borrower in the Note, this Security Instrument or the Other
Security Documents;
(e) the payment of all sums advanced pursuant to this Security
Instrument to protect and preserve the Property and the lien and the
security interest created hereby; and
(f) the payment of all sums advanced and costs and expenses
incurred by Lender in connection with the Debt or any part thereof, any
renewal, extension, or change of or substitution for the Debt or any
part thereof, or the acquisition or perfection of the security therefor,
whether made or incurred at the request of Borrower or Lender.
-6-
Section 2.2 OTHER OBLIGATIONS. This Security Instrument and the
grants, assignments and transfers made in Article 1 are also given for the
purpose of securing the following (the "Other Obligations"):
(a) the performance of all other obligations of Borrower
contained herein;
(b) the performance of each obligation of Borrower contained
in any other agreement given by Borrower to Lender which is for
the purpose of further securing the obligations secured hereby,
and any amendments, modifications and changes thereto; and
(c) the performance of each obligation of Borrower contained in
any renewal, extension, amendment, modification, consolidation, change
of, or substitution or replacement for, all or any part of the Note;
this Security Instrument or the Other Security Documents.
Section 2.3 DEBT AND OTHER OBLIGATIONS. Borrower's obligations
for the payment of the Debt and the performance of the Other Obligations shall
be referred to collectively below as the "Obligations."
Section 2.4 PAYMENTS. Unless payments are made in the required
amount in immediately available funds at the place where the Note is payable,
remittances in payment of all or any part of the Debt shall not, regardless of
any receipt or credit issued therefor, constitute payment until the required
amount is actually received by Lender in funds immediately available at the
place where the Note is payable (or any other place as Lender, in Lender's sole
discretion, may have established by delivery of written notice thereof to
Borrower) and shall be made and accepted subject to the condition that any check
or draft may be handled for collection in accordance with the practice of the
collecting bank or banks. Acceptance by Lender of any payment in an amount less
than the amount then due shall be deemed an acceptance on account only, and the
failure to pay the entire amount then due shall be and continue to be an Event
of Default (defined below).
Article 3 - BORROWER COVENANTS
Borrower covenants and agrees that:
Section 3.1 PAYMENT OF DEBT. Borrower will pay the Debt at the
time and in the manner provided in the Note and in this Security Instrument.
Section 3.2 INCORPORATION BY REFERENCE. All the covenants,
conditions and agreements contained in (a) the Note and (b) all and any of the
documents other than the Note or this Security Instrument now or hereafter
executed by Borrower and/or others and by or in favor of Lender, which wholly
or partially secure or guaranty payment of the Note (the "Other Security
Documents"), are hereby made a part of this Security Instrument to the same
extent and with the same force as if fully set forth herein.
-7-
Section 3.3 INSURANCE.
(a) Borrower shall obtain and maintain, or cause to be maintained,
insurance for Borrower and the Property providing at least the following
overages:
(i) comprehensive all risk insurance on the Improvements
and the Personal Property, in each case (A) in an amount equal to
100% of the "Full Replacement Cost," which for purposes of this
Security Instrument shall mean actual replacement value (exclusive
of costs of excavations, foundations, underground utilities and
footings) with a waiver of depreciation, but the amount shall in no
event be less than the outstanding principal balance of the Note;
(B) containing an agreed amount endorsement with respect to the
Improvements and Personal Property waiving all co-insurance
provisions; (C) providing for no deductible in excess of $25,000;
and (D) providing coverage for contingent liability from Operation
of Building Laws, Demolition Costs and Increased Cost of
Construction Endorsements together with an "Ordinance or Law
Coverage" or "Enforcement" endorsement if any of the Improvements
or the use of the Property shall at any time constitute legal
non-conforming structures or uses. The Full Replacement Cost shall
be redetermined from time to time (but not more frequently than
once in any twelve (12) calendar months) at the request of Lender
by an appraiser or contractor designated and paid by Borrower and
approved by Lender, or by an engineer or appraiser in the regular
employ of the insurer. After the first appraisal, additional
appraisals may be based on construction cost indices customarily
employed in the trade. No omission on the part of Lender to request
any such ascertainment shall relieve Borrower of any of its
obligations under this Subsection;
(ii) commercial general liability insurance against claims
for personal injury, bodily injury, death or property damage
occurring upon, in or about the Property, such insurance (A) to
be on the so-called "occurrence" form with a combined single
limit of not less than $2,000,000; (B) to continue at not less
than the aforesaid limit until required to be changed by Lender
in writing by reason of changed economic conditions making such
protection inadequate; and (C) to cover at least the following
hazards: (1) premises and operations; (2) products and completed
operations on an "if any" basis; (3) independent contractors; (4)
blanket contractual liability for all written and oral contracts;
and (5) contractual liability covering the indemnities contained
in Article 13 hereof to the extent the same is available;
(iii) loss of rents insurance (A) with loss payable to
Lender; (B) covering all risks required to be covered by the
insurance provided for in Subsection 3.3(a)(i); and (C) in an
amount equal to 100% of the projected gross income from the
Property for a period of twelve (12) months. The amount of such
loss of rents insurance shall be determined prior to the date
hereof and at least once each year thereafter based on Borrower's
reasonable estimate of the gross income from the
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Property for the succeeding twelve-month period. All insurance
proceeds payable to Lender pursuant to this Subsection shall be
held by Lender and shall be applied to the obligations secured
hereunder from time to time due and payable hereunder and under
the Note; provided, however, that nothing herein contained shall
be deemed to relieve Borrower of its obligations to pay the
obligations secured hereunder on the respective dates of payment
provided for in the Note except to the extent such amounts are
actually paid out of the proceeds of such loss of rents
insurance;
(iv) at all times during which structural construction,
repairs or alterations are being made with respect to the
Improvements (A) owner's contingent or protective liability
insurance covering claims not covered by or under the terms or
provisions of the above mentioned commercial general liability
insurance policy; and (B) the insurance provided for in
Subsection 3.3(a)(i) written in a so-called builder's risk
completed value form (1) on a non-reporting basis, (2) against
all risks insured against pursuant to Subsection 3.3(a)(i), (3)
including permission to occupy the Property, and (4) with an
agreed amount endorsement waiving co-insurance provisions;
(v) workers' compensation, subject to the statutory limits
of the state in which the Property is located, and employer's
liability insurance with a limit of at least $1,000,000 per
accident and per disease per employee, and $1,000,000 for disease
aggregate in respect of any work or operations on or about the
Property, or in connection with the Property or its operation (if
applicable);
(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lender;
(vii) if any portion of the Improvements is at any time
located in an area identified by the Secretary of Housing and
Urban Development or any successor thereto as an area having
special flood hazards pursuant to the National Flood Insurance
Act of 1968, the Flood Disaster Protection Act of 1973 or the
National Flood Insurance Reform Act of 1994, as each may be
amended, or any successor law (the "Flood Insurance Acts"), flood
hazard insurance in an amount equal to the lesser of (A) the
principal balance of the Note, and (B) the maximum limit of
coverage available for the Property under the Flood Insurance
Acts;
(viii) earthquake, sinkhole and mine subsidence insurance,
if required in amounts, form and substance satisfactory to
Lender, provided that the insurance pursuant to this Subsection
(viii) shall be on terms consistent with the all risk insurance
policy required under Section 3.3(a)(i);
(ix) such other insurance and in such amounts as Lender
from time to time may reasonably request against such other
insurable hazards which at the time
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are commonly insured against for property similar to the Property
located in or around the region in which the Property is located.
(b) All insurance provided for in Subsection 3.3(a) hereof
shall be obtained under valid and enforceable policies (the
"Policies" or in the singular, the "Policy"), in such forms and,
from time to time after the date hereof, in such amounts as may
from time to time be satisfactory to Lender, issued by
financially sound and responsible insurance companies authorized
to do business in the state in which the Property is located and
approved by Lender. The insurance companies must have a general
policy rating of A or better and a financial class of VII or
better by A.M. Best Company, Inc., and if there are any
Securities (defined in Section 19.1 below) issued which have been
assigned a rating by a credit rating agency approved by Lender (a
"Rating Agency"), the insurance company shall have a claims
paying ability rating by such Rating Agency of not less than one
rating category below the highest rating at any time assigned to
the Securities, but in no event less than BBB by Standard &
Poor's Corp. or such comparable rating by such other Rating
Agency (each such insurer shall be referred to below as a
"Qualified Insurer"). Not less than thirty (30) days prior to the
expiration dates of the Policies theretofore furnished to Lender
pursuant to Subsection 3.3(a), certified copies of the Policies
marked "premium paid" or accompanied by evidence satisfactory to
Lender of payment of the premiums due thereunder (the "Insurance
Premiums"), shall be delivered by Borrower to Lender; provided,
however, that in the case of renewal Policies, Borrower may
furnish Lender with binders therefor to be followed by the
original Policies when issued.
(c) Borrower shall not obtain (i) any umbrella or blanket
liability or casualty Policy unless, in each case, such Policy is
approved in advance in writing by Lender and Lender's interest is
included therein as provided in this Security Instrument and such
Policy is issued by a Qualified Insurer, or (ii) separate
insurance concurrent in form or contributing in the event of loss
with that required in Subsection 3.3(a) to be furnished by, or
which may be reasonably required to be furnished by, Borrower. In
the event Borrower obtains separate insurance or an umbrella or a
blanket Policy, Borrower shall notify Lender of the same and
shall cause certified copies of each Policy to be delivered as
required in Subsection 3.3(a). Any blanket insurance Policy shall
specifically allocate to the Property the amount of coverage from
time to time required hereunder and shall otherwise provide the
same protection as would a separate Policy insuring only the
Property in compliance with the provisions of Subsection 3.3(a).
Notwithstanding Lender's approval of any umbrella or blanket
liability or casualty Policy hereunder, upon the occurrence of an
Event of Default, Lender reserves the right, in its sole
discretion, to require Borrower to obtain a separate Policy in
compliance with this Section 3.3.
(d) All Policies of insurance provided for or contemplated
by Subsection 3.3(a), except for the Policy referenced in
Subsection 3.3(a)(v), shall name Lender and Borrower as the
insured or additional insured, as their respective interests may
appear, and in the case of property damage, boiler and machinery,
and flood insurance, shall contain a
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so-called New York standard non-contributing mortgagee clause in
favor of Lender providing that the loss thereunder shall be
payable to Lender.
(e) All Policies of insurance provided for in Subsection
3.3(a) shall contain clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone acting
for Borrower, or of any tenant under any Lease or other
occupant, or failure to comply with the provisions of any
Policy which might otherwise result in a forfeiture of the
insurance or any part thereof, shall in any way affect the
validity or enforceability of the insurance insofar as
Lender is concerned;
(ii) the Policy shall not be materially changed (other
than to increase the coverage provided thereby) or cancelled
without at least 30 days' written notice to Lender and any
other party named therein as an insured; and
(iii) each Policy shall provide that the issuers
thereof shall give written notice to Lender if the Policy
has not been renewed thirty (30) days prior to its
expiration; and
(iv) Lender shall not be liable for any Insurance
Premiums thereon or subject to any assessments thereunder.
(f) Borrower shall furnish to Lender, on or before thirty
(30) days after the close of each of Borrower's fiscal years, a
statement certified by Borrower or a duly authorized officer of
Borrower of the amounts of insurance maintained in compliance
herewith, of the risks covered by such insurance and of the
insurance company or companies which carry such insurance and, if
requested by Lender, verification of the adequacy of such
insurance by an independent insurance broker or appraiser
acceptable to Lender.
(g) If at any time Lender is not in receipt of written
evidence that all insurance required hereunder is in full force
and effect, Lender shall have the right, upon reasonable notice
to Borrower to take such action as Lender deems necessary to
protect its interest in the Property, including, without
limitation, the obtaining of such insurance coverage as Lender in
its sole discretion deems appropriate, and all expenses incurred
by Lender in connection with such action or in obtaining such
insurance and keeping it in effect shall be paid by Borrower to
Lender upon demand and until paid shall be secured by this
Security Instrument and shall bear interest in accordance with
Section 10.3 hereof.
(h) If the Property shall be damaged or destroyed, in whole
or in part, by fire or other casualty, Borrower shall give prompt
notice of such damage to Lender and shall promptly commence and
diligently prosecute the completion of the repair and restoration
of the Property as nearly as possible to the condition the
Property was in immediately prior to such fire or other casualty,
with such alterations as may be approved by Lender (the
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"Restoration") and otherwise in accordance with Section 4.4 of
this Security Instrument. Borrower shall pay all costs of such
Restoration whether or not such costs are covered by insurance.
Section 3.4 PAYMENT OF TAXES. ETC.
(a) Borrower shall promptly pay all taxes, assessments, water
rates, sewer rents, governmental impositions, and other charges,
including without limitation vault charges and license fees for the use
of vaults, chutes and similar areas adjoining the Land, now or hereafter
levied or assessed or imposed against the Property or any part thereof
(the "Taxes"), all ground rents payable under the Ground Lease,
maintenance charges and similar charges, now or hereafter levied or
assessed or imposed against the Property or any part thereof (the "Other
Charges"), and all charges for utility services provided to the Property
as same become due and payable. Borrower will deliver to Lender, promptly
upon Lender's request, evidence satisfactory to Lender that the Taxes,
Other Charges and utility service charges have been so paid or are not
then delinquent. Borrower shall not suffer and shall promptly cause to be
paid and discharged any lien or charge whatsoever which may be or become
a lien or charge against the Property. Except to the extent sums
sufficient to pay all Taxes and Other Charges have been deposited with
Lender in accordance with the terms of this Security Instrument, Borrower
shall furnish to Lender paid receipts for the payment of the Taxes and
Other Charges prior to the date the same shall become delinquent.
(b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated
and conducted in good faith and with due diligence, the amount or
validity or application in whole or in part of any of the Taxes, provided
that (i) no Event of Default has occurred and is continuing under the
Note, this Security Instrument or any of the Other Security Documents,
(ii) Borrower is permitted to do so under the provisions of any other
mortgage, deed of trust or deed to secure debt affecting the Property,
(iii) such proceeding shall suspend the collection of the Taxes from
Borrower and from the Property or Borrower shall have paid all of the
Taxes under protest, (iv) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to
which Borrower is subject and shall not constitute a default thereunder,
(v) neither the Property nor any part thereof or interest therein will be
in danger of being sold, forfeited, terminated, cancelled or lost, (vi)
Borrower shall have deposited with Lender adequate reserves for the
payment of the Taxes, together with all interest and penalties thereon,
unless Borrower has paid all of the Taxes under protest, and (vii)
Borrower shall have furnished the security as may be required in the
proceeding, or as may be requested by Lender to insure the payment of any
contested Taxes, together with all interest and penalties thereon.
Section 3.5 ESCROW FUND. In addition to the initial deposits with
respect to Taxes and, if applicable, Insurance Premiums made by Borrower to
Lender on the date hereof to be held by Lender in escrow, Borrower shall pay to
Lender on the tenth day of each calendar month (a) one-twelfth of an amount
which would be sufficient to pay the Taxes payable, or
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estimated by Lender to be payable, during the next ensuing twelve (12) months
and (b) at the option of Lender, if the liability or casualty Policy maintained
by Borrower covering the Property shall not constitute an approved blanket or
umbrella Policy pursuant to Subsection 3.3(c) hereof, or Lender shall require
Borrower to obtain a separate Policy pursuant to Subsection 3.3(c) hereof,
one-twelfth of an amount which would be sufficient to pay the Insurance Premiums
due for the renewal of the coverage afforded by the Policies upon the expiration
thereof (the amounts in (a) and (b) above shall be called the "Escrow Fund"). In
the event Lender shall elect to collect payments in escrow for Insurance
Premiums, Borrower shall pay to Lender an initial deposit to be determined by
Lender, in its sole discretion, to increase the amounts in the Escrow Fund to an
amount which, together with anticipated monthly escrow payments, shall be
sufficient to pay all Insurance Premiums and Taxes as they become due. Borrower
agrees to notify Lender immediately of any changes to the amounts, schedules and
instructions for payment of any Taxes and Insurance Premiums of which it has or
obtains knowledge and authorizes Lender or its agent to obtain the bills for
Taxes directly from the appropriate taxing authority. The Escrow Fund and the
payments of interest or principal or both, payable pursuant to the Note shall be
added together and shall be paid as an aggregate sum by Borrower to Lender.
Lender will apply the Escrow Fund to payments of Taxes and Insurance Premiums
required to be made by Borrower pursuant to Sections 3.3 and 3.4 hereof. If the
amount of the Escrow Fund shall exceed the amounts due for Taxes and Insurance
Premiums pursuant to Sections 3.3 and 3.4 hereof, Lender shall, in its
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Escrow Fund. In allocating such excess, Lender may
deal with the person shown on the records of Lender to be the owner of the
Property. If the Escrow Fund is not sufficient to pay the items set forth in (a)
and (b) above, Borrower shall promptly pay to Lender, upon demand, an amount
which Lender shall estimate as sufficient to make up the deficiency. The Escrow
Fund shall not constitute a trust fund and may be commingled with other monies
held by Lender. No earnings or interest on the Escrow Fund shall be payable to
Borrower.
Section 3.6 CONDEMNATION. Borrower shall promptly give Lender
notice of the actual or threatened commencement of any condemnation or eminent
domain proceeding and shall deliver to Lender copies of any and all papers
served in connection with such proceedings. Notwithstanding any taking by any
public or quasi-public authority through eminent domain or otherwise (including
but not limited to any transfer made in lieu of or in anticipation of the
exercise of such taking), Borrower shall continue to pay the Debt at the time
and in the manner provided for its payment in the Note and in this Security
Instrument and the Debt shall not be reduced until any award or payment
therefor shall have been actually received and applied by Lender, after the
deduction of expenses of collection, to the reduction or discharge of the Debt.
Lender shall not be limited to the interest paid on the award by the condemning
authority but shall be entitled to receive out of the award interest at the
rate or rates provided herein or in the Note. Lender may apply any award or
payment to the reduction or discharge of the Debt whether or not then due and
payable. If the Property is sold, through foreclosure or otherwise, prior to
the receipt by Lender of the award or payment, Lender shall have the right,
whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the award or payment, or a portion thereof
sufficient to pay the Debt.
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Section 3.7 LEASES AND RENTS.
(a) Except as otherwise consented to by Lender, all Leases shall be
written on the standard form of lease which shall have been approved by Lender.
Upon request, Borrower shall furnish Lender with executed copies of all Leases.
No material changes may be made to the Lender-approved standard lease without
the prior written consent of Lender. In addition, all renewals of Leases and all
proposed Leases shall provide for rental rates and terms comparable to existing
local market rates and terms and shall be arms-length transactions with bona
fide, independent third party tenants. All proposed Leases and renewals of
existing Leases (other than residential Leases relating to a residential
multifamily property) shall be subject to the prior approval of Lender and its
counsel, at Borrower's expense. All Leases excluding the Ground Lease shall
provide that they are subordinate to this Security Instrument and that the
lessee agrees to attorn to Lender. Borrower (i) shall observe and perform all
the obligations imposed upon the lessor under the Leases (except that with
respect to the Ground Lease, it shall observe and perform all of the obligations
imposed upon lessee) and shall not do or permit to be done anything to impair
the value of any of the Leases as security for the Debt; (ii) shall promptly
send copies to Lender of all notices of default which Borrower shall send or
receive thereunder; (iii) shall enforce all of the terms, covenants and
conditions contained in the Leases upon the part of the lessee thereunder to be
observed or performed, short of termination thereof excluding the Ground Lease;
provided however, with respect to multifamily residential property, a
residential Lease may be terminated in the event of a default by the tenant
thereunder; (iv) shall not collect any of the Rents more than one (1) month in
advance; (v) shall not execute any other assignment of the lessor's interest in
any of the Leases or the Rents; (vi) shall not alter, modify or change the terms
of any Leases without the prior written consent of Lender, or cancel or
terminate any Leases or accept a surrender thereof or convey or transfer or
suffer or permit a conveyance or transfer of the Land or of any interest therein
so as to effect a merger of the estates and rights of or a termination or
diminution of the obligations of, lessees thereunder; (vii) shall not alter,
modify or change the terms of any guaranty, letter of credit or other credit
support with respect to any of the Leases (the "Lease Guaranty") or cancel or
terminate such Lease Guaranty without the prior written consent of Lender; and
(viii) shall not consent to any assignment of or subletting under any Leases not
in accordance with their terms, without the prior written consent of Lender.
(b) Notwithstanding the provisions of Subsection 3.7(a) above, renewals
of existing Leases and Leases for commercial space for in-line stores (as
determined by Lender) shall not be subject to the prior approval of Lender
provided all of the following conditions are satisfied: (i) the rental income
pursuant to the renewal or proposed Lease is not more than ten percent (10%) of
the total rental income for the in-line stores, (ii) the renewal or proposed
Lease covers less than ten percent (10%) of the in-line store space, in the
aggregate, (iii) the renewal or proposed Lease shall have a lease term not to
exceed ten (10) years including options to renew, (iv) no rent credits, free
rents or concessions in excess of one (1) month for each two (2) years of lease
term (not to exceed three (3) months in the aggregate) have been granted under
the renewal or proposed Lease, (v) the
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renewal or proposed Lease shall provide for rental rates and terms comparable to
existing local market rates and terms, (vi) the renewal or proposed Lease shall
be an arms-length transaction with a bona fide, independent third party tenant,
(vii) the renewal or proposed Lease is subject and subordinate to the Security
Instrument and the lessee thereunder shall have agreed to attorn to Lender,
(viii) the renewal or proposed Lease is on the standard form of lease approved
by Lender, and (ix) the renewal or proposed Lease shall satisfy other criteria
as shall be required by Lender in its sole discretion. Borrower shall deliver to
Lender copies of all Leases which are entered into pursuant to this Subsection
(b) together with Borrower's certification that it has satisfied all of the
conditions of the preceding sentence within thirty (30) days after the execution
of the Lease.
Notwithstanding the provisions above, to the extent Lender's prior written
approval is required pursuant to this Section 3.7, Lender shall, with respect to
such proposed Leases and/or modifications, amendments or terminations of
existing Leases, have eleven (11) Business Days (as defined in Article 16) from
receipt of such written request and any and all required material information
and documentation relating thereto in which to approve or disapprove such
material information and documentation, provided, such request to Lender is
marked in bold lettering with the following language: "LENDER'S RESPONSE IS
REQUIRED WITHIN ELEVEN (11) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO
THE TERMS OF A MORTGAGE AND SECURITY AGREEMENT BETWEEN THE UNDERSIGNED AND
LENDER" and the envelope containing the request must be marked "PRIORITY". In
the event Lender fails to respond to the information and proposed documentation
within such time, Lender's approval shall be deemed given. Borrower shall be
required to provide Lender with such material information and documentation as
may be required by Lender, in its sole discretion, including without limitation,
lease comparables and other market information as required by Lender. If Lender
disapproves any new Leases, or any amendment, modification or termination of any
existing Leases, Lender shall provide Borrower with a written explanation of its
disapproval.
(c) Upon the occurrence of an Event of Default, to the extent permitted
by law, Borrower shall promptly deposit with Lender any and all monies
representing security deposits under the Leases, whether or not Borrower
actually received such monies (the "Security Deposits"). Lender shall hold the
Security Deposits in accordance with the terms of the respective Lease, and
shall only release the Security Deposits in order to return a tenant's Security
Deposit to such tenant if such tenant is entitled to the return of the Security
Deposit under the terms of the Lease and is not otherwise in default under the
Lease. To the extent required by Applicable Laws (defined below), Lender shall
hold the Security Deposits in an interest bearing account selected by Lender in
its sole discretion. In the event Lender is not permitted by law to hold the
Security Deposits, Borrower shall deposit the Security Deposits into an account
with a federally insured institution as approved by Lender.
Section 3.8 MAINTENANCE OF PROPERTY. Borrower shall cause the
Property to be maintained in a good and safe condition and repair. The
Improvements and the
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Personal Property shall not be removed, demolished or materially altered
(except for normal replacement of the Personal Property) without the consent of
Lender. Borrower shall promptly repair, replace or rebuild any part of the
Property which may be destroyed by any casualty, or become damaged, worn or
dilapidated or which may be affected by any proceeding of the character
referred to in Section 3.5 hereof and shall complete and pay for any structure
at any time in the process of construction or repair on the Land. Borrower
shall not initiate, join in, acquiesce in, or consent to any change in any
private restrictive covenant, zoning law or other public or private
restriction, limiting or defining the uses which may be made of the Property or
any part thereof. If under applicable zoning provisions the use of all or any
portion of the Property is or shall become a nonconforming use, Borrower will
not cause or permit the nonconforming use to be discontinued or abandoned
without the express written consent of Lender.
Section 3.9 WASTE. Borrower shall not commit or suffer any waste
of the Property or make any change in the use of the Property which will in any
way materially increase the risk of fire or other hazard arising out of the
operation of the Property, or take any action that might invalidate or give
cause for cancellation of any Policy, or do or permit to be done thereon
anything that may in any way impair the value of the Property or the security of
this Security Instrument. Borrower will not, without the prior written consent
of Lender, permit any drilling or exploration for or extraction, removal, or
production of any minerals from the surface or the subsurface of the Land,
regardless of the depth thereof or the method of mining or extraction thereof.
Section 3.10 COMPLIANCES WITH LAWS.
(a) Borrower shall promptly comply with all existing and future
federal, state and local laws, orders, ordinances, governmental rules
and regulations or court orders affecting or which may be interpreted to
affect the Property, or the use thereof ("Applicable Laws").
(b) Borrower shall from time to time, upon Lender's request,
provide Lender with evidence satisfactory to Lender that the Property
complies with all Applicable Laws or is exempt from compliance with
Applicable Laws.
(c) Notwithstanding any provisions set forth herein or in any
document regarding Lender's approval of alterations of the Property,
Borrower shall not alter the Property in any manner which would increase
Borrower's responsibilities for compliance with Applicable Laws without
the prior written approval of Lender. Lender's approval of the plans,
specifications, or working drawings for alterations of the Property
shall create no responsibility or liability on behalf of Lender for
their completeness, design, sufficiency or their compliance with
Applicable Laws. The foregoing shall apply to tenant improvements
constructed by Borrower or by any of its tenants. Lender may condition
any such approval upon receipt of a certificate of compliance with
Applicable Laws from an independent architect, engineer, or other person
acceptable to Lender.
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(d) Borrower shall give prompt notice to Lender of the receipt by
Borrower of any notice related to a violation of any Applicable Laws and of the
commencement of any proceedings or investigations which relate to compliance
with Applicable Laws.
Section 3.11 BOOKS AND RECORDS.
(a) Borrower and any Guarantors (defined in Subsection 10.1(e)) and
Indemnitor(s) (defined in Subsection 10.1(o)), if any, shall keep adequate books
and records of account in accordance with generally accepted accounting
principles ("GAAP"), or in accordance with other methods acceptable to Lender in
its sole discretion, consistently applied and furnish to Lender:
(i) monthly certified rent rolls signed and dated by Borrower,
detailing the names of all tenants of the Improvements, the portion of
Improvements occupied by each tenant, the base rent and any other
charges payable under each Lease and the term of each Lease, including
the expiration date, and any other information as is reasonably required
by Lender, within twenty (20) days after the end of each calendar month;
(ii) quarterly operating statements of the Property, prepared and
certified by Borrower in the form required by Lender, detailing the
revenues received, the expenses incurred and the net operating income
before and after debt service (principal and interest) and major capital
improvements for that quarter and containing appropriate year to date
information, within thirty (30) days after the end of each fiscal
quarter;
(iii) an annual operating statement of the Property detailing the
total revenues received, total expenses incurred, total cost of all
capital improvements, total debt service and total cash flow, to be
prepared and certified by Borrower in the form required by Lender, or if
required by Lender, an audited annual operating statement prepared and
certified by an independent certified public accountant acceptable to
Lender, within ninety (90) days after the close of each fiscal year of
Borrower;
(iv) an annual balance sheet and profit and loss statement of
Borrower, any Guarantors and any Indemnitor(s) in the form required by
Lender, prepared and certified by the respective Borrower, Guarantors
and/or Indemnitor(s), or if required by Lender, audited financial
statements prepared by an independent certified public accountant
acceptable to Lender, within ninety (90) days after the close of each
fiscal year of Borrower, Guarantors and Indemnitor(s), as the case may
be; and
(v) an annual operating budget presented on a monthly basis
consistent with the annual operating statement described above for the
Property, including
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cash flow projections for the upcoming year, and all proposed
capital replacements and improvements at least fifteen (15) days
prior to the start of each fiscal year.
(b) Upon request from Lender, Borrower, any Guarantor and any
Indemnitor shall furnish in a timely manner to Lender:
(i) a property management report for the Property, showing
the number of inquiries made and/or rental applications received
from tenants or prospective tenants and deposits received from
tenants and any other information requested by Lender, in
reasonable detail and certified by Borrower (or an officer,
general partner, member or principal of Borrower if Borrower is
not an individual) under penalty of perjury to be true and
complete, but no more frequently than quarterly; and
(ii) an accounting of all security deposits held in
connection with any Lease of any part of the Property, including
the name and identification number of the accounts in which such
security deposits are held, the name and address of the financial
institutions in which such security deposits are held and the
name of the person to contact at such financial institution,
along with any authority or release necessary for Lender to
obtain information regarding such accounts directly from such
financial institutions.
(c) Borrower, any Guarantor and any Indemnitor shall furnish
Lender with such other additional financial or management information
(including State and Federal tax returns) as may, from time to time, be
reasonably required by Lender in form and substance satisfactory to
Lender.
(d) Borrower, any Guarantor and any Indemnitor shall furnish to
Lender and its agents convenient facilities for the examination and audit
of any such books and records.
Section 3.12 PAYMENT FOR LABOR AND MATERIALS. Borrower will
promptly pay when due all bills and costs for labor, materials, and specifically
fabricated materials incurred in connection with the Property and never permit
to exist beyond the due date thereof in respect of the Property or any part
thereof any lien or security interest, even though inferior to the liens and the
security interests hereof, and in any event never permit to be created or exist
in respect of the Property or any part thereof any other or additional lien or
security interest other than the liens or security interests hereof, except for
the Permitted Exceptions (defined below).
Section 3.13 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall
observe and perform each and every term to be observed or performed by Borrower
pursuant to the terms of any agreement or recorded instrument affecting or
pertaining to the Property, or given by Borrower to Lender for the purpose of
further securing an Obligation and any amendments, modifications or changes
thereto.
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Article 4 - SPECIAL COVENANTS
Borrower covenants and agrees that:
Section 4.1 PROPERTY USE. The Property shall be used only for a
community shopping center, and for no other use without the prior written
consent of Lender, which consent may be withheld in Lender's sole and absolute
discretion.
Section 4.2 ERISA.
(a) It shall not engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise by
Lender of any of its rights under the Note, this Security Instrument and
the Other Security Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(b) Borrower further covenants and agrees to deliver to Lender
such certifications or other evidence from time to time throughout the
term of the Security Instrument, as requested by Lender in its sole
discretion, that (i) Borrower is not an "employee benefit plan" as
defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
or a "governmental plan" within the meaning of Section 3(32) of ERISA;
(ii) Borrower is not subject to state statutes regulating investments
and fiduciary obligations with respect to governmental plans; and (iii)
one or more of the following circumstances is true:
(A) Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R. ss. 2510.3-101(b)(2);
(B) Less than 25 percent of each outstanding class of
equity interests in Borrower are held by "benefit plan
investors" within the meaning of 29 C.F.R. ss. 2510.3-101(f)(2);
or
(C) Borrower qualifies as an "operating company" or a
"real estate operating company" within the meaning of 29 C.F.R.
ss. 2510.3-101(c) or (e) or an investment company registered
under The Investment Company Act of 1940.
Section 4.3 SINGLE PURPOSE ENTITY. Borrower covenants and agrees
that it has not and shall not and agrees that its general partner(s), if
Borrower is a partnership, its managing member(s), if Borrower is a limited
liability company, or its principal shareholders, if Borrower is a corporation
(in each case, "Principal"), has not and shall not:
(i) with respect to Borrower, engage in any business or activity
other than the ownership, operation and maintenance of the Property, and
activities incidental thereto and with
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respect to Principal, engage in any business or activity other than the
ownership of its interest in Borrower, and activities incidental thereto
including the management of the Property;
(ii) with respect to Borrower, acquire or own any material assets
other than (i) the Property, and (ii) such incidental Personal Property as may
be necessary for the operation of the Property and with respect to Principal,
acquire or own any material asset other than its interest in Borrower;
(iii) merge into or consolidate with any person or entity or
dissolve, terminate or liquidate in whole or in part, transfer or otherwise
dispose of all or substantially all of its assets or change its legal structure,
without in each case Lender's consent;
(iv) fail to preserve its existence as an entity duly organized,
validly existing and in good standing (if applicable) under the laws of the
jurisdiction of its organization or formation, or without the prior written
consent of Lender, amend, modify, terminate or fail to comply with the
provisions of Borrower's Partnership Agreement, Articles or Certificate of
Incorporation, Articles of Organization or similar organizational documents, as
the case may be, or of Principal's Partnership Agreement, Articles or
Certificate of Incorporation, Articles of Organization or similar organizational
documents, as the case may be, whichever is applicable;
(v) own any subsidiary or make any investment in, any person or
entity without the consent of Lender;
(vi) commingle its assets with the assets of any of its members,
general partners, affiliates, principals or of any other person or entity;
(vii) with respect to Borrower, incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any obligation), other
than the Debt, except for trade payables in the ordinary course of its business
of owning and operating the Property, provided that such debt is not evidenced
by a note and paid when due and with respect to Principal, incur any debt
secured or unsecured, direct or contingent (including guaranteeing any
obligations);
(viii) become insolvent and fail to pay its debts and liabilities
from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank
accounts separate and apart from those of the members, general partners,
principals and affiliates of Borrower or of Principal, as the case may be, the
affiliates of a member, general partner or principal of Borrower or Principal,
as the case may be, and any other person or entity;
(x) enter into any contract or agreement with any member, general
partner, principal or affiliate of Borrower or of Principal, as the case may be,
Guarantor or Indemnitor, or any member, general partner, principal or affiliate
thereof, except upon terms and conditions that are intrinsically fair and
substantially similar to those that would be available on an arms-length basis
with third parties other than any member, general partner, principal or
affiliate of
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Borrower or of Principal, as the case may be, Guarantor or Indemnitor, or any
member, general partner, principal or affiliate thereof;
(xi) seek the dissolution or winding up in whole, or in part, of
Borrower or of Principal, as the case may be;
(xii) fail to correct any known misunderstandings regarding the
separate identity of Borrower, or of Principal, as the case may be, or any
member, general partner, principal or affiliate thereof or any other person;
(xiii) hold itself out to be responsible for the debts of another
person;
(xiv) make any loans or advances to any third party, including
any member, general partner, principal or affiliate of Borrower, or of
Principal, as the case may be, or any member, general partner, principal or
affiliate thereof;
(xv) fail to file its own tax returns;
(xvi) agree to, enter into or consummate any transaction which
would render Borrower or Principal, as the case may be, unable to furnish the
certification or other evidence referred to in Section 4.2(b) hereof;
(xvii) fail either to hold itself out to the public as a legal
entity separate and distinct from any other entity or person or to conduct its
business solely in its own name in order not (i) to mislead others as to the
identity with which such other party is transacting business, or (ii) to
suggest that Borrower or Principal, as the case may be, is responsible for the
debts of any third party (including any member, general partner, principal or
affiliate of Borrower, or of Principal, as the case may be, or any member,
general partner, principal or affiliate thereof);
(xviii) 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;
(xix) file or consent to the filing of any petition, either
voluntary or involuntary, to take advantage of any applicable insolvency,
bankruptcy, liquidation or reorganization statute, or make an assignment for the
benefit of creditors; or
(xx) share any common logo with or hold itself out as or be
considered as a department or division of (i) any general partner, principal,
member or affiliate of Borrower or of Principal, as the case may be, (ii) any
affiliate of a general partner, principal or member of Borrower or of Principal,
as the case may be, or (iii) any other person or entity.
Section 4.4 RESTORATION. The following provisions shall apply in
connection with the Restoration of the Property:
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(a) If the Net Proceeds (defined below) shall be less than $75,000 and
the costs of completing the Restoration shall be less than $75,000, the Net
Proceeds will be disbursed by Lender to Borrower upon receipt, provided that all
of the conditions set forth in Subsection 4.4(b)(i) are met and Borrower
delivers to Lender a written undertaking to expeditiously commence and to
satisfactorily complete with due diligence the Restoration in accordance with
the terms of this Security Instrument.
(b) If the Net Proceeds are equal to or greater than $75,000 or the
costs of completing the Restoration is equal to or greater than $75,000, Lender
shall make the net amount of all insurance proceeds received by Lender pursuant
to Subsections 3.3(a)(i), (iv), (vi) and (vii) of this Security Instrument as a
result of such damage or destruction, after deduction of its reasonable costs
and expenses (including, but not limited to, reasonable counsel fees), if any,
in collecting the same (the "Net Proceeds") available for the Restoration in
accordance with the provisions of this Subsection 4.4(b).
(i) The Net Proceeds shall be made available to Borrower for the
Restoration provided that each of the following conditions are met:
(A) no Event of Default shall have occurred and be
continuing under the Note, this Security Instrument or any of the
Other Security Documents;
(B) less than fifty percent (50%) of the total floor area
of the Improvements has been damaged, destroyed or rendered
unusable as a result of such fire or other casualty;
(C) Leases demising in the aggregate at least 50% of the
total rentable space in the Property which has been demised under
executed and delivered Leases in effect as of the date of the
occurrence of such fire or other casualty shall remain in full
force and effect during and after the completion of the
Restoration, and Borrower furnishes to Lender evidence
satisfactory to Lender that ▇▇▇▇▇▇▇ Companies, Inc., The Pep
Boy-Manny, Moe and ▇▇▇▇ and Discovery Zone, L.P. shall continue
to operate their respective retail stores at the Property after
the completion of the Restoration;
(D) Borrower shall commence the Restoration as soon as
reasonably practicable (but in no event later than thirty (30)
days after such damage or destruction occurs) and shall
diligently pursue the same to satisfactory completion;
(E) Lender shall be satisfied that any operating deficits
which will be incurred with respect to the Property as a result
of the occurrence of any such fire or other casualty will be
covered out of (1) the Net
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Proceeds, (2) the insurance coverage referred to in Subsection
3.3(a)(iii), or (3) by other funds of Borrower;
(F) Lender shall be satisfied that, upon the completion of
the Restoration, the gross cash flow and the net cash flow of the
Property will be restored to a level sufficient to cover all
carrying costs and operating expenses of the Property, including,
without limitation, debt service on the Note at a coverage ratio
(after deducting all required reserves as required by Lender from
net operating income) of at least 1.25 to 1.0, which coverage
ratio shall be determined by Lender in its sole and absolute
discretion on the basis of the Applicable Interest Rate (as
defined in the Note);
(G) Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (1) six (6)
months prior to the Maturity Date (as defined in the Note), (2)
six (6) months after the occurrence of such fire or other
casualty, or (3) the earliest date required for such completion
under the terms of any Leases which are required in accordance
with the provisions of this Subsection 4.4(b) to remain in effect
subsequent to the occurrence of such fire or other casualty and
the completion of the Restoration or under the terms of the
Leases with ▇▇▇▇▇▇▇ Companies, Inc., The Pep Boy-Manny, Moe and
▇▇▇▇ and Discovery Zone, L.P. or (4) such time as may be required
under applicable zoning law, ordinance, rule or regulation in
order to repair and restore the Property to the condition it was
in immediately prior to such fire or other casualty;
(H) Borrower shall execute and deliver to Lender a
completion guaranty in form and substance satisfactory to Lender
and its counsel pursuant to the provisions of which Borrower
shall guaranty to Lender the lien-free completion by Borrower of
the Restoration in accordance with the provisions of this
Subsection 4.4(b);
(I) the Property and the use thereof after the Restoration
will be in compliance with and permitted under all applicable
zoning laws, ordinances, rules and regulations; and
(J) the Restoration shall be done and completed by Borrower
in an expeditious and diligent fashion and in compliance with all
applicable governmental laws, rules and regulations (including,
without limitation, all applicable Environmental Laws (defined
below).
(ii) The Net Proceeds shall be held by Lender and, until
disbursed in accordance with the provisions of this Subsection 4.4(b),
shall constitute additional security for the Obligations. The Net
Proceeds shall be disbursed by Lender to, or
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as directed by, Borrower from time to time during the course of the
Restoration, upon receipt of evidence satisfactory to Lender that (A)
all materials installed and work and labor performed (except to the
extent that they are to be paid for out of the requested disbursement)
in connection with the Restoration have been paid for in full; and (B)
there exist no notices of pendency, stop orders, mechanic's or
materialman's liens or notices of intention to file same, or any other
liens or encumbrances of any nature whatsoever on the Property arising
out of the Restoration which have not either been fully bonded to the
satisfaction of Lender and discharged of record or in the alternative
fully insured to the satisfaction of Lender by the title company
insuring the lien of this Security Instrument.
(iii) All plans and specifications required in connection with the
Restoration shall be subject to prior review and acceptance in all
respects by Lender and by an independent consulting engineer selected
by Lender (the "Casualty Consultant"). Lender shall have the use of
the plans and specifications and all permits, licenses and approvals
required or obtained in connection with the Restoration. The identity
of the contractors, subcontractors and materialmen engaged in the
Restoration, as well as the contracts under which they have been
engaged, shall be subject to prior review and acceptance by Lender and
the Casualty Consultant. All costs and expenses incurred by Lender in
connection with making the Net Proceeds available for the Restoration
including, without limitation, reasonable counsel fees and
disbursements and the Casualty Consultant's fees, shall be paid by
Borrower.
(iv) In no event shall Lender be obligated to make disbursements
of the Net Proceeds in excess of an amount equal to the costs actually
incurred from time to time for work in place as part of the
Restoration, as certified by the Casualty Consultant, minus the
Casualty Retainage. The term "Casualty Retainage" as used in this
Subsection 4.4(b) shall mean an amount equal to 10% of the costs
actually incurred for work in place as part of the Restoration, as
certified by the Casualty Consultant, until such time as the Casualty
Consultant certifies to Lender that Net Proceeds representing 50% of
the required Restoration have been disbursed. There shall be no
Casualty Retainage with respect to costs actually incurred by Borrower
for work in place in completing the last 50% of the required
Restoration. The Casualty Retainage shall in no event, and
notwithstanding anything to the contrary set forth above in this
Subsection 4.4(b), be less than the amount actually held back by
Borrower from contractors, subcontractors and materialmen engaged in
the Restoration. The Casualty Retainage shall not be released until
the Casualty Consultant certifies to Lender that the Restoration has
been completed in accordance with the provisions of this Subsection
4.4(b) and that all approvals necessary for the re-occupancy and use
of the Property have been obtained from all appropriate governmental
and quasi-governmental authorities, and Lender receives evidence
satisfactory to Lender that the costs of the Restoration have been
paid in full or will be paid in full out of the Casualty Retainage,
provided, however, that Lender will release the portion of the
Casualty Retainage being held
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with respect to any contractor, subcontractor or materialman engaged
in the Restoration as of the date upon which the Casualty Consultant
certifies to Lender that the contractor, subcontractor or materialman
has satisfactorily completed all work and has supplied all materials
in accordance with the provisions of the contractor's, subcontractor's
or materialman's contract, and the contractor, subcontractor or
materialman delivers the lien waivers and evidence of payment in full
of all sums due to the contractor, subcontractor or materialman as may
be reasonably requested by Lender or by the title company insuring the
lien of this Security Instrument. If required by Lender, the release
of any such portion of the Casualty Retainage shall be approved by the
surety company, if any, which has issued a payment or performance bond
with respect to the contractor, subcontractor or materialman.
(v) Lender shall not be obligated to make disbursements of the
Net Proceeds more frequently than once every calendar month.
(vi) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the opinion of Lender, be sufficient to pay in
full the balance of the costs which are estimated by the Casualty
Consultant to be incurred in connection with the completion of the
Restoration, Borrower shall deposit the deficiency (the "Net Proceeds
Deficiency") with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with
Lender shall be held by Lender and shall be disbursed for costs
actually incurred in connection with the Restoration on the same
conditions applicable to the disbursement of the Net Proceeds, and
until so disbursed pursuant to this Subsection 4.4(b) shall constitute
additional security for the Obligations.
(vii) The excess, if any, of the Net Proceeds and the remaining
balance, if any, of the Net Proceeds Deficiency deposited with Lender
after the Casualty Consultant certifies to Lender that the Restoration
has been completed in accordance with the provisions of this
Subsection 4.4(b), and the receipt by Lender of evidence satisfactory
to Lender that all costs incurred in connection with the Restoration
have been paid in full, shall be remitted by Lender to Borrower,
provided no Event of Default shall have occurred and shall be
continuing under the Note, this Security Instrument or any of the
Other Security Documents.
(c) All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Subsection 4.4(b)(vii) may be retained and applied by Lender toward the
payment of the Debt whether or not then due and payable in such order, priority
and proportions as Lender in its discretion shall deem proper or, at the
discretion of Lender, the same may be paid, either in whole or in part, to
Borrower for such purposes as Lender shall designate, in its discretion. If
Lender shall receive and retain Net Proceeds, the lien of this Security
Instrument shall be reduced only by the amount thereof received and retained by
Lender and actually applied by Lender in reduction of the Debt.
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Article 5 - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
Section 5.1 WARRANTY OF TITLE. Borrower has good title to the
Property and has the right to mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer and convey the same and that Borrower possesses an
unencumbered fee simple absolute estate in the Land and the Improvements and an
unencumbered leasehold estate (created by and pursuant to the terms of the
Ground Lease and Section 24.1 herein) and that it owns or leases the Property
free and clear of all liens, encumbrances and charges whatsoever except for
those exceptions shown in the title insurance policy insuring the lien of this
Security Instrument (the "Permitted Exceptions"). Borrower further represents
and warrants that (a) the Ground Lease is in full force and effect and has not
been further modified or amended in any manner whatsoever, (b) there are no
defaults under the Ground Lease and no event has occurred which but for the
passage of time, or notice, or both would constitute a default under the Ground
Lease, (c) all rents, additional rents and other sums due and payable under the
Ground Lease have been paid in full, and (d) neither Borrower, nor to the best
of Borrower's knowledge, Owner has commenced any action or given or received
any notice for the purpose of terminating the Ground Lease. Borrower shall
forever warrant, defend and preserve the title and the validity and priority of
the lien of this Security Instrument and shall forever warrant and defend the
same to Lender against the claims of all persons whomsoever.
Section 5.2 AUTHORITY. Borrower (and the undersigned
representative of Borrower, if any) has full power, authority and legal right
to execute this Security Instrument, and to mortgage, grant, bargain, sell,
pledge, assign, warrant, transfer and convey the Property pursuant to the terms
hereof and to keep and observe all of the terms of this Security Instrument on
Borrower's part to be performed.
Section 5.3 LEGAL STATUS AND AUTHORITY. Borrower (a) is duly
organized, validly existing and in good standing under the laws of its state of
organization or incorporation; (b) is duly qualified to transact business and
is in good standing in the State where the Property is located; and (c) has all
necessary approvals, governmental and otherwise, and full power and authority
to own and/or lease the Property and carry on its business as now conducted and
proposed to be conducted. Borrower now has and shall continue to have the full
right, power and authority to operate and lease the Property, to encumber the
Property as provided herein and to perform all of the other obligations to be
performed by Borrower under the Note, this Security Instrument and the Other
Security Documents.
Section 5.4 VALIDITY OF DOCUMENTS. (a) The execution, delivery
and performance of the Note, this Security Instrument and the Other Security
Documents and the borrowing evidenced by the Note (i) are within the
corporate/partnership/company power of Borrower; (ii) have been authorized by
all requisite corporate/partnership/company action; (iii) have received all
necessary approvals and consents, corporate, governmental or otherwise; (iv)
will not violate, conflict with, result in a breach of or constitute (with
notice or lapse of time, or
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both) a default under any provision of law, any order or judgment of any court
or governmental authority, the articles of incorporation, by-laws, partnership
or trust agreement, articles of organization, operating agreement, or other
governing instrument of Borrower, or any indenture, agreement or other
instrument to which Borrower is a party or by which it or any of its assets or
the Property is or may be bound or affected; (v) will not result in the creation
or imposition of any lien, charge or encumbrance whatsoever upon any of its
assets, except the lien and security interest created hereby; and (vi) will not
require any authorization or license from, or any filing with, any governmental
or other body (except for the recordation of this Security Instrument in
appropriate land records in the State where the Property is located and except
for Uniform Commercial Code filings relating to the security interest created
hereby); and (b) the Note, this Security Instrument and the Other Security
Documents constitute the legal, valid and binding obligations of Borrower.
Section 5.5 LITIGATION. There is no action, suit or proceeding,
judicial, administrative or otherwise (including any condemnation or similar
proceeding), pending or, to the best of Borrower's knowledge, threatened or
contemplated against, or affecting, Borrower, a Guarantor, if any, an
Indemnitor, if any, or the Property.
Section 5.6 STATUS OF PROPERTY.
(a) No portion of the Improvements is located in an area
identified by the Secretary of Housing and Urban Development or any
successor thereto as an area having special flood hazards pursuant to
the Flood Insurance Acts or, if any portion of the Improvements is
located within such area, Borrower has obtained and will maintain the
insurance prescribed in Section 3.3 hereof.
(b) Borrower has obtained all necessary certificates, licenses
and other approvals, governmental and otherwise, necessary for the
operation of the Property and the conduct of its business and all
required zoning, building code, land use, environmental and other
similar permits or approvals, all of which are in full force and effect
as of the date hereof and not subject to revocation, suspension,
forfeiture or modification.
(c) The Property and the present and contemplated use and
occupancy thereof are in full compliance with all applicable zoning
ordinances, building codes, land use and environmental laws and other
similar laws.
(d) The Property is served by all utilities required for the
current or contemplated use thereof. All utility service is provided by
public utilities and the Property has accepted or is equipped to accept
such utility service.
(e) All public roads and streets necessary for service of and
access to the Property for the current or contemplated use thereof have
been completed, are serviceable and all-weather and are physically and
legally open for use by the public.
(f) The Property is served by public water and sewer systems.
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(g) The Property is free from damage caused by fire or other
casualty.
(h) All costs and expenses of any and all labor, materials,
supplies and equipment used in the construction of the Improvements
have been paid in full.
(i) Borrower has paid in full for, and is the owner of, all
furnishings, fixtures and equipment (other than tenants' property) used
in connection with the operation of the Property, free and clear of any
and all security interests, liens or encumbrances, except the lien and
security interest created hereby.
(j) All liquid and solid waste disposal, septic and sewer
systems located on the Property are in a good and safe condition and
repair and in compliance with all Applicable Laws.
Section 5.7 NO FOREIGN PERSON. Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended and the related Treasury Department regulations, including temporary
regulations.
Section 5.8 SEPARATE TAX LOT. The Property is assessed for real
estate tax purposes as one or more wholly independent tax lot or lots, separate
from any adjoining land or improvements not constituting a part of such lot or
lots, and no other land or improvements is assessed and taxed together with the
Property or any portion thereof.
Section 5.9 ERISA COMPLIANCE.
(a) As of the date hereof and throughout the term of this
Security Instrument, (i) Borrower is not and will not be an "employee
benefit plan" as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA, and (ii) the assets of Borrower do not and will not
constitute "plan assets" of one or more such plans for purposes of
Title I of ERISA; and
(b) As of the date hereof and throughout the term of this
Security Instrument (i) Borrower is not and will not be a "governmental
plan" within the meaning of Section 3(3) of ERISA and (ii) transactions
by or with Borrower are not and will not be subject to state statutes
applicable to Borrower regulating investments of and fiduciary
obligations with respect to governmental plans.
Section 5.10 LEASES. (a) Borrower is the sole owner of the entire
lessor's interest in the Leases (except the Ground Lease); (b) the Leases are
valid and enforceable and in full force and effect; (c) all of the Leases are
arms-length agreements with bona fide, independent third parties; (d) no party
under any Lease is in default; (e) all Rents due have been paid in full; (f) the
terms of all alterations, modifications and amendments to the Leases are
reflected in the certified occupancy statement delivered to and approved by
Lender; (g) none of the Rents reserved in the Leases have been assigned or
otherwise pledged or hypothecated; (h) none of the Rents have been collected for
more than one (1) month in advance; (i) the premises demised under the Leases
have
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been completed and the tenants under the Leases have accepted the same and have
taken possession of the same on a rent-paying basis; (j) there exist no offsets
or defenses to the payment of any portion of the Rents; (k) no Lease contains an
option to purchase, right of first refusal to purchase, or any other similar
provision; (1) no person or entity has any possessory interest in, or right to
occupy, the Property except under and pursuant to a Lease; (m) each Lease is
subordinate to this Security Instrument, either pursuant to its terms or a
recorded subordination agreement; and (n) no Lease has the benefit of a
non-disturbance agreement that would be considered unacceptable to prudent
institutional lenders.
Section 5.11 FINANCIAL CONDITION. (a) (i) Borrower is solvent,
and no bankruptcy, reorganization, insolvency or similar proceeding under any
state or federal law with respect to Borrower has been initiated, and (ii)
Borrower has received reasonably equivalent value for the granting of this
Security Instrument.
(b) No petition in bankruptcy has ever been filed by or against
Borrower, any Guarantor, any Indemnitor or any related entity, or any principal,
general partner or member thereof, in the last seven (7) years, and neither
Borrower, any Guarantor, any Indemnitor nor any related entity, or any
principal, general partner or member thereof, in the last seven (7) years has
ever made any assignment for the benefit of creditors or taken advantage of any
insolvency act or any act for the benefit of debtors.
Section 5.12 BUSINESS PURPOSES. The loan evidenced by the Note
secured by the Security Instrument and the Other Security Documents (the "Loan")
is solely for the business purpose of Borrower, and is not for personal, family,
household, or agricultural purposes.
Section 5.13 TAXES. Borrower, any Guarantor and any Indemnitor
have filed all federal, state, county, municipal, and city income and other tax
returns required to have been filed by them and have paid all taxes and related
liabilities which have become due pursuant to such returns or pursuant to any
assessments received by them. Neither Borrower, any Guarantor nor any Indemnitor
knows of any basis for any additional assessment in respect of any such taxes
and related liabilities for prior years.
Section 5.14 MAILING ADDRESS. Borrower's mailing address, as set
forth in the opening paragraph hereof or as changed in accordance with the
provisions hereof, is true and correct.
Section 5.15 NO CHANGE IN FACTS OR CIRCUMSTANCES. All formation
in the application for the Loan submitted to Lender (the "Loan Application") and
in all financing statements, rent rolls, reports, certificates and other
documents submitted in connection with the Loan Application or in satisfaction
of the terms thereof, are accurate, complete and correct in all respects. There
has been no material adverse change in any condition, fact, circumstance or
event that would make any such information inaccurate, incomplete or otherwise
misleading.
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Section 5.16 DISCLOSURE. Borrower has disclosed to Lender all
material facts and has not failed to disclose any material fact that could cause
any representation or warranty made herein to be materially misleading.
Section 5.17 THIRD PARTY REPRESENTATIONS. Each of the
representations and the warranties made by each Guarantor and Indemnitor herein
or in any Other Security Document(s) is true and correct in all material
respects.
Section 5.18 ILLEGAL ACTIVITY. No portion of the Property has
been or will be purchased with proceeds of any illegal activity.
Section 5.19 CONTRACTS. All contracts, agreements, consents,
waivers, documents and writings of every kind or character at any time to which
Borrower is a party to be delivered to Lender pursuant to any of the provisions
of this Security Instrument are valid and enforceable against Borrower and, to
the best knowledge of Borrower, are enforceable against all other parties
thereto, and, to Borrower's actual knowledge, in all respects are what they
purport to be and, to the best knowledge of Borrower, to the extent that any
such writing shall impose any obligation or duty on the party thereto or
constitute a waiver of any rights which any such party might otherwise have,
said writing shall be valid and enforceable against said party in accordance
with its terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting the rights of
creditors generally.
Article 6 - OBLIGATIONS AND RELIANCES
Section 6.1 RELATIONSHIP OF BORROWER AND LENDER. The relationship
between Borrower and Lender is solely that of debtor and creditor, and Lender
has no fiduciary or other special relationship with Borrower, and no term or
condition of any of the Note, this Security Instrument and the Other Security
Documents shall be construed so as to deem the relationship between Borrower and
Lender to be other than that of debtor and creditor.
Section 6.2 NO RELIANCE ON LENDER. The members, general
partners, principals and (if Borrower is a trust) beneficial owners of Borrower
are experienced in the ownership and operation of properties similar to the
Property, and Borrower and Lender are relying solely upon such expertise and
business plan in connection with the ownership and operation of the Property.
Borrower is not relying on Lender's expertise, business acumen or advice in
connection with the Property.
Section 6.3 NO LENDER OBLIGATIONS. (a) Notwithstanding the
provisions of Subsections 1.1(f) and (1) or Section 1.2, Lender is not
undertaking the performance of (i) any obligations under the Leases; or (ii)
any obligations with respect to such agreements, contracts, certificates,
instruments, franchises, permits, trademarks, licenses and other documents.
(b) By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Lender pursuant to this Security
Instrument, the Note or the Other
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Security Documents, including without limitation, any officer's certificate,
balance sheet, statement of profit and loss or other financial statement,
survey, appraisal, or insurance policy, Lender shall not be deemed to have
warranted, consented to, or affirmed the sufficiency, the legality or
effectiveness of same, and such acceptance or approval thereof shall not
constitute any warranty or affirmation with respect thereto by Lender.
Section 6.4 RELIANCE. Borrower recognizes and acknowledges that
in accepting the Note, this Security Instrument and the Other Security
Documents, Lender is expressly and primarily relying on the truth and accuracy
of the warranties and representations set forth in Article 5 without any
obligation to investigate the Property and notwithstanding any investigation of
the Property by Lender; that such reliance existed on the part of Lender prior
to the date hereof; that the warranties and representations are a material
inducement to Lender in accepting the Note, this Security Instrument and the
Other Security Documents; and that Lender would not be willing to make the Loan
and accept this Security Instrument in the absence of the warranties and
representations as set forth in Article 5.
Article 7 - FURTHER ASSURANCES
Section 7.1 RECORDING OF SECURITY INSTRUMENT, ETC. Borrower
forthwith upon the execution and delivery of this Security Instrument and
thereafter, from time to time, will cause this Security Instrument and any of
the Other Security Documents creating a lien or security interest or evidencing
the lien hereof upon the Property and each instrument of further assurance to be
filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect and perfect the lien or security interest hereof upon, and the interest
of Lender in, the Property. Borrower will pay all taxes, filing, registration or
recording fees, and all expenses incident to the preparation, execution,
acknowledgment and/or recording of the Note, this Security Instrument, the Other
Security Documents, any note or mortgage supplemental hereto, any security
instrument with respect to the Property and any instrument of further assurance,
and any modification or amendment of the foregoing documents, and all federal,
state, county and municipal taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution and delivery of this Security
Instrument, any mortgage supplemental hereto, any security instrument with
respect to the Property or any instrument of further assurance, and any
modification or amendment of the foregoing documents, except where prohibited by
law so to do.
Section 7.2 FURTHER ACTS, ETC. Borrower will, at the cost of
Borrower, and without expense to Lender, do, execute, acknowledge and deliver
all and every such further acts, deeds, conveyances, mortgages, assignments,
notices of assignments, transfers and assurances as Lender shall, from time to
time, require, for the better assuring, conveying, assigning, transferring, and
confirming unto Lender the Property and rights hereby mortgaged, granted,
bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred or intended now or hereafter so to be, or which Borrower may be or
may hereafter become bound to convey or assign to Lender, or for carrying out
the intention or facilitating the performance of the terms of this Security
Instrument or for filing, registering or recording this Security Instrument, or
for
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complying with all Applicable Laws. Borrower, on demand, will execute and
deliver and hereby authorizes Lender to execute in the name of Borrower or
without the signature of Borrower to the extent Lender may lawfully do so, one
or more fins. ncing statements, chattel mortgages or other instruments, to
evidence more effectively the security interest of Lender in the Property.
Borrower grants to Lender an irrevocable power of attorney coupled with an
interest for the purpose of exercising and perfecting any and all rights and
remedies available to Lender at law and in equity, including without limitation
such rights and remedies available to Lender pursuant to this Section 7.2.
Section 7.3 CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS.
(a) If any law is enacted or adopted or amended after the date
of this Security Instrument which deducts the Debt from the value of
the Property for the purpose of taxation or which imposes a tax, either
directly or indirectly, on the Debt or Lender's interest in the
Property, Borrower will pay the tax, with interest and penalties
thereon, if any. If Lender is advised by counsel chosen by it that the
payment of tax by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury, then Lender
shall have the option by written notice of not less than ninety (90)
days to declare the Debt immediately due and payable.
(b) Borrower will not claim or demand or be entitled to any
credit or credits on account of the Debt for any part of the Taxes or
Other Charges assessed against the Property, or any part thereof, and
no deduction shall otherwise be made or claimed from the assessed value
of the Property, or any part thereof, for real estate tax purposes by
reason of this Security Instrument or the Debt. If such claim, credit
or deduction shall be required by law, Lender shall have the option,
by written notice of not less than ninety (90) days, to declare the
Debt immediately due and payable.
(c) If at any time the United States of America, any State
thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note, this Security Instrument, or
any of the Other Security Documents or impose any other tax or charge
on the same, Borrower will pay for the same, with interest and
penalties thereon, if any.
Section 7.4 ESTOPPEL CERTIFICATES.
(a) After request by Lender, Borrower, within ten (10) days,
shall furnish Lender or any proposed assignee with a statement, duly
acknowledged and certified, setting forth (i) the amount of the
original principal amount of the Note, (ii) the unpaid principal amount
of the Note, (iii) the rate of interest of the Note, (iv) the terms of
payment and maturity date of the Note, (v) the date installments of
interest and/or principal were last paid, (vi) that, except as provided
in such statement, there are no defaults or events which with the
passage of time or the giving of notice or both, would constitute an
event of default under the Note or the Security Instrument, (vii) that
the Note and this
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Security Instrument are valid, legal and binding obligations and have not
been modified or if modified, giving particulars of such modification,
(viii) whether any offsets or defenses exist against the obligations
secured hereby and, if any are alleged to exist, a detailed description
thereof, (ix) that all Leases are in full force and effect and (provided
the Property is not a residential multifamily property) have not been
modified (or if modified, setting forth all modifications), (x) the date
to which the Rents thereunder have been paid pursuant to the Leases, (xi)
whether or not, to the best knowledge of Borrower, any of the lessees
under the Leases are in default under the Leases, and, if any of the
lessees are in default, setting forth the specific nature of all such
defaults, (xii) the amount of security deposits held by Borrower under
each Lease and that such amounts are consistent with the amounts required
under each Lease, and (xiii) as to any other matters reasonably
requested by Lender and reasonably related to the Leases, the obligations
secured hereby, the Property or this Security Instrument.
(b) Borrower shall deliver to Lender, promptly upon request, duly
executed estoppel certificates from any one or more lessees as required
by Lender attesting to such facts regarding the Lease as Lender may
require, including but not limited to attestations that each Lease
covered thereby is in full force and effect with no defaults thereunder
on the part of any party, that none of the Rents have been paid more than
one month in advance, and that the lessee claims no defense or offset
against the full and timely performance of its obligations under the
Lease.
(c) Upon any transfer or proposed transfer contemplated by
Section 19.1 hereof, at Lender's request, Borrower, any Guarantors and
any Indemnitor(s) shall provide an estoppel certificate to the Investor
(defined in Section 19.1) or any prospective Investor in such form,
substance and detail as lender, such Investor or prospective Investor
may require.
Section 7.5 FLOOD INSURANCE. After Lender's request, Borrower
shall deliver evidence satisfactory to Lender that no portion of the
Improvements is situated in a federally designated "special flood hazard area"
or if it is, that Borrower has obtained insurance meeting the requirements of
Section 3.3(a)(vii).
Section 7.6 SPLITTING OF SECURTY INSTRUMENT. This Security
Instrument and the Note shall, at any time until the same shall be fully paid
and satisfied, at the sole election of Lender, be split or divided into two or
more notes and two or more security instruments, each of which shall cover all
or a portion of the Property to be more particularly described therein. To that
end, Borrower, upon written request of Lender, shall execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered by the then owner
of the Property, to Lender and/or its designee or designees substitute notes and
security instruments in such principal amounts, aggregating not more than the
then unpaid principal amount of this Security Instrument, and containing terms,
provisions and clauses similar to those contained herein and in the Note, and
such other documents and instruments as may be required by Lender.
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Section 7.7 REPLACEMENT DOCUMENTS. Upon receipt of an affidavit
of an officer of Lender as to the loss, theft, destruction or mutilation of the
Note or any Other Security Document which is not of public record, and, in the
case of any such mutilation, upon surrender and cancellation of such Note or
Other Security Document, Borrower will issue, in lieu thereof, a replacement
Note or Other Security Document, dated the date of such lost, stolen, destroyed
or mutilated Note or Other Security Document in the same principal amount
thereof and otherwise of like tenor.
Article 8 - DUE ON SALE/ENCUMBRANCE
Section 8.1 LENDER RELIANCE. Borrower acknowledges that Lender
has examined and relied on the experience of Borrower and its members, general
partners, principals and (if Borrower is a trust) beneficial owners in owning,
leasing and operating properties such as the Property in agreeing to make the
loan secured hereby, and will continue to rely on Borrower's ownership of the
Property as a means of maintaining the value of the Property as security for
repayment of the Debt and the performance of the Other Obligations. Borrower
acknowledges that Lender has a valid interest in maintaining the value of the
Property so as to ensure that, should Borrower default in the repayment of the
Debt or the performance of the Other Obligations, Lender can recover the Debt by
a sale of the Property.
Section 8.2 NO SALE/ENCUMBRANCE. Borrower agrees that Borrower
shall not, without the prior written consent of Lender, sell, convey, mortgage,
grant, bargain, encumber, pledge, assign, or otherwise transfer the Property or
any part thereof or permit the Property or any part thereof to be sold,
conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or
otherwise transferred.
Section 8.3 SALE/ENCUMBRANCE DEFINED. A sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer within
the meaning of this Article 8 shall be deemed to include, but not limited to,
(a) an installment sales agreement wherein Borrower agrees to sell the Property
or any part thereof for a price to be paid in installments; (b) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Borrower's right, title and interest
in and to any Leases or any Rents; (c) if Borrower, any Guarantor, any
Indemnitor, or any general or limited partner or member of Borrower, any
Guarantor or any Indemnitor is a corporation, the voluntary or involuntary sale,
conveyance, transfer or pledge of such corporation's stock (or the stock of any
corporation directly or indirectly controlling such corporation by operation of
law or otherwise) or the creation or issuance of new stock by which an aggregate
of more than 33% of such corporation's stock shall be vested in a party or
parties who are not now stockholders; (d) if Borrower, any Guarantor or any
Indemnitor or any general or limited partner or member of Borrower, any
Guarantor or any Indemnitor is a limited or general partnership or joint
venture, the change, removal or resignation of a general partner or managing
partner or the transfer or pledge of the partnership interest of any general
partner or managing partner or any profits or proceeds relating to such
partnership interest or the voluntary or involuntary sale, conveyance, transfer
or pledge of limited partnership interests
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(or the limited partnership interests of any limited partnership directly or
indirectly controlling such limited partnership by operation of law or
otherwise) or the creation or issuance of new limited partnership interests, by
which an aggregate of more than 33% of such limited partnership interests are
held by parties who are not currently limited partners; and (e) if Borrower, any
Guarantor, any Indemnitor or any general or limited partner or member of
Borrower, any Guarantor or any Indemnitor is a limited liability company, the
change, removal or resignation of a managing member or the transfer of the
membership interest of any managing member or any profits or proceeds relating
to such membership interest or the voluntary or involuntary sale, conveyance,
transfer or pledge of membership interests (or the membership interests of any
limited liability company directly or indirectly controlling such limited
liability company by operation of law or otherwise) or the creation or issuance
of new membership interests, by which an aggregate of more than 33% of such
membership interests are held by parties who are not currently members.
Notwithstanding the foregoing, the following transfer shall not be deemed to be
a sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment,
or transfer within the meaning of this Article 8: transfer by devise or descent
or by operation of law upon the death of a member, partner or stockholder of
Borrower, any Guarantor or any Indemnitor or any general partner or member
thereof. Notwithstanding the provisions of this Security Instrument to the
contrary, and provided that no default has occurred and is continuing under the
Note, this Security Instrument or the Other Security Documents, Lender's prior
written consent shall not be required with respect to transfers of stock in the
general partner of Borrower, provided (i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ maintains at least a
fifty-one percent (51%) ownership interest in said general partner of Borrower
and (ii) Lender receives sixty (60) days prior written notice of any such
transfer.
Section 8.4 LENDER'S RIGHTS. Lender reserves the right to
condition the consent required hereunder upon a modification of the terms hereof
and on assumption of the Note, this Security Instrument and the Other Security
Documents as so modified by the proposed transferee, payment of a transfer fee
of one percent (1%) of the principal balance of the Note, a $4,000 processing
fee, and all of Lender's expenses incurred in connection with such transfer, the
approval by a Rating Agency of the proposed transferee, the proposed
transferee's continued compliance with the covenants set forth in this Security
Instrument, including, without limitation, the covenants in Section 4.3 hereof,
or such other conditions as Lender shall determine in its sole discretion to be
in the interest of Lender. All of Lender's expenses incurred and the $4,000
processing fee shall be payable by Borrower whether or not Lender consents to
the transfer. Lender shall not be required to demonstrate any actual impairment
of its security or any increased risk of default hereunder in order to declare
the Debt immediately due and payable upon Borrower's sale, conveyance, mortgage,
grant, bargain, encumbrance, pledge, assignment, or transfer of the Property
without Lender's consent. This provision shall apply to every sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the
Property regardless of whether voluntary or not, or whether or not Lender has
consented to any previous sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, or transfer of the Property.
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Article 9 - PREPAYMENT
Section 9.1 PREPAYMENT BEFORE EVENT OF DEFAULT. The Debt may be
prepaid only in strict accordance with the express terms and conditions of the
Note including the payment of any prepayment consideration.
Section 9.2 PREPAYMENT ON CASUALTY OR CONDEMNATION. Provided no
Event of Default exists under the Note, this Security Instrument or the Other
Security Documents, in the event of any prepayment of the Debt pursuant to the
terms of Sections 3.3 or 3.6 hereof, no Prepayment Consideration (defined in the
Note) shall be due in connection therewith, but Borrower shall be responsible
for the Interest Shortfall Payment (defined in the Note), if any, and all other
amounts due under the Note, this Security Instrument and the Other Security
Documents.
Section 9.3 PREPAYMENT AFTER EVENT OF DEFAULT. If a Default
Prepayment (defined below) occurs, Borrower shall pay to Lender the entire Debt,
including without limitation, the following amounts:
(a) if the Default Prepayment occurs prior to the time when
prepayment of the principal balance of the Note is permitted, an amount
equal to the sum of (i) the present value of the interest payments which
would have accrued on the principal balance of the Note (outstanding as
of the date of such Default Prepayment) at the Applicable Interest Rate
(as defined in the Note) from the date of such Default Prepayment to the
first day prepayment is permitted pursuant to the Note discounted at a
rate equal to the Treasury Rate (as defined in the Note) except that
such Treasury Rate shall be based on the U.S. Treasury constant maturity
most nearly approximating the date upon which prepayment is first
permitted pursuant to the Note, and (ii) the Prepayment Consideration
(defined in the Note) which would have been payable to Lender as of the
first day of the fourth (4th) Loan Year (as defined in the Note) based
on the Treasury Rate in effect at the time of such Default Prepayment;
and
(b) if the Default Prepayment occurs at a time when prepayment
of the principal balance of the Note is permitted, the Prepayment
Consideration and the Interest Shortfall Payment (defined in the Note),
if applicable.
For purposes of this Section 9.3, the term "Default Prepayment" shall mean a
prepayment of the principal amount of the Note made after the occurrence of any
Event of Default or an acceleration of the Maturity Date (as defined in the
Note) under any circumstances, including, without limitation, a prepayment
occurring in connection with reinstatement of this Security Instrument provided
by statute under foreclosure proceedings or exercise of a power of sale, any
statutory right of redemption exercised by Borrower or any other party having a
statutory right to redeem or prevent foreclosure, any sale in foreclosure or
under exercise of a power of sale or otherwise.
Article 10 - DEFAULT
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Section 10.1 EVENTS OF DEFAULT. The occurrence of any one or
more of the following events shall constitute an "Event of Default":
(a) if any portion of the Debt is not paid on or prior to the
date the same is due;
(b) if any of the Taxes or Other Charges is not paid when the
same is due and payable except to the extent sums sufficient to pay
such Taxes and Other Charges have been deposited with Lender in
accordance with the terms of this Security Instrument;
(c) if the Policies are not kept in full force and effect, or
if the Policies are not delivered to Lender upon request;
(d) if Borrower violates or does not comply with any of the
provisions of Section 3.7 or Article 12 within thirty (30) days after
notice from Lender or if Borrower or Principal, as applicable, violates
or does not comply with any of the provisions of Section 4.3 or
Article 8;
(e) if any representation or warranty of Borrower, any
Indemnitor or any person guaranteeing payment of the Debt or any
portion thereof or performance by Borrower of any of the terms of this
Security Instrument (a "Guarantor"), or any member, general partner,
principal or beneficial owner of any of the foregoing, made herein or
in the Environmental Indemnity (defined below) or any guaranty, or in
any certificate, report, financial statement or other instrument or
document furnished to Lender shall have been false or misleading in any
material respect when made;
(f) if (i) Borrower or any managing member or general partner
of Borrower, or any Guarantor or Indemnitor shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or the Borrower or any managing member or general partner of
Borrower, or any Guarantor or Indemnitor shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against Borrower or any managing member or general partner of
Borrower, or any Guarantor or Indemnitor any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or
appointment or (B) retrains undismissed, undischarged or unbonded for a
period of sixty (60) days; or (iii) there shall be commenced against
the Borrower or any managing member or general partner of Borrower, or
any Guarantor or Indemnitor any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of any
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order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within sixty (60) days
from the entry thereof; or (iv) the Borrower or any managing member or
general partner of Borrower, or any Guarantor or Indemnitor shall take
any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) the Borrower or any managing member or general
partner of Borrower, or any Guarantor or Indemnitor shall generally
not, or shall be unable to, or shall admit in writing its inability to,
pay its debts as they become due;
(g) if Borrower shall be in default under any other mortgage,
deed of trust, deed to secure debt or other security agreement covering
any part of the Property whether it be superior or junior in lien to
this Security Instrument;
(h) if the Property becomes subject to any mechanic's,
materialman's or other lien other than a lien for local real estate
taxes and assessments not then due and payable and the lien shall
remain undischarged of record (by payment, bonding or otherwise) for a
period of thirty (30) days;
(i) if any federal tax .lien is filed against Borrower, any
member or general partner of Borrower, any Guarantor, any Indemnitor or
the Property and same is not discharged of record within thirty (30)
days after same is filed;
(j) if any condemnation or eminent domain proceeding has been
concluded which renders the use or occupancy of the Property
economically unfeasible;
(k) if (i) Borrower fails to timely provide Lender with the
written certification and evidence referred to in Section 4.2 hereof,
or (ii) Borrower consummates a transaction which would cause the
Security Instrument or Lender's exercise of its rights under this
Security Instrument, the Note or the Other Security Documents to
constitute a nonexempt prohibited transaction under ERISA or result in
a violation of a state statute regulating governmental plans,
subjecting Lender to liability for a violation of ERISA or a state
statute;
(1) if Borrower shall fail to reimburse Lender on demand, with
interest calculated at the Default Rate, for all Insurance Premiums or
Taxes, together with interest and penalties imposed thereon, paid by
Lender pursuant to this Security Instrument;
(m) if Borrower shall fail to deliver to Lender, within ten
(10) days after request by Lender, the estoppel certificates required
pursuant to the terms of Subsections 7.4(a) and (c);
(n) if Borrower shall fail to deliver to Lender, within ten
(10) days after request by Lender, the statements referred to in
Section 3.11 in accordance with the terms thereof;
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(o) if any default occurs under that certain environmental
indemnity agreement dated the date hereof given by Borrower and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ (at times hereinafter referred to collectively as "Indemnitor(s)")
to Lender (the "Environmental Indemnity") and such default continues
after the expiration of applicable notice and grace periods, if any;
(p) if any default occurs under any guaranty or indemnity
executed in connection herewith and such default continues after the
expiration of applicable grace periods, if any;
(q) if Borrower shall fail in the payment of any rent, additional
rent or other charge mentioned in or made payable by the Ground Lease
when said rent or other charge is due and payable;
(r) if there shall occur any default by Borrower, as tenant under
the Ground Lease, in the observance or performance of any term, covenant
or condition of the Ground Lease on the part of Borrower to be observed
or performed which shall result in liabilities of the Borrower and said
default is not cured following the expiration of any applicable grace and
notice periods therein provided, or if the leasehold estate created by
the Ground Lease shall be surrendered or in the Ground Lease shall be
terminated or cancelled for those reasons herein, or if any of the terms,
covenants or conditions of the Ground Lease shall in any manner be
modified, changed, supplemented, altered, or amended without a written
notice to Lender; or
(s) if for more than ten (10) days after notice from Lender,
Borrower shall continue to be in default under any other term, covenant
or condition of the Note, this Security Instrument or the Other Security
Documents in the case of any default which can be cured by the payment
of a sum of money or for thirty (30) days after notice from Lender in
the case of any other default, provided that if such default cannot
reasonably be cured within such thirty (30) day period and Borrower
shall have commenced to cure such default within such thirty (30) day
period and thereafter diligently and expeditiously proceeds to cure the
same, such thirty (30) day period shall be extended for so long as it
shall require Borrower in the exercise of due diligence to cure such
default, it being agreed that no such extension shall be for a period in
excess of sixty (60) days.
Notwithstanding the provisions of this Section 10.1 to the contrary, the
termination of the Ground Lease by Owner pursuant to Section 2 of the Ground
Lease, provided said termination is not the result of any action or inaction by
Borrower, shall not constitute an Event of Default hereunder.
Section 10.2 LATE PAYMENT CHARGE. If any monthly installment of
principal and interest is not paid on or prior to the date on which it is due,
Borrower shall pay to Lender upon demand an amount equal to the lesser of five
percent (5%) of such unpaid portion of the outstanding monthly installment of
principal and interest then due or the maximum amount permitted by applicable
law, to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent
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payment, and such amount shall be secured by this Security Instrument and the
Other Security Documents.
Section 10.3 DEFAULT INTEREST. Borrower will pay, from the date
of an Event of Default through the earlier of the date upon which the Event of
Default is cured or the date upon which the Debt is paid in full, interest on
the unpaid principal balance of the Note at a per annum rate equal to the lesser
of (a) five percent (5%) plus the Applicable Interest Rate (as defined in the
Note), and (b) the maximum interest rate which Borrower may by law pay or Lender
may charge and collect (the "Default Rate").
Article 11 - RIGHTS AND REMEDIES
Section 11.1 REMEDIES. Upon the occurrence of any Event of
Default, Borrower agrees that Lender may take such action, without notice or
demand, as it deems advisable to protect and enforce its rights against Borrower
and in and to the Property, including, but not limited to, the following
actions, each of which may be pursued concurrently or otherwise, at such time
and in such order as Lender may determine, in its sole discretion, without
impairing or otherwise affecting the other rights and remedies of Lender:
(a) declare the entire unpaid Debt to be immediately due and
payable;
(b) institute proceedings, judicial or otherwise, for the
complete foreclosure of this Security Instrument under any applicable
provision of law in which case the Property or any interest therein may
be sold for cash or upon credit in one or more parcels or in several
interests or portions and in any order or manner;
(c) with or without entry, to the extent permitted and pursuant to
the procedures provided by applicable law, institute proceedings for the
partial foreclosure of this Security Instrument for the portion of the
Debt then due and payable, subject to the continuing lien and security
interest of this Security Instrument for the balance of the Debt not then
due, unimpaired and without loss of priority;
(d) sell for cash or upon credit the Property or any part
thereof and all estate, claim, demand, right, title and interest of
Borrower therein and rights of redemption thereof, pursuant to power of
sale or otherwise, at one or more sales, as an entity or in parcels, at
such time and place, upon such terms and after such notice thereof as
may be required or permitted by law;
(e) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition, or agreement contained
herein, in the Note or in the Other Security Documents;
(f) recover judgment on the Note either before, during or after
any proceedings for the enforcement of this Security Instrument or the
Other Security Documents;
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(g) apply for the appointment of a receiver, trustee,
liquidator or conservator of the Property, without notice and without
regard for the adequacy of the security for the Debt and without regard
for the solvency of Borrower, any Guarantor, Indemnitor or of any
person, firm or other entity liable for the payment of the Debt;
(h) subject to any applicable law, the license granted to
Borrower under Section 1.2 shall automatically be revoked and Lender
may enter into or upon the Property, either personally or by its
agents, nominees or attorneys and dispossess Borrower and its agents
and servants therefrom, without liability for trespass, damages or
otherwise and exclude Borrower and its agents or servants wholly
therefrom, and take possession of all books, records and accounts
relating thereto and Borrower agrees to surrender possession of the
Property and of such books, records and accounts to Lender upon demand,
and thereupon Lender may (i) use, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and every part of
the Property and conduct the business thereat; (ii) complete any
construction on the Property in such manner and form as Lender deems
advisable; (iii) make alterations, additions, renewals, replacements
and improvements to or on the Property; (iv) exercise all rights and
powers of Borrower with respect to the Property, whether in the name of
Borrower or otherwise, including, without limitation, the right to
make, cancel, enforce or modify Leases, obtain and evict tenants, and
demand, ▇▇▇ for, collect and receive all Rents of the Property and
every part thereof; (v) require Borrower to pay monthly in advance to
Lender, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of such part of the
Property as may be occupied by Borrower; (vi) require Borrower to
vacate and surrender possession of the Property to Lender or to such
receiver and, in default thereof, Borrower may be evicted by summary
proceedings or otherwise; and (vii) apply the receipts from the
Property to the payment of the Debt, in such order, priority and
proportions as Lender shall deem appropriate in its sole discretion
after deducting therefrom all expenses (including reasonable attorneys'
fees) incurred in connection with the aforesaid operations and all
amounts necessary to pay the Taxes, Other Charges, Insurance Premiums
and other expenses in connection with the Property, as well as just and
reasonable compensation for the services of Lender, its counsel, agents
and employees;
(i) exercise any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code,
including, without limiting the generality of the foregoing: (i) the
right to take possession of the Personal Property or any part thereof,
and to take such other measures as Lender may deem necessary for the
care, protection and preservation of the Personal Property, and (ii)
request Borrower at its expense to assemble the Personal Property and
make it available to Lender at a convenient place acceptable to Lender.
Any notice of sale, disposition or other intended action by Lender with
respect to the Personal Property sent to Borrower in accordance with
the provisions hereof at least five (5) days prior to such action,
shall constitute commercially reasonable notice to Borrower;
(j) apply any sums then deposited in the Escrow Fund and any
other sums held in escrow or otherwise by Lender in accordance with the
terms of this Security Instrument
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or any Other Security Document to the payment of the following items in
any order in its uncontrolled discretion:
(i) Taxes and Other Charges;
(ii) Insurance Premiums;
(iii) Interest on the unpaid principal balance of the
Note;
(iv) Amortization of the unpaid principal balance of
the Note;
(v) All other sums payable pursuant to the Note, this
Security Instrument and the Other Security Documents, including
without limitation advances made by Lender pursuant to the
terms of this Security Instrument;
(k) surrender the Policies maintained pursuant to Article 3
hereof, collect the unearned Insurance Premiums and apply such sums as
a credit on the Debt in such priority and proportion as Lender in its
discretion shall deem proper, and in connection therewith, Borrower
hereby appoints Lender as agent and attorney-in-fact (which is coupled
with an interest and is therefore irrevocable) for Borrower to collect
such Insurance Premiums;
(l) pursue such other remedies as Lender may have under
applicable law; or
(m) apply the undisbursed balance of any Net Proceeds Deficiency
deposit, together with interest thereon, to the payment of the Debt in
such order, priority and proportions as Lender shall deem to be
appropriate in its discretion.
In the event of a sale, by foreclosure, power of sale, or otherwise, of less
than all of the Property, this Security Instrument shall continue as a lien and
security interest on the remaining portion of the Property unimpaired and
without loss of priority. Notwithstanding the provisions of this Section 11.1 to
the contrary, if any Event of Default as described in clause (i) or (ii) of
Subsection 10.1(f) shall occur, the entire unpaid Debt shall be automatically
due and payable, without any further notice, demand or other action by Lender.
Section 11.2 APPLICATION OF PROCEEDS. The purchase money,
proceeds and avails of any disposition of the Property, or any part thereof, or
any other sums collected by Lender pursuant to the Note, this Security
Instrument or the Other Security Documents, may be applied by Lender to the
payment of the Debt in such priority and proportions as Lender in its discretion
shall deem proper.
Section 11.3 RIGHT TO CURE DEFAULTS. Upon the occurrence of any
Event of Default or if Borrower fails to make any payment or to do any act as
herein provided, Lender may, but without any obligation to do so and without
notice to or demand on Borrower and without releasing Borrower from any
obligation hereunder, make or do the same in such manner and to such extent as
Lender may deem necessary to protect the security hereof. Lender is
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authorized to enter upon the Property for such purposes, or appear in, defend,
or bring any action or proceeding to protect its interest in the Property or to
foreclose this Security Instrument or collect the Debt, and the cost and expense
thereof (including reasonable attorneys' fees to the extent permitted by law),
with interest as provided in this Section 11.3, shall constitute a portion of
the Debt and shall be due and payable to Lender upon demand. All such costs and
expenses incurred by Lender in remedying such Event of Default or such failed
payment or act or in appearing in, defending, or bringing any such action or
proceeding shall bear interest at the Default Rate, for the period after notice
from Lender that such cost or expense was incurred to the date of payment to
Lender. All such costs and expenses incurred by Lender together with interest
thereon calculated at the Default Rate shall be deemed to constitute a portion
of the Debt and be secured by this Security Instrument and the Other Security
Documents and shall be immediately due and payable upon demand by Lender
therefor.
Section 11.4 ACTIONS AND PROCEEDINGS. Lender has the right to
appear in and defend any action or proceeding brought with respect to the
Property and to bring any action or proceeding, in the name and on behalf of
Borrower, which Lender, in its discretion, decides should be brought to protect
its interest in the Property.
Section 11.5 RECOVERY OF SUMS REQUIRED To BE PAID. Lender shall
have the right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Borrower existing at the time such earlier action was
commenced.
Section 11.6 EXAMINATION OF BOOKS AND RECORDS. Lender, its
agents, accountants and attorneys shall have the right to examine the records,
books, management and other papers of Borrower and its affiliates which reflect
upon their financial condition, at the Property or at any office regularly
maintained by Borrower, its affiliates where the books and records are located.
Lender and its agents shall have the right to make copies and extracts from the
foregoing records and other papers. In addition, Lender, its agents, accountants
and attorneys shall have the right to examine and audit the books and records of
Borrower and its affiliates pertaining to the income, expenses and operation of
the Property during reasonable business hours at any office of Borrower, its
affiliates where the books and records are located.
Section 11.7 OTHER RIGHTS, ETC. (a) The failure of Lender to
insist upon strict performance of any term hereof shall not be deemed to be a
waiver of any term of this Security Instrument. Borrower shall not be relieved
of Borrower's obligations hereunder by reason of (i) the failure of Lender to
comply with any request of Borrower, any Guarantor or any Indemnitor to take
any action to foreclose this Security Instrument or otherwise enforce any of
the provisions hereof or of the Note or the Other Security Documents, (ii) the
release, regardless of consideration, of the whole or any part of the Property,
or of any person liable for the Debt or any portion thereof, or (iii) any
agreement or stipulation by Lender extending the time of payment or otherwise
modifying or supplementing the terms of the Note, this Security Instrument or
the Other Security Documents.
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(b) It is agreed that the risk of loss or damage to the Property
is on Borrower, and Lender shall have no liability whatsoever for decline in
value of the Property, for failure to maintain the Policies, or for failure to
determine whether insurance in force is adequate as to the amount of risks
insured. Possession by Lender shall not be deemed an election of judicial
relief, if any such possession is requested or obtained, with respect to any
Property or collateral not in Lender's possession.
(c) Lender may resort for the payment of the Debt to any other
security held by Lender in such order and manner as Lender, in its discretion,
may elect. Lender may take action to recover the Debt, or any portion thereof,
or to enforce any covenant hereof without prejudice to the right of Lender
thereafter to foreclose this Security Instrument. The rights of Lender under
this Security Instrument shall be separate, distinct and cumulative and none
shall be given effect to the exclusion of the others. No act of Lender shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision. Lender shall not be limited exclusively to the
rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.
Section 11.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY. Lender
may release any portion of the Property for such consideration as Lender may
require without, as to the remainder of the Property, in any way impairing or
affecting the lien or priority of this Security Instrument, or improving the
position of any subordinate lienholder with respect thereto, except to the
extent that the obligations hereunder shall have been reduced by the actual
monetary consideration, if any, received by Lender for such release, and may
accept by assignment, pledge or otherwise any other property in place thereof as
Lender may require without being accountable for so doing to any other
lienholder. This Security Instrument shall continue as a lien and security
interest in the remaining portion of the Property.
Section 11.9 VIOLATION OF LAWS. If the Property is not in
compliance with Applicable Laws, Lender may impose additional requirements upon
Borrower in connection herewith including, without limitation, monetary
reserves or financial equivalents.
Section 11.10 RECOURSE AND CHOICE OF REMEDIES. Notwithstanding
any other provision of this Security Instrument, including but not limited to
Article 15 hereof, Lender and other Indemnified Parties (defined in Section
13.1 below) are entitled to enforce the obligations of Borrower, Guarantor and
Indemnitor contained in Sections 13.2, 13.3 and 13.4 without first resorting to
or exhausting any security or collateral and without first having recourse to
the Note or any of the Property, through foreclosure or acceptance of a deed in
lieu of foreclosure or otherwise, and in the event Lender commences a
foreclosure action against the Property, Lender is entitled to pursue a
deficiency judgment with respect to such obligations against Borrower, any
Guarantor and/or Indemnitor. The provisions of Sections 13.2, 13.3 and 13.4 are
exceptions to any non-recourse or exculpation provisions in the Note, this
Security Instrument or the Other Security Documents, and Borrower, Guarantor
and Indemnitor are fully and personally liable for the obligations pursuant to
Subsections 13.2, 13.3 and 13.4. The liability of Borrower, Guarantor and
Indemnitor is not limited to the original principal amount of the Note.
Notwithstanding the foregoing, nothing herein shall inhibit or prevent Lender
from foreclosing pursuant to this Security
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Instrument or exercising any other rights and remedies pursuant to the Note,
this Security Instrument and the Other Security Documents, whether
simultaneously with foreclosure proceedings or in any other sequence. A
separate action or actions may be brought and prosecuted against Borrower,
whether or not action is brought against any other person or entity or whether
or not any other person or entity is joined in the action or actions. In
addition, Lender shall have the right but not the obligation to join and
participate in, as a party if it so elects, any administrative or judicial
proceedings or actions initiated in connection with any matter addressed in
Article 12 or Section 13.4.
Section 11.11 RIGHT OF ENTRY. Lender and its agents shall have
the right to enter and inspect the Property at all reasonable times.
Article 12 - ENVIRONMENTAL HAZARDS
Section 12.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants, based upon an environmental assessment of the
Property and information that Borrower knows or should reasonably have known,
that: (a) there are no Hazardous Substances (defined below) or underground
storage tanks in, on, or under the Property, except those that are both (i) in
compliance with Environmental Laws (defined below) and with permits issued
pursuant thereto and (ii) fully disclosed to Lender in writing pursuant to the
written reports resulting from the environmental assessments of the Property
delivered to Lender (the "Environmental Report"); (b) there are no past, present
or threatened Releases (defined below) of Hazardous Substances in, on, under or
from the Property except as described in the Environmental Report; (c) there is
no threat of any Release of Hazardous Substances migrating to the Property
except as described in the Environmental Report; (d) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant thereto,
in connection with the Property except as described in the Environmental Report;
(e) Borrower does not know of, and has not received, any written or oral notice
or other communication from any person or entity (including but not limited to a
governmental entity) relating to Hazardous Substances or Remediation (defined
below) thereof, of possible liability of any person or entity pursuant to any
Environmental Law, other environmental conditions in connection with the
Property, or any actual or potential administrative or judicial proceedings in
connection with any of the foregoing; and (f) Borrower has truthfully and fully
provided to Lender, in writing, any and all information relating to conditions
in, on, under or from the Property that is known to Borrower and that is
contained in Borrower's files and records, including but not limited to any
reports relating to Hazardous Substances in, on, under or from the Property
and/or to the environmental condition of the Property. "Environmental Law" means
any present and future federal, state and local laws, statutes, ordinances,
rules, regulations and the like, as well as common law, relating to protection
of human health or the environment, relating to Hazardous Substances, relating
to liability for or costs of Remediation or prevention of Releases of Hazardous
Substances or relating to liability for or costs of other actual or threatened
danger to human health or the environment. "Environmental Law" includes, but is
not limited to, the following statutes, as amended, any successor thereto, and
any regulations promulgated pursuant thereto, and any state or local statutes,
ordinances, rules, regulations and the like addressing similar issues: the
Comprehensive Environmental
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Response, Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource
Conservation and Recovery Act (including but not limited to Subtitle I relating
to underground storage tanks); the Solid Waste Disposal Act; the Clean Water
Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking
Water Act; the Occupational Safety and Health Act; the Federal Water Pollution
Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the
Endangered Species Act; the National Environmental Policy Act; and the River and
Harbors Appropriation Act. "Environmental Law" also includes, but is not limited
to, any present and future federal, state and local laws, statutes, ordinances,
rules, regulations and the like, as well as common law: conditioning transfer of
property upon a negative declaration or other approval of a governmental
authority of the environmental condition of the property; requiring notification
or disclosure of Releases of Hazardous Substances or other environmental
condition of the Property to any governmental authority or other person or
entity, whether or not in connection with transfer of title to or interest in
property; imposing conditions or requirements in connection with permits or
other authorization for lawful activity; relating to nuisance, trespass or other
causes of action related to the Property; and relating to wrongful death,
personal injury, or property or other damage in connection with any physical
condition or use of the Property. "Hazardous Substances" include but are not
limited to any and all substances (whether solid, liquid or gas) defined,
listed, or otherwise classified as pollutants, hazardous wastes, hazardous
substances, hazardous materials, extremely hazardous wastes, or words of similar
meaning or regulatory effect under any present or future Environmental Laws or
that may have a negative impact on human health or the environment, including
but not limited to petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, lead, radon,
radioactive materials, flammables and explosives. "Release" of any Hazardous
Substance includes but is not limited to any release, deposit, discharge,
emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring,
emptying, escaping, dumping, disposing or other movement of Hazardous
Substances. "Remediation" includes but is not limited to any response, remedial,
removal, or corrective action, any activity to cleanup, detoxify, decontaminate,
contain or otherwise remediate any Hazardous Substance, any actions to prevent,
cure or mitigate any Release of any Hazardous Substance, any action to comply
with any Environmental Laws or with any permits issued pursuant thereto, any
inspection, investigation, study, monitoring, assessment, audit, sampling and
testing, laboratory or other analysis, or evaluation relating to any Hazardous
Substances or to anything referred to in Article 12.
Section 12.2 ENVIRONMENT COVENANTS. Borrower covenants and
agrees that: (a) all uses and operations on or of the Property, whether by
Borrower or any other person or entity, shall be in compliance with all
Environmental Laws and permits issued pursuant thereto; (b) there shall be no
Releases of Hazardous Substances in, on, under or from the Property; (c) there
shall be no Hazardous Substances in, on, or under the Property, except those
that are both (i) in compliance with all Environmental Laws and with permits
issued pursuant thereto and (ii) fully disclosed to Lender in writing; (d)
Borrower shall keep the Property free and clear of all liens and other
encumbrances imposed pursuant to any Environmental Law, whether due to any act
or omission of Borrower or any other person or entity (the "Environmental
Liens"); (e) Borrower shall, at its sole cost and expense, fully and
expeditiously cooperate in all activities pursuant to Section 12.3 below,
including but not limited to providing all relevant information and
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making knowledgeable persons available for interviews; (f) Borrower shall, at
its sole cost and expense, perform any environmental site assessment or other
investigation of environmental conditions in connection with the Property,
pursuant to any reasonable written request of Lender (including but not limited
to sampling, testing and analysis of soil, water, air, building materials and
other materials and substances whether solid, liquid or gas), and share with
Lender the reports and other results thereof, and Lender and other Indemnified
Parties shall be entitled to rely on such reports and other results thereof; (g)
Borrower shall, at its sole cost and expense, comply with all reasonable written
requests of Lender to (i) reasonably effectuate Remediation of any condition
(including but not limited to a Release of a Hazardous Substance) in, on, under
or from the Property; (ii) comply with any Environmental Law; (iii) comply with
any directive from any governmental authority; and (iv) take any other
reasonable action necessary or appropriate for protection of human health or the
environment; (h) Borrower shall not do or allow any tenant or other user of the
Property to do any act that materially increases the dangers to human health or
the environment, poses an unreasonable risk of harm to any person or entity
(whether on or off the Property), impairs or may impair the value of the
Property, is contrary to any requirement of any insurer, constitutes a public or
private nuisance, constitutes waste, or violates any covenant, condition,
agreement or easement applicable to the Property; and (i) Borrower shall
immediately notify Lender in writing of (A) any presence or Releases or
threatened Releases of Hazardous Substances in, on, under, from or migrating
towards the Property; (B) any non-compliance with any Environmental Laws related
in any way to the Property; (C) any actual or potential Environmental Lien; (D)
any required or proposed Remediation of environmental conditions relating to the
Property; and (E) any written or oral notice or other communication which
Borrower becomes aware from any source whatsoever (including but not limited to
a governmental entity) relating in any way to Hazardous Substances or
Remediation thereof, possible liability of any person or entity pursuant to any
Environmental Law, other environmental conditions in connection with the
Property, or any actual or potential administrative or judicial proceedings in
connection with anything referred to in this Article 12. Any failure of Borrower
to perform its obligations pursuant to this Section 12.2 shall constitute bad
faith waste with respect to the Property.
Section 12.3 LENDER'S RIGHTS. Lender and any other person or
entity designated by Lender, including but not limited to any receiver, any
representative of a governmental entity, and any environmental consultant,
shall have the right, but not the obligation, to enter upon the Property at all
reasonable times to assess any and all aspects of the environmental condition
of the Property and its use, including but not limited to conducting any
environmental assessment or audit (the scope of which shall be determined in
Lender's sole and absolute discretion) and taking samples of soil, groundwater
or other water, air, or building materials, and conducting other invasive
testing. Borrower shall cooperate with and provide access to Lender and any
such person or entity designated by Lender.
Article 13 - INDEMNIFICATION
Section 13.1 GENERAL INDEMNIFICATION. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and
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against any and all claims, suits, liabilities (including, without limitation,
strict liabilities), actions, proceedings, obligations, debts, damages, losses,
costs, expenses, fines, penalties, charges, fees, expenses, judgments, awards,
amounts paid in settlement, punitive damages, foreseeable and unforeseeable
consequential damages, of whatever kind or nature (including but not limited to
attorneys' fees and other costs of defense) (the "Losses") imposed upon or
incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any one or more of the
following: (a) ownership of this Security Instrument, the Property or any
interest therein or receipt of any Rents; (b) any amendment to, or restructuring
of, the Debt, and the Note, this Security Instrument, or any Other Security
Documents; (c) any and all lawful action that may be taken by Lender in
connection with the enforcement of the provisions of this Security Instrument or
the Note or any of the Other Security Documents, whether or not suit is filed in
connection with same, or in connection with Borrower, any Guarantor or
Indemnitor and/or any member, partner, joint venturer or shareholder thereof
becoming a party to a voluntary or involuntary federal or state bankruptcy,
insolvency or similar proceeding; (d) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about the Property
or any part thereof or on the adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (e) any use, nonuse or condition in, on
or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (f) any failure on
the part of Borrower to perform or be in compliance with any of the terms of
this Security Instrument; (g) performance of any labor or services or the
furnishing of any materials or other property in respect of the Property or any
part thereof; (h) the failure of any person to file timely with the Internal
Revenue Service an accurate Form ▇▇▇▇-▇, ▇▇▇▇▇▇▇▇▇ for Recipients of Proceeds
from Real Estate, Broker and Barter Exchange Transactions, which may be required
in connection with the Security Instrument, or to supply a copy thereof in a
timely fashion to the recipient of the proceeds of the transaction in connection
with which this Security Instrument is made; (i) any failure of the Property to
be in compliance with any Applicable Laws; (j) the enforcement by any
Indemnified Party of the provisions of this Article 13; (k) any and all claims
and demands whatsoever which may be asserted against Lender by reason of any
alleged obligations or undertakings on its part to perform or discharge any of
the terms, covenants, or agreements contained in any Lease; (l) the payment of
any commission, charge or brokerage fee to anyone which may be payable in
connection with the funding of the Loan evidenced by the Note and secured by
this Security Instrument; or (m) any misrepresentation made by Borrower in this
Security Instrument or any Other Security Document. Any amounts payable to
Lender by reason of the application of this Section 13.1 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. For purposes of this
Article 13, the term "Indemnified Parties" means Lender and any person or entity
who is or will have been involved in the origination of the Loan, any person or
entity who is or will have been involved in the servicing of the Loan, any
person or entity in whose name the encumbrance created by this Security
Instrument is or will have been recorded, persons and entities who may hold or
acquire or will have held a full or partial interest in the Loan (including, but
not limited to, Investors or prospective Investors in the Securities, as well as
custodians, trustees and other fiduciaries who hold or have held a full or
partial interest in the Loan for the benefit of third parties) as well as the
respective directors, officers, shareholders, partners, members, employees,
agents, servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all of the
foregoing (including but not
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limited to any other person or entity who holds or acquires or will have held a
participation or other full or partial interest in the Loan or the Property,
whether during the term of the Loan or as a part of or following a foreclosure
of the Loan and including, but not limited to, any successors by merger,
consolidation or acquisition of all or a substantial portion of Lender's assets
and business).
Section 13.2 MORTGAGE AND/OR INTANGIBLE TAX. Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold harmless
the Indemnified Parties from and against any and all Losses imposed upon or
incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any tax on the making and/or
recording of this Security Instrument, the Note or any of the Other Security
Documents.
Section 13.3 ERISA INDEMNIFICATION. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, attorneys' fees and costs incurred in the investigation, defense,
and settlement of Losses incurred in correcting any prohibited transaction or in
the sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in Lender's sole
discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections 4.2 or 5.9 or Subsection 4.3(p).
Section 13.4 ENVIRONMENTAL INDEMNIFICATION. Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold harmless
the Indemnified Parties from and against any and all Losses and costs of
Remediation (whether or not performed voluntarily), engineers' fees,
environmental consultants' fees, and costs of investigation (including but not
limited to sampling, testing, and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas)
imposed upon or incurred by or asserted against any Indemnified Parties, and
directly or indirectly arising out of or in any way relating to any one or more
of the following: (a) any presence of any Hazardous Substances in, on, above, or
under the Property; (b) any past, present or threatened Release of Hazardous
Substances in, on, above, under or from the Property; (c) any activity by
Borrower, any person or entity affiliated with Borrower or any tenant or other
user of the Property in connection with any actual, proposed or threatened use,
treatment, storage, holding, existence, disposition or other Release,
generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from
the Property of any Hazardous Substances at any time located in, under, on or
above the Property; (d) any activity by Borrower, any person or entity
affiliated with Borrower or any tenant or other user of the Property in
connection with any actual or proposed Remediation of any Hazardous Substances
at any time located in, under, on or above the Property, whether or not such
Remediation is voluntary or pursuant to court or administrative order, including
but not limited to any removal, remedial or corrective action; (e) any past,
present or threatened non-compliance or violations of any Environmental Laws (or
permits issued pursuant to any Environmental Law) in connection with the
Property or operations thereon, including but not limited to any failure by
Borrower, any person or entity affiliated with Borrower or any tenant or other
user of the Property to comply with any order of any governmental authority in
connection with any Environmental Laws; (f) the imposition, recording
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or filing or the threatened imposition, recording or filing of any Environmental
Lien encumbering the Property; (g) any administrative processes or proceedings
or judicial proceedings in any way connected with any matter addressed in
Article 12 and this Section 13.4; (h) any past, present or threatened injury to,
destruction of or loss of natural resources in any way connected with the
Property, including but not limited to costs to investigate and assess such
injury, destruction or loss; (i) any acts of Borrower or other users of the
Property in arranging for disposal or treatment, or arranging with a transporter
for transport for disposal or treatment, of Hazardous Substances owned or
possessed by such Borrower or other users, at any facility or incineration
vessel owned or operated by another person or entity and containing such or
similar Hazardous Substances; (j) any acts of Borrower or other users of the
Property, in accepting any Hazardous Substances for transport to disposal or
treatment facilities, incineration vessels or sites selected by Borrower or such
other users, from which there is a Release, or a threatened Release of any
Hazardous Substance which causes the incurrence of costs for Remediation; (k)
any personal injury, wrongful death, or property damage arising under any
statutory or common law or tort law theory, including but not limited to damages
assessed for the maintenance of a private or public nuisance or for the
conducting of an abnormally dangerous activity on or near the Property; and (l)
any misrepresentation or inaccuracy in any representation or warranty or
material breach or failure to perform any covenants or other obligations
pursuant to Article 12.
Section 13.5 DUTY TO DEFEND: ATTORNEYS' FEES AND OTHER FEES AND
EXPENSES. Upon written request by any Indemnified Party, Borrower shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may,
in their sole and absolute discretion, engage their own attorneys and other
professionals to defend or assist them, and, at the option of Indemnified
Parties, their attorneys shall control the resolution of any claim or
proceeding. Upon demand, Borrower shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified Parties for
the payment of reasonable fees and disbursements of attorneys, engineers,
environmental consultants, laboratories and other professionals in connection
therewith.
Article 14 - WAIVERS
Section 14.1 WAIVER OF COUNTERCLAIM. Borrower hereby waives the
right to assert a counterclaim, other than a mandatory or compulsory
counterclaim, in any action or proceeding brought against it by Lender arising
out of or in any way connected with this Security Instrument, the Note, any of
the Other Security Documents, or the Obligations.
Section 14.2 MARSHALLING AND OTHER MATTERS. Borrower hereby
waives, to the extent permitted by law, the benefit of all appraisement,
valuation, stay, extension, reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of any sale hereunder of
the Property or any part thereof or any interest therein. Further, Borrower
hereby expressly waives any and all rights of redemption from sale under any
order or decree of foreclosure of this Security Instrument on behalf of
Borrower, and on behalf of each and
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every person acquiring any interest in or title to the Property subsequent to
the date of this Security Instrument and on behalf of all persons to the extent
permitted by Applicable Law.
Section 14.3 WAIVER OF NOTICE. Borrower shall not be entitled to
any notices of any nature whatsoever from Lender except with respect to matters
for which this Security Instrument specifically and expressly provides for the
giving of notice by Lender to Borrower and except with respect to matters for
which Lender is required by Applicable Law to give notice, and Borrower hereby
expressly waives the right to receive any notice from Lender with respect to any
matter for which this Security Instrument does not specifically and expressly
provide for the giving of notice by Lender to Borrower.
Section 14.4 WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby
expressly waives and releases to the fullest extent permitted by law, the
pleading of any statute of limitations as a defense to payment of the Debt or
performance of its Other Obligations.
Section 14.5 SOLE DISCRETION OF LENDER. Wherever pursuant to this
Security Instrument (a) Lender exercises any right given to it to approve or
disapprove, (b) any arrangement or term is to be satisfactory to Lender, or (c)
any other decision or determination is to be made by Lender, the decision of
Lender to approve or disapprove, all decisions that arrangements or terms are
satisfactory or not satisfactory and all other decisions and determinations made
by Lender, shall be in the sole and absolute discretion of Lender and shall be
final and conclusive, except as may be otherwise expressly and specifically
provided herein.
Section 14.6 SURVIVAL. The indemnifications made pursuant to
Subsections 13.3 and 13.4 and the representations and warranties, covenants, and
other obligations arising under Article 12, shall continue indefinitely in full
force and effect and shall survive and shall in no way be impaired by: any
satisfaction or other termination of this Security Instrument, any assignment or
other transfer of all or any portion of this Security Instrument or Lender's
interest in the Property (but, in such case, shall benefit both Indemnified
Parties and any assignee or transferee), any exercise of Lender's rights and
remedies pursuant hereto including but not limited to foreclosure or acceptance
of a deed in lieu of foreclosure, any exercise of any rights and remedies
pursuant to the Note or any of the Other Security Documents, any transfer of all
or any portion of the Property (whether by Borrower or by Lender following
foreclosure or acceptance of a deed in lieu of foreclosure or at any other
time), any amendment to this Security Instrument, the Note or the Other Security
Documents, and any act or omission that might otherwise be construed as a
release or discharge of Borrower from the obligations pursuant hereto.
SECTION 14.7 WAIVER OF TRIAL BY JURY. BORROWER HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR
THE LOAN EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY INSTRUMENT OR THE OTHER
SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES,
DIRECTORS OR AGENTS IN CONNECTION THEREWITH.
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Article 15 - EXCULPATION
Section 15.1 EXCULPATION. Except as otherwise provided, Lender
shall not enforce the liability and obligation of Borrower to perform and
observe the obligations contained in the Note or this Security Instrument by any
action or proceeding wherein a money judgment shall be sought against Borrower,
except that Lender may bring a foreclosure action, action for specific
performance or other appropriate action or proceeding to enable Lender to
enforce and realize upon this Security Instrument, the Other Security Documents,
and the interest in the Property, the Rents and any other collateral given to
Lender created by this Security Instrument and the Other Security Documents;
provided, however, that any judgment in any action or proceeding shall be
enforceable against Borrower only to the extent of Borrower's interest in the
Property, in the Rents and in any other collateral given to Lender. Lender, by
accepting the Note and this Security Instrument, agrees that it shall not,
except as otherwise provided in Section 11.10, ▇▇▇ for, seek or demand any
deficiency judgment against Borrower in any action or proceeding, under or by
reason of or under or in connection with the Note, the Other Security Documents
or this Security Instrument.
Section 15.2 RESERVATION OF CERTAIN RIGHTS. The provisions of
Section 15.1 shall not (a) constitute a waiver, release or impairment of any
obligation evidenced or secured by the Note, the Other Security Documents or
this Security Instrument; (b) impair the right of Lender to name Borrower as a
party defendant in any action or suit for judicial foreclosure and sale under
this Security Instrument; (c) affect the validity or enforceability of any
indemnity, guaranty, master lease or similar instrument made in connection with
the Note, this Security Instrument, or the Other Security Documents; (d) impair
the right of Lender to obtain the appointment of a receiver; (e) impair the
enforcement of the Assignment of Leases and Rents executed in connection
herewith; or (f) impair the right of Lender to enforce the provisions of
Sections 11.10, 13.2, 13.3 and 13.4 of this Security Instrument.
Section 15.3 EXCEPTIONS TO EXCULPATION. Notwithstanding the
provisions of this Article to the contrary, Borrower shall be personally liable
to Lender for the Losses it incurs due to: (i) fraud or intentional
misrepresentation by Borrower or any other person or entity in connection with
the execution and the delivery of the Note, this Security Instrument or the
Other Security Documents; (ii) Borrower's misapplication or misappropriation of
Rents received by Borrower after the occurrence of an Event of Default; (iii)
Borrower's misappropriation of tenant security deposits or Rents collected in
advance; (iv) the misapplication or the misappropriation of insurance proceeds
or condemnation awards; (v) Borrower's failure to pay Taxes, Other Charges
(except to the extent that sums sufficient to pay such amounts have been
deposited in escrow with Lender pursuant to the terms of this Security
Instrument), charges for labor or materials or other charges that can create
liens on the Property (unless properly bonded); (vi) Borrower's failure to
return or to reimburse Lender for all Personal Property taken from the Property
by or on behalf of Borrower and not replaced with Personal Property of the same
utility and of the same or greater value; (vii) any act of actual waste or
arson by Borrower, any principal, affiliate, member or general partner thereof
or by any Indemnitor or Guarantor; (viii) any fees or commissions paid by
Borrower to any principal, affiliate, member or general partner of Borrower,
Indemnitor or Guarantor in violation of the terms of the Note, this Security
Instrument or the Other Security
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Documents; or (ix) Borrower's failure to comply with the provisions of Sections
4.2, 7.1, 12.1 and 12.2 of this Security Instrument.
Section 15.4 RECOURSE. Notwithstanding the foregoing, the
agreement of Lender not to pursue recourse liability as set forth in Section
15.1 above SHALL BECOME NULL AND VOID and shall be of no further force and
effect in the event of Borrower's default under Sections 3.11 (for ten (10)
days after notice by Lender), 4.3, or 8.1, 8.2, 8.3 or 8.4, or in the event of
Principal's default under Section 4.3 of this Security Instrument, or if the
Property or any part thereof shall become an asset in (i) a voluntary
bankruptcy or insolvency proceeding, or (ii) an involuntary bankruptcy or
insolvency proceeding which is not dismissed within ninety (90) days of filing.
Section 15.5 BANKRUPTCY CLAIMS. Nothing herein shall be deemed to
be a waiver of any right which Lender may have under Sections 506(a), 506(b),
1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for
the full amount of the Debt secured by this Security Instrument or to require
that all collateral shall continue to secure all of the Debt owing to Lender in
accordance with the Note, this Security Instrument and the Other Security
Documents.
Article 16 - NOTICES
Section 16.1 NOTICES. All notices or other written communications
hereunder shall be deemed to have been properly given (i) upon delivery, if
delivered in person or by facsimile transmission with receipt acknowledged by
the recipient thereof and confirmed by telephone by sender, (ii) one (1)
Business Day after having been deposited for overnight delivery with any
reputable overnight courier service, or (iii) three (3) Business Days after
having been deposited in any post office or mail depository regularly
maintained by the U.S. Postal Service and sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
If to Borrower: Port Richmond Associates LLC
c/o Bryant Development Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ & Masyr
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: The Chase Manhattan Bank
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c/o Chase Commercial Mortgage Banking Corp.
Servicing Department
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Ms. ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
The Chase Manhattan Bank
Legal Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇.
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Wood
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or addressed as such party may from time to time designate by written notice to
the other parties.
Either party by notice to the other may designate additional or
different addresses for subsequent notices or communications.
For purposes of this Subsection, "Business Day" shall mean a day
on which commercial banks are not authorized or required by law to close in New
York, New York.
Article 17 - SERVICE OF PROCESS
Section 17.1 CONSENT TO SERVICE.
(a) Borrower will maintain a place of business or an agent for
service of process in New York, New York and give prompt notice to
Lender of the address of such place of business and of the name and
address of any new agent appointed by it, as appropriate. Borrower
further agrees that the failure of its agent for service of process to
give it notice of any service of process will not impair or affect the
validity of such service or of any judgment based thereon. If, despite
the foregoing, there is for any reason no agent for service of process
of Borrower available to be served, and if it at that time has no place
of
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business in New York, New York, then Borrower irrevocably consents to
service of process by registered or certified mail, postage prepaid, to
it at its address given in or pursuant to the first paragraph hereof.
(b) Borrower initially and irrevocably designates ▇▇▇▇▇▇▇ &
Masyr, with offices . on the date hereof at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, to receive for and on behalf of Borrower service
of process in New York, New York with respect to this Security
Instrument.
Section 17.2 SUBMISSION TO JURISDICTION. With respect to any
claim or action arising hereunder or under the Note or the Other Security
Documents, Borrower (a) irrevocably submits to the nonexclusive jurisdiction of
the courts of the State of New York and the United States District Court
located in the Borough of Manhattan in New York, New York, and appellate courts
from any thereof, and (b) irrevocably waives any objection which it may have at
any time to the laying on venue of any suit, action or proceeding arising out
of or relating to this Security Instrument brought in any such court,
irrevocably waives any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.
Section 17.3 JURISDICTION NOT EXCLUSIVE. Nothing in this Security
Instrument will be deemed to preclude Lender from bringing an action or
proceeding with respect hereto in any other jurisdiction.
Article 18 - APPLICABLE LAW
Section 18.1 CHOICE OF LAW. THIS SECURITY INSTRUMENT SHALL BE
DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE STATE OF NEW
YORK AND SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, PROVIDED HOWEVER, THAT WITH
RESPECT TO THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIEN OF
THIS SECURITY INSTRUMENT, AND THE DETERMINATION OF DEFICIENCY JUDGMENTS, THE
LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED SHALL APPLY.
Section 18.2 USURY LAWS. This Security Instrument and the Note
are subject to the express condition that at no time shall Borrower be
obligated or required to pay interest on the Debt at a rate which could subject
the holder of the Note to either civil or criminal liability as a result of
being in excess of the maximum interest rate which Borrower is permitted by
applicable law to contract or agree to pay. If by the terns of this Security
Instrument or the Note, 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 under the Security Instrument and the Note shall be deemed to be
immediately reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in excess of such
maximum rate shall be applied and shall be deemed to have been payments in
reduction of the principal balance of the Note. All sums
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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 maximum lawful rate of interest from time to time in
effect and applicable to the Debt for so long as the Debt is outstanding.
Section 18.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights,
powers and remedies provided in this Security Instrument may be exercised only
to the extent that the exercise thereof does not violate any applicable
provisions of law and are intended to be limited to the extent necessary so
that they will not render this Security Instrument invalid, unenforceable or
not entitled to be recorded, registered or filed under the provisions of any
Applicable Law. If any term of this Security Instrument or any application
thereof shall be invalid or unenforceable, the remainder of this Security
Instrument and any other application of the term shall not be affected thereby.
Article 19 - SECONDARY MARKET
Section 19.1 TRANSFER OF LOAN. Lender may, at any time, sell,
transfer or assign the Note, this Security Instrument and the Other Security
Documents, and any or all servicing rights with respect thereto, or grant
participations therein (the "Participations") or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement (the "Securities"). Lender may
forward to each purchaser, transferee, assignee, servicer, participant, or
investor in such Participations and/or Securities (collectively, the
"Investor") or any Rating Agency rating such Participations and/or Securities
and each prospective Investor, all documents and information which Lender now
has or may hereafter acquire relating to the Debt and to Borrower, any
Guarantor, any Indemnitor(s) and the Property, whether furnished by Borrower,
any Guarantor, any Indemnitor(s) or otherwise, as Lender determines necessary
or desirable. Borrower, any Guarantor and any Indemnitor agree to cooperate
with Lender in connection with any transfer made or any Securities created
pursuant to this Section, including, without limitation, the delivery of an
estoppel certificate required in accordance with Subsection 7.4(c) hereof and
such other documents as may be reasonably requested by Lender. Borrower shall
also furnish and Borrower, any Guarantor and any Indemnitor consent to Lender
furnishing to such Investors or such prospective Investors or such Rating
Agency any and all information concerning the Property, the Leases, the
financial condition of Borrower, any Guarantor and any Indemnitor as may be
requested by Lender, any Investor, any prospective Investor or any Rating
Agency in connection with any sale, transfer, Participations or Securities.
Article 20 - COSTS
Section 20.1 PERFORMANCE AT BORROWER'S EXPENSE. Borrower
acknowledges and confirms that Lender shall impose certain administrative
processing and/or commitment fees in connection with (a) the extension,
renewal, modification, amendment and termination of the Loan, (b) the release
or substitution of collateral therefor, (c) obtaining certain consents, waivers
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and approvals with respect to the Property, or (d) the review of any Lease or
proposed Lease or the preparation or review of any subordination,
non-disturbance agreement (the occurrence of any of the above shall be called an
"Event"). Borrower further acknowledges and confirms that it shall be
responsible for the payment of all costs of reappraisal of the Property or any
part thereof, whether required by law, regulation, Lender or any governmental or
quasi-governmental authority. Borrower hereby acknowledges and agrees to pay,
immediately, with or without demand, all such fees (as the same may be increased
or decreased from time to time), and any additional fees of a similar type or
nature which may be imposed by Lender from time to time, upon the occurrence of
any Event or otherwise. Wherever it is provided for herein that Borrower pay any
costs and expenses, such costs and expenses shall include, but not be limited
to, all reasonable legal fees and disbursements of Lender with respect to
retained firms.
Section 20.2 ATTORNEY'S FEES FOR ENFORCEMENT. (a) Borrower shall
pay all legal fees incurred by Lender in connection with (i) the preparation of
the Note, this Security Instrument and the Other Security Documents and (ii)
the items set forth in Section 20.1 above, and (b) Borrower shall pay to Lender
on demand any and all expenses, including legal expenses and attorneys' fees,
incurred or paid by Lender in protecting its interest in the Property or
Personal Property or in collecting any amount payable hereunder or in enforcing
its rights hereunder with respect to the Property or Personal Property, whether
or not any legal proceeding is commenced hereunder or thereunder and whether or
not any default or Event of Default shall have occurred and is continuing,
together with interest thereon at the Default Rate from the date paid or
incurred by Lender until such expenses are paid by Borrower.
Article 21 - DEFINITIONS
Section 21.1 GENERAL DEFINITIONS. Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
words used in this Security Instrument may be used interchangeably in singular
or plural form and the word "Borrower" shall mean "each Borrower and any
subsequent owner or owners of the Property or any part thereof or any interest
therein," the word "Lender" shall mean "Lender and any subsequent holder of the
Note," the word "Note" shall mean "the Note and any other evidence of
indebtedness secured by this Security Instrument," the word "person" shall
include an individual, corporation, partnership, limited liability company,
trust, unincorporated association, government, governmental authority, and any
other entity, the word "Property" shall include any portion of the Property and
any interest therein, and the phrases "attorneys' fees" and "counsel fees"
shall include any and all attorneys', paralegal and law clerk fees and
disbursements, including, but not limited to, fees and disbursements at the
pre-trial, trial and appellate levels incurred or paid by Lender in protecting
its interest in the Property, the Leases and the Rents and enforcing its rights
hereunder.
Article 22 - MISCELLANEOUS PROVISIONS
Section 22.1 NO ORAL CHANGE. This Security Instrument, and any
provisions hereof, may not be modified, amended, waived, extended, changed,
discharged or terminated
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orally or by any act or failure to act on the part of Borrower or Lender, but
only by an agreement in writing signed by the party against whom enforcement of
any modification, amendment, waiver, extension, change, discharge or termination
is sought.
Section 22.2 LIABILITY. If Borrower consists of more than one
person, the obligations and liabilities of each such person hereunder shall be
joint and several. This Security Instrument shall be binding upon and inure to
the benefit of Borrower and Lender and their respective successors and assigns
forever.
Section 22.3 INAPPLICABLE PROVISIONS. If any term, covenant or
condition of the Note or this Security Instrument is held to be invalid,
illegal or unenforceable in any respect, the Note and this Security Instrument
shall be construed without such provision.
Section 22.4 HEADINGS, ETC. The headings and captions of various
Sections of this Security Instrument are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or
intent of the provisions hereof.
Section 22.5 DUPLICATE ORIGINALS; COUNTERPARTS. This Security
Instrument may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. This Security Instrument
may be executed in several counterparts, each of which counterparts shall be
deemed an original instrument and all of which together shall constitute a
single Security Instrument. The failure of any party hereto to execute this
Security Instrument, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.
Section 22.6 NUMBER AND GENDER. Whenever the context may require,
any pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
Section 22.7 SUBROGATION. If any or all of the proceeds of the
Note have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of
such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the repayment of the Debt, the performance
and discharge of Borrower's obligations hereunder, under the Note and the Other
Security Documents and the performance and discharge of the Other Obligations.
Article 23 - SPECIAL PENNSYLVANIA PROVISIONS
Section 23.1 INCONSISTENCIES. In the event of any inconsistencies
between the terms and conditions of Article 23 of this Security Instrument and
any other terms of this Security Instrument, the terms and conditions of
Article 23 shall control and be binding.
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Section 23.2 EJECTMENT. For the purpose of procuring possession
of the Property in the event of any default hereunder or under the Note, this
Security Instrument or the Other Security Documents, Borrower hereby authorizes
and empowers any attorney of any Court of record in the Commonwealth of
Pennsylvania or elsewhere, as attorney for Borrower and all persons claiming
under or through Borrower, to sign an agreement for entering in any competent
court an amicable action in ejectment for possession of the Property and to
appear for and confess judgment against Borrower, and against all persons
claiming under or through Borrower, for the recovery by Lender of possession of
the Property, without any stay of execution, for which this Security
Instrument, or a copy thereof verified by affidavit, shall be a sufficient
warrant; and thereupon a writ of possession may be issued forthwith, without
any prior writ or proceeding whatsoever. Borrower hereby releases Lender from
all errors and defects whatsoever in entering such action and judgment and in
causing such writ or writs to be issued, and hereby agrees that no writ of
error, appeal, petition to open or strike off judgment, or other objection
shall be filed or made with respect thereto. If for any reason after such
action has been commenced the same shall be discontinued or possession of the
Property shall remain in or be restored to Borrower, Lender shall have the
right for the same default or any subsequent default to bring one or more
further amicable actions as above provided to recover possession of the
Property. Lender may bring such amicable action in ejectment before or after
the institution of foreclosure proceedings upon this Security Instrument, or
after judgment thereon or on said obligation, or after a sale of the Property
by the Sheriff.
Section 23.3 REMEDIES. The text of Section 11.1 of this Security
Instrument entitled "Remedies" is hereby deleted and the following is
substituted therefor:
Upon the occurrence of any Event of Default, Borrower agrees that Lender
may take such action, without notice or demand, as it deems advisable to protect
and enforce its rights against Borrower and in and to the Property, including,
but not limited to, the following actions, each of which may be pursued
concurrently or otherwise, at such time and in such order as Lender may
determine, in its sole discretion, without impairing or otherwise affecting the
other rights and remedies of Lender:
(a) Lender may declare the entire unpaid principal balance of the
Note to be due and payable immediately, whereupon the obligations secured
hereby shall become immediately due and payable. Thereafter, the default may be
cured only by the payment of the entire Debt.
(b) Lender may (i) institute and maintain an action of mortgage
foreclosure against any of the Property, through judicial proceedings or by
advertisement, at the option of Lender, pursuant to the applicable statutes,
ordinances, or rules of civil procedure, (ii) institute and maintain an action
on the obligations secured hereby, (iii) have judgment entered pursuant to any
power to confess judgment contained in the Note or this Security Instrument,
(iv) sell or cause to be sold any of the Property at public sale, and convey
the same to the purchaser in accordance with said statutes in a single parcel
or in several parcels at the option of Lender, or (v) take such other action at
law or in equity for the enforcement of any document evidencing or securing the
obligations secured hereby as the law may allow. Lender may proceed in any such
action to final judgment and execution thereon for all sums due under
Subsection (a) of this Section 11.1,
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together with interest on such sums as provided in the Note, all costs of suit
and an attorneys' commission for fees and expenses actually incurred. Interest
at a rate equal to the Default Rate shall be due on any judgment obtained by
Lender from the date of judgment until actual payment is made of the full
amount of the judgment by the Sheriff or otherwise.
(c) Lender may, without releasing Borrower from any obligation
under any document evidencing or securing the obligations secured hereby or
under any lease or waiving any default: (i) collect any or all of the rents,
including any rents past due and unpaid, (ii) perform any obligation or
exercise any right or remedy of Borrower under any lease, or (iii) enforce any
obligation of any tenant of any of the Property. Lender shall not be obligated
to do any of the foregoing, even if Lender may have performed any obligation or
exercised any remedy of landlord or have enforced any obligation of a tenant.
Lender may exercise any right under this subsection (c) whether or not Lender
shall have entered into possession of any of the Property, and nothing
contained herein shall be construed as constituting Lender a "mortgagee in
possession" unless Lender shall have entered into and shall remain in actual
possession of the Property. Borrower hereby authorizes and instructs each and
every present and future tenant of any of the Property to pay all rents
directly to Lender and to perform all other obligations of that tenant for the
direct benefit of Lender as if Lender were the landlord under the lease with
that tenant immediately upon receipt of a demand by Lender to make such payment
or perform such obligations. No tenant shall have any responsibility to
ascertain whether such demand is permitted hereunder or whether an Event of
Default shall have occurred; Borrower hereby waives any right, claim or demand
it may now or hereafter have against any such tenant by reason of such payment
of rents or performance of obligations to Lender; and any such payment or
performance to Lender shall discharge the obligations of the tenant to make
such payment or performance to Borrower. Borrower agrees to indemnify Lender
and hold Lender harmless from any and all liability under any lease and from
any and all claims and demands which may be asserted against Lender by reason
of any alleged obligations to perform any provision of any lease, except as to
Lender's own negligence or willful misconduct.
(d) Lender may, without releasing Borrower from any obligation
under any document evidencing or securing the obligations secured hereby or
under any lease or waiving any default, enter upon and take possession of any
of the Property, with or without legal action and by force if necessary, or
have a receiver appointed without proof of depreciation or inadequacy of the
value of the Property or other security or proof of the insolvency of Borrower.
Lender or said receiver may manage and operate any of the Property; make,
cancel, enforce or modify leases; obtain and evict tenants; establish or change
the amount of any rents; and perform any acts which Lender deems proper to
protect the security of this Security Instrument. After deduction of all costs
and expenses of operation and management of the Property and of collection of
the rents (including attorneys' fees actually incurred, administration
expenses, management fees and brokers' commissions), Lender may apply the rents
received by Lender to the payment of any or all of the following, in such order
and amounts as Lender, in its sole discretion, may elect: liens on any of the
Property, taxes, claims, insurance premiums, other carrying charges, invoices
of persons who have supplied goods or services to or for the benefit of any of
the Property, costs and expenses of maintenance, repair, restoration,
alteration or improvement of any of the Property, costs and expenses of
maintenance, repair, restoration, alteration or improvement of any of the
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Property, or any amount outstanding on the obligations secured hereby. Lender
may, in its sole discretion, determine the method by which, and extent to which,
the rents will be collected and obligations of tenants enforced; and Lender may
waive or fail to enforce any right or remedy of the landlord under a lease.
Lender shall not be accountable for any rents or other sums it does not actually
receive. Borrower hereby appoints Lender as its attorney-in-fact to perform all
acts which Borrower is required or permitted to perform under any and all
leases.
(e) UPON THE OCCURRENCE OF AN EVENT OF DEFAULT BORROWER HEREBY
AUTHORIZES AND EMPOWERS ANY ATTORNEY OR ATTORNEYS OF ANY COURT OF THE
COMMONWEALTH OF PENNSYLVANIA TO APPEAR FOR BORROWER AND, AS ATTORNEY FOR
BORROWER, TO SIGN AN AGREEMENT FOR ENTERING AN AMICABLE ACTION OF EJECTMENT FOR
POSSESSION OF ANY OF THE PROPERTY, AND TO CONFESS JUDGMENT THEREIN AGAINST
BORROWER IN FAVOR OF LENDER. FOR SO DOING, THIS SECURITY INSTRUMENT OR A COPY
HEREOF CERTIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. THEREUPON, A WRIT
OF POSSESSION MAY IMMEDIATELY ISSUE FOR THE POSSESSION OF ANY OF THE PROPERTY,
WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER. LENDER MAY BRING SUCH AMICABLE
ACTION IN EJECTMENT BEFORE OR AFTER: (I) THE INSTITUTION OF FORECLOSURE
PROCEEDINGS UNDER THIS SECURITY INSTRUMENT, (II) THE ENTRY OF JUDGMENT
THEREUNDER OR UNDER THE NOTE, OR (III) A SHERIFF'S SALE OF ANY OF THE PROPERTY.
BORROWER HEREBY WAIVES THE BENEFIT OF ANY LAWS WHICH NOW OR
HEREAFTER MIGHT OTHERWISE AUTHORIZE THE STAY OF ANY EXECUTION TO BE ISSUED ON
ANY JUDGMENT RECOVERED ON THIS NOTE, OR THE EXEMPTION OF ANY PROPERTY FROM LEVY
OR SALE THEREUNDER.
(f) Lender may obtain a receiver to manage the Property and
collect the rents, issues, profits and income therefrom.
(g) Lender may disaffirm and cancel any lease which is
subordinate to this Security Instrument at any time before the expiration of
sixty (60) days after Lender acquires legal title to the Property by any
transfer pursuant to the exercise of a remedy hereunder or otherwise, even
though Lender shall have enforced such lease, collected rents thereunder or
taken any action that might be deemed by law to constitute an affirmance of the
lease. Such disaffirmance shall be made by notice addressed to the tenant at
the Property or, at Lender's option, such other address of the tenant as may be
provided in that tenant's lease.
(h) Lender may take possession of any of the Property and may
sell such property pursuant to the provisions of the applicable Uniform
Commercial Code and exercise such other rights and remedies with respect to
such property as may be provided by said Code.
(i) Lender may apply on account of the obligations secured hereby
the balance of the accumulated installment payments made by Borrower for taxes,
water and sewer rents and insurance premiums, and all other items for which
Lender has made payment, as set forth herein.
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(j) Upon the acceleration of the maturity of the obligations secured
hereby as herein provided, a tender of payment of the amount necessary to
satisfy the entire Debt made at any time prior to foreclosure sale by Borrower,
its successors or assigns, shall, to the extent permitted by law, constitute an
evasion of the prepayment terms of the obligations secured hereby and be deemed
to be a voluntary prepayment thereunder, and Lender shall not be obligated to
accept any such tender of payment unless such tender of payment includes the
additional prepayment premium required under the terms of the prepayment
privilege, if any, contained in the Note.
(k) If Lender retains the services of counsel in order to enforce any
remedy available to Lender under the Note, this Security Instrument, or any of
the Other Security Documents, an attorney's commission equal to five percent
(5%) of the outstanding principal amount of the Note shall be payable on demand
by Borrower to Lender, and Borrower shall also pay on demand the cost of any
title search and all other costs incurred by Lender in connection with
proceedings to recover any sums due hereunder. Any such amounts not paid
promptly on demand shall be added to the outstanding principal amount of the
Note, shall bear interest at the Default Rate from the date of such demand
until paid in full and shall be secured by this Security Instrument. Borrower
shall also pay on demand any reasonable charge of Lender in connection with the
cancellation of this Note and/or the satisfaction of this Security Instrument
of record. Nothing contained herein shall limit or impair the obligation of
Borrower to pay any and all costs and expenses for which Borrower is otherwise
liable under the Note, this Security Instrument, or any of the Other Security
Documents, and all costs and expenses provided by law.
In the event of a sale, by foreclosure, power of sale, or otherwise, of less
than all of the Property, this Security Instrument shall continue as a lien and
security interest on the remaining portion of the Property unimpaired and
without loss of priority. Notwithstanding the provisions of this Section 11.1 to
the contrary, if any Event of Default as described in clause (i) or (ii) of
Subsection 10.1(f) shall occur, the entire unpaid Debt shall be automatically
due and payable, without any further notice, demand or other action by Lender.
Section 23.4 FUTURE ADVANCES. It is understood and agreed that this
Security Instrument covers present and future advances made by Lender to or for
the benefit of Borrower on account of interest which may be deferred and
accrued and added to the principal balance of the Note in the maximum amount of
$24,000,000 and that the lien of such future advances shall relate back to the
date of this Security Instrument.
Section 23.5 PURCHASE MONEY INSTRUMENT. This Security Instrument is
intended to be a purchase money mortgage and shall be entitled to all the
benefits as such under the lien priority provisions of the Pennsylvania
Judicial Code, 42 Pa. C.S.A. ss. 8141, as amended.
Section 23.6 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. The text of
Section 12.1 of this Security Instrument entitled "Environmental
Representations and Warranties" is hereby amended by inserting after the words
"addressing similar issues:" and before the words "the Comprehensive
Environmental Response" the words "the Pennsylvania Hazardous Sites Cleanup
Act, the Pennsylvania Solid Waste Management Act,".
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Section 23.7 CONSTRUCTION MORTGAGE. This Security Instrument is
intended to be a Construction Mortgage within the meaning of 13 Pa. C.S.A.
ss. 9313(a).
Article 24 - GROUND LEASE PROVISIONS
Section 24.1 ACQUISITION OF GROUND LEASE. If at any time during the
term of the Loan, Borrower shall receive from the Owner a consent to the
assignment of Ground Lease dated the date hereof, then (i) this Security
Instrument and the lien thereof shall be spread to cover the Ground Lease and
(ii) all of the terms, conditions, agreements and provisions hereof, as
applicable, shall apply to that property covered by the Ground Lease described
on Exhibit B attached hereto. Lender may require Borrower to execute additional
documents to confirm such spreading of this Security Instrument and the lien
over the Ground Lease parcel.
Section 24.2 THE GROUND LEASE. Borrower shall (i) pay all rents,
additional rents and other sums required to be paid by Borrower, as tenant
under and pursuant to the provisions of the Ground Lease, (ii) diligently
perform and observe all of the terms, covenants and conditions of the Ground
Lease on the part of the Borrower, as tenant thereunder, and (iii) promptly
notify Lender of the giving of any notice by ground lessor to Borrower of any
default by Borrower, as tenant thereunder, and deliver to Lender a true copy of
each such notice. Borrower shall not, without the prior consent of Lender,
surrender the leasehold estate created by the Ground Lease or terminate or
cancel the Ground Lease or modify, change, supplement, alter or amend the
Ground Lease, in any respect, either orally or in writing. If Borrower shall
default in the performance or observance of any term, covenant or condition of
the Ground Lease, Lender shall have the right, but shall be under no
obligation, to pay any sums and to perform any act or take any action as may be
appropriate to cause all of the terms, covenants and conditions of the Ground
Lease on the part of Borrower to be performed or observed on behalf of
Borrower, to the end that the rights of Borrower in, to and under the Ground
Lease shall be kept unimpaired and free from default. Borrower shall exercise
each individual option, if any, to extend or renew the term of the Ground Lease
upon demand by Lender made at any time within one (1) year prior to the last
day upon which any such option may be exercised.
Section 24.3 SUBLEASES. Notwithstanding anything contained in the
Ground Lease to the contrary, Borrower shall not further sublet any portion of
the Property, except pursuant to the provisions of Section 3.7, without prior
written consent of the Lender. In the event that any portion of the Land shall
be sublet pursuant to the terms of this Subsection, such sublease shall be
deemed to be included in the Property.
Section 24.4 RELEASES. Lender reserves the right, at any time, to
release portions of the Property, including, but not limited to, the leasehold
estate created by the Ground Lease, with or without consideration, at Lender's
election, without waiving or affecting any rights hereunder or under the Note
or the Other Security Documents and any such release shall not affect Lender's
rights in connection with the portion of the Property not so released.
[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by
Borrower the day and year first above written.
ATTEST: PORT RICHMOND ASSOCIATES LLC,
a New York limited liability company
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------- By: PORT RICHMOND LAND, INC., a New York
Name: ▇▇▇▇ ▇▇▇▇▇▇▇ corporation, its managing member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
The mailing address of the within-named Lender is:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-----------------------------
On behalf of Lender
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this, the 2nd day of April, 1998, before me, the subscriber, a
Notary Public in and for the State and county aforesaid, personally appeared
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, who acknowledged himself to be President of Port Richmond
Land, Inc., a New York corporation, the sole managing member of Port Richmond
Associates LLC, a New York limited liability company, who I am satisfied is the
person who signed the within instrument and who acknowledged that he executed
same as such managing member on behalf of the limited liability company, being
authorized to do so, and that the within instrument is the voluntary act and
deed of such limited liability company.
WITNESS my hand and seal the day and year aforesaid.
---------------------------
Notary Public
My Commission Expires:
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
NOTARY PUBLIC, State of New York
No. 01CL5085811
Qualified in Kings County
Commission Expires September 29, 1999
EXHIBIT A
ALL THAT CERTAIN parcel of land situate in the Thirty-first ▇▇▇▇ of the City of
Philadelphia, and Commonwealth of Pennsylvania as shown on a plan prepared by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates entitled Existing Conditions Plan, dated July 25,
1989, last revised May 31, 1990, and being more particularly described, as
follows:
BEGINNING at a point of intersection between the westerly line of Cumberland
Street (60 feet wide) and the northerly line of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ feet wide;
thence
(1) along said line of Salmon Street South 41 degrees 29 minutes 03 seconds
West a distance of 340.80 feet to a point on the westerly line of York Street
(50' wide) thence;
(2) North 48 degrees 30 minutes 57 seconds West a distance of 7.11 feet to a
point; thence
(3) along a curve to the right having a radius o 2267.957 for an arc distance
of 50.237 feet to a point; thence
(4) South 67 degrees 33 minutes 34 seconds West a distance of 577.172 feet to a
point; thence
(5) North 48 degrees 30 minutes 57 seconds west a distance of 73.395 feet to a
point; thence
(6) North 00 degrees 28 minutes 43 seconds West a distance of 201.406 feet to a
point of curvature; thence
(7) along a curve to the right having a radius of 324.125 feet for an arc
distance of 223.36 feet to a point of tangency; thence
(8) North 50 degrees 59 minutes 43 seconds West a distance 17.952 feet to a
point on the southerly line of Aramingo Avenue (variable width); thence
(9) along said line of Aramingo Avenue, North 39 degrees 00 minutes 17 seconds
East a distance of 221.195 feet to a point within a 50 feet wide drainage
right-of-way; thence
(10) still along line of Aramingo Avenue North 57 degrees 35 minutes 34 seconds
East a distance of 470.577 feet to a point of curvature; thence
(11) along a curve to the right having a radius of 15.00 feet for an arc
distance of 23.562 feet to a point on the aforementioned line of Cumberland
Street; thence
(12) along said line of Cumberland Street South 32 degrees 24 minutes 26 seconds
East a distance of 470.088 feet to a point on the aforementioned line of Salmon
Street and the first mentioned point and place of beginning.
BEING KNOWN AS ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇ ▇), ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇ ▇) and ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇ B)
BEING THE SAME PREMISES which Urban Center Associates Limited Partnership by
Deed dated September 30, 1996 and recorded December 26, 1996 In Deed Book JTD
185 page 484.
EXHIBIT B
Description of land to be leased to PORT RICHMOND VILLAGE ASSOCOIATES Under
▇-▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
BEGINNING at a point at the intersection of the S.W. side of York Street (50'
wide) and the N.W. side of Richmond Street (120' wide), thence S 41"29'03" W
along said side of Richmond Street 100'-4 1/4" to a point on the south right of
way line of Delaware Expressway L.R. 1000; thence along the following eleven
courses and distance along the south right of way line
1) line curving to the right with a radius to 2303'-4 1/2" and an arc
distance of 191'-3 1/4" to a point of tangent
2) S 57(degree)35'34" E 32'-3/8" to a point
3) S 48(degree)30'57" E 54'-3 1/4" to a point on the N.W. side of
Richmond St.
4) S 41(degree)29'03" W 35'-9 1/8" to the intersection of ▇▇▇▇▇▇ Ave. and
Richmond St.
5) N 48(degree)30'57" W 64'-7 1/8" to a point
6) S 57(degree)35'34" W 69'-3/8" to a point
7) S 41(degree)29'03" W 17'-3 7/8" to a point
8) N 48(degree)30'57" W 5'-7 1/8" to a point
9) S 37(degree)13'283" W 50'3 1/2" to a point
10) S 48(degree)30'57" E 7'-8 1/8" to a point
11) S 41(degree)29'03" W 135'-1 1/4" to a point on the N.E. side of ▇▇▇▇▇▇
St.(60' wide):
thence, N 48(degree)30'57" W along the said side of ▇▇▇▇▇▇ St. produced 316'-
1/4" to a point; thence N 22"26'28" W, 133'-3 5/8" to a point on the north side
of the right of way line of the Delaware Expressway; thence, along said side of
Delaware Expressway the three following courses and distances
1)S 48(degree)30'57" E 73'-4 3/4" to a point
2)N 67(degree)33'34" E 577'-2" to a point of curve
3)along a line curving to the left with a radius of 2267'-11 1/2" and an
arc distance of 50'-2 7/8" to a point on the S.W. side of York Street;
thence S 48(degree)30'57" E along said side of York Street 165'-1 3/8" to
the point and place of beginning.
Subject to columns and piers for I-95 and ramps; limiting air easements; ▇▇▇▇▇▇
Avenue approachment and existing embankment slopes; and utilizing within the
parcel.
TABLE OF CONTENTS
Page
Article
1 - GRANTS OF SECURITY ..................................................... - 2 -
Sectionl.1 PROPERTY MORTGAGE ........................................ - 2 -
Section 1.2 ASSIGNMENT OF RENTS ...................................... - 5 -
Section 1.3 SECURITY AGREEMENT ....................................... - 5 -
Section 1.4 PLEDGE OF MONIES HELD .................................... - 5 -
Article 2 - DEBT AND OBLIGATIONS SECURED ........................................... - 6 -
Section 2.1 DEBT ..................................................... - 6 -
Section 2.2 OTHER OBLIGATIONS ........................................ - 7 -
Section 2.3 DEBT AND OTHER OBLIGATIONS ............................... - 7 -
Section 2.4 PAYMENTS ................................................. - 7 -
Article 3 - BORROWER COVENANTS ..................................................... - 7 -
Section 3.1 PAYMENT OF DEBT .......................................... - 7 -
Section 3.2 INCORPORATION BY REFERENCE ............................... - 7 -
Section 3.3 INSURANCE ................................................ - 8 -
Section 3.4 PAYMENT OF TAXES, ETC .................................... - 12 -
Section 3.5 ESCROW FUND .............................................. - 12 -
Section 3.6 CONDEMNATION ............................................. - 13 -
Section 3.7 LEASES AND RENTS ......................................... - 14 -
Section 3.8 MAINTENANCE OF PROPERTY .................................. - 16 -
Section 3.9 WASTE .................................................... - 16 -
Section 3.10 COMPLIANCE WITH LAWS ..................................... - 16 -
Section 3.11 BOOKS AND RECORDS ........................................ - 17 -
Section 3.12 PAYMENT FOR LABOR AND MATERIALS .......................... - 18 -
Section 3.13 PERFORMANCE OF OTHER AGREEMENTS .......................... - 18 -
Article 4 - SPECIAL COVENANTS ...................................................... - 19 -
Section 4.1 PROPERTY USE ............................................. - 19 -
Section 4.2 ERISA .................................................... - 19 -
Section 4.3 SINGLE PURPOSE ENTITY .................................... - 19 -
Section 4.4 RESTORATION .............................................. - 22 -
Article 5 - REPRESENTATIONS AND WARRANTIES ......................................... - 26 -
Section 5.1 WARRANTY OF TITLE ........................................ - 26 -
Section 5.2 AUTHORITY ................................................ - 26 -
Section 5.3 LEGAL STATUS AND AUTHORITY ............................... - 26 -
Section 5.4 VALIDITY OF DOCUMENTS .................................... - 26 -
Section 5.5 LITIGATION ............................................... - 27 -
Section 5.6 STATUS OF PROPERTY ....................................... - 27 -
Section 5.7 NO FOREIGN PERSON ........................................ - 28 -
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Section 5.8 SEPARATE TAX LOT ......................................... - 28 -
Section 5.9 ERISA COMPLIANCE ......................................... - 28 -
Section 5.10 LEASES ................................................... - 28 -
Section 5.11 FINANCIAL CONDITION ...................................... - 29 -
Section 5.12 BUSINESS PURPOSES ........................................ - 29 -
Section 5.13 TAXES .................................................... - 29 -
Section 5.14 MAILING ADDRESS .......................................... - 29 -
Section 5.15 No CHANGE IN FACTS OR CIRCUMSTANCES ...................... - 29 -
Section 5.16 DISCLOSURE ............................................... - 29 -
Section 5.17 THIRD PARTY REPRESENTATION ............................... - 30 -
Section 5.18 ILLEGAL ACTIVITY ......................................... - 30 -
Section 5.19 CONTRACTS ................................................ - 30 -
Article 6 - OBLIGATIONS AND RELIANCES .............................................. - 30 -
Section 6.1 RELATIONSHIP OF BORROWER AND LENDER ...................... - 30 -
Section 6.2 No RELIANCE ON LENDER .................................... - 30 -
Section 6.3 No LENDER OBLIGATIONS .................................... - 30 -
Section 6.4 RELIANCE ................................................. - 31 -
Article 7 - FURTHER ASSURANCES ..................................................... - 31 -
Section 7.1 RECORDING OF SECURITY INSTRUMENT, ETC .................... - 31 -
Section 7.2 FURTHER ACTS, ETC ........................................ - 31 -
Section 7.3 CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS ... - 32 -
Section 7.4 ESTOPPEL CERTIFICATES .................................... - 32 -
Section 7.5 FLOOD INSURANCE .......................................... - 33 -
Section 7.6 SPLITTING OF SECURITY INSTRUMENT ......................... - 33 -
Section 7.7 REPLACEMENT DOCUMENT ..................................... - 33 -
Article 8 - DUE ON SALE/ENCUMBRANCE ................................................ - 34 -
Section 8.1 LENDER RELIANCE .......................................... - 34 -
Section 8.2 No SALE/ENCUMBRANCE ...................................... - 34 -
Section 8.3 SALE/ENCUMBRANCE DEFINED ................................. - 34 -
Section 8.4 LENDER'S RIGHTS .......................................... - 35 -
Article 9 - PREPAYMENT ............................................................. - 35 -
Section 9.1 PREPAYMENT BEFORE EVENT OF DEFAULT ....................... - 35 -
Section 9.2 PREPAYMENT ON CASUALTY OR CONDEMNATION ................... - 36 -
Section 9.3 PREPAYMENT AFTER EVENT OF DEFAULT ........................ - 36 -
Article 10 - DEFAULT ............................................................... - 36 -
Section 10.1 EVENTS OF DEFAULT ........................................ - 36 -
Section 10.2 LATE PAYMENT CHARGE ...................................... - 36 -
Section 10.3 DEFAULT INTEREST ......................................... - 39 -
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Article 11 - RIGHTS AND REMEDIES ................................................... - 40 -
Section ll.1 REMEDIES ................................................. - 40 -
Section 11.2 APPLICATION OF PROCEEDS .................................. - 42 -
Section 11.3 RIGHT TO CURE DEFAULTS ................................... - 42 -
Section 11.4 ACTIONS AND PROCEEDINGS .................................. - 43 -
Section 11.5 RECOVERY OF SUMS REOUIRED To BE PAID ..................... - 43 -
Section 11.6 EXAMINATION OF BOOKS AND RECORDS ......................... - 43 -
Section 11.7 OTHER RIGHTS, ETC ........................................ - 43 -
Section 11.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY ............. - 44 -
Section 11.9 VIOLATION OF LAWS ........................................ - 44 -
Section 11.10 RECOURSE AND CHOICE OF REMEDIES .......................... - 44 -
Section ll.11 RIGHT OF ENTRY ........................................... - 45 -
Article 12 - ENVIRONMENTAl HAZARDS ................................................. - 45 -
Section 12.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES ............. - 45 -
Section 12.2 ENVIRONMENTAL COVENANTS .................................. - 46 -
Section 12.3 LENDERS RIGHTS ........................................... - 47 -
Article 13 - INDEMNIFICATION ....................................................... - 47 -
Section 13.1 GENERAL INDEMNIFICATION .................................. - 47 -
Section 13.2 MORTGAGE AND/OR INTANGIBLE TAX ........................... - 48 -
Section l3.3 ERISA INDEMNIFICATION .................................... - 49 -
Section 13.4 ENVIRONMENTAL INDEMNIFICATION ............................ - 49 -
Section 13.5 DUTY TO DEFEND: ATTORNEYS' FEES AND
OTHER FEES AND EXPENSES .................................. - 50 -
Article l4 - WAIVERS ............................................................... - 50 -
Section 14.1 WAIVER OF COUNTERCLAIM ................................... - 50 -
Section 14.2 MARSHALLING AND OTHER MATTERS ............................ - 50 -
Section 14.3 WAIVER OF NOTICE ......................................... - 50 -
Section 14.4 WAIVER OF STATUTE OF LIMITATIONS ......................... - 51 -
Section 14.5 SOLE DISCRETION OF LENDER ................................ - 51 -
Section 14.6 SURVIVAL ................................................. - 51 -
SECTION 14.7 WAIVER OF TRIAL BY JURY .................................. - 51 -
Article 15 - EXCULPATION ........................................................... - 51 -
Section 15.1 EXCULPATION .............................................. - 51 -
Section 15.2 RESERVATION OF CERTAIN RIGHTS ............................ - 52 -
Section 15.3 EXCEPTIONS TO EXCULPATION ................................ - 52 -
Section 15.4 RECOURSE ................................................. - 52 -
Section 15.5 BANKRUPTCY CLAIMS ........................................ - 53 -
Article 16 - NOTICES ............................................................... - 53 -
Section 16.1 NOTICES .................................................. - 53 -
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Article 17 - SERVICE OF PROCESS .................................................... - 54 -
Section 17.1 CONSENT TO SERVICE ....................................... - 54 -
Section 17.2 SUBMISSION TO JURISDICTION ............................... - 55 -
Section 17.3 JURISDICTION NOT EXCLUSIVE ............................... - 55 -
Article 18 - APPLICABLE LAW ........................................................ - 55 -
Section 18.1 CHOICE OF LAW ............................................ - 55 -
Section 18.2 USURY LAWS ............................................... - 55 -
Section 18.3 PROVISIONS SUBJECT TO APPLICABLE LAW ..................... - 55 -
Article 19 - SECONDARY MARKET ...................................................... - 56 -
Section 19.1 TRANSFER OF LOAN ......................................... - 56 -
Article 2O - COSTS ................................................................. - 56 -
Section 20.1 PERFORMANCE AT BORROWER'S EXPENSE ........................ - 56 -
Section 20.2 ATTORNEY'S FEES FOR ENFORCEMENT .......................... - 57 -
Article 21 - DEFINITIONS
Section 21.1 GENERAL DEFINITIONS ...................................... - 57 -
Article 22 - MISCELLANEOUS PROVISIONS ...................................... - 57 -
Section 22.1 NO ORAL CHANGE ........................................... - 57 -
Section 22.2 LIABILITY ................................................ - 58 -
Section 22.3 INAPPLICABLE PROVISIONS .................................. - 58 -
Section 22.4 HEADINGS, ETC. ........................................... - 58 -
Section 22.5 DUPLICATE ORIGINALS: COUNTERPARTS ........................ - 58 -
Section 22.6 NUMBER AND GENDER ........................................ - 58 -
Section 22.7 SUBROGATION .............................................. - 58 -
Article 23 - SPECIAl PENNSYLVANIA PROVISIONS ....................................... - 58 -
Section 23.1 INCONSISTENCIES .......................................... - 58 -
Section 23.2 EJECTMENT ................................................ - 58 -
Section 23.3 REMEDIES ................................................. - 59 -
Section 23.6 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES ............. - 62 -
Section 23.7 CONSTRUCTION MORTGAGE .................................... - 62 -
Article 24 - GROUND LEASE PROVISIONS ............................................... - 62 -
Section 23.2 SUBLEASES ................................................ - 63 -
Section 23.3 RELEASES ................................................. - 63 -
DEFINITIONS ................................................................ - v -
-iv-
Definitions
The terms set forth below are defined in the following Sections of this
Security Instrument:
(a) Applicable Laws: Article 3, Subsection 3.10(a);
(b) Attorneys' Fees/Counsel Fees: Article 21, Section 21.1;
(c) Bankruptcy Code: Article 1, Subsection 1.1(f);
(d) Borrower: Preamble and Article 21, Section 21.1;
(e) Business Day: Article 16, Section 16.1;
(f) Casualty Consultant: Article 4, Subsection 4.4(b)(iii);
(g) Casualty Retainage: Article 4, Subsection 4.4(b)(iv);
(h) Debt: Article 2, Section 2.1;
(i) Default Prepayment: Article 9, Section 9.3;
(j) Default Rate: Article 10, Section 10.3;
(k) Environmental Indemnity: Article 10, Subsection 10.1(q);
(1) Environmental Law: Article 12, Section 12.1;
(m) Environmental Liens: Article 12, Subsection 12.2(d);
(n) Environmental Report: Article 12, Subsection 12.1(a)
(o) ERISA: Article 4, Subsection 4.2(a);
(p) Escrow Fund: Article 3, Section 3.5;
(q) Event: Article 20, Section 20.1;
(r) Event of Default: Article 10, Section 10.1;
(s) Flood Insurance Acts: Article 3, Subsection 3.3 (a)(vii);
(t) Full Replacement Cost: Article 3, Subsection 3.3(a)(i)(A);
(u) GAAP: Article 3, Subsection 3.11(a);
-v-
(v) Guarantor: Article 10, Subsection 10.1(e);
(w) Hazardous Substances: Article 12, Section 12.1;
(x) Improvements: Article 1, Subsection 1.1(c);
(y) Indemnified Parties: Article 13, Section 13.1;
(z) Indemnitor(s): Article 10, Subsection 10.1(o);
(aa) Insurance Premiums: Article 3, Subsection 3.3(b);
(bb) Investor: Article 19, Section 19.1;
(cc) Land: Article 1, Section 1.1(a);
(dd) Lease Guaranty: Article 3, Subsection 3.7(a);
(ee) Leases: Article 1, Subsection 1.1(f);
(ff) Lender: Preamble and Article 21, Section 21.1;
(gg) Loan: Article 5, Subsection 5.12;
(hh) Loan Application: Article 5, Section 5.15;
(ii) Losses: Article 13, Section 13.1;
(jj) Net Proceeds: Article 4, Subsection 4.4(b);
(kk) Net Proceeds Deficiency: Article 4, Subsection 4.4(b)(vi);
(11) Note: Recitals and Article 21, Section 21.1;
(mm) Obligations: Article 2, Section 2.3;
(nn) Other Charges: Article 3, Subsection 3.4(a);
(oo) Other Obligations: Article 2, Section 2.2;
(pp) Other Security Documents: Article 3, Section 3.2;
(qq) Participations: Article 19, Section 19.1;
-vi-
(rr) Permitted Exceptions: Article 5, Section 5.1;
(ss) Person: Article 21, Section 21.1;
(tt) Personal Property: Article 1, Subsection 1.1(e);
(uu) Policies/Policy: Article 3, Subsection 3.3(b);
(vv) Principal: Article 4, Section 4.3;
(ww) Personal: Article 1, Section 1.1 and Article 21, Section
21.1;
(xx) Qualifier Insurer: Article 3, Subsection 3.3(b);
(yy) Rating Agency: Article 3, Subsection 3.3(b);
(zz) Release: Article 12, Section 12.1;
(aaa) Remediation: Article 12, Section 12.1;
(bbb) Rents: Article 1, Subsection 1.1(f);
(ccc) Restoration: Article 3, Subsection 3.3(h);
(ddd) Security Deposits: Article 19, Section 19.1;
(eee) Security Deposits: Article 3, Subsection 3.7(c);
(fff) Security Instrument: Preamble;
(ggg) Taxes: Article 3, Subsection 3.4(a);
(hhh) Uniform Commercial Code: Article 1, Subsection 1.1(e),
-vii-
