1
Exhibit (b)(18)
55 PUBLIC LLC, a Delaware limited liability company, as mortgagor
(Borrower)
to
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as mortgagee
(Lender)
-----------------------------------
OPEN-END MORTGAGE AND
SECURITY AGREEMENT
(Maximum Principal Indebtedness Not to Exceed $24,500,000.00)
-----------------------------------
Dated: August ____, 1999
PREPARED BY AND UPON
RECORDATION RETURN TO:
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
NOTE TO CUYAHOGA COUNTY RECORDER/CLERK:
THIS DOCUMENT IS ALSO A FIXTURE FINANCING STATEMENT AND SHOULD BE
SEPARATELY INDEXED AS SUCH.
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TABLE OF CONTENTS
ARTICLE I GRANTS OF SECURITY........................................1
1.1 PROPERTY MORTGAGED...............................................1
(a) Land......................................................1
(b) Improvements..............................................2
(c) Easements.................................................2
(d) Fixtures and Personal Property............................2
(e) Leases and Rents..........................................2
(f) Condemnation Awards.......................................3
(g) Insurance Proceeds........................................3
(h) Tax Certiorari............................................3
(i) Conversion................................................3
(j) Rights....................................................3
(k) Agreements................................................3
(l) Trademarks................................................3
(m) Accounts..................................................3
(n) Other Rights..............................................4
1.2 ASSIGNMENT OF RENTS..............................................4
1.3 DEFINITION OF PERSONAL PROPERTY..................................4
1.4 PLEDGE OF MONIES HELD............................................4
ARTICLE II DEBT AND OBLIGATIONS SECURED..............................5
2.1 DEBT.............................................................5
2.2 OTHER OBLIGATIONS................................................5
2.3 DEBT AND OTHER OBLIGATIONS.......................................5
2.4 PAYMENTS.........................................................5
ARTICLE III BORROWER COVENANTS........................................6
3.1 INCORPORATION BY REFERENCE.......................................6
3.2 INSURANCE........................................................6
3.3 PAYMENT OF TAXES, ETC...........................................13
3.4 CONDEMNATION....................................................13
3.5 USE AND MAINTENANCE OF PROPERTY.................................14
3.6 WASTE...........................................................14
3.7 COMPLIANCE WITH LAWS; ALTERATIONS...............................15
3.8 BOOKS AND RECORDS...............................................15
3.9 PAYMENT FOR LABOR AND MATERIALS.................................17
3.10 PERFORMANCE OF OTHER AGREEMENTS.................................17
ARTICLE IV SPECIAL COVENANTS........................................18
4.1 PROPERTY USE....................................................18
4.2 ERISA...........................................................18
4.3 SINGLE PURPOSE ENTITY...........................................18
ARTICLE V REPRESENTATIONS AND WARRANTIES...........................20
5.1 BORROWER'S REPRESENTATIONS......................................20
5.2 WARRANTY OF TITLE...............................................20
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5.3 STATUS OF PROPERTY..............................................21
5.4 NO FOREIGN PERSON...............................................22
5.5 SEPARATE TAX LOT................................................22
ARTICLE VI OBLIGATIONS AND RELIANCES................................22
6.1 RELATIONSHIP OF BORROWER AND LENDER.............................22
6.2 NO RELIANCE ON LENDER...........................................22
6.3 NO LENDER OBLIGATIONS...........................................22
6.4 RELIANCE........................................................23
ARTICLE VII FURTHER ASSURANCES.......................................23
7.1 RECORDING FEES..................................................23
7.2 FURTHER ACTS....................................................23
7.3 CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS..........24
7.4 CONFIRMATION STATEMENT..........................................24
7.5 SPLITTING OF SECURITY INSTRUMENT................................25
7.6 REPLACEMENT DOCUMENTS...........................................25
ARTICLE VIII DUE ON SALE/ENCUMBRANCE..................................25
8.1 LENDER RELIANCE.................................................25
8.2 NO SALE/ENCUMBRANCE.............................................25
8.3 EXCLUDED AND PERMITTED TRANSFERS................................26
8.4 NO IMPLIED FUTURE CONSENT.......................................27
8.5 COSTS OF CONSENT................................................27
8.6 CONTINUING SEPARATENESS REQUIREMENTS............................27
ARTICLE IX DEFAULT..................................................27
9.1 EVENTS OF DEFAULT..............................................27
9.2 DEFAULT INTEREST................................................29
ARTICLE X RIGHTS AND REMEDIES......................................30
10.1 REMEDIES........................................................30
(a) Right to Perform Borrower's Covenants....................30
(b) Right of Entry...........................................30
(c) Right to Accelerate......................................31
(d) Foreclosure-Power of Sale................................31
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(e) Rights Pertaining to Sales...............................31
(f) Lender's Judicial Remedies...............................33
(g) Lender's Right to Appointment of Receiver................33
(h) Commercial Code Remedies.................................33
(i) Apply Escrow Funds.......................................33
(j) Other Rights.............................................34
(k) Discontinuance of Remedies...............................34
(l) Remedies Cumulative......................................34
(m) Bankruptcy Acknowledgment................................35
(n) Application of Proceeds..................................35
10.2 RIGHT OF ENTRY..................................................35
ARTICLE XI INDEMNIFICATION; SUBROGATION.............................36
11.1 GENERAL INDEMNIFICATION.........................................36
11.2 ENVIRONMENTAL INDEMNIFICATION...................................37
11.3 EXCLUDED OCCURRENCES............................................39
11.4 DUTY TO DEFEND AND ATTORNEYS AND OTHER FEES AND EXPENSES........39
11.5 SURVIVAL OF INDEMNITIES.........................................40
ARTICLE XII SECURITY AGREEMENT.......................................40
12.1 SECURITY AGREEMENT..............................................40
ARTICLE XIII WAIVERS..................................................41
13.1 MARSHALLING AND OTHER MATTERS...................................41
13.2 WAIVER OF NOTICE................................................41
13.3 SOLE DISCRETION OF LENDER.......................................41
13.4 SURVIVAL........................................................42
13.5 WAIVER OF TRIAL BY JURY.........................................42
13.6 WAIVER OF AUTOMATIC OR SUPPLEMENTAL STAY........................42
ARTICLE XIV NOTICES..................................................43
14.1 NOTICES.........................................................43
ARTICLE XV APPLICABLE LAW...........................................44
15.1 GOVERNING LAW; JURISDICTION.....................................44
15.2 USURY LAWS......................................................44
15.3 PROVISIONS SUBJECT TO APPLICABLE LAW............................44
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ARTICLE XVI SECONDARY MARKET.........................................44
16.1 TRANSFER OF LOAN................................................44
ARTICLE XVII COSTS....................................................45
17.1 PERFORMANCE AT BORROWER'S EXPENSE...............................45
17.2 ATTORNEY'S FEES FOR ENFORCEMENT.................................45
ARTICLE XVIII DEFINITIONS..............................................45
18.1 GENERAL DEFINITIONS.............................................45
ARTICLE XIX MISCELLANEOUS PROVISIONS.................................46
19.1 NO ORAL CHANGE..................................................46
19.2 LIABILITY.......................................................46
19.3 INAPPLICABLE PROVISIONS.........................................46
19.4 HEADINGS, ETC...................................................46
19.5 DUPLICATE ORIGINALS; COUNTERPARTS...............................46
19.6 NUMBER AND GENDER...............................................46
19.7 SUBROGATION.....................................................46
19.8 ENTIRE AGREEMENT................................................47
ARTICLE XX SPECIAL PROVISIONS.......................................47
20.3 SPECIAL OHIO PROVISION..........................................48
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INDEX OF DEFINED TERMS
"ADA".......................................................................15
"Applicable Laws"...........................................................15
"attorneys' fees,"..........................................................46
"attorneys".................................................................36
"Bankruptcy Code"............................................................2
"Borrower"...............................................................1, 45
"Business Day"..............................................................43
"Collateral"................................................................40
"counsel fees"..............................................................46
"Debt"...................................................................5, 30
"Default Rate"..............................................................29
"Environmental Indemnity"....................................................6
"Environmental Law".........................................................37
"Environmental Lien"........................................................38
"ERISA".....................................................................18
"Escrow Agreement"...........................................................3
"Event of Default"..........................................................27
"Event".....................................................................45
"Exculpated Portion"........................................................35
"Existing Garage"...........................................................17
"Existing Garage Loan Portion"..............................................17
"fees and expenses".........................................................36
"fixture filing"............................................................40
"foreign person"............................................................22
"Full Replacement Cost"......................................................6
"Guarantor".................................................................19
"Hazardous Substances"......................................................38
"Improvements"...............................................................2
"Indemnified Parties".......................................................38
"Indemnitor".................................................................6
"Insurance Premiums".........................................................9
"Insured Casualty"..........................................................11
"Intangibles"................................................................4
"Investor"..................................................................45
"Land".......................................................................1
"Lease"......................................................................2
"Leases".....................................................................2
"legal fees"................................................................46
"Lender".................................................................1, 45
"Loan Documents".............................................................6
"Losses"....................................................................39
"New Garage"................................................................17
"Net Income"................................................................17
"Note"...................................................................1, 45
"Obligations."...............................................................5
"occurrence".................................................................7
"Other Charges".............................................................13
"Other Loan Documents".......................................................6
"Other Obligations"..........................................................5
"Permitted Exceptions"......................................................21
"person"....................................................................45
"Personal Property.".........................................................4
"Policies"...................................................................9
"Policy".....................................................................9
"Principal".................................................................19
"Property"...............................................................1, 46
"Qualified Insurer"..........................................................9
"Rating Agency".............................................................45
"Release"...................................................................39
"Remediation"...............................................................39
"Rents"......................................................................2
"Securities"................................................................45
"security agreement"........................................................40
"Security Instrument"........................................................1
"Taxes".....................................................................13
"Uniform Commercial Code"....................................................2
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OPEN-END MORTGAGE AND SECURITY AGREEMENT
(Maximum Principal Indebtedness Not to Exceed $24,500,000)
THIS OPEN-END MORTGAGE AND SECURITY AGREEMENT (this "SECURITY INSTRUMENT")
is made as of the ____ day of August, 1999, by 55 PUBLIC LLC, a Delaware limited
liability company, having its principal place of business at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, as mortgagor ("BORROWER"), to ▇▇▇▇▇▇ GUARANTY
TRUST COMPANY OF NEW YORK, a New York banking corporation, having its principal
place of business at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ County, New York
10260-0060, as mortgagee ("Lender").
RECITALS:
Borrower has executed and delivered to Lender (i) its Promissory Note of
even date herewith payable to the order of Lender in the principal sum of
$21,100,000.00 in lawful money of the United States of America (such Promissory
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, with a maturity date of September 1, 2002 and (ii) its Promissory Note
of even date herewith payable to the order of Lender in the principal sum of
$3,400,000.00 in lawful money of the United States of America (such Promissory
Note, together with all extensions, renewals, modifications, substitutions and
amendments thereof, shall collectively be referred to as the "FUTURE ADVANCE
NOTE"), with interest from the date thereof at the rates set forth in the Future
Advance Note, principal and interest to be payable in accordance with the terms
and conditions provided in the Future Advance Note, with a maturity date of
September 1, 2002.
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, the Future
Advance Note and the Other Obligations (as defined in Article 2).
ARTICLE I
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GRANTS OF SECURITY
------------------
1.1 PROPERTY MORTGAGED. Borrower does hereby irrevocably, unconditionally
and absolutely mortgage, grant, bargain, sell, pledge, enfeoff, assign, warrant,
transfer and convey to Lender (with power of sale), and does hereby grant a
first priority 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 located in Cuyahoga County, Ohio (collectively, the
"LAND"), together with ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, and development rights
hereafter acquired by Borrower for use in connection with the development,
ownership or occupancy of such real property, 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;
(b) Improvements. The buildings, structures, fixtures, additions,
accessions, enlargements, extensions, modifications, repairs,
replacements and improvements now or hereafter erected or located on
the Land (the "IMPROVEMENTS");
(c) 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 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 the Improvements and every part and parcel thereof, with the
appurtenances thereto;
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(d) Fixtures and Personal Property. All machinery, equipment, goods,
inventory, consumer goods, 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 appurtenant
thereto, and usable in connection with the present or future use,
maintenance, enjoyment, 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, and the right,
title and interest of Borrower in and to any of the Personal Property (as
hereinafter defined) 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;
(e) Leases and Rents. All leases and other agreements affecting the
use, enjoyment or occupancy of the Land and the Improvements heretofore or
hereafter entered into, whether before or after the filing by or against
Borrower of any petition for relief under 11 U.S.C. Section 101 et seq., as
the same may be amended from time to time (the "BANKRUPTCY CODE")
(individually, a "LEASE"; collectively, 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 (including all tenant security and other
deposits), 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
(collectively 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;
(f) 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;
(g) 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;
(h) 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;
(i) 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
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liquidation claims;
(j) 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;
(k) Agreements. All agreements, contracts (including purchase, sale,
option, right of first refusal and other contracts pertaining to the
Property), certificates, instruments, franchises, permits, licenses,
approvals, consents, 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 Property (including 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;
(l) 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;
(m) Accounts. All accounts, accounts receivable, escrows (including,
without limitation, all escrows, deposits, reserves and impounds
established pursuant to that certain Escrow Agreement for Reserves and
Impounds of even date herewith between Borrower and Lender; hereinafter,
the "ESCROW AGREEMENT"), documents, instruments, chattel paper, claims,
reserves (including deposits) representations, warranties and general
intangibles, as one or more of the foregoing terms may be defined in the
Uniform Commercial Code, and all contract rights, franchises, books,
records, plans, specifications, permits, licenses (to the extent
assignable), approvals, actions, choses, claims, suits, proofs of claim in
bankruptcy and causes of action which now or hereafter relate to, are
derived from or are used in connection with the Property, or the use,
operation, maintenance, occupancy or enjoyment thereof or the conduct of
any business or activities thereon (hereinafter collectively called the
"INTANGIBLES"); and
(n) Other Rights. Any and all other rights of Borrower in and to the
Property and any accessions, renewals, replacements and substitutions of
all or any portion of the Property and all proceeds derived from the sale,
transfer, assignment or financing of the Property or any portion thereof.
(o) Pursuant to the provisions of Ohio Revised Code Section 5301.232,
this Security Instrument shall secure unpaid balances of loan advances or
future advances made by Lender, its successors and assigns, after this
Security Instrument is delivered to the Cuyahoga County Recorder for record
to the extent that such unpaid balances or future advances, in the
aggregate and exclusive of interest accrued thereon, do not exceed the
maximum principal amount of Twenty Four Million Five Hundred Thousand and
00/100 Dollars ($24,500,000.00) at any time.
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 and unconditional assignment and not an
assignment for additional security
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only. Nevertheless, subject to the terms of this Section 1.2 and the terms and
conditions of that certain Assignment of Rents and Leases, of even date herewith
between Borrower and Lender, 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.
1.3 DEFINITION OF PERSONAL PROPERTY. For purposes of this Security
Instrument, the Property identified in Subsections 1.1(d) through 1.1(n),
inclusive, shall be collectively referred to herein as the "PERSONAL PROPERTY."
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 Funds (as defined in the Escrow Agreement), all insurance
proceeds described in Section 3.2 and condemnation awards or payments described
in Section 3.4, 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, the Future Advance 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 and the Future
Advance Note, these presents and the estate hereby granted shall cease,
terminate and be void; provided however, that Borrower's obligation to indemnify
and hold harmless Lender pursuant to the provisions hereof with respect to
matters relating to any period of time during which this Security Instrument was
in effect shall survive any such payment or release.
ARTICLE II
----------
DEBT AND OBLIGATIONS SECURED
----------------------------
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 and the
Future Advance 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, the Future Advance Note, this Security
Instrument or the Other Loan Documents (as hereinafter defined);
(c) the payment of all other moneys agreed or provided to be paid by
Borrower in the Note, the Future Advance Note, this Security Instrument or
the Other Loan Documents;
(d) the payment of all sums advanced pursuant to this Security
Instrument to protect and preserve the Property and the lien and the
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security interest created hereby; and
(e) 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.
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, the Future
Advance Note, this Security Instrument or the Other Loan Documents.
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 herein as the "OBLIGATIONS."
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 (as
hereinafter defined).
ARTICLE III
-----------
BORROWER COVENANTS
------------------
Borrower covenants and agrees that:
3.1 INCORPORATION BY REFERENCE. All the covenants, conditions and
agreements contained in (a) the Note and the Future Advance Note, and (b) all
and any of the documents other than the Note, the Future Advance Note or this
Security Instrument now or hereafter executed by Borrower and/or others and by
or in favor of Lender in connection with the creation of the Obligations, the
payment of any other sums owed by Borrower to Lender or the performance of any
Obligations (collectively the "OTHER LOAN 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. The term "LOAN DOCUMENTS" as used herein shall individually
and collectively refer to the
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Note, the Future Advance Note, this Security Instrument and the Other Loan
Documents; provided, however, that notwithstanding any provision of this
Security Instrument to the contrary, the Obligations of the indemnitor(s) under
that certain Environmental Indemnity Agreement of even date herewith executed by
Borrower and First Union Real Estate Equity and Mortgage Investments, an Ohio
business trust (whether one or more, "INDEMNITOR") in favor of Lender (the
"ENVIRONMENTAL INDEMNITY") shall not be deemed or construed to be secured by
this Security Instrument or otherwise restricted or affected by the foreclosure
of the lien hereof or any other exercise by Lender of its remedies hereunder or
under any other Loan Document, such Environmental Indemnity being intended by
the signatories thereto to be its (or their) unsecured obligation.
3.2 INSURANCE.
---------
(a) Borrower shall obtain and maintain, and shall pay all premiums in
accordance with Subsection 3.2(b) below for, insurance for Borrower and the
Property providing at least the following coverages:
i. comprehensive all risk insurance (including, without
limitation, riot and civil commotion, vandalism, malicious
mischief, water, fire, burglary and theft) on the Improvements
and the Personal Property and in each case (A) in an amount equal
to the lesser of the principal balance of the Note and the Future
Advance Note or 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; (B) containing an agreed amount endorsement with
respect to the Improvements and Personal Property waiving all
co-insurance provisions; (C) providing that the deductible shall
not exceed $25,000.00; and (D) containing Demolition Costs,
Increased Cost of Construction and "Ordinance or Law Coverage" or
"Enforcement" endorsements if any of the Improvements or the use
of the Property shall at any time constitute legal non-conforming
structures or uses or the ability to rebuild the Improvements is
restricted or prohibited. The Full Replacement Cost may be
redetermined from time to time by an appraiser or contractor
designated and paid by Lender or by an engineer or appraiser in
the regular employ of the insurer. No omission on the part of
Lender to request any such appraisals shall relieve Borrower of
any of its obligations under this Subsection;
ii. comprehensive 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 $1,000,000.00 and not less than
$3,000,000.00 if the Property has one or more elevators, as well
as liquor liability insurance in a minimum amount of
$2,000,000.00 if any part of the Property is covered by a liquor
license; (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;
(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; (5) contractual
liability covering the indemnities contained in Article 11
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hereof to the extent the same is available; and (D) to be without
deductible;
iii. business income insurance (A) with loss payable to Lender;
(B) covering losses of income and Rents derived from the Property
and any non-insured property on or adjacent to the Property
resulting from any risk or casualty whatsoever; (C) containing an
extended period of indemnity endorsement which provides that
after the physical loss to the Improvements and Personal Property
has been repaired, the continued loss of income will be insured
until such income either returns to the same level it was at
prior to the loss, or the expiration of twelve (12) months from
the date of the loss, whichever first occurs, and notwithstanding
that the policy may expire prior to the end of such period; and
(D) 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 business income insurance shall be determined by Lender
prior to the date hereof and at least once each year thereafter
based on Borrower's reasonable estimate of the gross income from
the Property for the succeeding twelve (12) month period. All
insurance proceeds payable to Lender pursuant to this Subsection
3.2(a) 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 and the Future Advance 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 and the Future Advance Note except to the extent such
amounts are actually paid out of the proceeds of such business
income 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 3.2(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 3.2(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 $1,000,000.00 per accident and
per disease per employee, and $1,000,000.00 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. if required by Lender, and if available in the area
where the Property is located, earthquake or sinkhole
insurance in the amount reasonably required by Lender;
vii. comprehensive boiler and machinery insurance (without
exclusion for explosion), if applicable, in amounts as shall be
reasonably required by Lender and covering all boilers or other
pressure vessels, machinery and equipment located at or about the
Property (including, without limitation,
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electrical equipment, sprinkler systems, heating and air
conditioning equipment, refrigeration equipment and piping);
viii. flood hazard insurance if any portion of the Improvements
is currently or at any time in the future located in a federally
designated "special flood hazard area," flood hazard insurance in
an amount equal to the lesser of (a) the outstanding principal
balance of the Note and the Future Advance Note, (b) the Full
Replacement Cost, or (c) the maximum amount of such insurance
available under 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; and
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 are commonly insured against for
property similar to the Property located in or around the region
in which the Property is located, including, without limitation,
earthquake insurance (in the event the Property is located in an
area with a high degree of seismic activity), mine subsidence
insurance and environmental insurance.
(b) All insurance provided for in Subsection 3.2(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 as
admitted or unadmitted carriers which, in either case, have been approved
by Lender and which have a general policy rating of A- or better and a
financial class of VIII or better by A.M. Best Co. or claims paying ability
rating of A or better issued by Standard & Poor's Ratings Group (each such
insurer shall be referred to below as a "QUALIFIED INSURER"). Such Policies
shall not be subject to invalidation due to the use or occupancy of the
Property for purposes more hazardous than the use of the Property at the
time such Policies were issued. Not less than thirty (30) days prior to the
expiration dates of the Policies theretofore furnished to Lender pursuant
to Subsection 3.2(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) separate insurance concurrent in
form or contributing in the event of loss with that required in Subsection
3.2(a) to be furnished by, or which may be reasonably required to be
furnished by, Borrower, or (ii) any umbrella or blanket liability or
casualty Policy unless, in each case, Lender's interest is included therein
as provided in this Security Instrument and such Policy is issued by a
Qualified Insurer. If 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
3.2(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
3.2(a).
(d) All Policies of insurance provided for or contemplated by
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Subsection 3.2(a) shall name Lender, its successors and assigns, including
any servicers, trustees or other designees of 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 so-called New York standard non-contributing
Lender clause in favor of Lender providing that the loss thereunder shall
be payable to Lender.
(e) All Policies of insurance provided for in Subsection 3.2(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 on the Property thereby) or
canceled without at least thirty (30) days' prior written notice
to Lender and any other party named therein as an insured;
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 within ten (10) calendar days
after Lender's request therefor, 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 but not the obligation, without 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 at the Default Rate (as hereinafter defined).
(h) If the Property shall be damaged or destroyed, in whole or in
part, by fire or other casualty, Borrower shall give prompt notice thereof
to Lender.
i. In case of loss covered by Policies, Lender may either (1)
settle and adjust any claim without the consent of Borrower;
provided, however, Lender shall endeavor to provide prior written
notice to Borrower of a settlement or adjustment of any claim,
but Lender's right to settle or adjust any claim shall not be
limited by providing (or
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failing to provide) such notice, or (2) allow Borrower to agree
with the insurance company or companies on the amount to be paid
upon the loss; provided, that Borrower may adjust losses
aggregating not in excess of $250,000.00 if such adjustment is
carried out in a competent and timely manner, and provided that
in any case Lender shall and is hereby authorized to collect and
receive any such insurance proceeds; and the reasonable expenses
incurred by Lender in the adjustment and collection of insurance
proceeds shall become part of the Debt and be secured hereby and
shall be reimbursed by Borrower to Lender upon demand (unless
deducted by and reimbursed to Lender from such proceeds).
ii. In the event of any insured damage to or destruction of the
Property or any part thereof (herein called an "INSURED
CASUALTY"), if (A) in the reasonable judgment of Lender, the
Property can be restored within six (6) months after insurance
proceeds are made available (or twelve (12) months after
insurance proceeds are made available if Borrower has in place at
the time of the Insured Casualty business income insurance
[described in Section 3.2(a)(iii) hereof] covering loss of income
for an eighteen (18) month period) to an economic unit not less
valuable (including an assessment by Lender of the impact of the
termination of any Leases due to such Insured Casualty) and not
less useful than the same was prior to the Insured Casualty, and
after such restoration will, at a minimum, secure the outstanding
balance of the Debt at the loan to value ratio that existed on
the date of this Security Instrument, and (B) no Event of Default
(hereinafter defined) shall have occurred and be then continuing,
then the proceeds of insurance shall be applied to reimburse
Borrower for the cost of restoring, repairing, replacing or
rebuilding the Property or part thereof subject to Insured
Casualty, as provided below; and Borrower hereby covenants and
agrees forthwith to commence and diligently to prosecute such
restoring, repairing, replacing or rebuilding; provided, however,
in any event Borrower shall pay all costs (and if required by
Lender, Borrower shall deposit the total thereof with Lender in
advance) of such restoring, repairing, replacing or rebuilding in
excess of the net proceeds of insurance made available pursuant
to the terms hereof.
iii. Except as provided above, the proceeds of insurance
collected upon any Insured Casualty shall, at the option of
Lender in its sole discretion, be applied to the payment of the
Debt or applied to reimburse Borrower for the cost of restoring,
repairing, replacing or rebuilding the Property or part thereof
subject to the Insured Casualty, in the manner set forth below.
Any such application to the Debt shall not be considered a
voluntary prepayment requiring payment of the prepayment
consideration provided in the Note or the Future Advance Note
(except that if an Event of Default has occurred, then such
application shall be subject to the full prepayment consideration
computed in accordance with the Note and the Future Advance
Note), and shall not reduce or postpone any payments otherwise
required pursuant to the Note or the Future Advance Note, other
than the final payment on the Note and the Future Advance Note.
iv. If proceeds of insurance, if any, are made available to
Borrower for the restoring, repairing, replacing or rebuilding of
the Property, Borrower hereby covenants to
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restore, repair, replace or rebuild the same to be of at least
equal value and of substantially the same character as prior to
such damage or destruction, all to be effected in accordance with
applicable law and plans and specifications approved in advance
by Lender.
v. If Borrower is entitled to reimbursement out of insurance
proceeds held by Lender, such proceeds shall be disbursed from
time to time upon Lender being furnished with (1) evidence
satisfactory to it (which evidence may include inspection[s] of
the work performed) that the restoration, repair, replacement and
rebuilding covered by the disbursement has been completed in
accordance with plans and specifications approved by Lender, (2)
evidence satisfactory to it of the estimated cost of completion
of the restoration, repair, replacement and rebuilding, (3)
funds, or, at Lender's option, assurances satisfactory to Lender
that such funds are available, sufficient in addition to the
proceeds of insurance to complete the proposed restoration,
repair, replacement and rebuilding, and (4) such architect's
certificates, waivers of lien, contractor's sworn statements,
title insurance endorsements, bonds, plats of survey and such
other evidences of cost, payment and performance as Lender may
reasonably require and approve; and Lender may, in any event,
require that all plans and specifications for such restoration,
repair, replacement and rebuilding be submitted to and approved
by Lender prior to commencement of work. With respect to
disbursements to be made by Lender: (A) no payment made prior to
the final completion of the restoration, repair, replacement and
rebuilding shall exceed ninety percent (90%) of the value of the
work performed from time to time; (B) funds other than proceeds
of insurance (representing the restoration costs, if any, not
covered by insurance) shall be disbursed prior to disbursement of
such proceeds; and (C) at all times, the undisbursed balance of
such proceeds remaining in the hands of Lender, together with
funds deposited for that purpose or irrevocably committed to the
satisfaction of Lender by or on behalf of Borrower for that
purpose, shall be at least sufficient in the reasonable judgment
of Lender to pay for the cost of completion of the restoration,
repair, replacement or rebuilding, free and clear of all liens or
claims for lien and the costs described in Subsection 3.2(h)(vi)
below. Any surplus which may remain out of insurance proceeds
held by Lender after payment of such costs of restoration,
repair, replacement or rebuilding shall be paid to any party
entitled thereto. In no event shall Lender assume any duty or
obligation for the adequacy, form or content of any such plans
and specifications, nor for the performance, quality or
workmanship of any restoration, repair, replacement and
rebuilding.
vi. Notwithstanding anything to the contrary contained herein,
the proceeds of insurance reimbursed to Borrower in accordance
with the terms and provisions of this Security Instrument shall
be reduced by the reasonable costs (if any) incurred by Lender in
the adjustment and collection thereof and in the reasonable costs
incurred by Lender of paying out such proceeds (including,
without limitation, reasonable attorneys' fees and usual and
customary costs paid to third parties for inspecting the
restoration, repair, replacement and rebuilding and reviewing the
plans and specifications therefor).
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3.3 PAYMENT OF TAXES, ETC.
----------------------
(a) Borrower shall 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, 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 allow 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, the
Future Advance Note, this Security Instrument or any of the Other Loan
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, canceled or lost, (vi)
Borrower shall have set aside and 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.
3.4 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. Lender is hereby irrevocably appointed as Borrower's
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain any award or payment for said condemnation or eminent domain
and, upon prior written notice to Borrower, to make any compromise or settlement
in connection with such proceeding, subject to the provisions of this Security
Instrument; provided, however, that Borrower reserves the right to make any
compromise or settlement in connection with any such proceeding for awards or
payments aggregating not in excess of $250,000.00 if such compromise or
settlement is carried out in a competent and timely manner, and provided that in
any case Lender shall and is hereby authorized to collect and receive any such
award or payment. Notwithstanding any taking by any public or quasi-public
authority through
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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.
Borrower shall cause the award or payment made in any condemnation or eminent
domain proceeding, which is payable to Borrower, to be paid directly to Lender.
Lender may apply any award or payment to the reduction or discharge of the Debt
whether or not then due and payable (such application to be free from any
prepayment consideration provided in the Note or the Future Advance Note, except
that if an Event of Default, or an event which with notice and/or the passage of
time, or both, would constitute an Event of Default, has occurred, then such
application shall be subject to the full prepayment consideration computed in
accordance with the Note and the Future Advance Note). 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 or the Future Advance Note shall have been sought, recovered or denied,
to receive the award or payment, or a portion thereof sufficient to pay the
Debt.
3.5 USE AND MAINTENANCE OF PROPERTY. Borrower shall cause the Property to
be maintained and operated in a good and safe condition and repair and in
keeping with the condition and repair of properties of a similar use, value,
age, nature and construction. Borrower shall not use, maintain or operate the
Property in any manner which constitutes a public or private nuisance or which
makes void, voidable, or cancelable, or increases the premium of, any insurance
then in force with respect thereto. The Improvements and the Personal Property
shall not be removed, demolished or materially altered (except for normal
replacement of the Personal Property with items of the same utility and of equal
or greater value) without the prior written consent of Lender. Borrower shall,
with all diligent speed, 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 3.4 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. Borrower shall not take any steps whatsoever to convert the
Property, or any portion thereof, to a condominium or cooperative form of
management.
3.6 WASTE. Borrower shall not commit or suffer any waste of the Property
or, without first obtaining such additional insurance as may be necessary to
cover a proposed change in use of the Property, 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
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extraction thereof.
3.7 COMPLIANCE WITH LAWS; ALTERATIONS.
---------------------------------
(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, including, but not limited to, the
Americans with Disabilities Act (the "ADA") (collectively "APPLICABLE
LAWS").
(b) 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; provided,
however, Lender's approval shall not be required for non-structural
alterations in connection with tenant finish work.
(c) 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.
(d) Borrower shall take appropriate measures to prevent and will not
engage in or knowingly permit any illegal activities at the Property.
3.8 BOOKS AND RECORDS.
-----------------
(a) Borrower shall keep accurate books and records of account in
accordance with sound accounting principles in which full, true and correct
entries shall be promptly made with respect to Borrower, the Property and
the operation thereof, and will permit all such books and records
(including without limitation all contracts, statements, invoices, bills
and claims for labor, materials and services supplied for the construction,
repair or operation to Borrower of the Improvements) to be inspected or
audited and copies made by Lender and its representatives during normal
business hours and at any other reasonable times; provided, however, if no
Event of Default has occurred and is continuing, Lender shall provide
written notice to Borrower prior to inspecting or auditing such books and
records. Borrower represents that its chief executive office is as set
forth in the introductory paragraph of this Security Instrument and that
all books and records pertaining to the Property are maintained at the
Property or such other location as may be expressly disclosed to Lender in
writing. Borrower will furnish, or cause to be furnished, to Lender on or
before forty-five (45) calendar days after the end of each calendar quarter
the following items, each certified by Borrower as being true and correct,
in such format and in such detail as Lender or its servicer may request:
i. a written statement (rent roll) dated as of the last day
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of each such calendar quarter identifying each of the Leases by
the term, space occupied, rental required to be paid (including
percentage rents and tenant sales), security deposit paid, any
rental concessions, all rent escalations, any rents paid more
than one (1) month in advance, any special provisions or
inducements granted to tenants, any taxes, maintenance and other
common charges paid by tenants, all vacancies and identifying any
defaults or payment delinquencies thereunder; and
ii. quarterly and year-to-date operating statements prepared for
each calendar quarter during each such reporting period detailing
the total revenues received, total expenses incurred, total cost
of all capital improvements, total debt service and total cash
flow.
(b) Within one hundred twenty (120) calendar days following the end of
each calendar year, Borrower shall furnish a statement of the financial
affairs and condition of the Borrower and the Property including a
statement of profit and loss for the Property in such format and in such
detail as Lender or its servicer may request, and setting forth the
financial condition and the income and expenses for the Property for the
immediately preceding calendar year prepared and audited by an independent
certified public accountant. Borrower shall deliver to Lender copies of all
income tax returns, requests for extension and other similar items
contemporaneously with its delivery of same to the Internal Revenue
Service.
(c) Borrower will permit representatives appointed by Lender,
including independent accountants, agents, attorneys, appraisers and any
other persons, to visit and inspect during its normal business hours and at
any other reasonable times any of the Property and to make photographs
thereof, and to write down and record any information such representatives
obtain, and shall permit Lender or its representatives to investigate and
verify the accuracy of the information furnished to Lender under or in
connection with this Security Instrument or any of the Other Loan Documents
and to discuss all such matters with its officers, employees and
representatives. Borrower will furnish to Lender at Borrower's expense all
evidence which Lender may from time to time reasonably request as to the
accuracy and validity of or compliance with all representations and
warranties made by Borrower in the Loan Documents and satisfaction of all
conditions contained therein. Any inspection or audit of the Property or
the books and records of Borrower, or the procuring of documents and
financial and other information, by or on behalf of Lender, shall be for
Lender's protection only, and shall not constitute any assumption of
responsibility or liability by Lender to Borrower or anyone else with
regard to the condition, construction, maintenance or operation of the
Property, nor Lender's approval of any certification given to Lender nor
relieve Borrower of any of Borrower's obligations.
3.9 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 any
default, notice and grace periods 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 exist beyond any
default, notice and grace periods 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 (as hereinafter
defined).
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3.10 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 secured hereby and any amendments, modifications or changes thereto.
3.11 CONSTRUCTION OF NEW PARKING GARAGE. (a) Prior to closing the existing
parking garage (the "EXISTING GARAGE") located on the Land or commencing any
renovations which would interfere with parking in the Existing Garage, Borrower
shall (i) complete construction of a new parking garage (the "NEW GARAGE") to
serve, at least, (A) the employees and visitors of the tenants occupying the
existing office building located upon the Land and (B) the employees of the
Borrower or Manager who regularly manage and maintain the existing office
building and (ii) cause the owner of the land upon which the New Garage is
located to grant an appurtenant easement (the "PARKING EASEMENT") to the
Borrower, which Parking Easement shall (A) permit pedestrian access from the
existing office building located upon the Land to the New Garage, (B) provide
exclusive rights to, at a minimum, the number of parking spaces required by
Leases in existence at the time the Parking Easement is entered into and (C) be
approved by Lender, in its sole and absolute discretion. Lender shall have the
right to require an endorsement to the Lender's loan policy of title insurance
updating the effective date of such title policy and adding the Parking Easement
as an insured appurtenant easement. All costs and expenses in connection with
the requirements of this Section 3.11 (including, without limitation, the cost
of the endorsement to Lender's loan policy of title insurance and fees and
expenses of Lender's counsel) shall be paid by Borrower.
(b) The New Garage shall (i) be located on a parcel of land contiguous
to the existing office building located upon the Land, (ii) contain, at
least, the greater of (A) the number of parking spaces required by the
Leases or (B) the number of parking spaces required by applicable zoning
laws and (iii) be in compliance with all applicable governmental
regulations.
(c) Notwithstanding anything contained herein, the terms and
conditions of this Section 3.11 shall be of no force and effect in the
event that Lender releases the Release Parcel from the lien of this
Security Instrument pursuant to Section 3.13 hereof.
3.12 PARTIAL LOAN REPAYMENT REQUIRED. Notwithstanding any contrary
provision of the Note, the Future Advance Note or this Security Instrument, if
(a) more than twenty percent (20%) of the parking spaces in the
Existing Garage shall become unusable for more than sixty (60) days by
virtue of closing or renovation (other than in the normal course of
maintenance) of the Existing Garage; or
(b) the gross income derived from the operation of the Existing Garage
shall be less than $55,000 per month for two consecutive months,
Borrower shall pay to Lender, within ten (10) Business Days of Lender's demand
for payment, the sum of $6,750,000.00 (the "RELEASE PAYMENT"), which amount
shall be applied to reduce the outstanding principal balance of the Note without
any prepayment consideration.
3.13 RELEASE OF EXISTING GARAGE. If (i) Borrower shall have paid to Lender
the Release Payment, (ii) Borrower shall have provided to Lender satisfactory
evidence that, for a period of three consecutive calendar months, 80% of the
rentable space in the office building located on the Land shall have been leased
to tenants who are in possession and paying rent, and with respect to Leases
entered into subsequent to the date
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hereof, such Leases shall (A) be in compliance with Sections 3.3 and 3.4 of the
Assignment of Leases and Rents and (B) contain an initial lease term of at least
5 years, and (iii) no Event of Default or event which with the passage of time
or the giving of notice or both, would constitute an Event of Default has
occurred, then Borrower reserves the right (subject to the terms and conditions
set forth below) to have released from the lien of this Security Instrument and
the Other Loan Documents, the parcel of real property described on Exhibit B
attached hereto (the "Release Parcel"), upon Lender's approval of the following
terms and conditions:
(a) Evidence that:
i. The release of the Release Parcel complies with all applicable
subdivision regulations including, without limitation, evidence
that the Release Parcel is a separate, legally subdivided lot.
ii. The Land remaining after the proposed release can be
foreclosed upon as a separate parcel or parcels.
iii. The proposed release will not affect the existing use
of the remaining Land (e.g. all necessary parking
requirements, setback requirements and access requirements
for the then existing use remain satisfied after the
release).
iv. Appropriate arrangements have been made for the Release
Parcel to be taxed as a parcel separate from the remaining
Land.
v. Adequate provision has been made for all easements necessary
for service of the remaining Land by utilities, for ingress and
egress and for lateral support.
vi. Adequate provision has been made for parking for the then
existing tenants in the office building located on the Land at a
parking garage reasonably proximate to the Land (in Lender's
discretion), and if required by Lender, Borrower shall cause the
owner of such parking garage to enter into an agreement (which
agreement shall contain terms and conditions acceptable to Lender
and shall be assigned to Lender) to permit Borrower's tenants to
park in such parking garage.
(b) Lender's receipt of an endorsement to the Lender's loan policy of
title insurance insuring the lien of this Security Instrument, which
endorsement shall (i) update the effective date of the title insurance
policy to the date and time of recordation of the deed of partial release
described in Section 3.13(d) hereof, (ii) contain a revised description of
the Land, excepting therefrom the legal description of the Release Parcel,
(iii) affirmatively insure that the remaining Land is a separately
subdivided lot or lots, (iv) confirm that the release of the Release Parcel
will not affect the first priority of this Security Instrument and that the
lien of this Security Instrument will be subject to only those exceptions
listed in the existing loan policy of title insurance, (v) contain a
revised "separate tax parcel" endorsement reflecting the new tax parcel
number(s) for the remaining Land and (vi) contain a revised "survey/legal
description" endorsement referencing the revised survey required by Section
3.13(c) hereof.
(c) Lender's receipt of a revised survey (prepared in accordance with
Lender's survey requirements) showing the Land after the proposed release.
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(d) Lender's receipt of a deed of partial release containing a legal
description of the Release Parcel.
All costs and expenses incurred by Lender in connection with this Section 3.13
(including, without limitation, reasonable fees and expenses of legal counsel to
Lender) shall be paid by Borrower.
ARTICLE IV
----------
SPECIAL COVENANTS
-----------------
Borrower covenants and agrees that:
4.1 PROPERTY USE. The Property shall be used only for an office building
and related retail uses, and a parking garage, and for no other use without the
prior written consent of Lender, which consent may be withheld in Lender's sole
and absolute discretion.
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, the Future Advance Note, this
Security Instrument and the Other Loan 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) It shall 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:
i. Equity interests in Borrower are publicly offered
securities, within the meaning of 29
C.F.R. Section 2510.3-101(b)(2);
ii. Less than twenty-five percent (25%) of each outstanding
class of equity interests in Borrower are held by "benefit
plan investors" within the meaning of 29 C.F.R. Section
2510.3-101(f)(2); or
iii. Borrower qualifies as an "operating company" or a "real
estate operating company" within the meaning of 29 C.F.R. Section
2510.3-101(c) or (e) or an investment company registered under
The Investment Company Act of 1940.
4.3 SINGLE PURPOSE ENTITY. Borrower covenants and agrees that it has
not and shall not:
(a) engage in any business or activity other than the
acquisition, ownership, operation and maintenance of the Property, and
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activities incidental thereto;
(b) acquire or own any material asset other than (i) the Property, and
(ii) such incidental Personal Property as may be necessary for the
operation of the Property;
(c) 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;
(d) 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, Operating Agreement or similar
organizational documents, as the case may be;
(e) own any subsidiary or make any investment in or acquire the
obligations or securities of any other person or entity without the
consent of Lender;
(f) commingle its assets with the assets of any of its general
partner(s), if Borrower is a partnership, its managing members, if Borrower
is a limited liability company, or its principal shareholders, if Borrower
is a corporation (in each case, "PRINCIPAL"), affiliates, or of any other
person or entity;
(g) incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the Debt, except in the
ordinary course of its business of owning and operating the Property,
provided that such debt is not evidenced by a note and is paid when due;
(h) fail to pay its debts and liabilities from its own assets;
(i) fail to maintain its records, books of account and bank accounts
separate and apart from those of the general partners, members, principals
and affiliates of Borrower, the affiliates of a general partner or member
of Borrower, and any other person or entity;
(j) enter into any contract or agreement with any general partner,
member, principal or affiliate of Borrower, any guarantor of all or a
portion of the Debt (a "GUARANTOR") or Indemnitor, or any general partner,
member, 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
general partner, member, principal or affiliate of Borrower, Guarantor or
Indemnitor, or any general partner, member, principal or affiliate thereof;
(k) seek dissolution or winding up, in whole or in part;
(l) fail to correct any known misunderstandings regarding the
separate identity of Borrower;
(m) hold itself out to be responsible (or pledge its assets as
security) for the debts of another person;
(n) make any loans or advances to any third party, including any
general partner, member, principal or affiliate of Borrower, or any
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26
general partner, member, principal or affiliate thereof;
(o) fail to file its own tax returns or to use separate
stationary, invoices and checks;
(p) agree to, enter into or consummate any transaction which would
render Borrower unable to furnish the certification or other evidence
referred to in Subsection 4.2(b) hereof;
(q) 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 entity with which such other party is transacting business, or (ii) to
represent that Borrower is responsible for the debts of any third party
(including any general partner, member, principal or affiliate of Borrower,
or any general partner, member, principal or affiliate thereof);
(r) fail to allocate fairly and reasonably among Borrower and any
third party (including, without limitation, any Guarantor) any overhead for
shared office space;
(s) fail to pay the salaries of its own employees and maintain a
sufficient number of employees for its contemplated business
operations;
(t) 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;
(u) 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
(v) 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, (ii) any affiliate of a general partner of
Borrower, or (iii) any other person or entity.
ARTICLE V
---------
REPRESENTATIONS AND WARRANTIES
------------------------------
5.1 BORROWER'S REPRESENTATIONS. Borrower represents and warrants to Lender
that each of the representations and warranties set forth in that certain
Closing Certificate of even date herewith executed by Borrower in favor of
Lender are true and correct as of the date hereof and are hereby incorporated
and restated in this Security Instrument by this reference.
5.2 WARRANTY OF TITLE. Borrower represents and warrants that it has good
and marketable 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 that it owns 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 shall, at its sole cost and expense, forever
warrant, defend and preserve the title and the validity and priority of the lien
of this Security Instrument and shall, at its sole cost and expense, forever
warrant and defend the same to Lender against the claims of all persons
whomsoever.
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5.3 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 National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as
amended, or any successor law, or, if located within any such area,
Borrower has obtained and will maintain the insurance prescribed in Section
3.2 hereof.
(b) To the best of Borrower's knowledge, Borrower has obtained all
necessary certificates, permits, licenses and other approvals, governmental
and otherwise, necessary for the use, occupancy and operation of the
Property and the conduct of its business (including, without limitation,
certificates of completion and certificates of occupancy) 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 to the best knowledge of Borrower in full compliance with all
Applicable Laws, including, without limitation, zoning ordinances, building
codes, land use and environmental laws, laws relating to the disabled
(including, but not limited to, the ADA) 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 are physically and legally open for use by
the public.
(f) The Property is served by public water and sewer systems.
(g) The Property is free from damage caused by fire or other casualty.
There is no pending or, to the best knowledge of Borrower, threatened
condemnation proceedings affecting the Property or any portion thereof.
(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 and no notice of any mechanics' or materialmen's liens or of any
claims of right to any such liens have been received.
(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 to the best knowledge of Borrower in a good and
safe condition and repair and in compliance with all Applicable Laws.
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(k) All Improvements lie within the boundary of the Land.
5.4 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.
5.5 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.
5.6 PROPERTY MANAGEMENT AGREEMENT. The Management Agreement dated August 1,
1999 (the "MANAGEMENT AGREEMENT") between Borrower and First Union Real Estate
Equity and Mortgage Investments, as manager (in such capacity, the "MANAGER"),
pursuant to which Manager operates the existing office building located upon the
Land, is in full force and effect and there is not default, breach or violation
existing under the Management Agreement by any party thereto and no event (other
than payments due but not yet delinquent) which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach or violation by any party under the Management Agreement.
ARTICLE VI
----------
OBLIGATIONS AND RELIANCES
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, the Future Advance Note, this Security Instrument and the other Loan
Documents shall be construed so as to deem the relationship between Borrower and
Lender to be other than that of debtor and creditor.
6.2 NO RELIANCE ON LENDER. The general partners, members, 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.
6.3 NO LENDER OBLIGATIONS.
---------------------
(a) Notwithstanding the provisions of Subsections 1.1(e) and 1.1(l) or
Section 1.2, Lender is not undertaking (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, the Future Advance Note or the Other Loan 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, legality or
effectiveness of same, and such acceptance or approval thereof shall not
constitute any warranty or affirmation with respect thereto by Lender.
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6.4 RELIANCE. Borrower recognizes and acknowledges that in accepting the
Note, the Future Advance Note, this Security Instrument and the Other Loan
Documents, Lender is expressly and primarily relying on the truth and accuracy
of the warranties and representations set forth in Article 5 and that certain
Closing Certificate of even date herewith executed by Borrower, 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 such warranties and representations are a material
inducement to Lender in accepting the Note, the Future Advance Note, this
Security Instrument and the Other Loan Documents; and that Lender would not be
willing to make the Loan (as hereinafter defined) and accept this Security
Instrument in the absence of the warranties and representations as set forth in
Article 5 and such Closing Certificate.
ARTICLE VII
-----------
FURTHER ASSURANCES
------------------
7.1 RECORDING FEES. 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, the Future Advance Note, this
Security Instrument, the Other Loan 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.
7.2 FURTHER ACTS. 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 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 financing 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.
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 imposes a tax, either directly or indirectly, on
the Debt or Lender's interest in the Property, requires
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revenue or other stamps to be affixed to the Note, the Future Advance Note,
this Security Instrument, or the Other Loan Documents, or imposes any other
tax or charge on the same, Borrower will pay the same, 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)
calendar 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) calendar days, to declare the Debt immediately due
and payable.
7.4 CONFIRMATION STATEMENT.
----------------------
(a) After request by Lender, Borrower, within ten (10) days, shall
furnish Lender or any proposed assignee with a statement, duly acknowledged
and certified, confirming to Lender (or its designee) (i) the amount of the
original principal amount of the Note and the Future Advance Note, (ii) the
unpaid principal amount of the Note and the Future Advance Note, (iii) the
rate of interest of the Note and the Future Advance Note, (iv) the terms of
payment and maturity date of the Note and the Future Advance Note, (v) the
date installments of interest and/or principal were last paid, and (vi)
that, except as provided in such statement, there are, to the best
knowledge of Borrower, no defaults or, to the best knowledge of Borrower,
events which with the passage of time or the giving of notice or both,
would constitute an event of default under the Note, the Future Advance
Note or this Security Instrument; provided, however, Lender shall not be
entitled hereunder to receive more than one (1) such statement in each
calendar year.
(b) Subject to the provisions of the Leases, Borrower shall deliver to
Lender, promptly upon request (but not more frequently than once annually
so long as no Event of Default exists), 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
16.1 hereof, at Lender's request, Borrower, any Guarantors and any
Indemnitors shall provide an estoppel certificate to the Investor (defined
in Section 16.1) or any prospective Investor in such form, substance and
detail as Lender, such Investor or prospective Investor may reasonably
require.
7.5 SPLITTING OF SECURITY INSTRUMENT. This Security Instrument, the Note
and the Future Advance 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
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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 Debt, and
containing terms, provisions and clauses similar to those contained herein and
in the Note, the Future Advance Note and such other documents and instruments as
may be required by Lender.
7.6 REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an officer of
Lender as to the loss, theft, destruction or mutilation of the Note, the Future
Advance Note or any Other Loan Document which is not of public record, and, in
the case of any such mutilation, upon surrender and cancellation of such Note,
Future Advance Note or Other Loan Document, Borrower, at its expense, will
issue, in lieu thereof, a replacement Note, Future Advance Note or Other Loan
Document, dated the date of such lost, stolen, destroyed or mutilated Note,
Future Advance Note or Other Loan Document in the same principal amount thereof
and otherwise of like tenor.
ARTICLE VIII
------------
DUE ON SALE/ENCUMBRANCE
-----------------------
8.1 LENDER RELIANCE. Borrower acknowledges that Lender has examined and
relied on the creditworthiness of Borrower and experience of Borrower and its
general partners, members, principals and (if Borrower is a trust) beneficial
owners in owning and operating properties such as the Property in agreeing to
make the Loan, 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.
8.2 NO SALE/ENCUMBRANCE.
-------------------
(a) 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. 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.
(b) Subsection 8.2(a) shall apply to: (i) an installment sales
agreement wherein Borrower agrees to sell the Property or any part thereof
for a price to be paid in installments; (ii) an agreement by Borrower
leasing all or a substantial 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; (iii) if Borrower,
Guarantor, or any general partner, manager or managing member of Borrower
or Guarantor is a corporation, any merger, consolidation or the voluntary
or involuntary sale, conveyance or transfer of such corporation's stock (or
the stock of any
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corporation directly or indirectly controlling such corporation by
operation of law or otherwise) or the creation or issuance of new stock in
one or a series of transactions by which an aggregate of forty nine percent
(49%) or more of such corporation's stock shall be vested in a party or
parties who are not now stockholders (provided, however, in no event shall
this subpart [iii] apply to any Guarantor whose stock, shares or
partnership interests are traded on a nationally recognized stock
exchange); (iv) if Borrower, Guarantor, or any general partner of Borrower
or Guarantor is a limited liability company or limited partnership, the
voluntary or involuntary sale, conveyance or transfer by which an aggregate
of forty-nine percent (49%) or more of the ownership interest in such
limited liability company or forty-nine percent (49%) or more of the
limited partnership interests in such limited partnership shall be vested
in parties not having an ownership interest as of the date of this Security
Instrument; and (v) if Borrower, any Guarantor or any general partner of
Borrower or any Guarantor is a limited or general partnership or joint
venture, the change, removal or resignation of a general partner, managing
partner or joint venturer or the transfer of all or any portion of the
partnership interest of any general partner, managing partner or joint
venturer.
8.3 EXCLUDED AND PERMITTED TRANSFERS.
--------------------------------
(a) A sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer within the meaning of this Article 8 shall not include (i)
transfers otherwise by operation of law in the event of a bankruptcy, or
(ii) a Lease of a portion of the Property to a space tenant.
(b) [Intentionally Omitted]
(c) [Intentionally Omitted]
(d) [Intentionally Omitted]
8.4 NO IMPLIED FUTURE CONSENT. Lender's consent to one sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the Property shall not
be deemed to be a waiver of Lender's right to require such consent to any future
occurrence of same. Any sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Property made in contravention of this Article 8 shall
be null and void and of no force and effect.
8.5 COSTS OF CONSENT. Borrower agrees to bear and shall pay or reimburse
Lender on demand for all reasonable expenses (including, without limitation, all
recording costs, reasonable attorneys' fees and disbursements and title search
costs) incurred by Lender in connection with the review, approval and
documentation of any such sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer.
8.6 CONTINUING SEPARATENESS REQUIREMENTS. In no event shall any of the
terms and provisions of this Article 8 amend or modify the terms and
provisions contained in Section 4.3 herein.
ARTICLE IX
----------
DEFAULT
-------
9.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an "EVENT OF DEFAULT":
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(a) if any portion of the Debt is not paid prior to the tenth (10th)
calendar day after the same is due or if the entire Debt is not paid on or
before the maturity date, along with applicable prepayment premiums, if
any;
(b) if Borrower, or Principal, if applicable, violates or does
not comply with any of the provisions of Section 4.3 or Article 8;
(c) if any representation or warranty of Borrower or of its members,
general partners, principals, affiliates, agents or employees, or of any
Guarantor or Indemnitor made herein or in the Environmental Indemnity or in
any other Loan Document, in 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;
(d) if Borrower or any Guarantor or any Indemnitor shall make an
assignment for the benefit of creditors or if Borrower or any Guarantor or
Indemnitor shall admit in writing its inability to pay, or Borrower's or
any Guarantor's or any Indemnitor's failure to pay its debts as they become
due;
(e) if (i) Borrower or any subsidiary or general partner or member of
Borrower, or any Guarantor or any 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 as
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 Borrower or any subsidiary or
general partner or member of Borrower, or any Guarantor or any Indemnitor
shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against Borrower or any subsidiary or general
partner or member of Borrower, or any Guarantor or any 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) remains undismissed, undischarged or
unbonded for a period of ninety (90) calendar days; or (iii) there shall be
commenced against Borrower or any subsidiary or general partner or member
of Borrower or any Guarantor or any 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 order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within ninety (90) calendar days from the entry thereof; or (iv) Borrower
or any subsidiary or general partner or member of Borrower, or any
Guarantor or any 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) Borrower or any
subsidiary or general partner or member of Borrower, or any Guarantor or
any Indemnitor shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due;
(f) subject to Borrower's right to contest certain liens as provided
in this Security Instrument, if the Property becomes subject to any
mechanic's, materialmen's or other lien other than a lien for
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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) calendar days;
(g) if any federal tax lien is filed against Borrower, any general
partner of Borrower, any Guarantor, any Indemnitor or the Property and same
is not either (i) discharged of record or (ii) contested and bonded within
thirty (30) calendar days after same is filed;
(h) except as permitted in this Security Instrument, the actual
alteration, improvement, demolition or removal of any of the Improvements
without the prior consent of Lender;
(i) damage to the Property in any manner which is not covered by
insurance, which lack of coverage arises solely as a result of Borrower's
failure to maintain the insurance required under this Security Instrument;
(j) without Lender's prior consent, (i) the Manager under the
Management Agreement resigns or is removed and is not replaced within
thirty (30) days of such resignation or removal; provided, however, Lender
shall have the right to approve (which approval shall not be unreasonably
withheld or delayed) any new property manager and any new property
management agreement, and as a condition to Lender's approval, such
property manager shall execute and deliver a lien waiver and subordination
agreement satisfactory to Lender, which also provides Lender the right, at
its option, to terminate the property management agreement or assume
Borrower's obligations thereunder upon an Event of Default, (ii) the
ownership, management or control of the Manager is transferred to a person
or entity other than the general partner, managing partner or managing
member or Principal of the Borrower, or (iii) there is any material change
in the Management Agreement of the Property;
(k) this Security Instrument shall cease to constitute a
first-priority lien on the Property (other than in accordance with its
terms);
(l) seizure or forfeiture of the Property, or any portion thereof, or
Borrower's interest therein, resulting from criminal wrongdoing or other
unlawful action of Borrower, its affiliates, or any tenant in the Property
under any federal, state or local law;
(m) if Borrower consummates a transaction which would cause this
Security Instrument or Lender's exercise of its rights under this Security
Instrument, the Note, the Future Advance Note or the Other Loan 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;
(n) if any default occurs under the Environmental Indemnity given by
Borrower and Indemnitor to Lender and other Indemnified Parties (as
hereinafter defined) and such default continues after the expiration of
applicable notice and grace periods, if any;
(o) 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;
(p) if Borrower, any Guarantor or any Indemnitor, as the case may be,
shall continue to be in default under any other term, covenant or
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condition of this Security Instrument (excluding Section 3.8(b) hereof) or
any Other Loan Documents (excluding the Note and the Future Advance Note)
for thirty (30) calendar days after notice from Lender; provided that if
such default cannot reasonably be cured within such thirty (30) calendar
day period and Borrower (or such Guarantor or Indemnitor as the case may
be) shall have commenced to cure such default within such thirty (30)
calendar day period and thereafter diligently and expeditiously proceeds to
cure the same, such thirty (30) calendar day period shall be extended for
so long as it shall require Borrower (or such Guarantor or Indemnitor as
the case may be) 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
ninety (90) calendar days after the notice from Lender referred to above;
or
(q) If Borrower fails to make the payment required in Section
3.12 hereof.
9.2 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 and the Future Advance Note at a per annum rate
equal to the lesser of (a) the greater of (i) five percent (5%) plus the Prime
Rate (as defined in the Note), and (ii) 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 X
---------
RIGHTS AND REMEDIES
-------------------
10.1 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) Right to Perform Borrower's Covenants. If Borrower has failed to
keep or perform any covenant whatsoever contained in this Security
Instrument or the Other Loan Documents, Lender may, but shall not be
obligated to any person to do so, perform or attempt to perform said
covenant and any payment made or expense incurred in the performance or
attempted performance of any such covenant, together with any sum expended
by Lender that is chargeable to Borrower or subject to reimbursement by
Borrower under the Loan Documents, shall be and become a part of the
"DEBT", and Borrower promises, upon demand, to pay to Lender, at the place
where the Note is payable, all sums so incurred, paid or expended by
Lender, with interest from the date when paid, incurred or expended by
Lender at the Default Rate.
(b) Right of Entry. Lender may, prior or subsequent to the institution
of any foreclosure proceedings, enter upon the Property, or any part
thereof, and take exclusive possession of the Property and of all books,
records, and accounts relating thereto and to exercise without interference
from Borrower any and all rights which Borrower has with respect to the
management, possession, operation, protection, or preservation of the
Property, including without limitation the right to rent the same for the
account of Borrower and to deduct from such Rents all costs, expenses, and
liabilities of every character
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incurred by Lender in collecting such Rents and in managing, operating,
maintaining, protecting, or preserving the Property and to apply the
remainder of such Rents on the Debt in such manner as Lender may elect. All
such costs, expenses, and liabilities incurred by Lender in collecting such
Rents and in managing, operating, maintaining, protecting, or preserving
the Property, if not paid out of Rents as hereinabove provided, shall
constitute a demand obligation owing by Borrower and shall bear interest
from the date of expenditure until paid at the Default Rate, all of which
shall constitute a portion of the Debt. If necessary to obtain the
possession provided for above, Lender may invoke any and all legal remedies
to dispossess Borrower, including specifically one or more actions for
forcible entry and detainer, trespass to try title, and restitution. In
connection with any action taken by Lender pursuant to this Subsection
10.1(b), Lender shall not be liable for any loss sustained by Borrower
resulting from any failure to let the Property, or any part thereof, or
from any other act or omission of Lender in managing the Property unless
such loss is caused by the willful misconduct of Lender, nor shall Lender
be obligated to perform or discharge any obligation, duty, or liability
under any Lease or under or by reason hereof or the exercise of rights or
remedies hereunder. Borrower shall and does hereby agree to indemnify
Lender for, and to hold Lender harmless from, any and all liability, loss,
or damage, which may or might be incurred by Lender under any such Lease or
under or by reason hereof or the exercise of rights or remedies hereunder,
and from 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 such Lease. Should Lender incur any such liability, the
amount thereof, including without limitation costs, expenses, and
reasonable attorneys' fees, together with interest thereon from the date of
expenditure until paid at the Default Rate, shall be secured hereby, and
Borrower shall reimburse Lender therefor immediately upon demand. Nothing
in this Subsection 10.1(b) shall impose any duty, obligation, or
responsibility upon Lender for the control, care, management, leasing, or
repair of the Property, nor for the carrying out of any of the terms and
conditions of any such Lease; nor shall it operate to make Lender
responsible or liable for any waste committed on the Property by the
tenants or by any other parties, or for any hazardous substances or
environmental conditions on or under the Property, or for any dangerous or
defective condition of the Property or for any negligence in the
management, leasing, upkeep, repair, or control of the Property resulting
in loss or injury or death to any tenant, licensee, employee, or stranger.
Borrower hereby assents to, ratifies, and confirms any and all actions of
Lender with respect to the Property taken under this subsection.
(c) Right to Accelerate. Lender may, without notice (except as
provided in Section 9.1(p) above), demand, presentment, notice of
nonpayment or nonperformance, protest, notice of protest, notice of intent
to accelerate, notice of acceleration, or any other notice or any other
action, all of which are hereby waived by Borrower and all other parties
obligated in any manner whatsoever on the Debt, declare the entire unpaid
balance of the Debt immediately due and payable, and upon such declaration,
the entire unpaid balance of the Debt shall be immediately due and payable.
(d) Foreclosure-Power of Sale. Lender may institute a proceeding or
proceedings, judicial, or nonjudicial, by advertisement or otherwise, for
the complete or partial foreclosure of this Security Instrument or the
complete or partial sale of the Property under power of sale or under any
applicable provision of law. Lender may sell the Property, and all estate,
right, title, interest, claim and demand of
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Borrower therein, and all rights of redemption thereof, at one or more
sales, as an entirety or in parcels, with such elements of real and/or
personal property, and at such time and place and upon such terms as it may
deem expedient, or as may be required by applicable law, and in the event
of a sale, by foreclosure 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.
(e) Rights Pertaining to Sales. Subject to the requirements of
applicable law and except as otherwise provided herein, the following
provisions shall apply to any sale or sales of all or any portion of the
Property under or by virtue of Subsection 10.1(d) above, whether made under
the power of sale herein granted or by virtue of judicial proceedings or of
a judgment or decree of foreclosure and sale:
i. Lender may conduct any number of sales from time to time. The
power of sale set forth above shall not be exhausted by any one
or more such sales as to any part of the Property which shall not
have been sold, nor by any sale which is not completed or is
defective in Lender's opinion, until the Debt shall have been
paid in full.
ii. Any sale may be postponed or adjourned by public announcement
at the time and place appointed for such sale or for such
postponed or adjourned sale without further notice.
iii. After each sale, Lender or an officer of any court empowered
to do so shall execute and deliver to the purchaser or purchasers
at such sale a good and sufficient instrument or instruments
granting, conveying, assigning and transferring all right, title
and interest of Borrower in and to the property and rights sold
and shall receive the proceeds of said sale or sales and apply
the same as specified in the Note and the Future Advance Note.
Lender is hereby appointed the true and lawful attorney-in-fact
of Borrower, which appointment is irrevocable and shall be deemed
to be coupled with an interest, in Borrower's name and stead, to
make all necessary conveyances, assignments, transfers and
deliveries of the property and rights so sold, Borrower hereby
ratifying and confirming all that said attorney or such
substitute or substitutes shall lawfully do by virtue thereof.
Nevertheless, Borrower, if requested by Lender, shall ratify and
confirm any such sale or sales by executing and delivering to
Lender or such purchaser or purchasers all such instruments as
may be advisable, in Lender's judgment, for the purposes as may
be designated in such request.
iv. Any and all statements of fact or other recitals made in any
of the instruments referred to in Subsection 10.1(e)(iii) given
by Lender shall be taken as conclusive and binding against all
persons as to evidence of the truth of the facts so stated and
recited.
v. Any such sale or sales shall operate to divest all of the
estate, right, title, interest, claim and demand whatsoever,
whether at law or in equity, of Borrower in and to the properties
and rights so sold, and shall be a perpetual bar both at law and
in equity against Borrower and any and all persons claiming or
who may claim the same, or any part thereof or any interest
therein, by, through or under Borrower to the fullest extent
permitted by applicable law.
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vi. Upon any such sale or sales, Lender may bid for and acquire
the Property and, in lieu of paying cash therefor, may make
settlement for the purchase price by crediting against the Debt
the amount of the bid made therefor, after deducting therefrom
the expenses of the sale, the cost of any enforcement proceeding
hereunder, and any other sums which Lender is authorized to
deduct under the terms hereof, to the extent necessary to satisfy
such bid.
vii. Upon any such sale, it shall not be necessary for Lender or
any public officer acting under execution or order of court to
have present or constructively in its possession any of the
Property.
(f) Lender's Judicial Remedies. Lender may proceed by suit or suits,
at law or in equity, to enforce the payment of the Debt to foreclose the
liens and security interests of this Security Instrument as against all or
any part of the Property, and to have all or any part of the Property sold
under the judgment or decree of a court of competent jurisdiction. This
remedy shall be cumulative of any other nonjudicial remedies available to
Lender under this Security Instrument, the Note, the Future Advance Note or
the Other Loan Documents. Proceeding with a request or receiving a judgment
for legal relief shall not be or be deemed to be an election of remedies or
bar any available nonjudicial remedy of Lender.
(g) Lender's Right to Appointment of Receiver. Lender, as a matter of
right and (i) without regard to the sufficiency of the security for
repayment of the Debt and without notice to Borrower, (ii) without any
showing of insolvency, fraud, or mismanagement on the part of Borrower,
(iii) without the necessity of filing any judicial or other proceeding
other than the proceeding for appointment of a receiver, and (iv) without
regard to the then value of the Property, shall be entitled to the
appointment of a receiver or receivers for the protection, possession,
control, management and operation of the Property, including (without
limitation), the power to collect the Rents, enforce this Security
Instrument and, in case of a sale and deficiency, during the full statutory
period of redemption (if any), whether there be a redemption or not, as
well as during any further times when Borrower, except for the intervention
of such receiver, would be entitled to collection of such Rents. Borrower
hereby irrevocably consents to the appointment of a receiver or receivers.
Any receiver appointed pursuant to the provisions of this subsection shall
have the usual powers and duties of receivers in such matters.
(h) Commercial Code Remedies. 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.
(i) Apply Escrow Funds. Lender may apply any Funds (as defined in the
Escrow Agreement) and any other sums held in escrow or otherwise by Lender
in accordance with the terms of this Security Instrument or
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any Other Loan 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
and the Future Advance Note;
iv. Amortization of the unpaid principal balance of the Note
and the Future Advance Note; and
v. All other sums payable pursuant to the Note, the Future
Advance Note, this Security Instrument and the Other Loan
Documents, including without limitation advances made by Lender
pursuant to the terms of this Security Instrument.
(j) Other Rights. Lender (i) may surrender the Policies maintained
pursuant to this Security Instrument or any part thereof, and upon receipt
shall apply the unearned premiums as a credit on the Debt, 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 premiums; and (ii) may apply the
Tax and Insurance Escrow Fund (as defined in the Escrow Agreement) and/or
the Replacement Escrow Fund (as defined in the Escrow Agreement) and any
other funds held by Lender toward payment of the Debt; and (iii) shall have
and may exercise any and all other rights and remedies which Lender may
have at law or in equity, or by virtue of any of the Loan Documents, or
otherwise.
(k) Discontinuance of Remedies. In case Lender shall have proceeded to
invoke any right, remedy, or recourse permitted under the Loan Documents
and shall thereafter elect to discontinue or abandon same for any reason,
Lender shall have the unqualified right so to do and, in such event,
Borrower and Lender shall be restored to their former positions with
respect to the Debt, the Loan Documents, the Property or otherwise, and the
rights, remedies, recourses and powers of Lender shall continue as if same
had never been invoked.
(l) Remedies Cumulative. All rights, remedies, and recourses of Lender
granted in the Note, the Future Advance Note, this Security Instrument and
the Other Loan Documents, any other pledge of collateral, or otherwise
available at law or equity: (i) shall be cumulative and concurrent; (ii)
may be pursued separately, successively, or concurrently against Borrower,
the Property, or any one or more of them, at the sole discretion of Lender;
(iii) may be exercised as often as occasion therefor shall arise, it being
agreed by Borrower that the exercise or failure to exercise any of same
shall in no event be construed as a waiver or release thereof or of any
other right, remedy, or recourse; (iv) shall be nonexclusive; (v) shall not
be conditioned upon Lender exercising or pursuing any remedy in relation to
the Property prior to Lender bringing suit to recover the Debt; and (vi) in
the event Lender elects to bring suit on the Debt and obtains a judgment
against Borrower prior to exercising any remedies in relation to the
Property, all liens and security interests, including the lien of this
Security Instrument, shall remain in full force and effect and may be
exercised thereafter at Lender's option.
(m) Bankruptcy Acknowledgment. In the event the Property or any
portion thereof or any interest therein becomes property of any bankruptcy
estate or subject to any state or federal insolvency
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proceeding, then Lender shall immediately become entitled, in addition to
all other relief to which Lender may be entitled under this Security
Instrument, to obtain (i) an order from the Bankruptcy Court or other
appropriate court granting immediate relief from the automatic stay
pursuant to Section 362 of the Bankruptcy Code so to permit Lender to
pursue its rights and remedies against Borrower as provided under this
Security Instrument and all other rights and remedies of Lender at law and
in equity under applicable state law, and (ii) an order from the Bankruptcy
Court prohibiting Borrower's use of all "cash collateral" as defined under
Section 363 of the Bankruptcy Code. In connection with such Bankruptcy
Court orders, Borrower shall not contend or allege in any pleading or
petition filed in any court proceeding that Lender does not have sufficient
grounds for relief from the automatic stay. Any bankruptcy petition or
other action taken by the Borrower to stay, condition, or inhibit Lender
from exercising its remedies are hereby admitted by Borrower to be in bad
faith and Borrower further admits that Lender would have just cause for
relief from the automatic stay in order to take such actions authorized
under state law.
(n) Application of Proceeds. The proceeds from any sale, lease, or
other disposition made pursuant to this Security Instrument, or the
proceeds from the surrender of any insurance policies pursuant hereto, or
any Rents collected by Lender from the Property, or the Funds (as defined
in the Escrow Agreement) or proceeds from insurance which Lender elects to
apply to the Debt pursuant to Article 3 hereof, shall be applied by Lender
to the Debt in the following order and priority: (1) to the payment of all
expenses of advertising, selling, and conveying the Property or part
thereof, and/or prosecuting or otherwise collecting Rents, proceeds,
premiums or other sums including reasonable attorneys' fees; (2) to that
portion, if any, of the Debt with respect to which no person or entity has
personal or entity liability for payment (the "EXCULPATED PORTION"), and
with respect to the Exculpated Portion as follows: first, to accrued but
unpaid interest, second, to matured principal, and third, to unmatured
principal in inverse order of maturity; (3) to the remainder of the Debt as
follows: first, to the remaining accrued but unpaid interest, second, to
the matured portion of principal of the Debt, and third, to prepayment of
the unmatured portion, if any, of principal of the Debt applied to
installments of principal in inverse order of maturity; (4) the balance, if
any or to the extent applicable, remaining after the full and final payment
of the Debt to the holder or beneficiary of any inferior liens covering the
Property, if any, in order of the priority of such inferior liens (Lender
shall hereby be entitled to rely exclusively on a commitment for title
insurance issued to determine such priority); and (5) the cash balance, if
any, to the Borrower. The application of proceeds of sale or other proceeds
as otherwise provided herein shall be deemed to be a payment of the Debt
like any other payment. The balance of the Debt remaining unpaid, if any,
shall remain fully due and owing in accordance with the terms of the Note,
the Future Advance Note and the other Loan Documents.
10.2 RIGHT OF ENTRY. Lender and its agents shall have the right to
enter and inspect the Property at all reasonable times and upon reasonable
notice so as to minimize any disruption to Borrower and tenants.
ARTICLE XI
----------
INDEMNIFICATION; SUBROGATION
----------------------------
11.1 GENERAL INDEMNIFICATION.
-----------------------
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(a) Borrower shall indemnify, defend and hold Lender harmless against:
(i) any and all claims for brokerage, leasing, finder's or similar fees
which may be made relating to the Property or the Debt, and (ii) any and
all liability, obligations, losses, damages, penalties, claims, actions,
suits, costs and expenses (including Lender's reasonable attorneys' fees,
together with reasonable appellate counsel fees, if any) of whatever kind
or nature which may be asserted against, imposed on or incurred by Lender
in connection with the Debt, this Security Instrument, the Property, or any
part thereof, or the exercise by Lender of any rights or remedies granted
to it under this Security Instrument; provided, however, that nothing
herein shall be construed to obligate Borrower to indemnify, defend and
hold harmless Lender from and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, suits, costs and expenses
enacted against, imposed on or incurred by Lender by reason of Lender's
willful misconduct or gross negligence.
(b) If Lender is made a party defendant to any litigation or any claim
is threatened or brought against Lender concerning the secured
indebtedness, this Security Instrument, the Property, or any part thereof,
or any interest therein, or the construction, maintenance, operation or
occupancy or use thereof, then Lender shall notify Borrower of such
litigation or claim and Borrower shall indemnify, defend and hold Lender
harmless from and against all liability by reason of said litigation or
claims, including reasonable attorneys' fees (together with reasonable
appellate counsel fees, if any). The right to such attorneys' fees
(together with reasonable appellate counsel fees, if any) and expenses
incurred by Lender in any such litigation or claim of the type described in
this Subsection 11.1(b), whether or not any such litigation or claim is
prosecuted to judgment, shall be deemed to have accrued on the commencement
of such claim or action and shall be enforceable whether or not such claim
or action is prosecuted to judgment. If Lender commences an action against
Borrower to enforce any of the terms hereof or to prosecute any breach by
Borrower of any of the terms hereof or to recover any sum secured hereby,
Borrower shall pay to Lender its reasonable attorneys' fees (together with
reasonable appellate counsel fees, if any) and expenses. If Borrower
breaches any term of this Security Instrument, Lender may engage the
services of an attorney or attorneys to protect its rights hereunder, and
in the event of such engagement following any breach by Borrower, Borrower
shall pay Lender reasonable attorneys' fees (together with reasonable
appellate counsel fees, if any) and expenses incurred by Lender, whether or
not an action is actually commenced against Borrower by reason of such
breach. All references to "ATTORNEYS" in this Subsection 11.1(b) and
elsewhere in this Security Instrument shall include without limitation any
attorney or law firm engaged by Lender and Lender's in-house counsel, and
all references to "FEES AND EXPENSES" in this Subsection 11.1(b) and
elsewhere in this Security Instrument shall include without limitation any
fees of such attorney or law firm and any allocation charges and allocation
costs of Lender's in-house counsel.
(c) A waiver of subrogation shall be obtained by Borrower from its
insurance carrier and, consequently, Borrower waives any and all right to
claim or recover against Lender, its officers, employees, agents and
representatives, for loss of or damage to Borrower, the Property,
Borrower's property or the property of others under Borrower's control from
any cause insured against or required to be insured against by the
provisions of this Security Instrument.
11.2 ENVIRONMENTAL INDEMNIFICATION. Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the
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Indemnified Parties from and against any and all Losses (as hereinafter defined)
imposed upon or incurred by or asserted against any Indemnified Parties (other
than those arising solely from a state of facts that first came into existence
after Lender acquired title to the Property through foreclosure or a deed in
lieu thereof), 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 (as hereinafter defined) in, on, above, or under the Property; (b)
any past, present or future Release (as hereinafter defined) of Hazardous
Substances in, on, above, under or from the Property; (c) any activity by
Borrower, any person or entity affiliated with Borrower, and 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, and any tenant or other user of the Property in
connection with any actual or proposed Remediation (as hereinafter defined) 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 Law (as hereinafter defined) (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, and 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 or filing or the future
imposition, recording or filing of any Environmental Lien (as hereinafter
defined) encumbering the Property; (g) any administrative processes or
proceedings or judicial proceedings in any way connected with any matter
addressed in this Section 11.2; (h) any misrepresentation or inaccuracy in any
representation or warranty or material breach or failure to perform any
covenants or other obligations under the Environmental Indemnity of even date
executed by Borrower and Indemnitor; and (i) any diminution in value of the
Property in any way connected with any occurrence or other matter referred to in
this Section 11.2.
The term "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. The term "Environmental Law" includes, but
is
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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 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. The term "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.
The term "Environmental Lien" includes but is not limited to any lien or
other encumbrance imposed pursuant to Environmental Law, whether due to any
act or omission of Borrower or any other person or entity.
The term "Hazardous Substances" includes but is 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, lead-based
paints, radon, radioactive materials, flammables and explosives.
The term "Indemnified Parties" includes but is not limited to Lender, any
person or entity who is or will have been involved in originating the Loan
evidenced by the Note or the Future Advance Note, any person or entity who
is or will have been involved in servicing 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 those who may acquire any interest in 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, employees,
agents, servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assign of any and all of the
foregoing (including but not 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 part of or following foreclosure pursuant to the Loan) and
including but not limited to any successors by merger, consolidation or
acquisition of all or a substantial part of Lender's assets and business.
The term "Losses" includes but is not limited to any claims, suits,
liabilities (including but not limited to strict liabilities),
administrative or judicial actions or proceedings, obligations, debts,
damages, losses, costs, expenses, diminutions in value, fines, penalties,
charges, fees, expenses, costs of Remediation (whether or not performed
voluntarily), judgments, award, amounts paid in settlement, foreseeable and
unforeseeable consequential damages, litigation costs, attorneys' fees,
engineer's fees, environmental consultants' fees and investigation costs
(including but not limited to costs for sampling, testing and analysis of
soil, water, air, building materials, and other materials and substances
whether solid,
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liquid or gas), of whatever kind or nature, and whether or not incurred in
connection with any judicial or administrative proceedings.
The term "Release" with respect to any Hazardous Substance includes but is
not limited to any release, deposit, discharge, emission, leaking,
leaching, spilling, seeping, migrating, injecting, pumping, pouring,
emptying, escaping, dumping, disposing or other movement of Hazardous
Substances.
The term "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 this Article 11.
11.3 EXCLUDED OCCURRENCES. Notwithstanding any provision of this Security
Instrument to the contrary, where after the date of this Security Instrument
there shall occur an event (including, without limitation, a Release) for which
Borrower would have an obligation under this Security Instrument to indemnify,
defend, protect or hold harmless the Indemnified Parties, then Borrower shall
have no such obligation to indemnify, defend, protect, release and hold harmless
the Indemnified Parties from and against Losses for acts or omissions the
cause(s) of which is outside or beyond the control of Borrower. For purposes of
this Section 11.3, Borrower shall be deemed and construed to have control over
the acts and omissions of all tenants and subtenants of the Property and each of
their respective agents, vendors, guests, invitees, licencees, servants,
employees, officers, directors, representatives, contractors, subcontractors,
affiliates and subsidiaries.
11.4 DUTY TO DEFEND AND ATTORNEYS 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 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.
11.5 SURVIVAL OF INDEMNITIES. Notwithstanding any provision of this
Security Instrument or any other Loan Document to the contrary, the provisions
of Section 11.1 and Section 11.2, and Borrower's obligations thereunder, shall
survive (a) the repayment of the Note and the Future Advance Note, (b) the
foreclosure of this Security Instrument, and (c) the release (or reconveyance,
as applicable) of the lien of this Security Instrument.
ARTICLE XII
-----------
SECURITY AGREEMENT
------------------
12.1 SECURITY AGREEMENT. This Security Instrument is both a real
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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. Borrower by executing and delivering this Security
Instrument has granted and hereby grants to Lender, as security for the
Obligations, a security interest in the Property to the full extent that the
Property may be subject to the Uniform Commercial Code (said portion of the
Property so subject to the Uniform Commercial Code being called in this
paragraph the "Collateral"). Borrower hereby agrees with Lender to execute and
deliver to Lender, in form and substance satisfactory to Lender, such financing
statements, continuation statements, other uniform commercial code forms and
shall pay all expenses and fees in connection with the filing and recording
thereof, and such further assurances as Lender may from time to time, reasonably
consider necessary to create, perfect, and preserve Lender's security interest
herein granted. This Security Instrument shall also constitute a "fixture
filing" for the purposes of the Uniform Commercial Code. All or part of the
Property are or are to become fixtures. Information concerning the security
interest herein granted may be obtained from the parties at the addresses of the
parties set forth in the first paragraph of this Security Instrument. If an
Event of Default shall occur, Lender, in addition to any other rights and
remedies which they may have, shall have and may exercise immediately and
without demand, any and all rights and remedies granted to a secured party upon
default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing, the right to take possession of the Collateral or
any part thereof, and to take such other measures as Lender may deem necessary
for the care, protection and preservation of the Collateral. Upon request or
demand of Lender, Borrower shall at its expense assemble the Collateral and make
it available to Lender at a convenient place acceptable to Lender. Borrower
shall pay to Lender on demand any and all expenses, including legal expenses and
attorneys' fees, incurred or paid by Lender in protecting the interest in the
Collateral and in enforcing the rights hereunder with respect to the Collateral.
Any notice of sale, disposition or other intended action by Lender with respect
to the Collateral 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. The proceeds of any disposition of the
Collateral, or any part thereof, may be applied by Lender to the payment of the
Obligations in such priority and proportions as Lender in its discretion shall
deem proper. In the event of any change in name, identity or structure of any
Borrower, such Borrower shall notify Lender thereof and promptly after request
shall execute, file and record such Uniform Commercial Code forms as are
necessary to maintain the priority of Lender's lien upon and security interest
in the Collateral, and shall pay all expenses and fees in connection with the
filing and recording thereof. If Lender shall require the filing or recording of
additional Uniform Commercial Code forms or continuation statements, Borrower
shall, promptly after request, execute, file and record such Uniform Commercial
Code forms or continuation statements as Lender shall deem necessary, and shall
pay all expenses and fees in connection with the filing and recording thereof,
it being understood and agreed, however, that no such additional documents shall
increase Borrower's obligations under the Note, the Future Advance Note, this
Security Instrument and the Other Loan Documents. Borrower hereby irrevocably
appoints Lender as its attorney-in-fact, coupled with an interest, to file with
the appropriate public office on its behalf any financing or other statements
signed only by Lender, as Borrower's attorney-in-fact, in connection with the
Collateral covered by this Security Instrument. Notwithstanding the foregoing,
Borrower shall appear and defend in any action or proceeding which affects or
purports to affect the Property and any interest or right therein, whether such
proceeding effects title or any other rights in the Property (and in conjunction
therewith, Borrower shall fully cooperate with Lender in the event Lender is a
party to such action or proceeding).
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ARTICLE XIII
------------
WAIVERS
-------
13.1 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
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.
13.2 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.
13.3 SOLE DISCRETION OF LENDER. Wherever pursuant to this Security
Instrument Lender exercises any right given to it to approve or disapprove, or
any arrangement or term is to be satisfactory to Lender, the decision of Lender
to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Lender and
shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
13.4 SURVIVAL. The indemnifications made pursuant to Article 11, 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, the Future Advance
Note or any of the Other Loan 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, the Future Advance Note or the Other Loan
Documents, and any act or omission that might otherwise be construed as a
release or discharge of Borrower from the obligations pursuant hereto.
13.5 WAIVER OF TRIAL BY JURY.
-----------------------
BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT
THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS
SECURITY INSTRUMENT, THE NOTE, THE FUTURE ADVANCE NOTE OR THE OTHER LOAN
DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH INCLUDING, BUT NOT LIMITED TO THOSE RELATING TO (A) ALLEGATIONS
THAT A PARTNERSHIP EXISTS BETWEEN
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LENDER AND BORROWER; (B) USURY OR PENALTIES OR DAMAGES THEREFOR; (C)
ALLEGATIONS OF UNCONSCIONABLE ACTS, DECEPTIVE TRADE PRACTICE, LACK OF GOOD
FAITH OR FAIR DEALING, LACK OF COMMERCIAL REASONABLENESS, OR SPECIAL
RELATIONSHIPS (SUCH AS FIDUCIARY, TRUST OR CONFIDENTIAL RELATIONSHIP); (D)
ALLEGATIONS OF DOMINION, CONTROL, ALTER EGO, INSTRUMENTALITY, FRAUD, REAL
ESTATE FRAUD, MISREPRESENTATION, DURESS, COERCION, UNDUE INFLUENCE,
INTERFERENCE OR NEGLIGENCE; (E) ALLEGATIONS OF TORTIOUS INTERFERENCE WITH
PRESENT OR PROSPECTIVE BUSINESS RELATIONSHIPS OR OF ANTITRUST; OR (F)
SLANDER, LIBEL OR DAMAGE TO REPUTATION. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT
TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF
THIS WAIVER BY BORROWER.
13.6 WAIVER OF AUTOMATIC OR SUPPLEMENTAL STAY. In the event of the filing
of any voluntary or involuntary petition under the Bankruptcy Code by or against
Borrower (other than an involuntary petition filed by or joined in by Lender),
the Borrower shall not assert, or request any other party to assert, that the
automatic stay under ss. 362 of the Bankruptcy Code shall operate or be
interpreted to stay, interdict, condition, reduce or inhibit the ability of
Lender to enforce any rights it has by virtue of this Security Instrument, or
any other rights that Lender has, whether now or hereafter acquired, against any
guarantor of the Debt. Further, Borrower shall not seek a supplemental stay or
any other relief, whether injunctive or otherwise, pursuant to ss. 105 of the
Bankruptcy Code or any other provision therein to stay, interdict, condition,
reduce or inhibit the ability of Lender to enforce any rights it has by virtue
of this Security Instrument against any guarantor of the Debt. The waivers
contained in this paragraph are a material inducement to Lender's willingness to
enter into this Security Instrument and Borrower acknowledges and agrees that no
grounds exist for equitable relief which would bar, delay or impede the exercise
by Lender of Lender's rights and remedies against Borrower or any guarantor of
the Debt.
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ARTICLE XIV
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NOTICES
-------
14.1 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, (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 certified mail, postage prepaid, addressed as
follows:
If to Borrower: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Executive Vice President
c/o First Union Real Estate Equity and Mortgage Investments
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇ ▇▇▇▇▇, Comptroller
c/o First Union Real Estate Equity and Mortgage Investments
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Ustin
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: 212-730-4518
If to Lender: ▇▇▇▇▇▇ Guaranty Trust Company of New York
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ Alto, Commercial Mortgage Finance Group
Loan Servicing
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or addressed as such party may from time to time designate by written notice to
the other parties. For purposes of this subsection, the term "Business Day"
shall mean a day on which commercial banks are not authorized or required by law
to close in New York, New York.
Any party by notice to the other parties may designate additional or
different addresses for subsequent notices or communications.
ARTICLE XV
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APPLICABLE LAW
--------------
15.1 GOVERNING LAW; JURISDICTION. This Security Instrument shall be
governed by and construed in accordance with applicable federal law and the laws
of the state where the Property is located, without reference or giving effect
to any choice of law doctrine. Borrower hereby irrevocably submits to the
jurisdiction of any court of competent jurisdiction located in the state in
which the Property is located in connection with any proceeding arising out of
or relating to this Security Instrument.
15.2 USURY LAWS. This Security Instrument, the Note and the Future Advance
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 and the Future Advance 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
terms of this Security Instrument, the Note or the Future Advance 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,
the Note and the Future Advance 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 and the Future Advance Note. All sums paid or agreed to be
paid to Lender for the use, forbearance, or detention of the Debt shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Note and the Future Advance Note
until payment in full so that the rate or
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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.
15.3 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 XVI
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SECONDARY MARKET
----------------
16.1 TRANSFER OF LOAN. Lender may, at any time, sell, transfer or assign
the Note, the Future Advance Note, this Security Instrument and the Other Loan
Documents, and any or all servicing rights with respect thereto, or grant
participations therein 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, investor in such
Securities or any Rating Agency (as hereinafter defined) rating such Securities
(collectively, the "Investor") 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 and the Property, whether
furnished by Borrower, any Guarantor, any Indemnitor or otherwise, as Lender
determines necessary or desirable. The term "Rating Agency" shall mean each
statistical rating agency that has assigned a rating to the Securities.
ARTICLE XVII
------------
COSTS
-----
17.1 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 (excluding the scheduled maturity of the Note and the Future Advance
Note) of its loans, (b) the release or substitution of collateral therefor, or
(c) obtaining certain consents, waivers and approvals with respect to the
Property (the occurrence of any of the above shall be called an "Event").
Borrower hereby acknowledges and agrees to pay, immediately, upon 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.
17.2 ATTORNEY'S FEES FOR ENFORCEMENT. (a) Borrower shall pay all legal fees
incurred by Lender in connection with (i) the preparation of the Note, the
Future Advance Note, this Security Instrument and the Other Loan Documents and
(ii) the items set forth in Section 17.1 above, and (b) Borrower shall pay to
Lender on demand any and all expenses, including reasonable legal expenses and
attorneys' fees, incurred or paid by Lender in protecting its interest in the
Property or Personal Property and/or collecting any amount payable or in
enforcing its rights hereunder with respect to the Property or Personal
Property, whether or not any legal
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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 of payment or incurring by
Lender until paid by Borrower.
ARTICLE XVIII
-------------
DEFINITIONS
-----------
18.1 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 and the Future Advance
Note," the word "Note" shall mean "the Note, any other evidence of indebtedness
secured by this Security Instrument and the subsequent consolidation of the Note
and the Future Advance Note," the word "person" shall include an individual,
corporation, partnership, trust, unincorporated association, government,
governmental authority, and any other entity, the word "Property" shall include
any portion of the Property and any interest therein, the word "Loan" shall
mean, collectively, the loan evidenced by the Note and the loan evidenced by the
Future Advance Note, and the phrases "attorneys' fees," "legal 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.
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ARTICLE XIX
-----------
MISCELLANEOUS PROVISIONS
------------------------
19.1 NO ORAL CHANGE. This Security Instrument, the Note, the Future Advance
Note, and the Other Loan Documents and any provisions hereof or thereof, may not
be modified, amended, waived, extended, changed, discharged or terminated 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.
19.2 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.
19.3 INAPPLICABLE PROVISIONS. If any term, covenant or condition of the
Note, the Future Advance Note or this Security Instrument is held to be invalid,
illegal or unenforceable in any respect, the Note, the Future Advance Note and
this Security Instrument shall be construed without such provision.
19.4 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.
19.5 DUPLICATE ORIGINALS; COUNTERPARTS. This Security Instrument may
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52
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.
19.6 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.
19.7 SUBROGATION. If any or all of the proceeds of the Note or the Future
Advance 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,
the Future Advance Note and the Other Loan Documents and the performance and
discharge of the Other Obligations.
19.8 ENTIRE AGREEMENT. The Note, the Future Advance Note, this Security
Instrument and the Other Loan Documents constitute the entire understanding and
agreement between Borrower and Lender with respect to the transactions arising
in connection with the Debt and supersede all prior written or oral
understandings and agreements between Borrower and Lender with respect thereto.
Borrower hereby acknowledges that, except as incorporated in writing in the
Note, the Future Advance Note, this Security Instrument and the Other Loan
Documents, there are not, and were not, and no persons are or were authorized by
Lender to make, any representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the transaction which is the subject
of the Note, the Future Advance Note, this Security Instrument and the Other
Loan Documents.
ARTICLE XX
----------
SPECIAL PROVISIONS
------------------
20.1 FUTURE ADVANCE NOTE.
-------------------
(a) Notwithstanding the Borrower's execution and delivery of the
Future Advance Note on the date hereof, Borrower acknowledges that (i)
Lender has not advanced any amounts under the Future Advance Note, (ii)
Lender will evaluate the Borrower's request for an advancement under the
Future Advance Note as a new loan request, (iii) Lender shall have the
right, in its sole and absolute discretion, to deny any request for an
advancement under the Future Advance Note based on underwriting and credit
factors, which may include, without limitation, changes in market
conditions, loan to value ratio and debt service coverage ratio, (iv)
Borrower must submit any request for an advance to Lender on or before
March 1, 2000 and (v) the funding of any advance under the Future Advance
Note must occur on or before April 1, 2000.
(b) Borrower further acknowledges that if the Lender elects to
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53
make an advancement to the Borrower under the Future Advance Note, (i)
Lender may advance all or a portion of the Future Advance Note, (ii) Lender
shall make only one advancement under the Future Advance Note, (iii) Lender
shall have the right to require an endorsement to the Lender's loan policy
of title insurance updating the effective date of such title policy to the
date of the future advance and, if the title insurance policy does not
include the amount of the Future Advance Note in the amount of insurance,
increasing the amount of insurance by the amount of the future advance and
(iv) all costs and expenses (including fees and expenses of Lender's
counsel) in connection with any disbursement under the Future Advance Note
shall be paid by Borrower.
20.2 PRIORITY. This Security Instrument is given to secure, inter alia,
payment of the Note and the Future Advance Note, and all substitutions,
amendments, restatements, modifications or consolidations thereof. The maximum
amount of principal outstanding at any one time under the Note and the Future
Advance Note (excluding interest thereon) shall not exceed $24,500,000.00. The
Borrower intends that this Security Instrument shall secure all disbursements
under the Future Advance Note (if any) subsequent to the date hereof, and all of
such disbursements shall be equally secured with and have the same priority as
any amounts advanced on the date hereof.
20.3 SPECIAL OHIO PROVISION. Lender is authorized, but not required,
to do anything permitted by Ohio Revised Code 1311.14.
20.4 EXCULPATION. Paragraph 10 of the Note and Paragraph 10 of the
Future Advance Note provide as follows:
(a) Notwithstanding anything in the Loan Documents to the contrary,
but subject to the qualifications below, Lender and Borrower agree that:
(i) Borrower shall be liable upon the Debt and for the other
obligations arising under the Loan Documents to the full extent
(but only to the extent) of the security therefor; provided,
however, that in the event (A) of fraud, willful misconduct or
material misrepresentation by Borrower, its general partners, if
any, its members, if any, its principals, its affiliates, its
agents or its employees or by any Guarantor or any Indemnitor in
connection with the loan evidenced by this Note, (B) of
Borrower's breach or default under Sections 4.3 or 8.2 of the
Security Instrument, or (C) the Property or any part thereof
becomes an asset in a voluntary bankruptcy or insolvency
proceeding, the limitation on recourse set forth in this
Subsection 10(a) will be null and void and completely
inapplicable, and this Note shall be with full recourse to
Borrower.
(ii) If a default occurs in the timely and proper payment of all
or any part of the Debt, Lender shall not enforce the liability
and obligation of Borrower to perform and observe the obligations
contained in this Note or the 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 the
Security Instrument, the Other Loan
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Documents and the interest in the Property, the Rents and any
other collateral given to Lender created by the Security
Instrument and the Other Loan 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 this Note and the Security
Instrument, agrees that it shall not, except as otherwise herein
provided, ▇▇▇ 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 this Note, the Other Loan Documents
or the Security Instrument.
(iii) The provisions of this Subsection 10(a) shall not (A)
constitute a waiver, release or impairment of any obligation
evidenced or secured by this Note, the Other Loan Documents or
the 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 the Security Instrument; (C) affect
the validity or enforceability of any indemnity, guaranty, master
lease or similar instrument made in connection with this Note,
the Security Instrument, or the Other Loan Documents; (D) impair
the right of Lender to obtain the appointment of a receiver; (E)
impair the enforcement of the Assignment executed in connection
herewith; (F) impair the right of Lender to enforce the
provisions of Article 11 of the Security Instrument; or (G)
impair the right of Lender to obtain a deficiency judgment or
judgment on this Note against Borrower if necessary to obtain any
insurance proceeds or condemnation awards to which Lender would
otherwise be entitled under the Security Instrument; provided,
however, Lender shall only enforce such judgment against the
insurance proceeds and/or condemnation awards.
(iv) Notwithstanding the provisions of this Article to the
contrary, Borrower shall be personally liable to Lender for the
Losses it incurs due to: (A) the misapplication or
misappropriation of Rents; (B) the misapplication or
misappropriation of insurance proceeds or condemnation awards;
(C) 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; (D) any act of actual
waste or arson by Borrower, any principal, affiliate, general
partner or member thereof or by any Indemnitor or any Guarantor;
(E) any fees or commissions paid by Borrower to any principal,
affiliate, general partner or member of Borrower, any Indemnitor
or any Guarantor in violation of the terms of this Note, the
Security Instrument or the Other Loan Documents; (F) Borrower's
failure to comply with the provisions of Section 11.2 of the
Security Instrument; or (G) any breach of the Environmental
Indemnity.
(b) 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 Bankruptcy Code to file
a claim for the full amount of the Debt or to require that all
collateral shall continue to secure all of the Debt, owing to
Lender in accordance with this Note, the Security Instrument
and the Other Loan Documents.
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IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by Borrower
the day and year first above written.
BORROWER:
Signed and acknowledged in the
presence of: 55 PUBLIC LLC, a Delaware limited liability
company
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: 55 PUBLIC REALTY CORP., a Delaware
---------------------------- corporation, Managing Member
Witness
▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Print Name By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ----------------------------------------
----------------------------
Witness Title: Executive Vice President
----------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Print Name
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COMMONWEALTH/STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 2nd day of August,
1999, by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ as Executive Vice President of 55 Public Realty
Corp., a Delaware corporation, on behalf of the corporation, which is Managing
Member of 55 Public LLC, a Delaware limited liability company, on behalf of the
limited liability company.
In testimony whereof, I have hereunto subscribed my name and affixed my
official seal at New York, New York, the 2nd day of August, 1999.
My commission expires: April 27, 1999
/s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
---------------------------
NOTARY PUBLIC
[SEAL] Print Name: ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
--------------------
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EXHIBIT A
PARCEL 1:
Situated in the City of Cleveland, County of Cuyahoga and State of Ohio:
and known as being Sublots Nos. 19, 20 and 21, part of Sublots Nos. 18 and 22,
and parts of Alleys Numbers 1 and 2 (now vacated, all in the ▇▇▇▇▇ ▇▇▇▇▇▇▇
Subdivision of Original Two Acre Lots 55, 56 and 57 as shown by the recorded
plat in Volume "F", Pages 264 and 265 of Cuyahoga County Deed Records, part of
▇▇▇▇▇▇ Court N.W. (now vacated), and part of Original Two Acre Lots 58 and 59,
and bounded and described as follows:
Beginning at a point on the centerline of ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇ ft.
wide, at its intersection with the centerline of West 3rd Street (formerly
Seneca Street), 99 ft. wide, and from which point an iron monument found in
the centerline of West 3rd Street bears South 34(0)03' 42" East, 0.10 ft.;
Thence North 55(0)56' 37" East along the centerline of St. Clair Avenue,
132.92 ft. to a nail set at its intersection with the northeasterly line of
said Original Lot 57;
Thence South 34(0)03' 33" east along the northeasterly line of said
Original lot 57, 49.50 ft. to a drill hole set at its intersection with the
southeasterly line of St. Clair Avenue, and the Principal Place of
Beginning of the parcel herein described;
Thence North 55(0) 56' 37" East along the southeasterly side of St. Clair
Avenue, 66.59 ft. to a drill hole set at its intersection with the southwesterly
line of a parcel of land conveyed to First Union Real Estate Equity and Mortgage
Investments by deed recorded in Volume 98-01915, Page 30 of Cuyahoga County
Records;
Thence South 34(0) 03' 23" East along the southwesterly line of said land
conveyed to First Union Real Estate Equity and Mortgage Investments, 173.74 ft.
to its intersection with the southeasterly line of said land so conveyed;
Thence North 55(0) 53' 12" East along the southeasterly line of said land
conveyed to First Union Real Estate Equity and Mortgage Investments, being also
the centerline of vacated ▇▇▇▇▇▇ Court N.W., formerly 16.5 ft. wide, 142.80 ft.
to a nail set at its intersection with the southwesterly line of a parcel of
land acquired by the City of Cleveland by means of said vacation of ▇▇▇▇▇▇
Court;
Thence South 34(0) 06' 48" East along the southwesterly lien of said land
acquired by the City of Cleveland, 8.25 ft. to a nail set at its intersection
with the northwesterly line of a parcel of land conveyed to the City of
Cleveland for the widening of West 2nd Place by deed recorded in Volume 9085,
Page 430 of Cuyahoga County Records;
Thence South 55(0)53' 12" West along the northwesterly line of said land
conveyed to the City of Cleveland, 6.00 ft. to a nail set at its intersection
with the southwesterly line of said land so conveyed;
Thence South 34(0)03' 04" East along the southwesterly line of said land
conveyed to the City of Cleveland, 153.89 ft. to its intersection with the
northwesterly line of Frankfort Avenue N.W., 45 ft. wide; from which point
a nail set bears North 55(0)55' 06" East, 6.00 feet.
Thence South 55(0)55' 06" West along the northwesterly line of Frankfort
Avenue, 286.76 ft. to a drill hole set at its intersection with the
northeasterly lien of West ▇▇▇ ▇▇▇▇▇▇;
Thence North 34(0) 03' 42" West along the northeasterly line of West 3rd Street,
253.05 ft. to its intersection with the southeasterly line of a parcel of land
conveyed to Prime Properties Limited Partnership by deed recorded in Volume
91-4116, Page 33 of the Official Records of Cuyahoga County, and from which
point a drill hole set bears South 55(0) 54' 58" West, 1.00 ft.;
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58
Thence North 55(0) 54' 58" East along the southeasterly line of said land
conveyed to Prime Properties Limited Partnership, being also the southeasterly
line of Sublot 17 in said ▇▇▇▇▇ ▇▇▇▇▇▇▇ Subdivision and its northeasterly
prolongation, 83.41 ft. to a drill hole set at its intersection with the
northeasterly line of said land so conveyed;
Thence North 34(0) 03' 33" West along the northeasterly line of said land
conveyed to Prime Properties Limited Partnership, being also the northeasterly
line of said Original Lot 57, 82.78 ft. to the Principal Place of Beginning, and
containing 65,688 square feet or 1.5080 acres of land according to the survey by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates, Inc., dated November 1994 and updated thru May
27, 1999.
The courses used in this description are referenced to an assumed meridian and
are used to indicate angles only.
PARCEL 2:
A Non-Exclusive Easement appurtenant to Parcel No. 1 over the following
described parcel:
Situated in the City of Cleveland, County of Cuyahoga and State of Ohio:
and known as being part of Original Two Acre Lots 58 and 59, and bounded and
described as follows:
Beginning at a point in the southwesterly line of West 2nd Place, 16.5 ft. wide,
at its intersection with the northwesterly line of ▇▇▇▇▇▇ Court N.W.,
16.5 ft. wide, (now vacated);
Thence South 34(0)03' 04" East along the southwesterly lien of West 2nd
Place, 8.25 ft. to its intersection with the centerline of ▇▇▇▇▇▇ Court,
now vacated;
Thence South 55(0) 53' 12" West along the centerline of ▇▇▇▇▇▇ Court, now
vacated, 147.80 ft. to its intersection with the southwesterly line of a parcel
of land conveyed to First Union Real Estate Equity and Mortgage Investments by
deed recorded in Volume 98-01915, Page 30 of Cuyahoga County Records;
Thence North 34(0) 03' 23" West along the southwesterly line of said land
conveyed to First Union Real Estate Equity and Mortgage Investments, 8.25 ft. to
its intersection with the northwesterly line of ▇▇▇▇▇▇ Court, now vacated;
Thence North 55(0)53' 12" East along the northwesterly line of ▇▇▇▇▇▇
Court, now vacated, 147.81 ft. to the Place of Beginning according to the
survey by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates, Inc., dated November, 1994 and
updated May 27, 1999.
The courses used in this description are referenced to an assumed meridian and
are used to indicate angles only.
PARCEL 3:
A Non-Exclusive Easement appurtenant to Parcel 1 over the following described
parcel:
Situated in the City of Cleveland, County of Cuyahoga and State of Ohio:
and known as being part of Original Two Acre Lot 59, and bounded and described
as follows:
Beginning at a point in the northwesterly line of Frankfort Avenue, N.W.,
45 ft. wide, at its intersection with the southwesterly line of a parcel of
land conveyed to the City of Cleveland by deed recorded in Volume 6488,
Page 224 of Cuyahoga County Records;
Thence South 55(0)55' 06" West along the northwesterly line of Frankfort
Avenue, 6.00 ft. to its intersection with the northeasterly line of a
parcel of land conveyed to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, et. al., Trustees of First
Union Realty, by deed recorded in Volume 10664, Page 461 of Cuyahoga County
Records;
Thence North 34(0)03' 04" West along the northeasterly line of said land
conveyed to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, et al, 153.89 ft. to its intersection with the
southeasterly line of ▇▇▇▇▇▇ Court, N.W., 16.5 ft. wide, (now vacated);
Thence North 55(0)53' 12" East along the southeasterly line of ▇▇▇▇▇▇ Court, now
vacated, 6.00 ft. to its intersection with the southwesterly line of said land
conveyed to the City of Cleveland;
Thence South 34(0)03' 04" East along the southwesterly line of said land
conveyed to the City of Cleveland, 153.90 ft. to the Place of Beginning
according to the survey by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates, Inc. dated
November, 1994 and undated thru May 27, 1999.
The courses used in this description are referenced to an assumed meridian and
are used to indicate angles only.
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59
EXHIBIT B
RELEASE PARCEL
Situated in the City of Cleveland, County of Cuyahoga, and State of Ohio, and
known as being Sublot 19, and part of Sublots 18 and 20, and part of Alley
Number 1 (now vacated), all in the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Subdivision of Original Two
Acre Lots 55, 56, and 57 as shown by the recorded plot in Volume "F" Pages 264
and 265 of Cuyahoga County Deed Records, part of ▇▇▇▇▇▇ Court N.W. (now
vacated), and part of Original Two Acre Lot 58, and bounded and described as
follows:
BEGINNING at a point in the centerline of ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇ feet wide, at
its intersection with the centerline of West 3rd Street (formerly Seneca Street
bears South 34 degrees 03 minutes 42 seconds East, 0.10 feet;
THENCE North 55 degrees 56 minutes 37 seconds East along the centerline of St.
Clair Avenue, 132.92 feet to a nail set at its intersection, with the
northeasterly line of said Original Lot 57;
THENCE South 34 degrees 03 minutes 33 seconds East along the northeasterly line
of said Original Lot 57, 49.50 feet to a drill hole set at its intersection with
the southeasterly line of St. Clair Avenue, and the principal place of beginning
of the parcel herein described:
THENCE North 55 degrees 56 minutes 37 seconds East along the southeasterly line
of St. Clair Avenue, 66.59 feet to a drill hole set at its intersection with the
southwesterly line of a parcel of land conveyed to First Union Real Estate
Equity and Mortgage investments by deed recorded in Volume 98-01915, Page 30 of
the Official Records of Cuyahoga County.
THENCE South 34 degrees 03 minutes 23 seconds East along the southwesterly line
of said land conveyed to First Union Real Estate Equity and Mortgage Investments
and its southeasterly prolongation, 202.02 feet to a point, from which a survey
spike set bears North 55 degrees 52 minutes 27 seconds East, 7.00 feet.
THENCE South 55 degrees 52 minutes 27 seconds West, 105.16 feet to a point.
THENCE North 34 degrees 03 minutes 42 seconds West, 1.60 feet to a point.
THENCE South 55 degrees 52 minutes 27 seconds West, 44.82 feet to a point in the
northeasterly line of West 3rd Street, from which a drill hole set bears South
55 degrees 52 minutes 27 seconds West; 1.00 foot;
THENCE North 34 degrees 03 minutes 42 seconds West along the northeasterly line
of West 3rd Street, 117.78 feet to its intersection with the southeasterly line
of a parcel of land conveyed to Prime Properties Limited Partnership by deed
recorded in Volume 91-4116, Page 33 of the Official Records of Cuyahoga County,
and from which point a drill hole set bears South 55 degrees 54 minutes 58
seconds West; 1.00 feet;
Page 59
60
THENCE North 55 degrees 54 minutes 58 seconds East along the southeasterly line
of said land conveyed to Prime Properties Limited Partnership, being also the
southeasterly line of Sublot 17 in said ▇▇▇▇▇ ▇▇▇▇▇▇▇ Subdivision and its
northeasterly prolongation, 83.41 feet to a drill hole set at its intersection
with the northeasterly line of said land so conveyed;
THENCE North 34 degrees 03 minutes 33 seconds West along the northeasterly line
of said land conveyed to Prime Properties Limited Partnership, being also the
northeasterly line of said Original Lot 57, 82.78 feet to the principal place of
beginning, and containing 23,336 square feet or 0.5357 acres of land according
to the survey by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates, Inc., dated November, 1994, and
updated through July 19, 1999.
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EXHIBIT A
PARCEL 1:
Situated in the City of Cleveland, County of Cuyahoga and State of Ohio:
and known as being Sublots Nos. 19, 20 and 21, part of Sublots Nos. 18 and 22,
and parts of Alleys Numbers 1 and 2 (now vacated, all in the ▇▇▇▇▇ ▇▇▇▇▇▇▇
Subdivision of Original Two Acre Lots 55, 56 and 57 as shown by the recorded
plat in Volume "F", Pages 264 and 265 of Cuyahoga County Deed Records, part of
▇▇▇▇▇▇ Court N.W. (now vacated), and part of Original Two Acre Lots 58 and 59,
and bounded and described as follows:
Beginning at a point on the centerline of ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇ ft.
wide, at its intersection with the centerline of West 3rd Street (formerly
Seneca Street), 99 ft. wide, and from which point an iron monument found in
the centerline of West 3rd Street bears South 34(0)03' 42" East, 0.10 ft.;
Thence North 55(0)56' 37" East along the centerline of St. Clair Avenue,
132.92 ft. to a nail set at its intersection with the northeasterly line of
said Original Lot 57;
Thence South 34(0)03' 33" east along the northeasterly line of said
Original lot 57, 49.50 ft. to a drill hole set at its intersection with the
southeasterly line of St. Clair Avenue, and the Principal Place of
Beginning of the parcel herein described;
Thence North 55(0) 56' 37" East along the southeasterly side of St. Clair
Avenue, 66.59 ft. to a drill hole set at its intersection with the southwesterly
line of a parcel of land conveyed to First Union Real Estate Equity and Mortgage
Investments by deed recorded in Volume 98-01915, Page 30 of Cuyahoga County
Records;
Thence South 34(0) 03' 23" East along the southwesterly line of said land
conveyed to First Union Real Estate Equity and Mortgage Investments, 173.74 ft.
to its intersection with the southeasterly line of said land so conveyed;
Thence North 55(0) 53' 12" East along the southeasterly line of said land
conveyed to First Union Real Estate Equity and Mortgage Investments, being also
the centerline of vacated ▇▇▇▇▇▇ Court N.W., formerly 16.5 ft. wide, 142.80 ft.
to a nail set at its intersection with the southwesterly line of a parcel of
land acquired by the City of Cleveland by means of said vacation of ▇▇▇▇▇▇
Court;
Thence South 34(0) 06' 48" East along the southwesterly lien of said land
acquired by the City of Cleveland, 8.25 ft. to a nail set at its intersection
with the northwesterly line of a parcel of land conveyed to the City of
Cleveland for the widening of West 2nd Place by deed recorded in Volume 9085,
Page 430 of Cuyahoga County Records;
Thence South 55(0)53' 12" West along the northwesterly line of said land
conveyed to the City of Cleveland, 6.00 ft. to a nail set at its intersection
with the southwesterly line of said land so conveyed;
Thence South 34(0)03' 04" East along the southwesterly line of said land
conveyed to the City of Cleveland, 153.89 ft. to its intersection with the
northwesterly line of Frankfort Avenue N.W., 45 ft. wide; from which point
a nail set bears North 55(0)55' 06" East, 6.00 feet.
Thence South 55(0)55' 06" West along the northwesterly line of Frankfort
Avenue, 286.76 ft. to a drill hole set at its intersection with the
northeasterly lien of West ▇▇▇ ▇▇▇▇▇▇;
Thence North 34(0) 03' 42" West along the northeasterly line of West 3rd Street,
253.05 ft. to its intersection with the southeasterly line of a parcel of land
conveyed to Prime Properties Limited Partnership by deed recorded in Volume
91-4116, Page 33 of the Official Records of Cuyahoga County, and from which
point a drill hole set bears South 55(0) 54' 58" West, 1.00 ft.;
Thence North 55(0) 54' 58" East along the southeasterly line of said land
conveyed to Prime Properties Limited Partnership, being also the southeasterly
line of Sublot 17 in said ▇▇▇▇▇ ▇▇▇▇▇▇▇ Subdivision and its northeasterly
prolongation, 83.41 ft. to a drill hole set at its intersection with the
northeasterly line of said land so conveyed;
Thence North 34(0) 03' 33" West along the northeasterly line of said land
conveyed to Prime Properties Limited Partnership, being also the northeasterly
line of said Original Lot 57, 82.78 ft. to the Principal Place of Beginning, and
containing 65,688 square feet or 1.5080 acres of land according to the survey by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates, Inc., dated November 1994 and updated thru May
27, 1999.
The courses used in this description are referenced to an assumed meridian and
are used to indicate angles only.
PARCEL 2:
A Non-Exclusive Easement appurtenant to Parcel No. 1 over the following
described parcel:
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Situated in the City of Cleveland, County of Cuyahoga and State of Ohio:
and known as being part of Original Two Acre Lots 58 and 59, and bounded and
described as follows:
Beginning at a point in the southwesterly line of West 2nd Place, 16.5 ft. wide,
at its intersection with the northwesterly line of ▇▇▇▇▇▇ Court N.W.,
16.5 ft. wide, (now vacated);
Thence South 34(0)03' 04" East along the southwesterly lien of West 2nd
Place, 8.25 ft. to its intersection with the centerline of ▇▇▇▇▇▇ Court,
now vacated;
Thence South 55(0) 53' 12" West along the centerline of ▇▇▇▇▇▇ Court, now
vacated, 147.80 ft. to its intersection with the southwesterly line of a parcel
of land conveyed to First Union Real Estate Equity and Mortgage Investments by
deed recorded in Volume 98-01915, Page 30 of Cuyahoga County Records;
Thence North 34(0) 03' 23" West along the southwesterly line of said land
conveyed to First Union Real Estate Equity and Mortgage Investments, 8.25 ft. to
its intersection with the northwesterly line of ▇▇▇▇▇▇ Court, now vacated;
Thence North 55(0)53' 12" East along the northwesterly line of ▇▇▇▇▇▇
Court, now vacated, 147.81 ft. to the Place of Beginning according to the
survey by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates, Inc., dated November, 1994 and
updated May 27, 1999.
The courses used in this description are referenced to an assumed meridian and
are used to indicate angles only.
PARCEL 3:
A Non-Exclusive Easement appurtenant to Parcel 1 over the following described
parcel:
Situated in the City of Cleveland, County of Cuyahoga and State of Ohio:
and known as being part of Original Two Acre Lot 59, and bounded and described
as follows:
Beginning at a point in the northwesterly line of Frankfort Avenue, N.W.,
45 ft. wide, at its intersection with the southwesterly line of a parcel of
land conveyed to the City of Cleveland by deed recorded in Volume 6488,
Page 224 of Cuyahoga County Records;
Thence South 55(0)55' 06" West along the northwesterly line of Frankfort
Avenue, 6.00 ft. to its intersection with the northeasterly line of a
parcel of land conveyed to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, et. Al., Trustees of First
Union Realty, by deed recorded in Volume 10664, Page 461 of Cuyahoga County
Records;
Thence North 34(0)03' 04" West along the northeasterly line of said land
conveyed to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, et al, 153.89 ft. to its intersection with the
southeasterly line of ▇▇▇▇▇▇ Court, N.W., 16.5 ft. wide, (now vacated);
Thence North 55(0)53' 12" East along the southeasterly line of ▇▇▇▇▇▇ Court, now
vacated, 6.00 ft. to its intersection with the southwesterly line of said land
conveyed to the City of Cleveland;
Thence South 34(0)03' 04" East along the southwesterly line of said land
conveyed to the City of Cleveland, 153.90 ft. to the Place of Beginning
according to the survey by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates, Inc. dated
November, 1994 and undated thru May 27, 1999.
The courses used in this description are referenced to an assumed meridian and
are used to indicate angles only.
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63
EXHIBIT B
RELEASE PARCEL
Situated in the City of Cleveland, County of Cuyahoga, and State of Ohio, and
known as being Sublot 19, and part of Sublots 18 and 20, and part of Alley
Number 1 (now vacated), all in the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Subdivision of Original Two
Acre Lots 55, 56, and 57 as shown by the recorded plot in Volume "F" Pages 264
and 265 of Cuyahoga County Deed Records, part of ▇▇▇▇▇▇ Court N.W. (now
vacated), and part of Original Two Acre Lot 58, and bounded and described as
follows:
BEGINNING at a point in the centerline of ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇ feed wide, a
its intersection with the centerline of West 3rd Street (formerly Seneca Street
bears South 34 degrees 03 minutes 42 seconds East, 0.10 feet;
THENCE North 55 degrees 56 minutes 37 seconds East along the centerline of St.
Clair Avenue, 132.92 feet to a nail set at its intersection, with the
northeasterly line of said Original Lot 57;
THENCE South 34 degrees 03 minutes 33 seconds East along the northeasterly line
of said Original Lot 57, 49.50 feet to a drill hole set at its intersection with
the southeasterly line of St. Clair Avenue, and the principal place of beginning
of the parcel herein described:
THENCE North 55 degrees 56 minutes 37 seconds East along the southeasterly line
of St. Clair Avenue, 66.59 feet to a drill hole set at its intersection with the
southwesterly line of a parcel of land conveyed to First Union Real Estate
Equity and Mortgage investments by deed recorded in Volume 98-01915, Page 30 of
the Official Records of Cuyahoga County.
THENCE South 34 degrees 03 minutes 23 seconds East along the southwesterly line
of said land conveyed to First Union Real Estate Equity and Mortgage Investments
and its southeasterly prolongation, 202.02 feet to a point, from which a survey
spike set bears North 55 degrees 52 minutes 27 seconds East, 7.00 feet.
THENCE South 55 degrees 52 minutes 27 seconds West, 105.16 feet to a point.
THENCE North 34 degrees 03 minutes 42 seconds West, 1.60 feet to a point.
THENCE South 55 degrees 52 minutes 27 seconds West, 44.82 feet to a point in the
northeasterly line of West 3rd Street, from which a drill hole set bears South
55 degrees 52 minutes 27 seconds West; 1.00 foot/
THENCE North 34 degrees 03 minutes 42 seconds West along the northeasterly line
of West 3rd Street, 117.78 feet to its intersection with the southeasterly line
of a parcel of land conveyed to Prime Properties Limited Partnership by deed
recorded in Volume 91-4116, Page 33 of the Official Records of Cuyahoga County,
and from which point a drill hole set bears South 55 degrees 54 minutes 58
seconds West; 1.00 feet;
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THENCE North 55 degrees 54 minutes 58 seconds East along the southeasterly line
of said land conveyed to Prime Properties Limited Partnership, being also the
southeasterly line of Sublot 17 in said ▇▇▇▇▇ ▇▇▇▇▇▇▇ Subdivision and its
northeasterly prolongation, 83.41 feet to a drill hole set of its intersection
with the northeasterly line of said land so conveyed.\
THENCE North 34 degrees 03 minutes 33 seconds West along the northeasterly line
of said land conveyed to Prime Properties Limited Partnership, being also the
northeasterly line of said Original Lot 57, 82, 78 feet to the principal place
of beginning, and containing 23,336 square feet or 0.5357 acres of land
according to the survey by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates, Inc., dated November,
1994, and updated through July 19, 1999.
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