Exhibit 10.47
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Acadia New Loudon, LLC,
as mortgagor
(Borrower)
to
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
as mortgagee
(Lender)
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AMENDED, RESTATED AND CONSOLIDATED
MORTGAGE, ASSIGNMENT OF LEASES AND
RENTS AND SECURITY AGREEMENT
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Dated: As of August 13, 2004
Property Location: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ and ▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
PREPARED BY AND UPON
RECORDATION RETURN TO:
▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
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THIS MORTGAGE DOES NOT COVER REAL PROPERTY PRINCIPALLY IMPROVED BY ONE OR MORE
STRUCTURES CONTAINING, IN THE AGGREGATE, NOT MORE THAN SIX RESIDENTIAL DWELLING
UNITS, EACH HAVING ITS OWN SEPARATE COOKING FACILITIES
AMENDED, RESTATED AND CONSOLIDATED MORTGAGE, ASSIGNMENT OF
LEASES AND RENTS AND SECURITY AGREEMENT
THIS AMENDED, RESTATED AND CONSOLIDATED MORTGAGE, ASSIGNMENT OF LEASES
AND RENTS AND SECURITY AGREEMENT (herein "INSTRUMENT") is made as of August 13,
2004, and is given by the mortgagor, Acadia New Loudon, LLC, a Delaware limited
liability company whose address is c/o Acadia Realty Trust, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (herein "BORROWER"), to the mortgagee,
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a corporation organized and existing
under the laws of the state of Delaware, whose address is ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, together with its successors, assigns and
transferees (herein "LENDER").
RECITALS
A. Lender is making a secured loan to Borrower in the
original principal amount of $15,000,000 (the "LOAN"). The Loan is evidenced by
that certain Amended, Restated and Consolidated Promissory Note dated the date
hereof made by Borrower to Lender in such principal amount (as the same may be
amended, modified, restated, severed, consolidated, renewed, replaced, or
supplemented from time to time, the "NOTE").
B. Lender is the holder of the mortgages described on
Schedule 1 hereto (collectively, the "ORIGINAL MORTGAGES") and of the notes
secured thereby (collectively, the "ORIGINAL NOTES").
C. Lender is also the holder of that certain promissory
note of even date herewith in the principal amount of $7,064,107.76 made by
Borrower to Lender (the "NEW NOTE" and together with the Original Notes,
collectively, the "EXISTING NOTES"), which New Note is secured by that certain
Mortgage, Assignment of Leases and Rents and Security Agreement of even date
herewith given by Borrower to Lender (the "NEW MORTGAGE" and together with the
Original Mortgages, the "EXISTING MORTGAGES").
D. The outstanding principal indebtedness evidenced by the
Existing Notes and secured by the Existing Mortgages is $15,000,000.00 and
Borrower represents and warrants that Borrower has no offsets, defenses on
counterclaims under or with respect to any of its obligations under the Existing
Notes or Existing Mortgages.
E. Simultaneously with the execution and delivery hereof,
Borrower is executing and delivering the Note, which Note is intended to
consolidate, amend and restate in their entirety the Existing Notes and to
evidence the principal indebtedness heretofore evidenced by the Existing Notes.
F. Borrower and Lender desire to confirm the lien of the
Existing Mortgages, to consolidate the Existing Mortgages and the liens created
thereby, to amend and restate the Existing Mortgages in their entirety and to
spread the lien of the Existing Mortgages, all pursuant to the terms set forth
herein (the Existing Mortgages, as so consolidated, amended and restated
and spread, and as hereafter from time to time extended, split, spread, renewed,
modified, consolidated, or further amended and restated, this "INSTRUMENT").
NOW THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender hereby agree that, effective as of the date
hereof, the Existing Mortgages and the respective liens thereof are hereby
combined and consolidated so that together they shall hereafter constitute in
law but one mortgage, a single lien covering the Collateral (as hereinafter
defined) and securing the principal sum of $15,000,000 and that the Existing
Mortgages are hereby amended and restated in their entirety, and the
consolidated lien thereof is hereby spread, as follows:
BORROWER, in consideration of the indebtedness herein recited,
irrevocably grants, conveys, mortgages and assigns to Lender, WITH POWER OF SALE
AND RIGHTS OF ENTRY AND POSSESSION, the following described property located in
the County of Albany, State of New York, and more particularly described on
Exhibit "A" attached hereto and incorporated herein by reference for all
purposes.
TOGETHER with all buildings, improvements and tenements now or hereafter
erected on the property, and all heretofore or hereafter vacated alleys and
streets abutting the property, and all easements, rights, appurtenances, rents
(subject however to the assignment of rents to Lender herein), royalties,
mineral, oil and gas rights and profits, water, water rights, and water stock
appurtenant to the property, and all fixtures, machinery, equipment, engines,
boilers, incinerators, building materials, appliances and goods of every nature
whatsoever now or hereafter located in, or on, or used, or intended to be used
in connection with the property, including, but not limited to, those for the
purposes of supplying or distributing heating, cooling, electricity, gas, water,
air and light; and all elevators, and related machinery and equipment, fire
prevention and extinguishing apparatus, security and access control apparatus,
plumbing, bath tubs, water heaters, water closets, sinks, ranges, stoves,
refrigerators, dishwashers, disposals, washers, dryers, awnings, storm windows,
storm doors, screens, blinds, shades, curtains and curtain rods, mirrors,
cabinets, paneling, rugs, attached floor coverings, furniture, pictures,
antennas, trees and plants, tax refunds, trade names, licenses, permits,
Borrower's rights to insurance proceeds, unearned insurance premiums and chooses
in action; all of which, including replacements and additions thereto and
substitutions therefor, shall be deemed to be and remain a part of the real
property covered by this Instrument; and all of the foregoing, together with
said property are herein referred to as the "PROPERTY";
TOGETHER with all right, title and interest in, to and under any and all
leases now or hereinafter in existence (as amended or supplemented from time to
time) and covering space in or applicable to the Property (hereinafter referred
to collectively as the "LEASES" and singularly as a "LEASE"), together with all
rents, earnings, income, profits, benefits and advantages arising from the
Property and from said Leases and all other sums due or to become due under and
pursuant thereto, and together with any and all guarantees of or under any of
said Leases, and together with all rights, powers, privileges, options and other
benefits of Borrower as lessor under the Leases, including, without limitation,
the immediate and continuing right to receive and collect all rents, income,
revenues, issues, profits, condemnation awards, insurance proceeds, moneys and
security payable or receivable under the Leases or pursuant to any of the
provisions
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thereof, whether as rent or otherwise, the right to accept or reject any offer
made by any tenant pursuant to its Lease to purchase the Property and any other
property subject to the Lease as therein provided and to perform all other
necessary or appropriate acts with respect to such Leases as agent and
attorney-in-fact for Borrower, and the right to make all waivers and agreements,
to give and receive all notices, consents and releases, to take such action upon
the happening of a default under any Lease, including the commencement, conduct
and consummation of proceedings at law or in equity as shall be permitted under
any provision of any Lease or by any law, and to do any and all other things
whatsoever which the Borrower is or may become entitled to do under any such
Lease together with all accounts receivable, contract rights, franchises,
interests, estates or other claims, both at law and in equity, relating to the
Property, to the extent not included in rent earnings and income under any of
the Leases;
TOGETHER with all right, title and interest in, to and under any and all
reserve, deposit or escrow accounts (the "ACCOUNTS") made pursuant to any loan
document made between Borrower and Lender with respect to the Property, together
with all income, profits, benefits and advantages arising therefrom, and
together with all rights, powers, privileges, options and other benefits of
Borrower under the Accounts, and together with the right to do any and all other
things whatsoever which the Borrower is or may become entitled to do under the
Accounts;
TOGETHER with all agreements, contracts, certificates, guaranties,
warranties, instruments, franchises, permits, licenses, plans, specifications
and other documents, now or hereafter entered into, and all rights therein and
thereto, pertaining to the use, occupancy, construction, management or operation
of the Property and any part thereof and any improvements or respecting any
business or activity conducted on the Property and any part thereof and all
right, title and interest of Borrower therein, including the right to receive
and collect any sums payable to Borrower thereunder and all deposits or other
security or advance payments made by Borrower with respect to any of the
services related to the Property or the operation thereof;
TOGETHER with all tradenames, trademarks, servicemarks, logos,
copyrights, goodwill, books and records and all other general intangibles
relating to or used in connection with the operation of the Property; and
TOGETHER with any and all proceeds resulting or arising from any of the
foregoing (the Property, the Leases, the Accounts, and all other property,
whether real, personal, tangible, or intangible, described above, and all
proceeds thereof, may be referred to collectively as the "COLLATERAL").
THIS INSTRUMENT SECURES TO LENDER (a) the repayment of the indebtedness
evidenced by the Note in the principal sum of FIFTEEN MILLION AND NO/100 DOLLARS
($15,000,000) (the "PRINCIPAL"), with interest thereon, with the balance of the
indebtedness, if not sooner paid, due and payable on September 6, 2014 (the
"MATURITY DATE"), and all renewals, extensions and modifications thereof; (b)
the performance of the covenants and agreements of Borrower contained in an
Environmental Indemnity Agreement (herein so-called) between Lender and Borrower
dated of even date herewith; (c) the payment of all other sums, with interest
thereon, advanced by Lender in accordance herewith to protect the security of
this Instrument; and (d) the performance of the covenants and agreements of
Borrower herein
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contained, or contained in any other Loan Document, INCLUDING BORROWER'S
COVENANT TO REPAY ALL FUTURE ADVANCES (the Note, this Instrument, and all other
documents or instruments given by Borrower or others and accepted by Lender for
purposes of evidencing, securing, perfecting, or guaranteeing the indebtedness
evidenced by the Note may be referred to as the "LOAN DOCUMENTS"). Without
limitation of the foregoing, the following documents and instruments of even
date herewith are also Loan Documents: (i) Assignment of Leases and Rents from
Borrower to Lender, (ii) Assignment of Agreements, Licenses, Permits and
Contracts from Borrower to Lender, (iii) the Clearing Account Agreement (the
"CLEARING ACCOUNT AGREEMENT") among Borrower, Lender, Acadia Realty Limited
Partnership ("MANAGER") and Fleet National Bank, (iv) the Deposit Account
Agreement (the "DEPOSIT ACCOUNT AGREEMENT") among Borrower, Lender, Manager and
Deposit Bank, (v) the Guaranty of Recourse Obligations (the "GUARANTY") made by
Acadia Realty Limited Partnership, a Delaware limited partnership ("GUARANTOR"),
(vi) the Certificate of Borrower and (vii) Environmental Indemnity Agreement
made by Borrower for the benefit of Lender (the "ENVIRONMENTAL INDEMNITY
AGREEMENT"), as each of the foregoing may be (and each of the foregoing defined
terms shall refer to such documents as they may be) amended, restated, replaced,
supplemented or otherwise modified from time to time.
Borrower covenants that Borrower is lawfully seized of the estate hereby
conveyed and has the right to mortgage, grant, convey and assign the Property,
that the Property is unencumbered, and that Borrower will warrant and defend
generally the title to the Property against all claims and demands, subject to
any easements and restrictions listed in a schedule of exceptions to coverage in
any title insurance policy insuring Lender's interest in the Property.
Borrower represents, warrants, covenants and agrees in favor of Lender
as follows:
SECTION 1. PAYMENT OF PRINCIPAL AND INTEREST. Borrower shall promptly
pay when due the principal of and interest on the indebtedness evidenced by the
Note, any prepayment and late charges provided in the Note and all other sums
secured by this Instrument.
SECTION 2. INTENTIONALLY DELETED.
SECTION 3. APPLICATION OF PAYMENTS. Lender may apply any payments
received from or on behalf of Borrower to any of the obligations of Borrower
then due under the Loan Documents, in any order determined by Lender.
SECTION 4. CHARGES; LIENS. Borrower shall pay all rents, taxes, charges
assessments and impositions attributable to the Property (collectively "TAXES")
when due. Unless Lender is paying such Taxes in accordance with Section 25,
Borrower shall promptly furnish to Lender all notices of amounts due under this
Section, and in the event Borrower shall make payment directly, Borrower shall
promptly furnish to Lender receipts evidencing such payments. Except only for
the liens and security interests in favor of Lender under this Instrument and
the other Loan Documents, which Borrower shall pay and discharge in accordance
with the Loan Documents, Borrower shall promptly discharge any lien encumbering
all or any portion of or interest in the Property (unless such lien is bonded
within 30 days after Borrower first receives notice of such lien), irrespective
of the priority of the same. Borrower
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shall pay, when due, the claims of all persons supplying labor or materials to
or in connection with the Property (unless such claims are the subject of a bona
fide dispute in which Borrower is contesting the amount or validity thereof).
SECTION 5. HAZARD INSURANCE. Borrower shall at all times keep the
improvements now existing or hereafter erected on the Property insured against
all losses, hazards, casualties, liabilities and contingencies as Lender shall
reasonably require and in such amounts and for such periods as Lender shall
reasonably require. Borrower shall purchase and maintain policies of insurance
with respect to the Property in such amounts and covering such risks as shall be
satisfactory to Lender, including, but not limited to, the following:
(a) Property damage insurance covering loss or damage to the
Property caused by fire, lightning, hail, windstorm, explosion, hurricane (to
the extent available), vandalism, malicious mischief, and, if available and
subject to subsection (i) below, coverage for damage or destruction caused by
the acts of "Terrorists" (or such policies shall have no exclusion from coverage
with respect thereto) and such other losses, hazards, casualties, liabilities
and contingencies as are normally and usually covered by fire policies in effect
where the Property is located endorsed to include all of the extended coverage
perils and other broad form perils, including the standard "all risks" clauses.
Such policy shall be in an amount not less than that necessary to comply with
any coinsurance percentage stipulated in the policy, but not less than the
lesser of 100% of the full replacement cost of the improvements on the Property
(without any deduction for depreciation) or the unpaid principal amount of the
loan evidenced by the Note, and shall contain a replacement cost endorsement.
The deductible under such policy, if any, shall not exceed the lesser of five
percent (5%) of Net Operating Income or $50,000. Further, if any of the
improvements or the use of the Property shall at any time constitute legal
nonconforming structures or uses under current zoning ordinances, such policy
shall contain an "Ordinance or Law Coverage" or "Enforcement" endorsement
providing coverage for demolition, increased cost of construction and inability
to rebuild.
(b) Broad form boiler and machinery insurance in an amount
equal to the lesser of 100% of the full replacement cost of the building
(without any deduction for depreciation) in which the boiler or similar vessel
is located, or $2,000,000. In addition, Lender may require a rider to such
policy to extend such coverage to electrical machinery and equipment, air
conditioning, refrigeration, and mechanical objects.
(c) If the Property is in an area prone to geological
phenomena, including, but not limited to, sinkholes, mine subsidence or
earthquakes, insurance covering such risks in an amount equal to 100% of the
full replacement cost of the improvements on the Property (without any deduction
for depreciation), and with a maximum permissible deductible equal to the lesser
of $25,000 or 10% of the face value of the policy.
(d) Flood insurance if the Property is in an area now or
hereafter designated by the Federal Emergency Management Agency as a Zone "A" &
"V" Special Hazard Area, or such other Special Hazard Area if Lender so requires
in its sole discretion. Such policy shall be in an amount equal to 100% of the
full replacement cost of the improvements on the Property (without any deduction
for depreciation), and shall have a maximum permissible deductible of $3,000.
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(e) Business interruption or rent loss insurance in an
amount equal to the gross income or rentals from the Property for an indemnity
period of eighteen months, such amount being adjusted annually.
(f) During any period of reconstruction, renovation or
alteration of the Property in excess of 10% of the Note, a completed value, "All
Risks" Builders Risk form or "Course of Construction" insurance policy in
non-reporting form and in an amount satisfactory to Lender in Lender's sole
discretion.
(g) Commercial General Liability insurance covering bodily
injury and death in an amount not less than $1,000,000 per occurrence and
$2,000,000 in the aggregate with no deductible, together with at least
$25,000,000 excess and/or umbrella liability insurance for any and all claims.
If Lender permits such liability coverage to be written on a blanket basis, then
such policy shall provide that the aggregate limit of insurance applies
separately to the Property.
(h) If required by applicable state laws, worker's
compensation or employer's liability insurance in accordance with such laws.
(i) Notwithstanding anything in subsection (a) above to the
contrary, Borrower shall be required to obtain and maintain coverage in its
property insurance policy (or by a separate policy) against loss or damage by
terrorist acts provided that such coverage is available. Borrower shall obtain
such coverage from a carrier which otherwise satisfies the rating criteria
specified in this Section 5 (a "QUALIFIED CARRIER") or in the event that such
coverage is not available from a Qualified Carrier, Borrower shall obtain such
coverage from the highest rated insurance company providing such coverage. If
such coverage with respect to terrorist acts is available as aforesaid, Borrower
shall obtain and maintain such coverage in an amount equal to 100% of the "Full
Replacement Cost" of the Property.
(j) Such other insurance and endorsements, if any, as Lender
may reasonably require from time to time, or which are required by the Loan
Documents.
Each carrier providing any insurance, or portion thereof, required by
this Section shall be issued by companies approved by Lender and licensed to do
business in the State, with a claims paying ability rating of "AA" or better by
S&P (and the equivalent by any other Rating Agency) and a rating of A:X or
better in the current Best's Insurance Reports; provided, that, the liability
insurance required under paragraph (g) of this Section shall be issued by
companies approved by Lender and licensed to do business in the State, with a
claims paying ability rating of "A+" or better by S&P (and the equivalent by any
other Rating Agency) and a rating of A:X or better in the current Best's
Insurance Reports. Borrower shall cause all insurance (except general public
liability insurance) carried in accordance with this Section to be payable to
Lender as a mortgagee and not as a coinsured, and, in the case of all policies
of insurance carried by each lessee for the benefit of Borrower, if any, to
cause all such policies to be payable to Lender as Lender's interest may appear.
All premiums on insurance policies shall be paid, in the manner provided under
Section 25(d) hereof, or in such other manner as Lender may designate in
writing.
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All insurance policies and renewals thereof (i) shall be in a form
acceptable to Lender, (ii) shall provide for a term of not less than one year,
(iii) shall provide by way of endorsement, rider or otherwise that such
insurance policy shall not be canceled, endorsed, altered, or reissued to effect
a change in coverage unless such insurer shall have first given Lender 30 days
prior written notice thereof, (iv) shall include a standard mortgagee clause in
favor of and in form acceptable to Lender, (v) shall provide for claims to be
made on an occurrence basis, except that boiler and machinery coverage may be
made on an accident basis, and (vi) shall contain an agreed value clause updated
annually (if the amount of coverage under such policy is based upon the
replacement cost of the Property). All property damage insurance policies
(except for flood and earthquake policies) must automatically reinstate after
each loss.
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 "stand-alone" policy insuring
only the Property in compliance with the provisions of this Section 5.
Lender shall have the right to hold the policies, and Borrower shall
promptly furnish to Lender all renewal notices and all receipts of paid
premiums. Not less than five (5) days prior to the expiration date of any
insurance policy required hereunder, a certificate of insurance evidencing the
renewal of such policy, together with evidence satisfactory to Lender of payment
in full of the annual premium therefor, shall be delivered by Borrower to
Lender. Not more than forty-five (45) days after to the expiration date of any
insurance policy required hereunder, Borrower shall deliver to Lender a renewal
insurance policy in form satisfactory to Lender.
If the Property is damaged or destroyed, in whole or in part, by fire or
other casualty (a "CASUALTY"), Borrower shall give immediate written notice
thereof to Lender and to the insurance carrier. If a Casualty covered by any of
the policies of insurance (an "INSURED CASUALTY") occurs where the loss does not
exceed $1,000,000, provided no Event of Default has occurred and is continuing,
Borrower may settle and adjust any claim without the prior consent of Lender;
provided such adjustment is carried out in a competent and timely manner, and
Borrower is hereby authorized to collect and receipt for the insurance proceeds.
In the event of an Insured Casualty where the loss equals or exceeds $1,000,000
(a "SIGNIFICANT CASUALTY"), Borrower may settle and adjust any claim with the
prior consent of Lender (which consent shall not be unreasonably withheld or
delayed) unless an Event of Default has occurred and is continuing in which case
Lender may settle and adjust any claim without the consent of Borrower and agree
with the insurer(s) on the amount to be paid on the loss, which settlement and
adjustment shall be in Lender's sole and absolute discretion. The proceeds with
respect to any Significant Casualty shall be due and payable solely to Lender
and held by Lender in the Casualty/Condemnation Subaccount and disbursed in
accordance herewith. If Borrower or any party other than Lender is a payee on
any check representing insurance proceeds with respect to a Significant
Casualty, Borrower shall immediately endorse, and cause all such third parties
to endorse, such check payable to the order of Lender. Borrower hereby
irrevocably appoints Lender as its attorney-in-fact, coupled with an interest,
to endorse such check payable to the order of Lender. Borrower further
authorizes Lender, at Lender's option, (a) to hold the balance of such proceeds
with respect to any Significant Casualty to be used to reimburse Borrower for
the cost of reconstruction or repair of the Property or (b) subject to the
immediately following paragraph, to apply such proceeds to the payment of the
sums secured by this Instrument whether or not then
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due, in any order. The expenses incurred by Lender in the settlement, adjustment
and collection of any insurance proceeds shall become part of the Debt and shall
be reimbursed by Borrower to Lender upon demand.
Lender shall not exercise Lender's option to apply insurance proceeds to
the payment of the sums secured by this Instrument if all of the following
conditions are met: (i) no Event of Default has occurred which is then
continuing; (ii) Lender determines that there will be sufficient funds to
restore and repair the Property to the Pre-existing Condition (as hereinafter
defined); (iii) Lender agrees in writing that the rental income of the Property,
after restoration and repair of the Property to the Pre-existing Condition, will
be sufficient to meet all operating costs and other expenses, payments for
reserves and loan repayment obligations (including any obligations under any
permitted subordinate financing) relating to the Property and maintain a Debt
Service Coverage Ratio of at least 1.25 to 1.0; (iv) Lender determines that
restoration and repair of the Property to the Pre-existing Condition will be
completed within one year of the date of the loss or casualty to the Property,
but in no event later than six months prior to the Maturity Date; (v) less than
30 percent of the total floor area of the improvements has been damaged,
destroyed or rendered unusable as a result of such fire or other casualty; (vi)
tenant leases demising in the aggregate at least 65% of the total rentable space
at the Property in effect as of the date of the occurrence of such fire or other
casualty remain in full force and effect during and after the completion of the
restoration and repair of the Property; and (vii) Lender is reasonably satisfied
that the Property can be restored and repaired as nearly as possible to the
condition it was in immediately prior to such casualty and in compliance with
all applicable zoning, building and other laws and codes (the "PRE-EXISTING
CONDITION"). If Lender elects to make the insurance proceeds available for the
restoration and repair of the Property, Borrower agrees that, if at any time
during the restoration and repair, the cost of completing such restoration and
repair, as determined by Lender, exceeds the undisbursed insurance proceeds,
Borrower shall, immediately upon demand by Lender, deposit the amount of such
excess with Lender, and Lender shall first disburse such deposit to pay for the
costs of such restoration and repair on the same terms and conditions as the
insurance proceeds are disbursed.
If the insurance proceeds are held by Lender to reimburse Borrower for
the cost of restoration and repair of the Property, then Borrower shall restore
the Property to the equivalent of its original condition or such other condition
as Lender may approve in writing, and Borrower shall promptly begin such
restoration and at all times thereafter diligently prosecute such restoration to
completion. Lender may, at Lender's option, condition disbursement of said
proceeds on Lender's approval of such plans and specifications of an architect
satisfactory to Lender, contractor's cost estimates, architect's certificates,
waivers of liens, sworn statements of mechanics and materialmen and such other
evidence of costs, percentage completion of construction, application of
payments; and satisfaction of liens as Lender may reasonably require. If the
insurance proceeds are applied to the payment of the sums secured by this
Instrument, any such application of proceeds to principal shall not extend or
postpone the due dates of the monthly installments due under the Note, under
Section 25(d) hereof, or otherwise under the Loan Documents, or change the
amounts of such installments. If the Property is sold at foreclosure or pursuant
to power of sale or if Lender acquires title to the Property, Lender shall have
all of the right, title and interest of Borrower in and to any insurance
policies and unearned premiums thereon and in and to the proceeds resulting from
any damage to the Property prior to such sale or acquisition.
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SECTION 6. PRESERVATION AND MAINTENANCE OF PROPERTY. Borrower (a) shall
not commit waste or permit impairment or deterioration of the Property, (b)
shall not abandon the Property, (c) shall restore or repair promptly and in a
good and workmanlike manner all or any part of the Property to the equivalent of
its original condition, or such other condition as Lender may approve in
writing, in the event of any damage, injury or loss thereto, whether or not
insurance proceeds are available to cover in whole or in part the costs of such
restoration or repair, (d) shall keep the Property, including improvements,
fixtures, equipment, machinery and appliances thereon in good repair and shall
replace fixtures, equipment, machinery and appliances on the Property when
necessary to keep such items in good repair, (e) shall comply with all laws,
ordinances, regulations and requirements of any governmental body applicable to
the Property, (f) shall provide for management of the Property by Acadia Realty
Limited Partnership, or otherwise provide for professional third-party
management of the Property by a commercial property manager with substantial
experience in managing properties of the applicable kind, and otherwise
satisfactory to Lender, pursuant to a contract approved by Lender in writing,
unless such requirement shall be waived by Lender in writing, (g) shall
generally operate and maintain the Property in a manner to ensure maximum
rentals, and (h) shall give notice in writing to Lender of and, unless otherwise
directed in writing by Lender, appear in and defend any action or proceeding
purporting to affect the Property, the security of this Instrument or the rights
or powers of Lender. Neither Borrower nor any tenant or other person shall
remove, demolish or alter any improvement now existing or hereafter erected on
the Property or any fixture, equipment, machinery or appliance in or on the
Property except when incident to the replacement of fixtures, equipment,
machinery and appliances with items of like kind.
SECTION 7. USE OF PROPERTY. Unless required by applicable law or unless
Lender has otherwise agreed in writing, Borrower shall not allow changes in the
use for which all or any part of the Property was intended at the time this
Instrument was executed. Borrower shall not subdivide the Property or initiate
or acquiesce in a change in the zoning classification of the Property without
Lender's prior written consent.
SECTION 8. PROTECTION OF LENDER'S SECURITY. If Borrower fails to perform
the covenants and agreements contained in this Instrument, or if any action or
proceeding is commenced which affects the Property or title thereto or the
interest of Lender therein, including, but not limited to, eminent domain,
insolvency, code enforcement, or arrangements or proceedings involving a
bankrupt or decedent, Lender, at Lender's option, may make such appearances,
disburse such sums and take such action as Lender deems necessary, in its sole
discretion, to protect Lender's interest, including, but not limited to, (i)
disbursement of attorney's fees, (ii) entry upon the Property to make repairs,
(iii) procurement of satisfactory insurance as provided herein, (iv) the payment
of any Taxes then due and payable, and (v) payment of any other amounts
contemplated in any of the Loan Documents. Any amounts disbursed by Lender
pursuant to this Section, with interest thereon, shall become additional
indebtedness of Borrower secured by this Instrument. Unless Borrower and Lender
agree to other terms of payment, such amounts shall be immediately due and
payable upon demand and shall bear interest from the date of disbursement at the
rate then applicable to principal under the Note unless collection from Borrower
of interest at such rate would be contrary to applicable law, in which event
such amounts shall bear interest at the highest rate which may be collected
9
from Borrower under applicable law. Nothing contained in this Section or
elsewhere in any of the Loan Documents shall require Lender to incur any expense
or take any action hereunder.
SECTION 9. INSPECTION. Lender may make or cause to be made reasonable
entries upon and inspections of the Property including, but not limited to,
Phase I and/or Phase II environmental audits and inspections.
SECTION 10. BOOKS AND RECORDS. Borrower shall keep and maintain at all
times at Borrower's address stated herein, or such other place as Lender may
approve in writing, complete and accurate books of accounts and records adequate
to reflect correctly the results of the operation of the Property and copies of
all written contracts, leases and other instruments which affect the Property.
Such books, records, contracts, leases and other instruments shall be subject to
examination and inspection at any reasonable time by Lender.
Borrower shall furnish to Lender annually, within 120 days after each
calendar year, a complete copy of Borrower's annual financial statements
prepared as a compilation (without a review and without disclosures) by a "big
four" accounting firm or another independent certified public accountant
reasonably acceptable to Lender, each in accordance with GAAP or a federal
income tax basis of accounting, in either case, consistently applied, and
containing balance sheets and statements of profit and loss for Borrower and the
Property in such detail as Lender may reasonably request. Each such statement
(x) shall be in form and substance satisfactory to Lender, (y) shall set forth
the financial condition and the income and expenses for the Property for the
immediately preceding calendar year, including statements of annual Net
Operating Income as well as (1) a list of commercial tenants, if any, occupying
more than twenty percent of the rentable space of the Property, (2) a breakdown
showing (a) the year in which each commercial Lease then in effect expires, and
(b) the percentage of rentable space covered by such commercial Lease as stated
in such Lease, and (z) shall be accompanied by an Officer's Certificate (as
defined in Section 25 hereof) certifying (1) that such statement is true,
correct, complete and accurate and presents fairly the financial condition of
the Property and has been prepared in accordance with GAAP or a federal income
tax basis of accounting, in either case, consistently applied, and (2) whether
there exists an Event of Default, and if so, the nature thereof, the period of
time it has existed and the action then being taken to remedy it.
On or before the 45th day after the end of each three-month fiscal
quarter of Borrower (which may include months for which reports shall have been
submitted under the prior sentence), Borrower shall deliver to Lender management
prepared financial statements for such quarter. Each set of such financial
statements (i) shall consist of an operating statement of income and expenses of
the Property, (ii) shall be in form and detail reasonably satisfactory to Lender
and (iii) shall be accompanied by an Officer's Certificate certifying that the
applicable statements are true, complete, and accurate and do not omit to state
any material information. All of such financial statements shall provide
information for the applicable month or quarter and on a year-to-date basis (and
at the end of the fourth quarter, for the year).
Borrower shall furnish, together with the foregoing financial statements
and at any other time upon Lender's request, a rent schedule for the Property,
certified by Borrower, showing the name of each tenant, and for each tenant, the
space occupied, the lease expiration date, the rent payable and the rent paid.
10
In addition to the above delivery of financial statements and rent
schedule, Borrower shall deliver to Lender updated versions of such financial
statements at any other time upon Lender's request, including operating
statements of income and expenses of the Property. Borrower shall also furnish
to Lender, during any Cash Management Period, the Annual Budget in accordance
with Section 28(h) of this Instrument. Further, Borrower shall provide to
Lender, as soon as the same are available to Borrower, all financial statements
and sales reports received from any tenant at the Property.
SECTION 11. CONDEMNATION. Borrower shall promptly give Lender notice of
the actual or threatened commencement of any condemnation or eminent domain
proceeding affecting the Property (a "CONDEMNATION") and shall deliver to Lender
copies of any and all papers served in connection with such Condemnation.
Following the occurrence of a Condemnation, Borrower, regardless of whether an
Award is available, shall promptly proceed to restore, repair, replace or
rebuild the Property in accordance with Legal Requirements to the extent
practicable to be of at least equal value and of substantially the same
character (and to have the same utility) as prior to such Condemnation. If a
Condemnation occurs where the award or payment in respect thereof (an "AWARD")
does not exceed $500,000 or which results in the taking of 5% or less of the
Property, provided no Event of Default has occurred and is continuing, Borrower
may make any compromise, adjustment or settlement in connection with such
Condemnation without the prior consent of Lender; provided such adjustment is
carried out in a competent and timely manner, and Borrower is hereby authorized
to collect and receipt for the Award. In the event of a Condemnation where the
Award is in excess of $500,000 or which results in the taking of more than 5% of
the Property, 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 and, so long as no Event of Default is continuing,
with Borrower's consent (which consent shall not be unreasonably withheld or
delayed) to make any compromise, adjustment or settlement in connection with
such Condemnation. Borrower shall cause any Award that is payable to Borrower to
be paid directly to Lender. Lender shall hold such Award in the
Casualty/Condemnation Subaccount and disburse such Award in accordance with the
terms hereof.
Borrower authorizes Lender to apply such Award, after the deduction of
Lender's expenses incurred in the collection of such amounts, at Lender's
option, to restoration or repair of the Property or to payment of the sums
secured by this Instrument, whether or not then due, in the order determined by
Lender, with the balance, if any, to Borrower. Unless Borrower and Lender
otherwise agree in writing, any application of proceeds to principal shall not
extend or postpone the due date of the monthly installments due hereunder or
under any of the Loan Documents or change the amount of such installments.
Borrower agrees to execute such further evidence of assignment of any awards,
proceeds, damages or claims arising in connection with such condemnation or
taking as Lender may require.
SECTION 12. BORROWER AND LIEN NOT RELEASED. From time to time, Lender
may, at Lender's option, without giving notice to or obtaining the consent of
Borrower, Borrower's successors or assigns or of any junior lienholder or
guarantors, without liability on Lender's part and notwithstanding Borrower's
breach of any covenant or agreement of Borrower in this Instrument, extend the
time for payment of said indebtedness or any part thereof, reduce the payments
thereon, release anyone liable on any of said indebtedness, accept a renewal
note or
11
notes therefor, modify the terms and time of payment of said indebtedness,
release from the lien of this Instrument any part of the Property, take or
release other or additional security, reconvey any part of the Property, consent
to any map or plan of the Property, consent to the granting of any easement,
join in any extension or subordination agreement, and agree in writing with
Borrower to modify the rate of interest or period of amortization of the Note or
change the amount of the monthly installments payable thereunder. Any actions
taken by Lender pursuant to the terms of this Section shall not affect the
obligation of Borrower or Borrower's successors or assigns to pay the sums
secured by this Instrument and to observe the covenants of Borrower contained
herein, shall not affect the guaranty of any person, corporation, partnership or
other entity for payment of the indebtedness secured hereby, and shall not
affect the lien or priority of lien hereof on the Property. Borrower shall pay
Lender a reasonable service charge, together with such title insurance premiums
and attorney's fees as may be incurred at Lender's option, for any such action
if taken at Borrower's request.
SECTION 13. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. This Instrument
is intended to be a security agreement pursuant to the Uniform Commercial Code
for any of the items specified above as part of the Collateral which, under
applicable law, may be subject to a security interest pursuant to the Uniform
Commercial Code, and Borrower hereby grants Lender a security interest in said
items. Borrower agrees that Lender may file this Instrument, or a reproduction
thereof, in the real estate records or other appropriate index, as a financing
statement for any of the items specified above as part of the Collateral. Any
reproduction of this Instrument or of any other security agreement or financing
statement shall be sufficient as a financing statement. In addition, Borrower
agrees to execute and deliver to Lender, upon Lender's request, any financing
statements, as well as extensions, renewals and amendments thereof, and
reproductions of this Instrument in such form as Lender may require to perfect a
security interest with respect to said items. Borrower shall pay all costs of
filing such financing statements and any extensions, renewals, amendments and
releases thereof, and shall pay all reasonable costs and expenses of any record
searches for financing statements Lender may reasonably require. Without the
prior written consent of Lender, Borrower shall not create or suffer to be
created pursuant to the Uniform Commercial Code any other security interest in
said items, including replacements and additions thereto. Upon Borrower's breach
of any covenant or agreement of Borrower contained in this Instrument, including
the covenants to pay when due all sums secured by this Instrument, Lender shall
have the remedies of a secured party under the Uniform Commercial Code and, at
Lender's option, may also invoke the remedies provided herein or in any of the
Loan Documents, or pursuant to any applicable law as to such items. In
exercising any of said remedies, Lender may proceed against the items of real
property and any items of personal property specified above as part of the
Collateral separately or together and in any order whatsoever, without in any
way affecting the availability of Lender's remedies under the Uniform Commercial
Code or of the remedies provided herein or in any of the Loan Documents. For
purposes of the Security Agreement and the fixture filing, the Borrower shall
constitute the "DEBTOR" and shall have the address specified in the first
paragraph of this Instrument and the Lender shall constitute the "SECURITY
PARTY" and shall have the address specified in the first paragraph of this
Instrument.
SECTION 14. LEASES OF THE PROPERTY. Borrower shall comply with and
observe Borrower's obligations as landlord under all leases of the Property or
any part thereof. Borrower will not lease any portion of the Property for any
use contrary to the existing character
12
of the Property except with the prior written approval of Lender. Borrower may
execute or modify, without Lender's prior written consent, any lease of space at
the Property now existing or hereafter made which affects less than 20,000
square feet of space at the Property and provided the term of such lease is less
than five years (an "EXEMPT LEASE") provided such lease:
(i) is on a standard lease form pre-approved by
Lender;
(ii) is at a net effective rent (after taking into
account any free rent, construction allowances or other concessions granted by
landlord) no less than the current actual rent or fair market rent then
prevailing for similar properties and leases in the market area;
(iii) contains rent or other concessions which are
legally required or are otherwise customary and reasonable for similar
properties and leases in the market area;
(iv) represents a bona fide arm's length transaction;
(v) does not permit any use which would violate any
provision of any existing lease or is otherwise inconsistent with the uses and
quality of existing tenants;
(vi) is provided to Lender within ten days after
execution;
(vii) as modified or amended does not become a lease
which fails to satisfy the criteria for an Exempt Lease pursuant to this
Section;
(viii) as modified or amended does not materially
modify the financial terms of Borrower's standard form of lease or materially
reduce the rights and remedies of the Borrower or Lender under said standard
lease;
(ix) is subordinate by its terms to this Instrument
provided that Lender shall have agreed to provide such tenant with a
non-disturbance agreement in form and substance reasonably acceptable to Lender;
provides that the tenant thereunder is required to attorn to Lender, such
attornment to be effective upon Lender's acquisition of title to the Property;
that the tenant agrees to execute such further evidences of attornment as Lender
may from time to time request; that the attornment of the tenant shall not be
terminated by foreclosure; that in no event shall Lender, as holder of this
Instrument or as successor landlord, be liable to the tenant for any act or
omission of any prior landlord or for any liability or obligation of any prior
landlord occurring prior to the date that Lender or any subsequent owner acquire
title to the Property; and that Lender may, at Lender's option, accept or reject
such attornment.
Borrower shall be required to obtain Lender's consent, which shall not
be unreasonably withheld, for the creation of any lease and subleases at the
Property other than an Exempt Lease. The request for approval of each such
proposed lease shall be made to Lender in writing and Borrower shall furnish to
Lender (and any loan servicer specified from time to time by Lender): (i) such
biographical and financial information about the proposed tenant as Lender may
reasonably require in conjunction with its review, (ii) a copy of the proposed
form of lease, and (iii) a summary of the material terms of such proposed lease
(including, without limitation, rental terms and the term of the proposed lease
and any options). Lender's failure to approve or
13
disapprove any such lease or sublease within ten (10) Business Days after
Lender's receipt of such request shall be deemed to constitute Lender's approval
thereof.
As to all leases other than Exempt Leases, Borrower shall not, without
the prior written consent of Lender (which shall not be unreasonably withheld),
(i) cancel, amend or modify any such lease, (ii) approve any assignment,
sublease or underlease of any such lease, or (iii) cancel or modify any
guaranty, or release any security deposit or letter of credit constituting
security pertaining to any such lease. Lender's failure to approve or disapprove
any of the matters described in the preceding sentence within ten (10) Business
Days after Lender's receipt of such request shall be deemed to constitute
Lender's approval thereof.
Borrower shall promptly send Lender copies of any notices of default
received from the tenant under any lease; and will enforce (short of terminating
such lease) the performance by the tenant of the tenant's obligations under any
lease.
Except for security deposits, no lease, whether an Exempt Lease or
otherwise, shall provide for payment of rent more than one month in advance, and
Borrower shall not under any circumstances collect any such rent more than one
month in advance.
Borrower, at Lender's request, shall furnish Lender with executed copies
of all leases hereafter made of all or any part of the Property, and all leases
hereafter entered into (other than Exempt Leases) will be in form and substance
subject to the approval of Lender. All leases of the Property or a separate
agreement in recordable form and substance satisfactory to Lender shall
specifically provide that such leases are subordinate to this Instrument; that
the tenant attorns to Lender, such attornment to be effective upon Lender's
acquisition of title to the Property; that the tenant agrees to execute such
further evidences of attornment as Lender may from time to time request; that
the attornment of the tenant shall not be terminated by foreclosure; that in no
event shall Lender, as holder of this Instrument or as successor landlord, be
liable to the tenant for any act or omission of any prior landlord or for any
liability or obligation of any prior landlord occurring prior to the date that
Lender or any subsequent owner acquire title to the Property; and that Lender
may, at Lender's option, accept or reject such attornment. Notwithstanding the
foregoing, Lender agrees to enter into a non-disturbance agreement with any
tenant at the Property, which agreement shall be in form and substance and on
terms and conditions reasonably acceptable to Lender. Except as otherwise
provided in this Section, Borrower shall not, without Lender's written consent,
(1) execute, modify, surrender or terminate, either orally or in writing, any
lease at the Property now existing or hereafter made of all or any part of the
Property, (2) permit an assignment or sublease of a lease, or (3) request or
consent to the subordination of any lease of all or any part of the Property to
any lien subordinate to this Instrument. Notwithstanding the foregoing and
provided that no Event of Default is continuing, , Borrower may, without
Lender's consent, terminate a Lease which covers less than 22,000 rentable
square feet provided that (i) the tenant under such Lease is in default under
such Lease and (ii) Borrower shall give Lender not less than thirty (30) days
prior written notice specifying the date on which Borrower will terminate such
Lease. If Borrower becomes aware that any tenant proposes to do, or is doing,
any act or thing which may give rise to any right of set-off against rent,
Borrower shall (i) take such steps as shall be reasonably calculated to prevent
the accrual of any right to a set-off against rent, (ii) notify Lender thereof
and of the amount of said set-offs, and (iii) within ten days after such
accrual, reimburse the tenant who shall have
14
acquired such right to set-off or take such other steps as shall effectively
discharge such set-off and as shall assure that rents thereafter due shall
continue to be payable without set-off or deduction.
Upon Lender's request, Borrower shall absolutely assign to Lender, by written
instrument satisfactory to Lender, all leases now existing or hereafter made of
all or any part of the Property and all security deposits made by tenants in
connection with such leases of the Property. Upon assignment by Borrower to
Lender of any leases of the Property, Lender shall have all of the rights and
powers possessed by Borrower prior to such assignment and Lender shall have the
right to modify, extend or terminate such existing leases and to execute new
leases, in Lender's sole discretion.
SECTION 15. TRANSFERS OF THE PROPERTY OR BENEFICIAL INTERESTS IN
BORROWER.
(a) As used in this Section 15 and elsewhere in this
Instrument, the following capitalized terms shall have the respective meanings
set forth below:
(i) "CONTROL": with respect to any Person, either
(i) ownership directly or indirectly of 49% or more of all equity interests in
such Person or (ii) the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
through the ownership of voting securities, by contract or otherwise.
(ii) "KEY PRINCIPALS": Acadia Realty Limited
Partnership, a Delaware limited partnership, and Acadia Realty Trust, a Maryland
real estate investment trust.
(iii) "PERMITTED ENCUMBRANCES": (i) the liens created
by the Loan Documents, (ii) all liens and other matters disclosed in Lender's
title insurance policy, (iii) liens, if any, for Taxes not yet due and payable
and not delinquent and (iv) any workers', mechanics' or other similar liens on
the Property provided that any such Lien is bonded or discharged within 30 days
after Borrower first receives notice of such lien and (v) such other title and
survey exceptions as Lender approves in writing in Lender's discretion.
(iv) "PERMITTED TRANSFERS": (i) a Lease entered into
in accordance with the Loan Documents, (ii) a Permitted Encumbrance, (iii) a
Transfer and Assumption, (iv) provided that no Event of Default shall then
exist, (1) a Transfer of an indirect interest in Borrower other than the
membership interest held by Acadia Realty Limited Partnership (the "SOLE
MEMBER"), (2) a Transfer of publicly traded shares in Acadia Realty Trust or (3)
a Transfer of an interest in the Sole Member to any Person, in either case,
provided that (A) such Transfer shall not (x) cause the transferee (other than
any Key Principal), together with its Affiliates, to acquire Control of Borrower
or the Sole Member or to increase its direct or indirect interest in Borrower or
in the Sole Member to an amount which equals or exceeds 49% or (y) result in
Borrower or the Sole Member no longer being Controlled by any Key Principal, (B)
after giving effect to such Transfer, Key Principals (in the aggregate) shall
continue to own at least 51% of all equity interests (direct or indirect) in
Borrower, (C) Borrower shall give Lender notice of such Transfer together with
copies of all instruments effecting such Transfer not less than 10 days prior to
the date of such Transfer, and (D) the legal and financial structure of Borrower
and its
15
members and the single purpose nature and bankruptcy remoteness of Borrower and
its members after such Transfer, shall satisfy Lender's then current applicable
underwriting criteria and requirements, (v) provided that no Event of Default
shall then exist, a Transfer of a direct or indirect interest in Borrower or
Sole Member that occurs by devise or bequest or by operation of law upon the
death of a natural person that was the holder of such interest to a member of
the immediate family of such interest holder or a trust established for the
benefit of such immediate family member, provided that (A) no such Transfer
shall result in a change of the day to day operations of the Property, (B)
Borrower shall give Lender notice of such Transfer together with copies of all
instruments effecting such Transfer not less than 20 days after the date of such
Transfer, (C) the legal and financial structure of Borrower and Sole Member, and
the single purpose nature and bankruptcy remoteness of Borrower and Sole Member
after such Transfer, shall satisfy Lender's then current applicable underwriting
criteria and requirements, (D) if any such Transfer would result in a change of
Control of Borrower or Sole Member and occurs prior to the occurrence of a
Secondary Market Transaction, such Transfer is approved by Lender in writing
within 30 Business Days after any such Transfer, and (E) if any such Transfer
would result in a change of Control of Borrower or Sole Member and occurs after
the occurrence of a Secondary Market Transaction, Borrower, at Borrower's sole
cost and expense, shall, within 30 Business Days after any such Transfer, (a)
deliver (or cause to be delivered) if required by Lender or any Rating Agency a
Rating Comfort Letter to Lender, (b) obtain the prior written consent of Lender
which shall not be unreasonably withheld and (c) reimburse Lender for all
reasonable expenses incurred by Lender in connection with such Transfer, or (vi)
provided that no Event of Default shall then exist, a Transfer of a direct or
indirect interest in Borrower or Sole Member to any Person (other than any Key
Principal) (the "NEW SPONSOR"), pursuant to which, after giving effect to such
Transfer, the New Sponsor, together with its Affiliates, acquires Control of
Borrower or the Sole Member or holds a direct or indirect interest in Borrower
or in Sole Member in an amount equaling or exceeding 49% provided that (A)
Lender consents to such Transfer, which consent shall not be unreasonably
withheld, (B) Borrower delivers to Lender evidence reasonably satisfactory to
Lender showing that, after giving effect to such Transfer, Borrower and Sole
Member remain in full compliance with Section 29 hereof, as the provisions
thereof may be modified by Lender taking into account the ownership structure of
New Sponsor and its Affiliates, (C) if the Loan (as defined in Section 32(e)
hereof), by itself or together with other loans, has been the subject of a
Secondary Market Transaction, then Lender shall have received a Rating Comfort
Letter from the applicable Rating Agencies, (D) if the Loan has not been the
subject of a Secondary Market Transaction, then Lender shall have determined in
its reasonable discretion (taking into consideration such factors as Lender may
determine, including the attributes of the loan pool in which the Loan might
reasonably be expected to be securitized) that no rating for any securities that
would be issued in connection with such securitization will be diminished,
qualified, or withheld by reason of such Transfer to New Sponsor, (E) the
identity, experience, and financial condition of the New Sponsor shall be
satisfactory to Lender in its reasonable discretion, (F) a replacement
guarantor(s) (the identity, experience and financial condition of which shall be
satisfactory to Lender in its reasonable discretion) shall execute and deliver
to Lender any and all documents reasonably required by Lender, in form and
substance reasonably required by Lender, in Lender's sole discretion, after
which Guarantor shall be released from all liabilities and obligations under the
Guaranty, and (G) counsel to New Sponsor and replacement guarantor(s) shall
deliver to Lender opinions in form and substance satisfactory to Lender as to
such matters as Lender shall reasonably require,
16
which may include opinions as to substantially the same matters as were required
in connection with the origination of the Loan.
(v) "PERSON": any individual, corporation,
partnership, limited liability company, joint venture, estate, trust,
unincorporated association, any other person or entity, and any federal, state,
county or municipal government or any bureau, department or agency thereof and
any fiduciary acting in such capacity on behalf of any of the foregoing.
(vi) "RATING AGENCY": each of Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P"), ▇▇▇▇▇'▇
Investors Service, Inc. ("MOODY'S"), and Fitch IBCA Duff & ▇▇▇▇▇▇ ("FITCH") or
any other nationally-recognized statistical rating organization to the extent
any of the foregoing have been engaged by Lender or its designee in connection
with or in anticipation of any Secondary Market Transaction.
(vii) "RATING COMFORT LETTER": a letter issued by each
of the applicable Rating Agencies which confirms that the taking of the action
referenced to therein will not result in any qualification, withdrawal or
downgrading of any existing ratings of Securities created in a Secondary Market
Transaction.
(viii) "SECONDARY MARKET TRANSACTION": any of (i) the
sale, assignment, or other transfer of all or any portion of the loan evidenced
by the Note and this Instrument or the Loan Documents or any interest therein to
one or more investors, (ii) the sale, assignment, or other transfer of one or
more participation interests in the loan evidenced by the Note and this
Instrument or Loan Documents to one or more investors, or (iii) the transfer or
deposit of all or any portion of the loan evidenced by the Note and this
Instrument or Loan Documents to or with one or more trusts or other entities
which may sell certificates or other instruments to investors evidencing an
ownership interest in the assets of such trust or the right to receive income or
proceeds therefrom.
(ix) "TRANSFER": any sale, conveyance, transfer,
lease or assignment, or the entry into any agreement to sell, convey, transfer,
lease or assign, whether by law or otherwise, of, on, in or affecting (i) all or
part of the Property (including any legal or beneficial direct or indirect
interest therein), (ii) any direct or indirect interest in Borrower (including
any profit interest), or (iii) any direct or indirect interest in the Sole
Member.
(x) "TRANSFER AND ASSUMPTION": is defined in
paragraph (c) of this Section 15.
(b) Borrower shall not directly or indirectly make, suffer
or permit the occurrence of any Transfer other than a Permitted Transfer.
(c) Notwithstanding the foregoing, Borrower shall have a
one-time right to Transfer the Property to another party (the "TRANSFEREE
BORROWER") and have the Transferee Borrower assume all of Borrower's obligations
under the Loan Documents, and have replacement guarantors and indemnitors assume
all of the obligations of the indemnitors and guarantors of the Loan Documents
(collectively, a "TRANSFER AND ASSUMPTION"). Borrower may make a written
application to Lender for Lender's consent to the Transfer and Assumption,
subject to the conditions set forth in subparagraphs (i) and (ii) of this
paragraph (c). Together
17
with such written application, Borrower will pay to Lender the reasonable review
fee then required by Lender. Borrower also shall pay on demand all of the
reasonable costs and expenses incurred by Lender, including reasonable
attorneys' fees and expenses, and including the fees and expenses of Rating
Agencies and other outside entities, in connection with considering any proposed
Transfer and Assumption, whether or not the same is permitted or occurs.
(i) Lender's consent, which may be withheld in
Lender's reasonable discretion, to a Transfer and Assumption shall be subject to
the following conditions:
(1) No Event of Default has occurred
and is continuing;
(2) Borrower has submitted to Lender
true, correct and complete copies of any and all information and
documents of any kind reasonably requested by Lender concerning
the Property, Transferee Borrower, replacement guarantors and
indemnitors and Borrower;
(3) Evidence reasonably satisfactory
to Lender has been provided showing that the Transferee Borrower
and such of its Affiliates as shall be designated by Lender
comply and will comply with Section 29 hereof, as those
provisions may be modified by Lender taking into account the
ownership structure of Transferee Borrower and its Affiliates;
(4) If the Loan (as defined in
Section 32(e) hereof), by itself or together with other loans,
has been the subject of a Secondary Market Transaction, then
Lender shall have received a Rating Comfort Letter from the
applicable Rating Agencies;
(5) If the Loan has not been the
subject of a Secondary Market Transaction, then Lender shall
have determined in its reasonable discretion (taking into
consideration such factors as Lender may determine, including
the attributes of the loan pool in which the Loan might
reasonably be expected to be securitized) that no rating for any
securities that would be issued in connection with such
securitization will be diminished, qualified, or withheld by
reason of the Transfer and Assumption;
(6) Borrower shall have paid all of
Lender's reasonable costs and expenses in connection with
considering the Transfer and Assumption, and shall have paid the
amount reasonably requested by Lender as a deposit against
Lender's costs and expenses in connection with effecting the
Transfer and Assumption;
(7) Borrower, the Transferee
Borrower, and the replacement guarantors and indemnitors shall
have indicated in writing in form and substance reasonably
satisfactory to Lender their readiness and ability to satisfy
the conditions set forth in subsection (ii) below; and
18
(8) The identity, experience, and
financial condition of the Transferee Borrower and the
replacement guarantors and indemnitors shall be satisfactory to
Lender in its reasonable discretion.
(ii) If Lender consents to the Transfer and
Assumption, the Transferee Borrower and/or Borrower as the case may be, shall
immediately deliver the following to Lender:
(1) Borrower shall deliver to Lender
an assumption fee in the amount of 1.00% of the then unpaid
Principal; provided that, notwithstanding the foregoing,
Borrower shall deliver to Lender an assumption fee in the amount
of .25% in the event that Borrower makes a Transfer to (i)
Acadia Strategic Opportunity Fund, L.P or (ii) Acadia Strategic
Opportunity Fund II, LLC;
(2) Borrower, Transferee Borrower
and the original and replacement guarantors and indemnitors
shall execute and deliver to Lender any and all documents
reasonably required by Lender, in form and substance reasonably
required by Lender, in Lender's sole discretion;
(3) Counsel to the Transferee
Borrower and replacement guarantors and indemnitors shall
deliver to Lender opinions in form and substance satisfactory to
Lender as to such matters as Lender shall reasonably require,
which may include opinions as to substantially the same matters
as were required in connection with the origination of the Loan;
(4) Borrower shall cause to be
delivered to Lender, an endorsement (relating to the change in
the identity of the vestee and execution and delivery of the
Transfer and Assumption documents) to Lender's title insurance
policy in form and substance acceptable to Lender, in Lender's
reasonable discretion (the "ENDORSEMENT"); and
(5) Borrower shall deliver to Lender
a payment in the amount of all remaining unpaid costs incurred
by Lender in connection with the Transfer and Assumption,
including but not limited to, Lender's reasonable attorneys fees
and expenses, all recording fees, and all fees payable to the
title company for the delivery to Lender of the Endorsement.
SECTION 16. FURTHER ENCUMBRANCES. Except only for the liens and security
interests in favor of Lender under this Instrument and the other Loan Documents,
without Lender's prior written consent, which Lender may withhold in its sole
discretion, Borrower shall not execute, cause, allow or suffer any mortgage,
deed of trust, deed to secure debt, assignment of leases or rents, statutory
lien, mechanic's lien or other similar involuntary lien (with respect to any
such statutory lien, mechanic's lien or other similar involuntary lien, unless
such lien is bonded or discharged within 30 days after Borrower first receives
notice of such lien), irrespective of its priority, to encumber all or any
portion of the Property or the leases, rents or profits thereof, or any interest
in any of the foregoing.
19
SECTION 17. GENERAL INDEMNITY. In addition to any other indemnification
obligation set forth elsewhere in the Loan Documents, Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Lender and its shareholders, directors, officers, agents, employees,
contractors, attorneys, servicers, and successors and assigns (the "INDEMNIFIED
PARTIES") from and against any and all claims, suits, liabilities (including,
without limitation, strict liabilities), actions, proceedings, obligations,
debts, damages, losses, costs, expenses, diminutions in value, fines, penalties,
charges, fees, expenses, judgments, awards, amounts paid in settlement, or
punitive damages, of whatever kind or nature (including, but not limited to
attorneys' fees and other costs of defense) (the "LOSSES") imposed upon or
incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any one or more of the
following (but excluding Losses arising out of Lender's gross negligence or
willful misconduct): (a) ownership of this Instrument or any of the Loan
Documents, or ownership of the Property or any interest therein, or demand for
or receipt of any Rents; (b) any amendment to, or restructuring of, any of the
Loan Documents or the obligations evidenced or secured thereby; (c) any and all
lawful action that may be taken by Lender in connection with the enforcement of
the provisions of any of the Loan Documents, whether or not suit is filed in
connection with same, or in connection with Borrower, any guarantor or
indemnitor and/or any member, partner, joint venturer or shareholder thereof
becoming a party to a voluntary or involuntary federal or state bankruptcy,
insolvency or similar proceeding; (d) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about the Property
or any part thereof or on the adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (e) any use, nonuse or condition in, on
or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (f) any failure on
the part of Borrower to perform or be in compliance with any of the terms of any
of the Loan Documents; (g) performance of any labor or services or the
furnishing of any materials or other property in respect of the Property or any
part thereof; (h) the failure of any person to file timely with the Internal
Revenue Service an accurate Form ▇▇▇▇-▇, ▇▇▇▇▇▇▇▇▇ for Recipients of Proceeds
from Real Estate, Broker and Barter Exchange Transactions, which may be required
in connection with this Instrument, or to supply a copy thereof in a timely
fashion to the recipient of the proceeds of the transaction in connection with
which this Instrument is made; (i) any failure of the Property to be in
compliance with any applicable laws; (j) the enforcement by any Indemnified
Party of the provisions of this Section; (k) any and all claims and demands
whatsoever which may be asserted against Lender by reason of any alleged
obligations or undertakings on its part to perform or discharge any of the
terms, covenants, or agreements contained in any Lease; (l) the payment of any
commission, charge or brokerage fee to anyone which may be payable in connection
with the funding of the loan evidenced by the Note; or (m) any misrepresentation
made by Borrower in any of the Loan Documents. Any amounts payable to any
Indemnified Party by reason of the application of this Section shall become
immediately due and payable upon demand and shall bear interest at rate then
applicable to principal outstanding under the Note.
SECTION 18. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN
POSSESSION. As part of the consideration for the indebtedness evidenced by the
Note, Borrower hereby absolutely and unconditionally assigns and transfers to
Lender all the rents and revenues of the Property, including those now due, past
due, or to become due by virtue of any lease or other agreement for the
occupancy or use of all or any part of the Property,
20
regardless of to whom the rents and revenues of the Property are payable.
Borrower hereby authorizes Lender or Lender's agents to collect the aforesaid
rents and revenues and hereby directs each tenant of the Property to pay such
rents to Lender or Lender's agents; provided, however, that prior to written
notice given by Lender to Borrower of an Event of Default, Borrower shall
collect and receive all rents and revenues of the Property as trustee for the
benefit of Lender and Borrower, to apply the rents and revenues so collected to
the sums secured by this Instrument in any order determined by Lender, so long
as no such Event of Default has occurred, to the account of Borrower, it being
intended by Borrower and Lender that this assignment of rents constitutes an
absolute assignment and not an assignment for additional security only. Upon
delivery of written notice by Lender to Borrower of an Event of Default, and
without the necessity of Lender entering upon and taking and maintaining full
control of the Property in person, by agent or by a court-appointed receiver,
Lender shall immediately be entitled to possession of all rents and revenues of
the Property as specified in this Section as the same become due and payable,
including, but not limited to, rents then due and unpaid, and all such rents
shall immediately upon delivery of such notice and during the continuance of
such Event(s) of Default be held by Borrower as trustee for the benefit of
Lender only; provided, however, that the written notice by Lender to Borrower of
such Event(s) of Default shall contain a statement that Lender exercises its
rights to such rents. Borrower agrees that commencing upon delivery of such
written notice of Borrower's breach by Lender to Borrower, each tenant of the
Property shall make such rents payable to and pay such rents to Lender or
Lender's agents on Lender's written demand to any tenant therefor, delivered to
such tenant personally, by mail or by delivering such demand to the tenant at
its location in the Property, without any liability on the part of said tenant
to inquire further as to the existence of a default by Borrower. Borrower hereby
covenants that Borrower has not executed any prior assignment of said rents,
that Borrower has not performed, and will not perform, any acts or has not
executed, and will not execute, any instrument which would prevent Lender from
exercising its rights under this Section, and that at the time of execution of
this Instrument there has been no anticipation or prepayment of any of the rents
of the Property for more than one month prior to the due dates of such rents.
Borrower covenants that Borrower will not hereafter collect or accept payment of
any rents of the Property more than one month prior to the due dates of such
rents. Borrower further covenants that Borrower will execute and deliver to
Lender such further assignments of rents and revenues of the Property as Lender
may from time to time request.
Upon an Event of Default, or upon Borrower's breach of any material
covenant of Borrower as landlord or lessor under any lease beyond applicable
notice and cure periods, Lender shall be entitled to the appointment of a
receiver for the Property, without notice to Borrower or any other person or
entity and Lender may in person, by agent or by a court-appointed receiver,
regardless of the adequacy of Lender's security, enter upon and take and
maintain full control of the Property in order to perform all acts necessary and
appropriate for the operation and maintenance thereof including, but not limited
to, the execution, cancellation or modification of leases, the collection of all
rents and revenues of the Property, the enforcement or fulfillment of any terms,
condition or provision of any lease, the making of repairs to the Property and
the execution or termination of contracts providing for the management or
maintenance of the Property, all on such terms as are deemed best to protect the
security of this Instrument. In the event Lender elects to seek the appointment
of a receiver for the Property upon Borrower's breach of any covenant or
agreement of Borrower in this Instrument, Borrower
21
hereby expressly consents to the appointment of such receiver. Lender or the
receiver shall be entitled to receive a reasonable fee for so managing the
Property.
All rents and revenues collected subsequent to delivery of written
notice by Lender to Borrower that an Event of Default has occurred and during
the continuance of such Event of Default shall be applied first to the costs, if
any, of taking control of and managing the Property and collecting the rents,
including, but not limited to, attorney's fees, receiver's fees, premiums on
receiver's bonds, costs of repairs to the Property, premiums on insurance
policies, Taxes, and the costs of discharging any obligation or liability of
Borrower as lessor or landlord of the Property and then to the sums secured by
this Instrument. Lender or the receiver shall have access to the books and
records used in the operation and maintenance of the Property and shall be
liable to account only for those rents actually received. Other than for
Lender's gross negligence or willful misconduct under this Section, Lender shall
not be liable to Borrower, anyone claiming under or through Borrower or anyone
having an interest in the Property by reason of anything done or left undone by
Lender under this Section.
If the rents of the Property are not sufficient to meet the costs, if
any, of taking control of and managing the Property and collecting the rents,
any funds expended by Lender for such purposes shall become indebtedness of
Borrower to Lender secured by this Instrument pursuant to Section 8 hereof.
Unless Lender and Borrower agree in writing to other terms of payment, such
amounts shall be payable upon notice from Lender to Borrower requesting payment
thereof and shall bear interest from the date of disbursement at the rate stated
in the Note unless payment of interest at such rate would be contrary to
applicable law, in which event such amounts shall bear interest at the highest
rate which may be collected from Borrower under applicable law.
Any entering upon and taking and maintaining of control of the Property
by Lender or the receiver and any application of rents as provided herein shall
not cure or waive any default hereunder or invalidate any other right or remedy
of Lender under applicable law or provided herein. This assignment of rents of
the Property shall terminate at such time as this Instrument ceases to secure
indebtedness held by Lender.
SECTION 19. DEFAULTS; ACCELERATION; REMEDIES. Each of the following
shall constitute an "EVENT OF DEFAULT" under this Instrument:
(a) Any failure of Borrower to pay any money as and when due
under the Note or under any of the other Loan Documents;
(b) Any breach of Sections 5, 15, 16, or 29 of this
Instrument, or the Environmental Indemnity Agreement;
(c) Other than as specified in items (a) or (b) above, any
breach of any covenant, representation, warranty, or other obligation of
Borrower or any guarantor or indemnitor under the Note, this Instrument, or any
of the other Loan Documents, which breach is not completely cured on or before
the 30th day after notice of the same from Lender to Borrower; provided however
that if the default is capable of cure but with diligence cannot be cured within
such period of 30 days, and if Borrower shall have given Lender evidence
satisfactory to Lender that Borrower has commenced the cure within 10 days after
the first notice
22
of default and at all times after such commencement has pursued such cure
diligently, then such period shall be extended for so long as is reasonably
necessary, but in no event beyond the 60th day after the original notice of
default.
If Lender shall have the right to exercise any of its remedies by reason
of any default as to which there is no grace period or by reason of expiration
of any grace period without cure of any applicable default, then there shall be
no requirement of notice and time to cure for any other or subsequent default.
Upon the occurrence and during the continuance of any Event of Default,
Lender may, at Lender's option, declare all of the sums secured by this
Instrument to be immediately due and payable without further demand, and may
exercise any and all remedies permitted hereunder, under any of the Loan
Documents, or pursuant to applicable law. Without limitation of the foregoing,
Lender may invoke the power of sale granted herein. Borrower acknowledges that
the power of sale herein granted may be exercised by Lender without prior
judicial hearing. Borrower has the right to bring an action to assert the
non-existence of a breach or any other defense of Borrower to acceleration and
sale. Lender shall be entitled to collect from Borrower all costs and expenses
incurred in pursuing such remedies, including, but not limited to, reasonable
attorney's fees and costs of environmental reports, appraisals, documentary
evidence, abstracts, and title reports.
Any deed delivered to the purchaser at any sale pursuant hereto may be
without any covenant or warranty, expressed or implied. The recitals in the deed
shall be prima facie evidence of the truth of the statements made therein. The
proceeds of the sale shall be applied in the following order: (a) to all costs
and expenses of the sale, including, but not limited to, fees for any
foreclosure services, attorney's fees and costs of title evidence; (b) to all
sums secured by this Instrument in such order as Lender, in Lender's sole
discretion, directs; and (c) the excess, if any, to the person or persons
legally entitled thereto.
SECTION 20. ACCELERATION IN CASE OF BORROWER'S INSOLVENCY. If Borrower
shall voluntarily file a petition under Title 11 of the U.S. Code (the "ACT"),
as such Act may from time to time be amended, or under any similar or successor
Federal statute relating to bankruptcy, insolvency, arrangements or
reorganizations, or under any state bankruptcy or insolvency act, or file an
answer in any involuntary proceeding admitting insolvency or inability to pay
debts, or if Borrower shall fail to obtain a vacation of involuntary proceedings
brought for the reorganization, dissolution or liquidation of Borrower, within
120 days of the filing of such involuntary proceeding, or if Borrower shall be
adjudged a bankrupt, or if a trustee or receiver shall be appointed for Borrower
or Borrower's property, or if the Property shall become subject to the
jurisdiction of a Federal bankruptcy court or similar state court, or if
Borrower shall make an assignment for the benefit of Borrower's creditors, or if
there is an attachment, execution or other judicial seizure of any portion of
Borrower's assets and such seizure is not discharged within 10 days, then Lender
may, at Lender's option, declare all of the sums secured by this Instrument to
be immediately due and payable without prior notice to Borrower, and Lender may
invoke any remedies permitted or provided for herein or in any of the Loan
Documents or pursuant to applicable law. Any attorney's fees and other expenses
incurred by Lender in connection with Borrower's bankruptcy or any of the other
aforesaid events shall be additional indebtedness of Borrower secured by this
Instrument pursuant to Section 8 hereof.
23
SECTION 21. REMEDIES CUMULATIVE. Each remedy provided in this Instrument
is distinct and cumulative to all other rights or remedies under this Instrument
or afforded by law or equity, and may be exercised concurrently, independently,
or successively, in any order whatsoever.
SECTION 22. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby waives the
right to assert any statute of limitations as a bar to the enforcement of the
lien of this Instrument or to any action brought to enforce the Note or any
other obligation secured by this Instrument.
SECTION 23. WAIVER OF MARSHALLING. Notwithstanding the existence of any
other security interest in the Property held by Lender or by any other party,
Lender shall have the right to determine the order in which any or all of the
Property shall be subjected to the remedies provided herein. Lender shall have
the right to determine the order in which any or all portions of the
indebtedness secured hereby are satisfied from the proceeds realized upon the
exercise of the remedies provided herein. Borrower, any party who consents to
this Instrument and any party who now or hereafter acquires a security interest
in the Property and who has actual or constructive notice hereof hereby waives
any and all right to require the marshalling of assets in connection with the
exercise of any of the remedies permitted by applicable law or provided herein.
SECTION 24. RELEASE. Upon payment of all sums secured by this
Instrument, Lender shall release this Instrument. Borrower shall pay Lender $100
for the release of this Instrument.
SECTION 25. CASH MANAGEMENT ARRANGEMENTS.
(a) As used in this Section 25 and elsewhere in this
Instrument and the other Loan Documents, the following capitalized terms shall
have the respective meanings set forth below:
"ALTERNATIVE ESCROW AMOUNT": on the date hereof, an amount equal
to $16,003.86, which represents an amount estimated by Lender as being necessary
for at least one quarterly payment of insurance premiums that Lender estimates
will be payable for the purchase of a separate "stand-alone" policy providing
the coverage afforded by the insurance policies required under this Instrument
upon the expiration thereof. The Alternative Escrow Amount is subject to change
from time to time based upon any actual increases, as determined by Lender in
its reasonable discretion, after the date hereof in the amount of such insurance
premiums.
"APPROVED CAPITAL EXPENSES": Capital Expenses incurred by
Borrower; provided, that, during a Cash Management Period, such Capital Expenses
shall either be (i) included in the Approved Capital Budget (as defined in
Section 28(h) hereof) for the current calendar month or (ii) approved by Lender.
"APPROVED LEASING EXPENSES": actual out-of-pocket expenses
incurred by Borrower and payable to third parties (including Affiliates of
Borrower or Guarantor, provided that, such expenses payable to Affiliates of
Borrower or Guarantor shall satisfy the conditions set forth below) in leasing
space at the Property pursuant to Leases entered into in accordance with
24
the Loan Documents, including brokerage commissions and tenant improvements,
which expenses (i) are (A) specifically approved by Lender in connection with
approving the applicable Lease, (B) incurred in the ordinary course of business
and on market terms and conditions in connection with Leases which do not
require Lender's approval under the Loan Documents, or (C) otherwise approved by
Lender, which approval shall not be unreasonably withheld or delayed, and (ii)
are substantiated by executed Lease documents and brokerage agreements.
"APPROVED OPERATING EXPENSES": during a Cash Management Period,
operating expenses incurred by Borrower which (i) are included in the Approved
Operating Budget (as defined in Section 28(h) hereof) for the current calendar
month, (ii) are for real estate taxes, insurance premiums, electric, gas, oil,
water, sewer or other utility service to the Property or (iii) have been
approved by Lender.
"AVAILABLE CASH": as of each Payment Date during the continuance
of Cash Management Period, the amount of Rents, if any, remaining in the Deposit
Account after the application of all of the payments required under clauses (i)
through (vi) of paragraph (l) of this Section 25.
"BUSINESS DAY": any day other than a Saturday, Sunday or any day
on which commercial banks in New York, New York are authorized or required to
close.
"CALCULATION DATE": the last day of each calendar quarter.
"CASH MANAGEMENT PERIOD": shall commence upon Lender giving
notice to the Clearing Bank of the occurrence of any of the following: (i) the
Maturity Date, (ii) an Event of Default, (iii) if, as of any Calculation Date,
the Debt Service Coverage Ratio is less than 1.10:1, or (iv) the commencement of
a Rollover Sweep Period; and shall end upon Lender giving notice to the Clearing
Bank that the sweeping of funds into the Deposit Account may cease, which notice
Lender shall only be required to give if (1) the Loan and all other obligations
under the Loan Documents have been repaid in full or (2) the Maturity Date has
not occurred and (A) with respect for the matters described in clause (ii)
above, such Event of Default has been cured and no other Event of Default has
occurred and is continuing or (B) with respect to the matter described in clause
(iii) above, Lender has determined that the Property has achieved a Debt Service
Coverage Ratio of at least 1.10:1 for two consecutive Calculation Dates or (C)
with respect to the matter described in clause (iv) above, the subject Rollover
Sweep Period has ended.
"CLEARING ACCOUNT": the account maintained by Borrower at the
Clearing Bank as more fully described in the Clearing Account Agreement.
"DEBT": the unpaid Principal, all interest accrued and unpaid
thereon, any Prepayment Consideration (as defined in the Note) and all other
sums due to Lender in respect of the loan evidenced by the Note and this
Instrument or under any Loan Document.
"DEBT SERVICE": with respect to any particular period, the
scheduled principal and interest payments due under the Note in such period.
25
"DEBT SERVICE COVERAGE RATIO": as of any date, the ratio
calculated by Lender of (i) the Net Operating Income for the 12-month period
ending with the most recently completed calendar month to (ii) the Debt Service
with respect to such period (but assuming, only for the purpose of calculating
the Debt Service Coverage Ratio, that the Amortization Commencement Date (as
defined in the Note) has already occurred).
"DEFAULT RATE": the rate of five percent per annum in excess of
the rate provided in the first paragraph of the Note, or, if such increased rate
of interest may not be collected from Borrower under applicable law, then at the
maximum increased rate of interest which may be collected from Borrower under
applicable law, if either (a) any installment under the Note or any other amount
owing thereunder or under any of the other Loan Documents is not received by the
holder hereof within five calendar days after the same is due, or (b) any other
Event of Default occurs, in each case, only while such installment remains past
due or such other Event of Default remains uncured.
"DEPOSIT ACCOUNT": an Eligible Account at the Deposit Bank
controlled by Lender.
"DEPOSIT BANK": Wachovia Bank, National Association, or such
other bank or depository selected by Lender in its discretion.
"ELIGIBLE INSTITUTION": a depository institution insured by the
Federal Deposit Insurance Corporation the short term unsecured debt obligations
or commercial paper of which are rated at least A-1 by S&P, P-1 by Moody's and
F-1+ by Fitch. in the case of accounts in which funds are held for thirty (30)
days or less or, in the case of letters of credit or accounts in which funds are
held for more than thirty (30) days, the long term unsecured debt obligations of
which are rated at least "AA" by Fitch and S&P and "Aa2" by Moody's.
"INTEREST PERIOD": (i) the period from the date hereof through
the first day thereafter that is the last day of a calendar month and (ii) each
period thereafter from the 1st day of each calendar month through the last day
of each such calendar month; except that the Interest Period, if any, that would
otherwise commence before and end after the Maturity Date shall end on the
Maturity Date.
"GOVERNMENTAL AUTHORITY": any court, board, agency, commission,
office or authority of any nature whatsoever for any governmental ▇▇▇▇ (▇▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ or otherwise) now or hereafter in
existence.
"LEGAL REQUIREMENTS": statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities affecting Borrower, any Loan Document or all or part of the Property
or the construction, ownership, use, alteration or operation thereof, whether
now or hereafter enacted and in force, and all permits, licenses and
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instrument, either of record or
known to Borrower, at any time in force affecting all or part of the Property.
"MAJOR LEASE": (i) that certain Lease between Raymours Furniture
Company, Inc. ("RAYMOURS TENANT"), as tenant, and Acadia Realty Limited
Partnership ("ACADIA"), as
26
landlord, dated as of November 5, 2003, (as further amended, modified or
assigned); (ii) that certain Lease between The Bon-Ton Department Stores, Inc.
("BON TON TENANT"), as tenant, and Acadia, as landlord, dated as of July 25,
2003 (as further amended, modified or assigned); (iii) that certain Lease
between ▇.▇. ▇▇▇▇▇ Incorporated ("▇▇▇▇▇ TENANT"), as tenant, and Acadia, as
landlord, dated as of December 6, 1993, as amended by that certain First
Amendment to Lease between ▇▇▇▇▇, as tenant, and Acadia, as landlord, dated as
of July 28, 2003 (as further amended, modified or assigned); (iv) that certain
Lease between Price Chopper Operating Co., Inc. ("PRICE CHOPPER TENANT"), as
tenant, and Acadia (f/k/a ▇▇▇▇ Centers Limited Partnership), as landlord, dated
as of January 7, 1994, as amended by that certain First Amendment to Lease
between Price, as tenant, and Acadia, as landlord, dated as of April 14, 1997,
as amended by that certain Second Amendment to Lease between Price, as tenant,
and Acadia, as tenant, dated as of August 6, 2001, with an effective date as of
January 1, 2001 (as further amended, modified or assigned); and (v) that certain
Lease between Marshalls of MA, Inc. (successor by merger to Marshalls of Latham,
N.Y., Inc.) ("MARSHALLS TENANT"), as tenant, and Acadia (successor-in-interest
to ▇▇▇▇ Centers Limited Partnership, successor-in-interest to Latham
Associates), as landlord, dated as of May 20, 1983, as amended by that certain
Second Amendment to Lease between Marshalls, as tenant, and Acadia, as landlord,
dated as of September 15, 1995; as amended by that certain Third Lease Amendment
Agreement between Marshalls, as tenant, and Acadia, as landlord, dated as of
April 22, 1997, as amended by that certain Fourth Lease Amendment between
Marshalls, as tenant, and Acadia, as landlord, dated as of March 12, 1998, as
amended by that certain Fifth Amendment to Lease between Marshalls, as tenant,
and Acadia, as landlord, dated as of December 3, 2003, as amended by that
certain Additional Space Rent Commencement Date Agreement between Marshalls, as
tenant, and Acadia, as landlord., as tenant, dated as of April 29, 2004 (as
further amended, modified or assigned).
"MAJOR TENANT": any tenant under either a Major Lease, or under
one or more Leases (leased by such tenant and/or its affiliates), which when
taken together cover in the aggregate 20,000 or more rentable square feet.
"NET OPERATING INCOME": for any period, the actual net operating
income of the Property determined on a cash basis of accounting, after deducting
therefrom deposits to (but not withdrawals from) any reserves required under
this Instrument, and without giving credit for (i) non-recurring extraordinary
items of income; or (ii) rent payable under leases where the tenant thereunder
is not open for business (i.e. "goes dark").
"OFFICER'S CERTIFICATE": a certificate delivered to Lender by
Borrower which is signed by a senior executive officer of the Sole Member.
"PAYMENT DATE": the 6th day of each calendar month or, upon
Lender's exercise of its right to change the Payment Date in accordance with the
terms and conditions of the Note, the New Payment Date (as defined in the Note)
(in either case, if such day is not a Business Day, the Payment Date shall be
the first Business Day thereafter). The first Payment Date hereunder shall be
October 6, 2004.
"PERMITTED INVESTMENTS": any investment suitable for the
investment of escrows and reserves established under mortgage loans included in
a Securitization in which some or all of the certificates issued are rated "AAA"
(or the equivalent rating) by the Rating Agencies, as
27
the standards therefor are established from time to time, or such investments
which are otherwise reasonably acceptable to Lender. If the Loan is subject to a
Securitization, then the Rating Agencies referred to immediately above shall be
the Rating Agencies that have rated the securities issued in such
Securitization.
"RENTS": all rents, rent equivalents, moneys payable as damages
(including payments by reason of the rejection of a lease in a bankruptcy
proceeding) or in lieu of rent or rent equivalents, royalties (including all oil
and gas or other mineral royalties and bonuses), income, fees, receivables,
receipts, revenues, deposits (including security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
payment and consideration of whatever form or nature received by or paid to or
for the account of or benefit of Borrower, Manager or any of their agents or
employees from any and all sources arising from or attributable to the Property,
including all receivables, customer obligations, installment payment obligations
and other obligations now existing or hereafter arising or created out of the
sale, lease, sublease, license, concession or other grant of the right of the
use and occupancy of the Property or rendering of services by Borrower, Manager
or any of their agents or employees and proceeds, if any, from business
interruption or other loss of income insurance.
"ROLLOVER SWEEP EVENT": (i) the date that is 12 months prior to
the stated expiration (including any renewal term) of a Major Lease (i.e.,
February 1, 2013 for Bon Ton Tenant; January 31, 2013 for Marshalls Tenant;
April 30, 2008 and April 30, 2013 for ▇▇▇▇▇ Tenant; May 31, 2014 for Price
Chopper Tenant); (ii) the date required under a Major Lease by which the
applicable Major Tenant is required to give notice of its exercise of a renewal
option thereunder (and such renewal has not been so exercised) (i.e. February 1,
2013 for Bon Ton Tenant; February 1, 2013 for Marshalls Tenant; November 1, 2013
for ▇▇▇▇▇ Tenant; May 31, 2104 for Price Chopper Tenant); (iii) the occurrence
of the early termination or early cancellation of a Major Lease; (iv) if any
Major Tenant at the Property shall discontinue its business at its premises
(i.e., "goes dark") or give notice that it intends to discontinue its business;
or (v) the bankruptcy or insolvency proceeding of a Major Tenant (and the
subject lease has not been affirmed or assumed and assigned).
"ROLLOVER SWEEP PERIOD": shall commence upon the occurrence of a
Rollover Sweep Event, and shall end upon the earlier to occur of: (A) the date
on which Lender has determined that sufficient funds have been collected in the
Rollover Reserve Subaccount to cover the anticipated tenant improvement costs
and leasing commissions in connection with the re-tenanting of the space(s) that
gave rise to such Rollover Sweep Period; (B) if the portion of the Property
which was the subject of the Rollover Sweep Event has been leased to a new
tenant pursuant to a Lease entered into in accordance with the provisions of
this Instrument (1) the receipt by Lender of evidence reasonably satisfactory to
Lender that all Approved Leasing Expenses in connection therewith have been paid
in full and (2) the receipt by Lender of an estoppel certificate from such new
tenant in which such new tenant certifies that the Lease is in full force and
effect, all conditions precedent to the commencement of rent under such Lease
have been satisfied, such new tenant has accepted delivery of the demised
premises and the payment of rent under such Lease has commenced. Notwithstanding
the foregoing, if any Rollover Sweep Period is triggered by the occurrence of an
event described in clause (v) of the definition of Rollover Sweep Event, such
Rollover Sweep Period shall also end upon the
28
assumption of the applicable lease by the tenant thereunder pursuant to Section
365 of the Bankruptcy Code.
(b) CASH MANAGEMENT ARRANGEMENTS. Borrower shall cause all
Rents to be transmitted directly by non-residential tenants of the Property into
a trust account (the "CLEARING ACCOUNT") maintained by Borrower at a local bank
selected by Borrower, which shall at all times be an Eligible Institution (the
"CLEARING BANK") as more fully described in the Clearing Account Agreement.
Without in any way limiting the foregoing, all Rents received by Borrower or
Manager shall be deposited into the Clearing Account within one Business Day of
receipt. Funds deposited into the Clearing Account shall be swept by the
Clearing Bank on a daily basis into Borrower's operating account at the Clearing
Bank, unless a Cash Management Period is continuing, in which event such funds
shall be swept on a daily basis into an Eligible Account (as defined in the
Deposit Account Agreement) at the Deposit Bank controlled by Lender (the
"DEPOSIT ACCOUNT") and applied and disbursed in accordance with this Instrument.
Funds in the Deposit Account shall be invested at Lender's discretion only in
Permitted Investments. Lender will also establish subaccounts of the Deposit
Account which shall at all times be Eligible Accounts (and may be ledger or book
entry accounts and not actual accounts) (such subaccounts are referred to herein
as "SUBACCOUNTS"). The Deposit Account and any Subaccount will be under the sole
control and dominion of Lender, and Borrower shall have no right of withdrawal
therefrom. Borrower shall pay for all expenses of opening and maintaining all of
the above accounts.
(c) REQUIRED REPAIRS.
(i) COMPLETION OF REQUIRED REPAIRS. Borrower shall
perform and complete each item of the repairs and environmental remedial work at
the Property described on Schedule 2 (the "REQUIRED REPAIRS") within six (6)
months of the date hereof or such shorter period of time for such item set forth
on Schedule 2.
(ii) REQUIRED REPAIRS RESERVES. On the date hereof,
Borrower shall deposit with Lender the aggregate amount set forth on Schedule 2
as being required to complete the Required Repairs and Lender shall cause such
amount to be transferred to a Subaccount (the "REQUIRED REPAIRS SUBACCOUNT").
Provided no Default or Event of Default shall have occurred and is continuing,
Lender shall disburse funds held in the Required Repairs Subaccount to Borrower,
within 15 days after the delivery by Borrower to Lender of a request therefor
(but not more often than once per month), in increments of at least $5,000,
accompanied by the following items (which items shall be in form and substance
satisfactory to Lender): (i) an Officer's Certificate (A) certifying that the
Required Repairs or any portion thereof which are the subject of the requested
disbursement have been completed in a good and workmanlike manner and in
accordance with all applicable laws, (B) identifying each Person that supplied
materials or labor in connection with such Required Repairs or any portion
thereof and (C) stating that each such Person has been or, upon receipt of the
requested disbursement, will be paid in full with respect to the portion of the
Required Repairs which is the subject of the requested disbursement; (ii) copies
of appropriate lien waivers or other evidence of payment satisfactory to Lender;
(iii) at Lender's option, a title search for the Property indicating that it is
free from all liens not previously approved by Lender; (iv) a copy of each
license required to be obtained with respect to the portion of the Required
Repairs which is the subject of the requested disbursement; and
29
(v) such other evidence as Lender shall reasonably request that the Required
Repairs which are the subject of the requested disbursement have been completed
and paid for. Provided no Default or Event of Default shall have occurred and is
continuing, upon Borrower's completion of all Required Repairs in accordance
with this Section, Lender shall release any funds remaining in the Required
Repairs Subaccount, if any, to Borrower.
(d) TAXES AND INSURANCE.
(i) Borrower shall pay to Lender on each Payment
Date (1) one-twelfth of the yearly Taxes that Lender estimates will be payable
during the next 12 months in order to accumulate with Lender sufficient funds to
pay all such Taxes at least 30 days prior to their respective due dates and (2)
one-twelfth of the insurance premiums that Lender estimates will be payable for
the renewal of a separate "stand-alone" policy providing the coverage afforded
by the insurance policies required under this Instrument upon the expiration
thereof in order to accumulate with Lender sufficient funds to pay all such
insurance premiums at least 30 days prior to the expiration of the insurance
policies. Such amounts will be transferred by Lender to a Subaccount (the "TAX
AND INSURANCE SUBACCOUNT"). Provided that no Event of Default has occurred and
is continuing, Lender will (a) apply funds in the Tax and Insurance Subaccount
to payments of Taxes required to be made by Borrower pursuant to this
Instrument, provided that Borrower has promptly supplied Lender with notices of
all Taxes due, or (b) reimburse Borrower for payments of (x) Taxes and (y)
insurance premiums paid in connection with the purchase of a separate
"stand-alone" policy providing the coverage afforded by the insurance policies
required under this Instrument upon the expiration thereof, in each case, due
upon presentation of evidence acceptable to Lender of such payment by Borrower;
subject, however, to Borrower's right to contest Taxes in accordance with this
Instrument. In making any payment or reimbursement relating to Taxes and
insurance premiums, Lender may do so according to any ▇▇▇▇, statement or
estimate procured from the appropriate public office (with respect to taxes) or
insurer or agent (with respect to insurance premiums), without inquiry into the
accuracy of such ▇▇▇▇, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof. If Lender
determines in its reasonable judgment that the funds in the Tax and Insurance
Subaccount will be insufficient to pay (or in excess of) the Taxes or insurance
premiums next coming due, Lender may increase (or decrease) the monthly
contribution required to be made by Borrower to the Tax and Insurance
Subaccount.
(ii) Alternative Escrow.
(1) Notwithstanding anything to the
contrary contained in paragraph (i) above, in lieu of the
requirements set forth therein with respect to Borrower's
obligations to make monthly deposits on account of insurance
premiums into the Tax and Insurance Escrow Fund, Borrower has
deposited with Lender on the date hereof an amount equal to the
Alternative Escrow Amount, which amount has been transferred by
Lender into a Subaccount (the "ALTERNATIVE ESCROW SUBACCOUNT").
From time to time, upon Lender's request, Borrower shall deposit
such additional funds into the Alternative Escrow Subaccount to
reflect any actual increases, as determined by Lender in its
reasonable discretion, after the date hereof in the amount of
such insurance premiums.
30
(2) At all times that the
Alternative Escrow Subaccount is being held by Lender, then,
notwithstanding anything to the contrary contained elsewhere in
this Instrument, Borrower shall pay (or cause to be paid) such
insurance premiums as the same become due and payable, and upon
reasonable request, promptly furnish to Lender receipts for the
payment of all such amounts or other evidence of such payment
reasonably satisfactory to Lender.
(3) Upon any non-payment of such
insurance premiums, Lender shall have the right to withdraw
funds from the Alternative Escrow Subaccount for the purpose of
making such required payments on behalf of Borrower.
(4) Notwithstanding the above,
Borrower's obligations to make the payments required under
Section 25(d)(i)(2) shall immediately resume and shall continue
until the end of the Term in the event that (i) all or any
portion of the Alternative Escrow Subaccount is applied in
accordance with subparagraph (3) above, (ii) Borrower fails to
deposit additional funds into the Alternative Escrow Subaccount
in accordance with the last sentence of subparagraph (1) above
within 5 days of demand or (iii) Borrower purchases a separate
"stand-alone" policy providing the coverage afforded by the
insurance policies required under this Instrument upon the
expiration thereof.
(e) CAPITAL EXPENSE RESERVES. Borrower shall pay to Lender
on each Payment Date an amount initially equal to one-twelfth of the product
obtained by multiplying $0.15 by the aggregate number of rentable square feet of
space in the Property. Lender will transfer such amounts into a Subaccount (the
"CAPITAL RESERVE SUBACCOUNT"). Provided that no Event of Default has occurred
and is continuing, Lender shall disburse funds held in the Capital Reserve
Subaccount to Borrower, within 15 days after the delivery by Borrower to Lender
of a request therefor (but not more often than once per month), in increments of
at least $5,000 provided that (i) such disbursement is for an Approved Capital
Expense; (ii) Lender shall have (if it desires) verified (by an inspection
conducted at Borrower's expense) performance of the work associated with such
Approved Capital Expense; and (iii) the request for disbursement is accompanied
by (A) an Officer's Certificate certifying (1) that such funds will be used to
pay or reimburse Borrower for Approved Capital Expenses and a description
thereof, (2) that all outstanding trade payables (other than those to be paid
from the requested disbursement or those constituting Permitted Indebtedness)
have been paid in full, (3) that the same has not been the subject of a previous
disbursement, and (4) that all previous disbursements have been used to pay the
previously identified Approved Capital Expenses, and (B) for any such
disbursement of more than $25,000, at Lender's option (which option shall be
exercised in Lender's reasonable judgment), a title search for the Property
indicating that the Property is free from all Liens, claims and other
encumbrances not previously approved by Lender and (C) such other evidence as
Lender shall reasonably request that the Approved Capital Expenditures at the
Property to be funded by the requested disbursement have been completed and are
paid for or will be paid upon such disbursement to Borrower.
(f) ROLLOVER RESERVES. Borrower shall pay to Lender
$10,636.13 on each Payment Date (the "MONTHLY ROLLOVER PAYMENT"); provided,
however, Borrower shall not be
31
required to make any Monthly Rollover Payment on any Payment Date when the
balance on deposit in the Rollover Reserve Subaccount is equal to or greater
than $125,000 (excluding any amounts deposited pursuant to the fourth sentence
of this subsection (f)). Additionally, if a Rollover Sweep Period has commenced,
and no other Cash Management Period is then continuing, then on the immediately
succeeding Payment Date and on each Payment Date thereafter during the
continuance of such Rollover Sweep Period, all Available Cash shall be paid to
Lender. Lender will transfer such amounts into a Subaccount (the "ROLLOVER
RESERVE SUBACCOUNT"). Borrower shall also pay to Lender for transfer into the
Rollover Reserve Subaccount all payments received from tenants in connection
with the early termination or cancellation of any Leases, including fees,
penalties and commissions. Provided that no Event of Default has occurred and is
continuing, Lender shall disburse funds held in the Rollover Reserve Subaccount
to Borrower, within 15 days after the delivery by Borrower to Lender of a
request therefor (but not more often than once per month), in increments of at
least $5,000, provided (i) such disbursement is for an Approved Leasing Expense;
(ii) Lender shall have (if it desires) verified (by an inspection conducted at
Borrower's expense) performance of any construction work associated with such
Approved Leasing Expense; and (iii) the request for disbursement is accompanied
by (A) an Officer's Certificate certifying (1) that such funds will be used only
to pay (or reimburse Borrower for) Approved Leasing Expenses and a description
thereof, (2) that all outstanding trade payables (other than those to be paid
from the requested disbursement or those constituting Permitted Indebtedness)
have been paid in full, (3) that the same has not been the subject of a previous
disbursement, and (4) that all previous disbursements have been used only to pay
(or reimburse Borrower for) the previously identified Approved Leasing Expenses,
and (B) reasonably detailed supporting documentation as to the amount, necessity
and purpose therefor. Provided that no Event of Default has occurred and is
continuing, the remaining funds in the Rollover Reserve Subaccount (to the
extent not drawn upon pursuant to this Section 25(f)) allocable to any specific
portion of the commercial space at the Property which is the subject of the
Rollover Sweep Event will be disbursed to Borrower within 10 days after written
request therefor, provided that Borrower has delivered (i) evidence reasonably
satisfactory to Lender that (y) such commercial space has been re-let pursuant
to Leases entered into in accordance with this Instrument and (z) all Approved
Leasing Expenses which have been incurred or which Lender anticipates will be
incurred with respect to such space have been paid in full and (ii) an estoppel
certificate from the applicable tenant occupying such portion of the commercial
space at the Property in a form reasonably satisfactory to Lender pursuant to
which such tenant certifies to Lender that (1) such tenant has taken occupancy
of its demised premises, (2) all of the conditions precedent to such tenant's
obligation to commence the payment of rent under its Lease have been satisfied
(including Borrower's contribution to the cost of any tenant improvement work)
and (3) such tenant has commenced the payment of rent under its Lease.
(g) OPERATING EXPENSE SUBACCOUNT. During a Cash Management
Period, Borrower shall pay to Lender on or before each Payment Date the monthly
amount set forth in the Approved Operating Budget for the following month as
being necessary for payment of Approved Operating Expenses at the Property for
such month, which amounts shall be transferred into a Subaccount for the payment
of Approved Operating Expenses (the "OPERATING EXPENSE Subaccount"). Provided no
Event of Default has occurred and is continuing, Lender shall disburse funds
held in the Operating Expense Subaccount to Borrower, within 15 days after
delivery by Borrower to Lender of a request therefor (but not more often than
once per month), in increments of at least $1,000, provided (i) such
disbursement is for an Approved Operating
32
Expense; and (ii) such disbursement is accompanied by (A) an Officer's
Certificate certifying (1) that such funds will be used to pay Approved
Operating Expenses and a description thereof, (2) that all outstanding trade
payables (other than those to be paid from the requested disbursement or those
constituting Permitted Indebtedness) have been paid in full, (3) that the same
has not been the subject of a previous disbursement, and (4) that all previous
disbursements have been or will be used to pay the previously identified
Approved Operating Expenses, and (B) reasonably detailed documentation
satisfactory to Lender as to the amount, necessity and purpose therefor.
(h) CASUALTY/CONDEMNATION SUBACCOUNT. Borrower shall pay, or
cause to be paid, to Lender all insurance proceeds or Awards due to any Casualty
or Condemnation which Borrower is required to deposit with Lender to be
transferred to a Subaccount (the "CASUALTY/CONDEMNATION SUBACCOUNT") in
accordance with the provisions of Sections 5 and 11. All amounts in the
Casualty/Condemnation Subaccount shall be disbursed in accordance with the
provisions of Sections 5 and 11.
(i) SECURITY DEPOSITS. Borrower shall keep all security
deposits under Leases at a separately designated account under Borrower's
control at the Clearing Bank (and in the case of a letter of credit, assigned
with full power of attorney and executed sight drafts to Lender) so that the
security deposits shall not be commingled with any other funds of Borrower (such
account, the "SECURITY DEPOSIT ACCOUNT"). Upon the occurrence and during the
continuance of an Event of Default, Borrower shall, upon Lender's request, if
permitted by applicable Legal Requirements, turn over to Lender the security
deposits (and any interest theretofore earned thereon) under Leases, to be held
by Lender in a Subaccount (the "SECURITY DEPOSIT SUBACCOUNT") subject to the
terms of the Leases. Security deposits held in the Security Deposit Subaccount
will be released by Lender upon notice from Borrower together with such evidence
as Lender may reasonably request that such security deposit is required to be
returned to a tenant pursuant to the terms of a Lease or may be applied as Rent
pursuant to the rights of Borrower under the applicable Lease. Any letter of
credit or other instrument that Borrower receives in lieu of a cash security
deposit under any Lease entered into after the date hereof shall (i) be
maintained in full force and effect in the full amount unless replaced by a cash
deposit as hereinabove described and (ii) if permitted pursuant to any Legal
Requirements, name Lender as payee or mortgagee thereunder (or at Lender's
option, be fully assignable to Lender).
(j) CASH COLLATERAL SUBACCOUNT. If a Cash Management Period
shall have commenced, then on the immediately succeeding Payment Date and on
each Payment Date thereafter during the continuance of such Cash Management
Period, all Available Cash shall be paid to Lender, which amounts shall be
transferred by Lender into a Subaccount (the "CASH COLLATERAL SUBACCOUNT") as
cash collateral for Borrower's obligations under the Loan Documents. At Lender's
option, during the continuance of a Rollover Sweep Period, any funds that have
been deposited into the Cash Collateral Subaccount may be transferred by Lender
into the Rollover Reserve Subaccount, to be applied and disbursed in accordance
with the provisions of Section 25(f) hereof. Any funds in the Cash Collateral
Subaccount Account and not previously disbursed or applied shall be disbursed to
Borrower upon the termination of such Cash Management Period. Lender shall have
the right, but not the obligation, at any time (i) during the continuance of an
Event of Default or (ii) subsequent to the second Calculation Date following the
commencement of a Cash Management Period (whether or not an Event of
33
Default is then continuing), in its sole and absolute discretion to apply all
sums then on deposit in the Cash Collateral Subaccount to Borrower's obligations
under the Loan Documents, in such order and in such manner as Lender shall elect
in its sole and absolute discretion, including to make a prepayment of principal
(together with the Prepayment Consideration (as defined in the Note) applicable
thereto).
(k) GRANT OF SECURITY INTEREST; APPLICATION OF FUNDS. As
security for payment of the Loan and the performance by Borrower of all other
terms, conditions and provisions of the Loan Documents, Borrower hereby pledges
and assigns to Lender, and grants to Lender a security interest in, all
Borrower's right, title and interest in and to all Rents and in and to all
payments to or monies held in the Clearing Account, the Deposit Account, all
Subaccounts created pursuant to this Instrument (collectively, the "CASH
MANAGEMENT ACCOUNTS"). Borrower hereby grants to Lender a continuing security
interest in, and agrees to hold in trust for the benefit of Lender, all Rents in
its possession prior to the (i) payment of such Rents to Lender or (ii) deposit
of such Rents into the Clearing Account. Borrower shall not, without obtaining
the prior written consent of Lender, further pledge, assign or grant any
security interest in any Cash Management Account, or permit any lien to attach
thereto, or any levy to be made thereon, or any UCC Financing Statements, except
those naming Lender as the secured party, to be filed with respect thereto. This
Instrument is, among other things, intended by the parties to be a security
agreement for purposes of the UCC. Upon the occurrence and during the
continuance of an Event of Default, Lender may apply any sums in any Cash
Management Account in any order and in any manner as Lender shall elect in
Lender's discretion without seeking the appointment of a receiver and without
adversely affecting the rights of Lender to foreclose the Lien of the Instrument
or exercise its other rights under the Loan Documents. Cash Management Accounts
shall not constitute trust funds and may be commingled with other monies held by
Lender. All interest which accrues on the funds in any Cash Management Account
(other than the Tax and Insurance Subaccount) shall accrue for the benefit of
Borrower and shall be taxable to Borrower and shall be added to and disbursed in
the same manner and under the same conditions as the principal sum on which said
interest accrued. Upon repayment in full of Borrower's obligations under the
Loan Documents, all remaining funds in the Subaccounts, if any, shall be
promptly disbursed to Borrower.
(l) PROPERTY CASH FLOW ALLOCATION.
(i) During any Cash Management Period, all Rents
deposited into the Deposit Account during the immediately preceding Interest
Period shall be applied on each Payment Date as follows in the following order
of priority: (i) First, to make payments into the Tax and Insurance Subaccount
as required under paragraph (d) of this Section 25; (ii) Second, to pay the
monthly portion of the fees charged by the Deposit Bank in accordance with the
Deposit Account Agreement; (iii) Third, to Lender to pay the principal and
interest due under the Note on such Payment Date (plus, if applicable, interest
at the Default Rate and all other amounts, other than those described under
other clauses of this paragraph (l) of this Section 25, then due to Lender under
the Loan Documents); (iv) Fourth, to make payments into the Capital Reserve
Subaccount as required under paragraph (e) of this Section 25; (v) Fifth, to
make payments of the Monthly Rollover Payment into the Rollover Reserve
Subaccount, as required under paragraph (f) of this Section 25; (vi) Sixth, to
make payments for Approved Operating Expenses as required under paragraph (g) of
this Section 25; (vii) Seventh, during the continuance of a
34
Rollover Sweep Period (and if no other Cash Management Period is then
continuing) to make payments in an amount equal to all remaining Available Cash
on such Payment Date into the Rollover Reserve Subaccount as required under
paragraph (f) of this Section 25; and (viii) Lastly, during the continuance of a
Cash Management Period described in clauses (i), (ii) or (iii) of the defined
term "Cash Management Period", to make payments in an amount equal to all
remaining Available Cash on such Payment Date into the Cash Collateral
Subaccount in accordance with paragraph (j) of this Section 25. Upon the
termination of any Cash Management Period, provided no Event of Default is then
continuing, any funds in the Operating Expense Subaccount and not previously
disbursed or applied shall be fully disbursed to Borrower.
(ii) The failure of Borrower to make all of the
payments required under clauses (i) through (viii) of paragraph (i) above in
full on each Payment Date shall constitute an Event of Default under this
Instrument; provided, however, if adequate funds are available in the Deposit
Account for such payments, the failure by the Deposit Bank to allocate such
funds into the appropriate Subaccounts shall not constitute an Event of Default.
Notwithstanding anything to the contrary contained in this Section 25, after the
occurrence and during the continuance of an Event of Default, Lender may apply
all Rents deposited into the Deposit Account and other proceeds of repayment in
such order and in such manner as Lender shall elect.
SECTION 26. NONRECOURSE LOAN. Subject to the provisions of this Section,
and notwithstanding any provision of the Loan Documents other than this Section,
the personal liability of Borrower, and of any general partner of Borrower, to
pay the principal of and interest on the debt evidenced by the Note and any
other agreement evidencing Borrower's obligations under the Note shall be
limited to (a) the Collateral, (b) the personal property described in and
pledged under any Loan Document other than this Instrument, and (c) the rents,
profits, issues, products and income of the Property, including any received or
collected by or on behalf of Borrower after an Event of Default.
Except as provided in this Section, Lender shall not seek (a) any
judgment for a deficiency against Borrower, any general partner or member of
Borrower, or Borrower's successors or assigns, in any action to enforce any
right or remedy under the Note, this Instrument or the other Loan Documents, or
(b) any judgment on the Note except as may be necessary in any action brought
under the Instrument to enforce the lien against the Property or any other
Collateral.
Notwithstanding the foregoing, Borrower and any general partner of
Borrower shall be fully and personally liable for payment and performance of all
obligations set forth in the Loan Documents, including the payment of all
principal, interest, and other amounts under the Note, in the event of (i) the
occurrence of an uncured default under Sections 15, 16 or 29 of this Instrument,
or (ii) the occurrence of any condition or event described in Section 20 (except
that in the event of involuntary proceedings described therein, neither Borrower
nor any general partner of Borrower shall be fully and personally liable under
this Section 26 unless either Borrower or any general partner of Borrower or any
Person owning an interest (directly or
35
indirectly) in Borrower or any general partner of Borrower consents to, aids,
solicits, supports, or otherwise cooperates or colludes to cause such event or
fails to contest such event).
Further, Borrower and any general partner of Borrower shall be
personally liable in the amount of any loss, damage or cost resulting from (a)
fraud or intentional misrepresentation by Borrower in connection with obtaining
the loan evidenced by the Note, (b) insurance proceeds, condemnation awards, or
other sums or payments attributable to the Property not applied in accordance
with the provisions of the Loan Documents (except to the extent that Borrower
did not have the legal right, because of a bankruptcy, receivership or similar
judicial proceeding, to direct disbursement of such sums or payments), (c) all
rents, profits, issues, products and income of the Property received or
collected by or on behalf of Borrower after and during an Event of Default and
not applied to payment of principal and interest due under the Note, and to the
payment of actual and reasonable operating expenses of the Property, as they
become due or payable (except to the extent that such application of such funds
is prevented by bankruptcy, receivership, or similar judicial proceeding in
which Borrower is legally prevented from directing the disbursement of such
sums), (d) misappropriation (including failure to turn over to Lender on demand
following an Event of Default) of tenant security deposits and rents collected
in advance, or of funds held by Borrower for the benefit of another party, or
(e) Borrower's failure to pay transfer fees and charges due Lender under the
Loan Documents in connection with any subordinate financing or any transfer of
all or any part of the Property, or any interest therein, from Borrower to
Borrower's transferee, or transfer of any beneficial interest in Borrower (if
Borrower is not a natural person or persons but is a corporation, partnership,
limited liability company, trust or other legal entity) other than a Permitted
Transfer, or (f) failure by Borrower, any general partner of Borrower, or any
indemnitor or guarantor to comply with the covenants, obligations, liabilities,
warranties and representations contained in the Environmental Indemnity
Agreement or otherwise pertaining to environmental matters, or (g) in the event
Lender has waived (or Borrower has failed to pay) the monthly collection for
real and personal property taxes, assessments, insurance premiums, or ground
rents, then failure by Borrower to pay any or all such taxes, assessments,
premiums and rents, or (h) in the event that Lender has waived (or Borrower has
not complied with) the requirement for third party property management, then any
management fee taken by Borrower or any principal or affiliate of Borrower after
an Event of Default, or (i) breach of any of Sections 15, 16 or 29 of this
Instrument, or (j) the occurrence of any condition or event described in Section
20 (except that in the event of involuntary proceedings described therein,
neither Borrower nor any general partner of Borrower shall be fully and
personally liable under this Section 26 unless either Borrower or any general
partner of Borrower or any Person owning an interest (directly or indirectly) in
Borrower or any general partner of Borrower consents to, aids, solicits,
supports, or otherwise cooperates or colludes to cause such event or fails to
contest such event).
No provision of this Section shall (i) affect the enforcement of the
Environmental Indemnity Agreement or any guaranty or similar agreement executed
in connection with the debt evidenced by the Note, (ii) release or reduce the
debt evidenced by the Note, (iii) impair the lien of this Instrument, (iv)
impair the rights of Lender to enforce any provisions of this Instrument, (v)
limit Lender's ability to obtain a deficiency judgment or judgment on the Note
or otherwise against Borrower to the extent necessary to obtain any amount for
which Borrower may be liable in accordance with this Section.
36
SECTION 27. REPRESENTATIONS OF BORROWER. The Borrower hereby represents
and warrants to Lender the following:
(a) Organization. Borrower is a limited liability company,
validly existing and in good standing under the laws of Delaware. There are no
proceedings or actions pending, threatened or contemplated for the liquidation,
termination or dissolution of Borrower.
(b) Rent Roll. Borrower has delivered to Lender a certified
rent roll (the "RENT ROLL"), a copy of which is attached hereto as Schedule 3,
which constitutes a true, correct, and complete list of each and every lease
affecting the Property (for each commercial tenant, together with all extensions
and amendments thereof) (the "EXISTING LEASES"); Borrower has delivered to
Lender a true, correct, and complete copy of each of the Existing Leases which
are entered into by commercial or retail tenants; and there are no other leases,
assignments, modifications, extensions, renewals, or other agreements of any
kind whatsoever (written or oral) outstanding with respect to the leases or the
Property.
(c) Leases. Unless otherwise specified in the Rent Roll:
(i) the Existing Leases are in full force and
effect;
(ii) Borrower has not given any notice of default to
any tenant under an Existing Lease (an "EXISTING Tenant") which remains uncured;
(iii) no Existing Tenant has any set off, claim or
defense to the enforcement of any Existing Lease;
(iv) no Existing Tenant is in arrears in the payment
of rent for more than 30 days, additional rent or any other charges whatsoever
due under any Existing Lease; or, to the knowledge of Borrower, is materially in
default in the performance of any other obligations of such Existing Tenant
under the applicable Existing Lease; and
(v) Borrower has completed all work or alterations
required of the landlord or lessor under each Existing Lease; and all of the
other obligations of landlord or lessor under the Existing Leases have been
performed.
(d) Rents. The Rent Roll truly and completely discloses all
annual and monthly rents payable by all Existing Tenants, including all
percentage rents, if any, expiration dates of the Existing Leases, and the
amount of security deposit being held by Borrower under each Existing Lease, if
any; and Borrower has not granted any Existing Tenant any rent concessions
(whether in form of cash contributions, work agreements, assumption of an
Existing Tenant's other obligations, or otherwise) or extensions of time
whatsoever not reflected in such Rent Roll.
(e) Lease Issues. There are no legal proceedings commenced
(or, to the best of the knowledge of the Borrower, threatened) against Borrower
by any Existing Tenant; no rental in excess of one month's rent has been prepaid
under any of the Existing Leases; each of the Leases is valid and binding on the
parties thereto in accordance with its terms; and the
37
execution of this Instrument and the other Loan Documents will not constitute an
event of default under any of the Existing Leases.
(f) Security Deposits. Borrower currently holds the security
deposits (if any) specified in the Existing Leases and has not given any credit,
refund, or set off against such security deposits to any person.
(g) Intentionally Deleted.
(h) No Undisclosed Tenants. Except for Borrower, there are
no persons or entities occupying space in the Property as tenants other than the
persons or entities specifically named in the Existing Leases.
(i) Title. Except as specifically listed in the schedule of
exceptions to coverage in the title policy insuring Lender's interest in the
Property, Borrower is now in possession of the Property; Borrower's possession
of the Property is peaceable and undisturbed; Borrower does not know any facts
by reason of which any claim to the Property, or any part thereof, might arise
or be set up adverse to Borrower; and the Property is free and clear of (i) any
lien for Taxes (except real property taxes not yet due and payable for the
calendar year in which this Instrument is being executed), and (ii) any
easements, rights-of-way, restrictions, encumbrances, liens or other exceptions
to title by mortgage, decree, judgment, agreement, instrument, or, to the
knowledge of Borrower, proceeding in any court. The Permitted Encumbrances (as
defined in Section 15 hereof) do not materially and adversely affect the value,
operation or use of the Property, or Borrower's ability to repay the Loan. This
Instrument when properly recorded in the appropriate records, together with any
UCC Financing Statements required to be filed in connection therewith, will
create (i) a valid, perfected first priority lien on the Borrower's interest in
the Property and (ii) valid and perfected first priority security interests in
and to, and perfected collateral assignments of, all personalty (including the
Leases), all in accordance with the terms thereof, in each case subject only to
any applicable Permitted Encumbrances. There are no pending or proposed special
or other assessments for public improvements or otherwise affecting the
Property, or any contemplated improvements to the Property that may result in
such special or other assessments.
(j) Liens. All charges for labor, materials or other work of
any kind furnished in connection with the construction, improvement, renovation
or rehabilitation of the Property or any portion thereof have been paid in full,
and no unreleased affidavit claiming a lien against the Property, or any portion
thereof, for the supplying of labor, materials or services for the construction
of improvements on the Property has been executed or recorded in the mechanic's
lien or other appropriate records in the county in which the Property is
located.
(k) Compliance with Law. The Property and the current and
contemplated uses of the Property are in compliance with all applicable federal,
state and municipal laws, rules, regulations and ordinances, applicable
restrictions, zoning ordinances, building codes and regulations, building lines
and easements, including, without limitation, federal and state environmental
protection law and the Americans with Disabilities Act of 1990, the Fair Housing
Amendments Act of 1988, all state and local laws or ordinances related to
handicapped access, and any statute, rule, regulation, ordinance, or order of
governmental bodies or regulatory
38
agencies, or any order or decree of any court adopted or enacted with respect
thereto; no governmental authority having jurisdiction over any aspect of the
Property has made a claim or determination that there is any such violation; the
Property is not included in any area identified by the Secretary of Housing and
Urban Development pursuant to the Flood Disaster Protection Act of 1973, as
amended, as an area having special flood hazards; and all permits, licenses and
the like which are necessary for the operation of the Property have been issued
and are in full force and effect.
(l) Adverse Changes; Full and Accurate Disclosure. There
have been no material adverse changes, financial or otherwise, in the condition
of Borrower from that disclosed to Lender in the loan application submitted to
Lender by Borrower, or in any supporting data submitted in connection with the
Loan, and all of the information contained therein was true and correct when
submitted and is now substantially and materially true and correct on the date
hereof. No statement of fact made by Borrower in any Loan Documents contains any
untrue statement of a material fact or omits to state any material fact
necessary to make statements contained therein not misleading. There is no
material fact presently known to Borrower that has not been disclosed to Lender
which adversely affects, or, as far as Borrower can foresee, might adversely
affect, the Property or the business, operations or condition (financial or
otherwise) of Borrower. All financial data, including the statements of cash
flow and income and operating expense, that have been delivered to Lender in
respect of Borrower and the Property (i) are true, complete and correct in all
material respects, (ii) accurately represent the financial condition of Borrower
and the Property as of the date of such reports, and (iii) to the extent
prepared by an independent certified public accounting firm, have been prepared
in accordance with GAAP or federal income tax basis of accounting, in either
case, consistently applied throughout the periods covered, except as disclosed
therein. Borrower has no contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments, unrealized or anticipated losses from any
unfavorable commitments or any liabilities or obligations not expressly
permitted by this Instrument. Since the date of such financial statements, there
has been no materially adverse change in the financial condition, operations or
business of Borrower or the Property from that set forth in said financial
statements.
(m) Claims, Litigation. There is no claim, litigation or
condemnation proceeding pending, or, to the knowledge of the Borrower,
threatened, against the Property or Borrower, which would be likely to have a
material adverse affect on the Property or Borrower's ability to perform its
obligations in the connection with the Loan.
(n) Single Purpose. Borrower does not own any real property
or assets other than the Property and does not operate any business other than
the management and operation of the Property.
(o) Bankruptcy. No proceedings in bankruptcy or insolvency
has ever been instituted by or against Borrower or any affiliate thereof, and no
such proceeding is now pending or contemplated.
(p) Solvency. Borrower is, and if there are any general
partners or members of Borrower, such partners or members are, solvent pursuant
to the laws of the United States, as reflected by the entries in Borrower's
books and records and as reflected by the actual facts.
39
(q) Enforceability of Loan Documents. The Loan Documents
have been duly authorized, executed and delivered by Borrower and constitute
valid and binding obligations of Borrower, enforceable against Borrower in
accordance with their respective terms. No approval, consent, order or
authorization of any governmental authority and no designation, registration,
declaration or filing with any governmental authority is required in connection
with the execution and delivery of the Note, this Instrument or any other Loan
Document. Neither Borrower nor any guarantor or indemnitor has any defense or
offset to the enforcement of any Loan Document, or any claim against Lender.
Neither Borrower nor any guarantor or indemnitor has any right whatsoever
against Lender other than the express contractual obligations of Lender set
forth in the Loan Documents. Any rights or claims contrary to this provision,
whether known or unknown, are hereby expressly waived.
(r) Non-contravention. The execution and delivery of the
Loan Documents will not violate or contravene in any way the articles of
incorporation or bylaws or partnership agreement, articles of organization or
operating agreement as the case may be, of Borrower or any indenture, agreement
or instrument to which Borrower is a party or by which it or its property may be
bound, or be in conflict with, result in a breach of or constitute a default
under any such indenture, agreement or other instrument, result in the creation
or imposition of any lien, charge or encumbrance of any nature whatsoever upon
any of the property or assets of Borrower, except as contemplated by the
provisions of such Loan Documents, and no action or approval with respect
thereto by any third person is required.
(s) Homestead. No part of the Property is all or a part of
Borrower's homestead or the homestead of anyone.
(t) Utilities. 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.
(u) Public Roads. All public roads and streets necessary for
service of and access to the Property for the current or contemplated use
thereof have been completed, are serviceable and all-weather and are physically
and legally open for use by the public.
(v) Water and Sewers. The Property is serviced by public
water and sewer systems.
(w) Damage. The Property is free from damage caused by fire
or other casualty.
(x) Waste Disposal. All liquid and solid waste disposal,
septic and sewer systems located on the Property are in a good and safe
condition and repair and in compliance with all applicable laws.
(y) Agreements. Borrower is not a party to any agreement or
instrument or subject to any restriction which might adversely affect Borrower
or the Property, or Borrower's business, properties, operations or condition,
financial or otherwise. Borrower is not in default in any material respect in
the performance, observance or fulfillment of any of the obligations,
40
covenants or conditions contained in any Permitted Encumbrance or any other
agreement or instrument to which it is a party or by which it or the Property is
bound.
(z) No Plan Assets. As of the date hereof and throughout the
entire term of the loan evidenced by the Note and this Instrument (the "TERM")
(i) Borrower is not and will not be an "employee benefit plan," as defined in
Section 3(3) of ERISA, subject to Title I of ERISA, (ii) none of the assets of
Borrower constitutes or will constitute "plan assets" of one or more such plans
within the meaning of 29 C.F.R. Section 2510.3-101, (iii) Borrower is not and
will not be a "governmental plan" within the meaning of Section 3(32) of ERISA,
and (iv) transactions by or with Borrower are not and will not be subject to
state statutes regulating investment of, and fiduciary obligations with respect
to, governmental plans.
(aa) Federal Reserve Regulations; Investment Company Act. No
part of the proceeds of the loan evidenced by the Note, this Instrument and the
other Loan Documents will be used for the purpose of purchasing or acquiring any
"margin stock" within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System or for any other purpose that would be inconsistent
with such Regulation U or any other regulation of such Board of Governors, or
for any purpose prohibited by Legal Requirements (as defined in Section 25
hereof) or any Loan Document. Borrower is not (i) an "investment company" or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended; (ii) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of either a
"holding company" or a "subsidiary company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended; or (iii) subject to any other
federal or state law or regulation which purports to restrict or regulate its
ability to borrow money.
(bb) Fraudulent Transfer. Borrower has not entered into the
loan evidenced by the Note, this Instrument and the other Loan Documents, or any
Loan Document with the actual intent to hinder, delay, or defraud any creditor,
and Borrower has received reasonably equivalent value in exchange for its
obligations under the Loan Documents. Giving effect to the transactions
contemplated by the Loan Documents, the fair saleable value of Borrower's assets
exceeds and will, immediately following the execution and delivery of the Loan
Documents, exceed Borrower's total liabilities, including subordinated,
unliquidated, disputed or contingent liabilities, including the maximum amount
of its contingent liabilities or its debts as such debts become absolute and
matured. Borrower's assets do not and, immediately following the execution and
delivery of the Loan Documents will not, constitute unreasonably small capital
to carry out its business as conducted or as proposed to be conducted. Borrower
does not intend to, and does not believe that it will, incur debts and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts to be payable on or in respect of obligations of Borrower).
(cc) No Other Debt. There is no indebtedness with respect to
the Property or any excess cash flow or any residual interest therein, whether
secured or unsecured, other than Permitted Encumbrances and Permitted
Indebtedness (as defined in Section 28(i) hereof).
(dd) Flood Zone. No portion of the Property is located in an
area as identified by the Federal Emergency Management Agency as an area having
special flood hazards.
41
SECTION 28. BORROWER'S ADDITIONAL COVENANTS. Borrower hereby covenants,
agrees and undertakes as follows:
(a) Alterations of Property. Borrower shall not undertake or
commence any alterations of any improvements on the Property the cost of which
is in excess of five percent of the then original principal amount of the Note,
without the prior written consent of Lender, not to be unreasonably withheld;
provided, however, that Lender may, in its sole and absolute discretion,
withhold consent to any alteration the cost of which is reasonably estimated to
exceed $2,000,000.
(b) Further Assurances. Borrower shall from time to time, at
the request of Lender, (i) promptly correct any defect, error or omission which
may be discovered in the contents of this Instrument or in any other Loan
Document or in the execution or acknowledgment thereof; (ii) execute,
acknowledge, deliver and record and/or file such further documents or
instruments (including, without limitation, further mortgages, security
agreements, financing statements, continuation statements, assignments of rents
or leases and environmental indemnity agreements) and perform such further acts
and provide such further assurances as may be necessary, desirable or proper, in
Lender's opinion, to carry out more effectively the purposes of this Instrument
and such other instruments and to subject to the liens and security interests
hereof and thereof any property intended by the terms hereof or thereof to be
covered hereby or thereby, including specifically, but without limitation, any
renewals, additions, substitutions, replacements, or appurtenances to the
Property; provided that such documents or instruments do not materially increase
Borrower's liability under the Loan Documents; and (iii) execute, acknowledge,
deliver, procure, and file and/or record any document or instrument (including
specifically, but without limitation, any financing statement) deemed advisable
by Lender to protect the liens and the security interests herein granted against
the rights or interests of third persons; provided that such documents or
instruments do not materially increase Borrower's liability under the Loan
Documents. Borrower will pay all reasonable costs connected with any of the
foregoing in this paragraph.
(c) Mortgage Taxes. Borrower shall at any time any law shall
be enacted imposing or authorizing the imposition of any tax upon this
Instrument, or upon any rights, titles, liens or security interests created
hereby, or upon the obligations secured hereby or any part thereof, immediately
pay all such taxes; provided that, if such law as enacted makes it unlawful for
Borrower to pay such tax, Borrower shall not pay nor be obligated to pay such
tax, and in the alternative, Borrower may, in the event of the enactment of such
a law, and must, if it is unlawful for Borrower to pay such taxes, prepay the
obligations secured hereby in full within 60 days after demand therefor by
Lender.
(d) Minerals. Borrower shall not permit any drilling or
exploration for or extraction, removal or production of any mineral, natural
element, compound or substance from the surface or subsurface of the Property
regardless of the depth thereof or the method of mining or extraction thereof.
(e) Maintenance of Borrower and Sole Member Names. Borrower
shall not change, or permit Sole Member to change, its name, identity (including
its trade name or names) or employer identification number, in any such case,
without notifying Lender of such change in
42
writing at least thirty (30) days prior to the effective date of such change.
Borrower shall deliver, or cause Sole Member to deliver, to Lender, prior to or
contemporaneously with the effective date of any such change, any financing
statement or financing statement change reasonably required by Lender, if any,
to establish or maintain the validity, perfection and priority of the security
interests granted herein.
(f) Costs and Expenses. Borrower shall pay on demand all
reasonable and bona fide out-of-pocket costs, fees and expenses and other
expenditures, including, but not limited to, reasonable attorneys' fees and
expenses, paid or incurred by Lender to third parties incident to this
Instrument or any other Loan Document (including, but not limited to, reasonable
attorneys' fees and expenses in connection with the negotiation, preparation and
execution hereof and of any other Loan Document and any amendment hereto or
thereto, any release hereof, any consent, approval or waiver hereunder or under
any other Loan Document, the making of any advance under the Note, and any suit
to which Lender is a party involving this Instrument or the Property) or
incident to the enforcement of the obligations secured hereby or the exercise of
any right or remedy of Lender under any Loan Document.
(g) Compliance with Laws. Borrower shall maintain and keep
the Property in compliance with all applicable laws.
(h) Annual Budget. Borrower shall prepare and submit (or
shall cause Manager to prepare and submit) to Lender within thirty (30) days
after a Cash Management Period and by November 30th of each year thereafter
during the Term until such Cash Management Period has ended, for approval by
Lender, which approval shall not be unreasonably withheld or delayed, a proposed
pro forma budget for the Property for the succeeding calendar year (the "ANNUAL
BUDGET", and each Annual Budget approved (or deemed approved pursuant to the
terms of this Section 28(h)) by Lender is referred to herein as the "APPROVED
ANNUAL BUDGET"), and, promptly after preparation thereof, any revisions to such
Annual Budget. Lender's failure to approve or disapprove any Annual Budget or
revision within 30 days after Lender's receipt thereof shall be deemed to
constitute Lender's approval thereof. The Annual Budget shall consist of (i) an
operating expense budget showing, on a month-by-month basis, in reasonable
detail, each line item of the Borrower's anticipated operating income and
operating expenses (on a cash and accrual basis), including amounts required to
establish, maintain and/or increase any monthly payments required hereunder (and
once such Annual Budget has been approved (or deemed approved pursuant to the
terms of this Section 28(h)) by Lender, such operating expense budget shall be
referred to herein as the "APPROVED OPERATING BUDGET"), and (ii) a Capital
Expense budget showing, on a month-by-month basis, in reasonable detail, each
line item of anticipated Capital Expenses (and once such Annual Budget has been
approved (or deemed approved pursuant to the terms of this Section 28(h)) by
Lender, such Capital Expense budget shall be referred to herein as the "APPROVED
CAPITAL BUDGET"). Until such time that any Annual Budget has been approved (or
deemed to have been approved pursuant to the terms of this Section 28(h)) by
Lender, the prior Approved Annual Budget shall apply for all purposes hereunder
(with such adjustments as reasonably determined by Lender (including increases
for any non-discretionary expenses).
(i) Indebtedness. Borrower shall not directly or indirectly
create, incur or assume any indebtedness other than the indebtedness evidenced
by the Loan Documents and
43
unsecured trade payables incurred in the ordinary course of business relating to
the ownership and operation of the Property which do not exceed, at any time, a
maximum amount of 2% of the original amount of the Loan and are paid within
sixty (60) days of the date incurred (collectively, "PERMITTED INDEBTEDNESS").
SECTION 29. COVENANTS WITH RESPECT TO SINGLE PURPOSE, INDEBTEDNESS,
OPERATIONS, FUNDAMENTAL CHANGES OF BORROWER.
(a) Pertaining to Borrower. Borrower represents, warrants
and covenants as of the date of hereof and until such time as the indebtedness
secured hereby is paid in full, that Borrower
(i) does not own and will not own any assets other
than the Property (including incidental personal property necessary for the
operation thereof and proceeds therefrom) or direct or indirect ownership
interests in Borrower (the "OWNERSHIP INTERESTS");
(ii) was and will be organized solely for the purpose
of owning the Property and is not engaged and will not engage in any business,
directly or indirectly, other than the ownership, management and operation of
the Property or the Ownership Interests;
(iii) has not entered and will not enter into any
contract or agreement with any partner, member, shareholder, trustee,
beneficiary, principal or affiliate of any Borrower Party 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 such
affiliate;
(iv) has not incurred and will not incur any debt,
secured or unsecured, direct or contingent (including guaranteeing any
obligation), other than (i) the obligations secured by this Instrument, and (ii)
trade payables or accrued expenses incurred in the ordinary course of business
of operating the Property which (1) do not exceed, at any time, (a) with respect
to Borrower, a maximum amount of 2% of the original amount of the Principal, and
(b) with respect to Sole Member, $10,000 and (2) are paid within sixty (60) days
of the date incurred;
(v) has not made and will not make any loan or
advances to any person or entity;
(vi) has remained and will remain solvent and pay its
own liabilities, indebtedness, and obligations of any kind from its own separate
assets as the same shall become due;
(vii) has not, and without the unanimous consent of
all of its partners, directors or members, as applicable, will not, with respect
to itself or to any other entity in which it has a direct or indirect legal or
beneficial ownership interest (A) file a bankruptcy, insolvency or
reorganization petition or otherwise institute insolvency proceedings or
otherwise seek any relief under any laws relating to the relief from debts or
the protection of debtors generally, (B) seek or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar
official for such entity or for all or any portion of such
44
entity's properties, (C) make any assignment for the benefit of such entity's
creditors or (D) take any action that might cause such entity to become
insolvent;
(viii) has done or caused to be done and will do all
things necessary to preserve its existence, and will not, nor will any partner,
member, shareholder, trustee, beneficiary, or principal amend, modify or
otherwise change its partnership certificate, partnership agreement, articles of
incorporation, by-laws, articles of organization, operating agreement, or other
organizational documents in any manner except as necessary to reflect Permitted
Transfers;
(ix) has maintained and shall continuously maintain
its existence and be qualified to do business in all states necessary to carry
on its business, specifically including in the case of Borrower, the state where
the Property is located;
(x) has conducted and operated and will conduct and
operate its business as presently conducted and operated;
(xi) has maintained and will maintain books and
records and bank accounts separate from those of its partners, members,
shareholders, trustees, beneficiaries, principals, affiliates, and any other
person or entity;
(xii) has been and will be, and at all times has held
and will hold itself out to the public as, a legal entity separate and distinct
from any other (including any of its partners, members, shareholders, trustees,
beneficiaries, principals and affiliates), and not as a department or division
of any entity;
(xiii) has not failed and will not fail to correct any
known misunderstanding regarding the separate identity of such entity;
(xiv) has and will 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;
(xv) has not and will not seek, acquiesce in, or
suffer or permit its liquidation, dissolution or winding up, in whole or in
part;
(xvi) has not entered and will not enter into any
transaction of merger or consolidation, or acquire by purchase or otherwise all
or substantially all of the business or assets of, or any stock of beneficial
ownership of, any person or entity;
(xvii) has not commingled and will not commingle or
permit to be commingled its funds or other assets with those of any other person
or entity;
(xviii) has and will maintain its assets in such a
manner that it is not costly or difficult to segregate, ascertain or identify
its individual assets from those of any other person or entity;
45
(xix) except as expressly provided for in the Loan
Documents, does not and will not hold itself out to be responsible for the debts
or obligations of any other person or entity;
(xx) except as expressly provided for in the Loan
Documents, has not and will not guarantee or otherwise become liable on or in
connection with any obligation of any other person or entity;
(xxi) has not done or shall not do any act which would
make it impossible to carry on its ordinary business;
(xxii) has not and will not possess or assign the
Property for other than a business or company purpose;
(xxiii) has not held and shall not hold its assets other
than in its name;
(xxiv) has paid and will pay its own liabilities,
including the salaries of its own employees, out of its own funds and assets;
(xxv) has observed and will observe all partnership,
corporate or limited liability company formalities, as applicable;
(xxvi) has maintained and will maintain an arm's-length
relationship with its Affiliates;
(xxvii) has not and will not acquire obligations or
securities of its partners, members or shareholders;
(xxviii) has allocated and will allocate fairly and
reasonably shared expenses, including shared office space, and uses separate
stationery, invoices and checks;
(xxix) except in connection with the Loan, has not
pledged and will not pledge its assets for the benefit of any other Person;
(xxx) has not identified and will not identify its
partners, members or shareholders, or any Affiliate of any of them, as a
division or part of it;
(xxxi) has and will have no obligation to indemnify its
partners, officers, directors, members or Special Members (as defined below), as
the case may be, or has such an obligation that is fully subordinated to the
Debt and will not constitute a claim against it if cash flow in excess of the
amount required to pay the Debt is insufficient to pay such obligation; and
(xxxii) will consider the interests of its creditors in
connection with all corporate, partnership or limited liability actions, as
applicable.
46
(xxxiii) has not instituted and shall not institute
proceedings to be adjudicated bankrupt or insolvent; consent to the institution
of bankruptcy or insolvency proceedings against it; file a petition seeking, or
consent to, reorganization or relief under any applicable federal or state law
relating to bankruptcy; consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of it or a
substantial part of its property; or make any assignment for the benefit of
creditors; or admit in writing its inability to pay its debts generally as they
become due;
(xxxiv) has and will have an operating agreement which
provides that the business and affairs of Borrower shall be managed by or under
the direction of a board of one or more directors designated by Sole Member,
(xxxv) has and will have an operating agreement which
provides that, as long as any portion of the Debt remains outstanding, (A) upon
the occurrence of any event that causes Sole Member to cease to be a member of
Borrower (other than (x) upon an assignment by Sole Member of all of its limited
liability company interest in Borrower and the admission of the transferee, if
permitted pursuant to the organizational documents of Borrower and the Loan
Documents, or (y) the resignation of Sole Member and the admission of an
additional member of Borrower, if permitted pursuant to the organizational
documents of Borrower and the Loan Documents), the person acting as the sole
member of borrower (the "SPECIAL MEMBER") of Borrower shall, without any action
of any Person and simultaneously with Sole Member ceasing to be a member of
Borrower, automatically be admitted as the Special Member and shall preserve and
continue the existence of Borrower without dissolution, (B) no Special Member
may resign or transfer its rights as Special Member unless (x) a successor
Special Member has been admitted to Borrower as a Special Member, and (y) such
successor Special Member has also accepted its appointment as a Special Member
and (C) except as expressly permitted pursuant to the terms of this Agreement,
Sole Member may not resign and no additional member shall be admitted to
Borrower; (v) has and will have an operating agreement which provides that, as
long as any portion of the Debt remains outstanding, (A) Borrower shall be
dissolved, and its affairs shall be would up only upon the first to occur of the
following: (x) the termination of the legal existence of the last remaining
member of Borrower or the occurrence of any other event which terminates the
continued membership of the last remaining member of Borrower in Borrower unless
the business of Borrower is continued in a manner permitted by its operating
agreement or the Delaware Limited Liability Company Act (the "DELAWARE ACT") or
(y) the entry of a decree of judicial dissolution under Section 18-802 of the
Delaware Act; (B) upon the occurrence of any event that causes the last
remaining member of Borrower to cease to be a member of Borrower or that causes
Sole Member to cease to be a member of Borrower (other than (x) upon an
assignment by Sole Member of all of its limited liability company interest in
Borrower and the admission of the transferee, if permitted pursuant to the
organizational documents of Borrower and the Loan Documents, or (y) the
resignation of Sole Member and the admission of an additional member of
Borrower, if permitted pursuant to the organizational documents of Borrower and
the Loan Documents), to the fullest extent permitted by law, the personal
representative of such member shall be authorized to, and shall, within 90 days
after the occurrence of the event that terminated the continued membership of
such member in Borrower, agree in writing to continue the existence of Borrower
and to the admission of the personal representative or its nominee or designee,
as the case may be, as a substitute member of Borrower, effective as of the
occurrence of the event that terminated the
47
continued membership of such member in Borrower; (C) the bankruptcy of Sole
Member or a Special Member shall not cause such member or Special Member,
respectively, to cease to be a member of Borrower and upon the occurrence of
such an event, the business of Borrower shall continue without dissolution; (D)
in the event of dissolution of Borrower, Borrower shall conduct only such
activities as are necessary to wind up its affairs (including the sale of the
assets of Borrower in an orderly manner), and the assets of Borrower shall be
applied in the manner, and in the order of priority, set forth in Section 18-804
of the Delaware Act; and (E) to the fullest extent permitted by law, each of
Sole Member and the Special Members shall irrevocably waive any right or power
that they might have to cause Borrower or any of its assets to be partitioned,
to cause the appointment of a receiver for all or any portion of the assets of
Borrower, to compel any sale of all or any portion of the assets of Borrower
pursuant to any applicable law or to file a complaint or to institute any
proceeding at law or in equity to cause the dissolution, liquidation, winding up
or termination of Borrower.
(xxxvi) shall comply with all (and shall not suffer to
be inaccurate any) of the assumptions, statements, certifications,
representations, warranties and covenants regarding or made by Borrower
contained in or appended to any opinion of Borrower's legal counsel delivered in
connection with the transaction in which the Loan Documents are executed.
SECTION 30. NOTICE. All notices given under this Instrument shall be in
writing, and sent to the other party at its address set forth below or at such
other address as such party may designate by notice to the other party and shall
be deemed given on the earliest of (i) actual receipt, duly evidenced by any
commercially reasonable means, (ii) three Business Days after mailing, by
certified or registered U.S. Mail, return receipt requested, postage prepaid,
(iii) one Business Day after timely delivery, fee prepaid, to a national
overnight delivery service (such as FedEx, Purolater Courier, U.P.S. Next Day
Air), (iv) the date of transmission of notice sent by telecopier or facsimile
machine (with a copy thereof sent in accordance with clause (ii) above) provided
notice was transmitted on a Business Day, otherwise notice shall be deemed given
on the next Business Day.
The applicable addresses are as follows:
To Borrower:
c/o Acadia Realty Trust
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to:
c/o Acadia Realty Trust
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
48
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
To Lender:
Greenwich Capital Financial Products, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Mortgage Loan Department
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to:
▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Borrower hereby requests that any notice of default or notice of sale in
any judicial or nonjudicial foreclosure proceeding be mailed to Borrower at its
address as specified herein.
SECTION 31. UNIFORM INSTRUMENT; GOVERNING LAW; SEVERABILITY. This form
of instrument combines uniform covenants for national use and non-uniform
covenants with limited variations by jurisdiction to constitute a uniform
security instrument covering real property and related fixtures and personal
property. THIS INSTRUMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY
BORROWER AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS INSTRUMENT OR THE OTHER LOAN DOCUMENTS, AND THIS
INSTRUMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW. In the event that any provision of this
Instrument or the Note conflicts with applicable
49
law, such conflict shall not affect other provisions of this Instrument or the
Note which can be given effect without the conflicting provisions, and to this
end the provisions of this Instrument and the Note are declared to be severable.
In the event that any applicable law limiting the amount of interest or other
charges permitted to be collected from Borrower is interpreted so that any
charge provided for in this Instrument or in the Note, whether considered
separately or together with other charges levied in connection with this
Instrument and the Note, violates such law, and Borrower is entitled to the
benefit of such law, such charge is hereby reduced to the extent necessary to
eliminate such violation. The amounts, if any, previously paid to Lender in
excess of the amounts payable to Lender pursuant to such charges as reduced
shall be applied by Lender to reduce the principal of the indebtedness evidenced
by the Note. For the purposes of determining whether any applicable law limiting
the amount of interest or other charges permitted to be collected from Borrower
has been violated, all indebtedness which is secured by this Instrument or
evidenced by the Note and which constitutes interest, as well as all other
charges levied in connection with such indebtedness which constitute interest,
shall be deemed to be allocated and spread over the stated term of the Note.
Unless otherwise required by applicable law, such allocation and spreading shall
be effected in such a manner that the rate of interest computed thereby is
uniform throughout the stated term of the Note.
SECTION 32. RESTRUCTURING LOAN, SECONDARY MARKET TRANSACTIONS.
(a) Secondary Market Transactions Generally. Lender shall
have the right to engage in one or more Secondary Market Transactions (as
defined in Section 15 hereof), and to structure and restructure all or any part
of the Loan, including without limitation in multiple tranches, as a wraparound
loan, or for inclusion in a REMIC or other Securitization (as defined in Section
15 hereof). Without limitation, Lender shall have the right to cause the Note
and this Instrument to be split into a first and a second mortgage loan in
whatever proportion Lender determines, and thereafter to engage in Secondary
Market Transactions with respect to all or any part of the indebtedness and loan
documentation. Borrower acknowledges that it is the intention of the parties
that all or a portion of the Loan will be securitized and that all or a portion
of the Loan (either itself, or in combination with other loans) will be rated by
one or more Rating Agencies (as defined in Section 15 hereof). Borrower further
acknowledges that additional structural modifications may be required to satisfy
issues raised by any Rating Agencies.
(b) Cooperation; Limitations. Borrower shall use all
reasonable efforts and cooperate reasonably and in good faith with Lender in
effecting any such restructuring or Secondary Market Transaction. Such
cooperation shall include without limitation, executing and delivering such
reasonable amendments to the Loan Documents as Lender may request, provided
however that no such amendment shall on an over-all basis modify (i) the
interest rate payable under the Note; (ii) the stated maturity date of the Note,
(iii) the amortization of the principal amount of the Note, (iv) any other
economic terms of the Loan, or (v) the non-recourse provisions of the Loan. Such
cooperation also shall include using best efforts to obtain such certificates
and assurances from governmental entities and others as Lender may request.
Borrower shall not be required to incur any cost in connection with such
restructure or Secondary Market Transaction or to provide additional collateral
that was not initially contemplated by the parties to effect any such
restructuring or Secondary Market Transaction.
50
(c) Information. Borrower shall provide such information and
documents relating to the Borrower and its principals, the manager of the
Property, the Property and the business and operations of all of the foregoing
as Lender may reasonably request in connection with any such Secondary Market
Transaction. Lender shall be permitted to share all such information with the
investment banking firms, Rating Agencies, accounting firms, law firms, other
third party advisory firms, potential investors, and other parties involved in
any proposed Secondary Market Transaction. Any such information may be
incorporated into offering documents for the Secondary Market Transactions.
Lender and all of the aforesaid third-party advisors and professional firms and
investors shall be entitled to rely upon such information, and Borrower shall
indemnify, defend, and hold harmless Lender from and against any losses, claims,
damages and liabilities that arise out of or are based upon any actual or
alleged untrue or misleading statement of material fact contained in such
information or the actual or alleged omission of any material fact without which
such information is materially misleading. Lender may publicize the existence of
the Loan in connection with Lender's Secondary Market Transaction activities or
otherwise.
(d) Additional Provisions. In any Secondary Market
Transaction, Lender may transfer its obligations under the Loan Documents (or
may transfer the portion thereof corresponding to the transferred portion of the
obligations of Borrower), and thereafter Lender shall be relieved of any
obligations under the Loan Documents arising after the date of said transfer
with respect to the transferred interest. Each transferee investor shall be
deemed to be a "Lender" under the applicable Loan Documents.
(e) Certain Definitions. As used herein, the following terms
have the meanings indicated:
"LOAN": all obligations of Borrower under the Loan Documents.
"SECURITIZATION": mean a rated offering of securities
representing direct or indirect interests in one or more mortgage loans
or the right to receive income therefrom.
SECTION 33. SUCCESSORS AND ASSIGNS BOUND. This Instrument and the other
Loan Documents shall be binding upon and inure to the benefit of Borrower and
Lender and their respective successors and assigns forever, subject to Section
15 hereof. Notwithstanding the foregoing, Lender shall have no liability under
any of the Loan Documents for any matter arising after Lender transfers its
interest in the Note to any successor. However, Lender shall continue to have
the benefit of all rights having accrued under the Loan Documents theretofore,
and all rights under all obligations of indemnification set forth in the Loan
Documents for matters arising theretofore, then, and thereafter.
SECTION 34. FORBEARANCE BY LENDER NOT A WAIVER. Any forbearance by
Lender in exercising any right or remedy hereunder, or otherwise afforded by
applicable law, shall not be a waiver of or preclude the exercise of any right
or remedy. The acceptance by Lender of payment of any sum secured by this
Instrument after the due date of such payment shall not be a waiver of Lender's
right to either require prompt payment when due of all other sums so secured or
to declare a default for failure to make prompt payment. The procurement of
insurance or the payment of taxes or other liens or charges by Lender shall not
be a waiver of
51
Lender's right to accelerate the maturity of the indebtedness secured by this
Instrument, nor shall Lender's receipt of any awards, proceeds or damages,
whether as proceeds of insurance or condemnation awards or otherwise, operate to
cure or waive Borrower's default in payment of sums secured by this Instrument.
SECTION 35. ESTOPPEL CERTIFICATE. Borrower shall within ten days of a
written request from Lender furnish Lender with a written statement, duly
acknowledged, setting forth the sums secured by this Instrument and any right of
set-off, counterclaim or other defense which exists against such sums and the
obligations of this Instrument and attaching true, correct and complete copies
of the Note, this Instrument and any other Loan Documents and any and all
modifications, amendments and substitutions thereof.
SECTION 36. WAIVER OF JURY TRIAL. BORROWER HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHT THE BORROWER MAY HAVE TO A TRIAL BY JURY IN
RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONJUNCTION WITH THE NOTE, THIS INSTRUMENT, ANY OTHER LOAN DOCUMENT, ANY OTHER
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
EITHER PARTY.
SECTION 37. MISCELLANEOUS.
(a) No Oral Change. No provision of this Instrument or any
of the other Loan Documents may 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, except 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.
(b) Liability. If Borrower consists of more than one person,
the obligations and liabilities of each such person hereunder and under the
other Loan Documents shall be joint and several.
(c) Captions. The captions and headings of the Sections,
paragraphs, and other provisions of this Instrument are for convenience only and
are not to be used to interpret or define the provisions hereof.
(d) Duplicate Originals; Counterparts. This Instrument and
any of the Loan Documents may be executed in any number of duplicate originals
and each duplicate original shall be deemed to be an original. This Instrument
and any of the Loan Documents may be executed in multiple counterparts.
(e) Number and Gender. Whenever the context may require, any
pronouns used herein or in any of the Loan Documents shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.
52
(f) Subrogation. If any or all of the proceeds of the Note
have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of
such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the performance and repayment of the
obligations secured hereby.
(g) Entire Agreement. The Note, this Instrument and the
other Loan Documents constitute the entire understanding and agreement between
Borrower and Lender pertaining to the subject matter hereof and thereof, and
supersede all prior written or oral understandings and agreements between
Borrower and Lender with respect thereto, including the prior agreements
evidenced by any application or commitment issued in connection with this
transaction. Borrower hereby acknowledges that, except as incorporated in
writing in the 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 Loan Documents, except only to the
extent expressly set forth in the Loan Documents.
(h) Action through Agents. In exercising any rights
hereunder or under any of the Loan Documents or taking any actions provided for
herein or therein, Lender may act through its employees, agents or independent
contractors as authorized by Lender.
SECTION 38. STATE OF NEW YORK PROVISIONS.
(a) In the event of any inconsistencies between the terms
and conditions of this Article 38 and the other terms and conditions of this
Instrument, the terms and conditions of this Article 38 shall control and be
binding.
(b) The terms, covenants and conditions contained herein
shall be construed as affording to Lender rights additional to, and not
exclusive of, the rights conferred under the provisions of Section 254 of the
Real Property Law of the State of New York.
(c) In compliance with Section 13 and Article 3-A of the
Lien Law of the State of New York, Borrower will receive all advances secured by
this Instrument and will hold the right to receive all such advances as a trust
fund to be applied first for the purpose of paying the cost of improvements, and
will apply all such advances first to the payment of the cost of improvements
before using any part of such advances for any other purpose. Borrower will
indemnify and hold Lender harmless from and against any loss, liability, cost or
expense, including, without limitation, any judgments, reasonable attorneys'
fees, costs of appeal bonds and printing costs, arising out of or relating to
any proceeding instituted by any claimant alleging a violation by Borrower of
any applicable lien law provisions including, without limitation, any section of
Article 3-A of the New York Lien Law.
(d) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
HEREIN, THE MAXIMUM AMOUNT OF PRINCIPAL INDEBTEDNESS
53
SECURED BY THIS INSTRUMENT AT THE TIME OF EXECUTION OR WHICH UNDER ANY
CONTINGENCY MAY HEREAFTER BECOME SECURED HEREBY AT ANY TIME IS FIFTEEN MILLION
AND NO/100 DOLLARS ($15,000,000.00) PROVIDED THAT SUCH LIMITATION SHALL NOT
LIMIT THE SECURITY OF THIS INSTRUMENT WITH RESPECT TO (I) INTEREST ON THE
AFORESAID MAXIMUM AMOUNT OF PRINCIPAL INDEBTEDNESS AT THE RATES SET FORTH IN THE
NOTE, (II) SUMS TO PAY TAXES, (III) SUMS TO PAY PREMIUMS ON INSURANCE POLICIES
COVERING THE MORTGAGED PROPERTY, (IV) EXPENSES INCURRED AFTER AN EVENT OF
DEFAULT IN UPHOLDING OR ENFORCING THE LIEN OF THIS INSTRUMENT, INCLUDING, BUT
NOT LIMITED TO, THE EXPENSES OF ANY LITIGATION TO PROSECUTE OR DEFEND THE RIGHTS
AND LIEN CREATED BY THIS INSTRUMENT, (V) ANY AMOUNT, COSTS OR CHARGE TO WHICH
LENDER BECOMES SUBROGATED, UPON PAYMENT, WHETHER UNDER RECOGNIZED PRINCIPLES OF
LAW OR EQUITY, OR UNDER EXPRESS STATUTORY AUTHORITY, AND (VI) ANY OTHER AMOUNT
SECURED BY THIS INSTRUMENT WHICH, IF NOT LIMITED BY SUCH LIMITATION, WOULD NOT
INCREASE THE AMOUNT OF INSTRUMENT RECORDING TAXES, IF ANY, PAYABLE WITH RESPECT
TO THIS INSTRUMENT.
(e) This Instrument does not cover real property principally
improved or to be improved by one or more structures containing in the aggregate
not more than six residential dwelling units, each having their own separated
cooking facilities.
(f) Reference is made to Section 291-f of the Real Property
Law of New York for purposes of obtaining the benefit of said Section in
connection with this Instrument.
(g) Upon the occurrence and during the continuance of an
Event of Default and acceleration of the indebtedness secured hereby, Lender
shall have the right to sell the Mortgaged Property, including, without
limitation, pursuant to Article 14 of the New York Real Property Actions and
Proceedings Law, as same may have been or may hereafter be amended.
(h) Lender shall, at the request of Borrower, deliver an
assignment of this Instrument (together with the Note) in lieu of a release or
satisfaction hereof upon the payment of the Debt in full, provided that (i)
other than containing a representation that Lender shall not have previously
transferred its rights under the Instrument and the amount of the then
outstanding indebtedness secured by the Instrument, the instrument of assignment
shall be without representation or warranty by, or recourse to, Lender, in any
event whatsoever, (ii) the assignee shall be a third party that is refinancing
the Loan, (iii) Lender is permitted by law to deliver an assignment in lieu of
recording a satisfaction and (iv) Borrower shall pay all reasonable fees and
expenses of Lender in connection with such assignment.
(i) It is expressly understood and agreed that this
Instrument is given for the purpose of continuing the lien evidenced by the
Existing Mortgages and modifying the terms, provisions, covenants and conditions
of the Existing Mortgages, as provided herein. The terms, provisions, covenants
and conditions of the Existing Mortgages are in their entirety modified and
superseded by the terms, provisions, covenants and conditions of this
Instrument. No part of the indebtedness evidenced by the Existing Notes shall be
disturbed, discharged, canceled or impaired by the execution and delivery of the
Note or this Instrument, it being the intention of
54
the parties hereto that such execution and delivery shall create no new or
further principal indebtedness other than the principal indebtedness evidenced
by the Existing Notes.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
55
IN WITNESS WHEREOF, Lender and Borrower have executed this Instrument or
has caused the same to be executed by its representatives thereunto duly
authorized.
BORROWER:
ACADIA NEW LOUDON, LLC, a Delaware
limited liability company
By:
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
LENDER:
GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC., a Delaware corporation
By:
-----------------------------------
Name:
Title:
ACKNOWLEDGMENT
STATE OF _____________________)
) ss.:
COUNTY OF ____________________)
On the ____ day of August in the year 2004, before me, a Notary
Public in and for said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, personally
known to me or proved to me on the basis of satisfactory evidence to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his capacity, and that by his signature on this
instrument, the person, or the entity upon behalf of which the person acted,
executed this instrument.
________________________________ (insert city or political subdivision and state
or county or other place acknowledgment taken).
----------------------------
Notary Public
(NOTARIAL SEAL)
My commission expires:
------------------------------
Acknowledgment In New York State
State of New York )
)ss.:
County of New York )
On the ____ day of August in the year 2004, before me, the
undersigned, personally appeared ____________, personally known to me or proved
to me on the basis of satisfactory evidence to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument, the person,
or the entity upon behalf of which the person acted, executed the instrument.
-------------------------------------------
(Signature of person taking Acknowledgment)
[SEAL]
Notary expiration date: __________
Acknowledgment Outside New York State
State of _____________________)
)ss.:
County of ____________________)
On the ____ day of August in the year 2004, before me, the
undersigned, personally appeared _______________________, personally known to me
or proved to me on the basis of satisfactory evidence to be the person whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her capacity, and that by his/her signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.
_____________________________________ (insert city or political subdivision and
state or county or other place acknowledgement taken).
-------------------------------------------
(Signature of person taking Acknowledgment)
[SEAL]
Notary expiration date: __________
EXHIBIT A
LEGAL DESCRIPTION OF REAL ESTATE
(See Attached)
SCHEDULE 1
ORIGINAL MORTGAGES
(a) Mortgage dated as of 03/30/00 made by Acadia Realty Limited Partnership
(f/k/a ▇▇▇▇ Centers Limited Partnership) in favor of The Dime Savings Bank of
New York, FSB, as administrative agent for itself and other lenders to secure
$9,375,000 and recorded 04/11/00 in Liber 3827, Page 512 in the Office of the
Albany Clerk.
(b) Mortgage Modification Agreement dated 03/26/04 made by Acadia Realty
Limited Partnership in favor of Washington Mutual Bank, FA, successor to the
Dime Savings Bank of New York, FSB, as Administrative Agent for Lenders and
recorded on 07/20/04 in Liber 4780 Page 1069 in the Office of the Albany Clerk.
(c) Assignment of Mortgage dated 08/13/04 made by Washington Mutual Bank,
FA, in favor of Greenwich Capital Financial Products, Inc. and to be recorded in
Liber ___, Page __ in the Office of the Albany Clerk.
(d) Mortgage, Assignment of Leases and Rents and Security Agreement dated
08/13/04 made by Acadia New Loudon, LLC in favor of Greenwich Capital Financial
Products and to be recorded in Liber ___, Page __ in the Office of the Albany
Clerk.
SCHEDULE 2
REQUIRED REPAIRS
None.
SCHEDULE 3
RENT ROLL
See Attached.