EXHIBIT 10.69
JBAK CANTON REALTY, INC., as mortgagor
(Borrower)
to
THE CHASE MANHATTAN BANK, as mortgagee
(Lender)
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MORTGAGE AND
SECURITY AGREEMENT
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Dated: As of December 30, 1996
Location: ▇. ▇▇▇▇▇ Corporate Facility
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
County: Norfolk
PREPARED BY AND UPON
RECORDATION RETURN TO:
MESSRS. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & WOOD
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
File No.: 86000-00376
Title No.:
THIS MORTGAGE AND SECURITY AGREEMENT (the "Security
Instrument") is made as of the ____ day of December, 1996, by JBAK CANTON
REALTY, INC., a Massachusetts corporation, having its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as mortgagor
("Borrower") to THE CHASE MANHATTAN BANK, a New York banking corporation, having
an address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as
mortgagee ("Lender").
RECITALS:
Borrower by its promissory note of even date herewith given to
Lender is indebted to Lender in the principal sum of FIFTEEN MILLION FIVE
HUNDRED THOUSAND AND 00/100 DOLLARS ($15,500,000) in lawful money of the United
States of America (the note together with all extensions, renewals,
modifications, substitutions and amendments thereof shall collectively be
referred to as the "Note"), with interest from the date thereof at the rates set
forth in the Note, principal and interest to be payable in accordance with the
terms and conditions provided in the Note.
Borrower desires to secure the payment of the Debt (as defined
in Article 2) and the performance of all of its obligations under the Note and
the Other Obligations (as defined in Article ).
Article 1 - GRANTS OF SECURITY
Section 1.1 PROPERTY MORTGAGED. Borrower does hereby
irrevocably mortgage, grant, bargain, sell, pledge, assign, warrant, transfer
and convey to Lender, and grant a security interest to Lender in, the following
property, rights, interests and estates now owned, or hereafter acquired by
Borrower (collectively, the "Property"):
(a) Land. The real property described in
Exhibit A attached hereto
and made a part hereof (the "Land");
(b) Additional Land. All ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
and development rights hereafter acquired by Borrower for use
in connection with the Land and the development of the Land
and all additional lands and estates therein which may, from
time to time, by supplemental mortgage or otherwise be
expressly made subject to the lien of this Security
Instrument;
(c) Improvements. The buildings, structures,
fixtures, additions, enlargements, extensions, modifications,
repairs, replacements and improvements now or hereafter
erected or located on the Land (the "Improvements");
(d) Easements. All easements, rights-of-way or use,
rights, strips and gores of land, streets, ways, alleys,
passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, and all estates,
rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature
whatsoever, in any way now or hereafter belonging,
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relating or pertaining to the Land and the Improvements and
the reversion and reversions, remainder and remainders, and
all land lying in the bed of any street, road or avenue,
opened or proposed, in front of or adjoining the Land, to the
center line thereof and all the estates, rights, titles,
interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever,
both at law and in equity, of Borrower of, in and to the Land
and the Improvements and every part and parcel thereof, with
the appurtenances thereto;
(e) Fixtures and Personal Property. All machinery,
equipment, fixtures (including, but not limited to, all
heating, air conditioning, plumbing, lighting, communications
and elevator fixtures) and other property of every kind and
nature whatsoever owned by Borrower, or in which Borrower has
or shall have an interest, now or hereafter located upon the
Land and the Improvements, or appurtenant thereto, and usable
in connection with the present or future operation and
occupancy of the Land and the Improvements and all building
equipment, materials and supplies of any nature whatsoever
owned by Borrower, or in which Borrower has or shall have an
interest, now or hereafter located upon the Land and the
Improvements, or appurtenant thereto, or usable in connection
with the present or future operation and occupancy of the Land
and the Improvements (collectively, the "Personal Property"),
and the right, title and interest of Borrower in and to any of
the Personal Property which may be subject to any security
interests, as defined in the Uniform Commercial Code, as
adopted and enacted by the state or states where any of the
Property is located (the "Uniform Commercial Code"), superior
in lien to the lien of this Security Instrument and all
proceeds and products of the above;
(f) Leases and Rents. All leases, subleases and other
agreements affecting the use, enjoyment or occupancy of the
Land and/or the Improvements heretofore or hereafter entered
into and all extensions, amendments and modifications thereto,
whether before or after the filing by or against Borrower of
any petition for relief under 11 U.S.C. ss.101 et seq., as the
same may be amended from time to time (the "Bankruptcy Code")
(the "Leases") and all right, title and interest of Borrower,
its successors and assigns therein and thereunder, including,
without limitation, cash or securities deposited thereunder to
secure the performance by the lessees of their obligations
thereunder and all rents, additional rents, revenues, issues
and profits (including all oil and gas or other mineral
royalties and bonuses) from the Land and the Improvements
whether paid or accruing before or after the filing by or
against Borrower of any petition for relief under the
Bankruptcy Code (the "Rents") and all proceeds from the sale
or other disposition of the Leases and the right to receive
and apply the Rents to the payment of the Debt;
(g) Condemnation Awards. All awards or
payments, including interest thereon, which may heretofore
and hereafter be made with respect to the Property, whether
from the exercise of the right of eminent domain (including
but not limited to any transfer made in lieu of or in
anticipation of the exercise of the
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right), or for a change of grade, or for any other injury to
or decrease in the value of the Property;
(h) Insurance Proceeds. All proceeds of and
any unearned premiums on any insurance policies covering the
Property, including, without limitation, the
right to receive and apply the proceeds of any insurance,
judgments, or settlements made in lieu thereof, for damage to
the Property;
(i) Tax Certiorari. All refunds, rebates or
credits in connection with a reduction in real estate taxes
and assessments charged against the Property as
a result of tax certiorari or any applications or proceedings
for reduction;
(j) Conversion. All proceeds of the conversion,
voluntary or involuntary, of any of the foregoing including,
without limitation, proceeds of insurance and condemnation
awards, into cash or liquidation claims;
(k) Rights. The right, in the name and on
behalf of Borrower, to appear in and defend any action or
proceeding brought with respect to the Property and to
commence any action or proceeding to protect the interest of
Lender in the Property;
(l) Agreements. All agreements, contracts,
certificates, instruments, franchises, permits, licenses,
plans, specifications and other documents, now or hereafter
entered into, and all rights therein and thereto, respecting
or pertaining to the use, occupation, construction, management
or operation of the Land and any part thereof and any
Improvements or respecting any business or activity conducted
on the Land and any part thereof and all right, title and
interest of Borrower therein and thereunder, including,
without limitation, the right, upon the happening of any
default hereunder, to receive and collect any sums payable to
Borrower thereunder;
(m) Trademarks. All tradenames, trademarks,
servicemarks, logos, copyrights, goodwill, books and records
and all other general intangibles relating to or used in
connection with the operation of the Property; and
(n) Other Rights. Any and all other rights of
Borrower in and to the items set forth in Subsections
(a) through (m) above.
Section 1.2 ASSIGNMENT OF RENTS. Borrower hereby absolutely
and unconditionally assigns to Lender Borrower's right, title and interest in
and to all current and future Leases and Rents; it being intended by Borrower
that this assignment constitutes a present, absolute assignment and not an
assignment for additional security only. Nevertheless, subject to the terms of
this Section and Section , Lender grants to Borrower a revocable license to
collect and receive the Rents. Borrower shall hold the Rents, or a portion
thereof sufficient to discharge all current sums due on the Debt, for use in the
payment of such sums.
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Section 1.3 SECURITY AGREEMENT. This Security Instrument is
both a real property mortgage and a "security agreement" within the meaning of
the Uniform Commercial Code. The Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Borrower in the Property. By executing and delivering this Security
Instrument, Borrower hereby grants to Lender, as security for the Obligations
(defined in Section ), a security interest in the Personal Property to the full
extent that the Personal Property may be subject to the Uniform Commercial Code.
Section 1.4 PLEDGE OF MONIES HELD. Borrower hereby pledges to
Lender any and all monies now or hereafter held by Lender, including, without
limitation, any sums deposited in the Escrow Fund (as defined in Section ), Net
Proceeds (as defined in Section 4.4) and condemnation awards or payments
described in Section 3.6, as additional security for the Obligations until
expended or applied as provided in this Security Instrument.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property
unto and to the use and benefit of Lender, and the successors and assigns of
Lender, forever;
PROVIDED, HOWEVER, these presents are upon the express
condition that, if Borrower shall well and truly pay to Lender the Debt at the
time and in the manner provided in the Note and this Security Instrument, shall
well and truly perform the Other Obligations as set forth in this Security
Instrument and shall well and truly abide by and comply with each and every
covenant and condition set forth herein and in the Note, these presents and the
estate hereby granted shall cease, terminate and be void.
Article 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1 DEBT. This Security Instrument and the grants,
assignments and transfers made in Article are given for the purpose of securing
the following, in such order of priority as Lender may determine in its sole
discretion (the "Debt"):
(a) the payment of the indebtedness evidenced by the Note
in lawful money of the United States of America;
(b) the payment of interest, default interest, late charges
and other sums, as provided in the Note, this Security Instrument or
the Other Security Documents (defined below);
(c) the payment of the Prepayment Consideration (as
defined in the Note), if any;
(d) the payment of all other moneys agreed or provided
to be paid by Borrower in the Note, this Security Instrument or the
Other Security Documents;
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(e) the payment of all sums advanced pursuant to this
Security Instrument to protect and preserve the Property and the lien
and the security interest created hereby;
and
(f) the payment of all sums advanced and costs and expenses
incurred by Lender in connection with the Debt or any part thereof, any
renewal, extension, or change of or substitution for the Debt or any
part thereof, or the acquisition or perfection of the security
therefor, whether made or incurred at the request of Borrower or
Lender.
Section 2.2 OTHER OBLIGATIONS. This Security Instrument and
the grants, assignments and transfers made in Article are also given for the
purpose of securing the following (the "Other Obligations"):
(a) the performance of all other obligations of Borrower
contained herein;
(b) the performance of each obligation of Borrower contained
in any other agreement given by Borrower to Lender which is for the
purpose of further securing the obligations secured hereby, and any
amendments, modifications and changes thereto; and
(c) the performance of each obligation of Borrower contained
in any renewal, extension, amendment, modification, consolidation,
change of, or substitution or replacement for, all or any part of the
Note, this Security Instrument or the Other Security Documents.
Section 2.3 DEBT AND OTHER OBLIGATIONS. Borrower's
obligations for the payment of the Debt and the performance of the Other
Obligations shall be referred to collectively below as the "Obligations."
Section 2.4 PAYMENTS. Unless payments are made in the required
amount in immediately available funds at the place where the Note is payable,
remittances in payment of all or any part of the Debt shall not, regardless of
any receipt or credit issued therefor, constitute payment until the required
amount is actually received by Lender in funds immediately available at the
place where the Note is payable (or any other place as Lender, in Lender's sole
discretion, may have established by delivery of written notice thereof to
Borrower) and shall be made and accepted subject to the condition that any check
or draft may be handled for collection in accordance with the practice of the
collecting bank or banks. Acceptance by Lender of any payment in an amount less
than the amount then due shall be deemed an acceptance on account only, and the
failure to pay the entire amount then due shall be and continue to be an Event
of Default (defined below).
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Article 3 - BORROWER COVENANTS
Borrower covenants and agrees that:
Section 3.1 PAYMENT OF DEBT. Borrower will pay the
Debt at the time and in the manner provided in the Note and in this Security
Instrument.
Section 3.2 INCORPORATION BY REFERENCE. All the covenants,
conditions and agreements contained in (a) the Note and (b) all and any of the
documents other than the Note or this Security Instrument now or hereafter
executed by Borrower and/or others and by or in favor of Lender, which wholly or
partially secure or guaranty payment of the Note (the "Other Security
Documents"), are hereby made a part of this Security Instrument to the same
extent and with the same force as if fully set forth herein.
Section 3.3 INSURANCE.
(a) Borrower shall obtain and maintain, or cause to be
maintained, insurance for Borrower and the Property providing at least
the following coverages:
(i) comprehensive all risk insurance on the
Improvements and the Personal Property which is owned by
Borrower, in each case (A) in an amount equal to 100% of the
"Full Replacement Cost," which for purposes of this Security
Instrument shall mean actual replacement value (exclusive of
costs of excavations, foundations, underground utilities and
footings) with a waiver of depreciation; (B) containing an
agreed amount endorsement with respect to the Improvements and
Personal Property which is owned by Borrower, waiving all
co-insurance provisions; (C) providing for no deductible in
excess of $100,000; and (D) providing coverage for contingent
liability from Operation of Building Laws, Demolition Costs
and Increased Cost of Construction Endorsements together with
an "Ordinance or Law Coverage" or "Enforcement" endorsement if
any of the Improvements or the use of the Property shall at
any time constitute legal non-conforming structures or uses.
The Full Replacement Cost shall be redetermined from time to
time (but not more frequently than once in any twelve (12)
calendar months) at the request of Lender by an appraiser or
contractor designated and paid by Borrower and approved by
Lender, or by an engineer or appraiser in the regular employ
of the insurer. After the first appraisal, additional
appraisals may be based on construction cost indices
customarily employed in the trade. No omission on the part of
Lender to request any such ascertainment shall relieve
Borrower of any of its obligations under this Subsection;
(ii) commercial general liability insurance against
claims for personal injury, bodily injury, death or property
damage occurring upon, in or about the Property, such
insurance (A) to be on the so-called "occurrence" form with a
combined single limit of not less than $2,000,000; (B) to
continue at not less than the aforesaid limit until required
to be changed by Lender in writing by reason of changed
economic conditions making such protection inadequate; and (C)
to
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cover at least the following hazards: (1) premises and
operations; (2) products and completed operations on an "if
any" basis; (3) independent contractors; (4) blanket
contractual liability for all written and oral contracts; and
(5) contractual liability covering the indemnities contained
in Article hereof to the extent the same is available;
(iii) loss of rents insurance (A) with loss payable
to Lender; (B) covering all risks required to be covered by
the insurance provided for in Subsection (a)(i); and (C) in an
amount equal to 100% of the projected gross income from the
Property for a period of twelve (12) months. The amount of
such loss of rents insurance shall be determined prior to the
date hereof and at least once each year thereafter based on
Borrower's reasonable estimate of the gross income from the
Property for the succeeding twelve-month period. All insurance
proceeds payable to Lender pursuant to this Subsection shall
be held by Lender and shall be applied to the obligations
secured hereunder from time to time due and payable hereunder
and under the Note; provided, however, that nothing herein
contained shall be deemed to relieve Borrower of its
obligations to pay the obligations secured hereunder on the
respective dates of payment provided for in the Note except to
the extent such amounts are actually paid out of the proceeds
of such loss of rents insurance;
(iv) at all times during which structural
construction, repairs or alterations are being made with
respect to the Improvements (A) owner's contingent or
protective liability insurance covering claims not covered by
or under the terms or provisions of the above mentioned
commercial general liability insurance policy; and (B) the
insurance provided for in Subsection (a)(i) written in a
so-called builder's risk completed value form or equivalent
property insurance satisfactory to Lender (1) on a
non-reporting basis, (2) against all risks insured against
pursuant to Subsection (a)(i), (3) including permission to
occupy the Property, and (4) with an agreed amount endorsement
waiving co-insurance provisions;
(v) workers' compensation, subject to the statutory
limits of the state in which the Property is located, and
employer's liability insurance with a limit of at least
$1,000,000 per accident and per disease per employee, and
$1,000,000 for disease aggregate in respect of any work or
operations on or about the Property, or in connection with the
Property or its operation (if applicable);
(vi) comprehensive boiler and machinery insurance,
if applicable, in amounts as shall be reasonably required by
Lender;
(vii) if any portion of the Improvements is at any
time located in an area identified by the Secretary of Housing
and Urban Development or any successor thereto as an area
having special flood hazards pursuant to the National Flood
Insurance Act of 1968, the Flood Disaster Protection Act of
1973 or the National Flood Insurance Reform Act of 1994, as
each may be amended, or any successor law (the "Flood
Insurance Acts"), flood hazard insurance in an amount equal to
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the lesser of (A) the principal balance of the Note, and (B)
the maximum limit of coverage available for the Property under
the Flood Insurance Acts;
(viii) earthquake, sinkhole and mine subsidence
insurance, if required by Lender in amounts, form and
substance satisfactory to Lender, provided that the insurance
pursuant to this Subsection (viii) shall be on terms
consistent with the all risk insurance policy required under
Subsection 3.3(a)(i);
(ix) such other insurance and in such amounts as
Lender from time to time may reasonably request against such
other insurable hazards which at the time are commonly insured
against for property similar to the Property located in or
around the region in which the Property is located.
(b) All insurance provided for in Subsection (a)
hereof shall be obtained under valid and enforceable policies (the
"Policies" or in the singular, the "Policy"), in such forms and, from
time to time after the date hereof, in such amounts as may from time to
time be satisfactory to Lender, issued by financially sound and
responsible insurance companies authorized to do business in the state
in which the Property is located and approved by Lender. The insurance
companies must have a general policy rating of A or better and a
financial class of VI or better by A.M. Best Company, Inc., and if
there are any Securities (defined in Section 19.1 below) issued which
have been assigned a rating by a credit rating agency approved by
Lender (a "Rating Agency"), the insurance company shall have a claims
paying ability rating by such Rating Agency of not less than one rating
category below the highest rating at any time assigned to the
Securities, but in no event less than BBB by Standard & Poor's Corp. or
such comparable rating by such other Rating Agency (each such insurer
shall be referred to below as a "Qualified Insurer"). Not less than
thirty (30) days prior to the expiration dates of the Policies
theretofore furnished to Lender pursuant to Subsection (a), certified
copies of the Policies marked "premium paid" or accompanied by evidence
satisfactory to Lender of payment of the premiums due thereunder (the
"Insurance Premiums"), shall be delivered by Borrower to Lender;
provided, however, that in the case of renewal Policies, Borrower may
furnish Lender with binders therefor to be followed by the original
Policies when issued.
(c) Borrower shall not obtain (i) any umbrella or
blanket liability or casualty Policy unless, in each case, such Policy
is approved in advance in writing by Lender and Lender's interest is
included therein as provided in this Security Instrument and such
Policy is issued by a Qualified Insurer, or (ii) separate insurance
concurrent in form or contributing in the event of loss with that
required in Subsection (a) to be furnished by, or which may be
reasonably required to be furnished by, Borrower. In the event Borrower
obtains separate insurance or an umbrella or a blanket Policy, Borrower
shall notify Lender of the same and shall cause certified copies of
each Policy to be delivered as required in Subsection (a). Any blanket
insurance Policy shall specifically allocate to the Property the amount
of coverage from time to time required hereunder and shall otherwise
provide the same protection as would a separate Policy insuring only
the Property in compliance with the provisions of Subsection (a).
Notwithstanding Lender's approval of any umbrella or blanket liability
or casualty Policy
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hereunder, Lender reserves the right, in its reasonable discretion, to
require Borrower to obtain a separate Policy in compliance with this
Section 3.3.
(d) All Policies of insurance provided for or contemplated by
Subsection (a), except for the Policy referenced in Subsection (a)(v),
shall name Lender and Borrower as the insured or additional insured, as
their respective interests may appear, and in the case of property
damage, boiler and machinery, and flood insurance, shall contain a
standard non-contributing mortgagee clause in favor of Lender providing
that the loss thereunder shall be payable to Lender.
(e) All Policies of insurance provided for in Subsection
(a) shall contain clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone
acting for Borrower, or of any tenant under any Lease or other
occupant, or failure to comply with the provisions of any
Policy which might otherwise result in a forfeiture of the
insurance or any part thereof, shall in any way affect the
validity or enforceability of the insurance insofar as Lender
is concerned;
(ii) the Policy shall not be materially changed
(other than to increase the coverage provided thereby) or
cancelled without at least 30 days' written notice to Lender
and any other party named therein as an insured; and
(iii) each Policy shall provide that the issuers
thereof shall give written notice to Lender if the Policy has
not been renewed thirty (30) days prior to its expiration; and
(iv) Lender shall not be liable for any Insurance
Premiums thereon or subject to any assessments thereunder.
(f) If requested by Lender, Borrower shall furnish to
Lender, on or before thirty (30) days after the close of each of
Borrower's fiscal years, a statement certified by Borrower or a duly
authorized officer of Borrower of the amounts of insurance maintained
in compliance herewith, of the risks covered by such insurance and of
the insurance company or companies which carry such insurance and, if
requested by Lender, verification of the adequacy of such insurance by
an independent insurance broker or appraiser acceptable to Lender.
(g) If at any time Lender is not in receipt of
written evidence that all insurance required hereunder is in full force
and effect, Lender shall have the right, without notice to Borrower to
take such action as Lender deems necessary to protect its interest in
the Property, including, without limitation, the obtaining of such
insurance coverage as Lender in its sole discretion deems appropriate,
and all expenses incurred by Lender in connection with such action or
in obtaining such insurance and keeping it in effect shall be paid by
Borrower to Lender upon demand and until paid shall be secured by this
Security Instrument and shall bear interest in accordance with Section
10.3 hereof.
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(h) If the Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty, Borrower shall give prompt
notice of such damage to Lender and shall promptly commence and
diligently prosecute the completion of the repair and restoration of
the Property as nearly as possible to the condition the Property was in
immediately prior to such fire or other casualty, with such alterations
as may be approved by Lender (the "Restoration") and otherwise in
accordance with Section of this Security Instrument. Borrower shall pay
all costs of such Restoration whether or not such costs are covered by
insurance.
Section 3.4 PAYMENT OF TAXES, ETC.
(a) Borrower shall promptly pay or cause to be paid all taxes,
assessments, water rates, sewer rents, governmental impositions, and
other charges, including without limitation vault charges and license
fees for the use of vaults, chutes and similar areas adjoining the
Land, now or hereafter levied or assessed or imposed against the
Property or any part thereof (the "Taxes"), all ground rents,
maintenance charges and similar charges, now or hereafter levied or
assessed or imposed against the Property or any part thereof (the
"Other Charges"), and all charges for utility services provided to the
Property as same become due and payable. Borrower will deliver to
Lender, promptly upon Lender's request, evidence reasonably
satisfactory to Lender that the Taxes, Other Charges and utility
service charges have been so paid or are not then delinquent. Borrower
shall not suffer and shall promptly cause to be paid and discharged any
lien or charge whatsoever which may be or become a lien or charge
against the Property. Except to the extent sums sufficient to pay all
Taxes and Other Charges have been deposited with Lender in accordance
with the terms of this Security Instrument, Borrower shall furnish to
Lender paid receipts for the payment of the Taxes and Other Charges
prior to the date the same shall become delinquent.
(b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any of the
Taxes, provided that (i) no Event of Default has occurred and is
continuing under the Note, this Security Instrument or any of the Other
Security Documents, (ii) Borrower is permitted to do so under the
provisions of any other mortgage, deed of trust or deed to secure debt
affecting the Property, (iii) such proceeding shall suspend the
collection of the Taxes from Borrower and from the Property or Borrower
shall have paid all of the Taxes under protest, (iv) such proceeding
shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Borrower is subject and
shall not constitute a default thereunder, (v) neither the Property nor
any part thereof or interest therein will be in danger of being sold,
forfeited, terminated, cancelled or lost, (vi) Borrower shall have
deposited with Lender adequate reserves for the payment of the Taxes,
together with all interest and penalties thereon, unless Borrower has
paid all of the Taxes under protest, and (vii) Borrower shall have
furnished the security as may be required in the proceeding, or as may
be requested by Lender to insure the payment of any contested Taxes,
together with all interest and penalties thereon.
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Section 3.5 ESCROW FUND. In addition to the initial deposits
with respect to Taxes and, if applicable, Insurance Premiums made by Borrower to
Lender on the date hereof to be held by Lender in escrow, Borrower shall pay or
cause to be paid to Lender on the first day of each calendar month (a)
one-twelfth of an amount which would be sufficient to pay the Taxes payable, or
estimated by Lender to be payable, during the next ensuing twelve (12) months
and (b) at the option of Lender, if the liability or casualty Policy maintained
by Borrower covering the Property shall not constitute an approved blanket or
umbrella Policy pursuant to Subsection 3.3(c) hereof, or Lender shall require
Borrower to obtain a separate Policy pursuant to Subsection 3.3(c) hereof,
one-twelfth of an amount which would be sufficient to pay the Insurance Premiums
due for the renewal of the coverage afforded by the Policies upon the expiration
thereof (the amounts in (a) and (b) above shall be called the "Escrow Fund"). In
the event Lender shall elect to collect payments in escrow for Insurance
Premiums, Borrower shall pay to Lender an initial deposit to be determined by
Lender, in its sole discretion, to increase the amounts in the Escrow Fund to an
amount which, together with anticipated monthly escrow payments, shall be
sufficient to pay all Insurance Premiums and Taxes as they become due. Borrower
agrees to notify Lender immediately of any changes to the amounts, schedules and
instructions for payment of any Taxes and Insurance Premiums of which it has or
obtains knowledge and authorizes Lender or its agent to obtain the bills for
Taxes and Other Charges directly from the appropriate taxing authority. The
Escrow Fund and the payments of interest or principal or both, payable pursuant
to the Note shall be added together and shall be paid as an aggregate sum by
Borrower to Lender. Lender will apply the Escrow Fund to payments of Taxes and
Insurance Premiums required to be made by Borrower pursuant to Sections and
hereof. If the amount of the Escrow Fund shall exceed the amounts due for Taxes
and Insurance Premiums pursuant to Sections and hereof, Lender shall, in its
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Escrow Fund. In allocating such excess, Lender may
deal with the person shown on the records of Lender to be the owner of the
Property. If the Escrow Fund is not sufficient to pay the items set forth in (a)
and (b) above, Borrower shall promptly pay to Lender, upon demand, an amount
which Lender shall estimate as sufficient to make up the deficiency. The Escrow
Fund shall not constitute a trust fund and may be commingled with other monies
held by Lender. No earnings or interest on the Escrow Fund shall be payable to
Borrower.
Section 3.6 CONDEMNATION. Borrower shall promptly give Lender
notice of the actual or threatened commencement of any condemnation or eminent
domain proceeding and shall deliver to Lender copies of any and all papers
served in connection with such proceedings. Notwithstanding any taking by any
public or quasi-public authority through eminent domain or otherwise (including
but not limited to any transfer made in lieu of or in anticipation of the
exercise of such taking), Borrower shall continue to pay the Debt at the time
and in the manner provided for its payment in the Note and in this Security
Instrument and the Debt shall not be reduced until any award or payment therefor
shall have been actually received and applied by Lender, after the deduction of
expenses of collection, to the reduction or discharge of the Debt. Lender shall
not be limited to the interest paid on the award by the condemning authority but
shall be entitled to receive out of the award interest at the rate or rates
provided herein or in the Note. If the Property or any portion thereof is taken
by the power of eminent domain, Borrower shall promptly commence and diligently
prosecute the Restoration of the Property in accordance with Section 4.4 of this
Security Instrument. In the event Lender is not required to disburse Net
Proceeds (defined below) to Borrower in accordance with Section 4.4 of this
Security
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Instrument, Lender may apply any award or payment to the reduction or discharge
of the Debt whether or not then due and payable. If the Property is sold,
through foreclosure or otherwise, prior to the receipt by Lender of the award or
payment, Lender shall have the right, whether or not a deficiency judgment on
the Note shall have been sought, recovered or denied, to receive the award or
payment, or a portion thereof sufficient to pay the Debt.
Section 3.7 LEASES AND RENTS.
(a) All renewals of Leases and all proposed Leases shall
provide for rental rates and terms comparable to existing local market
rates and terms and shall be arms-length transactions with bona fide,
independent third party tenants. All proposed Leases and renewals of
existing Leases (other than residential Leases relating to a
residential multifamily property) shall be subject to the prior
approval of Lender and its counsel, at Borrower's expense. All Leases
shall provide that they are subordinate to this Security Instrument and
that the lessee agrees to attorn to Lender. Borrower (i) shall observe
and perform all the obligations imposed upon the lessor under the
Leases and shall not do or permit to be done anything to impair the
value of any of the Leases as security for the Debt; (ii) shall
promptly send copies to Lender of all notices of default which Borrower
shall send or receive thereunder; (iii) shall enforce all of the terms,
covenants and conditions contained in the Leases upon the part of the
lessee thereunder to be observed or performed, short of termination
thereof; provided however, with respect to multifamily residential
property, a residential Lease may be terminated in the event of a
default by the tenant thereunder; (iv) shall not collect any of the
Rents more than one (1) month in advance; (v) shall not execute any
other assignment of the lessor's interest in any of the Leases or the
Rents; (vi) shall not alter, modify or change the terms of any Leases
without the prior written consent of Lender, or cancel or terminate any
Leases or accept a surrender thereof or convey or transfer or suffer or
permit a conveyance or transfer of the Land or of any interest therein
so as to effect a merger of the estates and rights of or a termination
or diminution of the obligations of, lessees thereunder; (vii) shall
not alter, modify or change the terms of any guaranty, letter of credit
or other credit support with respect to any of the Leases (the "Lease
Guaranty") or cancel or terminate such Lease Guaranty without the prior
written consent of Lender; and (viii) shall not consent to any
assignment of or subletting under any Leases not in accordance with
their terms, without the prior written consent of Lender.
(b) Intentionally Omitted
(c) Upon the occurrence of an Event of Default, to the extent
permitted by law, Borrower shall promptly deposit with Lender any and
all monies representing security deposits under the Leases, whether or
not Borrower actually received such monies (the "Security Deposits").
Lender shall hold the Security Deposits in accordance with the terms of
the respective Lease, and shall only release the Security Deposits in
order to return a tenant's Security Deposit to such tenant if such
tenant is entitled to the return of the Security Deposit under the
terms of the Lease and is not otherwise in default under the Lease. To
the extent required by Applicable Laws (defined below), Lender shall
hold the Security Deposits in an interest bearing account selected by
Lender in its sole discretion. In the event Lender is not permitted by
law to hold the Security
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Deposits, Borrower shall deposit the Security Deposits into an account
with a federally insured institution as approved by Lender.
(d) Notwithstanding anything to the contrary contained in this
Section 3.7, Lender shall consent to a one-time assignment or other
transfer of the tenant's interest in the ▇.▇▇▇▇▇ Lease (as defined in
Section 5.10) provided ▇. ▇▇▇▇▇, Inc. continues to guaranty the
tenant's obligations under said lease. Notwithstanding the foregoing,
Lender agrees to release JBI, Inc. from further liability under the ▇.
▇▇▇▇▇ Lease and to allow ▇. ▇▇▇▇▇, Inc. to terminate its Lease Guaranty
in connection with such a transfer provided that (a) Lender receives
thirty (30) days prior written notice of such termination, (b) no
default has occurred and is continuing under this Security Instrument,
the Note or the Other Security Documents and (c) upon the satisfaction
(in the sole determination of Lender) of such conditions as may be
reasonably imposed by Lender, which may include, but shall not be
limited to, the following matters:
A. Tenant's proposed transferee ("Tenant's Transferee")
shall have a credit rating from Standard's & Poor's
Corp. or ▇▇▇▇▇'▇ or such comparable
Rating Agency (a) if Lender has not released the
balance of the reserve amount held pursuant to that
certain Tenant Credit Reserve and Security
Agreement dated the date hereof, by and between
Borrower and Lender (the "Additional Reserve")
pursuant to the terms thereof, equal to or
greater than that of ▇. ▇▇▇▇▇, Inc. as of the date
hereof and at the time of said transfer or (b) if
Lender has released the balance of the Additional
Reserve pursuant to the terms thereof, of not less
than an investment grade credit rating from Standard
& Poor's Corp. or ▇▇▇▇▇'▇ or such comparable Rating
Agency;
B. Borrower shall pay to Lender a processing fee of
$4,000 upon request for approval of such termination
and a fee equal to 1% of the outstanding
principal balance of the Loan upon approval of the
release of JBI, Inc. from further liability under the
▇. ▇▇▇▇▇ Lease and the termination of the
Lease Guaranty;
C. Borrower shall pay any and all out-of-pocket costs
incurred in connection with the termination
(including, without limitation, Lender's reasonable
counsel fees and disbursements);
D. Tenant's Transferee shall, as of the date of such
transfer, have an aggregate net worth and liquidity
of not less than that of ▇. ▇▇▇▇▇, Inc. as of
the date hereof and as of the date of the transfer;
E. Tenant's Transferee must not have been a party to any
bankruptcy proceeding, voluntary or involuntary, made
an assignment for the benefit of creditors or taken
advantage of any insolvency act, or any act for the
benefit of debtors within seven (7) years prior to
the date of the transfer;
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F. Tenant's Transferee shall assume all of the
obligations of the tenant under
the ▇. ▇▇▇▇▇ Lease;
G. There shall be no material litigation pending against
Tenant's Transferee that is not acceptable to Lender;
and
H. Tenant's Transferee shall not have defaulted under
its or their obligations with respect to any other
indebtedness beyond any applicable grace period.
Section 3.8 MAINTENANCE OF PROPERTY. Borrower shall cause the
Property to be maintained in a good and safe condition and repair. The
Improvements and the Personal Property shall not be removed, demolished or
materially altered (except for normal replacement of the Personal Property)
without the consent of Lender. Borrower shall promptly repair, replace or
rebuild any part of the Property which may be destroyed by any casualty, or
become damaged, worn or dilapidated or which may be affected by any proceeding
of the character referred to in Section hereof and shall complete and pay for
any structure at any time in the process of construction or repair on the Land.
Borrower shall not initiate, join in, acquiesce in, or consent to any change in
any private restrictive covenant, zoning law or other public or private
restriction, limiting or defining the uses which may be made of the Property or
any part thereof. If under applicable zoning provisions the use of all or any
portion of the Property is or shall become a nonconforming use, Borrower will
not cause or permit the nonconforming use to be discontinued or abandoned
without the express written consent of Lender.
Section 3.9 WASTE. Borrower shall not commit or suffer any
waste of the Property or make any change in the use of the Property which will
in any way materially increase the risk of fire or other hazard arising out of
the operation of the Property, or take any action that might invalidate or give
cause for cancellation of any Policy, or do or permit to be done thereon
anything that may in any way impair the value of the Property or the security of
this Security Instrument. Borrower will not, without the prior written consent
of Lender, permit any drilling or exploration for or extraction, removal, or
production of any minerals from the surface or the subsurface of the Land,
regardless of the depth thereof or the method of mining or extraction thereof.
Section 3.10 COMPLIANCE WITH LAWS.
(a) Borrower shall promptly comply with all existing and
future federal, state and local laws, orders, ordinances, governmental
rules and regulations or court orders affecting or which may be
interpreted to affect the Property, or the use thereof ("Applicable
Laws").
(b) Borrower shall from time to time, upon Lender's request,
provide Lender with evidence satisfactory to Lender that the Property
complies with all Applicable Laws or is exempt from compliance with
Applicable Laws.
(c) Notwithstanding any provisions set forth herein or in any
document regarding Lender's approval of alterations of the Property,
Borrower shall not alter the Property in any manner which would
increase Borrower's responsibilities for compliance
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with Applicable Laws without the prior written approval of Lender.
Lender's approval of the plans, specifications, or working drawings for
alterations of the Property shall create no responsibility or liability
on behalf of Lender for their completeness, design, sufficiency or
their compliance with Applicable Laws. The foregoing shall apply to
tenant improvements constructed by Borrower or by any of its tenants.
Lender may condition any such approval upon receipt of a certificate of
compliance with Applicable Laws from an independent architect,
engineer, or other person acceptable to Lender.
(d) Borrower shall give prompt notice to Lender of the receipt
by Borrower of any notice related to a violation of any Applicable Laws
and of the commencement of any proceedings or investigations which
relate to compliance with Applicable Laws.
Section 3.11 BOOKS AND RECORDS.
(a) Borrower and any Guarantors (defined in Subsection (e))
and Indemnitor(s) (defined in Subsection (o)), if any, shall keep
adequate books and records of account in accordance with generally
accepted accounting principles ("GAAP"), or in accordance with other
methods acceptable to Lender in its sole discretion, consistently
applied and furnish to Lender:
(i) monthly certified rent rolls signed and dated by
Borrower, detailing the names of all tenants of the
Improvements, the portion of Improvements occupied by each
tenant, the base rent and any other charges payable under each
Lease and the term of each Lease, including the expiration
date, and any other information as is reasonably required by
Lender, within twenty (20) days after the end of each calendar
month;
(ii) upon Lender's written request therefor,
quarterly operating statements of the Property, prepared and
certified by Borrower in the form required by Lender,
detailing the revenues received, the expenses incurred and the
net operating income before and after debt service (principal
and interest) and major capital improvements for that quarter
and containing appropriate year to date information, within
thirty (30) days after the end of each fiscal quarter;
(iii) an annual operating statement of the Property
detailing the total revenues received, total expenses
incurred, total cost of all capital improvements, total debt
service and total cash flow, to be prepared and certified by
Borrower in the form required by Lender, or if required by
Lender, an audited annual operating statement prepared and
certified by an independent certified public accountant
acceptable to Lender, within sixty (60) days after the close
of each fiscal year of Borrower;
(iv) an annual balance sheet and profit and loss
statement of Borrower, any Guarantors and any Indemnitor(s) in
the form required by Lender, prepared and certified by the
respective Borrower, Guarantors and/or Indemnitor(s), or if
required by Lender, audited financial statements prepared by
an independent certified public accountant reasonably
acceptable to Lender, within sixty (60) days
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after the close of each fiscal year of Borrower, Guarantors
and Indemnitor(s), as the case may be; and
(v) an annual operating budget presented on a monthly
basis consistent with the annual operating statement described
above for the Property, including cash flow projections for
the upcoming year, and all proposed capital replacements and
improvements at least fifteen (15) days prior to the start of
each fiscal year.
Notwithstanding the provisions of this Subsection 3.11(a), Lender
agrees not to require the rent rolls referred to in Subsection 3.11(a)(i) for
so long as ▇. ▇▇▇▇▇, Inc. is the guarantor of the lease of the entire Property.
(b) Upon request from Lender, Borrower, any Guarantor
and any Indemnitor shall furnish in a timely manner to Lender:
(i) a property management report for the Property,
showing the number of inquiries made and/or rental
applications received from tenants or prospective tenants and
deposits received from tenants and any other information
requested by Lender, in reasonable detail and certified by
Borrower (or an officer, general partner, member or principal
of Borrower if Borrower is not an individual) under penalty of
perjury to be true and complete, but no more frequently than
quarterly; and
(ii) an accounting of all security deposits held in
connection with any Lease of any part of the Property,
including the name and identification number of the accounts
in which such security deposits are held, the name and address
of the financial institutions in which such security deposits
are held and the name of the person to contact at such
financial institution, along with any authority or release
necessary for Lender to obtain information regarding such
accounts directly from such financial institutions.
Notwithstanding the provisions of this Subsection 3.11(b), Lender
agrees not to require the reports referred to in Subsection 3.11(b) for so long
as ▇. ▇▇▇▇▇, Inc. is the guarantor of the lease of the entire Property.
(c) Borrower, any Guarantor and any Indemnitor shall furnish
Lender with such other additional financial or management information
(including State and Federal tax returns) as may, from time to time, be
reasonably required by Lender in form and substance satisfactory to
Lender.
(d) Borrower, any Guarantor and any Indemnitor shall furnish
to Lender and its agents convenient facilities for the examination and
audit of any such books and records.
Section 3.12 PAYMENT FOR LABOR AND MATERIALS. Borrower
will promptly pay when due all bills and costs for labor, materials, and
specifically fabricated materials
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incurred in connection with the Property and never permit to exist beyond the
due date thereof in respect of the Property or any part thereof any lien or
security interest, even though inferior to the liens and the security interests
hereof, and in any event never permit to be created or exist in respect of the
Property or any part thereof any other or additional lien or security interest
other than the liens or security interests hereof, except for the Permitted
Exceptions (defined below).
Section 3.13 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall
observe and perform each and every term to be observed or performed by Borrower
pursuant to the terms of any agreement or recorded instrument affecting or
pertaining to the Property, or given by Borrower to Lender for the purpose of
further securing an obligation secured hereby and any amendments, modifications
or changes thereto.
Article 4 - SPECIAL COVENANTS
Borrower covenants and agrees that:
Section 4.1 PROPERTY USE. The Property shall be used only for
a commercial office building and distribution center, and for no other use
without the prior written consent of Lender, which consent may be withheld in
Lender's sole and absolute discretion.
Section 4.2 ERISA.
(a) It shall not engage in any transaction which would cause
any obligation, or action taken or to be taken, hereunder (or the
exercise by Lender of any of its rights under the Note, this Security
Instrument and the Other Security Documents) to be a non-exempt (under
a statutory or administrative class exemption) prohibited transaction
under the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); provided, however, that Borrower shall not be deemed to have
breached the representation in this Section 4.2(a) if a prohibited
transaction occurs which would not have occurred if all or part of
Lender's interest had not been transferred to an employee benefit plan
(as defined in Section 3(3) of ERISA) or an entity using assets of such
a plan (as defined in 29 C.F.R. ss.2510.3-101).
(b) Borrower further covenants and agrees to deliver to Lender
such certifications or other evidence from time to time throughout the
term of the Security Instrument, as requested by Lender in its sole
discretion, that (i) Borrower is not an "employee benefit plan" as
defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
or a "governmental plan" within the meaning of Section 3(3) of ERISA;
(ii) Borrower is not subject to state statutes regulating investments
and fiduciary obligations with respect to governmental plans; and (iii)
one or more of the following circumstances is true:
(A) Equity interests in Borrower are publicly
offered securities, within the meaning of 29 C.F.R.
ss. 2510.3-101(b)(2);
[NY01:247789.4] 86000-00376 12/23/96 4:57pm
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(B) Less than 25 percent of each outstanding class of
equity interests in Borrower are held by "benefit plan
investors" within the meaning of 29 C.F.R. ss.
2510.3-101(f)(2); or
(C) Borrower qualifies as an "operating company" or a
"real estate operating company" within the meaning of 29
C.F.R. ss. 2510.3-101(c) or (e) or an investment company
registered under The Investment Company Act of 1940.
Section 4.3 SINGLE PURPOSE ENTITY. Borrower covenants and
agrees that it has not and shall not and agrees that its general partner(s), if
Borrower is a partnership, its managing member(s), if Borrower is a limited
liability company, or its principal shareholders, if Borrower is a corporation
(in each case, "Principal"), has not and shall not:
(a) with respect to Borrower, engage in any business or
activity other than the ownership, operation and maintenance of the
Property, and activities incidental thereto and with respect to
Principal, engage in any business or activity other than the ownership
of its interest in Borrower, and activities incidental thereto
including the management of the Property;
(b) with respect to Borrower, acquire or own any material
assets other than (i) the Property, and (ii) such incidental Personal
Property as may be necessary for the operation of the Property and with
respect to Principal, acquire or own any material asset other than its
interest in Borrower;
(c) merge into or consolidate with any person or entity or
dissolve, terminate or liquidate in whole or in part, transfer or
otherwise dispose of all or substantially all of its assets or change
its legal structure, without in each case Lender's consent;
(d) fail to preserve its existence as an entity duly
organized, validly existing and in good standing (if applicable) under
the laws of the jurisdiction of its organization or formation, or
without the prior written consent of Lender, amend, modify, terminate
or fail to comply with the provisions of Borrower's Partnership
Agreement, Articles or Certificate of Incorporation, Articles of
Organization or similar organizational documents, as the case may be,
or of Principal's Partnership Agreement, Articles or Certificate of
Incorporation, Articles of Organization or similar organizational
documents, as the case may be, whichever is applicable;
(e) own any subsidiary or make any investment in, any
person or entity without the consent of Lender;
(f) commingle its assets with the assets of any of its
members, general partners, affiliates, principals or of any other
person or entity;
(g) with respect to Borrower, incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any
obligation), other than the Debt, except for trade payables in the
ordinary course of its business of owning and operating the Property,
provided that such debt is not evidenced by a note and paid when due
and with respect
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to Principal, incur any debt secured or unsecured, direct or contingent
(including guaranteeing any obligations);
(h) become insolvent and fail to pay its debts and
liabilities from its assets as the same shall become due;
(i) fail to maintain its records, books of account and bank
accounts separate and apart from those of the members, general
partners, principals and affiliates of Borrower or of Principal, as the
case may be, the affiliates of a member, general partner or principal
of Borrower or Principal, as the case may be, and any other person or
entity;
(j) enter into any contract or agreement with any member,
general partner, principal or affiliate of Borrower or of Principal, as
the case may be, Guarantor or Indemnitor, or any member, general
partner, principal or affiliate thereof, except upon terms and
conditions that are intrinsically fair and substantially similar to
those that would be available on an arms-length basis with third
parties other than any member, general partner, principal or affiliate
of Borrower or of Principal, as the case may be, Guarantor or
Indemnitor, or any member, general partner, principal or affiliate
thereof;
(k) seek the dissolution or winding up in whole, or in
part, of Borrower or of Principal, as the case may be;
(l) fail to correct any known misunderstandings regarding the
separate identity of Borrower, or of Principal, as the case may be, or
any member, general partner, principal or affiliate thereof or any
other person;
(m) hold itself out to be responsible for the debts of
another person;
(n) make any loans or advances to any third party, including
any member, general partner, principal or affiliate of Borrower, or of
Principal, as the case may be, or any member, general partner,
principal or affiliate thereof without Lender's prior written consent;
(o) fail to file its own tax returns (except that Lender
acknowledges that Borrower and Principal will file a consolidated tax
return with ▇. ▇▇▇▇▇, Inc. which shall provide that Borrower, Principal
and ▇. ▇▇▇▇▇, Inc. are separate legal entities);
(p) agree to, enter into or consummate any transaction which
would render Borrower or Principal, as the case may be, unable to
furnish the certification or other evidence referred to in Section (b)
hereof;
(q) fail either to hold itself out to the public as a legal
entity separate and distinct from any other entity or person or to
conduct its business solely in its own name in order not (i) to mislead
others as to the identity with which such other party is transacting
business, or (ii) to suggest that Borrower or Principal, as the case
may be, is responsible for the debts of any third party (including any
member, general partner,
[NY01:247789.4] 86000-00376 12/23/96 4:57pm
- 19 -
principal or affiliate of Borrower, or of Principal, as the case may
be, or any member, general partner, principal or affiliate thereof);
(r) fail to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations;
(s) file or consent to the filing of any petition, either
voluntary or involuntary, to take advantage of any applicable
insolvency, bankruptcy, liquidation or reorganization statute, or make
an assignment for the benefit of creditors; or
(t) share any common logo with or hold itself out as or be
considered as a department or division of (i) any general partner,
principal, member or affiliate of Borrower or of Principal, as the case
may be, (ii) any affiliate of a general partner, principal or member of
Borrower or of Principal, as the case may be, or (iii) any other person
or entity.
Section 4.4 RESTORATION. The following provisions shall
apply in connection with the Restoration of the Property:
(a) If the Net Proceeds (defined below) shall be less than
$75,000 and the costs of completing the Restoration shall be less than
$75,000, the Net Proceeds will be disbursed by Lender to Borrower upon
receipt, provided that all of the conditions set forth in Subsection
(b)(i) are met and Borrower delivers to Lender a written undertaking to
expeditiously commence and to satisfactorily complete with due
diligence the Restoration in accordance with the terms of this Security
Instrument.
(b) If the Net Proceeds are equal to or greater than $75,000
or the costs of completing the Restoration is equal to or greater than
$75,000, Lender shall make the Net Proceeds available for Restoration
in accordance with the provisions of this Subsection 4.4(b). The term
"Net Proceeds" for purpose of this Section 4.4 shall mean: (i) the net
amount of all insurance proceeds received by Lender pursuant to
Subsections (a)(i), (iv), (vi) and (vii) of this Security Instrument as
a result of such damage or destruction, after deduction of its
reasonable costs and expenses (including, but not limited to,
reasonable counsel fees), if any, in collecting the same (the
"Insurance Proceeds"), or (ii) the net amount of all awards and
payments received by Lender with respect to a taking referenced in
Section 3.6 of this Security Instrument, after deduction of its
reasonable costs and expenses (including, but not limited to reasonable
counsel fees), if any, in collecting the same ("Condemnation
Proceeds"), whichever the case may be, available for the Restoration in
accordance with the provisions of this Subsection (b).
(i) The Net Proceeds shall be made available to
Borrower for the Restoration provided that each of the
following conditions are met:
[NY01:247789.4] 86000-00376 12/23/96 4:57pm
- 20 -
(A) no Event of Default shall have occurred
and be continuing under the Note, this Security
Instrument or any of the Other Security Documents;
(B) (1) in the event the Net Proceeds are
Insurance Proceeds, less than fifty percent (50%) of
the total floor area of the Improvements has been
damaged, destroyed or rendered unusable as a result
of such fire or other casualty or (2) in the event
that the Net Proceeds are Condemnation Proceeds, said
Condemnation Proceeds do not exceed $200,000;
(C) Leases demising in the aggregate at
least 50% of the total rentable space in the Property
which has been demised under executed and delivered
Leases in effect as of the date of the occurrence of
such fire or other casualty or taking, whichever the
case may be, shall remain in full force and effect
during and after the completion of the Restoration;
(D) Borrower shall commence the Restoration
as soon as reasonably practicable (but in no event
later than thirty (30) days after such damage or
destruction or taking, whichever the case may be,
occurs) and shall diligently pursue the same to
satisfactory completion (Restoration shall be deemed
commenced upon the filing of a building permit);
(E) Lender shall be satisfied that any
operating deficits which will be incurred with
respect to the Property as a result of the occurrence
of any such fire or other casualty or taking,
whichever the case may be, will be covered out of (1)
the Net Proceeds, (2) the insurance coverage referred
to in Subsection (a)(iii), or (3) by other funds of
Borrower;
(F) Lender shall be satisfied that, upon the
completion of the Restoration, the gross cash flow
and the net cash flow of the Property will be
restored to a level sufficient to cover all carrying
costs and operating expenses of the Property,
including, without limitation, debt service on the
Note at a coverage ratio (after deducting all
required reserves as required by Lender from net
operating income) of at least 1.2 to 1.0, which
coverage ratio shall be determined by Lender in its
sole and absolute discretion on the basis of the
Applicable Interest Rate (as defined in the Note);
(G) Lender shall be satisfied that the
Restoration will be completed on or before the
earliest to occur of (1) six (6) months prior to the
Maturity Date (as defined in the Note), (2) six (6)
months after the occurrence of such fire or other
casualty, or taking, whichever the case may be, or
(3) such time as may be required under applicable
zoning law, ordinance, rule or regulation in order to
repair and restore the Property to the condition it
was in immediately prior to such fire or other
casualty
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or to as nearly as possible the condition it was in
immediately prior to such taking, as applicable;
(H) Borrower shall execute and deliver to
Lender a completion guaranty in form and substance
satisfactory to Lender and its counsel pursuant to
the provisions of which Borrower shall guaranty to
Lender the lien-free completion by Borrower of the
Restoration in accordance with the provisions of this
Subsection (b);
(I) the Property and the use thereof after
the Restoration will be in compliance with and
permitted under all applicable zoning laws,
ordinances, rules and regulations; and
(J) the Restoration shall be done and
completed by Borrower in an expeditious and diligent
fashion and in compliance with all applicable
governmental laws, rules and regulations (including,
without limitation, all applicable Environmental Laws
(defined below); and
(K) with respect to a taking of the
Property, such taking does not (1) result in the
violation of any requirement pursuant to the terms of
any Leases or (2) adversely impact the operations
and/or the fair market value of the Property, as
determined by Lender in its sole discretion.
(ii) The Net Proceeds shall be held by Lender and,
until disbursed in accordance with the provisions of this
Subsection (b), shall constitute additional security for the
Obligations. The Net Proceeds shall be disbursed by Lender to,
or as directed by, Borrower from time to time during the
course of the Restoration, upon receipt of evidence
satisfactory to Lender that (A) all materials installed and
work and labor performed (except to the extent that they are
to be paid for out of the requested disbursement) in
connection with the Restoration have been paid for in full,
and (B) there exist no notices of pendency, stop orders,
mechanic's or materialman's liens or notices of intention to
file same, or any other liens or encumbrances of any nature
whatsoever on the Property arising out of the Restoration
which have not either been fully bonded to the satisfaction of
Lender and discharged of record or in the alternative fully
insured to the satisfaction of Lender by the title company
insuring the lien of this Security Instrument.
(iii) All plans and specifications required in
connection with the Restoration shall be subject to prior
review and acceptance in all respects by Lender and by an
independent consulting engineer selected by Lender (the
"Restoration Consultant"). Lender shall have the use of the
plans and specifications and all permits, licenses and
approvals required or obtained in connection with the
Restoration. The identity of the contractors, subcontractors
and materialmen engaged in the Restoration, as well as the
contracts under which they have been engaged, shall be subject
to prior review and acceptance by Lender and the Restoration
Consultant. All costs and expenses incurred by
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Lender in connection with making the Net Proceeds available
for the Restoration including, without limitation, reasonable
counsel fees and disbursements and the Restoration
Consultant's fees, shall be paid by Borrower.
(iv) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal
to the costs actually incurred from time to time for work in
place as part of the Restoration, as certified by the
Restoration Consultant, minus the Restoration Retainage. The
term "Restoration Retainage" as used in this Subsection (b)
shall mean an amount equal to 10% of the costs actually
incurred for work in place as part of the Restoration, as
certified by the Restoration Consultant, until such time as
the Restoration Consultant certifies to Lender that Net
Proceeds representing 50% of the required Restoration have
been disbursed. There shall be no Restoration Retainage with
respect to costs actually incurred by Borrower for work in
place in completing the last 50% of the required Restoration.
The Restoration Retainage shall in no event, and
notwithstanding anything to the contrary set forth above in
this Subsection (b), be less than the amount actually held
back by Borrower from contractors, subcontractors and
materialmen engaged in the Restoration. The Restoration
Retainage shall not be released until the Restoration
Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Subsection
(b) and that all approvals necessary for the re-occupancy and
use of the Property have been obtained from all appropriate
governmental and quasi-governmental authorities, and Lender
receives evidence satisfactory to Lender that the costs of the
Restoration have been paid in full or will be paid in full out
of the Restoration Retainage, provided, however, that Lender
will release the portion of the Restoration Retainage being
held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon
which the Restoration Consultant certifies to Lender that the
contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in
accordance with the provisions of the contractor's,
subcontractor's or materialman's contract, and the contractor,
subcontractor or materialman delivers the lien waivers and
evidence of payment in full of all sums due to the contractor,
subcontractor or materialman as may be reasonably requested by
Lender or by the title company insuring the lien of this
Security Instrument. If required by Lender, the release of any
such portion of the Restoration Retainage shall be approved by
the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor
or materialman.
(v) Lender shall not be obligated to make
disbursements of the Net Proceeds more frequently than once
every calendar month.
(vi) If at any time the Net Proceeds or the
undisbursed balance thereof shall not, in the opinion of
Lender, be sufficient to pay in full the balance of the costs
which are estimated by the Restoration Consultant to be
incurred in connection with the completion of the Restoration,
Borrower shall deposit the deficiency (the "Net Proceeds
Deficiency") with Lender before any further
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disbursement of the Net Proceeds shall be made. The Net
Proceeds Deficiency deposited with Lender shall be held by
Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions
applicable to the disbursement of the Net Proceeds, and until
so disbursed pursuant to this Subsection (b) shall constitute
additional security for the Obligations.
(vii) The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency
deposited with Lender after the Restoration Consultant
certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Subsection (b), and the
receipt by Lender of evidence satisfactory to Lender that all
costs incurred in connection with the Restoration have been
paid in full, shall be remitted by Lender to Borrower,
provided no Event of Default shall have occurred and shall be
continuing under the Note, this Security Instrument or any of
the Other Security Documents.
(c) All Net Proceeds not required (i) to be made available for
the Restoration or (ii) to be returned to Borrower as excess Net
Proceeds pursuant to Subsection (b)(vii) may be retained and applied by
Lender toward the payment of the Debt whether or not then due and
payable in such order, priority and proportions as Lender in its
discretion shall deem proper or, at the discretion of Lender, the same
may be paid, either in whole or in part, to Borrower for such purposes
as Lender shall designate, in its discretion. If Lender shall receive
and retain Net Proceeds, the lien of this Security Instrument shall be
reduced only by the amount thereof received and retained by Lender and
actually applied by Lender in reduction of the Debt.
Article 5 - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
Section 5.1 WARRANTY OF TITLE. Borrower has good title to the
Property and has the right to mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer and convey the same and that Borrower possesses an
unencumbered fee simple absolute estate in the Land and the Improvements and
that it owns the Property free and clear of all liens, encumbrances and charges
whatsoever except for those exceptions shown in the title insurance policy
insuring the lien of this Security Instrument (the "Permitted Exceptions").
Borrower shall forever warrant, defend and preserve the title and the validity
and priority of the lien of this Security Instrument and shall forever warrant
and defend the same to Lender against the claims of all persons whomsoever.
Section 5.2 AUTHORITY. Borrower (and the undersigned
representative of Borrower, if any) has full power, authority and legal right to
execute this Security Instrument, and to mortgage, grant, bargain, sell, pledge,
assign, warrant, transfer and convey the Property pursuant to the terms hereof
and to keep and observe all of the terms of this Security Instrument on
Borrower's part to be performed.
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Section 5.3 LEGAL STATUS AND AUTHORITY. Borrower (a) is duly
organized, validly existing and in good standing under the laws of its state of
organization or incorporation; (b) is duly qualified to transact business and is
in good standing in the State where the Property is located; and (c) has all
necessary approvals, governmental and otherwise, and full power and authority to
own the Property and carry on its business as now conducted and proposed to be
conducted. Borrower now has and shall continue to have the full right, power and
authority to operate and lease the Property, to encumber the Property as
provided herein and to perform all of the other obligations to be performed by
Borrower under the Note, this Security Instrument and the Other Security
Documents.
Section 5.4 VALIDITY OF DOCUMENTS. (a) The execution, delivery
and performance of the Note, this Security Instrument and the Other Security
Documents and the borrowing evidenced by the Note (i) are within the
corporate/partnership/company power of Borrower; (ii) have been authorized by
all requisite corporate/partnership/company action; (iii) have received all
necessary approvals and consents, corporate, governmental or otherwise; (iv)
will not violate, conflict with, result in a breach of or constitute (with
notice or lapse of time, or both) a default under any provision of law, any
order or judgment of any court or governmental authority, the articles of
incorporation, by-laws, partnership or trust agreement, articles of
organization, operating agreement, or other governing instrument of Borrower, or
any indenture, agreement or other instrument to which Borrower is a party or by
which it or any of its assets or the Property is or may be bound or affected;
(v) will not result in the creation or imposition of any lien, charge or
encumbrance whatsoever upon any of its assets, except the lien and security
interest created hereby; and (vi) will not require any authorization or license
from, or any filing with, any governmental or other body (except for the
recordation of this instrument in appropriate land records in the State where
the Property is located and except for Uniform Commercial Code filings relating
to the security interest created hereby); and (b) the Note, this Security
Instrument and the Other Security Documents constitute the legal, valid and
binding obligations of Borrower.
Section 5.5 LITIGATION. There is no action, suit or
proceeding, judicial, administrative or otherwise (including any condemnation or
similar proceeding), pending or, to the best of Borrower's knowledge, threatened
or contemplated against, or affecting, Borrower, a Guarantor, if any, an
Indemnitor, if any, or the Property.
Section 5.6 STATUS OF PROPERTY.
(a) No portion of the Improvements is located in an area
identified by the Secretary of Housing and Urban Development or any
successor thereto as an area having special flood hazards pursuant to
the Flood Insurance Acts or, if any portion of the Improvements is
located within such area, Borrower has obtained and will maintain the
insurance prescribed in Section hereof.
(b) Borrower has obtained all necessary certificates, licenses
and other approvals, governmental and otherwise, necessary for the
operation of the Property and the conduct of its business and all
required zoning, building code, land use, environmental and other
similar permits or approvals, all of which are in full force and
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effect as of the date hereof and not subject to revocation, suspension,
forfeiture or modification.
(c) To the best of Borrower's knowledge after due inquiry and
investigation, the Property and the present and contemplated use and
occupancy thereof are in full compliance with all applicable zoning
ordinances, building codes, land use and environmental laws and other
similar laws.
(d) The Property is served by all utilities required for the
current or contemplated use thereof. All utility service is provided by
public utilities and the Property has accepted or is equipped to accept
such utility service.
(e) All public roads and streets necessary for service of and
access to the Property for the current or contemplated use thereof have
been completed, are serviceable and all-weather and are physically and
legally open for use by the public.
(f) The Property is served by public water and sewer
systems.
(g) The Property is free from damage caused by fire or
other casualty.
(h) All costs and expenses of any and all labor, materials,
supplies and equipment used in the construction of the Improvements
have been paid in full.
(i) Borrower has paid in full for, and is the owner of, all
furnishings, fixtures and equipment (other than tenants' property) used
in connection with the operation of the Property, free and clear of any
and all security interests, liens or encumbrances, except the lien and
security interest created hereby.
(j) To the best of Borrower's knowledge after due inquiry and
investigation, all liquid and solid waste disposal, septic and sewer
systems located on the Property are in a good and safe condition and
repair and in compliance with all Applicable Laws.
Section 5.7 NO FOREIGN PERSON. Borrower is not a "foreign
person" within the meaning of Sections 1445(f)(3) of the Internal Revenue Code
of 1986, as amended and the related Treasury Department regulations, including
temporary regulations.
Section 5.8 SEPARATE TAX LOT. The Property is assessed for
real estate tax purposes as one or more wholly independent tax lot or lots,
separate from any adjoining land or improvements not constituting a part of such
lot or lots, and no other land or improvements is assessed and taxed together
with the Property or any portion thereof.
Section 5.9 ERISA COMPLIANCE.
(a) As of the date hereof and throughout the term of this
Security Instrument, (i) Borrower is not and will not be an "employee
benefit plan" as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA, and (ii) the assets of Borrower do not
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and will not constitute "plan assets" of one or more such plans for
purposes of Title I of ERISA; and
(b) As of the date hereof and throughout the term of this
Security Instrument (i) Borrower is not and will not be a "governmental
plan" within the meaning of Section 3(3) of ERISA and (ii) transactions
by or with Borrower are not and will not be subject to state statutes
applicable to Borrower regulating investments of and fiduciary
obligations with respect to governmental plans.
Section 5.10 LEASES. (a) Borrower is the sole owner of the
entire lessor's interest in the Leases; (b) the Leases are valid and enforceable
and in full force and effect; (c) all of the Leases are arms-length agreements
with bona fide, independent third parties (except, however, with respect to that
certain lease dated December 11, 1996 between Borrower, as landlord, and JBI,
Inc., as tenant (the "▇. ▇▇▇▇▇ Lease")); (d) no party under any Lease is in
default; (e) all Rents due have been paid in full; (f) the terms of all
alterations, modifications and amendments to the Leases are reflected in the
certified occupancy statement delivered to and approved by Lender; (g) none of
the Rents reserved in the Leases have been assigned or otherwise pledged or
hypothecated; (h) none of the Rents have been collected for more than one (1)
month in advance; (i) the premises demised under the Leases have been completed
and the tenants under the Leases have accepted the same and have taken
possession of the same on a rent-paying basis; (j) there exist no offsets or
defenses to the payment of any portion of the Rents; (k) no Lease contains an
option to purchase, right of first refusal to purchase, or any other similar
provision; (l) no person or entity has any possessory interest in, or right to
occupy, the Property except under and pursuant to a Lease; (m) each Lease is
subordinate to this Security Instrument, either pursuant to its terms or a
recorded subordination agreement; and (n) no Lease has the benefit of a
non-disturbance agreement that would be considered unacceptable to prudent
institutional lenders.
Section 5.11 FINANCIAL CONDITION. (a) (i) Borrower is solvent,
and no bankruptcy, reorganization, insolvency or similar proceeding under any
state or federal law with respect to Borrower has been initiated, and (ii)
Borrower has received reasonably equivalent value for the granting of this
Security Instrument.
(b) No petition in bankruptcy has been filed by or
against Borrower, JBI, Inc. or ▇. ▇▇▇▇▇, Inc., or any principal, general partner
or member thereof, in the last seven (7) years, and neither Borrower, JBI, Inc.
nor ▇. ▇▇▇▇▇, Inc. or any principal, general partner or member thereof, in the
last seven (7) years has ever made any assignment for the benefit of
creditors or taken advantage of any insolvency act or any act for the benefit
of debtors.
Section 5.12 BUSINESS PURPOSES. The loan evidenced by the Note
secured by the Security Instrument and the Other Security Documents (the "Loan")
is solely for the business purpose of Borrower, and is not for personal, family,
household, or agricultural purposes.
Section 5.13 TAXES. Borrower, any Guarantor and any
Indemnitor have filed all federal, state, county, municipal, and city income
and other tax returns required to have been filed by them and have paid all
taxes and related liabilities which have become due pursuant to such returns or
pursuant to any assessments received by them. Neither Borrower, any Guarantor
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nor any Indemnitor knows of any basis for any additional assessment in respect
of any such taxes and related liabilities for prior years.
Section 5.14 MAILING ADDRESS. Borrower's mailing
address, as set forth in the opening paragraph hereof or as changed in
accordance with the provisions hereof, is true and correct.
Section 5.15 NO CHANGE IN FACTS OR CIRCUMSTANCES. All
information in the application for the Loan submitted to Lender (the "Loan
Application") and in all financing statements, rent rolls, reports, certificates
and other documents submitted in connection with the Loan Application or in
satisfaction of the terms thereof, are accurate, complete and correct in all
material respects. There has been no adverse change in any condition, fact,
circumstance or event that would make any such information inaccurate,
incomplete or otherwise misleading.
Section 5.16 DISCLOSURE. Borrower has disclosed to Lender all
material facts and has not failed to disclose any material fact that could cause
any representation or warranty made herein to be materially misleading.
Section 5.17 THIRD PARTY REPRESENTATIONS. Each of the
representations and the warranties made by each Guarantor and Indemnitor herein
or in any Other Security Document(s) is true and correct in all material
respects.
Section 5.18 ILLEGAL ACTIVITY. No portion of the
Property has been or will be purchased with proceeds of any illegal activity.
Section 5.19 CONTRACTS. All contracts, agreements, consents,
waivers, documents and writings of every kind or character at any time to which
Borrower is a party to be delivered to Lender pursuant to any of the provisions
of this Security Instrument are valid and enforceable against Borrower and, to
the best knowledge of Borrower, are enforceable against all other parties
thereto, and, to Borrower's actual knowledge, in all respects are what they
purport to be and, to the best knowledge of Borrower, to the extent that any
such writing shall impose any obligation or duty on the party thereto or
constitute a waiver of any rights which any such party might otherwise have,
said writing shall be valid and enforceable against said party in accordance
with its terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting the rights of
creditors generally.
Article 6 - OBLIGATIONS AND RELIANCES
Section 6.1 RELATIONSHIP OF BORROWER AND LENDER. The
relationship between Borrower and Lender is solely that of debtor and creditor,
and Lender has no fiduciary or other special relationship with Borrower, and no
term or condition of any of the Note, this Security Instrument and the Other
Security Documents shall be construed so as to deem the relationship between
Borrower and Lender to be other than that of debtor and creditor.
Section 6.2 NO RELIANCE ON LENDER. Lender will be
relying solely upon Borrower's expertise and business plan in connection with
the ownership and operation of the
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Property. Borrower is not relying on Lender's expertise, business acumen or
advice in connection with the Property.
Section 6.3 NO LENDER OBLIGATIONS. (a) Notwithstanding the
provisions of Subsections (f) and (l) or Section , Lender is not undertaking the
performance of (i) any obligations under the Leases; or (ii) any obligations
with respect to such agreements, contracts, certificates, instruments,
franchises, permits, trademarks, licenses and other documents.
(b) By accepting or approving anything required to be
observed, performed or fulfilled or to be given to Lender pursuant to this
Security Instrument, the Note or the Other Security Documents, including without
limitation, any officer's certificate, balance sheet, statement of profit and
loss or other financial statement, survey, appraisal, or insurance policy,
Lender shall not be deemed to have warranted, consented to, or affirmed the
sufficiency, the legality or effectiveness of same, and such acceptance or
approval thereof shall not constitute any warranty or affirmation with respect
thereto by Lender.
Section 6.4 RELIANCE. Borrower recognizes and acknowledges
that in accepting the Note, this Security Instrument and the Other Security
Documents, Lender is expressly and primarily relying on the truth and accuracy
of the warranties and representations set forth in Article without any
obligation to investigate the Property and notwithstanding any investigation of
the Property by Lender; that such reliance existed on the part of Lender prior
to the date hereof; that the warranties and representations are a material
inducement to Lender in accepting the Note, this Security Instrument and the
Other Security Documents; and that Lender would not be willing to make the Loan
and accept this Security Instrument in the absence of the warranties and
representations as set forth in Article 5.
Article 7 - FURTHER ASSURANCES
Section 7.1 RECORDING OF SECURITY INSTRUMENT, ETC. Borrower
forthwith upon the execution and delivery of this Security Instrument and
thereafter, from time to time, will cause this Security Instrument and any of
the Other Security Documents creating a lien or security interest or evidencing
the lien hereof upon the Property and each instrument of further assurance to be
filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect and perfect the lien or security interest hereof upon, and the interest
of Lender in, the Property. Borrower will pay all taxes, filing, registration or
recording fees, and all expenses incident to the preparation, execution,
acknowledgment and/or recording of the Note, this Security Instrument, the Other
Security Documents, any note or mortgage supplemental hereto, any security
instrument with respect to the Property and any instrument of further assurance,
and any modification or amendment of the foregoing documents, and all federal,
state, county and municipal taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution and delivery of this Security
Instrument, any mortgage supplemental hereto, any security instrument with
respect to the Property or any instrument of further assurance, and any
modification or amendment of the foregoing documents, except where prohibited by
law so to do.
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Section 7.2 FURTHER ACTS, ETC. Borrower will, at the cost of
Borrower, and without expense to Lender, do, execute, acknowledge and deliver
all and every such further acts, deeds, conveyances, mortgages, assignments,
notices of assignments, transfers and assurances as Lender shall, from time to
time, reasonably require, for the better assuring, conveying, assigning,
transferring, and confirming unto Lender the property and rights hereby
mortgaged, granted, bargained, sold, conveyed, confirmed, pledged, assigned,
warranted and transferred or intended now or hereafter so to be, or which
Borrower may be or may hereafter become bound to convey or assign to Lender, or
for carrying out the intention or facilitating the performance of the terms of
this Security Instrument or for filing, registering or recording this Security
Instrument, or for complying with all Applicable Laws. Borrower, on demand, will
execute and deliver and hereby authorizes Lender to execute in the name of
Borrower or without the signature of Borrower to the extent Lender may lawfully
do so, one or more financing statements, chattel mortgages or other instruments,
to evidence more effectively the security interest of Lender in the Property.
Borrower grants to Lender an irrevocable power of attorney coupled with an
interest for the purpose of exercising and perfecting any and all rights and
remedies available to Lender at law and in equity, including without limitation
such rights and remedies available to Lender pursuant to this Section .
Section 7.3 CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP
-------------------------------------------------
LAWS.
----
(a) If any law is enacted or adopted or amended after the date
of this Security Instrument which deducts the Debt from the value of
the Property for the purpose of taxation or which imposes a tax, either
directly or indirectly, on the Debt or Lender's interest in the
Property, Borrower will pay the tax, with interest and penalties
thereon, if any. If Lender is advised by counsel chosen by it that the
payment of tax by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury, then Lender
shall have the option by written notice of not less than ninety (90)
days to declare the Debt immediately due and payable.
(b) Borrower will not claim or demand or be entitled to any
credit or credits on account of the Debt for any part of the Taxes or
Other Charges assessed against the Property, or any part thereof, and
no deduction shall otherwise be made or claimed from the assessed value
of the Property, or any part thereof, for real estate tax purposes by
reason of this Security Instrument or the Debt. If such claim, credit
or deduction shall be required by law, Lender shall have the option, by
written notice of not less than ninety (90) days, to declare the Debt
immediately due and payable.
(c) If at any time the United States of America, any State
thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note, this Security Instrument, or
any of the Other Security Documents or impose any other tax or charge
on the same, Borrower will pay for the same, with interest and
penalties thereon, if any.
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Section 7.4 ESTOPPEL CERTIFICATES.
(a) After request by Lender, Borrower, within ten (10) days,
shall furnish Lender or any proposed assignee with a statement, duly
acknowledged and certified, setting forth (i) the amount of the
original principal amount of the Note, (ii) the unpaid principal amount
of the Note, (iii) the rate of interest of the Note, (iv) the terms of
payment and maturity date of the Note, (v) the date installments of
interest and/or principal were last paid, except as provided in such
statement, there are no defaults or, to the best of Borrower's
knowledge, events which with the passage of time or the giving of
notice or both, would constitute an event of default under the Note or
the Security Instrument, (vi) that the Note and this Security
Instrument are valid, legal and binding obligations and have not been
modified or if modified, giving particulars of such modification, (vii)
whether any offsets or defenses exist against the obligations secured
hereby and, if any are alleged to exist, a detailed description
thereof, (viii) that all Leases are in full force and effect and
(provided the Property is not a residential multifamily property) have
not been modified (or if modified, setting forth all modifications),
(ix) the date to which the Rents thereunder have been paid pursuant to
the Leases, (x) whether or not, to the best knowledge of Borrower, any
of the lessees under the Leases are in default under the Leases, and,
if any of the lessees are in default, setting forth the specific nature
of all such defaults, (xi) the amount of security deposits held by
Borrower under each Lease and that such amounts are consistent with the
amounts required under each Lease, and (xii) as to any other matters
reasonably requested by Lender and reasonably related to the Leases,
the obligations secured hereby, the Property or this Security
Instrument.
(b) Borrower shall deliver to Lender, promptly upon request,
duly executed estoppel certificates from any one or more lessees as
required by Lender attesting to such facts regarding the Lease as
Lender may reasonably require, including but not limited to
attestations that each Lease covered thereby is in full force and
effect with no defaults thereunder on the part of any party, that none
of the Rents have been paid more than one month in advance, and that
the lessee claims no defense or offset against the full and timely
performance of its obligations under the Lease.
(c) Upon any transfer or proposed transfer contemplated by
Section hereof, at Lender's request, Borrower, any Guarantors and any
Indemnitor(s) shall provide an estoppel certificate to the Investor
(defined in Section ) or any prospective Investor in such form,
substance and detail as Lender, such Investor or prospective Investor
may require.
Section 7.5 FLOOD INSURANCE. After Lender's request, Borrower
shall deliver evidence satisfactory to Lender that no portion of the
Improvements is situated in a federally designated "special flood hazard area"
or if it is, that Borrower has obtained insurance meeting the requirements of
Section 3.3(a)(vii).
Section 7.6 SPLITTING OF SECURITY INSTRUMENT. This Security
Instrument and the Note shall, at any time until the same shall be fully paid
and satisfied, at the sole election of Lender, be split or divided into two or
more notes and two or more security
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instruments, each of which shall cover all or a portion of the Property to be
more particularly described therein. To that end, Borrower, upon written request
of Lender, shall execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered by the then owner of the Property, to Lender and/or
its designee or designees substitute notes and security instruments in such
principal amounts, aggregating not more than the then unpaid principal amount of
this Security Instrument, and containing terms, provisions and clauses similar
to those contained herein and in the Note, and such other documents and
instruments as may be required by Lender.
Section 7.7 REPLACEMENT DOCUMENTS. Upon receipt of an
affidavit of an officer of Lender as to the loss, theft, destruction or
mutilation of the Note or any Other Security Document which is not of public
record, and, in the case of any such mutilation, upon surrender and cancellation
of such Note or Other Security Document, Borrower will issue, in lieu thereof, a
replacement Note or Other Security Document, dated the date of such lost,
stolen, destroyed or mutilated Note or Other Security Document in the same
principal amount thereof and otherwise of like tenor.
Article 8 - DUE ON SALE/ENCUMBRANCE
Section 8.1 LENDER RELIANCE. Lender will rely on Borrower's
ownership of the Property as a means of maintaining the value of the Property as
security for repayment of the Debt and the performance of the Other Obligations.
Borrower acknowledges that Lender has a valid interest in maintaining the value
of the Property so as to ensure that, should Borrower default in the repayment
of the Debt or the performance of the Other Obligations, Lender can recover the
Debt by a sale of the Property.
Section 8.2 NO SALE/ENCUMBRANCE. Borrower agrees that Borrower
shall not, without the prior written consent of Lender, sell, convey, mortgage,
grant, bargain, encumber, pledge, assign, or otherwise transfer the Property or
any part thereof or permit the Property or any part thereof to be sold,
conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or
otherwise transferred.
Section 8.3 SALE/ENCUMBRANCE DEFINED. A sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer within
the meaning of this Article 8 shall be deemed to include, but not limited to,
(a) an installment sales agreement wherein Borrower agrees to sell the Property
or any part thereof for a price to be paid in installments; (b) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Borrower's right, title and interest
in and to any Leases or any Rents; (c) if Borrower, any Guarantor, any
Indemnitor, or any general or limited partner or member of Borrower, any
Guarantor or any Indemnitor is a corporation, the voluntary or involuntary sale,
conveyance, transfer or pledge of such corporation's stock (or the stock of any
corporation directly or indirectly controlling such corporation by operation of
law or otherwise) or the creation or issuance of new stock by which an aggregate
of more than 10% of such corporation's stock shall be vested in a party or
parties who are not now stockholders; (d) if Borrower, any Guarantor or any
Indemnitor or any general or limited partner or member of
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Borrower, any Guarantor or any Indemnitor is a limited or general partnership or
joint venture, the change, removal or resignation of a general partner or
managing partner or the transfer or pledge of the partnership interest of any
general partner or managing partner or any profits or proceeds relating to such
partnership interest or the voluntary or involuntary sale, conveyance, transfer
or pledge of limited partnership interests (or the limited partnership interests
of any limited partnership directly or indirectly controlling such limited
partnership by operation of law or otherwise) or the creation or issuance of new
limited partnership interests, by which an aggregate of more than 10% of such
limited partnership interests are held by parties who are not currently limited
partners; and (e) if Borrower, any Guarantor, any Indemnitor or any general or
limited partner or member of Borrower, any Guarantor or any Indemnitor is a
limited liability company, the change, removal or resignation of a managing
member or the transfer of the membership interest of any managing member or any
profits or proceeds relating to such membership interest or the voluntary or
involuntary sale, conveyance, transfer or pledge of membership interests (or the
membership interests of any limited liability company directly or indirectly
controlling such limited liability company by operation of law or otherwise) or
the creation or issuance of new membership interests, by which an aggregate of
more than 10% of such membership interests are held by parties who are not
currently members. Notwithstanding the foregoing, the following transfer shall
not be deemed to be a sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer within the meaning of this Article 8: a transfer
by devise or descent or by operation of law upon the death of a member, partner
or stockholder of Borrower, any Guarantor or any Indemnitor or any general
partner or member thereof.
Section 8.4 LENDER'S RIGHTS. Lender reserves the right to
condition the consent required hereunder upon a modification of the terms hereof
and on assumption of the Note, this Security Instrument and the Other Security
Documents as so modified by the proposed transferee, payment of a transfer fee
of equal to one percent (1%) of the principal balance of the Note, a $4,000
processing fee, and all of Lender's expenses incurred in connection with such
transfer, the approval by a Rating Agency of the proposed transferee, the
proposed transferee's continued compliance with the covenants set forth in this
Security Instrument, including, without limitation, the covenants in Section 4.3
hereof, or such other conditions as Lender shall determine in its sole
discretion to be in the interest of Lender. All of Lender's expenses incurred
and the $4,000 processing fee shall be payable by Borrower whether or not Lender
consents to the transfer. Lender shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon Borrower's sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer of the Property without Lender's consent. This provision shall apply to
every sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, or transfer of the Property regardless of whether voluntary or not,
or whether or not Lender has consented to any previous sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the
Property.
Section 8.5 ONE-TIME TRANSFER. Notwithstanding anything to the
contrary contained in this Article 8, Lender shall not unreasonably withhold its
consent to a one-time sale, assignment, or other transfer of the Property or a
one-time sale or transfer of Borrower or Principal provided that (a) Lender
receives thirty (30) days prior written notice of such transfer, (b) no default
has occurred and is continuing under this Security Instrument, the Note or the
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Other Security Documents and (c) upon the satisfaction (in the sole
determination of Lender) of such conditions as may be reasonably imposed by
Lender, which may include, but shall not be limited to, the following matters:
A. Borrower shall pay to Lender a processing fee of $4,000 upon
request for loan assumption and a transfer fee equal to 1% of the
outstanding principal balance of the Loan upon transfer approval;
B. Borrower shall pay any and all out-of-pocket costs incurred in
connection with the transfer (including, without limitation,
Lender's counsel fees and disbursements and all recording fees,
title insurance premiums and mortgage and intangible taxes);
C. The proposed transferee (the "Transferee") and Transferee's
Principals, as hereinafter defined, must have demonstrated
expertise as determined by Lender in owning and operating
properties similar in location, size and operation to the Property.
The term "Transferee's Principals" shall include Transferee's (I)
managing members, general partners or principal shareholders and
(II) such other members, partners or shareholders which shall own
a 5% or greater interest in Transferee;
D. Transferee and Transferee's Principals shall, as of the date of such
transfer, have an aggregate net worth and liquidity of not less than
that of ▇. ▇▇▇▇▇, Inc. as of the date hereof and as of the date of
the transfer;
E. Transferee, Transferee's Principals and all
other entities which may be owned or
controlled directly or indirectly by
Transferee's Principals ("Related Entities")
must not have been a party to any bankruptcy
proceeding, voluntary or involuntary, made
an assignment for the benefit of creditors
or taken advantage of any insolvency act, or
any act for the benefit of debtors within
seven (7) years prior to the date of the
transfer;
F. Transferee shall assume all of the
obligations of Borrower under the Note, this
Security Instrument and the Other Security
Documents in a manner satisfactory to Lender
in all respects, including, without
limitation, by entering into an assumption
agreement in form and substance satisfactory
to Lender;
G. There shall be no material litigation pending against Transferee,
Transferee's Principals and Related Entities that is not acceptable
to Lender;
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H. Transferee, Transferee's Principals and Related Entities shall not
have defaulted under its or their obligations with respect to any
other indebtedness;
I. Transferee and Transferee's Principals must be able to satisfy all
the covenants set forth in Section 4.3 hereof;
J. Transferee shall be approved by such Rating Agencies as selected
by Lender; and
K. Transferee shall deliver an endorsement to the existing title policy
insuring this Security Instrument as modified by the assumption
agreement, as a valid first lien on the Property and naming the
Transferee as owner of the fee estate of the Property, which
endorsement shall insure that as of the recording of the assumption
agreement, the Property shall not be subject to any additional
exceptions or liens other than those contained in the title policy
issued in connection with this Security Instrument.
Article 9 - PREPAYMENT
Section 9.1 PREPAYMENT BEFORE EVENT OF DEFAULT. The Debt may
be prepaid only in strict accordance with the express terms and conditions of
the Note including the payment of any prepayment consideration.
Section 9.2 PREPAYMENT ON CASUALTY OR CONDEMNATION. Provided
no Event of Default exists under the Note, this Security Instrument or the Other
Security Documents, in the event of any prepayment of the Debt pursuant to the
terms of Sections or hereof during the last thirty-six (36) months prior to the
Maturity Date, no Prepayment Consideration (defined in the Note) shall be due in
connection therewith, but Borrower shall be responsible for the Interest
Shortfall Payment (defined in the Note), if any, and all other amounts due under
the Note, this Security Instrument and the Other Security Documents.
Section 9.3 PREPAYMENT AFTER EVENT OF DEFAULT. If a Default
Prepayment (defined below) occurs, Borrower shall pay to Lender the entire Debt,
including without limitation, the following amounts:
(a) if the Default Prepayment occurs prior to the time when
prepayment of the principal balance of the Note is permitted, an amount
equal to the sum of (i) the present value of the interest payments
which would have accrued on the principal balance of the Note (which
would be outstanding each month assuming scheduled amortization) at the
Applicable Interest Rate (as defined in the Note) from the date of such
Default Prepayment to the first day prepayment is permitted pursuant to
the Note discounted at a rate equal to the Treasury Rate (as defined in
the Note) except that such Treasury Rate shall be based on the U.S.
Treasury constant maturity most nearly approximating the date upon
which prepayment is first permitted pursuant to the Note, and (ii) the
Prepayment Consideration (defined in the Note) which would have been
payable to Lender as of the
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first day of the sixth (6th) Loan Year (as defined in the Note) based
on the Treasury Rate in effect at the time of such Default Prepayment;
and
(b) if the Default Prepayment occurs at a time when prepayment
of the principal balance of the Note is permitted, the Prepayment
Consideration and the Interest Shortfall Payment (defined in the Note),
if applicable.
For purposes of this Section 9.3, the term "Default Prepayment" shall mean a
prepayment of the principal amount of the Note made after the occurrence of any
Event of Default or an acceleration of the Maturity Date (as defined in the
Note) under any circumstances, including, without limitation, a prepayment
occurring in connection with reinstatement of this Security Instrument provided
by statute under foreclosure proceedings or exercise of a power of sale, any
statutory right of redemption exercised by Borrower or any other party having a
statutory right to redeem or prevent foreclosure, any sale in foreclosure or
under exercise of a power of sale or otherwise.
Article 10 - DEFAULT
Section 10.1 EVENTS OF DEFAULT. The occurrence of any
one or more of the following events shall constitute an "Event of Default":
(a) if any portion of the Debt is not paid prior to the
tenth (10th) day after the same is due or if the entire Debt is not paid on or
before the Maturity Date;
(b) if any of the Taxes or Other Charges is not paid when the
same is due and payable except to the extent sums sufficient to pay
such Taxes and Other Charges have been deposited with Lender in
accordance with the terms of this Security Instrument;
(c) if the Policies are not kept in full force and effect,
or if the Policies are not delivered to Lender upon request;
(d) if Borrower violates or does not comply with any of the
provisions of Section or Article 12 within thirty (30) days after
notice from Lender or if Borrower or Principal, as applicable, violates
or does not comply with any of the provisions of Section 4.3 or Article
8;
(e) if any representation or warranty of Borrower, any
Indemnitor or any person guaranteeing payment of the Debt or any
portion thereof or performance by Borrower of any of the terms of this
Security Instrument (a "Guarantor"), or any member, general partner,
principal or beneficial owner of any of the foregoing, made herein or
in the Environmental Indemnity (defined below) or any guaranty, or in
any certificate, report, financial statement or other instrument or
document furnished to Lender shall have been false or misleading in any
material respect when made;
(f) if (i) Borrower or any managing member or general
partner of Borrower, or any Guarantor or Indemnitor shall commence any
case, proceeding or other action (A)
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under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization,
conservatorship or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or the Borrower or
any managing member or general partner of Borrower, or any Guarantor or
Indemnitor shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Borrower or any
managing member or general partner of Borrower, or any Guarantor or
Indemnitor any case, proceeding or other action of a nature referred to
in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of sixty (60) days;
or (iii) there shall be commenced against the Borrower or any managing
member or general partner of Borrower, or any Guarantor or Indemnitor
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of any order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within sixty (60) days from the entry
thereof; or (iv) the Borrower or any managing member or general partner
of Borrower, or any Guarantor or Indemnitor shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Borrower or any managing member or general
partner of Borrower, or any Guarantor or Indemnitor shall generally
not, or shall be unable to, or shall admit in writing its inability to,
pay its debts as they become due;
(g) if Borrower shall be in default under any other mortgage,
deed of trust, deed to secure debt or other security agreement covering
any part of the Property whether it be superior or junior in lien to
this Security Instrument;
(h) if the Property becomes subject to any mechanic's,
materialman's or other lien other than a lien for local real estate
taxes and assessments not then due and payable and the lien shall
remain undischarged of record (by payment, bonding or otherwise) for a
period of thirty (30) days;
(i) if any federal tax lien is filed against Borrower, any
member or general partner of Borrower, any Guarantor, any Indemnitor or
the Property and same is not discharged of record within thirty (30)
days after same is filed;
(j) if any condemnation or eminent domain proceeding has
been concluded which renders the use or occupancy of the Property
economically unfeasible;
(k) if (i) Borrower fails to timely provide Lender with the
written certification and evidence referred to in Section hereof, or
(ii) Borrower consummates a transaction which would cause the Security
Instrument or Lender's exercise of its rights under this Security
Instrument, the Note or the Other Security Documents to constitute a
nonexempt prohibited transaction under ERISA or result in a violation
of a state statute
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regulating governmental plans, subjecting Lender to liability for a
violation of ERISA or a state statute;
(l) if Borrower shall fail to reimburse Lender on demand, with
interest calculated at the Default Rate, for all Insurance Premiums or
Taxes, together with interest and penalties imposed thereon, paid by
Lender pursuant to this Security Instrument;
(m) if Borrower shall fail to deliver to Lender, within ten
(10) days after request by Lender, the estoppel certificates required
pursuant to the terms of Subsections (a) and (c);
(n) if Borrower shall fail to deliver to Lender, within ten
(10) days after request by Lender, the statements referred to in
Section in accordance with the terms thereof;
(o) if any default occurs under that certain environmental
indemnity agreement dated the date hereof given by Borrower (at times
hereinafter referred to as "Indemnitor(s)") to Lender (the
"Environmental Indemnity") and such default continues after the
expiration of applicable notice and grace periods, if any;
(p) if any default occurs under any guaranty or indemnity
executed in connection herewith and such default continues after the
expiration of applicable grace periods, if any; or
(q) if for more than ten (10) days after notice from Lender,
Borrower shall continue to be in default under any other term, covenant
or condition of the Note, this Security Instrument or the Other
Security Documents in the case of any default which can be cured by the
payment of a sum of money or for thirty (30) days after notice from
Lender in the case of any other default, provided that if such default
cannot reasonably be cured within such thirty (30) day period and
Borrower shall have commenced to cure such default within such thirty
(30) day period and thereafter diligently and expeditiously proceeds to
cure the same, such thirty (30) day period shall be extended for so
long as it shall require Borrower in the exercise of due diligence to
cure such default, it being agreed that no such extension shall be for
a period in excess of sixty (60) days.
Section 10.2 LATE PAYMENT CHARGE. If any monthly installment
of principal and interest is not paid prior to the tenth (10th) day after the
date on which it is due, Borrower shall pay to Lender upon demand an amount
equal to the lesser of five percent (5%) of such unpaid portion of the
outstanding monthly installment of principal and interest then due or the
maximum amount permitted by applicable law, to defray the expense incurred by
Lender in handling and processing such delinquent payment and to compensate
Lender for the loss of the use of such delinquent payment, and such amount shall
be secured by this Security Instrument and the Other Security Documents.
Section 10.3 DEFAULT INTEREST. Borrower will pay, from
the date of an Event of Default through the earlier of the date upon which the
Event of Default is cured or the date
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upon which the Debt is paid in full, interest on the unpaid principal balance of
the Note at a per annum rate equal to the lesser of (a) five percent (5%) plus
the Applicable Interest Rate (as defined in the Note), and (b) the maximum
interest rate which Borrower may by law pay or Lender may charge and collect
(the "Default Rate").
Article 11 - RIGHTS AND REMEDIES
Section 11.1 REMEDIES. Upon the occurrence of any Event of
Default, Borrower agrees that Lender may take such action, without notice or
demand, as it deems advisable to protect and enforce its rights against Borrower
and in and to the Property, including, but not limited to, the following
actions, each of which may be pursued concurrently or otherwise, at such time
and in such order as Lender may determine, in its sole discretion, without
impairing or otherwise affecting the other rights and remedies of Lender:
(a) declare the entire unpaid Debt to be immediately due and payable;
(b) institute proceedings, judicial or otherwise, for the
complete foreclosure of this Security Instrument under any applicable
provision of law in which case the Property or any interest therein may
be sold for cash or upon credit in one or more parcels or in several
interests or portions and in any order or manner;
(c) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute
proceedings for the partial foreclosure of this Security Instrument for
the portion of the Debt then due and payable, subject to the continuing
lien and security interest of this Security Instrument for the balance
of the Debt not then due, unimpaired and without loss of priority;
(d) sell for cash or upon credit the Property or any part
thereof and all estate, claim, demand, right, title and interest of
Borrower therein and rights of redemption thereof, pursuant to power of
sale or otherwise, at one or more sales, as an entity or in parcels, at
such time and place, upon such terms and after such notice thereof as
may be required or permitted by law;
(e) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein,
in the Note or in the Other Security Documents;
(f) recover judgment on the Note either before, during or after any
proceedings for the enforcement of this Security Instrument or the
Other Security Documents;
(g) apply for the appointment of a receiver, trustee,
liquidator or conservator of the Property, without notice and without
regard for the adequacy of the security for the Debt and without regard
for the solvency of Borrower, any Guarantor, Indemnitor or of any
person, firm or other entity liable for the payment of the Debt;
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(h) subject to any applicable law, the license granted to
Borrower under Section shall automatically be revoked and Lender may
enter into or upon the Property, either personally or by its agents,
nominees or attorneys and dispossess Borrower and its agents and
servants therefrom, without liability for trespass, damages or
otherwise and exclude Borrower and its agents or servants wholly
therefrom, and take possession of all books, records and accounts
relating thereto and Borrower agrees to surrender possession of the
Property and of such books, records and accounts to Lender upon demand,
and thereupon Lender may (i) use, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and every part of
the Property and conduct the business thereat; (ii) complete any
construction on the Property in such manner and form as Lender deems
advisable; (iii) make alterations, additions, renewals, replacements
and improvements to or on the Property; (iv) exercise all rights and
powers of Borrower with respect to the Property, whether in the name of
Borrower or otherwise, including, without limitation, the right to
make, cancel, enforce or modify Leases, obtain and evict tenants, and
demand, ▇▇▇ for, collect and receive all Rents of the Property and
every part thereof; (v) require Borrower to pay monthly in advance to
Lender, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of such part of the
Property as may be occupied by Borrower; (vi) require Borrower to
vacate and surrender possession of the Property to Lender or to such
receiver and, in default thereof, Borrower may be evicted by summary
proceedings or otherwise; and (vii) apply the receipts from the
Property to the payment of the Debt, in such order, priority and
proportions as Lender shall deem appropriate in its sole discretion
after deducting therefrom all expenses (including reasonable attorneys'
fees) incurred in connection with the aforesaid operations and all
amounts necessary to pay the Taxes, Other Charges, insurance and other
expenses in connection with the Property, as well as just and
reasonable compensation for the services of Lender, its counsel, agents
and employees;
(i) exercise any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code,
including, without limiting the generality of the foregoing: (i) the
right to take possession of the Personal Property or any part thereof,
and to take such other measures as Lender may deem necessary for the
care, protection and preservation of the Personal Property, and (ii)
request Borrower at its expense to assemble the Personal Property and
make it available to Lender at a convenient place acceptable to Lender.
Any notice of sale, disposition or other intended action by Lender with
respect to the Personal Property sent to Borrower in accordance with
the provisions hereof at least five (5) days prior to such action,
shall constitute commercially reasonable notice to Borrower;
(j) apply any sums then deposited in the Escrow Fund and any
other sums held in escrow or otherwise by Lender in accordance with the
terms of this Security Instrument or any Other Security Document to the
payment of the following items in any order in its uncontrolled
discretion:
(i) Taxes and Other Charges;
(ii) Insurance Premiums;
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(iii) Interest on the unpaid principal balance of the Note;
(iv) Amortization of the unpaid principal balance of the Note;
(v) All other sums payable pursuant to the Note, this
Security Instrument and the Other Security Documents,
including without limitation advances made by Lender pursuant
to the terms of this Security Instrument;
(k) surrender the Policies maintained pursuant to Article
hereof, collect the unearned Insurance Premiums and apply such sums as
a credit on the Debt in such priority and proportion as Lender in its
discretion shall deem proper, and in connection therewith, Borrower
hereby appoints Lender as agent and attorney-in-fact (which is coupled
with an interest and is therefore irrevocable) for Borrower to collect
such Insurance Premiums;
(l) pursue such other remedies as Lender may have under applicable law; or
(m) apply the undisbursed balance of any Net Proceeds
Deficiency deposit, together with interest thereon, to the payment of
the Debt in such order, priority and proportions as Lender shall deem
to be appropriate in its discretion.
In the event of a sale, by foreclosure, power of sale, or otherwise, of less
than all of the Property, this Security Instrument shall continue as a lien and
security interest on the remaining portion of the Property unimpaired and
without loss of priority. Notwithstanding the provisions of this Section to the
contrary, if any Event of Default as described in clause (i) or (ii) of
Subsection (f) shall occur, the entire unpaid Debt shall be automatically due
and payable, without any further notice, demand or other action by Lender.
Section 11.2 APPLICATION OF PROCEEDS. The purchase money,
proceeds and avails of any disposition of the Property, or any part thereof, or
any other sums collected by Lender pursuant to the Note, this Security
Instrument or the Other Security Documents, may be applied by Lender to the
payment of the Debt in such priority and proportions as Lender in its discretion
shall deem proper.
Section 11.3 RIGHT TO CURE DEFAULTS. Upon the occurrence of
any Event of Default (unless such Event of Default shall have been cured by
Borrower and such cure has been accepted by Lender) or if Borrower fails to make
any payment or to do any act as herein provided, Lender may, but without any
obligation to do so and without notice to or demand on Borrower and without
releasing Borrower from any obligation hereunder, make or do the same in such
manner and to such extent as Lender may deem necessary to protect the security
hereof. Lender is authorized to enter upon the Property for such purposes, or
appear in, defend, or bring any action or proceeding to protect its interest in
the Property or to foreclose this Security Instrument or collect the Debt, and
the cost and expense thereof (including reasonable attorneys' fees to the extent
permitted by law), with interest as provided in this Section , shall constitute
a portion of the Debt and shall be due and payable to Lender upon demand. All
such costs and expenses incurred by Lender in remedying such Event of Default or
such failed payment or act or in appearing in, defending, or bringing any such
action or proceeding shall
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bear interest at the Default Rate, for the period after notice from Lender that
such cost or expense was incurred to the date of payment to Lender. All such
costs and expenses incurred by Lender together with interest thereon calculated
at the Default Rate shall be deemed to constitute a portion of the Debt and be
secured by this Security Instrument and the Other Security Documents and shall
be immediately due and payable upon demand by Lender therefor.
Section 11.4 ACTIONS AND PROCEEDINGS. Lender has the right to
appear in and defend any action or proceeding brought with respect to the
Property and to bring any action or proceeding, in the name and on behalf of
Borrower, which Lender, in its discretion, decides should be brought to protect
its interest in the Property.
Section 11.5 RECOVERY OF SUMS REQUIRED TO BE PAID. Lender
shall have the right from time to time to take action to recover any sum or sums
which constitute a part of the Debt as the same become due, without regard to
whether or not the balance of the Debt shall be due, and without prejudice to
the right of Lender thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by Borrower existing at the time such earlier
action was commenced.
Section 11.6 EXAMINATION OF BOOKS AND RECORDS. Lender, its
agents, accountants and attorneys shall have the right to examine the records,
books, management and other papers of Borrower, Borrower's principals, any
tenant under any Lease and any guarantor of any tenant's obligations or of any
Guarantor or Indemnitor which reflect upon their financial condition, at the
Property or at any office regularly maintained by Borrower, its affiliates or
any Guarantor or Indemnitor where the books and records are located. Lender and
its agents shall have the right to make copies and extracts from the foregoing
records and other papers. In addition, Lender, its agents, accountants and
attorneys shall have the right to examine and audit the books and records of
Borrower, Borrower's principals, any tenant under any Lease and any guarantor of
any tenant's obligations or of any Guarantor or Indemnitor pertaining to the
income, expenses and operation of the Property during reasonable business hours
at any office of Borrower, Borrower's principals, any tenant under any Lease and
any guarantor of any tenant's obligations or any Guarantor or Indemnitor where
the books and records are located.
Section 11.7 OTHER RIGHTS, ETC. (a) The failure of Lender to
insist upon strict performance of any term hereof shall not be deemed to be a
waiver of any term of this Security Instrument. Borrower shall not be relieved
of Borrower's obligations hereunder by reason of (i) the failure of Lender to
comply with any request of Borrower, any Guarantor or any Indemnitor to take any
action to foreclose this Security Instrument or otherwise enforce any of the
provisions hereof or of the Note or the Other Security Documents, (ii) the
release, regardless of consideration, of the whole or any part of the Property,
or of any person liable for the Debt or any portion thereof, or (iii) any
agreement or stipulation by Lender extending the time of payment or otherwise
modifying or supplementing the terms of the Note, this Security Instrument or
the Other Security Documents.
(b) It is agreed that the risk of loss or damage to the
Property is on Borrower, and Lender shall have no liability whatsoever for
decline in value of the Property, for failure to maintain the Policies, or for
failure to determine whether insurance in force is adequate as to the amount of
risks insured. Possession by Lender shall not be deemed an election of judicial
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relief, if any such possession is requested or obtained, with respect to any
Property or collateral not in Lender's possession.
(c) Lender may resort for the payment of the Debt to any other
security held by Lender in such order and manner as Lender, in its discretion,
may elect. Lender may take action to recover the Debt, or any portion thereof,
or to enforce any covenant hereof without prejudice to the right of Lender
thereafter to foreclose this Security Instrument. The rights of Lender under
this Security Instrument shall be separate, distinct and cumulative and none
shall be given effect to the exclusion of the others. No act of Lender shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision. Lender shall not be limited exclusively to the
rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.
Section 11.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY.
Lender may release any portion of the Property for such consideration as Lender
may require without, as to the remainder of the Property, in any way impairing
or affecting the lien or priority of this Security Instrument, or improving the
position of any subordinate lienholder with respect thereto, except to the
extent that the obligations hereunder shall have been reduced by the actual
monetary consideration, if any, received by Lender for such release, and may
accept by assignment, pledge or otherwise any other property in place thereof as
Lender may require without being accountable for so doing to any other
lienholder. This Security Instrument shall continue as a lien and security
interest in the remaining portion of the Property.
Section 11.9 VIOLATION OF LAWS. If the Property is not in
compliance with Applicable Laws, Lender may impose additional requirements upon
Borrower in connection herewith including, without limitation, monetary reserves
or financial equivalents.
Section 11.10 RECOURSE AND CHOICE OF REMEDIES. Notwithstanding
any other provision of this Security Instrument, including but not limited to
Article 15 hereof, Lender and other Indemnified Parties (defined in Section
below) are entitled to enforce the obligations of Borrower, Guarantor and
Indemnitor contained in Sections , and without first resorting to or exhausting
any security or collateral and without first having recourse to the Note or any
of the Property, through foreclosure or acceptance of a deed in lieu of
foreclosure or otherwise, and in the event Lender commences a foreclosure action
against the Property, Lender is entitled to pursue a deficiency judgment with
respect to such obligations against Borrower, any Guarantor and/or Indemnitor.
The provisions of Sections , and are exceptions to any non-recourse or
exculpation provisions in the Note, this Security Instrument or the Other
Security Documents, and Borrower, Guarantor and Indemnitor are fully and
personally liable for the obligations pursuant to Subsections , and . The
liability of Borrower, Guarantor and Indemnitor is not limited to the original
principal amount of the Note. Notwithstanding the foregoing, nothing herein
shall inhibit or prevent Lender from foreclosing pursuant to this Security
Instrument or exercising any other rights and remedies pursuant to the Note,
this Security Instrument and the Other Security Documents, whether
simultaneously with foreclosure proceedings or in any other sequence. A separate
action or actions may be brought and prosecuted against Borrower, whether or not
action is brought against any other person or entity or whether or not any other
person or entity is joined in the action or actions. In addition, Lender shall
have the right but not the obligation to join and
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participate in, as a party if it so elects, any administrative or judicial
proceedings or actions initiated in connection with any matter addressed in
Article or Section .
Section 11.11 RIGHT OF ENTRY. Lender and its agents shall
have the right to enter and inspect the Property at all reasonable times.
Article 12 - ENVIRONMENTAL HAZARDS
Section 12.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. To
the best of Borrower's knowledge after due inquiry and investigation: (a) there
are no Hazardous Substances (defined below) or underground storage tanks in, on,
or under the Property, except those that are both (i) in compliance with
Environmental Laws (defined below) and with permits issued pursuant thereto and
(ii) fully disclosed to Lender in writing pursuant to the written reports
resulting from the environmental assessments of the Property delivered to Lender
(the "Environmental Report"); (b) there are no past, present or threatened
Releases (defined below) of Hazardous Substances in, on, under or from the
Property except as described in the Environmental Report; (c) there is no threat
of any Release of Hazardous Substances migrating to the Property except as
described in the Environmental Report; (d) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant thereto,
in connection with the Property except as described in the Environmental Report;
(e) except as expressly disclosed in the Environmental Report, Borrower does not
know of, and has not received, any written or oral notice or other communication
from any person or entity (including but not limited to a governmental entity)
relating to Hazardous Substances or Remediation (defined below) thereof, of
possible liability of any person or entity pursuant to any Environmental Law,
other environmental conditions in connection with the Property, or any actual or
potential administrative or judicial proceedings in connection with any of the
foregoing; and (f) Borrower has truthfully and fully provided to Lender, in
writing, any and all information relating to conditions in, on, under or from
the Property that is known to Borrower and that is contained in Borrower's files
and records, including but not limited to any reports relating to Hazardous
Substances in, on, under or from the Property and/or to the environmental
condition of the Property. "Environmental Law" means any present and future
federal, state and local laws, statutes, ordinances, rules, regulations and the
like, as well as common law, relating to protection of human health or the
environment, relating to Hazardous Substances, relating to liability for or
costs of Remediation or prevention of Releases of Hazardous Substances or
relating to liability for or costs of other actual or threatened danger to human
health or the environment. "Environmental Law" includes, but is not limited to,
the following statutes, as amended, any successor thereto, and any regulations
promulgated pursuant thereto, and any state or local statutes, ordinances,
rules, regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Substances Transportation Act;
the Resource Conservation and Recovery Act (including but not limited to
Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act;
the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the
Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal
Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide
Act; the Endangered Species Act; the National Environmental Policy Act; and the
River and Harbors Appropriation Act. "Environmental Law" also includes, but is
not limited
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to, any present and future federal, state and local laws, statutes, ordinances,
rules, regulations and the like, as well as common law: conditioning transfer of
property upon a negative declaration or other approval of a governmental
authority of the environmental condition of the property; requiring notification
or disclosure of Releases of Hazardous Substances or other environmental
condition of the Property to any governmental authority or other person or
entity, whether or not in connection with transfer of title to or interest in
property; imposing conditions or requirements in connection with permits or
other authorization for lawful activity; relating to nuisance, trespass or other
causes of action related to the Property; and relating to wrongful death,
personal injury, or property or other damage in connection with any physical
condition or use of the Property. "Hazardous Substances" include but are not
limited to any and all substances (whether solid, liquid or gas) defined,
listed, or otherwise classified as pollutants, hazardous wastes, hazardous
substances, hazardous materials, extremely hazardous wastes, or words of similar
meaning or regulatory effect under any present or future Environmental Laws or
that may have a negative impact on human health or the environment, including
but not limited to petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, lead, radon,
radioactive materials, flammables and explosives. "Release" of any Hazardous
Substance includes but is not limited to any release, deposit, discharge,
emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring,
emptying, escaping, dumping, disposing or other movement of Hazardous
Substances. "Remediation" includes but is not limited to any response, remedial,
removal, or corrective action, any activity to cleanup, detoxify, decontaminate,
contain or otherwise remediate any Hazardous Substance, any actions to prevent,
cure or mitigate any Release of any Hazardous Substance, any action to comply
with any Environmental Laws or with any permits issued pursuant thereto, any
inspection, investigation, study, monitoring, assessment, audit, sampling and
testing, laboratory or other analysis, or evaluation relating to any Hazardous
Substances or to anything referred to in Article .
Section 12.2 ENVIRONMENTAL COVENANTS. Borrower covenants and
agrees that: (a) all uses and operations on or of the Property, whether by
Borrower or any other person or entity, shall be in compliance with all
Environmental Laws and permits issued pursuant thereto; (b) there shall be no
Releases of Hazardous Substances in, on, under or from the Property; (c) there
shall be no Hazardous Substances in, on, or under the Property, except those
that are both (i) in compliance with all Environmental Laws and with permits
issued pursuant thereto and (ii) fully disclosed to Lender in writing; (d)
Borrower shall keep the Property free and clear of all liens and other
encumbrances imposed pursuant to any Environmental Law, whether due to any act
or omission of Borrower or any other person or entity (the "Environmental
Liens"); (e) Borrower shall, at its sole cost and expense, fully and
expeditiously cooperate in all activities pursuant to Section below, including
but not limited to providing all relevant information and making knowledgeable
persons available for interviews; (f) Borrower shall, at its sole cost and
expense, perform any environmental site assessment or other investigation of
environmental conditions in connection with the Property, pursuant to any
reasonable written request of Lender (including but not limited to sampling,
testing and analysis of soil, water, air, building materials and other materials
and substances whether solid, liquid or gas), and share with Lender the reports
and other results thereof, and Lender and other Indemnified Parties shall be
entitled to rely on such reports and other results thereof; (g) Borrower shall,
at its sole cost and expense, comply with all reasonable written requests of
Lender to (i) reasonably effectuate Remediation of any condition (including but
not limited to
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a Release of a Hazardous Substance) in, on, under or from the Property; (ii)
comply with any Environmental Law; (iii) comply with any directive from any
governmental authority; and (iv) take any other reasonable action necessary or
appropriate for protection of human health or the environment; (h) Borrower
shall not do or allow any tenant or other user of the Property to do any act
that materially increases the dangers to human health or the environment, poses
an unreasonable risk of harm to any person or entity (whether on or off the
Property), impairs or may impair the value of the Property, is contrary to any
requirement of any insurer, constitutes a public or private nuisance,
constitutes waste, or violates any covenant, condition, agreement or easement
applicable to the Property; and (i) Borrower shall immediately notify Lender in
writing of (A) any presence or Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards the Property; (B) any
non-compliance with any Environmental Laws related in any way to the Property;
(C) any actual or potential Environmental Lien; (D) any required or proposed
Remediation of environmental conditions relating to the Property; and (E) any
written or oral notice or other communication which Borrower becomes aware from
any source whatsoever (including but not limited to a governmental entity)
relating in any way to Hazardous Substances or Remediation thereof, possible
liability of any person or entity pursuant to any Environmental Law, other
environmental conditions in connection with the Property, or any actual or
potential administrative or judicial proceedings in connection with anything
referred to in this Article . Any failure of Borrower to perform its obligations
pursuant to this Section
shall constitute waste with respect to the Property.
Section 12.3 LENDER'S RIGHTS. Lender and any other person or
entity designated by Lender, including but not limited to any receiver, any
representative of a governmental entity, and any environmental consultant, shall
have the right, but not the obligation, to enter upon the Property at all
reasonable times to assess any and all aspects of the environmental condition of
the Property and its use, including but not limited to conducting any
environmental assessment or audit (the scope of which shall be determined in
Lender's sole and absolute discretion) and taking samples of soil, groundwater
or other water, air, or building materials, and conducting other invasive
testing. Borrower shall cooperate with and provide access to Lender and any such
person or entity designated by Lender.
Article 13 - INDEMNIFICATION
Section 13.1 GENERAL INDEMNIFICATION. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, fines, penalties, charges,
fees, expenses, judgments, awards, amounts paid in settlement, punitive damages,
foreseeable and unforeseeable consequential damages, of whatever kind or nature
(including but not limited to reasonable attorneys' fees and other costs of
defense) (the "Losses") imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out of or in any way
relating to any one or more of the following: (a) ownership of this Security
Instrument, the Property or any interest therein or receipt of any Rents; (b)
any amendment to, or restructuring of, the Debt, and the Note, this Security
Instrument, or any Other Security Documents; (c) any and all lawful action that
may be taken by Lender in connection with the enforcement of the provisions of
this Security Instrument or the Note or any of the Other
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Security Documents, whether or not suit is filed in connection with same, or in
connection with Borrower, any Guarantor or Indemnitor and/or any member,
partner, joint venturer or shareholder thereof becoming a party to a voluntary
or involuntary federal or state bankruptcy, insolvency or similar proceeding;
(d) any accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(e) any use, nonuse or condition in, on or about the Property or any part
thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (f) any failure on the part of Borrower to
perform or be in compliance with any of the terms of this Security Instrument;
(g) performance of any labor or services or the furnishing of any materials or
other property in respect of the Property or any part thereof; (h) the failure
of any person to file timely with the Internal Revenue Service an accurate Form
▇▇▇▇-▇, ▇▇▇▇▇▇▇▇▇ for Recipients of Proceeds from Real Estate, Broker and Barter
Exchange Transactions, which may be required in connection with the Security
Instrument, or to supply a copy thereof in a timely fashion to the recipient of
the proceeds of the transaction in connection with which this Security
Instrument is made; (i) any failure of the Property to be in compliance with any
Applicable Laws; (j) the enforcement by any Indemnified Party of the provisions
of this Article ; (k) any and all claims and demands whatsoever which may be
asserted against Lender by reason of any alleged obligations or undertakings on
its part to perform or discharge any of the terms, covenants, or agreements
contained in any Lease; (l) the payment of any commission, charge or brokerage
fee to anyone which may be payable in connection with the funding of the Loan
evidenced by the Note and secured by this Security Instrument; or (m) any
misrepresentation made by Borrower in this Security Instrument or any Other
Security Document. Any amounts payable to Lender by reason of the application of
this Section shall become immediately due and payable and shall bear interest at
the Default Rate from the date loss or damage is sustained by Lender until paid.
For purposes of this Article , the term "Indemnified Parties" means Lender and
any person or entity who is or will have been involved in the origination of the
Loan, any person or entity who is or will have been involved in the servicing of
the Loan, any person or entity in whose name the encumbrance created by this
Security Instrument is or will have been recorded, persons and entities who may
hold or acquire or will have held a full or partial interest in the Loan
(including, but not limited to, Investors or prospective Investors in the
Securities, as well as custodians, trustees and other fiduciaries who hold or
have held a full or partial interest in the Loan for the benefit of third
parties) as well as the respective directors, officers, shareholders, partners,
members, employees, agents, servants, representatives, contractors,
subcontractors, affiliates, subsidiaries, participants, successors and assigns
of any and all of the foregoing (including but not limited to any other person
or entity who holds or acquires or will have held a participation or other full
or partial interest in the Loan or the Property, whether during the term of the
Loan or as a part of or following a foreclosure of the Loan and including, but
not limited to, any successors by merger, consolidation or acquisition of all or
a substantial portion of Lender's assets and business).
Section 13.2 MORTGAGE AND/OR INTANGIBLE TAX. Borrower shall,
at its sole cost and expense, protect, defend, indemnify, release and hold
harmless the Indemnified Parties from and against any and all Losses imposed
upon or incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any tax on the making and/or
recording of this Security Instrument, the Note or any of the Other Security
Documents.
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Section 13.3 ERISA INDEMNIFICATION. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable attorneys' fees and costs incurred in the investigation,
defense, and settlement of Losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited transaction exemption under ERISA that may be required, in Lender's
sole discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections or or Subsection (p).
Section 13.4 ENVIRONMENTAL INDEMNIFICATION. Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold harmless
the Indemnified Parties from and against any and all Losses and costs of
Remediation (whether or not performed voluntarily), engineers' fees,
environmental consultants' fees, and costs of investigation (including but not
limited to sampling, testing, and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas)
imposed upon or incurred by or asserted against any Indemnified Parties, and
directly or indirectly arising out of or in any way relating to any one or more
of the following: (a) any presence of any Hazardous Substances in, on, above, or
under the Property; (b) any past, present or threatened Release of Hazardous
Substances in, on, above, under or from the Property; (c) any activity by
Borrower, any person or entity affiliated with Borrower or any tenant or other
user of the Property in connection with any actual, proposed or threatened use,
treatment, storage, holding, existence, disposition or other Release,
generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from
the Property of any Hazardous Substances at any time located in, under, on or
above the Property; (d) any activity by Borrower, any person or entity
affiliated with Borrower or any tenant or other user of the Property in
connection with any actual or proposed Remediation of any Hazardous Substances
at any time located in, under, on or above the Property, whether or not such
Remediation is voluntary or pursuant to court or administrative order, including
but not limited to any removal, remedial or corrective action; (e) any past,
present or threatened non-compliance or violations of any Environmental Laws (or
permits issued pursuant to any Environmental Law) in connection with the
Property or operations thereon, including but not limited to any failure by
Borrower, any person or entity affiliated with Borrower or any tenant or other
user of the Property to comply with any order of any governmental authority in
connection with any Environmental Laws; (f) the imposition, recording or filing
or the threatened imposition, recording or filing of any Environmental Lien
encumbering the Property; (g) any administrative processes or proceedings or
judicial proceedings in any way connected with any matter addressed in Article
and this Section ; (h) any past, present or threatened injury to, destruction of
or loss of natural resources in any way connected with the Property, including
but not limited to costs to investigate and assess such injury, destruction or
loss; (i) any acts of Borrower or other users of the Property in arranging for
disposal or treatment, or arranging with a transporter for transport for
disposal or treatment, of Hazardous Substances owned or possessed by such
Borrower or other users, at any facility or incineration vessel owned or
operated by another person or entity and containing such or similar Hazardous
Substances; (j) any acts of Borrower or other users of the Property, in
accepting any Hazardous Substances for transport to disposal or treatment
facilities, incineration vessels or sites selected by Borrower or such other
users, from which there is a Release, or a threatened Release of any Hazardous
Substance which causes the incurrence of costs for Remediation; (k) any personal
injury, wrongful death, or property
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damage arising under any statutory or common law or tort law theory in
connection with Hazardous Materials or any Environmental Law, including but not
limited to damages assessed for the maintenance of a private or public nuisance
or for the conducting of an abnormally dangerous activity on or near the
Property; and (l) any misrepresentation or inaccuracy in any representation or
warranty or material breach or failure to perform any covenants or other
obligations pursuant to Article .
Section 13.5 DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES
AND EXPENSES. Upon written request by any Indemnified Party, Borrower shall
defend such Indemnified Party (if requested by any Indemnified Party, in the
name of the Indemnified Party) by attorneys and other professionals approved by
the Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties
may, in their sole and absolute discretion, engage their own attorneys and other
professionals to defend or assist them, and, at the option of Indemnified
Parties, their attorneys shall act as co-counsel in connection with the
resolution of any claim or proceeding. Upon demand, Borrower shall pay or, in
the sole and absolute discretion of the Indemnified Parties, reimburse, the
Indemnified Parties for the payment of reasonable fees and disbursements of
attorneys, engineers, environmental consultants, laboratories and other
professionals in connection therewith.
Article 14 - WAIVERS
Section 14.1 WAIVER OF COUNTERCLAIM. Borrower hereby waives
the right to assert a counterclaim, other than a mandatory or compulsory
counterclaim, in any action or proceeding brought against it by Lender arising
out of or in any way connected with this Security Instrument, the Note, any of
the Other Security Documents, or the Obligations.
Section 14.2 MARSHALLING AND OTHER MATTERS. Borrower hereby
waives, to the extent permitted by law, the benefit of all appraisement,
valuation, stay, extension, reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of any sale hereunder of the
Property or any part thereof or any interest therein. Further, Borrower hereby
expressly waives any and all rights of redemption from sale under any order or
decree of foreclosure of this Security Instrument on behalf of Borrower, and on
behalf of each and every person acquiring any interest in or title to the
Property subsequent to the date of this Security Instrument and on behalf of all
persons to the extent permitted by applicable law.
Section 14.3 WAIVER OF NOTICE. Borrower shall not be entitled
to any notices of any nature whatsoever from Lender except with respect to
matters for which this Security Instrument specifically and expressly provides
for the giving of notice by Lender to Borrower and except with respect to
matters for which Lender is required by applicable law to give notice, and
Borrower hereby expressly waives the right to receive any notice from Lender
with respect to any matter for which this Security Instrument does not
specifically and expressly provide for the giving of notice by Lender to
Borrower.
Section 14.4 WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby
expressly waives and releases to the fullest extent permitted by law, the
pleading of any statute of limitations as a defense to payment of the Debt or
performance of its Other Obligations.
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Section 14.5 SOLE DISCRETION OF LENDER. Wherever pursuant to
this Security Instrument (a) Lender exercises any right given to it to approve
or disapprove, (b) any arrangement or term is to be satisfactory to Lender, or
(c) any other decision or determination is to be made by Lender, the decision of
Lender to approve or disapprove, all decisions that arrangements or terms are
satisfactory or not satisfactory and all other decisions and determinations made
by Lender, shall be in the sole and absolute discretion of Lender and shall be
final and conclusive, except as may be otherwise expressly and specifically
provided herein.
Section 14.6 SURVIVAL. The indemnifications made
pursuant to Subsections and and the representations and warranties, covenants,
and other obligations arising under Article , shall continue indefinitely in
full force and effect and shall survive and shall in no way be impaired
by: any satisfaction or other termination of this Security Instrument, any
assignment or other transfer of all or any portion of this Security Instrument
or Lender's interest in the Property (but, in such case, shall benefit both
Indemnified Parties and any assignee or transferee), any exercise of Lender's
rights and remedies pursuant hereto including but not limited to
foreclosure or acceptance of a deed in lieu of foreclosure, any exercise of
any rights and remedies pursuant to the Note or any of the Other
Security Documents, any transfer of all or any portion of the
Property (whether by Borrower or by Lender following foreclosure or acceptance
of a deed in lieu of foreclosure or at any other time), any amendment to this
Security Instrument, the Note or the Other Security Documents, and any act or
omission that might otherwise be construed as a release or discharge of Borrower
from the obligations pursuant hereto.
SECTION 14.7 WAIVER OF TRIAL BY JURY. BORROWER
-----------------------
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM,
WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR
INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR
THE LOAN EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY
INSTRUMENT OR THE OTHER SECURITY DOCUMENTS OR ANY ACTS OR
OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS
IN CONNECTION THEREWITH.
Article 15 - EXCULPATION
Section 15.1 EXCULPATION. Except as otherwise provided, Lender
shall not enforce the liability and obligation of Borrower to perform and
observe the obligations contained in the Note or this Security Instrument by any
action or proceeding wherein a money judgment shall be sought against Borrower,
except that Lender may bring a foreclosure action, action for specific
performance or other appropriate action or proceeding to enable Lender to
enforce and realize upon this Security Instrument, the Other Security Documents,
and the interest in the Property, the Rents and any other collateral given to
Lender created by this Security Instrument and the Other Security Documents;
provided, however, that any judgment in any action or proceeding shall be
enforceable against Borrower only to the extent of Borrower's interest in the
Property, in the Rents and in any other collateral given to Lender. Lender, by
accepting the Note and this Security Instrument, agrees that it shall not,
except as otherwise provided in
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Section , ▇▇▇ for, seek or demand any deficiency judgment against Borrower in
any action or proceeding, under or by reason of or under or in connection with
the Note, the Other Security Documents or this Security Instrument.
Section 15.2 RESERVATION OF CERTAIN RIGHTS. The provisions of
Section 15.1 shall not (a) constitute a waiver, release or impairment of any
obligation evidenced or secured by the Note, the Other Security Documents or
this Security Instrument; (b) impair the right of Lender to name Borrower as a
party defendant in any action or suit for judicial foreclosure and sale under
this Security Instrument; (c) affect the validity or enforceability of any
indemnity, guaranty, master lease or similar instrument made in connection with
the Note, this Security Instrument, or the Other Security Documents; (d) impair
the right of Lender to obtain the appointment of a receiver; (e) impair the
enforcement of the Assignment of Leases and Rents executed in connection
herewith; or (f) impair the right of Lender to enforce the provisions of
Sections , , and of this Security Instrument.
Section 15.3 EXCEPTIONS TO EXCULPATION. Notwithstanding the
provisions of this Article to the contrary, Borrower shall be personally liable
to Lender for the Losses it incurs due to: (i) fraud or intentional
misrepresentation by Borrower; (ii) Borrower's misapplication or
misappropriation of Rents received by Borrower after the occurrence of an Event
of Default; (iii) Borrower's misappropriation of tenant security deposits or
Rents collected in advance; (iv) the misapplication or the misappropriation of
insurance proceeds or condemnation awards; (v) Borrower's failure to pay Taxes,
Other Charges (except to the extent that sums sufficient to pay such amounts
have been deposited in escrow with Lender pursuant to the terms of this Security
Instrument), charges for labor or materials or other charges that can create
liens on the Property; (vi) Borrower's failure to return or to reimburse Lender
for all Personal Property taken from the Property by or on behalf of Borrower
and not replaced with Personal Property of the same utility and of the same or
greater value; (vii) any act of actual waste or arson by Borrower, any
principal, affiliate, member or general partner thereof or by any Indemnitor or
Guarantor; (viii) any fees or commissions paid by Borrower to any principal,
affiliate, member or general partner of Borrower, Indemnitor or Guarantor in
violation of the terms of the Note, this Security Instrument or the Other
Security Documents; or (ix) Borrower's failure to comply with the provisions of
Sections , , and of this Security Instrument.
Section 15.4 RECOURSE. Notwithstanding the foregoing, the
agreement of Lender not to pursue recourse liability as set forth in Section
15.1 above SHALL BECOME NULL AND VOID and shall be of no further force and
effect after the occurrence of an Event of Default relating to the breach of any
covenant in the Note, this Security Instrument or any of the Other Loan
Documents relating to Borrower's default under Sections (for ten (10) days after
notice by Lender), , or 8.1, 8.2, 8.3 or , or in the event of Principal's
default under Section 4.3 of this Security Instrument, or if the Property or any
part thereof shall become an asset in (i) a voluntary bankruptcy or insolvency
proceeding, or (ii) an involuntary bankruptcy or insolvency proceeding which is
not dismissed within ninety (90) days of filing.
Section 15.5 BANKRUPTCY CLAIMS. Nothing herein shall be deemed
to be a waiver of any right which Lender may have under Sections 506(a), 506(b),
1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for
the full amount of the Debt secured by this Security Instrument or to require
that all collateral shall continue to secure all of the Debt
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owing to Lender in accordance with the Note, this Security Instrument and the
Other Security Documents.
Article 16 - NOTICES
Section 16.1 NOTICES. All notices or other written
communications hereunder shall be deemed to have been properly given (i) upon
delivery, if delivered in person or by facsimile transmission with receipt
acknowledged by the recipient thereof and confirmed by telephone by sender, (ii)
one (1) Business Day (defined below) after having been deposited for overnight
delivery with any reputable overnight courier service, or (iii) three (3)
Business Days after having been deposited in any post office or mail depository
regularly maintained by the U.S. Postal Service and sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
If to Borrower: JBAK Canton Realty, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇. ▇▇▇▇▇, Inc.
Legal Department
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: The Chase Manhattan Bank
c/o Chase Commercial Mortgage Banking Corp.
Servicing Department
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Ms. ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
The Chase Manhattan Bank
Legal Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Wood
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or addressed as such party may from time to time designate by written notice to
the other parties.
Either party by notice to the other may designate additional
or different addresses for subsequent notices or communications.
For purposes of this Subsection, "Business Day" shall mean a
day on which commercial banks are not authorized or required by law to close in
New York, New York.
Article 17 - SERVICE OF PROCESS
Section 17.1 CONSENT TO SERVICE.
(a) Borrower will maintain a place of business or an agent for
service of process in New York, New York or Massachusetts and give
prompt notice to Lender of the address of such place of business and of
the name and address of any new agent appointed by it, as appropriate.
Borrower further agrees that the failure of its agent for service of
process to give it notice of any service of process will not impair or
affect the validity of such service or of any judgment based thereon.
If, despite the foregoing, there is for any reason no agent for service
of process of Borrower available to be served, and if it at that time
has no place of business in New York, New York or Massachusetts, then
Borrower irrevocably consents to service of process by registered or
certified mail, postage prepaid, to it at its address given in or
pursuant to the first paragraph hereof.
(b) Borrower initially and irrevocably designates CT
Corporation System, with offices on the date hereof at ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to receive for and on behalf of Borrower
service of process in Massachusetts with respect to this Security
Instrument.
Section 17.2 SUBMISSION TO JURISDICTION. With respect to any
claim or action arising hereunder or under the Note or the Other Security
Documents, Borrower (a) irrevocably submits to the nonexclusive jurisdiction of
the courts of the State of New York and the United States District Court located
in the Borough of Manhattan in New York, New York, and appellate courts from any
thereof, and (b) irrevocably waives any objection which it may have at any time
to the laying on venue of any suit, action or proceeding arising out of or
relating to this Security Instrument brought in any such court, irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.
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Section 17.3 JURISDICTION NOT EXCLUSIVE. Nothing in this
Security Instrument will be deemed to preclude Lender from bringing an action or
proceeding with respect hereto in any other jurisdiction.
Article 18 - APPLICABLE LAW
Section 18.1 CHOICE OF LAW. THIS SECURITY INSTRUMENT SHALL BE
DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE STATE OF NEW
YORK AND SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, PROVIDED HOWEVER, THAT WITH
RESPECT TO THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIEN OF
THIS SECURITY INSTRUMENT, AND THE DETERMINATION OF DEFICIENCY JUDGMENTS, THE
LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED SHALL APPLY.
Section 18.2 USURY LAWS. This Security Instrument and the Note
are subject to the express condition that at no time shall Borrower be obligated
or required to pay interest on the Debt at a rate which could subject the holder
of the Note to either civil or criminal liability as a result of being in excess
of the maximum interest rate which Borrower is permitted by applicable law to
contract or agree to pay. If by the terms of this Security Instrument or the
Note, Borrower is at any time required or obligated to pay interest on the Debt
at a rate in excess of such maximum rate, the rate of interest under the
Security Instrument and the Note shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at such maximum
rate and all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the principal
balance of the Note. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the Debt shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Note until payment in full so that the rate or amount of
interest on account of the Debt does not exceed the maximum lawful rate of
interest from time to time in effect and applicable to the Debt for so long as
the Debt is outstanding.
Section 18.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights,
powers and remedies provided in this Security Instrument may be exercised only
to the extent that the exercise thereof does not violate any applicable
provisions of law and are intended to be limited to the extent necessary so that
they will not render this Security Instrument invalid, unenforceable or not
entitled to be recorded, registered or filed under the provisions of any
applicable law. If any term of this Security Instrument or any application
thereof shall be invalid or unenforceable, the remainder of this Security
Instrument and any other application of the term shall not be affected thereby.
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Article 19 - SECONDARY MARKET
Section 19.1 TRANSFER OF LOAN. Lender may, at any time, sell,
transfer or assign the Note, this Security Instrument and the Other Security
Documents, and any or all servicing rights with respect thereto, or grant
participations therein or issue mortgage pass-through certificates or other
securities evidencing a beneficial interest in a rated or unrated public
offering or private placement (the "Securities"). Lender may forward to each
purchaser, transferee, assignee, servicer, participant, or investor in such
Securities (collectively, the "Investor") or any Rating Agency rating such
Securities and each prospective Investor, all documents and information which
Lender now has or may hereafter acquire relating to the Debt and to Borrower,
any Guarantor, any Indemnitor(s) and the Property, whether furnished by
Borrower, any Guarantor, any Indemnitor(s) or otherwise, as Lender determines
necessary or desirable. Borrower, any Guarantor and any Indemnitor agree to
cooperate with Lender in connection with any transfer made or any Securities
created pursuant to this Section, including, without limitation, the delivery of
an estoppel certificate required in accordance with Subsection 7.4(c) hereof and
such other documents as may be reasonably requested by Lender. Borrower shall
also furnish and Borrower, any Guarantor and any Indemnitor consent to Lender
furnishing to such Investors or such prospective Investors or such Rating Agency
any and all information concerning the Property, the Leases, the financial
condition of Borrower, any Guarantor and any Indemnitor as may be requested by
Lender, any Investor, any prospective Investor or any Rating Agency in
connection with any sale, transfer or participation interest.
Article 20 - COSTS
Section 20.1 PERFORMANCE AT BORROWER'S EXPENSE. Borrower
acknowledges and confirms that Lender shall impose certain administrative
processing and/or commitment fees in connection with (a) the extension, renewal,
modification, amendment and termination of the Loan, (b) the release or
substitution of collateral therefor, (c) obtaining certain consents, waivers and
approvals with respect to the Property, or (d) the review of any Lease or
proposed Lease or the preparation or review of any subordination,
non-disturbance agreement (the occurrence of any of the above shall be called an
"Event"). Borrower further acknowledges and confirms that it shall be
responsible for the payment of all costs of reappraisal of the Property or any
part thereof, whether required by law, regulation, Lender or any governmental or
quasi-governmental authority. Borrower hereby acknowledges and agrees to pay,
immediately, with or without demand, all such fees (as the same may be increased
or decreased from time to time), and any additional fees of a similar type or
nature which may be imposed by Lender from time to time, upon the occurrence of
any Event or otherwise. Wherever it is provided for herein that Borrower pay any
costs and expenses, such costs and expenses shall include, but not be limited
to, all legal fees and disbursements of Lender, whether with respect to retained
firms, the reimbursement for the expenses of in-house staff or otherwise.
Section 20.2 ATTORNEY'S FEES FOR ENFORCEMENT. (a) Borrower
shall pay all legal fees incurred by Lender in connection with (i) the
preparation of the Note, this Security Instrument and the Other Security
Documents and (ii) the items set forth in Section above, and (b) Borrower shall
pay to Lender on demand any and all expenses, including legal expenses and
attorneys' fees, incurred or paid by Lender in protecting its interest in the
Property or
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Personal Property or in collecting any amount payable hereunder or in enforcing
its rights hereunder with respect to the Property or Personal Property, whether
or not any legal proceeding is commenced hereunder or thereunder and whether or
not any default or Event of Default shall have occurred and is continuing,
together with interest thereon at the Default Rate from the date paid or
incurred by Lender until such expenses are paid by Borrower.
Article 21 - DEFINITIONS
Section 21.1 GENERAL DEFINITIONS. Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
words used in this Security Instrument may be used interchangeably in singular
or plural form and the word "Borrower" shall mean "each Borrower and any
subsequent owner or owners of the Property or any part thereof or any interest
therein," the word "Lender" shall mean "Lender and any subsequent holder of the
Note," the word "Note" shall mean "the Note and any other evidence of
indebtedness secured by this Security Instrument," the word "person" shall
include an individual, corporation, partnership, limited liability company,
trust, unincorporated association, government, governmental authority, and any
other entity, the word "Property" shall include any portion of the Property and
any interest therein, and the phrases "attorneys' fees" and "counsel fees" shall
include any and all attorneys', paralegal and law clerk fees and disbursements,
including, but not limited to, fees and disbursements at the pre-trial, trial
and appellate levels incurred or paid by Lender in protecting its interest in
the Property, the Leases and the Rents and enforcing its rights hereunder.
Article 22 - MISCELLANEOUS PROVISIONS
Section 22.1 NO ORAL CHANGE. This Security Instrument, and any
provisions hereof, may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Borrower or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
Section 22.2 LIABILITY. If Borrower consists of more than one
person, the obligations and liabilities of each such person hereunder shall be
joint and several. This Security Instrument shall be binding upon and inure to
the benefit of Borrower and Lender and their respective successors and assigns
forever.
Section 22.3 INAPPLICABLE PROVISIONS. If any term, covenant or
condition of the Note or this Security Instrument is held to be invalid, illegal
or unenforceable in any respect, the Note and this Security Instrument shall be
construed without such provision.
Section 22.4 HEADINGS, ETC. The headings and captions of
various Sections of this Security Instrument are for convenience of reference
only and are not to be construed as defining or limiting, in any way, the scope
or intent of the provisions hereof.
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Section 22.5 DUPLICATE ORIGINALS; COUNTERPARTS. This Security
Instrument may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. This Security Instrument
may be executed in several counterparts, each of which counterparts shall be
deemed an original instrument and all of which together shall constitute a
single Security Instrument. The failure of any party hereto to execute this
Security Instrument, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.
Section 22.6 NUMBER AND GENDER. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa.
Section 22.7 SUBROGATION. If any or all of the proceeds of the
Note have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of
such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the repayment of the Debt, the performance and
discharge of Borrower's obligations hereunder, under the Note and the Other
Security Documents and the performance and discharge of the Other Obligations.
Article 23 - SPECIAL MASSACHUSETTS PROVISIONS
Section 23.1 In the event of any inconsistencies between the
terms and conditions of this Article 23 and the terms and conditions of this
Security Instrument, the terms and conditions of this Article 23 shall control
and be binding.
Section 23.2 The paragraph following the word "RECITALS" is
hereby deleted and the following paragraph is substituted therefor:
For Consideration Paid, to secure the payment of an
indebtedness in the principal sum of FIFTEEN MILLION FIVE
HUNDRED THOUSAND AND 00/100 DOLLARS ($15,500,000) lawful money
of the United States of America, to be paid with interest
according to a certain note dated the date hereof made by
Borrower to Lender (the note, together with all extensions,
renewals or modifications thereof being hereinafter
collectively called the "Note"), Borrower has mortgaged,
given, granted, bargained, sold, aliened, enfeoffed, conveyed,
confirmed, pledged, assigned and hypothecated and by these
presents does mortgage, give, grant, bargain, sell, alien,
enfeoff, convey, confirm, pledge, assign and hypothecate unto
Lender WITH MORTGAGE COVENANTS, the Property (as more
particularly described in Section 1.1 below);
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Section 23.3 The words "with covenants" are hereby added after
the word "Lender" contained in the second line of Article 1, Section 1.1
entitled "Property Mortgaged."
Section 23.4 The words "located in the Town of Canton, County
of Norfolk, and Commonwealth of Massachusetts and" are hereby added after the
words "real property" in Article 1, Section 1.1(a) entitled "Land."
Section 23.5 Intentionally Omitted
Section 23.6 The words "fire pipe charges" are hereby added
following the words "governmental impositions" in Article 3, Section 3.4(a)
entitled "Payment of Taxes, Etc."
Section 23.7 The third sentence of Article 3, Section 3.7(a)
entitled "Leases and Rents" is deleted in its entirety and the following
sentence is substituted therefor:
All Leases shall provide that they are subordinate or
superior to this Security Instrument as Lender elects and that
the Lessee agrees to attorn to the Lender.
Section 23.8 The word "right" in the first sentence of Article
5, Section 5.1 entitled "Warranty of Title" is hereby deleted and the following
words are substituted therefor:
full power, authority and right to execute, deliver and
perform its obligations under this Security Instrument and
Section 23.9 The following words are hereby added after the
words "environmental laws" found in the third line of Article 5, Subsection
5.6(c): "subdivision control laws, rent control and condominium control laws."
Section 23.10 The following words are hereby added to the end
of Article 10, Section 10.3 entitled "Default Interest":
and (c) Lender shall have the STATUTORY POWER OF SALE, as
hereinafter provided. If the rate specified in the previous
sentence is above the maximum rate permitted by applicable
law, the Default Rate shall be the maximum rate permitted by
applicable law.
Section 23.11 The following language is hereby added to the
end of the third sentence of Article 12, Section 12.1 entitled "Environmental
Representations and Warranties":
M.G.L. c. 21 (Massachusetts Clean Waters Act; Scenic Rivers Act), M.G.L. c.
21C (Massachusetts Hazardous Waste Management Act), M.G.L. c. 21E
(Massachusetts Oil and Hazardous Materials Release Prevention and Response
Act), M.G.L. c. 130 (Massachusetts Coastal Zone Management Act), M.G.L. c.
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- ▇▇ -
▇▇▇ (▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇), M.G.L. c. 30 (Massachusetts
Environmental Policy Act), M.G.L. c. 91 (waterways, licensing), M.G.L. c.
111 (air pollution); and in each case all regulations promulgated
thereunder.
Section 23.12 The word "INTERNAL" is hereby added immediately
before the word "LAWS" wherever the word "LAWS" appears in Article 18, Section
18.1 entitled "CHOICE OF LAW."
Section 23.13 The words "including, without limitation, any
subsequent owner or owners of the equity of redemption in the Property" are
hereby added following the words "or any part thereof or any interest therein"
in the first sentence of Article 21, Section 21.1 entitled "General
Definitions".
Section 23.14 Statutory Power of Sale. This Security
Instrument is upon the STATUTORY CONDITION and upon the further condition that
all covenants and agreements of the Security Instrument in the Note, this
Security Instrument and the Other Security Documents, and in all other
mortgages, debts and obligations of or from Borrower to or for benefit of Lender
shall be kept and fully performed and upon any breach of same, Lender shall have
the STATUTORY POWER OF SALE and any other powers given by statute.
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IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed
by Borrower the day and year first above written.
JBAK CANTON REALTY, INC., a
Massachusetts corporation
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
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ACKNOWLEDGEMENTS
STATE OF MASSACHUSETTS )
).ss:
COUNTY OF NORFOLK )
On this 27th day of December, 1996, before me appeared ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, to me personally known, who being by me duly sworn, did say that he
is the President of JBAK CANTON REALTY, INC., a Massachusetts corporation, and
that said instrument was signed on behalf of said corporation and said ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ acknowledged said instrument to be the free act and deed of said
corporation.
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public
My Commission Expires:
5/24/2002
[NY01:247789.4] 86000-00376 12/23/96 4:57pm
EXHIBIT A
(Description of Land)
ALL of that certain lot, piece or parcel of land, with the
buildings and improvements thereon, situate, lying and being
[NY01:247789.4] 86000-00376 12/23/96 4:57pm
TABLE OF CONTENTS
Page
Article 1 - GRANTS OF SECURITY............................................................................- 1 -
Section 1.1 PROPERTY MORTGAGED.............................................................- 1 -
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Section 1.2 ASSIGNMENT OF RENTS............................................................- 3 -
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Section 1.3 SECURITY AGREEMENT.............................................................- 4 -
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Section 1.4 PLEDGE OF MONIES HELD..........................................................- 4 -
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Article 2 - DEBT AND OBLIGATIONS SECURED.................................- 4 -
Section 2.1 DEBT...........................................................................- 4 -
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Section 2.2 OTHER OBLIGATIONS..............................................................- 5 -
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Section 2.3 DEBT AND OTHER OBLIGATIONS.....................................................- 5 -
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Section 2.4 PAYMENTS.......................................................................- 5 -
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Article 3 - BORROWER COVENANTS............................................................................- 6 -
Section 3.1 PAYMENT OF DEBT................................................................- 6 -
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Section 3.2 INCORPORATION BY REFERENCE.....................................................- 6 -
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Section 3.3 INSURANCE......................................................................- 6 -
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Section 3.4 PAYMENT OF TAXES, ETC.........................................................- 10 -
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Section 3.5 ESCROW FUND...................................................................- 11 -
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Section 3.6 CONDEMNATION..................................................................- 11 -
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Section 3.7 LEASES AND RENTS..............................................................- 12 -
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Section 3.8 MAINTENANCE OF PROPERTY.......................................................- 14 -
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Section 3.9 WASTE.........................................................................- 14 -
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Section 3.10 COMPLIANCE WITH LAWS..........................................................- 14 -
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Section 3.11 BOOKS AND RECORDS.............................................................- 15 -
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Section 3.12 PAYMENT FOR LABOR AND MATERIALS...............................................- 16 -
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Section 3.13 PERFORMANCE OF OTHER AGREEMENTS...............................................- 17 -
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Article 4 - SPECIAL COVENANTS............................................................................- 17 -
Section 4.1 PROPERTY USE..................................................................- 17 -
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Section 4.2 ERISA.........................................................................- 17 -
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Section 4.3 SINGLE PURPOSE ENTITY.........................................................- 18 -
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Section 4.4 RESTORATION...................................................................- 20 -
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Article 5 - REPRESENTATIONS AND WARRANTIES...............................- 24 -
Section 5.1 WARRANTY OF TITLE.............................................................- 24 -
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Section 5.2 AUTHORITY.....................................................................- 24 -
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Section 5.3 LEGAL STATUS AND AUTHORITY....................................................- 24 -
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Section 5.4 VALIDITY OF DOCUMENTS.........................................................- 25 -
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Section 5.5 LITIGATION....................................................................- 25 -
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Section 5.6 STATUS OF PROPERTY............................................................- 25 -
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Section 5.7 NO FOREIGN PERSON.............................................................- 26 -
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Section 5.8 SEPARATE TAX LOT..............................................................- 26 -
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Section 5.9 ERISA COMPLIANCE..............................................................- 26 -
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Section 5.10 LEASES........................................................................- 27 -
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Section 5.11 FINANCIAL CONDITION...........................................................- 27 -
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Section 5.12 BUSINESS PURPOSES.............................................................- 27 -
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Section 5.13 TAXES.........................................................................- 27 -
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Section 5.14 MAILING ADDRESS...............................................................- 28 -
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Section 5.15 NO CHANGE IN FACTS OR CIRCUMSTANCES...........................................- 28 -
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Section 5.16 DISCLOSURE....................................................................- 28 -
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Section 5.17 THIRD PARTY REPRESENTATIONS...................................................- 28 -
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Section 5.18 ILLEGAL ACTIVITY..............................................................- 28 -
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Section 5.19 CONTRACTS.....................................................................- 28 -
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Article 6 - OBLIGATIONS AND RELIANCES......................................................................- 28 -
Section 6.1 RELATIONSHIP OF BORROWER AND LENDER...........................................- 28 -
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Section 6.2 NO RELIANCE ON LENDER.........................................................- 28 -
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Section 6.3 NO LENDER OBLIGATIONS.........................................................- 29 -
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Section 6.4 RELIANCE......................................................................- 29 -
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Article 7 - FURTHER ASSURANCES...........................................................................- 29 -
Section 7.1 RECORDING OF SECURITY INSTRUMENT, ETC.........................................- 29 -
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Section 7.2 FURTHER ACTS, ETC.............................................................- 30 -
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Section 7.3 CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP
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LAWS..........................................................................- 30 -
Section 7.4 ESTOPPEL CERTIFICATES.........................................................- 31 -
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Section 7.5 FLOOD INSURANCE...............................................................- 31 -
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Section 7.6 SPLITTING OF SECURITY INSTRUMENT..............................................- 31 -
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Section 7.7 REPLACEMENT DOCUMENTS.........................................................- 32 -
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Article 8 - DUE ON SALE/ENCUMBRANCE.......................................................................- 32 -
Section 8.1 LENDER RELIANCE...............................................................- 32 -
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Section 8.2 NO SALE/ENCUMBRANCE...........................................................- 32 -
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Section 8.3 SALE/ENCUMBRANCE DEFINED......................................................- 32 -
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Section 8.4 LENDER'S RIGHTS...............................................................- 33 -
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Section 8.5 ONE-TIME TRANSFER. ...........................................................- 33 -
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Article 9 - PREPAYMENT.................................................................................- 35 -
Section 9.1 PREPAYMENT BEFORE EVENT OF DEFAULT............................................- 35 -
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Section 9.2 PREPAYMENT ON CASUALTY OR CONDEMNATION........................................- 35 -
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Section 9.3 PREPAYMENT AFTER EVENT OF DEFAULT.............................................- 35 -
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Article 10 - DEFAULT...................................................................................- 36 -
Section 10.1 EVENTS OF DEFAULT.............................................................- 36 -
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Section 10.2 LATE PAYMENT CHARGE...........................................................- 38 -
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Section 10.3 DEFAULT INTEREST..............................................................- 38 -
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Article 11 - RIGHTS AND REMEDIES..........................................................................- 39 -
Section 11.1 REMEDIES......................................................................- 39 -
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Section 11.2 APPLICATION OF PROCEEDS.......................................................- 41 -
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Section 11.3 RIGHT TO CURE DEFAULTS........................................................- 41 -
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Section 11.4 ACTIONS AND PROCEEDINGS.......................................................- 42 -
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Section 11.5 RECOVERY OF SUMS REQUIRED TO BE PAID..........................................- 42 -
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Section 11.6 EXAMINATION OF BOOKS AND RECORDS..............................................- 42 -
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Section 11.7 OTHER RIGHTS, ETC.............................................................- 42 -
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Section 11.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY..................................- 43 -
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Section 11.9 VIOLATION OF LAWS.............................................................- 43 -
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Section 11.10 RECOURSE AND CHOICE OF REMEDIES...............................................- 43 -
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Section 11.11 RIGHT OF ENTRY................................................................- 44 -
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Article 12 - ENVIRONMENTAL HAZARDS........................................................................- 44 -
Section 12.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES..................................- 44 -
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Section 12.2 ENVIRONMENTAL COVENANTS.......................................................- 45 -
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Section 12.3 LENDER'S RIGHTS...............................................................- 46 -
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Article 13 - INDEMNIFICATION.............................................................................- 46 -
Section 13.1 GENERAL INDEMNIFICATION.......................................................- 46 -
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Section 13.2 MORTGAGE AND/OR INTANGIBLE TAX................................................- 47 -
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Section 13.3 ERISA INDEMNIFICATION.........................................................- 47 -
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Section 13.4 ENVIRONMENTAL INDEMNIFICATION.................................................- 48 -
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Section 13.5 DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND
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EXPENSES......................................................................- 49 -
Article 14 - WAIVERS...................................................................................- 49 -
Section 14.1 WAIVER OF COUNTERCLAIM........................................................- 49 -
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Section 14.2 MARSHALLING AND OTHER MATTERS.................................................- 49 -
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Section 14.3 WAIVER OF NOTICE..............................................................- 49 -
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Section 14.4 WAIVER OF STATUTE OF LIMITATIONS..............................................- 49 -
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Section 14.5 SOLE DISCRETION OF LENDER.....................................................- 49 -
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Section 14.6 SURVIVAL......................................................................- 50 -
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SECTION 14.7 WAIVER OF TRIAL BY JURY.......................................................- 50 -
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Article 15 - EXCULPATION................................................................................- 50 -
Section 15.1 EXCULPATION...................................................................- 50 -
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Section 15.2 RESERVATION OF CERTAIN RIGHTS.................................................- 51 -
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Section 15.3 EXCEPTIONS TO EXCULPATION.....................................................- 51 -
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Section 15.4 RECOURSE......................................................................- 51 -
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Section 15.5 BANKRUPTCY CLAIMS.............................................................- 51 -
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Article 16 - NOTICES...................................................................................- 52 -
Section 16.1 NOTICES.......................................................................- 52 -
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Article 17 - SERVICE OF PROCESS..........................................................................- 53 -
Section 17.1 CONSENT TO SERVICE............................................................- 53 -
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Section 17.2 SUBMISSION TO JURISDICTION....................................................- 53 -
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Section 17.3 JURISDICTION NOT EXCLUSIVE....................................................- 54 -
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Article 18 - APPLICABLE LAW.............................................................................- 54 -
Section 18.1 CHOICE OF LAW.................................................................- 54 -
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Section 18.2 USURY LAWS....................................................................- 54 -
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Section 18.3 PROVISIONS SUBJECT TO APPLICABLE LAW..........................................- 54 -
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Article 19 - SECONDARY MARKET............................................................................- 55 -
Section 19.1 TRANSFER OF LOAN..............................................................- 55 -
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Article 20 - COSTS....................................................................................- 55 -
Section 20.1 PERFORMANCE AT BORROWER'S EXPENSE.............................................- 55 -
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Section 20.2 ATTORNEY'S FEES FOR ENFORCEMENT...............................................- 55 -
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Article 21 - DEFINITIONS................................................................................- 56 -
Section 21.1 GENERAL DEFINITIONS...........................................................- 56 -
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Article 22 - MISCELLANEOUS PROVISIONS......................................................................- 56 -
Section 22.1 NO ORAL CHANGE................................................................- 56 -
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Section 22.2 LIABILITY.....................................................................- 56 -
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Section 22.3 INAPPLICABLE PROVISIONS.......................................................- 56 -
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Section 22.4 HEADINGS, ETC.................................................................- 56 -
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Section 22.5 DUPLICATE ORIGINALS; COUNTERPARTS.............................................- 57 -
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Section 22.6 NUMBER AND GENDER.............................................................- 57 -
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Section 22.7 SUBROGATION...................................................................- 57 -
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Article 23 - SPECIAL ..................................................................................- 57 -
Section 23.1........................................................................................- 57 -
Section 23.2........................................................................................- 57 -
Section 23.3........................................................................................- 58 -
Section 23.4........................................................................................- 58 -
Section 23.5........................................................................................- 58 -
Section 23.6........................................................................................- 58 -
Section 23.7........................................................................................- 58 -
Section 23.8........................................................................................- 58 -
Section 23.9........................................................................................- 58 -
Section 23.10.......................................................................................- 58 -
Section 23.11.......................................................................................- 58 -
Section 23.12.......................................................................................- 59 -
Section 23.13.......................................................................................- 59 -
Section 23.14 Statutory Power of Sale..................................................- 59 -
DEFINITIONS............................................................................................-v-
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DEFINITIONS
The terms set forth below are defined in the following Sections of this
Security Instrument:
(a) Additional Reserve: Article 3, Subsection 3.7(d);
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(b) Applicable Laws: Article 3, Subsection 3.10(a);
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(c) Attorneys' Fees/Counsel Fees: Article 21, Section 21.1;
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(d) Bankruptcy Code: Article 1, Subsection 1.1(f);
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(e) Borrower: Preamble and Article 21, Section 21.1;
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(f) Business Day: Article 16, Section 16.1;
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(g) Condemnation Proceeds: Article 4, Subsection 4.4(b)(ii);
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(h) Debt: Article 2, Section 2.1;
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(i) Default Prepayment: Article 9, Section 9.3;
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(j) Default Rate: Article 10, Section 10.3;
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(k) Environmental Indemnity: Article 10, Subsection 10.1(q);
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(l) Environmental Law: Article 12, Section 12.1;
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(m) Environmental Liens: Article 12, Subsection 12.2(d);
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(n) Environmental Report: Article 12, Subsection 12.1(a)
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(o) ERISA: Article 4, Subsection 4.2(a);
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(p) Escrow Fund: Article 3, Section 3.5;
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(q) Event: Article 20, Section 20.1;
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(r) Event of Default: Article 10, Section 10.1;
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(s) Flood Insurance Acts: Article 3, Subsection 3.3(a)(vii);
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(t) Full Replacement Cost: Article 3, Subsection 3.3(a)(i)(A);
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(u) GAAP: Article 3, Subsection 3.11(a);
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(v) Guarantor: Article 10, Subsection 10.1(e);
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(w) Hazardous Substances: Article 12, Section 12.1;
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(x) Improvements: Article 1, Subsection 1.1(c);
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(y) Indemnified Parties: Article 13, Section 13.1;
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(z) Indemnitor(s): Article 10, Subsection 10.1(o);
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(aa) Insurance Premiums: Article 3, Subsection 3.3(b);
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(ab) Insurance Proceeds: Article 4, Subsection 4.4(b);
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(ac) Investor: Article 19, Section 19.1;
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(ad) ▇. ▇▇▇▇▇ Lease: Article 5, Section 5.10;
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(ae) Land: Article 1, Subsection 1.1(a);
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(af) Lease Guaranty: Article 3, Subsection 3.7(a);
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(ag) Leases: Article 1, Subsection 1.1(f);
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(ah) Lender: Preamble and Article 21, Section 21.1;
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(ai) Loan: Article 5, Subsection 5.12;
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(aj) Loan Application: Article 5, Section 5.15;
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(ak) Losses: Article 13, Section 13.1;
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(al) Net Proceeds: Article 4, Subsection 4.4(b);
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(am) Net Proceeds Deficiency: Article 4, Subsection 4.4(b)(vi);
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(an) Note: Recitals and Article 21, Section 21.1;
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(ao) Obligations: Article 2, Section 2.3;
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(ap) Other Charges: Article 3, Subsection 3.4(a);
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(aq) Other Obligations: Article 2, Section 2.2;
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(ar) Other Security Documents: Article 3, Section 3.2;
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(as) Permitted Exceptions: Article 5, Section 5.1;
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(at) Person: Article 21, Section 21.1;
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(au) Personal Property: Article 1, Subsection 1.1(e);
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(av) Policies/Policy: Article 3, Subsection 3.3(b);
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(aw) Property: Article 1, Section 1.1 and Article 21, Section
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21.1;
(ax) Qualified Insurer: Article 3, Subsection 3.3(b);
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(ay) Rating Agency: Article 3, Subsection 3.3(b);
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(az) Related Entities: Article 8, Subsection 8.5(c)(E);
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(ba) Release: Article 12, Section 12.1;
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(bb) Remediation: Article 12, Section 12.1;
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(bc) Rents: Article 1, Subsection 1.1(f);
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(bd) Restoration: Article 3, Subsection 3.3(h);
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(be) Restoration Consultant: Article 4, Subsection 4.4(b)(iii);
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(bf) Restoration Retainage: Article 4, Subsection 4.4(b)(iv);
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(bg) Securities: Article 19, Section 19.1;
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(bh) Security Deposits: Article 3, Subsection 3.7(c);
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(bi) Security Instrument: Preamble;
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(bj) Taxes: Article 3, Subsection 3.4(a);
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(bk) Tenant's Transferee: Article 3, Subsection 3.7(d);
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(bl) Transferee: Article 8, Subsection 8.5(c)(C);
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(bm) Transferee's Principals: Article 8, Subsection 8.5(c)(C);
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(bn) Uniform Commercial Code: Article 1, Subsection 1.1(e)
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