EXHIBIT 10.10
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MONTICELLO RACEWAY MANAGEMENT, INC., as mortgagor
(Borrower)
to
THE BERKSHIRE BANK, as mortgagee
(Lender)
LEASEHOLD MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
Dated: October 29, 2003
Location: Monticello, New York
County: ▇▇▇▇▇▇▇▇ A) Section 101 Block 1 Lot 1.1
County: ▇▇▇▇▇▇▇▇ B) Section 101 Block 1 Lot 1.3
County: ▇▇▇▇▇▇▇▇ C) ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇ ▇
▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ ▇) Section 12 Block 1 Lot 46.2
County: ▇▇▇▇▇▇▇▇ E) ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇▇ ▇▇
▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ F) ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇ Principal Amount Secured: $3,500,000, plus other sums
described in Section 22.7
PREPARED BY AND UPON
RECORDATION RETURN TO:
Blank Rome LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
BR File No.: 521464-00101
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TABLE OF CONTENTS
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ARTICLE 1 GRANTS OF SECURITY.............................................. 1
Section 1.1. PROPERTY MORTGAGED....................................... 1
Section 1.2. ASSIGNMENT OF RENTS...................................... 2
Section 1.3. SECURITY AGREEMENT....................................... 2
Section 1.4. PLEDGE OF MONIES HELD.................................... 2
ARTICLE 2. PAYMENTS........................................................ 3
Section 2.1. DEBT AND OBLIGATIONS SECURED............................. 3
Section 2.2. PAYMENTS................................................. 3
ARTICLE 3. BORROWER COVENANTS.............................................. 3
Section 3.1. PAYMENT OF DEBT.......................................... 3
Section 3.2. INCORPORATION BY REFERENCE............................... 3
Section 3.3. INSURANCE................................................ 3
Section 3.4. PAYMENT OF TAXES, ETC.................................... 5
Section 3.5. INTENTIONALLY DELETED.................................... 5
Section 3.6. CONDEMNATION............................................. 5
Section 3.7. LEASES AND RENTS......................................... 6
Section 3.8. MAINTENANCE OF PROPERTY.................................. 7
Section 3.9. WASTE.................................................... 7
Section 3.10. COMPLIANCE WITH LAWS..................................... 7
Section 3.11. INTENTIONALLY DELETED,................................... 7
Section 3.12. PAYMENT FOR LABOR AND MATERIALS.......................... 7
Section 3.13. OTHER AGREEMENTS......................................... 8
Section 3.14. PROPERTY MANAGEMENT...................................... 8
Section 3.15. GROUND LEASE............................................. 8
ARTICLE 4. SPECIAL COVENANTS............................................... 11
Section 4.1. PROPERTY USE............................................. 11
Section 4.2. RESTORATION AFTER CASUALTY/CONDEMNATION.................. 11
ARTICLE 5. REPRESENTATIONS AND WARRANTIES.................................. 11
Section 5.1. WARRANTY OF TITLE........................................ 11
Section 5.2. INTENTIONALLY DELETED.................................... 11
Section 5.3. INTENTIONALLY DELETED.................................... 12
Section 5.4. INTENTIONALLY DELETED.................................... 12
Section 5.5. INTENTIONALLY DELETED.................................... 12
Section 5.6. STATUS OF PROPERTY....................................... 12
Section 5.7. NO FOREIGN PERSON........................................ 12
Section 5.8. SEPARATE TAX LOT......................................... 12
Section 5.9. GROUND LEASE............................................. 12
Section 5.10. LEASES................................................... 13
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TABLE OF CONTENTS
(continued)
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Section 5.11. INTENTIONALLY DELETED................................... 13
Section 5.12. BUSINESS PURPOSES....................................... 13
Section 5.13. INTENTIONALLY DELETED................................... 13
Section 5.14. MAILING ADDRESSES....................................... 13
Section 5.15. NO CHANGE IN FACTS OR CIRCUMSTANCES..................... 13
Section 5.16. INTENTIONALLY DELETED................................... 13
ARTICLE 6. OBLIGATIONS AND RELIANCES...................................... 13
Section 6.1. RELATIONSHIP OF BORROWER AND LENDER..................... 14
Section 6.2. NO RELIANCE ON LENDER................................... 14
Section 6.3. NO LENDER OBLIGATIONS................................... 14
Section 6.4. RELIANCE................................................ 14
ARTICLE 7. FURTHER ASSURANCES............................................. 14
Section 7.1. RECORDING OF SECURITY INSTRUMENT, ETC................... 14
Section 7.2. INTENTIONALLY DELETED................................... 14
Section 7.3. CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS 15
Section 7.4. ESTOPPEL CERTIFICATES................................... 15
ARTICLE 8. SALE/ENCUMBRANCE............................................... 16
Section 8.1. INTENTIONALLY DELETED................................... 16
Section 8.2. NO SALE/ENCUMBRANCE..................................... 16
Section 8.3. INTENTIONALLY DELETED................................... 16
ARTICLE 9. PREPAYMENT..................................................... 16
Section 9.1. PREPAYMENT BEFORE EVENT OF DEFAULT...................... 16
ARTICLE 10. DEFAULT....................................................... 16
Section 10.1. EVENTS OF DEFAULT....................................... 16
ARTICLE 11. RIGHTS AND REMEDIES........................................... 16
Section 11.1. REMEDIES................................................ 16
Section 11.2. APPLICATION OF PROCEEDS................................. 17
Section 11.3. RIGHT TO CURE DEFAULTS.................................. 17
Section 11.4. ACTIONS AND PROCEEDINGS................................. 18
Section 11.5. RECOVERY OF SUMS REQUIRED TO BE PAID.................... 18
Section 11.6. EXAMINATION OF BOOKS AND RECORDS........................ 18
Section 11.7. OTHER RIGHTS, ETC....................................... 18
Section 11.8. RIGHT TO RELEASE ANY PORTION OF THE PROPERTY............ 18
Section 11.9. INTENTIONALLY DELETED................................... 19
Section 11.10. RIGHT OF ENTRY.......................................... 19
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TABLE OF CONTENTS
(continued)
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ARTICLE 12. ENVIRONMENTAL HAZARDS......................................... 19
Section 12.1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES............ 19
Section 12.2. ENVIRONMENTAL COVENANTS................................. 19
Section 12.3. LENDER'S RIGHTS......................................... 20
ARTICLE 13. INDEMNIFICATION............................................... 20
Section 13.1. GENERAL INDEMNIFICATION................................. 20
Section 13.2. MORTGAGE AND/OR INTANGIBLE TAX.......................... 20
Section 13.3. ENVIRONMENTAL INDEMNIFICATION........................... 21
Section 13.4. DUTY TO DEFEND; ATTORNEYS' FEES AND
OTHER FEES AND EXPENSES................................. 21
ARTICLE 14. WAIVERS....................................................... 21
Section 14.1. WAIVER OF COUNTERCLAIM.................................. 21
Section 14.2. MARSHALLING AND OTHER MATTERS........................... 21
Section 14.3. WAIVER OF NOTICE........................................ 21
Section 14.4. SOLE DISCRETION OF LENDER............................... 22
Section 14.5. SURVIVAL................................................ 22
Section 14.6. INTENTIONALLY DELETED................................... 22
ARTICLE 15. INTENTIONALLY DELETED......................................... 22
ARTICLE 16. NOTICES....................................................... 22
Section 16.1. NOTICES................................................. 22
ARTICLE 17. INTENTIONALLY DELETED......................................... 22
ARTICLE 18. APPLICABLE LAW................................................ 22
Section 18.1. CHOICE OF LAW........................................... 22
Section 18.2. USURY LAWS.............................................. 22
Section 18.3. PROVISIONS SUBJECT TO APPLICABLE LAW.................... 23
ARTICLE 19. INTENTIONALLY DELETED......................................... 23
ARTICLE 20. COSTS......................................................... 23
Section 20.1. PERFORMANCE AT BORROWER'S EXPENSE....................... 23
Section 20.2. INTENTIONALLY DELETED................................... 23
ARTICLE 21. MISCELLANEOUS................................................. 23
Section 21.1. NO ORAL CHANGE.......................................... 23
Section 21.2. LIABILITY; SUCCESSORS AND ASSIGNS....................... 23
Section 21.3. INAPPLICABLE PROVISIONS................................. 24
Section 21.4. HEADINGS, ETC........................................... 24
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TABLE OF CONTENTS
(continued)
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Section 21.5. DUPLICATE ORIGINALS; COUNTERPARTS...................... 24
Section 21.6. NUMBER AND GENDER...................................... 24
Section 21.7. SUBROGATION............................................ 24
Section 21.8. SATISFACTION OR ASSIGNMENT............................. 24
Article 22. NEW YORK PROVISIONS.......................................... 24
Section 22.1. TRUST FUND............................................. 24
Section 22.2. COMMERCIAL PROPERTY.................................... 24
Section 22.3. INSURANCE.............................................. 25
Section 22.4. LEASES................................................. 25
Section 22.5. STATUTORY CONSTRUCTION................................. 25
Section 22.6. INTENTIONALLY DELETED.................................. 25
Section 22.7. MAXIMUM PRINCIPAL AMOUNT SECURED....................... 25
Acknowledgments
Exhibit A Description of Land
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LEASEHOLD MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND
RENTS AND FIXTURE FILING (this "SECURITY INSTRUMENT") made as of the ________
day of October, 2003, by MONTICELLO RACEWAY MANAGEMENT, INC., a New York
corporation ("BORROWER"), having its principal place of business at Monticello
Raceway, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as mortgagor, to THE BERKSHIRE
BANK ("LENDER"), having an address at ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, as mortgagee.
RECITALS:
WHEREAS, pursuant to a certain Term Loan Note of even date herewith
executed by Borrower, as maker, in favor of Lender, as payee, Borrower is
indebted to Lender in the principal sum of Three Million Five Hundred Thousand
AND 00/100 DOLLARS ($3,500,000) 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 thereon 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; and
WHEREAS, Borrower and Lender are parties to a certain Loan and
Security Agreement of even date herewith (as modified from time to time, the
"LOAN AGREEMENT"); and
NOW THEREFORE, Borrower desires to secure the payment of the Debt
(as defmed in Article 2) and the performance of all of its obligations under the
Note, the Loan Agreement and the Other Obligations (as defined in Article 2) as
follows:
ARTICLE 1.
GRANTS OF SECURITY
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Section 1.1. PROPERTY MORTGAGED. Borrower does hereby 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) Borrower's leasehold interest in the real
property described in EXHIBIT A attached hereto and made a part hereof (the
"LAND"); (b) Borrower's leasehold interest in all additional lands, estates 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) Borrower's
leasehold interest in all buildings and improvements now or hereafter erected or
located on the Land (the "IMPROVEMENTS"); (d) Borrower's leasehold interest in
all easements, rights-of-way or use, rights, strips and gores of land, streets,
ways, alleys, passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, and all estates, rights, titles,
interests, privileges, liberties, servitudes, tenements, hereditaments and
appurtenances of any nature whatsoever, in any way now or hereafter belonging,
relating or pertaining to the Land and the Improvements and the reversion and
reversions, remainder and remainders, and all land lying in the bed of any
street, road or avenue, opened or proposed, in front of or adjoining the Land,
to the center line thereof and all the estates, rights, titles, interests, dower
and rights of dower, curtesy and rights of curtesy, property, possession, claim
and demand whatsoever, both at law and in equity, of Borrower of, in and to the
Land and the Improvements and every part and parcel thereof, with the
appurtenances thereto; (e) all of Borrower's right, title and interest in and to
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)
all leases and other agreements affecting the use, enjoyment or occupancy of the
Land and the Improvements heretofore or hereafter entered into, including any
and all guaranties of any such lease (a "LEASE" or "LEASES") and all right,
title and interest, if any, 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 (the "RENTS") and all proceeds from the sale or other
disposition of the Leases and the right (to the extent now or hereafter held by
Borrower) to receive and apply the Rents to the payment of the Debt; (g) all
awards or payments, including interest thereon, which may heretofore and
hereafter be made with respect to the Property, whether from the exercise of the
right of eminent domain (including but not limited to any transfer made in lieu
of or in anticipation of the exercise of the right), or for a change of grade,
or for any other injury to or decrease in the value of the Property; (h) 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) 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)
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) 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; (1) 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 and continuance of an Event of
Default, to receive and collect any sums payable to Borrower thereunder; (m) 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; (n) the lessee's interest in that certain
agreement of lease more particularly described on EXHIBIT B hereto, together
with all exhibits and renewals, modifications and extensions, if any, thereto
(collectively, the "GROUND LEASE") and the leasehold estate created thereby and
all credits, deposits, options, privileges and rights of Borrower as tenant
under the Ground Lease; and (o) any and all other rights of Borrower in and to
the items set forth in Subsections (a) through (n) above.
Section 1.2. ASSIGNMENT OF RENTS. Borrower hereby absolutely and
unconditionally assigns to Lender Borrower's right, title and interest in and to
all current and future Leases and Rents; it being intended by Borrower that this
assignment constitutes a present, absolute assignment and not an assignment for
additional security only. Nevertheless, subject to the terms of this Section 1.2
and Section 3.7, Lender grants to Borrower a revocable license to collect and
receive the Rents.
Section 1.3. SECURITY AGREEMENT. This Security Instrument is both a
real property mortgage and a "security agreement" within the meaning of the
Uniform Commercial Code. The Property includes both real and personal property
and all other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Security Instrument,
Borrower hereby grants to Lender, as security for the Obligations (defined in
Section 2.1), a security interest in the Property to the full extent that the
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 Net Proceeds (as defined in Section 4.2) 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;
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
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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, at the request and at the expense of Borrower, be terminated.
ARTICLE 2.
PAYMENTS
Section 2.1. DEBT AND OBLIGATIONS SECURED. This Security Instrument
and the grants, assignments and transfers made in Article 1 are given for the
purpose of securing the following, in such order of priority as Lender may
determine in its sole discretion (collectively, 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, prepayment premiums, default interest,
late charges and other sums, as provided in the Note, this Security Instrument
or the other Loan Documents (defined below); (c) the payment of all other moneys
agreed or provided to be paid by Borrower in the Note, this Security Instrument
or the other Loan Documents; (d) the payment of all sums advanced pursuant to
this Security Instrument to protect and preserve the Property and the lien and
the security interest created hereby; and (e) the payment of all sums advanced
and costs and expenses incurred by Lender in connection with the Debt or any
part thereof, any renewal, extension, or change of or substitution for the Debt
or any part thereof, or the acquisition or perfection of the security therefor,
whether made or incurred at the request of Borrower or Lender. This Security
Instrument and the grants, assignments and transfers made in Article 1 are also
given for the purpose of securing the performance of all other obligations of
Borrower contained herein and 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 this Security
Instrument, the Note or the other Loan Documents (collectively, the "OTHER
OBLIGATIONS"). Borrower's obligations for the payment of the Debt and the
performance of the Other Obligations shall be referred to collectively herein as
the "OBLIGATIONS."
Section 2.2. PAYMENTS. Unless payments are made in the required
amount 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 at the place where the Note is payable (or any other place as Lender, in
Lender's sole discretion, may have established by delivery of written notice
thereof to Borrower) and shall be made and accepted subject to the condition
that any check or draft may be handled for collection in accordance with the
practice of the collecting bank or banks. Acceptance by Lender of any payment in
an amount less than the amount then due shall be deemed an acceptance on account
only, and the failure to pay the entire amount then due shall be and continue to
be an Event of Default (defined below).
ARTICLE 3.
BORROWER COVENANTS
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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, (b) the Loan Agreement and
(c) all and any of the documents other than the Note, the Loan Agreement 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 (together with the Note and this Security Instrument, the "LOAN
DOCUMENTS"), are hereby made a part of this Security Instrument to the same
extent and with the same force as if fully set forth herein.
Section 3.3. INSURANCE.
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(a) Supplementing Section 6.2 of the Loan Agreement, Borrower shall
maintain, at its sole cost and expense, with respect to the Property, all
insurance required to be maintained under the Loan Agreement. Without limiting
the foregoing, Borrower shall obtain and maintain during the entire term of this
Security Instrument policies of insurance against loss or damage by fire and
against loss or damage by other risks and hazards covered by a standard extended
coverage insurance policy including, without limitation, riot and civil
commotion, vandalism, malicious mischief, burglary and theft. Such insurance
shall be in an amount equal to the greatest of (i) the then full replacement
cost of the Improvements and Personal Property, without deduction for physical
depreciation, (ii) the outstanding principal balance of the Note, and (iii) such
amount that the insurer would not deem Borrower a co-insurer under said
policies. The policies of insurance carried in accordance with this paragraph
shall be paid annually in advance and shall contain a "Replacement Cost
Endorsement" with a waiver of depreciation.
(b) Borrower, at its sole cost and expense, for the mutual benefit
of Borrower and Lender, shall also obtain and maintain during the entire term of
this Security Instrument the following policies of insurance:
(i) Flood insurance if any part of the Property is located in an
area identified by the Federal Emergency Management Agency as an area having
special flood hazards and in which flood insurance has been made available under
the National Flood Insurance Act of 1968 (and any amendment or successor act
thereto) in an amount at least equal to the outstanding principal amount of the
loan evidenced by the Note or the maximum limit of coverage available with
respect to the Improvements and Personal Property under said Act, whichever is
less.
(ii) Comprehensive public liability insurance, including broad
form property damage, blanket contractual and personal injuries (including death
resulting therefrom) coverages and containing minimum limits per occurrence of
$20,000,000 for the Property.
(iii) Rental loss and/or business interruption insurance
(including rental value if any of the Property is leased in whole or in part) in
an annual aggregate amount equal to all rents or estimated gross revenues from
the operations of the Property, as may be applicable, and covering rental losses
or business interruption, as may be applicable, for a period of at least one (1)
year after the date of the fire or casualty in question. The amount of such
insurance shall be increased from time to time during the term of this Security
Instrument as and when new Leases and renewal Leases are entered into and the
rents payable increase or the annual estimate of (or the actual) gross revenue,
as may be applicable, increases to reflect such increases. The proceeds of such
insurance shall be and are hereby assigned to Lender, to be applied to the
payment of principal and interest on the Note, Taxes (defined below), Other
Charges (defined below), and Insurance Premiums (defined below), in any order of
preference determined by Lender, until such time as the damaged Improvements
shall have been restored and placed in full operation, at which time, provided
Borrower is not then in default under this Security Instrument, the balance of
such insurance proceeds, if any, held by Lender shall be returned to Borrower.
(iv) Worker's compensation insurance with respect to any
employees of Borrower, as required by any governmental authority or legal
requirement.
(v) During any period of repair or restoration, builder's "all
risk" insurance in an amount equal to not less than the full insurable value of
the Property against such risks (including, without limitation, fire and
extended coverage and collapse of the Improvements to agreed limits) as Lender
may request, in form and substance acceptable to Lender.
(vii) Such other insurance as may from time to time be
reasonably required by Lender in order to protect its interests.
(c) All policies of insurance (the "POLICIES") required pursuant to
this paragraph: (i) shall be issued by companies approved by Lender and licensed
to do business in the state where the Property is located, with a claims paying
ability rating of "A" or better by Standard & Poor's Corporation or a rating of
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"A:VII" or better in the current Best's Insurance Reports; (ii) shall name
Lender as an additional insured; (iii) shall contain a Non-Contributory Standard
Mortgagee Clause and a Lender's Loss Payable Endorsement (Form 438 BFU NS), or
their equivalents, naming Lender as first mortgagee-loss payee; (iv) shall
contain a waiver of subrogation against Lender; (v) shall be maintained
throughout the term of this Security Instrument without cost to Lender; (vi)
shall be assigned and, if so requested by Lender, the originals (or duplicate
originals certified to be true and correct by the related insurer) delivered to
Lender; (vii) shall contain such provisions as Lender deems reasonably necessary
or desirable to protect its interest including, without limitation, endorsements
providing that neither Borrower, Lender nor any other party shall be a
co-insurer under said Policies and that Lender shall receive at least thirty
(30) days prior written notice of any modification, reduction or cancellation;
and (viii) shall be satisfactory in form and substance to Lender and shall be
approved by Lender as to amounts, form, risk coverage, deductibles, loss payees
and insureds. Borrower shall pay the premiums for such Policies (the "INSURANCE
PREMIUMS") as the same become due and payable and shall furnish to Lender
evidence of the renewal of each of the new Policies with receipts for the
payment of the Insurance Premiums or other evidence of such payment reasonably
satisfactory to Lender. If Borrower does not furnish such evidence and receipts
at least thirty (30) days prior to the expiration of any apparently expiring
Policy, then Lender may procure, but shall not be obligated to procure, such
insurance and pay the Insurance Premiums therefor, and Borrower agrees to
reimburse Lender for the cost of such Insurance Premiums promptly on demand.
Within thirty (30) days after request by Lender, Borrower shall obtain such
increases in the amounts of coverage required hereunder as may be reasonably
requested by Lender, taking into consideration changes in the value of money
over time, changes in liability laws, changes in prudent customs and practices,
and the like.
(d) 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 4.2 of this Security Instrument.
Borrower shall pay all costs of such Restoration whether or not such costs are
covered by insurance. In case of loss covered by Policies, Borrower shall have
the right, so long as no Event of Default and no event which with the giving of
notice or the passage of time or both would constitute an Event of Default (an
"UNMATURED DEFAULT") has occurred and is continuing, to collect all insurance
proceeds below the Threshold Amount (defmed below) for application in the manner
provided by Section 4.2 of this Security Instrument. All insurance proceeds
equal to or in excess of the Threshold Amount shall be paid to Lender for
application in the manner provided by Section 4.2. If an Event of Default or an
Unmatured Default has occurred and is continuing, all insurance proceeds,
regardless of amount, shall be payable to Lender, who shall have the right, but
not the obligation, to apply them in reduction of the Debt.
Section 3.4. PAYMENT OF TAXES, ETC. Borrower shall pay all taxes,
assessments, water rates, sewer rents, governmental impositions, and other
charges, including without limitation vault charges and license fees for the use
of vaults, chutes and similar areas adjoining the Land, now or hereafter levied
or assessed or imposed against the Property or any part thereof (the "TAXES"),
all ground rents, maintenance charges and similar charges, now or hereafter
levied or assessed or imposed against the Property or any part thereof (the
"OTHER CHARGES"), in the manner specified in, and subject to the terms and
conditions of, the Loan Agreement.
Section 3.5. [Intentionally deleted.]
Section 3.6. CONDEMNATION. Borrower shall promptly give Lender
written notice of the actual or threatened (in writing) commencement of any
condemnation or eminent domain proceeding and shall deliver to Lender copies of
any and all papers served in connection with such proceedings. Lender is hereby
granted the exclusive right to collect, receive and retain any award or payment
payable to Borrower for any taking accomplished through a condemnation or
eminent domain proceeding and to make any compromise or settlement in connection
therewith. All condemnation awards or proceeds shall be paid to Lender and (a)
if in an amount less than or equal to the Threshold Amount (hereinafter defmed)
made available to Borrower for restoration of the Property or (b) if in an
amount greater than the Threshold Amount applied, as determined by Lender, in
its sole discretion, either (i) to repayment of the Debt (whether or not then
due and payable) or (ii) made available to Borrower for Restoration of the
Property on such terms and conditions as Lender deems appropriate.
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
-5-
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.
Any award or payment to be applied to the reduction or discharge of the Debt or
any portion thereof may be so applied whether or not the Debt or such portion
thereof is 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
or may be 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) Borrower does hereby absolutely and unconditionally assign to
Lender Borrower's right, title and interest, if any, in 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. Such assignment to Lender shall not be construed to bind Lender to the
performance of any of the covenants, conditions or provisions contained in any
such Lease or otherwise impose any obligation upon Lender, except to the extent
that Lender shall be operating the Property following a foreclosure. Borrower
agrees to execute and deliver to Lender such additional instruments, in form and
substance reasonably satisfactory to Lender, as may hereafter be reasonably
requested by Lender to further evidence and confirm such assignment.
Nevertheless, subject to the terms of this Section 3.7, Lender grants to
Borrower a revocable license to operate and manage the Property and to collect
the Rents. Upon the happening and continuance of an Event of Default, without
the need for notice or demand, the license granted to Borrower herein shall
automatically be revoked, and Lender shall immediately be entitled to possession
of all Rents, whether or not Lender enters upon or takes control of the
Property. Lender is hereby granted and assigned by Borrower the right, at its
option, upon revocation of the license granted herein, to enter upon the
Property in person, by agent or by court-appointed receiver to collect the
Rents. Any Rents collected after the revocation of the license may be applied
toward payment of the Debt in such priority and proportions as Lender in its
sole discretion shall deem proper. This section is made with reference to
Section 291-f of the New York Real Property Law for the purpose of obtaining for
Lender the benefit of said section in connection with this Security Instrument.
(b) All Leases shall be written on the standard form of lease
approved in writing by Lender, such approval not to be unreasonably withheld or
delayed. No changes may be made to the Lender-approved standard lease without
the prior written consent of Lender which consent shall not be unreasonably
withheld or delayed. All Leases shall provide that they are subordinate to this
Security Instrument and that the tenant thereunder agrees to attorn to Lender.
(c) 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 the Leases as security for the Debt; (ii) shall
promptly send copies to Lender of all notices of default which Borrower shall
receive thereunder; (iii) shall not collect any of the Rents more than one (1)
month in advance; and (iv) shall not execute any other assignment of the
lessor's interest in the Leases or the Rents. Borrower shall promptly send
copies to Lender of all notices of default which Borrower shall send under any
Lease and (A) shall enforce all of the terms, covenants and conditions contained
in the Lease upon the part of the lessee thereunder to be observed or performed,
short of termination thereof; (B) shall not alter, modify or change the terms of
the Leases without the prior written consent of Lender which consent shall not
be unreasonably withheld or delayed; (C) shall not convey or transfer or suffer
or permit a conveyance or transfer of the Property or of any interest therein so
as to effect a merger of the estates and rights, or a termination or diminution
of the obligations of, tenants under the Leases; and (D) shall not consent to
any assignment of or subletting under the Leases not in accordance with the
terms of the Leases, without the prior written consent of Lender which consent
shall not be unreasonably withheld or delayed.
(d) Borrower shall not execute any Lease (i) demising in excess of
10,000 square feet, individually or when combined with any other Leases or (ii)
for a term of more than one year, unless Lender shall have consented thereto in
writing, in each instance. Borrower shall furnish Lender with executed copies of
all Leases and any amendments or other agreements pertaining thereto within
ten (10) days of the execution thereof.
-6-
(e) All security deposits of tenants, whether held in cash or any
other form, shall not be commingled with any other funds of Borrower and, if
cash, shall be deposited by Borrower with Lender or an Affiliate thereof or at
such other commercial or savings bank or banks as may be satisfactory to Lender.
Any bond or other instrument which Borrower is permitted to hold in lieu of cash
security deposits under any applicable legal requirements (i) shall be
maintained in full force and effect in the full amount of such deposits unless
replaced by cash deposits as hereinabove described, (ii) shall be issued by an
institution reasonably satisfactory to Lender, (iii) shall, if permitted
pursuant to any legal requirements, name Lender as payee or lender thereunder
(or at Lender's option, be fully assignable to Lender) and (iv) shall, in all
respects, comply with any applicable legal requirements and otherwise be
reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender
with evidence reasonably satisfactory to Lender of Borrower's compliance with
the foregoing. Following the occurrence and during the continuance of an Event
of Default, Borrower shall, upon Lender's request, if permitted by any
applicable legal requirements, turn over to Lender the security deposits (and
any interest theretofore earned thereon) with respect to all or any portion of
the Property, to be held by Lender subject to the terms of the Leases.
Section 3.8. MAINTENANCE OF PROPERTY. Supplementing Section 6.2 of
the Loan Agreement, Borrower shall not conduct, demolish or materially alter any
improvements on the Land without the consent of Lender, which consent shall not
be unreasonably withheld or delayed. Borrower shall promptly repair, replace or
rebuild any part of the Property which may be destroyed by any casualty, or
become damaged, worn or dilapidated or which may be affected by any proceeding
of the character referred to in Section 3.6 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 which may have a material adverse affect on the
use, operation or value of the Property. 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 knowingly commit any waste of
the Property and shall use diligent efforts to prevent any waste to the
Property. Borrower shall not 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 unless Lender shall have consented thereto, which
consent shall not be unreasonably withheld. 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. Supplementing Section 6.2 of the
Loan Agreement, Borrower shall from time to time, upon Lender's request, provide
Lender with evidence reasonably satisfactory to Lender that the Property
complies 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") or is exempt from compliance with Applicable Laws. 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. [Intentionally deleted.]
Section 3.12. PAYMENT FOR LABOR AND MATERIALS. Borrower will
promptly pay when due all bills and costs for labor, materials, and specifically
fabricated materials incurred in connection with the Property and never permit
to exist beyond the due date thereof in respect of the Property or any part
thereof any lien or security interest, even though inferior to the liens and the
security interests hereof, and in any event never permit to be created or exist
in respect of the Property or any part thereof any other or additional lien or
security interest other than the liens or security interests hereof, except for
the Permitted Exceptions (defined below). Nothing contained herein shall affect
or impair Borrower's ability to diligently and in good faith contest any lien or
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▇▇▇▇ for labor or materials, provided that any lien placed upon the Property
must be fully and irrevocably discharged (by bond or otherwise) within 60 days
after the date the same is first placed upon the Property.
Section 3.13. OTHER AGREEMENTS.
(a) 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.
(b) Except with respect to or in connection with the Consolidation
Transaction, unless Lender shall have consented thereto in writing in each
instance, Borrower shall not execute any agreements, other than Leases (which
are governed by the provisions of Section 3.7 hereof), for a term that would
extend beyond the maturity date of the Loan, which agreement would be binding on
the successor lessor under Ground Lease in the event of a foreclosure or
deed-in-lieu of foreclosure of this Security Instrument, unless such agreements
are terminable without penalty upon 30 days' notice.
(c) [Intentionally deleted.]
(d) On or before the date hereof, Borrower has delivered to Lender a
true and correct copy of each Lease and each other agreement materially
affecting the Property.
Section 3.14. PROPERTY MANAGEMENT. In the event that Lender
determines that the Property is not being managed in accordance with generally
accepted management practices for properties similar to the Property, Lender
shall deliver written notice thereof to Borrower, which notice shall specify
with particularity the grounds for Lender's determination. If Lender determines
that the conditions specified in Lender's notice are not remedied to Lender's
satisfaction by Borrower within thirty (30) days from receipt of such notice or
that Borrower has failed to diligently undertake correcting such conditions
within such thirty (30) day period, Borrower shall, at Lender's direction,
terminate any existing management agreement for the Property and enter into a
property management agreement acceptable to Lender with a management company
acceptable to Lender.
Section 3.15 GROUND LEASE.
(a) Borrower will comply in all material respects with the terms and
conditions of the Ground Lease. Borrower will not do or permit anything to be
done, the doing of which, or refrain from doing anything, the omission of which,
will impair or tend to impair the interest of the tenant under the Ground Lease
or will be grounds for declaring a forfeiture of the Ground Lease.
(b) Borrower shall enforce the Ground Lease and will not terminate,
modify, cancel, change, supplement, alter or amend the Ground Lease, or waive,
excuse, condone or in any way release or discharge Ground Lessor (hereinafter
defined) of or from any of the material covenants and conditions to be performed
or observed by Ground Lessor. Borrower does hereby bargain, sell, assign and set
over to Lender, all of Borrower's interests in the Ground Lease. The assignment
of Borrower's interest set forth in this Section 3.15(b) is an absolute,
unconditional and present assignment from Borrower to Lender and not an
assignment for security and the existence or exercise of Borrower's revocable
license to take all actions with respect to the Ground Lease shall not operate
to subordinate this assignment to any subsequent assignment. The exercise by
Lender of any of its rights or remedies pursuant to this Section 3.15(b) shall
not be deemed to make Lender a Lender-in-possession. So long as no Event of
Default shall have occurred and be continuing, Borrower shall have a revocable
license to take all actions with respect to the Ground Lease subject to the
terms of this Security Instrument. Any surrender of the leasehold estate created
by the Ground Lease or termination, cancellation, modification, change,
supplement, alteration or amendment of the Ground Lease without the prior
written consent of Lender in each instance shall be void and of no force and
effect.
(c) Lender shall have the right after notice to Borrower, but not
the obligation, to perform any obligations of Borrower under the terms of the
Ground Lease during the continuance of an Event of Default. All costs and
expenses (including, without limitation, reasonable attorneys' fees and
-8-
expenses) so incurred, shall be treated as an advance secured by this Security
Instrument, shall bear interest thereon at the Default Rate from the date of
payment by Lender until paid in full and shall be paid by Borrower to Lender
during the continuance of an Event of Default within five (5) days after written
demand. No performance by Lender of any obligations of Borrower shall constitute
a waiver of any Event of Default arising by reason of Borrower's failure to
perform the same. If Lender shall make any payment or perform any act or take
action in accordance with this Section 3.15(c), Lender will notify Borrower of
the making of any such payment, the performance of any such act, or the taking
of any such action. In any such event, subject to the rights of lessees,
sublessees and other occupants under the Leases, Lender and any individual,
corporation, limited liability company, partnership, joint venture, estate,
trust, unincorporated association, any federal, state, county or municipal
government or any bureau, department or agency thereof and any fiduciary acting
in such capacity on behalf of any of the foregoing (the "PERSON") designated by
Lender shall have, and are hereby granted, the right to enter upon the Property
at any time and from time to time for the purpose of taking any such action.
(d) To the extent permitted by law, the price payable by Borrower or
any other Person in the exercise of any right of redemption following
foreclosure of the Property shall include all rents paid and other sums advanced
by Lender on behalf of Borrower, together with interest thereon at the Default
Rate.
(e) Unless Lender shall otherwise consent, the fee title to the Land
and the leasehold estate in the Ground Lease shall not merge but shall always be
kept separate and distinct, notwithstanding the union of said estates either in
Ground Lessor or in Borrower, or in any other Person, by purchase or otherwise.
(f) If the Ground Lessor shall deliver to Lender a copy of any
notice of default sent by the Ground Lessor to Borrower, as tenant under the
Ground Lease, such notice shall constitute full protection to Lender for any
action taken or omitted to be taken by Lender, in good faith in accordance with
this Security Instrument, in reliance thereon.
(g) [Intentionally deleted.]
(h) Each Lease or sublease hereafter made, or any other agreement
providing for the use and occupancy of a portion of the Property hereafter made,
as the same may be amended, renewed and each renewal of any existing Lease shall
provide that, (i) in the event of the termination of the Ground Lease, such
Lease shall not terminate or be terminable by the lessee; (ii) in the event of
any action for the foreclosure of this Security Instrument, such Lease shall not
terminate or be terminable by the lessee by reason of the termination of the
Ground Lease unless the lessee is specifically named and joined in any such
action and unless a judgment is obtained therein against the lessee; and (iii)
in the event that the Ground Lease is terminated as aforesaid and a "new lease"
is granted, the lessee under such Lease shall attorn to the Borrower or to the
purchaser at the sale of the Property upon such foreclosure, as the case may be.
(i) Borrower hereby assigns, transfers and sets over to Lender all
of Borrower's claims and rights to the payment of damages arising from any
rejection by the Ground Lessor of the Ground Lease under the Bankruptcy Code.
Borrower shall notify Lender promptly (and in any event within ten (10) days) of
any claim, suit, action or proceeding relating to the rejection of the Ground
Lease. Lender is hereby irrevocably appointed as Borrower's attorney-in-fact,
coupled with an interest, with exclusive power to file and prosecute, to the
exclusion of Borrower, any proofs of claim, complaints, motions, applications,
notices and other documents, in any case in respect of the Ground Lessor under
the Bankruptcy Code during the continuance of an Event of Default. Borrower may
make any compromise or settlement in connection with such proceedings (subject
to Lender's reasonable approval); provided, however, that Lender shall be
authorized and entitled to compromise or settle any such proceeding if such
compromise or settlement is made after the occurrence and during the continuance
of an Event of Default. Borrower shall promptly execute and deliver to Lender
any and all instruments reasonably required in connection with any such
proceeding after request therefor by Lender. Except as set forth above, Borrower
shall not adjust, compromise, settle or enter into any agreement with respect to
such proceedings without the prior written consent of Lender, which consent
shall not be unreasonably withheld or delayed.
(j) Borrower shall not, without Lender's prior written consent,
elect to treat the Ground Lease as terminated under Section 365(h)(1) of the
Bankruptcy Code. Any such election made without Lender's prior written consent
shall be void.
-9-
(k) If pursuant to Section 365(h)(2) of the Bankruptcy Code,
Borrower seeks to offset against the rent reserved in the Ground Lease the
amount of any damages caused by the non-performance by the Ground Lessor of any
of the Ground Lessor's obligations under the Ground Lease after the rejection by
the Ground Lessor of the Ground Lease under the Bankruptcy Code, Borrower shall,
prior to effecting such offset, notify Lender of its intention to do so, setting
forth the amounts proposed to be so offset and the basis therefor. If Lender has
failed to object as aforesaid within ten (10) days after notice from Borrower in
accordance with the first sentence of this Section 3.15(k), Borrower may proceed
to effect such offset in the amounts set forth in Borrower's notice. Neither
Lender's failure to object as aforesaid nor any objection or other communication
between Lender and Borrower relating to such offset shall constitute an approval
of any such offset by Lender. Borrower shall indemnify and save Lender harmless
from and against any and all claims, demands, actions, suits, proceedings,
damages, losses, costs and expenses of every nature whatsoever (including,
without limitation, reasonable attorneys' fees and disbursements) arising from
or relating to any such offset by Borrower against the rent reserved in the
Ground Lease.
(1) Borrower shall immediately, after obtaining knowledge thereof,
notify Lender of any filing by or against the Ground Lessor of a petition under
the Bankruptcy Code. Borrower shall thereafter forthwith give written notice of
such filing to Lender, setting forth any information available to Borrower as
to' the date of such filing, the court in which such petition was filed, and the
relief sought therein. Borrower shall promptly deliver to Lender following
receipt, any and all notices, summonses, pleadings, applications and other
documents received by Borrower in connection with any such petition and any
proceedings relating thereto.
(m) If there shall be filed by or against Borrower a petition under
the Bankruptcy Code, and Borrower, as the tenant under the Ground Lease, shall
determine to reject the Ground Lease pursuant to Section 365(a) of the
Bankruptcy Code, then Borrower shall give Lender not less than ten (10) days'
prior notice of the date on which Borrower shall apply to the bankruptcy court
for authority to reject the Ground Lease. Lender shall have the right, but not
the obligation, to serve upon Borrower within such 10-day period a notice
stating that (i) Lender demands that Borrower assume and assign the Ground Lease
to Lender pursuant to Section 365 of the Bankruptcy Code and (ii) Lender
covenants to cure or provide adequate assurance of prompt cure of all defaults
and provide adequate assurance of future performance under the Ground Lease. If
Lender serves upon Borrower the notice described in the preceding sentence,
Borrower shall not seek to reject the Ground Lease and shall comply with the
demand provided for in clause (i) of the preceding sentence within thirty (30)
days after the notice shall have been given, subject to the performance by
Lender of the covenant provided for in clause (ii) of the preceding sentence.
(n) Effective upon the entry of an order for relief in respect of
Borrower under the Bankruptcy Code, Borrower hereby assigns and transfers to
Lender a non-exclusive right to apply to the appropriate bankruptcy court under
Section 365(d)(4) of the Bankruptcy Code for an order extending the period
during which the Ground Lease may be rejected or assumed.
(o) Borrower will give Lender prompt (and in all events within five
(5) days) notice of any default under the Ground Lease or of the receipt by
Borrower of any notice of default from Ground Lessor. Borrower will promptly
(and in all events within five (5) days) furnish to Lender copies of all
information furnished to Ground Lessor by the terms of the Ground Lease or the
provisions of this Section 3.15. Borrower will deposit with Lender an exact copy
of any notice, communication, plan, specification or other instrument or
document received or given by Borrower in any way relating to or affecting the
Ground Lease which may concern or affect the estate of Ground Lessor or Borrower
thereunder in or under the Ground Lease or in the real estate thereby demised.
(p) Upon acquisition of the fee title or any other estate, title or
interest in the Land by Borrower, this Security Instrument shall, automatically
and without the necessity of execution of any other documents, attach to and
cover and be a lien upon such other estate so acquired, and such other estate
shall be considered as mortgaged, assigned and conveyed to Lender and the lien
hereof spread to cover such estate with the same force and effect as though
specifically herein mortgaged, assigned and conveyed. The provisions of this
subsection shall not apply if Lender acquires title to the Land and/or the
Ground Lessor's interest in the Improvements unless Lender shall so elect.
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ARTICLE 4.
SPECIAL COVENANTS
-----------------
Borrower covenants and agrees that:
Section 4.1. PROPERTY USE. The Property shall be used only for its
current use or for racing, gaming, entertainment, retail, hotel, restaurants,
any other use related to so-called "tourism" and other ancillary and related
activities thereto only, 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. RESTORATION AFTER CASUALTY/CONDEMNATION. In the event
of a casualty or a taking by eminent domain, the following provisions shall
apply in connection with the Restoration of the Property:
(a) If the Net Proceeds (defined below) shall be less than or equal
to $500,000 (the "THRESHOLD AMOUNT"), the Net Proceeds will be disbursed by
Lender to Borrower upon receipt, provided that no Event of Default or Unmatured
Default shall have occurred.
(b) If the Net Proceeds are greater than the Threshold Amount, the
Net Proceeds shall, at Lender's election and in Lender's sole discretion, be
applied by Lender toward the payment of the Debt (whether or not then due and
payable) or made available to Borrower on such terms and conditions as Lender
deems appropriate. The term "NET PROCEEDS" for purposes of this Section 4.2
shall mean: (I) the net amount of all insurance proceeds received by Lender
pursuant to Subsections 3.3(a) and 3.3(b)(i), (iv) and (vi) of this Security
Instrument as a result of such damage or destruction, after deduction of its
reasonable out-of-pocket costs and expenses (including, but not limited to,
reasonable counsel fees), if any, in collecting the same 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 out-of-pocket costs and expenses (including, but not limited to,
reasonable counsel fees), if any, in collecting the same, whichever the case may
be.
(c) If an Event of Default shall have occurred and be continuing,
all Net Proceeds (whether less than equal to or greater than the Threshold
Amount) 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. If Lender shall receive and retain
any 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
------------------------------
Supplementing the provisions of Article 5 of the Loan Agreement,
Borrower represents and warrants to Lender that:
Section 5.1. WARRANTY OF TITLE. Borrower has the right to mortgage,
grant, bargain, sell, pledge, assign, warrant, transfer and convey the same and
that Borrower possesses a leasehold estate in the Land and the Improvements and
such interest is held free and clear of all liens, encumbrances and charges
whatsoever except Permitted Liens. 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. [Intentionally deleted.]
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Section 5.3. [Intentionally deleted.]
Section 5.4. [Intentionally deleted.]
Section 5.5. [Intentionally deleted.]
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 National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, or any successor law, or, if located within
any such area, Borrower has obtained and will maintain the insurance prescribed
in Section 3.3 hereof.
(b) [Intentionally deleted].
(c) The Property and the present use and occupancy thereof are in
compliance in all material respects with all applicable zoning ordinances,
building codes, land use and environmental laws and other similar laws except
where the failure to be in compliance would reasonably result in a Material
Adverse Effect.
(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) [Intentionally deleted.]
(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 or will be
paid in full.
(i) [Intentionally deleted.]
(j) All liquid and solid waste disposal, septic and sewer systems
located on the Property are in a good and safe condition and repair and in
compliance with all Applicable Laws.
Section 5.7. NO FOREIGN PERSON. Borrower is not a "foreign person"
within the meaning of Sections 1445(f)(3) of the Code 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. GROUND LEASE.
(a) Borrower has delivered a true and correct copy of the Ground
Lease to Lender. The Ground Lease is unmodified and in full force and effect and
represents the entire agreement of Borrower and Catskill Development, L.L.C.
(together with its successors and assigns as lessor under the Ground Lease,
"GROUND LESSOR"), and the Ground Lease represents the entire agreement between
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Ground Lessor and Borrower. Borrower is authorized to assign its interest in any
condemnation award which Borrower is entitled to receive pursuant to the Ground
Lease.
(b) Borrower has the right to encumber the Ground Lease and the
leasehold estate created thereby without the consent of the Ground Lessor.
(c) The Ground Lease requires the Ground Lessor to give copies of
all notices of default which are given under the Ground Lease to Borrower
contemporaneously to Lender.
(e) The Ground Lease cannot be cancelled solely by Ground Lessor and
requires Lender's consent for all modifications.
(f) All rents (including additional rents and other charges)
reserved for in the Ground Lease and payable prior to the date hereof have been
paid.
(g) To the best of Borrower's knowledge, no party to the Ground
Lease is in default of any obligation such party has thereunder and no event has
occurred which, with the giving of notice or the lapse of time, or both, would
constitute such a default.
(h) No notice or other written or oral communication has been
provided to any party under the Ground Lease which alleges that, as of the date
hereof, either a default exists or with the passage of time will exist under the
provisions of such Ground Lease.
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; (c)
the terms of all alterations, modifications and amendments to the Leases are
reflected in the certified occupancy statement delivered to and approved by
Lender; (d) none of the Rents reserved in the Leases have been assigned or
otherwise pledged or hypothecated; (e) none of the Rents have been collected for
more than one (1) month in advance; (f) the 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; and (g) to the best of Borrower's
knowledge, there exist no offsets or defenses to the payment of any portion of
the Rents.
Section 5.11. [Intentionally deleted.]
Section 5.12. BUSINESS PURPOSES. The loan evidenced by the Note is
solely for the business purpose of Borrower, and is not for personal, family,
household, or agricultural purposes.
Section 5.13. [Intentionally deleted.]
Section 5.14. MAILING ADDRESSES. 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
submitted to Lender in connection with any request by Borrower for the loan
evidenced by the Note and/or any letter of application, preliminary commitment
letter, final commitment letter or other application or letter of intent
(including, but not limited to, all financial statements, rent rolls, reports
and certificates) 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. [Intentionally deleted.]
ARTICLE 6.
OBLIGATIONS AND RELIANCES
-------------------------
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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 Loan
Documents shall be construed so as to deem the relationship between Borrower and
Lender to be other than that of debtor and creditor.
Section 6.2. NO RELIANCE ON LENDER. The general partners,
shareholders, members, principals or other beneficial owners of Borrower are
experienced in the ownership and operation of properties similar to the
Property, and Borrower and Lender are relying solely upon such expertise and
business plan in connection with the ownership and operation of the Property.
Borrower is not relying on Lender's expertise, business acumen or advice in
connection with the Property.
Section 6.3. NO LENDER OBLIGATIONS.
(a) Notwithstanding any of the provisions of this Security
Instrument (including, but not limited to, the provisions of Subsections 1.1(f)
and (1), Section 1.2 or Section 3.7), 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 Loan Documents, including without limitation,
any officer's certificate, balance sheet, statement of profit and loss or other
financial statement, survey, appraisal, or insurance policy, Lender shall not be
deemed to have warranted, consented to, or affirmed the sufficiency, 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 Loan Documents,
Lender is expressly and primarily relying on the truth and accuracy of the
warranties and representations set forth in Article 5 without any obligation to
investigate the Property and notwithstanding any investigation of the Property
by Lender; that such reliance existed on the part of Lender prior to the date
hereof; that the warranties and representations are a material inducement to
Lender in accepting the Note, this Security Instrument and the other Loan
Documents; and that Lender would not be willing to make the loan evidenced by
the Note, this Security Instrument and the other Loan Documents 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 Loan 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
Loan Documents, any note or mortgage supplemental hereto, any security
instrument with respect to the Property and any instrument of further assurance,
and any modification or amendment of the foregoing documents, and all federal,
state, county and municipal taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution and delivery of this Security
Instrument, any mortgage supplemental hereto, any security instrument with
respect to the Property or any instrument of further assurance, and any
modification or amendment of the foregoing documents, except to extent
prohibited by law so to do.
Section 7.2. [Intentionally deleted.].
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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 all ground rents,
maintenance charges and similar charges, now or hereafter levied or assessed or
imposed against the Property or the 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 Loan
Documents or impose any other tax or charge on the same, Borrower will pay for
the same, with interest and penalties thereon, if any.
Section 7.4. ESTOPPEL CERTIFICATES.
(a) After request by Lender, Borrower, within ten (10) days, shall
furnish Lender or any proposed assignee with a statement, duly acknowledged and
certified, setting forth (i) the amount of the original principal amount of the
Note, (ii) the unpaid principal amount of the Note, (iii) the rate of interest
of the Note, (iv) the terms of payment and maturity date of the Note, (v) the
date installments of interest and/or principal were last paid, (vi) that, except
as provided in such statement, there are no defaults or events which with the
passage of time or the giving of notice or both, would constitute an event of
default under the Note or the Security Instrument, (vii) that the Note and this
Security Instrument are valid, legal and binding obligations and have not been
modified or if modified, giving particulars of such modification, (viii) whether
any offsets or defenses exist against the obligations secured hereby and, if any
are alleged to exist, a detailed description thereof, (ix) that all Leases are
in full force and effect and (provided the Property is not a residential
multifamily property) have not been modified (or if modified, setting forth all
modifications), (x) the date to which the Rents thereunder have been paid
pursuant to the Leases, (xi) whether or not, to the best knowledge of Borrower,
any of the lessees under the Leases are in default under the Leases, and, if any
of the lessees are in default, setting forth the specific nature of all such
defaults, (xii) the amount of security deposits held by Borrower under each
Lease and that such amounts are consistent with the amounts required under each
Lease, and (xiii) as to any other matters reasonably requested by Lender and
reasonably related to the Leases, the obligations secured hereby, the Property
or this Security Instrument.
(b) Borrower shall use diligent efforts to deliver to Lender,
promptly upon request (provided such request is reasonable and not made more
than twice in any calendar year), duly executed estoppel certificates from any
one or more lessees as required by Lender attesting to such facts regarding the
Lease as Lender may require, including but not limited to attestations that each
Lease covered thereby is in full force and effect with no defaults thereunder on
the part of any party, that none of the Rents have been paid more than one month
in advance, and that the lessee claims no defense or offset against the full and
timely performance of its obligations under the Lease.
(c) Lender, by its acceptance of this Security Instrument, agrees to
deliver to Borrower promptly upon Borrower's request therefor (provided such
request is not made more than twice in any calendar year) a written statement
setting forth the unpaid principal amount of the Note, the accrued and unpaid
interest thereon and the date on which an installment of interest and/or
principal were last paid thereunder.
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ARTICLE 8.
SALE/ENCUMBRANCE
----------------
Section 8.1. [Intentionally deleted.].
Section 8.2. NO SALE/ENCUMBRANCE. Except as expressly permitted in
the Loan Agreement, or herein, 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. [Intentionally deleted.]
ARTICLE 9.
PREPAYMENT
----------
Section 9.1. PREPAYMENT BEFORE EVENT OF DEFAULT. The Debt may be
prepaid in accordance with the terms and conditions, and upon payment of the
amounts specified, in the Loan Agreement.
ARTICLE 10.
DEFAULT
-------
Section 10.1. EVENTS OF DEFAULT. An "Event of Default" under the
Loan Agreement shall constitute an "EVENT OF DEFAULT" hereunder.
ARTICLE 11.
RIGHTS AND REMEDIES
-------------------
Section 11.1. REMEDIES. Except to the extent prohibited by
applicable law, upon the occurrence and during the continuance 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
judicial proceedings 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) [intentionally
deleted]; (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 Loan Documents; (f) recover judgment on the Note either
before, during or after any proceedings for the enforcement of this Security
Instrument or the Other Loan 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 or of any person, firm or other entity liable for
the payment of the Debt; (h) subject to any applicable law, the license granted
to Borrower under Section 1.2 shall automatically be revoked and Lender may
enter into or upon the Property, either personally or by its agents, nominees or
attorneys and dispossess Borrower and its agents and servants therefrom, without
liability for trespass, damages or otherwise and exclude Borrower and its agents
or servants wholly therefrom, and take possession of all books, records and
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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 twenty (20) days prior to such action, shall
constitute commercially reasonable notice to Borrower; (j) surrender the
Policies maintained pursuant to Article 3 hereof, collect the unearned Insurance
Premiums and apply such sums as a credit on the Debt in such priority and
proportion as Lender in its discretion shall deem proper, and in connection
therewith, Borrower hereby appoints Lender as agent and attorney-in-fact (which
is coupled with an interest and is therefore irrevocable) for Borrower to
collect such Insurance Premiums; (k) pursue such other remedies as Lender may
have under applicable law; (1) 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. or (m) [intentionally deleted].
Except to the extent prohibited by applicable law, in the event of a
sale, by foreclosure, or otherwise, of less than all of the Property, this
Security Instrument shall continue as a lien and security interest on the
remaining portion of the Property unimpaired and without loss of priority. In
the event of a sale, by foreclosure, or otherwise, Lender may bid for and
acquire the Property and, in lieu of paying cash therefor, may make settlement
for the purchase price by crediting against the Obligations the amount of the
bid made therefor, after deducting therefrom the expenses of the sale, the cost
of any enforcement proceeding hereunder and any other sums which Lender is
authorized to deduct under the terms hereof, to the extent necessary to satisfy
such bid.
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 Loan 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.
Upon any foreclosure sale or sales of all or any portion of the Property under
judicial order, Lender may bid for and purchase the Property and shall be
entitled to apply all or any part of the Debt as a credit to the purchase price.
Section 11.3. RIGHT TO CURE DEFAULTS. Upon the occurrence of any
Event of Default or if Borrower fails to make any payment or to do any act as
herein provided, Lender may, but without any obligation to do so and without
notice to or demand on Borrower and without releasing Borrower from any
obligation hereunder, make or do the same in such manner and to such extent as
Lender may deem necessary to protect the security hereof. Lender is authorized
to enter upon the Property for such purposes, or appear in, defend, or bring any
action or proceeding to protect its interest in the Property or to foreclose
this Security Instrument or collect the Debt, and the cost and expense thereof
(including reasonable attorneys' fees to the extent permitted by law), with
interest as provided in this Section 11.3, shall constitute a portion of the
Debt and shall be due and payable to Lender upon demand. All such costs and
expenses incurred by Lender in remedying such Event of Default or such failed
payment or act or in appearing in, defending, or bringing any such action or
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proceeding shall bear interest at the default rate specified in Section 2.3(c)
of the Loan Agreement (the "DEFAULT RATE"), for the period incurring such cost
or expense 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 Loan Documents and shall be immediately due
and payable upon demand by Lender therefor.
Section 11.4. ACTIONS AND PROCEEDINGS. After the occurrence and
during the continuance of an Event of Default, 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, upon reasonable notice to
Borrower and during reasonable business hours, to examine the records, books,
management and other papers of Borrower and its affiliates which reflect upon
their financial condition, at the Property or at any office regularly maintained
by Borrower or its affiliates or where the books and records are located. Lender
and its agents shall have the right to make copies and extracts from the
foregoing records and other papers. In addition, Lender, its agents, accountants
and attorneys shall have the right to examine and audit the books and records of
Borrower and its affiliates pertaining to the income, expenses and operation of
the Property, upon reasonable notice to Borrower and during reasonable business
hours, at any office of Borrower and its affiliates where the books and records
are located.
Section 11.7. OTHER RIGHTS, ETC. (a) To the extent permitted by law,
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 to take any action to
foreclose this Security Instrument or otherwise enforce any of the provisions
hereof or of the Note or the other Loan 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 Loan
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
relief, if any such possession is requested or obtained, with respect to any
Property or collateral not in Lender's possession.
(c) Except to the extent prohibited by applicable law, 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. Except to the extent prohibited by applicable law, 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. Except to the
extent ▇▇▇▇▇▇▇▇▇▇.▇▇ applicable law, 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
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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. [Intentionally deleted.]
Section 11.10. RIGHT OF ENTRY. Lender and its agents shall have the
right to enter and inspect the Property at all reasonable times, and upon prior
written notice to Borrower. Provided there is no Event of Default, Lender will
use reasonable efforts to minimize interference with occupants at the Property.
ARTICLE 12.
ENVIRONMENTAL HAZARDS
---------------------
Section 12.1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Borrower
represents and warrants that, to Borrower's knowledge, without inquiry: (a)
there are no hazardous materials or hazardous substances ("HAZARDOUS
SUBSTANCES") or underground storage tanks in, on, or under the Property, except
those that are both (i) in compliance with environmental laws 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) [Intentionally deleted]; (c) [Intentionally
deleted]; (d) [Intentionally deleted]; and (e) 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. "Hazardous Substances"
shall not include cleaning materials customarily used at properties similar to
the Property, to the extent such materials are used, stored and disposed of in
accordance with Environmental Laws.
Section 12.2. ENVIRONMENTAL COVENANTS. Borrower covenants and agrees
that so long as the Security Instrument encumbers the Property: (a)
[Intentionally deleted]; (b) there shall be no releases of Hazardous Substances
by Borrower, its agents or employees in, on, under or from the Property; (c)
[Intentionally deleted]; (d) the Property shall be kept 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; (e)
Borrower shall, at its sole cost and expense, have an environmental consultant
reasonably satisfactory to Lender perform an environmental site assessment or
other investigation of environmental conditions in connection with the Property,
pursuant to any written request of Lender (including but not limited to
sampling, testing and analysis of soil, water, air, building materials and other
materials and substances whetherr solid, liquid or gas), and share with Lender
the reports and other results thereof, and Lender and other Indemnified Parties
(as defined herein) shall be entitled to rely on such reports and other results
thereof; (f) Borrower shall, at its sole cost and expense, comply with all
reasonable written requests of Lender to (i) comply with any Environmental Law;
and (ii) take any other reasonable action necessary or appropriate for
protection of human health or the environment; (g) 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 (h) Borrower shall immediately notify Lender in writing of (A) any
presence or releases or threatened releases of Hazardous Substances in, on,
under, from or migrating towards the Property; (B) any non-compliance with any
environmental laws related in any way to the Property; (C) any actual or
potential environmental lien; (D) any required or proposed remediation of
environmental conditions relating to the Property; and (E) any written or oral
notice or other communication which Borrower becomes aware from any source
whatsoever (including but not limited to a governmental entity) relating in any
way to Hazardous Substances or remediation thereof, possible liability of any
person or entity pursuant to any Environmental Law, other environmental
conditions in connection with the Property, or any actual or potential
administrative or judicial proceedings in connection with anything referred to
in this Article 12. Any failure of Borrower to perform its obligations pursuant
to this Section 12.2 shall constitute bad faith waste with respect to the
Property.
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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. The costs and expenses of such
assessments shall be borne by Lender except in instances where such report or
assessment is performed due to Borrower's failure to comply with its obligations
under Section 12.2(e) or following an Event of Default, in which cases the costs
and expenses of such assessments shall be paid for by Borrower.
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, diminutions in value,
fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in
settlement, punitive damages, foreseeable and unforeseeable consequential
damages, of whatever kind or nature (including but not limited to attorneys'
fees and other costs of defense) (the "LOSSES") imposed upon or incurred by or
asserted against any Indemnified Parties and directly or indirectly arising out
of or in any way relating to any one or more of the following, except to the
extent any of the following are attributable to the gross negligence or willful
misconduct of an Indemnified Party: (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 Loan 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 Loan Documents, whether or not suit is filed in
connection with same, or in connection with Borrower and/or any 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 ▇▇▇ 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) performance of any labor or services or the furnishing of any
materials or other property in respect of the Property or any part thereof; (g)
any failure of the Property to be in compliance with any Applicable Laws; (h)
the enforcement by any Indemnified Party of the provisions of this Article 13;
(i) 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; (j) 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 (k) any misrepresentation made
by Borrower in this Security Instrument or any other Loan Document. Any amounts
payable to Lender by reason of the application of this Section 13.1 shall become
immediately due and payable and shall bear interest at the Default Rate from the
date loss or damage is sustained by Lender until paid. For purposes of this
Article 13, the term "Indemnified Parties" means Lender and any directors,
officers, shareholders, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of Lender or any and all of the foregoing
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 Loan Document, except
for net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on an Indemnified Party as a result of a present or former connection
between the jurisdiction of the government or taxing authority imposing such tax
and the Indemnified Party (excluding a connection arising solely from the
Indemnified Party having executed, delivered, or performed its obligations or
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received a payment under, or enforced, this Security Instrument, the Note and
the other Loan Documents) or any political subdivision or taxing authority
thereof or therein.
Section 13.3. 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 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 (except to the extent the same relate solely to Hazardous Substances
first introduced to the Property by anyone other than Borrower, its agents or
employees following the foreclosure of this Security Instrument (or the delivery
and acceptance of a deed in lieu of such foreclosure), the expiration of any
right of redemption with respect thereto and the obtaining by the purchaser at
such foreclosure sale or grantee under such deed of possession of the Property):
(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, 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
past, present or threatened non-compliance with any environmental laws in
connection with the Property; (e) the imposition, recording or filing or the
threatened imposition, recording or filing of any environmental lien encumbering
the Property; (f) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter relating to Environmental Laws;
and (g) any misrepresentation or inaccuracy in any representation or warranty or
material breach or failure to perform any covenants or other obligations
pursuant to Article 12.
Section 13.4. DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND
EXPENSES. Upon written request by any Indemnified Party, Borrower shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may,
in their sole and absolute discretion, engage their own attorneys and other
professionals to defend or assist them, and, at the option of Indemnified
Parties, their attorneys shall control the resolution of 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 Loan Documents, or the Obligations.
Section 14.2. MARSHALLING AND OTHER MATTERS. For itself 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, 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
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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. 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 14.5. SURVIVAL. The indemnifications made pursuant to
Section 13.3 and the representations and warranties, covenants, and other
obligations arising under Article 12, shall continue indefinitely in full force
and effect and shall survive and shall in no way be impaired by: any
satisfaction or other termination of this Security Instrument, any assignment or
other transfer of all or any portion of this Security Instrument or Lender's
interest in the Property (but, in such case, shall benefit both Indemnified
Parties and any assignee or transferee), any exercise of Lender's rights and
remedies pursuant hereto including but not limited to foreclosure or acceptance
of a deed in lieu of foreclosure, any exercise of any rights and remedies
pursuant to the Note or any of the other Loan Documents, any transfer of all or
any portion of the Property (whether by Borrower or by Lender following
foreclosure or acceptance of a deed in lieu of foreclosure or at any other
time), any amendment to this Security Instrument, the Note or the, other Loan
Documents, and any act or omission that might otherwise be construed as a
release or discharge of Borrower from the obligations pursuant hereto.
Section 14.6. [Intentionally deleted.]
ARTICLE 15.
[Intentionally deleted.]
ARTICLE 16.
NOTICES
-------
Section 16.1. NOTICES. All notices or other written communications
hereunder shall be deemed to have been properly if given in accordance with
Section 9.8 of the Loan Agreement and the Guaranty.
ARTICLE 17.
[Intentionally deleted.]
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.
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, the Loan
Agreement 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
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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.
ARTICLE 19.
[Intentionally deleted.]
ARTICLE 20.
COSTS
-----
Section 20.1. PERFORMANCE AT BORROWER'S EXPENSE. Supplementing
Section 9.6 of the Loan Agreement, 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 its loans, (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 required by law,
regulation, any governmental or quasi-governmental authority or, following an
Event of Default, Lender. Borrower hereby acknowledges and agrees to pay,
immediately, upon demand, all such fees (as the same may be increased or
decreased from time to time), and any additional fees of a similar type or
nature which may be imposed by Lender from time to time, upon the occurrence of
any Event or otherwise. Wherever it is provided for herein that Borrower pay any
costs and expenses, such costs and expenses shall include, but not be limited
to, all reasonable legal fees and disbursements of Lender, whether retained
firms, the reimbursement for the expenses of in-house staff or otherwise.
Section 20.2. [Intentionally deleted.]
ARTICLE 21
MISCELLANEOUS.
--------------
Section 21.1. 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 21.2. LIABILITY; SUCCESSORS AND ASSIGNS. 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.
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Section 21.3. INAPPLICABLE PROVISIONS. To the extent permitted by
law, 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 21.4. HEADINGS, ETC. The headings and captions of various
Sections of this Security Instrument are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or intent
of the provisions hereof.
Section 21.5. 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 21.6. 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 21.7. 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 Loan
Documents and the performance and discharge of the Other Obligations.
Section 21.8. SATISFACTION OR ASSIGNMENT. When Lender has been paid
all amounts due under the Note and all amounts then outstanding under the Loan
Agreement, this Security Instrument and the other Loan Documents, Lender will,
at the Borrower's written request, discharge this Security Instrument by
delivering a certificate stating that this Security Instrument has been
satisfied. In lieu of such a discharge, Lender will, if Borrower shall so
request, assign the Note and this Security Instrument to a new lender financing
the Property. Any such assignment shall be without recourse, representation or
warranty. Borrower shall pay all out-of-pocket costs and expenses incurred by
Lender, including, without limitation, reasonable attorneys' fees, in connection
with any such assignment. No such discharge or assignment shall relieve Borrower
of obligations that expressly survive under the terms of this Security
Instrument, the Loan Agreement or any other Loan Document.
ARTICLE 22.
NEW YORK PROVISIONS
-------------------
Section 22.1. TRUST FUND. Pursuant to Section 13 of the New York
Lien Law, Borrower shall receive the advances secured hereby and shall hold the
right to receive the advances as a trust fund to be applied first for the
purpose of paying the cost of any improvement and shall apply the advances first
to the payment of the cost of any such improvement on the Property before using
any part of the total of the same for any other purpose.
Section 22.2. COMMERCIAL PROPERTY. Borrower represents that this
Security Instrument does not encumber real property principally improved or to
be improved by one or more structures containing in the aggregate not more than
six residential dwelling units, each having its own separate cooking facilities.
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Section 22.3. INSURANCE. The provisions of subsection 4 of Section
254 of the New York Real Property Law covering the insurance of buildings
against loss by fire shall not apply to this Security Instrument. In the event
of any conflict, inconsistency or ambiguity between the provisions of Section
3.3 hereof and the provisions of subsection 4 of Section 254 of the New York
Real Property Law covering the insurance of buildings against loss by fire, the
provisions of Section 3.3 shall control.
Section 22.4. LEASES. Lender shall have all of the rights against
lessees of the Property set forth in Section 291-f of the Real Property Law of
New York.
Section 22.5. STATUTORY CONSTRUCTION. The clauses and covenants
contained in this Security Instrument that are construed by Section 254 of the
New York Real Property Law shall be construed as provided in those sections
(except as provided in Section 22.3). The additional clauses and covenants
contained in this Security Instrument shall afford rights supplemental to and
not exclusive of the rights conferred by the clauses and covenants construed by
Section 254 and shall not impair, modify, alter or defeat such rights (except as
provided in Section 22.3), notwithstanding that such additional clauses and
covenants may relate to the same subject matter or provide for different or
additional rights in the same or similar contingencies as the clauses and
covenants construed by Section 254. The rights of Lender arising under the
clauses and covenants contained in this Security Instrument shall be separate,
distinct and cumulative and none of them shall be in 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, anything herein or
otherwise to the contrary notwithstanding. In the event of any inconsistencies
between the provisions of Section 254 and the provisions of this Security
Instrument, the provisions of this Security Instrument shall prevail.
Section 22.6 [Intentionally deleted.]
Section 22.7. MAXIMUM PRINCIPAL AMOUNT SECURED. Notwithstanding
anything to the contrary contained in this Security Instrument, the maximum
amount of principal indebtedness secured by this Security Instrument or which
under any contingency may be secured by this Security Instrument is $3,500,000,
plus amounts that Lender expends after a declaration of default under this
Security Instrument to the extent that any such amounts shall constitute payment
of (i) taxes, charges or assessments that may be imposed by law upon the
Property; (ii) premiums on insurance policies covering the Property; (iii)
expenses incurred in upholding the lien of this Security Instrument, including
the expenses of any litigation to prosecute or defend the rights and lien
created by this Security Instrument; and (iv) any amount, cost or charge to
which Lender becomes subrogated, upon payment, whether under recognized
principles of law or equity, or under express statutory authority; then, and in
each such event, such amounts or costs, together with interest thereon, shall be
added to the Debt and shall be secured by this Security Instrument.
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IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by
Borrower the day and year first above written.
MONTICELLO RACEWAY MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------
Name:
Title:
STATE OF NEW YORK )
) ss:
COUNTY OF ▇▇▇▇▇▇▇▇)
On the 23rd day of October in the year 2003 before me, the
undersigned, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇ personally known to me or proved
to me on the basis of satisfactory evidence to be th dividual(s) whose name(s)
is(are) subscribed to the within instrument and acknowledged to me that he/
she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Signature amd Office of individual
taking acknowledgment