Exhibit 10.137
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MEADOWVIEW SQUARE, LLC,
a Delaware limited liability company, as mortgagor
(Borrower)
to
▇▇▇▇▇▇ BROTHERS BANK, FSB, as mortgagee
(Lender)
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OPEN-END MORTGAGE AND
SECURITY AGREEMENT IN THE MAXIMUM AMOUNT OF
$7,550,000
(exclusive of interest)
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Dated: As of February 14, ▇▇▇▇
▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇
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RECORDING REQUESTED BY AND WHEN RECORDED PLEASE RETURN TO:
Stroock & Stroock & ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
TABLE OF CONTENTS
Article 1 - GRANTS OF SECURITY
Section 1.1 Property Mortgaged...........................................................................1
Section 1.2 Assignment of Rents..........................................................................1
Section 1.3 Security Agreement...........................................................................1
Section 1.4 FIXTURE FILING...............................................................................1
Section 1.5 Pledges of Monies Held.......................................................................1
Article 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1 DEBT.........................................................................................1
Section 2.2 Other Obligations............................................................................1
Section 2.3 Debt And Other Obligations...................................................................1
Article 3 - BORROWER COVENANTS
Section 3.1 Payment of Debt..............................................................................1
Section 3.2 Incorporation by Reference...................................................................1
Section 3.3 INSURANCE....................................................................................1
Section 3.4 Maintenance of Property......................................................................1
Section 3.5 WASTE........................................................................................1
Section 3.6 Payment for Labor and Materials..............................................................1
Section 3.7 Performance of Other Agreements..............................................................1
Section 3.8 Change of Name, Identity or Structure........................................................1
Article 4 - OBLIGATIONS AND RELIANCES
Section 4.1 Relationship of Borrower and Lender..........................................................1
Section 4.2 No Reliance on Lender........................................................................1
Section 4.3 No Lender Obligations........................................................................1
Section 4.4 RELIANCE.....................................................................................1
Article 5 - FURTHER ASSURANCES
Section 5.1 Recording of Security Instrument, etc........................................................1
Section 5.2 Further Acts, etc............................................................................1
Section 5.3 Changes in Tax, Debt, Credit and Documentary Stamp Laws......................................1
Section 5.4 Splitting of Mortgage........................................................................1
Section 5.5 Replacement Documents........................................................................1
Article 6 - DUE ON SALE/ENCUMBRANCE
Section 6.1 Lender Reliance..............................................................................1
Section 6.2 No Sale/Encumbrance..........................................................................1
Section 6.3 Sale/Encumbrance Defined.....................................................................1
Section 6.4 Lender's Rights..............................................................................1
Article 7 - RIGHTS AND REMEDIES UPON DEFAULT
Section 7.1 REMEDIES.....................................................................................1
Section 7.2 Application of Proceeds......................................................................1
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Section 7.3 Right to Cure Defaults.......................................................................1
Section 7.4 Actions and Proceedings......................................................................1
Section 7.5 Recovery of Sums Required To be Paid.........................................................1
Section 7.6 Examination of Books and Records.............................................................1
Section 7.7 Other Rights, Etc............................................................................1
Section 7.8 Right to Release Any Portion of the Property.................................................1
Section 7.9 Violation of Laws............................................................................1
Section 7.10 Recourse and Choice of Remedies..............................................................1
Section 7.11 RIGHT OF ENTRY...............................................................................1
Article 8 - ENVIRONMENTAL HAZARDS
Section 8.1 Environmental Representations and Warranties.................................................1
Section 8.2 Environmental Covenants......................................................................1
Section 8.3 Lender's Rights..............................................................................1
Article 9 - INDEMNIFICATION
Section 9.1 General Indemnification......................................................................1
Section 9.2 Mortgage and/or Intangible Tax...............................................................1
Section 9.3 ERISA Indemnification........................................................................1
Section 9.4 Environmental Indemnification................................................................1
Section 9.5 Duty to Defend; Attorneys' Fees and Other Fees and Expenses..................................1
Article 10 - WAIVERS
Section 10.1 Waiver of Counterclaim.......................................................................1
Section 10.2 Marshalling and Other Matters................................................................1
Section 10.3 Waiver of Notice.............................................................................1
Section 10.4 Waiver of Statute of Limitations.............................................................1
Section 10.5 SURVIVAL.....................................................................................1
Article 11 - EXCULPATION
Article 12 - NOTICES
Article 13 - APPLICABLE LAW
Section 13.1 GOVERNING LAW................................................................................1
Section 13.2 USURY LAWS...................................................................................1
Section 13.3 Provisions Subject to Applicable Law.........................................................1
Article 14 - DEFINITIONS
Article 15 - MISCELLANEOUS PROVISIONS
Section 15.1 NO ORAL CHANGE...............................................................................1
Section 15.2 Successors and Assigns.......................................................................1
Section 15.3 Inapplicable Provisions......................................................................1
Section 15.4 HEADINGS, ETC................................................................................1
Section 15.5 Number and Gender............................................................................1
Section 15.6 SUBROGATION..................................................................................1
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Section 15.7 Entire Agreement.............................................................................1
Section 15.8 Limitation on Lender's Responsibility........................................................1
Article 16 - INTENTIONALLY DELETED
Article 17 - STATE-SPECIFIC PROVISIONS
Section 17.1 Principals Of Construction...................................................................1
Section 17.2 Open-End Mortgage Maximum Principal Amount...................................................1
Section 17.3 OHIO REMEDIES................................................................................1
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OPEN-END MORTGAGE AND SECURITY AGREEMENT
THIS OPEN-END MORTGAGE AND SECURITY AGREEMENT IN THE MAXIMUM
AMOUNT OF $7,550,000 (this "SECURITY INSTRUMENT") is made as of this 14 day of
February, 2001, by MEADOWVIEW SQUARE, LLC, a Delaware limited liability company,
having its principal place of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, as grantor ("BORROWER") to ▇▇▇▇▇▇ BROTHERS BANK, FSB, a federal stock
savings bank, having an address at Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, as beneficiary ("LENDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Security Instrument is given to secure a loan
(the "LOAN") in the principal sum of SEVEN MILLION five HUNDRED FIFTY THOUSAND
AND 00/100 DOLLARS ($7,550,000) or so much thereof as may be advanced pursuant
to that certain Loan Agreement dated as of the date hereof between Borrower and
Lender (as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time, the "LOAN AGREEMENT") and evidenced by
that certain Promissory Note dated the date hereof made by Borrower to Lender
(such Note, together with all extensions, renewals, replacements, restatements
or modifications thereof being hereinafter referred to as the "NOTE"); and
WHEREAS, the maturity date of the Note is March 11, 2011; and
WHEREAS, Borrower desires to secure the payment of the Debt
(as defined in the Loan Agreement) and the performance of all of its obligations
under the Note, the Loan Agreement and the other Loan Documents; and
WHEREAS, this Security Instrument is given pursuant to the
Loan Agreement, and payment, fulfillment, and performance by Borrower of its
obligations thereunder and under the other Loan Documents are secured hereby,
and each and every term and provision of the Loan Agreement and the Note,
including the rights, remedies, obligations, covenants, conditions,
agreements, indemnities, representations and warranties of the parties
therein, are hereby incorporated by reference herein as though set forth in
full and shall be considered a part of this Security Instrument (the Loan
Agreement, the Note, this Security Instrument, that certain Assignment of
Leases and Rents of even date herewith made by Borrower in favor of Lender
(the "ASSIGNMENT OF LEASES") and all other documents evidencing or securing
the Debt are hereinafter referred to collectively as the "LOAN DOCUMENTS").
NOW THEREFORE, in consideration of the making of the Loan by
Lender and the covenants, agreements, representations and warranties set forth
in this Security Instrument:
Article 1 - GRANTS OF SECURITY
Section 1.1 PROPERTY MORTGAGED. Borrower does hereby
irrevocably mortgage, grant, bargain, sell, pledge, assign, warrant, transfer
and convey to Lender, the following property, rights, interests and estates now
owned, or hereafter acquired by Borrower (collectively, the "PROPERTY"):
(a) LAND. The real property described in EXHIBIT A
attached hereto and made a part hereof (the "LAND");
(b) ADDITIONAL LAND. All ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
and development rights hereafter acquired by Borrower for use
in connection with the Land and the development of the Land
and all additional lands and estates therein which may, from
time to time, by supplemental mortgage or otherwise be
expressly made subject to the lien of this Security
Instrument;
(c) IMPROVEMENTS. The buildings, structures,
fixtures, additions, enlargements, extensions, modifications,
repairs, replacements and improvements now or hereafter
erected or located on the Land (collectively, the
"IMPROVEMENTS");
(d) EASEMENTS. All easements, rights-of-way or use,
rights, strips and gores of land, streets, ways, alleys,
passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, and all estates,
rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature
whatsoever, in any way now or hereafter belonging, 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) EQUIPMENT. All "equipment," as such term is
defined in Article 9 of the Uniform Commercial Code, now owned
or hereafter acquired by Borrower, which is used at or in
connection with the Improvements or the Land or is located
thereon or therein (including, but not limited to, all
machinery, equipment, furnishings, and electronic
data-processing and other office equipment now owned or
hereafter acquired by Borrower and any and all additions,
substitutions and replacements of any of the foregoing),
together with all attachments, components, parts, equipment
and accessories installed thereon or affixed thereto
(collectively, the "EQUIPMENT"). Notwithstanding the
foregoing, Equipment shall not include any property belonging
to tenants under leases except to the extent that Borrower
shall have any right or interest therein;
(f) FIXTURES. All Equipment now owned, or the
ownership of which is hereafter acquired, by Borrower which is
so related to the Land and Improvements forming part of the
Property that it is deemed fixtures or real property under the
law of the particular state in which the Equipment is located,
including, without limitation, all building or construction
materials intended for construction, reconstruction,
alteration or repair of or installation on the Property,
construction equipment, appliances, machinery, plant
equipment, fittings,
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apparatuses, fixtures and other items now or hereafter
attached to, installed in or used in connection with
(temporarily or permanently) any of the Improvements or the
Land, including, but not limited to, engines, devices for the
operation of pumps, pipes, plumbing, cleaning, call and
sprinkler systems, fire extinguishing apparatuses and
equipment, heating, ventilating, plumbing, laundry,
incinerating, electrical, air conditioning and air cooling
equipment and systems, gas and electric machinery,
appurtenances and equipment, pollution control equipment,
security systems, disposals, dishwashers, refrigerators and
ranges, recreational equipment and facilities of all kinds,
and water, gas, electrical, storm and sanitary sewer
facilities, utility lines and equipment (whether owned
individually or jointly with others, and, if owned jointly, to
the extent of Borrower's interest therein) and all other
utilities whether or not situated in easements, all water
tanks, water supply, water power sites, fuel stations, fuel
tanks, fuel supply, and all other structures, together with
all accessions, appurtenances, additions, replacements,
betterments and substitutions for any of the foregoing and the
proceeds thereof (collectively, the "FIXTURES").
Notwithstanding the foregoing, "Fixtures" shall not include
any property which tenants are entitled to remove pursuant to
leases except to the extent that Borrower shall have any right
or interest therein;
(g) PERSONAL PROPERTY. All furniture, furnishings,
objects of art, machinery, goods, tools, supplies, appliances,
general intangibles, contract rights, accounts, accounts
receivable, franchises, licenses, certificates and permits,
and all other personal property of any kind or character
whatsoever (as defined in and subject to the provisions of the
Uniform Commercial Code as hereinafter defined), other than
Fixtures, which are now or hereafter owned by Borrower and
which are located within or about the Land and the
Improvements, together with all accessories, replacements and
substitutions thereto or therefor and the proceeds thereof
(collectively, the "PERSONAL PROPERTY"), and the right, title
and interest of Borrower in and to any of the Personal
Property which may be subject to any security interests, as
defined in the Uniform Commercial Code, as adopted and enacted
by the state or states where any of the Property is located
(the "UNIFORM COMMERCIAL CODE"), superior in lien to the lien
of this Security Instrument and all proceeds and products of
the above;
(h) LEASES AND RENTS. All leases and other agreements
affecting the use, enjoyment or occupancy of the Land and the
Improvements heretofore or hereafter entered into, whether
before or after the filing by or against Borrower of any
petition for relief under 11 U.S.C. section 101 et seq., as
the same may be amended from time to time (the "BANKRUPTCY
CODE") (collectively, the "LEASES") and all right, title and
interest of Borrower, its successors and assigns therein and
thereunder, including, without limitation, cash or securities
deposited thereunder to secure the performance by the lessees
of their obligations thereunder and all rents, additional
rents, revenues, issues and profits (including all oil and gas
or other mineral royalties and bonuses) from the Land and the
Improvements whether paid or accruing before or after the
filing by or against Borrower of any petition for relief under
the Bankruptcy Code (collectively, the "RENTS") and all
proceeds from the sale or other disposition of the Leases and
the right to receive and apply the Rents to the payment of the
Debt;
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(i) CONDEMNATION AWARDS. All awards or payments,
including interest thereon, which may heretofore and hereafter
be made with respect to the Property, whether from the
exercise of the right of eminent domain (including but not
limited to any transfer made in lieu of or in anticipation of
the exercise of the right), or for a change of grade, or for
any other injury to or decrease in the value of the Property;
(j) INSURANCE PROCEEDS. All proceeds in respect of
the Property under any insurance policies covering the
Property, including, without limitation, the right to receive
and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Property;
(k) TAX CERTIORARI. All refunds, rebates or credits
in connection with reduction in real estate taxes and
assessments charged against the Property as a result of tax
certiorari or any applications or proceedings for reduction;
(l) CONVERSION. All proceeds of the conversion,
voluntary or involuntary, of any of the foregoing including,
without limitation, proceeds of insurance and condemnation
awards, into cash or liquidation claims;
(m) RIGHTS. The right, in the name and on behalf of
Borrower, to appear in and defend any action or proceeding
brought with respect to the Property and to commence any
action or proceeding to protect the interest of Lender in the
Property;
(n) AGREEMENTS. All agreements, contracts,
certificates, instruments, franchises, permits, licenses,
plans, specifications and other documents, now or hereafter
entered into, and all rights therein and thereto, respecting
or pertaining to the use, occupation, construction, management
or operation of the Land and any part thereof and any
Improvements or respecting any business or activity conducted
on the Land and any part thereof and all right, title and
interest of Borrower therein and thereunder, including,
without limitation, the right, upon the happening of any
default hereunder, to receive and collect any sums payable to
Borrower thereunder;
(o) TRADEMARKS. All tradenames, trademarks,
servicemarks, logos, copyrights, goodwill, books and records
and all other general intangibles relating to or used in
connection with the operation of the Property;
(p) OTHER RIGHTS. Any and all other rights of
Borrower in and to the items set forth in Subsections (a)
through (o) above.
AND without limiting any of the other provisions of this
Security Instrument, to the extent permitted by applicable law, Borrower
expressly grants to Lender, as secured party, a security interest in the portion
of the Property which is or may be subject to the provisions of the Uniform
Commercial Code which are applicable to secured transactions; it being
understood and agreed that the Improvements and Fixtures are part and parcel of
the Land (the Land, the Improvements and the Fixtures collectively referred to
as the "REAL PROPERTY") appropriated to the use thereof and, whether affixed or
annexed to the Real Property or not, shall for the purposes of this Security
Instrument be deemed conclusively to be real estate and conveyed hereby.
Section 1.2 ASSIGNMENT OF RENTS. Borrower hereby absolutely
and unconditionally assigns to Lender all of 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
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present, absolute assignment and not an assignment for additional security only.
Nevertheless, subject to the terms of the Assignment of Leases and Section
7.1(h) of this Security Instrument, Lender grants to Borrower a revocable
license to collect, receive, use and enjoy the Rents. Borrower shall hold the
Rents, or a portion thereof sufficient to discharge all current sums due on the
Debt, for use in the payment of such sums.
Section 1.3 SECURITY AGREEMENT. This Security Instrument is
both a real property deed of trust 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
(hereinafter defined), a security interest in the Fixtures, the Equipment and
the Personal Property to the full extent that the Fixtures, the Equipment and
the Personal Property may be subject to the Uniform Commercial Code (said
portion of the Property so subject to the Uniform Commercial Code being called
the "COLLATERAL"). If an Event of Default shall occur and be continuing, Lender,
in addition to any other rights and remedies which it may have, shall have and
may exercise immediately and without demand, any and all rights and remedies
granted to a secured party upon default under the Uniform Commercial Code,
including, without limiting the generality of the foregoing, the right to take
possession of the Collateral or any part thereof, and to take such other
measures as Lender may deem necessary for the care, protection and preservation
of the Collateral. Upon request or demand of Lender after the occurrence and
during the continuance of an Event of Default, Borrower shall, at its expense,
assemble the Collateral and make it available to Lender at a convenient place
(at the Land if tangible property) reasonably acceptable to Lender. Borrower
shall pay to Lender on demand any and all expenses, including reasonable legal
expenses and attorneys' fees, incurred or paid by Lender in protecting its
interest in the Collateral and in enforcing its rights hereunder with respect to
the Collateral after the occurrence and during the continuance of an Event of
Default. Any notice of sale, disposition or other intended action by Lender with
respect to the Collateral sent to Borrower in accordance with the provisions
hereof at least ten (10) business days prior to such action, shall, except as
otherwise provided by applicable law, constitute reasonable notice to Borrower.
The proceeds of any disposition of the Collateral, or any part thereof, may,
except as otherwise required by applicable law, be applied by Lender to the
payment of the Debt in such priority and proportions as Lender in its discretion
shall deem proper. Borrower's (Debtor's) principal place of business is as set
forth on page one hereof and the address of Lender (Secured Party) is as set
forth on page one hereof.
Section 1.4 FIXTURE FILING. Certain of the Property is or will
become "fixtures" (as that term is defined in the Uniform Commercial Code) on
the Land, described or referred to in this Security Instrument, and this
Security Instrument, upon being filed for record in the real estate records of
the city or county wherein such fixtures are situated, shall operate also as a
financing statement naming Borrower as the Debtor and Lender as the Secured
Party filed as a fixture filing in accordance with the applicable provisions of
said Uniform Commercial Code upon such of the Property that is or may become
fixtures.
Section 1.5 PLEDGES OF MONIES HELD. Borrower hereby pledges to
Lender any and all monies now or hereafter held by Lender or on behalf of
Lender, including, without limitation, any sums deposited in the Clearing
Account, the Reserve Funds and Net Proceeds, as additional security for the
Obligations until expended or applied as provided in this Security Instrument.
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CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property
unto and to the use and benefit of Lender and its successors and assigns,
forever;
PROVIDED, HOWEVER, these presents are upon the express
condition that, if Borrower shall well and truly pay to Lender the Debt at the
time and in the manner provided in the Note, the Loan Agreement 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, the
Loan Agreement and the other Loan Documents, these presents and the estate
hereby granted shall cease, terminate and be void; provided, however, that
Borrower's obligation to indemnify and hold harmless Lender pursuant to the
provisions hereof shall survive any such payment or release.
Article 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1 DEBT. This Security Instrument and the grants,
assignments and transfers made in Article 1 are given for the purpose of
securing the Debt which by its definition (as set forth in Loan Agreement)
includes, but is not limited to, the obligations of Borrower to pay to Lender
the principal and interest owing pursuant to the terms and conditions of the
Note.
Section 2.2 OTHER OBLIGATIONS. This Security Instrument and
the grants, assignments and transfers made in Article 1 are also given for the
purpose of securing the following (the "OTHER OBLIGATIONS"):
(a) the performance of all other obligations of
Borrower contained herein;
(b) the performance of each obligation of Borrower
contained in the Loan Agreement and any other Loan Document;
and
(c) the performance of each obligation of Borrower
contained in any renewal, extension, amendment, modification,
consolidation, change of, or substitution or replacement for,
all or any part of the Note, the Loan Agreement or any other
Loan Document.
A copy of each of the Loan Documents is available for review during regular
business hours at the office of Lender at the address first set forth above.
Section 2.3 DEBT AND OTHER OBLIGATIONS. Borrower's obligations
for the payment of the Debt and the performance of the Other Obligations may
sometimes be referred to collectively herein as the "OBLIGATIONS."
Article 3 - BORROWER COVENANTS
Borrower covenants and agrees that:
Section 3.1 PAYMENT OF DEBT. Borrower will pay the Debt at the
time and in the manner provided in the Loan Agreement, the Note and this
Security Instrument.
Section 3.2 INCORPORATION BY REFERENCE. All the covenants,
conditions and agreements contained in (a) the Loan Agreement, (b) the Note and
(c) all and any of the other Loan Documents, are hereby made a part of this
Security Instrument to the same extent and with the same force as if fully set
forth herein as permitted by Ohio Revised Code Section 5301.233.
Section 3.3 INSURANCE. Borrower shall obtain and maintain, or
cause to be maintained, in full force and effect at all times insurance with
respect to Borrower and the Property as required pursuant to the Loan Agreement.
Section 3.4 MAINTENANCE OF PROPERTY. (a) Borrower shall cause
the Property to be maintained in a good and safe condition and repair. The
Improvements, the
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Fixtures, the Equipment and the Personal Property shall not be removed,
demolished or materially altered (except for normal replacement of the Fixtures,
the Equipment or the Personal Property, tenant finish and refurbishment of the
Improvements) without the consent of Lender. Borrower shall promptly repair,
replace or rebuild any part of the Property which may be destroyed by any
casualty, or become damaged, worn or dilapidated and shall complete and pay for
any structure at any time in the process of construction or repair on the Land.
Section 3.5 WASTE. Borrower shall not commit or suffer any
waste of the Property or make any change in the use of the Property which will
in any way materially increase the risk of fire or other hazard arising out of
the operation of the Property, or take any action that might invalidate or allow
the cancellation of any Policy, or do or permit to be done thereon anything that
may in any way materially impair the value of the Property or the security of
this Security Instrument. Borrower will not, without the prior written consent
of Lender, permit any drilling or exploration for or extraction, removal, or
production of any minerals from the surface or the subsurface of the Land,
regardless of the depth thereof or the method of mining or extraction thereof.
Section 3.6 PAYMENT FOR LABOR AND MATERIALS. (a) Borrower will
promptly pay when due all bills and costs for labor, materials, and specifically
fabricated materials ("LABOR AND MATERIAL COSTS") 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 Encumbrances.
(b) After prior written notice to Lender, Borrower, at
its own expense, may contest by appropriate legal proceeding, promptly initiated
and conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any of the Labor and Material Costs, provided
that (i) no Event of Default has occurred and is continuing under the Loan
Agreement, the Note, this Security Instrument or any of the other Loan
Documents, (ii) Borrower is permitted to do so under the provisions of any other
mortgage, deed of trust or deed to secure debt affecting the Property, (iii)
such proceeding shall suspend the collection of the Labor and Material Costs
from Borrower and from the Property or Borrower shall have paid all of the Labor
and Material Costs under protest, (iv) such proceeding shall be permitted under
and be conducted in accordance with the provisions of any other instrument to
which Borrower is subject and shall not constitute a default thereunder, (v)
neither the Property nor any part thereof or interest therein will be in danger
of being sold, forfeited, terminated, canceled or lost, and (vi) Borrower shall
have furnished the security as may be required in the proceeding, or as may be
reasonably requested by Lender to insure the payment of any contested Labor and
Material Costs, together with all interest and penalties thereon.
Section 3.7 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall
observe and perform each and every term, covenant and provision to be observed
or performed by Borrower pursuant to the Loan Agreement, any other Loan Document
and any other agreement or recorded instrument affecting or pertaining to the
Property and any amendments, modifications or changes thereto.
Section 3.8 CHANGE OF NAME, IDENTITY OR STRUCTURE. Borrower
shall not change Borrower's name, identity (including its trade name or names)
or, if not an individual, Borrower's corporate, partnership or other structure
without notifying Lender of such change in
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writing at least thirty (30) days prior to the effective date of such change
and, in the case of a change in Borrower's structure, without first obtaining
the prior written consent of Lender. Borrower shall execute and deliver to
Lender, prior to or contemporaneously with the effective date of any such
change, any financing statement or financing statement change required by Lender
to establish or maintain the validity, perfection and priority of the security
interest granted herein. At the request of Lender, Borrower shall execute a
certificate in form satisfactory to Lender listing the trade names under which
Borrower intends to operate the Property, and representing and warranting that
Borrower does business under no other trade name with respect to the Property.
Article 4 - OBLIGATIONS AND RELIANCES
Section 4.1 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 Loan Agreement, 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 4.2 NO RELIANCE ON LENDER. The general partners,
members, principals and (if Borrower is a trust) beneficial owners of Borrower
are experienced in the ownership and operation of properties similar to the
Property, and Borrower and Lender are relying solely upon such expertise and
business plan in connection with the ownership and operation of the Property.
Borrower is not relying on Lender's expertise, business acumen or advice in
connection with the Property.
Section 4.3 NO LENDER OBLIGATIONS. (a) Notwithstanding the
provisions of SUBSECTIONS 1.1(h) AND (n) or SECTION 1.2, Lender is not
undertaking the performance of (i) any obligations under the Leases; or (ii) any
obligations with respect to such agreements, contracts, certificates,
instruments, franchises, permits, trademarks, licenses and other documents.
(b) By accepting or approving anything required to
be observed, performed or fulfilled or to be given to Lender pursuant to this
Security Instrument, the Loan Agreement, 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 4.4 RELIANCE. Borrower recognizes and acknowledges
that in accepting the Loan Agreement, 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 Section 4.1 of the
Loan Agreement 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 making the Loan; and that
Lender would not be willing to make the Loan and accept this Security Instrument
in the absence of the warranties and representations as set forth in Section 4.1
of the Loan Agreement.
Article 5 - FURTHER ASSURANCES
Section 5.1 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
8
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, deed of trust 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 deed
of trust or mortgage supplemental hereto, any security instrument with respect
to the Property or any instrument of further assurance, and any modification or
amendment of the foregoing documents, except where prohibited by law so to do.
Section 5.2 FURTHER ACTS, ETC. Borrower will, at the cost of
Borrower, and without expense to Lender, do, execute, acknowledge and deliver
all and every such further acts, deeds, conveyances, deeds of trust,
assignments, notices of assignments, transfers and assurances as Lender shall,
from time to time, reasonably require, for the better assuring, conveying,
assigning, transferring, and confirming unto Lender the property and rights
hereby deeded, granted, bargained, sold, conveyed, confirmed, pledged, assigned,
warranted and transferred or intended now or hereafter so to be, or which
Borrower may be or may hereafter become bound to convey or assign to Lender, or
for carrying out the intention or facilitating the performance of the terms of
this Security Instrument or for filing, registering or recording this Security
Instrument, or for complying with all Legal Requirements. Borrower, on demand,
will execute and deliver, and in the event it shall fail to so execute and
deliver, hereby authorizes Lender to execute in the name of Borrower or without
the signature of Borrower to the extent Lender may lawfully do so, one or more
financing statements to evidence more effectively the security interest of
Lender in the Property. Borrower grants to Lender an irrevocable power of
attorney coupled with an interest for the purpose of exercising and perfecting
any and all rights and remedies available to Lender at law and in equity,
including without limitation such rights and remedies available to Lender
pursuant to this SECTION 5.2. Nothing contained in this SECTION 5.2 shall be
deemed to create an obligation on the part of Borrower to pay any costs and
expenses incurred by Lender in connection with the Securitization or other sale
or transfer of the Loan.
Section 5.3 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 one hundred twenty
(120) days to declare the Debt immediately due and payable.
(b) Borrower will not claim or demand or be entitled to any
credit or credits on account of the Debt for any part of the Taxes or Other
Charges assessed against the Property, or any part thereof, and no deduction
shall otherwise be made or claimed from the assessed value of the Property, or
any part thereof, for real estate tax purposes by reason of this Security
9
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 one
hundred twenty (120) 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 5.4 SPLITTING OF MORTGAGE. This Security Instrument
and the Note shall, at any time until the same shall be fully paid and
satisfied, at the sole election of Lender, be split or divided into two or more
notes and two or more security instruments, each of which shall cover all or a
portion of the Property to be more particularly described therein. To that end,
Borrower, upon written request of Lender, shall execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered by the then owner
of the Property, to Lender and/or its designee or designees substitute notes and
security instruments in such principal amounts, aggregating not more than the
then unpaid principal amount of this Security Instrument, and containing terms,
provisions and clauses similar to those contained herein and in the Note, and
such other documents and instruments as may be required by Lender.
Section 5.5 REPLACEMENT DOCUMENTS. Upon receipt of an
affidavit of an officer of Lender as to the loss, theft, destruction or
mutilation of the Note or any other Loan Document which is not of public record,
and, in the case of any such mutilation, upon surrender and cancellation of such
Note or other Loan Document, Borrower will issue, in lieu thereof, a replacement
Note or other Loan Document, dated the date of such lost, stolen, destroyed or
mutilated Note or other Loan Document in the same principal amount thereof and
otherwise of like tenor.
Article 6 - DUE ON SALE/ENCUMBRANCE
Section 6.1 LENDER RELIANCE. Borrower acknowledges that Lender
has examined and relied on the experience of Borrower and its general partners,
members, principals and (if Borrower is a trust) beneficial owners in owning and
operating properties such as the Property in agreeing to make the Loan, and will
continue to rely on Borrower's ownership of the Property as a means of
maintaining the value of the Property as security for repayment of the Debt and
the performance of the Other Obligations. Borrower acknowledges that Lender has
a valid interest in maintaining the value of the Property so as to ensure that,
should Borrower default in the repayment of the Debt or the performance of the
Other Obligations, Lender can recover the Debt by a sale of the Property.
Section 6.2 NO SALE/ENCUMBRANCE. Borrower agrees that Borrower
shall not, without the prior written consent of Lender, sell, convey, mortgage,
grant, bargain, encumber, pledge, assign, or otherwise transfer the Property or
any part thereof or permit the Property or any part thereof to be sold,
conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or
otherwise transferred, unless Lender shall consent thereto in accordance with
SECTION 6.4 hereof.
Section 6.3 SALE/ENCUMBRANCE DEFINED. A sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer within
the meaning of this Article 6 shall be deemed to include, but not be limited to,
(a) an installment sales agreement wherein Borrower agrees to sell the Property
or any part thereof for a price to be paid in installments; (b) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of
10
a security interest in, Borrower's right, title and interest in and to any
Leases or any Rents; (c) the voluntary or involuntary sale, conveyance, transfer
or pledge of the stock of the general partner of Borrower (or the stock of any
corporation directly or indirectly controlling such general partner by operation
of law or otherwise) or the creation or issuance of new stock by which an
aggregate of more than ten percent (10%) of such general partner's stock shall
be vested in a party or parties who are not now stockholders; (d) the voluntary
or involuntary sale, conveyance, transfer or pledge of any general or limited
partnership interest in Borrower; (e) if Borrower, any general partner of
Borrower, any guarantor or any indemnitor is a limited liability company, the
change, removal or resignation of a member or managing member or the transfer or
pledge of the interest of any member or managing member or any profits or
proceeds relating to such interest; or (f) any other transfer prohibited by the
terms of the Loan Agreement.
Section 6.4 LENDER'S RIGHTS. Lender reserves the right to
condition the consent required hereunder upon (a) a modification of the terms
hereof and of the Loan Agreement, the Note or the other Loan Documents; (b) an
assumption of the Loan Agreement, the Note, this Security Instrument and the
other Loan Documents as so modified by the proposed transferee, subject to the
provisions of Section 9.4 of the Loan Agreement; (c) payment of all of Lender's
reasonable expenses incurred in connection with such transfer; (d) the
confirmation in writing by the applicable Rating Agencies that the proposed
transfer will not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned in
connection with any Securitization; (e) the delivery of a nonconsolidation
opinion reflecting the proposed transfer satisfactory in form and substance to
Lender; (f) the proposed transferee's continued compliance with the
representations and covenants set forth in Section 4.1.30 and 5.2.14 of the Loan
Agreement; (g) the delivery of evidence satisfactory to Lender that the single
purpose nature and bankruptcy remoteness of Borrower, its shareholders, partners
or members, as the case may be, following such transfers are in accordance with
the standards of the Rating Agencies; (h) the proposed transferee's ability to
satisfy Lender's then-current underwriting standards; (i) payment of a transfer
fee to Lender equal to 1% of the outstanding principal balance of the Loan at
the time of such transfer; or (j) such other conditions as Lender shall
determine in its reasonable discretion to be in the interest of Lender,
including, without limitation, the creditworthiness, reputation and
qualifications of the transferee with respect to the Loan and the Property.
Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default hereunder in order to declare the Debt
immediately due and payable upon Borrower's sale, conveyance, mortgage, grant,
bargain, encumbrance, pledge, assignment, or transfer of the Property without
Lender's consent. This provision shall apply to every sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the
Property regardless of whether voluntary or not, or whether or not Lender has
consented to any previous sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, or transfer of the Property.
Notwithstanding anything to the contrary contained in this
Article 6, and in addition to the transfers permitted hereunder, following the
sale of the Loan in a securitization, Lender's consent to a sale, assignment, or
other transfer of the Property shall not be withheld provided that Lender
receives sixty (60) days prior written notice of such transfer hereunder and no
Event of Default has occurred and is continuing, and further provided that, the
following additional requirements are satisfied:
(a) Borrower shall pay Lender a transfer fee equal to 1% of the
outstanding principal balance of the Loan at the time of such transfer;
11
(b) Borrower shall pay any and all out-of-pocket costs incurred in
connection with the transfer of the Property (including, without
limitation, Lender's counsel fees and disbursements and all recording
fees, title insurance premiums and mortgage and intangible taxes and
the fees and expenses of the Rating Agencies pursuant to clause (x)
below);
(c) The proposed transferee (the "Transferee") or Transferee's
Principals (hereinafter defined) must have demonstrated expertise in
owning and operating properties similar in location, size and operation
to the Property, which expertise shall be reasonably determined by
Lender. The term "Transferee's Principals" shall include Transferee's
(A) managing members, general partners or principal shareholders and
(B) such other members, partners or shareholders which directly or
indirectly shall own a 15% or greater interest in Transferee;
(d) Transferee and Transferee's Principals shall, as of the date of
such transfer, have an aggregate net worth and liquidity reasonably
acceptable to Lender;
(e) Transferee, Transferee's Principals and all other entities which
may be owned or controlled directly or indirectly by Transferee's
Principals ("Related Entities") must not have been a party to any
bankruptcy proceedings, voluntary or involuntary, made an assignment
for the benefit of creditors or taken advantage of any insolvency act,
or any act for the benefit of debtors within seven (7) years prior to
the date of the proposed transfer of the Property;
(f) Transferee shall assume all of the obligations of Borrower under
the Loan Documents in a manner satisfactory to Lender in all respects,
including, without limitation, by entering into an assumption agreement
in form and substance satisfactory to Lender and one or more
Transferee's Principals having an aggregated net worth and liquidity
reasonably acceptable to Lender shall execute in favor of Lender a
Guaranty of Recourse Obligations and Environmental Indemnity Agreement
in form acceptable to Lender;
(g) There shall be no material litigation or regulatory action pending
or threatened against Transferee, Transferee's Principals or Related
Entities which is not reasonably acceptable to Lender;
(h) Transferee, Transferee's Principals and Related Entities shall not
have defaulted under its or their obligations with respect to any other
indebtedness in a manner which is not reasonably acceptable to Lender;
(i) No Event of Default or event which, with the giving of notice,
passage of time or both, shall constitute an Event of Default, shall
otherwise occur as a result of such transfer, and Transferee and
Transferee's Principals shall deliver (A) all organization
documentation reasonably requested by Lender, which shall be reasonably
satisfactory to Lender, and (B) all certificates, agreements and
covenants reasonably required by Lender; and
(j) Borrower shall deliver, at its sole cost and expense, an
endorsement to the existing title policy insuring the Security
Instrument, as modified by the assumption agreement, as a valid first
lien on the Property and naming the Transferee as owner of the
Property, which endorsement shall insure that, as of the date of the
recording of the assumption agreement, the Property shall not be
subject to any additional exceptions or liens other than those
contained in the title policy issued on the date hereof.
12
In addition to the foregoing, Lender shall have the right to
condition the consent required hereunder upon the confirmation in writing by the
applicable Rating Agencies that the proposed transfer to, and assumption of the
Loan by, the Transferee will not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned in connection with any Securitization.
Immediately upon a transfer of the Property to such Transferee
and the satisfaction of all of the above requirements, the named Borrower herein
shall be released from all liability under this Security Instrument, the Note
and the other Loan Documents accruing after such transfer. The foregoing release
shall be effective upon the date of such transfer, but Lender agrees to provide
written evidence thereof reasonably requested by Borrower.
Article 7 - RIGHTS AND REMEDIES UPON DEFAULT
Section 7.1 REMEDIES. 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 their sole
discretion, without impairing or otherwise affecting the other rights and
remedies of Lender:
(a) declare the entire unpaid Debt to be immediately due and
payable;
(b) institute proceedings, judicial or otherwise, for the
complete foreclosure of this Security Instrument under any applicable
provision of law, in which case the Property or any interest therein
may be sold for cash or upon credit in one or more parcels or in
several interests or portions and in any order or manner;
(c) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute
proceedings for the partial foreclosure of this Security Instrument for
the portion of the Debt then due and payable, subject to the continuing
lien and security interest of this Security Instrument for the balance
of the Debt not then due, unimpaired and without loss of priority;
(d) sell for cash or upon credit the Property or any part
thereof and all estate, claim, demand, right, title and interest of
Borrower therein and rights of redemption thereof, pursuant to power of
sale or otherwise, at one or more sales, as an entity or in parcels, at
such time and place, upon such terms and after such notice thereof, all
as may be required or permitted by law; and, without limiting the
foregoing:
(i) In connection with any sale or sales hereunder,
Lender shall be entitled to elect to treat any of the Property
which consists of a right in action or which is property that
can be severed from the Real Property covered hereby or any
improvements without causing structural damage thereto as if
the same were personal property, and dispose of the same in
accordance with applicable law, separate and apart from the
sale of Real Property. Where the Property consists of Real
Property, Personal Property, Equipment or Fixtures, whether or
not such Personal Property or Equipment is located on or
within the Real Property, Lender shall be entitled to elect to
exercise its rights and remedies against any or all of the
Real Property, Personal Property, Equipment and Fixtures in
such order and manner as is now or hereafter permitted by
applicable law;
(ii) Lender shall be entitled to elect to proceed
against any or all of the Real Property, Personal Property,
Equipment and Fixtures in any manner permitted under
applicable law; and if Lender so elects pursuant to applicable
13
law, the power of sale herein granted shall be exercisable
with respect to all or any of the Real Property, Personal
Property, Equipment and Fixtures covered hereby, as designated
by Lender, and Lender is hereby authorized and empowered to
conduct any such sale of any Real Property, Personal Property,
Equipment and Fixtures in accordance with the procedures
applicable to Real Property;
(iii) Should Lender elect to sell any portion of the
Property which is Real Property or which is Personal Property,
Equipment or Fixtures that the Lender has elected under
applicable law to sell together with Real Property in
accordance with the laws governing a sale of Real Property,
Lender shall give such notice of Event of Default, if any, and
election to sell as may then be required by law. Thereafter,
upon the expiration of such time and the giving of such notice
of sale as may then be required by law, and without the
necessity of any demand on Borrower, Lender at the time and
place specified in the notice of sale, shall sell such Real
Property or part thereof at public auction to the highest
bidder for cash in lawful money of the United States. Lender
may from time to time postpone any sale hereunder by public
announcement thereof at the time and place noticed therefor;
(iv) If the Property consists of several lots,
parcels or items of property, Lender shall, subject to
applicable law, (A) designate the order in which such lots,
parcels or items shall be offered for sale or sold, or (B)
elect to sell such lots, parcels or items through a single
sale, or through two or more successive sales, or in any other
manner Lender designates. Any Person, including Borrower or
Lender, may purchase at any sale hereunder. Should Lender
desire that more than one sale or other disposition of the
Property be conducted, Lender shall, subject to applicable
law, cause such sales or dispositions to be conducted
simultaneously, or successively, on the same day, or at such
different days or times and in such order as Lender may
designate, and no such sale shall terminate or otherwise
affect the lien of this Security Instrument on any part of the
Property not sold until all the Debt has been paid in full. In
the event Lender elects to dispose of the Property through
more than one sale, except as otherwise provided by applicable
law, Borrower agrees to pay the costs and expenses of each
such sale and of any judicial proceedings wherein such sale
may be made;
(e) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained
herein, in the Note, the Loan Agreement 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, any guarantor, indemnitor with respect to
the Loan or of any Person, liable for the payment of the Debt;
(h) the license granted to Borrower under SECTION 1.2 hereof
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
14
Borrower and its agents or servants wholly therefrom, and take
possession of all books, records and accounts relating thereto and
Borrower agrees to surrender possession of the Property and of such
books, records and accounts to Lender upon demand, and thereupon Lender
may (i) use, operate, manage, control, insure, maintain, repair,
restore and otherwise deal with all and every part of the Property and
conduct the business thereat; (ii) complete any construction on the
Property in such manner and form as Lender deems advisable; (iii) make
alterations, additions, renewals, replacements and improvements to or
on the Property; (iv) exercise all rights and powers of Borrower with
respect to the Property, whether in the name of Borrower or otherwise,
including, without limitation, the right to make, cancel, enforce or
modify Leases, obtain and evict tenants, and demand, ▇▇▇ for, collect
and receive all Rents of the Property and every part thereof; (v)
require Borrower to pay monthly in advance to Lender, or any receiver
appointed to collect the Rents, the fair and reasonable rental value
for the use and occupation of such part of the Property as may be
occupied by Borrower; (vi) require Borrower to vacate and surrender
possession of the Property to Lender or to such receiver and, in
default thereof, Borrower may be evicted by summary proceedings or
otherwise; and (vii) apply the receipts from the Property to the
payment of the Debt, in such order, priority and proportions as Lender
shall deem appropriate in its sole discretion after deducting therefrom
all expenses (including reasonable attorneys' fees) incurred in
connection with the aforesaid operations and all amounts necessary to
pay the Taxes, Other Charges, insurance and other expenses in
connection with the Property, as well as just and reasonable
compensation for the services of Lender, its counsel, agents and
employees;
(i) exercise any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code,
including, without limiting the generality of the foregoing: (i) the
right to take possession of the Fixtures, the Equipment, 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
Fixtures, the Equipment, the Personal Property, and (ii) request
Borrower at its expense to assemble the Fixtures, the Equipment, 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 Fixtures, the Equipment, the
Personal Property sent to Borrower in accordance with the provisions
hereof at least ten (10) days prior to such action, shall constitute
commercially reasonable notice to Borrower;
(j) apply any sums then deposited or held in escrow or
otherwise by or on behalf of Lender in accordance with the terms of the
Loan Agreement, this Security Instrument or any other Loan Document to
the payment of the following items in any order in its uncontrolled
discretion:
(i) Taxes and Other Charges;
(ii) Insurance Premiums;
(iii) Interest on the unpaid principal balance of
the Note;
(iv) Amortization of the unpaid principal balance
of the Note;
(v) All other sums payable pursuant to the Note,
the Loan Agreement, this Security
Instrument and the other Loan Documents,
including without limitation advances made
by Lender pursuant to the terms of this
Security Instrument;
(k) pursue such other remedies as Lender may have under
applicable law; or
15
(l) apply the undisbursed balance of any Net Proceeds
Deficiency deposit, together with interest thereon, to the payment of
the Debt in such order, priority and proportions as Lender shall deem
to be appropriate in its discretion.
In the event of a sale, by foreclosure, power of sale or otherwise, of less than
all of 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.
Lender reserves the right at any time to subordinate the lien
of this Security Instrument to any one or more of the leases now or in the
future pertaining to any part of the Property upon the unilateral execution and
recording by Lender of said subordination agreement prior to the filing of any
action by Lender to foreclose upon the Property, such subordination agreement to
be effective as of the date of execution of this Security Instrument as to those
leases identified by Lender in such subordination agreement.
Section 7.2 APPLICATION OF PROCEEDS. The purchase money,
proceeds and avails of any disposition of the Property, and 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, to the extent consistent with law.
Section 7.3 RIGHT TO CURE DEFAULTS. Upon the occurrence and
during the continuance of any Event of Default, Lender may remedy such Event of
Default in such manner and to such extent as Lender may deem necessary to
protect the security hereof, but without any obligation to do so and without
notice to or demand on Borrower, and without releasing Borrower from any
obligation hereunder. Lender is authorized to enter upon action or proceeding to
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 7.3, shall constitute a portion of the Debt and shall
be due and payable to Lender upon demand. All such costs and expenses incurred
by Lender in remedying such Event of Default or such failed payment or act or in
appearing in, defending, or bringing any such action or proceeding shall bear
interest at the Default Rate, for the period after notice from Lender that such
cost or expense was incurred to the date of payment to Lender. All such costs
and expenses incurred by Lender together with interest thereon calculated at the
Default Rate shall be deemed to constitute a portion of the Debt and be secured
by this Security Instrument and the other Loan Documents and shall be
immediately due and payable upon demand by Lender therefor.
Section 7.4 ACTIONS AND PROCEEDINGS. Lender has the right to
appear in and defend any action or proceeding brought with respect to the
Property and to bring any action or proceeding, in the name and on behalf of
Borrower, which Lender, in its discretion, decides should be brought to protect
its interest in the Property.
Section 7.5 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 7.6 EXAMINATION OF BOOKS AND RECORDS. At reasonable
times and upon reasonable notice, Lender, its agents, accountants and attorneys
shall have the right to
16
examine the records, books, management and other papers of Borrower which
reflect upon their financial condition, at the Property or at any office
regularly maintained by Borrower 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, at reasonable times and upon
reasonable notice, Lender, its agents, accountants and attorneys shall have the
right to examine and audit the books and records of Borrower pertaining to the
income, expenses and operation of the Property during reasonable business hours
at any office of Borrower where the books and records are located. This SECTION
7.6 shall apply throughout the term of the Note and without regard to whether an
Event of Default has occurred or is continuing.
Section 7.7 OTHER RIGHTS, ETC. (a) The failure of Lender to
insist upon strict performance of any term hereof shall not be deemed to be a
waiver of any term of this Security Instrument. Borrower shall not be relieved
of Borrower's obligations hereunder by reason of (i) the failure of Lender to
comply with any request of Borrower or any guarantor or indemnitor with respect
to the Loan 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) Lender may resort for the payment of the Debt to any other
security held by Lender in such order and manner as Lender, in its discretion,
may elect. Lender may take action to recover the Debt, or any portion thereof,
or to enforce any covenant hereof without prejudice to the right of Lender
thereafter to foreclose this Security Instrument. The rights of Lender under
this Security Instrument shall be separate, distinct and cumulative and none
shall be given effect to the exclusion of the others. No act of Lender shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision. Lender shall not be limited exclusively to the
rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.
Section 7.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY.
Lender may release any portion of the Property for such consideration as Lender
may require without, as to the remainder of the Property, in any way impairing
or affecting the lien or priority of this Security Instrument, or improving the
position of any subordinate lienholder with respect thereto, except to the
extent that the obligations hereunder shall have been reduced by the actual
monetary consideration, if any, received by Lender for such release, and may
accept by assignment, pledge or otherwise any other property in place thereof as
Lender may require without being accountable for so doing to any other
lienholder. This Security Instrument shall continue as a lien and security
interest in the remaining portion of the Property.
Section 7.9 VIOLATION OF LAWS. If the Property is not in
material compliance with Legal Requirements, Lender may impose additional
requirements upon Borrower in connection herewith including, without limitation,
monetary reserves or financial equivalents.
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Section 7.10 RECOURSE AND CHOICE OF REMEDIES. Notwithstanding
any other provision of this Security Instrument or the Loan Agreement,
including, without limitation, Section 9.4 of the Loan Agreement, Lender and
other Indemnified Parties (as hereinafter defined) are entitled to enforce the
obligations of Borrower, any guarantor and indemnitor contained in Sections 9.2,
9.3 and 9.4 herein and Section 9.2 of the Loan Agreement without first resorting
to or exhausting any security or collateral and without first having recourse to
the Note or any of the Property, through foreclosure, exercise of a power of
sale or acceptance of a deed in lieu of foreclosure or otherwise, and in the
event Lender commences a foreclosure action against the Property, or exercises
the power of sale pursuant to this Security Instrument, Lender is entitled to
pursue a deficiency judgment with respect to such obligations against Borrower
and any guarantor or indemnitor with respect to the Loan. The provisions of
Sections 9.2, 9.3 and 9.4 herein and Section 9.2 of the Loan Agreement are
exceptions to any non-recourse or exculpation provisions in the Loan Agreement,
the Note, this Security Instrument or the other Loan Documents, and Borrower and
any guarantor or indemnitor with respect to the Loan are fully and personally
liable for the obligations pursuant to Sections 9.2, 9.3 and 9.4 herein and
Section 9.2 of the Loan Agreement. The liability of Borrower and any guarantor
or indemnitor with respect to the Loan pursuant to Sections 9.2, 9.3 and 9.4
herein and Section 9.2 of the Loan Agreement is not limited to the original
principal amount of the Note. Notwithstanding the foregoing, nothing herein
shall inhibit or prevent Lender from foreclosing or exercising a power of sale
pursuant to this Security Instrument or exercising any other rights and remedies
pursuant to the Loan Agreement, the Note, this Security Instrument and the other
Loan Documents, whether simultaneously with foreclosure proceedings or in any
other sequence. A separate action or actions may be brought and prosecuted
against Borrower pursuant to Sections 9.2, 9.3 and 9.4 herein and Section 9.2 of
the Loan Agreement, whether or not action is brought against any other Person or
whether or not any other Person is joined in the action or actions. In addition,
Lender shall have the right but not the obligation to join and participate in,
as a party if it so elects, any administrative or judicial proceedings or
actions initiated in connection with any matter addressed in Article 8 or
Section 9.4 herein.
Section 7.11 RIGHT OF ENTRY. Upon reasonable notice to
Borrower, Lender and its agents shall have the right to enter and inspect the
Property at all reasonable times.
Article 8 - ENVIRONMENTAL HAZARDS
Section 8.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
Based upon an environmental assessment of the Property and information that
Borrower knows after due inquiry of the Manager, and except as otherwise
disclosed by that certain Environmental Site Assessment of the Property
delivered to Lender (such report is referred to below as the "ENVIRONMENTAL
REPORT"), (a) there are no Hazardous Substances (defined below) or underground
storage tanks in, on, or under the Property, except those that are both (i) in
compliance with Environmental Laws (defined below) and with permits issued
pursuant thereto and (ii) fully disclosed to Lender in writing pursuant the
Environmental Report; (b) there are no past, present or threatened Releases
(defined below) of Hazardous Substances in, on, under or from the Property which
has not been fully remediated in accordance with Environmental Law; (c) there is
no threat of any Release of Hazardous Substances migrating to the Property; (d)
there is no past or present non-compliance with Environmental Laws, or with
permits issued pursuant thereto, in connection with the Property which has not
been fully remediated in accordance with Environmental Law; (e) Borrower does
not know of, and has not received, any written or oral notice or other
communication from any Person (including but not limited to a governmental
18
entity) relating to Hazardous Substances or Remediation (defined below) thereof,
of possible liability of any Person pursuant to any Environmental Law, other
environmental conditions in connection with the Property, or any actual or
potential administrative or judicial proceedings in connection with any of the
foregoing; and (f) Borrower has truthfully and fully provided to Lender, in
writing, any and all information relating to conditions in, on, under or from
the Property that is known to Borrower and that is contained in Borrower's files
and records, including but not limited to any reports relating to Hazardous
Substances in, on, under or from the Property and/or to the environmental
condition of the Property.
"ENVIRONMENTAL LAW" means any present and future federal,
state and local laws, statutes, ordinances, rules, regulations and the like, as
well as common law, relating to protection of human health or the environment,
relating to Hazardous Substances, relating to liability for or costs of
Remediation or prevention of Releases of Hazardous Substances or relating to
liability for or costs of other actual or threatened danger to human health or
the environment. Environmental Law includes, but is not limited to, the
following statutes, as amended, any successor thereto, and any regulations
promulgated pursuant thereto, and any state or local statutes, ordinances,
rules, regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Substances Transportation Act;
the Resource Conservation and Recovery Act (including but not limited to
Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act;
the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the
Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal
Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide
Act; the Endangered Species Act; the National Environmental Policy Act; and the
River and Harbors Appropriation Act. Environmental Law also includes, but is not
limited to, any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law: conditioning
transfer of property upon a negative declaration or other approval of a
governmental authority of the environmental condition of the Property; requiring
notification or disclosure of Releases of Hazardous Substances or other
environmental condition of the Property to any governmental authority or other
Person, whether or not in connection with transfer of title to or interest in
property; imposing conditions or requirements in connection with permits or
other authorization for lawful activity; relating to nuisance, trespass or other
causes of action related to the Property; and relating to wrongful death,
personal injury, or property or other damage in connection with any physical
condition or use of the Property.
"HAZARDOUS SUBSTANCES" include but are not limited to any and
all substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or regulatory
effect under any present or future Environmental Laws or that may have a
negative impact on human health or the environment, including but not limited to
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables and
explosives, but excluding substances of kinds and in amounts ordinarily and
customarily used or stored in similar properties for the purpose of cleaning or
other maintenance or operations and otherwise in compliance with all
Environmental Laws.
"RELEASE" of any Hazardous Substance includes but is not
limited to any release, deposit, discharge, emission, leaking, spilling,
seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping,
disposing or other movement of Hazardous Substances.
19
"REMEDIATION" includes but is not limited to any response,
remedial, removal, or corrective action, any activity to cleanup, detoxify,
decontaminate, contain or otherwise remediate any Hazardous Substance, any
actions to prevent, cure or mitigate any Release of any Hazardous Substance, any
action to comply with any Environmental Laws or with any permits issued pursuant
thereto, any inspection, investigation, study, monitoring, assessment, audit,
sampling and testing, laboratory or other analysis, or evaluation relating to
any Hazardous Substances or to anything referred to in Article 8.
Section 8.2 ENVIRONMENTAL COVENANTS. Borrower covenants and
agrees that: (a) all uses and operations on or of the Property, whether by
Borrower or any other Person, shall be in compliance with all Environmental Laws
and permits issued pursuant thereto; (b) there shall be no Releases of Hazardous
Substances in, on, under or from the Property; (c) there shall be no Hazardous
Substances in, on, or under the Property, except those that are both (i) in
compliance with all Environmental Laws and with permits issued pursuant thereto
and (ii) fully disclosed to Lender in writing; (d) Borrower shall keep the
Property free and clear of all liens and other encumbrances imposed pursuant to
any Environmental Law, whether due to any act or omission of Borrower or any
other Person (the "ENVIRONMENTAL LIENS"); (e) Borrower shall, at its sole cost
and expense, fully and expeditiously cooperate in all activities pursuant to
SECTION 8.3 below, including but not limited to providing all relevant
information and making knowledgeable persons available for interviews; (f)
Borrower shall, at its sole cost and expense, perform any environmental site
assessment or other investigation of environmental conditions in connection with
the Property, pursuant to any reasonable written request of Lender made in the
event that Lender has reason to believe that an environmental hazard exists on
the Property (including but not limited to sampling, testing and analysis of
soil, water, air, building materials and other materials and substances whether
solid, liquid or gas), and share with Lender the reports and other results
thereof, and Lender and other Indemnified Parties shall be entitled to rely on
such reports and other results thereof; (g) Borrower shall, at its sole cost and
expense, comply with all reasonable written requests of Lender made in the event
that Lender has reason to believe that an environmental hazard exists on the
Property (i) reasonably effectuate Remediation of any condition (including but
not limited to a Release of a Hazardous Substance) in, on, under or from the
Property; (ii) comply with any Environmental Law; (iii) comply with any
directive from any governmental authority; and (iv) take any other reasonable
action necessary or appropriate for protection of human health or the
environment; (h) Borrower shall not do or allow any tenant or other user of the
Property to do any act that materially increases the dangers to human health or
the environment, poses an unreasonable risk of harm to any Person (whether on or
off the Property), impairs or may impair the value of the Property, is contrary
to any requirement of any insurer, constitutes a public or private nuisance,
constitutes waste, or violates any covenant, condition, agreement or easement
applicable to the Property; and (i) Borrower shall immediately notify Lender in
writing of (A) any presence or Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards the Property; (B) any
non-compliance with any Environmental Laws related in any way to the Property;
(C) any actual or potential Environmental Lien; (D) any required or proposed
Remediation of environmental conditions relating to the Property; and (E) any
written or oral notice or other communication of 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 pursuant to any Environmental Law,
20
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 8.
Section 8.3 LENDER'S RIGHTS. In the event that Lender has
reason to believe that an environmental hazard exists on the Property, upon
reasonable notice from Lender, Borrower shall, at Borrower's expense, promptly
cause an engineer or consultant satisfactory to Lender to conduct any
environmental assessment or audit (the scope of which shall be determined in
Lender's sole and absolute discretion) and take any samples of soil, groundwater
or other water, air, or building materials or any other invasive testing
requested by Lender and promptly deliver the results of any such assessment,
audit, sampling or other testing; provided, however, if such results are not
delivered to Lender within a reasonable period, upon reasonable notice to
Borrower, Lender and any other Person 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 reasonably
conducting other invasive testing. Borrower shall cooperate with and provide
access to Lender and any such Person designated by Lender.
Article 9 - INDEMNIFICATION
Section 9.1 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 reasonable
attorneys' fees and other costs of defense) (collectively, the "LOSSES") imposed
upon or incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any one or more of the
following: (a) ownership of this Security Instrument, the Property or any
interest therein or receipt of any Rents; (b) any amendment to, or restructuring
of, the Debt, and the Note, the Loan Agreement, 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 Loan Agreement 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, any
guarantor or indemnitor 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 or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (e) any use, nonuse or
condition in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(f) any failure on the part of Borrower to perform or be in compliance with any
of the terms of this Security Instrument; (g) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Property or any part thereof; (h) the failure of any person to file timely with
the Internal Revenue Service an accurate Form ▇▇▇▇-▇, ▇▇▇▇▇▇▇▇▇ for Recipients
of Proceeds from Real Estate, Broker and Barter Exchange
21
Transactions, which may be required in connection with this Security Instrument,
or to supply a copy thereof in a timely fashion to the recipient of the proceeds
of the transaction in connection with which this Security Instrument is made;
(i) any failure of the Property to be in compliance with any Legal Requirements;
(j) the enforcement by any Indemnified Party of the provisions of this Article
9; (k) any and all claims and demands whatsoever which may be asserted against
Lender by reason of any alleged obligations or undertakings on its part to
perform or discharge any of the terms, covenants, or agreements contained in any
Lease; (1) the payment of any commission, charge or brokerage fee to anyone
claiming through Borrower which may be payable in connection with the funding of
the Loan; or (m) any misrepresentation made by Borrower in this Security
Instrument or any other Loan Document. Notwithstanding the foregoing, Borrower
shall not be liable to the Indemnified Parties under this SECTION 9.1 for any
Losses to which the Indemnified Parties may become subject to the extent such
Losses arise by reason of the gross negligence, illegal acts, fraud or willful
misconduct of the Indemnified Parties. Any amounts payable to Lender by reason
of the application of this SECTION 9.1 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 9, the term
"INDEMNIFIED PARTIES" means Lender and any Person who is or will have been
involved in the origination of the Loan, any Person who is or will have been
involved in the servicing of the Loan secured hereby, any Person in whose name
the encumbrance created by this Security Instrument is or will have been
recorded, persons and entities who may hold or acquire or will have held a full
or partial interest in the Loan secured hereby (including, but not limited to,
investors or prospective investors in the Securities, as well as custodians,
trustees and other fiduciaries who hold or have held a full or partial interest
in the Loan secured hereby for the benefit of third parties) as well as the
respective directors, officers, shareholders, partners, employees, agents,
servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all of the
foregoing (including but not limited to any other Person who holds or acquires
or will have held a participation or other full or partial interest in the Loan,
whether during the term of the Loan or as a part of or following a foreclosure
of the Loan and including, but not limited to, any successors by merger,
consolidation or acquisition of all or a substantial portion of Lender's assets
and business).
Section 9.2 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
Documents, but excluding any income, franchise or other similar taxes.
Section 9.3 ERISA INDEMNIFICATION. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable attorneys' fees and costs incurred in the investigation,
defense, and settlement of Losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited transaction exemption under ERISA that may be required, in Lender's
sole discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections 4.1.9 or 5.2.12 of the Loan Agreement.
Section 9.4 ENVIRONMENTAL INDEMNIFICATION. Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold harmless
the Indemnified Parties
22
from and against any and all Losses and costs of Remediation (whether or not
performed voluntarily), engineers' fees, environmental consultants' fees, and
costs of investigation (including but not limited to sampling, testing, and
analysis of soil, water, air, building materials and other materials and
substances whether solid, liquid or gas) imposed upon or incurred by or asserted
against any Indemnified Parties, and directly or indirectly arising out of or in
any way relating to any one or more of the following: (a) any presence of any
Hazardous Substances in, on, above, or under the Property; (b) any past, present
or threatened Release of Hazardous Substances in, on, above, under or from the
Property; (c) any activity by Borrower, any Person affiliated with Borrower or
any tenant or other user of the Property in connection with any actual, proposed
or threatened use, treatment, storage, holding, existence, disposition or other
Release, generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from
the Property of any Hazardous Substances at any tine located in, under, on or
above the Property; (d) any activity by Borrower, any Person affiliated with
Borrower or any tenant or other user of the Property in connection with any
actual or proposed Remediation of any Hazardous Substances at any time located
in, under, on or above the Property, whether or not such Remediation is
voluntary or pursuant to court or administrative order, including but not
limited to any removal, remedial or corrective action; (e) any past or present
non-compliance or violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in connection with the Property or operations
thereon, including but not limited to any failure by Borrower, any Affiliate of
Borrower or any tenant or other user of the Property to comply with any order of
any Governmental Authority in connection with any Environmental Laws; (f) the
imposition, recording or filing of any Environmental Lien encumbering the
Property; (g) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in Article 8 and this
SECTION 9.4; (h) any past, present or threatened injury to, destruction of or
loss of natural resources in any way connected with the Property, including but
not limited to costs to investigate and assess such injury, destruction or loss;
(i) any acts of Borrower or other users of the Property in arranging for
disposal or treatment, or arranging with a transporter for transport for
disposal or treatment, of Hazardous Substances owned or possessed by such
Borrower or other users, at any facility or incineration vessel owned or
operated by another Person and containing such or any similar Hazardous
Substance; (j) any acts of Borrower or other users of the Property, in accepting
any Hazardous Substances for transport to disposal or treatment facilities,
incineration vessels or sites selected by Borrower or such other users, from
which there is a Release, or a threatened Release of any Hazardous Substance
which causes the incurrence of costs for Remediation; (k) any personal injury,
wrongful death, or property damage arising under any statutory or common law or
tort law theory, including but not limited to damages assessed for the
maintenance of a private or public nuisance or for the conducting of an
abnormally dangerous activity on or near the Property; and (1) any
misrepresentation or inaccuracy in any representation or warranty or material
breach or failure to perform any covenants or other obligations pursuant to
Article 8. Notwithstanding the foregoing, Borrower shall not be liable under
this SECTION 9.4 for any Losses or costs of Remediation to which the Indemnified
Parties may become subject to the extent such Losses or costs of Remediation
arise by reason of the gross negligence, illegal acts, fraud of willful
misconduct of the Indemnified Parties. This indemnity shall survive any
termination, satisfaction or foreclosure of this Security Instrument, subject to
the provisions of SECTION 10.5.
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Section 9.5 DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND
EXPENSES. Upon written request by any Indemnified Party, Borrower shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, if the defendants in any
such claim or proceeding include both Borrower and any Indemnified Party and
Borrower and such Indemnified Party shall have reasonably concluded that there
are any legal defenses available to it and/or other Indemnified Parties that are
different from or additional to those available to Borrower, such Indemnified
Party shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such Indemnified Party, provided that no compromise or settlement shall be
entered without Borrower's consent, which consent shall not be unreasonably
withheld. 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 10 - WAIVERS
Section 10.1 WAIVER OF COUNTERCLAIM. To the extent permitted
by applicable law, 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 Loan Agreement, the Note, any of the other Loan
Documents, or the Obligations.
Section 10.2 MARSHALLING AND OTHER MATTERS. 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 10.3 WAIVER OF NOTICE. To the extent permitted by
applicable law, Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Security
Instrument or the Loan Documents specifically and expressly provide for the
giving of notice by Lender to Borrower and except with respect to matters for
which Lender is required by applicable law to give notice, and Borrower hereby
expressly waives the right to receive any notice from Lender with respect to any
matter for which this Security Instrument does not specifically and expressly
provide for the giving of notice by Lender to Borrower.
Section 10.4 WAIVER OF STATUTE OF LIMITATIONS. To the extent
permitted by applicable law, Borrower hereby expressly waives and releases to
the fullest extent permitted by law, the pleading of any statute of limitations
as a defense to payment of the Debt or performance of its Other Obligations.
Section 10.5 SURVIVAL. The indemnifications made pursuant to
SECTIONS 9.3 AND 9.4 herein and the representations and warranties, covenants,
and other obligations arising under Article 8, shall continue indefinitely in
full force and effect and shall survive and shall in no way be impaired by: any
satisfaction, release or other termination of this Security Instrument,
24
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 Loan Agreement, 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 Loan Agreement, 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. Notwithstanding anything to the contrary
contained in this Security Instrument or the other Loan Documents, Borrower
shall not have any obligations or liabilities under the indemnification under
SECTION 9.4 herein or other indemnifications with respect to Hazardous
Substances contained in the other Loan Documents with respect to those
obligations and liabilities that Borrower can prove arose solely from Hazardous
Substances that (i) were not present on or a threat to the Property prior to the
date that Lender or its nominee acquired title to the Property, whether by
foreclosure, exercise by power of sale, acceptance of a deed-in-lieu of
foreclosure or otherwise and (ii) were not the result of any act or negligence
of Borrower or any of Borrower's affiliates, agents or contractors.
Article 11 - EXCULPATION
The provisions of Section 9.4 of the Loan Agreement are hereby
incorporated by reference into this Security Instrument to the same extent and
with the same force as if fully set forth herein.
Article 12 - NOTICES
All notices or other written communications hereunder shall be
delivered in accordance with Section 10.6 of the Loan Agreement.
Article 13 - APPLICABLE LAW
Section 13.1 GOVERNING LAW. (A) THIS SECURITY INSTRUMENT WAS
NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY BORROWER AND ACCEPTED BY LENDER
IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE SECURED HEREBY WERE
DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A
SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
SECURITY INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF
CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT
THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT
OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE
OTHER LOAN DOCUMENTS WITH RESPECT TO THE PROPERTY SHALL BE GOVERNED BY AND
CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT
BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE,
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND
ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING
HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT
25
PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS SECURITY
INSTRUMENT AND THE OR THE OTHER LOAN DOCUMENTS, AND THIS SECURITY INSTRUMENT AND
THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS SECURITY INSTRUMENT MAY AT LENDER'S
OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY DESIGNATE AND APPOINT
CT CORPORATION SYSTEM, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTENTION: SERVICE OF PROCESS DEPARTMENT
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
Section 13.2 USURY LAWS. Notwithstanding anything to the
contrary, (a) all agreements and communications between Borrower and Lender are
hereby and shall automatically be limited so that, after taking into account all
amounts deemed interest, the
26
interest contracted for, charged or received by Lender shall never exceed the
maximum lawful rate or amount, (b) in calculating whether any interest exceeds
the lawful maximum, all such interest shall be amortized, prorated, allocated
and spread over the full amount and term of all principal indebtedness of
Borrower to Lender, and (c) if through any contingency or event, Lender receives
or is deemed to receive interest in excess of the lawful maximum, any such
excess shall be deemed to have been applied toward payment of the principal of
any and all then outstanding indebtedness of Borrower to Lender, or if there is
no such indebtedness, shall immediately be returned to Borrower.
Section 13.3 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 14 - DEFINITIONS
All capitalized terms not defined herein shall have the
respective meanings set forth in the Loan Agreement. Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
words used in this Security Instrument may be used interchangeably in singular
or plural form and the word "BORROWER" shall mean "each Borrower and any
subsequent owner or owners of the Property or any part thereof or any interest
therein," the word "LENDER" shall mean "Lender and any subsequent holder of the
Note," the word "NOTE" shall mean "the Note and any other evidence of
indebtedness secured by this Security Instrument," the word "PROPERTY" shall
include any portion of the Property and any interest therein, and the phrases
"ATTORNEYS' FEES", "LEGAL FEES" and "COUNSEL FEES" shall include any and all
attorneys', paralegal and law clerk fees and disbursements, including, but not
limited to, fees and disbursements at the pre-trial, trial and appellate levels
incurred or paid by Lender in protecting its interest in the Property, the
Leases and the Rents and enforcing its rights hereunder.
Article 15 - MISCELLANEOUS PROVISIONS
Section 15.1 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 15.2 SUCCESSORS AND ASSIGNS. This Security Instrument
shall be binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns forever.
Section 15.3 INAPPLICABLE PROVISIONS. If any term, covenant or
condition of the Loan Agreement, the Note or this Security Instrument is held to
be invalid, illegal or unenforceable in any respect, the Loan Agreement, the
Note and this Security Instrument shall be construed without such provision.
Section 15.4 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.
27
Section 15.5 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 15.6 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 Loan Agreement, the
Note and the other Loan Documents and the performance and discharge of the Other
Obligations.
Section 15.7 ENTIRE AGREEMENT. The Note, the Loan Agreement,
this Security Instrument and the other Loan Documents constitute the entire
understanding and agreement between Borrower and Lender with respect to the
transactions arising in connection with the Debt and supersede all prior written
or oral understandings and agreements between Borrower and Lender with respect
thereto. Borrower hereby acknowledges that, except as incorporated in writing in
the Note, the Loan Agreement, this Security Instrument and the other Loan
Documents, there are not, and were not, and no persons are or were authorized by
Lender to make, any representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the transaction which is the subject
of the Note, the Loan Agreement, this Security Instrument and the other Loan
Documents.
Section 15.8 LIMITATION ON LENDER'S RESPONSIBILITY. No
provision of this Security Instrument shall operate to place any obligation or
liability for the control, care, management or repair of the Property upon
Lender, nor shall it operate to make Lender responsible or liable for any waste
committed on the Property by the tenants or any other Person, or for any
dangerous or defective condition of the Property, or for any negligence in the
management, upkeep, repair or control of the Property resulting in loss or
injury or death to any tenant, licensee, employee or stranger. Nothing herein
contained shall be construed as constituting Lender a "mortgagee in possession."
Article 16 - INTENTIONALLY DELETED
Article 17 - STATE-SPECIFIC PROVISIONS
Section 17.1 PRINCIPALS OF CONSTRUCTION. In the event of any
inconsistencies between the terms and provisions of this Security Instrument and
Article 17 of this Security Instrument, the terms and provisions of Article 17
shall govern and control.
Section 17.2 OPEN-END MORTGAGE MAXIMUM PRINCIPAL AMOUNT. This
Security Instrument is an open-end mortgage made pursuant to Section 5301.232 of
the Ohio Revised Code, and shall secure the payment of all loan advances
included within the term "Debt," regardless of the time such advances are made.
The maximum amount of unpaid loan indebtedness, exclusive of interest thereon,
which may be outstanding at any time and secured hereby shall be the maximum
principal amount stated on the cover page of this Security Instrument. As
permitted and provided in Section 5301.233 of the Ohio Revised Code, this
Security Instrument shall also secure unpaid balances of advances made with
respect to the Property for the payment of taxes, assessments, insurance
premiums, or costs incurred for the protection of the Property and other costs
which Lender is authorized by this Security Instrument
28
to pay on Borrower's behalf, plus interest thereon, regardless of the time when
such advances are made.
Section 17.3 OHIO REMEDIES. Without limitation to the other
terms and provisions of this Security Instrument, Lender may, at its option, do
all things provided or permitted to be done by a mortgagee under Section 1311.14
of the Ohio Revised Code and any amendment thereto, for the protection of
Lender's interest in the Property.
[NO FURTHER TEXT ON THIS PAGE]
29
IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed
by Borrower as of the day and year first above written.
MEADOWVIEW SQUARE, LLC,
a Delaware limited liability company
By: GLIMCHER MEADOWVIEW SQUARE, INC., a Delaware
corporation, its managing member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
SIGNED IN THE PRESENCE OF:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------ ----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Name:
SEALED AND DELIVERED
IN THE PRESENCE OF:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Prepared by: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
and upon recordation return to:
Stroock & Stroock & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
30
ACKNOWLEDGMENT
State of Ohio )
) ss.
County of ________ )
The foregoing instrument was acknowledged before me this 12th day of February,
2001, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the Executive Vice President of Glimcher Meadowview
Square, Inc., a Delaware corporation, the managing member of Meadowview Square,
LLC, a Delaware limited liability company, on behalf of the company.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Notary Public
Commission
Expiration: 7/02/05
--------------
EXHIBIT A
LEGAL DESCRIPTION
[To Be Attached]